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International conference

LEMIMA

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Faculty of Business Studies and LawBelgrade, Serbia

Vol. 6, No. 17, 2016.

Faculty of Business Studies and Law UNIVERSITY „UNION-NIKOLA TESLA” OF BELGRADE

INTERNATIONAL JOURNAL OF ECONOMICS AND LAW

Volume 6, No. 17August 2016.

Belgrade, Serbia

International Journal of Economics and Law, Vol. 6, No. 17 (2016)2

INTERNATIONAL JOURNAL OF ECONOMICS AND LAW

ISSN:2217-5504

Scientific magazine reflecting trends in law, economics and management

Published by:Faculty of Business Studies and Law

Printed:3 times a year

Editor-in-chief:Zivota Radosavljevic

Secretariat:Vladana Lilic

International editing committee:

1. Prof. dr Milan Radosavljevic, Faculty of Business Studies and Law, University UNION - Nikola Tesla, Belgrade, Republic of Serbia

2. Prof. dr Maja Andjelkovic, Faculty for Strategic and Operational Management, University UNION - Nikola Tesla, Belgrade, Republic of Serbia

3. Prof. dr Yuri Doroshenko, Belgorod State Techinological University, named after V.G. Shukov, Belgorod, Russian Federation

4. Prof. dr Sergey Kupriyanov, Belgorod State Techinological University, named after V.G. Shukov, Belgorod, Russian Federation

5. Prof. dr Alexios Panagopoulos, National College, Patras, Greece6. Prof. dr Volodymyr Denysyuk, Dobrov Center for Scientific and Technologogical Potential

and History studies at the National Academy of Sciences of Ukraine, Kiyev, Ukraine7. Prof. dr Viacheslav Soloviov, Dobrov Center for Scientific and Technologogical Potential and

History studies at the National Academy of Sciences of Ukraine, Kiyev, Ukraine8. Prof. dr Karl Schopf, Akademie für Wissenschaft liche Forschung und Studium, Wien,

Austria 9. Prof. dr Natallia Kireуenka, Institute of system research in the agroindustrial complex of the

National Science Academy of the Republic of Belarus, Minsk, Belarus10. Prof. dr Tatyana Sobolieva, State Higher Education Establishment Vadiym Getman Kiyev

National Economic University, Kiyev, Ukraine11. Prof. dr Svetlana Tereshcenko, Faculty for Economy and Management, Saint Petrsburg State

Forest Technical University, Saint Petersburg, Russian Federation12. Prof. dr Nedeljka Rosic, Global Change Institute, The University of Queensland, Brisbane,

Australia

International Journal of Economics and Law, Vol. 6, No. 17 (2016)3

13. Prof. dr Rok Strasek, Faculty of Management, Primorska University, Koper, Slovenia14. Prof. dr Atanas Kozarev, Faculty of detectives and criminology, European University, Skopje,

Republic of Macedonia15. Prof. dr Aleksandr Tufanov, Saint Petersburg State Agrarian University, Saint Petrsburg,

Russian Federation16. Prof. dr Jasmina Starc, Faculty of Business and Management Sciences, Higher Education

Centre Novo Mesto, Novo Mesto, Slovenia17. Prof. dr Karmen Erjavec, Faculty of Business and Management Sciences, Higher Education

Centre Novo Mesto, Novo Mesto, Slovenia18. Prof. dr Anna Charina, Academy of State Service and Administration of Komi Republic,

Syktyvkar, Russian Federation19. Prof. dr Iztok Podberger, Faculty of Organizational Studies, University of Maribor, Maribor,

Slovenia20. Prof. dr Teodora Ivanusa, Faculty of Logistics, University of Maribor, Maribor, Slovenia21. Prof. dr Dejan Mihajlovic, Universidad Tecnologico do Monterrey, Monterrey, Nuevo Leon,

Mexico22. Prof. dr Goran Sucic, Faculty of Humanities and Social Sciences, University ff Split, Split,

Croatia23. Prof. dr Nedzad Korajlic, Faculty of Criminology and Security Studies, University in

Sarajevo, Sarajevo, Bosnia and Herzegovina

Editorial board:

1. Prof. emeritus dr Zivota Radosavljevic, Faculty of business studies and law, University UNION-Nikola Tesla, Belgrade, Republic of Serbia

2. Prof. dr Bozidar Forca, Faculty of Business Studies and Law, University UNION - Nikola Tesla, Belgrade, Republic of Serbia

3. Prof. dr Dragana Radosavljevic, Faculty of Business Studies and Law, University UNION - Nikola Tesla, Belgrade, Republic of Serbia

4. Prof. dr Edita Kastratovic, Faculty of Business Economics and Entrepreneurship, Belgrade, Republic of Serbia

5. Prof. dr Olja Arsenijevic, Faculty of business studies and law, University UNION -Nikola Tesla, Belgrade, Republic of Serbia

6. Prof. dr Milan Milosevic, Faculty of Business Studies and Law, University UNION -Nikola Tesla, Belgrade, Republic of Serbia

7. Prof. dr Branko Tesanovic, Faculty of Business Studies and Law, University UNION -Nikola Tesla, Belgrade, Republic of Serbia

8. Prof dr. Zeljko Simic, Faculty of Business Studies and Law, University UNION - Nikola Tesla, Belgrade, Republic of Serbia

9. Prof. dr Dragan Trivan, Faculty of Business Studies and Law, University UNION -Nikola Tesla, Belgrade, Republic of Serbia

10. Prof. dr Dragan Golijan, Faculty of Business Studies and Law, University UNION -Nikola Tesla, Belgrade, Republic of Serbia

International Journal of Economics and Law, Vol. 6, No. 17 (2016)4

11. Prof. dr Nevena Krasulja, Faculty of Business Studies and Law, University UNION -Nikola Tesla, Belgrade, Republic of Serbia

12. Prof. dr Milijanka Ratkovic, Faculty of Business Studies and Law, University UNION - Nikola Tesla, Belgrade, Republic of Serbia

13. Prof. dr Vilmos Tot, Faculty of business economics, University Educons, Sremska Kamenica, Serbia

14. Prof. dr Srdjan Nikezic, Modern Business School, Belgrade, Republic of Serbia15. Prof. dr Ljiljana Bulatovic, Faculty of Media and Communications, Singidunum University,

Belgrade, Republic of Serbia16. Doc. dr Zoran Kalicanin, Faculty of Business Studies and Law, University UNION - Nikola

Tesla, Belgrade, Republic of Serbia17. Doc. dr Milijana Danevska, Faculty of Business Studies and Law, University UNION - Nikola

Tesla, Belgrade, Republic of Serbia18. Doc. dr Edit Der Seregelj, Faculty of Business Studies and Law, University UNION - Nikola

Tesla, Belgrade, Republic of Serbia19. Doc. dr Violeta Babic, Faculty of Business Studies and Law, University UNION - Nikola

Tesla, Belgrade, Republic of Serbia20. Doc. dr Aleksandra Gajdobranski, Faculty of Business Studies and Law, University UNION -

Nikola Tesla, Belgrade, Republic of Serbia21. Doc. Dr Maja Dimic, Faculty for Strategic and Operational Management, University UNION

- Nikola Tesla, Belgrade, Republic of Serbia

Technical editor:Zoran Bojanic

Front page design:

Ivan AvdagicMilan Jakovljevic

Printed by:

Beopress, Beograd

Copies:200

Editorial office and administration:Faculty of Business Studies and Law in Belgrade11070 Belgrade, Sajmiste 29, SerbiaTel: +381 (11) 31-31-246

Fax: +381 (11) 21-32-372Website: www.economicsandlaw.orgE-mail: [email protected]

International Journal of Economics and Law, Vol. 6, No. 17 (2016)5

FOREWORD

Dear readers,

In front of you is the fifth issue of International journal of economics and law, published by the Faculty of Business Studies and Law (FPSP), Belgrade. The idea for starting “Inter-national journal of economics and law”, is an effort of the Faculty to enable the placement of their scientific works and its critical reviews, theoretical discussions and research to stu-dents, colleagues, teachers, other professionals from home and abroad, as well as acquisition and expansion of knowledge in economics, law, management, and so on.

Gratitude for publishing this scientific journal belongs to all of you who participated in the work of our international conferences, ANTiM and LEMiMA, to all of you who have created the basis for further expansion of our cooperation to promote these disciplines with yours scientific contributions. The structure of the papers in this journal comprises three dominant scientific disciplines in the social humanistic field that unify the faculty including economics, law and management, but the sciences that have a dominant influence on the global, national, and corporate performance. Integrating these sciences in one place and with the participation of domestic and foreign experts, conditions for exchange of scientific information and experience are created, and thus the achievement of defined objectives of every reasonable organizing.

We can achieve that only by common effort of all of us. By starting this scientific journal, we have shown our readiness, responsibility, and

resources for stimulating scientific research and publishing work, and along with other to improve legal, economic, and management thought, i.e. theory and practice. The challenge is certainly greater bearing in mind the times we live in, and followed by a high turbulence in the natural order (earthquakes, tsunamis, volcanoes, etc.), and so in the social order as well as internal conflicts that shook certain countries, through the technological boom, and moral problems in different spheres of life and work.

Due to this complexity, which will in future be more complex and uncertain, it is nec-essary to put science in the foreground, as new production work force. Scientific journals are one of the most efficient sources of acquiring knowledge, especially in terms of their electronization and possibility of rapid scientific information transfer provided in their fa-cilities. Therefore, the idea is that contents of this journal are modern and actual, but also to be available to all who are interested in economics, law, management, entrepreneurship, and so on. International editorial board invites esteemed scholars, admirers of science and scien-tific thought, i.e. profession to enrich the quality of journal and thus contribute to improving these disciplines, but also business i.e. legal and management practices.

Welcome to “International journal of economics and law”. Good luck!

Editor in chief Prof. emeritus dr Zivota Radosavljevic

International Journal of Economics and Law, Vol. 6, No. 17 (2016)6

International Journal of Economics and Law, Vol. 6, No. 17 (2016)7

CONTENT

FOREWORD 5

THE TEST OF TOLERANCE TO CHANGES IN CULTURAL CENTRE OF NOVI SAD 9Olja Arsenijevic, Maja Dimic, Milan Radosavljevic

CARDIOVASCULAR AND PROFESSIONAL DISEASES IN WORKERS IN WOOD INDUSTRY 21Radojka Golijan

INTRA-ORGANIZATIONAL KNOWLEDGE TRANSFER PROCESSES 33Ivana Grujovska

CREATING CREATIVE CLIMATE FOR CHANGE MANAGEMENT IN THE KNOWLEDGE AGE 49Marjan Marjanovic, Nevena Krasulja, Nikolaj Ivannikov

MANAGEMENT IN EDUCATION AS A FUNCTION OF SOCIO-ECONOMIC DEVELOPMENT REPUBLIC OF SERBIA 65Dragan Mitrovic

STRATEGIC ASPECT OF COMBATING BIOTERRORISM 81Muris Mujanovic

GREEK DEBT IN POLITICAL SITUATION IN THE NEW AGE OF EU AND INSTITUTIONAL LOAN SHARKS 91Alexios Panagopoulos, Vasileios Anyfantis

ENTREPRENEURSHIP EDUCATION - FACTOR OF HUMAN RESOURCES DEVELOPMENT IN SERBIA 97Svetislav Paunovic, Maja Dimic

THE ROLE OF INNOVATIVE APPROACH IN SMALL AND MEDIUM ENTERPRISES 107Miodrag Pavlovic, Drago Orcic

UNDERSTANDING OF THE CONCEPT OF LOCAL ECONOMIC DEVELOPMENT 121Ljupka Petrevska, Marija Bulatovic, Ivana Petrevska

International Journal of Economics and Law, Vol. 6, No. 17 (2016)8

SPIRITUAL INTELLIGENCE AS A FACTOR FOR DEVELOPMENT OF PERSONALITY 129Goran Sucic, Dragana Radosavljevic, Polona Sprajc

INSTRUCTIONS FOR AUTHORS 137

UDC 316.647.5:070.3(497.11)

THE TEST OF TOLERANCE TO CHANGES IN CULTURAL CENTRE OF NOVI SAD

Olja Arsenijevic1, Maja Dimic2, Milan Radosavljevic3

1Faculty of Business Studies and Law, University “Union-Nikola Tesla”, Belgrade, SERBIA, e-mail: [email protected]

2Faculty for Strategic and Operational Management, University “Union-Nikola Tesla”, Belgrade, SERBIA, e-mail: [email protected]

3Faculty of Business Studies and Law, University “Union-Nikola Tesla”, Belgrade, SERBIA, e-mail: [email protected]

Abstract: Identification and interpretation of the nature and range of changes around us is equally important as an attempt to define the changes that occur in the man. Moreover, these changes are reciprocal and complementary, they require thoughtful and analytical review, and an attempt of inter-pretation of human potential, desire and resistance to respond to external changes its internal change.While all changes do not mean improvement, all improvements include changes. The purpose of this paper is based on longitudinal research conducted in 2014, 2015 and 2016, to determine and display the degree of tolerance towards changes in the cultural center of Novi Sad. Based on these results, it is necessary to point out the basic problems related to management changes at the Cultural Center of Novi Sad that managemant needs to resolve, and to explain the reasons why employees resist change, and the ways through which we can understand and reduce the resistance.

Keywords: change, tolerance, management, cultural center Novi Sad.

1. INTRODUCTION

Culture is one of the modes of human existence, i.e. a way of life. In the broader sense of the word culture consists of all the positive values that are the result of man’s purpose-ful activity. Global social and technological changes bring about fundamental and lasting change in people. [1]

The objectives and tasks of cultural and artistic management are:1. building of the systems (models) of cultural life, which start from a specific cultural policy;2. planning the development of culture, which includes the determination of objec-

Olja Arsenijevic, Maja Dimic, Milan Radosavljevic10

tives, priorities and methods of carrying out the proposed cultural policy, as well as research of the existing cultural situation as a basis for developing planning models;3. construction of branch systems in cultural activities (establishment of relations be-tween individual institutions in order to achieve optimal results);4. creating models of individual institutions of culture, management and organization of work in them – management of institutions (film production houses, theaters, cul-tural centers);5. organization of production processes (project management) of a certain work of art within cultural institutions or independently;6. organizing of processes of distribution (diffusion) of culture;7. product management;8. on the general level: the establishment of forms and models of international cultural cooperation.

These eight tasks of management in culture and art imply different levels of training and competence of managers. [1]

The activity of managers in culture is to create conditions for cultural creativity and production of cultural goods (ideas and values), for their transformation into art forms that are available to cultural community. [1]

Research and knowledge of cultural needs is one of the main tasks of culture manage-ment, primarily to be able to plan cultural activities and programs (meet the cultural needs), but also in order to plan cultural development (to encourage the development of new cul-tural needs and expand the circle of people who will be encouraged by cultural aspirations).

Under the cultural needs we understand, first of all, the needs through which man real-izes himself as a being, different from all the others (the majority of physiological needs), as well as a unique personality in his social and cultural environment. These are the purposes by which man develops his personality so that he works actively, produces, creates new ma-terial and spiritual values, enjoys in the existing ones, communicates ...

Every company, i.e. every organization that wants continuous success must continually modify, or adapt the organization, according to the requirements of the environment, and according to other factors of the organization.

However, and in addition to the changes that are necessary in any organization needed, in fact imperative, a certain level of system stability is also necessary, because only under these conditions the company can ensure its survival and development.

Changes create new situations which create uncertainty in people. Even when people are explained the consequences of the changes, they express a fear of change: the fear of the new, the unknown, fear of failure, trying, risk, fear that it will turn out stupid, fear of dis-approval. Fear is the basis of man’s learned behavior formed in the family, school, and his whole mindset works by outside approval of the desirable and punishment of undesirable behavior.

Since changes in the organization are necessary and much needed, as the agents of change there are managers, who must have the ability to assess the need for change. When managers notice an objective need for change, already a part of the problem is solved, be-cause the problem identification and definition of the need to change is the first and most important step in making the change.

THE TEST OF TOLERANCE TO CHANGES IN CULTURAL CENTRE OF NOVI SAD11

In the broadest sense, the change means moving from one (current) situation into a new state (whether it be individuals, organizations or society itself).

Change is the most important event in a system, performance of the change is valorized in the new situation, and whether it will be reached depends on several influencing factors: environment, management, knowledge, willingness to change, resistance to change, entre-preneurial spirit, motivation, risks ... [2]

This process is neither quick nor easy, nor simple; it requires a decision, time, initiative to implement changes, time for the new solution to start to operate, to be maintained and to lead to a new quality. The functioning of the new solution is only a transitional phase towards further changes.

Can a XXI century man be trained for changes in which there is more uncertainty than security, more instability than stability? Is it possible to suppress the reflex reaction through which man often expresses resistance towards changes in the structure where they have long been supposed to happen and which are necessary for his ability to live in the new conditions?

J. Cotter has recorded eight most common mistakes by management in companies when introducing changes. His findings are fascinating for the experts who are seriously engaged in the management, so we pay special attention to these errors:

„1. excessive indulgence in satisfaction,2. propusti koalicije, failures of the coallition,3. underestimating the power of vision,4. shortfall of communications of vision at the level of a factor of 10 (or 100 or even

1000),5. allowing obstacles to block the new vision,6. failures in achieving short-term success,7. premature declaration of victory,8. changes that are not firmly embedded in the company culture „[3]

It is this obvious demand for change, as well as the presence of the above errors, that gives rise to the need for the formation of the ruling coalition powerful enough to investigate tolerance to change among employees. In the Cultural Center of Novi Sad it is evident that for many years everything seems settled, unchanged. Although each system in order to op-erate successfully must express a certain stability, that certainly does not mean that the sys-tem should not be changed, improved. The system must have a sufficient level of flexibility and adaptability to the requirements of the environment. Lately we have witnessed various changes in the environment which should result in a change in the program and the work of cultural institutions, and hence in the Cultural Center of Novi Sad too.

Cultural Center of Novi Sad, aware of the above situation, and bearing in mind the complete picture about the current situation in the European and especially national cin-ema, came to the conclusion about the necessity of modernization of cinema halls, and made a decision on joining the project Premiere - Europe cinemas.

Within this project, all cinema halls included in the project in Serbia should form a chain of digitized cinemas with the latest equipment for the projection of images and sound.

Cultural Center of Novi Sad is the only one in this part of Europe and one of the first in the world which then began to implement this project. With regard that the question of

Olja Arsenijevic, Maja Dimic, Milan Radosavljevic12

interest is pure film, non-political entity, it is logical to expect that this will soon be joined by many cinemas from our closest environment, of which there were indications. The inten-tion was to make in the very start such a program and organizational, technological and economic model which provides a high responsibility for the overall business and program-matic autonomy for all entities in the chain, while at the same time respecting sufficiently high-interest joint cohesion factors that are important to all network members and the wider community.

We stated that the Cultural Center of Novi Sad identified the need for change and de-cided to join the project Premiere - Europe cinemas. But after five years it all remained only in plans.

This research should reveal the degree of tolerance to changes in the organization on the basis of which we need to identify the reasons why the project has not been implemented, and, on the basis of the obtained information, it is necessary to take action to overcome the current unfavorable situation.

2. RESEARCH

2.1. ID of the Cultural centre of Novi Sad

Data on the Cultural Center of Novi Sad are taken from the official website of the Cul-tural Center of Novi Sad; www.kcns.org.

“Cultural Center of Novi Sad was formed in 1985 by merging the Cultural Center of young Sonja Marinkovic and the Center for Culture at the Workers’ University Radivoj Ćirpanov. The founder of the Cultural Center was the City Assembly of Novi Sad. “

“With its variety of programs: oral, social forums, theater, music, visual art, film, pub-lishing – Journal Polja, a large number of festivals - INFANT, NOVI SAD JAZZ FESTIVAL, EUROFILM NS, production of plays and musical-stage projects, coordination of important cultural events of provincial, state and national importance ... With its volume and quality, Cultural center stands out from other cultural institutions in our region.

2.1.1. Human resources structure

There are 25 employees in the Cultural Center of Novi Sad. The work of the Cultural Center is organized in seven editorial boards including: liter-

ary forums, community forums, a music program, publishing, theater program, art pro-gram and film program. At the head of each redaction is an editor, and next to him there are also one or two of the organizers.

According to the gender structure there are 13 female and 12 male employees.Sector EmployeesDirector 1Assist. Director: for marketing 1Assist Director: for organization 1Editor of the editorial board 8

THE TEST OF TOLERANCE TO CHANGES IN CULTURAL CENTRE OF NOVI SAD13

Program organizers 9Accounting: head and two assist. 3Superintendent 1Janitor 1Total employees 25

Table 1. Structure of employees according to functions

The distribution of employees by level of education is in Table 2, and according to the position in Table 3.

Degree of education No of employees College graduates 13VI degree 1High school education 9VKV, KV 2Total 25

Table 2. Structure of qualificatons

Degree of leadership No of employeesManager 12Worker 13Total 25

Table 3. Structure of leadership

3. SUBJECT AND OBJECTIVE OF THE RESEARCH

3.1. Subject of the research:

• research and identification of tolerance towards changes at the Cultural Center of Novi Sad

3.2. Objectives of research:

• determine whether the established tolerance to changes in the Cultural Centre of Novi Sad provides the possibility of introducing changes in the Cultural Center of Novi Sad

• on the basis of the results obtained suggest the measures for eliminating obstacles to the introduction of changes, i.e. realization of the project Premiere - Europe cinemas.

Olja Arsenijevic, Maja Dimic, Milan Radosavljevic14

4. RESEARCH TASKS

• determine the degree of tolerance to changes in the cultural center of Novi Sad, ac-cording to the years of research,

• determine whether there is a statistically significant difference in the level of toler-ance for changes between the subgroup of managers and subgroup of workers,

• determine a tendency towards the level of tolerance regarding changes in the exam-ined period,

• determine whether the established tolerance to changes in the Cultural Centre of Novi Sad allows the possibility of introducing changes in the Cultural Center of Novi Sad.

5. RESEARCH HYPOTHESES

Based on the objectives and tasks of the research we have formulated the following hypotheses:

H 0 - Tolerance to changes at the Cultural Center of Novi Sad is low.H 1- There is a statistically significant difference in the degree of tolerance between the

subgroup of managers and subgroup of workers.

6. METHODOLOGY

6.1. Research methods and instruments for data collection

The method we used was a longitudinal study in the field by filling out questionnaires prepared in advance.

To determine tolerance to changes we used a survey of 16 questions from three aspects of tolerance from the questionnaire by Steva Marušić “Human Resources Management.’

6.2. The methods for data processing

6.2.1. Determination of tolerance towards changes

The level of tolerance for the changes we have observed from the three aspects of toler-ance:

1. acceptance of changes ( answers 2, 9, 11, 13,16) 2. ability to manage the complexities of a large number of unsorted and incomplete

information (answers 4, 5, 6, 7, 8, 10, 14, 15) 3. resolving unclear situations where decisions must be made (answers 1, 3, 12) Odd numbers questions are graded as answers are listed, while even questions respons-

es are scored in reverse order.The answers are given in seven categories:7- I agree completely, 6- I agree a lot, 5- I agree, 4- I neither agree nor disagree, 3- I can’t

completely agree, 2- I do not agree, 1- I do not agree at all. The result that can be considered as an average tolerance is 3, everything below that is

THE TEST OF TOLERANCE TO CHANGES IN CULTURAL CENTRE OF NOVI SAD15

insufficient, and above it is satisfactory or excellent.

6.2.2. Flow of researchThe survey was conducted among all 25 emplyees. In the study period, there were no significant changes of the employment structure of

the employed, so results of the research can be accepted as valid in the examined period.

7. REVIEW AND ANALYSIS OF RESULTS

To test the tolerance for changes all the employees of the Cultural Centre of Novi Sad were interviewed. In the review of the results we shall in parallelreview the results to show the results obtained when testing all three years and make a comparison of the results ob-tained, and on that basis we shall draw conclusions and propose solutions.

An expert who doesn’t know all the answers in details prob-ably doesn’t know too much. 4.362 3.312 4.009

I would like to live in a foreign country for a while. 4.382 4.065 3.136There is no problem that cannot be resolved. 4.001 3.264 5.391People who live according to a schedule probably miss the best things in life. 4.164 3.994 3.272

A good job is the one where it is always clear what to do and how to do it. 4.211 4.115 5.180

It is more fun to dig into a complicated problem than to do something easier. 3.687 3.912 3.136

In the long run, a man can do more by solving small and simple things than large and complex problems. 3.812 4.215 4.663

Often people who behave differently are the most interesting and inspiring ones. 3.991 4.364 3.227

We rather accept something that we are used to, than some-thing we do not know. 4.514 4.231 4663

People who insist on answers probably don’t know just how complicated things are. 4.263 4.906 3.281

People who live a correct and monotonous life have enough reasons to be happy. 4.174 3.894 3.845

Many of our most important decisions are based on incom-plete information. 4.786 3.102 3.609

I prefer company of people that I know that the one where most people are strangers to me. 4.263 3.946 4.163

Managers or lecturers who give unclear tasks allow an indi-vidual to show his originality and initiative. 3.748 4.111 4.381

Olja Arsenijevic, Maja Dimic, Milan Radosavljevic16

The sooner we adjust similar values and ideals, the sooner it will be better for us. 3.724 3.833 4.409

A good manager is the one who makes you wonder about the way you view things. 4.602 4.164 3.618

Total 4.154 3.927 3.998

Table 4. Total tolerance for changes according to individual claims for 2014, 2015 and 2016

From Table 4 it is evident that there are no significant changes in the overall level of tolerance to changes in relation to the time of interview. However, we must emphasize that it is very important that the overall level of tolerance to changes in the final year of studies has decreased compared to the first year.Acceptance of novelties and unexpected situations 4.387 4.060 3.885Ability to cope with a multitude of unsorted information 3.950 4.080 3.943Solving of unclear situations with making decisions 4.383 3.226 4.336Total 4.154 3.927 3.998

Table 5. Total tolerance for changes in all three years of research

The Table 5 also shows that there are no significant changes in the overall level of toler-ance to changes in relation to certain aspects. It is indicative that the level of tolerance to the changes to the all three aspects of research in the last year has decreased compared to the first year. Only the aspect of orientation in the multitude of unsorted information increased in 2015, but still fell in 2016 compared to the initial 2014.

7.1. Parallel display of aspects of tolerance towards changes in the management structure

Manager 3.931 3.803 3.651Worker 4.359 4.041 4.318Total 4.154 3.927 3.998

Table 6. Total tolerance for change of the management structure for all three years of research

The table shows that the overall level of tolerance for change both at the subgroup of managers and subgroup of workers declined in the last year of the research in relation to the first. Here we must emphasize that it is even more important that the overall level of tolerance of the subgroup of managers in all three years of the study is lower than that of subgroup of workers.Manager 4.099 3.711 3.811Worker 4.928 4.437 3.953Total 4.387 4.060 3.885

Table 7. The aspect of accepting novelties, new and unexpected situations – managers and workers

THE TEST OF TOLERANCE TO CHANGES IN CULTURAL CENTRE OF NOVI SAD17

Manager 3.826 4.125 4.002Worker 4.178 4.031 3.888Total 3.950 4.080 3.943

Table 8. Aspect of the ability of performing in the in the multitude of unsorted information – managers and workers

Manager 4.076 2.923 4.228Worker 4.952 3.555 4.356Total 4.383 3.226 4.336

Tabela 9. Aspect of resolving unclear situation when decisions must be made – managers and workers

The results of the level of tolerance for changes according to individual aspects of toler-ance to changes shown in Tables 7, 8, 9 show us that there are also no significant changes in the overall level of tolerance to changes in relation to time when the survey was con-ducted. However, we must emphasize that it is very important that the level of tolerance to the changes to the all three aspects of research in the last year has decreased compared to the first year. In addition to this fact, we must point out that only in the aspect of ability to cope in the complexity of a large number of unsortedinformation there is evident a better result with the subgroup of managers in relation to the subgroup of workers. This was expected with respect to differences in the nature of work of the two subgroups.

7.2. Conclusions of the results

Based on the obtained and discussed results from the questionnaire to determine the level of tolerance for change, we can conclude that the null hypothesis - H 0- tolerance to changes in the Cultural Center of Novi Sad is low - has not been confirmed, given that the level of overall tolerance as well as the levels of all three individual aspects tolerance towards changes is higher than the grade 3.00.

Based on the obtained and above discussed results we can conclude that the auxiliary hypothesis - H1 There is a statistically significant difference in the degree of tolerance be-tween the subgroup of managers and subgroup of workers has been confirmed, with the note that the subgroup of managers has a higher level of tolerance to changes only in the aspect - Ability to cope in complexity of a large number of disordered information, while the sub-group of workers had a higher level of tolerance towards changes with the other two aspects, i.e. aspects - Acceptance of novelties, new and unexpected situations and aspects - Resolving ambiguous situations where decisions have to be made.

8. CONCLUSION

Based on the reviewed and analyzed results we can conclude that, in the reported pe-riod, the overall level of tolerance to changes in the Cultural Center of Novi Sad is high, because in all three surveys it is around grade 4, and a satisfactory level of tolerance is con-

Olja Arsenijevic, Maja Dimic, Milan Radosavljevic18

sidered to be the level grade 3.In the opening remarks we stated that it is evident that at the Cultural Center of Novi

Sad for many years there have been no significant changes in both the program content and in the way of implementing the same.

Analyzed general situation in the Cultural Center of Novi Sad clearly indicates that the cultural center has not fulfilled one of the most important roles of its existence and opera-tion. It is not enough just to understand the nature of cultural needs, it is necessary to make them effective and turn them into interests. The Premiere Project - Europa cinemas is one of the examples of this statement. This project has for more than five years not moved from the level of plans, and a long time ago it had a chance to be a leader in the presentation of films in the wider environment. Instead, we have seen that for more than a year in Novi Sad there is no official cinema which reflects the state of interest for this type of cultural activity.

The purpose of this study, as well as of many other researches should not be a mere statement of the current state. Based on these results and identified problems solution must be found to overcome the existing negative situation.

The most striking result of the research is the fact that, in addition to lowering the gen-eral level of tolerance to changes in the reporting period, in all three subgroups separately the subgroup of managers has a lower tolerance to changes in relation to the subgroup of workers. This indicates that there is an obvious problem of appointing managers due to po-litical reasons and not on the basis of knowledge and skills. The management of any organi-zation is by its nature the first to notice business problems. Based on the identified problems management must see the need to introduce changes, but also devise a strategy to lead the organization through the changes.

Institutional conditions must be created for the employees in cultural institutions to create the conditions and manner of work in these institutions.

Taking into account the specificities of cultural workers and their institutions in order to meet this objective it is essential that holders of these changes be cultural workers them-selves, and not political cronies. In addition, it is necessary to realize the expressed desire of employees for continuous improvement, and observed problems in communication need to be solved through a more comprehensive representation.

In the introductory remarks we cited eight most common errors, according to J. Cotter, used by management in companies when introducing the changes. Unfortunately, we must state that in the Cultural Center of Novi Sad it is evident that management is responsible for the existence of all eight of those errors, which is a direct result of the installation, not choice of the managers of the Cultural Center. To confirm the above allegations we present an analysis of the eight errors according to John Cotter in the failure of the project Premiere - Europa cinemas:

1. excessive indulgence in satisfaction - management has allowed the fact that they were elected for experimental cinema project be enough in itself. They did not recognize that this is only a good starting point and the true value of the project but have faltered from the start and stayed on satisfaction without coverage, which in practice proved to be an aggravating circumstance. It is essential to turn the initial satisfaction into a driving energy and this is as a direct failure of management.2. Failure to establih a powerful enough leading coallition - the realization of the pro-ject is left to the film editorial board, i.e. to its editor. The project is of far greater im-

THE TEST OF TOLERANCE TO CHANGES IN CULTURAL CENTRE OF NOVI SAD19

portance for the whole cultural center, but also for the wider environment and in its implementation had to involve the entire multidisciplinary team. The above team had to include a complete management and involve all stakeholders, from government rep-resentatives (such as funders of the Cultural Center) to potential beneficiaries.3. underestimating the power of vision - as in the previous section due to non-rec-ognition of the importance of the project for the overall work of the Cultural Centre the management did not build a vision, so we can not talk about underestimating the power of vision.4. shortfall in the communications of vision at the level of a factor of 10 (or 100 or even 1000) - since there is no vision, we can not talk about its communication even in narrow or even in a broader context.5. allowing obstacles to block the new vision – in the realization of this project it is dif-ficult to talk about obstacles, although there are some - problems with loans, etc. The main problem is the failure to recognize the importance of the project by the manage-ment and the failure to build a strong vision6. failures in achieving short-term success - as the project stumbled at the start it Is hard to talk about short-term successes. It was necessary in the beginning to divide into the implementation phases, and based on the success in achieving certain stages to hold a strong motivation for its final implementation.7. premature declaration of victory - this error is directly related to the error excessive indulgence in satisfaction. Due to their wish to look good in front of the structures who appointed them, the managemt declared victory at the very beginning. Simply, we are the best because we were elected among all the others, which means we are the best. Once victory is declared motivation declines, and without maintaining and supporting motivation it is not reasonable to expect success. 8. changes that are not firmly rooted in the company’s culture - this error is embedded in the root of the failure of the project. Here we must pay attention to a specific contra-diction of the study results and the actual situation at the Cultural Center of Novi Sad.

The total level of tolerance to changes in the Cultural Center is high. The subgroup of workers expressed a higher level of tolerance to changes than the subgroup of managers, suggesting the basis of the problem. Employees are aware of the need to introduce changes, and also expressed a high level of tolerance to change. Although changes mean great uncer-tainty, we assume that employees overcome this fear by a realistic assessment of the current situation and the knowledge that they need to improve the program content or update and change the way of thinking and working. Managers expressed a lower level of tolerance to changes primarily because they want to satisfy the structures that appointed them, and only then do they engage in the true nature of their position. This can be overcome by choosing leaders based on knowledge and skills, not based on political considerations.

Previous analysis of errors in the introduction of changes in the project Premiere - Eu-ropa cinemas unfortunately are not appropriate for the said project alone. Those errors are present in the entire business of the Cultural Center, so its survival requires necessary and comprehensive restructuring. It is not enough to change only the mode of work, they must comprehensively change the way of thinking and understanding of the role of the Cultural Center in the wider environment. But this, in addition to the employees at the Cultural Cen-

Olja Arsenijevic, Maja Dimic, Milan Radosavljevic20

tre, must first of all be understood and accepted by the local government which is the first step in changing the selection of managers which was identified as one of the main causes of the current situation.

Only through the realization of the above objectives can we hope that in due course we will not speak of Novi Sad as a city without a single theater, as we now speak about the city without a cinema.

REFERENCES

[1] Stojković, B., Dragićević Šešić, M. (2011) Kultura – menadžment, animacija, marketing, Clio, Beograd

[2] Koter, Dž. (2009) Vođenje promjena, Lider press, Zagreb [3] Marušić, S. (2006) Upravljanje ljudskim potencijalima, Adeco, Zagreb

UDC 331:616.1

CARDIOVASCULAR AND PROFESSIONAL DISEASES IN WORKERS IN WOOD INDUSTRY

Radojka GolijanHan Pijesak, BOSNIA AND HERZEGOVINA, e- mail: [email protected]

Abstract: Cardiovascular and occupational diseases among workers in the timber industry are very common. These diseases arise due to the nature of the work, the conditions at the workplace, stress, a great physical and mental effort, poor and irregular diet, smoking, alcohol use, which are among the factors that are very present in these workers. The most common diseases of the cardiovascular system are heart diseases, blood vessels, high blood pressure, diseases of the musculoskeletal system (joints, muscles and bones), skin diseases, allergic diseases, diseases of the hearing, vibrating illness, injury at work. The main task is to improve the working conditions of these workers and reduce the risk factors that lead to these diseases.

Keywords: occupational diseases, heart, blood vessels, hypertension, vibration disease, joint disease, hearing loss, smoking, fatigue, occupational health and safety.

1. INTRODUCTION

Occupational disease is a disease or a collection of diseases that have arisen as a result of the impact of adverse factors, factors in a workplace, which caused acute, long-term or permanent effects on health of the person-worker who is sick, who is doing his job in this workplace and under such operating conditions and circumstances. For the occurrence of occupational injuries or illnesses at work, several factors are responsible. First of all, these include:

Personal factor of the worker- (carelessness of workers, lack of professionalism and lack of training for a particular job, lack of concentration due to a variety of personal, family and business situations, physical disability in terms of disproportionate power required and the available physical potential workers for the job, etc.).

Risk factors - The work of these workers in the timber industry is too dangerous to per-form, and always carries a high risk of injury and the emergence of occupational diseases. Occupational disease can occur in almost all workplaces, and most often is encountered in carrying out extremely dangerous and stressful jobs (miners, workers at extreme altitudes, forestry workers, workers in the timber industry, cutters, workers in the chemical industry,

Radojka Golijan22

in the nuclear industry, working with infectious patients, work in microbiological laborato-ries, especially working with a very virulent and dangerous viruses and bacteria, working with X-ray radiation). All these are factors of danger and are interpreted as risk factors for occupational diseases. There is always needed also an activating factor of dangerous factors for the occurrence of injuries or diseases (opening of boilers under pressure in heating, dry-ers, steaming, moving the logs in stock, toppling over logs in forest workers, the extraction of the lighter at the mine clearers, deactivation of the mine, working without adequate pro-tection from virus causes and other infectious diseases). When analyzing and designating a disease as a occupational disease we must carefully analyze the disease itself, its factors and specificity, as well as workplace conditions at the workplace, factors of physics degree of professionalism and safety at work, if there is an injury at work in or outside the workplace. All this should be well studied and analyzed, under which conditions in the workplace that worker used to work and why the problem occurred with the injured worker and the in-jured worker should be thoroughly reviewed. Only a detailed review of both workers and the workplace can give us the real cause of injury, and therefore enable us to take safety measures and prevent such or similar violations from occuring again.

2. THE CONCEPT OF OCCUPATIONAL DISEASE

These illnesses include all states that have arisen due to unfavorable conditions on the job, and the types of work in the workplace that a worker performs. The term diseases can be considered as an occupational disease in a narrow sense, or occupational disease in a broad sense.

Occupational diseases in the narrow sense aree diseases whose causes are mainly re-lated to work which the employee performs at his workplace.

Occupational diseases in a wider sense are all diseases that cause adverse effects in the workplace, but also risk impact outside the workplace. [1]

Occupational diseases may occur in many workplaces because of different circum-stances. The most common occupational diseases still occur on specific tasks which are also difficult and dangerous to human health. A few centuries ago there had been known occupa-tional diseases of workers in coal mines. They used to very often and very soon get infected by from respiratory diseases, bronchitis, asthma, penumokosis (lung disease that occurs due to prolonged and heavy coal dust in mines of brown coal). As an occupational disease in the mercury mines there were often signs of intoxication with this highly toxic metal, which are significantly downplayed the working ability of miners, and often led to complete loss of the ability to damage the skin, lungs, blood elements and CNS. As an occupational disease there are common diseases among health workers such as X-ray technicians and radiologists. It is true that today they are fairly rare diseases because of better safety at work, better appliances that give minimum radiation and a greater knowledge of these diseases. It is known that a major disease and infectious disease epidemiology, microbiologist who work with highly infectious patients, or with the material in the microbiological work and instruments which are used during an intervention. They used needles and syringes that were not for single use, but they washed and sterilized them, and thus there were frequent stings with nurses, and because of the transferred infectious material in these instruments and in the sting had frequent occurrence of diseases, a mostly from infectious jaundice.

CARDIOVASCULAR AND PROFESSIONAL DISEASES IN WORKERS IN WOOD INDUSTRY23

The most common causes of cardiovascular and occupational diseases among workers in the timber indrustry is the disproportion of working capacity of workers and the needs of the workplace to perform this type of work. It is often seen that workers do not have enough physical, occupational, conditional and professional skills that the difficult and demanding job requires. The microclimate conditions are not adjusted to endurance of workers, reduc-ing their impact on work efficiency. As factors for the occurrence of occupational disease we can indicate large differences in temperatures, humidity, air flow, (wind and drafts), snow and rain, the brightness which is substantially reduced in the halls and in the forests where workers perform these difficult tasks. Working conditions are unfavorable due to higher altitude, high inclination of steep and unstableland. These conditions are often made worse due to natural disasters when working outdoors. In the workplace, the worker is exposed to other disadvantages, such as stress, vibration, noise, movement of powerful machines for the transport of logs in the forest or to process logs in the working halls. Safety at work is often not adequate and insufficient, but some workers are contributing, as they improperly use it or not even useit, although it is required by law, but it is often considered voluntary. Labor productivity is often low, so the payment for these jobs are low too, so that these workers often work at additional duties for the sake of higher earnings, as more and more exhausted workers and lead to health damage.

Overview of occupational injuries

Injuries in the timber industry are quite common and almost most often in relation to other jobs. They account for about 10% of the total of all occupational injuries. The most common injuries are at the workplace and by frequency in most cases with the cutters in the forests 48%. Per 1000 workers a year about 120 workers are hurt, and injuries have the char-acter of injuries in the workplace in about 95%. This ratio is about 1.5 times higher than the workers who work in wood processing, in the halls and in enclosed spaces. The most com-mon injuries aer due to a fall of the worker, falling tools (axes, chainsaws or saws), falling trees, logs, boards, and causing injuries to muscles, ligaments, bones and other body parts. These injuries are most common at the start of the working time at about 9 to 10 HRS and at the end of the day, about 14 to 15 HRS, usually at the beginning and end of the week. Here dominates as a cause of injury overall fitness and general psycho-physical state of workers, especially workers who work with machines and chain saws. Most of the injuries are with youngest and inexperienced workers aged about 26 years and work experience of one year, as well as workers over 60 years of experience and over 25 years of service. Most of the injuries of the workers happen in the early spring months, March and April and in September. In these injuries usually suffer hands and fingers about 16%, 15% legs, chest 5%. All of these injuries can be divided into light, heavy, and some of the serious injuries leading to the death of 0.5%. [2]

Occupational diseases of workers in the timber industry are the most common chronic diseases of the joints, damage to meniscus, cuts leading to contracture of muscle and paresis of the nerves, hearing loss due to noise, vibration disease, diseases of the hand due to vibra-tions (for the cutter), diseases and defects of the skin, allergic diseases, bronchitis, asthma and cardiovascular diseases.

A vibration disease affects about 30% of workers in the timber industry. Hearing disor-

Radojka Golijan24

der is about 20% due to excessive noise or poor protection.Employees working in these conditions usually go in early disability pension and the

percentage is large and is around 30%. This is a big problem and warns of the seriousness, gravity and insecure jobs of workers in the forest industry. These workers usually before the start of the working time perform some physical tasks which are physically exhausting. They get up very early, on average, about 5 o’clock in the morning, usually walk to the workplace or to the collection of transport, take an early breakfast, smoke, drink coffee and often, and take an average of up to ½ oz of alcohol approximately 5% of them.

These activities in workers spend a certain amount of energy, and when they leave and return to the workplace usually the energy consumption ranges from 2600 to 4000 KJ, which is an additional burden on these workers who perform heavy work otherwise. [3] It has been shown that about 6.2% of injury occurs in the morning hours at about 6 o’clock, which is the so-called injury in non-working time.

3. CARDIOVASCULAR DISEASES IN WORKERS IN THE WOOD INDUSTRY

Out of cardiovascular diseases among workers in the timber industry usually occur the following diseases: hypertension, ischemic heart disease, cerebrovascular disease, varkoz-itets, thrombophlebitis and other diseases of blood vessels of the extremities. Hypertension among workers in the timber industry is a very common disease. Under hypertension is meant blood pressure that has a value above 140 mm Hg (systolic) and 90 mm Hg (diastolic) pressure. Following the tension of the workers in the industry it can be noted that a large number of workers has a greater value of blood pressure, and often in the enormously high value, which reaches up to 200/100 mm Hg.The reasons are numerous. Most often we in-terpret this phenomenon of high blood pressure with the nature of work of workers in the forest industry, difficult conditions at work, improper diet, stress, smoking and overtime. It is known that heavy and long-term physical exertion increases the value of blood pressure. In addition to the causes for these workers there are other causes that increase the value of blood pressure. The workers in the timber industry are usually smoking and take more than 20 cigarettes a day, while it is the most common and range, all of which increases the nega-tive effect of nicotine on the body. These workers have poor sleep due to early getting up and going to work and generally irregular diet that is greasy, salty, smoked meat, preserved food. After returning from work due to fatigue they usually take a lying position which further affects blood flow and cardiovascular system. Usually they do not have a balanced sleep, be-cause they have to go to work very early. Due to poor economic conditions they often engage in additional jobs for economic reasons, shorten their vacations and days off on weekends mainly use for subsequent operations, which further burdens the cardiovascular system and heart. Stressful factors are present everyday, a big nervous tension further increases risk factors for hypertension. Hypertension has a great influence on other organs and the organ-ism as a whole. Previously listed risk factors influence the occurrence of atherosclerotic and varicose changes in blood vessels, especially of the lower extremities. In violation of these varicose changes there occurs heavy bleeding. It often leads to infections injured wounds, as stopping bleeding occurs in unsterile conditions and unprofessional, usually at the site of injury. In these places are not uncommon inflammation of the veins, and if there are complications they can lead to thrombophlebitis, which have many serious consequences. It

CARDIOVASCULAR AND PROFESSIONAL DISEASES IN WORKERS IN WOOD INDUSTRY25

can start up the thrombus that can clog blood vessels of the heart, lungs and brain. On cere-bro-vascular level they often exhibit changes in blood vessels in the form of arterosklerosis, aneurizms, which provide headache, numbness of certain parts of the body, paraesthesia, tinnitus, dizziness and instability. [4]

Ischemic heart diseases. These are diseases that occur due to atherosclerotic changes and the appearance of plaques in the blood vessels of the heart, increased blood pressure, cardiac hypertrophy due to physical exertion or other causes. We have already listed many of the risk factors that result in workers in changes in blood vessels and ischemic diseases, most commonly to the heart and brain. With workers in the timber industry, this disease appears at about 30% of cases. At the heart occur specific changes - cardiac hypertrophy. In this dis-ease already atherosclerotic blood vessels are not strong enough to feed a sufficient amount of oxygen, and often occur ischemic changes in heart accompanied by specific symptoms, it is usually severe pain behind the breastbone, pain to the neck and back, and expansion of pain usually down the left arm. These ailments are known as angina pain, a disease such as angina pectoris. If the disease occurs in every major effort, then we are talking about stable angina pectoris, if it occurs without any sequence and effort then it is unstable angina pec-toris. This is a very serious disease and must be addressed seriously in diagnostics and in therapy. From this global disease frequently suffer more men than women at the ratio 4:1, in the most productive years of about 40 years of age the ratio is 8:1, and with increasing age this ratio is declining, and almost equals at about 70 years of age. In the occurrence of angina it is necessary to perform EKG, heart ultrasound, Egro- stress test and coronary heart to have adequate therapeutic effect. [5]

With changes in the ECG there may be a therapeutic intervention, but there are also unstable angina pectoris which do not give change on the ECG, and they are much more dangerous and unpredictable because they can lead to plaque rupture in the blood vessel and that the content put into circulation and after that often arises heart attack, stroke or pulmonary embolism. All of these complications are very urgent and very dangerous condi-tions that require immediate hospitalization and intensive therapy. If an employee survives this condition usually he can no longer perform his previous work in the timber industry, and most often these workers go into early disability pension.

4. OCCUPATIONAL DISEASES AMONG WORKERS IN THE WOOD INDUSTRY

The most common occupational disease among workers in the timber industry are:- Vibration Disease - This disease is an occupational disease and is caused by constant

exposure or arm and whole body to vibration at work on the machines, tractors, saws. This disease is very common among workers in the timber industry and occupies about 95% of all occupational diseases such work and 32% of disability in workers. Most of those affected are aged between 45 and 47 years of age in the percentage of 29% and from 47 to 50 years of age the percentage is about 26%. Since these workers with this disease have a permanent damage to their health, they have tremor (shaking hands), and sometimes the entire body, sometimes occurs unsteady gait. To the discomfort and pain in the hands of the percentage is 15.8%, a pain in the hands 25%, bone pain 8%, myalgia 5%, peripheral nervous system dis-order, 12.1%, and 8.5% has a psychological disturbance. All these percentages indicate a high professional disability to the permanent loss of working ability, which often occurs already

Radojka Golijan26

after 5-10 and years of work in these extremely difficult conditions. [6]– Skin diseases- changes are usually located on the palms and fists, and often on the

face. These diseases occur due to direct contact with wood, with impurities on tree bark, various resins, paddle, paints and varnishes that are often used in the wood industry. These changes are in the form of allergic reactions in the form of redness, flaking and peeling of the skin, are often of chronic nature in the form of contact dermatitis that require changing jobs at around 8.6%.

- hearing loss is also very common due large and excessive noise by machinery, vehicles and equipment that workers, and occurs in 30% of all workers in the timber industry. Out of these defects 28% is minor damage, 24% medium damage and 28% the excess of hearing impairment. On average only 20% of workers in the timber industry has normal hearing.

- Respiratory diseases are very common among workers in the timber industry. The most common causes are high humidity, dust, presence of various chemicals, such as paints, varnishes, paddle, various allergens from nature such as pollen of trees, pitch, frequent colds due to perspiration and the great physical effort, open exposure drafts, wind and rain. Res-piratory diseases often suffer upper respiratory airways, throat, tonsils, larynx. More serious illnesses when the operations of the lower respiratory tract such as bronhitih and bronchial asthma. It is not uncommon nor emphysema which is the permanent destruction of lung parenchyma. In patients with asthma, reduced is the capacity of the inhaled air, but the bigger problem is the inability to throw out more of the inhaled air, so there occurs the so-called stridor, which is characteristic in asthmatics and bronhitis patients. These diseases are chronic obstructive pulmonary disease (COPD), and those make up about 3-4% of oc-cupational diseases of workers in the industry.

- Diseases of muscle and joint tissue in workers in the forest industry are very common and almost inevitable. These diseases are common due to forced postures and disproportion-ate burden of locomotion. Workers who work as cutters whole day to spend polukrečećem or kneeling, Utility chain saw that has quite a lot of weight 10-12 kg represents an additional burden on the joints workers. The most commonly damaged cartilage occur in the knee joint, elbow joint, shoulder joint, wrists and inter-vertebral region of the spine. All these dis-eases because of forced positions of the joints leading to degenerative changes in the joints. Studies have shown that 39.2% of the degenerative changes in the spine take into account spondylosis, 23.8% as spondyartrosis, 23% in the form of intervertebral disc, and the gain-fully going 15.4%. These data are similar to degenerative changes in the joints of the legs and hands, as locomotor apparatus is permanently in fixed position throughout the day, and for professionals in the industry.

5. CONCLUSION

Diseases of workers in the timber industry are very common, they often fall into the occupational disease. They are often very serious and lead to permanent disability. Its a very reduced service life and the ability of these workers, because of difficult working conditions, heavy and hard work, spending a large energy potential of the organism. Often to all these troubles contribute the workers too because of non-compliance on the work, not wearing protective equipment, irregular and inadequate nutrition, bad own habits such as smoking, alcohol consumption, doing extra jobs at home and outside working hours. The task of the

CARDIOVASCULAR AND PROFESSIONAL DISEASES IN WORKERS IN WOOD INDUSTRY27

whole society is to provide good protection at work, to improve conditions in the workplace to carry out regular medical examinations of workers to be adequately paid for the hard and difficult work to provide them with enough days of rest relying on the quality use of annual leave, and to provide them with regular and quality health care and treatment of diseases.

REFERENCES

[1] Čomić, Ratko, Povrede na radu i profesionalne bolesti šumarskih radnika, Grafo Mark Beograd,1997, pp195-201

[2] Čomić, Ratko, Povreda na radu i profesionalna oboljenja šumarskih radnika, Šumarski fakultet Univerziteta u Banja Luci, Banja Luka, 1997, pp 177-192

[3] Čomić, Ratko, isto djelo, Povreda na radu i profesionalna oboljenja šumarskih radnika, Šumarski fakultet Univerziteta u Banja Luci, Banja Luka, 1997, pp156-158

[4] Stefanović, Stanoje, Interna medicina, Medicinska knjiga Beograd-Zagreb, 1982, pp 311

[5] Krup, Marucious, Interna medicina, Savremena administracija Beograd, 1988, pp 228-302

[6] Aranđelović, Mirjana, Medicina rada, Medicinski fakultet Univerzitet u Nišu, Niš, 2009, str. 39

[7] Fajgelj, Aleksandar, Interna medicina I, Svjetlost, Zavod za udžbenike i nastavna sredstva, Sarajevo, 1986.

UDC 331.103:001

INTRA-ORGANIZATIONAL KNOWLEDGE TRANSFER PROCESSES

Ivana GrujovskaFaculty of Economics, Prilep, University St. Kliment Ohridski, Bitola, REPUBLIC OF MACEDONIA, e-mail: [email protected]

Abstract: Knowledge is the essential force that pulls up the companies’ strings in the game called “business survival”. Companies that are able to create knowledge, but also to transfer it through the organization and modify it so they can implement it in their knowledge gaps can be called “wise or-ganizations”. The aim of this paper is to confirm the importance of knowledge transfer for sustainable competitive advantage, as well as to explain the circumstances which influence knowledge to be best transmitted from one organizational unit to another. Knowledge transfer is examined as a phase of the knowledge management supply chain. It does not imply a complete replica of knowledge in a new location, but effectual transmission and adaptation of knowledge to recipient’s specific setting. The company has to detect and identify the barriers to knowledge transfer and also has to know how to reduce them. Casual ambiguity, tacitness and lack of motivation to share are often observed as com-mon impediments of knowledge transfer for MNCs. The company, also, has to amplify the potential of knowledge transfer facilitators which are crucial for solid knowledge management. The paper supports the knowledge-based view of the firm.

Keywords: intra – organizational, knowledge, transfer

1. INTRODUCTION

In the twenty – first century landscape, firms must compete in a complex and challeng-ing context that is being transformed by many factors, from globalization, technological development, and increasingly rapid diffusion of new technology, to the development and use of knowledge (Hitt, Keats & DeMarie, 1998). This new landscape requires firms to do things differently in order to survive and prosper. Specifically, they must look to new sources of competitive advantage and engage in new forms of competition. This, in turn, requires a clear understanding of the nature of competition and competitive dynamics (DeNisi, Hitt, Jackson). In this dynamically changing landscape, firms have to learn the fastest way of how to use “the new century resources”, so they can win the fight over their business rivals.

Ivana Grujovska30

An argument usually put forward is that we have gone from an industrial age in which the most important resource was capital, into an age in which the most critical resource is knowledge. Firms who have gained competitive edge over their rivals, have done so through innovative recombination of knowledge (Bresman, Birkinshaw & Nobel, 1999). On many occasions, knowledge has been described as a key force and a fundamental source of sus-tainable competitive advantage in the hyper – combative markets in today’s global economy. Nonaka (1991) stated that in an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge.

The proponents of the knowledge – based view of the firm consider knowledge as the most strategically significant resource of the firm. They argue that because of the difficulty to imitate knowledge, it is the majordeterminant of sustained competitive advantage and superior performance.

There has been a debate in the past among economists that only parent company can create and transfer knowledge to subsidiaries, but nowadays, views have changed. MNCs are complex and differentiated cross – border organizations that manage knowledge flows in multiple directions, including exchanges within local clusters, transfers between parent and subsidiary and transfers between subsidiaries (Andersson, Forsgren &Halm, 2002, Ghoshal & Bartlett, 1990, Mudambi &Navarra, 2004). Every foreign subsidiary inherently provides some minimum geographically-unique knowledge that allows a parent to exploit opportu-nities that exist in local resources and/or output market (Gupta & Govindarajan, 2001).

2. DEFINING KNOWLEDGE AND TYPES OF ORGANIZATIONAL KNOWL-EDGE

There is neither consensus among researchers on what is the most appropriate defini-tion of knowledge, nor any prospect of developing one in the near future. An overview of various knowledge definitions is beneficial as a takeoff, enabling a better understanding of implications that knowledge has on companies’ competitive advantage.

Knowledge is not a static and passive projection of what is learnt. It is very dynamically constructed concept that changes constantly. In organizations, knowledge is the source of power.

Knowledge is defined by the Oxford English Dictionary as (i) expertise, and skills ac-quired through experience or education; (ii) the sum of what is known; (iii) awareness or familiarity gained by experience of a fact or situation.

In many cases, information is accepted as the fundamental basis of knowledge. How-ever, information needs to be interpreted, and understanding what information means re-quires knowledge (Bolisani & Scarso, 1999). Thus knowledge can be seen as the capacity, embodied in the minds of people and embedded in social practices, to interpret information (Davenport & Prusak, 1998). In organizations, knowledge is embedded in documents or da-tabases, in organizational processes, routines and norms and is obtained from individuals, groups, or organizational routines either through structured media or through person-to-person contact (Davenport, 1998).

Knowledge, itself, sometimes can be seen as the highest competitive advantage only if it is understood through the prism of action. Having information and data available doesn’t assure competitive advantage. But if information and data are translated into actionable

INTRA-ORGANIZATIONAL KNOWLEDGE TRANSFER PROCESSES31

system, then competitive advantage can be expected. This implicates that the importance of knowledge lies in execution – effective application of information and data resources and completion of action – oriented decisions.

There are different types of knowledge and there are different ways of creating, trans-ferring, sharing, and usingit. The classification of knowledge dates back to Aristotle,who made a difference between three types of knowledge:theoretical and universal; instrumental knowledge,practice related and context specific; and experience –based, normative, related to common sense and contextspecific (Johnson and Lundvall, 2001). Partially related tothis an-cient classification is the recently proposedclassification that consists of four types of knowl-edge.Know-how is a description of knowing how to dosomething; know-what is knowledge about facts, know-why (referring to scientific knowledge) and know-who(involving informa-tion about who knows what, and whoknows how). The first two are easy to codify andgen-erally belong to the explicit form of knowledge,know-how and know-who are difficult to translate intocodes, and can consequently be regarded as tacitknowledge.

2.1. Explicit and tacit knowledge

Explicit knowledge can be precisely and formally articulated. It can be codified as in-formation in the form of formulas, reports or designs, and is therefore relatively easy to document, acquire, transfer, share, communicate and store. It consists of some systematic language and is codified through words, numbers and codes (Hedlund 1994). This codifica-tion makes it amenable to transfer (Riesenberger 1998). The transfer can take place orally or in written form, using blueprints, patents or computer programs. According to Hanson and Haas, knowledge is transferred explicitly if it takes the form of written or electronic documentation, most commonly existing when employees write down things they know and make them accessible to others. Its ready accessibility has lead to many ways of using it as a management tool. Explicit knowledge must rely on being tacitly understood and ap-plied. A wholly explicit knowledge is unthinkable (Polanyi, 1966).

Tacit knowledge. Explicit knowledge only represents the tip of the iceberg. The other type of knowledge is called tacit knowledge and is connected with ideas, perceptions and experience. Polanyi (1966) says that it is personal, context - specific and therefore difficult to articulate. This personal dimension makes it hard to formalize and communicate. Tacit knowledge is deeply rooted in action, commitment and involvement in a specific context (Nonaka, 1994). It is non - verbalized, intuitive and unarticulated (Hedlund 1994), depends on the experience of the individual, includes beliefs and emotions (Nonaka and Takeuchi, 1995; Riesenberger 1998), personal skills and acquired knowledge (Bennett and Gabriel, 1999). According to Pan and Scarbrough (1999), tacit knowledge is not available as a text... It involves intangible factors embedded in personal beliefs, experiences, and values. Platts and Yeung (2000) consider tacit knowledge as “knowledge – in - action” which presumes that this knowledge hasn’t been articulated as opposed to explicit knowledge that is readily accessible within the organizational domain. Knowledge is transferred tacitly if it is passed from person to person, as in face to face meetings, emails and telephone conversations (Han-son and Haas). Because of its implicit nature it is difficult to formalize and to transfer, but it is precisely this experience - based tacit knowledge which – because of the difficulty in imitating it – creates the basis for a sustainable advantage (Zack, 1999).

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But, it is often stated that the boundary between tacit and explicit knowledge is rather blurred and flexible and that tacit knowledge may be overemphasized.

3. KNOWLEDGE TRANSFER AS A PHASE OF THE KNOWLEDGE MANAGE-MENT

Unfortunately, there is no universal definition of knowledge management (KM), just as there is no consensus as to what constitutes knowledge in the first place. The so – called “integrative” approach to knowledge management is based on the fact that only the combi-nation of human and technological resources gives an optimal result for the company.

Knowledge management can be defined as a set of practices used in a company in or-der to identify, create, represent, distribute and enable adoption of knowledge. Blair (2008) and Birkinshaw (2001) see knowledge management similarly. According to them, knowl-edge management represents a process or a set of techniques used to facilitate the genera-tion and flow of knowledge into and within the company. Alavi and Leidner (2001) argue that “knowledge management is distinct but interdependent process of knowledge creation, knowledge storage and retrieval, knowledge transfer and knowledge application.” The aim that the company is determined to accomplish with knowledge management is to improve the performance, achieve sustainable competitive advantage, succeed in innovation, share the lessons learned and advance the company continuously. Knowledge management ef-forts can help individuals and groups to share valuable organisational insights, to reduce redundant work, to avoid reinventing the wheel per se, to reduce training time for new employees, to retain intellectual capital as employees turnover in an organisation, and to adapt to changing environments and markets (McAdam & McCreedy, 2000) (Thompson & Walsham, 2004).

According to the definitions given above and the literature examined, the process of managing knowledge can be divided into several stages and knowledge transfer can be identified as just one phase of it. It is a question of transferring knowledge through the organization – from one organizational unit to another (or to all other parts of the organi-zation). Knowledge transfer is all about organizing, capturing and distributing knowledge and ensuring its availability for future users. The accent here is on the “distribution” stage of the knowledge management process. Because the character of knowledge is fundamen-tally different from physical goods, the transfer of knowledge becomes more complicated than physically moving something from A to B (Arrow, 1969). Knowledge transfer is a com-plex organizational matter because (1) knowledge resides in organizational members, tools, tasks, and their sub - networks (Argote &Ingram, 2000) and (2) much knowledge in organi-zations is tacit or hard to articulate (Nonaka & Takeuchi, 1995).

Argote & Ingram (2000) define knowledge transfer as “the process through which one unit (e.g., group, department, or division) is affected by the experience of another”. They argue that knowledge can be transferred by moving a knowledge reservoir from one unit to another or by modifying a knowledge reservoir at a recipient site. That can be done by moving company’s members and technology from one organizational unit to another. Com-munication and training can modify reservoirs at the recipient unit. The knowledge transfer can be measured by measuring changes in knowledge or changes in performance.

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Szulanski (1996) was among the first who introduced the concept of knowledge transfer as a communication model in the knowledge management literature. He conceptualized knowledge transfer as a message transmission from a source to a recipient in a given context. Knowledge transfer is thus seen as a dyadic exchange of knowledge between source and re-cipient. The critical feature of this concept is the time – lag between the sender and recipient.

3.1. The sub – stages of knowledge transfer

The knowledge transfer, as a stage of the knowledge management, can be split up to several sub – stages. According to the literature reviewed, the knowledge transfer process consists of the following:

1. identifying the knowledge holders within the organization 2. motivating them to share 3. designing a sharing mechanism to facilitate the transfer 4. applying the knowledge transferred.

The first step of the knowledge transfer process is the identification of the knowledge holders that possess the knowledge that has to be delivered to the receiver. At this point, of great importance is accepting the possibility that the source of knowledge sometimes can be hidden and not as apparent as expected. A continuous process of searching and selection has to be conducted, so the non – context – specific knowledge sources can be excluded. A successful identification of the knowledge holders requires active support of the organiza-tion’s leadership.

After detecting the knowledge sources, the next step is to persuade (or motivate) them to share the knowledge. The real answer is to help them see for themselves that knowledge sharing is in their direct interest. The old paradigm was “knowledge is power”. Today it needs to be explicitly understood that “sharing knowledge is power”. If organizational units under-stand that sharing their knowledge increases their effectiveness; helps them in their devel-opment and progression; rewards them for getting things done (not for blind sharing);and bringsmore recognition, then knowledge sharing will become a reality (Gurteen, 1999). The third step of the transferring knowledge process, after identifying knowledge holders and motivating them for sharing, is the construction of a transfer mechanism – a strategy that will make the knowledge transfer as easy as possible. The strategy may vary, depending on what type of knowledge is being transferred. Below are listed some of the most commonly used strategies by MNCs when they are transferring knowledge between their organiza-tional units:

· mentorship · simulation · guided experimentation · work shadowing · paired work · communities of practice · narrative transfer (storytelling) - as a mean of transferring tacit knowledge · cross - project learning · best practice transfer

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· master - apprentice relationship · collaborative technologies (groupware, etc) · knowledge repositories (databases, etc) · knowledge brokers (some organizational units take on responsibility for a specific “field” and act as first reference on whom to talk about a specific subject) · social software (wikis, social bookmarking, blogs, etc).

The fourth and final step is application of the transferred knowledge. The knowledge has to applied, so it can be retained in the recipient unit. The organization is enabled to learn, not by the knowledge itself, but by the results of the knowledge application. Before it is as-similated into the core routines of the company, the knowledge has to be found acceptable to the company members. Only then it can be diffused. A lack of acceptance is one impor-tant possible reason for failure in the transfer process, not uncommonly caused by lack of absorptive capacity of the receiver. At the end of the transfer process, knowledge has to be institutionalized, so it can become an integral part of the recipient unit.

4. CHARACTERISTICS OF MNCS’ UNITS THAT ENGAGE IN THE PROCESS OF KNOWLEDGE TRANSFER

4.1. Characteristics of the knowledge provider

Provider’s motivation to share knowledge In their attempts to develop a clearer understanding of the knowledge sharing between

providers and recipients, researchers have noted the critical role of motivation (e.g., Ar-gote and Ingram, 2000; Alavi and Leidner, 2001; Hansen, 1999; Goodman and Darr, 1998; Spender and Grant, 1996; Szulanski, 1996).

Gupta and Govindarajan (2000) foresee that the same factors that increase the moti-vational disposition of theknowledge provider to transfer its knowledge to other units may have a positive influence on the extent of knowledge flows. If a relationship between the source and the receptor of knowledge exists prior of the knowledge transfer process, then it can be expected that the bond created between them will increase provider’s motivational disposition for sharing knowledge. Szulanski (1994) confirms that, by stating that “lack of relationship between source and recipient” can be the major barrier of knowledge transfer. The motivation of knowledge providers is important for engaging in the effort and time

required to transfer knowledge and overcome concerns about ownership of informa-tion (Davenport and Prusak, 1998, Goodman and Darr, 1998, Hansen, 2005, Kostova,

1999).

4.2. Characteristics of the knowledge receiver

Receiver’s motivation to obtain knowledge If a MNC aspires for an effective knowledge transfer, then the existence of motivation

in both – provider and receiver, is necessary. A receiver will be motivated to accept and ap-

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ply the transmitted knowledge only if its knowledge stock is on a really low level and if it is obvious that the knowledge received will contribute for receiver’s higher performance. Unfortunately, in some organizational units, when they have the role of receivers, can be detected the “Not – invented – here” syndrome. The “Not – invented – here” syndrome is a name for the tendency of individual and organizational rejection of external solutions to internal problems in favor of the internally developed solutions, although there is no reason to believe that the internal solution will be superior.

The “Not-Invented-here” (NIH) syndrome, closely related to the “Let’s re – invent the wheel” syndrome, has at least two drivers: (i) ego – defense mechanisms (Allport, 1937; Sherif & Cantrill, 1947), which can force managers to block any information that suggests that others are more competent than they are, and (ii) power struggles within organizations (Pfeffer, 1981), which can lead some managers to try to undervalue the potential power of peer units by pretending that the knowledge stock possessed by them is not unique and valuable. In order to overcome the NIH syndrome, countervailing forces are indispensable. They can be manifested as subsidiary’s eagerness to learn or domineering pressures from the headquarters.

Either way, if these countervailing forces aren’t present, the NIH syndrome will be seen as a barrier to knowledge transfer. According to Gupta and Govindarajan (2000), the factors

that increase the motivational disposition of the receiver to adopt knowledge, most likely will have a positive impact on the extent of knowledge transferred. This statement is confirmed by Szulanski’s (2000) findings about the significance of recipient’s motivation.

Awareness of the value that provider’s knowledge stock has The idiom “Ignorance is bliss” can not be further from the truth when knowledge

transfer is in question. Ignorance is a state in which one lacks knowledge, is unaware of something or chooses to subjectively ignore information.

At some companies, particularly large ones, neither the source nor the recipient knew that someone else had knowledge that they required or that someone else would be inter-ested in knowledge that they had themselves.

If the receiver unit has great potential for perceiving or estimating the value of a sub-sidiary’s knowledge stock, then the attractiveness for transferring that knowledge will be higher. If the subsidiary is aware of the knowledge stock’s relevance and non – duplicative nature, then knowledge outflows can be expected.

Receiver’s absorptive capacity

The existence of motivation and awareness of the value of knowledge stock are two of the conditions necessary to facilitate knowledge transfer, but an even more significant con-dition for the recipient organization is to possess appropriate absorptive capacity in order to assimilate and utilize such knowledge (Cohen and Levinthal, 1990, Leonard, 1995, Dyer and Singh, 1998).

The main point is that the more absorptive capacity is developed by the receiver, the more likely it is that knowledge transfer occurs.

Absorptive capacity involves not only the ability to assimilate new external knowledge but also the ability to apply such knowledge to commercial ends and thus create the op-portunity for profit (Cohen and Levinthal 1990, Tsai 2001). Gupta and Govindarajan (2000)

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predict that the absorptive capacity of a receiver will be positively correlated to the inflows of knowledge to that unit. Szulanski’s (2000) findings confirm Gupta and Govindarajan’s research that the absorptive capacity of the recipient becomes highly significant during im-plementation.

5. CONVENTIONAL AND REVERSE KNOWLEDGE TRANSFER

There can be distinguished two main streams of knowledge flows within a MNC: con-ventional and reverse. In conventional knowledge transfers, the parent company can dic-tate the subsidiary to accept knowledge developed at home, by using control mechanisms. Conventional knowledge transfer can be seen as “transplantation” or “supplantation” (Mu-dambi, 2002). It’s most probable that when a local firm is acquired by the MNC, the parent company will infiltrate its own knowledge as a supplement of subsidiary’s existing knowl-edge. This was especially true for transition economies in the 1990sbecause they were im-patient to learn from their new foreign owners. In that way, the knowledge from the parent company is replicated in the subsidiary. In reverse knowledge transfers, the subsidiary is the source of the knowledge directed to the parent company. The subsidiary can be motivated to transfer its knowledge because it can strengthen its strategic position in the MNC (Gupta & Govindarajan, 2000; Mudambi and Navarra, 2004). But the parent company will engage in this transfer if it’s beneficial from its point of view (Gupta &Govindarajan, 2000; Kogut & Zander, 1993; McDonald,

Tüselmann, Voronkova & Dimitratos, 2005). There are many ways how can parent companies benefit from a reverse knowledge transfer. They can use the knowledge trans-ferred from the subsidiary to access local knowledge, to better coordinate the global strate-gy, to improve the development of new products, technologies or services (Ambos, Ambos & Schlegelmilch, 2006), to control and monitor subsidiaries’ power (Yamin & Forsgren, 2006). Parent companies might also play a role in channeling knowledge to the appropriate MNC unit, orchestrating knowledge transfer processes in their own network (Criscuolo & Naru-la, 2007, Phene & Almeida, 2008).Because of the principal - agentrelationship, the parent firms’ commitment to learning from subsidiaries is less than the subsidiaries’ commitment to learning from their MNC parents. In other words, conventional transfer is a ‘teaching’ process whereas reverse transfer is a ‘persuading’ process. The subsidiary has to persuade the parent firm that its knowledge can fit the parent’s needs (Yang, Mudambi & Meyer, 2008). This persuading process can depend on subsidiary’s strategic position in the MNC network.

6. STRATEGIC SIGNIFICANCE OF SUBSIDIARIES IN THE KNOWLEDGE TRANSFER PROCESS

In today’s global challenging environment, MNCs can no longer be seen as centrally managed entities. That means that the parent company’s position in MNCs network differs from the one they had in the past and that subsidiaries have learnt how to gain higher auton-omy and use it to strengthen their position in the MNC’s system of entities. The subsidiary’s role shifts from the simple adoption of technology transferred by the parent company to the creation and development of local competences complementary to the rest of the MNC

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(Bartlett and Ghoshal, 1989; Birkinshaw, 1996; Gupta and Govindarajan, 1991; Kuemmerle, 1997). Their role has changed from competence exploiting subsidiaries to competence creat-ing subsidiaries. Competence exploiting subsidiaries mainly adapt products, processes and technologies developed in the parent company to the local needs and conditions. Compe-tence creating subsidiaries possess richer knowledge and they introduce new products and technologies. They may act as a source in the knowledge transfer process between them and the parent company.

The extent to which subsidiaries are involved in intra –firm knowledge exchange may differ according to their level of autonomy. A greater degree of autonomy is often consid-ered positively related with subsidiaries’ knowledge creation and development (Ghoshal andNohria 1989; Gupta and Govindarajan 1991; Nohria and Ghoshal 1994; Persaud 2005), based on the idea that independent subsidiaries have strategic mandates that favour local responsiveness (Bartlett and Ghoshal, 1989).In contrary, a lower level of autonomy might reduce the subsidiary’s enthusiasm for intra – firm knowledge transfer (Cantwell and Mu-dambi, 2004; Tsai, 2002).

The extent to which subsidiaries are involved in knowledge transfer activities depends on the strategic mandate that they have. Certain subsidiaries engage inintra – company transactions, but others do not. The ones that do engage can do it in high or low levels of transaction inflows/outflows. Depending on their role in the exchanging process, they can be distinguished as providers (sources) or receivers (receptors) of the knowledge transferred.

6.1. Subsidiaries’ strategic roles depending on their engagement in the knowledge transfer process

The nature of subsidiaries’ operations often varies. Whilesome subsidiaries are man-dated to contribute to the MNC by creating and disseminating new knowledge, the pri-mary aim of others is to implement or exploit headquarters’ knowledge in the local context (Gupta and Govindarajan 1991; Kuemmerle 1997; Asakawa 2001;Birkinshaw 2002; Ambos and Schlegelmilch 2004).

According to Gupta and Govindarajan (1991) knowledge flow patterns between or-ganizational units represent a core dimension along which subsidiaries’ strategic context can differ. They distinguish four types of roles that subsidiaries can have according to their involvement into the knowledge transfer process. The typology is based on their interpre-tation of the MNC as a network of capital, product and knowledge flows, with the highest importance given to the knowledge flows. The roles are consistent with (1) the magnitude of knowledge flows i.e. the intensity of subsidiaries’ engagement in knowledge transfer and (2) the directions of the knowledge flows, which means wheatear subsidiaries are knowledge providers or recipients.

The subsidiaries that are categorized as Global innovators serve as MNC’s fountainhead of knowledge and provide other subsidiaries with significant knowledge. Because of its ex-pertise in a specific knowledge area, the global innovator is a role model for the subsidiaries in other countries. The Global innovator has high knowledge outflows and low knowledge inflows. The Integrated player role has certain similarities with the Global innovator role because it implies a responsibility for knowledge creation. But, an integrated player is not self – sufficient in fulfillment of its own knowledge needs. That’s why when a subsidiary has

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the Integrated player role, it creates and receives knowledge at the same time. The Integrated played has high knowledge outflows and also, high knowledge inflows.

If a subsidiary has the Implementer role, then it engages in little knowledge creation and relies on information, resources and knowledge created in other subsidiaries or in the parent company. The Implementer has low knowledge outflows and high knowledge inflows.

When subsidiaries have the Local innovator role, they are relatively independent and have a local responsibility and engage in creation of country/region – specific knowledge in all key functional areas. However, this knowledge doesn’t have much competitive use out-side the country in which the Local innovator operates. These types of subsidiaries have low knowledge outflows and low knowledge inflows.

7. BARRIERS TO THE INTRA – FIRM KNOWLEDGE TRANSFER

The intra – organizational knowledge transfer is not an easy going process. Uncertain as it is, knowledge transfer takes time and incurs costs.

Sometimes, the reason for knowledge transfer difficulty can be found in the lack of motivation to share knowledge, but other times, the impediments can be of greater infra-structural significance. One of the most thorough research on knowledge transfer barriers has been conducted by Gabriel Szulanski. He has identified three components as strong predictors of knowledge stickiness (difficulty to transfer):

- Causal ambiguity - Lack of absorptive capacity - Poor sender/receiver relationship usal ambiguity is a lack of clarity about how owledge

components cause certain outcomes.

That is the reason why more and more owledge is harder to communicate and transfer. The

cond barrier for knowledge transfer is the lack of sorptive capacity. Cohen and Lev-inthal (1990) defined sorptive capacity as the “ability to recognize the value new external information, assimilate it, and apply it to mmercial ends”. The lack of absorptive capacity is ated to recipient’s inability to recognize value of new owledge as an obstruction component to knowledge nsfer. The third barrier, according to Szulanski, is the ture of the relationship between the knowledge source the recipient. If knowledge is transferred between people of two different organizational units and there is personal bond, tie or link between them which can pre– establish trust, then it’s less probable that they will incorporate each other’s knowledge into their own work.

Andreas Riege has made a literature review that lists sets of potential knowledge - shar-ing barriers. He has divided the barriers into three categories: individual, organizational and technological.

Individual knowledge sharing barriers:

· general lack of time to share knowledge, and time to identify colleagues in need of specific knowledge;

· apprehension of fear that sharing may reduce or jepardise people’s job security;

INTRA-ORGANIZATIONAL KNOWLEDGE TRANSFER PROCESSES39

· low awareness and realisation of the value and benefit of possessed knowledge to others; · dominance in sharing explicit over tacit knowledge such as know-how and experience that requires hands-on learning, observation, dialogue and interactive problem solving; · use of strong hierarchy, position-based status, and formal power (“pull rank”); · insufficient capture, evaluation, feedback, communication, and tolerance of past mistakes that would enhance individual and organisational learning effects; · differences in experience levels; · lack of contact time and interaction between knowledge sources and recipients; · poor verbal/written communication and interpersonal skills; · age differences; · gender differences; · lack of social network; · differences in education levels; · taking ownership of intellectual property due to fear of not receiving just recognition and accreditation from managers and colleagues; · lack of trust in people because they misuse knowledge or take unjust credit for it; · lack of trust in the accuracy and credibility of · knowledge due to the source; and · differences in national culture or ethnic background; and values and beliefs associated with it (language is part of this).Organizational knowledge sharing barriers: · integration of KM strategy and sharing initiatives into the company’s goals and strategic approach is missing or unclear; · lack of leadership and managerial direction in terms of clearly communicating the benefits and values of knowledge sharing practices; · shortage of formal and informal spaces to share, reflect and generate (new) knowledge; · lack of transparent rewards and recognition systems that would motivate people to share more of their knowledge; · existing corporate culture does not provide sufficient support for sharing practices;· deficiency of company resources that would provide adequate sharing opportunities; · external competitiveness within business units or functional areas and between subsidiaries can be high (e.g. not invented here syndrome); · communication and knowledge flows are restricted into certain directions (e.g. top-down); · physical work environment and layout of work areas restrict effect sharing practices; · internal competitiveness within business units, functional areas, and subsidiaries can be high; · hierarchical organization structure inhibits or slows down most sharing practices; and

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· size of business units often is not small enough and unmanageable to enhance contact and facilitate ease of sharing.

Technological knowledge sharing barriers: · lack of integration of IT systems and processes impedes on the way people do things; · lack of technical support (internal and external) and immediate maintenance of integrated IT systems obstructs work routines and communication flows; · unrealistic expectations of employees as to what technology can do and cannot do; · lack of compatibility between diverse IT systems and processes; · mismatch between individuals’ need requirements and integrated IT systems and processes restrict sharing practices; · reluctance to use IT systems due to lack of familiarity and experience with them; · lack of training regarding employee familiarisation of new IT systems and processes; and · lack of communication and demonstration of all advantages of any new system over existing ones.

8. BENEFITS OF INTRA – FIRM KNOWLEDGE TRANSFER

In today’s global network of inter - dependable business relationships between the units of a single MNC, there seems to be a small number of MNCs that still underestimates the potential power of sharing knowledge. The fundamental question that has to be addressed and answered here is: What are the benefits of knowledge transfer for the provider and re-ceiver unit, as well as, for the MNC as a whole? Answering this question requires thorough understanding of the knowledge transfer process. The benefits of knowledge transfer go be-yond “simple” financial return. Only a fraction of the benefits can be expressed in terms of money. The benefits also lie in other, less tangible, advantages that can be gained. The impact of successful knowledge transfer can be seen in terms of:• Achieving higher productivity • Availability of increased knowledge for the development of products and services in

other • organizational units • Achieving shorter new product development cycles • Making easier to distribute innovation and organizational learning • Influencing the expertise of people across the organization • Strengthening the network connectivity between individuals from different organi-

zational units • Increasing the interconnections between the organizational units • Allowing workers to obtain relevant insights and ideas that are necessary for ef-

ficiently executing their assignments • Solving intractable and wicked problems • Achieving higher customer satisfaction

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9. CONCLUSION

Today’s inconsistent business environment is embedded with more and more organiza-tions that base their competitive advantage on knowledge resources. They especially empha-size the significance of the knowledge transfer processes within the organizational frame-work. Effective and sustainable knowledge transfer can be very complex. Knowledge cannot survive in vacuum because subsidiaries aren’t knowledge islands. That is the reason why executives are eager to engage in processes that will ensure “two – way” benefits. The re-ceiver’s gains from the transfer are quite obvious and clear. It’s the provider that may need to be persuaded of the value of the process. A MNC’s competitive advantage relies on resources that are not being possessed by many competitors. It is necessary that those resources are developed or made valuable within the organization and hard to duplicate outside of it. The focus on resources that are developed within the organization and difficult to imitate puts organizational knowledge in a preeminent position as the principal source of competitive advantage (Spender and Grant, 1996; Teece, Pisano and Shuen, 1997). Knowledge transfer avoidance can result in significant drain of business wisdom that may decrease innovation, lower the growth capacity and reduce company’s effectiveness.

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UDC 005.32:001

CREATING CREATIVE CLIMATE FOR CHANGE MANAGEMENT IN THE KNOWLEDGE AGE

Marjan Marjanovic1, Nevena Krasulja2, Nikolaj Ivannikov3

1 Institute for Risk Assessment and Critical Infrastructure, Podgorica, MONTENEGRO, e-mail: [email protected]

2 Faculty of Business Studies and Law, University “Union-Nikola Tesla”, Belgrade, SERBIA, e-mail: [email protected]

3 Faculty of Business Studies and Law, University “Union-Nikola Tesla”, Belgrade, SERBIA, e-mail: [email protected]

Abstract: In order to achieve a successful business and compete successfully in today’s marketplace, organizations should treat and pay to attention to knowledge, which is the core of their competence, as to other strategy-an irreplaceable resource and asset. Knowledge Management (KM) essentially presents an intellectual property management - as a resource in a way that provides the company a competitive advantage. While KM has a lot to offer, the implementation of KM process is not so sim-ple, such as installing a software package. The successful implementation of KM requires long-term commitment and dedication of management, leadership that supports and complements the corpo-rate culture, dedicated, well-trained employees and managers, the use and application of information technology in the right way. The aim of this paper is to highlight the importance of creating a creative climate for change management in the knowledge age.

Keywords: creative climat, change, management

1. INTRODUCTION

KM is the ability to acquire and use resources to create an environment in which the information is available to individuals and in which individuals collect, share and use infor-mation in order to develop their knowledge and thus are encouraged to apply their knowl-edge for the benefit of the organization. (Chris Harman, C. and Berlade, S. 2000)

The acquisition and use of resources - in terms of the role of human resources this im-plies that the right people are placed in the right jobs through recruitment, planning and the ways in which employees operate.

Creating an environment - in terms of the role of human resources this entails the crea-

Marjan Marjanovic, Nevena Krasulja, Nikolaj Ivannikov46

tion of organizational culture and climate.In which the information is available - in terms of the role of human resources, this

implies the establishment of communication channels and creation of interface which con-nects user-employee with the computer.

In which individuals collect, share and use Information - in terms of the role of human resources, this will have an impact on the type of culture regarding KM, teamwork, human resource development, development of a climate of cooperation.

Encouraged to apply their knowledge for the benefit of the organization - in terms of the role of human resources this entails fostering and encouraging individuals to behave according to the rules that govern the organization, and from this arises the reward system.

This working definition is only a means to more easily understand the role of human resource management in the company.

One of the most important elements in the definition is creating the right environment in which to apply the concept of KM. This environment includes in addition to the physical (premises and equipment) also psychological environment. In this environment, employees create reciprocal links as well as the connections between the IT and staff and the effective use of these links to create benefits for the company. Effective KM equally applies to the culture and behavior within the code of conduct within the company, as well as the informa-tion system. Part of the role of human resources in knowledge management refers to a set of guidelines for the establishment and management of organizational culture. However, it is not so simple, because the difficulties arise when attempting to define culture and units that would quantify and measure it, i.e. its impact. Many so-called units of measurement are indirect and descriptive, and thus that way we can not precisely define culture.

Još jedan dokaz da se korporativna kultura ne može precizno definisati, koji pokazuje da kada bi ispitali desetoro zaposlenih dobili bismo deset različitih odgovora na pitanje šta za njih predstavlja organizaciona kultura. Ovo samo pokazuje da se organizaciona kultura više “oseća” kroz efekte koje stvara nego kroz samo postojanje njenog pojma. Another proof that the corporate culture can not be precisely defined, which shows that if we examined ten employees we would get ten different answers to the question what for them is the organi-zational culture. This only shows that the organizational culture is more “felt” through its effects than through the term as such.

2. STEPS FOR CREATING ORGANIZATIONAL CULTURE

Steps to create an organizational culture that will support KM include the following:

1. Understanding the existing culture of the companyCulture reflects the values and attitudes that influence employee behavior, consciously

or unconsciously. These values and attitudes are linked and intertwined with the values and attitudes that individuals from the environment (outside the company) bring with them, and with the views of top managers and top executives. We can also observe differences in behavior and thinking within the organization at different departments, creating so-called subculture. Subcultures have their own identity and affect other subculture, with which they are in some way connected. One of the subculture that has the greatest impact on others, is the one that occurs within the IT sector, because this sector interacts with all the others. It is

CREATING CREATIVE CLIMATE FOR CHANGE MANAGEMENT IN THE KNOWLEDGE AGE47

important to observe all of these elements, however, culture is not only a set of sub-cultures, but also a reflection of the values and attitudes of the whole company.

2. Re-examining values and attitudesThe best way to achieve this step is to review both the written and unwritten rules of

the company. Written rules are mainly found in the form of documents, such as codes of conduct, manuals, etc. Unwritten rules are best identified by working with employees to es-tablish rules that employees adhere to and are related to the company’s operations, internal rules and values of each employee. Some of the unwritten rules include the following:

• giving explicit orders is not acceptable, all commands are expressed as require-ments

• People are not contacted when not at work (leisure time)• women can talk about issues that concern care for children, while men can not• nobody talks positively about the company when they are on a break in the cafete-

ria• errors will be treated as failures and attributed to an individual, etc.

3. Adjusting or changing the culture in order to provide an environment that would suit KM

The existing culture is very difficult to change. However, the recognition of critical places in the values and positions is a first step to establishing the desired change.

Methods of change of cultureThese can be classified in 3 procedures.

Head on conflictDirektni konflikt sa postojećomkulturom

Working with elements of the cultureUzimati delove postojećekulture

Working around the existingcultureZaobilaženje postojećekulture

Strategije za promenu kulture

Figure 1. Source: Knowledge Management and The Role of HR – Chris Harman and Sue Berlade, Velika Britanija 2000.

Marjan Marjanovic, Nevena Krasulja, Nikolaj Ivannikov48

Head-on conflict – direct conflict with the existing cultureHere the desired changes are imposed on the company as a direct challenge to the

existing culture. This approach carries the highest level of risk, but if it turns out as good, it very quickly produces results. The approach will be successful the organization works to “remove” those people who were responsible for creating the existing culture - which the organization wishes to change. However, the negative effects brought by this approach are: creating conflicts within the company and leaving the jobs by the employees because they feel less important and under-appreciated.

Working with elements – take certain elements from the existing culture Unlike the previous approach, here the desired changes are implemented in the existing

areas of the culture, which are subject to change, without changing the whole culture. Pre-cisely because of this, this approach is met with much less resistance, because it assembles in one place the benefits of the existing culture. It is not a quick process and it requires good preparation and understanding. A typical example: when current management implements changes in an environment where change is not immediate, it will only happen in the future – they are gradual and value continuity. This approach may prove to be good as it is less di-rect than the previous one, because it includes a broader range of actors involved in deciding whether and when changes are needed, as well as in the implementation of changes. How-ever, with this approach it may happen that change of the old culture is not achieved due to lack of motivation for change and the prevalence of the existing culture.

Working arround –going around the existing culture Basically, this approach is based on avoiding problems, although sometimes to avoid or

work around the problem can be very creative. For example: setting up a new department in the company, or even create a new company with a brand new culture. A company that wants to create an innovative step forward the development of culture, will rather create a new unit that will operate under much less stringent rules and operational requirements than the other units, but cope with the changes in the existing culture and solve the prob-lem. Suppose, if we recruit a brand new personnel that would distance themselves from the influence of the existing culture, they will considered themselves to be a special group and different from the rest of the company. The problem with this approach would be the estab-lishment of relations between the newly created units and the company or between new and existing staff. When creating a completely new organization there is a risk that the existing culture simply gets transferred again, and again we have the same problem. However, de-spite all the pitfalls that this approach brings, there are also positive sides. From emerging parts we receive feedback that generates cultural change in the existing company.

1. Creating culture for KMThe traditional factors of production, such as natural resources, labor and capital are

increasingly losing their importance. At the same time there is a very noticeable tendency of attributing the growing importance to intangible assets. These should include: knowledge, information, experience, skills... Today, the story of knowledge involves the entire intellec-tual assets - intellectual capital – of the company. The value of intellectual capital is huge, but if we take that the entire capital is 100%, 80% is in the invisible assets, and only 20% is in the financial capital.

Uncertainty has become a commandment of today! Competencies of the company are

CREATING CREATIVE CLIMATE FOR CHANGE MANAGEMENT IN THE KNOWLEDGE AGE49

no longer based solely on the economy, calculating and presenting financial performance indicators, but on something much bigger - the Knowledge economy! In the knowledge economy it is critical to quickly and efficiently respond to the unexpected and unusual mar-ket demands and at the same time juggle conflicting interests of the ever less conciliatory sides. Companies can no longer survive if they exist only to compete; now they must be prepared to last!

We must discard the old paradigms that re-engineering and restructuring can fix eve-rything, because they can not. This is the problem of today’s economy, which has roots in the past, thinking that any new business can be incorporated into the framework of the old strategy and thinking, lulling in the cradle of safety from which they will soon have to wake up because the new knowledge economy will override and bypass them with large speed!

These facts are supported by the reality that most managers come from the industrial economy, they believe in manufacturing processes and products, but they are no longer the deciding factor.

In the industrial age, people were going to work and “did” their job. It was a time when productivity was ensured through routinized work and the elimination of any deviations from the norm. Creativity was not viewed favorably. Construction took place within par-ticular limits. Limited jobs create limited people.

In today’s hyper-competitive market, limited is the last thing that a smart organization can afford. When people start working smart, it is like a breath of fresh air in the working environment. Almost all companies agree that we have entered the knowledge economy, and that means the age of knowledge workers. Human capital is recognized as a driving force for innovation and a sustainable competitive advantage.

Much of our understanding of organizations was formed before or during the indus-trial age. We think about the features, but we should think about individuals. Because in a smart organization, individuals, and not the positions that they occupy, are the blood vessels of knowledge. Coordination is not a result of the chain of command, but the result of co-operation between the various team members. The more wise knowledge is exchanged, the more hierarchy as a coordination mechanism isunderestimated and the more undermined the legitimacy of the underlying management.

‘’Smart head’’ of workers contains part of the intellectual capital of the company and makes him/her shareholders and stakeholders of the most valuable wealth owned by a com-pany. The result is that a knowledge worker gradually gets the role of manager, because the development and the search for new wealth of organizations traditionally used to be busi-ness of managers and CEO.

The following examples are evidence of doom which is consequence of blindly follow-ing the result of inertia - the keeping of the old paradigm.

• Strategic frameworks become blinding light - strategies are ways and forms, ac-tually windows through which managers view their business. With their help, managers remain focused on the desired field of activity. However, because of thema managerdoes not see further and deeper, new ideas and opportunities, because they become blinding, if they are blindly followed!

Example: Firestone, after years of continuous growth, finally took the leading position in the US market in 1970. Michelin presented at that time safer and more economical tires. Firestone was competing with Michelin in Europe, but because of the blinding fear for their

Marjan Marjanovic, Nevena Krasulja, Nikolaj Ivannikov50

position in the market, they continued to produce only traditional tires. This way they had lost significant market share and withdrew a year later.

• Processes transformed into routines - Conventional processes can ruin themselves. People are always looking for better ways to do jobs.

Example, McDonald’s has built its success on standardized processes that were moni-tored from the top of the pyramid. Strictly adhering to this kind of business, in 1990 they lost a significant market share in favor of Burger King and Taco Bell, which were much faster in meeting changing consumer demands for healthier food.

• Ties are becoming unstable - Every company should have a strong relationship with their customers, suppliers and employees. However, when changes happen, these links can impair flexibility. This implies strict adherence to certain suppliers, lack of search for new customers ...

Example: Vision of Apple computer manufacturer of technically elegant computers and its free will attracted many creative engineers. Once the computer became no longer so al-luring, the company’s survival would depend on reducing costs and speeding production time. Engineers have refused to change anything in their work, thus compromising the con-nection between the company and its leading engineers, leading to an inability to react to market changes.

• The values turn into dogma - values that are full of energy and alive inspire people. Very often they can turn into a rigid, self-defeating policies and relationships.

Example: Polaroid had awarded a very high value to research of cost reduction, to the extent that it eventually identified with that research. It almost ruined the company.

A culture that is related to knowledge management is the one that encourages and val-ues the following:

• Connection into the communication networks within and outside the organization• Respect for individuals• Creativity and Innovation• Confidence• Sharing of information and ideas• Constant learning and development• Cooperation instead of competition• Diversification in business• The low level of strict policies and control• Skills, knowledge and talent

New paradigmes1. There is no “right” ideal way of controlling peopleThere is no “right” ideal organizational structure2. Basing business strategy on new certainties

New certainties:• Global competition• The discrepancy between the political and economic realities3. Manage the change so that everyone sees the change as an opportunity.

CREATING CREATIVE CLIMATE FOR CHANGE MANAGEMENT IN THE KNOWLEDGE AGE51

3. LEADER OF CHANGE

“Successful leadership does not mean to solve the problem once they occur but to pre-dict and prevent potential problems before they that occur”

Jack WelshThere are three types of companies:• those that affect things that happen• those that observe what happens• those that are wondering why something happened4. Increasing the productivity of knowledge workers - the greatest challenge of the 21st

century5. The challenge of information technology - turning information into knowledge6. Managing personal career

4. CREATIVE APPROACH TO IMPLEMENTATION OF CHANGES

Accepting change and creative change management is an extremely difficult task, es-pecially for those companies that are not oriented to knowledge management, as well as on fostering and creating innovative climate. As already mentioned, there are various ways to satisfy these items, but we have to reflect on the “life of individuals” within the company, the way they are seen by the companies and how companies should behave in order to gain the title of creative.

The willingness to take risks and the possible introduction of novelties is not always sufficient. The company must be prepared to absorb the personal initiative to facilitate the creation of innovative teams that will allow operation in accordance with these initiatives and create a fertile ground for the growth of creative ideas that will open the door to change.

Analysis of the creative process within each company, and generally, involves the con-cept of duality and context. (Hartley, K, 2007) The dual character of creativity is due to a combination of different styles of thinking. It is assumed that creative work will meet our criteria if it takes place within certain limits while reviewing expectations at the same time.

If creative thinking is positioned “too out of clichés”, then the result of creative think-ing becomes a novelty that can not be evaluated. If positioned too close to the “center”, the creative process follows the given concept and will strive for the fulfillment of the set point, but not in an innovative way. (Bolton, K. 2010) The best solution is to position the creative thinking on the boundary of conceptual space, because in this way a creative idea can be built in a familiar and understandable environment, but also expanding the existing bor-ders.

This comparison helps us to project the same image onto the organizations when ac-cepting changes.

The best recipe for creativity represents in fact the ability to connect different compo-nents, different styles of thinking, different processes and ideas, different contexts and to bring them in combinations that at first glance may seem unacceptable. Putting together novelties and values, in a link with hard work and inventiveness leads, to outstanding results.

Creative thinking takes place in the border areas of the brain, at points where different kinds of thinking and different realities are connected. The creative individuals are particu-

Marjan Marjanovic, Nevena Krasulja, Nikolaj Ivannikov52

larly successful in overcoming existing boundaries and creating new ones.The mind works in such a way as to understand the sense of confusion and uncertainty,

to recognize known patterns in the outside world. As soon as it recognizes this pattern, the mind switches to it and follows it – it no longer needs to think.

For activities such as problem solving both ways of thinking are essential. First, the problem must be analyzed, and then generate possible solutions, then we have to choose and implement the best solution and in the end there must be conducted evaluation of the effectiveness of solutions. As can be concluded from the above, as well as from the practice of real life, these two ways of thinking often complement each other. Here are some authors who are also dealing with the implementation of creativity.

Nickerson has provided a summary of the various creative activities that have already been presented. These include approaches that have been developed by academias and in-dustry:

1. Establishment of intents and purposes,2. Construction of basic skills,3. Encouraging the collection of certain knowledge,4. Stimulating and rewarding curiosity and exploration,5. Construction of motivation (especially internal)6. Encourage self-confidence and willingness to take risks,7. Focusing on the improvement of skills and self-competitive spirit,8. Providing opportunities to choose and discover,9. Developing the self-management skills (meta-cognitive skills)10. Learning of techniques and strategies that encourage creative activity,11. Providing a sense of balance

5. WHAT IS MEANT BY CREATIVITY

Ability. The simplest definition of creativity tells us that creativity is the ability to in-vent or create something new. Creativity is not related to the ability to create something out of nothing, but it is the ability to generate new ideas by combining, changing or re-use of existing or different ideas. Some ideas will be brilliant and outstanding, while others will be simply practical, good ones which no one thought of so far. Each of us has basic creative skills. One has only to look back and look at the children, it is very easy for them. In adults human creativity is largely suppressed during the process of education, but is still present and only needs to be encouraged. Sometimes it is enough simply to devote attention and find time to deal with it, while in other cases the application of techniques for stimulating creativity is necessary.

Behavior - Attitude. Creativity is an attitude: the ability to accept changes and innova-tions, readiness and willingness to play with ideas and possibilities, the flexibility of view, the habit of enjoying the good things, but at the same time finding ways to improve them. We grew up accepting the framework of action, allowing only a small number of things that are considered to be normal, like strawberries topped with whipped cream. Creative people would see that there are other possibilities, such as, for example, a sandwich with peanut butter and bananas or prunes topped with chocolate.

Process. Creative people work constantly and very hard on perfecting ideas and so-

CREATING CREATIVE CLIMATE FOR CHANGE MANAGEMENT IN THE KNOWLEDGE AGE53

lutions so as to gradually build and edit their job with a certain amount of ingenuity. In contrast to the myth on creativity, a very small number of exceptional ideas is created as a product of a single flash of brilliance or in the performance due to collision of insanity of a large number of activities. Much closer to reality and the truth about creativity are stories of companies that have had to take innovation and inventive innovators in order to sell to the market, because the innovator would have kept this idea and hid it, always trying to improve it even more. For a creative person there is always room for improvement.

6. CREATIVE METHODS

There are several predefined methods that achieve creative results. Here are five clas-sic methods. Development. This is a method of incremental improvements. New ideas stem from others, new solutions arise from pre-existing, with a slight improvement compared to the old ones. Many sophisticated things we enjoy today, were created as a result of long-standing and constant progress. Achieving that something is improved a little bit from one side and a little bit from the other as a result brings something better, sometimes even some-thing completely different from the initial solutions or original.

Let us take look at an example of the auto industry or any product of technological progress. Each new model achieves a new improvement. Each new model is created on the basis of the creative experience collected from previous models, so that the new model in-corporates improvements in economic terms, comfort and duration. Here creativity lies in the ingenuity, the gradual improvement rather than something that is completely new.

The evolutionary method of creativity reminds us of the basic principle: Every problem that has already been solved, we can solve this in a better way. People who think creatively are not satisfied with the fact that the problem is solved once and that is the end it, it can be forgotten. They do not support the view that if something is not broken don’t fix it. The phi-losophy that they espouse is that there is no insignificant improvement, any improvement leads to something new.

Synthesis. This method can combine 2 or 3 ideas resulting in the fourth one. For exam-ple, the idea of combining magazines and audio tapes led to the idea of the magazine which can be listened to, which is extremely useful when it comes to blind people. Another exam-ple. If it is known that couples at the first meeting go to dinner, and in the second date to the theater, we can connect these two ideas and make a third one. Make a restaurant theater so that couples first go to dinner and then see a show, or vice versa.

Revolution. Sometimes the best idea is totally different, a significant change from the previous one. One example of revolutionary improvements. Professor of psychology has asked himself a question: “How to improve the teaching and?”, a revolutionary idea would be “to arrange lectures for students to train each other, let them work in teams and give reports.”

Repeated use - “Recycling”. Observing something old in a new way. We should go be-yond set boundaries. Getting rid of prejudices, expectations and assumptions and discover how something that can again be applied. Creative people, like painters, can go to waste and in an old model see the work of art, which they will paint and bring back to the apartment. The key thing is to see beyond the limits of previous ideas, solutions or things and see that there is another solution possible.

Marjan Marjanovic, Nevena Krasulja, Nikolaj Ivannikov54

Examples: staple can be used as a small screwdriver if turned downwards; colors can be used as a sort of glue to prevent the screw up to become lose; dishwashing detergents can be used as removers of the DNA from bacteria in a laboratory; spray for general use in cleaning can be used as a spray against ants.

Change direction. Many creative solutions arise when attention is transferred from one viewing angle problem into the other corner. This is often called creative insight.

A classic example of this method is a problem that has a department for the preserva-tion of the sidewalk, and that is how to keep skaters that in certain parts of the sidewalk where there is a hole-ditches do not use skate. They tried to put the fence, but the children went around it, they tried to set up a long fence, however, the children broke it; then they put warning signs on the fence that children ignored. Then someone from the department tried to change the direction of thinking, so they realized that their problem is how to keep children away from these areas and not the fact that children are trying in every way to pass the next set of barriers. The solution was to remove their desire to use skejtboards there so they put something on the pavement to make it less smooth. The only way to reduce their desire was to fill the bottom of the ditch, poure concrete to fulfillment and make smooth curvature. The acute angle formed by the concrete made the skateboard ride impossible and this activity was finished. There were no more problems with driving skateboarding , and no problems with the fence.

This example supports the fact that the goal is to solve the problem, and not try to im-plement a single solution. When one method does not work, you should move on to another. In this way, we are not tied to individual ways of solving problems but to the solutions to this problem.

One of the major errors with the understanding of creativity is that it gets identified with the mere novelty. In this way we exclude the expediency and value that carries the crea-tive process, creative individuals - holders of creative ideas that we leave completely out of the system and process that enables us to turn original ideas into creative work. (Bolton, K. 2010)

Creativity is not a quest for novelties for their own sake.One of the main postulates of the creative process is that we should disregard normal

rational judgment and the ability to avoid a dedicated review of the value or purpose so that the creative flow would not be hampered. We will later explain this in detail, because this kind of thinking is called a lateral thinking.

This is just one of the ways to openly embrace change and not to oppose the implemen-tation of the same.

In the wider organizational level, the direct application of innovation can be equally damaging, as it is useful, if we insist only on constant innovation and creation of new ideas, rather than on the development of sustainable innovation. Theodore Levitt in the sixties no-ticed that those who conduct uncritical innovation neglect resources and the organization’s ability to accept novelties and neglect issues of continuity and sustainability of innovation. (http://hbr.org/2002/08/creativity-is-not-enough/ar/1)

For this reason it is very important to create such an organizational culture that sup-ports a climate of innovation and creativity. This will establish a balance between excessive tendency to constantly insists on introducing innovations and closing of the organizations for innovation that will lead them towards creative industries.

CREATING CREATIVE CLIMATE FOR CHANGE MANAGEMENT IN THE KNOWLEDGE AGE55

Therefore, the motto of such an organizational culture should be: Not novelty before the value!

Value of the innovation is as important as the innovation that it entails. . True crea-tive thinking involves combining multiple components of knowledge and understanding of different styles of reality, in order to harmonize the possibility of creating a novelty and the ability to develop and determine its value.

The creativity of the individual, innovative ideas and inventions represent only a small part of a complex production process. In contemporary creative economy, ideas are cheap because they are too many of them, but the only important thing is what will eventually hap-pen with them and how they will be implemented. The challenge of management and struc-turing creative process represents toleration of contradictions and opposites management.

Creative and innovative ability of organizations are becoming increasingly important in transition from economies based on material goods and transactions on the creative in-dustry in which the basic capital consists of ideas and knowledge.

“The matrix organizational structure better adapt to rapid, fragmented markets, in-novative products and flexible, highly skilled labor. Such structures allow for quick rede-ployment of creative teams and resources, which encourages employee productivity in the creation and implementation of innovations.

The myth that the creative industries are the product of individuals is just a myth. Creative individuals are part of the system and the network, which is often overseen in favor of “personal talent.” The creative process in the creative industries is essentially collective, although based on the abilities of individuals. It could be said that the high level of depend-ing in the supply chain is a direct result of specialization and individualization of creative work. No single company can expect to be self-sufficient and completely independent. “ (Hartli, Dž. 2007)

Taking multiple roles in the creative industries is different from playing assigned roles in the team in traditional organizations. By assigning roles in the team, employees are im-posed by extremely limited and uncreative stereotype because each role is based on a pre-planned system, instead of the actual complex and multiple ones which are advocated by the theory of knowledge management. In contrast, multitasking and changes of the roles in creative industries are both creative and necessary. At the beginning of each new project or during the establishment of the new company, if we are talking about creating a creative climate from the start, the role that each individual receives and powers are defined only exhaustively, and communication is informal. The next step is to change the roles so that each individual changes the mode of reasoning, where a change in perspective introduces elements of something new and unknown and appeals to the review of existing ideas, which automatically results in a triggering of the brain and creating new ideas. In addition to a general review, there are many techniques and methods by which we encourage our brains to overcome the existing framework and view on the existing problem or a challenge from a completely new perspective. These are the tools and techniques of the so-called lateral thinking and for the purposes of this paper we will briefly describe some of them, that in the application enable and create innovative and creative climate, that is needed in order to cope with the company’s resistance to change.

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7. LATERAL THINKING AND TECHNIQUES OF CREATIVE INCENTIVES

The term lateral thinking was created by Edward de Bono in 1967 to allow a tool for problem solving in an indirect and creative way.

Critical thinking is primarily engaged in awareness of truthfulness of some testimonies and looking for faults. Lateral thinking is focused on improving the value of these state-ments and ideas, i.e. it focuses on values that they carry. A person who wants to distance itself from the already known and existing ideas and create a new one uses lateral thinking.

If we consider the behavior of the system to create forms that organize themselves in our perception, then from this follows the logic of these forms of lateral thinking.

The nature of human brain (Ristić, D. 2011) is such that all the observations of the out-side world it “classifies” into the known, usual, previously approved scheme of thinking and comprehension (understanding). Therefore, analysis of data and information often do not give new ideas. The brain can “see” only what it was prepared for. So that, when analyzing the data, we can only get ideas that already exist. We are educated in such a way that we are always trying to “remember” something that we have heard or learned, we tend to “copy” things.

We usually expect things to happen in the usual, expected way. If somehow we can get through and bypass the main stream of thought or expected events and enter into a “lateral flow of thought,” then we can come back to the starting point and get creative insight into the possible solution, and get new ideas for a solution. This is also the so-called model of lateral or side views.

8. ‘SIX THINKING HATS’ METHOD

Six-thinking hats is an extremely powerful technique of lateral thinking. It is used to change the perception regarding important decisions. This technique forces us to move be-yond the usual framework of thinking and helps to get a more rounded view of the given situation. (De Bono, 1995)

Many successful people think in a very rational, positive way. This is part of the reason why they are successful. Often, however, they can not observe the problem from an emotion-al, intuitive, creative or negative angle. This can mean that they underestimate resistance to plans, are not ready to make a creative step forward and are not willing to engage in dealing with anything that is unusual.

This technique of lateral thinking is a simple and proven technique that awakens enthu-siasm, creativity, courage, and all that in order that each meeting and any decision be filled with new ideas.

Hats are metaphors. Each represents a different perspective or a different way of think-ing. Team members receive a certain color hat and while that hat is actual, they must think in a way that is determined by that color. This helps them to view things from the perspective of others and not to be exclusive in their views. Symbols are very effective and really work. Symbols are related to the placement and use of a hat, which is automatically identified with the “placing” of a certain type of thinking onto the head, i.e. focus on this type of thinking.

What is really fascinating, when the application of this tool is concerned, is that in a very simple way (with simple symbols such as hats) the flow of thinking is directed in the

CREATING CREATIVE CLIMATE FOR CHANGE MANAGEMENT IN THE KNOWLEDGE AGE57

right direction so that there is only one hat at the same time for all participants.Each participant thinks along with others, not against each other, as in the traditional

way of conflict thinking.The technique of six-thinking hat separates ego from performance. Nothing is lost

among many information and everything is one place. The very replacement of hats is very interesting and good at the same time, as this way

we go from one mindset to another, but the focus remains under every hat tied to what that hat means. People should be encouraged to wear hats, because this is a very effective way to make people understand the change of mindset, not as a compulsion or command, but sim-ply as change hats and focus on what is of that hat expected at that moment.

This method-technique leads to a drastic shortening of the duration of the meetings (saves around 75% of the time) and to the structural results. This method has recently been adopted by an increasing number of companies including Du Pont, IBM, NASA Prudential Texas Instruments, NTT, Statoil, Shell, JP Morgan.

A brief overview of each hatWhite hatInformation that is known and needed• Neutral and objective• Clean facts and figures• First class facts: tested and proven• Second class facts: believed to be true• Identify the information needed• Never expresses own opinionYellow hatOptimism: the value and benefits - why something will work?• It symbolizes sunlight, joy and optimism• Positive and constructive• Examines and gives support• Tends to find logical support• Generative and supportive• Allows visions and dreamsGreen hat The possibility, alternatives and new ideas• It symbolizes fertility, growth and value of seeds• Creative Thinking• The search for alternatives• It does not have to be logical• Operation replaces reasoning• Moving from one idea toward other ideas• Creates new concepts and viewsRed hatsHunches and intuition• Legitimizes emotions and feelings• “This is how I feel”• Fears, what we do not like, love, hate

Marjan Marjanovic, Nevena Krasulja, Nikolaj Ivannikov58

• Contrary to a neutral, objective information• Make it concise• No need for excuses• Lets explore the feelings of othersBlack hatNegative judgment, the so-called devil’s advocate - why it will not workCaution – not arguing• Negative critical reasoning• Risk analysis• Logical reasons must be given• It points out the dangers and potential problems• It points out errors in the projectBlue hatManaging the process of thinking• A hat that controls• Conductor of the orchestra• Organizes thinking• “thinking about thinking that you need to explore the theme”• Calls for the use of other hats• Sets focus: defines the problem and formulates questions• It is responsible for summarizing, inspections and conclusions• Ensures that we act by the rules

9. SCAMPER TECHNIQUE

Scamper technique falls into the category of linear thinkertoys techniques, class A. This class of techniques reorganizes the known information in a different way by listening, shar-ing, combining and manipulating this information for the purpose of creating new points of departure, the entrance to the creative zone of problem solving. Using these new entries, you can move from idea to idea, until you find the one that suits you best. It is similar to rocks in the river. Skipping from one stone to another, as we cross the river. (Mihalko, M, 1991)

Scamper technique essentially consists of nine techniques for transforming objects, service or process into something new, something improved.

Technique Scamper is a list of questions that support the idea encouraging. Essentially it is an abbreviation for the following questions:

Substitute something - Replacement is actually a method of trial and error, i.e. replace-ment of one thing with another, until we reach the right idea.

Combine it with something else - Creative thinking involves synthesis - the process of combining already existing ideas to give something new.

Adapt something to it - Adjust something to that particular work. The paradox of crea-tivity is that we first have to get acquainted with the ideas of others, in order to come up with something original.

Modify or Magnify it - People, generally, objects or things that they value experience as larger compared to those that are not. This is a simple example of the poor and rich children. Poor children experience money as something big, and the rich do not. As far as changes go,

CREATING CREATIVE CLIMATE FOR CHANGE MANAGEMENT IN THE KNOWLEDGE AGE59

everything may be subject to modification.Put it to some other uses –This issue will primarily help you find an idea, and then im-

agine what else you can do with this idea.Eliminate something - This is not in the literal sense of the word - to remove. Ideas are

sometimes generated if diminish the subject. Constant shortening of ideas, processes and objects, can narrow down a challenge to the part or function that are necessary. From the large whole to allocate the part that we need.

Reverse or Rearrange it - Creativity consists of the rearrangement of what we know in the way to find out what is unknown to us – this usually leads to extraordinary ideas.

These techniques are not a tool for the individual. They are applied in teams and with-out the teams they are of little use to a company. Here we come back to the fact that compa-nies that seek to constantly adapt to changes, to manage the expertise of their employees and at the same time to be creative and innovative, must not consider only a creative individual, but a creative team.

10. CONCLUSION

For companies to swim in the waters of creativity and become part of the so-called creative industries, where changes are imperative, they should form a Team for creativity and innovation (TCI). These teams represent the effort within the company to create a col-lective model of creativity and applicable to the model lineup as a key element of each of the functions in the company, of which all further initiatives will start.

In the framework of such formed teams, as input resource in the process of creativity we take diversity and contradiction, from which through the “processing” we get seemingly incompatible ideas. The task of these teams is to tolerate diversity, building on the ideas of diversity and have the power to reach out to other parts of the organization. Perhaps their role will no be theatrical to the extent that we expect “bum” effect every time, but it is the task of this team to identify and develop an idea that was somewhere already formed, but could not be realized.

This team is built by individuals who know how to listen, who can adapt to the needs of existing ideas and companies to transform individuals who generate ideas, but also those who think critically. Each team must develop the ability to solve problems just as much as the ability to find problems. A balance must be achieved, because only in this way, teams will be able to create a realistic picture to what extent the company is useful, and to what extent ideas and competitiveness of the company fit into the existing image and situation in the market. TCI should be an integral part of the creative bloodstream of the organization based on changes.

This way, as well as through creating a cultural climate which represents creativity, we can realize the willingness to change not only the operating mode but to switch the capacity of companies in the broader framework of the present paradigm based on knowledge.

Marjan Marjanovic, Nevena Krasulja, Nikolaj Ivannikov60

REFERENCES

[1] Harman C. Berlade,S. (2000) Knowledge Management and The Role of HR –, Ve-lika Britanija.[2] Ristić, D. i saradnici, (2011) Osnovi Menadžmenta, Cekom books, Novi Sad[3] Hartli, Dž. (2011) Kreativne industrije, Clio, Beograd[4] de Bono, E. (1995) Serious Creativity, HarperCollinsBusiness, London[5] http://hbr.org/2002/08/creativity-is-not-enough/ar/1[6] http://www.virtualsalt.com/crebook2.htmhttp://www.virtualsalt.com/crebook1.htm[7] Bolton, K. (2010) Menadžment i kreativnost, Clio, Beograd[8] Marx, M. (2009) Kreativan Kapital Srbije, Kreativne industrije i ekonomija znanja, Academica, Beograd[9] Michalko, M. (1991) Thinkertoys – the handbook of creative-thinking techniques, Toronto,[10] Ristić, D. Boršoš, A. Kliček, T. (2009) „Kreativnost kao katalizator razvoja intelek-tualnog kapitala“, Zbornik radova Na putu ka dobu znanja, 2009.[11] Tisen, T. Andriesen, D. Lekan Depre, F. (2006) Dividenda znanja, Novi Sad[12] www.vernaalee.com

UDC005:316.323

MANAGEMENT IN EDUCATION AS A FUNCTION OF SOCIO -ECONOMIC DEVELOPMENT

REPUBLIC OF SERBIA

Dragan MitrovicRepublic Education Inspector, Ministry of Education,

Science and Technological Development, Belgrade, SERBIA

Abstract: this paper will try to highlight the issues of educational needs that are constantly expand-ing and growing, the corresponding trends and changes, it will try to emphasize the importance of management in education and the impact of education on socio-economic development in Serbia, through the implementation of basic management functions: planning, organizing, leading, control-ling, analyzing and measuring the results of educational achievements and educational benefits. Im-plementation of management principles in education is a fundamental prerequisite for internal and external efficiency of education system, with significant implications for the socio-economic develop-ment of Serbia, which is primarily determined by the general level of education. The desired result of implementing results of scientific research to educational uses, is the change in individuals, as well as the acquisition of practical skills and abilities. In the history of Serbia, education has always con-tributed to the inner rise of the Serbian people and was strong factor in its overall development and spiritual liberation. Is this still so?

Keywords: management, education, science, socio-economic development

1. INTRODUCTION

Globally looking, the world is experiencing changes and science and education are the key factors of those changes. New knowledge reveals new horizons and needs, new engage-ments in the implementation of changes.

Successful socio- economic development is reached through knowledge, and knowl-edge is reached through education. Thus are created numerous questions, seeking answers in the development process of education which takes attributes of one of the leading factors of country’s development.

Therefore, the changes require activities and in the education process, in fact, every-thing that education system can make more efficient and effective in the context of socio-economic development of Serbia.

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In order to meet the requirements which characterize contemporary management of educational institutions and their contribution to socio-economic growth, the concept of active managing is used- management concept- enabling goal orientation, flexibility and control over achieving goals.

Management expediency in education and reaching development goals is mirrored in dropping the classic principal of static-functional management principle and orientation towards variable and flexible business organization which is shifting its form along with change of Serbia’s sustainable development requirements.

Let’s remember the definition of sustainable development, where we can recognize two basic concepts:

- Development leading to present, which implies harmonizing economic and overall social standard on one hand, and the quality of life, i.e. the acceptable living standard, on the other hand.

- Development which does not jeopardize the possibility of future generations meet-ing their needs, i.e. the existence of future generations.

Economic development is conventionally defined as the growth of real gross domestic product (GDP) per capita.

Development suggests innovation process where new technologies will be generated, new manner of operation etc., and in a sociological sense, it implies that big social and struc-tural changes will emerge in the process of institutional transformation.

Successful development requires adequate knowledge, invention, responsibility, initia-tive and innovation, as well as hard work. Also, new marker realities require elasticity and speed.

Economic growth rate is vastly determined by the availability of educational workforce.Therefore, science and education present solid grounds and reliable pillar of every

well-arranged country. [1] Science and education in Serbia have always been in function of constant and continuous inner rise of Serbian nation, strong factor in its overall develop-ment and spiritual liberation and independence.

Educational level of the population is an indispensable mark of achieved level of social development in every social community. Higher level of education implies a higher level of capacity to manage complex and responsible businesses in society and it affects all aspects of social living- economy, politics, health culture and social security. Science and education are measure of progress in every social community.

Economic crisis accelerates the interest for position and role of science and education which represent treasure trove of valuable experiences that can be adjusted to present mo-ment of Serbia’s development, through intensive research of different areas of operation, idea generating, as well as development of methods and techniques of practical problem solving which, in contemporary conditions, implies speed, optimal costs and innovation.

Necessary changes are, primarily, connected to changes in people’s attitude (in motiva-tion, knowledge, criteria, individual’s behaviour and group’s behaviour with abilities and other personal characteristics.

In the same manner, country needs to stop influencing the outcome of education, sci-ence and economic functioning and limit itself to the role of creating institutional frame-works, protectors of game rules based on the rule of law and respect of legality as well as rules of socio-economic development and market economy.

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2. IMPACT OF SCIENCE AND EDUCATION ON SOCIO-ECONOMIC DEVELOPMENT

Modernisation of society and country, and orientation towards modern economic and technological development imply innovation of global goals of science and education in Ser-bia.

In order to shift the development of our society towards scholar society, it is necessary to develop willingness and ability for continuous professional improvement and life-long studying altogether. Along with well structured formal system of education, it is essential to have an adequate system of institutions, organizations and programs outside of formal system of education, through which the ability for continuous studying will be implemented and nurtured throughout the entire life, as a form of wishing for the future by increasing the value of human resources.

Contemporary tendencies of economic market countries’ development have shown that science and education are the top priorities of global national strategies and politics of socio-economic and technological development and progress. We are talking about such social organizations that are based on knowledge and where science and education have the status of main instruments of entire socio-economic development, solving basic social problems and production of social, economic and technological changes.

The best resume of the research of scientific and educational benefits for socio-econom-ic development is in the change in the individuals (characteristics and behaviour patterns of individuals) and changes in the society. These changes can have serious consequences on economy and society, and even on the course of history. Summing up the main results on the impact of education on socio-economic development and society in general, concludes that education, on average:

- Significantly raises the level of knowledge, intellectual tendencies, etc.;- Helps people define their personal identities and choice of their lifestyle;- Education significantly increases practical responsibilities, flexibilities and toler-

ance of people such as citizens, workers, family members and consumers and it affects their activities in their spare time, their health, and their general abilities to deal with problems in life.

Main impact is on practical abilities, skills and characteristics of general applicabil-ity, such as: verbal skill, essential knowledge, rational approach to problems, intellectual tolerance, future orientation, adjustability, confidence etc.

On average, educated people are:- more open to new ideas, more curious, bolder when confronting and making

new questions and problems, and more open when gaining new scientific knowledge and experience;

- Probably more rational when approaching problems. They are more aware of different opinions and views, legitimacy to disagree, uncertainties and potential differences;

- More independent and self-reliant in their opinions, more confident and more ready to stand up for their opinions;

- People (especially women) with university degree have a higher chance at getting employed and are, on average, unemployed less;

- They have higher ‘allocative abilities’, which is the ability to adjust fast and

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adequately to changes that require development, through improvements of technologies and resource supplies;

- They develop interest for aesthetic feel and view, as well as the susceptibility for inner senses and experience, as well as tolerance towards individuals and groups from dif-ferent ethical, religious, national and socio-economic environments with participation in political and social activities and upbringing and education of children.

Also, changes in individuals as a result of science and education are carried on to their children and future generations.

It is indisputable that educated people impact the social environment (on prevailing interests, values, opinions, behaviour etc.)

These effects can appear in various aspects, including creativity as well, family plan-ning, child care, school quality, recognising art, culture and knowledge, health services, political participation, understanding of social inquiries, acceptance of social changes, as well as the feeling for mutual culture and social solidarity.

Science and education are also used to preserve cultural heritage and improve civilisa-tion.

Conclusion is that science and education are a good investment for the majority of in-dividuals as they are for overall society. However, it should be emphasized that science and education cannot solve all the problems in Serbia and at the moment, we cannot expect too much from them.

3. HOW DO SCIENCE AND EDUCATION CONTRIBUTE TO DEVELOPMENT?

Even though here is a convincing argument about the role and contribution of science and development in economic literature, it remains relative what it is that makes educated people more productive, as well so called ’overflowing’ education which can indirectly con-tribute to development.

It is apparent that the whole process of the development is connected, not only with rising levels of education, but also that the connection between education, political and eco-nomic growth is more problematic in extremities (political instability, corruption, violence etc.)

Basically, the relations between science, education, population growth and economic development are complex, and especially directed towards socio-psychological research through transformation of values and opinions which have a direct implication on develop-ment.

Sciences and education in socio-economic development contribute to capability to transform separate opinions and values from ‘traditional’ to ‘contemporary’, and in such manner fortify the rate of structural modernism in the society and enlarge the rate of socio-economic development.

Other contribution put the emphasis on the role of literacy and improvement of com-munication in development. Many researchers claimed that written traditions are of es-sential value for continuation of ‘formal rationality’ in every society. Others suggested that if the development so far depended on efficient transfer of new information into complex social systems, the role of science and education especially, lies in their influence on the costs of such information transfers. That is, most of all, manifested in facilitating communica-

MANAGEMENT IN EDUCATION AS A FUNCTION OF SOCIO-ECONOMIC DEVELOPMENT REPUBLIC OF SERBIA65

tional processes which are of essential significance on socio-economic development.Even though the research in social sciences provided series of convincing hypotheses

about the ‘intervening variables’ which are used to explain the relation between science, education and socio-economic development, direct political implications of such research are in no way obvious in Serbia (preliminary results of research are used selectively to justify educational politics for very different and often political reasons).

4. THE EFFECT OF SCIENCE AND EDUCATION ON BUSINESS ECONOMY

Science and education definitely need to be connected with:- Profits of local economies and progressive exchange of activities- Development of transport networks, as well as appearance of new professional

possibilities- Population growth in urban centres and migration rate phenomenon connected

to it- Appearance of new systems of social differentiation based on migration and

income- Creation of new forms of communities (first of all regional) based on main

regional features (socio-economic, social, educational, etc).

However, wider terms of institutional transformation, which are connected to the de-velopment, imply that scientific and educational institutions (formal and informal) have to go through certain changes in function. Balance is shifting towards the use of educational institutions, as agents in selection and appointment of individuals and groups on various economic roles and taking positions in social structure. That way, the education becomes independent variable in the process of social change and as structural differentiations in-crease; it can simplify or interfere with development process. Specific problem of measuring the improvement factor of educational entrance on economic exit has to be mirrored in wider historical socio-economic and social perspective which is trying to investigate the problem of relation between science, education and development in the widest sense.

It, basically, emphasizes, the interactive relation between economic and educational dimension, because it is a popular belief worldwide that the education base is prerequisite for sustainable development (developed countries suggest at least 30 to 40 percent). Indisput-ably, the socio-economic development in Serbia is a requirement for education reform, but it can hardly be considered a political priority or that the role of education as instrument of socio-economic development will be very variable during time.

For example, those who are focused on sustainability and revitalization of agriculture, claim that the educational expansion have had a harmful effect on rural economy growth. The educated migrate into cities and deprive the countryside of their potentially more pro-ductive and more innovative groups, while, at the same time, massive migrations into cities deteriorate the problems of urban unemployment with following ‘pathological’ phenomena. Of course, those claims are arbitrary and scientifically unfounded because the bad state of rural (agrarian) environment is a consequence of bad economic, agrarian and primarily social politics, and then also other factors, as well as education.

False dichotomy is created between city and country, ignoring the symbiosis between

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urban and rural development. Flow of capital resources, human and physical (back and forth) between them definitely exists. It is clear that tendency of the educated to migrate, is reduced in cases when imbalance between urban and rural possibilities becomes less promi-nent.

Instead of limiting the school education in rural regions, educational solution to rural problem is to suggest a program of teaching plan and program reform: changing allegedly academic and book education with rurally practical programs which would cause dedica-tion to life in a country, lower migration rate, higher level of agricultural knowledge, which will make the rural economic development easier.

At the same time, unemployment would be reduced by introducing vocational educa-tion to school that are meeting the need of the work market in the city. While the tendency of rural individuals to migrate into cities is undoubtedly growing with the level of formal education, the educated represent only a small number of total migration groups.

Therefore, the profit coming from urban employment should be invested into encour-aging rural development, while that decreases the tendency to migrate, from that side. In such manner, migrations and urbanization give positive contribution to total development process of Serbia.

5. SCIENCE AND EDUCATION IN THE CONTEXT OF SOCIO-ECONOMIC DE-VELOPMENT OF SERBIA TODAY

Between science and education and socio-economic development there is a firm inter-relation (interactivity) and conditionality. Science and education are the foundation of the socio-economic development, and vice versa socio-economic development is the foundation and function of education since the development of the society is conditioned, first of all, by the level of development of science, technique and technology which are the result of edu-cation. We have entered an age when “nothing is forgiven”. The rules are being constantly changed followed by the business atmosphere. The changes of the reality are faster than reflexive thought. The problem is not in the world it is in us.

Main problem lies in the question of whether there is a politically articulated, persua-sive alternative of the better in relation to the condition and whether there are socio-cultural and political subjects strong enough and capable of creating it. Moreover, this is true because all paradoxes of our society come from the antagonism of the real and promised socio-economic development.

The conflict and confusion of goals of changes and means of their realization is very obvious and at the same time burdened by extra expectations regarding the decrease of in-equality in the living conditions and life chances of people. [2]

Also present is the “condition of spirit” which is, on one hand, marked with entre-preneurial initiative and business inventiveness and, on the other, with unscrupulousness – “fury“ of egoistic interests, and crisis of hope and perspective of the largest number of population, fear of half-freedom and nostalgia for times of social security. There is no socio - economic growth and exiting the crisis, without economic liberties – creation of new values, the way of entrepreneurship, business, and property rights protection.

The reforms are the concessions of spontaneity to the organic growth, natural flows in economy and in the wider context of realization – the freedom of creation, until the very

MANAGEMENT IN EDUCATION AS A FUNCTION OF SOCIO-ECONOMIC DEVELOPMENT REPUBLIC OF SERBIA67

core of the system is not changed. Here is why!Huge expenses of not taking action in the long run are the consequence of many un-

sustainable trends today, as poor choices and solutions regarding production, technology, infrastructure, agriculture, using the natural treasures of Serbia etc.

Political inventiveness and personal preferences led the economy of Serbia, economic activities, the process of transition and privatization, consumption etc. in an unsustainable manner and in the interest of the minority. It is hard to accept the “greed” as a legitimate concept and institutional roots of numerous and diverse forms of its manifestation. Serbia nowadays has a present high degree of state regulation of economic activities, which has the consequence of capital escaping (great depreciation of fear of investing), high degree of corruption and discouraging of the private entrepreneurship which could be the answer to a long economic crisis. On the other hand, state policy has created generations of “big business managers” who lost the sense of global aspect of the society, economic and social responsibility.

As we have already mentioned at the beginning of this paper, sustainable development requires harmonization of economic and overall social development on one hand and qual-ity of life on the other.

It is also important to have the stimulation of economic growth which does not jeop-ardize the survival of the future generations.

The following data indicate the opposite trends in the development of Serbia.- Unemployment rate (high rate of latent employment) 52%, and in the EU 65%.- Employment rate of the young in Serbia is around 15% and in the EU over 30%.- Unemployment rate is 22.9% and in the EU it is 6.8% (here we should emphasise

that this rate in 2008 was 14.4% which shows a significant trend of increase of unemploy-ment).

- External debt has reached 23.8 billion EUR or 75.6% of GDP (it is considered that a country is highly indebted with 80% of external debt in relation to the GDP).

- Public debt reached 14.7 billion EUR or 46.7% GDP (legal frame is 45%).- Debt per capita is: 2008=1235 EUR, 2009=1376 EUR. 2010 = 1713 EUR and 2011 =

2078 EUR. Ranking of Western Balkan countries (which are not EU members) according to the

index of competitive growth in 2010 – 2011 (World Economic Forum) “Global competi-tiveness report”

Serbia Croatia Bosnia and Herzego-vina

Montene-gro

Macedo-nia

Alba-nia

Sub index: Basic conditions 93 50 98 45 70 75- Institutions 120 86 126 45 80 63- Infrastructure 93 41 98 67 91 89- Macroeconomic

stability 109 51 81 37 47 101

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- Health and elementary edu-cation

50 48 89 33 69 56

Sub index: ways of efficiency improvement 93 76 100 64 83 89

- Education and training 74 56 88 52 72 84

- Efficiency of goods market 125 110 127 44 57 63

- Efficiency of labour market 102 113 94 39 71 63

- Sophistication of financial market 94 88 113 28 87 100

- Technological capability 80 39 85 44 64 72

- Market size 72 70 93 129 106 103Sub index: Innovation and sophistication factors 107 85 120 56 97 104

- Business sophis-tication 125 92 115 70 96 87

- Innovation 88 70 120 45 97 121Rank among 139 countries 96 77 102 49 79 88

Indicators of lack of competitiveness of Serbian economy [3]Index Indicator Ranking

Institutions

Small stockholders protection 137Efficiency of corporate management 134Efficiency of legal framework for solving the disputes 132The burden of state regulations 131Efficiency of legal framework 125Partiality in decision-making of state officials 125Wastefulness of government spending 124Court independence 124Ownership rights 122Ethical behaviour of the company 120Intellectual property protection 111Organized crime 111Audit and reporting standards strengthening 115

MANAGEMENT IN EDUCATION AS A FUNCTION OF SOCIO-ECONOMIC DEVELOPMENT REPUBLIC OF SERBIA69

Infrastructure

Quality of ports 129Quality of air traffic 124Quality of roads 123Quality of the overall infrastructure 122

Macroeconomic stabilityState savings rate 131Inflation movement 115Public debt 106

Education and trainingThe Level of training of the personnel 130Quality of management in schools 101Local availability of research and training service 100

Efficiency of goods market

Degree of market domination 138Efficiency of anti monopoly policy 137Intensity of local competition 131Consumer sophistication 131Influence of business regulations on attracting of for-eign direct investments 123

Degree of consumer orientation 120Foreign ownership degree 119Agricultural policy 103The burden of customs procedures 101

Efficiency of labour market Bain drain 128Cooperation between the employees and employer 135Payments and productivity 128

Sophistication of financial market

Safety of banks 115Regulations of exchange protection 115Availability of financial services 111Existence of risk for the capital 102Financing through share of the local markets 101

Technological readiness Level of adopting the technologies 134Availability of modern technologies 117Direct foreign investment and technology transfer 113

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Business sophistication

Character of competitive advantage 133Readiness of entrusting monitoring 127Sophistication of production process 125Scope of marketing 122Cluster development 122Control of international distribution 120Estimate of networks wideness 116Quality of local suppliers 107Investment of companies in research and development 104

Greatest impediments to doing business in Serbia are: corruption, inefficiency of state administration, political instability and access to finance.

Through researching the fears of the citizens of Serbia [4] we have completed a grim picture of our reality.

1 Very afraid 2 Quite afraid3 Mostly not afraid 4 Not afraid at all Global warmingPressure from the West Incurable disease Disappearance of a nationLack of... Personal crisisCriminal attackSocial differences Loose a job

The questionnaire shows that the greatest fear is from further poverty and even greater from social differences: 77% of citizens share that fear. Second place belongs to loosing the job 69%, personal crisis – 37%, criminal attack 51% etc.

Almost all fears are significantly higher at the end of 2011 than in the 2004. A few rays of light but all in all, trouble. It is clear to everybody that Serbia is not in the phase of transition and economic recov-

ery, but first of all, in between many global and local processes which has the consequence of extremely poor economic and social atmosphere, in respect of economic efficiency of using the available resources, staff drain and larger technical and technological backlog, social issues etc. Politics and ownership elite have destroyed Serbian industry and agriculture, by wastefully privatizing productive capacities so nowadays we have little left to sell, while on the other hand there is a rise in the layers of transitional losses, fictitiously employed or un-employed, in a discouraging atmosphere of poverty which is spread across large part of the society as well as the sector of education.

Political elite and missionary intelligence accustomed to “cheap” loans, donations,

MANAGEMENT IN EDUCATION AS A FUNCTION OF SOCIO-ECONOMIC DEVELOPMENT REPUBLIC OF SERBIA71

sponsorships etc. justify themselves with the world economic crisis. In the attempt to explain the causes of economic crisis John Stewart Mill emphasises: “Panic does not destroy capital, it just uncovers the level of its previous destruction

which is a consequence of its own deception through non-productive business.”Reasonableness of the comparative experience shows that the world crisis cannot be the

justification for new falls in any area and especially in education.” [5]Aimlessness, lack of own way of socio-economic growth, inability to endure the transi-

tional and socio-economic crisis, has become the “only way”, regardless of us calling it a way of reforms or in any other manner, from which we “must not turn”, which means one view, one mind, one way. Way to EU.

Here we only see one key problem: Way to European Union and changes which should be conducted require hard and team work (many are biologically not ready for that, so it is necessary to work on that), economic realism and scientific foundation, sense of goal and direction. This is essential because economic policy has no more space for initiating and encouraging the recovery of economy and agriculture as base of existence of every society as well as Serbia.

The sooner we realize that, the better. Science and education could become, on that road, the bridge between “outer world”

and “inner world”, between the “somewhere out there” world and the “right here” world. In science and education the questions are as important as the answers. It is a place where generalisations have to make way for concrete actions.

We said could become, are they that today? The answer is no!The verification of that is the educational level of population: 7% of highly educated and

48% who finished or still have not the elementary school are a poor indicator of the degree of social development and a very poor starting point on the way to EU.

Current process of changes in the field of science and education is essentially impov-erished, and the quality of changes is made completely uncertain because the changes were treated as the goal, and not as the way and means to achieve the socially formulated goal. So the social and economic atmosphere for reaching the healthy and reasonable reform of sci-ence and education is not achieved. The reason is that reforms of education are approached with little knowledge and even less practice, with purely theoretical assumptions of the great “thinkers” [6]. Also, all great changes demand reallocation of the economic wealth and po-litical power, which created great resistance of those social groups whose interests would be jeopardized. Great changes in education also require significant material and financial investments in large steps into the unknown, unpredictable and uncertain. Their assimila-tion with the social system is questioning their other values which advance and sustain the society and which are in the function of their progress.

“Science and education should not be submerged into the social life but they should encourage creativity and reveal reality of the social life.”[7]

Conception mistakes in the educational policy result in postponed, but more difficult consequences, which are firstly visible at the labour market in the form of imbalance in the offer and demand for specific professions, and in the end they are visible in the general com-mercial and economic lag and social issues.

On the other hand, most serious consequence is interference of socio-political authori-

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ties in the professional activities and over attachment to European education models. Edu-cation policy in Serbia is not clear from the aspect of national interest, in which the relation of the state and education is formed, and also theoretical background of the practical edu-cation policy in the reform light is not visible. Reform of the science and education cannot be conducted with incompetent, vain and narrowly professional personnel based on party smoke signals and tam-tam drums. Instead of commenting we shall remind everyone of the proverb:”Tell to the incompetent man that he is incompetent and then you shall see of what he is competent.”

The condition in society and education is affected by other factors as well, and espe-cially the constant brain drain of personnel who then are included in the creative processes in other countries.

It is a large number of people, who are educated in the country, usually at a high price, who leave the country due to disturbed circumstances, without the intention to come back, at least not until country is in the uncertain crisis situation. Truth to be told, no one is invit-ing them back.

Of course “it is easy to live with eyes shut, wrongly interpreting everything you see” [8]. In turmoil times scientific covers are blown in front of the killer force which demands

loyalty to new forms of thinking, transformation or reshaping of awareness, i.e. “natural” standpoint.

The conjuncture of frenzy into irrelevant developed. Namely when you do not have a vision, then anything can be your programme. Even though the signs by the road which is followed by developed countries point something completely different.

The shift of awareness happened in Serbia under the pressure of ideological relativism. Professional scientists do not want to be ideologists. Their tendency towards scientific purity is expressed by distancing from ideology interference.

In scientific and educational respect, Serbia became different depending on the causes which came from society, destiny of the state and the condition of the nation, but largely also from the outer influences.

Along with the weakened state, new forms of awareness are imposed with the appear-ance of all-knowing and all-solving individuals and non-government organizations and their famous “fighters for rights”, veterans and ideologists of civil society, attested “Bologna missionaries” and “caring people” who are re-educating Serbian population, together with: orders of IMF, World bank and their branches in the country, propaganda of non-govern-ment organizations under the ruling of George Soros and his fund. Nowhere in the EU, are such desires to make “Bologna declaration” rooted as the basic principle of transition of Serbian education and science, as are among the members of dependant and enviable quasi-elite in Serbia. The fact is that by the application of the Bologna declaration efficiency of studying is not achieved – neither the quality nor the level of knowledge was increased, but actually the opposite is done. It is logical, since the reform of high education according to the Bologna Declaration was approached without any critical analysis, blindly copying methods and experience of others. “Many prestigious universities in Europe (Oxford, Cambridge, Polytechnic Institute in Paris etc.) have not agreed to adopt the study model according to the Bologna declaration; with key arguments that they have set very high standards of studying and that they do not want to lower them. [9]”

Non-government organizations are segmented and strictly functional organizations

MANAGEMENT IN EDUCATION AS A FUNCTION OF SOCIO-ECONOMIC DEVELOPMENT REPUBLIC OF SERBIA73

with foreign, but also budget financing and suspicious quality, so they are not interested in the general interest in the field of education (they bring the spirit of special interests and fragmented knowledge and skills [10].

New and post-modern forms are introduced: trainings, educations, consultations, courses, workshops etc., which are usually organized outside of Serbia, so it is unclear what the purpose of this kind of education is or is this the way to make relative the education organizations and to have them discredited.

No one in Serbia pays attention to one “minor thing” that annually from the budget of the Republic of Serbia over four billion dinars (or over forty million euros) are donated to various non-government organizations! That is more than the subventions for agriculture (3.5), pupil standard (1.7), student standard (3.2), young talents fund (0.4) etc.

So priorities are set straight in Serbia right?It is very difficult to avoid the impression that they really think that we, not only do not

know what we do, but that at the words like “EU standards” and “world experience” we fall into hypnotic trance, and even more problematic is that they use direct lies or half truths [11].

At universities internal interest groups, clans and political groups are created, and they justify their dabbling into politics with scientific goals.

It is a whole another story with acquiring titles. It is no secret that it is done, quite often, through political party arrangements, which led to simulating science and forging of scien-tific spirit. So, the corruption in education includes acquiring of knowledge and academic titles using money, politics and some other favours, and many more unanswered questions.

Entering of business logic into education i.e. when profit becomes one of the basic prin-ciples of education the question is posed: Is expanding business in education contributing to its quality?

What does our society do against the grey economy, business logic and corruption in education?

Almost nothing!The policy of equal opportunities is abandoned, and changes are limited to internal ap-

proach (universities, faculties, schools, teachers, teaching programmes and textbooks). The greatest confusion is present in relation national – global.

In practice so far, the rationality of goals is scarified for the rationality of means [12]. We come to the conclusion that Serbia needs reform of the management system of edu-

cation and not only the financial reform. What needs to be done?We can be desperate, introduce savings measures by closing the small schools, think

about changing the school network and keep losing educated professionals...However, this means:By being desperate we open the door for defeat, by saving we shall decrease the compe-

tencies and scientific and educational possibilities and their contribution to socio-economic development, neglect, what we are traditionally best at, let quality and hard-working profes-sionals go abroad...

Is it not better to:Step outside and look for the answers to failure in the environment, invest more in peo-

ple, implement new doctrine and apply management in education. The goal is to have educa-

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tional institution position itself as a responsible and organized institution which follows the modern trends and satisfies the needs of the users (pupils, students and society in general) in a quality manner. Under the pressure of exceptional difficulties it becomes clearer that the things which are in common to all our troubles are not acknowledging the practically applicable, modern techniques of management, understood as integration of foreseeing, or-ganizing, developing the human resources, management and control.

Also, the discipline, will and innovation are the basic characteristics which show, in the long run, the differences between successful and those less successful.

6. CONCLUSION

Carried research, analysis and research result interpretation, as well as other similar research, were in the function of overview, defining and understanding undeniable contri-bution of management in education, science development and education (educational of-fers) and their influence on positive socio-economic changes and entire development of the Republic of Serbia.

General conclusion is: it is necessary to create vital and creative society, educated, ver-satile, harmonically and entirely developed, ready and capable for confronting very fast and constant development changes.

It should also be emphasized: “The significant problems we have cannot be solved at the same level of thinking with which we created them”. (Albert Einstein)

Healthy and reasonable reform of education depends on essence of social needs, social establishment, soundness of its development and rhythm of its realization.

All this returns (or leads) us to questions of need, development and capacity of local and regional governments, available and future quality and availability of education, as well as many other questions (content, work manner, resources etc), as well as realistic factors contributing to general society progress.

Something other than what we have today is what is needed-science and education leaving room for innovation, new teacher plans and initiatives with clearly controlled qual-ity criteria through implementation of management in education. On that road beware of false prophets who have solutions for everything, especially if they also have cannons to support their opinion”(Karl R. Popper).

To conduct any type of reform and change in the education system, it is previously necessary to express and define national interest connected to education, as well as regional, local and other interests of the society. We should build the awareness of interactive relations of socio-economic development and education-about reform needs of education. Especially for development of Serbia, science and education should be given a chance in search of new identity, and it primarily implies the change of developed addictive mentality of education (political, economic before other), mentality “second class traveller in the train to future” because the hand that is receiving is always under the hand that is giving. Also, it should not be forgotten, the historical contribution of education in creation of national structure necessary for functioning of Serbian economy and society, national culture and elite, as a channel of social mobility. And no matter how ruined the education system is today, it is still, of higher quality than anything else you can find in Serbia. As much as it is possible, on its basic level, it is working on socialization and upbringing and education of children and

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youth and it creates the elite of knowledge, not necessarily any worse than the one educated on universities worldwide.

Who makes this happen?Those who are dedicated to science and education and deeply devoted to interests of

Serbian people. The future of Serbian education and science, first of all, depends on those working in

education who sincerely want to preserve it and improve it according to national and state interest of development.

“The future is what is being developed now. When working with young, we are always in the beginning of what is coming” [13]

With this paper, authors provided the foundation for further research and they set in-tellectual challenges for all those who vocationally or theoretically deal with this subject.

REFERENCES

[1] Karavidić S., Menadžment obrazovanja - socioekonomski aspekti razvoja i modeli finansiranja obrazovanja, Institute of Pedagogy and Andragogy, Faculty of Philosophy, Belgrade, 2006., p. 8[2] Karavidić S., Menadžment obrazovanja - socioekonomski aspekti razvoja i modeli finansiranja obrazovanja, Institute of Pedagogy and Andragogy, Faculty of Philosophy, Belgrade, 2006., p. 286 [3] World Economic Forum , Global Competitiveness Report 2010-2011[4] Research Closeness and distances in Serbian society and fears of the citizens of Serbia at the end of the first decade of the 21st century, led by Prof PhD Slobodan Branković, conducted by Faculty of Culture and Media, Megatrend University and agency Medium Gallup. The research was conducted on 2400 participants who represent population of adults (over 18). Population covered by this sample is around six million people. [5] Dušanić J., „Svetska kriza je izvor za neuspešnu politiku“, Interview, weekly paper Pečat, January 2009., p. 22-23[6] Karavidić S., Obrazovanje u Srbiji danas, Union of Education Workers of Serbia, 2010., p. 99[7] Koković D., Sociologija obrazovanja, National book, Belgrade 1994., p. 83[8] Karavidić S., Menadžment obrazovanja - socioekonomski aspekti razvoja i modeli finansiranja obrazovanja, Institute of Pedagogy and Andragogy, Faculty of Philosophy, Belgrade, 2006., p. 3[9] Vujić J., (professor at Berkeley, University in California), Obrazovanje u Srbiji danas, Union of Education Workers of Serbia, 2010., p. 160[10] Avramović Z. Obrazovanje u Srbiji danas, Union of Education Workers of Serbia, 2010., p. 27[11] Antonić S., Obrazovanje u Srbiji danas, Union of Education Workers of Serbia,

2010[12] Karavidić S., Obrazovanje u Srbiji danas, Union of Education Workers of Serbia, 2010., p.97[13] Šušnjić Ć., Preface in Koković D., Sociologija obrazovanja, National book, Belgrade 1994., p. 15[14] Avramović Z., Država i obrazovanje, ČPI, Belgrade, 2003.[15] Karavidić S., Čukanović- Karavidić M., Ekonomika i finansijski menadžment u obrazovanju, Faculty of Organizational Sciences, Belgrade, 2008.[16] Education – hidden treasure chest: UNESCO – international group report on education of 21st century, Belgrade, 19996.

UDC323.28351.78:321.011

STRATEGIC ASPECT OF COMBATING BIOTERRORISM

Muris MujanovicFaculty of Criminalistics, Criminology and Security Studies, Sarajevo,

BOSNIA AND HERZEGOVINA, e-mail: [email protected]

Abstract: In many modern countries of the world, there is prevailing belief of government officials and the majority of the public that the question is not whether, but when will a terrorist attack by biological weapons happen. The probability that a terrorist organization might use biological weapons has increased considerably although the use of conventional instruments of terrorism has not dimin-ished. The threat that terrorists will apply biological weapons is a present and unambiguous danger because with these means terrorists can multiply increase the effects of their actions. In this regard, many countries have opted for a strategic approach to prevent this type of threat to national security. This way they providea comprehensive and continuous approach in the fight against bioterrorism and misuse of biological weapons. The author of this paper provides basic considerations of strategic ap-proaches and primary focus of states and the international community to prevent the use of biological weapons for terrorist purposes. A strategic approach to this phenomenon is not a new approach and we can find it in the Cold War era when the great powers used to pay extra attention to the use of biological weapons. In modern times states are preoccupied with preventing its use by terrorist groups.

Keywords: strategy, biological weapons, terrorism, national security

1. INTRODUCTION

Advances in technology and the fact that biological weapons possess characteristics that in certain situations and circumstances make it a very suitable vehicle for violent politi-cal purposes, created the possibility of its abuse by terrorist organizations.

In the modern history of warfare there is no evidence of intentional use of biological weapons, which greatly affects our inability to predict the results of its eventual use. There-fore, many estimates are based exclusively on natural outbreaks and experimental laborato-ry models. Development, production, storage and use of biological weapons is prohibited in many conventions and international documents, but despite all efforts, the threat of possible deliberate use of biological agents has increased since the end of the Cold War to the present.

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On the other hand, for years, many countries have developed their own programs of biological weapons. These are, among others, Germany, France, USA, UK, Russia (then the Soviet Union), China, North Korea. According to certain data today about 15 states work on programs for the development of biological weapons. It is difficult to determine this number because the possession and work on biological weapons can always be justified by its possible use in a defensive purposes, which of course does not preclude examination of aspects of of-fensive biological agents as well as the need to establish protection measures. In other words, they can easily and quickly switch from a defensive mode to offensive mode of biological weapons development program. On the other hand, new scientific knowledge in microbiol-ogy, pathology, genetics and other fields have contributed to the development of biological weapons.

The development of science in the subject areas affected, among other things, the fact that the scientists were able to permanently change certain biological properties of some pathogenic microorganisms to increase their infectious capability and resistance to external physical influences. Unlike nuclear and chemical weapons, there are no technical means to detect biological weapons nor the opportunity to prove their use. While the nuclear weapons are complex, expensive and require advanced transmission systems, chemical weapons are easier and cheaper to manufacture but also difficult to transfer to the goal. Further, biologi-cal weapons are fundamentally different from other weapons of mass destruction. While nuclear and chemical weapons cause immediate victims, biological agents require from sev-eral hours to several days or even weeks of incubation before they cause deaths.

Biological weapons are relatively cheap and easy to manufacture which makes it attrac-tive for use by terrorists, as well as the fact that they may be secretly produced whereby it is impossible to timely detect their use, which represents a considerable danger for the affected country. Also, a possible biological attack may not be aimed at humans, but can aim domes-tic animals as a source of food or agricultural production, and a particular danger manifests itself in the fact that biological agent may be introduced into an area (endemic area) that is characteristic of the agent making it even harder to detect biological attack. Biological weapons can cause unpredictable psychological consequences such as mass panic and loss of morale. Inability to provide adequate protection and medical services to all is an additional psychological effect, and panic is especially dangerous which is why the organization of anti-biological defense and preparation for the defense that includes the protection of food and water is of particular importance.

2. BIOLOGICAL WEAPONS

Biological weapons include microbes and other biological agents, or toxins regardless of their origin or method of obtaining, possession of which is not intended for prophylactic, protective or some other peaceful purpose, as well as weapons, equipment and other means and methods of dissemination of these agents with hostile intent or during the war.[1] Ac-cording to NATO definitions:

- biological agent is a “micro-organism (or its toxin) that causes a disease of humans, animals and plants and causes damage to inanimate matter”

- biological warfare “is the use of biological agents to cause the loss of the people and livestock, as well as damage to plants and materials”;

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- biological defense “includes methods, plans and procedures through which meas-ures of defense against biological attack are established and realized”. [2]

The terms biological weapons and biological warfare for the first time officially ap-peared after World War II, at the meeting of the UN General Assembly held in 1947, when biological weapons, apart from nuclear and chemical addition, were ncluded in the group of weapons of mass destruction. The concept of weapons of mass destruction began to be used at the end of the Cold War in the United States as a common term because until then nuclear, biological and chemical weapons were separate terms. This was a more correct ap-proach because all of these categories of weapons significantly differ both in the effects of their operations as well as in the principles and use for military purposes. In addition, for each of these categories there are different rules in terms of arms control and proliferation of these weapons, and the introduction of a common concept is in direct correlation with the new tasks of the Armed Forces of the United States after the end of the Cold War. At the same time this is a period when ban on proliferation of all three categories of these weapons became one of the primary tasks of the USA foreign and security policy.

As its name suggests, the concept of weapons of mass destruction is used for weapons whose common feature are large destructive effects and huge human casualties or mass de-struction, and it is mainly used as a common term for nuclear, radiological , biological and chemical weapons and is derived from the UN Recommendations Commission for Conven-tional Armaments in 1948. Since then biological weapons are considered to be potentially the most dangerous weapons of mass destruction of people, animals and plants with pos-sible unforeseeable consequences. According to the definition by the UN in 1969 under bio-logical agents we classify living organisms that are derivedd naturally or in a infectious way, which can cause illness or death of people, animals, plants, depending on the effects and the ability of reproduction in humans, animals or plants that they attack.

According to the NATO definition, biological and toxin warfare agents are microor-ganisms and toxins derived from them with the purpose of causing disease in humans, ani-mals and plants or degradation of materials. Even without further specifying the definition of this phenomenon, we can see that in the context of these weapons there are microbial or other biological agents or toxins of any origin, whose use can not be justified with protective or other peaceful goals, as well as weapons, equipment or delivery methods that are designed to use such agents or toxins for hostile purposes. In short, a biological agent that is used in the armed purposes is a live micro-organism or biological created toxin that causes injury or death [3]. When it comes to the agent, it is derived from a living micro-organism or its products, and through incorporation into various types of weapons it becomes a biological weapon. Biological agents are viruses, bacteria, fungi, and toxins.

2.1. Characteristics of biological weapons

The concept of bioterrorism has multiple meanings. This primarily involves the appli-cation of biological agents in terrorist acts to cause infectious disease in innocent civilians or military formations, animals and plants that are spread in the form of an epidemic or pandemic [4].

From the point of view of a possible use of biological weapons in terrorist purposes, potential terrorist organizations have at their disposal a large selection of harmful agents. In addition to the above, a special “mitigating circumstance” is its availability, especially in

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clinical and microbiological laboratories and other scientific institutions. They have a short incubation period and are very contagious and consistently act in small doses. With very low costs, accessible equipment and widely available knowledge, the production of these agents is very easy. A particular problem that all its negative implications manifests in the field of biological weapons, is the fact that a large number of biological agents that represent poten-tial biological weapons are already found in nature. The aforementioned fact causes further problems in distinguishing a situation where there was a deliberate spread of disease from the situation that occurred naturally. The indisputable fact that a large number of viruses and pathogenic organisms are found in nature does not mean that they are all suitable for terrorist purposes. [5]

As can be seen from the above, in the history of mankind biological weapons were often used as a weapon of war or in achieving some other goals, although its use has always been considered a shameful act. Therefore, the question is why, despite universal public con-demnation, certain states do not give it up, but keep it, produce, improve and apply it in a given situation. The answer would be that there are many characteristics that make biologi-cal weapons attractive, of which the most important are:

a) easy production; it is easy to produce certain biological agents even in a modestly equipped microbiological laboratories: all that is required for the reproduction of bacterial culture is nutrient medium and incubator-thermostat;

b) low-cost production, arising from the above; according to some calculations from a few decades ago, the costs of achieving a particular effect (“neutralizing living force”) on the surface area of 1 square kilometer by using various types of weapons are: conventional weapons - 2000 dollars, nuclear – 800, chemical - 600, and biological only 1 dollar;

c) hidden application; it is very difficult to establish biological aggression or bioter-rorism if there is no convincing epidemiological evidence or material; a professional user of biological weapons can, knowing the epidemiological and ecological characteristics of an area, cause illness on a smaller or larger scale that can not be distinguished from naturally occurring epidemics;

d) efikasna primena; sa 1 kg antraksnih spora, diseminovanih kao aerosol, može se prekriti površina od 100 km2 i na njoj izazvati smrt 50 odsto ljudi ; effective implementation; with 1 kg of antrax spores disseminated as an aerosol, one can cover an area of 100 km2 and lead to the death of 50 percent of the people;

e) effects on humans, animals or plants, without causing significant material damage, destruction and without significant environmental consequences;

f) causing mass ilness - death; it depends, mainly, on the type of pathogen and the route of administration of the biological agent; the most appropriate agents are those that can be diseminated by air (aerosol), and in which there is a possibility of subsequent inter-human transmission (variola virus);

g) causing panic, political instability, disruption of health care and other services and disruption of normal activity with all the consequences resulting from it;

h) the emergence of the problem of fast detection and identification of the applied agent, establishment of adequate measures neutralizing biological attack, adequate treat-ment and prophylaxis of healthy patients - exposed.

Biological weapons can penetrate the body in three different ways: inhalation repre-sents the most likely way, inhaling of infectious organisms or toxins that are found in the

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air. The second way is through ingestion or swallowing, where the infection i.e. intoxication is done through the digestive organs. Absorption through the mucous membrane i.e. expo-sure through the skin or as a result of wounds or scratches is a third possibility. In addition, biological weapons can cause damage to or make material resources unusable.

3. BIOTERRORISM

The current threat of terrorism is different from the one in the past in the change of tactics, stronger destructiveness, the introduction of professional planning of coordinated attacks and the transnational character of the operations. There is increasing talk about the terms of postmodern terrorism or superterrorism, which aims to draw attention to the use of weapons of mass destruction for the purpose of terrorist attacks. Today, there is a much greater danger of its use by various organizations, sects and individuals. In this sense, the term “bio-terrorism” is used, which is defined as the use of biological agents in the acts of vi-olence for political, religious, environmental or other ideological reasons, regardless of their moral or political justification. [6] Some differentiate this term from the term “bio-criminal act” that would identify the use of biological agents not because of ideology, but for other reasons. The risk of the use of biological weapons for this purpose is on the increase due to:

- easy production of certain biological agent,- wide availability of scientific information through publications and the Internet

and- the existence of a large number of institutional and non-institutional laboratories

(microbiology, molecular biology, genetic) in whose work there is not always a complete overview.

The greatest effects would come from the operations of large, well-equipped, sometimes state-sponsored organizations that are able to use modern scientific knowledge, biological arsenal of various weapons and sophisticated equipment and technology for their produc-tion and dissemination. Somewhat smaller effects would come from the work of not so well equipped, smaller organizations, and the smallest effects from the functioning of small groups or individuals, usually in attempts to assassinate certain individuals or to initiate panic.

Biological weapons can penetrate the body in three different ways. The most likely way is inhalation of infectious organisms or toxins that are found in the air. Another way is by ingestion or swallowing, where the infection or intoxication is carried through the diges-tive tract. Absorption through the mucous membrane i.e. exposure through the skin or as a result of wounds or scratches is a third possibility. In addition, biological weapons can cause damage or make material resources unusable. Particular danger of biological weapons is its diversity and the difficulties in assessing the manner in which it will be used, which is the main problem in detecting and responding to such threats, especially when used in covert attacks.

4. REASONS FOR STRATEGIC APPROACH

In the past, the concept of strategy was primarily related to the armed forces of a state,

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but in the modern era it gets a much wider application. In the most general sense strategy is a “long-term planning and political forecasting with a view to ensuring freedom of ac-tion, social freedoms, quality of life and order of the state on the basis of the Constitution in order to achieve common political concept”. [7] The danger of biological weapons is the dark side of globalization, so we often hear calls for global implementation of prevention and accountability. Faced with the possibility of using biological weapons for terrorist pur-poses, states have intensified efforts at the international and national levels aimed primarily at encouraging the introduction and use of a strategic approach in controlling biological weapons in particular in terms of possible misuse for terrorist purposes. Strategic concept is an overall, general and systematic approach to the basic features of bioterrorism with the aim of making rational use of available resources and more efficient prevention of the mani-festation of this phenomenon. In addition, the strategy of countering bioterrorism is linked to the achievement of the strategic objectives pursued by the country and the international community as a whole.

As the factors that determine the strategic approach we should mention that biological weapons have their advantages over conventional, nuclear or chemical weapons. Therefore, the threat of biological weapons requires a different paradigm than defensive from a threat by conventional or other weapons of mass destruction. Naturally, a particular contribution to the strategic orientation is the fact that this is basically terrorism i.e. it is only one of the possible forms of its manifestation. Bioterrorism as a relatively new phenomenon further complicates the complexity of the fight against this phenomenon and dealing with its con-sequences. In fact, this is a special type of weapons of mass destruction which poses an in-creasing and terrifying addition to the terrorist arsenal. Its destructive potential is so great that it is now considered a strategic threat to many countries and can cause suffering on a large scale, but also significant political consequences. The above indicates that regarding the security plan orientation on preventive action is an imperative as well as establishing a long-term strategy of action in order to preserve security in the situation of global danger.

However, strategic approach to bioterrorism is not a new phenomenon because strate-gies existed during the Cold War, in which they were often changed, adapted and conceived. In the middle of the last century, biological weapons gained strategic importance in modern wars. The basic method of wadging a biological warfare was the application of biological agents, germ-killera in the form of aerosols which also meant the total contamination of the atmosphere and territories of smaller states due to the inability to control the territory of countries that are not targeted. Especially important is the period at the end of the last century when biological weapons get new contours of a terrorist war or bioterrorism. On the other hand strategy of countering bioterrorism involves modern approach to the control and prevention of this phenomenon. In addition, the strategy can also be perceived as an expression of the evolution of the control of biological weapons with the orientation of the projection of future manifestations of bioterrorism in order to take optimal measures coun-tering this phenomenon.

5. BIOTERRORISM IN THE NATIONAL SECURITY STRATEGIES

Because of its risks as well as other characteristics that set it apart from other weapons, preventing the use of biological weapons for terrorist purposes is a top priority of preserving

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national security of modern states. Many national security strategies pay special attention to this phenomenon. Very often, the biological weapons is viewed in the context of weapons of mass destruction but also particularly as is the case in the US National Security Strategy. [8] In the part relating to the prevention of the spread and use of weapons of mass destruction, in particular, it focuses on the ability that either state and non-state actors may procuret or develop among others biological weapons too, which of course requires adequate response of relevant state entities. Apart from that, in the current US strategy in the part related to health security in a special way biological weapons are mentioned, stressing that the spread of communicable diseases pose an increasing risk despite the scientific and technological advances in their prevention. In particular is worrying the statement that there is lack of the capacity to prevent, detect and respond in the event of an outbreak of these diseases. As a world leader in the fight against the current pandemic, the US continues to strengthen the capacity for adequate response and crisis management caused by infectious diseases, which among other things requires the expansion of cooperation through the Global Health Security program to achieve a world that is safer and less susceptible to infectious diseases.

Special approach to biological weapons can be found in the Global Strategy for Foreign and Security Policy of the EU. However, in previous EU strategy significant attention was paid to this phenomenon for which we briefly reflect on its contents. The European Union has with a substantial delay and in completely different circumstances, but instructed by the tragic experience of the United States, prepared a conceptual document called the European Security Strategy [9] in which the proliferation of WMD is the greatest threat to the security of the EU and its citizens, and then it also made the EU Strategy to combat the proliferation of WMD.

A special importance to the problem of proliferation of weapons of mass destruction is the fact that proliferation of WMD is in connection with other global risks such as organ-ized crime, international terrorism, regional conflicts and other global problems that are conducive to the proliferation of WMD, thus dramatically reducing global security.

By analyzing the nature of the risks, threats and endangering of the European Security Strategy, European security is faced with the following key risks:

- the proliferation of weapons of mass destruction, especially in combination with international terrorism,

- terorizam, posebno sa velikim razmerama (“superterorizam”, “hiperterorizam”, “megaterorizam”) i terrorism, especially with large scale (“super terrorism”, “hiper-terrorism,” “mega terrorism”), and

- regional conflicts that occur as sources of other threats such as terrorism, proliferation of WMD, organized crime and extremism.

Most states of the European Union in their strategic documents, which are primarily related to national security, as the most important security challenges cites the proliferation of weapons of mass destruction and international terrorism (including the use of weapons of mass destruction. The most obvious examples are the National Security Strategies of Austria and Bulgaria, which similarly assess the potential hazard by asymmetric threats and par-ticularly terrorism and the proliferation of weapons of mass destruction. [10] The content of strategies of other countries is quite similar so that we can give a general conclusion. All strategies treat weapons of mass destruction without special separation of nuclear, chemical and biological weapons, which has been a common practice that came from NATO. Apart

Muris Mujanovic84

from this, special attention is paid to the proliferation of these weapons which is due to the fact that these are transit countries through whose territory lead many road corridors which means that they can be vulnerable as transit countries for this type of weapon. Complete picture of bioterrorism is complemented by the fact that on the list of possible forms of threats there is also terrorism.

Faced with the threat of biological terrorism and its possible consequences, many states have approached this problem with a lot of attention. The provisions given in national se-curity strategies are operationalized through separate strategies as a general framework for action by all relevant government entities. The relevant strategies are commonly referred to as Strategies for combating the proliferation of weapons of mass destruction that could be viewed as guidelines for improving the coordination and activities at national but also at the international level in combating this phenomenon. In addition, the strategy can be seen as a response to the commitments of the countries signatories of the UN Security Council Resolution 1540 of 2004, which calls on all states, in accordance with their national legisla-tion and international law, to undertake joint measures and activities to prevent the spread of weapons of mass destruction and to observe relevant international legal instruments.

Special importance of the strategies is that they represent a basis for joint and coor-dinated action by the state authorities as well as the continuous improvement and finding mechanisms for the control and prevention of proliferation of biological weapons as well as the eventual establishment of specialized authorities with a view to implementing the provi-sions for more efficient strategies. Adequately formulated strategy allows the achievement of prevention as one of the key areas to prevent the spread of weapons of mass destruction. In this regard, there is the need to strengthen the national capacity of all institutions responsi-ble for the implementation of the Strategy.

6. CONCLUSION

Biological terrorism as a modern phenomenon through its unpredictability, fanaticism and cruelty, is a major threat to humanity today. Bioterrorism can be a powerful factor in the destabilization of a country, especially if it is supported by foreign interests, and there-fore it must be taken very seriously. Despite the fact that the NHB terrorism was present throughout the twentieth century, it is certainly a general danger and a threat to humanity in the XXI century too. Bioterrorism is a specific security threat because it is characterized by a combination of high mortality rates, relatively simple method of production and the possibility of covert use.

The simplicity of misuse of biological weapons is perhaps best evidenced by its defini-tion as “atomic bomb of the poor” due to relatively low cost of production. From the stand-point of terrorist organizations and groups, the use of biological weapons brings more ad-vantages over the conventional explosive materials as biological weapons produces a high level of mortality of humans, animals and plants, very small amounts of pathogens can achieve a high degree of destruction, pathogens can be activated (released)in a relatively easy and fast way, biological weapons provides the possibility of permanent activation, and the necessary equipment is inexpensive and easily available. This danger is usually invisible, and a man who is not aware of it is not even able to take timely protection.

Trend of increasing number of casualties in terrorist attacks in recent years suggests

STRATEGIC ASPECT OF COMBATING BIOTERRORISM85

that terrorists are looking for new strategies, methods, weapons and funds so that the effects of their attacks become as large as possible. Many evidence suggests that the use of nuclear, radiological, and most of all biological and chemical weapons is likely and we should be prepared for such scenarios. Biological “war” is quite possible, maybe it has already become our reality. The fact is that after the spread of the contaminated letters in the US biological war officially started. Those who meet it unprepared shall face unforeseeable consequences.

REFERENCES

[1] Jončić V., Međunarodno humanitarno pravo, Pravni fakultet, Beograd, 2010, p 125 [2] NATO Glossary of terms and definitions (AAP-6), available: http://www.dtic.mil/

doctrine/doctrine/other/aap6.pdf [3] Paulun, M., Weapons of mass destruction, the first responder. Random, USA, 2003,

p. 201 [4] Jović R, Savić A., Bioterorizam, biološki rat, Institut za političke studije, Beograd,

2004, str. 34 [5] Larsen, M. R., Al qaeda weapons of mass destruction threat: hype or reality.

Cambridge: Belfer center for science and international affairs, 2010, pp. 7-9 avalilable: http://www.belfercenter.org/sites/default/files/files/publication/al-qaeda-wmd-threat.pdf

[6] Gaćinović R., Terorizam, Draslar, Beograd, 2005, p 134 [7] Ernest-Christoph Meier, Klaus-Michael Nelte, Heiny-Uwe

Schaefer: WoerterbuchyurSichereitspolitik-Deutschland in einemveraenderteninternationalenUmfeld, 6. vollstaendingueberarbeiteteAuflage, Verlag E.S. Mittler&Sohn, Hamburg, Germany, 2006, p. 391

[8] National Security Strategy USA, pp. 9-11, available: http://nssarchive.us/national-security-strategy-2015/

[9] Safe Europe in a better light, European Security Strategy, available at: http://www.isac-fund.org/download/Evropska%20strategija%20bezbednosti.pdf

[10] Austrian Security Strategy, available at: https://www.bka.gv.at/DocView.axd?CobId=52251,

[11] Bulgarian National Security Strategy, available at: https://www.bbn.gov.pl/ftp/dok/07/BGR_National_Security_Strategy_Republic_Bulgaria_2011.pdf

UDC 336.71:327 (495)

GREEK DEBT IN POLITICAL SITUATION IN THE NEW AGE OF EU AND INSTITUTIONAL LOAN

SHARKS

Alexios Panagopoulos1, Vasileios Anyfantis2

1National College, Patras, GREECE, e-mail: [email protected] College, Patras, GREECE

Abstract: A close look at the factors and the contributors of the current financial crisis, especially as it regards Greece, which is under immense pressure from friendly institutional organizations. Who and why is pushing economies to their fiscal limits in the Eurozone when there is no apparent logical explanation for such extreme austerity, nor past successful examples. The heavily indebted economies are not possible to consolidate their finances and reduce their loans, using old recipes – so they’ll have to resort to the method of deleting or freezing of debts, since there is no other peaceful solution. «If we don’t react collectively, then we will lose our homes, we will lose our deposits, we will miss the euro, we will eventually reach bankruptcy and debt slaves of elite in perpetuity – in our own motherland!» [1].

Keywords: Bankers, Crisis, Globalization, EU, Politics, Economy, Greece.

1. INTRODUCTION

As public debts are rising in the world, with even greater pace after the financial crisis of 2008 [2], the more interesting is the analysis of how, in which way it has became able to deal with them after the 2nd World War – especially with regard to our country which, although literally we are throttled to serve it, while there has been a large deletion within the PSI [3], notes that continue to increasing uncontrollably. When the European Central Bank provides further liquidity, as in the example of Greece (ELA - Emergency Liquidity Assistance), always of course with a feasibility that is kept hidden, secret, which then appear in some arranged Media various arbitrary assertions – under which Governments cease to insist on necessary structural changes and reforms, leading to growing deficits and debts in their countries.

If someone translates this it does not mean anything else than that elected Govern-ments have held to ransom with the help of financial instruments, from the non-elected bank lobby, so as not to apply those that the citizens who elected them expect – but to pro-

Alexios Panagopoulos, Vasileios Anyfantis88

mote the «Neoliberal» [4] reconstruction of the social State, which is wanted by the fi nancial markets, as well as large multinationals. Th e main fi nancial blackmail weapon of Govern-ments are purchases of government bonds – with the European Central Bank requiring understanding, according to which Governments, and so their countries, depend on the «charity» of investors, as well as large banks. Simply put Governments need to persuade banks, which themselves were rescued earlier with money their citizens paid, that the policy is «trustworthy» – that they work in the direction of creating surpluses, so they can serve the loans taken by issuing and selling bonds.

Because Governments were well over charged by rescuing banks, they must now dem-onstrate to banks that can reduce social costs, to increase taxes imposed or to better combat tax evasion – since, if they dare to apply a diff erent policy will lose their solvency! Course rating agencies [5] waving the serious threat of Damocles sword menacingly above the heads of Government, advocating the imposition of neo-liberal policy – along with the rest of the «investment community», such as speculative funds (hedge funds) and so on.

Everything that could release Governments from the bond markets, as well as from banks, are slip or are prohibited by the ECB – which essentially acts as the guardian of the interests of the fi nancial beast and as the non-elected civil prison guard. In this context, the best example of all is the management of public debt on behalf of Britain – in which, from the 250% of GDP in 1945 dropped below 50% at the end of the 1970s (chart). Th e secret of this fall was a series of diff erent «actors» – principal of which was the high rate of growth, infl ation, the low lending rates, capital controls, as well as high taxes.

Further, the specifi c factors that have contributed to the reduction of the debt in rela-tion to GDP in Britain, absent today infl ation – which are trying desperately to detonate with the help of Quantitative Easing the major central banks of the U.S., Japan, the Euro zone etc. With the same method (QE) an attempt is taking place to increase growth, but

GREEK DEBT IN POLITICAL SITUATION IN THE NEW AGE OF EU AND INSTITUTIONAL LOAN SHARKS89

without any results – while the lending rates of the Western States (basically), located at the lowest point of all-time, with capital controls to have formally adopted and inadvertently only from Greece.

Th erefore, discussions are focused on the last factor, the increase in taxation – where many believe, higher and higher income strata should contribute more in revenue. Th ough not given the required attention to the fact that the current circumstances have nothing to do with those that had formed during the second World War – where fi nancing had increased tax rates (90% in Britain for higher incomes), without any reactions at all, since it was obvious for the protection of the homeland (while they were preceded by the capital controls).

Moreover, the UK aft er the Second World War was in a completely diff erent place, com-pared with the current Governments in combating the debts – since it was not compelled to raise taxes, but simply to delay the reduction. Respectively, there was no drop in government revenue from income tax aft er the war – as shown by the chart on total revenue of the coun-try directly from 1900 until 2018.[6]

Continuing, today there is no emergency situation, like then, which could justify such a

high tax rates – while the higher income strata have dozens of ways to avoid paying [7] taxes at their disposal (tax havens [8], etc.).Th erefore, it is diffi cult for someone to imagine that it can be imposed such drastic taxation in peacetime – something that is substantiated by the French experience, where the 75% tax on incomes over 1 cm. € had no eff ect on revenue, hav-ing being removed two years later (2015).On the other hand Britain had not a good starting point only as regards public revenue but also the costs – having been unable de facto to re-strict military spending drastically, because the war was over. Reasonably Britain developed within a minimum period of time large surpluses in the budget – which have contributed to the rapid reduction of public debt. Today even this is not something doable, especially because the bulk of government spending for costs of the welfare State – which is impossible to drop in a short time, even if imposed the harshest neoliberal reforms imaginable.

So in conclusion the heavily indebted Western economies, let alone Greece, are not pos-

Alexios Panagopoulos, Vasileios Anyfantis90

sible to consolidate their finances, using old recipes – so they will probably have to go sooner or later to the debt deletion method, since no other peaceful solution exists. That exactly is proposed firstly to Greece, Italy, Spain, Cyprus, etc. – unless they adopt the way it seems that Japan [9] will launch (freezing of a large part of the debt from the ECB [10] European Central Bank).

In any case, as there are such large debts, let alone when they are augmented, they are not going to be followed by development – since the current system of ‘linear economy’ growth is based on debt. If selected the “circular economy” by the sustainable development that marks, maybe the conditions would change – something which, however, continues to require the deletion of a large part of the existing debts.

2. THE DEVELOPMENT

Especially as it regards the issue of the development of the Greek economy, without which non of our problems are ever going to be solved, we are reminding the following: We would very much like to believe government statements regarding Greece’s return to growth in the near future – specially because we are looking forward to some optimistic prospects for our country, knowing that it is unfair, if not inhumane, to be “flooded” everyday all the Greeks with bad news.

Nobody wants to hear any more on the successful negotiations with lenders, which lead to more and larger concessions – nor for agreements relating to the payment of installments already approved by installments and provided new measures for the aggravation of poverty, squalor, for Red loans, seizures, for auctions, the dangers of deposits etc.

At the same time we all know that non of our problems regarding our economy are solved if the fall of GDP is not halted – which goes on for six years, something which is unprecedented in historical chronicles. Moreover, from over 60 billion€ GDP that we lost cumulatively, with the rate of public revenues now at 39% (together with the contributions), the State’s annual losses in excess of € 23 billion – a sum that is apparently impossible to save, no matter what austerity measures are taken.

Let alone when only from banks were lost more than 40 billion€ the previous year [11], which puts a strain on the State budget and therefore the debt – a sum that also is impossible to be ever saved with new measures of impoverishment.

Finally, we all know that when you go to a bank to get a loan of 1,000€, signing as a guarantee everything one owns (all of our public assets, in this case against the lenders), while the Bank knows very well that (1) is not able to serve even the loan and (2) that a new loan will be needed soon, it is not possible to negotiate properly. Reasonably the Bank will assume that is either a crook or an ignorant – so it would certainly not be trusted by the Bank.

3. RESUME - EPILOGUE

As mentioned above without development we are not going to solve our problem what-soever. Obviously neither by Government propaganda [12], to whom the addition of the word “fair” before “development” is charged , however good it may be and if it is – despite

GREEK DEBT IN POLITICAL SITUATION IN THE NEW AGE OF EU AND INSTITUTIONAL LOAN SHARKS91

the fact that we would like very much not happening. Of course, we all urgently needed posi-tive news so as our country does not sunk into a collective depression, from which she will never be able to heal itself. Nonetheless, the news must be based on documented and realistic elements – rather than foolish illusions and childish utopias that cannot ever be made. In conclusion, the heinous crime that occurs today in Greece is probably unprecedented in world history – even if compared to the crimes of the first colonial era. In each case, the country will not soon belong to the Greeks, while managed by a brutal dictatorial Govern-ment in the background, by the Troika with pro forma Governments on track – which es-sentially play the role of the boxing bag that blows over silly rage of citizens.

As conclusions - as regards democratic participation at all levels of the institutions of Monetary Union, there doesn’t seem to be accepted by the powerful countries – notably by Germany, whose intention is not democratic «United States of Europe», but a fourth Reich, where it preceded a two-speed Europe, divided into debt slaves (European South) and court-iers (European North).Unique solution therefore continues to be the return of all countries together at the starting line – in pre Euro time, so as to avoid the planned major conflicts. If this doesn’t happen, especially if they create the economic NATO in absentia of citizens, all European citizens will be made feckless slaves of elite – without any «political right».

REFERENCES

[1] http://www.analyst.gr/2015/02/05/nea-vouna-xreon/2/ [2] http://www.analyst.gr/2015/02/05/nea-vouna-xreon/ [3] http://www.analyst.gr/2011/10/28/2539/ [4] http://www.analyst.gr/2015/05/08/o-neofilelefteros-paralogismos/ [5] http://www.analyst.gr/2014/03/31/7341/ [6] http://www.ukpublicrevenue.co.uk/revenue_history [7] http://www.analyst.gr/2016/04/12/forodiafigi-meso-offshore/ [8] http://www.analyst.gr/2014/11/17/h-forodiafigi-stin-evropi/ [9] http://www.analyst.gr/2016/09/16/alita-provlimata-dieremeno-ethnos/ [10] http://www.analyst.gr/2012/12/02/3102/ [11] http://www.analyst.gr/2015/11/23/to-trapeziko-kolpo/ [12] http://www.analyst.gr/2016/05/09/to-telos-ton-mnimonion/ [13] Neill Nugent, The Government and Politics of the European Union – Social

Sciences, London 1989. [14] George Mazis, Geopolitics Theory and Praxis, Athens 2002. [15] Joseph Nye, Soft Power: The Means To Success In World Politics, New York 2004. [16] Johan Van Overtveldt,The End of the Euro: The Uneasy Future of the European

Union, Berkeley 2011. [17] Panayiotis V. Roumeliotis, The road to Globalization, Athens 1996. [18] Andy Beckett, When the Lights Went Out: Britain in the Seventies, London 2010

UDC 334.713:37005.96

ENTREPRENEURSHIP EDUCATION - FACTOR OF HUMAN RESOURCES DEVELOPMENT IN

SERBIA

Svetislav Paunovic1, Maja Dimic2

1Faculty for Banking, Insurance and Finance, Belgrade, SERBIA2Faculty for Strategic and Operational Management, University “Union-Nikola

Tesla”,Belgrade, SERBIA, e-mail: [email protected]

Abstract: The paper elaborates the importance as well as current situation in entrepreneurship edu-cation as a factor of human resource development in Serbia. Although Serbia generally achieved con-siderable progress in implementation of the European Charter for Small Enterprises in many areas, it is evident that referent score for entrepreneurship education in Serbia is relatively low comparing other components. National Strategy for the Development of Competitive and Innovative SMEs recognized the role of entrepreneurship education as the necessary precondition for the development of human re-sources as well as entrepreneurial economy based on knowledge and innovations. It is absolutely clear that the education for entrepreneurship is not only a lecturing activity and that future development requires much more than good curriculum. A step forward has to be made towards transforming the university in order to be the key element not only in creation of knowledge but in the process of spread-ing and capitalisation of knowledge.

Keywords: entrepreneurship education, entrepreneurship, human resources, knowledge

1. ENTREPRENEURSHIP EDUCATION – CHALLENGES AND CHANCES

In terms of growing dynamics of technological change, their globalization, increasing competition and constant changes in technology, especially in information, before entrepre-neurs, as leaders of the new millennium, there are great challenges. The importance of edu-cation for entrepreneurship stems from the essence and importance of entrepreneurship as a key development resource, action oriented thinking and behavior and business philosophy that puts innovation in the center of things.

Entrepreneurship is recognized as basic skills in the process of permanent (lifelong) education (LLL- concept of lifelong learning), which is why education for entrepreneurship

Svetislav Paunovic, Maja Dimic94

is promoted and implemented effectively in the educational system of the EU at all levels of formal (from primary education to university) and informal education. EU expert group defines entrepreneurship education not only as a process of preparing education and train-ing to create a business, but as a process of developing an entrepreneurial mindset, entre-preneurial skills, personal characteristics and qualities that are not directly focused on the creation of a business. [1] Entrepreneurial education has the following goals:

• Raising awareness of potential entrepreneurs about the importance of taking re-sponsibility (leaving philosophy ‘get a job ‘, accepting philosophy ‘create a job’).

• Development and promotion of personal qualities (creativity, innovation, spotting business opportunities and challenges, adaptability, ability to take risks in crisis situations, persistence and perseverance, responsibility).

The importance of entrepreneurship is emphasized in many EU documents, where the most important one is the Charter for Small Enterprises. EU Education Council, in its report on the objectives of the education system, [2] already in 2001 ranked among its priorities in-tensifying connections of educational institutions and enterprises as well as the strengthen-ing of the entrepreneurial spirit through education and training system. Forum EU ‘Train-ing for entrepreneurship’ [3], held in 2003 in France, touched the issue of education for entrepreneurship in the formal system of education (from primary school to university) and in the non-formal education system in the companies themselves (internal entrepreneur-ship, corporate entrepreneurship). At this context, the three main recommendations of the Forum are defined as follows:

1. An entrepreneurial driven education system is necessary;2. It is necessary to create a comprehensive strategy that includes all levels of formal

and non-formal education and all the relevant players in the educational process (teachers, students, businesses);

3. Entrepreneurship must be treated as a basic set of skills that are continuously up-graded in the process of lifelong learning.

2. ENTREPRENEURSHIP EDUCATION - RELEVANT EU AND NATIONAL DOCUMENTS IN SERBIA

2.1 The European Charter for Small Enterprises

The European Charter for Small Enterprises is a document of the European Commis-sion, which in 2003 was adopted by the governments of the Western Balkans. The Western Balkan countries, based on 10 dimensions of the European Charter, have the ability to track the progress and development of SMEs and entrepreneurship. [4] Each of these 10 dimen-sions is estimated in the range from the first to the fifth level, wherein a policy that goes from the first level shows the lack of initiative, and the fifth level shows the level of realiza-tion close to good practice, which is defined in the Charter and OECD process for SMEs [5]. Annual Report SME Policy Index 2009 [6] shows the level of progress achieved in the im-plementation of the European Charter for Small Enterprises in the Western Balkans. SME Policy Index is jointly prepared by the European Commission (EC), the European Training Foundation (ETF), the European Bank for Reconstruction and Development (EBRD) and

ENTREPRENEURSHIP EDUCATION - FACTOR OF HUMAN RESOURCES DEVELOPMENT IN SERBIA95

the Organization for Economic Cooperation and Development (OECD). Basic dimensions [7] on the basis of which the evaluation of policy implementation are related to the following:

1. Education and training for entrepreneurship2. Cheaper and faster start-up3. Better legislation and regulatory framework4. Availability of professional development5. Improving on-line access to resources6. Increased benefit of the common market7. Taxation and financial matters8. Strengthen the technological capacity of small enterprises9. Successful e-business models and top-notch support for enterprises10. Developing more effective representation of the interests of small businesses

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50

Albanija

Bosna i Hercegovina

Hrvatska

Kosovo

Makedonija

Crna Gora

Srbija

2008

2006

Graph 1. The results of the implementation of the European Charter in Serbia according to components, 2008 Source: Progress in the Implementation of the European Charter for Small

Enterprises in the Western Balkans http://www.oecd.org/dataoecd/51/61/46583422.pdf, str. 251; Report on small and medium enterprises and entrepreneurship, 2008, p 10

In the application of the European Charter for Small Enterprises in 2008 Serbia achieved a rating of 3.3 (on a scale of 1 to 5) and made progress compared to 2007, when the aggregate score was 2.5. Comparing the aforementioned components of the Charter, it can be seen that Serbia has made progress according to a greater number of components. But in the field of

Svetislav Paunovic, Maja Dimic96

education and training for entrepreneurship in 2008. Serbia has achieved the worst results.

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50

Albanija

Bosna i Hercegovina

Hrvatska

Kosovo

Makedonija

Crna Gora

Srbija

2008

2006

Graph 2. Component Education and training for entrepreneurship in the Western Balkans Source: Progress in the Implementation of the European Charter for Small Enterprises in the Western Balkans, SME Policy Index 2009, http://www.oecd.org/dataoecd/51/61/46583422.

pdf, str. 24, 48; i Progress in the Implementation of the European Charter for Small Enterprises in the Western Balkans, SME Policy Index 2007, http://www.oecd.org/document/59/0,3746,

en_2649_34893_43092411_1_1_1_1,00.html, str. 55

Graph 2 shows comparative data for the countries of the Western Balkans within the component Education and training for entrepreneurship in 2006 and 2008. In 2006, Serbia, together with Montenegro, Macedonia, Kosovo and Albania, with the rank of 2.00, was beneath the average for the Western Balkan countries (2.10), while Croatia was the leader in the region, followed by Bosnia and Herzegovina. The situation has not significantly changed in 2008 when compared with countries in the region Serbia with a score of 2.00 was in the group of lowest-ranked countries.

2.2. The strategy of development of competitive and innovative small and medium-sized enterprises for the period from 2008 to 2013

In the context of entrepreneurship education, existing legislation [8] has recognized the importance of introducing entrepreneurship education and the need for further improving the ability of pupils / students to initiate change, take responsibility, show an entrepreneurial approach and a clear commitment to achieving the goals.

Of particular importance for the further development of entrepreneurship education in Serbia is the Strategy of competitive and innovative small and medium-sized enterprises for the period from 2008 to 2013, which was adopted by the Government of Serbia in 2008. This strategy defines as a strategic goal building of an entrepreneurial economy based on knowledge and innovation, with a clear focus on creating a strong, competitive and export-

ENTREPRENEURSHIP EDUCATION - FACTOR OF HUMAN RESOURCES DEVELOPMENT IN SERBIA97

oriented SME sector.

Graph 3. The pillars of development policy of SMEs Source: Strategy for the development of competitive and innovative small and medium enterprises for the period from 2008 to 2013,

p.10 Within the pillar II Human resources for competitive SME sector [9], the following

measures related to entrepreneurship education were elaborated: Improving of policies for entrepreneurship education • Adopt and implement a National Strategy for Entrepreneurship Education in

cooperation with the business community and other interested parties. • Establish a working group on entrepreneurship education within the Council for

SMEs. • Conduct awareness campaigns and promote entrepreneurship education at

national / regional level and develop a strong entrepreneurial culture. • Define a system of monitoring and evaluation of activities of entrepreneurship

education.

Graph 3. The pillars of development policy of SMEs Source: Strategy for the development of competitive and innovative small and medium enterprises for the period from 2008 to 2013, p.10

Within the pillar II Human resources for competitive SME sector [9], the following measures related to entrepreneurship education were elaborated:

Improving of policies for entrepreneurship education· Adopt and implement a National Strategy for Entrepreneurship Education in

cooperation with the business community and other interested parties.· Establish a working group on entrepreneurship education within the Council for

SMEs.· Conduct awareness campaigns and promote entrepreneurship education at

national / regional level and develop a strong entrepreneurial culture.· Define a system of monitoring and evaluation of activities of entrepreneurship

education.

Svetislav Paunovic, Maja Dimic98

· Promotion of good practices in the field of education.Integration and continuous improvement of entrepreneurial education at all levels· Integrateprogramsofentrepreneurshipinthecurriculaofprimaryschools,sec-

ondary(vocational)schoolsandcolleges.· Professionaldevelopmentofteachersandtrainersinthefieldofentrepreneurship.· Reinforceextra-curricularactivitiesinthefieldofentrepreneurshipatalllevelsof

education.· Directconnectionofeducationalinstitutionswiththeindustryinordertoimple-

mentbusinessprojects.Developedlegalandfinancialframeworktoencouragedifferentformsofentrepreneur-

shipeducation· Developlegislation.· Providefinancialresourcesfrompublicandprivatesourcestoencouragetheestab-

lishmentofstudententerprisesandentrepreneurialprojectsineducationalinstitutions.· Developasystemofaccreditationofeducationalprogramsandasystemofissuing

certificatesofacquiredknowledge.

3. FORMS OF ENTREPRENEURIAL EDUCATION IN SERBIA - THE CURRENT SITUATION

3.1 Formal entrepreneurship education

The study of entrepreneurship is not integrated into the system of primary and sec-ondary education in Serbia. When we speak about the primary level, in the forefront of the activities is to encourage students to recognize personal qualities (creativity, independence, readiness for competition, entrepreneurial spirit, action-orientation). At this stage it is also possible to develop more independent forms of learning. From educational activities at this age we should emphasize ‘learning through play’, presentation of simple case studies, the first contacts with the world of business, visits to local companies and meetings with suc-cessful entrepreneurs.

At the secondary level there has been progress in terms of integrating entrepreneur-ial content primarily in secondary vocational schools - through pilot programs CARDS of introducing entrepreneurship as an academic and non-academic subjects. In order to strengthen the awareness of students about the importance of self-employment as a possible career option particularly accented are activities related to the organization of exhibitions, competitions, career guidance, sports competitions, fashion weeks and publishing activities. A significant number of high schools in Serbia took part in the Junior Achievement project to raise the capacity of its entrepreneurial students.

The experience of higher education in management and entrepreneurship is very mod-est and relatively recent. There are very few private and state universities (mostly colleges of economic, business or management orientation) that deal with this issue and provide its students the opportunity to learn something more about entrepreneurship. There are also not many faculties where entrepreneurship has the status of a separate course, and in most colleges certain segments of entrepreneurship are taught within other subjects. Bear-ing in mind that almost all faculties are in the process of innovation of existing curricula, it

ENTREPRENEURSHIP EDUCATION - FACTOR OF HUMAN RESOURCES DEVELOPMENT IN SERBIA99

should be expected that the issue of entrepreneurship gain much more important place in the programs of higher education institutions in Serbia. It is particularly important to bring this matter closer to the population of engineering students who, by definition, represent innovative core which typically is not sufficiently market-oriented and entrepreneurial. The educational process significantly uses traditional methods and techniques. Despite the fact that significant steps have been made towards repression of merely storing information on the one hand and the development of logical thinking, on the other hand, it can generally be concluded that entrepreneurial education provides enough knowledge and information on key elements of entrepreneurship, but does not contribute to the improvement of skills and entrepreneurial behavior in the real business environment. In reality we have here “educa-tion on entrepreneurship” rather than “education for entrepreneurship”.

In order for entrepreneurship education program to be implemented in educational institutions it requires an adequate profile of educators (teachers, lecturers, trainers) with quality theoretical but also practical knowledge. Professors, lecturers and trainers should have a modern approach and accumulated experience in management and entrepreneur-ship. In addition, it is important that educators apply entrepreneurial methods and tech-niques in the educational process. In this context, a proactive approach to entrepreneurial education includes [10]:

• promoting entrepreneurship as business philosophy and multidisciplinary field that can be used in all spheres of human work and activities;

• creation of conditions for the abandonment of philosophy ‘get a job’ and accepting philosophy ‘create a job’;

• accepting the changes as a way of life;• providing a kind of ‘know-how’ in solving business problems;• assisting students in the process of identifying new opportunities in the market that

can be used to start a business;• create a relaxing atmosphere in which all students feel complete freedom to crea-

tively participate and contribute in solving a given problem.

3.2 Informal entrepreneurship education

In the field of informal entrepreneurship education in Serbia in recent years there have been made significant steps towards initiating activities on the training of future entrepre-neurs and owners of small and medium-sized enterprises. Although the process of creating a system to support the SME sector and entrepreneurship is still in the initial stage of develop-ment, there are a couple things that are directly in the function of strengthening the training and consulting services at the local level. National Agency for SME Development carries out the following forms of business education and development of human resources: [11]

• Training for beginners in business in order to increase the level of entrepreneurial culture, education and skills of potential entrepreneurs, with the possibility of testing en-trepreneurial skills, providing the necessary packets of information on the possibilities of business ideas, providing information on legislation and tax system and professional help in checking the business idea through the development of a business plan.

• Mentoring program is being implemented exclusively for companies that have been established with support from the National Employment Service. In the process of mentor-ing program they analyze the situation of the company, define plan for solving a specific

Svetislav Paunovic, Maja Dimic100

problem as well as the action plan for intervention.• Consulting (entrepreneurial service) refers to the provision of legal and financial

advice to potential and existing small and medium enterprises and entrepreneurs in the following areas:

o options for getting funding and the loan conditions through existing credit lines and grants;

o assistance in developing business plans;o finding new markets both at home and abroad and connect with business partners

and institutions;o help with the selection of activities they would deal with and the legal form of the

business;o the possibility of acquisition of fixed assets;o legal aspects of the business and the latest changes to the law;o the tax liability and tax incentives, etc.

4. HOW TO MAKE ENTREPRENEURSHIP EDUCATION MORE ENTREPRE-NEURIAL AND MORE EFFICIENT?

Entrepreneurial education as an essential component of the overall development of hu-man resources in a time of turbulent changes in the environment involves a significant step forward in the domain of improving curricula and substantial changes in the functioning of educational institutions. In this context, the internal and external factors that are trans-forming the role of educational institutions at all levels are of particular importance. En-trepreneurship education should deal with concrete projects that allow the capitalization of knowledge. Educational institutions are expected to be entrepreneurial, teachers and pupils / students should transform themselves into entrepreneurs, where their interaction with the wider community should follow the entrepreneurial models and patterns.

The process of evolution of university involves a transformation of the creators of knowledge to the key factors in the expansion process, and capitalization of knowledge through a process of strengthening the innovation and the interaction with the external environment. In the extent that these processes are effective it is expected that the University becomes less an institution that is being supported (by other parts of society through dona-tions and budgetary considerations), and more and more an institution that with its actions supports the other parts of society and contribute to their development and prosperity.

REFERENCES

[1] European Commission - Enterprise Directorate-General (2002): Final Report of the Expert Group “Best Procedure” Project on the Education and Training for Entre-preneurship[2] http://europa.eu.int/comm/enterprise/enterpreneurship[3] http://europa.eu.int/comm/enterprise/enterpreneurship/ support_measures/train-ing_education

ENTREPRENEURSHIP EDUCATION - FACTOR OF HUMAN RESOURCES DEVELOPMENT IN SERBIA101

[4] The European Commission and the Council of Europe in 2008 adopted ‘Small Business Act’ for Europe. Similarly there is European Charter of small and medium enterprises, and this document contains 10 areas that are of importance for the devel-opment of SME sector.[5] Ministarstvo ekonomije i regionalnog razvoja, Republički zavod za razvoj, Republička agencija za razvoj MSP i preduzetništva: Izveštaj o malim i srednjim preduzećima i preduzetništvu, 2008, str.10[6] OECD, European Commission, European Bank for Reconstruction and Develop-ment and the European Training Foundation: Progress in the Implementation of the European Charter for Small Enterprises in the Western Balkans http://www.oecd.org/dataoecd/51/61/46583422.pdf[7] Ministarstvo ekonomije i regionalnog razvoja, Republički zavod za razvoj, Republička agencija za razvoj MSP i preduzetništva: Izveštaj o malim i srednjim preduzećima i preduzetništvu, 2008, str.10[8] Javna debata u Skupštini Srbije: Zašto je važno preduzetničko obrazovanje?, Građanske inicijative , Beograd, 2010. [9] Strategija razvoja konkurentnih i inovativnih malih i srednjih preduzeća za period od 2008. do 2013. godine, str.13. [10] Paunović S., Entrepreneurship Education in Serbia- some experiences, prezentacija za učesnike TEMPUS projekta NP-16098-2001, Beograd, 2002.[11] Ministarstvo ekonomije i regionalnog razvoja, Republički zavod za razvoj, Republička agencija za razvoj MSP i preduzetništva: Izveštaj o malim i srednjim preduzećima i preduzetništvu za 2008. godinu, str.85[12] Clark B.R.: Creating Entrepreneurial University – Organizational Pathway of Transformation, London and New York, International Association of University Press and Pergamon-Elsevier Science, 1998.[13] Etkowitz H.: The future of the university and the university of the future: evolution of the ivory tower to entrepreneurial paradigm, Research Policy, Vol.29, 2000. [14] EU: Action plan to promote entrepreneurship and competitiveness, 1999. [15] Paunović S.: Preduzetništvo – od biznis ideje do realizacije (Entrepreneurship – from a business idea to realisation); BK University, Beograd, 2003. [16] Ropke J.: The Entrepreneurial University: Innovation, academic knowledge crea-tion and regional development in a global economy; Phillips University Marburg, 1998. [17] Trachtenberg S.J.: The New Entrepreneurship University, speech to the AAUA; 1999.

UDC 005.71

THE ROLE OF INNOVATIVE APPROACH IN SMALL AND MEDIUM ENTERPRISES

Miodrag Pavlovic1, Drago Orcic2

1Faculty of Management, Novi Sad, University “Union-Nikola Tesla”, Belgrade, SERBIA, e-mail: [email protected]

2Fourth year student of the Faculty of Management, Novi Sad, University “Union-Nikola Tesla”, Belgrade, SERBIA

Abstract: In economically developed countries of the world and in our country, the sector of small and medium enterprises has been recognized as one of the main pillars of economic stability and eco-nomic development. The European Commission has drafted a framework program for initiating the competitiveness and innovation in the field of small and medium-sized enterprises. The innovative approach always puts into operation all the potential resources available. Innovative companies accept the philosophy that there’s always a better way of doing business and they search for new ideas that will increase their value and reduce costs. To accelerate the component of innovation in small and medium enterprises, the market offers consulting services aimed to provide for companies recommendations and advice in order to improve existing business or resolve problems within certain areas of business.

Keywords: innovative approach , small, medium enterprises

1. INTRODUCTION

In economically developed countries, in Europe, and in our country, the sector of small and medium enterprises has been recognized as one of the main pillars of economic stability and economic development. The European Commission has drafted a framework program for competitiveness and innovation for the period 2007-2013, with a special focus on small and medium-sized enterprises (hereinafter SMEs). Many countries in the region have their own national development strategies of the SME sector more in line with the said program, and Serbia is among them.

The aim of the Strategy for Competitive and Innovative SMEs from 2008 to 2013, is the development of an entrepreneurial economy based on knowledge and innovation, which creates a strong, competitive and export-oriented SME sector, but also significantly con-tributes to increasing the standard of living in Serbia. Implementation of the Strategy in the

Miodrag Pavlovic, Drago Orcic104

coming period should allow the creation of a more efficient business environment of small and medium-sized enterprises, balance the number of small and medium-sized enterprises and encourage faster development of this sector.

Support to development of entrepreneurship has the main goal to help create a frame-work for the development of sustainable, internationally competitive sector of small and me-dium-sized enterprises, oriented towards exports. One of these goals is achievable through increased efficiency of government policy that should promote private sector entrepreneur-ship.

Basic things that are currently affecting the development of enterprises and entrepre-neurship in Serbia are reflected in the institutional flaws that exist within government in-stitutions and business support organizations, discontinuity of financial institutions, the existence of certain legal obstacles, human resource development, incomplete information and statistical system, the lack of a mechanism of strategic consulting, inefficient coordina-tion of donors, etc. On the other hand, because of the transition process which is underway, our businesse, and their management the role of innovation place into the background and not as a priority for their own progress and increase of their role in the market. The constant presence of this problem has caused resorting to other forms of promoting and supporting the development of enterprises and entrepreneurship. One of these forms is the role of “In-novation consulting” in supporting the development of small and medium-sized enterprises.

2. TRANSITION - ADVANTAGE OR DISADVANTAGE FOR THE DEVELOPMENT OF SMES

When we compare a variety of transitions, we come to the conclusion that among them there are many similarities. Serbia has been in the process of transition for just a few years and in some neighboring countries the transition has been going on for over 20 years. Serbia is, so to speak, in the initial phase and it is a fact that is important to keep in mind. Another important element is the fact that Serbia has a long entrepreneurial tradition compared to the countries of the former Eastern Bloc. The people of Serbia traveled, worked with foreign companies, which is a good prerequisite for the development and promotion of entrepre-neurship in Serbia.

Innovation is an essential factor of development. Innovation always leads to new ideas, new solutions, new forms of business, particularly in the SME sector.

Especially in times of crisis and transition, entrepreneurs need to think about new products, new processes and new ways of working. This is in order to, with better price, bet-ter quality product or service, not only survive in the market, but also improve the existing market position. In this way we get new ideas which bring new jobs.

The main competitive advantage of every modern company is its ability to innovate. Innovation in a company results in an advantage over the competition, and achieved com-petitive advantage results in an increase in profit as the main goal of every modern company. Improving of overall social innovation capacity and the development of entrepreneurship, is one of the key factors of social development. By raising awareness of the need for innovative consulting in SMEs we would create an environment that would be conducive to SME de-velopment and innovation in general. The future of SMEs in business development is based on knowledge. A company that is able to offer a quality resource of intellectual capital, will

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surely find partners. Today, most wanted goods and services are the ones that are based on innovation and knowledge.

3. POTENTIAL IN SMALL AND MEDIUM SIZED ENTERPRISES

SMEs are the driving force on which more and more economies of the European Union rely. In Europe there are about 20 million small and medium-sized enterprises, and they ac-count for over 99% of enterprises in most EU member states. Small and medium enterprises represent an important and basic source for the creation of new businesses and the expan-sion of new business practices. SMEs make a significant contribution for the gross domestic product. This rule applies both to small and medium enterprises in Serbia as well as those that are located anywhere in the world. The role of small and medium-sized enterprises is particularly important in countries that are in transition. The advantage of small and medi-um-sized enterprises, in addition to many other advantages, is reflected in innovation. SMEs in Serbia proved to be very resilient during the 90s of the twentieth century, although this period was marked by a very harsh economic environment (UN sanctions, civil war broke out in the region, bombing in 1999, the lack of incentive regulation for SMEs, legal and eco-nomic instability, etc.). Over the years, the number of SMEs had even increasing rate, which indicates the huge potential and flexibility of SMEs. The latest data (Blic Online 23.11.2007) show that there are 60,552 active companies (legal entities) in Serbia, most of which are small businesses - 94.1% (56,993). There are 2.573 medium enterprises (4.3% of total) and 986 large companies (1.6% of total). Also there are more than 200,000 entrepreneurs.

In the 21st century, innovation is a key driver of economic growth. Innovation condi-tion the competitiveness of the region and the nation. In order to further its economic de-velopment Serbia has a good chance to develop in the direction of an innovative society. The chance is in creating knowledge-based economy, which provides support for innovation in SMEs, and therefore increases its competitiveness in the market.

The innovative approach always puts into operation all the potential resources avail-able. In our case, one of the potential resources can be even the transition of the old bulky industries that are directed toward new forms of business, particularly to the SME sector.

In the process of transition, people are usually forced to change the paradigm. Pressed by the new circumstances they need to think about new products, new processes and new ways of working. Thus new businesses are born that create new jobs, new ideas, new prod-ucts and new market access, new services. Raising awareness about the importance of in-novation is a great chance to prepare well for entry into the market “arena” called the EU. I believe that it is necessary to use the time ahead of us to prepare the SME sector and provide training for innovative ways of thinking and operating.

The concept of innovation should not be linked only to science and high technology. Innovation is an innate part of every human being. Innovation has always been the human virtue. Innovation is the driving force that has always throughout history resulted in pro-gress. Innovation in SMEs is very important. It is inconceivable to conduct business in small and medium-sized enterprises without a permanent progress and innovation. Innovation is “effectively putting into operation the latent potential that exists in the organization.”

The goal of innovation is “to make a profit on the ideas that are new to the organiza-tion.” Innovation should be a key element of the strategy of each company. Innovation is a

Miodrag Pavlovic, Drago Orcic106

process! The process of innovation begins with an idea, the idea turns into a proposal, the proposal becomes a plan. When the idea is turned into a plan, then we perform a detailed business plan in which we can be invest. The investment, when implemented, increases the value of the organization and brings profit.

Innovation is the key driver of economic growth and development. It means he intro-duction of new and improved technology, and development of new and improved ideas. Continuous improvement of quality and services, is one of the basic conditions for the sur-vival of any company in the market. Especially in transition countries where the economy is less developed it is very important to promote and provide an environment for innovation and innovative approach. Innovation and development are the key elements for any product or service to be competitive in the market.

It is necessary to have organized and applicable development that will result in new innovative product or service at a competitive market. Often innovation requires a much smaller investment and achieves much greater results.

Innovation is the foundation on which rests the future of any company. Whether it is a large company or a small or micro enterprises. Innovations enable significant progress in business and increased utilization of company resources.

The concept of innovation includes not only technical innovation but also economic, social and institutional innovation.

4. HOW TO INTRODUCE INNOVATIVE BUSINESS IN COMPANY?

Innovation is not the same as creativity. Innovation is the realization of profit from ideas that are new to the organization. The point is not in possession, but in the realization of profitable ideas. One should not forget that innovation in the enterprise necessarily results in improved competitiveness, and competitive advantage increases the profits.

Manifestation of entrepreneurship is innovation. According to the social dimension they can be defined as: social, socio-technical and purely technical innovations. According to the degree of innovation (change) they are divided into: radical, revolutionary, evolution-ary, trivial and peripheral. They all have their significant aspects, because they represent innovations in process, product or production solution.

In defining the concept of innovation there are also certain difficulties. It is often not clear whether a certain novelty should be considered an innovation due to low or insignifi-cant degree of change that it causes. Sometimes, however, under the innovation we mean invention, imagination and often some new solution which is, admittedly, quite different from innovation.

Invention is a unique idea, which is just an idea and there is a very long way to its commercialization. If, however the idea finds its commercial way and causes change in the process of innovation, product or solution, and achieves significant economic results, then it is innovation.

Imagination is not even an idea, but only a reflection, a sort of spiritual creative pro-cess. Imagination is the process of creating works of art, which certainly increases the social wealth of a nation, but does not directly contribute to its economic development.

Discovery is the process of finding something that has long existed.Columbus did not invent America but had made this great historical discovery. Inno-

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vation is not a discovery, it never existed in this form, it is the original act of an individual.Based on all the above, it can be implied that innovation is “a novelty that is inserted

into the current situation.” According to the nature and extent this novelty may be present as replacement and as renovation (supplement). In any case, it is the change of the former and the introduction of new, where future covers the existing situation.[1]

Therefore innovations are:§ inventions§ technical improvements and§ improvement of organization and operation.

There is no innovation without entrepreneurship. In inverse social movements often in-novation and entrepreneurship are mutually equal. This is certainly possible, provided that the holder, financier and implementer of innovation is the owner of the capital who with his assets bears the risk for the business decisions.

P. Drucker all causes of innovation is classified into seven groups:[2]§unexpected: success, failure and external event,§discrepancy between current and normative reality,§needs caused by some process,§ changes in the structure of the economy or the market,§demographic trends,§ changes in perceptions, moods and meanings and§new scientific and non-scientific knowledge.

Intuition, experience, knowledge and reality are the best components in the imple-mentation of entrepreneurial ideas. One without the other does not create chances, does not solve problems, does not notice the danger or perceive a range of business decisions taken.

Innovative organization is inversely proportional to the economies of scale: the bigger the company, the less the percentage of innovative solutions. The real fact is not understood for a long time in large enterprises, which, with its mighty economic power, huge capital and number of employees, compensate for the lack of invention and innovation of their employees.

Small and medium-sized enterprises generate new ideas and seek prompt and effective economic solutions. Searching for opportunities and addressing risks belong to small and medium-sized enterprises, which are, by definition, more flexible and more adaptable than the powerful economic systems. Entrepreneurship as organizational skill here is a form of adaptation.

Development of small and medium-sized enterprises and the privatization of social ownership in our economy are the two necessary conditions for the reaffirmation of entre-preneurship. In such conditions between entrepreneurship and private initiatives we can often put an equal sign. One without the other does not exist, both are based on private property and essentially belong to small businesses.

Innovation is the development and application of new ideas or skills to commercialize new or improvement of products, processes and services, which leads to increased economic

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and social prosperity.Innovation is a new way to perceive things and the process, and a key element in creating a

competitive strategy.[3]Innovative companies adopt the philosophy that there is always a better way of doing

business and they search for new ideas that will increase the value, and reduce costs. Regard-less of the opinions, which largely prevail with us, innovation is required every enterprise, from the smallest ones to those where innovation is the main driving force of development.

Innovation in companies can be seen through the sale of products and services, op-eration, organizing their own business, etc. In addition to the innovation it is necessary to develop many other skills in order to master them successfully.

Very few organizations can survive indefinitely without innovation. The urge to explore the latent potential of new ideas is not a privilege of only commercial enterprises.

Innovation is a process (Figure 1). It starts with an idea that is new, at least for an or-ganization that is considering its adoption. Innovation takes place in stages. When the idea develops, often in combination with other ideas, it can become a “proposal” - something that an organization may choose to invest in it. If the organization decides to adopt the proposal, it usually requires investment and previous modes of work may need to change, sometimes radically. When the proposal becomes a reality, in the good case it starts to add value to the organization - then it can properly be described as “innovation”. We define in-novation as “getting new ideas and fully exploiting their latent potential.”

Figure 1.- Process of innovation

Each stage is an element of the innovation process. Separately they are important, but by themselves they are not innovations. If a company finds a new way to increase the safety of passengers in plane crashes and others use their ideas then the inventor can not be regard-ed as an innovator. Innovation requires the organization to benefit from the latent potential stored in the idea. Innovation is a strategy to receive and maintain competitive advantage.

Innovation helps organizations in five main ways:· Theycanofferproductsandservicesthatconsumersconsiderthatarebetterthan

thoseofferedbyrivals.Itisastrategyofdifferentiation.· Activitiesundertakenbytheorganizationcanbeperformedcheaper,thus

reducingcoststructureoftheorganization.Thisisthestrategyofleadershipincosts.· Theprocessesintheorganizationandsupplychainoperationsmaybemore

THE ROLE OF INNOVATIVE APPROACH IN SMALL AND MEDIUM ENTERPRISES109

robustandbedeliveredfaster,allowingtheorganizationtobeflexibleandprovideopportunities.Itisstrategyofagility.

· Newwaysofsellingproducts,brandororganization.Thisincreasesorchangesawarenessofthemarketandpositionoftheproductsothatithasspecialworth.Thisisthestrategyofmarketposition.

· Sometimesanewformulafortheformationofthebusinesscanbefound.Forexample,theInternetoffersanopportunityforbankstoworkoutsideofbranches.Inthiscaseinnovationwasinthefundamentalbusinessmodel.Newwaysofformingtheorganizationcanopenmanyopportunities. This strategy is a paradigm shift.

5. INNOVATON MANAGEMENT

How much innovation is needed depends on the industry. Companies should strive to be leaders in their industries and to be careful regarding the radical changes that may occur when the rules of the game change.

Usually, the organization wisely follow three interrelated approaches to innovation in a competitive relationship.

Those are:· Takingmany small innovations in everybusiness activity.Thisgivesorganiza-

tionalcompetencethatisdifficulttocopy.· Conductingalargenumberofvaluableinnovationsthatkeeptheorganizationin

termsofthecompanythatkeepsupwiththestateofscience.· Exploringthepossibilitiesforsysteminnovationsthatcanleadtotransformational

changeandgivearadicallydifferentwaysofmeetingtheneedsofconsumers.

If organizations need to follow all three innovation strategy, they should have a general innovation capability. Francis A. Voodcock [3] presented a model of innovation possibilities with 8 segment-subcomponents. These are shown in Figure 2.

Innovative organizations need to create a culture that respects the system of values of the enterprise. Little can be achieved without the widely held belief in the value of oppor-tunism and adventurism. Those people who are leading innovation should adopt a “pirate spirit.” New challenges need to be constantly searched for, and organizational culture should support them, and thereby strengthen the awards of the company.

Phases of action for the development of the company include:

§ Identify the value of “drivers” (internal entrepreneurs).§Accepting investment into the future.§Determining the strategic objectives for the exploration of new areas.

Component 2 – Energy

Miodrag Pavlovic, Drago Orcic110

Figure 2. – Model of innovation capability Component 1 - Enterprise

Organizations that are innovative are optimistic. They are full of energy. High levels of energy are natural in the organization that are based on teams, but stiffness, narrow think-ing, fear and pessimism can hijack the organization excitement, passion and enthusiasm. Such “energy sinks” can undermine, maybe even destroy innovation ability. Managers need to release the latent energy and channel the passion to explore the potential of new ideas. Like most organizational features, bringing energy to organization should start with bring-ing energy to oneself. Organizational leaders must be excited by ideas and must be enthusi-astic. They should be role models and leaders.

Phases of action for the development of organizational energy:§Employing of people with unusual energy.§Adoption of rapid, positive decisions about what needs to be done.§ Investment in personal development of key employees.

Component 3 – AuthorizationIn small organizations, the owner or general manager is often the only source of inno-

vation but, as the organization grows, it becomes impossible. No individual can be a source of innovation for large enterprise. Many people must be involved and be able to contribute, they must all be authorized.

Authorization is vital to innovation, because good ideas can com from anywhere. In-novation will stagnate unless people feel they have the right to explore ideas. Considerable creativity is released when every employee feels the need to look around and find new and better ways to do something. The most innovative organizations expect people to develop ideas and they measure innovation performance of each individual.

Authorization for innovation encourages people to seek ideas, experiment and make suggestions. Given that innovation initiatives may require the secured assets, it is neces-sary for management to take care of that. Accordingly, innovation requires a partnership between authorized, creative employees and decisive managers who can act.

THE ROLE OF INNOVATIVE APPROACH IN SMALL AND MEDIUM ENTERPRISES111

Phases of action for the development of authorizaton:• Ensure that there are expectations that everyone should contribute to innovation• Train leaders to empower the members of their teams• Ask key employees to develop new ideas.

Component 4 – ExperimentInnovation requires experimentation. A huge number of ideas may need to be reviewed,

examined and investigated, but only a small part of them will be adopted. It makes sense to adopt those ideas that provide the maximum benefits. Often the latent value of the ideas is hidden when the idea is first suggested. Ideas must be explored in order for costs and benefits of implementation to become clearer.

Industries based on creativity, such as fashion, film industry and pharmaceutical re-search, know the importance of experimentation. They deliberately try out ideas and use the most objective procedures available to them to assess the ideas. Such techniques are applied to a growing number of industries.

Experimentation is necessary for three main reasons. First, it forces the development of ideas. Second, it reduces the risk because objective information provides a solid basis for making decisions. Third, the experiment is a powerful source of learning those involved get firsthand insight into the reality of the idea put into practice.

Phases of action for the development of experimentation:• The establishment of the fund for speculative initiatives.• The formation of special groups of experimental work.• Accepting that some projects will fail.

Component 5 – InsightSuccessful organizations are not engaged only in innovation. They innovate with the

goal. In order to know where there is a need for innovation they must have insight. They require insight into the desires and needs of the people. For this purpose market research techniques can be used. Equally important is the knowledge of customers and insight into potential ideas. Insight requires powers of observation, open-mindedness and persistence. It is necessary to look further than the others and to see deeper. This requires people with a vision of working together to create a picture of what will be in the future. Getting insight should become a way of life.

Phases of action for the development of insight:§The inclusion of many people in the convergence of consumer and market research.§Research of needs and desires of people who are not your customers.§Research of potential of emerging technologies.

Component 6 – IntentionGood ideas are often found because someone is looking for them. It is not possible to

guarantee creativity, but targeted search often brings results. This means that there is a close link between innovation and strategy. Directing efforts towards presenting innovation with a clear intention is the task of leaders. Managers must illuminate the direction the organiza-

Miodrag Pavlovic, Drago Orcic112

tion should follow.

Phases of action for the development of intention (for innovation):§Establish a powerful ad hoc teams to investigate defined “areas of opportunity”.§Establish alliances with innovative companies that are just starting and share ideas.§Develop scenarios what the future will be lake - and define your role in it.

Component 7 – InvestmentSome innovations are free. The company can begin to pay suppliers via electronic mon-

ey transfers which requires little or no additional effort or cost. However, many innovations require investment. In the early stages, while the ideas are searched for, the likely investment is in time and effort people. Later it may be required to invest additional resources, including significant amounts of money and time of management.

Innovation requires intensive work. When the leadership of the organization chooses to invest in a large innovation project they open one door of opportunities but the other doors are likely to remain closed. An organization can only deal with a certain amount of innovation. If they follow too many ideas at the same time, resources are wasted and creative intensity weakens. Innovation poses a dilemma for financial managers because it is difficult, perhaps impossible, to predict the value that will be created once the idea is put to use. Ac-cordingly, it requires a lot of skills of managers, rational mind and good intuition.

Phases of the investment in innovation:§Allocate a fund for innovation.§Better to invest a lot in several initiatives, rather than wasting resources.§ Set aggressive targets for innovation projects

Component 8 – ImplementationWonderful creative ideas are inspiring, but they are only the first step in the innova-

tion procedure. Ideas should be applied if they are expected to give some contribution in return. Implementation of small innovation often occurs between the working groups and represents local challenges. Great innovation initiatives may require complex changes that require a lot of cooperation among the groups and present great challenges for managers. Some forms of innovation, especially in the technical products, begin in the department for research and development and are then transfered to production departments. Efficient implementation of product innovation demands that the horizontal processes are optimized and arranged.

Phases of action to improve implementation of innovations:§Setting of good, structured process of innovation (e.g., recognition of phases and

outputs).§Appointment of a person responsible for the overall innovation process.§Try to reduce useless boundaries between groups.

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6. THE ROLE OF CONSULTANTS IN THE PROCESS OF INNOVATIVE APPROACH

SMEs often do not have the ability to afford professional staff specialized in invest-ment, marketing, improvement of the quality of products, processes and management sys-tems, process of improvement and quality, the application of new technologies or business transformation through cooperation and integration into larger systems. On the other hand, there is a quality experience and expertise of individuals and agencies that are trained and competent in the implementation of quality processes. To initiate component of innova-tion in small and medium enterprises, the market offers consulting services that aim to, among other things, help in the first place managers to accept different organizational cli-mate, which emphasizes the importance of changes in behavior and not only in increasing the knowledge .

Consulting or business consulting is the activity through which companies provide recommendations and advice, in order to improve existing business or solve problems with-in certain areas of business. Business consulting means to help companies to, through vari-ous analysis and research, improve existing business.

The role of consultants in the innovative approach of the company is significant for several reasons. The consultant has a neutral approach, providing a second viewing angle (“you can see better from the outside”), increases the efficiency and rationality, focuses on the result and brings a new quality and value.

In the process of consulting the consultant should:§ Identify and define the current situation.§ look at the problem and clearly define the causes and consequences.§Generate possible solutions.§According to the criteria provide help in choosing the best solution.§ Implemented the plan and, if necessary, participate in it.

The process of consulting includes: Defining the business requirements by gathering facts based on research (questionnaires and surveys)

§Testing and analysis of specific business functions, plans and objectives§Record and report on the current situation and proposals for development strate-

gies§Preparation of a clearly defined action plan and participation in its implementation§A detailed evaluation of the degree of effectiveness of the operation

There are various models that can be applied in the consultation process. The model that is offered by CENTRIM4 for the execution of the service innovation consulting consists of 9 steps. These 9 steps (shown schematically in Figure 3) require the systematic point of view (the client is “organization”) and review the innovation in the value chain, but also in the broader context of value flows.

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Figure 3. - Model for the execution of innovative consulting services

The very process of innovation consulting is carried out through the nine steps:

Step 1 – Clarification of strategic intent

Purpose: To understand the way in which the business going. Assessment: Where a company wants to be in 3 years? For 10 years?

Step 2 – Defining competitiveness strategy

Purpose: To u n d e r s t a n d c u r r e n t a n d p l a n n e d c o m p e t i t i v e n e s s s t r a t e g y . Assessment: Why do people turn to you and not your competition? How do you plan to keep the advantage in the next few years?

Step 3 – Analysis of professional skills

Purpose: Assess whether the company is one of the “world class”. Assessment: Looking at the company as a whole, which activities are performing well? What should be improved?

Step 4 – Analysis of the industry

Purpose: To define the generic drivers of change.Assessment: Looking at other companies of the same profile, consider what changes will

happen in the next few years? What impact will they have on the company?

Step 5 – Market analysis

CENTRIM - Centre for Research in Innovation Management http://centrim.mis.bright-on.ac.uk

Purpose: To identify the changing needs of consumers. Assessment: Who would be your

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choice consumers within a few years? How will their preferences differ from today?

Step 6 - Defined plan of innovation at the company level

Purpose: To determine where there is need for innovation.Assessment: Where are, in your opinion new ideas most needed for the development of

your business enterprise?

Step 7 - Evaluation of innovation capability

Purpose: Reveal the areas where the organization needs to develop.Assessment: Looking at the entire business (including suppliers and customers) where

are your innovation strengths and weaknesses?

Step 8 - Determination of the objectives of the innovation activity in the development of the organization

Purpose: To define the requirements in terms of organizational development. Assess-ment: What new or better skills you want to have in the future?

Step 9 – Realization

Purpose: concrete activities. Assessment: What should be done? Who will do it? Howwill we know that we have succeeded?

7. CONCLUSION

Small and medium enterprises are the main carriers of development directions of each country. During the last period it is evident that the number of SMEs is growing and they are becoming more competitive. Small and medium enterprises are oriented on smaller parts of the market and thus to certain consumers. They are more adaptable to change, more quickly recognize and respond to potential chances, as well as potential threats.

Small and medium-sized enterprises because of their flexibility and homogeneous structures have a solid basis to develop innovation and thus enhance the market competi-tiveness. The flexibility of small and medium-sized enterprises is particularly evident during periods of slowing economic activity and crises. There is evidence that small businesses are an important driving force of economic development of each country and are a potential generator of entrepreneurial ideas and innovations. It is not realistic that our SMEs expect to become branch leaders in the EU market. The direction in which small and medium-sized enterprises in Serbia can develop is the innovative approach to real market needs. The condition for the survival of any company is constantly improving the competitiveness and investments in product innovation and service.

The strategic advantage of small and medium-sized enterprises in Serbia should be based on innovation, developing partnerships, striving to conquer the regional market. Yet

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what is also characteristic of small and medium enterprises in Serbia, is the relatively low awareness of the role of skills and training in the areas of management and business func-tions. Successful operation and management of small and medium enterprises has become unthinkable without adequate data, information, new knowledge and continuous innova-tion process. Business and management is significantly different in the “Age of Knowledge” in which we are, from the management of the organization and its processes in the industrial era. In the “Age of Knowledge” intellectual resources have a special value in relation to mate-rial resources. An important form of intellectual property are information, knowledge and skills that can be reflected through the ongoing process of innovation. Strategy of develop-ment of small and medium enterprises based on knowledge and innovation guarantees suc-cess. Innovation is the key driver of economic growth and development of each country. For this reason it is very important for the management of small and medium-sized enterprises, to develop awareness of the necessity of creating a creative atmosphere in their companies. In other words, they should raise the level of culture of the organization to the level of aware-ness of employees about the necessity of changing innovative character. In all this a great role should be played by individuals or agencies that provide consulting services.

8. REFERENCES

[1] Ožanić, M. (1989): Inventivno stvaralaštvo - bez pravog zamaha, „Poslovna politika”, Beograd, strana 21.

[2] Drucker, P. F. (1991): Inovacije i preduzetništvo„Privredni pregled”, Beograd, strana 62.

[3] Support to Enterprise Development and Entrepreneurship Programme - Centre for Research inSupport to Enterprise Development and Entrepreneurship Programme - Centre for Research in Innovation Management - Univerzitet Brajton - UK, 2006 http://centrim.mis.brighton.ac.uk

UDC 330.34

UNDERSTANDING OF THE CONCEPT OF LOCAL ECONOMIC DEVELOPMENT

Ljupka Petrevska 1, Marija Bulatovic 2, Ivana Petrevska 3

1 Faculty of Business Studies and Law, University Union - Nikola Tesla, Belgrade, SERBIA, e-mail: [email protected]

2 Institute of Public Health of Serbia „Dr Milan Jovanović Batut“, Belgrade, SERBIA, e-mail: [email protected]

3 College of Professional Studies in Education of educators and business informatics -Sirmijum, Belgrade, SERBIA, e-mail: [email protected]

Abstract: The modern age is characterized by rapid change on all levels, from local and national, to regional and international. Changes and processes that induce the most attention are those that affect and determine economic life of society and of man as an individual. In the 20th century, such changes can be monitored at the local level, as the practice and decision-making in economic matters was descended to the level of citizens in local government units, which makes it a more effective and more efficient way of managing the economy both in the developed and the less developed countries. The following article deals with the concept and importance of the concept of local economic development, both in our country and beyond, at the international level, as well as the factors that significantly af-fect the local economic development.

Keywords: Local-economic development, factors of LED, local unit

INTRODUCTION

Local units in the territorial organization of a country generate a wide range of re-sponsibilities, and recently typical for them are the responsibilities and tasks that are in the sphere of economy and economic activities. Shifting of the focus of planning and decision-making on economic issues at the local level is the product of the needs of modern times, which are based on expeditious development at all levels.

With such demands of the time we live in, there has been developed was a concept of local economic development, which has a relatively short history, and that during that time has attracted the attention of professional circles in order to comprehensively address this issue. Consequently to great interest and many questions that the concept of LED opened

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there is a number of different interpretations of both the concept of the local economic de-velopment and the content of this concept, measures and instruments that can be attributed to it.

Hereinafter there will be perceived different concepts of the LED by prominent experts, as well as the stages of development of the concept of time from when it appeared, after which it will be accentuated by instruments which have been applied or not applied through the LED, as well as factors important for development of the concept of local economic development. Before that, as a basis for consideration of these issues the meaning of the concept of local units will be determined, without which the LED would not have a spatial guideline for its action.

The local unit is a spatially conceived term used in parallel with the concept of the local community, to indicate the territorial framework for the exercise of the functions and respon-sibilities of local authorities, and in which there live and operate subjects to which these com-petencies are applied, and where there are also located natural, economic and other resources that represent its potential. The territorial principle of organization of local work can rest on different grounds, and be built on the basis of different criteria. Based on the criteria used and the choice of which of them will be dominant for organizing a network of local businesses different principles of organization of local government are formed. The territorial division may be organized as a basis for the performance of certain administrative activities, which is known in theory and in practice, but has not proved to be the most rational solution since it re-quires special and individual status of the organization and regulation of temporary functions of local authorities. Each activity would therefore be in direct relation with the central govern-ment, which would lead to its impractical and irrational high growth, which consequently carries with it a high degree of bureaucratization of local authorities. [1]

Territorial division can work through local units, i.e. through local units of general juris-diction. Local units have their responsibilities defined with longer period life and a permanent administration. This kind of territorial conception has proved to be a more rational and effi-cient form of solutions, primarily due to the unification of all important local functions, and in order to facilitate their carrying out, as well as greater and easier access for the citizens of these functions for which they were established. This provides an opportunity for citizens of local communities to take part in the exercise of those functions. This concept is normally used in comparative legal practice.

Territorial division is applied to the entire territory of a state, and therefore it is neces-sary to take into account the size and position of the territorial units of the same type and the same level [2], as well as the ability of the local population to access local authority. Optimal territorial division is achieved through the best combination of these causal factors. When the local units are formed in a territorial way, citizens can participate in decision-making, through local centers. In these centers decisions are made and various service operations are performed necessary for the development and improvement of life of the citizens of a local community.

DEFINING THE CONCEPT OF LOCAL ECONOMIC DEVELOPMENT

The term “local economic development” refers to a process of constant movement and changes in operating actors, who in this process are limited primarily by available sources of financing. Local economic development indicates that the units of local self-government

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after the transition period from a centralized to a decentralized system of regulation, are an important actor affecting economic development and has its place in the economic life of the country together with the business entities. For this reason, a number of theorists and practitioners have tried to pinpoint the concept of local economic development.

However, the concept of local economic development is a dynamic concept, implies activism and events, rather than a passive state, and for this reason many authors who were trying to reach a single definition of the term, have not been able to agree on a single defini-tion that can be considered as the only one and acceptable in general. Definition of local - economic development went from thinking that questioned only dealing with this concept, reducing the national and global economy in the simple sum of the local economies, from which it appeared that it was enough to study the national and global economy, i.e. it is un-necessary to deal with specific local - economic development. More specifically efforts in an attempt to define the concept of LED made Blakely and Bradshaw, who put emphasis on the importance of local elements in the economy, noting that “local-based economic develop-ment and encouragement of employment are more likely to successed if they are run at a local level compared to some other level. [3]”

Further, the experts of the World Bank contributed to the defining of the concept of LED, which according to them has a goal to create “the capacity of local communities to improve their own economic future and the quality of life for all. [4]” With such a definition local economic development is not limited only to the economy, but also it brings to the fore a broader concept, which refers to the overall quality of life of citizens at the local level. This broader understanding has led in the sixties of the 20th century to the emergence of the concept of economic development of the community, i.e. to the merging of social develop-ment with this concept.

Coulson perceived local economic development as the sum of interventions to be un-dertaken in order to strengthen both local and regional economy. [5]

Bartik is also one of the authors who tried to look beyond the local economic develop-ment, and by this term he meant all activities aimed at increasing the capacity of the lo-cal economy to create wealth for their local population, while the policy of local economic development he designated as a “special activities undertaken by state agencies or private groups to assist economic development. [6]“

An important feature of the concept of local economic development is its strategy, which is necessary for decision-makers at the local level in order to take advantage in the most optimal way of all conomic capacities within its territorial units, improve the invest-ment climate, and increase productivity and market position of local businesses. Coopera-tion between businesses, citizens and local authorities is a necessary condition to strengthen the local economy and to use all available economic capacities[7].

From these and other similar attempts to define local economic development it can be concluded that the local economic development is a process that is still developing, and not a reached ideal state, and therefore it tends towards continuous engagement of involved competent authorities in the improvement of work and strengthening of the capacity of lo-cal government units.

The importance of introducing the concept of local economic development is that it expands the circle of actors of economic life, introducing local governments, municipalities and local communities in economic activities. The positive sides are that within the bounda-

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ries of one state there takes place a competition between its territorial units with the aim of achieving the best economic results. In addition to mutual competition, bearing in mind the achievement of better economic results, possibilities of mutual cooperation of several local governments are also open in the implementation of various projects in the field of lo-cal economic development, resulting in better quality of life for the population in the local communities.

HISTORICAL MEOVEMENT OF THE LOCAL ECONOMIC DEVELOPMENT

The concept of local economic development is among relatively new concepts whose use became common only in the 20th century. Many authors associated this term with the first recorded organized efforts of local decision-makers to, with various incentives and pol-icy support, motivate domestic and foreign investors to invest in their community. However, the precise determination of the time when the concept of local economic development was conceived can not be determined, because each author has his own starting point and the arguments for the same.

For example, Bartik claims that the first wave of local-economic development occurs in the thirties of the 20th century in the United States [8]. Other authors as the onset of the concept of local economic development take the postwar period of forties of the 20th cen-tury, which was a developmental and dynamic period in many fields. Furthermore, there are also claims that the concept of local economic development, most similar to the concept that is practiced today, first appeared in the United States, and that only in the beginning of the seventies of the 20th century. This is connected with the changes with which the local practices met. Namely, the bigger businesses have begun to practice the relocation of their operations from one city to another and even from one federal state to another. This was af-fected by the current economic conditions most suitable for the business that were offered by different environments. The precise time of the creation of the concept of local economic development, concerning the activities of implementation of decisions at the local level and other stakeholders in order to encourage economic development, is not possible to express through the analysis of available sources.

Until the early nineties of the 20th century, the state authorities were not inclined to-wards involvement of local governments in economic development planning process. As unemployment grew, and hence poverty, local economic development began to gain impor-tance, primarily in developing countries.

Initially, local economic development was introduced into practice for some of the fol-lowing reasons [9]:

- decision-makers at the local level were trying to promote local development, and thus contribute to their legitimacy in the local electorate and, possibly, improve the revenue stream for their local authorities;- decision-makers at the state level have begun to encourage local initiatives because they ran out of the information and skills, and the necessary resources for the promo-tion of economic development;- In some countries, local economic development has become a mandatory task of local governments, as part of the decentralization policy;- from the perspective of foreign donor organizations, local economic development

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is an established practice with a long tradition in their countries, and there can be no reasonable doubt that local economic development is an important task of the respon-sible local authorities.

The reasons why today the national and local authorities encourage local economic development, each in accordance with available resources, are in the understanding that this is a good way to increase revenue and profits. Given that local actors know best local developments and potential opportunities for business improvement, they can more easily engage private funds for public affairs. If we go back through history, we can see that all the big cities and states sought to use all the existing potentials and advantages that they had at their disposal, in order to improve economic and trade activities, and thus provide the sta-tus of safer places for the existence of their citizens, in the material sense, in relation to the environment. Compared to that period, today it is not enough that a community has a good geographical position, access to the sea and the like, but it must operate through various forms of modified social and economic activities, innovation at all levels, and emphasizing and promoting of public-private partnerships in communities.

From the above discussion it can be concluded that the economy for the citizens in all communities is a major issue because it determines their existence. Therefore we emphasize the fact that the citizens should not accept the argument that some important economic is-sues are not under the jurisdiction of local governments.

Local economic development is usually present and practiced in those communities that are affected by some form of economic crisis, which first affects the economy, and then the state itself in the form of reduced revenue, increased costs, etc. This, for example, can be observed through a more frequent need for social transfers to vulnerable population. Local economic units, through their activities and powers should be engaged in the realization of reducing these and similar problems at the optimum level. In crisis conditions all affected stakeholders should make efforts to initiate all relevant local community capacities to help economic activity, and therefore the recovery of society. These first steps of LED may be marked as the first wave.

In Serbia, the period of economic crisis and difficulties in economic development takes quite a long time, so that the condition for activation of the capacity of local economic devel-opment is fullfiled, but it is certainly not sufficient for local economic development to come to life at full capacity. It is a recent phenomenon, which currently represents more a tendency than a well-defined economic doctrine [10].

In order to enhance and improve the functioning of local economic development, theo-rists have the task to allocate the best designed models of practical examples of functioning of local governments and to systematize them, but also to detect weaknesses that should be eliminated in the future.

The number of businesses and economic activities that were covered by LER in the seventies and eighties of the 20th century has increased significantly, and in the second wave programs programs were launched aimed at supporting existing companies, particularly medium sized companies [11]. The second wave continued the funding programs from the first wave, but also reduced budgets for local governments that have had financial problems until the early 90s of the 20th century in the United States.

The third wave of incentives local economic development is linked to the end of the 90s of the 20th century. In the third wave the emphasis is on private sector development, in

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relation to the state sector. In this way an attempt was made to involve the private sector in the creation and implementation of activities in order to reduce costs and increase revenues, which makes the relations of economic programs that are more adapted to the real needs of the private sector. This wave has contributed to the fact that the political decision-making has been reduced only to the issues of industry and what types of business entities will be supported by programes, and decisions on financing the projects are no longer influenced by politics, but decided on the basis of economic criteria. The third wave first began to be practiced in Europe, and later in the United States. The contents of each wave can be seen in Table 1.

Table 1:.Focus and LED instruments through its historical development phases

Wave Focus Instruments

First: from the 60s to the 80s

- Attracting production capaci-ties, specially in the form of direct foreign investmens- Investment into basic infrastru-cure

- Large subventions- Loans with subventions for the producers- Tax reliefs- Subventions for investments into infrastructure- Certain ‘shady’ promises in or-der to attract important investors

Second: From the 80s to the middle of the 90s

- Keeping and attracting business that are already present- More selective policy of attract-ing investments, with emphasis on certain economy sectors

- Direct subventions to individual businesses- Business incubators- Consulting and training of SME- Expert support for business men- Support for opening of busi-nesses- Investments into basic infra-structure but also into advance technologies

Third: From the end of the 90s until today

- Investments into high technol-ogy infrastructure- Public-private partnerships- Networking of the private sector and mobilization of private sec-tor’s funds for public projects- Careful selection process of at-tracting investment in line with the LED policy

- Making of overall strategies aimed at growth of local busi-nesses- Development of more concur-rent environment for business- Encouragement of networking and cooperation in private sector- Support for organization of business unions and associations- Encouragement of training and education of work force- Support for activities that im-prove the quality of life

Source: World Bank, A Brief History of LED

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FACTORS OF LOCAL ECONOMIC DEVELOPMENT

A smalller or greater success in application of local economic development is influ-enced by numerous factors, some are common to all environments in which the LED is applied, while others are specific to a particular community, and the territory in which they are administered. In order to present the main factors affecting the LED, we shall use the research efforts and results of the local academic community.

First of all, the primary factors affecting local economic development can be divided into two groups:- natural and- social Natural factors of LED are: - location and - natural resourcesThe basic social factors of LED are:- degree of decentralization i.e. autonomy of local authorities,- entrepreneurial capacity of local governments- sectoral structure of the economy,- existing state of the economy, or the existence of the market competitiveness of lo-

cal businesses,- level of development of physical infrastructure,- unemployment rate of local residents,- educational structure and technical capacity of the local workforce,- macroeconomic and political stability,- existence of the rule of law and the efficiency and impartiality of the judicial power

[12].

Each of these factors, be they natural or social, carry great weight, and the absence of any of these factors, significantly hinders and slows down the local economic development of a community or society as a whole. For example, if a local community has an enviable natural resources, but the educational structure and technical capacity of the local work-force is not satisfactory, the logical consequence is that it will not be possible to take maxi-mum advantage of the natural resources for the general good of all the citizens of the given community.

To maximize the potential of the concept of local economic development it is necessary to all of these factors, particularly the social factors, bring to the highest possible level.

CONCLUSION

All the experts who have dealt with or are still dealing with the analysis of the concept of local economic development concluded that there is a number of benefits of the introduc-tion and practice of LED. Lowering the decision-making and practice in economic matters to the local level that is much closer and more accessible to the citizens than remote central level decision-making, is the incentive measure of economic development based on the as-sumption that the people at the local level are more qualified and better versed in the local

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economic fact than the remote state governments. They all agree that the direct involvement of citizens in economic activity, through the concept of local economic development brings developmental benefits for the whole society and the state. In fact, the very aim of LER is that a local community becomes a sustainable economic entity.

REFERENCES:

[1] Jovicic, M., (1974), Structure and territorial basis of local self-government in Europe, Belgrade, pp. 152

[2] Jovicic, M., (1974), Structure and territorial basis of local self-government in Europe, Belgrade, pp. 87.

[3] Blakely, E., Bradshaw, T., (2002), Planning Local Economic Development – Theory and Practice, SAGE Publications, Thousand Oaks. pp. 25

[4] Winburn, G., Goga, S., Murphy, F., (2004), Local Economic Development: A Primer Developing and Implementing Local Economic Development Strategies and Action Plans, The World Bank and Bertelsmann Stiftung, Washington D.C. pp. 1.

[5] Coulson, A., (1997), Local Economic Development: A Guide to Practice, Birmingham University, Birmingham. pp. 6.

[6] Bartik, T., (2003), Local Economic Development Policies, Upjohn Institute Working Paper No. 03-91.

[7] Winburn, G., Goga, S., Murphy, F., (2004), Local Economic Development: A Primer Developing and Implementing Local Economic Development Strategies and Action Plans, The World Bank and Bertelsmann Stiftung, Washington D.C. pp. 2.

[8] Bartik, T., (1993), Federal Policy Towards State and Local Development in the 1990s, Upjohn Institute Working Paper 93-17, W.E. Upjohn Institute for Employment Research. p.2

[9] Cunningham, S., Meyer-Stamer, J., (2005), Planning or Doing Local Economic Development? Problems with the Orthodox Approach to LED, Africa Insight Vol. 35 No. 4. pp. 2.

[10] Blakely, E., Bradshaw, T., (2002), Planning Local Economic Development – Theory and Practice, SAGE Publications, Thousand Oaks. pp. 55.

[11] Bartik, T., (1993), Federal Policy Towards State and Local Development in the 1990s, Upjohn Institute Working Paper 93-17, W.E. Upjohn Institute for Employment Research, pp. 2

[12] Rapaic, S., (2016), The Role of foreign direct investment in local economic development in the Republic of Serbia (2001-2013), dissertation, Faculty of Political Sciences, Belgrade, pp.164-171.

[13] Goga, S., Marphy, F. (2006), Local Economic Development: A Primer, the World Bank, Washington, DC.

UDC 37.03

SPIRITUAL INTELLIGENCE AS A FACTOR FOR DEVELOPMENT OF PERSONALITY

Goran Sucic1 Dragana Radosavljevic2, Polona Sprajc3

1Faculty of Philosophy, University in Split, CROATIA, e-mail: [email protected]

2Faculty of Business Studies and Law, University “Union-Nikola Tesla”, Belgrade, SERBIA, e-mail: [email protected]

3Faculty of Organizational Sciences, University of Maribor, SLOVENIA, e-mail: [email protected]

Abstract: The roots of human intelligence lie in our genetic code and in the entire evolutionary his-tory of life on this planet. It is influenced by our daily experience, our physical and mental health, diet, amount of physical exercise, the type of relationship that we form and many other factors. However, neurologically speaking, everything concerning intelligence is forwarded or controlled by the brain and its nerve endings in the body. One type of neural organization allows us to deal with rational, logically related thinking. It gives us our IQ. Nevertheless, the other type gives us emotional opinion which is as-sociative, linked by habit and based on pattern recognition. It gives us our EQ. The third kind provides us with the opportunity to deal with the creative, insight, rule-making opinion, and that is the opinion through which we re-frame and transform our previous thoughts. The aim of this paper is theoretical consideration of spiritual intelligence, its development, encouragement and testing.

Keywords: spiritual intelligence, emotional intelligence, stimulation, testing

1. SPIRITUAL INTELLIGENCE, RATIO OF INTELLIGENCE AND EMOTIONAL INTELLIGENCE

At the beginning of the twentieth century intelligence quotient -IQ became a large field of interest. Our intellectual or rational intelligence is what we use in solving logical or stra-tegic issues. Psychologists had begun to discover tests for its measurement, and these tests had turned into a means of grouping people in various degrees of intelligence, known as the Intelligence Quotient, or IQ, which could point to their ability. The theories claimed that the higher one’s IQ, the higher is the intelligence of the person.

In the mid 1990s, Daniel Goleman popularized the research of many psychologists and

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neurologists which indicated that emotional intelligence, EQ is of great importance. Emo-tional intelligence makes us aware of our own feelings and the feelings of others. It gives us self-awareness, self-control, self-motivation, empathy and social skills. As Daniel Goleman points out EQ is a basic requirement for the effective implementation of IQ. Namely, if the areas of the brain with which we feel are damaged, our thinking will be less effective.

At the end of the century, a series of recent, but so far “undigested” scientific data indi-cates that there is a third kind of intelligence, that is third “Q”. The full picture of the human intelligence can be completed by considering our spiritual intelligence i.e. “SQ”. By “SQ” we understand the kind of intelligence by which we perceive and solve problems of the value and meaning, intelligence that helps us place our lives and activities in a wider, richer se-mantic context, the intelligence with which we can estimate that one course of action or the way of life is more meaningful than others. SQ is the essential foundation for the effective functioning of both IQ and EQ. This is our ultimate intelligence.

In his book “Multiple Intelligence” Howard Gardner from Harvard argues that there are at least seven types of intelligence, which includes spatial, musical, sports, emotional and rational intelligence. According to other authors, such as Danah Zohar and Ian Marshall, it is possible to connect all of our infinite intelligences with one of the three basic neural sys-tems in the brain and therefore that all intelligence that Gardner describes actually represent a variation of the basic IQ, EQ and SQ, and their related neuronal deployment.

Neither IQ nor EQ, separately or in combination, do not provide enough to explain the full complexity of human intelligence and enormous wealth of the human soul and imagi-nation. Computers have a high IQ: they know the rules and can follow them without any errors. Animals often have a high EQ: they have a feeling for the situation in which they are located and know how to respond appropriately. But neither computers, nor animals wonder why there are such rules or situations, or whether they might be different or better. They act within the limits playing “the final (limited) game.” SQ allows human beings to be creative, to change situations and rules. It enables us to “play” with the boundaries, to play the “infinite” game. SQ gives us our ability to discern. It gives us a sense of morality, the ability to mitigate the rigid rules through understanding and compassion, as well as a significant ability to realize when understanding and compassion have their limitations. We use SQ in order to get to grips with questions of good and evil and to anticipate unrealized opportunities.

It is exactly by this transformation of power that SQ is essentially different from EQ. According to Daniel Goleman definition our EQ enable us to judge the situation we are in and then act appropriately within that situation. This means functioning within the bound-aries of the given situation, allowing the situation to lead us, but our SQ allows us to ask ourselves whether we want to be in the given situation in the first place. Would we prefer to change the situation, would we rather create a better situation? This means functioning within the limits of our situation, enabling us to lead the situation.

SQ literally acts from the brain center – from the neurological unifying features of the brain – it integrates all our intelligence. SQ makes us fully intellectual, emotional and spir-itual creatures that we are.

Ideally, our three basic intelligences work together and help each other. Our brain is designed so as to be capable of it. But every one of them -IQ, EQ and SQ - has its own area of power and can operate separately. Specifically, our coefficient does not necessarily have to be

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high or low for all three simultaneously. One does not have to have a high IQ or SQ in order to have a high EQ. On the other hand, someone may have a high IQ but low EQ and SQ, etc.

The roots of human intelligence are in genetic code and in the entire evolutionary hi-story of life on this planet. It is influenced by our daily experience, our physical and mental health, diet, amount of physical exercise, the type of relationship that we form and many other factors. However, neurologically speaking, everything concerning intelligence is for-warded or controlled by the brain and its nerve endings in the body. One type of neural organization allows us to deal with rational, logically related thinking. It gives us our IQ. The other type gives us emotional opinion which is associative, linked by habit and based on pattern recognition. It gives us our EQ. The third kind provides us with the opportunity to deal with the creative, insight, rule-making opinion, and that is the opinion through which we re-frame and transform our previous thoughts. It gives us our SQ. If we want to fully understand the IQ, EQ and SQ, a very important part of the story is based on the understan-ding of different thought systems of the brain and their neural organization.

The brain is the most complex organ in the body. It produces the mystery of the con-scious mind, our awareness of ourselves and the world in which we find ourselves and our ability to make free decisions regarding participation in the world. It creates the structure of our thoughts, allows us to have emotions and mediates in our spiritual lives - in our sense of the meaning and value and an appropriate context within which we can grasp the meaning of our experience. The brain gives us a touch, sight, smell and speech. It is a storehouse of our feelings. It controls the rhythm of our hearts, the extent to which we sweat, breathing rhythm and countless other bodily functions. Its outer directed nerve fibers reach every part of the body. It is the bridge between our inner life and the outside world. The brain can per-form all of this because it is a complex, flexible, scalable and self-organizing.

2.WHAT IS ACTUALLY SPIRITUAL INTELLIGENCE?

Meaning is the main question that now occupies the minds of men. Many authors ar-gue that the need for a greater sense is the central crisis of our age. Many people have now reached the level of material well-being never reached before, but still want to feel something more. Many of them speak of the emptiness of “around here,” pointing to their abdomen. That “something more” that would fill the void is rarely in any way connected with the for-mal religion. Indeed, most people who are looking for some kind of spiritual fulfillment do not see any connection between their longing and formal religion.

SQ is not necessarily connected with religion. For some people, SQ can find a way of expression through a formal religion but religiosity does not guarantee a high SQ. Nu-merous humanists and atheists have extremely high SQ; however, a number of active and thunderously religious people have a low SQ. The psychologist Gordon Allport conducted surveys that showed that more people get a religious experience beyond the boundaries of the prevailing religious institutions than within them.

Conventional religion is a set of rules and beliefs that are imposed from the outside. It is turned top-down, inherited from priests, prophets and holy books, or absorbed through the family or tradition. SQ represents internal, the innate ability of the human brain and psyche, which draws its deepest resources from the heart of the universe itself. It is the abil-ity developed over millions of years, which allows the brain to make sense of and use it to

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solve problems. Sudden changes that have occurred in the last three centuries in the Western world have led to the fact that conventional religions hardly manage to retain some sense. Today we must use our innate SQ in order to pave new paths and find a new form of mean-ing, something that can touch us and lead from inside.

Spiritual intelligence is the intelligence of the soul. It is the intelligence that we use to heal ourselves and make ourselves whole. A lot of people today live their lives wounded by fragmentation. SQ is intelligence that rests in the deep part of the self that is associated with wisdom that penetrates beyond the ego or conscious mind, this is the intelligence with which we not only recognize the existing, but also creatively discover new values. It does not come from the existing values, but instead creates the very possibility that we even have some value at all. Throughout human history, every known culture has possessed a certain set of values, although the specific values vary from culture to culture. Thus, SQ precedes any specific valueof any given culture. It therefore precedes any form of religious expression that it might take. SQ makes religion possible (perhaps even necessary), but SQ does not rely on religion.

3. NAUČNI DOKAZI VEZANI ZA ZNAČAJ DUHOVNE INTELIGENCIJE (SQ)

SQ is as old as humanity, but the very concept was developed entirely for the first time in the book by Danah Zohar and Ian Marshall “Spiritual Intelligence the Ultimate Intelli-gence” in 2000. In recent neurological, psychological and anthropological studies of human intelligence there is a lot of scientific evidence for SQ, which are connected with the study of human thinking and linguistic processes. In explaining the SQ four specific research field are combined.

First of all, in the early 1990s neuropsychologist Michael Persinger conducted research that was somewhat later, in 1997 also conducted by V. S. Ramachandran and his team at the University of California, about the existence of “God’s spot” in the human brain. This built-in spiritual center is located between the neural connections in the temporal lobes of the brain. Scanning obtained by the technique of positron emission topography shows that these nerve areas get “inflammed” whenever they are subjected to research subjects of the spiritual or religious theme. These reactions vary depending on the culture, where Western-ers respond to the mention of “God”, Buddhists and the rest respond to the symbols that have a certain meaning for them. Such activity of brain lobes has been associated for years with mystical visions of epileptics and LSD users. Ramachandran’s research has for the first time demonstrated that this activity is present in the normal population too.

Secondly, the research of the “binding problem”, which was during the 1990s conduct-ed by the Austrian neurologist Wolf Singer shows that in the brain there is a neural process that has the mission to unify our experience and give it a meaning – a neuronal process that literally connects our experience. Before Singer’s research on unifying, synchronous neural oscillations along the entire brain, neuroscientists and cognitive scientists recognized only two forms of brain neural organization.

The basis of our IQ is one of these forms of serial neural connections. Serially connect-ed neural tracts allow the brain to follow rules, to think step by step, logically and rationally. In the second of these forms, in the organization of neural networks, bundles containing up to hundreds of thousands of neurons are randomly connected to other massive bundles.

SPIRITUAL INTELLIGENCE AS A FACTOR FOR DEVELOPMENT OF PERSONALITY129

These neural networks are the basis of our EQ, of our intelligence based on emotions which is responsible for identifying patterns and building habits. Today there are serial and parallel computers that are characterized by different abilities, but neither of them can not function with a meaning. No current computer can wonder, “Why?”. Singer’s research on unifying neural oscillations provide the first hint of a third kind of thinking, unifying thinking, and the accompanying third kind of SQ intelligence, which can deal with such issues.

Third, Rodolfo Llinas developing further Singer’s work in the mid 1990s conducted research on the consciousness of sleep and wakefulness and cognitive binding events in the brain, greatly enriched by the new MEG (magnetic-encephalographic) technology, which allows the study of brain oscillating electric fields and magnetic fields related to the level of the entire skull.

Fourth, a Harvard neurologist and bio-antropologist Terrance Deacon has recently published a new paper about the origins of human language (symbolic species, 1997). Dea-con here proves that language is a unique human, essentially symbolic meaningful activity that has co-evolved with the rapid development of the frontal lobes of the brain. Existing computers, or even apes (with rare and limited exceptions), can not use the language because they lack the capacity to engage frontal lobes to deal with the meaning.

4. IMPLEMENTATION OF SPIRITUAL INTELLIGENCE (SQ)

In evolutionary terms, Deacon’s neurobiological paper on the language and symbolic representation shows that we have literally used the SQ for the development of our human brains. SQ provided us with the necessary “installations” in order for us to become what we are and gives us the potential to further continue “pre-installing” - for the development and transformation, for the further evolution of our human potential.

We use SQ in order to be creative. We refer to it when we need flexibility, visionary abil-ity and creative ability.

Also, we use SQ in dealing with existential problems – the problems when we feel that something is stuck somewhere in our life, that we are caught in the trap of habits or neurosis of the past, or problems associated with illness and bad mood. SQ makes us conscious of the fact that we have existential problems and allows us to solve them - or at least to make peace with them. It gives us a deep sense of the meaning of life’s struggle.

SQ is our compass “on the edge”. The most challenging existential problems begin be-yond the expected and known, beyond the established rules, beyond the scope of previous experience, far beyong the things that we know how to cope with. In the theory of chaos the “edge” is the boundary between order and chaos, between the leisurely insights on what we strive for and total disorientation. This is the place where we can express our creativity to the greatest extent. SQ, our deep, intuitive sense of meaning and value, is our guide on the edge. SQ is our conscience. (In Hebrew, words denoting the “conscience”, “compass” and “hidden, inner truth of the soul” have the same root).

We can apply the SQ to become spiritually more intelligent in terms of religion. SQ leads us to the heart of things, to the unity that lies behind the difference, to the potential beyond the current expression. SQ can bring us into contact with the meaning and the es-sential spirit that lie behind all the great religions. A person who has a high SQ can practice any religion, but without narrow views, exclusiveness, bigotry or prejudice. Similarly, some-

Goran Sucic, Dragana Radosavljevic, Polona Sprajc130

one who has a high SQ may own distinct spiritual qualities, while not being religious at all. SQ allows us to integrate the intrapersonal and interpersonal, to overcome the gap be-

tween us and others. Daniel Goleman wrote about intrapersonal emotions, those that live within the self and about interpersonal emotions - emotions that we share with others or use them in relationships with other people.

However, a mere EQ can not help us to bridge this gap. SQ is necessary in order for us to understand who we are and what certain things mean to us, as well as the fact how those things give the meaning to our own world.

We use SQ to set off towards the more developed individuals whose potential we carry with-in ourselves. Each of us forms a character through the combination of experience and vision, through the tension between what we do and larger, the better things that we could do. On the level of pure ego we are focused on ourselves, selfish, materially ambitious, etc. But despite that, we have transpersonal visions of goodness, beauty, perfection, generosity, sacrifice, etc. SQ helps us to transcend our immediate ego-self and to set out beyond them towards those deeper layers of the potentialities that lie hidden within us. It helps us to live lives on a deeper level of meaning.

Finally, SQ can be applied in order to get to grips with the problems of good and evil, life and death issues, the deepest roots of human suffering and often despair. Too often we try, through rationalization of such problems, to push them into the background, or they otherwise might emotionally overwhelm and swallow us. In order to fully master our spiritual intelligence it is sometimes necessary to deal with the very doors of hell to get acquainted with the possibility of despair, deep suffering, pain and loss and to reconcile with them. “When we merge with a loss,” says the ancient Chinese text known as the Tao Te Jing “the loss is experienced willingly.” Some-times you need to experience a deep yearning, in the interior of our being, for the meaning that will touch us, for a hint of something new, something pure, something revitalizing. And then we can hope to find in such a longing what we long for, and that we may share the fruits of creative discoveries with others.

5. TESTING OF SPIRITUAL INTELLIGENCE (SQ)

Among indications that poing to a highly developed SQ there are the following: • the ability to be flexible (actively and spontaneously customizable)• a high degree of self-awareness• ability to cope with suffering and its later use• the capacity to cope with the pain and its overcoming• the quality of the inspiration by vision and values• refusal of the application of non-essential damage• tendency towards perceiving connections between different things (“holism”)• pronounced tendency to ask questions like “Why?” and “What if?”and search for

“fundamental”responses• be “independent regarding discipline” - having the ability to operate in contrast to

the conventions

A person who has a high SQ can also easily become a “leader who serves” - someone who is responsible for the presentation of higher vision and values to others and who shows them how to use the above mentioned, in other words, a person who inspires others.

SPIRITUAL INTELLIGENCE AS A FACTOR FOR DEVELOPMENT OF PERSONALITY131

6. FOSTERING OF SPIRITUAL INTELLIGENCE (SQ)

Collective SQ is low in modern society. We live in a spiritually dull culture that is char-acterized by materialism, the principle of utility, narrow egocentricity, lack of meaning and lack of commitment. However, as individuals we can work on improving our personal SQ - moreover, further evolution of society depends on a sufficient number of individuals who will be devoted to this end. Generally speaking, we can improve our SQ through increased use of the tertiary process: our tendency to ask why, to seek the links between things, to bring to the surface the assumptions that we make about the meaning behind the things, to become more reflective, to go beyond ourselves sometimes, to take responsibility, to become more self-aware, to be honest with ourselves as well as bolder.

Through the more cultivated us of our spiritual intelligence, as well as through per-sonal honesty and courage that such cultivation requires, we can reconnect with the deeper sources and deeper meanings within ourselves, and this we can use to achieve goals and processes that are much bigger than us. In this function we can find our own psychic self-development. Our psychological self-development can rest in the service of our own deep imagination.

REFERENCES

[1] Berger, J.(1979). Psihodijagnostika. Beograd: Nolit [2] Bradberry, T. ,Greaves, J.(2006).Emocionalna inteligencija, Šta sve treba da znate da biste pokrenuli svoju emocionalnu inteligenciju.Beograd:Sezam Book [3] Goleman, D. (2005). Emocionalna inteligencija. Beograd: Geopoetika[4] Goleman, D., Ričard, B., Maki, E. (2004). Emocionalna inteligencija u liderstvu. Novi Sad: Adižez [5] Goleman, D. (2000). Emocionalna inteligencija u poslu. Zagreb: Mozaik knjiga [6] Goleman, D. (2004). Destruktivne emocije i kako ih možemo prevazići.Beograd:Geopoetika [7] Goleman, D. (2007). Socijalna inteligencija, Nova nauka o ljudskim odnosima.Beograd:Geopoetika [8] Gulding Meklur, M., Gulding, L R. (2007). Promeniti život, Terapija novom odlukom.Novi Sad:Psihopolis institut [9] Ivić, I., Milinković, M., Rosandić, R., Smiljanić, V.(1981). Razvoj i merenje inteligencije. Beograd: Zavod za udžbenike i nastavna sredstva [10] Kvaščev, R.(1981). Mogućnosti i granice razvoja inteligencije. Beograd: Nolit[11] Krstić, D. (1996). Psihološki rečnik, Beograd: Savremena administracija [12] Milivojević Z. : Emocije, Psihoterapija i razumevanje emocija. Novi Sad: Prometej [13] Stajner, K. (2007). Školovanje srca, Učenje emocionalne pismenosti. Novi Sad: Psihopolis institut [14] Reber, S. A.(1995).Dictionary of Psychology. Penguin books

Goran Sucic, Dragana Radosavljevic, Polona Sprajc132

[15] Zarevski, P. (2000). Struktura i priroda inteligencije. Zagreb: Naklada Slap [16] Zohar, D. Maršal J.(2000).Duhovna inteligencja krajnja inteligencija. Novi Sad:

Svetovi

Internet Resources:[1] http:// www. tportal. hr [2] 2.http:// www. roda. hr [3] 3.http:// www. medicicom. com [4] 4.http:// www. kodren. com[5] 5.http:// www. gemini-centar. com[6] 6.http:// www. voa. gov[7] 7.http:// www. geopoetika. com[8] 8.http:// www. abg. ba[9] 9.http:// www. zzjzpgz. hr

SPIRITUAL INTELLIGENCE AS A FACTOR FOR DEVELOPMENT OF PERSONALITY133

INSTRUCTIONS FOR AUTHORS

TITLE OF THE PAPER (TNR - 14 pt Bold)

First A. Author1, Second B. Author2, Third C. Author3, … (TNR 11 pt Bold)1 Association name, City, COUNTRY, e-mail (TNR 10 pt)

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Abstract: The length of abstract maximally 10 lines, type of font TNR 9 points normal, justify.

Keywords: keyword 1, keyword 2, keyword 3, keyword 4, keyword 5 (max. 5 TNR 9 pt)

1. INTRODUCTION (TITLE OF CHAPTER TNR 11 PT BOLD)These are the guidelines for writing the paper for the International Journal of Economic and Law (IJEL). Papers should be written in format that is described bellow. Please follow these instructions.

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Goran Sucic, Dragana Radosavljevic, Polona Sprajc134

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Referencing (literature references) HARVARD SYSTEM

Based on the recommendations of the Centre for Evaluation in Education and Science

(CEES), in order to harmonize the format of references with a leading international database dedicated to the evaluation, Military Technical Courier for referencing (citation and references to literature) applies Harvard referencing System, i.e Harvard Style Manual.

Instructions given hereinafter is consistent with the recommendations of the BSI - British Standards Institution.1

Proper referencing makes it easy to readers to monitor the content, and at the same time by stating the relevant literature we show that the investigated / treated problems / topics have been adequately and properly researched and presented.

In order to have precision and compliance literature referencing, and in order to establish standard forms that reduce inaccuracies and shorten the path to approval of the publication of the article, please follow the above recommendations as much as possible. Possible undefined forms please try to synchronize with the above recommendations.

CITATION OF REFERENCES IN THE TEXT (Reference within the text)

When in a paper we use content that belongs to another author it can appear in the

following forms: o Paraphrasing - transmission of original ideas or opinions in your own words, o Summary review - a brief description of original ideas or opinions in your own

words, giving personal interpretations. o Citation - the use of original parts of the text through identical copy of words,

sentences or paragraphs, given in quotes, o Pointing to the source – mentioning the source, without much information about

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ADDING AUTHOR'S FAMILY NAME AND THE YEAR OF PUBLICATION OF THE REFERENCE

At the end of paraphrasing, summary views, or pointing to a source, in parenthese list the author's name and year of publication, separated by commas. If the intent is to point to

1 British Standards Institution (2010) BS ISO 690:2010: Information and documentation.

Guidelines for bibliographic references and citations to information resources. London, BSI.

INSTRUCTIONS FOR AUTHORS135

Referencing (literature references) HARVARD SYSTEM

Based on the recommendations of the Centre for Evaluation in Education and Science

(CEES), in order to harmonize the format of references with a leading international database dedicated to the evaluation, Military Technical Courier for referencing (citation and references to literature) applies Harvard referencing System, i.e Harvard Style Manual.

Instructions given hereinafter is consistent with the recommendations of the BSI - British Standards Institution.1

Proper referencing makes it easy to readers to monitor the content, and at the same time by stating the relevant literature we show that the investigated / treated problems / topics have been adequately and properly researched and presented.

In order to have precision and compliance literature referencing, and in order to establish standard forms that reduce inaccuracies and shorten the path to approval of the publication of the article, please follow the above recommendations as much as possible. Possible undefined forms please try to synchronize with the above recommendations.

CITATION OF REFERENCES IN THE TEXT (Reference within the text)

When in a paper we use content that belongs to another author it can appear in the

following forms: o Paraphrasing - transmission of original ideas or opinions in your own words, o Summary review - a brief description of original ideas or opinions in your own

words, giving personal interpretations. o Citation - the use of original parts of the text through identical copy of words,

sentences or paragraphs, given in quotes, o Pointing to the source – mentioning the source, without much information about

the content.

ADDING AUTHOR'S FAMILY NAME AND THE YEAR OF PUBLICATION OF THE REFERENCE

At the end of paraphrasing, summary views, or pointing to a source, in parenthese list the author's name and year of publication, separated by commas. If the intent is to point to

1 British Standards Institution (2010) BS ISO 690:2010: Information and documentation.

Guidelines for bibliographic references and citations to information resources. London, BSI.

INSTRUCTIONS FOR AUTHORS136

the pages of the summarized content, that page or pages should be listed too (Petrović, 2005, p.126) or (Petrović, 2005, pp.12-18).2

• Decision making process consists of several stages, which are links in a chain, each of which has its place and importance (Petrović, 2005).

• Decision making process consists of several stages, which are links in a chain, each of which has its place and importance (Petrović, 2005, p.126).

CITING DIRECTLY

Citing should be carried out through literal transcription of the content, always in quotation marks. The pages from which content is used are required to be listed when citing directly:

• Decision making process consists of several stages, 'which are links in a chain, each of which has its place and importance' (Petrović, 2005, p.126).

NATURAL APPEARANCE OF THE AUTHOR'S NAME IN PAPER

In some cases the author may be added, with the year of issue and possiblz number of pages that are being paraphrases or whose summary review is given:

• Decision making process consists of several stages, which, according to Petrovic (2005, pp.16-18) are links in a chain, each of which has its place and importance.

ADDING NAME OF ORGANIZATION - CORPORATE AUTHOR

Different institutions, companies, universities or other structures may be the authors of certain publications. They must be cited in the same way as individuals - authors:

• Quantitative Risk Modeling provides the ability to precisely define warning limits and optimal reserves (Standard & Poors, 2005, pp.16-18).

• Quantitative Risk Modeling gives the ability to precisely define warning limits (Ministry of Environmental Protection, 2005, p.16).

• The results of the research conducted by MIT (2010) show that the use of these technologies achieve significantly better results.

2 When citing pages that have been used or the contents which are quoted, use (for example)

p.18 when it comes to one page, and pp. 25-29 when it comes to multiple pages.

INSTRUCTIONS FOR AUTHORS137

the pages of the summarized content, that page or pages should be listed too (Petrović, 2005, p.126) or (Petrović, 2005, pp.12-18).2

• Decision making process consists of several stages, which are links in a chain, each of which has its place and importance (Petrović, 2005).

• Decision making process consists of several stages, which are links in a chain, each of which has its place and importance (Petrović, 2005, p.126).

CITING DIRECTLY

Citing should be carried out through literal transcription of the content, always in quotation marks. The pages from which content is used are required to be listed when citing directly:

• Decision making process consists of several stages, 'which are links in a chain, each of which has its place and importance' (Petrović, 2005, p.126).

NATURAL APPEARANCE OF THE AUTHOR'S NAME IN PAPER

In some cases the author may be added, with the year of issue and possiblz number of pages that are being paraphrases or whose summary review is given:

• Decision making process consists of several stages, which, according to Petrovic (2005, pp.16-18) are links in a chain, each of which has its place and importance.

ADDING NAME OF ORGANIZATION - CORPORATE AUTHOR

Different institutions, companies, universities or other structures may be the authors of certain publications. They must be cited in the same way as individuals - authors:

• Quantitative Risk Modeling provides the ability to precisely define warning limits and optimal reserves (Standard & Poors, 2005, pp.16-18).

• Quantitative Risk Modeling gives the ability to precisely define warning limits (Ministry of Environmental Protection, 2005, p.16).

• The results of the research conducted by MIT (2010) show that the use of these technologies achieve significantly better results.

2 When citing pages that have been used or the contents which are quoted, use (for example)

p.18 when it comes to one page, and pp. 25-29 when it comes to multiple pages.

ADDING "OFFICIAL GAZETTE OF THE REPUBLIC OF SERBIA" AND "OFFICIAL MILITARY GAZETTE" IN CITING LAW, REGULATION,

ORDINANCE, ETC. When quoting the law, rules, etc. which have been published in the Official Gazette of

the Republic of Serbia or the Official Military Gazette, according to publication name and number, with year of release:

• Of particular importance is the establishment of a functional system for collecting e-waste, in accordance with the Law on Waste Management (Official Gazette of RS, 36/2009).

• Basic normative - legal act regulating equipment MO and VS armament represents Rules on equipping the Army of arms and military equipment in peace (Official Military Gazette, 25/1996).

ADDING REFERENCE WITH UNKNOWN YEAR OF PUBLICATION

If for a particular reference the year of issuance is unknown, instead we state nd: • Decision making process consists of several stages, which are links in a chain, each

of which has its place and importance (Petrović, nd).

ADDITION OF REFERENCE WHEN THERE IS MORE THAN ONE AUTHOR

If there are two authors, cite both family names: • Decision making process consists of several stages, which are links in a chain, each

of which has its place and importance (Petrović, Marković, 2005 p.18). If there are more than two authors, cite the family name of the first author, and for

others cite et al.3: • Decision making process consists of several stages, which are links in a chain, each

of which has its place and importance (Petrović, et al., 2005, p.32).

ADDING REFERENCE IN MULTIPLE REFERENCE OF THE SAME

AUTHOR IN ONE YEAR If the paper lists a number of references by the same author in one year, then with the

year of issue indicate in the alphabet order: • Decision making process consists of several stages, which are links in a chain, each

of which has its place and importance (Petrović, 2005a, p.46).

3 If there appear more than one author for a particular source, cite the first name, and for other

state et al., which is Latin abbreviation "et alii` meaning "and others".

INSTRUCTIONS FOR AUTHORS138

• Multi-criteria analysis is an indispensable tool in solving the problem of decision-making (Petrović, 2005b, p.78).

ADDING REFERENCE WHEN AUTHOR IS NOT KNOWN

If in the paper we cite reference for which the author is not known, we cite the title of the cited reference, with year, if known:

• Decision making process consists of several stages, which are links in a chain, each of which has its place and importance (Decision Theory, 2005, p.45).

ADDING REFERENCES FROM INTERNET SOURCES

If in the paper you use content from the Internet, cite reference in the same way, if authors or organizations that are being referenced are known. In the extreme case, if the authors are not known, cite the Web site from which the content was used:

• Decision making process consists of several stages, which are links in a chain, each of which has its place and importance (http://www.ucla.edu, nd).

SPECIFYING LITERATURE AT THE END OF PAPER

(Enumeration in the list of references) A list of references (literature) is organized alphabetically, without stating the ordinal

numbers, by: o First letter of the family name of the first author, o First letter of the first word in the name of the organization if the

author is not known, or o First letter of the title reference, unless both the author and the

organization are unknown. In the list of references (literature) we list all materials used in the paper, or in a certain

place in the paper. Segments in the list of references (literature) must be separated, for easier tracking of the structure of that literature, and in order to separate the segment we primarily use commas.

For all references, regardless of whether there appears one or more authors, cite all authors' family name and the initial letter of the name. References are not numbered.

BOOKS

Books are listed with the following elements, in the following sequence: 1. Author(s) or organization, 2. Year of publication, 3. Title of the book (italic) 4. Place of publication,

INSTRUCTIONS FOR AUTHORS139

5. Publisher. Specifying the book from which content was used should be in the following form: Surname, comma, initial of the first name, period, comma, year of publication,

comma, title of book (italic), place of publication, comma, publisher, full stop. • Petrović, P., 2008, Multi-criteria analysis, Belgrade, Operations Research Society. • Petrović, P., Marković, M., 2008, Multi-criteria analysis, Belgrade, Operations

Research Society. • Petrović, P., Marković, M., Jankovic, J., 2008, Multi-criteria analysis, Belgrade,

Operations Research Society.

E-BOOKS Electronic books (books in electronic form, downloaded from the Internet) are listed

with the following elements, in the following sequence: 1. Author(s) or organization, 2. Year of issuance, 3. Title of the book (italic), 4. The phrase [e-book] in square brackets, 5. Place of the printed edition, 6. Publisher of the printed edition, 7. The words "Available from:" with full Internet address in the angular <lower /

higher> brackets, 8. The word "Downloads" with the date of receiving / use the content.

Specifying an electronic book from which we used certain content should be done in the following form:

Surname, comma, initial of the first name, period, comma, year of publication of the printed version, comma, book title (italics), comma, phrases [e-book] in square brackets, place of publication of the printed edition, comma, publisher of printed editions, the words "Available at:" with full internet address in an angular (smaller / bigger) brackets, comma, the word "Downloads" with the date of receiving / use, full stop.

• Brown, C., 2008, Multicriteria analysis, [e-book], New York, John Willey and sons, Available at: <http://www.gigabook/multicriteria-analysis.pdf>, Downloads: 05.05.2005

• Multicriteria analysis, [e-book], New York, John Willey and sons, Available at: <http://www.gigabook/multicriteria-analysis.pdf>, Downloads: 08.08.2008

CORPORATE ISSUES Publications of various institutions, organizations, institutions, shall be cited in the

following order: 1. Name of organization

INSTRUCTIONS FOR AUTHORS140

2. Year of publication 3. Title of the publication, 4. Place of publication, 5. Publisher.

Specifying publications from which content was should be in the following form: Organization name, comma, year of publication, comma, title of book (italic), place of

publication, full stop. • USAID, Implementation of ISO 9001 in small and medium-sized enterprises, 2005

Kragujevac, Qualitass Education. • Institute for standardization of Serbia, 2008, Quality management systems -

Requirements, Belgrade, Institute for Standardization of the Republic of Serbia.

JOURNAL ARTICLES Journal articles are cited with the following elements, in the following sequence:

1. Author(s), 2. Year of publication, 3. Title of article, 4. Title of journal (italic), 5. `Volume` - no full stop, 6. Edition number in the cycle of the magazine - in small parenthesis, no full

stop, 7. Page numbers in the journal.

Specifying journal articles from which we used certain content should be done in the following form:

Surname, comma, initial of the first name, full stop, comma, year of publication, comma, title of article, journal title (italic), comma, `Volume`- without a period, comma, number of the edition of the journal cycle - in small parenthesis without full stop, full stop.

• Brown, C., 2008, Multicriteria analysis, European Journal for Operational Research, 22(3), pp.89-112.

• Stopić, S., Friedrich, B., 2011, Pressure hydrometallurgy - a new chance to non-polluting processes, Military Gazette / Military Technical Courier, 59 (3), p.29. ∗*

CONFERENCE PAPERS

Papers presented at conferences, published in the conference proceedings, cited according to the following elements in the following sequence:

1. Author(s)

∗ * Specifying articles from the Military Technical Gazette must be in a given form, with a

bilingual display of the title of the Military Technical Gazette.

INSTRUCTIONS FOR AUTHORS141

2. Year of Published Proceedings, 3. Title of paper, 4. Pages in the proceedings, 5. Conference title (italic) 6. Venue of the conference, 7. Conference Date,

Specifying papers from conferences should be in the following form: Surname, comma, initial of the first name, full stop, comma, year of publication of

Proceedings, comma, title of paper, the article in the Proceedings of the Conference, comma, title of the conference (italic), comma, conference venue, the comma, the time of the conference, full stop.

• Brown, C., 2008, Multicriteria analysis, pp.89-112, Operational Research Conference, London, September 17-19.

THESES, DISSERTATIONS, RESEARCH REPORTS

Theses and dissertations are listed with the following elements, in the following sequence:

1. Author (s) 2. Date of creation / edition, 3. The title of the thesis / dissertation / research (italic) 4. Paper category - master theses, doctoral dissertation, etc., 5. Educational / research institution where (and on whose behalf) the paper was

prepared. Specifying the thesis, dissertation or research report from which contents was used

should be given in the following form: Surname, comma, initial of the first name, full stop, comma, year of creation /

publication, comma, title of the paper (italic), comma, category of paper, comma, name of institution, full stop.

• Morison, M., 2010, Improvement of education management, Ph.D. thesis, Leeds

Metropolitan Univerity.

WEB PAGES Web site content often has corporate authors, and in some cases, the authors are not

specified at all. If so, specify the name of the content. In extreme cases, specify only Internet address.

Web pages from which we used certain content are given in the following order: 1. The author(s) 2. Name of the content (italic) 3. The word [Internet] in square brackets,

INSTRUCTIONS FOR AUTHORS142

4. The words "Available from:" with full Internet address in angle <smaller / bigger> character,

5. The word "Downloads" from the date of receiving / use the content. Specifying a Web site from which we used certain content should be done in the

following form: Surname, comma, initial of the first name, full stop, comma, title of content (italic), the

word "Internet" in square brackets, comma, the words "Available from:" with the full address of the angular (lower / higher) brackets, comma, the word "Downloads" on the date of use / download content, full stop.

• Walter. M, Konaguchi, J., Multicriteria analysis, [Internet], Available: <http://www.gigabook/multicriteria-analysis.pdf>, Preuzeto: 05.05.2005. godine.

• http://www.mscma.com.

LAWS, REGULATIONS, RULES

Laws, regulations, rules, etc., that have been published in the Official Gazette of the Republic of Serbia or the Official Journal of the military, are given in the following order:

1. Title of publication, 2. Edition / year of publication 3. Name of the law, regulation, ordinance, etc. 4. Place of publication, 5. Publisher. • Official Gazette of the Republic of Serbia, 36/2009, Law on Waste Management,

Belgrade, PE "Official Gazette". • Official Military Gazette, 25/1996, Rules on equipping the Army of arms and

military equipment in peace, Belgrade, Ministry of Defence of the Republic of Serbia.

WORK OF UNKNOWN AUTHORS If the author of the material that is quoted in the work is unknown, reference is carried

out in the following order: 1. Title of publication (italic) 2. Year of publication, 3. Place of publication (if known) 4. Publisher (if known). • Style manual for authors, editors and printers, 2002, Milton, John Wiley & Sons.

INSTRUCTIONS FOR AUTHORS143

EXAMPLE REFERENCE LIST (LIST OF LITERATURE)

Anderson, A., 2008, Multicriteria analysis, pp.89-112, Operational Research

Conference, London, September 17-19. Brown, C., 2008, Multicriteria analysis, [e-book], New York, John Willey and sons,

Dostupno na: http://www.gigabook/multicriteria-analysis.pdf., Preuzeto: 05.05.2005. godine.

Janković, J., Marković, M., Petrović, P., 2008, Operaciona istraživanja, Beograd, Društvo operacionih istraživača.

http://www.mscma.com. Institut za Standardizaciju Srbije, 2008, Sistemi menadžmenta kvalitetom- Zahtevi,

Beograd, Institut za standardizaciju Srbije. Montgomery, M., 2010, Improvement of education management, Ph.D. thesis, Leeds

Metropolitan Univerity. Multicriteria analysis, [e-book], New York, John Willey and sons, Available at:

http://www.gigabook/multicriteria-analysis.pdf. Downloads: 05.05.2005. godine. Stopić, S., Friedrich, B., 2011, Pressure hydrometallurgy – a new chance to non-

polluting processes, Vojnotehnički glasnik/Military Technical Courier, 59(3), pp.29-44. Style manual for authors editors and printers, 2002, Milton, John Wiley & Sons. Richards, R., 2008, Multicriteria analysis, European Journal for Operational Research,

22(3), pp.89-112. Walter. M, Konaguchi, J., Multicriteria analysis, [Internet], Available at:

<http://www.gigabook/multicriteria-analysis.pdf>, Downloads: 05.05.2005. godine. Official Gazette of the Republic of Serbia, 36/2009, Law on Waste Management,

Belgrade, Pe "Official Gazette"

INSTRUCTIONS FOR AUTHORS144

CIP - Каталогизација у публикацији

Народна библиотека Србије, Београд

33+34

INTERNATIONAL journal of economics and law : scientific magazine reflecting trends in law, economics and management / editor-in-chief Života Radosavljević. - Vol. 1, no. 1 (Apr 2011)- . - Beograd

Faculty for Business Studies and Law. 2011- (Beograd : Beopress). - 24 cm

Tri puta godišnje

ISSN 2217-5504 = International journal of economics and law

COBISS.SR-ID 183119116

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