We Gratefully Thank to the Sponsors of the
6
thInternational Strategic Management Conference
THE PROCEEDINGS OF
6
th
INTERNATIONAL
STRATEGIC MANAGEMENT
CONFERENCE
Searching For Strategies Out Of The Global Recession
6
th.
INTERNATIONAL STRATEGIC
MANAGEMENT CONFERENCE
“Searching For Strategies Out Of The Global Recession”
July 8-10, 2010
St. Petersburg, Russia
Honorary Presidents
Ahmet YÜKSEL (Ph.D.)
Ali AKDEMİR (Ph.D.)
Alinur BÜYÜKAKSOY (Ph.D.)
Chairman
Erol EREN (Ph.D.)
Co-Chair
Oya ERDİL (Ph.D.)
Typesetting
Mehtap ÖZŞAHİN
ISBN
Organizing Institutions
Beykent University
Gebze Institute of Technology
Canakkale Onsekiz Mart University
Prime Ministry State Planning Organization of The Republic of Turkey
Statements of facts or opinions appearing in Proceedings of the 6
thInternational Strategic
Management Conference are solely those of the authors and do not imply endorsement by the
Organization Committee or publisher
TABLE OF CONTENTS
STRATEGIES FOR THE GLOBAL CRISIS
Managing Large Corporate Crisis In Italy.An Empirical Survey On Extraordinary Administration
(ALESSANDRO DANOVI)
3
Impact Of The Global Crisis On The Governance Structures Of International Financial Institutions
(ADEM ÇABUK,GÖKHAN ÖZKAN, İSMAIL AKTAR)
15
A Strategic Management Approach During The Time Period Of Coping With Global Crisis: Rightsizing
(MEHMET TIKICI, ALI AKSOY, RABIA ECE OMAY, NESLIHAN DERIN, ŞEYDA NUR SEÇKIN)
25
Moderating Effects Of Government Assistance And Turnaround Strategies: A Research On Private Manufacturing Companies
(TENGKU MOHAMMAD CHAIRAL ABDULLAH,ZOLKAFLI HUSSIN)
37
The Relationship Between Strategic Orientation And Cultural Values: The Effect Of Business Owners’/Leaders’ Cultural Values On The Strategic Behavior In Condition Of Crisis: A Research On Small Enterprises In Istanbul Chamber Of Industry (BINALI DOĞAN, ATA ÖZDEMIRCI)
47
The Effects Of Global Economic Crisis To The Marketing Strategies Of Hospitality Business: Istanbul Field
Research (BURHANETTIN ZENGİN, LÜTFI MUSTAFA ŞEN)
59
The Global Recession After The Recent Crisis And Its Effects On The Turkish Economy(ENGIN ERDOĞAN,
MELIHA ENER, MURAT GÜVEN, FEYZA ARICA)
71
Marketing Strategies During Recession and Economic Crisis(GÜNAL ÖNCE, MEHMET MARANGOZ)
85
Information Communication Technologies And Global Financial Crisis
(NURDAN COLAKOĞLU, SERKAN DILEK)
95
Personnel Turnover In Turkish Banking System During Global Crisis: A Comparison With Pre-Crisis Period
(MEHMET TIKICI, ALI AKSOY, M. RECEP ARMUTLU, SINEM GÜRAVŞAR GÖKÇE, RABIA ECE OMAY)
105
Strategic Financial Leadership:Can It Take Us Out Of Global Crisis?( KORKMAZ ULUÇAY)
115
Management Measures To Be Taken For The Enterprises In Difficulty During Times Of Economic Crisis
(SUDI APAK, MIKAIL EROL, GÜLGÜN ERKAN)
121
Differentiated Marketing Policies In Terms Of Company Size And Sector During Global Recession
(A. KAZIM KIRTIŞ, FILIZ KARAHAN)
127
COMPETITIVENESS
Maintenance Management Is Now Of Strategic Importance: So What Strategies Are Your Competitors Using?
( KYM FRASER,JANEK RATNATUNGA)
139
Strategies For Competitive Advantage In Electronic Commerce (SIAMAK AZADI)
153
A Framework For Measuring Strategic Competition (THEMIN SUWARDY, JANEK RATNATUNGA, ERWIN
WALDMANN,KYM FRASER)
161
Target Costing System For Gaining Power Of Sustainable Competition And An Application Of System In A
International Competitive Analysis Of Boron In Energy Sector According To Michael Porter’s Diamond
Model (ŞERAFETTIN SEVIM, ORHAN ELMACI, EMEL ALTIN)
191
Technological Specialization And The International Competitive Position Of The European Union’s Enterprises
(ALINA HYZ)
201
Competitive Strategies And Firm Performance: A Literature Survey (I.HAKKI ERASLAN, IZZET KILINÇ,
YUNUS EMRE TAŞGIT)
211
The Art Of Publishing In Scholarly Journals (REFIK CULPAN)
221
ICT Investments And Firm Productivity: A Case Study In Industrial Sites In Turkey
(NURDAN COLAKOĞLU, SERKAN DILEK, FATMA ATIGAN)
227
A New Approach To Menu Analysis; 3p Method: How To Analyze A Menu By Using Profitability, Popularity
And Performance Of Menu Items (MEHMET SARIISIK, MUHSIN HALIS, OGUZ TURKAY)
237
A Study On The Impact Of Flexible Manufacturing Systems On Business Profitability
(MUSTAFA SOBA, TUNGA BOZDOĞAN)
245
STRATEGY FORMATION, CHANGE & CONTROL
Evaluating The Quality Of Corporate Mission Statement (A. DABBAGHI, A.M. MALEK, A.R. AULIZADEH)
259
A Comparative Research On Whether Employees Participate In The Process Of Vision Determination
(HARUN DEMIRKAYA, GÜROL ÖZCÜRE)
265
Strategic Intent, Organizational Ambidexterity And Performance: A Test Of The Moderating Role Of Perceived
Environmental Uncertainty(MEHMET ŞERIF ŞIMŞEK, ŞEVKI ÖZGENER, METIN KAPLAN, SEHER ULU)
273
Developing Strategic Foresight For Strategic Transformation (GARY J. STOCKPORT)
287
Organizational Change For The Environmentally Sustainable Airport Management (VILDAN DURMAZ)
295
Strategies To Respond To Change: An Exploratory Study
(BELLA BUTLER, CAROLYN DICKIE, MARITA NAUDÉ )
301
The Assumptions Behind Strategy Theories And Issues Addressed And The Alternative View Of Complexity
(SITHULISIWE MAZWI)
315
The Strategic Pragmatism Of Central Asian States (OSKAR KAYASAN)
319
The Alignment Of Business Environment Scanning Strategy And It Strategy In The Enterprise
(DOROTA JELONEK)
329
Effects Of Environmental Scanning And Planning Flexibility Over Firm Performance In SMEs (TÜRKAN
DOĞAN, ASIM ALTUNBAŞ, LÜTFIHAK ALPKAN)
339
Evaluation Of The Paradoxes In Strategy Formation From The Perspective Of Strategic Management Schools
(SÜLEYMAN AGRAS, REFIKA BAKOĞLU DELIORMAN)
357
The Role Of Design In Business Strategies (CELAL HAKAN KAĞNICIOĞLU)
367
The Performance Analysis Of Banking Companies (GÖKHAN ÖZER, METIN UYAR)
377
A New Balancing Approach In Balanced Scorecard By Applying Cooperative Game Theory
(M. JAFARI-ESKANDARI, A.R. ALIAHMADI, M.HEIDARI AND A.AGHA-BOZORGI)
387
View Of The Organizations That Are In The First 500 In Turkey On Balanced Scorecard Method
The Key Differences Between Balanced Scorecard Framework For Public And Private Sector (MARCELA
KOZENA, MICHAELA STRITESKA)
403
ENTRY STRATEGIES AND STRATEGIC ALLIANCES
Management Of Strategic Alliance Making Process And The Case Study
(İNAN ÖZALP, SENEM BESLER,BURCU ŞEFIKA DOĞRUL )
413
A Study On The Entry Strategies Of Turkish Companies To The Developing Economies: Case Of Romania
(İBRAHIM ANIL, GAYE ÖZKASAP)
425
Coopetition Strategy: The Influence Of External Workplace And Technology Flexibilities
(ANGEL MARTINEZ-SANCHEZ, SILVIA ABELLA-GARCES, MANUELA PEREZ-PEREZ, MARIA-JOSE VELA-JIMENEZ)
435
Effective International Expansion Strategies Of Developing Countries: Turkish Home Appliance Companies
And The Global Recession (TANSES GÜLSOY, ÖZLEM ÖZKANLI, RICHARD LYNCH)
445
Risk Perception Of Turkish Exporters In Transportation: An Example Of Aegean Region (AYKAN CANDEMIR,
ALI ERHAN ZALLUHOGLU, ERDAL DEMIRALAY)
465
Self-Assessment Of Several Companies In Order To Establish A Holding (IMRAN ASLAN, ORHAN ÇINAR)
477
FINANCE STRATEGIES
The Effects Of The Foreign Direct Investment On Turkish Economy Between 2000-2009 Period (FURKAN
DISKAYA, SENEL SECIL OLMEZ , EBRU TERAZI)
501
Systemic Risk And Hedge Funds (NURAY TERZI)
509
Price Transmission And The Globalization Of Stock Markets: Evidence From Five Countries(RUI MENEZES)
517
Criteria For Off-shoring Decisions In Emerging Economies(FABIENNE FEL, ERIC GRIETTE)
527
Market Asymmetries, Arbitrage And Transition: The Case Of Russia (MIKHAIL GLAZUNOV)
537
SMEs STRATEGIES
Internationalization Of Small And Medium Sized Enterprises (SME) In Germany
(CHRISTOPHER STEHR)
545
How To Improve Innovativeness Of Small And Medium Enterprises
(ZLATKO NEDELKO, VOJKO POTOCAN)
557
A Strategic Tool For The Success Of SMEs: Entrepreneurial Culture
(SABIHA KILIÇ, EMRE ÇAĞLAR, EREN GÜNGÖR, İRFAN ÇAĞLAR)
567
Continuous Improvement Culture In SME’s: An Interpretive Field Studies In Industrial Sites
(SEYFI TOP, NURDAN COLAKOĞLU, SERKAN DILEK)
575
Small To Medium, Sized Enterprises And The Strength Of Weak Network Ties
(LYNNE BUTEL, DABABRATA CHOWDHURY)
587
Female Directors And SMEs: An Empirical Analysis
ENTREPRENEURSHIP & INNOVATIVENESS
How Do Social Entrepreneurs Develop Intensions To Create A Social Venture?: A Case Study
(AYTÜL AYŞE ÖZDEMIR)
611
Learning, Entrepreneurship And Innovation Orientations In Turkish Family-Owned Firms
(ERKUT ALTINDAĞ, CEMAL ZEHİR, A.ZAFER ACAR)
623
Can Innovation Be A Reason For A Long Term Survival?( BIGE ASKUN, REFIKA BAKOGLU)
633
The Role Of Innovation For Reducing The Effects Of The Crises
(SEFER ŞENER, MESUT SAVRUL, CAN KÖSE)
647
Measuring The Innovation Performance Of Turkish Science&Technology Parks: An Application Of Data
Envelopment Analysis (ILKER MURAT AR, BIRDOGAN BAKI)
657
A Study On The Relationship Between Innovation Performance And Competitiveness Ranking Of Some Countries In The Global Economic Crisis Period
(SELMA KARATEPE, RABIA ECE OMAY, SINEM GÜRAVŞAR GÖKÇE)
665
Predicting Micro-Level Innovation Potential With Neurofuzzy Hybrid Modeling – A Model Framework
(RICHARD KÁSA)
675
Istanbul: A Candidate City For The Global Innovation League?
( DILEK ÇETINDAMAR, AYŞE GÜNSEL, SEMA TÜRKKANTOS)
685
The Relationship Between Organizational Learning And Firm Performance: The Mediating Roles Of Innovation
And TQM (İPEK KOÇOĞLU, SALIH ZEKI İMAMOĞLU, HÜSEYIN İNCE)
697
Knowledge Management In Providing Value Added To Organizations
(EDWARD WONG SEK KHIN, ABDUL RAZAK IBRAHIM )
715
Linking Dynamic Capabilities And Digital Technologies: A Case Study Of Small Firms In The UK Audio Visual
Sector (KEITH RANDLE, MARIANA DODOUROVA)
723
CORPORATE GOVERNANCE & CORPORATE CULTURE
Corporate Governance And ERM In A High Risk Industry
(JANEK RATNATUNGA, KYM FRASER,MANZURUL ALAM)
737
Does CEO Duality And Board Heterogeneity Affect Firm Performance? Evidence From Istanbul Stock
Exchange (ISE) Services Index (SERHAT HARMAN,EBRU KANYILMAZ POLAT)
751
Corporate Governance And Financial Performance With A Perspective On Institutional Ownership: Empirical
Evidence From Turkey(ALI OSMAN GÜRBÜZ,ASLI AYBARS,ÖZLEM KUTLU)
759
How Institutional Corporate Governance Effect Organizational Commitment: Developing A Framework For
Research Model (PINAR ÖZTÜRK, MURAT KASIMOĞLU)
769
Managing The Banking Crises Through The Corporate Governance: The Case Of Turkish Banks
(GÜRAN YAHYAOĞLU, MEHTAP ÖZŞAHIN)
775
Cross-Cultural Strategic Marketing, Approach To Analyze The High-Context And Low-Context Cultures (Edward Hall Model) In Web Development (EHSAN FAKKAR, FARHAD SIASAR DJAHANTIGHI, MOHAMAD HAGHIGHI, ABOLGHASEM MIRA)
789
Changing Corporate Culture To Improve Business Performance: Case Of The Australian Automobile Industry
The Effect Of Family Culture On Family Business: A Research On Family Business In Istanbul Chamber Of
Commerce (CANAN ÇETIN, ATA ÖZDEMIRCI, ERKAN TAŞKIRAN, ESRA DINÇ ÖZCAN)
807
Integrating Both Negative And Unrecognized Positive Implications Of Cultural Diversity For Strategic Management Of Companies Operating Across The Borders
(SALIH YEŞİL, ADNAN ÇELİK, İBRAHIM AKBEN)
813
The Strategic Benefits Of Using Items Parcels On Ad Hoc Goodness-Of-Fit Indices
(TAREK KANDIL, DABABRATA CHOWDHURY)
825
The Influence Of Historic, Geographic And Cultural Factors As An Important Explanation For Corporative Culture And Economic Development: A Comparison Between Latin America And The United States (PAULO ROBERTO FELDMANN)
835
ETHICS AND SOCIAL RESPONSIBILITY
Developing Hypernorms For Corporate Codes Of Ethics (TIMO HEROLD,CHRISTOPHER STEHR)
845
Can Prosocial Corporate Behavior Conceal Unfair Business Practices? An Experimental Study In The Banking
Industry (ÜMIT ALNIAÇIK, KÜLTIGIN AKÇIN, ORKUN BAYRAM, ERŞAN CIĞERIM)
855
Who’s Mobbing Whom?( FATMA ZEHRA SAVI, BEHIÇ ÇELEBI)
865
The Relationship Between Personality And Being Exposed To Workplace Bullying Or Mobbing
(NEVIN DENIZ, ÖZNUR GÜLEN ERTOSUN)
871
Investigating Corporate Social Responsibility Of Turkish Company Websites Through Content Analysis
(DENIZ KAĞNICIOĞLU)
883
The Relationship Between Perceptions Of Ethical Climate Types And Affective Commitment: The Case Of
Turkish Hotel Employees (ADEM OGUT, METIN KAPLAN)
893
The Role Of Corporate Social Performance/Responsibility In Building And Protecting Corporate Reputation
(A. ASUMAN AKDOĞAN, AYŞE CINGÖZ)
901
Does Companies’ Corporate Social Responsibility Enhance Economic Value Added? Empirical Evidence From
Turkey (GÜLER ARAS, ASLI AYBARS, ÖZLEM KUTLU)
909
Effects Of Corruption On Reinvestment Decisions: A World Wide Analysis With MNEs (MARTINA
MCGUINNESS, NIZAMETTIN BAYYURT, MEHMET DEMIRBAG)
917
The Relationship Among Charismatic Leadership, Ethical Climate, Job Satisfaction And Organizational
Commitment In Companies(CEMAL ZEHIR, EBRU ERDOGAN, DOGAN BASAR)
925
STRATEGIES FOR HEALTHCARE MANAGEMENT
The Strategy Of Managed Care Health Funds(YAFFA MACHNES)
937
Relationship Marketing Approach And An Application In Service Sector: Karaman Private Health
Organizations (SELDA BAŞARAN ALAGÖZ, MAHMUT SAMI İŞLEK, NEZAHAT EKICI)
943
Word-Of-Mouth (WOM) In Health Care Marketing: A Study On Dimensions Of WOM Towards
Physicians(MEHPARE TOKAY ARGAN, METIN ARGAN, ALPER OZER)
953
Research On Determining Employee Satisfaction Of Physicians Who Work At Primary Health Services
TOURISM AND HOSPITALITY MANAGEMENT
The Impacts Of Globalization On Service Quality And Innovation Of Firms In Tourism Sector In Antalya
(OYA ERDİL, ADNAN KALKAN)
973
Human Capital Heterogeneity And Organizational Performance Analysis: An Empirical Study About International Hotel Chains In Turkey
(ALI HALICI, RAMAZAN AKTAŞ, MURAT KASIMOGLU, AHU GENIS GRUBER)
991
Russian And German Tourist Potential And Satisfaction In Sustainable Competitive Advantage Of Alanya
Destination (HULUSI DOĞAN, SÜLEYMAN BARUTÇU, ENGIN ÜNGÜREN)
997
Destination Competitiveness Of Turkey At Global Tourism Platform (MUHSIN HALIS, DIDAR SARI)
1007
Institutional Strategic Consciousness And Its Reflections: A Research On Qualified Hotels In Istanbul
(MUHSIN HALIS, MEHMET SARIIŞIK, OGUZ TURKAY)
1015
The Importance Of Customer Focused Marketing Strategy By Relationship Marketing Approach And A
Boutique Hotel Application From Turkey(GÜZIDE ÖNCÜ EROĞLU PEKTAŞ, MUSTAFA KARADENIZ)
1025
MARKETING STRATEGIES
The Effects Of Consumer Ethnocentrism And Consumer Animosity On The Re-Purchase Intent: The Moderating Role Of Consumer Loyalty
(M. ŞÜKRÜ AKDOĞAN, ŞEVKI ÖZGENER, METIN KAPLAN, AYŞEN COŞKUN)
1035
Detecting Customer Defections: An Application Of Continuous Duration Models
(SOFIA PORTELA, RUI MENEZES)
1045
Mobile Marketing Opportunities Via 3g Mobile Communication Technology
(VOLKAN POLAT, FATIH GEÇTI, MESUT ÇIÇEK)
1055
Consequences Of Service-Workers’ Customer Orientation And Perceived Organizational Support: Proposing
And Testing A Model In Cafe Chains (F. OBEN ÜRÜ, UĞUR YOZGAT)
1067
Market Orentation And Business Performance Of BH Enterprises
(VESNA BABIC-HODOVIC, ELDIN MEHIC, EMIR AGIC, AMELA JAHIC)
1083
The Effect Of Advertisement On Improving Brand Perception: An Evaluation In Automobile Sector
(T. SABRI ERDIL, ÖNER BAŞARIR)
1093
Concept Of Artificial Scarcity In Fast Fashion In The 21st Century Modern Marketing: “Zara Turkey Example”
(MUSTAFA AKSU, GÜZIDE ÖNCÜ E. PEKTAŞ, KAZIM KARABOĞA)
1101
The Impact Of Gender And Education On Perceptions Of Organizational Reputation
(AYŞE OĞUZLAR ULUDAĞ ,MEHMET EYMEN ERYILMAZ)
1111
Measuring Customer Satisfaction In Turk Telekom Company Using Structural Equation Modeling Technique
(SELIM ZAIM, ALI TURKYILMAZ, MEHVES TARIM, BILAL UCAR, OGUZ AKKAS)
1133
The Role Of Personality Traits In Status Consumption, A Study Into Domestic And Foreign Brands
(AYSEL ERCIS, SEVTAP UNAL, BILSEN BILGILI)
1143
The Impacts Of External Image Formed By Customer Perception On Consumer Emotion And Behavior
(MEVLÜT TÜRK, NESLIHAN DERIN, ŞEYDA NUR SEÇKIN)
1157
Nostalgic Gale On Marketing(SELDA BAŞARAN ALAGÖZ, MAHMUT SAMI İŞLEK, NEZAHAT EKICI)
1167
Sales Persons’ Work Methods Influence On Customer Satisfaction And Organisation Activities
Exploring Lifestyle Versus Consumption Patterns In Emerging Markets (YULIA LUKINIH, ZOLTÁN VERES)
1183
Performance Risk Perception In Service Projects(ZOLTÁN VERES)
1193
SUPPLY CHAIN MANAGEMENT
Managing Supply Chain-Based Conflict: A Study From Textile Exporters Perspectives (SÜLEYMAN
BARUTÇU, HULUSI DOĞAN, ESIN BARUTÇU, ATIK KULAKLI)
1205
Impact Of Relational Factors On Suppliers Performance: The Malaysian Experience (MOHAMMAD IKRAM
AHMED FADZIL, SHARIFAH FARIDAH SYED ALWI, TENGKU FAZIHARUDEAN DATO FEISAL)
1215
HUMAN RESOURCE MANAGEMENT AND ORGANIZATIONAL BEHAVIOR
Effects Of Core Employees On Organizational Capabilities And Firm Performance
(OYA ERDIL,HAKAN KITAPÇI, BEYZA TIMURLENK)
1225
Moderator Effects On Human Resource Flexibility And Innovation (ANGEL MARTINEZ-SANCHEZ,
MANUELA PEREZ-PEREZ, SILVIA ABELLA-GARCES, MARIA-JOSE VELA-JIMENEZ)
1233
The Importance Of People Capability Maturity Model In A Strategic Approach In Human Resource
Development (HESSAM ZANDHESSAMI,SHAHRZAD ALIJANI, ZEINAB MOLAEI, GHAZALEH GOUDARZI)
1243
University Student’s Perceptions And Attitudes About Time Using, And How To Deal With Their Daily Life
Stress: An Investigation From Turkey(MEHMET SARIISIK, HATICE GUCLU NERGIS, OZGUR ERGUN)
1253
The Effects Of Mentor’s Emotional Intelligence In Relationship Management: The Evaluation Of Lecturers’
Emotional Intelligence’s Effects (ALI ŞAHIN ÖRNEK, TANJU ÇOLAKOĞLU)
1261
The Influence Of Key Occupational Stress Sources On Employee Turnover Intention During Global Economic
Recession(MERAL ELÇI, İRGE ŞENER.)
1269
Exploring Companies' Behavioral Paradox By Using "The Corporation" Documentary (SELIM YAZICI,
AYŞEGÜL ÖZBEBEK, ESRA KILIÇARSLAN TOPLU)
1277
The Effects Of Affective Commitment And Organizational Citizenship Behaviors On Creative Behavior: An Empirical Investigation In Turkish Chemistry Industry (HÜLYA GÜNDÜZ ÇEKMECELİOĞLU, İRGE ŞENER, MERAL ELÇİ)
1283
Management Of Behavioral Issues In Strategic Projects(MOJTABA AZIZI, AMIR ALBADVI, EHSAN
FORSATKAR, SAEED ROKOOEI)
1293
Perceived Organizational Support And Organizational Citizenship Behavior: A Study Of Hotel Employees In
Cappadocia(EMINE OGUT, MELIS ATTAR, IBRAHIM ILHAN )
1303
INFORMATION TECHNOLOGIES AND E-BUSINESS
The Impact Of Information Technology Investments On Firm Performance In National And Multinational
Companies(CEMAL ZEHIR, BÜLENT AKYÜZ, ALI CELEP, BÜŞRA MÜCELDILI)
1311
Measurement Of Travel Supplier’s Website Quality By View Of Its Intermediaries’ Sales And Operation
Divisions (CAN DENIZ KÖKSAL, MELTEM CABER)
1321
Workplace Internet Leisure Browsing (BRENT COKER)
1331
STRATEGIC MANAGEMENT IN PUBLIC SECTOR
Leadership Style In Public Services Sector, Employee Silence And Organizational Commitment Relationship:
A Study In The Province Of Ordu(M. TURAN ÇUHADAR)
1353
Strategic Planning For Local Government: A Case Study (SEHER ARSLANKAYA, TÜLAY KORKUSUZ
POLAT)
1365
Adoption Of Performance Measurement Among Public Sectors In Malaysia: An Exploratory Study
(RUZITA JUSOH, RUDYANTO AZHAR, HASLIDA ABU HASSAN)
1371
Strategic Change In Public Sector Management In Turkey: A Brief Appraisal (SEFA ÇETİN)
1393
An Application Of Strategic Management To The Public Sector: What Accounts For Adoption Of Reinventing
Government Strategies Across The States Of The United States(MURAT ÖNDER)
1403
ENERGY AND DEVELOPMENT STRATEGIES
Financial Policies On Rural Development: EU Funds And The Example Of Turkey
(CEM KOLUKIRIK, H.SELÇUK ETİ)
1415
Forecasting Turkey’s Natural Gas Consumption By Using Time Series Methods
(MUSTAFA AKKURT, OMER F. DEMIREL, SELIM ZAIM)
1423
Current Energy Strategy Of Turkey And Eastern European Countries And Nuclear Energy
(SUDI APAK, GÜNGÖR.TUNCER, ERHAN ATAY)
1433
Recomputation Of UNDP’s HDI Rankings By Data Envelopment Analysis
(MEHMET TOLGA TANER, BÜLENT SEZEN, LÜTFIHAK ALPKAN, SELIM AREN)
1443
Management Of Agriculture Complex Of Russia Maintaining Food Security (The Regional Aspect) ( NICOLAY G KUZNESOV, ULIAY V SOLDATOVA , VIKTOR N OVCHINNIKOV, MICHAEL A CHERNYSHEV , IRINA Y SOLDATOVA)
1453
ORGANIZING COMMITTEE
• Erol Eren (Chairman, Beykent University, Istanbul-Turkey)
• Oya Erdil (Co-Chair, Gebze Institute of Technology, Kocaeli-Turkey)
• Ali Akdemir (Co-Chair,Canakkale Onsekiz Mart University, Canakkale-Turkey)
• Kemal Madenoğlu (Undersecretary, Prime Ministry State Planning Organization - Turkey)
• Erhan Usta (Deputy Undersecretary, Prime Ministry State Planning Organization – Turkey)
• Ahmet Çelenkoğlu (General Directorate of Economic Modeling and Strategic Research, Prime Ministry
State Planning Organization – Turkey)
• Anıl Yılmaz (Strategic Planning Department, Prime Ministry State Planning Organization – Turkey)
• Lütfihak Alpkan (Gebze Institute of Technology, Kocaeli-Turkey)
• Richard Lynch (Middlesex University, London, UK)
• A. J. Strickland III (The University of Alabama, Tuscaloosa, Alabama - USA)
• Uğur Yozgat (Marmara University, Istanbul, Turkey)
• Cemal Zehir (Gebze Institute of Technology, Kocaeli-Turkey)
• Tanses Gülsoy (Beykent University, Istanbul-Turkey)
• Güngör Tuncer (Beykent University, Istanbul-Turkey)
• Fuat Oktay (Turkish Airlines, Istanbul, Turkey)
• Gülruh Gürbüz (Marmara University, Istanbul-Turkey)
• Irem Erdoğmuş (Marmara University, Istanbul-Turkey)
• Esin Sadıkoğlu (Gebze Institute of Technology, Kocaeli-Turkey)
• Meral Elçi (Gebze Institute of Technology, Kocaeli-Turkey)
• Mehtap Özşahin (Gebze Institute of Technology, Kocaeli-Turkey)
ADVISORY BOARD & REVIEW COMMITTTEE
A. Asuman Akdoğan (Erciyes University, Kayseri-Turkey)
A. J. Strickland III (The University of Alabama, Tuscaloosa, Alabama - USA) A. Zafer Acar (Okan University, Turkey)
Abdurrahman Benli (Canakkale Onsekiz Mart University, Canakkale-Turkey) Adem Öğüt (Selçuk University, Konya - Turkey)
Adnan Çelik (Sütçü İmam University, Kahramanmaraş-Turkey) Adnan Ceylan (Gebze Institute of Technology, Kocaeli-Turkey)
Ahmet Kesik, Ph.D., Associate Professor (President of Strategy Development Unit, Ministry of Finance,
Republic of Turkey)
Alain Crochet (University of Sorbonne Nouvelle - Paris 3, France)
Alexander Egorshin (The Nizhny Novgorod Institute of Management and Business, Russia) Alexi Danchev, Fatih University, Istanbul, Turkey
Ali Akdemir (Canakkale Onsekiz Mart University, Canakkale-Turkey) Ali Ekber Akgün (Gebze Institute of Technology, Kocaeli-Turkey) Ali Halıcı (Baskent University, Ankara-Turkey)
Alistair M Brown (Curtin University of Technology, Western Australia) Amar KJN Nayak (Xavier Institute of Management, Orrissa-India) Andrei Burenin (Irkutsk State University, Russia)
Andrey Dashkov (Moscow State University, Russia) Asım Şen (St. John Fisher College, USA)
Atilla Dicle (Yeditepe University, İstanbul-Turkey)
Aurea Helena Puga Ribeiro (Fundacao Dom Cabral, Brazil) Ayse Günsel (Gebze Institute of Technology, Kocaeli-Turkey) Ayşen Hiç Gencer (Beykent University, Turkey)
Ayten Akatay (Canakkale Onsekiz Mart University, Canakkale-Turkey) Bahadır Akın (Selcuk University, Konya-Turkey)
Birol Bumin (Gazi University, Ankara-Turkey)
Borisas Melnikas (Vilnius Gediminas Technical University, Lithuania) Branko Bucar (Pace University,USA)
Bülent Sezen (Gebze Institute of Technology, Kocaeli-Turkey) Canan Çetin (Marmara University, Istanbul-Turkey)
Celso ClaudioHildebrand Grisi (University of Sao Paulo,Brazil) Cemal Zehir (Gebze Institute of Technology, Kocaeli-Turkey) Cengiz Yılmaz (Bogazici University, Istanbul-Turkey) Cevat Gerni (Gebze Institute of Technology, Kocaeli-Turkey) Ceyhan Aldemir (Dokuz Eylül University, İzmir-Turkey)
Chien-Chung Nieh (Tamkang University, Taipei Country- Taiwan) Con Korkofingas (Macquarie University,Sydney-Australia) Dursun Bingöl (Atatürk University, Erzurum-Turkey)
Dzevad Sehic (Faculty of EconomicsUniversity of Sarajevo, Bosnia) Ebru Kabadayı (Gebze Institute of Technology, Kocaeli-Turkey) Ekrem Tatoglu (Bahçeşehir University, Istanbul-Turkey) Enver Özkalp (Anadolu University, Eskişehir-Turkey)
Ernst Neuland, Institute for Business Innovation, South Africa; Erol Eren (Beykent University, Istanbul-Turkey)
Esin Can Mutlu(Yıldız Technical University, İstanbul-Turkey) Esin Sadıkoglu (Gebze Institute of Technology, Kocaeli-Turkey) Eyüp Aktepe (Gazi University, Ankara-Turkey)
Fahri Karakaya (University of Massachusetts, Dartmouth-USA) Feyzullah Eroğlu (Pamukkale University,Denizli-Turkey) Fuat Oktay (Turkish Airlines, Istanbul, Turkey )
Garry L. Adams (Auburn University, USA)
Gökhan Özer (Gebze Institute of Technology, Kocaeli-Turkey) Gönül Budak (Dokuz Eylul University, İzmir-Turkey)
Gülruh Gürbüz (Marmara University, Istanbul-Turkey) Gültekin Yıldız (Sakarya University, Sakarya-Turkey) Güneş Berberoğlu (Anadolu University, Eskişehir-Turkey) Gürcan Papatya (Süleyman Demirel University, Isparta-Turkey) Güven Alpay (Boğaziçi University, İstanbul-Turkey)
Hakan Kitapçı (Gebze Institute of Technology, Kocaeli-Turkey) Halil Çivi (İnönü University, Malatya-Turkey)
Halim Kazan (Gebze Institute of Technology, Kocaeli-Turkey)
Halis Kalmış (Canakkale Onsekiz Mart University, Canakkale-Turkey) Halit Keskin (Gebze Institute of Technology, Kocaeli-Turkey)
HA-Nguyen (Vietnam National University, Hanoi School of Business, Vietnam) Hasan İbicioğlu (Süleyman Demirel University, Isparta-Turkey)
Hayat Kabasakal (Boğaziçi University, İstanbul-Turkey) Hikmet Timur (Hacettepe University, Ankara-Turkey) Hisao Fujimoto (Osaka University of Economics, Japon) Howard Clayton (Auburn University, USA)1
Hüseyin İnce (Gebze Institute of Technology, Kocaeli-Turkey) İnan Özalp (Anadolu University, Eskişehir-Turkey)
Jamaluddin H. Husain (Purdue University)
Jiri Mezulanik (Silesian University, Opava-Czech Republic)
JoAnn D. Hawkins, Howard Community College, Columbia, Maryland, USA Johan Hough (Stellenbosch University, South Africa)
Julie Barker Lebo, Ball State University, Muncie, Indiana, USA Jungwan Lee (Bang College of Business, Kazakhstan)
Kamil Kozan (St. John Fisher College, USA)
Kathleen Marshall Park (Massachusetts Institute of Technology, USA) Kenneth Holland, Ball State University, Muncie, Indiana, USA Lars Ehrengren (Stockholm University, Sweden)
Ljiljana Maurovic (University of Rijeka, Croatia)
Lonnie Strickland (The University of Alabama, Tuscaloosa, Alabama - USA) Lütfihak Alpkan (Gebze Institute of Technology, Kocaeli-Turkey)
M. K. Sharma (Himachal Pradesh University, Shimla-India) Mahmut Özdevecioğlu (Erciyes University, Kayseri-Turkey) Mariana Dodourova (University Of Hertfordshire, UK) Marius Ungerer (Stellenbosch University, South Africa) Mehmet Barca (Sakarya University, Sakarya-Turkey) Mehmet Sahin (Anadolu University, Eskisehir-Turkey) Mehmet Şahin (Canakkale Onsekiz Mart University, Turkey)
Mehmet Zor Kaya (Diyalog Avrasya, Chisinau, Republic of Moldova) Muhsin Halis (Gaziantep University, Gaziantep-Turkey)
Mümin Ertürk (Beykent University, İstanbul-Turkey) Münevver Çetin (Marmara University, İstanbul-Turkey) Murat Azaltun (Beykent University, İstanbul-Turkey)
Murat Kasimoglu (Canakkale Onsekiz Mart University, Turkey) Murat Kayalar (Süleyman Demirel University, Isparta-Turkey) Musa Pınar (Valparaiso University, Indiana-USA)
Mustafa Delican (Beykent University, İstanbul-Turkey) Mustafa Köksal (Kocaeli University, Kocaeli-Turkey)
Nazan Yelkikalan (Canakkale Onsekiz Mart University, Canakkale-Turkey) Necdet Timur (Anadolu University, Eskisehir-Turkey)
Neil Bechervause (Swinburne University of Technology, Melbourne- Australia) Nurhan Papatya (Süleyman Demirel University, Isparta-Turkey)
Nurullah Genç (Kocaeli University, Kocaeli-Turkey)
Ömer Adil Atasoy (Osman Gazi University, Eskişehir-Turkey) Ömer Torlak (Osman Gazi University, Eskişehir-Turkey) Ömür Özmen (Dokuz Eylül University, İzmir-Turkey) Orhan Elmacı (Dumlupınar University, Kütahya-Turkey) Oya Erdil (Gebze Institute of Technology, Kocaeli-Turkey) Özlem Özkanlı (Ankara University, Ankara-Turkey)
Paul Z. Jackson, The Solutions Focus, St. Albans, United Kingdom Pauline Magee-Egan (St. John’s University, USA)
Peet Venter (University of South Africa, Pretoria-South Africa) Radhi Al-Mabuk, University of Northern Iowa, Cedar Falls, Iowa, USA Recep Şener (Muğla University, Muğla-Turkey)
Refik Culpan (Pennsylvania State University, Harrisburg-USA) Refika Bakoğlu (Marmara University, İstanbul-Turkey) Rezan Tatlıdil (Ege University, İzmir-Turkey)
Richard Lynch (Middlesex University, London-UK) Rıdvan Karalar (Anadolu University, Eskişehir-Turkey) Riza Atiq Abdullah (Universiti Ke Bangsaan-Malaysia) Sabahat Bayrak (Pamukkale University, Denizli-Turkey) Sadi Can Saruhan (Marmara University, İstanbul-Turkey) Sefer Şener (Canakkale Onsekiz Mart University, Turkey) Selahattin Sarı (Beykent University, İstanbul-Turkey) Selen Doğan (Niğde University, Niğde-Turkey) Selim lter (St. John Fisher College, USA)
Selim Özdemir, Qafqaz University, Baku, Azerbaijan Selim Zaim (Fatih University, Turkey)
Şerafettin Sevim (Dumlupınar University, Kütahya-Turkey)
Sergei Mordovin (International Management Institute St. Petersburg, Russia) Sevinç Köse (Celal Bayar University, Manisa-Turkey)
Şevki Özgener (Nevşehir University, Nevşehir-Turkey)
Shamsul Nahar Abdullah (Northen University of Malaysia,AmanMalasia) Sharan L. Oswald (Auburn University, USA)
Shaukat Ali (University of Wolverhampton, Shropsire-Great Britain) Sonja Petrovich Lazarevic (Monash University, Victoria-Australia) Stanislav Poloucek (Silesian University, Opava-Czech Republic) Subodh Bhat (San Francisco State University,San Francisco - USA) Sudi Apak (Beykent University, Turkey)
Süleyman Türkel (Çağ University, Mersin - Turkey)
T. Diana A. De Macedo- Soares (Pontifical Catholic University of Rio de Janeiro, Brazil) Tanses Gülsoy (Beykent University, İstanbul-Turkey)
Tatiana A. Burenina (State University of Management, Russia) Tijen Harcar (İzmir University of Economics, Turkey)
Tuğba Karabulut (Istabul Commerce University, Turkey) Tuna Taner (Celal Bayar University, Manisa-Turkey) Uğur Yozgat (Marmara University, İstanbul-Turkey) Ülkü Dicle (Yeditepe University, İstanbul-Turkey) V. Dolyatovskiy (The Rostow State University, Russia)
Victor Gnevko (St. Petersburg Institute of Management and Economics, Russia) Vojtech Malatek (Silesian University, Opava-Czech Republic)
Warren J. Keegen (Pace University, USA)
Xavier Richet (University of Sorbonne Nouvelle-Paris 3, France) Yasemin Arbak (Dokuz Eylül University, İzmir-Turkey)
Yonca Gürol (Yıldız Technical University, İstanbul-Turkey)
Yücel Acer (Canakkale Onsekiz Mart University, Canakkale-Turkey) Zeyyat Hatipoglu (Dogus University, Istanbul-Turkey)
PREFACE
Dear Colleagues, Ladies and Gentlemen,
Welcome to the Sixth International Strategic Management Conference in St. Petersburg, Russia. On
behalf of the Organizing Committee, I would like to extend my heartfelt greetings to all of you and wish
you a successful conference that yields many productive academic collaborations and reinforces the
already established ties, as with previous meetings of our conference.
The Sixth International Strategic Management Conference is organized jointly by Beykent University,
Çanakkale Onsekiz Mart University, and Gebze Institute of Technology, of Turkey. This year we have
also enjoyed the academic and financial support of Turkey’s State Planning Organization. As Conference
Chairman, I deem it a great pleasure to extend my deep appreciation to my colleagues, the presidents of
Çanakkale Onsekiz Mart University and of Gebze Institute of Technology, and the distinguished
Undersecretary of the State Planning Organization, all of whom also act as the Honorary Presidents of
our conference.
This year’s conference has received a total of 262 papers from 33 different countries. Some of these
papers were submitted as full papers from the start. Unfortunately, some of the extended abstracts were
not received as full papers by the deadline given for submission of full papers. In the Proceedings Book
and CD that you have, 145 papers are included. These were selected after careful screening.
I am happy to announce that in this year’s conference a much wider geography is represented than in
previous years. The number of different countries is more than double that in past conferences, and this
indicates that we are reaching an ever wider audience of academicians. These 33 countries are: Albania,
Australia, Belgium, Bosnia and Herzegovina, Brazil, China, the Czech Republic, Finland, France,
Germany, Greece, Hungary, Indonesia, Iran, Israel, Italy, Malaysia, Mexico, New Zealand, Nigeria,
Pakistan, Poland, Portugal, Russia, Singapore, Slovenia, South Africa, Spain, Thailand, Tunisia, the UK,
the USA, and Turkey. Also, some academicians have been unable to attend the conference due to visa
problems, which have caused us all much concern. This year two keynote speakers will address you on
the strategies out of the global recession.
Ladies and Gentlemen, on behalf of the Organizing Committee, I would once again like to welcome you
to the Sixth International Management Conference.
Prof. Dr.Erol Eren
Conference Chair
PREFACE
We are pleased to welcome you to the 6th International Strategic Management Conference in St.
Petersburg. This year, the theme is “Searching for Strategies out of the Global Recession”.
Participants coming from different parts of the world aim to discuss and explore for strategic
management issues and approaches to managing global crises. We are going to debate on different topics
including industry analysis, innovation, entrepreneurship, marketing and financial aspects of strategies
addressing mainly problems and issues in turbulent environments.
Academicians from different countries submitted original papers for conference presentation and for
publication in this Proceedings Book. All competitive papers have been subject to a peer review. The
results of the evaluation efforts produced 145 empirical, conceptual and methodological papers submitted
from 26 different countries involving all functional areas of strategic management with a specific focus
on strategies for the global recession. I would like to express our appreciation to the reviewers for
reviewing the papers that were submitted to this conference. We also thank to all those who submitted
their work to be considered for presentation at the conference.
I would like to thank to the Rectors of Universities for their continuing cooperation. My special thanks go
to Alinur Büyükaksoy, Rector of Gebze Institute of Technology for his valuable support and
encouragement.
Many people worked very hard for the realization of this organization. The Conference could not have
been held without the diligent work of Professor Erol Eren, Faculty Dean and Chairman of the
Conference. He made great effort to organize and perfect all arrangements. Special thanks to him for his
leadership and execution of 2010 Conference. I want to extend special appreciation to Mehtap Özşahin
for her hard work and commitment to the Conference development. She carefully worked in coordination
with us during the all phases of the organization.
We hope that you all will enjoy and benefit from the conference and enjoy your stay in this great and
historic city, St.Petersburg.
Oya Erdil, PhD
Co-Chair
PREFACE
Strategic management is a term that is acknowledged in areas of individualism to institutionalism, urban
government to regional planning and administration of nation to international relations and
organizations.
While it was first identified and regarded as a subject of multi-company corporations, today strategic
management has gained a strategic identity for every individual, every institution and every nation.
Indeed, strategic management that can be defined as decision of long term behavior pattern has become a
reality that is required in every field.
Design of strategy in every phase also mediates in planned development. Indeed, definition of vision and
mission is a requirement where strategies of objectives and goals are put forward. This requirement
cause individuals work for long years and as a result resources are used rationally and performance
levels of managers increase.
Six years ago we have decided to organize international strategic management conference at an
institutional level and led by Prof. Erol EREN in order to expand the concept of strategic management
perception in this way and context in Turkey. First conference was organized in Çanakkale by Çanakkale
Onsekiz Mart University, Gebze Institute Technology and İstanbul Ticaret University.Conference has
developed its international feature and gained an internationally institutionalized identity.
The theme of the conference which will be held for the sixth time this year also has significance.
“Searching For Strategies Out Of The Global Recession” is quite a significant theme in today’s
conjuncture since the crisis itself is a natural possible result and expectation of the globalization.
Therefore it is not a conjectural happening but a structural phenomenon.
Yet, a strategic approach to global crisis and crisis in general is a requirement as a structural
phenomenon. Design of strategies in getting over from crisis and reaction to crisis both in macro level
and institutional level is another requirement. In this regard we will have the opportunity to see
significant crisis strategies proposals in the 6th International Strategic Management Conference.
I wish a successful organization of 6th International Strategic Management Conference and thank
everyone for their efforts in the event.
Prof. Ali AKDEMİR
Co-Chairman of the Conference
Rector
FOREWARD
Dear Colleagues,
On behalf of Beykent University, I would like to express my pleasure at holding the Sixth International
Strategic Management Conference at the historic city of St. Petersburg. Ever since its establishment our
conference has enjoyed the generous support of two important institutions: Gebze Institute of Technology
and Çanakkale Onsekiz Mart University. Both institutions have displayed an extraordinary effort in
collaborating with Beykent University in the preparation of this conference over the years. I would like to
express my deep gratitude to my colleagues, Professor Alinur Büyükaksoy, the President of Gebze
Institute of Technology, and Professor Ali Akdemir, the President of Çanakkale Onsekiz Mart University.
In addition, this year the Conference has benefited from the academic and financial support of the State
Planning Organization, an institution that plays a critical role in the long-term economic planning for
Turkey. I would like to extend my sincere appreciation to the State Planning Organization in the person
of the Undersecretary, Mr. Kemal Madenoğlu. I would also like to thank all of the institutions and the
individuals who have contributed to the organization of this conference.
The Sixth International Strategic Management Conference enjoys the participation of academicians from
33 different countries. Represented are nearly all of the countries of Europe, and also countries from the
continents of Asia, Oceania, Africa, and America. The number of countries has more than doubled
compared to previous years. I would like to express my appreciation and respect to all of the
distinguished academicians who have contributed their academic endeavors from all around the world.
Putting together a truly international conference requires a lot of organizing and the synergy of a
harmonious team. In the person of the Conference Chair, Professor Erol Eren, I congratulate all of the
members of the Organizing Committee and the Advisory Board and Peer Review Committee.
It is my sincere wish that the Conference is productive and successful for all of the participants.
Professor Ahmet Yüksel
President
Beykent University
FOREWORD
Dear Colleagues,
On behalf of my university and staff members I would like to welcome the delegates of the 6th
International Strategic Management Conference with the theme “Searching for strategies out of the
global recession” organized jointly by Beykent University of İstanbul, Turkey, the Gebze Institute of
Technology of Kocaeli, Turkey, and the Çanakkale Onsekiz Mart University of Çanakkale, Turkey.
As Gebze Institute of Technology, we are extremely pleased to have participated in the organization and
realization of this series of conference and many of others which contributes our aim of concentrating on
scientific events. This year, we provide our support for the success of the 6th International Strategic
Management Conference which will be held in historic city of Saint Petersburg, Russia.
My special thanks go to Professor Ahmet Yüksel, Rector of Beykent University, and Professor Ali
Akdemir, Rector of Çanakkale Onsekiz Mart University who give the excellent example of cooperation to
realize this successful event. I would like to express my sincere hope that this cooperation will continue
in the coming years.
Professor Dr. Erol Eren, Dean, and the President of the Organizing Committee, successfully lead the
organization the last five years. I would like to thank to Dr. Eren for his valuable efforts. I also would like
to thank to colleagues and staff of our Faculty of Business Administration for their hard work.
It is our sincere hope that you will enjoy both the academic discussions and social events of the Congress
and your stay in St. Petersburg.
Alinur Büyükaksoy (Ph.D.)
Rector
Gebze Institute of Technology
STRATEGIES FOR
THE GLOBAL CRISIS
MANAGING LARGE CORPORATE CRISIS IN ITALY.
AN EMPIRICAL SURVEY ON EXTRAORDINARY
ADMINISTRATION
Alessandro Danovi
Bergamo University, Italy
ABSTRACT
This paper aims at presenting some initial empirical evidence regarding Extraordinary Administration (amministrazione straordinaria), a sort of Italian Chapter 11. This procedure was introduced into Italian bankruptcy legislation in 1979, in order to manage large corporate crises. It was reformed afterwards in 1999 and amended in 2003 and 2008 to deal with two of the biggest Italian crises, the Parmalat and Alitalia cases.
While there is an ample theoretical framework on the legal aspects (for a general overview in English see Panzani, 2009), economic issues have not been thoroughly addressed. Among the few we refer to Floreani,1997; Leogrande, 2003; Danovi, 2003; Falini 2008.
The paper investigates, how the procedure was put into effect between 1999 and 2008. Sources of information are documents available from the Ministry of Industry, which sets out the procedure and has to approve the restructuring plan and the Court Houses that are empowered to accept filing for EA, in cases of insolvency. The data collected, regarding almost all cases ruled by Act 270/1999 refer to 57 groups composed by 183 companies.
Specifically the empirical survey discusses: i) the economic relevance and size of the phenomenon; ii) the characteristics and assets of the companies involved; iii) timeframes and management aspects; iv) safeguarding of the work force.
The main conclusion is that the new law is more concentrated on recovering entrepreneurial activities through the sale of companies and not on true restructuring. This seems correlated to the short timespan for carrying out the process, as well as the excessive indebtedness of companies which file for EA.
Under a strictly economic profile, the results of administrator management show operative inefficiency which is difficult to overcome in the time period available for the process.
The author is aware that because of the statistical limits the analysis can be considered an initial survey, but it is worth presenting as the basis for future studies and to create the conditions for proper discussion for a procedure whose real effect is often merely imagined, rather than known.
Key words: Corporate restructuring; bankruptcy procedures in Italy; Extraordinary Administration
Jel classification: G33 - Bankruptcy; Liquidation; K35 - Personal Bankruptcy Law
INTRODUCTION
Extraordinary Administration (amministrazione straordinaria), a sort of Italian Chapter 11, was introduced in Italian bankruptcy legislation in 1979, by Act 270/1999, in order to manage large corporate crises. It was reformed afterwards in 1999 according to EU recommendations and amended in 2003 and 2008 to deal with two of the biggest Italian crises, the Parmalat and Alitalia cases.
Differently from other Italian bankruptcy procedures, Extraordinary Administration is a sort of hybrid since it is under the jurisdiction of both the administrative authority (Ministry of Industry) as well as the Court. Currently there are two distinct phases. During the initial “observation” phase, an extraordinary administrator manages the company and also has to verify whether there is a real possibility for recovery. During the second phase (“recovery phase”), the restructuring program prepared by the administrator follows a going concern logic, and the company can either be sold to other investors or guided towards a stand alone recovery. If according to the program only some divisions of the company are sold, after the sale, the rest has to be liquidated (“liquidation phase”).
As often happens with bankruptcy laws, there is ample theoretical framework and many studies have been carried out, focused on the legal aspects (Alessi, 2000; Costa, 2008; Ponti & Spadetto, 2006, Stanghellini, 2007 for a general overview in English see Panzani, 2009), while economic issues have not been thoroughly
investigated. Among the few we refer to Floreani,1997; Bertoli, 2000; Leogrande, 2003; Danovi, 2003, Lacchini et Al. 2005; Falini, 2008a and b.
In such a context, this paper aims at presenting some initial empirical evidence regarding how the procedure was put into effect between 1999 (the year of the reform) and 2008. The research follows the ideal framework of the most complete empirical study in Italian literature (Floreani, 1997) which studied the phenomenon before the reform, analysing almost all cases up to 1996. It is a useful tool for comparing the effect of the new law on corporate reorganization in Italy.
Information sources utilized to carry out the study were documents available from the Ministry of Industry, which sets out the procedure and has to approve the restructuring plan, and the Courts, that are empowered to accept filing for EA, in case of insolvency. The data collected, regarding all cases filed under Act 270/1999 (“Legge Prodi bis”), refer to 57 groups composed of 183 companies. The analysis was carried out on the EA cases under Act 270/1999 as it was more widely used than the revised version ruled by Act 39/2004.
The paper is divided into the following sections: §2. Characteristics of group involved. - § 3. Causes of the Crisis and the situation at filing. -§ 4. Management and Liquidation Phase. – § 5. Conclusions.
The main conclusions are as follows:
- The new legislation widened the sphere of application: the regulations introduced by the Act of 1999 notably increased the area of application, extending the intervention of the administrative authority to protect industry and national employment levels;
- The analysis of sectorial distribution illustrates how the phenomenon especially effects industrial sectors, like engineering and textiles, as well as commerce and wholesale, the same sectors especially hit by the crisis in Italy;
- Filing for EA often happens too late and this delay has negative effects on the possibility for recovery. The principle of “merit” introduced by the new legislation, based on the observation phase, is an important filter for singling out companies which are effectively salvageable;
- The economic rebalancing of the companies seems to have been pursued almost exclusively through the sale of the whole company or at least some divisions to other competitors. There are only three cases of stand-alone restructuring. This suggests that the new legal tools serve to foster sales rather than carry out real internal recovery.
- The aim to protect the workers seems to be reached in the majority of cases through the transfer of a significant number of employees (about 51%) with the company still functioning. EA seems to be useful in safeguarding the work force in most cases.
- The deadlines fixed for the execution of the program have produced tangible benefits on the duration of the procedure, at least as far as regards the recovery phase.
- The liquidation phase is the most complex of the entire procedure. In fact, for those still in progress (87%), the total timeframe is more than 6 years, similar to Italian bankruptcy procedures.
- In conclusion, while EA has proven to be generally efficient, effects on creditor’s rights are variable: in some cases there are significant recovery ratios, in others the percentages are not far from the ones creditors could have had if the company had gone bankrupt.
The author is aware that because of the statistical limits, this analysis can be considered as an initial survey. From a methodological point of view, it is necessarily more descriptive than analytical. The size of the sample, in fact, while often representing the whole population, is too small to find statistically significant correlations. It is meant as the basis for future studies, to create the conditions for proper discussion for a procedure whose real weight is often merely imagined, rather than known.
CHARACTERISCS OF GROUPS INVOLVED
After Act 270/1999 was approved and up to November 2008, 57 groups for a total of 183 companies filed for EA.
Table 1- EA Admission Over Time
A- Year by year
Year Groups Companies Groups Companies
1999 0 0 2004 9 29 2000 4 20 2005 6 11
2001 5 18 2006 2 13 2002 8 13 2007 6 17 2003 9 40 2008 ( up to Novembre) 8 22
Total 57 183
Source: Ministry of Industry data
Most admissions took place between 2003-2005 (42% for groups and 44% for single companies).. The frequency appears linked to the general economic trend: the increase in the number of cases filed followed the downturn of the economy, with the usual delay as illustrated below. Vice versa, there were just a few cases during the expansive phase of the cycle. Figure 1 illustrates the existing relationship between the dynamic of the real GNP and the number of cases filed. In light of the present significant crisis, a great increase in the phenomenon in the near future is expected.
Figure 1: The economic trend and EA cases
Source: Ministry of Finance and Ministry of Industry data
Following the national economic trends, a larger number of groups filed for EA during the last decade. Fewer companies filed between 1999-2008 (183 against 229), but more groups were involved (57 against 25). This can be explained in light of the following elements introduced by the new law (Danovi, 2003, 71):
a) lowering the dimension required to file for EA led to filing by smaller groups;
b) greater access selectivity, i.e. only for recoverable companies as well as the removal of automatic extension to all other distressed companies within the group .
Analysis of the sectorial distribution shows how the phenomenon effects the engineering, textile, commercial and distribution sectors. The high incidence of significant difficulties in the engineering field is due to the stagnation of 2007-2008. The textile sector also made widespread use of EA, particularly in 2006-2008. There is a correlation between the incidence and the economic sector trends, which experienced severe structural crises in the last years.
The entity of the crisis that has hit the industrial sector and the importance of EA is also illustrated in the Report on the State of Industry (Ministry of Industry & IPI 2003), which discusses crisis situations between 2002 and 2003.EA seems to be a solution to company crises, especially in industrial sectors.
Table 2 - Sectorial subdivision of the groups in EA
Total 2000-2008 2000-2002 2003-2005 2006-2008 Sector Count % Count % Count % Count % Food 2 3.51% 1 5.88% 1 4.17% 0 0.00% Textiles and clothing 9 15.79% 2 11.76% 3 12.50% 4 25.00% Paper and Publishing 3 5.26% 2 11.76% 1 4.17% 0 0.00% Chemical 1 1.75% 1 5.88% 0 0.00% 0 0.00% Commerce and distribution 6 10.53% 1 5.88% 4 16.67% 1 6.25% Construction 4 7.02% 2 11.76% 1 4.17% 1 6.25% Engineering 15 26.32% 4 23.53% 5 20.83% 6 37.50% 0 1 2 3 4 5 6 7 8 9 1 0 199 9 2000 2001 2002 2003 2004 2005 2006 2007 2008 -1,5% -1,0% -0,5% 0,0 % 0,5 % 1,0 % 1,5 % 2,0 % 2,5 % 3,0 % 3,5 % Groups in
Electronics 3 5.26% 0 0.00% 3 12.50% 0 0.00% Steel and Metallurgy 4 7.02% 3 17.65% 0 0.00% 1 6.25% Plant Design 1 1.75% 1 5.88% 0 0.00% 0 0.00% Transport 2 3.51% 0 0.00% 1 4.17% 1 6.25% Telecommunications 4 7.02% 0 0.00% 4 16.67% 0 0.00% Services 3 5.26% 0 0.00% 1 4.17% 2 12.50%
Total 57 100.00% 17 100.00% 24 100.00% 16 100.00% Source: data from various files and from Mediobanca, 2000-2008
The size of groups involved can be evaluated from the number of employees (Table 4), the first requirement for access to the procedure or, for a smaller sample, from the company turnover (Table 3).
Table 3 - The turnover of companies which accessed EA
Turnover (millions of Euro) Count %
more than 200 4 26.67% from100 to 200 5 33.33% from 50 to 100 4 26.67% less than 50 2 13.33% Total 15 100.00% Source: Mediobanca, 2000-2008
About a third (33%) of the companies included in the sample had a turnover between 100 and 200 million Euro. A significant percentage (more than 26%) had a turnover between 50 and 100 million Euro or over 200 million Euro. The other companies do not exceed 50 million. Within four listed companies that filed for EA only one had a turnover of over 200 million Euro and this can be interpreted under a double profile: on the one hand, it is possible that the listed companies, since they are subject to greater controls, file more rarely; on the other hand, there is a sort of self-exclusion from the sample. Since 2003 the largest listed companies can file more easily for the new version of the law (under Act 39/2004), not included in our sample.
Table 4- The size of groups based on the number of employees
Entire period 2000-2008 2000-2002 2003-2005 2006-2008 Employees Count % Count. % Count. % Count. % between 1000 and 2000 5 8.77% 1 5.88% 1 4.17% 3 17.65% between 500 and 1000 11 19.30% 2 11.76% 7 29.17% 2 11.76% less than 500 41 71.93% 14 82.35% 16 66.67% 11 64.71% Total 57 100.00% 17 100.00% 24 100.00% 16 94.12%
Average and median employees per
group
Average 444 358 469 499
Median 324 265 352 365 Source: Ministry of Industry data
In all, 25,308 workers were employed by companies that filed for EA between 2000 and 2008. More than half of the groups had fewer than 500 employees and during the first three years (2000-2002), almost all had fewer than 1000 employees. From 2003-2005, even though the majority of cases regarded companies with fewer than 500 employees, there was an increase in cases which involved groups between 1000 and 2000 employees. This is linked to the general crisis in labour intensive sectors (see Table 2). The smaller number of large groups is due to the fact that since 2003 these crises have been dealt with using EA in accordance with Law 39/2004, not included in our sample.
As the median data in 2000-2002 is under 300 employees, many groups would not have been able to access EA because of the size limit under the previous Law 95/1979 that required more than 300 workers. Compared with previous data (Floreani,1997), the dimension of the groups involved under the new regulations is much smaller, suggesting that the renewed procedure involved medium-large sized companies.
CAUSES OF CRISIS AND THE SITUATION AT FILING
Once the state of insolvency has been declared by the Court, the observation phase of the procedure begins, aimed at verifying whether there are the conditions for restructuring.
Table 5 illustrates the main causes of the crises as singled out in administrator reports regarding a sample of 22 companies, the largest industrial holdings (subsidiaries are not considered).
Table 5 - The main cause of the crisis.
Factors of the crisis Count %
Strategic errors 6 27.27% Overcapacity/rigidity 5 22.73% Decline of product/market/technology combination 4 18.18% Financial and asset imbalance 7 31.82%
Total 22 100.00%
Source: Administrator reports
According to the administrator reports, the reasons for the crisis are as follows:
• strategic errors, due to acquisition or investment operations without appropriate financial planning; • rigid conditions in the production structure, due to prediction errors which have led to an excessive
production capacity. This condition generates fixed costs that are not in proportion to the turnover, with the consequent lowering of operational margins and cash flows;
• decline of the product-market-technology: errors in the market choice, loss of brand image, bad product mix, lack of distribution channels. These errors result in lower competitivity and consequently in the loss of company market quotas;
• financial imbalances, due to excessive leverage, lack of correlation between sources and uses of founds and insufficient liquidity.
The causes listed above refer to internal company factors, as stated in Italian economic literature (Brugger, 1984; Guatri, 1995). Sometimes the crisis originates from external factors, which management wasn’t able to or didn’t wish to face, like market globalization, economic cycle trends and changes in consumer behaviour. In many cases, before filing, companies unsuccessfully tried to negotiate a financial settlement through a workout or a preventive creditors’ settlement.
Data show a generalized delay in filing. This happens especially when entrepreneurs are unwilling to give up management and leads to a higher percentage of debts on the total assets of the company.
The lateness of many insolvency claims is shown by the balance figures for a sample of 54 companies, for which financial statements at the date of filing were available.
Table 6 – Percentage of assets vs. debts when EA is filed
Sample
2000-2008 Sub-sample Companies’ balance sheet
data
Administrators’ data
Average 55.43% 66.62% 36.46% Median 50.65% 75.55% 40.09%
Count 54 16 16
Source: Company financial statements and administrator reports
Net assets vs. the total debt ratio, which approximates the likelihood of satisfying creditors, seems to be almost half but, for a smaller sample of 16 companies in which comparison is possible, administrator-reviewed data show completely different figures from the company balance sheets (Table 6).
Company financial statements overestimate the asset value by about 30%. This is due to the habit of window dressing (when not falsifying) figures during the period of decline.
MANAGEMENT AND LIQUIDATION PHASE
If the administrator report states that there is a real possibility for recovery, the second phase of the procedure starts with a Court Order. During this phase, EA can be extended to other insolvent companies within the group. In our sample this happened 33 times, involving 126 companies.
