Consumer Behavior, Organizational Strategy and Financial Economics

Table of Contents

1. Frontmatter

2. Consumer Behavior

   1. Frontmatter

   2. The Influence of Sales Stimulation Methods on the Behaviour of Consumers While Making the Decision on Purchase of Products in the Latvian Market

      Anda Batraga, Valerijs Praude, Jelena Šalkovska, Oksana Afoniceva

      Abstract

      The purpose of this research is the determination the extent of influence of various stimulation methods on the behaviour of consumers while making the decision on purchase of products in the Latvian market. In the course of the research approaches to development and realization of sales’ stimulation process were used which were described in scientific literature and the results of empirical researches that were made under the leadership of the authors. In the article the following research methods were used: abstract literature analysis, Latvian residents’ questionnaire (1320 respondents), and the correlation analysis. As a result the model for developing and realization of sales promotion process was made, the extent of influence of various stimulation methods on the behaviour of consumers while making the decision on purchase of products in the Latvian market was determined based on the correlation analysis. The results of the research let the authors to make conclusion and develop recommendations for producers and sellers of foodstuff for process of developing and realization of sales’ stimulation for these products in the Latvian market. The results of the research have as well as theoretical as practical meaning not only for Latvian market subjects, but also for foodstuff market subjects in other countries.

   3. Consumers’ Behavior in Decision-Making in Foodstuff Purchasing Process

      Jelena Šalkovska, Valerijs Praude, Anda Batraga, Oksana Afoniceva

      Abstract

      The purpose of this research is developing of model of market segmentation for food consumers, as well as determination the extent of influence of various factors influencing the behavior of the Latvian consumers while making the decision on purchase of these goods. In the course of the research approaches to market segmentation of food products consumers were used, as well as statistical data for Latvian food product market, described in literature, also the results of empirical researches. As a result the model of market segmentation for food consumers was developed, the extent of influence of various factors influencing the behavior of the Latvian consumers was determined based on the correlation analysis. The results of the research let the authors to make conclusion and develop recommendations for producers and sellers of food products for possible effective marketing impact on the Latvian food product consumers. The results of the research have as well as theoretical as practical meaning not only for Latvian market subjects, but also for food product market subjects in other countries.

   4. Content Analysis of Greek Medical Tourism Websites for a Successful Implementation of an E-Marketing Strategy

      Katsoni Vicky, Goula Aspa, Karagianni Olympia, Prezani Aikaterini, Papandoniou Panagiotis, Hatzidimitriou Maria

      Abstract

      The growing international demand for top medical services in combination with consumers’ constant research for competitive prices in such services, has led to the growth of medical and health tourism in Greece, mainly because of the country’s Mediterranean climate and its qualified health experts. In accordance with the above, the use of the Internet enables the Greek medical community to expand its marketing and advertising outside its borders. In this paper, the authors try to form a data base of the medical tourism providers in Greece and then they proceed with a website evaluation of the medical tourism providers in order to investigate and appraise their internet appearance. The results of the website evaluation can in turn lead to useful practical results with the aim of providing a successful e-marketing strategy implementation of the medical tourism providers.

   5. Smartphone Adoption: Design of Factors Within the Framework of Theory of Consumption Values

      Katarína Petrovčiková, František Sudzina

      Abstract

      After the initial feature mobile phone adoption, there is a widespread smartphone proliferation. The Theory of Consumption Values (TCV) is a marketing theory that explains purchase behavior of consumer goods and services. The framework consists of functional, social, epistemic, hedonic, and conditional values; the latter being functional and/or social values present only in a specific situation. TCV is used in mobile device adoption literature disproportionably more often than in other fields. However, virtually all TCV studies focused on smartphones are qualitative. The aim of this research is to design factors which could be later used in quantitative studies. These factors are identified using principal component analysis. With regards to the results, there were five factors identified for functional values, six factors for social values, three factor for epistemic values, four factors for hedonic values, and seven factors for conditional values.

   6. Impact of UTAUT/UTAUT2 Motives on Intention to Use Deal Sites

      František Sudzina

      Abstract

      Deal sites, in different forms, exist for more than a decade. Although the industry is mature, there is only a limited number of papers investigating deal sites adoption and use from a customer perspective. Most of the research published on the topic is rather exploratory than using existing theories. The unified theory of acceptance and use of technology (UTAUT) is an information systems theory that explains adoption and continued usage behavior. There already exists the second version of the theory. The aim of this research is to test if UTAUT and UTAUT2 motives influence intention to use deal sites. As it is a preliminary study, only four core UTAUT and core seven UTUAT2 (a superset of UTAUT) motives are investigated, not factors moderating the core motives. Data were collected in Denmark, and they are analyzed using multiple linear regression. Considering only UTAUT motives, only performance expectancy was found to significantly influence intention to use deal sites. Considering UTAUT2 motives, besides performance expectancy, also price value, and habit were found to significantly influence intention to use deal sites.

   7. The Purpose, Scope and Basic Principles of Consumer Protection in Turkey

      Ahmet Karakocali

      Abstract

      Turkey’s previous Consumer Protection Act 1995 was valid until 28 November 2013 when the new Consumer Protection Act (Ankara: TGNA, 2014) was issued in the Turkish Official Gazette and entered into force on 28 May 2014 after a series of intensive legislation work. In this respect, 21 Implementing By-laws entered into force subsequently. This new law, replacing the former Consumer Protection Act 1995, was enacted to comply with both the provisions of the new Turkish Obligations Act (Ankara: TGNA, 2012) and European Commission’s related directives. Full harmonization with the EU practices and legislation is the actual target. The new Act covers the entire consumer transactions and practices concerning consumers whereas the previous Consumer Protection Act 1995 governed only consumer transactions for the goods and service market. In this respect the new Act is more comprehensive compared to the Consumer Protection Act 1995. With this paper, we will try to explain the purpose, scope and basic principles of Consumer Protection Act (Ankara: TGNA, 2014).

3. Organizational Strategy

   1. Frontmatter

   2. How Are Strategy and Organizational Culture Related? A Conceptual Discussion

      Güven Alpay, Pınar Büyükbalcı, Meral Dülger

      Abstract

      This paper seeks to foster a conceptual discussion about the relationship between organizational culture and strategy. Organizations must find ways to handle global, national, market, technological and consumer demands whilst crafting relevant strategies to their internal workings and cultures. When the strategies of organizations are misaligned with market realities, the survival rate rapidly decreases. We suggest that the culture of organizations offer an anchor dictating how organizations perceive themselves, their surroundings, their customers and relevant stakeholders. The assumptions, beliefs and values determine how companies comprehend what is happening inside and outside the organization while dominating the strategy formulation and execution process. In a culture where change is avoided, prompt adaptation to market changes could be painful if not impossible. Thus, we propose that organizational culture can be utilized as a bridge for aligning inner realities of organizations with demands of the outer domain. Essentially, we suggest that organizations’ internal values and culture are generally not aligned with their strategic positions and that the focus of organizations need to be on a “fit” which will create a “competitive cultural persona” supporting the strategic posture in the marketplace. Such a “fit” will enable organizations to deploy resources effectively and manage information flow smoothly.

   3. Immigrant Cultural Diversity Management as a Catalyst for Organisation-Level Innovation

      Dovile Jankauskaite

      Abstract

      A growing body of empirical research is uncovering the correlation between diversity and regional economic performance. Cultural diversity is accepted both as an economic asset, as well as a social benefit. Studies have demonstrated a positive economic impact of cultural diversity on productivity and innovation, but only a few organization-level studies have been conducted. The scientific literature discusses various benefits of cultural diversity to organisations, e.g., establishing the encouraging environment of “outside the box” thinking. Diverse management is more likely to introduce product innovations; moreover, diversity is particularly important for reaching international markets and serving the cosmopolitan population. Diversity encompasses race, gender, age, culture, education, personality, skills and life experiences. When managed effectively, cultural diversity offers the flexibility and creativity that is needed for enhanced innovation. The aim is to investigate how to handle immigrant cultural diversity to improve innovativeness in an organisation. Firstly, immigrant cultural diversity management and relation to innovation are discussed; secondly, the immigrant cultural diversity management model is presented.

   4. The Effects of Human Resources’ Qualification Improvement on Their Efficiency in the Public and Private Sectors

      Edmundas Jasinskas, Biruta Svagzdiene, Arturas Simanavicius

      Abstract

      In a varying and regularly learning environment the opinion has been formed, human resources of organization is the main factor ensuring the efficiency of organization activity. With a changing environment the qualification of human resources has to be properly improved both in private and public sectors. The main scientific problem is, that the methods for qualification improvement of human resources have to be applied adequately in accordance with activity features of different sectors. The research revealed, that qualification improvement methods in both sectors were different. Usually applied qualification improvement methods in the public sector were the following: self-training, seminars and trainings organized by the training agencies, dual strategy of refresher training was applied, and in the private sector the following methods were the most popular: training of internal employees, internship in other organizations, international trainings as well as mentoring and the most applied intensive qualification improvement strategy of human resources; this differently influenced the efficiency of their activities.

   5. Turnover Tendencies Among Workers

      Marek Botek

      Abstract

      The literature often studies turnover and the reasons underlying it. This is logical as high turnover not only increases costs, but also means that employees represent a threat to the original company if they go to competitors. The most frequent reason for high turnover is perhaps dissatisfaction with work, but the influence of other factors has also been studied. In spite of the breadth of research, the results are very often ambiguous. This article is focused on turnover tendencies in two plants operated by a ceramic company in the Czech Republic. Among the sample of workers, the study examined the impact of expectations of work, training pursued and age. Dependence was confirmed only between work expectations and turnover tendencies in one of the two plants. Statistically, it is only possible to confirm/reject those aspects that are currently relevant. However, it is possible that turnover tendencies are influenced by more factors with a cumulative impact. Managers and HR managers should therefore pay attention to all potential aspects of risk.

   6. Do Problems in Project Teams Explain the Influence of Family Involvement on Project Management Activities? A Family-Firm Perspective

      Joanna Sadkowska

      Abstract

      In the extant literature, there have been calls for researchers to deeply study the reasons why many projects still fail regardless of employment of reliable project management tools and techniques. Despite the numerous studies dedicated to the role of a project team in the overall success of a project, a relatively small number of papers have been dedicated to exploring the study area of the relationship between project teams and family involvement. The primary objective of this paper is to investigate whether the problems in project teams explain the influence of family involvement on project management activities, as based on the researched enterprises. Using binary logistic regression, Polish family businesses were surveyed. The results of the study indicate that the problems within the work of project teams are a significant factor in modelling the chance that companies will manage projects. This relationship might be additionally intensified by family involvement.

   7. Disclosure of Non-financial Information: The Case of Croatian Listed Companies

      Danimir Gulin, Mirjana Hladika, Marina Mićin

      Abstract

      Financial reporting is standardized, mandatory and regulated by numerous regulations, and financial statements in the prescribed form must be published by all companies. Reporting on non-financial information has not yet been harmonized. It is still voluntary in a large extent and it depends on the willingness of management. The interests of different users of financial statements about non-financial information of companies are increasing. For the purpose of making investment and other business decisions, investors require more information about the company, employees, relations and environmental sustainability and responsible sourcing. These requirements of investors are forcing managers to publish additional non-financial information about the company. The annual report is the most important source for the publication of non-financial information. The consistency and transparency in disclosure of non-financial information in the annual report strengthens the confidence of investors in the company. The level of non-financial information disclosed in the annual report is examined on a sample of the most liquid non-financial companies at the Zagreb Stock Exchange. The analysis includes the annual reports for 3 years (2013, 2014 and 2015) in order to compare the policy of publication of non-financial information over 3 years and to determine the non-financial information (NFI) disclosure index. The study results showed an unsatisfactory level of published non-financial information of companies which are listed on the Zagreb Stock Exchange, but the policy of publication of non-financial information indicates enhancing in the transparency of the disclosure of non-financial information during the last 3 years.

4. Financial Economics

   1. Frontmatter

   2. New Financial Reality as Evolution Result of World Financial System

      Liudmila Guzikova, Igor N. Lioukevich

      Abstract

      In recent period the number of studies on the phenomenon called “new economic reality” is sufficiently large. However, the literature does not usually tend to differentiate economic and financial aspects of this phenomenon. Objective of the current study is to identify changes and trends in the world and national financial systems determining the new economic reality and caused by it. As the methods of research analytical and synthetic aspects of the system approach were used. Tendencies of changes in the basic element of financial system—money as the medium of financial-relations, were identified. The paper deals with the role of information technology in the formation of the identified trends. Conclusions about supranational money and suitability of cryptocurrency as the money of new financial reality were made.

   3. Does Longer Cash Gap Require Greater External Financing?

      Hrvoje Perčević, Mirjana Hladika, Marina Mićin

      Abstract

      Components which significantly affect the level of working capital are inventories, accounts receivables and accounts payables. Company must tend to keep inventories at an optimal level and collect receivables as soon as possible since it is important that cash is not tied up in inventories or in receivables. Cash gap represents the difference in days between the days of paying for purchases and days of collecting cash form receivables. Considering that in these days company is without cash, the cash gap must be financed. As higher the cash gap is, more funds are needed. When company is financed from other sources, there is the cost of financing, that is, interest cost. As higher the cash gap is, interest is higher. The starting point of this research is that the relation between the cash gap and the company’s indebtedness is positive, in other words, the higher the cash gap is, liabilities are higher, such as interest cost. The research is conducted on the large entities in the Republic of Croatia for the period from the year 2010 to the year 2015. Cash gap was put in relation with debt indicators such as: financial expense which is interest cost and debt ratio which shows how big part of the company’s asset is financed from external sources. Results showed that although there is weak positive correlation between the cash gap and interest cost, as well as between the cash gap and debt ratio, those correlations are not significant.

   4. Crowdfunding as a Model and Financing Instrument in Social Enterprises

      Ubaldo Comite

      Abstract

      Access to credit and financial inclusion are decisive instruments in promoting the economic development and social cohesion of a community and territory. Helping social enterprises grow and compete is an essential priority for all economies, as they carry out fundamental and necessary functions. Consequently, the search for new methods of financing must become a challenge to pursue and overcome. One of the main problems that social enterprises face is access to credit. In fact, access models to traditional financing instruments fail to comprehend the peculiarity of this type of nonprofit entrepreneurship. To this, the so-called “credit crunch” is added, that is, the restriction of credit offers that affected all enterprises indiscriminately, further aggravating the circumstances of social enterprises. To deal with this situation, a new model, easily applied by social enterprises, is crowdfunding. It is one of the swifter, more social and transparent solutions to gain capital, in stark contrast to the bureaucratic approaches by banks and credit institutions. This paper highlights how the crowdfunding model has become an instrument with a notable impact in terms of fundraising and low implementation costs.

   5. The Perspective of the Green Bonds as Novel Debt Instruments in Sustainable Economy

      Aura Draksaite, Vilma Kazlauskiene, Leonid Melnyk

      Abstract

      Being relatively new, even definition of green bonds is under scrutiny. As the market of green bonds is rapidly growing (with the small recent setback in growing rates), it is crucial to establish the main determinants of the green bonds market growth and evaluate the perspectives of green bonds in sustainable economy. The main objectives of the research are the following: to evaluate the need for the green bonds as instruments, fostering the sustainability of economy; to identify the determinants of both green bonds related and green investment; to analyze the green bond yields and prices in comparison to non-green bonds; to estimate the perspective volatility of the green bonds price. Green bonds characteristics were compared against characteristics of the non-green bonds. Covariation and regression based analysis was used for the identification of green investment determinants. Variance was estimated in the assessment of bond price volatility. The results showed that price of both green bonds and non-green bonds has tendency to fluctuate in the similar trend; green bond appeal determinants are in coherence with the determinants of green investment; green bonds tend to be less volatile than non-green bonds. It is concluded that the use of green bonds has significant potential to add to the sustainability of the economy.

   6. Comparison of Borrower Default Factors in Online Lending

      Ginta Railiene

      Abstract

      The factors describing the P2P borrower late payments and defaults are analyzed in the paper. Credit scoring and credit rating techniques are developed and used by finance institutions, but the features of online lending encourages to apply new practices in order to develop the decision support patterns for online lenders that are not professional investors. P2P platforms use credit scoring usually based on third party calculations, but they may be improved using wider soft information sources. The credit risk valuation of online borrowers is relatively new research area, where hard and soft information is used and assessed with different statistical methods, including the big data analysis. The paper aims to define the factors of online borrower late payments by systemizing the recent research findings and comparing them with results got from Lithuanian P2P platform data. The groups of factors researched are borrower and loan characteristics, borrower assessment and creditworthiness. The main findings allow to form specific propositions for lender decision support pattern suggesting the factors explaining the default: lower credit ratings and higher interest rates; greater loan amount and loan purpose for business, consolidation, home improvement and other; borrower indebtedness, employment length, age.

   7. Pricing of the License Agreements: Improvement of the Methodology on the Basis of the Game Approach

      Dmitriy G. Rodionov, Iuliia V. Boiko, Olga S. Nadezhina

      Abstract

      Dealing with practical issues concerning pricing is a topical problem of innovation commercialization and is related to controversial approaches of experts to evaluation of profits or losses when using intellectual property items and establishing “fair” amounts of payoffs under license agreements. Based on this approach, the authors created the methodology of pricing of the license agreements. In the result, authors can conclude that the game approach is developed and reviewed statistical methods and made possible to take in touch factors which are not represented explicitly, such as the preferences of constituent entities of the transaction. Obtaining a coherent assessment under conditions of incomplete and insufficiently accurate information makes it possible to justify the formation of a value chain in the process of commercialization of innovation and to assess the effectiveness of the strategy.

5. Industrial and Public Policy

   1. Frontmatter

   2. The Impact of Global Economic Crisis on the Functioning of Special Economic Zones in Poland

      Katarzyna Przybyła, Alina Kulczyk-Dynowska

      Abstract

      The article attempts to determine the impact exerted by the global economic crisis on the efficiency of selected Special Economic Zones (SEZ) functioning in Poland. The research covered four SEZ functioning in Polish northern and north-southern macro-regions (NTS 1). The article analyses changes in such dimensions as e.g. the number of valid permits to perform economic activities in the discussed zones, investment expenditure incurred by entrepreneurs or employment size. The study covered the period 2005–2015. The conducted research allowed concluding that the phenomena related to global downturn, even though somewhat delayed, were present in the aforementioned zones. More serious symptoms could have been observed in 2008, whereas the years 2009–2012 turned out to be the critical ones. As it seems, starting from 2013 certain symptoms of the situation improvement could be observed, predominantly within the scope of investment expenditure incurred by businesses.

   3. Analysis of Spillover Effects of Crisis in Conflict-Ridden Regions on Top Tourism Destinations

      Elimdar Bayramov, Harun Ercan

      Abstract

      Different studies on tourism showed that negative cases in the region have a significant negative impact on the tourism industry of that region. Consequently, it may also have positive or negative spillover effects on other regions and tourist destinations. The consequences of the Arab Spring uprising started at the end of 2010 had a negative impact on the tourism industry in the Middle East following the shocks of 2008 financial crisis. The aim of this article is to analyze the spillover effects of the crisis in conflict-ridden areas on top tourist destinations and provide a descriptive analysis of the tourism indicators over the period from 2005 to 2015. The data of main tourism indicator of the world’s top tourist destinations was used to present the annual percentage growth rates for illustrating the effects spillover from the period of conflicts. The results show that there is similar growth rate pattern of top tourist destinations and linear trend after the conflicts started. We also used the cluster analysis to illustrate if the spillover effect patterns depend on the distance from the conflict-ridden regions.

   4. Public Supervision of Public Procurement Market: A Contribution to Debate

      Wojciech Szydło

      Abstract

      In the EU and in individual Member States some deficiencies in the functioning of the public procurement market may hinder or, in some cases, even prevent the achievement of basic objectives of the legal regime of public procurement. Such deficiencies can be eliminated successfully or, at the very least, mitigated through establishment of a public (administrative) supervision over the public procurement market. The purpose of this article is, first of all, to determine the need for a public (administrative) supervision over the public procurement market in UE. Also, upon prior verification of this need, to propose some essential elements of the legal structure of such public supervision over the public procurement market in the UE. An analysis of various elements of the said structure will be made from two points of view: the actual and/or anticipated impact of these elements on the public procurement market; and the relation of those elements to the basic national constitutional legal principles relating to the organisation of public authorities and to the relationship between public authorities and individuals.

   5. Activation of Business and Society for Regional Benchmarking

      Monika Fabińska

      Abstract

      Success in the implementation of the objectives of the Europe 2020 strategy requires the involvement of all stakeholders, the authorities, business, science, and society. Regrettably, the level of commitment on the part of business and society—especially in the countries of Central and Eastern Europe—to the implementation of these objectives is at a relatively low level and requires the formulation of proposals for actions aimed at their activation at the stage of formulation of strategic objectives, their implementation and the achievement of the effects of the adopted objectives. The process of the formulation of the Regional Innovation Strategies for Smart Specialization (RIS3) for 2014–2020 has been completed. And, as is apparent from the analysis of RIS3 documents and supporting documents for the Polish regions, the strategies are the result of cooperation among key stakeholders of the regional scene. However, as shown by the indicators, e.g.: the level of participation in public consultations (low frequency), and observations of participation in research and expert groups (high frequency of refusal to participate in research), this cooperation was of a rather passive and incidental nature (especially on the part of business and society). Given that for the next few years the regions will implement, monitor and modify the objectives of RIS3, there is a need to undertake actions in order to activate these social groups and develop mechanisms to support the continuity and regularity of cooperation.

   6. The Development of the Creative Industries Sector of Computer Games in Poland

      Magdalena Ratalewska

      Abstract

      Creative industries in Poland and around the world are among the most promising sectors of the economy that also affect the development of traditional industries. This stems from a high level of innovativeness of companies belonging to the creative industries sector and their high flexibility to adapt to the expectations of their customers. Foreign as well as Polish examples indicate that companies that are part of creative industries can very quickly become global companies, reaffirming that intellect, talent and creativity can be a key factor for the company’s success in the global market. The paper aims to (i) present what the creative sector is (ii) show how to develop the sector of computer games in Poland and in the whole world; (iii) present the case study of the company that has achieved spectacular success in the computer games market. The company is CD Projekt, the manufacturer of “The Witcher” which sold 600,000 copies worldwide in the first 3 months after its 2007 début.

   7. Prioritizing Youth in the National Policy Agendas: The Role of the Youth Guarantee in Three European Countries

      Sofia Boutsiouki

      Abstract

      In recent years the European Union (EU), recognizing the importance of young people for economic development and social cohesion, has placed pro-youth policies in its top-priority agenda. The Youth Guarantee constitutes one of the emblematic European initiatives. The paper focuses on the national Youth Guarantee plans of three European countries, Greece, Ireland and Spain. First, it makes a short reference to the institutional framework, which is being created by the EU as a means of establishing better prospects for young people, and describes the socioeconomic environment of the three countries. Then, the paper makes a comparative analysis of their Youth Guarantee plans in order to designate their particular characteristics. Also, it examines the funding options for the projects in each country and attempts to evaluate their potential. In addition, the paper comments on the role of stakeholders in the initiative’s implementation in an effort to underline their importance and to highlight the differences and the limitations regarding their contribution. Finally, the paper attempts an evaluation of the Youth Guarantee schemes of the three countries, in an effort either to indicate deficiencies or to emphasize good practices, which in the long-term would serve as useful experiences for other member states.

   8. Total Factor Productivity in Turkey: A Comparative Analysis

      Murat Şeker

      Abstract

      Total factor productivity (TFP) is the most commonly used measure of firm performance and a valuable tool for policy making. Although cross-country TFP analyses have been performed by many researchers, lack of homogeneous data sources obstructed conducting conclusive analyses with micro-level datasets. This study compares average TFP performances of Turkish firms and aggregate TFP in Turkey with firms in a group of selected countries using data collected by the World Bank. Data was collected through firm-level surveys that follow a standard methodology. Cross-country comparison of TFP performances shows that there are significant differences between average and aggregate TFP across countries. While aggregate TFP in Turkey ranks high among the peers, the rank of Turkey’s average TFP is lower. Also, relative to the peer group, productivity distribution is more dispersed in Turkey and large firms are more productive than small firms. This finding is consistent across various methodologies implemented to measure TFP. Despite low average productivity in Turkey, there are some industries such as Textile, Chemicals, Basic Metals and Machinery where Turkish firms rank among the top.