Economics, Law, Management, Entrepreneurship

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In this detailed data regarding economics, law, management, entrepreneurship.

FACULTY FOR EDUCATION OF THE EXECUTIVES
INTERNATIONAL
JOURNAL
OF ECONOMICS AND LAW
Vol. 3, No. 9,
December 2013.
Novi Sad, Serbia
II
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
INTERNATIONAL JOURNAL OF ECONOMICS AND LAW
ISSN: 2217-5504
Scientifc magazine refecting trends in law, economics and management
Published by:
Faculty for Education of the Executives
Printed:
3 times a year
Editor-in-chief:
Života Radosavljevi?
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Greece, Radoje Ze?evi?, Serbia, Miodrag Star?evi?, Serbia, Anita Trnav?evi?, Slovenia,
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III
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
FOREWORD
Dear readers,
In front of you is the ffh issue of International journal of economics and law, published
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three dominant scientifc disciplines in the social humanistic feld that unify the faculty
including economics, law and management, but the sciences that have a dominant infu-
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By starting this scientifc journal, we have shown our readiness, responsibility, and re-
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improve legal, economic, and management thought, i.e. theory and practice. Te chal-
lenge is certainly greater bearing in mind the times we live in, and followed by a high tur-
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order as well as internal conficts that shook certain countries, through the technological
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Due to this complexity, which will in future be more complex and uncertain, it is neces-
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electronization and possibility of rapid scientifc information transfer provided in their fa-
cilities. Terefore, 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
scientifc 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!
Belgrade, 2013.
Editor in chief
Prof. dr Života Radosavljevi?
IV
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
V
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
CONTENTS
1 Avdagi? Mehmed, Avdagi? Dževada, Radi? Maja,

Goli? Dženan
COMPETITIVE ABILITY OF THE ASSUMPTIONS OF STABLE GROWTH
OF THE NATIONAL ECONOMY
8 Belovi? Duško
ENTREPRENEURSHIP AND INNOVATION AS CERTAIN WAY-OUT FROM
CURRENT ECONOMIC CRISIS
17 Cokovi? Sabahudin
TAX EVASION IN THE DOMESTIC AND COMPARATIVE CRIMINAL LAW
24 Fauzer Viktor, Fauzer Galina
DIRECTIONS OF THE STATE POLICY ACCORDING TO THE SOLUTION
OF DEMOGRAPHIC AND LABOUR PROBLEMS IN NORTHERN
TERRITORIES OF RUSSIA
32 Dragi? Milan, Kastratovi? Edita, ?ilerdži? Vesna, Mileti? Lidija
CHALLENGES OF HUMAN RESOURCES MANAGEMENT AT GLOBAL
LEVEL
37 Gajdobranski Aleksandra
TRENDS AND OPPORTUNITIES OF ECO-TOURISM WITH AN
EMPHASIS ON RURAL TOURISM IN SERBIA
45 Giji? Nebojša, Lili? Vladana, Reko Krstina
NEW STRATEGIC MANAGER AND ALLOCATION OF CORPORATE
ASSETS
51 Hasanovi? Halil, Jahi? Merima, Murselovi? Lejla
TRANSFORMATIONAL MANAGEMENT DEVELOPMENT PROGRAM
IN ELEMENTARY AND SECONDARY SCHOOLS IN BOSNIA AND
HERZEGOVINA
56 Kastratovi? Edita, Dragi? Milan, ?ilerdži? Vesna
ETHICS IN MODERN ECONOMY
61 Krmpot Vera
THE FIGHT AGAINST CORRUPTION - CROWDSOURCING
VI
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
69 Kutas Maryna
THE ISSUE OF STRESS-RESISTANCE DEVELOPMENT AS A CONDITION
OF FUTURE PROJECT MANAGERS EFFECTIVE ACTIVITY
77 Laki? Nikola
ENERGY SECURITY OF THE REPUBLIC OF SERBIA
87 Radosavljevi? Milan
DILEMMA – INSIDER OR OUTSIDER DIRECTORS
98 Risti? Mirjana, Milosavljevi? Milan
CRIMINAL ACTS AGAINST THE SAFETY OF THE PUBLIC TRANSPORT
WITH SPECIAL FOCUS ON THREAT TO PUBLIC TRANSPORT
105 Suboti? Borivoj, Stankovi? Ivica
DETERMINATION OF A GENERAL NORMAL DISTRIBUTION
109 Syngaivska Iryna, Shuldyk Anatolii
SOCIAL AND PSYCHOLOGICAL FACTORS OF COMPREHENSIVE
EDUCATIONAL INSTITUTION HEADMASTER PROFESSIONALISM
DEVELOPMENT
119 Uki? Nihad, Muratovi? Minela
PRINCIPLE OF CUSTODY RESTRICTIVENESS AGAINST JUVENILES -
INTERNATIONAL AND DOMESTIC LEGAL STANDARDS
124 Vuji? Vidoje, Radosavljevi? Dragana, Panagopoulos Alexios
ETHICAL AND MORAL DUTY AND RESPONSIBILITY IN BUSINESS
INSTRUCTIONS FOR AUTHORS
1
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
COMPETITIVE ABILITY OF THE ASSUMPTIONS OF
STABLE GROWTH OF THE NATIONAL ECONOMY
Avdagi? Mehmed
1
, Avdagi? Dževada
2
, Radi? Maja
3
,

Goli? Dženan
4
1
Faculty for Education of the Executives, Novi Sad, SERBIA,
e-mail: [email protected]
2
Health Center of Canton Sarajevo, Sarajevo, BOSNIA AND HERZEGOVINA,
e-mail: [email protected]
3
Faculty for Education of the Executives, Novi Sad, SERBIA,
e-mail: [email protected]
4
Te Independent Trade Union PPDIVUT BiH, Sarajevo,
BOSNIA AND HERZEGOVINA,
e-mail: [email protected]
Abstract: Competitive ability is a basic need of every economic activity and increasingly dominates
the comparative advantages. It is, in fact, the ability to proftably export, and survive on the domestic
market. Te essence of the competitive ability is the quality and attractiveness of the products or ser-
vices, their innovation, but also in new and smarter ways of doing business and management, with the
goal of “smart development”. Te role of the state regarding improving and stimulating competitiveness
consists in the process of synergy efects equilibrium state measures and market laws, which stimulates
everything creative and innovative that can contribute to the competitiveness and stable growth of the
national economy.
Keywords: competitive ability, competitive advantages, market and market principles, creativity, in-
novation, the role of the state, synergy efects, the national economy
1. DOMINATION OF COMPETITIVENESS
Competitiveness category of the national economy suppressed an existing theory and
practice of comparative advantages. Te values of natural resources, natural beauty, loca-
tions of their potential signifcance, are entirely replaced by the abilities of companies and
the overall economy to produce something, or to ofer a service, whose beneft is based on
efciency greater than competition, favorable price and appropriate quality of the prod-
uct, or service. In the production of furniture, the most important thing is where high
quality wood grows, then where is the most attractive design and distribution logistics,
for example.
Tus, the ability to proftably export, and also survive in the domestic market, while
strengthening the economies of scale, shows the state of things, and who in the space of
competitiveness succeeding and who is not.
2
COMPETITIVE ABILITY OF THE ... Avdagi? M., Avdagi? D., Radi? M., Goli? Dž.
Te question of how to achieve the competitiveness of the national economy that will
ensure the survival of the national and adequate presence on the surrounding, and then
the distant markets, it is the assumption of achieving vital development goals of society,
such as a higher level of employment of the working age population, social involvement
of all sections of the population investment in physical and overall infrastructure, and
steady and stable growth of living standards. At the same time, to stop the present trend
of outfows of the population in Western Europe and overseas in search of employment
that lasts for decades. Te basic parameters of the success of economy are measured by
GDP growth, the increase in employment rate and suitable infrastructure according to the
requirements of business and life, and permanently sustainable growth of living standard.
New investments and, consequently, the necessary capital investments, and market share
increase in some economic segments of fnding their own niche are the only permanent
sustainable solution, therefore, raising the level of competitiveness in order to strengthen
the export performance.
2. THE COMPETITIVENESS OF THE NATIONAL ECONOMY
Known turbulent events in our region from the late 80s afer the fall of the Berlin Wall,
marked by the war conficts, radical changes and transformations, were the main concern
of all social factors and the total population.
In the same period, the enormous developmental conceptual shif from comparative ad-
vantage to competitive advantage of the nation and each individual company has been
realized worldwide. More natural resources and locations were not so important, but how
to achieve the level of creating more sophisticated goods and services more successful
than competition. Tis new understanding of the contents of competitiveness implies the
following:
“Te competitiveness is the country’s ability to achieve success on the world market, which
allows a better standard of living for all. It is the result of numerous factors, especially at
the level of competitiveness and favorable business climate that encourages the introduc-
tion of new products, processes, and investments. All these factors lead to increased pro-
ductivity, increased income, and sustainable development.”
1
Tus, the objectives are to achieve stable economic growth, to raise the level of employ-
ment and quality of life, which is imperative for any government, i.e. the protagonists of
economic policy.
But, how to do that? Te answer lies in the need to raise the threshold of national com-
petitiveness.
Raising the level of competitive ability of the national economy is the basic premise of
stable growth, i.e. achieving of two important goals - to increase employment and quality
of life. Te total score of the current situation is contained in the conclusions of the high
costs, especially labor costs. Ten, weak demand for local products, i.e. limited market op-
portunities are a refection of weak internal and foreign trade competitiveness of domestic
producers.
Competitive power can be expressed by three basic characteristics - macroeconomic sta-
bility, the average growth within the region and the level of employment. A direct and
1
Godišnje izvješ?e o konkurentnosti Hrvatske, Nacionalno vije?e za konkurentnost, Zagreb,
svibanj 2005., Svezak 2, str. 8
3
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
broader business environment (growth), the dominant mode of restructuring and in-
creasing productivity (employment), as well as the need to maintain macroeconomic sta-
bility has its impact.
Our situation is the fact that the bulk of the privatization process took place within the
buying of the existing companies, so-called brown feld investments, while the level of in-
vestment in innovation and new economic entities is unsatisfactory, lagging behind other
leading transition countries.
3. INNOVATIONS - THE BASIS OF COMPETITIVENESS AND
PRIORITY OF THE EUROPEAN POLICY
Innovations are not just new technologies, or new products, but these are new and smarter
ways to perform tasks, new management methods, new business systems, or new services.
Innovations do not only bring greater development, more jobs and money, innovations
lead to the creation of “smart” development.
Smart development could include eco-innovations that improve the environment, or so-
cial innovations that provide similar opportunities to all. Innovations are not based only
on higher production, or increasing sales, but bring a real improvement in our lives. In-
novations that bring smart growth ultimately require social interaction, and social and
cultural environment are the key to the innovation process.
Creativity and innovation are the top priority of European policy. Europe’s response to
the challenges of globalization is the adoption of the Lisbon Agenda, which established
an ambitious set of goals based on the idea that Europe needs to strengthen research and
innovation in order to remain competitive. Focusing on innovation has led to the “birth”
of a new generation of transnational cooperation programs with emphasis on funding in-
novations as a priority.
Knowledge and ideas are not by sufcient themselves, because it is important to translate
them into action. What is important for the transfer of knowledge into new products and
services? Investing in knowledge is not enough if that knowledge does not return the
invested funds. Losing a job is not the problem - the problem is there are no new jobs
creating. Innovations require competitiveness. In the transfer of knowledge and ideas into
products and services, it is important to emphasize the need for better coordination of all
levels and better cooperation between all stakeholders, i.e. between so-called “triangle of
knowledge” - public policy, education and research community, on the one hand, and the
business community on the other.
2
A well-functioning research centers, innovative and well-equipped industrial parks, are
critical to the achievement of results in research and development. In addition, coopera-
tion among regions and countries is specifcally emphasized. A common challenge lies in
the integration of shared resources, fnding a balance between cooperation and competi-
tion, in order to enhance competitiveness. Shared resources include transport infrastruc-
2
dr Mehmed Avdagi?, „Strateški menadžment“, Sarajevo 2009, p.45, Te need for business
strategy and development of the company comes from the mission and the needs of enterprises
to survive, progress and gain proft on the market. On the other hand, the need for a strategy
imposes the environment, whose essential feature is the competition, the variability of the
structure and characteristics of the market and a host of infuential factors from international
relations, international and national regulations, and the development of technology, customer
requirements, and practices.”
4
COMPETITIVE ABILITY OF THE ... Avdagi? M., Avdagi? D., Radi? M., Goli? Dž.
ture, energy and telecommunications, universities, scientifc and technological centers
and tourism.
Innovation and innovation processes belong to the basic factors of development and com-
petitiveness of enterprises, whose importance is increased especially today, in a time of
so-called knowledge based economy.
Te OECD defnes a knowledge based economy as directly “dependent on the production,
distribution and use of knowledge and information.” Tis approach has evolved from the
60s to the late 20
th
century, when the infuence of knowledge manifests itself as a central
element of the new economy, with the domination of information and communication
technologies, as key strategic dimensions of competitive advantages through new forms of
communication and business - such as e-commerce and Internet use.
Te concept of innovation is largely evolved in the last decade, together with the extraor-
dinary development of innovation management. Te European Commission, according
to the standard document known as the Green Paper on Innovation from the 1995, de-
fnes innovation as “improving and enhancing the scope of products, services and related
markets, establishment of new methods of production, supply and distribution; introduc-
tion of changes in management, organization and working conditions for employees.”
3
Te development of the theory of innovation is associated with the analysis of J. Schum-
peter in ‘30s of the last century, which marked the innovation as a basic factor of techno-
logical progress and economic development, in terms of replacing old technology with
new, called a creative destruction. He was one of the frst scientists who recognized the
importance of developing a new product - product innovation for economic develop-
ment, considering that the competition, achieved by introducing a new product far more
signifcant than the one based on marginal changes in the price of existing products. Te
approach by which the phase of establishment of each industry sector there is a radical
product innovation developed much later, followed by a radical innovation of the corre-
sponding production process, followed by difusion of incremental innovations.
One of the simplest and most popular defnitions of innovation is the process of turn-
ing ideas into practical application - realization. In other words, the process of innova-
tion - innovation process (project), and output - innovation process output, which can be
represented as a relation: Innovation = theoretical concept + technical inventions + the
commercial exploitation.
4
In its defnition of innovation and innovation processes, Porter, who has formulated a
model known as fve forces of competition, as one of the key elements citing the ability of
enterprises to gain competitive - competitive advantage based on innovation, i.e. ability of
the company to realize a successful innovational projects.
Generally, these elements of innovation processes are implemented in the organization
through three key functions: research and development, production and marketing. Suc-
cessful management of innovation is based on the concept of managing the knowledge
fow within and between these (and other) functions in the company, which should sup-
port the communication with the environment in order to increase competitiveness and
proftability, and achieving the overall business success.
Te most important criteria for the classifcation of innovations, on which depends one
of the distinctive attributes of each innovation - the degree of innovation, is nature of in-
3
www.symorg2008.fon.bg.ac.yu
4
Piter Draker, „Inovacije i preduzetništvo“, Privredne teme, Beograd 1991
5
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
novation and the type of paper. According to the criteria of the nature of innovation, there
are two broad classes of innovations:
- Radical (essential) innovations;
- Incremental (evolutionary) innovations
Incremental innovations are small improvements, which can be described as “solving
problem where the aim is clear and well known, but the solution is to fnd it.” In con-
trast, the result of radical innovations is new products/services/processes, and they can
be presented as a process in which a research direction is known, but the ultimate goal
is unknown. Incremental innovations are the most common form of innovation in many
enterprises and in average, about 80 % of all investments belongs to them. Within the dif-
ferent classifcations, there is a group of so–called semi-radical innovations (between two
general, fnal shapes). When it comes to the criterion of the type of innovation, the latest
edition of a basic document known as the Oslo Manual (2005) - Guidelines for Collecting
and Interpreting Innovation Data, for the frst time explicitly states the following classes
of innovations:
5
- Product/service innovation;
- Process innovation;
- Organization innovation;
- Marketing innovation
Bearing in mind that the innovation is one of the key factors of competitiveness, one of
the elements essential to the success of the new task is the appropriation of innovation
benefts. Appropriability represents an extremely important component that innovation
and technological breakthrough transforms into the economic efect. Te high degree of
appropriability enables the company that is the leader in innovations to achieve the posi-
tion of market leader, or to realize the beneft based on innovations. Te capacity of the
company for the appropriation of the benefts of innovation generally depends on:
- Te ability of the company to transform its innovation advantage into commercially
important products/services and processes (product/service innovation and pro-
cess);
- Te ability of the company to defend itself against imitators
6
4. THE ROLE OF THE STATE
When we look at every aspect of the subject that afects the competitiveness, we ask the
question, where are the main causes of the unsatisfactory situation in this respect in our
country. Are they predominantly a consequence of some of our properties (war, political
problems), or the result of some sort of transition disorientation. Tat is the way to recog-
nize how institutions are important.
Today it is a challenge to fnd the right balance between state and market, between collec-
tive action at local, national, and global level, and between government and non-govern-
5
www.symorg2008.fon.bg.ac.yu
6
Kyprijanov S., Shevtsova S., Regional innovative system as the main part of the national innovative
system, „LAW, ECONOMY AND MANAGEMENT IN MODERN AMBIENCE“ LEMIMA 2011,
12.-15-APRIL 2011. Belgrade, Serbia
6
COMPETITIVE ABILITY OF THE ... Avdagi? M., Avdagi? D., Radi? M., Goli? Dž.
mental actions. As the economic circumstances change, so that balance must be redefned.
Te government must undertake new activities and abandon the old ones. “
7
It is of crucial development importance to recognize and to appropriately defne the role
of the state in the intelligent development of each country, especially those where the
process is just at the beginning. Te role and responsibility of the state is to structure eco-
nomic and political environment by encouraging investments, which inevitably must be
preceded by raising the level of export performance. Tat means ensuring political stabil-
ity, arranged legal framework and efcient public administration, create a real economic
policy, be internationally active and open, and be more successful and plausible on its
way to join the EU. In the feld of industrial environment, it is necessary to accelerate the
improvement of infrastructure and to encourage the cluster development.
In the feld of human resources, it is necessary to raise the level of education quality, and
encourage the processes of ongoing professional development. In addition, it is necessary
to create the legal requirements for fexibility on the labor market, which does not mean
an increase in unemployment or uncontrolled deterioration of the conditions of existing
employees. Conversely, it must to be aimed at stimulating capital and entrepreneurs to
help decide on new investments and new jobs.
In the context of raising the level of concern for human resources, it is very important to
fnd ways of encouraging the return of high-quality professionals who spent part of their
working life abroad, in the countries of exceptional competitive potential. Terefore, it
is necessary to fnd ways to attract them to be employed in their country, which brings a
number of benefts starting from lower infrastructure costs (existing apartment, houses),
especially knowledge of social values and social system, faster socialization, and, conse-
quently, more efcient professional performance.
Problems of export competitiveness must be solved with the full coordination of the gov-
ernment and the authorities of the republic, who must provide the clarity of the devel-
opment goals, selection of appropriate instruments of economic policy and coherence
in achieving development programs, common criteria of success with practicing actual
specifcs of each country and how to adapt the process of building competitiveness and
fnding the balance between state and market.
5. RESUME
Raising the level of competitive ability of the national economy is the basic premise of
stable growth that is best recognized in increasing employment and quality of life.
Weak competitiveness is taking advantages of high costs, especially high labor costs. Cer-
tain structural features of the economy contribute to that, which it is necessary to afect on
thru the larger share of manufacturing and high-accumulative production of such prod-
ucts (and services) that will fnd its way to customers due to its quality and performance,
both on the local and the wider international social and market environment. All this
can be achieved by an appropriate activity and synchronization of all economic entities
through the process of restructuring activities and checking the intentions regarding the
export orientation and their afrmation.
Innovative products and services are the driving force of competitiveness. Innovative
products are generators of demand, profts and customer loyalty. Good innovations give
7
J. Stiglitz: Te Roaring Nineties, Alen Lane – Pengium Group, London 2003., str. XII
7
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
the company a positive image; such products eventually become synonymous with qual-
ity and ofen are the decisive factor when deciding which product to choose. However,
we should be careful, because each innovation, which carries a greater chance of success,
entails a greater risk.
Creating innovative products primarily requires knowledge of the consumer target mar-
ket, knowledge of their own capabilities, as well as the competitive environment. Innova-
tive products enable companies to become market leaders, but involve great risk, that will
be reduced or eliminated if development process is properly managed.
Te state must be able to provide the balance of state measures and market laws in or-
der to contribute to synergy efects of that balance, which actually means that achieved
balance needs to release all that is creative and innovative, which can contribute to the
competitiveness and exports, but also to prevent efect of negative factors that can hamper
competitiveness.
BIBLIOGRAPHY:
[1] Avdagi?, M.:Strateški menadžment. Sarajevo, (2009).
[2] Draker, P.: Inovacije i preduzetništvo. Beograd: Privredne teme, (1991).
[3] Nacionalno vije?e za konkurentnost: Godišnje izvješ?e o konkurentnosti Hrvatske
2004., Zagreb, (2005).
[4] Galinec, A.; Jurlin, K. & Lenardi?, M.: Konkurentnost hrvatskog izvoza u EU.
IMO–J.E. Zagreb: Austin Associates, Inc, (2002).
[5] Radoševi?, D.: Izazovi razvoja. Zagreboliti?ka kultura, (2005).
[6] Kyprijanov S. & Shevtsova S.: Regional innovative system as the main part of the
national innovative system, „Law, Economy and Management in Modern Ambience“
LEMiMA 2011, Belgrade, (2011).
[7] Stiglitz, J.: Te Roaring Nineties, Sides of Destruction. London: Alen Lane and
Penguin Group, (2003).
[8] www.symorg2008.fon.bg.ac.yu
8
ENTREPRENEURSHIP AND INNOVATION AS CERTAIN... Belovi? D.
ENTREPRENEURSHIP AND INNOVATION AS CERTAIN
WAY-OUT FROM CURRENT ECONOMIC CRISIS
Belovi? Duško
PhD student, Faculty for Education of the Executives, Novi Sad, SERBIA,
e-mail: [email protected]
Abstract: Te purpose of this paper is to highlight the question of the relationship between innova-
tion, growth and entrepreneurship as possible path to solve actual global economic crisis. Te paper
investigates the process of reactualization of the role of entrepreneurship and innovation in modern
economy. Actual direction of global economy changes, give increasingly relevance and importance of the
innovation and entrepreneurship as a generators of the economic growth. Due to, many countries have
recognized these processes as a vital elements of their recovery and development.
Keywords: entrepreneurship, innovation, economic crisis, economic growth, entrepreneurial economy,
innovative entrepreneurship
1. INCREASING ROLE OF ENTREPRENEURSHIP AND
ENTREPRENEURS IN CONTEMPORARY ECONOMY
Te role and functions of entrepreneurship in the new global economy have taken on
added signifcance and face compounded challenges. In recent years, also there has been
increasing interest in comparing entrepreneurs from diferent cultures. Some author
found signifcant diferences across cultures in motivations to launch a new business. Tey
concluded that entrepreneurship was not simply a function of opportunity recognition
in isolation, but coloured by cultural perception of opportunity. In fact, a environment
constitutes the initial conditions facing the entrepreneur.
Te most of authors defned entrepreneurship as forming and growing something valu-
able from virtually nothing; process starts from creating or grasping an opportunity, and
then pursuing it. As we mentioned above, entrepreneurship is a very important dynamic
process involving opportunities, individuals, organizational contexts, risks, innovation
and resources. Furthermore, entrepreneurship is an attitude and capability that difuses
beyond the founding team to all members of its organization.
Entrepreneurship has been recognized as a micro driver of innovation and economic
growth. Lastly, entrepreneurship is more than the creation of a business and the wealth
associated with it. It is focused on the creation of a new enterprise that serves society and
makes a positive change.
Considering the role of entrepreneurship in the crisis, we can see that due to its ability of
innovation and growth of investment, entrepreneurship is able to play a vital role in the
current fnancial scenario by creating job opportunities and economic growth.
9
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
Te key agents of entrepreneurship are entrepreneurs. An entrepreneur is a person who
undertakes the creation of an enterprise or business that has the chance of proft (or suc-
cess). In fact, entrepreneur, as a term, applies to someone who establishes a new entity to
ofer a new or existing product or service into a new or existing market.
First of all, entrepreneurs create a novel response to an opportunity by recombining peo-
ple, concepts, and technologies into an original solution. An opportunity evaluation is
perhaps the most critical phase of the entrepreneurial process, as it allows the entrepre-
neur to assess whether the specifc new product or service has the needed returns. Entre-
preneurs are perceptive and goal-oriented people. Te ability to spot business ideas, to
launch new products, or open new markets is triggered by the accumulation of confrming
or disconfrming evidence as perceived by the entrepreneur. Also, entrepreneurs have a
strong need for achievement, or a strong ego-drive. Entrepreneurs strive to make a difer-
ence in their own lives or the lives of others.
Entrepreneurship can consist of innovation or the introduction of creative change and
change is generally considered as part of the entrepreneurial expectation. In that sense,
the entrepreneur is a change agent. Terefore, more innovators need to be entrepreneurial,
and more entrepreneurs need to be innovative.
2. KEY ROLE OF INNOVATION IN CONTEMPORARY ECONOMY
It is generally known that the key fundamental drivers of sustainable prosperity are
innovation and productivity growth, and their interaction over time. Although an inno-
vation is successful only with a good idea and eforts to convert the idea into a marketable
tangible product or service, innovations are usually investigated in three distinct research
agendas: new product development, process innovations and management innovations.
Once more, innovation is the process of putting ideas into useful form and bringing them
to market, and, due to, innovation is the true engine of economic growth. Many authors
described innovation as a virtuous circle of research, development and application, all of
which must be pursued together in other to maintain a competitive edge. Terefore, we
also think that innovations are the best - and maybe the only - way the countries like Ser-
bia can get out of its economic and fnancial problems.
Also, we deeply believe that innovation requires radical change and a new vision, one that
integrates the marketing, engineering and industrial design attributes necessary to suc-
ceed in globalized economy.
According to the OECD, innovation is the implementation of a new or signifcantly im-
proved product (good or service) or process, a new marketing method, or a new organi-
zational method in business practices, workplace organization or external relations of a
company.
1

Innovations transform economies into the knowledge-based economy and alter global
relations and produce new structures of social control. Innovation can be developed in
order to activate demand, by fnding new ways of marketing products or services, but also
through new applications of technology which will facilitate fast and efcient operation of
the distribution network and conduction of transactions. Also, innovations and ideas that
may arise from new research and data in the feld of marketing could serve as a way-out
from the current economic crisis.
1
OECD, Oslo Manual , Paris, 2005, p. 30.
10
ENTREPRENEURSHIP AND INNOVATION AS CERTAIN... Belovi? D.
Successful innovation requires contributions from managers, salespeople and customers
just as much, if not more than, researchers and scientists. Terefore, without entrepreneurs
there can be no future, yet without people able to work in an efcient, consistent manner
there can be no present. In short, the promise of an innovative, entrepreneurial and com-
petitive economy is being held out as the so-called panacea for economic ills. Innovation
has become an increasingly complex process with an increasing number of interacting
actors involved. Terefore, we need both individual and corporate entrepreneurship, in-
novation and operational excellence at the same time.
In this sense there are a few key innovation dimension:
• Pragmatic. A focus on converting ideas into revenue growth and profts.
• Customer-centric. Discovering and serving customer needs, both explicit and hid-
den, to create a diferentiated customer experience.
• Open. Cast a wide net to capture the best ideas from internal and external sources,
and the capability to capitalize on them.
• Holistic. Innovation isn’t just about technology or a new product, but also your
brand, operating environment, employees, the impact on your business ecosystem,
and the impact on society.
• Controlled experimentation. Creating a culture that encourages organizations to ex-
periment, rapidly prototype new ideas, and learn and capture new knowledge.
2
In other words, innovation is a pervasive phenomenon, whose efects are ofen ambiva-
lent, i.e. leading to opposite direction, depending on the goals of the innovator, the tech-
nological opportunities as well as the society constraints.
3. INNOVATION AND ECONOMIC GROWTH
Te role of innovation for growth is strengthened by advances in new technologies, and a
greater focus on knowledge creation and use of new knowledge.
Generally, innovations have improved consumer welfare through the introduction of new
goods and services, improvements in the quality and lower costs of existing products.
Tey also revolutionized the organization of production, not just the ‘technology’ of pro-
duction as narrowly conceived, but also the management and global reach of corporations
around the world. In short, innovation refers to a broad range of activities aimed in part at
incremental improvements to existing products, processes, services (“new ways of mak-
ing current products better, faster, cheaper”) and in part at revolutionary, breakthrough
developments (“creating something not previously created”).
Te so-called ‘’new growth theory’’ has exploited this old Schumpeterian idea to formalize
the link between innovation and long run growth. According this theory (Romer 1986,
1990) diferences in economic development across countries should be understood as the
outcome of diferences in endogenous knowledge accumulation within borders.
Investments in innovation can be of strategic importance for long-term growth. Most
growth comes from improvements in efciency and new technologies. Te crisis causes
some of these types of investments to fade away, but governments are trying to cushion
the fall in private research and development (R&D) spending through support for private
R&D. Many countries are investing in research infrastructure because it can be a double-
2
Manufacturing Innovation, Cisco White Paper, 2010, p. 8
11
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
dividend improvement. Many countries are also trying to connect spending in research,
development and innovation to the market.
Te Global Entrepreneurship Monitor
3
, a program initiated by Babson College and the
London Business School to assess entrepreneurial activity around the world, explores the
link between economic growth and entrepreneurship. Te 2008 report discusses this posi-
tive relationship in terms of the diverse phases of economic development that vary from
country to country:
• Factor-driven economies (economies relying on unskilled labor and natural re-
source extraction) will need to focus on institution-building, infrastructure and the
provision of such basic services as healthcare.
• Efciency-driven economies (growing economies in need of improving produc-
tion processes and quality) will be most concerned with such priorities as domestic
and/or foreign market size, fnancial market sophistication and labor market ef-
fciency.
• Innovation-driven economies (the most-advanced stage in which businesses com-
pete primarily on the basis of innovation) will have needs related to entrepreneur-
ship-specifc education and research and development.
4
Figure 1: Entrepreneurship and the corresponding stages of economic development
5
During economic downturns, innovation is the single most important condition for trans-
forming the crisis into an opportunity. Also, while many businesses simply won’t be able
to aford further investment in innovation, governments should recognize that innovation
3
www.gemconsortium.org/default.aspx
4
Entrepreneurship and Innovation: Te keys to global economic recovery, Ernst & Young, 2009ns
5
Zoltan J. Ács and Wim Naudé, Entrepreneurship, Stages of Development, and Industrialization,
UNU-WIDER, Working Paper No. 2011/80, November 2011
12
ENTREPRENEURSHIP AND INNOVATION AS CERTAIN... Belovi? D.
systems, with all their academic, industrial, and public components, are strategic national
assets that need to be protected, just like the fnancial and housing sectors.
Figure 1 shows the relationship between entrepreneurship and economic development.
Entrepreneurship is considered to be an important mechanism for economic develop-
ment through employment, innovation, and welfare.
Te S-curve suggests that in the factor-driven stage a relatively small amount of entre-
preneurial activity is productive, that is, it creates economic and/or social value. As men-
tioned earlier, this increases sharply through the efciency-driven stage and levels of in
the innovation-driven stage of development. As institutions are strengthened more and
more entrepreneurial activity is shifed towards productive entrepreneurship strengthen-
ing economic development.
4. ECONOMIC CRISIS IS THE RIGHT TIME FOR INNOVATION AND
ENTREPRENEURSHIP
If innovation is a key stimulant of economic growth, entrepreneurs are synonymous with in-
novation — and there’s no time like a downturn to take advantage of entrepreneurial thinking.
Unfortunately, public policy is not always friendly to innovation. During severe economic
crises, governments ofen turn to policies that restrict or close the doors to what innova-
tors need most: an open fow of people, goods, services and ideas.
It is obvious, we think that the current economic and fnancial crisis is the frst of this
severity to hit developed countries since they have shifed to knowledge-based service
economies. We think that the problem of the current economic crisis is not, inherently
and mainly, a problem of supply, but a problem of active demand for goods and services.
Although the global, hypercompetitive nature of the current business environment makes
any competitive advantage short-lived, it would be a mistake to view these turbulent times
as anything other than an unparalleled era of opportunity. Terefore, we accept opinion of
many authors that current economic crisis can provide a perfect backdrop for disruptive
or radical innovation. Moreover, we believe that economic crises are also historically times
of industrial renewal and new economic take-of.
Shortly, the current fnancial and economic crisis is providing the impetus for new entre-
preneurs to take the step into self-determination and to build the employment base for
the future. Furthermore, we think there is nothing like a good economic crisis to fuel the
growth of new innovative energetic businesses.
However, without brilliant engineers and competent management, the most advanced
technology can wind up on the scrap heap of business history, or even worse, usurped by
a competitor. Moreover, some authors suggests that, for some companies, the economic
crisis can actually provide an innovation platform. While many organizations are focused
on being solvent in this current economic crisis, companies with strong balance sheet
should continue to focus their R&D efort on radical, or disruptive innovation. Also, we
believe that in a current economic crisis an entrepreneurial culture will be a new “modus
operandi” that will drive individuals, organizations, and societies towards an expanding
set of new possibilities, ensuring not only business survival, but also self-renewal and the
long-term health and well-being of the economy and society.
Also, the current economic and social crisis invites us to discuss “sustainable innovation”
or “environmental innovation” as a basis for a new techno-economic (and social) para-
13
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
digm founded on new technologies, and savings of energy and resources and on the deve-
lopment of renewable energies. In this context public policies to support innovation are
henceforth at the root of all scientifc and technological initiatives.
In this process government can act as a catalyst to greater entrepreneurial action without
serving as the agent of action itself. It should invest in upstream areas, such as education,
as well as remove obstacles and encourage new forms of investment. For market funda-
mentalists, government is always the problem, not the solution. But over the centuries,
there are many examples of governments that have led the process of economic develop-
ment in their societies. 
Indeed, the crisis is providing multiple opportunities for governments to take decisive ac-
tion on innovation. Given the deeply intertwined nature of the modern global innovation
system, they should act collaboratively — as they have already begun to do in addressing
the problems of the global fnancial system. International cooperation at this level has
been all too rare in recent years.
5. NECESSITY OF FOSTERING ENTREPRENEURSHIP AND CULTURE
OF INNOVATIVE ENTREPRENEURSHIP IN CRISIS
Strenghtening and fostering entrepreneurship means channeling entrepreneurial drive
into a dynamic process that takes advantage of all the opportunities the economy can
provide. To fourish, entrepreneurship requires efcient fnancial markets, a fexible labor
market, a simpler and more transparent corporate taxation system, and business rules bet-
ter adapted to the realities of the modern business world.
Enterprises large and small have great trouble sustaining long-term superior performance.
Even with large R&D budgets, success at innovation is not automatic. Te innovation
process requires active orchestration of both intangible and tangible assets by entrepre-
neurs and managers. Tis is true whether the context is the small or the large enterprise.
6

Moreover, we have remember that the high-growth companies have been built by entre-
preneurs with: 1) an innovative idea, 2) great ambitions and 3) signifcant market and
business related skills. In short, entrepreneurship is a great mechanism to deliver new
ideas, unique approaches and innovative technologies. When conducted in a proper way,
turning people into entrepreneurs improves a country’s economic situation and aids sus-
tainable progress. However, transition to become an entrepreneur is not that aspiring to
all. Risks and uncertainties involved in starting a new business coupled with stagnant
economy discourage people to step up the plate and take a game. Terefore, teaching of
entrepreneurial skills at all education levels, from elementary school through university,
has a signifcant impact on levels of entrepreneurship throughout the world.
Fostering Entrepreneurship is commonly viewed in the light of economic growth, com-
petitiveness and job-creation. But this perception falls short on the social relevance en-
trepreneurship has for society. In fact, ever faster structural and competitive economic
changes are leading to signifcant changes in society. Tis afects the individual life plans
of particularly the youth and requires an increasing degree of self-reliance. In this context,
fostering entrepreneurship and self-employment also provides the population with a ca-
6
David J. Teece, ‘’Te role of managers, entrepreneurs and the literati in enterprise performance
and economic growth’’, Int. J. Technological Learning, Innovation and Development, Vol. 1, No. 1,
2007
14
ENTREPRENEURSHIP AND INNOVATION AS CERTAIN... Belovi? D.
reer option parts of society might be better suited with to meet the changing demands of
new economies. In this respect fostering entrepreneurship is not only an economic but a
socioeconomic task for most economies.
6. CREATING A CULTURE OF INNOVATIVE ENTREPRENEURSHIP
As we stressed, entrepreneurship has more to it than just self-employment and hard work;
to express its full potential one needs to put emphasis on the generation and development
of ideas. Research on creativity suggests that all of us are able to engage in this kind of
creative activity. Entrepreneurial initiative covers the concepts of creation, risk-taking,
renewal or innovation inside or outside an existing organization. Promoting innovative
entrepreneurship is therefore a central concern for government and industry. Innova-
tive entrepreneurship is becoming the cornerstone of economic growth in the developed
world. Entrepreneurship education and research are seen as important means to foster en-
trepreneurial culture. Lastly, innovative entrepreneurship need not rely on inspira tion or
luck, but can be fostered. Innovative entrepreneurs create ideas and have the ambition to
build them into high-growth enterprises. Fostering innovative entrepreneurship is critical
to our future competitiveness. It is these innovative entrepreneurs who are more likely to
seek growth, create the majority of jobs and wealth, and therefore contribute to closing
the productivity gap. Improvements in productivity are crucial to raising long-term eco-
nomic performance and increasing living standards. Regardless of its traditional antipathy
to innovators, every corporation must search for, recognize, communicate with, support,
reward, publicly thank and stimulate actions of its quiet “positive deviants.” Working with,
instead of against, the corporation’s silent innovators will require a signifcant shif in cor-
porate ideas regarding risk. Firms must be intentional in creating an environment where
appropriate risk is welcome and corporate incentives must likewise be designed to reduce
risk-averse behavior. In other words, we can develop a tentative and working defnition
of the innovative entrepreneur as follows: a person who identifes an opportunity from an
innovation, whether social or commercial, evaluates its market potential based on their
own knowledge networks, fnancial or educational capital, and establishes an organiza-
tional structure, either within an existing entity or by creating a new one, that allows that
innovation to be developed. Of course, it is important to distinguish between the “inno-
vative entrepreneur” and the “innovation process”. Overall, the innovation process is the
interaction between individuals within an organization or business once the innovative
entrepreneur has identifed, articulated and articulated a strategy to implement a com-
mercial opportunity from an innovation. However, the “innovative entrepreneur” is an
individual and the interest of any further work should be on identifying their attributes,
the sources of their ideas, their fnance, their social capital networks, their knowledge
capital and, of course, the challenges and barriers that they face. In Schumpeterian light
‘’innovative entrepreneur’’ is the hero of the business drama. First of all, he must be able
to identify opportunities to defne a new winning business models which come in variety
forms in turbulent environment. Becoming a successful entrepreneur does not require a
lot of money but require innovative ideas and a strong urge to do something extraordinary
and prove oneself. It is amazing that there is no need of huge investment to become an
entrepreneur. Because, if this would be the major requirement then none of the following
would have existed who have created history of economic and business successes.
15
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
7. CONCLUSION
Entrepreneurship and innovation provide a way for many people and professionals to over-
come the global challenges of today, building sustainable development, creating jobs, gen-
erating renewed economic growth and advancing human welfare. Innovation create new
products that respond to what customers are looking for and succeed in the marketplace.
Technological innovation is the best, and perhaps the only, way to overcome an economic
crisis, and for that we do not need an indiscriminate expansive fnancial policy.
Moreover, during economic recession, innovation is the single most important condition
for transforming the crisis into an opportunity. Also, while many businesses simply won’t
be able to aford further investment in innovation, governments should recognize that in-
novation systems, with all their academic, industrial, and public components, are strategic
national assets that need to be protected, just like the fnancial sectors.
Entrepreneurialism does more than rise to this challenge. In chastened times, it also
spreads beyond the economy - into arts and culture, academia, professions, even pure
science, which must fght harder for public interest when the public purse is otherwise
engaged.
Terefore, individual initiative must not be devalued by arguing that businesses do well
(or badly) because of background factors: strong science research, a supportive legal
framework, efciency government, or just an “entrepreneurial culture” that makes busi-
nesses easy to form and transform.
BIBLIOGRAPHY:
[1] Audretsch, D.: Sustaining Innovation and Growth: Public Policy Support for
Entrepreneurship. Industry and Innovation, Vol. 11 (2004), pp. 167-191.
[2] Barringer, B, & Ireland, R.: Entrepreneurship: Successfully Launching new Ventures,
New Jersey: Prentice Hall, (2006).
[3] Belovic D.: Innovation, Entrepreneurship and Reindustrialization in Serbia. 3rd
International Conference ”Law, Economy and Management in Modern Ambiance”,
LEMiMA 2013, Belgrade (2013).
[4] De Cusatis C.: Creating, Growing and Sustaining Efcient Innovation Teams,
Creativity and Innovation Management, Vol. 17 (2008), No. 2.
[5] Teece D.: Te role of managers, entrepreneurs and the literati in enterprise
performance and economic growth’’. Int. J. Technological Learning, Innovation and
Development, Vol. 1 (2007), No. 1.
[6] Drucker, P.F.: Innovation and Entrepreneurship. Practice and Principles, London:
Heinemann, (1985).
[7] Entrepreneurship and innovation: Te keys to global economic recovery, Ernst &
Young, (2009).
[8] Filippetti, A. & Archibugi, D.: Innovation in times of crisis: National Systems of
Innovation, structure, and demand. Res. Policy, (2010).
[9] Harding, R.: Global Entrepreneurship Monitor, London: London Business School,
(2006).
[10] Ha-Joon Chang, Bad Samaritans: Te Myth of Free Trade and the Secret History of
Capitalism, New York: Bloomsbury Press, (2007).
16
ENTREPRENEURSHIP AND INNOVATION AS CERTAIN... Belovi? D.
[11] Hisrich D. R., Peters M.P. & Shepherd D.A.: Entrepreneurship, Seventh Ed.,
McGraw-Hill International, (2008).
[12] Fagerberg, J., Srholec M., & Verspagen B.: Innovation and Economic Development,
UNU-MERIT, (2009).
[13] Innovation and Growth: Rationale for an Innovation Strategy, OECD (2007),
[14] Romer, P. M.: Increasing Returns and Long Run Growth, Journal of Political
Economy, Vol. 94 (1986), pp. 1002–1037.
[15] Romer, P. M.: Endogenous Technological Change, Journal of Political Economy, Vol.
98 (1990), pp. 71–102.
[16] United Nations Economic Commission for Europe, Fostering Innovative
Entrepreneurship, Challenge and Policy Options, United Nations, New York and
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[17] Zoltan J. & Naudé W., Entrepreneurship, Stages of Development and Industrialization,
Working Paper UNU-WIDER, Vol. 80 (2011).
17
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
TAX EVASION IN THE DOMESTIC AND COMPARATIVE
CRIMINAL LAW
Cokovi? Sabahudin
e-mail: [email protected]
Abstract: Te object of this paper is the crime of “tax evasion”. Te frst part is dedicated to the concep-
tual defnition and the elements of “tax evasion” in some comparative legal criminal law, i.e. criminal
law of Albania, Finland, Croatia and Uzbekistan. In the second part, the author pays attention to the
concept, basic elements and characteristics of the ofense, “tax evasion” in Article 229 of the Criminal
Code of the Republic of Serbia.
Keywords: criminal act, tax, tax, criminal sanctions
1. INTRODUCTION
Historically, tax evasion exists since the tax payment. Tax evasion has existed regardless
of which form of state there was, regardless to governmental structure, which leads us to
the conclusion that the negative social phenomena can never be completely eradicated.
Tax evasion in the modern world, afects almost all modern countries, it is becoming the
trend and a problem that needs to be addressed urgently. Tis negative social phenom-
enon is present in the territory of the Republic of Serbia, leading to the conclusion that
neither our state is immune to the issue of tax evasion.
Community development causes an increase in the collection of public revenues; a notion
of public revenues is mainly identifed with the taxes because they have the largest share
of the revenue.
Public revenues including taxes alone serve to satisfy public needs, i.e. government ex-
penditure. Its characteristic is to be collected in cash, periodically and continuously. At
the same time, along with the tax collection evasion of the tax liability appears, and that
avoidance is ofen turned into tax evasion.
Tax evasion is legal with full use of the law for the purpose of reducing or abolishing the
tax liability, and may be realized due to defciencies or inaccuracies of the law.
Tax evasion involves illegal avoiding violation of the law in order to lower the payment or
non-paying the taxes. Speaking of tax evasion, two types of fraud can be described - full
and partial. Full tax evasion is not reporting earned income; while a partial evasion is
reporting the revenues partially.
Tax evasion undermines the tax system and a number of factors afect the tax, such as
level of tax burden, the fair distribution of the tax burden, tax technique, the ratio of tax
administration to taxpayers and tax morale.
18
TAX EVASION IN THE DOMESTIC AND COMPARATIVE... Cokovi? S.
In Serbia, tax morale at very low level because most people think that tax evasion is nor-
mal and justifed. For this reason, it is necessary that the tax authorities apply all available
measures and instruments that will afect the reduction of tax evasion. Tis primarily
refers to the identifcation of the various forms of tax evasions, which is most ofen en-
countered in the calculation of VAT. It is also the most abundant tax revenue of the state
budget making 80% of total tax revenue.
Speaking of evasion of VAT, the most common cases occur with employers who pay in
cash a major part of their income, to whom the account is blocked, showing false export
deliveries, which carry out the delivery of goods and services on the black market, which
stated incorrect information in the tax returns. In addition to the above common cases,
tax evasion is done via so-called “phantom” companies that have no employees, no busi-
ness premises, whose ofce is registered in a non-existent address, there is no commercial
property etc.
2. TAX EVASION IN COMPARATIVE CRIMINAL LAW
2. 1. Albania
Te Criminal Code of the Republic of Albania
1
provides only a tax criminal ofense in
Article 181. Tis ofense is titled “Failure to pay the withholding tax.” It consists of non-
payment of taxes or other duties prescribed by law in certain time by a person who has
previously been administratively (misdemeanor) punished even though it was capable
(able) to pay, without reasonable excuse.
Te objects of this criminal ofense are taxes, but other public fees too.
Te act of commission consists of unjustifed tax evasion in the manner and time as speci-
fed by the law. However, the law for the existence of criminal ofenses requires that the
ofender was able to pay a set amount of public duties. Secondly, it must be a person who
has previously been convicted for a tax ofense. Terefore, the perpetrator of this criminal
ofense may be only the person who has special traits determined by the law, i.e. it is a
recidivist, a person who has a tendency of non-paying its duties or tax evasion.
2
Tis criminal ofense shall be punishable by a term of imprisonment for up to three years
or a fne.
2. 2. Finland
Te Criminal Code of Finland
3
in chapter 29 of the “Ofenses against public fnances”
criminalizes three criminal ofenses related to tax evasion, including tax evasion
4
, aggra-
vated tax evasion
5
, and petty tax evasion
6
.
1
Kodi penal i Republikës së Shqipërisë (Botim i Qendrës së Publikimeve Zyrtare, Shtator 2011),
???????? ??:http://www.justice.gov.al/UserFiles/File/Legjislacioni_Brendshem_Web/KODI_
PENAL.pdf
2
Jovaševi?, D. Te Tax Evasion In Te Comparative Criminal Law. Beograd: Strani pravni život,
2009., str. 163
3
Criminal Code of Finland (39/1889, amendments up to 940/2008 included),http://legislationline.
org/documents/section/criminal-codes
4
Section 1. (1228/1997)
5
Section 2. (769/1990)
6
Section 3. (769/1990)
19
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
a) Te crime of “tax evasion” is perpetrating a person who gives a taxation authority
false information on a fact that infuences the assessment of tax, fles a tax return
concealing a fact that infuences the assessment of tax, for the purpose of avoiding
tax, fails to observe a statutory duty pertaining to taxation that is of signifcance
in the assessment of tax, or otherwise acts fraudulently and thereby causes or at-
tempts to prevent assessment and tax determination, causing the assessment of
taxes at a lower value or the tax is being refunded groundless.
Te commission is alternatively determined, so it can take be in the form of providing
false information to the tax authorities, unfounded or unsubstantiated seeking of tax re-
funds, causing or attempt to prevent the evaluation and determination of the tax, causing
assessment of a lower tax value, or in any other way makes evasion in order to avoid pay-
ing taxes.
Te objects of this crime are taxes, but other fees too.
Perpetrator of this criminal ofense shall be imposed a fne or imprisonment of up to two
years.
b) Aggravated tax evasion is the criminal ofense made by a person who obtains a
substantial illegal fnancial gain, or the fraud is perpetrated in a special, i.e. spe-
cifc manner.
Te perpetration includes obtaining substantial fnancial benefts, contrary to the regula-
tions in this feld, fraud, or any other specifc way.
Te objects of criminal ofense are taxes, but other fees too.
Tis crime is punishable by imprisonment from four months to four years.
c) Te third criminal ofense in relation to the Code is petty tax evasion. Tis form
of the crime is specifc in that the ofender shall be sentenced to a fne, if it is
assessed that the amount of evaded taxes is low, and the circumstances of the
perpetration are related to tax ofense.
If it is estimated that the tax increase is sufcient penalty for the perpetrator of this crime,
the perpetrator may be released from punishment.
2. 3. Croatia
Croatian Criminal Code
7
was adopted on October 21, 2011; and entered into force Janu-
ary 1, 2013. In Chapter XXIV, in the group of crimes against the economy, Article 256
criminalizes the ofense entitled “Tax evasion and evasion of customs duty.” Te protec-
tion objects in this criminal ofense are taxes, contributions for social insurance, customs,
and any other necessary liabilities or benefts.
Tis criminal ofense
8
is committed by a person who is giving false or incomplete infor-
mation on incomes with the goal that he or another person wholly or partially avoid the
payment of taxes or duties, objects or other facts that are important for determining the
amount of tax or customs duty, or anyone with the same goal who in case of mandatory
application does not report income, subject, or other facts that may afect the assessment
of the tax or customs duties, and therefore there is a reduction or failure to determine the
tax or customs duties in excess of HRK 20,000.
7
Kazneni zakon Republike Hrvatske (Uredn?ki pro?iš?eni tekst, „Narodne novine“, broj 125/11 i
144/12):http://www.propisi.hr/print.php?id=11365,
8
?lanak 256. stavka 1
20
TAX EVASION IN THE DOMESTIC AND COMPARATIVE... Cokovi? S.
Tis criminal ofense is determined in two ways, so it consists of giving inaccurate or in-
complete data on incomes, objects or other facts on the one hand and on the other hand
consists of underreporting of income and other items, or the facts that are obligated under
the letter of the law.
Te perpetrator of this criminal ofense should be aware of the fact it is avoiding entirely
or in part the payment of taxes, duties or other prescribed duties by its act.
Te perpetrator of this crime will be sanctioned by imprisonment of six months up to fve
years.
Tose who use tax or tarif benefts in excess of HR20,000 contrary to the conditions un-
der which it received them
9
, shall be fned according to a paragraph 1 of this article.
If the criminal ofense from the paragraphs 1 and 2 of this article has led to a reduction
in tax liability or non-determination of a large scale, the ofender shall be punished by
imprisonment of one up to ten years.
10
Te provisions of paragraph 1 to 3 of this Article shall apply also to the ofender that in
described actions reduce the funds of the European Union.
11
2.4. Uzbekistan
Te Criminal Code of the Republic of Uzbekistan
12
in Chapter XII, entitled “Economic
Crime”, prescribed the criminal ofense titled “Taxes or other payments evasion” under
the Article 184.
13

Tis criminal ofense has basic and qualifed form.
Te basic form of the ofense consists in the deliberate concealment or failure to report
a proft (revenue) or other taxable items, or otherwise evaded taxes, duties or other pay-
ments.
Te act of commission consists of deliberate concealment or failure to report a proft, or in
any other manner that avoids payment of taxes, duties and other prescribed duties.
For this criminal ofense, a fne up to one hundred and ffy minimum monthly wages,
correctional labor up to two years, or imprisonment up to six months is predetermined.
Te qualifed form of this act performs a person who evaded taxes or other payments in
the return or in high amounts.
A person who commits a criminal ofense in the return shall be fned with the amount
of 150 to 300 minimum monthly salaries, correctional labor from two to three years, or
imprisonment up to three years.
Tose who evade taxes or other payments in high amounts shall be fned in the amount of
300 to 600 minimum monthly wages, or imprisonment from three to fve years.
Te objects of this criminal ofense are taxes, customs, and other prescribed duties.
If the ofender meets its obligations to the state by paying taxes, duties, and other pre-
scribed liabilities, it may be released from punishment.
9
?lanak 256. stavka 2
10
?lanak 256. stavka 3
11
?lanak 256. stavka 4
12
Criminal Code of the Republic of Uzbekistan (Tashkent, September 22, 1994,
No. 2012-XII)http://legislationline.org/download/action/download/id/1712/fle/
a45cbf3cc66c17f04420786aa164.htm/previewv
13
As amended by Law 29.08.2001
21
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
3. TAX EVASION IN THE DOMESTIC CRIMINAL LAW
Te Criminal Code of the Republic of Serbia
14
was adopted on September 29, 2005, and
entered into force on January 1, 2006. In the “Crimes against the economy,” group our
legislators Article 229 provides for a criminal ofense called “Tax Evasion “.
Tis criminal act committed by a person who with intent to fully or partially avoid paying
taxes, contributions or other prescribed duties, giving false information on legally earned
income, on the subjects or other facts which may afect the determination of such obliga-
tions or with the same intention, the case of mandatory application, not the application
lawfully earned income, or objects or other facts that may afect the determination of such
obligations or with the same intention otherwise concealing information related to the
establishment of the aforementioned obligation, and the obligation whose payment avoids
exceeding 150,000 RSD.
Whoever with intent to fully or partially avoid payment of taxes, contributions or other
statutory dues, gives false information on legal income, objects and other facts relevant
to determination of such obligations, or who with same intent, in case of mandatory re-
porting (fling of returns) fails to report lawful income, objects and other facts relevant to
determination of such obligations or who with same intent conceals information relevant
for determination of aforementioned obligations, and the amount of obligation whose
payment is avoided exceeds RSD 150,000.
15
Te object of protection is a tax
16
, the fscal system, while the objects of the attack are taxes,
contributions, and other prescribed duties.
Te committed criminal ofense may consist of: a) providing false data on legally earned
income, on the subjects or other facts that are important for determining the obligation
to pay taxes, b) failure to report legally acquired income or other objects or facts that
are important for determining the payment of taxes, in those cases where the taxpayer is
obliged by law to mandatory reporting, and c) otherwise concealing data referring to the
establishment of the aforementioned obligations in terms of paying taxes, contributions
and other prescribed duties.
In addition to the above mentioned, for the existence of this part, two more elements are
necessary, namely 1) the existence of the intent of the ofender to fully or partially avoid
paying taxes, contributions or other prescribed duties at the time of execution of the ac-
tion, 2) that the amount of the obligation exceeding RSD 150,000.
Tis is the premeditated ofense.
17
Te perpetrator of this crime can be any person. Te prescribed penalty for the ofense is
imprisonment of six months to fve years and a fne.
In addition to the basic form, there are two severe forms of this ofense.
If the amount of the liability specifed in paragraph 1 of this Article whose payment is
avoided exceeds RSD 1,500,000, the ofender shall be punished by imprisonment of one
to fve years and fned
18
.
14
Krivi?ni zakonik Republike Srbije („Službeni glasnik Republike Srbije“, broj 85 /2005, 88/2005 -
ispr., 107/2005 - ispr., 72/2009, 111/2009 i 121/2012).
15
?lan 229. stav 1.
16
?ur?i? Vojislav, Jovaševi? Dragan. Krivi?no pravo, Posebni deo. Beograd: Nomos, 2010), 123
17
Stojanovi? Zoran, Peri? Obrad, Krivi?no pravo, Posebni deo (Beograd: Pravna knjiga, 2006), 198
18
?lan 229. stav 2.
22
TAX EVASION IN THE DOMESTIC AND COMPARATIVE... Cokovi? S.
If the amount of the liability specifed in paragraph 1 of this Article whose payment is
avoided exceeds RSD 7,500.000, the ofender shall be punished by imprisonment of one
to eight years and fned.
19
4. CONCLUSION
Tax evasion is a pressing problem that afects all countries and all modern legal systems.
Te fact is that no one likes to pay taxes, and therefore people are looking for various ways
to avoid taxes or to reduce them. It is needless to emphasize the harmful efects of this
negative social phenomenon.
States criminalize tax evasion or tax fraud in various ways, so we have the cases that in
certain criminal laws one criminal ofense is provided, and in some two or more ofenses,
pointing out to less severe or more severe criminal sanctions for the tax evasion ofenders.
Criminal Code of Albania stipulates in Article 181 entitled “Failure to pay the withholding
tax” the criminal ofense in relation to tax evasion. In the fght against tax evasion, this
state stipulates the following types of criminal sanctions - a fne or imprisonment up to
three years.
Te Criminal Code of the Republic of Croatia, Article 256 criminalizes the ofense entitled
“Tax evasion and evasion of customs duty x evasion and customs”. Te legislation provides
imprisonment from six months to ten years for this criminal ofense, which leads us to
the conclusion that this country is more severe in terms of threaten criminal sanctions to
perpetrators of these crimes, compared to the previously mentioned state.
Uzbek lawmaker also provides one criminal ofense in connection with tax evasion called
“Evasion of tax and other types of payments”. Te sanctions for the perpetrators of this
crime are fnes of from 150 up to 600 minimum monthly wages; imprisonment up to six
months; correctional labor up to three years, and imprisonment of up to fve years. In
contrast to the above-mentioned Code, the criminal law of Uzbekistan provides for the
possibility of releasing from punishment if the ofender meets its obligations toward the
state, payment of taxes, duties and other prescribed duties.
In contrast to the above-mentioned Code, Finnish criminal code is distinctive in that it
provides three ofenses related to tax evasion, as follows: 1) Tax Evasion, 2) Aggravated tax
evasion, and 3) Petty tax evasion.
In this country, to the perpetrators of the foregoing ofenses may be impose a fne or im-
prisonment up to four years, with the possibility for exemption from punishment.
Te Criminal Code of the Republic of Serbia defnes a criminal ofense, under the title
“Tax Evasion” with more specifc alternative actions. Te imprisonment for the perpetra-
tors of this crime ranges from six months to ten years, along with a fne, the same as in the
Criminal Code of the Republic of Croatia.
In order to establish the tax discipline, it is necessary to introduce several measures, one
of which is the imposition of stricter penalties and their rapid execution. It would also
be desirable to allow access to information, through which taxpayers can fnd out who is
included in the VAT system. Tis kind of access to information exists in many countries,
and it is known that the better information has impacts on reducing tax evasion.
19
?lan 229. stav 3.
23
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
BIBLIOGRAPHY:
[1] Criminal Code of Finland (39/1889, amendments up to 940/2008 included).
[2] Criminal Code of the Republic of Uzbekistan (Tashkent, September 22, 1994, No.
2012-XII).
[3] ?ur?i? V. & Jovaševi? D.: Krivi?no pravo, Posebni deo. Beograd: Nomos, (2010).
[4] Kodi penal i Republikës së Shqipërisë (Botim i Qendrës së Publikimeve Zyrtare,
Shtator 2011).
[5] Kazneni zakon Republike Hrvatske (Uredn?ki pro?iš?eni tekst, „Narodne novine“,
broj 125/11 i 144/12).
[6] Krivi?ni zakonik Republike Srbije („Službeni glasnik Republike Srbije“, broj 85
/2005, 88/2005 - ispr., 107/2005 - ispr., 72/2009, 111/2009 i 121/2012).
[7] Stojanovi? Z. & Peri? O.: Krivi?no pravo, Posebni deo. Beograd: Pravna knjiga,
(2006).
[8]http://www.justice.gov.al/UserFiles/File/Legjislacioni_Brendshem_Web/KODI_
PENAL.pdf.
[9]http://lawline.org/download/action/download/id/1712/fle/
a45cbf3cc66c17f04420786aa164.htm/previewv.
[10]http://lawline.org/documents/section/criminal-codes.
[11]http://www.propisi.hr/print.php?id=11365.
24
DIRECTIONS OF THE STATE POLICY ACCORDING ... Fauzer V., Fauzer G.
DIRECTIONS OF THE STATE POLICY ACCORDING TO
THE SOLUTION OF DEMOGRAPHIC AND LABOUR
PROBLEMS IN NORTHERN TERRITORIES OF RUSSIA*
Fauzer Viktor
1
, Fauzer Galina
2
1
Federal State Budgetary Establishment of Science Institute of Socio-economic and
Energy Problems of the North, Komi Science Centre Ural Branchof the Russian
Academy of Sciences, Syktyvkar, RUSSIAN FEDERATION,
e-mail: [email protected]
2
Federal State Budgetary Establishment of Science Institute of Socio-economic and
Energy Problems of the North, Komi Science Centre Ural Branchof the Russian
Academy of Sciences, Syktyvkar, RUSSIAN FEDERATION,
e-mail: [email protected]
Abstract: Te article proves the main directions of state policy in the feld of the social and labor rela-
tions and demographic development of the northern regions of Russia; the levels of responsibility are
defned (state - region - corporation); recommendations to the Federal Assembly of the Russian Federa-
tion and the Government of the Russian Federation according to the solution of demographic and labor
problems are provided.
Keywords: North of Russia, state policy, population, demographic development, living standards, guar-
antees and compensation.
1. INTRODUCTION
Obviously, there is no uniform solutions of development of the Russian North. Mean-
while, the strategy of development of the northern regions of Russia is necessary. Tat
question prompted by serious, largely mutually exclusive bases: the value of the natural
and resource potential of the North to Russia’s economic security; the need to preserve
traditional nature as one of the most important conditions for maintaining the ethnic
group of northern people; difcult situation in the economy of the North, where possi-
bilities of transition to the market relations in the conventional model less, than in other
regions of Russia.
In order that the economy of northern regions of Russia gained stability it is necessary to
overcome disproportions in development of extracting and processing branches, to re-
duce the share of resources in structure of commodity production while increasing its
physical volumes, and also to promote the equally efective development of small, medium
and large businesses.
For many years, the problem of developing the North viewed only from an economic
point of view, but there is also one more important aspect - the people. At the same time
25
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
the active exploration of natural resource potential of northern territories led to anthropo-
genic pollution of the environment and the negative impact on the socio-cultural develop-
ment of the indigenous peoples of the North.
Nowadays it is necessary to develop a strategy. Primarily due to the fact that there is the
increasing diferentiation in the socio-economic development of regions. Te Ministry of
economic development and trade pushed the concept of reducing diferences in socio-
economic development of the regions in Russian Federation, called «equalization policy».
Tere is a «Fund of fnancial support of regions», «Fund of regional development», «Fund
of reforming the regional fnance» which gave and give help in development of regional
economy. It was supposed that more developed regions will help to develop to less devel-
oped regions and disproportions in development will be reduced. But this did not happen.
As less developed regions didn’t want to be tightened under the average level (if they are
tightened, any more to them won’t help), and more developed regions didn’t want to help
less developed regions and to develop in parallel. Te policy showed the inefciency [1].
Secondly, in our opinion, if to leave everything as it is going now, the natural course of
existing processes will lead to realization to selective development of northern regions,
regarding the production focused, frst of all, on optimization, processing and export of
raw material resources.
Terefore there is an urgent need for working out the strategy of development of northern
regions of Russia. It could determine their development, not only as sources of raw ma-
terials, but also as areas of intensively developing through the efective use of all available
resources.
2. COORDINATION OF THE INTERESTS OF ALL MANAGEMENT
LEVELS IN THE NORTHERN TERRITORIES
In this situation the problem of coordination of all management levels (states, regions,
corporations, local communities, etc.) is of particular importance. Te program docu-
ment focused on the creation of conditions for stable social and economic development
of northern regions?; on increasing the gross domestic product and a standard of living
of the population on elimination of disproportions in social and economic development
of regions belonging to the Russian North; on realization the unique geostrategic capacity
of northern regions.
For achievement this specifed purposes of social and economic revival of northern re-
gions, fxing their sustainable development, the uniform strategy of development consid-
ering features of each territory also is necessary. Realization of Strategy of development in
all Russian North will allow using:
- the principle of synergetic efciency – inefcient from the economic point of view
the separate regional projects having a strategic importance for municipality, have
to be confgured among themselves so that to provide the essential growth of the
local economic efciency;
- the principle of realism which gives the exact time frame of individual projects, the
calculation of the available resources and the participation of all stakeholders;
- the principle of synchronization of projects – coordination of rate of implementa-
tion of each project in a context of other projects and design plans from the point of
view of short, average and long-term goals and complementarity;
26
DIRECTIONS OF THE STATE POLICY ACCORDING ... Fauzer V., Fauzer G.
- the principle of a trans boundary – limits of compound projects don’t become iso-
lated administrative borders of territories.
Defnition of the strategy purposes is possible with primary orientation to the decision
global, and already through it local tasks.
Searching the solution to problems of preservation and development of the North has
the state value. Terefore during working on strategy the important role has to be giv-
en to measures of the state infuence. Afer the transition to market transformations the
approach which avoids any state involvement, even in those types of economic activity
which are subsidized around the world is prevailed. It is necessary to analyze the state sup-
port measures, to defne the priority directions of development and specifc mechanisms
for their implementation. Tere is no uniform decision, but there are a recognized need to
use available competitive advantages of each particular area [2].
Force of a federal state is based on force of its regions. On the basis of such approach it is
necessary to consider a question of features of the modern “northern” policy representing
an important component of the regional policy of Russian. On the basis of such approach
it is necessary to consider a question of features of modern «northern» policy which rep-
resents important part of regional policy of the Russian state.
Te efective regional policy should include several elements: an understanding of the
specifcs of the region, working out the reasonable measures and decisions for the devel-
opment of the region taking into account its specifcs and consecutive implementation of
these decisions in practical life.
It became obvious that the continuation of policy of the 1990-2000th doesn’t provide a
sustainable socio-economic development of the northern regions, but also conducts to
their degradation. Te representatives of the northern regions of Russia had been saying
about this problem for a long time. In order that steady positive dynamics of the North
development was outlined, the relation to northern regions has to be changed in principle.
In such country as Russia where the North occupies more than two thirds of the territory
of the country, should be formed specifc state «northern» policy [3]. At the basis of such
policy the following principles and mechanisms have to be used:
- increasing the role of the state in combination with market mechanisms in regulat-
ing the economy and social sphere of the northern regions;
- creation of a common economic space with the mandatory-specifc areas with spe-
cial conditions of managing;
- a comprehensive socio-economic development of the northern territories, includ-
ing new areas of natural resource development; support operating and creation of
the new industrial complexes (clusters) ;
- state protectionism directed not on creation privileges and preferences for the pop-
ulation and branches of economy of the North, but on the mode of development
taking into account ensuring the state needs and the social sphere;
- accelerating the introduction of science and new technologies, ensuring rapid
growth in production while reducing process cycle time and the required volume
of importation and storage of fuel, raw materials and other resources;
- the formation of intergovernmental relations, tax policy and customs positions
with equal economic conditions for economic activities and livelihoods;
- the comparison of economic growth opportunities with efective management in
special climatic, ecological and geographical conditions;
27
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
- maintenance of natural resource and capacity , taking into account the need to meet
the needs of future generations;
- maintenance of transport systems serving major trafc fows in the North, includ-
ing the perspectives of development of the continental shelf of the Russian Federa-
tion and the Northern Sea Route ;
- formation of budgetary provision and sufciency of the northern territories to meet
the increasing cost of reproduction of labor resources and ensuring life;
- optimization of the population based on market principles of management, facili-
tating the resettlement of disabled and disadvantaged citizens;
- creating conditions for a traditional way of life and economic activities of indig-
enous peoples;
- providing a diferentiated approach to each of the northern territory on the basis of
climatic conditions, transport provision and the level of socio -economic development.
Tis policy will allow turning the North into dynamically developing region with steady
economy and a stable economy and social progress, securely providing Russia’s demand
for natural resources in the long term.
Does not require proof the fact that the work of people in the North is necessary today. It
will be necessary in foreseeable prospect, until there are no real alternative fuel and en-
ergy resources. But the North - it’s not just a «natural larder». Northern territories have a
strategic importance for Russia, frst of all, in safety and defense capability of the country.
Te solution of demographic and labor problems requires a comprehensive approach, an
active federal and regional socio-demographic directed on all components of preservation
and increase in population – the birth rate growth, decrease in incidence and mortality,
attraction and fxing of a manpower in regions of the North.
Practice shows that there are still very weak motivational mechanisms to attract and retain
qualifed personnel in the North, especially the youth, necessary for the region develop-
ment. Te system of attraction and manpower training for the development of the North,
existing to the beginning of the 1990s,was destroyed, but the new system, assuming suf-
fcient economic incentives, was not created.
Te existing system of guarantees and compensations require major adjustment that
would make life and work in the North attractive and a labor cost – justifed from the
point of view of compensation of material and moral losses of the person caused by ex-
treme climatic conditions of this region.
For most people, especially for young people, the main incentives that are crucial when
choosing a place of residence, are the presence of interesting and well-paid jobs, career
opportunities, create normal living conditions, access to education, health, cultural and
sporting institutions respective territory. Terefore, the solution of demographic prob-
lems of the northern regions of Russia is impossible without comprehensive moderniza-
tion of social infrastructure [4].
3. THE MAIN DIRECTIONS FOR THE SOLUTION OF
DEMOGRAPHIC AND LABOR PROBLEMS
Te main directions for the solution of demographic and labor problems of northern
regions were identifed in recommendations at parliamentary hearings in the Federa-
tion Council of Federal Assembly of Russia: «Problems of legislative demographic en-
28
DIRECTIONS OF THE STATE POLICY ACCORDING ... Fauzer V., Fauzer G.
sure implementation of state policy in the Far North and the districts equated to them”
on November 30, 2011. All recommendations had address character on imperious levels
management [5]. Let’s denote the main recommendations made by the participants of the
parliamentary hearings.
1. To recommend to the Federal Assembly of Russia and Government of the Russian
Federation to:
1) develop and adopt the acts directed on activation of demographic policy of the
state in northern regions of Russia, having provided additional measures for birth
rate stimulation, reduction of mortality of the population, optimization of migra-
tory processes;
2) accelerate the development and adoption of federal laws in the Russian North and
the Arctic zone of the Russian Federation;
3) make changes and additions to the Labour code of the Russian Federation and
to the Law of the Russian Federation «About the state guarantees and compen-
sations for the persons working and living in the region of the Far North and
equated to them districts», establishing:
- a system of the minimum standards of conditions of work and standard of living
of the citizens working and living in the region of the Far North and equated
to them districts;
- the minimum guarantees and compensations for the persons working in the
organizations, not relating to the budgetary sphere, having determined their
size not below guarantees and compensations of the persons working in the
organizations, fnanced of the federal budget;
- the specifed concept of the minimum wage, having excluded from it compensa-
tion and stimulating payments (regional coefcients, percentage extra charges
and so forth) and having defned that the sizes of tarif rates, salaries, basic
salaries can’t be lower than a minimum wage;
- the right of persons is younger than 30 years working in the region of the Far
North and equated to them districts, on receiving a percentage extra charge to
a salary in full from frst year of work if they lived before work in these areas
not less than 5 years;
- the reduced 36-hour working week for the women working in the region of the
Far North and equated to them districts, without instruction on need of inclu-
sion of this norm in the collective agreement or the individual employment
contract;
- the account in seniority the period of baby-minding until the child reaches the
age of three years and training time in higher education institution
- uniform order, the size and conditions of granting a compensation for expenses
on journey to a place of use of holiday and back for all persons working in the
region of the Far North and equated to them districts and members of their
families;
- right for compensation from the federal budget for travel expenses and baggage:
wards children to the place of vacation; unemployed disabled children who are
the recipients of social pensions; children in need of spa treatment and living in
families whose average income is less than the subsistence minimum;
29
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
- payments from the federal budget for travel expenses and baggage to unem-
ployed pensioners of disabled age irrespective of a type of received pension,
leaving for permanent residence outside of the Far North and the districts
equated to them;
- the right for free travel once a year to the place of permanent residence and
back to undergraduate and graduate students living in the Far North and the
districts equated to them;
- free medicament from the federal budget for preschool children (under 6 years)
, children from large families, single-parent and low-income families;
- restore and consolidate the federal legislation sanctions of employers in the
private sphere for providing northern guarantees and compensations to their
employes;
- increase the size of the family capital for the persons living in the region of the
Far North and the districts equated to them;
- establish that the monthly payments to veterans and disabled people living in
the Far North and the districts equated to the mare paid based on regional
coefcient;
- transfer the spending authority for the organization of emergency medical care
with the use of aviation in the Far North and the districts equated to them to
the federal level;
- provide in the legislation governing the provision of educational services, the
possibility of establishing educational institutions in the form of nomadic edu-
cational school and nomadic kindergarten.
2. To recommend to the Government of the Russian Federation to instruct relevant min-
istries and departments of the Russian Federation to:
1) develop proposals for adjustment of economic and demographic policy, aimed
at improving the quality of life in the Far North and districts equated to them,
including systems of protection of a family providing creation, motherhood and
the childhood, priority medical examination and improvement of women and
children, increase in duration of a maternity leave, increasing the responsibility
of employers for workers’ health;
2) develop strict criteria for the health of people attracted to work and residence
(constant or temporary) in the Far North and districts equated to them;
3) enter obligatory medical examinations at the expense of employers of the persons
attracted for work (constant or temporary) in the Far North and districts equated
to them, and accompanying members of their families;
4) identify and establish the form and order additional compulsory health insurance
of persons involved to work (constant or temporary) in the Far North and equiva-
lent areas , and accompanying members of their families ;
5) provide conditions for efective treatment of regional pathology in northern ar-
eas, having provided retraining and professional development of primary care
physicians in the prevention, diagnostics, treatments and rehabilitations of pa-
tients with regional pathology;
6) include the category of children of the indigenous peoples of the North in the list
of persons subject to an annual medical examination at the expense of the federal
budget;
30
DIRECTIONS OF THE STATE POLICY ACCORDING ... Fauzer V., Fauzer G.
7) take the measures providing target contract training specialists with higher and
secondary professional medical education to work in the Far North and districts
equated to them with obligatory working of by graduates not less than fve years
on distribution;
8) amend the health rules, regulations, and requirements for educational institu-
tions, tailored nomadic educational institutions;
9) extend the practice of payment of the cost of airline tickets, river trafc on the citi-
zens residing in the remote areas of the Far North and districts equated to them;
10) develop a mortgage and other types of housing loans to citizens attracted to
work in the Far North and districts equated to them, with lower fees for the credit
and the possibility of its consecutive decline with increasing length of service in
the northern regions.
3. To recommend to state authorities of subjects of the Russian Federation which are in
whole or in part carried to northern regions to:
1) allocate an independent branch of measures in the regional programs of socio-
economic development to improve the demographic situation;
2) provide measures to promote and strengthen the institutions of social services for
families and children;
3) provide granting guarantees and compensations to the persons receiving them
from the budgets of subjects of the Russian Federation and local budgets, in an
amount not lower than from the federal budget;
4) provide special standards and volumes of rendering medical care to citizens in
remote and inaccessible areas;
5) develop legal and economic mechanisms to encourage businesses and potential
investors to participate in the socio-economic development of the territories;
6) provide methodological support of the local authorities to manage demographic
and labor processes.
4. CONCLUSION
We emphasize once again that for the solution of economic and geopolitical problems of
the Russian Federation it is necessary to approach more closely to the solution of demo-
graphic and labor problems of northern regions. It makes a life of northerners comfort-
able and safe. For the successful decision of the mentioned problems it’s necessary to re-
quire a special authority to manage the North of Russia. Tere is a hope that this problem
will be solved soon.
* Te article was supported by the Russian Foundation for Humanities within the re-
search project «Coordination of the interests of the state, regional, and corporate man-
agement to form and use the labor potential of the northern territories» (2012-2014,
project ? 12-03-00287)
31
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
BIBLIOGRAPHY:
[1] Edited by Okrepilov, V.: Strategic priorities of regional development: from the theory
to the principles of formation of uniform social and economic space. Saint Petersburg:
Science, (2009), pp. 448. ISBN 978-5-02025-368-1.
[2] Basargin V.F. & Loginov S.V.: Relevance of the development strategy of regions of
the Russian North, Proceedings of the All-Russian scientifc conference «Strategy of
development of northern regions of Russia», Arkhangelsk: Arkhangelsk Branch of the
Institute of Economics, Ural Branch of RAS, Arkhangelsk, Russia, (2003).
[3] Oleynik G.: What a «northern» policy does Russia need? Federal relations and
regional economic and social policie, (2007), ? 4, ISSN 1561-7017.
[4] Federation Council Committee for the North and the small people. Available on Wed
site:http://www.severcom.ru/actions/ section4/.
[5] Federation Council Committee for the North and the small people. Available on Wed
site:http://www.severcom.ru/actions/section4/.
32
CHALLENGES OF HUMAN ... Dragi? M., Kastratovi? E., ?ilerdži? V., Mileti? L.
CHALLENGES OF HUMAN RESOURCES MANAGEMENT
AT GLOBAL LEVEL
Dragi? Milan
1
, Kastratovi? Edita
2
, ?ilerdži? Vesna
3
, Mileti? Lidija
4
1
Faculty of Business Economics and Entrepreneurship, Belgrade, SERBIA,
e-mail: [email protected]
2
Faculty of Business Economics and Entrepreneurship, Belgrade, SERBIA,
e-mail: [email protected]
3
Faculty of Business Economics and Entrepreneurship, Belgrade, SERBIA
4
College of Entrepreneurship, Belgrade, SERBIA
Abstract: In this paper we present the signifcance of human resources, as well as the challenges that
managers face in respect of human resources management at the global level. We present the specifc
conditions of doing business at the global level and according to that we present the application of the
adequate strategic decisions with the goal of adapting to those conditions. We also consider the signif-
cance of educational approach in respect of human resources at the global level and the application of
modern technological achievement, with the goal of education and doing business in general at the level
of an organization and wider.
Keywords: human resources, globalization, management.
1. INTRODUCTION
Human resources represent a signifcant factor in competition of organizations at the
global market. Te potential of employees can be seen in their qualifcations and compe-
tence, abilities of team work, communication skills, creativity and loyalty to organization.
Globalization is inevitable considering the economic parameters which present the con-
dition for success. Decisions of organizations to open new organizational units in other
countries, even on other continents, represent the rational decision in respect of decreas-
ing of basic business expenses. Companies that build the production facilities in low-cost
countries have competitive advantage in relation to the companies that have production
facilities in countries where the expenses are higher. Te greatest competitive advantage
belongs to the companies that do business in countries with low incomes such as China,
India, Pakistan, Cambodia, Vietnam, Mexico, Brazil, Guatemala, Philippines and a few
African states
1
.
Considering that the competitiveness is based upon quality, price, diversity, organizations
have the imperative of having the best experts who will fulfll these conditions. Today the
business systems are faced with exponential growth of knowledge, progressive worsening
1
Tompson A. Arthur et all. Strategic management (Zagreb: Mate, 2008), 176
33
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
of the existing knowledge and fast innovation cycles, caused by the competition. In this
way the managers and employees are forced to continually upgrade their knowledge and
skills. Knowledge is the essential resource in turbulent circumstances of today and it also
has a strategic role in efcient management of modern business systems
2
.
Human resources managers are faced with the challenge in respect of defning the real
need for the staf, their hiring, implementation into work environment, care of their needs
and rights etc. Te greatest challenge of all mentioned is hiring the adequate experts, who
will enable for the organization to be recognizable and successful in its feld. Te possibil-
ity of fnding the employees for the business units at local and state level is not such a big
problem, but it is a problem when an organization needs to fnd the employees for their
units in other countries and continents. Tere are many obstacles in such circumstances:
cultural, linguistic, political, social, ethical etc. Overcoming of these potential obstacles
represents a true test of skills for human resources managers.
2. THEORETICAL FRAMEWORK
Human resources
Human resources management has sufered signifcant changes during time. By the
change in business circumstances, the methods applied in human resources management
have also changed. In the conditions of global business, human resources management
has a completely diferent approached to solving the current issues that organizations face.
In such circumstances it is necessary to give a fast reply to the constant changes that are
present at global level. Organizations that have appropriate staf capable to see and analyze
specifc changes at global level and suggest an adequate adaptation of organization’s busi-
ness, are considered to be successful organizations.
Te most signifcant novelty in modern environment the human resources managers are
faced with is concerned with the appropriate relation with the growing competition. Te
greatest challenge is the balance between the need for lowering the prices on one hand,
which provoke the reduction in production expenses and keeping the optimal number of
employees, in such circumstances, on the other hand
3
.
Human resources managers are faced with challenges set up by diferent markets where
the organization is present. Every state has its own cultural, legal, political and business
code diferent from others. Certain procedures and actions can be done in defned matrix,
in the same structural respect, in all the countries in which that organization does busi-
ness. However there are certain procedures that have to be adapted to specifc conditions
of some countries in which they are done. Tis is where the managers should show their
creativity and adaptability, in respect of defning the specifc plans as well as conducting
those specifc procedures. Te strategies that organizations apply while competing at for-
eign markets have to be adjusted to the situation.
For human resources management in global companies the best solution is the standardi-
zation of procedures, which facilitates the mobility of employees from one country to an-
other , as well as completely using the best experiences and best practice in that segment.
Problems that can appear in the respect of standardization of procedures refer to various
2
Draškovi? Milan et al. “Intellectual capital – a competitive advantage of modern business
systems” International journal of economics and law, Vol. 2, No. 4 (2012): 27
3
Torrington Derek et all., Human resources management, (Belgrade: Data status, 2004), 19
34
CHALLENGES OF HUMAN ... Dragi? M., Kastratovi? E., ?ilerdži? V., Mileti? L.
tax rates between countries, diferent trainings and qualifcation system. Besides this the
laws on employment are also diferent, which provokes the need to adjust, and in certain
situations to completely change certain procedures within HRM. In some states the col-
lective contracts are binding, while in other states they are a matter of conscience of an
organization and their managers
4
.
Expanding of the activities of an organization outside the domestic borders represents the
possibility for expanding the knowledge as well as professional capacities. Te transfer
of expertise, skills and means from one country to another contributes to expansion and
deepening of expertise and skills, which has a consequence of long-term gain in respect
of human resources. Te examples of successful transfer of expertise and knowledge at
the global level are organizations such as Whirlpool and Wal-Mart. World manufacturer
of home appliances Whirlpool, with 14 production facilities and sales network that com-
prises 170 countries, uses Internet to create global platform of information technologies
which enables the company to transfer key innovation from one region to another in a fast
and efcient way. Te example of successful transfer can be seen in Wal-Mart company,
which slowly but strongly expands its operations by using the strategy which is based
upon transfer of signifcant domestic professional knowledge from distribution and dis-
count retail into its other divisions in other countries
5
.
Organizations have to set a balance between global and local human resources manage-
ment. Ofen, in the area of human resources management, international strategy is applied
with small applications of global philosophy of human resources. However, the applica-
tion at the local level has to be diferent
6
.
European Union has certain standardization; however the diferences in certain countries
are obvious. Minimum number of non-work days which are obligatory by law goes from
zero in Great Britain to fve weeks a year in Luxemburg. In Italy there is no obligation for
employees to have their representatives on the Management Board, while in Denmark it
is obligatory for companies that have more than 30 employees; they have to have their
representative in the Management Board
7
.
In the research conducted in eight large companies, researchers asked higher managers for
international HRM, which are the key global challenges in human resources management
that they face, that is, which their company will face in the future. Tey got three answers
that explain main challenges:
Allocation – Te ability to use the right skills without any problems, where they are neces-
sary, regardless of geographical location.
Expanding of knowledge and innovation – Expanding of top knowledge and practice
through entire organization, regardless of the origin.
Discovering and developing the talent at the global scale – Discovering the staf that can
successfully work in an organization and developing their skills
8
.
One of the signifcant goals of human resources managers is education and informing
the employees, in order for employees to use the accessible information to upgrade their
performance. Regardless weather the performance is in respect of the higher performance
4
Torrington Derek et all., Human resources management, 17
5
Tompson A. Arthur et all. Strategic management (Zagreb: Mate, 2008), 187
6
Markovi? Aca, Markovi? Ljiljana “New trends in human resources management” International
journal of economics and law, Vol. 1, No. 1 (2011): 71
7
Dessler Gary, Basics of human resources management, (Belgrade: Data status, 2007), 347
8
Dessler Gary, Basics of human resources management, (Belgrade: Data status, 2007), 346-347
35
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
(quantitatively) or in respect of quality of the work done (qualitative performance), being
informed would contribute to positive efect.
Managers of global organization faced the problem of informing and training their em-
ployees in various countries and at diferent continents. Development of information
technologies enabled the free fow of realization of their ideas and programs, and also
the higher performance of employees. One of the successful examples of facing the chal-
lenges of the global human resources management is the example of international group
National Australia Bank Limited (NAB), which thanks to Brett Ellison, manager of global
e-business of NAB, managed to connect 18000 employees in its divisions worldwide. Be-
cause of Ellison’s suggestion NAB invested $11 million in a portal, which supported vari-
ous activities of human resources management by various applications
9
.
Organizations, which have potential in respect of innovation and knowledge expansion,
represent leaders who are taking over the strategy of researches. Tey direct their energy
towards fnding and choosing creative experts, who can realize their talent at the highest
possible level. Organizations give a signifcant fnancial support needed to gather the most
modern tools, which will help the creative individuals to invent a product/service based
upon which the organization will stand out in the market “game”.
Tis strategy is applied by the organizations that keep introducing innovations in their
area of business. Tey realize this because of capable staf to recognize the specifcity of
certain situations and trends which the organization is currently in, and based on those
assessments apply the adequate strategy. Competitiveness can be seen in the ability of the
researcher to keep innovating, developing and testing new products. Organization, which
is able to develop new products, which are sought for and for which the consumers are
ready to pay, has success guaranteed. Te examples of the companies that conduct the
strategy of researchers are Fox Broadcasting Network and MTV
10
.
3. CONCLUSION
Human resource management at the global level represents a difcult situation but also
a challenge. Te signifcance of overcoming that challenge is obvious if we take into con-
sideration the fact that competitiveness, and the success of an organization, depend on
the staf’s quality on a large scale. Tis fact imposes the signifcance of the procedure of
gathering the staf itself and taking care of their needs in everyday business. Investing in
staf represents investing in competitiveness. Only the quality staf, that possesses an ad-
equate interdisciplinary knowledge, can bring an advantage to the organization in a highly
demanding global market. Other developing countries can give a signifcant contribution
in respect of educated quality employees. Based upon the long-term investments the states
could make certain cooperation with the economic entities which have the intention to do
long-term business in those states. Tey could sync the market need for specifc staf with
the quotas for enrollment at education institutions. Tis could be of beneft to the country
as well as the society and international organizations (companies) whose business units
are in that country. Te country would partly solve the problem of extra staf in certain
professions and organizations would get quality staf motivated to get educated consider-
ing the potential of employees in the future.
9
Robbins P. Stephen, Coulter Mary, Management, (Belgrade: Želnid, 2000), 281
10
Coulter Mary, Strategic management at work, (Belgrade: Data status, 2010): 207
36
CHALLENGES OF HUMAN ... Dragi? M., Kastratovi? E., ?ilerdži? V., Mileti? L.
BIBLIOGRAPHY:
[1] Brnjas, Z., Strategic management, Belgrade: Grme?, (2000).
[2] Coulter, M., Strategic management at work, Belgrade, Data Status, (2010).
[3] Draker, P. F.: Management in new society. Adizes, Novi Sad, (2005).
[4] raškovi?, M.: Intellectual capital – a competitive advantage of modern business
systems. International Journal of economics and law, Vol. 2, No. 4 (2012), pp. 26-34.
[5] Jovanovi?, P.: Strategic management, Belgrade: College of Project Management,
(2007).
[6] Kastratovi?, E.: Management in modern sport, Belgrade: Faculty of Management in
Sport, (2008).
[7] Maksvel, K. Dž.: How to become a true leader, Belgrade: Algoritam, (2005).
[8] Markovi?, A., Markovi?, L.: New trends in human resources management,
International journal of economics and law, Vol. 1, No. 1 (2011), pp. 70-77.
[9] Robbins, P. & Stephen, Coulter Mary, Management, Belgrade: Data status, (2005).
[10] Stoner, Dž. A. F.: Management, Belgrade: Želnid, (2000).
[11] Torrington, D., Hall L., &Taylor S.: Human resources management, Belgrade: Data
Status, (2004).
[12] Tompson, A. Arthur. Jr., Strickland A. J. & Gamble E. J.,: Strategic management,
Zagreb: Mate, (2008).
[13] Whren, D. & Voich, D.: Management: Process, structure and behavior, Belgrade:
Grme?- Privredni pregled, (2001).
37
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
TRENDS AND OPPORTUNITIES OF ECO-TOURISM
WITH AN EMPHASIS ON RURAL TOURISM IN SERBIA
Gajdobranski Aleksandra
Faculty of Management, Sremski Karlovci, SERBIA,
e-mail: [email protected]
Abstract: Te main purpose of this paper is to review the main trends and opportunities for develop-
ment of ecotourism in Serbia using the available primary and secondary data. Representing space in
which traditions and pride of medieval rural Serbia are woven in, the values of the idyllic landscapes of
untouched nature are highlighted.
Our country is committed to ofer innovative programs within rural tourism on the European market.
In this regard, we point out that the strategy of tourism development in Serbia established a selective
approach, where the rural tourism stands out as a priority in forms of tourism that are tied to special
interests. Tis is particularly emphasized development of ecotourism villages in mountainous areas, the
water that ofer a healthy environment, organic food, pleasant atmosphere, quiet holiday in the coun-
tryside, ethnographic and other cultural and historical values.
It is expected that tourist visits in Serbia will be experiencing a gradual expansion, calculated on the
representation of all age groups of tourists, various forms of tourism trends with rich marketing facili-
ties in rural tourism. Serbia is ready to ofer a new kind of tourist services - life in the country with the
use of existing facilities for independent living of families with two or three members, with activities
around the small, rural household.
Keywords: ecotourism, rural tourism, market trends, opportunities, strategies
1. INTERESTS AND TRENDS IN THE FIELD OF RURAL TOURISM
Tourism related to the special interests include several aspects of tourism for which there
is a corresponding demand showing steady growth, with an expected tendency of even
faster growth in the future. Tis includes interest in the culture, archeology, art, architec-
ture, sport, music, hobbies, hunting and fshing, sojourns in the village and other inter-
ests. Tis group of diferent interests is especially important in Serbia with those forms of
tourism in which to some extent already a tourism product is established. One of these
forms is precisely ecotourism, which is closely related to rural tourism. In developing, for
the time being, small but high-quality nucleus of rural tourism it is necessary to build up
environmental elements (development of eco-villages with diferent forms of common
life, such as healthy food, walking, etc.).
Of the many defnitions of the various authors, the most commonly used is the one that
defnes ecotourism “as a natural based form of tourism which is the main motivation for
watching and enjoying tourist in nature, as well as the traditional cultures prevailing in
natural areas” (International Year of Ecotourism, 2002).
38
TRENDS AND OPPORTUNITIES OF ECO-TOURISM WITH ... Gajdobranski A.
Market trends in the world are moving in favor of rural tourism, which is confrmed by
the estimates of the World Tourism Organization (WTO). Demand in the last 15 years
shows a clear growth, where the highest rate of annual increase of about 25% have been
observed in some of the countries of Southern and Eastern Europe. Based on research
within rural tourism within Europe, there are about 200,000 known service providers,
2,000,000 beds and 500,000 directly and indirectly employed in the sector, with an annual
consumption of about 65 billion Euros (http://ec.europa.eu/enterprise/sectors/tourism).
In our region, according to WTO data, Slovenia has the most developed rural tourism.
Te World Tourism Organization recommends Serbia to develop rural tourism, since it
has many resources for the development of this form of ecotourism. Te strategy for de-
velopment of tourism in Serbia provides signifcant activity in this type of tourism and
gives the priority importance to it. Rural tourism in Serbia contributes to the conserva-
tion of the rural environment and cultural heritage, but also economically motivates local
people to stay in rural areas. Tis type of tourism could signifcantly contribute to the pro-
tection of nature, but also provide the means for survival and development of the village.
Te development of tourism in the villages of Serbia, as an organized activity began over a
quarter of a century. Te early development of rural tourism is linked to the spontaneous
movement of tourists who wanted to briefy escape from the city, environmentally degrad-
ed environment and to spend some time in nature. At the beginning, this type of tourism
dealt only with individual households. Over time, fueled by tourism companies, tourism
in the country received a mass character. In order to develop tourism in the countryside,
tourism companies appear, mainly in the mountainous villages (Devi?i, Brankovina, Stu-
denica), tourism associations of municipalities (Kosjeri?, Ivanjica, Kni?), and agricultural
cooperatives and hospitality and tourism industry joined to this activity.
Te economic importance that Serbia may have on the development of rural tourism is
huge. For example, if we start from the simple premise that a rural household has only two
rooms with two beds and issues them to foreigners only 200 days per year at the price of 20
Euro for full board, we get a fgure of 16,000 Euros per year. In Serbia, half the population
lives in villages, i.e. so it is the place where it is possible to fnd millions of households. If
only 10% of these households decide to be engaged in rural tourism, it would generate 1.6
billion Euros just from the sojourns and food. If we add the revenue from transportation,
tours, hotel spending, duty customs, etc. more than three billion Euros per year is to be
expected, initially. Satisfed tourist spends over 100 Euros per day (www.cenort.org.yu).
In order to realize this, it is essential that many industries maximize its engagement. Let
us mention only the construction industry, building materials, industrial equipment, food
industry, transport, etc.
According to information from the archives of the tourist association, in the late eight-
ies of the last century, 50 villages with approximately 3,000 beds in 800 households were
engaged in rural tourism. Today, it is estimated that approximately 250 households has
approximately 1800 beds. Te Table 1 shows the ofcial statistics in relation to the num-
ber of tourists in western Serbia, in period 1999 – 2012: According to ofcial statistics,
in period 1999 – 2012 about 300,000 tourists visited western Serbia per year. Te largest
number of tourists was recorded in 2012 (370,924) and the smallest number of tourist was
recorded in 1999, (237,419) due to the political situation in the country and the period of
NATO bombing of Serbia. Growth of the number of tourists afer in 1999 has slow growth
rate low because ecotourism as an economic sector is the most sensitive to changes in
39
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
the political and economic nature. It is important to point out that, regardless of the state
trend, the number of tourist arrivals from year to year rises, i.e. has an upward trend. Te
rural tourism as a special tourism industry is getting more and more important, (www.
dokuments%20and%20settings/korisnik/Desktop/Teksovi%20za%20projekat/Seoski%20
turizam.htm).
Table 1: Te number of tourists in western Serbia, in period 1999 - 2012
(Source: www.stat.serb.sr.gov.yu)
Year
Te number of tourists Number of spent nights BDP
Total Domestic Foreign Total Domestic Foreign Domestic Foreign
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
237.419
328.663
311.378
300.936
288.213
313.138
308.494
288.213
347.997
363.444
318.118
332.650
345.248
370.924
226.441
310.785
294.559
284.122
270.737
292.683
285.167
270.737
313.260
324.563
279.700
287.733
300.062
316.827
10.978
17.878
16.819
16.814
17.476
20.455
23.327
17.476
34.737
38.881
38.418
44.917
72.262
54.097
1.291.621
1.775.092
1.607.553
1.472.350
1.363.773
1.337.820
1.303.884
1.363.773
1.432.774
1.442.961
1.294.672
1.257.546
1.350.141
1.530.211
1.226.012
1.707.702
1.541.281
1.413.215
1.289.809
1.262.565
1.230.995
1.289.809
1.323.578
1.325.429
1.185.114
1.130.834
1.200.459
1.360.218
65.609
67.390
66.272
59.135
73.964
75.255
72.889
73.964
109.166
117.532
109.558
126.712
275.682
169.993
5,41
5,49
5,23
4,97
4,76
4,31
4,39
4,76
4,23
4,08
4,24
3,93
12,6
12,9
5,98
3,77
3,94
3,52
4,23
3,68
3,12
4,23
3,24
3,02
2,85
2,82
6,2
5,4
Based on the data of the Tourist Organization of Serbia, hosts in Kosjeric, Valjevo Ljig,
?a?ak, Požega Kni?, Lu?ani, Mionica, Uzice, Sokobanja, ?ajetina, Prijepolje, Brus, Šabac,
Kraljevo, Ivanjica, Ra?a kragujeva?ka and Gornji Milanovac deal with organized tourism
(SBS, Municipalities in the Republic of Serbia 1999-2012, Belgrade). Based on the survey,
it was concluded that the majority of tourists who visit the villages of these municipalities
are older age people, belong to the age group of 46 to 60 years (32 %) and the age group
over 60 years (46%). A signifcantly smaller number of tourists belong to the age group
of 31 to 45 years (15%), while children under 15 years accounted for only 7% of the total
number of tourists. Of all the surveyed tourists, half of them are highly educated, while
about 43% of tourists have secondary education. Most of the surveyed tourists are domes-
tic tourists (86%) and comes from Subotica, Kikinda, Belgrade, Novi Sad, and Pancevo.
Te remaining 14% are foreign tourists, and they come from Skoplje. However, from dis-
cussions with the hosts, it can be concluded that visitors of Kosjeric are tourists from
many European countries, such as France, UK, Netherlands, Belgium, Germany and other
European countries. Te majority of tourists (90%) were very satisfed with their sojourn
in the village and the rooms were rated with 5 on a scale of 1 to 5. Te remaining 10% of
the tourists stays were rated between 4 and 5. Based on this, it can be concluded that tour-
ists are very happy with everything that villages are ofering, and that rural tourism is the
future of these municipalities, regardless of minor and major fuctuations.
As for tourist valorization of rural spaces or areas in western Serbia, their condition was
assessed with medium grade (2.72 to 3.88), while micro-location status and the availabil-
ity were poorly rated. Tese environments, in addition to cultural, historical and artistic
value, do not have adequate ecotourism facilities, which reduce the value of tourism and
limiting them to regional importance, as can be seen in the following table:
40
TRENDS AND OPPORTUNITIES OF ECO-TOURISM WITH ... Gajdobranski A.
Table 2: Tourist valorization of rural spaces or areas in western Serbia
(Source: Ivanovic, M. (2009))
Entirety Place
Te elements of touristic valorization Average
Micro
location
and the
availability
Touristic
value of
the envi-
ronment
Cul-
tural and
historical
value
Artistic
value
Touristic
equipment
Touristic
richness
General
touristic
value
Zaseok
Bebi?a
Valjevo 3.66 4.66 3.66 4.66 2.00 4.66 3.88
Selo
Štitkovo
Nova Varoš 3.00 3.33 3.66 3.33 1.33 2.66 2.89
Ti?ije Polje Prijepolje 1.33 3.66 4.66 2.66 3.00 2.66 3.00
Centar sela Godovik 2.33 3.00 4.00 3.00 1.66 2.33 2.72
Stara
?aršija
Bajina
Bašta
3.33 3.00 3.33 3.66 1.66 3.00 3.00
GENERAL TOURISTIC VALUE OF RURAL AMBIENTAL ENTIRETIES 3.10
2. OPPORTUNITIES FOR FURTHER DEVELOPMENT OF RURAL
TOURISM
An important advantage of the development of rural tourism in Serbia is refected in the
achievement of household income with minimal investment. Households, in addition to
agriculture, as the main activity in tourism sell their products at the most competitive re-
tail prices, because the tourists come for the goods themselves. Bearing in mind this fact,
the rural tourism should become one of the development generators of Serbia and the
growth of overall economic activity. Te prospect of Serbia is in agriculture and tourism.
Tese two industries have to be closely related because both rely on each other and their
common ground - the village. Prospects for agriculture and rural tourism are great. Te
world is increasingly demand high quality food, especially those produced in a healthy
way. While food can be exported, tired man must come to our villages to be well rested.
As estimated by the Observer, this year Serbia was ranked among the 20 of the most at-
tractive destinations in the world (14th place) and that is the best way of talking about our
perspective.
Te Strategy of Tourism (2005-2015) was adopted in the Republic of Serbia, and points
out to the possibility of the development of tourism in Serbia with focus on rural tour-
ism in relation to trends in world tourism, with tourist strategic positioning, selection of
priority of Serbian tourism products and the competitiveness plan, investment strategy,
necessary investment plans and marketing plan. Te expected results of the implementa-
tion of the strategy are achieving increasing the competitiveness of Serbian rural tourism,
increase foreign exchange earnings, the growth of the domestic tourist trafc, as well as
job growth through this type of tourism in order to transform Serbia into a competitive
tourist destination. Development strategy of Serbia by 2015 envisages establishing of the
41
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
tourism clusters in order to successfully position Serbia as a relevant destination in the
international tourism market. Tis strategy defnes the following clusters - Vojvodina,
Belgrade, Southwest Serbia and Southeast Serbia. Te vision of rural tourism in Western
Serbia from this strategy is following, “Western Serbia, the land of an open heart receives
tourists from home and abroad, pointing to its rich heritage, nurtured and protected natu-
ral resources and modern accommodation facilities. Here are the key natural and historic
resources of the country, and a high standard of well-equipped winter and summer rec-
reation and health centers, as well as a dense network of roads heritage, ofering a unique
insight into a living organism of Serbian spiritual culture of the monasteries”. According
to this strategy, positioning and brand of the Republic of Serbia as an eco-tourism des-
tination has to ofer interest for traveling to Serbia on the basis of a number of products,
which are already nearly ready, such as city breaks, touring; MICE (Meetings Incentives
Congresses Exhibitions), (meetings, tourism tied to special interests, conferences, exhibi-
tions), cruising, and special interests (Tourism Strategy of Serbia, 2005).
Here are some guidelines for the future development of tourism in the country:
• For the further development of tourism in the country, it is necessary to apply the
appropriate standardization and categorization of services, particularly adequate
conditions for accommodation. Tourism law specifcally regulates the provision of
accommodation and food in the household, as a specifc form of service delivery.
Rooms, houses, and holiday apartments rented to tourists, shall meet the sanitary
and technical requirements and are be classifed in the appropriate categories by
a specifc act of the municipal authorities, as required by the Regulations on the
classifcation, minimum requirements, and categorization of tourist facilities in the
Republic of Serbia (www.razvojturizma.rs).
• Usage of available houses in the villages may be a part of completely new tourist
package and deal for those people who live in major cities to be able to spend four
or fve months per year in the country side. Users of these arrangements may be,
and in practice they are, retired people from the metropolis that rent their apart-
ments to others, and can be retired person from our cities dedicated to themselves
and their grandchildren. A survey by the NGO “Agroproft” from Novi Sad, show
there is a willingness of tourism organizations in local government to coordinate
the implementation of such programs that bring proft to service providers.
• Today in Serbia, there are necessary conditions and extreme ofers in villages remote
from city centers, which only two or three households live in, with provided elec-
tricity, water, and telephone networks. Ofers like these with independent taking
care of food, exist in the municipalities of Pirot, Dimitrovgrad, Svrljig, Bela Palanka,
but in slightly diferent conditions in lowland municipalities such as Bela Crkva,
?oka, Vršac and Beo?in.
• Defnition of deals with high-quality content and services of the hosts that in ad-
dition to a top accommodation have to tennis courts, swimming pools, children’s
playgrounds, walking guides, and additional facilities for barbecue, wine cellars,
etc. is realistic. Te bikes are required on farms in the west, if there is an opportu-
nity to use them, and in some regions, there are special sleighs, horseback riding,
carriage rides, etc. Facilities for such a rich ofer are located in large, remote areas,
with no neighbors. Te overall price of this service is more expensive than a high-
class hotel.
42
TRENDS AND OPPORTUNITIES OF ECO-TOURISM WITH ... Gajdobranski A.
• Of particular importance are investments in infrastructure (roads, telecommunica-
tion, etc.), the provision of health care and the preservation and protection of the
environment in order to prevent uncontrolled urbanization.
• One of the most important tasks in the development of rural tourism is to educate
rural home for engaging in this activity. A great role in this should have the non-
governmental organizations, tourism organizations, municipalities and all stake-
holders. First, it is necessary to point to the economic feasibility of carrying out this
activity through domestic and international positive experiences in countryside
tourism.
• Te hosts should attend specially organized lectures and red the relevant literature
in order to be familiar with the standards related to guest’s accommodation, ap-
propriate hygiene requirements, method, quantity and quality of services of nutri-
tion, behavior towards guests and other necessary conditions for comfortable stay
of tourists in the countryside.
• On the achieved level of development of rural tourism, the role of animation of
the users and organizing feld trips, sports and other cultural, entertainment and
recreational activities take tourism organizations of municipalities through which
booking of the accommodation were made, which are engaged organized in tour-
ism. In the future development, in line with market-based development of all, and
this type of tourism, the role of supporting the activities of the organizers and the
reservation of accommodation will take over the travel agencies having an interest
in engaging in this type of tourism.
• Tourism product of rural tourism must also have adequate sale channels. It is neces-
sary to overcome the lack of organization in flling the capacity of tourist facilities
in the villages while travel agencies should perform sale. Organized way of selling
will greatly contribute to a better matching of supply and demand for holiday in the
country and certainly will help rural householders to fully valorize made invest-
ments.
• Promotion of eco-tourism (accommodation in the countryside, authentic food)
started without integrated supply - each host was operating in accordance with the
budget, and usually, it was expected that the media would react emotionally and
promote such programs. Tat was the case for some time, but it is not possible to
rely on that. Te fact that conditions the agro-tourism sector have improved is ob-
vious thru the fact that great number of families depend on this, it has become the
main occupation of many families, rather than as an additional activity. According
to incomplete data, around 120 villages in Serbia have no other income (pensions,
children support or part-time work).
• On the demand side, in line with international experience, there are tendencies to
the greater sophistication of tourism demand and its fussiness in relation to the
quality, content, price and other elements of specifc destination. Te general posi-
tion is that in the tourist demand, the individualization of the requirements with
the orientation of the special interests is increasingly coming to the fore, and that is
the great chance of rural tourism.
• For the approach to planning tourism development in the villages of Serbia, of par-
ticular importance is market research, and the use of marketing instruments. Tour-
ist values in Serbia are highly correlated with these growing trends when it comes
43
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
to foreign as well as domestic tourism demand. Because of this, it is necessary to
determine the target markets i.e. their segments, on which positioning of Serbian
villages would be performed. On the domestic market, it is primarily urban popu-
lation, and a large number of potential tourists from Vojvodina of certain age, edu-
cational structure and afordability. As for the international market, selling holiday
facilities in rural areas will have to be much more direct and to meet the demands
for individualization.
• Positioning of Serbian tourism products will be based on the preservation of the nat-
ural environment, the diversity of the tourism product, the richness of the cultural
heritage of the village (architecture, tradition, old crafs), as well as the hospitality
and warmth of the population.
• Te number of registered organic food producers in Serbia is 150, but it is not a
measure for the ofer because 1000 households in extensive conditions opted for
this type of production, and these products can be part of the tourist spending in
the rural environments. Ofen ofers include this type of foods are reduced to dairy
and meat products, rather than ofering healthier fruits and vegetables. Tis type
of food preparation involves thorough education of producers and users, which is
ofen lacking in the feld.
Based on the above facts, our potential for ecotourism development, with special empha-
sis on rural tourism, are listed in the following - a regional approach to tourism develop-
ment (forming clusters); land usage plan of the district, geographic and strategic position,
commercialization and conservation of cultural and historical heritage; building the road
network; involvement of local communities, intergovernmental cooperation, stimulating
the development of this form of tourism by the state; marketing plan, implementation
of the Strategy for the development of tourism, the impact of this form of tourism in
the development of other activities (the typical product placement); adapting to educa-
tional backgrounds; the ability to access donor programs and funds, strengthening public-
private partnership, market-oriented operation of the tourist facilities, local and regional
media, improving the image of the destination, etc.
3. CONCLUSION
As already mentioned above, Serbia has a number of resources on which it is possible to
develop rural tourism as an important aspect of eco-tourism. Unused potentials indicate
an unfair representation of eco-tourism, the need for better management and develop-
ment of rural tourism in Serbia. It is necessary to develop interest in the culture, archeol-
ogy, art, architecture, sport, music, hobbies, hunting and fshing, sojourns in the village
and other interests.
All of these forms should be adequately involved in the design and development of eco-
tourism, and as such become a permanent ofer in other forms of tourist movements, and
in our case, it is a village. Combined with natural resources as the main motive of tourist
movement in Serbia, rural tourism could become a signifcant factor in improving tour-
ism in general, and setting aside as an independent form of tourist movements.
Tere are good initiatives, proposals and projects for the development of this type of tour-
ism, but they are still untapped and without continuous marketing. Te goal is to get
tourists who come for vacation or business commitments to encourage for intensive use
44
TRENDS AND OPPORTUNITIES OF ECO-TOURISM WITH ... Gajdobranski A.
of rural tourism facilities, to enhance the oferings and services. Tis would increase the
competitiveness of the tourism sector, which would still allow for an increase in foreign
exchange earnings, growth in domestic tourist trafc as well as job growth.
Tis goals should answer the basic key questions related to this issue, which is, In which
direction development of rural tourism in Serbia will continue; In which way Serbia can
identify areas with the greatest potential for the development of rural tourism so Serbia
could improve the competitiveness of the tourism ofer in the tourism market, How to
fnd resources for funding future development of rural tourism in Serbia, How to ensure
the implementation of this objectives to the greatest extent.
BIBLIOGRAPHY:
[1] ?uki? Doj?inovi?, V.: Kulturni turizam-menadžment i razvojne strategije, Clio:
Beograd (2005).
[2] ?uraševi?, S.: Odnos destinacije i klastera, Menadžment turisti?ke destinacije,
FTHM: Univerzitet Singidunum, Beograd, (2008).
[3] Ivanovi?, M.: Turisti?ka valorizacija starih gradskih jezgara i zna?ajnih seoskih
ambijentalnih celina jugozapadne Srbije, Zbornik radova Savremene tendencije u
turizmu, hotelijerstvu i gastronomiji, Novi Sad: PMF, (2009).
[4] International Year of Ecoturism, (2002).
[5] Lazi? L, & Koši? K.: Turisti?ka geografja, Departman za geografju, turizam i
hotelijerstvo, Novi Sad: PMF, (2007).
[6] Lord, G.D.: Te Power of Cultural tourism, Wisconsin Heritage Tourism
Conference, Lac du Flambeau, Wisconsin, (1999).
[7] Ministarstvo trgovine, turizma i usluga Republike Srbije: Strategija turizma
Republike Srbije, Horwath Consulting Croup & Ekonomski fakultet u Beogradu,
Beograd, (2005).
[8]http://ec.europa.eu/enterprise/sectors/tourism
[9] www.uns.ac.rs/sr/doktorske/miroslavIvanovic/disertacija.pdf
[10] www.cenort.org.yu
[11] www.stat.serb.sr.gov.yu
[12] www.dokuments%20and%20settings/korisnik/Desktop/Teksovi%20za%20projekat/
Seoski%20turizam.htm
[13] www.razvojturizma.rs
[14] www.etnosrbija.org
[15] www.istorijskiarhiv.rs
[16] www.kosjeric.org.rs
[17] www.manifestacije.com
[18] www.nadlanu.com
[19] www.selo.co.rs
[20] www.srbija.travel
[21] www.turizam.merr.gov.rs
45
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
NEW STRATEGIC MANAGER AND ALLOCATION OF
CORPORATE ASSETS
Giji? Nebojša
1
, Lili? Vladana
2
, Reko Krstina
3
1
Faculty for Education of the Executives, Novi Sad, SERBIA,
e-mail: [email protected]
2
Faculty for Education of the Executives, Novi Sad, SERBIA,
e-mail: [email protected]
3
Faculty for Education of the Executives, Novi Sad, SERBIA,
e-mail: [email protected]
Abstract: Te deployment of resources i.e. their allocation is an inevitable problem in nearly every
business system. New managers are faced with critical strategic choice. Do they need to settle down on
the job and spend a year getting to know the operations of the company and then start changing the
portfolio? Or is it better to act quickly, boldly and immediately divert funds from ordinary activities to
a new generation of corporate opportunities?
Keywords: strategy, allocation, management
1. INTRODUCTION
Te term allocation of resources in the feld of business management, most ofen involves
the process of redistribution of fnancial capital from one business activity that one busi-
ness unit deals with to another activity that other business unit deals with, in order to
increase the total revenue of the observed business enterprises and the reduction of its
cost. Te special signifcance of allocation is expressed within enterprises with complex
organizational structure dealing with multiple activities, i.e. multi-business companies.
In addition to the allocation of capital, of course, it is possible to allocate all the other re-
sources to a greater or lesser extent depending on the decision of the management.
Reasons for the market transition of the company and hence for subsequent allocation
and re-allocation of resources resulting from stagnation or disappearance of existing tar-
get markets, pushing the limits of critical success factors, erosion of competitive advan-
tage, the emergence of new competitors, the development of new markets.
1
Te way of presenting a vision or a plan of work (change of plan) to subordinates, refer-
ring to a number of established values that are later concerning the way in which business
is conducted; essentially determine the manner and the acceptance by the staf. People
must be handled carefully because they bring the success to the organization, on their full
engagement depends the success of a business venture, not the vision or idea. Te leader
1
Babi? M. 1997. Reforma preduze?a, Beograd, PS Grme? - Privredni pregled, 32.
46
NEW STRATEGIC MANAGER AND ALLOCATION... Giji? N., Lili? V., Reko K.
has a crucial role to play in fostering and strengthening of creativity and creative thinking
of the team members, and this is one of the basic requirements of a good acceptance and
implementation of change and innovations in companies. Early changes in the course of
business and company management can lead to improved operation of the company and
eliminate unplanned events over a longer period.
2. COURAGEOUS MANAGERS
Maintain a competitive advantage and even survival of the company is primarily deter-
mined by its willingness, non-inertness and ability to adapt to the market, i.e. to modify
its ofer, to establish a new relationship with the challenges and constraints of the environ-
ment through the re-allocation of its resources.
2
In the period 1990 – 2010, those executives who have changed suppliers of the company
at the beginning of its term have contributed to the increase of income for the owners of
the company, then those who did that later.
3
In this process, managers with more courage
are thus provided the time at the top and deserved respect. More importantly, a similar
decision regarding a change of personnel in the company also brought diferent results.
Primarily it had a positive efect on those leaders who have made a change of personnel
at the beginning.
Te available database, which consists of 1500 companies with multiple branch opera-
tions in the U.S., shows a small group that has changed its managers. Ten new leaders
were appointed (there were 365 of them), into two equal groups, roughly taken: those that
have changed the way of business during the initial three years of work and those who
have done it before. When they compared these results with the work of managers, it was
concluded that only one third of relatively inactive progressed in their work, only afer six
years. Only one quarter of the managers has become the main managers.
Tose who easily moved to new alternatives, and then slow down and return to the estab-
lished paths achieved the best results, thus allowing market to “understands” them and
evaluate their decisions. In contrast, inactive managers - who moved to new sources of
business afer several years of work, and then change the speed - were not crowned with
glory and praise.
Te key to making changes is not only the acquisition and relocation of the capital, but
the courage to make important decisions and to accept the challenge of a new job with-
out thinking, and this act can ofen make moves that are treated as a risk to the business
and to initiate new investments “growing” alternatives. Active and courage managers are
predestined to make bolder decisions rather than their non-active competitors. Hence,
they defne goals and methods for their implementation and impact on subordinates to
achieve them.
4
2
?ogi? R., Arnaut E., Kulovi? Dž., 2009., “Nužnost završetka privredne tranzicije u Bosni i
Hercegovini kao pretpostavka privla?enja inostranog kapitala”, zbornik radova nau?nog skupa sa
me?unarodnim u?eš?em - Inostrani kapital kao faktor razvoja zemalja u tranziciji, Kragujevac,
Univerzitet u Kragujevcu – Ekonomski fakultet u Kragujevcu, 155
3
Hall Stephen and Kehoe Conor 2013., “How quickly should a new CEO shif corporate
resources?”, McKinsey Quarterly, October 2013.,http://www.mckinsey.com/insights/strategy/
how_quickly_should_a_new_ceo_shif_corporate_resources
4
Zorni? Džemail, Rušovi? Munir, Plojovi? Šemsudin, Ujkanovi? Enis 2012., “Information
Technology and Konwledge management as a Basis for the Economic Development”, Novi
47
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
3. “FAST” MANAGERS
Interestingly, managers selected outside companies much easier take the responsibility for
the tasks they accept or reject from the candidates who have been “created” in the com-
pany. Internal candidates who are not afected by their personal empathy to the company
they work for, may be repugnant to the removal of jobs controlled by the persons of the
same age. New internal managers may have certain tendencies to existing ways of doing
business. Finally, an example is taken from everyday life showing that one who is raising
a child shall be deprived of subjectivity to it, when it should be evaluated and analyzed.
Value of the managers is refected in making quick and important decisions about changes
in equity, i.e. top talent. Te database tells us that managers who hire or replace any mem-
ber of the executive council during their frst year were able to stay longer in a managerial
position than those who were not able to do so. Te analysis shows that the greatest impact
is gained by changing the members of the “top” team of the company, rather than a change
of the manager in a lower position in the hierarchy. If they are courage enough to get new
talents and implement a new strategy for the development of the company, the new man-
gers can expect good results and record positive reviews.
New managers must consciously take advantage of a period of “the honeymoon” in their work
at the beginning, in order to bring some important decisions related to capital and manage-
ment. Markets later recognize the results of diverting – the frst step is taking the value of the
shares down. It takes usually one to two years for results to be positive. Te message of this
study is that afer a while the market is less forgiving to those managers who procrastinate.
Pazar, Te Scientifc Journal for Teory and Practice of Socioeconomic Development Vol. 1, N° 2,
December, 2012., 389 – 396
48
NEW STRATEGIC MANAGER AND ALLOCATION... Giji? N., Lili? V., Reko K.
4. PRINCIPLES FOR A SUCCESSFUL CAREER OF A MANAGER
Suggestions to new managers on the road to a successful career:
1 Explain the allocation strategy at the very beginning. Investors may be dissatis-
fed with every plan that undermines their profts at the beginning, but it will
certainly be cooperative if they immediately make it clear that the project is being
prepared, the reason for this and the projected time will bring positive results. As
much as possible, you should take into account the long-term investors and not
to worry about the owners of shares who work in the short term.
2. Be courage. Do not worry too much about the allocation. It was presumed there
would be companies that were previously carried out the aforementioned allo-
cation assessed positively by the governing board. Tis epilogue was not found
in the database of multi - business companies in the United States in the last 20
years. It seems that managers do much less than they should, in order to optimize
the total return of funds to shareholders.
3. Ofer good business opportunities for a young, fresh graduate candidate. Manag-
ers must ensure the employment of high quality people who will be dealing with
new or expanded activities within the business strategy of the company. One of
the basic misconceptions of classical management and organization lasts several
decades and it is the fact that the material resources are primary for the achieve-
ment of corporate performance.
5
In order to gain infuence in the work and to
earn the respect of colleagues, it is necessary to expand the number of managers
in the frm, and it is of vital importance for the simple reason that in this way it is
possible for a manager to contribute to successful allocations.
4. Win the support of the governing board. Te most infuential executives focus on
the analysis and the results of the strategy (to ensure that the people, resources
and processes are able to fnish the project), and count on the support of the en-
tire management.
5
Radosavljevi? Ž., Soloviov P. V., Panagopulos A. 2012., “Modern technology application in
economics and management”, Belgrade, FPSP, International journal of economics and law Vol. 2,
No. 4 (2012), 109
49
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
5. Te failure or error arising from deliberate experimentation, or researching new
technologies, processes and concepts of work, may even be praised.
6
Innovative
organizations encourage individuals to explore, and if it is successful, manage-
ment encourages those who make mistakes and thus encourages them to contin-
ue experimenting and searching for new technological, organizational, and other
solutions.
6. Establishing a positive climate. One event at a time set standards of behavior for
the entire team.
7
5. CONCLUSION
Te only guaranteed things that will happen in the business are changes. Tey are inevita-
ble, both in life and in business. Te time we live in brings a dynamic, fast pace, constant
adapting. Tese changes afect business world more than other. Te recipe for success lies
in developing a sense of change in the management of the company.
If a manager is courageous and willing to risk, hence the company he works for gain ben-
efts. Every change is an opportunity for a clever man to make use of it. Chance turns into
proft, which is characteristic of a smart manager. Ordinary people always try to predict
the outcome of the future, and managers are constantly occupied with this issue because
their business career depends on it. Tey will be remembered for their work and thus be
labeled according to their decisions. Successful companies have managerial teams with
specifc skills, knowledge and distinctive corporate culture and values on which they are
able to defne a clear and efcient strategy for resource changes in a diferent economic
environment that will result in the realization or at least maintaining and even increasing
the revenue of the company.
Te conclusion is that the reallocation is similar to muscles, the more you exercise, they
increase strength to overcome unplanned burden in the future, and muscles need even
more training new during the ongoing challenges in order to be strong, and not to be
damaged by a rapid training that can even result in unplanned medical intervention.
Achieving of a high level of resources reallocation doesn’t slowness, sluggishness, lack of
leadership, indecision, fear, laziness, lack of initiative, but it requires high quality manage-
ment personnel who possess the knowledge and experience in frst place, leadership, lack
of personal interest, commitment to achieving the company’s success.
BIBLIOGRAPHY:
[1] Babi?, M.: Reforma preduze?a, Beograd, PS Grme?: Privredni pregled, (1997).
[2] ?ogi?, R., Arnaut, E. & Kulovi?, Dž.: Nužnost završetka privredne tranzicije u
Bosni i Hercegovini kao pretpostavka privla?enja inostranog kapitala, zbornik
radova nau?nog skupa sa me?unarodnim u?eš?em -
[3] Inostrani kapital kao faktor razvoja zemalja u tranziciji, Kragujevac, Univerzitet u
Kragujevcu – Ekonomski fakultet u Kragujevcu, Kragujevac (2009).
6
Radosavljevi? Milan, Dorosenko Yuri, Radosavljevi? Života 2012., „Strategy for learning from
failure“, Belgrade, FPSP, International journal of economics and law Vol. 2, No. 4 (2012), 115
7
Giji? N., Lili? V., ?ureti? G. 2013., „Te importance of small wins“, Belgrade, FPSP, International
Journal of Economics and Law, Vol. 3, No. 7 (2013), 43
50
NEW STRATEGIC MANAGER AND ALLOCATION... Giji? N., Lili? V., Reko K.
[4] Giji? N., Lili? V., & ?ureti? G.: Te importance of small wins, International Journal
of Economics and Law, Vol. 3 (2013), No. 7.
[5] Hall Stephen and Kehoe Conor 2013.: How quickly should a new CEO shif
corporate resources?, McKinsey Quarterly, (2013), Avaliable on:http://www.
mckinsey.com/insights/strategy/how_quickly_should_a_new_ceo_shif_corporate_
resources.
[6] Radosavljevi?, M., Dorosenko Yu. & Radosavljevi? Ž. 2012.: Strategy for learning
from failure, International journal of economics and law, Vol. 2 (2012), No. 4.
[7] Radosavljevi? Ž., Soloviov V. & Panagopulos A.: Modern technology application
in economics and management, International journal of economics and law Vol. 2
(2012), No. 4.
[8] Zorni? Dž., Rušovi? M., Plojovi? Š. & Ujkanovi? E.: Information Technology and
Konwledge management as a Basis for the Economic Development, Te Scientifc
Journal for Teory and Practice of Socioeconomic Development, Vol. 1 (2012), No. 2.
51
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
TRANSFORMATIONAL MANAGEMENT DEVELOPMENT
PROGRAM IN ELEMENTARY AND SECONDARY
SCHOOLS IN BOSNIA AND HERZEGOVINA
Hasanovi? Halil
1
, Jahi? Merima
2
, Murselovi? Lejla
3
1
EU VET III, Sarajevo, BOSNIA AND HERZEGOVINA,
e-mail: [email protected]
2
Faculty for Education of the Executives, Novi Sad, SERBIA,
e-mail:[email protected],
3
Faculty for Education of the Executives, Novi Sad, SERBIA, e-mail:[email protected]
Abstract: Empirical research in primary and secondary schools in Tuzla Canton, Bosnia and Herze-
govina confrmed the theoretical expectations that successful schools have high and very high levels
of transformational leadership methods. Transformational management strongly supports building
adaptable organizational culture of the school in environment full of changes that make vague and
undefned tasks for their followers. Te proposed strengthening program of transformation method is
based on keeping the results of good practice in the training of educational managers. It is the syner-
gistic product of many years of researching by several authors in the feld of management education in
particular, and the actual practice of keeping the operation of primary and secondary schools in Bosnia
and Herzegovina.
Keywords: elementary and secondary schools, educational management, program development, trans-
formational leadership, transformational changes
1. INTRODUCTION
Transformational way of managing defnes adaptable and fexible organizational culture
towards the challenges of the environment (Burns, 2006), and it is a pledge for the sur-
vival of the organization in the future (Howard, 2004). Transformational way of managing
contributes to transforming the old into the new values that are complementary in rela-
tion to radical challenges in the environment (Bass, 1990; Northouse, 2001). Adjusting to
change is a precondition for the survival of any organization. Earlier studies of transfor-
mational managerial methods (Hasanovic, 2009; Isakovic, 2008) have confrmed its high
impact on the introduction of changes in primary and secondary schools in Bosnia and
Herzegovina. Studies have shown that the training of the secondary school principals in
the feld of management signifcantly contributed to the development of transformational
managerial methods (Hasanovic, 2009), which is typically a feature of the principals of
particularly successful schools. Training principal program and management teams in the
feld of application of the modern management concepts, and in particular, the transfor-
52
TRANSFORMATIONAL MANAGEMENT... Hasanovi? H., Jahi? M., Murselovi? L.
mational management will signifcantly contribute to the strategic adjustment of primary
and secondary schools to changes in the environment.
2. THEORETICAL REVIEW
2.1. Education of the principals of elementary and secondary schools regarding the
introduction of modern ways of managing in Bosnia and Herzegovina
In Bosnia and Herzegovina, until now there was not a decision on mandatory system
and the comprehensive (formal) education of the principals of elementary and secondary
schools in the feld of educational management. Former education of school principals
was organized mostly by international governmental and non-governmental organiza-
tions directly involved in the reform of the education system in Bosnia and Herzegovina.
Organized by the Soros Foundation – FOD BIH, in period 2001/2002 school year, a group
of 20 principals of primary and secondary schools from the region of Tuzla Canton was
trained. Trainers from the “Škola za ravnatelje” school from Ljubljana according to the
national principal training program realized one-year training in the Republic of Slovenia.
Curriculum of the “Škola za ravnatelje” school was adapted to the conditions in Bosnia
and included training in the following modules (Hasanovic, 2009):
Introductory module - 20 contact hours
Teories of organization and management - 20 contact hours
Planning and decision-making - 20 contact hours
Director as a pedagogical leader - 20 contact hours
Working with people (HRM) - 20 contact hours
Legislative module - 20 contact hours
Optional content and end of the program - 24 hours
It should be noted that during the training mainly were represented interactive methods
of learning, which is a special quality of formal training programs. Te program ended by
taking principal exam, and all participants received a diploma and diploma supplement.
In total, training program lasted for 428 hours, and in addition to the contact hours (lec-
tures, workshops, seminars, conferences) encompassed and self-involved theoretical and
research work in the elaboration of specifc problems of educational theory and practice
of leadership in schools.
Experts in the feld of management education - masters and specialists in management ed-
ucation, for education authorities and international governmental and non-governmental
organizations, designed the custom curriculum for the training of primary and secondary
school principals in Bosnia and Herzegovina.
2.2. Transformation method of managing primary and secondary schools strength-
ening program in Tuzla Canton and in Bosnia and Herzegovina
In the literature, one can fnd a variety of training for managers at all levels of management
to promote transformational leadership methods. Avolio and Bass (1991, Bass, 1996) have
done Management trainee program, which consists of 8 basic and 5 advanced training
modules. Students who ended up training under this program were becoming certifed
53
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
trainers transformational ways of leading. Based on a competence training model for
principals of secondary schools in Bosnia and Herzegovina (Hasanovic, 2009: 262) it is
possible to program a special segment of the improvement and development of transfor-
mational leadership methods (Figure 1).
 
Module 7
Preparation and
defense of the
school projects
Module 6
Presentation of
teamwork: transf.
guidance
Module 5
Competence
development:
delegation
Module 4
Teamwork:
Transformational
management
Module 3
Management
questionnaire:
MLQ – 6S
Module 2
Total range model
Module 1
Theories and
modern concepts of
managing
Transformational
management
development
program
Figure 1: Program for improvement and development of transformational ways of
managing schools 0
Program for promotion and development of transformational ways of managing the
school includes basic training modules, which could provide educate competent prin-
cipals of primary and secondary schools, members of the management teams, and all
the teachers (Table 1). Basis for programming improvement and development of trans-
formational leadership would be a Competence model of training principals of primary
and secondary school, management teams, teachers and others staf of secondary schools
(Hasanovic, 2009: 258-262). Only based on the Plan of the training needs in every elemen-
tary and high school, through the development of optimal Competence model (based on
the 6-3-5 method) of managing, we get a clear picture of the needs of schools (and other
categories) for the promotion and development of transformation managing method in
the school.
54
TRANSFORMATIONAL MANAGEMENT... Hasanovi? H., Jahi? M., Murselovi? L.
Table 1: Transformational managing method development program of the school: mod-
ule contents
NO. OF MODULES MODULE CONTENT IMPLEMENTATION METHODOLOGY
Module 1 - Teory of modern concepts
of management in education,
development leading competen-
cies of associates, training for the
introduction of changes
- Educational teaching materials, team work
in workshops, processing questionnaires for
modern management concepts, realizing
of the competency models based on 6.3.5
method
Module 2 Detailed knowledge of the Model
of the total range (Full-range
management model)
- Educational didactic materials: trans-
formational, transactional, and the liberal
leadership,
- Teamwork in workshops on the distinction
of the leadership styles
Module 3 Introducing of participants with
the MLQ 6S questionnaire
- Detailed introduction and practical use of
MLQ 6S questionnaire or alternative MLQ
5S questionnaire
- Teamwork in workshops on processing and
presentation of research results
Module 4 Teamwork on the distinction of
transformational and transac-
tional managing school
- Work of school teams (management team
or development team) on management diag-
nosing according to the model of total range
- Discussion of results on a participant’s
conference panel
Module 5 Te development of techniques
to delegate in the function of
individual development of com-
petence leading associates
- Educative teaching materials and examples
of good practice,
- Work in workshops on the development of
techniques to solve the problems of specifc
leadership practice
Module 6 - Teamwork on the presentation
of distinction of transformational
and transactional management
in schools
- Presentation of teamwork at the schools
regarding the distinction of transformational
and transactional managing in schools
- Making important decisions and conclu-
sions for creating transformational manage-
ment development program (Conference)
Module 7 Making and defense of transfor-
mational management develop-
ment project
- Presentation of school development pro-
jects of transformational ways of managing
at the fnal conference,
- Discussion of research results and short
written evaluation of the training partici-
pants,
- Distribution of certifcates to successful
participants
Source: According to Bass, 1996; Hasanovic, 2009; Hasanovic, Sinanovic,
2010; Jahic, 2012
3. CONCLUSION
Program for promotion and development of transformational managing the school can
be realized within the framework of the general program of professional training and pro-
55
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
fessional development for all school employees. Program promotion and development of
transformational management in primary and secondary schools can be part of a special
project of education of transformation leaders in education, which would be implemented
under the responsibility of educational authorities (Schools for principals, introductory
course in the management theory, etc.). Te most important part of training is a refection
of the application of the good educational practice. Depending on the level of representa-
tion of transformational management methods (MLQ 6S questionnaire) in each particu-
lar school, the essential conditions for the adjustment of primary and secondary schools
to changes in the environment create. Te program for transformational development
method of managing is only a tool in the hands of successful principals, management
teams, and all employees in the process of strategic adjustment of primary and secondary
schools to changes in the environment.
BIBLIOGRAPHY:
[1] Bass, B. M.: Bass&Stogdills Handebook of Leadership: Teory, Research and
Managerial Applications, 3th Edition. New York: Te Free Press, (1990).
[2] Bass, B.M.: A New Paradigm of Leadership: An Inquiry Into Transformational
Leadership. U.S. Army Research Institute for the Behavioral and Social Sciences.
Alexandria, Virginia, (1996).
[3] Burns, N.D., Backhouse, C.J., Dani, S.S., & Masood, S.A.: Transformational
Leadership and Organizational Culture: Te Situational Strength Perspective.
Loughborough: Loughborough University, (2006).
[4] Hasanovi?, H.: Savremeni koncepti vo?enja srednjih škola i mogu?nosti njihove
primjene u Bosni i Hercegovini . Novi Sad: Privredna akademija, FORKUP, (2009),
pp. 283.
[5] Hasanovi?, H. & Sinanovi?, M.: Kompetencijsko modeliranje stru?nog usavršavanja
i osposobljavanja direktora srednjih stru?nih škola u Bosni i Hercegovini. „Naša
škola“, Sarajevo, No. 54/224 (2010), pp. 69-79.
[6] Hasanovi?, H., Sinanovi?, M. & Murselovi?, L.: Organizational Culture and Change
Management in Secondary Schools in Bosnia and Herzegovina. 3 rd International
Conference Appliction of New Technologies in Management ANTiM 2012, Belgrade,
Serbia, 19-21. April, Vol. 1 (2012), pp 256 – 263.
[7] Howard, P.M.: A Study of the Relationship Between Transformational Leadership
and Organizational Culture. Michigan: Western Michigan University Kalamazoo,
(2004).
[8] Isakovi?, Z.: Transformacijsko vo?enje u jednoj opštini Tuzlanskog kantona. Koper:
Fakultet za management. (2008), pp. 162.
[9] Jahi?, M.: Transformacijsko vo?enje u osnovnim školama. Novi Sad: FORKUP,
Beograd, (2012), pp. 85.
[10] Northouse, P. G.: Leadership: Teory and Practice, 2nd Edition. London: Sage,
(2011).
56
ETHICS IN MODERN ECONOMY Kastratovi? E., Dragi? M., ?ilerdži? V.
ETHICS IN MODERN ECONOMY
Kastratovi? Edita
1
, Dragi? Milan
2
, ?ilerdži? Vesna
3
1
Faculty of Business Economics and Entrepreneurship, Belgrade, SERBIA,
e-mail: [email protected]
2
Faculty of Business Economics and Entrepreneurship, Belgrade, SERBIA,
e-mail: [email protected]
3
Faculty of Business Economics and Entrepreneurship, Belgrade, SERBIA
Abstract: Ethics is defned in various ways. Its signifcance is emphasized in the conditions of severe
competitive challenges. Modern managers have a difcult task to realize their activities in the ethically
accepted framework, but not to become less competitive. Tere are diferent approaches to business
ethics depending on the interpreter of the business ethics. Companies, which are leaders in their areas,
have realized the signifcance of ethically responsible business. Tis paper presents ethics as a signifcant
phenomenon of modern economy. We emphasize the need for education of managers in respect of ethi-
cal norms and social responsibility.
Keywords: ethics, economy, social responsibility
1. INTRODUCTION
Modern economy implies the readiness of organizations to respond to challenges and
demands of local, regional and global market, at any moment. Competitiveness is the
condition that is imposed by the market economy. In such circumstances, organizations
face huge pressure from many sides: suppliers, consumers, government, media, banking
sector, insurance sector etc. Tese circumstances can be and ofen are the trigger of ethi-
cally problematic decisions and actions. Modern managers have a difcult task, to realize
their activities in the scope of ethically acceptable, but not to become less competitive.
Organizations are, in economically logical sense, oriented towards generating proft and
decreasing the expenses of business. Managers have to be fexible and ready to use any
situation in which the organization is, in a way that is acceptable according to the interests
and goals of that organization. Afer facing the current situation, they defne next steps in
order for the situation, which is obviously unfavorable, to be used in a positive sense and
be turned into their favor. In such circumstances and under pressure of realizing the com-
petitive advantage, managers usually make decisions which are not completely according
to the ethical standards. While planning and defning the strategy and operational plans,
managers need to put these plans through ethical code of modern business.
57
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
2. THEORETICAL FRAMEWORK
Ethics represents the signifcant factor of modern business environment. By developing
the human rights, as well as workers’ rights, the need for education of managers in respect
of signifcance of ethics in modern economy arises. Socially responsible companies set
aside signifcant material means for education and implementation of ethics in practice.
Te monopolist phenomenon in modern economy signifcantly infuences the appearance
of ethical dilemmas in organizations whose survival, at the competitive market, depends
on productivity and minimizing the expenses of business activities. It is ofen the case that
the organizations, with the goal of decreasing the business expenses, opt for unpopular
measures, whose efects have an unethical connotation.
Ethics is defned and classifed in various ways. We usually divide ethics into individual
and organizational.
Individual – Certain leaders consider that company should not bear the consequences
of the mistakes of individuals. According to their opinion ethics has nothing to do with
leadership.
Organizational – Ethics has to be present in leadership. Ethical orientation of a leader
represents the key factor in the process of promoting the ethically correct way of behavior
among the employees
1
.
Ethical dilemmas usually come up in the strategic foundation. Typical situations for such
cases are the ones in which the interests of an organization and the attitude of an indi-
vidual are not in accordance based on the ethical principles
2
.
In order for an organization to be successful and acknowledged at regional and global
level, there has to be certain elements in domain of ethics present:
Role models – Leaders represent the role models in their organizations. Tey have to be
consistent in their actions and justify the given promises.
Corporate credo and codes of conduct – provide the guidelines for norms and beliefs, as
well as guidelines during decision-making. Enable the employees to reject the ethically
incorrect actions.
Reward and evaluation system - Inappropriate rewarding may provoke employees to
behave unethically, which would not be the case in conditions of better defned reward
system. Te example of inadequate reward system and its infuence on unethical behav-
ior of employees can be seen in Sears, Roebuck & Co. company. In 1992 Sears received
huge amount of complaints for car servicing, because of selling the unnecessary parts and
services as a part of servicing. Te cause of unethical conduct of employees was present
because of management’s decision to introduce the stimulations and quotas for mechan-
ics, in order to increase income and market share. Mechanics, with the goal of fulflling
the quotas, ofered the unnecessary services and parts as a part of standard service, which
resulted in unsatisfed clients and many complaints. Overall expense of litigations was 60
million dollars and the enormous damage of reputation of the company.
Policy and procedures – It is essential to develop policies and procedures which will defne
a certain conduct system, in order for all employees to be encouraged to act ethically
3
.
1
Dess Gregory et al. Strategic management, Belgrade: Data status, 2007, 417
2
Markovi? Aca, Ljiljana Markovi? „New trends in human resources management“, International
journal of economics & law, Vol.1 No.1(2011): 75
3
Dess Gregory et all. Strategic management, Belgrade: Data status, 2007, 423-426
58
ETHICS IN MODERN ECONOMY Kastratovi? E., Dragi? M., ?ilerdži? V.
Tere are diferent approaches to business ethics depending on the interpreter of business
ethics. We can divide ethics on:
Normative approach – refers to the clear defnition of rules of correct conduct
Descriptive approach – analyzing the moral principles and how much they are obvious in
the practice
4
.
In modern economy we can see unethical behavior of certain managers that apply the
business policy of an organization they are a part of. Depending on the circumstances in
which they do business, the causes of unethical behavior can be very diferent:
Overly ambitious or obsessive want for personal gain, wealth or some other selfsh interests.
Pressure on the managers in respect of attaining high goals, and even attaining more.
Organizational culture that forces proftability and business results and not the ethical
behavior
5
.
Ethical dilemmas are present in all areas of economic activities. Everybody is faced with
ethical problems, starting with managers, operational managers in the production pro-
cess, engineers and employees. Besides these subjects within the organizations and ethical
dilemmas of internal character, the subjects from the environment also face the ethical
challenges: associates, service agencies, buyers, suppliers, agents, media etc. Every subject
has a signifcant infuence on people that he directly cooperates with, and on the other
participants in business activities indirectly. Besides infuencing one another, the activi-
ties of the mentioned subjects can have an infuence on the environment as well and social
community in which they conduct their business activities and are a part of.
Companies which are world leaders in their areas have realized the signifcance of ethically
responsible business. Tey see the corporate success through three equally important seg-
ments: proft, loss and social impact/infuence on the environment. Te next table shows
the companies with the highest grades in respect of socially responsible business activities.
Table 1: companies with the highest grades in respect of social responsibility
Name of the company
1. Johnson & Johnson
2. Coca-cola
3. Wal-Mart
4. Anheuser-Busch
5. Hewlett/Packard
6. Walt Disney
7. Microsof
8. IBM
9. McDonald’s
10. 3M
11. UPS
12. FedEx
13. Target
14. Te Home Depot
15. General Electric1
4
Beech John, Chadwick Simon. Sports management, Zagreb: Mate, 2010, 30
5
Tompson A. Arthur et all. Strategic management, Zagreb: Mate, 2008, 285
59
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
Considering the proft they make and means that they have at their disposal, these com-
panies have advantage when speaking of the possibility of setting aside enough means for
socially responsible business activities. Organizations that do not realize signifcant proft,
direct their energy towards solvent business activities and development, and in economi-
cally inferior countries even towards survival at the market.
Organizations from the countries in transition have additional burdening circumstances
and obstacles in respect of implementation of ethical norms of business. One of the limit-
ing factors is lack of education of employees in respect of ethics and social responsibility.
Te awareness of Serbian population of socially responsible business because of the envi-
ronment and the organization is very low. It signifcantly slows the procedure of introduc-
ing and encouraging social responsibility
6
.
3. CONCLUSION
Business ethics represents a very tangible category of the modern economy. Its signifcance
comes into light in the conditions of severe competition. To what extent the organizations
will accept the ethical norms, depends primarily on the education of top managers who
create the business policy of an organization. Managers of organizations that represent the
world leaders, put ethical codes into strategy itself. By their relation with employees, asso-
ciates, clients, buyers, environment and the society in general, they establish the desirable
forms of behavior for the smaller organizations that are searching for their place in the
market. Organizations that do business in transitional environment, under economic and
existential problems and with scarce resources, face even greater challenge of change of
ethical codes in doing business. Te state has an important role in respect of the laws that
it makes that refer to business activities of organizations labor law etc. Tere are signifcant
diferences in law regulations, which are ofen used by the big and successful companies
to reduce the expenses of production. Tey mask the unethical principles in respect of law
minimum with insisting on socially responsible behavior at other markets and in other
regions.
BIBLIOGRAPHY:
[1] Beech J. & Chadwick S.: Sports management. Zagreb: Mate, (2010).
[2] Brnjas Z.: Strategic management. Belgrade: Grme?, (2000).
[3] Coulter M.: Strategic management at work. Belgrade: Data Status, (2010).
[4] Dess G.: Strategic management. Belgrade: Data status, (2007).
[5] Draker P. F.: Management in new society. Novi Sad: Adizes, (2005).
[6] Jovanovi? P.: Strategic management. Belgrade: College of Project Management,
(2007).
[7] Kastratovi? E.: Management in modern sport, Beograd: Faculty of Management in
Sport, (2008).
[8] Kotler P. & Keller K. L.: Marketing management, Belgrade: Data Status, (2006).
[9] Markovi? A. & Markovi? L.: New trends in human resources management,
International journal of economics & law, Vol.1 (2011), No.1, pp. 70-77.
6
Radosavljevi? Dragana, „Corporate management and social responsibility in Serbia“,
International journal of economics & law. Vol. 1 No. 1 (2011): 107
60
ETHICS IN MODERN ECONOMY Kastratovi? E., Dragi? M., ?ilerdži? V.
[10] Maksvel K. Dž.: How to become a true leader, Belgrade: Algoritam, (2005).
[11] Radosavljevi? D.: Corporate management and social responsibility in Serbia,
International journal of economics & law, Vol.1 (2011), No.1, pp. 105-111.
[12] Robbins P. S. & Coulter M.: Management. Belgrade: Data status, (2005).
[13] Stoner, J. A. F.: Management. Belgrade: Želnid, (2000).
[14] Tompson A. A. Jr., Strickland A. J., & Gamble E. J.: Strategic management. Zagreb:
Mate, (2008).
[15] Whren, D. & Voich, D.: Management: process, the structure and behavior. Belgrade:
Grme?- Privredni pregled, (2001).
61
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
THE FIGHT AGAINST CORRUPTION -
CROWDSOURCING
Krmpot Vera
Faculty for Education of the Executives, Novi Sad, SERBIA,
e-mail: [email protected]
Abstract: Corruption as the abuse of public authority in order to achieve personal beneft is deeply
rooted, takes various forms in order to cover and survive, adapt quickly and easily to all eforts to
eradicate it. Terefore, the fght against corruption must likewise be persistent and stubborn, but also
innovative, fexible and technologically current. Together we are a huge and powerful force - the basis
of crowdsourcing that maximize the benefts ofered by the Internet as a new technology. Tis paper
summarize good and bad sides of this kind of association in trying to reduce corruption to the lowest
level, as a parasite that is undermining the foundations of any society, developed and systems in devel-
oping countries.
Keywords: corruption, crowdsourcing
1. CROWDSOURCING - A NEW FORM OF ANTI-CORRUPTION
Crowdsourcing as a way of fghting corruption has signifcant advantages and introduces
new technologies and new opportunities, which represents a permanent, continuous ac-
tivity and efort.
Together we are a huge and powerful force - it is the basis crowdsourcing.
Relying on the contribution of each of us, crowdsourcing could actually become a funda-
mental aspect of the fght against corruption because it has signifcant advantages: request
us all to be engaged - thus, with our engagement or lack of engagement we all carry the
responsibility for the level of success of this collaborative efort.
Crowdsourcing term was created by merging two English words: crowd meaning group,
pile and sourcing which means to draw from the source.
Te reporter Jef Howe frst used the term crowdsourcing in 2006. Crowdsourcing means
the use of information collected from the public and usage of this information to perform
a specifc business tasks. Te company itself performs these tasks or by a third party that
provides execution services, but through crowdsourcing, the public helps in performing
the task. Companies ofen resort to crowdsourcing because it expands the source from
which you draw information and very ofen is completely free. Crowdsourcing also allows
companies to gain an insight into who their customers are and what they really want.
A term that is slightly older may help us understand the etymological basis of the term
crowdsourcing but other term is more common in our country - outsourcing. Outsourc-
62
THE FIGHT AGAINST CORRUPTION - CROWDSOURCING Krmpot V.
ing is contrary to the term analyzed here because it actually means giving sources to oth-
ers, or the relocation of jobs from other sources.
In outsourcing, company (organization) chooses to whom will forward the tasks (activi-
ties), while in crowdsourcing everything is going the opposite direction: group realized as a
collection of a large number of people are choosing to whom will forward the information.
In any case, it is obvious that we are talking about usage of new, broad and so far insuf-
fciently used sources either as drawing from these sources (crowdsourcing), either as
giving to these sources (outsourcing).
By exactly the same lexical defnition, neither the crowdsourcing term should be trans-
lated into Serbian language. Although whenever is possible we should use our word and
not foreign word, here it is obvious that we (just like any other languages) still do not have
the right word for this term - this phenomenon appeared before less than a decade, so
there was no word for it. As with already mentioned outsourcing, as a confrmation that
the usage of foreign word is right thing to do, I want to specify the terms ‘marketing’ and
‘management’ also used in our language and no one will tell you these are English words
based on exactly the same lexical principle as the crowdsourcing.
As a second argument that we should not translate the term crowdsourcing is the fact that
using internationally accepted term it would be always easier to recognize this type of
activity than if we try to translate it in a descriptive way.
Crowdsourcing uses new technologies - the Internet above all - and this new technologies
have their own important advantages: they are cheap, fast, accessible to a large number
of people, and even allow anonymity, where necessary, allow to fnd out the experiences,
views, opinions and suggestions of people to which we cannot communicate in traditional
ways in the fght against corruption (e.g. ‘whistleblowers’).
Te big advantage of crowdsourcing is the fact it does not presuppose institutional, hierar-
chical organization, can be easily started, it is very adaptive and relatively small number of
people can be coordinate the activities of a large number of those who contribute.
Crowdsourcing uses the same ‘the wisdom of the group’ theory that emerged in the early
twentieth century in order to organize the collection of information. Te whole process
in this way expands the broad strata of society, ofen disengaged by then for given form of
gathering information and organizing activities.
Although the practice of crowdsourcing - gathering information from the group, a large
number of people - is older than the Internet, the term itself is recent. Te fact that one
phenomenon didn’t have name until it gained its place on the Internet is talking that the In-
ternet as a new technology is the best, fully adequate and optimal tool for this kind of gath-
ering information of any kind and organization of activities based on the collected data.
When we look at things to their essence, we recognize that crowdsourcing actually is a
form of an open call to the public, appeal to as many people gets involved and that their
participation contributes to organized efort that has clearly defned goals and objectives.
Because it is calling the broadest strata of society – it calls everyone to engage, not to re-
main passive, to contribute - in the right hands crowdsourcing is a very powerful tool and
a way for the activity of any kind.
Counting on all of us, including all of us, encouraging us to realize that no matter how
small our individual efort is, it multiplies exponentially when it becomes part of a broad
movement in which we all participate - as a means to combat corruption, crowdsourcing
not only represents the future of this struggle.
63
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
Crowdsourcing - a term that I would characterize as the common fght against corruption
- must become our present.
1.1. From shareholders to stakeholders
Any activity carried out by an organization or group of people afects the other people
associated with them in any way: geographically, historically, in terms of preserving the
environment, in terms of sustainable community development, regarding the interests.
Terefore, in recent years, especially in the study of corporate social responsibility (CSR)
1

the term stakeholder instead of the original shareholder has developed.
When it comes to business and economic relations, the shareholders are emerging as the
primary stakeholders so the whole group consists of a shareholders, buyers (customers),
suppliers, employees, creditors, and partners. Furthermore, secondary stakeholders are
those who, although not directly involved in the economic and business impact sufered
by the organization’s activities. It’s overall public opinion, community and every individu-
al in it, all kinds of civic organizations and initiatives, the media - in a word all of us.
Te business understood in this way and all other human activities make us conclude that
we all - as stakeholders - must behave in the fnest possible manner in all activities, to pro-
tect the community and the environment and to perceive ourselves as active participants
and not passive observers who always shif the responsibility to someone else.
When it comes to corruption, it is important to emphasize that it prevents sustainable
economic development and undermines the very foundation of all forms of social organi-
zation. Te sole change of consciousness and perception of us as active participants rather
than passive observers can help fght corruption. If we are all in some way stakeholders -
and we are - then we have to accept that any form of rights entails responsibilities that we
cannot always ask from the others, but primarily from ourselves.
How much people are actually aware of this shows the fact that any initiated action using
a crowdsourcing method records an incredible number of received information. Crowd-
sourcing, as its name suggests, draws information from many (of the group) and uses
them for the interests of all.
2. CROWDSOURCING, TRANSPARENCY AND GLOBAL EXPERIENCE
Corruption is by defnition completely opposite of transparency and it is very difcult to
follow, that’s why it is so difcult - if not infeasible at all – to provide quantitative indicators
of the degree of corruption at the international level.
At the end of the nineties, Transparency International
2
non-governmental organization
was established with its headquarters in Berlin. TI systematically deals with the monitor-
ing of corruptive practices in the world, and the basic logic is based on two postulates: 1)
Tens of thousands of people are daily faced with corruption and do not know what to do,
2) it is simple and easy to quickly send and accept information over the Internet.
From this set of experiences, a large number of people and their perceptions of corrup-
tion, TI established a Corruption Perception Index (CPI), which is increasingly becoming
the basis for quantitative investigations of corruption.
1
Corporate Social Responsibility - CSR
2
Transparency International- TI
64
THE FIGHT AGAINST CORRUPTION - CROWDSOURCING Krmpot V.
Every year since its founding TI published a report on the results achieved by the govern-
ment. In these reports, ‘0’ rating got governments perceived as the most corrupted and
‘100’ those where corruption is least represented, and all of these reports are available on
their site (Figure 1).

Figure 1: Global view CP Index reports for 2012
Source: Transparency International
Figure 1: Global view CP Index reports for 2012
Source: Transparency International
“Looking at CPIndex2012, it becomes clear that corruption is a serious threat to humanity.
Corruption destroys the lives of people and communities and undermines the state and
institutions. Corruption creates anger of public opinion, which threatens to destabilize
society and intensify violent conficts.”
3
Te state must increase transparency and access to public expenditure and its institutions
while institutions must become more responsible to the whole society.
Recognizing the importance of transparency in the fght against corruption, China for exam-
ple has introduced a ‘zero tolerance policy’ towards corruption and, according to the fndings
of Transparency International has made signifcant step forward in the last decade (Table 1).
Survey conducted by the National Bureau of Statistics of China shows that in the period
2003-2010, satisfaction of citizens fghting corruption and creating non-corruptive gov-
ernment were continuously growing; the percentage of satisfaction among citizens went
from the initial 51.9% to 70.6% at the end of the period. Moreover, the percentage of those
who believed that corruption is actually on the decline increased from 68.1% to 83.8%.
4

“We must have the courage to fght against all forms of corruption, to punish any corrupt
public ofcials and to continuously eliminate soil where corruption appears, because we
gained the trust of the people with visible achieved results.”
5
.
3
Te Governments Must Prioritize the Fight Against Corruption,http://cpi.transparency.org/
cpi2012/results/
4
National Bureau of Statistics in China,http://www.stats.gov.cn/english/index.htm
5
Ksi ?inping, proslava 90 godina KPK, 22.01.2013.http://www.china.org.cn/china
65
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
Table 1: TI Corruption Perceptions Index – years and results
CHINA TI INDEX PERCEPTIONS CORRUPTION (CPI)
Year Result Year Result
1995 2.16 2004 3.40
1996 2.43 2005 3.20
1997 2.88 2006 3.30
1998 3.50 2007 3.50
1999 3.40 2008 3.60
2000 3.10 2009 3.60
2001 3.50 2010 3.50
2002 3.50 2011 3.60
2003 3.40 2012 39.00
3. CROWDSOURCING OPPORTUNITIES IN SERBIA
Let’s face opportunities like this, a new form of fghting at the moment in Serbia, which is
by no means immune to corruption as a seriously rooted problem. Pretending to become a
member of the European Union, one of the major tasks ahead for Serbia is fght against cor-
ruption, a systematic struggle at all levels of society, in all sectors, especially in the justice
and health sector. Moreover, while it does not address a certain number of contentious pri-
vatization listed by name (corruptively performed), Serbia cannot even begin negotiations
In Serbia, in the middle of 2009, the Anti-Corruption Agency began its work, and in the
beginning of the 2010, was ready to implement the Law on Agency to fght against corrup-
tion. On several occasions, the Agency has organized dozens of working meetings in all
parts of Serbia, where public sector ofcials, civil servants, representatives of local govern-
ment, territorial autonomy, civil society and media from most municipalities participated.
“Law on Anti-Corruption Agency for the frst time stipulated penalties for violations of
the law, and for the failure and providing false information about the assets prescribed
imprisonment and prohibition of performing a public function for a period of ten years, if
the ofcial is sentenced to imprisonment.”
6
Te government, at least declaratively, declared the fght against corruption and estab-
lished the Agency for it. One aspect of crowdsourcing applied the Anti-Corruption Agen-
cy. It is the creation of integrity plans that by the end of last year all civil authorities were
required to draw up, and that the completed integrity plan is submitted to the Agency. Tis
is done in cooperation with the EU and the Council of Europe as a joint project entitled
“Strengthening of the police and judiciary capacity to fght corruption in Serbia.”
7
What’s the similarity with crowdsourcing: - Agency set the integrity plans and distributed
them as a portal allowing quick and easy access and withdrawal; - Te agency has asked of
all government and public institutions to develop an integrity plan and that it within the
time limit return it the same way – submitting on the portal.
6
Osnivanje i status Agencije za borbu protiv korupcije,http://acas.rs/sr_cir/o-agenciji/osnivanje-
i-status.html
7
www.coe.int/pacs
66
THE FIGHT AGAINST CORRUPTION - CROWDSOURCING Krmpot V.
Diferences in relation to the ‘classic’ crowdsourcing, diferences are as follows: - Te agen-
cy did not seek information from all groups or individuals but only from state institutions;
- the Agency has not sought nor accepted the information in free form but in the pre-
scribed form, in the predetermined manner; - as the name suggests, integrity plans were
not providing data on corrupt practices but about existing ways of doing business that
may allow corruption or the cases in which the corruption is not prevented, on ways and
means of raising awareness and integrity of all stakeholders; - All these actions through
the Agency were initiated and funded by the government.
Well designed, due to the above work on raising awareness and integrity and considera-
tion of ways of doing business that allow corruption - actually based on self assessment,
project of integrity plan development is not recorded signifcant result in the public nor it
was presented to the public which measures are to be taken.
Serbia recognized that itself, its mechanisms and bodies are main source and engine of
corruption. Terefore, the establishment and operation of the Agency deserve all the
praise because it shows that the state is aware of the problem. Whether the agency itself is
sufcient in the way it was conceived - is another question.
It is also commendable that the agency decide to use new technologies in the fght against
corruption. Teir site is clear, usable, and up to date.
With all the resources at its disposal - human, technical, fnancial - the Agency would be
able to opt for the real crowdsourcing – to opt for collecting information directly from
the public, information on all aspects and forms of corruption faced by people every day.
Tere are several reasons why the agency would be an appropriate address for such a pro-
ject: - Te agency would be able to immediately begin work on crowdsourcing because it
already functions as an institution and has all the necessary conditions and resources for
it; - Te agency already has experience in this business; - Agency as a public entity has di-
rect access to the state authorities who should be obliged to take measures by reports that
the Agency would deliver to each ministry.
Such a project would be possible to start relatively quickly and painlessly. Anti-corruption
agency has both people and resources to handle information that would certainly arrive
from civil society. Te government would thus show it is indeed a serious partner - a seri-
ous stakeholder - and that is not willing to stay in a declarative attitude towards the fght
against corruption.
In addition to the new legal obligation that provides that all public tenders must be pub-
lished to the portal of the institution that opens them (transparency), hiring Agency to
fght corruption as the engine that drives crowdsourcing as a way to fght corruption would
make a great thing for many citizens to regain faith in their country and institutions.
If the government does not take this road, it will miss a great opportunity to show as a true
partner (stakeholder) of the citizens of this country. Ten the empty space will defnitely
fll some of our Alexei Navalny who started the crowdsourcing campaign in Russia because
crowdsourcing advantages are so obvious that even in Serbia will not be long ignored.
4. RESUME
A business without moral criteria and economy without business ethics cannot provide
permanent, stable and signifcant results. Te question of whether business ethics is a
matter of personal conscience of directors i.e. managers, a matter of personal conscience
67
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
of each and every employee involved in any way in the process of doing business. Ethical
behavior and moral responsibility in the use of both, old and new technologies is an im-
portant issue that requires some serious work.
Corruption is when we deliberately violate the principle of fairness in order to ensure an
advantage of any kind for himself or another. A formula of corruption is well known, it is
the sum of the monopoly and silence, when the responsibility is taken away.
Corruption is widespread and rooted, and not just that it seems it cannot be completely
eradicated, the big question is how to reduce it generally and then to be reduced to mini-
mum.
One way is defnitely the fght against corruption using new, innovative ways and new
technologies. Together we are a huge and powerful force - it is the basis of crowdsourcing
as a new vision of fghting corruption.
Since it requires the contribution of each of us, crowdsourcing has three serious advan-
tages - requires that all contribute to the fght against corruption, thus expanding the base
and information gathering and liability base for any act or omission; - crowdsourcing uses
new technologies that are fast, inexpensive and readily available; - crowdsourcing not
have to wait for an institutional government action - the previous two advantages allow
anyone who has the good will to do something and takes action.
In this way, crowdsourcing is fully in line with modern business principles and corporate
social responsibility where it says that business organizations are not only responsible to
the suppliers and subcontractors, but the wider community and all those who sufer the
impact of their business - all stakeholders.
Becoming stakeholders, people are on the way to re-become something other than mere
homo ekonomikus as has been the practice. However, understood as a spiritual being with
a certain material needs and not as a means to exploit the other man to become rich, one
must accept its responsibility for the environment, as a stakeholder, as one who has a cer-
tain share, rights and the responsibilities.
One of the primary responsibilities is the ethical struggle and the principle of impartiality
that provides equal opportunities for all. Corruption, as the mortal enemy of ethics and
fairness, threatens to endanger human society as a whole because it erodes the founda-
tions for sustainable growth.
Tat is why everyone is obliged to participate in the fght against corruption - perhaps,
until we come up with something better, crowdsourcing is the right solution - as in this
way we fght as a group, following the One for all, all for one principle.
BIBLIOGRAPHY:
[1] Chomsky, N.: Proft Over People & Global Order, New York: Seven Stories Press,
(2011).
[2] Healy, P. & Ramanna, K.: When the Crowd Fights Corruption, Harvard Business
Review, Vol. 91 (2013), No. 1/2.
[3] Josifdis, K.: Makroekonomija: Principi teorije i politike; Novi Sad: Ekonomski
fakultet, (2008).
[4] Ramanna, K.: Business Leaders Are More Tan Profteers, Te Economic Times,
(04/12/2012).
[5] Ratkovi? Nj.: Poslovna etika; Novi Sad: Fakultet tehni?kih nauka, (2008).
68
THE FIGHT AGAINST CORRUPTION - CROWDSOURCING Krmpot V.
[6]http://acas.rs/
[7]http://cpi.transparency.org/cpi2012/results/
[8]http://www.china.org.cn/china
[9]http://www.exed.hbs.edu/programs/lcai/Pages/default.aspx
[10]http://www.ipaidabribe.com/
[11]http://www.stats.gov.cn/english/index.htm
69
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
THE ISSUE OF STRESS-RESISTANCE DEVELOPMENT
AS A CONDITION OF FUTURE PROJECT MANAGERS
EFFECTIVE ACTIVITY
Kutas Maryna
KROK University Higher Educational Institution, Kyiv, UKRAINE,
e-mail: [email protected]
Abstract: Under modern conditions stress-factors exert regular infuence upon a human being. In this
regard it is necessary to say that the very infuence of these factors is unavoidable in our life. Tus the
diversity of such factors according to their origin, duration, intensity, reactions peculiarity causes a real
problem in course of professional development. People constantly striving to progress complicate this di-
versity and in such a way the study of stress-resistance as a human quality to resist a negative infuence
of factors and pathological states development is becoming more and more signifcant.
Key words: project manager, professionally important capacities, stress-resistance, training.
1. INTRODUCTION
Project managers ofen fnd themselves in difcult stressful situations what gives rise to
professional burnout, emotional exhaustion and mental stress which interfere with profes-
sional duties efective implementation. Terefore we consider stress-resistance as a profes-
sionally important capacity of a project management specialist.
Te issue of stress and stress resistance for the representatives of diferent professions has
been studied by ?. Bernard, H. Selye, R. Lazarus, O. Kononenko, K. Vereschahina-Yatsen-
ko, M. Kaplia, O. Markovets etc. We consider the issue of stress-resistance development as
one of important and necessary peculiarities of project manager professional and psycho-
logical aptitude as a basis of this sphere specialist personhood achievement.
In its direct meaning stress-resistance is regarded as an individual capacity of an organism
to keep its normal working efciency (K. Sudakov); as an important level of adaptation to
environment and professional activity extreme factors (V. Bodrov); as a capacity to social
adaptation, important interpersonal relations maintenance, successful personal potential
fulfllment provision, life goals achievement, working efciency and health preservation
(H. Nikiforov); as a condition of physical, emotional and mental exhaustion caused by an
array of emotional tensions and signifcant situations (V. Ababkov, M. Perrez).
Personality stress-resistance keeping or development involves the search of resources fa-
voring stress situations negative consequences overcoming. Te resources relate to inter-
nal and external variables which contribute to resistance maintenance in stressful situa-
tions. Te peculiar category of stress-resistance resources includes overcoming behavior
70
THE ISSUE OF STRESS-RESISTANCE DEVELOPMENT... Kutas M.
strategies and models. Te character and methods of stress-situations overcoming depend
upon the life stand, personality activity, personal potential and capacities fulfllment ne-
cessity (H. Nikiforov, Yu. Aleksandrovskyi, V. Ababkov, M. perrez, Yu. Scherbatykh, O.
Chebykin, V. Maryschuk, R. Lazarus).
2. STRESS CONCEPT RELATED TO MANAGERIAL ACTIVITY AND
STRESS-RESISTANCE METHODS
Te stress concept was introduced into science approximately 70 years ago by the Cana-
dian scientist H. Selye, one of the most prominent physiologists of the 20th century. He
mentioned that the very concept of stress bore diferent meaning for diferent people;
therefore it was quite difcult to fnd its specifc and unambiguous defnition. Te stress
theory of H. Selye is the most popular [1]. According to this theory the mechanism of
stress appearance consists in the fact that all biological organisms possess vitally impor-
tant inborn mechanism of inner equilibrium and balance support. Strong external irri-
tants can shatter this balance and an organism shows a protective and adjustable reaction.
Tis nonspecifc for an organism balance violation is considered to be a stress condition.
If the irritant doesn’t disappear the stress becomes stronger, develops causing an array of
peculiar changes and an organism tries to protect itself, prevent stress or suppress it. But
the possibilities of every separate organism are not immeasurable and under strong and
ofen stressful infuence they become exhausted or sometimes even ill.
H. Selye proved that there were three stages in course of stressful reaction development:
– an anxiety stage, which fnds expression in all body resources mobilization;
– a resistance stage on which an organism successfully copes with external factors at the
expense of previous mobilization. Te highest level of stress-resistance, mental and mus-
cular activity intensifcation, a will and desire to overcome unusual circumstances or ex-
traordinary situation are typical for this stage. If the stressor efect ceases at this stage or its
intensity diminishes, the aroused changes gradually return to normal;
– an exhaustion stage on which durable exhaustion develops if the stressor efect doesn’t
cease and continues to exert strong and durable infuence. Te adjustable opportunities of
an organism diminish, it ofers worse resistance to new harmful factors and as a result the
danger of a disease appears.
Over the last years physiological and psychoemotional stresses have been conventionally
distinguished [2]. Te physiological stress is attributed to a real irritant. Besides micro-
climate, radiation, noise, vibration, natural disasters may be regarded as stressors. Psy-
choemotional stress arises from the individual’s personal stand. An individual responds
to the surrounding factors relying upon external stimuli personal interpretation which
depends upon mental qualities, social status, role behavior, age, breeding, life experience.
Psychoemotional stress divides into informational stress, which develops as a result of
informational overexertion (a person doesn’t perform tasks, doesn’t have time to take cor-
rect decisions in necessary order under high level of responsibility), and emotional stress,
which arises under threat, danger, ofence, when a person during a long time remains
alone with personal feelings.
Among the common characteristics of stress one can distinguish enhanced anxiety, irrita-
tion, difculties with attention concentration, chronic tension combined with inability to
relax, difculties with decisions-taking, decrease of the level of the work being performed
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International Journal of Economics and Law, Vol. 3, No. 9 (2013)
and its performance delay. In addition stress has physiological symptoms such as head-
ache, appetite and sleep violation, and in the worst case scenario psychosomatic devia-
tions. Durable stress aggravates immune system functions and possibilities. It is extremely
hard to perform purposeful activity, switch and distribute attention under stressful situa-
tions and the threat of activity general suppression or total disorganization emerges. Be-
sides, skills and habits remain without changes [2].
Stress-resistance is identifed with emotional stability and ability to control emotions (Ye.
Milerian); ability to endure large loadings and successfully solve diferent problems in ex-
treme situations (N. Danylova); ability to cope with emotional excitement state in course
of complicated operation execution (V. Maryschuk); temperament characteristic allow-
ing to fulfll purpose-oriented tasks at the expense of optimal exploitation of neuropsy-
chic emotional energy reserves (V. Plakhtiienko, N. Bludov), positive emotions steadfast
prevalence (?. Olshannykova); integrated personal quality which is characterized by the
interaction of emotional, volitional, intellectual and motivational components of a hu-
man’s mental activity which provides activity target optimal successful achievement in a
complicated emotive atmosphere (P. Zilberman).
Stress-resistance is developed on the basis of multiple contact of a person with stress-pro-
ducing factors. Tis contact manifests itself in a complicated process including stressful
situation assessment, activity regulation under stressful conditions, coping with the stress.
Today there are a lot of methods aimed at stress-resistance level enhancement. All these
methods can be divided into two groups: diferential and integrated [3]. Te group of
diferential methods is used in those cases when a person’s activity is connected with
distinctly expressed physiological or psychoemotional stresses. For such workers stress-
resistance enhancement psychological relaxation and physical exercises complexes are
applied. Modern kinds of a human activity are infuenced by stress-factors which don’t
have distinctly expressed mechanism of physiological and psychoemotional operation,
therefore stress-resistance enhancement integral methods including refexotherapy and
refex preventive treatment are more wide-spread. Tese methods presuppose the infu-
ence upon human’s skin biologically active markings. Furthermore skin is considered as
integral informational system. Its parameters undergo dynamic changes under the infu-
ence of diferent stress-factors what is predetermined by the skin close functional connec-
tion with all subsystems of a human body. Tese methods include acupuncture, palpation,
warming-up, cauterization, cryotherapy, electropuncture, magnetotherapy, laser therapy.
Such methods as relaxation, breath autoregulation, recreation, autogenous training con-
tribute to the stress-resistance level enhancement, positive psychological state preserva-
tion and health promotion.
Managers with high emotional stability demonstrate constancy of their interests, assess situ-
ation objectively and are able to control the surrounding processes. Low level of emotional
stability testifes to possible emotional state balance change under nonstandard conditions,
diferent disorders etc. High personal anxiety is accompanied by neurotic confict, emotional
breakdown and psychological diseases. Low personal anxiety of a manager testifes to the
manifestation of self-confdence, carelessness and sometimes redundant audacity which
verges upon unreasonableness. Under high reactive anxiety manager’s attention and coor-
dination get violated, professional activity is accompanied by subjective emotions, tension,
disturbance, nervousness. Low reactive anxiety manifests itself in a striving to show oneself
in fne fashion, that’s why such category of managers requires mental activity stimulation [2].
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THE ISSUE OF STRESS-RESISTANCE DEVELOPMENT... Kutas M.
Managerial activity provides for the availability of quite manifold spectrum of profes-
sional skills and practices what in course of aspiration of their implementation results in a
sharp growth of psychological loadings. In answer to their action the body tries to achieve
stability at the expense of additional resources involvement. Such method of inner balance
achievement generates stress. Tat is the reason why stress-resistance is considered to be
the main psychophysiological professionally important capacity of a manager [4].
Having integrated scientifc approaches to stress-resistance determinants, V. Korolchuk
draws a conclusion on external and internal psychological factors of a personality stress-
resistance. Te external factors include stressful situation assessment which embraces
objective (external) and subjective (internal) stressful situation parameters; stress-coping
strategies (coping-behavior); the infuence of traumatic events upon personality and trau-
matic experience processing level; social support; professional and personal experience;
psychological preparation to the activity under extreme conditions. Being a personality
integrated characteristic stress-resistance provides for the interaction with all structural
characteristics of a psyche both during stress-factors infuence and afer it. Determinant
internal factors of personality stress-resistance formation and development are as follows:
personality self-conception, internal locus of control, cognitive development, commu-
nicative sphere maturity, personality stress-resistance structural components informa-
tive characteristics. Besides, stress-resistance high level provides for emotional balance,
self-assuredness, absence of shyness, low level of personal anxiety, volitional self-control,
self-possession; certain characteristics of motivational sphere (labor social importance,
mastery, achievement motivation), high level of internal locus of control, aptitude for ac-
tivity. Initial stress-resistance determinant characteristics are as follows: information pro-
cessing rate, neural processes lability, reliability, fortitude, activity accuracy and produc-
tivity. Assertive actions, personality activity in interaction, prosocial behavior, search of
social support and social contacts are the leading stress-coping strategies which determine
stress-resistance [5]. So personality stress-resistance has a multilevel determination and is
predetermined both by environmental and personality characteristics.
3. RESEARCH RESULTS
Cattell’s Sixteen Personality Factor Questionnaire has been applied to defne the level of
stress-resistance among 186 project managers and 54 students majoring in Project Man-
agement [6]. As only separate factors refer to the stress-resistance level of respondents we
have accomplished selective analysis by separate factors. Tus ?, ?, ?, ?, Q3, Q4 factors
testify to the availability of stressful situations efective overcoming skills and practices.
According to C factor (emotional instability – emotional stability) high received scores
testify to the ability to cope with stressful situations in a short period of time. In project
managers group C factor index tends to a stability pole (7,39 ± 1,60) and denotes emotion-
al stability, discretion, emotional maturity, inherent tranquility, adequate way of feelings
expression, real vision of situation and even-minded attitude to own unsolved emotional
problems. Managers with a high score by this factor more frequently become leaders in
their team though the range of indices is quite broad: low scores can be explained by the
reaction of tiredness or excessive disquietude under stress. In students’ group this index
is lower (4,80 ± 1,75), what may testify to the emotional instability, impulsivity, low toler-
ance as regards frustration, annoyance, fatigability. Qualitative distribution analysis has
73
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
shown that 95% of questioned project managers and 57% of students may be regarded as
emotionally mature personalities.
H factor average index (timidity – boldness) takes boldness position in both groups and
is approximately identical (6,53 ± 1,36 ? 6,74 ± 1,57 in a group of project managers and
students respectively). Te respondents have an inclination for risk and cooperation with
strange people and in unacquainted situations, tend to take independent, unconventional
decisions, have a turn for adventurism and leadership qualities manifestation. H factor
is distinctly defned; it characterizes the level of activity in social contacts, though it is
necessary to consider its genetic origin and property to refect temperament peculiarities.
People with high scores by this factor are persistent, sociable, able to sustain emotional
loadings, what helps them become leaders and fnd solutions in stressful situations. Quali-
tative distribution analysis has shown that 98% of project managers and 94% of future
project management specialists are able to take independent decisions.
I factor average indices (rigidity – sensitivity) relate to the rigidity pole in project manag-
ers group (3,65 ± 1,00) and testify to respondents self-confdence, reasonableness, fex-
ibility, practicality, rationality, logicality. So far as the respondents have received the scores
of higher negative pole we consider that their hardness mainly reveals itself in practical
and realistic approach toward the solution of delivered tasks and in the capability to cope
with stressful situations. In students’ group this index proved to be higher (5,35 ± 1,77)
and testifes to impressionability, emotional feelings variety, inclination for romanticism,
empathy. Qualitative distribution analysis shows that anxiety is typical for 20% of project
managers and 74% of students.
By O factor (tranquility – anxiety) project managers can be totally described as self-
reliant, cool-headed and even-tempered. Low scores by this factor in project managers
group (4,64 ± 0,94) describe people who cope with their defeats with ease in contrast to
those people who take any defeat as an inner confict. O factor average index in students’
group is considerably higher (6,43 ± 1,55) and testifes to instability, enhanced tension in
complicated life situations, extreme shyness and difculties with other people contacts
establishment. Nevertheless it is necessary to take into account that high scores by this
factor can have situational origin. Anxiety is typical for 20% of project managers and 76%
of students.
Q3 factor average indices (low self-control – high self-control) are high in both groups
(7,64 ± 1,34 > 5,83 ± 1,92 in groups of project managers and students respectively) though
in project managers group this index is considerably higher. Te respondents are single-
minded, have strong will, can control their emotions and behavior, what requires certain
eforts application, clear principles availability, social thought consideration. Personalities
with high scores possess socially approved characteristics such as self-control and persis-
tence. Tis factor measures the level of inner control of behavior, personality integrated-
ness. Such people are prone to organizational activity and achieve success in those spheres
where objectivity, resoluteness and tranquility are required. Besides this factor is connect-
ed with the level of activity in course of group problems solution. Qualitative distribution
analysis testifes to the fact that 99% of project managers have high self-control while the
percent of students able to control their emotions and behavior makes 83%.
Signifcant statistical discrepancies have been established in examined groups by Q4 fac-
tor (limpness – tension) (5,91 ± 1,08 > 3,59 ± 2,06 in project managers and students’ group
respectively). It’s worth saying that for successful activity it is quite important to receive
74
THE ISSUE OF STRESS-RESISTANCE DEVELOPMENT... Kutas M.
not high or low scores but the golden mean from 5 to 8 points, so long as researches have
shown that individuals who have received 5-8 points possess optimal emotional tone and
stress-resistance. Tus the average estimation results of project managers range from 6
to 7 points. As regards students their average score by this factor is too much close to
the limpness pole and describes the respondents as people having low level of achieve-
ment motivation who frequently content themselves with what they have already received.
Qualitative distribution analysis testifes to the fact that 90% of project managers and only
30% of students have optimal emotional tone and are stress-resistant.
4. SOCIAL AND PSYCHOLOGICAL TRAINING AS A METHOD OF
SPECIALISTS STRESS-RESISTANCE ENHANCEMENT
Project managers professional activity difers by a high level of emotional loading, requires
constant display of moral and social responsibility qualities and altruistic behavior as re-
gards subordinates. Regular stresses related to time and resources restrictions can con-
tribute to negative personal changes, dissatisfaction with oneself and one’s work, fatigabil-
ity emergence. For all that indiference, formalism and aggression as regards colleagues
develop what is considered as manifestation of psychological protection mechanisms and
means of psyche unsuccessful adaptation to durable stressful condition at the initial stage.
Labor psychology considers professional destructions as activity and personality formed
structure changes which exert negative infuence upon labor productivity and interaction
with other participants of this process [3]. Project manager personality qualities negative
changes (as concerns perception stereotypes, system of values, character, communication
means and behavioral patterns), which are regarded as personality professional deforma-
tions, more frequently emerge under the infuence of professional activity durable fulfll-
ment [7].
Today there are a lot of diferent technologies as regards stress prevention and overcom-
ing. Tey include the arrangement of proper working conditions which contribute to
stressors level reduction, mastering of stress management means like social, psychologi-
cal and organizational working environment change; bridge erection between home and
work; skills improvement; favorable social and psychological climate creation. Apart from
the mentioned technologies in our opinion special attention should be paid to the or-
ganization of special trainings to teach participants how to apply relaxation and stressful
situations overcoming methods.
We consider social and psychological training to be quite efective method of project
manager professionally caused psychological problems overcoming. Russian researcher S.
Ryzhenko distinguishes the following advantages of training applied with the purpose to
prevent emotional burnout and professional destructions [8]:
high level of personnel involvement in contrast to individual forms of interaction;
favorable moral and psychological climate development and support;
positive infuence of a group upon a personality, change of personal opinions, self-assess-
ment and other participants estimation in course of discussions and group dynamics;
possibility to apply a wide range of practical psychology diferent directions group meth-
ods: role-divided therapy, art-therapy, fairy-tale therapy, body-oriented therapy.
Tere are diagnostic and intervention stages of social and psychological training. In course
of a diagnostic stage the following tasks are to be accomplished:
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International Journal of Economics and Law, Vol. 3, No. 9 (2013)
training participants self-knowledge – their personal qualities perception, communica-
tion processes and behavior introspection;
other training participants feedback acquisition;
every participant personality peculiarities external diagnostics procedure ofered by psy-
chologist-trainer.
In course of social and psychological training intervention stage every participant disad-
vantages undergo correction and psychological competency improvement methods are
outlined [9].
Trainings aimed at stress-management refer to stress-management sphere. N. Vodopi-
anova and O. Starchenkova determine stress-management as a chapter of management
focused on organization stress management theory and practice (organizational stress);
professional stress prevention and personnel stress-resistance enhancement [10]. We con-
sider that stress-resistance level enhancement training should be aimed at negative emo-
tions overcoming, mood and motivation correction, professional burnout, anxiety, stress-
ful situations prevention and social and psychological successful adaptation. For this aim
implementation it is necessary to analyze and change inefective strategies of behavior in
tense professional or personal signifcant situations.
We ofer the algorithm of efective work with social and psychological stress-resistance
level enhancement training participants for future project managers which includes two
stages:
on the frst stage the environment of open communication and observation shall be cre-
ated which will help all participants gather required information necessary for the devel-
opment of stress-resistance certain instructions and dominants accountable for calmness,
comfort, confdence in course of professional obligations fulfllment, interest in a selected
sphere of activity, high volitional regulation;
on the second stage stressful situations positive visualization shall be put into practice,
self-cultivation work recommendations shall be ofered in order to cope with available
negative emotions, high unreasonable anxiety, stressful conditions and develop personal-
ity adaptive qualities.
5. CONCLUSION
Tense managerial activity makes high demands on project manager behavior and activity
structure volitional and emotional regulatory mechanisms. When managerial situation
doesn’t coincide with usual, stereotyped one optimal decision is taken by means of crea-
tive intellectual activity which requires exceptional volitional eforts. However every voli-
tional tension causes emotional overloadings resulting not only in breakdowns, neuroses
and other diseases, but also arouses compensatory reaction: a person makes an attempt
to take decisions relying upon previously developed and already not so exact algorithms
regardless of situation and logic. Tus under the conditions of constant tension caused
by the necessity to fulfll the required tasks within rather short period of time and under
resources insufciency conditions project managers have to be able to enlist their eforts
not to lose self-control and counter stress. Project management sphere specialist stress-
resistance level plays an important role. Successful completion of a project depends on
the ability to properly organize own and subordinates activity without losing self-control
in a responsible moment. Te research results have demonstrated that among students
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THE ISSUE OF STRESS-RESISTANCE DEVELOPMENT... Kutas M.
majoring in Project Management there are many people who cannot cope with stressful
situations, have increased anxiety and emotional tension which may exert negative infu-
ence upon future specialists activity. Te application of social and psychological train-
ing method will not only teach how to cope with excessive overloading which may lead
to stress emergence but also will help apply necessary knowledge and skills received in
course of training to prevent stress emergence among the subordinates. As our following
task we consider future project managers stress-resistance level enhancement social and
psychological training plan and scenario development.
BIBLIOGRAPHY:
[1] Selye, H.: Stress without distress. Riga: Vieda, (1992), pp. 112. ISBN 5-85745-033-0
(Published in Russian).
[2] Edited by Kyrychuk, O.: Labor and management psychology, VI International
scientifc and practical conference, (2009), pp. 202. IS?N 978-966-8640-44-5
(Published in Ukrainian).
[3] Zeer, E. & Symaniuk, E.: Professional destructions psychology: manual for higher
educational institutions, Academic project, (2005), pp. 240. ISBN: 5-8291-0566-7
(Published in Russian).
[4] Burega, V.: Managerial activity: job research theory, Donetsk, (2000), pp. 96. ISBN
5-7763-1785-1 (Published in Russian).
[5] Edited by: Maksymenko S., Sliusarevskyi M. etc.: Articles collection: PSA of
Ukraine, Social and Political Psychology Institute, Stal Publishing House LLC, (2011),
pp. 287. (Published in Ukrainian).
[6] Kapustina, A.: Multofactor personality test of R. Cattell, St. Petersburg: «Rech»,
(2007), pp. 104. ISBN 5-9268-0068-4 (Published in Russian).
[7] Gafner, V.: Pedagogue professional deformation and professional competency, Life
safety, No. 10 (2004), pp. 22–24. (Published in Russian).
[8] Edited by Kaigorodova B. & Maisak N.: Professional and organizational stress:
diagnostics, prevention and correction: All-Russian scientifc and practical
international conference materials, Astrakhan State University, Astrakhan University
Publishing House, Astrakhan, October 7-8, (2011), pp. 207. ISBN 978-5-9926-0509-9
(Published in Russian).
[9] Syngaivska, I.: Educational organizations managers psychological training be means
of interactive methods, Legal Herald of KROK University, Edition 4. (2009), pp. 203-
207. (Published in Ukrainian).
[10] Vodopianova, N.: Burnout syndrome. Diagnostics and prevention, St. Petersburg:
Piter-print, (2005), pp. 336. ISBN 5-469-00289-6 (Published in Russian).
77
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
ENERGY SECURITY OF THE REPUBLIC OF SERBIA
Laki? Nikola
PhD student at the Faculty of Political Science, University of Belgrade, Belgrade,
SERBIA, e-mail: [email protected]
Abstract: Te critical points of the energy security of Serbia are energy dependence, low rate of energy
efciency, high-energy intensity and insufciently exploited potential of renewable energy sources. On
the territory of Serbia, there are not enough conventional energy sources. Te quality of available fossil
fuels is very limited. Serbia is forced to the high import dependence. Serbia spends three to four times
more energy per unit of output than in Europe. Irrational electricity consumption per capita is the result
of intensive use by the public due to depressed prices of electricity compared to other energy sources and
due to the stagnation of economic activity. Te low cost of energy may calm nation and lead to a false
sense of security even when the energy intensity of its economy remains large. Te social price of energy
that the political elite use to lead social policy except that discourages capital investment in measures
to reduce energy intensity, consequently diminish the responsibility for the rational and efcient use
of energy. Energy security is therefore a derivative concept that cannot be separated from political in-
terests. Great potential for saving energy and reducing the use of fossil fuels in Serbia is a fund that in
the structure of fnal energy consumption is the most involved. Most of the existing buildings in Serbia
has been built based on a system of fast construction at the time of the socialist reconstruction of the
country when it no one care about the energy efciency. Reducing energy dependence of Serbia is pos-
sible thru the exploitation of the potential of renewable energy sources, which according to estimates of
experts has a value of half the annual energy needs of the country. Te liberalization of the electricity
market, increase energy efciency and greater utilization of renewable energy sources are key measures
to increase the energy security of the Republic of Serbia.
Keywords: energy security, energy efciency, renewable energy, fnancial instruments
1. INTRODUCTION
Increasing unsustainable demand for energy resources could be realized with the projec-
tion of progressive growth of the world population to 10 billion people in 2050. It is ex-
pected that the urban population will almost double over the next 40 years: it will increase
to 6.4 billion in 2050.
1
According to projections, 75 percent of the population of Europe
will live in cities by 2020.
2
Te threat of urban overpopulation looms over the entire world
and in this regard, there is a threat of unsustainable demand for energy. Urban buildings
have a signifcant impact on energy consumption, which in turn produces huge and un-
1
United Nations, World Urbanization Prospects: Te 2007 Revision (New York: Department of
Economic and Social Afairs, 2008),1
2
Tai-Chee Wong and Belinda Yuen, Eco-city Planning: Policies, Practice and Design (New York:
Springer, 2011), 240.
78
ENERGY SECURITY OF THE REPUBLIC OF SERBIA Laki? N.
necessary amount of losses and waste. According to an analysis of the “Architecture 2030”,
today’s buildings are the largest global consumers of energy as they consume about 40
percent of the energy and are responsible for 40 percent of emissions of harmful gases,
which is more than any other sector, including transportation and industry
3
. Excessive
and inefcient use of energy in urban areas can impoverish domestic natural resources
and exponentially increase energy depending on foreign resources. Decline in the quality
and quantity of resources and population growth are factors besides endangering energy
security and pose a threat to the vital functioning and survival of future generations.
Implementation of energy efciency measures in the building technique and renovation
residential sector (houses, residential and commercial buildings) and greater utilization
of renewable energy potential may act causally on the energy security of a country, eco-
nomic growth and the prevention of losses of natural resources. Te current Department
of Energy, Development and Environmental Protection of the Republic of Serbia with
its nominal expression reveal that the “energy security, economic development and the
efciency of the environmental baseline are interrelated objectives for which no national
economy can say is energy safe.”
4
Endangering of natural resources as negative external
efects of production and the consequences of energy inefciency is possible to limit only
with the strengthening of “green” measures through state regulation, economic policy in-
struments (regulation of subsidies, changes in the structure of the tax system), incentives
for innovation, “green” technology and the introduction of new rules on fnancial market.
Energy security of the Republic of Serbia and the measures that have the potential to
transform current unsustainable energy paradigm are the subject of this paper. We start
from the basic assumption that in Serbia there is not enough conventional sources of
energy, which constitutes a high energy dependence on imports, as well as the fact that
potential of energy efciency and renewable energy are poorly utilized in Serbia, which
has overall implications for energy security of the Republic of Serbia.
2. CONCEPTUALIZATION OF ENERGY SECURITY
Arnold Wolfers defned security as “the absence of threats to the adopted values.”
5
In ac-
cordance with this defnition, security is a necessity of human existence that in addition to
existence requires freedom from all kinds of threats and space to make choices about life-
style. Economic well-being, individual security and stability of the political system may be
viewed as the “adopted” values of each society. Energy insecurity could pose a threat or risk
to these values as any threat to the stable fow of energy production damage the economic,
political stability and personal welfare of citizens
6
. Energy security is therefore, to para-
phrase Ken Booth, the instrumental value that allows people the opportunity to choose
how to live
7
. Energy for this reason should be securitized and treated as security issue.
3
Jerry Yudelson, Te Green Building Revolution (Washington: Island Press,2008),1.
4
Zorana Z. Mihajlovi? Milovanovi?, “Energetska bezbednost zemalja Jugoisto?ne Evrope u svetlu
ruske energetske politike“, pristupljeno Juna 23, 2013
5
Arnold Wolfers, “National Security as an Ambiguous Symbol”, Political Science Quarterly, Vol.
LXVIII, No.4 (1952):485
6
Florian Baumann, “Energy Security as multidimensional concept”(Policy Analysis No.1, Center
for Applied Policy Research, March 2008),4.
7
Ken Booth, Critical Security Studies and World Politics (Boulder London: Lynne Rienner
Publishers,2005),23.
79
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
Diferent actors are also giving a diferent meaning to the concept of energy security. Te
traditional defnition of energy security involves elements of availability, reliability and
accessibility
8
. Energy security is defned as the ability of a nation and its economy to guar-
antee the supply of energy resources in a timely manner and at reasonable prices that will
not adversely afect the economic performance of the economy.
9
Economic understanding
of energy security as well as security of energy supply analytically is not helpful.
Energy security is primarily situational condition and contextually dependent concept.
No question and the safety aspect cannot be separated from political interests.
10
Safety
is a derivative concept that contributes to the production and reproduction of reality in
the interests of politics and inherently associated with Laswell’s who gets what, when and
how.
11
Energy security should therefore be analyzed as a result of the political process in
which inter-subjective structures and individual political preferences play an important
role. Tus, for example, low energy prices may be calming nation into a false sense of se-
curity even when the energy intensity
12
of its economy remains signifcantly increased
13
.
Te social price of energy is a phenomenon that is ofen used by political elites to led social
policy over the energy sector and in return gaining a broader base of political support.
However, the social price of energy except that discourages capital investment in measures
to reduce energy intensity, it creates awareness, understanding, ways of behavior, desires
and expectations among consumers that energy is constantly available with secured sup-
ply, which consequently reduces the responsibility for rational and efcient use of energy.
Energy security is thus embedded in the factors that constitute the social environment, in-
cluding everything from politics, education, media, cultural values and access to resources.
With respect to a given role of political interests and demographic factors in deepening
energy security, establishing the objective standpoint whether energy state of government
is uncertainty, insecurity or vulnerability, mainly depends on the combination of the fol-
lowing variables: dependence of the economy and society of individual energy resources,
location of foreign sources energy supply, security of energy supply routes in the state’s
ability to quickly restore power supply
14
. Terefore, threats and risks to energy security
are the depletion of natural resources, reliance on foreign sources of energy and volatile
energy prices. Providing cost-efective, reliable and environmentally sustainable energy
supply is one of the main priorities of contemporary international and national policies,
and energy efciency is a key component of a comprehensive energy strategy.
8
Jonathan Elkind, “Energy Security: Call for a Broader Agenda”, in Energy Security: Economics,
Politics, Strategies, And Implications, eds. Carlos Pascual and Jonathan Elkind (Washington:
Brookings Institution Press, 2010), 121.
9
Christian Winzer, “Conceptualizing Energy Security”(EPRG Working Paper, Cambridge
Working Paper in Economics, July 2011),6.
10
R.B.J, Walker, “Te Subject of Security”, in Critical Security Studies: Concepts and Cases, eds.
Keith Krause and Michael Williams ( Minneapolis: University of Minnesota Press,1997),63.
11
Detaljnije u Ken Booth, Teory of World Security (Cambridge: Cambridge University Press,
2007).
12
Te ratio of energy consumption and unit of newly created value - the gross domestic product.
Increased energy intensity indicates that energy is used in a inefciently and irrationally way.
13
Jonathan Elkind, “Energy Security: Call for a Broader Agenda”,120.
14
Michael Wesley, Power Plays: Energy and Australia’s Security(Barton: Australian Strategic Policy
Institute, 2007),21
80
ENERGY SECURITY OF THE REPUBLIC OF SERBIA Laki? N.
Under the concept of energy efciency, we mean a wide range of activities, which is the
ultimate goal of reducing the energy consumption of all types with the same or better con-
ditions.
15
Improving energy efciency is ofen the fastest way to meet energy needs. En-
ergy efciency reduces the need for energy from the system, which automatically reduce
production costs and energy (prevents the shock of the price), and provide energy security
for the individual, the nation and the global community. Rational use of fossil fuels and
the implementation of efective measures to reduce energy losses open the door for new
investments in the production of renewable energy and energy efciency measures, which
lays the foundation for building a sustainable economy without the necessary growth in
energy consumption and energy dependence. Problems with the current energy systems
are not limited to the use of non-renewable energy sources, a signifcant problem is that
the entire energy system is inefcient. Large, centralized power supply system systemati-
cally leads to unnecessary and large distribution losses only if you consider these basic
facts: more than two-thirds of the fuel energy used to produce electricity is lost before it
reaches the household, over 90 percent of the energy of the pit coal is lost before utiliza-
tion, while ordinary bulbs lose 90 percent of their energy as heat, using only 10 percent
for the production of light.
16
Terefore, the need for energy should be evaluated to a great
extent and in manner in which the buildings and transport systems are efcient.
3. ENERGY SECURITY OF THE REPUBLIC OF SERBIA
National Security Strategy of the Republic of Serbia is the most important strategic docu-
ment that represents a synthesis of chosen and binding positions on the issue of security
of the state and the basis for the development of strategic documents in all areas of social
life. Strategy only means inevitable trend exhaustion of non-renewable sources of energy
resources as the real basis of endangering energy security and the challenge of stability and
security of the Republic of Serbia
17
. Energy Development Strategy of the Republic of Serbia
by 2015, as a basic instrument for the implementation of the energy politics of Serbia sets
the following priorities: economic utilization of high-quality energy products, energy ef-
fciency and use of renewable energy sources. In this paper, the critical points of the energy
security of Serbia are presented as energy dependence, high energy intensity, low rate of
energy efciency and insufciently exploited potential of renewable energy sources.
Serbia slowly enters the absolute energy dependence. Te import dependence was about
33.6 percent in 2010, while import dependency projected for 2008 stood at 42 percent. Te
reserves of high-quality fuels, such as oil and gas are very small, amounting to less than 1
percent of the total energy reserves of Serbia.
18
Te largest reserves are of low-quality lig-
nite, with about 92 percent of the total balance reserves. In the structure of the production
of primary energy, coal accounts for 69 percent, while as an energy input in the system
transformation is presented with 64 percent. Lignite with a total exploitation reserves of
15
Michael Hoexter, “Achieving More with Less: Te State of Energy Conservation and Energy
Efciency”, in Sustainable Communities Design Handbook: Green Engineering, Architecture, and
Technology, ed. Clark Woodrow( Butterworth-Heinemann, 2010),45
16
Surte Bry Sarte, Sustainable Infrastructure: Te Guide to Green Engineering and Design (New
York: John Wiley & Sons, 2010),167.
17
“Strategija nacionalne bezbednosti Republike Srbije”, Beograd, aprila 2009.godine,10.
18
„Simplifed National Action Plan for Renewable Energy of the Republic of Serbia” (Belgrade:
Ministry of Energy, Development and Environmental Protection, December 2012), 4
81
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
about 13,350 Mt represents the most important domestic energy resource, which will be
sufcient for the period between ffy and seventy years.
Te total amount of primary energy needed for consumption in 2013 was 16.739 mil-
lion tons of oil equivalent (Mtoe). It is 5 percent more than the estimated total amount of
primary energy consumption in the 2012, which amounts to 15,992 Mtoe. Te required
amount of primary energy will provide 67 percent of domestic production and 33 per-
cent of net imports. Domestic production of primary energy includes exploitation/utiliza-
tion of domestic resources of coal, crude oil, natural gas and renewable energy sources
(hydropower and frewood) per annum. Planned production of primary energy in 2013
amounted to 11.259 Mtoe, an increase of 4 percent of the estimated produce it in the 2012,
which amounts to 10.852 Mtoe.
Serbia is energetically most dependent on natural gas and imported oil. In the case of natu-
ral gas, there is a tendency of complete binding for Russian gas. Te whole potential of Ser-
bia is in an advanced stage of exploitation and can meet 20 percent of demand. Te required
quantities of natural gas in 2013 will provide the 17 percent of domestic production and 83
percent from import.
19
Plans for the construction of alternative sources of supply will raise
the level of security of gas supply in Serbia, primarily the construction of a gas pipeline
called “Juzni tok” whose capacity is about 40 billion cubic meters over Serbia’s territory, and
gas storages.
20
Oil was provided with 43 percent of domestic production and with imported
57 percent of total needs. Import of crude oil in 2013 were planned in quantities of 1,660
million tons, which is 55 percent more than the estimated import in 2012, which amounts to
1.073 million tones.
21
However, Serbia has no strategic reserves of petroleum and petroleum
products, but only supplies from stockpiles, which are used in the emergencies. Strategic re-
serves in other countries are sufcient for about 90 days and those are imported petroleum
products. Lack of strategic reserves refects the weak state’s ability to quickly restore power
supply in terms of energy crisis. Energy security of Serbia is vulnerable to geopolitical events
in the world, because an increase in the price of crude oil and petroleum products in the
Mediterranean region afects the price of energy in Serbia, as the contract with the main
supplier is on oil based formula. Serbia due to its geographical location has a developmental
problem in the feld of energy, because there is no access to the sea and consequently no cost
unencumbered access to the world market of conventional energy, bearing in mind the fact
that oil, gas and coal trade largely thru marine transportation.
From the above-mentioned data it can be observed, that the continued growth depends
on import and a need for more intensive use of fossil fuels grows due to the growth of
the needs for primary energy. Treats to energy security of Serbia determines the energy
intensity, or the energy consumption per unit of added value, which is up to four times
higher in Serbia than in the EU because it produces little new products and spends a lot of
energy for them. Irrational electricity consumption per capita is the result of intensive use
by the public due to depressed prices of electricity compared to other energy sources and
the apparent disagreement in prices of diferent types of fuel and energy, as well as due to
the stagnation of economic activity. Te main efort of the energy policy of Serbia must
19
„Energy balance of the Republic of Serbia for the 2013”, 5
20
November 21, 2011 „Banatski Dvor”, underground gas storage was ofcially started to work.
Underground storage is one of the largest facilities for the storage of gas in southeastern Europe.
Te active storage capacity is 450 million cubic meters of gas, while the maximum daily capacity
is 5 million cubic meters.
21
„Energy balance of the Republic of Serbia for the 2013”, 3
82
ENERGY SECURITY OF THE REPUBLIC OF SERBIA Laki? N.
be reducing dependence on imports and the rational use of fossil fuels through systemic
measures of liberalization of the electricity market, increasing energy efciency and the
intensifcation of the usage of the potential renewable energy sources. Increasing energy
efciency and application of renewable energy sources are key measures to increase en-
ergy security.
State of the energy efciency in Serbia is such that places it among the largest consumers
and polluters in the Balkans. Energy efciency in Serbia is even 2.5 times lower than in the
EU countries. Inadequate level of energy efciency in Serbia testifes the fact that losses
in transmission and distribution of electricity amounted to 19 percent and are among
the highest in Europe.
22
Endemic problem of energy efciency of Serbia, and thus the en-
ergy security of Serbia, is the fact that most of the existing buildings were constructed by
the system of rapid construction in the period of socialist reconstruction of the country
when no one cared about energy efciency. Tis has contributed to the average energy
consumption in buildings in Serbia is over 150kWh/m² per year, while in the developed
European countries is below 50 kWh/m². In the residential sector (households, buildings
and public utilities) is the largest energy consumption. Te structure of fnal energy trans-
port accounts for 24 percent, with 30 percent of the industry, and other sectors together
(households, agriculture and public and commercial activities) account for 46 percent
23
.
Total electricity consumption by sector accounted for 56 percent of the households and 65
percent of it is used for space heating in residential area.
24
Since the residential buildings
were built during the seventies and eighties with inadequate insulation or with no insula-
tion whatsoever, they now represent the biggest problem in terms of energy consumption
in Serbia, and at the same time and a great potential for energy savings.
25
Serbia per season
spends about half a billion Euros for heating, and if the energy efciency savings is 10%, it
would be possible to save some 50 million Euros per season, which would be possible to
invest in other development projects. In addition, if you every household in Serbia would
be willing to replace one 100W bulb with 20 watts, it would be possible to save more than
17 million Euros per year. Currently available measures and technologies according to
BASF statistics can reduce total energy use in buildings up to 80 percent
26
. Te buildings
can improve energy efciency and achieve approximate net - zero fossil fuel consumption
through more efcient insulation, utilization of natural energy (solar panels) and better
control of climatic conditions in the building using double glazing, natural air condition-
ing, passive illumination and other energy efciency measures. Te potential of energy
efciency could be crucial especially if you consider the fact that more than 90 percent
of the production of thermal energy in district heating systems in Serbia is based on the
direct use of fossil fuels, while in the EU fossil fuels are used only in 15 percent in cases of
thermal energy production.
22
Dragan Ugrinov, Snežana Komatina-Petrovi? i Aleksander Stojanov, “Mogu?nosti eksploatacije
deponijskog i biogasa kao obnovljivog izvora energije u Srbiji”, Zaštita materijala,Vol.53,No.4
(2012):380.
23
„Energy balance of the Republic of Serbia for the 2013”,12
24
„First Action Plan for Energy Efciency of the Republic of Serbia for the period 2010 - 2012”
(Belgrade, June 2010), 13
25
Zoran Živkovi?, Predlog mera za fnansiranje energetske efkasnosti u zgradarstvu u Srbiji
(Beograd:Gra?evinska knjiga, 2011),37
26
Jerry Yudelson, Green Building A to Z: Understanding the Language of Green Building (Gabriola
Island: New Society Publishers, 2007),191
83
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
At the current level and the manner of exploitation of resources as well as due to limited
resources and ways of irrational consumption, in order to rationalize the use of energy
resources, the most important role has the renewable energy. In order to realize the en-
ergy balance and increase security of energy supply and energy, it is necessary to inten-
sify the activities in order to increase the use of renewable energy sources in Serbia. By
ratifying the treaty on establishing the energy community in 2006, Serbia has committed
to the implementation of European directives in the feld of renewable energy. Directive
2009/28/EC set binding targets to ensure that by 2020 the renewable energy accounts for
20 percent of total energy consumption in the European Union. Based on this, Serbia has
made a commitment that by 2020 increases the share of renewable energy in total energy
consumption to 27 percent. Te structure of the planned domestic production of primary
energy for the 2013, renewable energy sources account for 1,835 Mtoe which is 16 percent
of the domestic production of primary energy. Renewable energy sources, with estimated
technically exploitable potential of about 6 Mtoe per year, which corresponds, according
to the estimates of experts almost half of the annual energy
27
needs of the country, can
contribute to smaller usage of fossil fuels and improve energy security and efciency of
the environment.
Te most important renewable energy source in Serbia is biomass whose energy potential
is estimated at about 2.7 million tones and which according to some estimates could meet
30 percent of the energy needs of Serbia (1.7 million ten residues in agricultural produc-
tion and about one million tons in wood biomass). It is estimated that the total potential
of biomass from agriculture in Serbia is about 12.5 million tons per year, which in terms
of energy is approximately 1.7 million tons of the total quantity of biomass residues from
agricultural production intended for thermal purposes (just over 3 million tons), which
could provide to save the equivalent amount of light heating oil
28
. Te estimated amount
of biomass in Serbia, which can be used as fuel, is about 1.65 million m3 per year, while the
energy potential of forest biomass with more than 12 million tons of wood waste produc-
tion per year is estimated that supports Serbia in the future potential to develop its bio-
energy sector for the production of electricity and heat. In addition to these two sources of
biomass, of the most signifcant sources we should mention the waste of livestock produc-
tion. For the most part, the waste of the livestock production is animal manure that can
be used as raw material for the production of biogas. Based on the statistics, Serbia could
produce that much biogas to compensate for about 20% of its natural gas imports, only
from livestock.
29
Prospects for energy independence in the future ofer hydropower too. Te total hydro-
power potential in Serbia is estimated at 17,000GWh of which has been used around
10,000GWh. Te remaining hydropower potential is estimated to be about 7,000GWh
and in the basin of the Morava, Drina and Lim. Tese areas are suitable for the construc-
tion of facilities with power greater than 10MW and an annual production of around
5,200GWh. Te potential of small rivers, where they can build small hydropower plants,
is approximately 0.4 million complexion, or 3% of the total potential of renewable energy
27
„Simplifed National Action Plan for Renewable Energy of the Republic of Serbia” (Belgrade:
Ministry of Energy, Development and Environmental Protection, December 2012), 4
28
Branimir Jovanovi?, Miroslav Parovi?, “ Stanje i razvoj biomase u Srbiji”(Beograd: Jeferson
institute, Novembar 2009),6.http://www.jefersoninst.org
29
Branimir Jovanovi?, Miroslav Parovi?, “ Stanje i razvoj biomase u Srbiji”,9
84
ENERGY SECURITY OF THE REPUBLIC OF SERBIA Laki? N.
sources in Serbia. Small hydropower plants are power plants with up to 10MW and fall
into the category of privileged power producer. If the total energy potential of small hydro
power plants could be used, it could be possible to produce 4.7 percent of the total elec-
tricity production of Serbia (34,400GWh in the 2006) and about 15 percent of the annual
production of electricity from hydro power plants, which amounts to about 10,000GWh.
30

Wind energy, solar and geothermal energy account for less than 1% of domestic primary
energy production. Te total potential of wind energy in Serbia is around 1300MW of in-
stalled capacity, which is approximately 15% of the total energy potential in Serbia. Tese
capacities can potentially produce about 2.3TWh of electricity per year
31
. Tere is also a
considerable potential in solar energy, which makes 20-30 percent higher intensity than
the European average by insolation. Mean annual global solar radiation on a horizontal
plane is as high as about 1,300kWh/m².
Low utilization rate of renewable energy potential exists because of unrealistic price par-
ity of energy and energy services since energy is an instrument of social policy in the
Republic of Serbia. Te low price of electricity is particularly unrealistic, which is about
5.5 euro cents per kilowatt - hour, which is three to four times lower than in the EU.
In such circumstances, there is no economic interest in investing in projects to increase
energy efciency and renewable energy. Te biggest loss due to the efect of price policy
is tactless and non-rationalized energy consumption, which compels states to import re-
sources at high prices, while energy from domestic production (coal) sale and exhausts
at very low prices. A key step to begin market development of renewable energy would
be to determine feed-in tarifs, or guaranteed purchase prices and incentives for electric-
ity produced from renewable energy sources for 12 years from the start of production.
Te introduction of these measures in 2009 represented the incentive for investors who
subsequently showed more interest for investing in this area. Government of Serbia on
January 24, 2013 adopted new regulation on supportive prices for the purchase of electric-
ity from renewable energy sources. In addition to feed-in tarifs in Serbia, other fnancial
instruments for energy savings are present, such as funds, subsidies, grants and loans, and
fnancial mechanisms for energy conservation and raising energy efciency is still not
present in the fnancial market. Important market services in Serbia for raising energy ef-
fciency and saving energy should be the ESCO mode (Energy Service Company). ESCO
act as a third party between customer and fnancial institution. Te mechanism involves
the development and fnancing of projects aimed at improving energy efciency. Partner-
ship with fnancial institutions allows ESCO mechanism to invest in improving efciency
and reducing cost of energy using the projected cash fows from future energy savings
per investment
32
. During the period of investment repaying, the customer pays the same
amount for the cost of energy as before the implementation of the project, so there is no
investment risk. Te European Bank for Reconstruction and Development has noted that
the ESCO represents a win-win situation in terms of energy, economy, and environment.
30
Maja Poznatov, “Obnovljivi izvori energije-energetska budu?nost”, Juna 22, 2013,http://www.
euractiv.rs/odrzivi-razvoj/2272-obnovljivi-izvori-energije-energetska-budunost.html
31
http://www.serbia-energy.com
32
Sudhakara Reddy et al., Energy Efciency and Climate Change: Conserving Power for a
Sustainable Future (New Delhi: Sage Publications, 2009),251.
85
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
4. CONCLUSION
On the territory of Serbia, there are not enough conventional energy sources. Not only
the total volume of conventional sources is small, but also the quality of the available fossil
fuels is very limited. Serbia is forced to import fossil fuels, which constitute the need for
high import dependence. Te largest part of the available energy is spent by population for
now, and any potential industrial development of Serbia would imply, however, a dramatic
increase in import dependency in the feld of energy, which would completely restricted
the potential of industrial development of Serbia based on energy-intensive industries. In
the future, for the Republic of Serbia of the utmost importance will be to reduce the en-
ergy dependence of the country and provide safe, quality, cost-efective, environmentally
efcient and reliable energy supply and energy. Great potential for energy savings is that
the housing area that in the structure of fnal energy consumption involved in the biggest
percent. Serbia consumes three times more energy in residential, commercial and indus-
trial buildings than in the EU. Energy efciency measures would improve energy security
of Serbia with the automatic reduction of the expenditure of fossil fuels. Te buildings are
unused natural resource and investment in energy efciency and renewable energy would
coincidence with the period when these changes could encourage new jobs and economic
growth at present macroeconomic recession. Reducing the energy dependence of Serbia is
realistic thru the exploitation of the potential of renewable energy sources, which accord-
ing to estimates of experts has a value of half the annual energy needs of the country. Te
most important measure of rational and efcient energy consumption is its price, which
is at the moment, at least when it comes to electricity, a disincentive in terms of motiva-
tion, above all, consumers, and manufacturers for implementation of energy efciency
measures and investments in renewable energy. Low price of energy is only an instrument
of social policy in Serbia. Political conditions which nation is exposed to consequently
forming the perspective of energy security of the Republic of Serbia.
BIBLIOGRAPHY:
[1] Baumann, F.: Energy Security as multidimensional concept. Policy Analysis No.1,
Center for Applied Policy Research, (2008).
[2] Booth, K.: Critical Security Studies and World Politics. Boulder London: Lynne
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[3] Booth, K.: Teory of World Security. Cambridge: Cambridge University Press,
(2007).
[4] Bry S.: Sustainable Infrastructure: Te Guide to Green Engineering and Design. New
York: John Wiley & Sons, (2010).
[5] Elkind, J.: Energy Security: Call for a Broader Agenda”. Energy Security: Economics,
Politics, Strategies, And Implications, edited by Carlos Pascual and Jonathan Elkind,
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[6] Živkovi?, Z.: Predlog mera za fnansiranje energetske efkasnosti u zgradarstvu u
Srbiji. Beograd:Gra?evinska knjiga, (2011).
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Architecture, and Technology, edited by Clark Woodrow, Butterworth-Heinemann,
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[11] Reddy, S., Gaudenz B. Assenza, D. & Franziska H.: Energy Efciency and Climate
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[12] Šumarac, D.: Energetska efkasnost zgrada u Srbiji-stanje i perspektive.
Termotehnika, Vol.XXXVI, No.1 (2010), pp. 11-29.
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deponijskog i biogasa kao obnovljivog izvora energije u Srbiji. Zaštita
materijala,Vol. 53 (2012), No.4, pp. 379-385.
[14] United Nations: World Urbanization Prospects: Te 2007 Revision. New York:
Department of Economic and Social Afairs, (2008).
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Cases, edited by Keith Krause and Michael Williams, Minneapolis: University of
Minnesota Press, (1997), pp. 61-83.
[16] Wesley, M.: Power Plays: Energy and Australia’s Security. Barton: Australian Strategic
Policy Institute, (2007).
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Working Paper in Economics, (2011).
[18] Wolfers, A.: National Security as an Ambiguous Symbol. Political Science Quarterly,
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[19] Wong, Tai-Chee & Yuen, B.: Eco-city Planning: Policies, Practice and Design. New
York: Springer, (2011).
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DILEMMA – INSIDER OR OUTSIDER DIRECTORS
Radosavljevi? Milan
Faculty for Strategic and Operational Management, Belgrade, SERBIA,
e-mail: [email protected]
Abstract: Achieving business success is becoming increasingly difcult, especially when viewed over
prolonged period of time. However, some companies and their executive directors achieve positive re-
sults, while others remain at the level of mediocrity which eventually leads to their disappearance. It
turns out that the success of the business is afected by whether the frst people are appointed from
within the company from the company, or those are outside people.
Since this issue was not sufciently addressed in the management literature, this paper attempts to shed
light on this phenomenon from the perspective of the theory and practice of management. Tis paper
investigates whether and to what extent insiders and outsiders afect business success, in order to trans-
late the fndings of this study for the implementation in the Republic of Serbia as a country in transition.
Keywords: CEO, insider, outsider, success
1. ARGUMENTS FOR AND AGAINST HIRING INSIDERS -
OUTSIDERS
Te dilemma regarding the leading people in the company, whether in leadership posi-
tions to set up someone from the company or outside the company, is a matter of judgment
of owners (shareholders), i.e. what he wants to achieve with their appointment. Tere is
no universal answer to this dilemma because each organization is unique, at diferent
stages of the life cycle and ofen exposed to a variety of business and market competition.
However, it is possible to point to specifc situations in which priority is given to either
insiders or outsiders.
Te dilemma insiders or outsiders must be solved by the policy which is formulated by the
owners of the company. Practice shows that insiders are generally appointed when there
is a high quality human resources, or individuals or experts that have proven their ability
in the company, doing a variety of jobs in diferent functional areas. In these circum-
stances, the board or the owners have a clear career plan for development of management
structures. In the event that the executive director or other executives leave the company,
owners do have options, i.e. they do have at their disposal individuals who may be able to
take over management of the company, or some functional part of the company. Career
plan is commonplace in large business organizations, but there has been certain criti-
cism regarding this issue. Te most serious criticism states that planning a career does not
stimulate the competitive spirit and competition of individuals in advance to favor indi-
viduals, since it is known in advance who will take the top position. In order to eliminate
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DILEMMA – INSIDER OR OUTSIDER DIRECTORS Radosavljevi? M.
this problem, some companies are preparing more candidates for these places, and they
are usually appointed deputy director-general. However, practice shows that here we have
an even bigger problem between rivals on the one hand, and employee relations. It turns
out that today employees too are asked for their opinion on the appointment of top peo-
ple. Wise owners will never appoint competent individuals if they are not accepted by the
executive structure, throughout depth and width of the organization. Tis ofen becomes
the deciding factor in the appointment of individuals, which is only natural because to-
day there is a need for a high level of socialization and appreciation of the personality of
every person by the top management [1]. Another factor that goes in favor of insiders
is an attempt to ensure the continuity of the organization, or the completion of certain
tasks. It turns out that in the modern business we establish cooperation primarily with
people, and then with the organization. In these circumstances, it is not wise to change
the management structure, and in particular the frst man since the arrival of a new man
and even his deputy, ofen changes relationship between the partners, and ofen leads to
the further co-operation with individual companies. In other words, companies in busi-
ness relationships get associated with personality and individuals, so that even if there is
departure of an individual, they usually continue to cooperate with the company in which
the individual was engaged.
Of course, the family company has leading positions typically reserved for a family mem-
ber or founder. It is usually the oldest or the most experienced member of the family who
is at the same time both visionary and strategist. In the family or in the company where
there are family relationships outsiders have no chance. It is important to point this out
because there are authors who deny the specifcity of a family business. Tey ignore the
emotional connections and relationships between family members that are at the same
time the strongest cohesive tissue of integration of all members towards achieving the set
goals. Any exclusion of emotion and efort to the relationship between family members is
reduced to interpersonal and business relationships not only is unacceptable but impos-
sible, and it is also detrimental to business success. It turns out that a man is willing to
sacrifce himself only for his descendants, and that through good family relationships one
can build a successful business and, vice versa, a successful business encourages the crea-
tion of good family relations [2].
Outsiders have more chances in companies that do not have enough qualifed staf. Here
the owners feel that there is a sufcient number of educated people for ofce business in
the market, as well as for strategic management, and that there is no need to prepare and
plan their own leadership potential. In this context, the company hires the so-called ‘head
hunters,’ i.e. agencies, consultants and other parties to make recommendations for the ap-
pointment of the frst people company. Tese professional organizations keep records of
successful managers ranked their success and are able to recommend appropriate strategic
managers, keeping in mind whether you are talking about intellectual, manual, dynamic
or classical organization. Another element in favor of outsiders is when we want to break
the continuity of certain trends, i.e. we want a clear break with current practice in com-
panies. Te owners recognize that certain strategies do not provide satisfactory growth
and development, and competitiveness and proftability. Tese are ofen high costs, lack
of fexibility, solid bureaucracy of the organization, and so on. In these circumstances, the
owners are trying to bring a new leading people, or people with new ideas, approaches and
philosophy of business. Tis is similar to changing the sports coach when the team does
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International Journal of Economics and Law, Vol. 3, No. 9 (2013)
not achieve the expected results. By bringing a new coach we are changing the attitude
of the team, but also within other parts of the sporting organizations, thus with the same
team we achieve better results.
An outsider is ofen the solution when we have disturbed interpersonal relationships
within the organization. Tis is so whether it is the case of disturbed relations between
people or between parts of the company and between the company and the environment
in which it operates. Shareholders or owners feel that there is no authority in the organiza-
tion that could solve these problems and make decisions to invite an outside person.
2. ADVANTAGES AND DISADVANTAGES OF INSIDERS AND
OUTSIDERS
Appointment or selection of strategic managers is the most important task of manage-
ment or board of directors or shareholders assembly. Errors in this regard are being paid
dearly, which requires high professionalism in the selection or appointment of the Di-
rector. Some companies, as noted, do plan a business career and prepare individuals for
senior positions, while others choose to hire professionals to manage the side. Notwith-
standing the foregoing, any dismissal of the head of the company causes tentative “shocks”
and is ofen refected in the decline in stock prices, which can lead the organization in a
very difcult situation. Hence the practice in many companies that the health status of top
managers or possible illness is kept as a secret because when stakeholders get hold of this
information about diseases of the Director whom they believe, this leads to lowering the
price of shares, and thus the sales price of the company [3].
Te involvement of an insider or an outsider has its good and bad sides. Te good sides of
insiders are generally poor by outsiders. However, things are much more complicated. It
may be noted that the rule is that there are no strict rules or correct answers. We should
particularly keep this in mind now. Tis is a time of revolutionary change and great un-
certainty that requires strategic management to be adaptive and to provide fast and high-
quality answers to increasingly complex and interrelated problems.
However, the practice has diferentiated good and bad sides of insider or the outsider
appointment of the frst people company, which is relatively well represented in the fol-
lowing table: Advantages and disadvantages of insiders and outsiders can be strengthened
or reduced, depending on the type, size and type of organization. For example, in case of
intellectual organization, election of the frst man is much more complex, as compared to
an organization followed by manual structure. However, each organization is distinct and
unique, so that the weakness of one can be strengths in other organizations. Te above
indicates the need for a broader explanation of the above table.
2.1. Advantages and disadvantages of insider directors
Although it is difcult to generalize insider and outsider directors on the criterion of busi-
ness success, it is shown that insiders have their strengths and weaknesses, which can be
represented by the following arguments:
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DILEMMA – INSIDER OR OUTSIDER DIRECTORS Radosavljevi? M.
Table 1: Advantages and disadvantages of insider (outsider) appointments of lead-
ers in companies
Advantages Disadvantages
Insiders
Better knowledge of the problem
Better knowledge of the org. resources
Knowledge of the org. culture and relationships
more committed to the company
Employees can infuence the selection of managers
Te ability to create
Favors unit where it came from
Not ready for radical change
Do not have sufcient authority
Accustomed to the current state
Outsiders
Generalizes diferent experiences
New people bring new ideas
Objective interest in making decisions
Faster running organizational change
Te involvement of professional organizations
Inadequate knowledge of the problem
Not familiar with relationships in the organization
Longer time to adapt to the organization
Mechanical transmission of past experience
Increased costs in seeking outsiders
a) Insiders’ advantages
• Tey are more familiar with the problems of organizations. Tis is the most pow-
erful insider feature because people ofen live with the problems of the organiza-
tion and can relatively quickly diagnose its causes, and hire a specialist or agency
to resolve the problem. Insiders ofen understand and solve the problem, and
ofen can be with their own staf to the same resolve, reducing time and costs,
which in modern terms is increasingly gaining in importance.
• Insider directors have deeper knowledge of organizational resources. People in
the organization know each other and know their abilities, and strengths and
weaknesses and are able to design their outcomes in appointments to senior posi-
tions. Wise insiders are more opportunities to seek ideas within the organization.
According to many, “local” ideas have much more credibility than those who
came “from outside”. Tis is particularly evident when rewarding individuals or
departments, or departments within companies that innovate, or to stand out. [4]
• He is familiar with the organizational culture and interpersonal relationships. Or-
ganizational culture and behavior are very important factors of business success.
Insiders usually do not need to adapt to a particular organizational milieu, nor
the organization to adapt insider director. In this context the knowledge of in-
terpersonal relationships and creating opportunities to eliminate the causes that
aggravate relations between people, enhancing the powers that enhance interper-
sonal relationships.
• Insider directors are more committed to the company. Individuals are ofen as-
sociated with the company and are willing to stay the same, even when there is a
problem. When the organization is in a difcult situation, an insider CEO is ofen
the only solution because outsiders ofen do not want to take responsibility for a
bad company.
• Employees may react to the appointment. Sometimes they can have a decisive infu-
ence on the choice of insider directors. Tis particularly applies to those who have
shown leadership positions in organizations and that employees believe, and whom
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International Journal of Economics and Law, Vol. 3, No. 9 (2013)
they trust. It shows the confdence today most vulnerable to the phenomenon of mi-
cro-level (individual level), and also at the organization level, i.e. at the macro level.
b) Disadvantages of insider directors
• Many years of work in an organization create bonds of friendship that can weaken
the organization, especially when the friendship abused. Friendship and friendly
relations can be both strong side, because the people in the name of friendship
are able to make more sacrifces for the common goals. However, the example of
Serbia and other countries in transition shows that friendship is ofen misused
and that is one of the main reasons of unprofessional management.
• He favors organizational unit where it came from. Te largest number of insiders
can never rise above the workplace and organizational unit where he was. For
example, if a man of fnance is appointed to the position of top management, he
primarily deals with fnancial matter even though he is now the CEO. More ofen
than not, he usually simply returns to his ‘fock.’ Of course, this can be a problem
because it creates unequal status of men or unequal status of parts within the
organization, which undermines its homogeneity and the ability to act integrally.
• Insider director is not ready for radical change. Te downside is the administra-
tive proportion to the length of service of the individual in the organization, as
well as with age. We see that individuals who have more time in the organiza-
tion, as well as older people are not ready for radical change. Tey are difcult to
change and very restrictive accept new ideas, trying to work the old way.
• Strategic managers who come from the organizations do not have the authority,
especially if they had spent considerable time in the organization. For many, the
newly appointed Managing Director of the organization will remain the same
person as when he occupied some lower management position. Tis usually ap-
plies when an insider di- rector asks for gaining certain knowledge or university
degrees, including PhDs. Many directors are not able to think strategically, deal
with trivial matters and are not ready to respond to new challenges.
• Insider directors can ofen be inert and insensitive to certain negative develop-
ments in the organization. Habits ofen produce inertia to change a bad situation,
so that the problem is ignored. For example, insider directors in a Serbian com-
pany were not interested for years to do an analysis of the cost of each line and
each public transport vehicle. Tis should have served to review the costs, i.e. to
get a clear picture of how much money they must feed into this ‘dragon’ in order
to make the business process proftable.
From the above it can be concluded that insiders have good and bad qualities, and that it
depends on the personality of each individual. Practice shows that a manager who had not
change a company at least, is actually not a manager at all. Business history has repeatedly
shown examples of top managers who have been raised in a certain company and spent
their entire lifetime there, but still they did experience difcult times and challenges.
2.2. Advantages and disadvantages of outsiders
Outsider directors have gained in importance in the second half of the last century, when
increased competition and when the owners, with their own human potential have not
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DILEMMA – INSIDER OR OUTSIDER DIRECTORS Radosavljevi? M.
been able to meet the new challenges that have appeared in the business sphere. It turned
out that the cause of problems for many organizations was excessive orientation to their
own staf, which made organization closed and not capable enough to learn from others
and through other people and organizations. In this context outsiders have become one of
the ways to increase competitive advantage. Analysis of engagement of outsider director
shows the following pros and cons:
c) Advantages of outsiders:
• Outsider director generalizes the experience of other organizations and used by
them in their work. Potential outsiders are ofen people change companies, or
go from company to company, they acquire diferent experiences and are able to
generalize and apply in their work to other companies. Of course, it should be
borne in mind that each organization is unique and that the transfer of solutions
from one organization can produce diferent and ofen conficting results.
• New people bring new ideas. Te organization ofen is faced with crisis due to
the application of the same concepts over a longer period, or the application of
the approaches that are outdated and as such unacceptable. In other words, in-
dividuals who have led the company in a difcult situation, they are unable to
get out of the same situation, because the problem resulting from the application
of inadequate concepts. In these circumstances, the solution is to bring outsider
directors, who need to bring not only new ideas, but also refreshing attitude and
optimism.
• Outsider director is more objective in making decisions related to certain inter-
ests. New, outsider director is not burdened by certain relations, friendly relations
and infuences and is able to make more objective, and rational decisions. For
example, when it comes to the preparation of lists of redundancies, outsider di-
rector makes a just decision, while the insider is ofen taken to protect his friends,
so to speak.
• Outsider director is able to quickly bring radical change. Related to this, let us
mention the fact that outsider directors are able to perform faster change, espe-
cially if it is a radical and un popular change. It’s important to establish a rapid
diagnosis of the current situation and create sufcient critical mass to implement
changes. If an outsider director is delaying the execution of change, his willing-
ness to introduce the changes will become more “dull.” Tere is also a danger that
individuals who are against the change will become stronger and create coalitions
that seek to maintain the status quo.
• Hiring or appointing an outsider in market countries is usually accompanied by
the professional recommendations of expert agencies, companies and consult-
ants. Tey have the data and characteristics of potential individuals in the previ-
ous results, or results in other companies. Agencies evaluate and analyze the spe-
cifc organization and based on that recommended expert who could successfully
take control. If the organization is in crisis conditions (i.e. losing market share
and customers, employees leave the company, poor interpersonal relationships),
we recommend an outsider who respond quickly to problems that have practical
solutions and has the tact in dealing with people. In these circumstances, it is not
likely that the recommendation is inadequate.
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International Journal of Economics and Law, Vol. 3, No. 9 (2013)
d) Disadvantages of outsider Directors
• He does not know the business problem. Tis is particularly evident if an out-
sider di- rector comes out of existing branches where there are diferent bases of
functioning and characteristics. For example, when coming from an agrarian to
an industrial company, it is unlikely that the experience gained in previous opera-
tions will be of great beneft, because each activity has a number of characteristics
in management. A special danger is outsider directors who want to do their job,
but do not know how to do it; all this boils down to the familiar folk wisdom:
“Te ignorance in action is the most dangerous thing.”
• Outsider director does not know the human potential. Outsider before coming
to a particular company will frst check human potential through insider that ex-
ist in the company, but also by our competition, business partners, and even the
specifc agencies involved in this work. However, outsider should have a “seventh
sense” to assess the qualitative side of the staf, their emotional and motivational
potential and characteristics. Of course, he should in a relatively short period of
time select his team, and the people who do possess special knowledge, skills and
abilities.
• It takes longer for an outsider to ft into the existing milieu, or to modify it. Ar-
rival of each individual in the new environment is a stressful event for both the
one who is coming, and for those in whose organization the individual comes.
When it comes to the outsider director, stress objectively exists with people in his
environment, because there is fear that the individuals do not ft into his system
of work, or the outsider director does not ft into the existing operation and gen-
eral business philosophy.
• Using the experience from previous work can prove wrong. It turns out that out-
sider director can mechanically transmit the experience of management in the
early, or earlier organizations, which are at the same time is unacceptable, consid-
ering that each organization has its specifcs and particularities. For example, if
the experience of small business is transferred to large commercial systems, it can
be not only inefective, but also counterproductive.
• Cost and time of the appointment are increased, or extended. Experience shows
that owners ofen turn to specialized agencies that would have to recommend ap-
propriate Directors for controlling the organization. In this context, agencies typ-
ically require the analysis of organizational performance with regard to quality of
staf, the organic composition of capital, whether it is on a manual, or intellectual
organization, in which the age of organizations, whether and how successful, and
so on. It is necessary to al- locate signifcant funds for the election of directors,
but also takes time, which can be a big problem for stakeholders.
Analysis of the strengths and weaknesses of insiders and outsiders should be entrusted
to multi-disciplinary teams. Te most important thing is to diagnose the state of the or-
ganization, because it is possible that professional bodies (agencies) or owners (employ-
ees) due to poor diagnostic recommend wrong solutions, or people who need to ensure
survival, and growth and development of the organization. Good or bad results in previ-
ous organizations are not a guarantee that these results will automatically be replicated in
other organizations, and even in the same organization at diferent times.
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DILEMMA – INSIDER OR OUTSIDER DIRECTORS Radosavljevi? M.
3. INSIDERS – OUTSIDERS IN DEVELOPED COUNTRIES
Te fact is that there are diferent criteria by which to evaluate the success of the business
of the general manager or executive director, president, etc. It turns out that most ofen as
criterion of business success we take proftability, and share price growth from the time
of taking the company to the end of his term. Tis classic criterion has a high level of cor-
relation with customer satisfaction and other stakeholders. However, in the last decade as
a criterion of success of business leaders to take the fact the condition is a director of the
company, took over from his predecessor, and how the company works afer the departure
of its leader [5]. Te theory and practice of management is based on the fact that outsid-
ers are more objective because they come from outside, or from other companies and are
able to make better decisions. Furthermore, the outsiders generalize experiences gained
in other companies and can better apply them to a particular organization. According to
many theorists, outsiders are ofen the only solution when the company is in a crisis situ-
ation and when it is uncertain that the management that led the company into the very
difcult situation can perform consolidation, revive the company and move it towards
prosperity. Tis view was taken from professional sport, where in the event of disturbed
interpersonal relationships and failures they engage people outside the club, which will
consolidate the ranks and have put in a position to achieve better results. Tis statement
is confrmed on the example of top managers. Among the analyzed ffy most successful
executive directors, the outsider solution proved to be successful in the case of the Execu-
tive Director placed as number 19, John Tompson, who had lef a job at IBM to take over
the CEO of Symantec which was in a very difcult situation [ 6 ] . However, the Harvard
Business School and other management researchers are of the opinion that insider man-
agers are better option (for the position of CEO). Tey argue that outsiders are expensive
and that’s critical in this mode; they do not know the specifcs of the same company in the
above research showed that though insiders showed better results. Within
2000 companies insiders have had a better position in 57 companies, more than outsid-
ers. Te companies that were in trouble were more likely to hire outsiders as CEOs, which
corresponds to the claim that directors who have led the company in a difcult situation
not being able to get away from the same situation. However, when we compare the CEO
who took over companies that operate poorly, outsiders did not achieve a better result by
whistleblowers. Finally, of the fve most successful leaders who have been the most suc-
cessful since the mid- nineties, they all came from the company, or were insiders.
Tis research has shown that on the list of ffy most successful executive director of the
world in 76 % of the cases are those who have been raised in their company and in the
same used to perform certain tasks, such as fnance, development, human resources, etc.
Steve Jobs, the most successful man in the business world, grew as Apple executive, frst
as an acting board member and then as executive ofcer (CEO). Afer Jobs died, he was
replaced by Tim Cook, again the man from Apple, who worked together with Jobs and
Jobs had had confdence in him [7]. Te situation is similar with other names in the group
of 50 of the world ‘s most successful executive directors. Most insiders, before they come
to the top positions, were engaged on the average in two companies in important positions
for some 5-8 years. Tus, the gradual progression in career is one of the most important
principles of creating a successful manager. Te companies plan and develop the careers
of their managers and executive directors. Search and selection for the chief executive has
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International Journal of Economics and Law, Vol. 3, No. 9 (2013)
become a very challenging job, requiring competence, multidisciplinary skills, and art.
Te advantage of an insider is in better understanding of the problem and the situation
in the company, and he can ofen motivate capable and loyal people from the company,
but they have the problem of subjectivity in decision -making in particular interest cases.
However, this weakness can be relatively easily remedied, because when individuals reach
the top position, they must learn to forget what they had learned before, etc.. All this is
very difcult, but not impossible.
4. INSIDER OR OUTSIDER IN SERBIA
Te issue of insider or outsider appointment or election of directors is not considered in
the management of Serbia. Tis does not mean that this factor has no efect on the busi-
ness performance of Serbian companies,. In the above should be noted that Serbia is a
country that is still doubtful about management as profession and management is present-
ed in a negative light. It is ofen pointed out that we educate a large number of unnecessary
future managers who can not fnd jobs. Te situation is completely opposite. Serbia lacks
over 100,000 managers of diferent levels of management (top management, middle and
lower management) in diferent areas of life and work. Tose are pre-school institutions,
university facilities, medical, cultural and business organizations. All this in the following
sectors: industry, agriculture, mining, tourism, all the way to the public administration.
Te most important positions in the public sector, which accounts for over 50% of the Ser-
bian economy, is occupied by incompetent people. In other words, instead of profession-
alization of management in Serbia there is ideological and cheap political management. Its
main task is not to ensure the success of a business organization, but to provide privileges
to a certain political option, which appointed him to that position. Hence the dilemma
between insiders and outsiders does not appear in a serious form. Tere is a debate on the
professionalization of management in all areas of the economy and society. [8]
Te dilemma insider or outsider is conditioned on the type of ownership. In private, espe-
cially family businesses, the rule is to appointed individuals from the organization, or the
insiders to leading positions. In a family business that is usually a member of the immedi-
ate or extended family, or individuals who have been checked. In SOEs mainly the system
of out- sider nomination and the political structure that is in power is applied.
However, it can be concluded that in most organizations there is no career planning and
advancement of people from the company. Te reason is that management is still per-
ceived as a profession and as a craf that requires a certain competence, knowledge and
skills. Accordingly, management is not seen as a permanent profession, but as a temporary
and occasional management of organizations.
Although there are no precise fgures, it is estimated that Serbian companies prefer out-
sider directors, especially when dealing with large organizations that exist in the public
sector. Here the directors change when the party in power changes. Tis means that direc-
tors in large public companies tend to retain about three years, and the time interval when
the Serbian conduct elections at all levels of the change of power, even when the same
political options remains in power afer the elections, there shall be the appointment of a
new Director. Outsider appointment of the leading people in companies in the public sec-
tor, who are both incompetent and inexperienced, but party ofcials leads to bad results
in business. According to the data, in Belgrade in 2012 there were 26 public companies
96
DILEMMA – INSIDER OR OUTSIDER DIRECTORS Radosavljevi? M.
which, employ about 18,000 employees. In these companies the total income in 2012 was
around 68.3 billion RSD, which amounts to about 600 million euros. Te highest income
was recorded in Belgrade Electricity Co. with almost 30% of total revenue, at least was
recorded by the Olimp Sports Center, about
50 million RSD, or half a million euros.
Of this number of public companies, 8 companies in 2012 reported a loss of around three
billion dinars, or about 300 million, while other public companies working with minimal,
or no gain. Te greatest loss is expressed Public Transport Company in an amount of
about 2 milliard dinars, or about 200 million euros. In most of the Belgrade public com-
panies, directors are appointed by the party’s key and largely as outsiders, ofen with no
working experience and competence. A similar situation arose in recent years [9].
In these circumstances, better result was not to be expected. Tis necessitates a radical
redesigning of public sector Serbia so that instead of party cadres and outsider (who are
appointed temporarily and periodically) to introduce those who have graduated from a
manager and experience in managing an organization. Of course, the practice of the de-
veloped world should be implemented in Serbia, meaning that primarily insiders should
be appointed, including career planning and long-term preparation of personnel to down-
load the most important positions in organizations.
Serbia has thousands of graduate managers, who may be appointed to leading positions in
the public sector, government agencies and organizations, health, educated, cultural and
other institutions and agencies. Teir places are now occupied by political, incompetent
people. De-politicization of the public sector in terms of management is the frst step in
the reform of the political scene in Serbia announced more than a decade and a half ago.
5. CONCLUSION
Te issue of insider, i.e. outsider directors is not sufciently clarifed in the theory and
practice of management. Analysis has shown that this issue is the high level of correlation
with business success rate, i.e. the most successful global companies appointed directors
of the company, with career plans of each manager and his progress. In other words, com-
panies monitor individuals in lower management positions, monitor their performance
and improve them gradually, until they are ready to occupy a certain position with high
responsibility. Tis practice is natural, because the management company is one of the
most complex activities which one can engage. Hence the above practice of selection and
election or appointment of directors. Tis is because the error in his choice of paying ex-
pensive and ofen difcult to correct all the turbulent and uncertain market.
In Serbia, a country in transition, the practice is quite diferent. In over 75% of compa-
nies in the public sector managerial positions are reserved for people from the party or
coalition in power. Tey are named as outsiders, at intervals when local or parliamentary
elections are held. Terefore, it is noted that the director’s position in Serbia is provisional
and temporary, and that this complex and very hard profession is occupied by the incom-
petent, inexperienced amateurs. Outsider directors, as second-rate, surround themselves
with the party aides and advisers (who are third-rate personnel). Tese people continue
to surround themselves with the fourth rate associates and thus create negative pyramid
of personnel. Outsider directors in Serbia are generally loyal to their party. Tey generally
provide privileges to the party in power, and are not interested in the business perfor-
97
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
mance of the companies they manage. Afer the expiry of the mandate, the leave for other
party duties, and as party ofcials they implement the policy of their party.
BIBLIOGRAPHY:
[1] Radosavljevi?, M.: Holisti?ka tehnologija uspešnosti-Kako postati uspešan. Novi Sad:
FORKUP, (2011).
[2] Handbook: O interpesonalizaciji porodi?nog biznisa i njegovo svo?enje na nivo bilo
kog biznisa. Washington: IFC-Family business governance.
[3] Bilten Menadžer Delfn, (April 1998), No 28, Beograd.
[4] Hansen, M.; Ibarra, H. & Peyer, U.: Te best-Performing CEOs in the World.
Harvard Business Review, (2010). pp.105-113.
[5] Radosavljevi?, Ž.: Karakteristike najuspešnijih izvršnih direktora u svetu. In: ANTIM,
2012, Beograd. Edited by Života Radosavljevi?. Novi Sad: FORKUP, (2012).
[6] Isaacson, W.: Steve Jobs, (2011).
[7] Radosavljevi?, Ž.: Menadžment u modernom biznisu. Novi Sad : FORKUP, (2004).
pp. 315.
[8] Agencija za privredni registar (APR). www.apr.rs, (za 2012. godinu za koju su
objavljeni podaci.).
98
CRIMINAL ACTS AGAINST THE SAFETY... Risti? M., Milosavljevi? M.
CRIMINAL ACTS AGAINST THE SAFETY OF THE
PUBLIC TRANSPORT WITH SPECIAL FOCUS ON
THREAT TO PUBLIC TRANSPORT
Risti? Mirjana
1
, Milosavljevi? Milan
2
1
Police department, Niš, SERBIA, e –mail: [email protected]
2
Police department, Niš, SERBIA, e –mail: [email protected]
Abstract: Road safety is the lack of danger in the activity of overcoming the space. Security is contained
in the core of the trafc, as the property of trafc activities. It exist due to danger when a man shakes
is managing machines overcoming space, and it is inevitable in case of failing functioning of the trafc,
which exhibits a certain reliability, monitor the production process trafc as the inevitable loss due to
unplanned costs and damages due to accident events. Trafc was established as a man to satisfy a desire
to master space. Te level of transport development refects the current level of development of society.
If the development of trafc is lagging behind the development of the society, then it is an obstacle to the
further development of society. Optimal development is possible only with coordinated development of
transport, economy and society as a whole. Today, most developed countries have the most developed
transport. Trafc has contributed much to the overall development of civilization, and it is one of the
important elements of its development. However, the adverse efects of trafc threatening to belittle and
signifcantly reduce the use of transport.
In the period 1981 – 2012, 41,064 people were killed in road accidents in the Republic of Serbia. Dur-
ing the same period, 614,437
1
were injured. During the nineties, there has been a drastic increase in
the number of accidents and the number of fatalities increased. Tese data represent a logical sequence
of events, taking into account the kind of economic situation in the former Yugoslavia at that. At that
time, little attention has been addressed to safety. Tis trend lasted until the mid-nineties, i.e. improved
economic power, and afer the growth of all indicators, at the end of the decade decline was obvious.
However, all these changes cannot be regarded as a consequence of systemic breakthroughs in the man-
agement of road safety, but the current situation in which the Serbian society was. At the end of 2009,
the new Road Safety Act entered into force, one of the most systematically signifcant, written on the
model of the acts of leading European countries in terms of road safety.
Keywords: trafc accidents, road trafc, endangering public transport, road safety, RSA
1. INTRODUCTION
Whoever in trafc on public roads fails to observe trafc regulations and thereby en-
dangers road trafc to extent to compromise life and body or property of larger extent,
and this consequently results in minor bodily injury or property damage exceeding RSD
200,000 shall be punished by imprisonment up to three years.
1
Podaci Agencije za bezbednost saobra?aja
99
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
Whoever fails to observe trafc regulations and consequently endangers railway, streetcar,
trolley bus, bus trafc or cable car transport to imperil life and body or property of larger
extent, shall be punished by imprisonment of six months to fve years.
If the ofence specifed in paragraphs 1 and 2 of this Article is committed from negligence,
the ofender shall be punished by fne or imprisonment up to one year.
2
2. THE PHENOMENON OF AN ACCIDENT
A trafc accident is an accident that happened on the road or started on the road, includ-
ing at least one vehicle in motion, in which at least one person is killed or injured or dam-
age is caused.
3
A trafc accident happens to a direct participant in the accident but the wider community
too. A participant who is not to blame for the resulting accident is interested to be satisfed
from the economic point of view. Te economic interest of the community is to reduce the
frequency and severity of the consequences of accidents to a minimum. Each individual
case of accidents it is necessary to discuss, and it is necessary to clarify the circumstances
and facts why did the accident happen, because there are economic and other interests of
the individuals and the community.
Direct protection of the accident cannot be considered the only factor that afects the
properties of trafc safety. Objectively, judging on the organization of security or regula-
tory requirements demands broader observations that are founded on the study of the
transportation activities. Direct care is a signifcant part of the required impact on safety.
It usually leads to the ‘’unexpected’’ oscillation of security, when society reacts more or less
violently to the negative efects of trafc events. Te dimensions of the actual security are
objectively diferent. It is certain there are two main reasons for engaging each organized
community in the prevention of trafc accidents - the need to protect life and health and
to protect vulnerable material values in trafc. Given the fact that the accidents are social
problem, there is a justifcation and interest of every organized society for the prevention
of accidents, and much wider than interest in the proper orientation of direct care.
• Economic consequences of insecurity materialize as equivalent to the value of the
loss, cost and damage to the transportation activities due to accident events.
• Epidemiological vulnerability of the population is evaluated according to death
and injuries of people in trafc, compared to other high-risk activities.
• Bearing in mind the existence of correlations in economic development and traf-
fc as particular types of economic activities, point of view that emphasizes the
fact that material equivalent of the consequences of accidents directly afects the
performance of economic activities is reasonable.
An important step to improve road safety in the Republic of Serbia are high quality, pro-
fessionally based, enforceable and accepted programs and plans that defne the objectives,
activities for the realization of the goals and priorities according to the principle of rel-
evance. It is important to clearly establish responsibilities and accountability for the im-
plementation of plans and programs. Facilities that are planned and implemented by the
trafc police, despite the fact they have the professional and public support, without sig-
nifcant participation of other stakeholders in the existing trafc conditions it is difcult
2
Krivi?ni Zakonik, ?l.289, glava XXVI
3
Zakon o bezbednosti saobra?aja na putevima ?l.7 ta?.82
100
CRIMINAL ACTS AGAINST THE SAFETY... Risti? M., Milosavljevi? M.
to signifcantly contribute to stopping growth and a gradual reduction in the number and
severity of accidents and consequences.
Table 1: Overview of the number of accidents with the number of casualties, fatali-
ties and injured persons by year
4
Year No. o
accidents
Te number of
trafc accidents
with persons
victimized
Causalities Injured
persons
1981 N/A 16207 1810 21750
1982 N/A 16357 1838 21829
1983 N/A 15317 1658 19889
1984 N/A 15323 1719 20551
1985 N/A 14941 1603 20123
1986 N/A 15787 1667 21043
1987 N/A 16047 1714 21374
1988 N/A 16162 1704 21829
1989 N/A 16810 1780 22424
1990 N/A 17133 1955 23070
1991 N/A 16294 1892 22182
1992 30465 13664 1595 18071
1993 19963 9902 1183 13209
1994 20037 10951 1198 14084
1995 21578 11556 1090 15341
1996 65015 14283 1215 17974
1997 72059 17139 1496 22601
1998 62224 14491 1331 18856
1999 45339 11860 1100 15079
2000 48830 12749 1048 16620
2001 61711 15099 1275 19906
2002 52177 11586 854 14760
2003 55660 12415 868 15953
2004 62434 13374 960 17557
2005 62036 12769 843 16890
2006 63954 13923 910 18411
2007 70789 16594 968 22209
2008 67786 16672 905 22297
2009 64877 15814 810 21511
2010 47757 14179 660 19326
2011 42438 14119 731 19312
2012 37559 13333 684 18406
4
http://prezentacije.mup.gov.rs/usp/Statistika/Statistika.html
101
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
During the 2010, 660 people were killed in trafc accidents. Te following year was even
worse in terms of the number of fatalities in trafc accidents. Te scientifc and profes-
sional community usually explains this as weakening efects of the impossibility to imple-
ment certain statutory provisions, delays related to the adoption of by-laws, insufcient
activity of individual institutions, weakening the positive efects of media infuence and
lack of enforcement of penal policy.
3. MAN
In a broader conceptual preventing of accidents, the man is regarded as the primary factor
of safety. Observing how a person performs the task of driving are important for achieving
security, because usually the driver at a critical moment can cause or avoid a trafc acci-
dent. A process of receiving and processing information is very important in making deci-
sion to drive. Ability to safely drive is shaped in layers: based on acquired knowledge about
road safety, training of manual application of basic knowledge and skills of good driving.
Tere are many elements in which man in diferent ways infuence the passive and active
safety. Te most important elements of a man who infuenced a comprehensive road safety
are gender, age, ability, knowledge - education, attitudes, experience, behavior, fatigue.
5
Men and women difer in many characteristics, which afect the diference in risk and
their involvement in trafc accidents. Based on the analysis of approximately one hundred
twenty fve thousand trafc accidents in Serbia, it was concluded that women have a lower
risk of involvement in accidents.
6
Women, on average, they realize the danger better than men and are less prone to risks.
Women are less involved in trafc accidents especially rarely exceed speed.
Te life and life experience in trafc signifcantly afect the risk of trafc accidents. Ac-
cording to extensive research conducted in Serbia, it was observed that the driving experi-
ence decisively contributes to the safety of drivers.
7
According to the nominal driving the
track, all the drivers were divided into fve classes:
• Inexperienced drivers (drivers beginners), up to 5 years of driving experience
• Inexperienced drivers (6 - 10 years of driving experience)
• Experienced drivers (11 - 15 years of driving experience)
• Mature drivers (16 - 20 years of driving experience)
• Very experienced drivers (21– 25 years of driving experience), and
• Old drivers (more than 25 years of driving experience).
It was observed that 42% of drivers involved in road accidents were beginners (up to 5
years of driving experience).
8
4. VEHICLE
Te vehicle is an essential factor in many developments in road transport. Trough the
number of vehicles in trafc, one of a natural indicator of the achieved level of security -
5
Lipovac Krsto, Bezbednost saobra?aja, Beograd 2008, str. 105
6
Lipovac Krsto, Saobra?ajne nezgode u preticanju, Viša škola unutrašnjih poslova, Beograd, 1997.
(39. str.)
7
Lipovac Krsto, Obuka kandidata za voza?e i polaganje voza?kih ispita u funkciji bezbednosti
saobra?aja, (studija), Viša škola unutrašnjih poslova, Beograd, 1997
8
Lipovac Krsto, Bezbednost saobra?aja, Beograd 2008, str.112
102
CRIMINAL ACTS AGAINST THE SAFETY... Risti? M., Milosavljevi? M.
the number of accidents and their consequences to the number of passenger vehicles is
expressed.
Te vehicle is adapted to man in slow motion compared to the developments of modern
trafc. Sometimes there is a discrepancy in relation to the needs and expectations of the
vehicle to provide security. It is logical that the development of the automotive industry
refects the technical and technological level of the environment. It remains the fact that
the trafc environment makes users of the vehicles - a man who operated the machine
– that diferent bears the risk of unsafe outcomes machine control under other various
trafc conditions.
Vehicle security is not neglected, as could be judged by the huge loss of humanity in the
era of motoring. Aware of the high number of casualties in trafc, many studies and exper-
iments are directed precisely to the vehicle as a ‘’dangerous weapon’’ that people must use.
Driving standards are based on exact explanation of how the vehicle adheres to road,
transferring the load to the wheels when the vehicle brakes, accelerates.
5. THE SAFETY ASPECT OF THE ACTIVITIES OF THE POLICE IN
PREVENTING CRIMES AGAINST ROAD SAFETY
A study of trafc accidents, as a way of endangering public transportation, shows the
complexity of the etiology of trafc accidents. Te role of the study of trafc accidents is
essential in police work, because the efects of the work are seen through the prism of the
frequency and severity of accidents. A great importance is given to accidents, because it is
possible to precisely count and assess the legality of the next event. Professional work of
the police department in road trafc safety is based on the requirements of the police to
ensure the efcient performance of the transportation activities. Te next step is imple-
mentation of guidance, positioning the organization of work, planning of activities and
assessment of the efects of organization and planning.
Materially - the economic equivalent of losses and consequences for the life and health
of people committed to the establishment of protection in trafc to the extent that the
company is able to organize a preventive approach and to improve the technical and tech-
nological organization of the transportation processes.
Te safety aspect of the development of police work in trafc is a problem that needs to
be considered with care. Mortality statistic in relation to trafc is linearly related to the
increase in the index of industrial production. Exposure of the population to death in the
trafc accidents occurs with the increase of the motorization level.
Generally, regular checks are the needs of organized trafc, irreplaceable method of op-
eration. Te point of control is achieved if its application of the regulation does not retain
trafc and does not interfere with its operation.
Police is dealing with preventive propaganda activities in trafc on clear assumptions and
the belief that prevention in trafc is efective.
In order to successfully manage the trafc safety, it is necessary to carry out a coordinated
series of extensive measures and activities, such as:
• Ensuring and improving trafc fow,
• Ensuring compliance with established modes of transport, detection and treatment
of the ofenders in trafc
103
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
• Support and contribution to the optimal training of drivers and improving the secu-
rity properties of the vehicle in trafc
• Support and participation in the implementation of programs for the prevention of
trafc safety,
• Managing and constant improvement of organization of the trafc police
6. CONCLUSION
Applying the law and changes in trafc behavior
Today, it is estimated that the change in behavior is the greatest potential of the impact
on road safety (20 to 40% in the EU). Regulations play an important role in changing
behavior. To realize this potential, it is necessary to make a good law and other regula-
tion (already done), and that people comply with regulations while the behavior opposite
to law would be punished. Implementation of the law has diferent goals and objectives
implemented in three phases:
1. phase: changing behavior due to police presence
Tese are the current efects on the feld – at the place and in time of trafc control. For
example, drivers will obey a red light (or decrease speed) at a given location at a time when
they realize there is a police control.
2. phase: changing attitudes
Tese are short-term memory efects related to the same place or the same ofense that
continue even afer the police control. For example, afer long-term control of movement
at a red light (or speed control) in a particular place, drivers will obey the light signals (or
decrease speed) at that place and even at times when no police control. Automated trafc
control can contribute to this.
3. phase: Change of moral - social norms
Tese are long-term efects of expertly engineered campaigns and consistent application
of the law, and rely on understanding the dangers of certain trafc violations.
For example, afer many years (or decades) of consistent application of the law in relation
to not obeying the red light (or speed control) and comprehensive campaigns that explain
the meaning of coercion, most participants agree it is immoral to go thru the red light or
exceed the speed drastically. In this way, people are willing to help and support the police
in identifying and solving these ofenses.
In Europe, there is an ongoing process of harmonization of regulations in road safety.
Particularly are monitored and harmonized:
- Passing the law,
- Respecting the law (police practice in particular), and
- Te efciency of the courts
In adopting new laws and the amendment, of existing state regulations is expected to
support the minimum agreed expert opinion. In this regard, there are a number of recom-
mendations of the United Nations, resolutions and other KEMT documents, EU Direc-
tives, OECD documents, etc. Tere is a number of international organizations, commit-
104
CRIMINAL ACTS AGAINST THE SAFETY... Risti? M., Milosavljevi? M.
tees and other bodies which constantly monitor the process and help governments and
other institutions to create national regulations.
Harmonization process does not end following the adoption of laws and regulations. To-
day, a great emphasis is given to harmonization of police practices. A uniform level of
compliance with the law in the feld of trafc safety is expected to be achieved in Europe,
especially in the EU. In this sense, the European strategy of police force was adopted, while
international experts participate in the reform of police organizations.
Te role of law in promoting road safety is great. Tis role is ofen simplifed and accord-
ing to law encompass respecting the law, and sometimes only police force in the immedi-
ate trafc control (detection and punishment of ofenses). However, when it comes to the
law (regulations), we should discuss the following important areas:
1) Establishing a baseline of professional attitudes underlying the laws and regula-
tions of trafc safety,
2) Compliance and verifcation of attitudes, policies and principles in the wider pub-
lic,
3) Shaping clear scientifc opinions in laws and regulations,
4) Promoting professional attitudes and legal provisions to public,
5) Passing laws and regulations,
6) Realization of the broadest campaign aimed at improving the attitudes of the
public to accept and support the provisions of the law,
7) Law enforcement in practice, and
8) Continuous monitoring and improvement of regulations
Beside the fact that police is taking care that trafc law is obeyed, it is important to actively
participate in other felds of work, too.
BIBLIOGRAPHY:
[1] Krivi?ni Zakonik RS, (2006).
[2] Zakon o bezbenosti saobra?aja na putevima, (2009).
[3]http://prezentacije.mup.gov.rs/usp/Statistika/Statistika.html
[4]http://www.abs.gov.rs/statistika.html
[5] Lipovac, K..: Saobra?ajne nezgode u preticanju, Viša škola unutrašnjih poslova,
Beograd, (1997).
[6] Lipovac, K.: Obuka kandidata za voza?e i polaganje voza?kih ispita u funkciji
bezbednosti saobra?aja, (studija), Viša škola unutrašnjih poslova, Beograd, (1997).
[7] Lipovac, K..: Bezbednost saobra?aja, Beograd, (2008).
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International Journal of Economics and Law, Vol. 3, No. 9 (2013)
DETERMINATION OF A GENERAL NORMAL
DISTRIBUTION
Suboti? Borivoj
1
, Stankovi? Ivica
2
Faculty for Education of the Executives, Novi Sad, SERBIA,
e-mail: [email protected]
Faculty for Education of the Executives, Novi Sad, SERBIA,
e-mail: [email protected]
Abstract: In this paper, one way of the generalization of the normal distribution curve, using interpola-
tion system and Chebyshev polynomials because it represents an indispensable arsenal in the economic
analysis and econometrics that each serious economist is using, in order to get a quick and elegant
result of its research. Terefore, it is a non-standard apparatus known only to rare economists. Te
name of the Russian mathematician Chebyshev in mathematical statistics is related mainly to so-called
Chebyshev inequality, which also called Chebyshev law of large numbers, while his polynomials remain
unknown to many theorists of statistics and econometrics. Terefore, the aim of this article is to fll this
gap and to put closer Chebyshev polynomial approximation to a large number of economists.
Keywords: normal curve, Chebyshev polynomials, generalized normal distribution, recurrent formu-
las, characteristic of orthogonal polynomials
1. INTRODUCTION
In 1855, Chebyshev proposes a general interpolation formula (Chebyshev order, which
satisfes the conditions of the method of the smallest squares and is expressed using or-
thogonal polynomials. It has the following form:
Where:
– required function,
- known values of the required function,
- weight (for example, the distribution of frequencies), and
- Chebyshev polynomials
Chebyshev showed that his polynomials have three very important characteristics:
106
DETERMINATION OF A GENERAL NORMAL... Suboti? B., Stankovi? I.
2. TH FEATURES OF CHEBYSHEV POLYNOMIALS
1. Zero polynomial is always one:

2. Polynomials have the property of orthogonality:
za ;
3. Successive polynomials are associated by recurrent formula:

Subsequent research has shown that the Chebyshev interpolation order substantially sim-
plifes if we measure the distance x - a from the mean value (in the form )
and k in medium square deviation units, i.e . shaped into
If we introduce a new variable t using the formula:
where: -is the number of cases or observed objects (analyzed) (5)
we have:
- a formula for the function of the normal distribution
density (6)
(7)
(8)
(9)
(10)
3. THE EXAMPLE OF CHEBYSHEV INTERPOLATION ORDER
Let us select one numerical example to show how to decompose a function of frequency
allocation into the order Chebyshev interpolation order. Let it be in the feld of forest
management.
Determination of the normal general curves is shown in the table. Te calculations in the
table are based on the use of functions , which are, in fact, the products of Cheby-
shev polynomial and the function . Values of the function were taken
from the regular table for a normal probability distribution curve .
It is useful to calculate the coefcients of generalized curves using central moments, be-
cause in this case, zero, third and forth term remain in the expression. So we get a curve:
(11)
107
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
Table 1: Determination of general normal curve (frequency of pine trees by diam-
eter)

(4)+(7)+
(8)

Observed
frequencies

6 -
6,25
- 2,338 0,0259
4
+
0,14955
+
0,00213
-
0,01237
-
0,00000
0,013 44,82 9
7 -
5,25
- 1,964 0,0579
9
+
0,09762
-
0,30529
-
0,00807
+
0,00029
0,050 172,39 132
8 -
4,25
- 1,590 0,1127
0
-
0,08456
-
0,65113
+
0,00699
+
0,00063
0,120 413,74 370
9 -
3,25
- 1,216 0,1904
7
-
0,35235
-
0,70193
+
0,02914
+
0,00067
0,220 758,52 868
10 -
2,25
- 0,842 0,2798
7
-
0,53987
-
0,21020
+
0,04465
+
0,00020
0,325 1120,5
4
1226
11 -
1,25
- 0,468 0,3575
6
-
0,46535
+
0,61993
+
0,03848
-
0,00060
0,395 1361,8
7
1332
12 -
0,25
- 0,094 0,3971
8
-
0,11167
+
1,17046
+
0,00921
-
0,00112
0,405 1396,3
6
1325
13 +
0,75
+ 0,281 0,3835
0
+
0,31477
+
0,97118
-
0,02603
-
0,00093
0,356 1227,4
2
1266
14 +
1,75
+ 0,655 0,3219
2
+
0,54207
+
0,19635
-
0,04483
-
0,00019
0,277 955,04 908
15 +
2,75
+ 1,029 0,2349
6
+
0,46931
-
0,52438
-
0,03881
+
0,00050
0,197 679,22 630
16 +
3,75
+ 1,403 0,1491
0
+
0,21580
-
0,73589
-
0,01785
+
0,00071
0,132 455,11 470
17 +
4,75
+ 1,777 0,0822
7
-
0,02305
-
0,49154
+
0,00191
+
0,00047
0,085 293,06 321
18 +
5,75
+ 2,151 0,0394
7
-
0,13809
-
0,13235
+
0,01142
+
0,00013
0,051 175,84 185
19 +
6,75
+ 2,525 0,0164
6
-
0,14030
+
0,08879
+
0,01160
-
0,00009
0,028 96,54 95
20 +
7,75
+ 2,899 0,0059
7
- 0,
09353
+
0,13853
+
0,00773
-
0,00013
0,013 44,82 57
21 +
8,75
+ 3,273 0,0018
8
-
0,04752
+
0,10068
+
0,00393
-
0,00010
0,006 20,69 22
? - - 2,6572
4
- - - - 2,673 9215,9
8
9216

Determination of central moments is carrying out in a conventional manner, based on the
following formulas:
(12)
(13)
(14)
(15)
(16)
(17)
(18)
108
DETERMINATION OF A GENERAL NORMAL... Suboti? B., Stankovi? I.
(19)
(20)
(21)
(22)
(23)
(24)
Putting these values in the interpolation polynomial (11), we fnally obtain the following
equation:
(25)

Te calculated values of the distribution of the pinewood by the diameter using the ob-
tained formula are given also in table 1 (penultimate column).
We defne quadratic approximation using the following formula:
(26)
wherein :
(27)
(28)
(29)
Te resulting approximation is quite satisfactory.
4. RESUME
Tis paper showed the basic theory and in a practical way demonstrated why interpola-
tion order and Chebyshev polynomials have fundamental importance for the theory of
the distribution function probability and the distribution of computation.
BIBLIOGRAPHY:
[1] ????????, ?.: ?????????–?????????????? ?????? ? ??????. ??????: ?????,
(1965).
[2] Vrani?,V.: Vjerojatnost i statistika. Zagreb:Tehni?ka knjiga, (1970).
[3] Hogg, C.: Introductionto mathematical statistics. NewYork: Macmillan, (1959).
[4] Munroe, M.E.: Teory of Probability. NewYork: McGraw-Hill, (1951).
109
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
SOCIAL AND PSYCHOLOGICAL FACTORS OF
COMPREHENSIVE EDUCATIONAL INSTITUTION
HEADMASTER PROFESSIONALISM DEVELOPMENT
Syngaivska Iryna
1
, Shuldyk Anatolii
2
1
KROK University Higher Educational Institution, Kyiv, UKRAINE,
e-mail: [email protected]
2
KROK University Higher Educational Institution, Kyiv, UKRAINE,
e-mail: [email protected]
Abstract: Te article deals with social and psychological factors of professional progress of secondary
school headmasters. It discloses the infuence of age, gender and work experience upon the profession-
alism progress of secondary school headmasters. Te article under review describes the restrictions of
headmasters of diferent gender, age and work experience at the executive position which slow up the
process of professional development.
Keywords: professionalism, the factors of professional development of secondary school headmasters,
professionalism development restrictions.
1. INTRODUCTION
Domestic scientifc researches scarcely cover the problem of professionalism structure and
various factors infuence on its development. New requirements to the professionalism of
Comprehensive Educational Institutions headmasters and the contradictions which com-
plicate their implementation prove the necessity to substantiate scientifc and psychologi-
cal principles of headmaster professional progress and its structure development.
Te fact that society requires managers with a high level of profciency constitutes the
importance of professionalism investigation. But at the same time all the factors which
infuence its development are rarely taken into account. Social and psychological factors
which infuence high-level professionalism development include: 1) the objective factors
- psychological demands on the profession, environment, the state of education in the
country, region, etc. 2) the subjective factors – the headmasters’ abilities as a background
to the profession; 3) the objective-subjective factors – temporary factors, that determine
irregularity of professional development according to the age, gender, work experience,
professional situation.
110
SOCIAL AND PSYCHOLOGICAL FACTORS OF ... Syngaivska I., Shuldyk A.
2. THE ANALYSIS OF RECENT RESEARCHES AND PUBLICATIONS
ON THE PROBLEM OF PROFESSIONALISM
During the last decades the problem of professionalism has become the subject of detailed
consideration of psychological science (O. Bondarchuk, L. Danilenko, H. Yelnykova, Ye.
Klimov, A. Markova, L. Karamushka, I. Syngaivska, O. Fil et al.). From A. Markova’s per-
spective, a separate direction - professional psychology has been formed, which “identifes
conditions and regularities as regards advance to professionalism in a job, changes in hu-
man mentality in the process of professional development” [6]. In this meaning profes-
sional psychology describes the criteria and levels of professionalism.
Te study of the professionalism concept genesis in Ukrainian and foreign researches al-
lowed to state that it characterizes high level of professional performance. Te most com-
mon defnition presented in the explanatory dictionary of the Ukrainian language is the
following: professionalism is the process of any profession basics and depth acquisition [2,
p. 62]. According to A. Derkach, the process of acmeological reserves implementation is
compared to personal and professional development, and its result is the professionalism
acquisition [3].
3. THE OBJECTIVES OF THE STUDY
Te profound analysis of the scientifc researches on the problem of professionalism for-
mation [1, 3, 4, 5, 6, 7] has discovered a diference in this concept understanding as well as
the lack of comprehensive understanding of its structure. Also the infuence of such fac-
tors as age, gender, work experience in the professionalism progress has not been studied
in details, as well as possible restrictions in the process of professional development and
the ways to cope with them have not been determined.
Taking all these factors into consideration, we set an objective to investigate the infuence
of various factors on the development of professionalism of secondary school headmas-
ters and to identify the restrictions which hinder the process of this development.
4. PROFESSIONALISM STRUCTURAL AND FUNCTIONAL
COMPONENTS
On the basis of psychological literature analysis we consider it appropriate to highlight
three structural and functional components in the structure of managerial activity pro-
fessionalism and fll them up with the correspondent content. Cognitive (Latin ?ognitio
- knowledge) component of managerial activity professionalism is a system of knowledge
about the nature, structure, levels of manager professionalism development, about the
personality professionalism, activity professionalism and the professional competence.
Cognitive component per se includes managerial competence.
Motivational and axiological component of managerial activity professionalism is an in-
ducement of comprehensive school headmaster to professional activity, positive attitude
and strong desire to develop managerial activity professionalism. Tis is a high level of
readiness of headmasters to management, an interest in it. Tis is a professional stand,
objectives, professional and axiological orientations, vocation for management, social ac-
tivity, social optimism etc.
111
International Journal of Economics and Law, Vol. 3, No. 9 (2013)
Operational and technological component of the professional management of the com-
prehensive educational institution headmasters is a set of skills, abilities, techniques and
technologies for the professionalism progress guaranteeing. It includes the managerial
ability to analyze, plan, forecast, and monitor the educational institution activities.
We researched the factors that belong to the micro-level (gender, age, management expe-
rience) and those which infuence the development of previously mentioned structural
components of headmasters professionalism.
5. THE INFLUENCE OF A HEADMASTER GENDER UPON THE
PROFESSIONALISM
According to the comparative analysis of two groups of managers (men-headmasters and
women-headmasters), there are statistically signifcant diferences between them (p