organizacja i zarządzanie

Transcription

ORGANIZACJA
I ZARZĄDZANIE
KWARTALNIK NAUKOWY
Nr 3(19)
WYDAWNICTWO POLITECHNIKI ŚLĄSKIEJ
GLIWICE 2012
Rada Naukowa
Przewodnicząca Rady Naukowej
Dr hab. Agata STACHOWICZ-STANUSCH, prof. Pol. Śl., Politechnika Śląska
Członkowie
Prof. dr hab. inż. Mariusz BRATNICKI, Uniwersytet Ekonomiczny w Katowicach
Professor Hans Krause HANSEN, Copenhagen Business School, Dania
Professor Matthias KLEINHAMPEL, IAE Business School, Buenos Aires, Argentyna
Prof. dr hab. inż. Maria NOWICKA-SKOWRON, Politechnika Częstochowska
Professor Nikos PASSAS, Northeastern University, Boston, USA
Dr hab. Agnieszka SITKO-LUTEK, prof. UMCS, Uniwersytet Marii Curie-Skłodowskiej w Lublinie
Professor Marco TAVANTI, DePaul University, Chicago, USA
Professor Charles WANKEL, St. John’s University, New York, USA
Komitet Redakcyjny
Redaktor Naczelny – prof. dr hab. inż. Andrzej KARBOWNIK
Zastępca Redaktora Naczelnego – dr hab. Agata STACHOWICZ-STANUSCH, prof. Pol. Śl.
Sekretarz Redakcji – mgr inż. Aneta ALEKSANDER
Redaktor wydawniczy – mgr Andrzej SMOGULSKI
Redaktor językowy (język polski) – mgr Roma ŁOŚ
Redaktor językowy (język angielski) – Denis POITRAS
Redaktor statystyczny – dr Anna MĘCZYŃSKA
Redaktorzy tematyczni
Prof. dr hab. inż. Józef BENDKOWSKI
Prof. dr hab. inż. Lech BUKOWSKI
Prof. dr hab. inż. Małgorzata GABLETA
Prof. dr hab. inż. Grażyna GIERSZEWSKA
Prof. dr hab. inż. Jerzy LEWANDOWSKI
Prof. dr hab. Krystyna LISIECKA
Prof. dr hab. Arkadiusz POTOCKI
Prof. dr hab. inż. Jan STACHOWICZ
http://www.polsl.pl/Wydzialy/ROZ/Strony/Kwartalnik_Naukowy.aspx
email: [email protected]
ISSN 1899-6116
Wersją pierwotną Kwartalnika Naukowego „Organizacja i Zarządzanie” jest wersja papierowa
SPIS TREŚCI
Słowo wstępne .................................................................................................................... 5
1.
Ewa BOJAR, Małgorzata KWIETNIEWSKA – Społeczna odpowiedzialność
przedsiębiorstw w województwie lubelskim ................................................................ 7
2.
Katarzyna IWANICKA – Zastosowanie wiedzy o stylach uczenia w celu
przeciwdziałania wypaleniu zawodowemu oraz wzmocnienia konkurencyjności
wśród polskich menedżerów ......................................................................................... 23
3.
Peter MEŽA – Rozwój kompetencji zarządzania produktem w przedsiębiorstwie
produkcyjnym ………………………........................................................................... 39
4.
Katarzyna SEKŚCIŃSKA – Zarządzanie ryzykiem finansowym – nadzieja
na sukces a inwestowanie wśród przedsiębiorców i pracowników najemnych ............ 51
5.
Agnieszka WOJTCZUK-TUREK – Innowacyjne zachowanie w pracy i kapitał
psychologiczny – analiza zależności ............................................................................ 71
6.
Joanna SITKO – Zarządzanie własnością intelektualną w przedsiębiorstwie ……... 89
7.
Sebastian BAKALARCZYK – Model Longstaffa-Schwartza i jego wycena
w zarządzaniu – analizy finansowe i analizy danych …………………....................... 105
8.
Dorota CHMIELEWSKA-MUCIEK – Zarządzanie wiedzą w małych
przedsiębiorstwach branży informatycznej w Polsce ………………………............... 121
9.
Urszula SKURZYŃSKA-SIKORA – Kompetencje w zarządzaniu organizacją
a jej efektywność ………………………………………………………………………. 137
10. Aneta Aleksander, Agata STACHOWICZ-STANUSCH – Odbudowa reputacji
marki w następstwie kryzysu w organizacji ………………......................................... 149
CONTENTS
Foreword ............................................................................................................................. 5
1.
Ewa BOJAR, Małgorzata KWIETNIEWSKA – Corporate social responsibility of
companies operating in the Lublin Voivodeship ......................................................
7
2.
Katarzyna IWANICKA – Appling knowledge about learning styles to fight
burnout and amplify competitiveness among polish managers .................................... 23
3.
Peter MEŽA – Developing product management competencies in the production
company ……………………….................................................................................... 39
4.
Katarzyna SEKŚCIŃSKA – Management of financial risk – hope of success
and investment among entrepreneurs and employees ................................................... 51
5.
Agnieszka WOJTCZUK-TUREK – Innovative work behavior and psychological
capital – analysis of relationships ................................................................................. 71
6.
Joanna SITKO – Intellectual property management in enterprise ……..................... 89
7.
Sebastian BAKALARCZYK – Longstaff-Schwartz model and facility pricing
in management– financial analysis and data solutions ………………......................... 105
8.
Dorota CHMIELEWSKA-MUCIEK – Knowledge management in small
enterprises in the information technology sector in Poland ……………...................... 121
9.
Urszula SKURZYŃSKA-SIKORA – Competence in the management
of an organization and its effectiveness ………………………………………………... 137
10. Aneta Aleksander, Agata STACHOWICZ-STANUSCH – Corporate brand
reputation rebuilding after the company’s crisis …………........................................... 149
FOREWORD
Dear Reader,
I have great pleasure to present you the Third Issue of the year 2012.
It contains very interesting and inspiring publications on the topic of innovation,
competitiveness and crises challenges facing contemporary organizations.
We have received a good number of submissions, and after applying the due process of
double blind review, we have selected 10 papers from academicians in Poland and Slovenia.
E. Bojar, M. Kwietniewska focus on Corporate Social Responsibility in the Lublin
Voivodship, studying the awareness and application of CSR principles in companies operating
in eastern Poland.
K. Iwanicka analyses managerial stress and burnout syndrome taking into consideration
learning styles, features of personality and recommendations to protect managers from this
unwanted psychological phenomenon.
P. Meza explores product management in relation with product managers’ competences in
production companies inside the domestic appliance industry in Slovenia.
K. Sekścinska examines the differences in financial behavior between entrepreneurs and
employees based on survey research. It examines how their hope of success and its components
will affect risk-taking and financial decisions.
J. Sitko focusing on intellectual property management in the knowledge management
context of enterprises, as well as in the strategic context.
A. Wojtczuk-Turek identifies individual predictors of employees’ innovative work
behavior, presenting the research results from medium-sized and large companies operating in
Poland.
S. Bakalarczyk presents the Longstaff-Schwartz Model and Facility Pricing in Management
applied for financial analysis, especially for option spreads.
A. Aleksander and A. Stachowicz-Stanusch examine the consequences a company may
suffer when brand reputation is threatened by a crisis situation by looking at case studies and
thereafter presenting their own research model.
D. Chmielewska-Muciek discusses the results of knowledge management research
conducted in 79 enterprises active in the IT sector in Poland.
U. Skurzyńska-Sikora presents the results of empirical studies performed in order to
determine the competency gap in Polish enterprises and their influence on company’s
effectiveness.
On behalf of the editorial board I share the hope that you will enjoy this issue.
Dr hab. Agnieszka SITKO-LUTEK, Prof. UMCS
Ewa BOJAR, Małgorzata KWIETNIEWSKA
Lublin University of Technology
Faculty of Management
Department of Economics and Management of Economy
CORPORATE SOCIAL RESPONSIBILITY OF COMPANIES
OPERATING IN THE LUBLIN VOIVODESHIP
Summary. In the globalized era, the world economy is facing many challenges
resulting from deterioration of the environment, financial crises, and deepening of
social inequalities. Human activities, including business activity, are leading the world
to the limits of growth. Emerging challenges raise the need for in-depth research on
how businesses follow and incorporate the CSR principles into their day-to-day
operations, both globally and locally. The purpose of this paper is to present a study of
the awareness and applications of corporate social responsibility principles in
companies operating in the Lublin Voivodeship.
Keywords: corporate social responsibility, CSR
SPOŁECZNA ODPOWIEDZIALNOŚĆ PRZEDSIĘBIORSTW
W WOJEWÓDZTWIE LUBELSKIM
Streszczenie. W dobie globalizacji gospodarka światowa staje w obliczu wielu
wyzwań, związanych z pogorszeniem stanu środowiska naturalnego, kryzysów
finansowych oraz pogłębianiem nierówności społecznych. To działalność człowieka,
między innymi przedsiębiorstw, doprowadza nasz świat do granic wzrostu. Wobec
tych wyzwań, celowe staje się badanie stosowania zasad CSR przez przedsiębiorstwa
zarówno na poziomie globalnym, jak i lokalnym. Niniejszy artykuł prezentuje wyniki
badań, dotyczące świadomości pracowników i pracodawców na temat społecznej
odpowiedzialności przedsiębiorstw w regionie lubelskim.
Słowa kluczowe: społeczna odpowiedzialność przedsiębiorstw, CSR
8
E. Bojar, M. Kwietniewska
1. The Concept of Corporate Social Responsibility
The concept of corporate social responsibility is a response to changes occurring in
the business environment. Most of the available definitions characterize corporate social
responsibility as a form of voluntary self-regulation which consist of respecting various social
and environmental aspects of business operations. A responsible business is not confined
to observance of the law exclusively. This self-regulation mechanism incorporated into
a business model means that the company assumes a more pro-active approach to
the environment and society. A socially responsible business invests more in development
of relations with its stakeholders, ensures that its day-to-day activities comply with ethical
standards and other socially recognized norms in order to bring benefits to local communities
and society at large. The European Commission states that being socially responsible means
not only fulfilling the applicable legal obligations, but also going beyond compliance and
investing “more” into human capital, the environment and relations with stakeholders
(European Commission, 2001). The World Bank defines social responsibility as an obligation
of business entities to contribute to the process of sustainable development in cooperation
with employees, their families, local communities and all society in order to ensure constant
improvement of the quality of life which is beneficial to business and social development
alike (World Bank, 2005). Governments should encourage responsible business practices
through efforts and undertakings which stimulate development of all forms of cooperation
between enterprises embedded in local communities with various social groups and
information campaigns promoting good CSR practices (Bojar M., 2007, p. 15-16).
Although economic growth is still the main source of economic progress and social
development, many noticed that profit-oriented activities result in many negative side effects,
including environmental degradation, monopolization of markets, excessive consumption,
development of black markets and unfair competition practices (Rybak M., 2004, p. 14).
Presently, definitions of responsible business emphasize that a responsible business
should generate profit and develop lasting relations with all stakeholders and use dialogue
with its stakeholders as an instrument to improve business development strategy, achieving
a competitive advantage based on the lasting values for shareholders and other stakeholders.
A responsible business should deliver products and services in a manner which causes
the least possible burden for the environment and local communities, respect recognized
social and ethical values, employees‟ rights and properly fulfills all assumed contractual
obligations. A business model based on the concept of corporate social responsibility is
a model focused on various groups of stakeholders, including a wide spectrum of institutions
and organizations which can impact the company or which the company can influence
Corporate social responsibility…
9
through its products, strategies, production processes, management systems and procedures
(Hausner J., 2008, p. 159).
The impact of social perception of the company and its activities on the long-term
increase in total corporate value is increasingly attracting the attention of scientists involved
in development of enterprise management theories and concepts. Numerous observations
show that a socially responsible business approach, respecting widely recognized ethical
values in day-to-day business operations, help companies achieve a lasting competitive
advantage and develop harmoniously. A responsible business approach contributes to social
cohesion and preservation of the environment and its resources for future generations.
More and more managers associate a company's market value with social responsibility,
defined as concern for the environment, care about well-being, security, and professional
development of their employees, respect for the rights and interests of local communities,
principles of democracy, fair play in business, and participation in the process of civil society
building. Many authors claim that the business model based on corporate social
responsibility, despite incurred costs, may only increase the total corporate value in a longterm horizon (Wołoszyn J., Ratajczak M., 2011, p. 141).
2. Corporate Social Responsibility of Companies in Lublin Voivodeship
Unfortunately, local business still demonstrates a lack of understanding of the essence
of the CSR concept. CSR is frequently associated with the observance of law, sponsoring
and charity, whereas little attention is paid to identifying the needs of various stakeholders.
In the context of the competitiveness of Polish companies in the globalized economy, one can
raise the question of how Polish managers approach various ethical problems they encounter
in day-to-day business activities, especially if they feel responsible for the environment they
operate in and what is their awareness of CSR systems. One can observe many activities
which quite universally are identified with the concept of responsible business. Therefore,
the main purpose of our research was to assess the level of awareness of the CSR concept
among managers and employees of companies operating in the Lublin region (Lublin
Voivodeship) and determine whether regional businesses perform responsibly. For
the purpose of our research, corporate social responsibility was defined globally to include
a wide array of issues, including environmental issues, human rights and social dialogue with
local communities. The main thesis of our study reads as follows: both entrepreneurs and
employees of companies operating in the Lublin region demonstrate poor knowledge and
understanding of the CSR concept, which in turn translates into insufficient accomplishment
of goals put forward by promoters of the responsible business model.
10
2.1. The Structure of Research Sample
From May to August 2011, researchers from the Department of Economics
and Management of the Faculty of Management at the Lublin University of Technology
carried out a pilot questionnaire research on how employees assess various activities and on
manifestations of social responsibility by their employers. The research sample
was composed of employees of randomly selected enterprises based in the Lublin
Voivodeship. The research questionnaire was anonymous and included 28 questions.
The randomly selected research sample was composed of 500 people; 437 questionnaire
forms were considered valid. 400 questionnaire forms were filled out by employees of 400
enterprises operating in the Lublin Voivodeship, which, according to data published by
the Central Statistical Office as of December 31, 2011 represents 0.25% of the total number
of enterprises operating in the region (CSO, 2012). 84% of polled employees work in private
companies, while the reminder (16%) are employees of territorial self-government bodies and
other public institutions.
Fig. 1. The structure of surveyed companies according to the number of employees
Rys. 1. Struktura badanych przedsiębiorstw ze względu na liczbę zatrudnionych
Source: Own work.
The structure of the research sample to a large extent is similar to the structure of
enterprises operating in the Lublin region. Most of the companies included in the study
operate in the trade, building and construction, and telecommunication sector followed by
11
other services and administration. According to the Polish Classification of Activities (PCA),
more than 30% of the companies operating in the Lublin Voivodeship are trading companies
and less than 12% operate in the building and construction industry, industrial processing –
8%, science and technology – 7.3%, transport – 6.9%, other services – 6.9%, healthcare –
5.8%, education and training – 3.6%, and other trades – 19.4% (Central Statistical Office,
2012).
Fig. 2. The structure of surveyed companies according to trades
Rys. 2. Struktura badanych przedsiębiorstw ze względu na branżę
Source: Own work.
2.2. Research Findings
Effective implementation of the CSR principles is based on knowledge and understanding
of the CSR concept and ability to incorporate socially responsible activities into day-to-day
business practice. Therefore, the key point was to establish to what extent managers
and employees of surveyed companies were familiar with the corporate social responsibility
concept and practices, and what values they used as a reference point while assessing
business activities in the context of social responsibility.
Data gathered from the study show that only one third of employees are familiar with
the idea of corporate social responsibility, while about 50% of them are „rather familiar‟.
The rest of the polled employees either have no knowledge of what corporate social
12
responsibility is about or do not identify business activities carried out by their companies
with this term.
Fig. 3. Knowledge of the CSR concept
Rys. 3. Znajomość koncepcji CSR
Source: Own work.
The questionnaire also contained questions allowing us to establish how respondents
define socially responsible business. For most of those polled (59%), corporate social
responsibility was tantamount to ethical conduct in business activities and 15% of
respondents identified CSR with observance of binding legal regulations. The study also
revealed that socially responsible business conduct is hardly associated with environmental
issues (9%), transparency (6%) and activities aimed at reducing social inequalities (6%).
This means that respondents tend to reduce the concept of corporate social responsibility to
ethical behaviors in business and observance of the law. We would like to emphasize that the
mere observance of the law has little in common with corporate social responsibility.
All entrepreneurs have to run business according to binding regulations and fulfill all legal
requirements that pertain to their business. However, activities not required by the law, which
exceed these minimal requirements can be described as socially responsible business
behavior.
Relations between the company and its stakeholders, in particular relations with
its employees, are crucial to achieving lasting market success. Employees who feel that they
are appreciated by the company‟s management and are offered opportunities for personal
development alongside the company‟s growth, identify themselves with the company, are
more productive and less resistant to change. Therefore, companies should have clearly
13
developed employment and staff development policies incorporated into their long-term
business development strategies.
Our study of social aspects of implementation of CSR norms covered three key areas –
staff development, work conditions and observance of human rights.
As regards development of employees, only 23% of respondents expressed opinions that
employees in their company were encouraged in the area of career planning and personal
development, and about 41% declared that their employers offered them opportunities for
long-term planning of personal development. The other group of respondents either had no
opinions on the subject or declared that their employers did not offer them any opportunities
for career planning and professional or personal development.
Respondents expressed the view that the main activities undertaken by their employers
for staff development included periodical assessments of employees‟ achievements and
subsidies for various courses, training and studies. Slightly less respondents pointed to other
activities such as in-company training schemes and career path development, clear and
transparent employment and staff development policies, opportunities for professional
development and the offering of shares for outstanding achievements.
Fig. 4. Forms of support for career planning and development of employees‟ competences and
skills
Rys. 4. Sposoby wsparcia rozwoju kompetencji i umiejętności pracowników oraz planowanie
kariery
Source: Own work.
14
Since Poland has a well developed labor law system and respecting employees‟ rights is
part of socially responsible business, therefore an other topic covered by our study included
work conditions and observance of labor law by regional entrepreneurs. Most respondents
(90%) declared that labor law regulations were observed in their companies. However, what
is be worrying is the fact that as many as 6% of respondents claimed that labor law was
violated in their companies.
Our study also confirmed that employees highly value timely payment of due
remuneration for work, proper and transparent rules for the documentation hours worked, and
annual leave granted according to labor law regulations (over three fourths of respondents).
More than 50% of respondents declared that they were paid for overtime. Some employees
reported violations of freedom of trade union membership.
Fig. 5. Which rules are obeyed in your enterprise?
Rys. 5. Które z wymienionych poniżej zasad są przestrzegane w Pana/Pani przedsiębiorstwie?
Source: Own work.
Equal treatment and non-discrimination for gender, race, religion and form
of employment are the other fundamentals of the labor law. The study revealed that more than
70% of respondents claimed that they did not experience any form of discrimination in
the workplace or during the recruitment process. 14% of respondents had no opinion on
the subject and 12% encountered some forms of discrimination in the workplace.
The
following
chart
illustrates
15
that
counteracting
discriminatory
practices
in the workplace is largely identified with equal treatment of men and women. Our study
shows that respondents pay less attention to equal professional development opportunities
for co-workers representing other nationalities or religion, and to equal access to professional
promotion and training regardless of the term of employment contracts (indefinite or
temporary) or job seniority. This may be explained by a relatively low amount of people
belonging to different ethnic groups in the local labor market. According to opinions
expressed by the respondents, insufficient efforts are made to facilitate the disabled with
better access to the labor market. This calls for immediate action to be made in order to
counteract social exclusion of different social groups.
Fig. 6. Manifestations of counteracting discrimination in the workplace
Rys. 6. Sposoby przeciwdziałania dyskryminacji w miejscu pracy
Source: Own work.
The quality of relations with different groups of external stakeholders, including
suppliers, customers, cooperating firms, and local communities, is vitally important
to enterprises, both in an economic context and in terms of successful implementation of CSR
principles. More than 50% of respondents claim that their company carries out consultations
with customers and suppliers in order to find out their opinions and monitor cooperation
relations and almost one third of respondents observed a lack of efforts, large or small, in this
field.
16
Fig. 7. What is the method of conducting consultations with stakeholders?
Rys. 7. W jaki sposób prowadzone są konsultacje z interesariuszami?
Source: Own work.
Surveyed companies tend to underestimate the relevance of information pertaining to their
relations with external stakeholders. They lack effective instruments and knowledge about
management of relations with their stakeholders. About 30% of companies have departments
or other organizational units responsible for customer service and monitoring the quality
of relations with external stakeholders. Outsourcing of these services is rare. Very few
companies have organizational units responsible for management of CSR activities.
The idea of social responsibility consists of a company‟s involvement in the development
of positive relations with local communities and support to those in need. According to
the opinions presented by the respondents, the involvement of regional companies in
the development of local intellectual capital is very low. 45% of respondents claimed that
their companies did not provide any support to the development of external human capital.
Only 23% of respondents acknowledged that their company supported development of human
capital of local communities, while 12% had no information on the subject.
17
Fig. 8. Forms of support to local communities in improving professional qualifications
and acquiring new skills
Rys. 8. Formy wsparcia lokalnej społeczności przez dokształcanie oraz podnoszenie
kwalifikacji
Source: Own work.
Internship schemes were the main form of support to local communities offered
by surveyed companies. Moreover, entrepreneurs offered jobs to young people with
no professional background and experience who were in a difficult situation. The least
popular were open days, career days, job exchanges and fairs where local people could get
acquainted with the profile and activities of potential employers and their requirements.
Participating in events like career days and open days are an excellent opportunity
to improve the company‟s image and perception in the local community and among other
stakeholders. This is the area which is largely neglected and underestimated by regional
entrepreneurs who apparently are not conscious of the fact that this kind of social
participation can benefit all involved parties.
14% of respondents are of the view that their company conducts an open dialogue with
local communities in order to keep them well informed about their development plans
and undertake efforts to stimulate mutual cooperation. However, almost 50% of respondents
claim that their companies do not cooperate with local communities.
According to our study, 24% of companies researched communicate with their
environment through websites, 12% distribute newsletters and 14% use local press
and regional TV stations. Only 7% of respondents expressed the view that their company
18
organizes social consultations on a regular basis as a form of cooperation with local
communities. The study shows that the companies that were researched operate in a hermetic
environment and they feel no need to communicate their plans and exchange information with
local communities. They seem to ignore potential benefits resulting from greater openness
to the environment they operate in, for example increased confidence.
As regards financial support, more than 50% of respondents claimed that their company
provided no funding to local communities, while only 13% of respondents were certain that
their employers supported local communities financially. Forms of support included financing
or co-financing various concerts, balls and other charity events (12% of respondents), while
subsidies to schools and financial aid to poor families, including food, books and language
courses were less popular forms of support to local communities (9% of respondents).
The impact of regional entrepreneurs on the environment was the third area covered
by our research. Very worrying is the fact that as many as 12% of respondents claim that their
employers pay very little attention to environmental issues and make no attempts to reduce
the environmental burden resulting from economic activity, and 13% of respondents
expressed the view that their company does very little to decrease their environmental
footprint. At the same time, over a half of the respondents (60%) admitted that environmental
issues are important matter in their company‟s activities.
Fig. 9. Efforts undertaken by regional entrepreneurs to reduce a negative impact
on the environment
Rys. 9. Sposoby redukcji negatywnego wpływu na środowisko podejmowane przez lokalnych
przedsiębiorców
Source: Own work.
19
In the context of environmental protection, recycling and decreasing energy consumption
seem to be the most important priorities of regional companies followed by the reduction
of waste and harmful gas emissions. The least important are vibrations and noise pollution.
Our study confirm that at least a half of regional entrepreneurs have sufficient knowledge on
how their environmental footprint could be reduced and make some efforts to run a more
greener and environment-friendly business. However, almost a half of the researched
companies still make no efforts to improve the efficiency of materials used and reduce energy
consumption.
Our study also included an identification of barriers hampering the effective
implementation of responsible business principles in day-to-day business operations and the
perception of potential benefits for both entrepreneurs and local communities. Among the
most serious barriers are excessively high costs resulting from changes introduced
in enterprises (25% of respondents) and a lack of an appropriate regulatory base (16%). 15%
of entrepreneurs expressed an opinion that introducing changes generate insufficient financial
gains and 14% complained about the lack of institutions which support efforts made
by entrepreneurs to incorporate CSR principles into their business and daily practices.
Our study shows that entrepreneurs tend to focus on quick, short-term benefits (12%
of respondents). Therefore, managements are reluctant to long-term change (12%). Successful
implementation of CSR principles is a lasting process that also causes a lot of concern
for employees (13%). Cultural differences in enterprises play a rather insignificant role (3%)
which, as explained earlier, stems from the relatively insignificant employment of foreigners
in regional companies. Less than one third of respondents claimed that they did not observe
any barriers which hamper or prevent entrepreneurs from incorporating CSR principles into
day-to-day business operations. What is important is the fact that more than two thirds
of respondents recognized benefits resulting from the implementation of a socially
responsible business model. However, corporate social responsibility is perceived as part of
the company‟s marketing activities.
20
Fig. 10. Perception of benefits resulting from the implementation of CSR practices
Rys. 10. Dostrzegane korzyści z wdrażania praktyki CSR
Source: Own work.
More than 50% of respondents claimed that corporate social responsibility contributed
to improving their company‟s goodwill and image on the market (51%) and 40% of them
regarded CSR as a useful instrument to win customer loyalty. Our study showed that
the respondents were aware that solidarity with local communities is important (28%
of respondents) and that local embedding and solidarity can contribute to long-term success
of the company (27%). The study also revealed the very alarming fact that insignificant
importance was still attached to environmental protection issues (24% of respondents)
and both employees and employers demonstrated insufficient knowledge about the impacts
exerted by their company on sustainable development in Poland and in the Lublin region
(15% of respondents).
3. Conclusion
Ethical values and corporate social responsibility (CSR) are becoming increasingly
popular in the world economy. CSR is an innovative vehicle which can be effectively used
by companies to achieve a lasting competitive advantage and contribute to sustainable
development.
21
Regardless of the size and legal form of business, enterprises operating in the Lublin
Voivodeship demonstrate insufficient knowledge and awareness of environmental and social
impacts of their business operations. Our research shows that the concept of corporate social
responsibility is still little known among regional entrepreneurs. Moreover, they tend
to reduce corporate social responsibility to ethical issues and observance of the law. Social
responsibility is hardly identified with care of the environment and nature conservation.
The study also shows that little importance is attached to social dialogue with various
groups of stakeholders in order to find out their views and opinions and establish lasting
cooperation links and mutually profitable relations based on confidence. This is the area
largely neglected and underestimated by regional entrepreneurs, which probably results from
an insufficient knowledge about the concept of corporate social responsibility and a low
awareness of potential long-term benefits resulting from incorporating CSR principles in the
business model. Cooperation links with external institutions and local communities are very
weak. This adversely affects the innovative potential of regional companies and significantly
reduces opportunities of producing synergy effects which could result from the combination
of innovative knowledge with practical experience. The concept of corporate social
responsibility is still perceived through the prism of public relations. This calls for immediate
educational activities to be undertaken in order to promote the concept of corporate social
responsibility among entrepreneurs and in society. Our study shows that in addition to
insufficient knowledge and awareness of potential benefits, the main barriers which have
hampered implementing and effectively incorporating CSR principles into daily business
operations included excessive costs of change and a lack of adequate legal regulations
and institutions which support companies in implementing a business model based
on the concept of corporate social responsibility.
Although our study shows that knowledge and awareness of the CSR concept and
principles among regional companies is growing, the pace of change still seems to be
unsatisfactory. The situation could be improved by various educational and promotional
activities carried out by various scientific and educational institutions and organizations.
Promoting socially responsible business models is one of the most important and demanding
challenges that today's education systems are facing. Scientific institutions have excellent
qualifications and expertise to help companies implement the CSR-based business model and
to share relevant knowledge and exchange information about good practices. Moreover,
difficult to estimate is the role played by the government and other public institutions which
should support and encourage a more socially responsible business approach through various
incentives and promotion efforts.
22
Bibliography
1. Adamczyk J.: Społeczna odpowiedzialność przedsiębiorstw. PWE, Warszawa 2009.
2. Blicharz A.: Koncepcja społecznej odpowiedzialności na przykładzie przedsiębiorstw
województwa lubelskiego, [in:] Bojar M. (ed.): Społeczna odpowiedzialność w biznesie.
Publishing House of the Lublin University of Technology, Lublin 2007, p. 165-172.
3. Geryk M.: Społeczna odpowiedzialność uczelni w percepcji jej interesariuszy. Raport
z badań. Publishing House of the Warsaw School of Economics, Warszawa 2010.
4. Central Statistical Office, Business entities operating in Lublin Voivodeship, registered in the
REGON register, data revised as of the end of 2011 [Podmioty gospodarki narodowej
w rejestrze REGON w województwie lubelskim, stan na koniec 2011 roku], Lublin 2012.
5. Hausner J. (ed.): Ekonomia społeczna a rozwój. Małopolska Szkoła Administracji
Publicznej, Uniwersytetu Ekonomicznego w Krakowie, Kraków 2008; www.msap.uek.
krakow.pl/ (downloaded on March 11, 2012).
6. European Commission, Green Paper on Corporate Social Responsibility, 2001.
7. European Commission, Lisbon Strategy, 2000.
8. Laszlo C.: Firma zrównoważonego rozwoju. Publishing House Studio EMKA, Warszawa
2008.
9. Polish Agency for Enterprise Development. Ocena stanu wdrażania standardów społecznej
odpowiedzialności biznesu. Zestaw wskaźników społecznej odpowiedzialności w mikro,
małych, średnich oraz dużych przedsiębiorstwach. Raport, Warszawa 2011; http://badania.
parp. gov.pl/files/74/75/77/13079.pdf (downloaded on March 11, 2012).
10. Wołoszyn J., Ratajczak M.: Organizacja oparta na wiedzy a CSR. Zeszyty Naukowe Szkoły
Głównej Gospodarstwa Wiejskiego w Warszawie. Ekonomika i organizacja gospodarki
żywnościowej. Warszawa 2011, Vol. 88, p. 141-149.
11. Rybak M.: Etyka menadżera – społeczna odpowiedzialność przedsiębiorstwa. PWN,
Warszawa 2004.
Katarzyna IWANICKA
University of Warsaw
Faculty of Journalism and Political Studies
APPLING KNOWLEDGE ABOUT LEARNING STYLES TO FIGHT
BURNOUT AND AMPLIFY COMPETITIVENESS AMONG POLISH
MANAGERS
Summary. Managers, working under constant stress and pressure of decision
making, are a social group that is highly prone to burnout syndrome. This research
takes into consideration variables such as learning styles, features of personality such
as extraversion vs. introversion, sensing vs. intuition, thinking vs. feeling and judging
vs. perceiving may provide data essential to protect managers from this unwanted
psychological phenomenon. Burnout syndrome, invented as a concept in 1970,
consists of three aspects according to the Maslah Burnout Inventory (MBI): emotional
exhaustion, depersonalization and reduced personal accomplishment. This research
uses a point-scoring system whereby burnout syndrome is indicated by lower scores
on the personal accomplishment scale, and by higher scores on the emotional
exhaustion and depersonalization scales. This psychological phenomenon leads to
gaining less satisfaction from work, which seems to be a significantly important
problem in the contemporary job market, especially among managers. It is strongly
related to the intensity of stress at work. If stress is permanent and not handled
appropriately, impairments of cognitive abilities such as declined attention and
perception may occur. Some features of personality can also be correlated to higher
susceptibility to stress and the risk of burnout syndrome.
Keywords: burning out syndrome, learning styles, MBTI, managers
ZASTOSOWANIE WIEDZY O STYLACH UCZENIA W CELU
PRZECIWDZIAŁANIA WYPALENIU ZAWODOWEMU ORAZ
WZMOCNIENIA KONKURENCYJNOŚCI WŚRÓD POLSKICH
MENEDŻERÓW
Streszczenie. Menedżerowie, pracujący w ciągłym stresie i pod presją
podejmowania decyzji, są grupą społeczną, która jest bardzo podatna na syndrom
24
K. Iwanicka
wypalenia zawodowego. Prezentowane badanie uwzględnia takie zmienne, jak: style
uczenia, cechy osobowości (ekstrawersja vs introwersja; doznawanie vs intuicja,
uczucia vs myślenie oraz ocenianie vs spostrzeganie), które mogą przekazywać dane
niezbędne, mówiące o tym, jak chronić menedżerów przed niepożądanym zjawiskiem
psychologicznym, jakim jest wypalenie zawodowe. Koncepcja pojęcia wypalenia
zawodowego została stworzona w 1970 roku, składa się z trzech aspektów, ujętych
w kwestionariuszu MBI: wyczerpanie emocjonalne, depersonalizacja i poczucie
dokonań osobistych. Diagnozuje się go, gdy osoba uzyskuje niskie wyniki na skali
poczucia dokonań osobistych oraz wyższe wyniki na skalach wyczerpania
emocjonalnego i depersonalizacji. To zjawisko psychologiczne prowadzi do coraz
mniejszej satysfakcji z pracy, co wydaje się być znaczącym problemem na
współczesnym rynku pracy, szczególnie wśród menedżerów. Jest to ściśle związane
z intensywnością doświadczanego stresu; jeśli jest on przewlekły i przekracza
możliwości adaptacyjne jednostki, upośledza zdolności poznawcze, takie jak uwaga
i postrzeganie. Niektóre cechy osobowości mogą być również skorelowane
z większą podatnością na stres i ryzyko wypalenia.
Słowa kluczowe: wypalenie zawodowe, style uczenia, kwestionariusz MBTI,
menedżerowie
1. Introduction
This article attempts to demonstrate the interaction between personality types, learning
styles and burnout. Much attention was paid to the interaction between burnout and features of
personality such as “Big Five” (NEO FFI) or MMPI (Munn-Giddings, Hart, Ramon, 2005)
where the neuroticism was a predictor of depersonalization among professional care givers;
however the MBTI (Myers-Briggs Type Indicator) questionnaire has not been frequently applied
in studies among managers. The correlation between MBTI types of personality and learning
styles has also not been examined in much depth, apart from some studies, for example, one
examining upper-level civilian managers of the US Army that proofed relationships existing
between Kolb's LSI dimension of concrete vs. abstract and the MBTI dimension of feeling vs.
thinking and between the LSI dimension of active vs. reflective and the MBTI dimension of
extrovert vs. introvert (Konopka, George, 1999). MBTI concentrates on four basic aspects of
human personality – interactions of humans and widely taken environment, the way people
make decisions, preference of living in a more structured or a more spontaneous world and
the type of information they receive from their surroundings.
The view on the learning styles has been developed in recent years (De Bello, 1990).
The theoretical research concept is derived from Kolb’s learning cycle. What is most important
in his theory is the fact that learning is best conceived as a process, not in terms of outcomes.
Latest neurobiological research shows that Kolb’s learning cycle reflects the brain functioning
Appling knowledge about learning styles…
25
while processing information (Kolb, 2005). The learning cycle covered all areas of the learning
process: concrete experience (CE); reflective observation (RO); abstract conceptualization
(AC); active experimentation (AE). The learning cycle has the underlying assumption that
the most effective learning will include all parts of this process. Research has consistently
demonstrated that most people have strengths in some areas and weaknesses in others and this
has led to the popularity of learning styles. The learning styles allow us to identify how
an individual prefers to learn. There is debate in the application of learning styles however.
Should learning styles predict who will be more successful when a learning experience matches
styles? (Allinson & Hayes, 1988).
1.1. Honey and Mumford learning styles
Based on the model of Kolb, Honey and Mumford developed their own improved
research tool for measuring learning styles in an attempt to eliminate the methodological
weaknesses, which drew attention to the Kolb’s learning style questionnaire. The basis for
identifying learning styles, according to them, is the opposition in two dimensions: reflection
– action and the theory – practice. The first dimension refers the preferred type of units
involved in the learning process, from passive observation to active participation. The second
dimension indicates the skills possessed by the person – from the theoretical analysis of
the surface of issues to deal with specific tasks. Based on these dimensions, Honey and
Mumford identified four learning styles:
 Activator,
 Contemplative,
 Theorist,
 Pragmatics.
Fig. 1. Four learning styles according to Honey and Mumford
Rys. 1. Cztery style uczenia się według Honeya i Mumforda
Source: Honey, Mumford, 1986.
26
K. Iwanicka
Figure 1 shows that the activist and reflective learning styles are placed on opposing sides
of the profile. To take a true measure of the preference for an activist style it is necessary to
consider the reflective preferences at the same time (Wells et al, 1991). The following table
shows a combined measure of the two scores.
The first of the styles – activator can be characterized as engaging in new experiences.
People presenting this style have a high level of extraversion, are sociable and they attach
great importance to interpersonal relations. It is crucial for them to be committed to
cooperation in the workplace. Activators may feel reluctant to attempt entering a rigid team
structure and having the obligation to report on the progress of a project. These people are
able to stimulate others to action, they are creative, not afraid of change and innovation.
Sometimes, however, this behavior is associated with the fact that action precedes
the analysis and evaluation of the situation (Honey, Mumford, 1992).
The second of these styles is reflector. People who represent this style prefer to watch
the action of others than to participate in specific projects, and therefore appreciate
the opportunity to examine the situation in detail. Their preferred way of learning is collecting
data and looking at them from different perspectives. Reflectors can be characterized by
prolonging decision-making, and even delaying or full omission, if possible. These people are
rather introverted and usually keep out of the way of a team.
The third learning style is theorist. Theorists feel comfortable in a situation where they
can, based on observations, combine elements into a logical and complex whole. Theorists
have a penchant for perfectionism and order. They prefer clear and structured activities with
a clearly marked target. Theorists tent to avoid an ambiguous and obscure situation with highrisk and uncertainties. Theorists are good at executing tasks based on a thorough analysis of
the causes of phenomena.
The last style is pragmatist. For pragmatists, the most important is the realization and
application of specific solutions in practice. These people learn best when “relevance face”
tasks are high, that is in dealing with real-world problems, such as case studies. They are
willing to try out new ideas, theories and techniques to see if they actually work in reality.
Pragmatists treat each new task as a challenge, they tend to act swiftly and observe the effects
of the changes. They can be characterized by their technical knowledge, often also without
a broader analysis of the phenomena.
27
Table 1
Strengths and weaknesses of people presenting a particular learning style
Honey and
Mumford
Learning Style
Activist
Pragmatist
Theorist
Reflector
Strengths
Openness
Readiness for challenges
Flexibility
Quickness of action
Methodical approach to tasks
Scrupulousness
Caution in formulating
premature statements
Objectivity
Rationality
Consistency
Pragmatism
Effectiveness
Realism
Weaknesses
Lack of consistency in the implementation of projects
Tendency to excessive risk
Hasty action without a plan
Excessive minuteness
Emphasis and difficulty in defending its borders
Troubles in decision-making
Low toleration to dissimilarity
Perfectionism
Patronizing attitude toward co-workers
Impatience
Low toleration to frustration
Lack of interest in the theory underlying the phenomena
Source: Own elaboration based on Wilson D.: An investigation of the properties of Kolb's
Learning Style Inventory. “Leadership & Organization Development Journal”,
No. 7(3), 1986, p. 3-15.
1.2. Maslach concept of burnout
The most well-known concept of burnout, and one that has become a medium for the
creation of a research tool used in this study is a multidimensional concept by Christina
Maslach. As for the burnout, Maslach et al. (2001) describes it as a prolonged response to
a chronic emotional and interpersonal stressors on the job and it is defined by the three
dimensions: exhaustion, cynicism and inefficiency. So the researches of this phenomena are
of the opinion that burnout consists of three aspects: emotional exhaustion (reduced energy
and enthusiasm), depersonalization (cynical approach to clients or co-workers) and reduced
personal accomplishment (capacity to innovate and a sense of efficacy).
The two most important concepts in medical literature which formed the basis for later
reflections on burnout were: defensive dehumanization and distant concern. The first one
refers to the processes of protecting themselves (care givers) against the flood of strong
emotions connected with the performance of the professional duties (eg. patient assistance)
through the treatment of other subjects. The second concept relates to the balance between
compassion shown to the patient by a healthcare professional and emotional distance. Thus,
in jobs that involved working with others, people may experience strong emotional arousal.
The author (Sęk, 2004) places particular emphasis on the fact that only including the stress
and burnout component is not sufficient. It should be emphasized that this experience
of stress is always embedded in the context of interpersonal relationships. In summary, two
28
K. Iwanicka
components contribute to the burnout phenomenon: performance pressures and relationships
with other people.
The first component of the concept is personal accomplishment, described by Maslach
as a dimension of reduced sense of personal achievement, and the second component –
the relationship with others, described in the dimension called depersonalization. Given
the emotional exhaustion component, there is a ternary model of burnout. In light
of the reasoning of the author quoted, focusing only on emotional exhaustion, which is
similar to the definition of stress, would be tantamount to narrowing the phenomenon of
burnout. Opposed to this approach is the author of the concept, Christina Maslach.
Researchers (Antczewska, Świtaj, Roszczyńska, 2005) emphasize, however, that the term
“depersonalization” should be understood differently here than in psychiatric literature, where
it is used in terms of a psychopathological condition. As for burnout, it rather regards
a dynamic process, that of being unfeeling and impersonal in response toward recipients of
one's service, care treatment, or instruction. In literature (ibid.) also appears many terms
describing emotional exhaustion (reduced personal accomplishment), such as decreased job
satisfaction, lower professional and personal commitment and reduced sense of personal
achievement. For the purposes of this study the term “personal accomplishment” will be used,
as used by Sęk (2004) in the Polish adaptation of the MBI questionnaire.
Table 2
Dimensions of burnout according to Maslach and their characteristic
Dimensions of burnout according to Maslach
Emotional
Exhaustion
Depersonalization
Personal
Accomplishment
Characteristic
Irritability
• powerlessness
• Lack of energy
• Fatigue
• psychosomatic symptoms (headache, insomnia)
dehumanized attitude to clients or colleagues
• coldness and indifference in interpersonal relations
• Isolation in the workplace
• cynicism
• Reluctance to professional topics in a conversation
Feelings of incompetence
• Loss of sense of what you are doing
• Dissatisfaction with job performance
• The attitude of resignation
• Increase self-criticism
Source: Own elaboration based on Sęk H.: Wypalenie zawodowe. Przyczyny i zapobieganie.
Wydawnictwo PWN, Warszawa 2004.
1.3. Briggs and Briggs-Myers concept of personality types
Briggs and Briggs-Myers took into account all the typology developed by Jung into
a research tool, supplementing it with a fourth pair, namely judging versus perception (Cakrt,
29
2006). They obtained, thanks to this, a classification of 16 personality types, which are
the result of a combination of four output options. A simplification of this approach is
a reduced typology, taking into account only the dimensions such as perception versus
intuition and thinking versus feeling.
The first pair of dimensions is introversion versus extroversion, referring directly
to the ideas of Jung of whether the libido energy is directed outward (extraversion) or inward
(introversion). This also shows that the individual draws energy from being with people or
spending time alone. Extroverts are characterized by emotional expression, sociability and
openness. An inspiring environment for them is one where a lot is happening, and where you
need to make quick decisions and work with people. Introverts, on the other hand, avoid
places abound in number of stimuli and rather prefer a small group of devoted friends.
By nature, they are more reflective and also have less capacity to adapt to a new environment.
Another pair of dimensions is intuition versus sensitivity (basing on the feelings flowing
from the senses) which has been distinguished due to the way that an individual collects
information about the world. These dimensions say whether a person carefully gathers facts
and details (experiencing) or is guided by intuition and look at the overall picture of
the situation (intuition). Jung ranked sensory perception and intuitive functions to
the so-called irrational, because they did not benefit from the mind and rationality. People
using this kind of approach accept things as they are, based on the facts. Moreover,
they easily remember specific events, rather than their hidden meaning or connection between
the events. People with superior intuitive perception tend to use their own generalized
experience in gathering the information. Furthermore, they often use metaphorical language
and are oriented to what will happen in the future. One can characterize them by their rich
imagination and willingness to draw conclusions, regardless of the logical reasons.
These people do not like to deal with the little things and details. Their aim is rather to create
new ideas and look for the relationship between them.
In the pair of dimensions described above the focal point was a way of gathering
information about the world by the individual. When it comes to the division into thinking
versus feeling, it has been distinguished for its method of use, evaluation and processing of
data, but also, for reasons of decision making. In contrast to the previous pair (intuition versus
sensation), thinking and feelings are described as rational functions, because in both cases we
are dealing with an assessment. As Cakrt writes (2006, p. 77) – the mind estimates by means
of information, while feelings by emotions, pleasure and satisfaction. People with
a predominance in rational approach (thinking) focus on the logical parameters
of the situation and approach problems in an analytical way. They try at all cost to maintain
objectivity, are systematic and well organized. People with a preference for thinking can be
30
K. Iwanicka
seen by others as conservative and principled. “Feelers” attach importance to feelings and
emotions and can sympathize and understand the situation of others. When they make
decisions they take into consideration the best interests of other people. One can say that they
care about making others happy. In conflict situations, they may give up their opinion in favor
of values such as harmony and peace. These people tend to take an emotional approach to
assessing and dealing with events.
Last but not least is the pair of dimensions judging versus perceiving. The authors have
made this division in order to show a definite preference for task completion in contrast to
a tendency to leave things open and take their own course so that all possible outcomes
remain open for as long as possible. People with a preference for judging prefer active
decision-making and planning their lives, as opposed to those with a preference for
perceiving, who would rather observe and postpone a decision in order to allow time for
things to fall into place on their own. People representing the perceiving personality type want
as much as possible to extend decision making time in order to look at the issue from
different points of view. “Judgers” are anxious and nervous as long as a case is not closed.
People with a preference for perception, even having made the decision, feel discontent,
claiming that it was always possible to make a better one.
Table 3
Strengths and weaknesses of people presenting a particular personality type
according to Briggs Myers
Briggs Myers personality
types
Extravertion
Introvertion
Strengths
Weekneses
 openess
 innovativeness
 flexibility
 quickness in action
• independence
• reflexivity
• ability to concentrate attention on
a particular task diligence
lack of consistency in the
implementation of projects
• tendency to excessive risk
• hasty action without a plan
Inability to work in an environment full
of incentives
• Difficulty in establishing
relationships
• Often misunderstood by co-workers
• Impatience
• depreciating the importance of details
• Focusing on too many issues at once
Intuition
• Creativity
• Holistic approach
• A rich imagination
• Curiosity about the world
Sensitivity
• Practical approach to tasks
• taking account of details
• patience
• precision
Thinking
logic, analyticity
• objectivity
• Good organization
• excessive focus on details
• adherence to proven methods of
operation
• Problems with the recognition holistic
issues
 principal approach at work
 ruthlessness
 Lack of interest in conflict resolution
31
cont. tab. 3
Feeling
Perceiving
Judging
Mediation Skills
• Loyalty to the team
• interest in the situation of other
people
Avoid conflicts and confrontations
• Delaying the implementation of
unpleasant tasks
• Excessive sentimentality
Spontaneity
• objectivity
• Ability to compromises
Troubles in decision-making
• Difficulties in planning activities
• chaos
• Meticulous planning
• Commitment to order
• Decisiveness
• Difficulties in finding a new
environment
• Lack of flexibility
• Persistence
Source: Own elaboration based on Cakrt M.: Typy osobowości dla menedżerów.
Wydawnictwo Helion, Gliwice 2006.
2. Method
Participants
Descriptive analyses were used to summarize the demographic characterization of
the participants. The studied group consisted of 110 middle managers and executives, aged
25-58. All of them came both from the public and private sector. The average seniority in this
group was 13,5 years and the managerial serenity amounted to 6,43 years. In the survey were
not included managers with managerial experience of less than 1 year because this period of
time is needed to get accustomed to changes which could have blurred the results
of the survey. The majority were men (58%); 87 per cent lived together with a partner; 85 per
cent of them declared having many friends and acquaintances, only 15 per cent of the group
admitted having severe problems in their private lives, while 26 per cent declared having
severe problems in their occupational life. In the survey participants were also asked about
job satisfaction; 6 per cent deemed their satisfaction as low, 71 per cent as average and 23 per
cent assessed it as high. The majority were non smoking (71%) and doing sport occasionally
(66%). A typical managerial sample consisted of predominantly middle aged and married
men.
Measures
Burnout was measured using the Maslach Burnout Inventory (MBI), having three
subscales – depersonalization, emotional exhaustion and personal accomplishment. All items
are scored on a 7 point frequency rating scale from 0 (meaning “never”) to 6 (meaning daily).
According to the author, burnout is indicated both by high scores on the emotional exhaustion
and depersonalization subscale and by low scores on personal accomplishment subscale.
32
K. Iwanicka
The learning styles were measured in this study using the Learning Styles Questionnaire
(LSQ) developed by Honey and Mumford and consisted of four stressed styles – activist,
reflector, theorist and pragmatist. This questionnaire consisted of 80 affirmations (e.g. “I like
to try new and different things without too much preparation”) and each style with 20 items
each. The personality test used in this study was of the Myers-Briggs Type Indicator (MBTI)
– short version, having four subscales – extraversion vs. introversion; intuition vs. sensing;
thinking vs. feeling and perceiving vs. judging. The Myers-Briggs Type Indicator (MBTI)
personality inventory based on the C.G. Jung theory of personality was chosen because it was
designed for non clinical use.
3. Results
Table 5 shows the mean and standard deviation of the study variables. The most common
learning style among surveyed managers was pragmatist (mean = 11,97; SD = 3,61), while
the most rare learning style seemed to be the activist (mean = 7,66; SD = 3,91).
In comparison with results from British, Canadian and American surveys, showed in
the Table 4, the Polish sample scores relatively lower for all styles. As for theorist (mean =
10,48; SD = 3,63), the nominal score is almost three full points lower than for Canadian and
British managers and almost four points lower than American managers. Correlations among
the study variables are presented in Table 6. In terms of the outcome, extraversion was
correlated with the activist learning style (r = 0,21, p < 0,05) and was negatively correlated
with the reflector learning style (r = -0,19, p < 0,05). Moreover, there was a significant
correlation between the intuition and activist learning style (r = 0,5, p < 0,01), while activist
correlates negatively with sensing (r = 0,44, p < 0,01). Sensing also correlates with reflector
(r = 0,22, p < 0,05) and theorist (r = 0,23, p < 0,05). Furthermore, a negative correlation
occurred between the intuition and theorist learning style (r = -0,32, p < 0,01) as well as with
the reflector learning style (r = -0,31, p < 0,05). Thinking correlates with reflector (r = 0,36,
p < 0,01), theorist (r = 0,38, p < 0,01), and pragmatist (r = 0,22 p < 0,05), but negatively with
activist (r = -0,23, p < 0,05). Feeling correlates with activist (r = 0,26, p < 0,01), however
negatively with both reflector (r = 0,36, p < 0,01), and theorist (r = 0,4, p < 0,01). As far as
burnout is concerned, only the depersonalization subscale seemed to be significant
in the correlation with the learning styles. Depersonalization correlates with activist (r = 0,3,
p < 0,01), and pragmatist (r = 0,23, p < 0,01). There were no significant correlations between
the two other subscales of burnout as emotional exhaustion and personal accomplishment.
33
Table 4
Learning styles distribution in Great Britain, Canada and the United States
Nationality
British
Canadian
American
Activist
8,7
8,5
9,5
Reflector
12,9
13,9
12,0
Theorist
13,5
13,7
14,5
Pragmatist
14,5
14,0
14,5
Source: Honey and Mumford, 1986, p. 79.
Table 5
Mean and standard deviations of the four categories of personality styles
(extraversion vs. introversion; intuition vs. sensing; thinking vs. feeling; perceiving vs.
judging), three subscales of burnout (emotional exhaustion, depersonalization, personal
accomplishment) and four learning styles (activist, reflector, theorist, pragmatist)
Extraversion
Introversion
Intuition
Sensing
Thinking
Feeling
Perceiving
Judging
Emotional
Exhaustion
Depersonalization
Personal
Accomplishment
Activist
Reflector
Theorist
Pragmatist
Mean
22, 96
17,43
18,65
27,76
24,56
15,82
17,95
22,34
17,02
SD
5,61
5,46
5,91
5,74
4,95
4,68
4,64
4,81
9,97
8,78
34,60
6,61
8,56
7,66
10,97
10,48
11,61
3,91
3,99
3,63
3,61
Table 6
Correlations between four learning styles (activist, reflector, theorist, pragmatist)
and four categories of personality styles (extraversion vs. introversion; intuition vs. sensing;
thinking vs. feeling; perceiving vs. judging), three subscales of burnout
(emotional exhaustion, depersonalization, personal accomplishment)
Activists
Reflector
Theorist
Pragmatist
Extraversion
,209*
-,190*
-,134
,041
Introversion
-,112
,099
,039
-,018
Intuition
,502**
-,305**
-,319**
-,044
Sensing
-,437**
,219*
,232*
,055
Thinking
-,227*
,335**
,376**
,217*
Feeling
,265**
-,358**
-,397**
-,157
Perceiving
,117
-,136
-,200*
-,119
Judging
-,017
,033
,061
,116
Emotional
Exhaustion
,151
-,131
,050
,051
34
K. Iwanicka
cont. tab. 6
Depersonalization
,296**
-,089
,088
,229*
Personal
Accomplishment
,022
,040
,000
-,007
Note: *p < 0,05; **p < 0,01
4. Discussion
The results suggests that some of the learning styles correlates with both personality types
from MBTI, as well as subscales of burnout. Extravertic types of personalities seem to be
more active learning types. As the days of activists are filled with activity, it is highly likely
that they are faced with situations where other people are involved, such as meetings, panel
discussions and conferences. In these types of social situations, contact with other people is
inevitable, which makes these managers more sensitive to horizontal and vertical interactions
with other people.
Other studies have shown correlations between the LSQ (Learning Style Questionnaire)
and the big-five factors (NEO-PI-R), where the activist learning style was correlated with
agreeableness, conscientiousness, and extroversion (Gentry, Mondore, Cox, 2007). In light of
the data from this research, the correlations now seem easier to explain. An activist tends to
act first and then considers the consequences afterwards, whereas the reflector first collects
data and observes people in the process of doing activity, instead of actively taking part in it.
This kind of attitude involves more a philosophy of caution. It is easier to be an observer
outside a social group than to take part in work. The results have also shown a negative
correlation between the activist and the way of judging - thinking that is based on a logical
process aimed at impersonal findings, which is contrary to feeling. Feeling types are naturally
friendly and sociable, finding it difficult to be businesslike (Brigs Myers; Myers, 1995),
which closely corresponds with activists preferring to share ideas with other people.
A negative correlation between perceiver and theorist could be expected, since the perceiver
type, who is active and empirical appears to be disjoined with the precision and detail focused
theorist.
The most essential information from this survey is that only two learning styles are prone
to depersonalization. Being an activist means tackling problems by brainstorming, while
being pragmatist means trying out new ideas in practice; so both learning styles are strongly
connected with being in touch with others who either accompany activist in the process of
creative thinking or give pragmatist the feedback about applied solutions. The more
interactions with coworkers or clients managers have, the more potential stressful situation
35
may occur. If the satisfaction from work is low and the stress becomes chronic, managers can
treat people around them as unfeeling objects, which leads to distancing from them and
having a cynical attitude towards them. Given these results, the question of whether
the reflector and theorist can be protected from the burnout syndrome should be asked.
As for learning styles, the overall learning profile is lower for Polish managers and this
may mean that they will be more selective or less interested in learning. The dominant style
is clearly pragmatist and the sample scored very low on the activist style. This shows that
Polish managers are passive, not very willing to take action or to make changes. From
the research it is difficult to evaluate the reasons for this. It may be the educational system
which did not use active methods or applications but focused on acquiring theoretical
knowledge.
The result of this study can be used in academic education among students of
management, business, marketing etc, who after getting to know their personality styles and
learning styles can more consciously affect their educational attainment. Zebun (2009), in her
article derived a conclusion that teachers should tailor their teaching strategies based on
the learning styles of students. This kind of attitude generates more interest in the learning
process which can bear fruits not only in occupational, but also in the personal lives of those
young people. The more enthusiastic towards learning a student will be, the more creative and
open- minded they become. As well as in higher education, the results of this survey have
practical implications in MBA programs and courses designed especially for managers, as
(Wells; Layne; Allen, 1991) suggested in literature, because the better the methods of
teaching are matched to students, the greater chances for success can be observed.
Further study is needed on the correlation between learning styles, burnout and cognitive
functioning of Polish managers in order to examine potential interactions between attention,
memory, perceptiveness and learning styles. What else should be examined is the influence of
a multicultural environment in the work field. This trend can result in hybridization of
learning styles especially among higher level management. Thanks to globalization and
exchange programs in companies, managers share and derive knowledge from the experience.
Although learning styles have been widely researched, little is known about gender
differences in learning styles among managers. According to the latest data, almost 40 per
cent of upper and middle managerial positions are held by women. It is also crucial to
examine if women, who are managers having a particular learning style, are more prone to
burnout.
What seems interesting is the potential situation, in which a manager and their workers
have the same dominant learning style. The question arises of whether it helps them to
communicate and solve the problem or rather impede progress. The common assumption that
36
K. Iwanicka
the most effective team should be composed of workers representing different learning styles
may be in need of reappraisal. Nowadays, when a high level of specialization is needed,
perhaps small groups of two or three workers with the same learning style could be more
competitive. Those people would not waste time adjusting to the way the other members of
the team process information. This seems to be one of the many ways of taking advantage of
human potential in a company or organization. Investing in the training and development of
managers seems to have a return. Moreover, as some researchers highlight, they are the chain
link in the organization that is able to pass on knowledge.
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Kolb D.A.: The Kolb Learning Style Inventory – Version 3.1. Technical Specification.
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Academic Search Complete, Ipswich, MA.
Peter MEŽA
International School for Social and Business Studies, Slovenia
Institute of Management
DEVELOPING PRODUCT MANAGEMENT COMPETENCIES
IN THE PRODUCTION COMPANY
Summary. This paper aims to explore product management in relation to product
manager competences in production companies in the domestic appliance industry.
Research recently done in the Slovenian industry reflects the state of development of
product management and also reflects the awareness of the product manager.
As a starting point in this article we use the competence profile of the product
manager, taking into account the integration of managerial and operative activities,
and implementing competency concepts into practice. In the paper we define a product
manager job description for the domestic appliance industry. In compliance with
previous research and the O*Net model, the diversity of product manager
competences has been confirmed. We identified key focus areas: tasks, knowledge,
skills, abilities, working tasks and working styles. According the O*net model six key
competence areas were structured.
Keywords: product management, training, training transfer factors, marketing mix
ROZWÓJ KOMPETENCJI ZARZĄDZANIA PRODUKTEM
W PRZEDSIĘBIORSTWIE PRODUKCYJNYM
Streszczenie. Celem niniejszego artykułu jest zbadanie zarządzania produktami
w odniesieniu do kompetencji menedżera produktu w firmach produkcyjnych z branży
sprzętu gospodarstwa domowego. Badania przeprowadzone w omawianej branży
w Słowenii odzwierciedlają stan rozwoju zarządzania produktem, a także świadomość
menedżera produktu. Punktem wyjścia w artykule jest określenie profilu kompetencji
menedżera produktu, z uwzględnieniem integracji działań zarządczych i operacyjnych, a także wdrażania koncepcji kompetencji w praktyce. W pracy zdefiniowano
opis stanowiska pracy menedżera produktu w przemyśle urządzeń gospodarstwa
domowego. Zgodnie z wcześniejszymi badaniami i modelem O*Net, potwierdziła się
różnorodność kompetencji menedżera produktu. W artykule zidentyfikowano
kluczowe obszary kompetencji, do których należą: zadania, wiedza, umiejętności,
zdolności, zadania robocze i style pracy.
Keywords: zarządzanie produktem, szkolenia, czynniki transferu szkoleń,
marketing mix
P. Meža
40
1. Introduction
In recent years there has been a growing emphasis within research and in practice on
the need to develop and improve the performance of product management in order to meet
the increasing demands being placed on the market (Qui et al, 2011). This emphasis stems
from a growing recognition of the centrality of the product manager's competency in industry.
Such people now operate with a significant degree of power and autonomy in return for
increased responsibility for the product success on the market. Notably, the domestic
appliance industry has sought to develop evaluative criteria that can be used to measure
a product manager's performance, provide a basis for reward, determine training and
development needs, provide a basis for successful product planning and related (Meža, 2011).
These criteria effectively form competency profiles for occupational roles against which
performance can be evaluated and improved. However, although the use of the terms
“competence” and “competency” is fairly indistinguishable, there are important conceptual
and practical distinctions to be made that fundamentally affect their application within
modem organizations (Moore et al., 2002). Competence relates to a person's ability to comply
to a range of externally agreed standards, whereas competency refers to personal attributes
that a person draws upon as part of their work activities. Thus, whereas competence is
a work-related concept that defines the areas of work at which a person needs to be competent
(Armstrong, 2001), “competency” is a person-related concept that refers to the dimensions of
behaviour underlying competent performance. Thus, displaying competency is not about
demonstrating an ability to comply with minimum standards of functional performance, but
relates to generic underlying behavioural characteristics that results in effective performance
(Mansfield, 1999).
2. The role of product manager competencies
Competence is important in today’s business environment. Competence has been
associated with a firm's competitiveness (Nylan, 1998), achieving the organization's
objectives, successfully dealing with change (Dingle, 1995), improving the firm's competitive
advantage (Lei, 1997), and improving the organization's performance. Major components of
competencies include abilities, attitudes, behaviour, knowledge, personality and skills.
Competence can be defined as a cluster of related knowledge, attitude, skills, and other
personal characteristics that affect a major part of one’s job, correlates with performance on
Developing product management competencies…
41
the job, can be measured against well accepted standards, and can be improved via training
and development (Webster, 2006).
Many disciplines are concerned about competence. The product manager profession is
concerned with improving the skills of its graduates as they enter the workforce (Morris,
2000). Business knowledge, technical and integration skills are increasingly important to
product managers. Companies are also working toward maintaining and improving
the professionalism of their discipline through competency-based qualifications (Lloyd,
1994). The product managers profession has recognized the importance of competency and is
very active in its development (Meža, 2012).
Many professional organizations related to product management offer competency
certification programs. AIPMM (Association of International Product Marketing and
Management) is a good example of a professional organization that has a well-established
certification program. The purpose of most professional certification programs is to provide
recognition of the capabilities of an individual in a professional area.
Many academics are currently researching competence within the product management
context (Meža, 2012). The purpose of the research is to develop a framework that will help
direct the professional development of product managers.
3. Development the product manager competency model
Product managers in industry are responsible for the overall product success on
the market.
Meža (2009) defines product management as a kind of a messenger from
a market to a business. It directly transfers clear information about market logic to different
departments in a company which need such information to make their business decisions.
Nowadays, in times of severe competition and constant price pressures, there should be
a permanent activity of product managers to care for cost reduction of product cycles. Product
management’s core activities are by no means focused on a product and/or on management
activities. They are related to direct participation in project development and in the planning
of new products. The outcomes of product management work can be judged by the product
quality or the level of its success. Certainly, we should note, that there are some products
which are more likely to be successful on the market, and there are others, which might be
unsuccessful as well.
The domestic appliance industry is facing a crisis nowadays. Some authors (Meža, 2009)
suggest a variety of possibilities to solve or even prevent such product crises. Product
management and product training could play an important role in avoiding and preventing
potential
product
crises
resulting
in
inefficient
market
communication,
weak
P. Meža
42
commercialization of novelties/changes (due to poor advertising starts and inadequate
advertising strategy). Therefore product training is inherently related to cycle time reduction
activities. When considering trainings for new salespeople and customers about a product,
the implicit assumption is that the benefits of such training should be improved product sales,
better product introduction on market, improved brand image, etc. In our opinion, product
managers competencies in the industry of domestic appliances play an important role.
3.1. Medhodology
A survey was administered by applying several research instruments, by interview and
through a postal option questionnaire. The first instrument was implemented from the O`Net
model for a selected group of organisations in the domestic appliance industry in which
several interviews were conducted with product managers. This helped us to build a list of
relevant competencies and to determine the metrics for various factors identified in
the objectives. The second phase of the survey involved the postal option. The main tool
employed in collecting the core data for the survey was a structured questionnaire, which was
developed by employing the outcome of the interview phase and various other criteria
identified from literature.
We conducted empirical research based on the O`NET model (picture 1), which provides
a framework that identifies the most important types of information about work and integrates
them into a theoretically and empirically sound system. The model was developed using
research on job and organizational analysis. It embodies a view that reflects the character of
occupations (via job-oriented descriptors) and people (via worker-oriented descriptors).
The model also allows occupational information to be applied across jobs, across sectors in
the domestic appliance industry and within occupational-specific descriptors in product
management. These descriptors are organized into six major domains which enable us to
focus on areas of information that specify the key attributes and characteristics of product
managers competencies. The population of the survey consisted of 17 product manager
participants on the IFA, the world's largest and most important trade fair for consumer
electronics and household appliances (7th September 2011).
43
Worker-oriented
Worker
Characteristics:
- Abilities
- Occupational
Interests
- Work Values
- Work Styles
Worker
Requirements:
- Skills
- Knowledge
- Education
Experience
Requirements:
- Experience and
Training
- Skills
- Entry Requirement
- Licensing
Cross
Occupation
Occupational
Requirements:
- Generalized Work
Activities
- Detailed Work
Activities
- Organiz. Context
- Work Context
Ocupation
Specific
Workforce
Characteristics:
- Labor Market
Information
- Occupational
Outlook
OccupationSpecific
Information:
- Tasks
- Tools and
Technology
Job-oriented
Fig. 1. O*NET. Content Model
Rys. 1. Składniki Modelu O*NET
Source: O*NET, 2003.
3.2. Results
As mentioned above, it was difficult to derive competency factors for each job because
the items associated with product management ability evaluation were mostly related to
company specific factors (brand image, financial conditions, programs, etc). However, by
using interview evaluations, we were able to derive general product manager tasks.
Table 1
Product Manager Function – Product Manager Tasks
Product Manager Tasks
Initiate market research studies or analyze their findings.
Use sales forecasting or strategic planning to ensure the sale and profitability
of products, lines, or services, analyzing business developments and
monitoring market trends.
Coordinate or participate in product promotional/education activities or trade
shows, working with developers, advertisers, or production managers, to
market products or services.
Managing new product proposals, product registration and product changes
Demonstrate or explain products, methods, or services to persuade customers
to purchase products or use services.
Suggest specific product purchases to meet customers' needs.
Competency
importance
4,06
Competency
presence
3,65
4,5
3,5
4,5
4,25
4
3,25
4,25
3,75
4,5
4
P. Meža
44
cont. tab. 1
Collaborate with sales teams to understand customer requirements, to promote
the sale of company products, and to provide sales support
Develop, present, or respond to proposals for specific customer requirements,
including request for proposal responses and industry-specific solutions
Collaborate with sales teams & quality department about product quality issues
Prepare and deliver technical presentations that explain products or services to
customers and prospective customers.
Provide technical and non-technical support and services to clients or other
staff members regarding the use, operation, and maintenance of equipment.
Direct and coordinate activities involving sales of manufactured products,
services, commodities, real estate or other subjects of sale.
Confer with potential customers regarding equipment needs and advise
customers on types of equipment to purchase.
5
4,25
3,25
2,75
4
4,25
3,75
3,25
4
4
3,5
3,25
3,75
3,5
Table 2
Product Manager Function – Product Manager Tools & Technology
Product Manager Tools & Technology
Personal computers & MS Office applications (Mail, Presentation software,
Spreadsheet software)
Enterprise resource planning ERP software
Competency
importance
Competency
presence
4,5
4
4,5
3,75
Table 3
Product Manager Function – Product Manager Knowledge
Product Manager Knowledge
Customer and personal Service - Knowledge of principles and processes for
providing customer and personal services. This includes customer needs
assessment, meeting quality standards for services, and evaluation of customer
satisfaction.
Sales and marketing - Knowledge of principles and methods for showing,
promoting, and selling products or services. This includes marketing strategy
and tactics, product demonstration, sales techniques, and sales control systems.
Engineering and technology - Knowledge of the practical application of
engineering science and technology. This includes applying principles,
techniques, procedures, and equipment to the design and production of various
goods and services.
Design - Knowledge of design techniques, tools, and principles involved in
production of precision technical plans, blueprints, drawings, and models.
Communications and media - Knowledge of media production,
communication, and dissemination techniques and methods. This includes
alternative ways to inform and entertain via written, oral, and visual media
Project management - Knowledge of principles and methods of product
management: coordination in project plans, including project scope, goals,
tasks, resources, schedules, costs, contingencies, or other project information,
establish and execute a new product commercialization plan.
English language - Knowledge of the structure and content of the English
language including the meaning and spelling of words, rules of composition,
and grammar.
Computers and electronics – Knowledge of circuit boards, processors, chips,
electronic equipment, and computer hardware and software, including
applications and programming.
Competency
importance
Competency
presence
4,25
3,5
4
3
4,25
3,5
3
2,75
3,5
3,25
4,25
4
4,75
4
3,5
3
45
cont. tab. 3
Administration and management - Knowledge of business and management
principles involved in strategic planning, resource allocation, human resources
modelling, leadership technique, production methods, and coordination of
people and resources.
Mathematics - Knowledge of arithmetic, algebra, geometry, calculus, statistics,
and their applications.
Mechanical - Knowledge of machines and tools, including their designs, uses,
repair, and maintenance.
Psychology - Knowledge of human behaviour and performance; individual
differences in ability, personality, and interests; learning and motivation;
psychological research methods; and the assessment and treatment of
behavioural and affective disorders.
Education and training - Knowledge of principles and methods for curriculum
and training design, teaching and instruction for individuals and groups, and
the measurement of training effects.
4
4,25
2,5
3,25
3
3,5
4
4,25
4,25
4,25
Table 4
Product manager function – Product manager Skills
Product manager Skills
Critical thinking - Using logic and reasoning to identify the strengths and
weaknesses of alternative solutions, conclusions or approaches to problems.
Writing - Communicating effectively in writing as appropriate for the needs of
the audience.
Monitoring - Monitoring/Assessing performance of yourself, other individuals,
or organizations to make improvements or take corrective action.
Active learning - Understanding the implications of new information for both
current and future problem-solving and decision-making.
Coordination - Adjusting actions in relation to others' actions.
Operations analysis - Analyzing needs and product requirements to create a
design.
Complex problem solving - Identifying complex problems and reviewing
related information to develop and evaluate options and implement solutions.
Service orientation - Actively looking for ways to help people.
Competency
importance
Competency
presence
4
3,75
4
3,75
4,75
4,5
5
4,25
4
4
3
3,25
5
4
4
3,75
Table 5
Product Manager Function – Product Manager Abilities
Product Manager Abilities
Oral expression - The ability to communicate information and ideas in
speaking so others will understand.
Oral comprehension - The ability to listen to and understand information and
ideas presented through spoken words and sentences.
Speech recognition - The ability to identify and understand the speech of
another person.
Written Comprehension - The ability to read and understand information and
ideas presented in writing.
Speech clarity - The ability to speak clearly so others can understand you.
Deductive reasoning - The ability to apply general rules to specific problems
to produce answers that make sense.
Inductive reasoning - The ability to combine pieces of information to form
general rules or conclusions (includes finding a relationship among seemingly
unrelated events).
Competency
importance
Competency
presence
5
4,5
5
3,75
4,75
4,25
4,25
4
4
4,25
4
4,75
4,5
3,75
P. Meža
46
cont. tab. 5
Originality - The ability to come up with unusual or clever ideas about a given
topic or situation, or to develop creative ways to solve a problem.
Problem sensitivity - The ability to tell when something is wrong or is likely to
go wrong. It does not involve solving the problem, only recognizing there is a
problem.
Fluency of ideas - The ability to come up with a number of ideas about a topic
(the number of ideas is important, not their quality, correctness, or creativity).
Information ordering - The ability to arrange things or actions in a certain
order or pattern according to a specific rule or set of rules (e.g., patterns of
numbers, letters, words, pictures, mathematical operations).
5
3,75
4
3,75
4,5
3,75
5
3,75
Table 6
Product Manager Function – Product Manager Work Activities
Product Manager Work Activities
Getting information - Observing, receiving, and otherwise obtaining
information from all relevant sources.
Selling or influencing others - Convincing others to buy merchandise/goods or
to otherwise change their minds or actions.
Communicating with people outside the organization, representing the
organization to customers, the public, government, and other external sources.
This information can be exchanged in person, in writing, or by telephone or email.
Interacting with computers - Using computers and computer systems
(including hardware and software) to program, write software, set up
functions, enter data, or process information.
Making decisions and solving problems - Analyzing information and
evaluating results to choose the best solution and solve problems.
Establishing and maintaining interpersonal relationships - Developing
constructive and cooperative working relationships with others, and
maintaining them over time.
Identifying objects, actions, and events - Identifying information by
categorizing, estimating, recognizing differences or similarities, and detecting
changes in circumstances or events.
Monitor processes, materials, or surroundings - Monitoring and reviewing
information from materials, events, or the environment, to detect or assess
problems.
Thinking creatively - Developing, designing, or creating new applications,
ideas, relationships, systems, or products, including artistic contributions.
Developing and building teams - Encouraging and building mutual trust,
respect, and cooperation among team members.
Updating and using relevant knowledge - Keeping up-to-date technically and
applying new knowledge to your job.
Thinking creatively - Developing, designing, or creating new applications,
ideas, relationships, systems, or products, including artistic contributions.
Organizing, planning, and prioritizing work - Developing specific goals and
plans to prioritize, organize, and accomplish your work.
Developing objectives and strategies - Establishing long-range objectives and
specifying the strategies and actions to achieve them.
Interpreting the meaning of information for others - Translating or explaining
what information means and how it can be used.
Competency
importance
Competency
presence
5
4,75
4
3,5
5
4,25
4
3,5
4,25
3,5
4
4
4,25
4
3,25
3,5
5
4
4,5
4
5
3,75
5
4,25
4,25
4
5
3,75
4
3,5
47
cont. tab. 6
Communicating with supervisors, peers, or subordinates - Providing
information to supervisors, co-workers, and subordinates by telephone, in
written form, e-mail, or in person.
Training and teaching others - Identifying the educational needs of others,
developing formal educational or training programs or classes, and teaching or
instructing others.
4,5
4
4,5
4
Table 7
Product Manager Education
Product Manager Education Level Required
Bachelor's degree
Master's degree
Some college, no degree
Today
Future
64,5
26,1
9,4
63,8
29,1
7,1
4. Discussion
For the last decade the domestic appliance industry has been faced with the challenge of
explosive demand for new and improved products as well as the availability of new
technologies for production and delivery of such products which generate additional demands
on the system (O’Connell, 1996). This situation accelerates the rate of a change and it
produces an “evolved” system which attempts to respond to changes on the marketplace
(Katsanis and Pitta, 1995). Product managers in the domestic appliance industry are
responsible for the overall success of delivering the owner's physical development within
the constraints of cost, schedule, quality and safety requirements. Product managers find
themselves confronted by issues and undertaking additional roles that have traditionally not
been part of their responsibility. Professional competency in product management is attained
by the combination of knowledge acquired during training, skills developed through
experience, and the application of the acquired knowledge.
Fig. 2. Distribution of Product management competencies
Rys. 2. Dystrybucja kompetencji zarządzania produktem
P. Meža
48
The product and technological complexity which is actually the base for communication
with customers, addresses external and internal marketing needs as well. Therefore many
companies are of the opinion that product training is a top priority for them (Neff, 2002).
Despite the importance of the role product managers have for the marketing function and for
new product introduction, there has been little research conducted on the matter of product
manager’s competencies. Distribution of product management competencies is shown in
picture 2. In general, the median of “Competency importance” was 4,25; the median of
“Competency presence” was 3,75. This shows the future need for further development of
product management competencies and identifying the routes and mechanisms by which these
product managers acquire such requisite skills should provide options for addressing
the training of future product managers. A more significant aspect of the study, however, is
identifying potential lessons for management development policy that the domestic appliance
industry may adopt. Therefore, we recommend conducting further research related to product
management competencies because the findings may have a significant impact on company
strategies and daily business.
Bibliography
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International Scientific Conference Marketing Theory Challenges in Transitional
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Meža P., Dermol V.: Synergetic effects of product training and training transfer factors
on marketing mix – case study on domestic appliance industry, [in:] Savolainen M.,
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13. Nyhan B.: Competence Development as a Key Organizational Strategy – Experiences of
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Katarzyna SEKŚCIŃSKA
Uniwersytet Warszawski
Wydział Psychologii
MANAGEMENT OF FINANCIAL RISK – HOPE OF SUCCESS AND
INVESTMENT AMONG ENTREPRENEURS AND EMPLOYEES
Summary. The aim of the study presented herein was to examine the differences
in financial behaviour between entrepreneurs and employees, including their risktaking behaviour and the association between financial actions with the hope of
success. The hope of success has been broken down into components for the purpose
of analysis. 143 subjects participated in the study, whom among them were shop
owners and employees in Warsaw. The results showed that 1) entrepreneurs tend to
invest more in assets than employees, 2) entrepreneurs tend to make riskier
investments than employees, 3) entrepreneurs have a higher level of hope of success
and in its individual components 4) hope of success and its components are associated
with the tendency towards financial behaviour in both groups, though the association
differs 5) The hope of success and its components are associated with the tendency
towards investment risk primarily in the entrepreneur group.
Keywords: entrepreneurs, employees, financial behaviour, investment risk, hope
of success
ZARZĄDZANIE RYZYKIEM FINANSOWYM – NADZIEJA
NA SUKCES A INWESTOWANIE WŚRÓD PRZEDSIĘBIORCÓW
I PRACOWNIKÓW NAJEMNYCH
Streszczenie. Opisywane badanie miało na celu sprawdzenie różnic między
przedsiębiorcami i pracownikami najemnymi w skłonności do zachowań
finansowych, w tym zachowań ryzykownych oraz związku działań finansowych
z nadzieją na sukces i jej komponentami w każdej z grup. Wzięły w nim udział
143 osoby, w tym właściciele i pracownicy warszawskich sklepów. Okazało się,
że: 1) przedsiębiorcy są skłonni inwestować większą część środków niż pracownicy,
2) przedsiębiorcy są skłonni inwestować bardziej ryzykownie niż pracownicy
najemni, 3) przedsiębiorcy charakteryzują się wyższym poziomem nadziei na sukces
K. Sekścińska
52
i jej komponentów, 4) nadzieja na sukces i jej komponenty mają związek ze
skłonnością do zachowań finansowych w obu grupach, choć zależność ta nie jest taka
sama, 5) nadzieja na sukces i jej komponenty na związek ze skłonnością do ryzyka
inwestycyjnego występuje przede wszystkim w grupie przedsiębiorców.
Słowa kluczowe: przedsiębiorcy, pracownicy najemni, zachowania finansowe,
ryzyko inwestycyjne, nadzieja na sukces
1. Introduction
Small entrepreneurs have gained markedly more attention in recent years. This is largely
due to the influence of small business activities in the national economy. Many researchers
have pointed out the large impact that small companies have in creating new jobs in
the economy, raising national work productivity and in reducing poverty. They have also
emphasized the importance of small entrepreneurs as a source of innovation and economic
growth [i.e.,1,2,3]. Research by Blanchflower, Oswald and Stutzer4 has shown that a large
percentage of people would prefer „being self-employed” to „being an employee”. Ute and
Ulrike1 even state that in some countries such people constitute over 50% of the population.
If this is the case, what stops these people from starting their own business? Ute and Ulrike1
suggest this is due to a lack of entrepreneurial skills and abilities and in not knowing about
existing business possibilities.
What traits distinguish entrepreneurs from employees? Researchers point out
the importance of risk tolerance, a preference for autonomy and innovativeness and feeling in
control, as well as education, business experience in the family and access to financial capital
as important determinants of undertaking entrepreneurial activity. Dawidziuk5 also points out
several other important traits that distinguish entrepreneurs: self-confidence, resolve and
persistence, diligence, inventiveness, vigour, the ability to take risks and thirst for
achievement, creativity, initiative, flexibility, a positive attitude towards new situations,
independence, being dynamic, foresight, and a desire for gain and optimism. If entrepreneurs
are so different from employees, how does it reflect on their financial behaviours? Apart from
1
2
3
4
5
Ute S., Ulrike R.: Health of entrepreneurs versus employees in a national representative sample. „Journal of
Occupational & Organizational Psychology”, 2010, No. 83(3), p. 717-738.
Reynolds P.: Entrepreneurship in the US: The future is now. Springer 2005.
Sekścińska K., Domurat A.: Inteligencja emocjonalna i dyrektywność wśród mazurskich przedsiębiorców, [w:]
Skrzypek E. (red.): Etyka w biznesie. Wydawnictwo UMCS, Lublin 2010.
Blanchflower D.G., Oswald A.J.: What makes an entrepreneur? „Journal of Labor Economics”, 1998,
No. 16(1), p. 26-60.
Dawidziuk S.: Przedsiębiorczość, droga do sukcesu w biznesie. Wyższa Szkoła Menadżerska SIG, Warszawa
1999.
Management of financial risk…
53
the decision to start a business, do the smaller, everyday financial decisions differ between
the two groups?
Classical economic theories view man as homo-oeconomicus, who typically makes
rational decisions. A rational individual always manages his/her capital so as to maximize
his/her gains, is not influenced by emotions or the pressure of others and only follows
information coming from reliable financial analysis. After Daniel Kahneman and Amos
Tversky published their article “Prospect Theory: an Analysis of Decision under Risk” in
the Ekonometrica magazine in 1979, something changed in the way that researchers see
the individual on the market. That paper became one of the most important texts that
contributed to the birth of behavioural economics.
The representatives of this branch of economy had a different perspective on the way
economic decisions were made by consumers and investors. The behavioural approach
acknowledges the influence of psychological factors on the process of making financial
decisions by market participants and questions the two main assumptions about the actions of
consumers and investors emphasized by the neoclassical theory. In this form, the science has
become strongly interdisciplinary and now combines economy with psychology and
management.
Since the emergence of behavioural economics, including behavioural finance, much
research has been conducted relating to the psychological determinants of the economical
behaviour of the individual. One can utilise his or her accumulated capital in three ways:
1) current consumption, 2) saving and 3) increasing one’s means – investment.
Research in the area of individual financial behaviour has so far shown a distinctive
influence of psychological factors on the decisions made to consume, save or invest. Among
others, the influence of emotion and mood6 and personality traits such as conscientiousness,
introversion, amicability7,8 (Schmölder, 1966; Brandstatter 1996), inflexibility9, locus of
control10 and materialism10,11 on the tendency to save has been proven. There has been
relatively little research related to investments, and those conducted were concerned mostly
with the behavioural determinants of stock market investors. Research of this type have so far
examined the influence of investors' heuristics, motivational tendencies and preferences,
6
Zaleśkiewicz T.: Psychologia inwestora giełdowego. GWP, Gdańsk 2003.
Nyhus E.K., Webley P.: The role of personality in household saving and borrowing behaviour. „European
Journal of Personality”, 2001, No. 15 (Special issue: Personality and economic behavior), p.85-103.
8
Davey J., George C.: Personality and Finance: The Effects of Personality on
Financial Attitudes and Behaviour. The International Journal of Interdisciplinary Social Sciences,5 (9), 2011.
9
Wärneryd K.E.: Personality and Saving. VSB-CentER Savings Project Progress Report 39. Center for
Economic Research, Tilburg University, 1996.
10
Lunt P.K., Livingstone S.M.: Psychological, social and economic determinants of saving: comparing recurrent
and total savings. „Journal of Economic Psychology” 1991, No. 12, p. 621-641.
11
Rudzińska-Wojciechowska J.: niepublikowana praca doktorska.
7
54
K. Sekścińska
emotional states and personality traits such as emotional stability, extroversion, risk
acceptance, return, agreeableness, conscientiousness and reasoning on their stock market
behaviours6,12. Among the wealth of research on an individual's financial behaviour, the
author of this research has failed to find any that would examine its association with hope of
success. The research described in the present work attempts to verify whether the level of
hope of success and it's components differentiates the individual's financial behaviour.
The hope of success is viewed in terms of a personality trait as described in Snyder's
theory13. It is the individual's belief that one is competent enough to enable achieving success.
Hope is comprised of two components: 1) the belief that one will be successful and
2) the belief that that success is dependent on one’s own competence. Hope of success is
important in situations of successive failures, overcoming obstacles and in moments of doubt
about one’s actions. The strength of hope of success is a result of its components:
“willpower” – the belief that one can persevere in one’s actions and successfully complete
them; “waypower” – seeing oneself as resourceful, having the ability to find one or more
pathways/solutions to a given problem.11 Research thus far has shown that hope of success is
associated with higher self-esteem, life satisfaction and less depressive tendencies and coping
with stress better14. Research by Chmielewska and Trzebiński15 has also shown a positive
association between the hope of success with effectiveness and efficiency in coping with
difficult situations. The author of this paper has been unable to find any research examining
the association of hope of success with risky behaviour, including investing behaviour.
Nonetheless, if people believing in success cope with stress better, have more self-confidence
and do not give up after failure, they might prove to be good candidates for “small” investors,
as they have the traits important for people actively building up their capital. Moreover,
the belief in one’s own agency in this area might significantly influence one’s selection of
investment strategies. Revealing these associations might be a starting point for new research.
Each way of utilising accumulated capital brings its own gains and losses. In the case of
consumption, gain may be measured by the marginal utility of the purchased good or service.
Of course, satisfying one’s needs, improving one’s mood or life satisfaction are also examples
of gains. However, excessive buying is associated with the risk of spending more than one’s
12
Chitra K., Sreedevi R.: Does Personality Traits Influence the Choice of Investment? „Journal of Behavioral
Finance”, 2011, No. 8(2), p. 47-57.
13
Snyder C.R., Cheavens J., Sympson S.C: Hope: An individual motive for social commerce. „Group Dynamics:
Theory, Research and Practise”, 1997, No. 1(2), p. 107-118.
14
Kwon P.: Hope, defence mechanisms, and adjustment: implications for false hope and defensive hopelessness.
„Journal of Personality”, 2002, No. 70(2), p. 207-232.
15
Chmielewska A., Trzebiński J.: Basic hope and adaptation to flood trauma. Conference of the Society for
Philosophy and Psychology. Barcelona 2004.
55
disposable means and so the risk of being unable to cover other important expenses. Such
a situation results in debt or maxing out one’s line of credit.
The cost of saving is the delaying of the possibility to purchase, but the gain is
the possibility of bigger expenses without the need to take on credit or a loan with interest.
Another gain is the profit from the interest earned on savings, net of inflation. However,
saving is also tied to the necessity to resign from the possibility of using one’s financial
means over a given period, a year for instance. This carries the risk of having no dispensable
means in case of sudden, necessary expenses.
Finally, investment enables one to build up capital, but carries the risk of losing it.
It should be noted that money is an absolutely liquid instrument, which however brings no
profit. Only on financial markets does its liquidity transfer into expected profit, which also
carries a risk.16 Financial instruments differ primarily on the expected rate of return and risk
level one has to accept when allocating one’s capital there.
Financial risk results from uncertain conditions and is also the result of an individual's
actions and future environmental conditions.16 From an economic viewpoint, the investment
risk related to investments on the capital market can be divided into several specific
categories. The first and most important is market risk, which is associated with the general
economic situation. Its elements are:
1. the risk that the prices of instruments being sold will fall and of those being bought
will rise,
2. the currency risk that fluctuations in currency exchange rates will influence
the investor's financial result in the instruments denominated in a currency being
different than that of the buyer's country,
3. the interest rate risk and the associated inflation risk. The rise of interest and inflation
rates inclines investors to purchase bonds, while their fall inclines to buying shares.
Investment risk is also associated with the liquidity of a given security.17 In case of low
liquidity on a given market, selling an instrument might prove difficult,17 which along with
the above factors influences the profitability of securities purchased by individuals. Thus
the described risk might, in the worst case scenario, mean the complete loss of allocated
investments. It should also be noted that the liquidity risk might relate to the asset owner
themself.
Another category is the solvency risk, which is associated with the financial situation of
the issuer of a given security. The shares of a badly prospering company lose value and
16
17
Górski M.: Rynkowy system finansowy. PWE, Warszawa 2007.
Dębski W.: Rynek finansowy i jego mechanizmy. Podstawy teorii i praktyki. PWN, Warszawa 2003.
K. Sekścińska
56
the company might even stop paying dividends. This category of risk, in its extreme form, is
when a company might declare itself bankrupt.16
Political and legal risks are those associated with the influence of legal regulations, rules
and taxes on the possibility of profiting from the investment in a given financial instrument.
The above risk categories are only a few of several other existing ones. However these
selected few are those which seem most relevant to the risk to private individuals.
Risk-taking tendencies have been the subject of much research, proving or demonstrating
the influence of many different psychological and environmental factors on one’s preferences
in this area. Among the economical factors one should note the financial situation of
the security issuer, the economical situation in the country and world-wide and
the individual's income. In the case of psychological factors, conducted research has shown
that personalities showing low-anxiety and low-neurosis,18,19 with high results on
the hardness scale and an inner locus of control,20,21,22 being less prone to stress, more
resilient, more lively,23 extrovert, open to new experiences,24 with lower perseveration,
less emotionally reactive23 and with low agreeableness and conscientiousness24 have more
risk-taking tendencies.
Little research however has been conducted on the tendency towards risky investment
behaviour of average individuals such as small entrepreneurs and employees.
2. The purpose of the study
The purpose of the conducted research was to examine the differences between
entrepreneurs and employees in tendencies towards particular financial behaviours, taking
risky investment decisions and preferred investment strategies dependant on their hope of
success, and on the individual components which make up this hope.
18
Xiao Z., Wang D.: Economic environment and personality: how do they influence investment decisions and
regret? „Social Behavior and Personalisty”, 2009, No. 37(10), p. 1297-1304.
19
Dziworska K.: Inwestycje przedsiębiorstw. Wydawnictwa Uniwersytetu Gdańskiego, Gdańsk 1993.
20
Studenski R.: Ryzyko i ryzykowanie. Wydawnictwo Uniwersytetu Śląskiego, Katowice 2004.
21
Zawadzki B., Strelau J.: Formalna Charakterystyka Zachowania – Kwestionariusz Temperamentu (FCZ-KT).
Pracowania Testów Psychologicznych PTP, Warszawa 1997.
22
Drwal R.Ł.: Opracowanie kwestionariusza Delta do pomiaru poczucia kontroli. „Studia Psychologiczne”,
1979, Nr 18, s. 67-84.
23
Glenc M.: Skłonność do podejmowania ryzyka, czyli psychologiczna charakterystyka ryzykantów, [w:]
Goszczyńska M., Studenski R. (red.): Psychologia zachowań ryzykownych. Wydawnictwo Akademickie Żak,
Warszawa 2006.
24
Lauriola M., Levin I.P.: Personality traits and risky decision-making in a controlled experimental task: An
exploratory study. „Personality and Individual Differences”, 2001, No. 31, p. 215-226.
57
As opposed to most research conducted to examine the interrelations associated with
investment, the presented research considers the allocation of assets by average individuals
who are not stock market investors.
Research questions:
1. Do the tendencies to consume, save and invest differ between entrepreneurs and
employees?
2. Do the tendencies towards risky investment behaviours and investment strategies
differ between entrepreneurs and employees?
3. Does the hope of success and its components differ between entrepreneurs and
employees?
4. Are the tendencies to consume, save and invest associated with hope of success and
its components?
5. Is there a relationship or association between the tendency towards risky investment
behaviour and hope of success?
3. Research method
3.1. Participants
The research subjects were 143 owners and employees of shops in the city of Warsaw.
Participation was voluntary and anonymous. The group consisted of 101 women and 42 men,
aged 19 to 74 (mean = 33,64; SD = 13,19). The average disposable (left after covering all
necessary bills and dues) real income in the group was 2561,64 zł with SD = 789,77.
Two equinumerous groups were considered in the analysis. There were 53 entrepreneurs aged
23 to 60 (mean = 40,57, SD = 11,56) in the first group and 53 randomly selected employees
aged 20 to 64 (mean = 34,17, SD = 13,99) in the second group. The groups thus set apart did
not significantly differ in real income (t(102) = 1,489, p > 0,05) or perceived income (t(102) =
1,371, p > 0,05).
3.2. Research tools and procedure
Participants first completed a short initial survey in which they stated their form of
employment (entrepreneur/ employee), gave their real income and evaluated it on a five point
(very low to very high) scale, and evaluated their economic knowledge. They would then
solve the psychometric instrument measuring the tendencies to invest, save and consume,
the instrument measuring the tendencies towards investment risk and investment strategies
and finally complete the Hope of Success Questionnaire.
K. Sekścińska
58
3.2.1. The tendency to consume/ save/ invest
The tendency to consume/ save/ invest was measured using the author's own designed
instrument, comprising of 3 items in which participants were asked to divide 3 sums of
money between current consumption, savings and investments. The amounts of money
differed significantly so that there was a small amount, an amount neither small nor large and
a large amount. This differentiation was to ensure that these amounts would be thus perceived
by the participants accordingly. At the end of the procedure they were asked to evaluate each
amount on a three point scale of 1) small 2) neither large nor small 3) large.
3.2.2. The tendency towards investment risk and investment strategies
The tendency towards investment risk and investment strategy was measured with
the author's instrument consisting of four items. Each item included a description of
a situation involving investment decisions by the participant. The participant's task was
to select from the possibilities given his/her preferred form of allocating financial resources.
The answers in each task involved different levels of risk. The sum total was the general
indicator of the tendency towards investment risk. The result of individual tasks indicated
particular investment strategy in the circumstances given. The psychometric properties of
the Tendency towards Investment Risk Scale were satisfactory (the Cronbach Alpha was
0,793).
3.2.3. Hope of success
Hope of success was measured with the Hope of Success Questionnaire by M. Łaguna,
J. Trzebiński and M. Zięba (2005). The questionnaire consists of 12 statements, out of which
4 are buffer items. The result of the remaining eight is the general indicator of the hope of
success, which comprises of two components: 1) concerning the ability to initiate action and
persist despite obstacles, called the belief one is strong-willed, and 2) perceiving oneself as
resourceful and able to come up with a way to achieve a goal, called the belief one is able to
find solutions. The psychometric properties of the scale are satisfactory: the Cronbach Alpha
for the whole scale is 0,74 to 0,88; 0,7 to 0,84 for the first subscale and 0,63 to 0,86 for
the second.
4. Results
The results analysis was initiated by verifying the descriptive statistics for the tendency to
consume, save and invest in the two groups as set apart by the employment from. Irrespective
of the allocated amount, employees assigned a greater part of it to consumption and saving
59
than entrepreneurs. Entrepreneurs tended to invest a greater part of the allocated amount,
irrespective of whether it was small, medium or large. The results are presented in table 1.
Table 1
Descriptive statistics for the tendency to consume, save and invest
in the entrepreneur and employee groups
Consumption
Small
amount
Saving
Investment
Consumption
Medium
amount
Saving
Investment
Consumption
Large
amount
Saving
Investment
Entrepreneur group results
(in zł)
Mean = 271,57
SD = 187,68
Mean = 67,06
SD = 126,57
Mean = 160,78
SD = 105,64
Mean = 909,80
SD = 781,86
Mean = 635,29
SD = 664,15
Mean = 1445,09
SD = 930,01
Mean = 1874,51
SD = 1103,09
Mean = 2294,12
SD = 2224,75
Mean = 5500,00
SD = 3506,08
Employee group results
(in zł)
Mean = 324,04
SD = 157,61
Mean = 99,04
SD = 119,41
Mean = 56,73
SD = 112,47
Mean = 1128,85
SD = 836,03
Mean = 876,92
SD = 773,99
Mean = 950,00
SD = 780,00
Mean = 2480,77
SD = 1110,02
Mean = 2969,23
SD = 1160,89
Mean = 4061,54
SD = 2907,23
Total population
results (in zł)
Mean = 298,05
SD = 174,32
Mean = 83,20
SD = 123,46
Mean = 65,31
SD = 93,95
Mean = 796,93
SD = 505,43
Mean = 1410,97
SD = 688,29
Mean = 824,43
SD = 729,54
Mean = 1815,58
SD = 1151,96
Mean = 4563,96
SD = 2300,59
Mean = 3515,86
SD = 2467,23
The next descriptive statistics verified were those concerning the tendency towards risky
investment behaviour between the same groups. Consequently in all aspects of investment
and the general indicator of the tendency towards risky investment decisions, entrepreneurs
chose higher-risk options which gave the possibility of more gain. The results are presented in
table 2.
Table 2
Descriptive statistics for the tendency towards risk investment behaviour
in entrepreneur and employee groups
Entrepreneur group results
Employee group results
Total population results
Instrument selection
by others
Mean = 2,87
SD = 1,19
Mean = 2,29
SD = 1,07
Mean = 2,58
SD = 1,16
Individual selection
Mean = 3,02
SD = 1,24
Mean = 3,17
SD = 1,32
Mean = 2,31
SD = 1,21
Mean = 11,52
SD = 3,92
Mean = 2,38
SD = 0,88
Mean = 2,79
SD = 1,30
Mean = 2,04
SD = 1,00
Mean = 9,94
SD = 3,42
Mean = 2,70
SD = 1,11
Mean = 2,98
SD = 1,32
Mean = 2,17
SD = 1,11
Mean = 10,72
SD = 3,74
Long term
Short term
General indicator
K. Sekścińska
60
The next step was to verify descriptive statistics for hope of success and its components in
the total population and among the entrepreneur and non-entrepreneur groups. Employees had
consistently lower results both in the general hope of success indicator and in both of its
components. The results are shown in table 3.
Table 3
Descriptive statistics for hope of success and its components in the total population
and the entrepreneur and employee groups
Hope of success general
indicator
Being strong willed
Solution finding ability
Entrepreneur group
results
Mean = 48,70
SD = 8,56
Mean = 23,26
SD = 5,06
Mean = 25,44
SD = 4,49
Employee group
results
Mean = 43,33
SD = 10,09
Mean = 20,00
SD = 6,99
Mean = 23,33
SD = 5,73
Total population
results
Mean = 45,99
SD = 9,69
Mean = 21,61
SD = 5,76
Mean = 24,38
SD = 5,24
The significance of the differences observed with the descriptive statistics was then
verified. The answer to the first research question was attempted: do the tendencies to
consume, save and invest differ between entrepreneurs and employees? For this purpose,
the results were analysed with t- Student's test for independent samples. The first group was
entrepreneurs, the second-employees.
Results showed that the groups did not differ in their tendencies to consume and save,
irrespective of the distributed amount. However, there were significant differences in
investment tendencies between the two groups. It appeared that entrepreneurs tended to invest
more of their disposable income than employees. It should be pointed out that differences
appeared in the allocation of all the amounts: the small, the neither small nor large and
the large amount of money. In all three cases entrepreneurs tended to invest a greater part of
their financial resources. The results are shown in Table 4. In the cases of distributing
the small and large amounts, the results of both groups did not differ significantly.
Table 4
The tendency towards financial behaviour depending on the individual’s income
Investing a small amount
Investing a medium amount
Investing a large amount
Average result in the
entrepreneur group
160,78 zł
1445,09 zł
5500,00 zł
Average result in
the employee group
56,73 zł
950,00 zł
4061,54 zł
t-Student's test results
t(83,43) = -3,501, p = 0,001
t(101) = -2,440, p < 0,01
t(101)= -2,139, p < 0,05
The next step was to run an analysis to answer the second research question:
Do the tendencies towards risky investment behaviours and investment strategies differ
between entrepreneurs and employees? This was done with a t-Student's test for independent
samples. It appears from the results that entrepreneurs have a stronger tendency towards
61
investment risk than employees (table 5). The analysis of the results shows that entrepreneurs
tend to take more risks than non-entrepreneurs in either case when the individual financial
instrument is chosen by them or whether the final choice was made for them by a third party.
The maturity date of assets did not differentiate investment risk tendencies between
the groups. The values of individual statistics for this step of analysis are presented in table 5.
The next step of the analysis was to verify the differences between entrepreneurs and
employees in their levels of hope of success and its two components. The results show that
entrepreneurs have a higher level of general hope of success than employees (table 6).
They also have higher results in both subscales of the test, which means they have a stronger
belief in themselves both as strong-willed and more able to find solutions (table 6).
Table 5
Difference in the tendency towards making risky investment decisions
between the entrepreneur and employee groups
Instrument selection by
others
Long term
Short term
General indicator
Average result in
the entrepreneur group
Average result in
the employee group
t- Student's test results
2,87
2,29
t(103) = -2,615, p < 0,01
3,02
3,17
2,31
11,52
2,38
2,79
2,04
9,94
t(182) = -2,830, p < 0,01
n.s.
n.s.
t(95) = -2,118, p < 0,05
Table 6
Differences in hope of success levels and its components between
the entrepreneur and employee groups
Hope of success general
indicator
Being strong willed
Solution finding ability
Average result in
the entrepreneur group
48,70
Average result in
the employee group
43,33
t-Student's test results
23,26
25,44
20,00
23,33
t(99) = -2,950, p < 0,005
t(99) = -2,053, p < 0,05
t(99) = -2,881, p < 0,005
It was further verified whether there is a relationship between the tendencies towards
consumption, saving and investment and the hope of success and its components.
The analysis was done by a one-way analysis of variance. To do this, both the entrepreneurs
and the employees were divided into 3 groups of persons with the lowest, medium and
highest levels of hope of success. The medium level of this variable was decided to be within
+/- 1 standard deviation from the group's mean, and other results were divided into groups of
either low or high levels of this trait.
After the one-way ANOVA, in the case of employees neither their level of the general
indicator nor their being strong-willed appeared to differentiate their tendency towards
investment risk. Only the ability to find solutions differentiated them in the case of allocation
K. Sekścińska
62
of assets selected by a third party. It is worth noting that the eta2 statistic proved this effect to
be strong. A contrast test was then run and it showed that people with a low level of solution
finding ability tend to take risks in such a situation less than people with a medium level of
the variable, who in turn tend to take risks less than people with high levels of this variable.
(tables 7 and 8).
In the entrepreneur group, the ANOVA revealed that the level of general hope of success
differentiates the general tendency towards investment risk, and also the tendency towards
risk in the case of allocating resources to instruments chosen by a third party and long term
investments. It should however be noted that these effects were not strong. In all cases
contrast tests showed a difference between persons with medium and high levels, where
people with the highest results on hope of success scale taking the greatest risks. Furthermore,
ANOVA analysis and contrast tests revealed that people with medium to high levels of
the solution finding ability have a stronger tendency towards investment risk, especially in
the case of short-term investments and individually chosen instruments, than people with low
levels of the variable. It should be noted that the effects for the solution finding ability as
shown by the ANOVA were strong when expressed by the eta2 statistic were strong. Contrast
tests show a difference between people with the highest and lowest levels of this variable
(tables 7 and 8).
Table 7
Differences in the tendency towards investment risk depending on the level of hope
of success and its components (ANOVA) in the entrepreneur and employee groups
Entrepreneurs
Employees
1) F = 3,644; p < 0,05, eta2 = 0,041 n.s.
2) F = 3,229; p < 0,05, eta2 = 0,127 n.s.
3) F = 2,908; p < 0,05, eta2 = 0,024 n.s.
Instrument selection by others
1) F = 4,169; p < 0,01, eta2 = 0,041 n.s.
2) n.s.
F = 4,060; p < 0,05, eta2 = 0,156
2
3) F = 4,478; p < 0,01, eta = 0,044 n.s.
1) n.s.
n.s.
2) F = 3,304; p < 0,05, eta2 = 0,264 n.s.
3) n.s.
n.s.
2
Long term
1) F = 3,251; p < 0,05, eta = 0,048 n.s.
2) n.s.
n.s.
3) n.s.
n.s.
Short term
1) n.s.
n.s.
2) F = 3,007; p < 0,05, eta2 = 0,147 n.s.
1) Hope of success – general indicator; 2) Hope of success – solution finding ability; 3) Hope of success –
being strong-willed.
General indicator
The final stage of analysis was devoted to examining the differences in tendencies
towards particular financial behaviours in the entrepreneur and employee groups in relation to
their hope of success and its components levels. As in the previous stage, the analysis was
63
initiated by a one-way ANOVA, verifying the strength of the observed effects and running
the appropriate contrast tests (tables 8 and 9).
In the entrepreneur group, the general indicator of hope and the ability to find solutions
differentiated the tendency to invest small amounts but the effect was not strong. The analysis
via contrast test shows that people with high levels of both variables invest a greater part of
a small amount than people with a medium level. The second hope of success component –
being strong willed – appeared to differentiate the tendency towards consumption
and investing small and medium amounts. It should be noted that in the case of consumption
and investing small amounts and consumption of medium amounts, the effect was strong.
The contrast test showed that in the case of a small and medium allocation amount, people
with medium levels of strong will consume more and invest less than people with a high level
of this trait (table 9.)
Table 8
Differences in the tendency towards investment risk in relation to levels of hope of success
and its components (contrast tests) in the entrepreneur and employee groups
Hope of success –
General indicator
Hope of success –
solution finding ability
ENTREPRENEURS
high > low
t = 2,53; p < 0,01
average > low
t = 1,99; p < 0,05
Hope of success –
being strong willed
General indicator
high > average
t = 2,70; p < 0,01
by others
high > average
t = 2,89; p < 0,01
n.s.
n.s.
Long term
High > average
t = 2,53; p < 0,01
n.s.
n.s.
Short term
n.s.
high > low
t = 2,43; p < 0,01
average > low
t = 2,02; p < 0,05
n.s.
by others
n.s.
high > low
t = 2,35; p < 0,01
average > low
t = 2,43; p < 0,01
EMPLOYEES
high > average
t = 2,58; p < 0,01
average > low
t = 2,51; p < 0,01
high > low
t = 2,39; p < 0,01
high > low
t = 2,94; p < 0,005
n.s.
n.s.
In the employee group, ANOVA proved the general indicator for hope of success to
differentiate the tendency to consume and invest small and medium amounts. It should be
pointed out that this effect in the case of consuming both amounts and investing the small
K. Sekścińska
64
amounts was strong (table 9). Contrast analysis showed that in the case of consuming small
and medium amounts, people with high hope of success levels tend to devote more money
than people with a medium level of this variable. Moreover, in the case of consuming small
amounts, people with low hope of success levels want to spend more than people with
a medium level. The tendency to invest small and medium amounts is stronger among people
with a medium hope of success level than people with a low or high level (table 10).
Table 9
Differences in financial behaviour tendencies depending on the size of the amount and level
of hope and its components (ANOVA) in the entrepreneur and employee groups
Entrepreneurs
Employees
1)
n.s.
F = 7,064; p < 0,005, eta2 = 0,116
Small
2)
n.s.
F = 2,931; p < 0,05, eta2 = 0,023
2
amount
3)
F = 3,93; p < 0,05, eta = 0,114
n.s.
Saving
1)
n.s.
n.s.
2)
n.s.
F = 2,999; p < 0,05, eta2 = 0,068
3)
n.s.
n.s.
Investment
1)
F = 3,837; p < 0,05, eta2 = 0,021
F = 4,237; p < 0,01, eta2 = 0,173
2
2)
F = 5,035; p < 0,01, eta = 0,055
n.s.
3)
F = 3,807; p < 0,001, eta2 = 0,113 n.s.
Consumption
1)
n.s.
F = 4,265; p < 0,01, eta2 = 0,095
Medium
2)
n.s.
F = 4,063; p < 0,05, eta2 = 0,138
2
amount
3)
F = 3,067; p < 0,05, eta = 0,157
n.s.
Saving
1)
n.s.
n.s.
2)
n.s.
n.s.
3)
n.s.
F = 3,820; p < 0,05, eta2 = 0,138
Investment
1)
n.s.
F = 6,556; p < 0,005, eta2 = 0,091
2)
n.s.
F = 5,515; p < 0,005, eta2 = 0,043
2
3)
F = 4,052; p < 0,05, eta = 0,093
n.s.
Consumption
1)
n.s.
n.s.
Large
2)
F = 3,057; p < 0,05, eta2 = 0,189
n.s.
amount
3)
n.s.
n.s.
Saving
1)
n.s.
n.s.
2)
n.s.
n.s.
3)
n.s.
n.s.
Investment
1)
n.s.
n.s.
2)
n.s.
n.s.
3)
n.s.
n.s.
1) Hope of success – general indicator; 2) Hope of success – solution finding ability; 3) Hope of success – being
strong-willed.
Consumption
The ability to find solutions (AFS) differentiates the tendency to consume and save small
amounts and consume and invest medium amounts. However, these effects are not strong
(table 9). Contrast analysis has shown a greater tendency to consume small amounts in people
with low rather than medium levels of AFS and a greater desire for consumption of medium
amounts in the low AFS group than the medium variable level group.
65
Table 10
Differences in financial behaviour tendencies depending on the amount and the levels of hope
of success and its components (contrast tests) in the entrepreneur and employee groups
Consumption
small amount
Investment
small amount
Consumption
medium amount
Investment
medium amount
Consumption
large amount
Consumption
small amount
Saving
small amount
Investment
small amount
Consumption
medium amount
Saving
medium amount
Investment
medium amount
Hope of success –
Hope of success –
General indicator
solution finding ability
ENTREPRENEURS
n.s.
n.s.
high > average
t = 2,89; p < 0,01
n.s.
high > average
t = 3,166; p < 0,005
n.s.
n.s.
n.s.
n.s.
average > high
t = 2,316; p < 0,05
EMPLOYEES
low > average
low > average
t = 3,211; p < 0,005
t = 1,949; p < 0,05
high > average
t = 2,682; p < 0,01
n.s.
low > average
t = 2,127; p < 0,05
low < average
n.s.
t = 3,322; p < 0,005
high < average
t = 3,843; p < 0,001
high > average
high > average
t = 2,903; p < 0,005
t = 2,850; p < 0,005
n.s.
n.s.
low < average
t = 2,903; p < 0,005
high < average
t = 3,142; p < 0,005
average > high
t = 5,712; p < 0,001
Hope of success – being
strong willed
average > high
t = 2,729; p < 0,005
high > average
t = 3,807; p < 0,001
average > high
t = 2,420; p < 0,05
high > average
t = 2,882; p < 0,005
n.s.
n.s.
n.s.
n.s.
n.s.
high > average
t = 2,822; p < 0,005
n.s.
Moreover, people with low AFS tend to save a smaller part of the small amount than
those with a medium level of this trait, and people with high levels of AFS are more willing
to devote a larger part of the medium amount to investment than people with a medium
variable level (table 10).
Being strong-willed has shown to differentiate the tendency to save large amounts.
The effect described proved to be strong (table 9). The contrast test shows that the difference
appears in both groups. People with high levels of being strong willed want to save more of
a large amount than persons with a medium level of this variable (table 10).
K. Sekścińska
66
5. Conclusions
The results of the presented research have shown that the tendency towards consuming
and saving one’s income, irrespective of its value, is the same among entrepreneurs and
employees. Distinct differences do however appear in the case of the investment tendency.
Entrepreneurs tend to invest more and irrespective of the value of the amount allocated. Both
consumption and saving do not require economic knowledge for their effects to be satisfying.
Investing one’s financial means is burdened with insecurity as to the final effects of the action
and the risk of losing one’s capital with nothing in return. The factor that might decrease
the probability of allocating means in assets with little perspective for growth is economic
knowledge. It enables the individual to verify a financial instrument offer at least with regards
to a few basic characteristics. In the research presented here, the participants were asked to
estimate their economic knowledge on a 0 to 10 scale, where 0 meant no knowledge and
10 meant expert knowledge. The results showed a distinct difference between entrepreneurs
(Mean = 4,53, SD = 2,08) and employees (Mean = 2,91, SD = 1,75). Entrepreneurs evaluated
their knowledge as much higher (t(102) = 3,969, p < 0,001). Perhaps this could explain why
they tend to invest a greater part of their means. They might feel that their knowledge will
help them in selecting a financial instrument and will limit the likelihood of loss, which
would give them a greater sense of security in financial actions than those people with low
perceived economic knowledge.
The research results have also shown that entrepreneurs tend to invest in assets with
a higher risk level than employees, both when they choose the financial instrument
themselves and when it is done by a financial specialist. The perceived level of their own
economic knowledge described above could explain the accepted risk in the case of
individual asset choice, but if this variable was to explain the total variability of the tendency
towards investment risk, there should be no difference between entrepreneurs and employees
in the case of investing in financial instruments chosen by a third, specialised party.
A difference does however appear. It is probable that earlier successes and failures in
financial matters and experience in risk taking might cause this difference between
entrepreneurs and employees even when the instrument is chosen by a specialist. Moreover,
in accordance with the definition of an entrepreneur as given by Dawidziuk,5 entrepreneurs
generally have a stronger tendency towards risk, probably primarily including financial risk.
Further research results have shown that entrepreneurs differ from employees in a higher
level of hope of success and in both of its components. Entrepreneurs have a stronger belief
in their own strong will and abilities to find solutions. This result might point to
the entrepreneur's natural predispositions towards fulfilling the tasks resulting from their form
67
of employment, but on the other hand it might be the result of earlier experiences. Opening
one’s own business is usually initially associated with slow financial growth or even losses,
which teaches entrepreneurs patience and persistence in their actions. Moreover, nowadays
it's difficult to imagine a company enjoying constant growth or even a financial situation
stable over longer periods. Experiencing persistence in one’s actions despite temporary
failures seems to be an almost everyday occurrence to entrepreneurs. Running one’s own
business is also associated with constantly solving larger or smaller problems, and each of
them strengthens the entrepreneur's feeling of being able to find solutions. Of course,
employees also face failures and situations difficult to solve, but it still seems that
entrepreneurs experience it significantly more often.
Research results have also pointed out a difference in the association between
the tendency to invest and consume and the hope of success (and its components) between
the two groups. Entrepreneurs consume less and invest more, the more hope of success they
have. Employees consume most when they have a very low or a very high level of hope of
success (and its components). The interrelation to investment has an inverted U-shape: people
with a medium level of the variable have the tendency to invest the most, while persons with
high or low levels invest significantly less. The observed interrelation in the entrepreneur
group seems to have a logical explanation. A higher level of hope for an individual's success
strengthens their will make investments, which after all always carry the risk of losing part or
all of one’s capital. We can assume that taking action without the belief that they will be
successful seldom occurs. On the other hand the result in the non-entrepreneur group is
astounding. Perhaps it is the effect of a poorly selected or too small sample. It would
undoubtedly be interesting to replicate the conducted research and verify whether this
interrelation is not an artefact.
Moreover, the entrepreneur group has shown an interrelation between hope of success and
its components with the tendency towards investment risk, irrespective of the investment’s
duration and whether the choice of the financial instrument is done personally or not. In the
case of the general indicator and strong will, one variable rises with the other. In the case of
the solution-finding ability, the tendency towards risk grows with it until the medium level of
the variable and later becomes constant. In the employee group, the interrelation concerned
only the solution-finding ability and one aspect of investment. The results of the presented
research thus show that the hope of success and its components are more important for risktaking tendencies in the entrepreneur, rather than the employee group. However, this
conclusion definitely demands a replication of the research with a greater number of
participants.
K. Sekścińska
68
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Agnieszka WOJTCZUK-TUREK
Warsaw School of Economics
Department of Human Capital Development
INNOVATIVE WORK BEHAVIOR AND PSYCHOLOGICAL
CAPITAL – ANALYSIS OF RELATIONSHIPS
Summary. The purpose of the this study is to identify individual predicators of
employees‟ innovative work behavior (IWB), defined as generating, promoting, and
implementing ideas. Research to date confirms the relationships between innovative
behavior and these individual predicators, which strengthens the justification, and
need, for including psychological capital – comprised of hope, optimism, efficacy and
resilience – into research as an explanatory variable.
The study included research which covered employees from medium-sized
and large companies operating in Poland. As hypothesized, innovative work behavior
was found to be related to employees‟ psychological capital. The results of multiple
regression analysis show that three dimensions, “self-efficacy”, “hope” and
“resilience”, are the main predictors of innovative work behavior.
Keywords: innovative work behavior, psychological capital, creativity in
organizations
INNOWACYJNE ZACHOWANIE W PRACY I KAPITAŁ
PSYCHOLOGICZNY – ANALIZA ZALEŻNOŚCI
Streszczenie. Celem badania jest poszukiwanie podmiotowych uwarunkowań
innowacyjnego zachowania w pracy, rozumianego jako generowanie, promowanie
i wdrażanie pomysłów. Stwierdzone w dotychczasowych badaniach związki
zachowania innowacyjnego ze zmiennymi podmiotowymi uzasadniają potrzebę
włączenia do badań kapitału psychologicznego – obejmującego nadzieję, optymizm,
skuteczność i odporność, jako zmiennej wyjaśniającej.
Badaniami objęto pracowników różnych szczebli średnich i dużych firm,
działających na terenie Polski. Zgodnie z hipotezą innowacyjne zachowanie jest
związane z kapitałem psychologicznym. Wyniki wielokrotnej analizy regresji ukazują,
72
A. Wojtczuk-Turek
że trzy wymiary: „przekonanie o własnej skuteczności”, „nadzieja”, „odporność” są
głównymi predyktorami innowacyjnego zachowania w pracy.
Słowa kluczowe: innowacyjne zachowanie w pracy, kapitał psychologiczny,
kreatywność w organizacjach
1. Introduction
The increase of interest in innovative employee behavior stems from the search for factors
which facilitate the competitiveness of firms based on human capital, as it is more and more
often stressed that, at present, economic value is created, to a significant extent, on the basis
of intangibles such as optimism and hope (Kianto, Hurmelinna-Laukkanen, Ritala, 2010).
Innovative employee behavior is related to key aspects of organizational effectiveness:
generation, promotion and implementation of new ideas which benefit performance (Sanders
et. all., 2010). Thus, both theoreticians and the practitioners are concerned with determining
individual and organizational predictors which can later become a foundation for creative
activities to be undertaken in the workplace. The recognition of such predictors is of crucial
relevance for the practice of human capital management in any organization – it allows to
stimulate the aforesaid behaviors by utilizing the competence potential of the employees, and
to create an appropriate organizational environment for the development of such behavior.
The starting point for the analysis of predicators of innovative work behavior should be
those subjective variables that have the greatest influence on the professional functioning of
the individual. One of them is psychological capital (Luthans, Youssef, Avolio, 2007a),
which is an attempt to aggregate certain psychological resources that are essential to the
explanation of human behavior. The analysis of the relation between psychological capital
and the professional functioning of the individual indicates its significance both in the
professional performance (work efficiency) (Avey, Nimnicht, Pigeon, 2010; Peterson et al.,
2011) and in the motivational aspects (well-being and work satisfaction) (Luthans et. al.,
2007b).
The relationship between innovative behavior and those subjective variables, as
determined in research to date (Janssen, 2004; Ramamoorthy et. all., 2005; Houghton, Neck,
2002; Sanders et. all., 2010; Carmeli, Metair, Weisberg, 2006; Jafri, 2010; Yuan, Woodman,
2010), justifies the need to include psychological capital in studies, as a variable explaining
the creative activity of employees. As to date, it has not been the subject of thorough
empirical exploration.
The purpose of this article is to present the results of research on the relationship between
innovative work behavior and individual dimensions of psychological capital.
Innovative work behavior…
73
2. Theoretical Considerations and Hypothesis
2.1. Innovative Work Behavior (IWB)
The term “innovative behavior” (West, Farr, 1989; Scott, Bruce, 1994; Kleysen, Street
2001; Yuan, Woodman, 2010) is a construct related to employee‟s individual characteristics
within specifically undertaken forms of activity. It is defined as the sum of the individual‟s
intentional actions which are aimed at generation, promotion and realization of new ideas
within a work role, group or organization, in order to benefit role performance, the group or
the organization (Janssen, 2000), at any level of organization (West, Farr, 1989). It comprises,
among others, the development of ideas related both to new products and technologies, and to
administrative procedures which serve to improve relations at a workplace and notably
increase their effectiveness (e.g. search for new technologies, promotion of new means of
goal achievement, application of new work methods).
Innovative work behavior includes intended introduction and use of new and improved
methods of action, therefore it constitutes an intentional activity leading to a defined result.
Other features of this behavior include: generetiveness, effectiveness, complexity/
multidimensionality, processiveness, heuristics.
Innovative work behavior develops in a manner akin to a process (as it is possible to
isolate certain stages in its course), and so is the fact that they do not only encompass
activities related strictly to generation of ideas, but also to taking action which facilitate their
promotion. From such a perspective, innovative behavior reveals itself as a multiphase
process, within which an individual recognizes a problem and, subsequently, generates new
ideas, promotes them, builds support for their implementation, and finally develops an
appropriate model for using them to benefit the organization (Kleysen, Street, 2001; Yuan,
Woodman, 2010).
The decision to implement a specific solution based on some defined, very rational
criteria that takes the current and future situation of the organization into account (in the case
that the innovation project is in a large scale enterprise) reflects one of the perspectives of the
innovation phenomenon, namely the efficiency-oriented perspective (Yuan, Woodman,
2010). This implies that innovative behavior is supposed to bring measurable effects to the
employee, in addition to the organization, e.g. improvement of effectiveness within the
professional role, the feeling of more adequate compatibility of perceived job demands and
a worker's resources, increased job satisfaction, and better interpersonal communication
(Janssen 2000). This, in turn, enhances motivation to perform creative activity in the
workplace. Therefore, innovative behavior of an employee is created by their expectations for
the potential effect this behavior has on job efficacy. An important aspect in taking action
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A. Wojtczuk-Turek
aimed at implementing an idea is to find the basis for converting an idea into capital, and to
obtain social acceptation for its performance, as well as to build the relationship capital for its
implementation. This reflects the second perspective of understanding innovation, i.e. the
socio-political perspective. Generation of an idea is the starting point for actions that are
directed at convincing others on the value of the idea, obtaining acceptance and support of the
decision makers, gaining cooperation and building the relationship capital, which are
indispensable in the implementation process. This requires skillful management of one's own
image (Yuan, Woodman, 2010).
Scott and Bruce (1994) point out three types of behavioral tasks which constitute
innovative behavior: generation, promotion and realization of ideas. However, it has been
suggested considering some other activities within the realm of innovative behavior (which
could be treated as its dimensions): opportunity exploration, idea generation, championing
and application (de Jong, de Hartog, 2010).
The analyses of various types of activities of creative nature conducted by Kleysen and
Street (2001) allowed to isolate 17 types of behaviors which together fit into 5 general
dimensions of innovative behavior. These are: opportunity exploration, generativity,
formative investigation, championing and application.
The above characteristics allows to state that the competences necessary to undertake and
efficiently realize innovative behavior exceed those which are usually associated with
individual innovativeness. To clarify this point, consider creativity. An integral characteristic
of innovative behavior is the realization of ideas, yet this realization aspect does not have to
be present in the case of purely creative behavior. Nevertheless, the fact remains that
implementation of ideas has a creative character as well, since the process is often related to
a need to solve all kinds of problems of organizational, technological, social, etc. nature.
From this point of view, it seems justified to search for innovative behavior predictors within
a wide range of individual and organizational (and also situational) variables, and to
determine the conditions under which they can be undertaken and successfully implemented.
The number of determinants which are included into the field of analysis in relation to this
issue is constantly increasing and continues to stir scholars‟ interest. Both organizational
(De Jong, Kemp, 2003; Ramamoorthy et. all., 2005; Janssen, 2000) and individual
determinants have been undergoing empirical verification. As far as individual determinants
are concerned, the analyses included: the relationship of innovative behavior with, among
others, personality (George, Zhou 2001; Kelly, 2006; Sung, Choi, 2009), initiatives (Talke,
Salomo, Mensel, 2006), proactivity (Kim, Hon, D. Lee, 2010; Seibert, Kraimer, Crant,
2001), distributive and procedural justice (Janssen, 2004; Ramamoorthy et. all.,
2005),
perceived job challenge (De Jong, Kemp, 2003), the perception of organizational climate
75
(Scott, Bruce, 1994), expected positive performance outcomes (Yuan, Woodman, 2010), selfesteem and perceived insider status in the organization (Chen, Aryee, 2007), self-leadership
competences (Houghton, Neck, 2002; Carmeli, Metair, Weisberg, 2006), job satisfaction
(Sanders et. all., 2010) and commitment (Jafri, 2010).
In the context of the analysis of the relationship between innovative work behavior and
psychological capital, all the dimensions (self-efficacy, optimism, hope and resiliency) should
be taken into consideration and related to individual stages of innovative behavior: problem
recognition, activity initiation and generation of ideas and their implementation.
2.2. Psychological Capital
Psychological capital is a positive psychological stage of an individual‟s development,
characterized by: 1) having confidence in the ability to take on and put in the necessary effort
to succeed at challenging tasks (confidence in self-efficacy), 2) making a positive assessment
on the possibility of success now and in the future (optimism), 3) persevering toward goals
and, when necessary, redirecting paths to goals in order to succeed (hope), 4) when beset by
problems and adversity, sustaining and bouncing back and even beyond to attain success
(resiliency) (Luthans, Youssef, Avolio, 2007a; Luthans, Avolio, 2009). Thus, psychological
capital is a constellation of motivational and behavioral trends arising out of four
components: self-efficacy, optimism, hope and resilience. All these components are vital
from a perspective of professional activity.
The current exploration of the influence of psychological capital on professional
functioning of individuals has included the analyses of its relationship with employee's
performance (Avey, Nimnicht, Pigeon, 2010; Peterson et all, 2011), leadership (McMurray et
all, 2010; Caza et all, 2010), feeling of satisfaction (Luthans, Avolio, Avey, Norman, 2007),
climate, commitment (McMurray et all, 2010) and trust (Walumbwa et all, 2011). Apart from
the direct influence of psychological capital on employee's results, there is also an indirect
influence, the supporting organizational climate, which is a moderator of the relationship
between psychological capital and its effects (Luthans, Norman, Avolio, Avey, 2008).
However, both psychological capital and a positive, supporting professional environment are
necessary to achieve professional results. It creates not only favorable conditions for
employee's high performance, but also it conditions their engagement and feeling of job
satisfaction.
Psychological capital comprises the following dimensions: self-efficacy, optimism, hope
and resilience.
Self-efficacy (Bandura, 1997) is one's belief in one's ability to have influence on courses
of action. It is the key element of motivation and determines courses of action, perseverance,
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A. Wojtczuk-Turek
how much effort must be put forth in given endeavors, what emotions accompany it and the
resilience to obstacles and failures, (Bandura, 2001). It also influences the mobilization of
cognitive resources needed to perform tasks. Therefore, it plays a self-regulative role, which
is essential in all the stages of innovative behavior.
Confidence in one‟s own self-efficacy favors taking on initiatives related to innovative
activity. Certainly, this evaluation is rather subjective and includes valuing individual
predispositions and evaluating task difficulties, which results in the conviction in the ability
(or lack of ability) to tackle it. Moreover, self-efficacy affects the perception of obstacles and
the potential of reaching goals and, at the same time, determines the individual's expectations
of effects of their own actions. As Bandura (1997) argues, when one‟s self-efficacy is high,
they are more likely to put more effort into a given task where the activity will be continued
even in face of obstacles. Thus, self-efﬁcacy contributes to employee‟s performance.
Conviction about one‟s self-efficacy may have a general character, but when it has
a specific character, it applies to a particular range of activity, situations, or even tasks. In the
context of innovative behaviors it seems worthwhile to mention “the sense of creative selfefficacy”, which reflects an individual‟s belief in possessing the ability to produce creative
outcomes (Tierney, Farmer, 2002, p. 1138).
Based on this conviction and on anticipated organizational support, an employee may
formulate innovative goals, enabling them to direct attention, mobilize forces and develop
a strategy of operation. Self-efficacy is also vital in further steps of the innovative process,
namely in the idea implementation step. This does not only concern the price for the
possibility of carrying out own ideas in the context of adequate competencies, but also the
aspect of authorization to decide whether and which idea is going to be chosen for
implementation and what methods and resources are going to be used. Lack of decisionmaking power in such a situation will induce the employee to look for support and social
approval for the realization of the suggested solution.
Self-efficacy is related with expected positive performance outcomes; this variable was
analyzed by Yuan and Woodman (2010) in relation to innovative work behavior.
The expected positive performance outcomes are the belief of the employee that their efficacy
of work is expected when innovative behavior will bring improvement of performance or
effectiveness (expressed e.g. by higher capability of reaching goals, work quality or lower
number of mistakes) and benefits from their work role or works unit (Yuan, Woodman 2010).
Optimism represents another element of psychological capital and is perceived as
a personality trait, constant in time and independent of the situation, which is characterized as
a generalized expectancy regarding future outcomes (Scheier, Carver, 1985). It is related to
constructive thought schemes which enable to build one‟s confidence in their own success
77
and to raise the probability of positive situations for the individual. This perspective has its
consequences on undertaking and successful performance of tasks. Above all, it stimulates
activities to reach the set goals. When the outcome of a person‟s action is seen as very
desirable, optimism would tend to correlate with the actual performance (Avey, Nimnicht,
Pigeon, 2010). Optimism is related to the style of justification and signifies a trend towards
stable, internal attributions for positive experiences and external attributions for negatives
ones, e.g. failures (Seligman, 1998). Attributing failure to temporary, local and external
causes helps the individual not to lose motivation for action.
Apart from optimism functioning as a motivator, it can also be a certain activity regulator;
owing to selective perception (focusing on positive aspects of a task), the individual continues
the performance of various tasks (also more difficult and unpleasant ones) and leads them to
a successful end. Thus, the individual may use strategies based on constructive thought
strategies, which are included in self-leadership strategies (Houghton, Neck, 2002). These
strategies include the evaluation and challenging of irrational beliefs and assumptions, mental
imagery of successful future performance, and positive self-talk. Carmeli, Meitar and
Weisberg (2006) underline that constructive thought pattern is essential during the first stage
of the innovation process – recognizing problems and generating new ideas and solutions.
For further stages of innovative behavior, behavior-focused strategies gain significant
importance because they are designed to increase self-awareness, leading to the successful
management of behavior involving necessary but perhaps unpleasant tasks. These strategies
include self-observation, self-goal setting, self-reward and self-evaluation aimed at improving
one‟s own actions.
Talking about optimism, an opposite pole should be also mentioned, namely that of
“unrealistic optimism”, which is an inclination to neglecting potential risks and the evaluation
of subjective chances to avoid unpleasant incidents. Such perception of reality is defensive,
contrary to “realistic optimism”, which allows for the possibility of failure, but assumes an
interpretation of occurrences beneficial for the individual. This realistic optimism influences
the performance and supports further effort; expecting positive results from actions decreases
the probability of resignation from further activity (Avey, Nimnicht, Pigeon, 2010).
The basis for optimism seems indispensable from the point of view of innovative
behaviors directed towards creation (recognizing problems and generating ideas), and
oriented on realization of ideas (idea promoting and performance). A similar situation occurs
in another dimension of psychological capital – hope.
There are a lot of similarities between hope and optimism, because hope is the awaiting
that current actions will have positive results in the future (Zimbardo, Boyd, 2008).
Therefore, similarly to optimism, hope is a kind of belief related to reaching goals. Snyder's
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model (1991) of hope defines it as a positive motivational state that is based on experience of
success, derived from goal-directed activities and plans for their performance. This feeling is
connected with the belief (cognitive process) that an individual is able to reach goals that are
achievable (realistic goals) but, on the other hand, are challenging. Achieving a goal requires
determination, will power, energy, control and ability to generate alternative ways of reaching
this goal. The final component of hope enables one to separate it from other components of
psychological capital – resilience, the belief in own efficacy and optimism. People who have
high hope, direct their efforts towards achievement of goals and their abilities towards
overcoming obstacles to reach success.
As Zimbardo and Boyd (2008) emphasize, hope is one of the components with future
orientation. The future is for the individual the main motivational area and future perspective
creates space for exposure of both optimism and hope. Hope enables to build faith in one‟s
own capabilities in dealing with challenges (realism-based hope). “Future-oriented” people
are characterized by a tendency to accept a postponed reward; they perceive long-term gains
as more profitable than short-term ones, which reinforces them in their actions, even when
facing difficulties. It is hope that creates “emotional safety” and reinforces the individual's
involvement in striving for their goals.
From the point of view of dealing with problems that may arise during the innovative
process, the last component of psychological capital becomes particularly important –
psychological resilience. It combines with other traits, such as endurance and flexibility.
Endurance enables efficient functioning in difficult, demanding or even dangerous conditions
and flexibility is essential in situations requiring adaptive behaviors, e.g. adaptation to
change.
Psychological resilience is the ability to make a successful comeback (to regain balance)
after being assailed by problems, failures, crises or even after positive events (Luthans,
Youssef, Avolio, 2007a). It also enables to deal with stressors (e.g. at work) and, at the same
time, to keep a high level of performance. In case of difficulties, endurance ensures the use of
mechanisms that reduce or eliminate “deficiencies” in employee functioning and enables
them to come back to goal-directed activity (Avey, Nimnicht, Pigeon, 2010). Research
emphasizes that people have natural capabilities to regain and even to increase their adaptive
abilities in adverse conditions (Miller, 2005).
There are three core principles of resilience (Reich, 2006): control, coherence and
connectedness. The feeling of control is combined with the belief that the individual has
personal resources to achieve goals. The belief in the ability to influence the outcome of
events (behavioral control) is related to a specific type of activity in stressful situations, the
adaptation of problem – directed strategy.
79
The sense of coherence is composed of three principle elements: understanding, self-help
and reasonableness and expresses the individual's need for predictable events and removal of
uncertainties. It makes people search for the meaning of things and to gain understanding of
circumstances at hand, even in the face of very difficult situations, and at the same time
providing resources enabling them to deal with a given situation. It allows for mobilization of
resources to overcome the stressor and increases integrity of cognitive, emotional and
behavioral possibilities, which improves the individual's activity effectiveness. Thus, the
individual's perception of a problematic situation becomes clear, which favors proper
decisions and emotions accompanying a difficult situation, stimulating the individual to start
constructive activity.
Next, the “sense of connectedness” relates to behaviors of people experiencing very
stressful situations that direct them to band together (self-organizing). Particularly in the face
of danger people show a tendency towards an increased need of affiliation, which is related to
search of social support. Social support is also an important moderator of response to stressful
experiences. It reduces or neutralizes harmful effects of the stressor.
Abilities connected with psychological resilience are essential for constructive reaction in
stress-generating situations and for long-term effort directed towards dealing with challenges,
while keeping high performance.
Overall, it may be stated that the study of the relationship between innovative behavior
and psychological capital is relevant because each of the components are an important
element that determine innovative activity. The belief in the ability of achieving creative
results will support efforts in the execution of the idea (creative efficacy), and will similarly
support the belief in success now and in the future (optimism). Persistence in carrying out the
idea by using alternative methods of achieving a goal and confidence in success will be the
result of hope, and thanks to psychological resilience the individual will be able to cope with
problems that appear on their way.
In view of the above, it is justified to assume a research hypothesis:
Hypothesis 1. Psychological capital is positively related to innovative behavior
Hypothesis 1a. Self-efficacy is positively related to innovative behavior
Hypothesis 1b. Optimism is positively related to innovative behavior
Hypothesis 1c. Hope is positively related to innovative behavior
Hypothesis 1d. Resilience is positively related to innovative behavior
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A. Wojtczuk-Turek
3. Methods
The goal of the research was to establish one of the individual determinants of innovative
behaviors – psychological capital. The problem addressed in the research concerned the
verification of the assumption that there is a relation between the occurrence of employees‟
innovative behaviors and their psychological capital.
3.1. Measures
Innovative behavior (dependent variable). The variable was measured with 14 item
Innovative Behavior Questionnaire developed by Kleysen and Street (2001). The data was
provided by choosing an answer to every statement from a 6-point scale, where: 1 – “never”;
6 – “always”. In the process of cultural adaptation of the instrument, statistical analyses were
performed for the sake of secondary verification of reliability. The coefficient of reliability α
for the whole instrument amounted to 0.94. On the basis of the factor analysis (KMO = 0.929;
χ2 = 2016.359; df = 91; p < 0.001) performed by the method of Principal Component Analysis
with Varimax Rotation (using Kaiser Normalization), two factors were isolated: recognizing
problems and initiating activities (factor 2, α = 0.83), and generating ideas and implementing
them (factor 1, α = 0.92). Jointly, they account for 62% of variance.
Psychological capital (independent variable). Psychological capital was measured using
a 12-item, shortened version of the Psychological Capital Questionnaire (PCQ)1, empirically
validated by Luthans, Youssef, Avolio, (2007a). The PCQ-24 measures six items of each of
the psychological resource capacities of confidence, hope, optimism and resiliency. The scale
of the items are anchored from “1” (strongly disagree) to “6” (strongly agree). In this study,
the average coefficient alpha was 0.87. The coefficient of reliability for the factors are the
following: efficacy alpha 0.76; hope 0.70; resiliency 0.74; optimism 0.73.
The research methods also accounted for the controlled independent variables, relevant
for the analyzed dependent variables, which comprise: age, sex, education, job seniority, job
position, company size, and line of business.
3.2. Sample and Procedures
The surveys covered 246 employees from companies diversified as to their size and line
of business. The majority of employees who participated in the survey represented large
companies (68%) from the sector of: processing industry and, production (27%), financial
agency services and banking (12%) and telecommunications (10%). Among the respondents,
1
Permission for use granted by the authors.
81
the majority were employees within the age range of 26-35 (60%), with university education
(92%), holding managerial positions (69%), mostly with work experience of over 5 years
(55%). Among the respondents 64% were female and 36% male. The survey was anonymous
and the questionnaire was sent to the respondents via electronic mail. 538 questionnaires were
distributed, and 246 of them were answered and returned.
3.3. Results
The first step in the research procedure was to search for a relationship between
innovative behavior and the measured variables, based on r-Pearsona correlation analysis.
Correlation coefficients for specific variables are presented in Table 1.
Table 1
Correlations among researched variables
Variable
1
2
3
4
5
6
7
8
1.Generating ideas and
implementing them
1
2. Recognizing
problems and initiating
activities
,806**
3. Self-efficacy
,434** ,480**
4. Optimism
,323** ,370** ,459**
1
,572
**
,502
**
1
,518
**
,512
**
**
1
,011 ,182
**
*
,067
1
-,088
,115
,109
-,032 -,172**
-,066
5. Hope
6. Resilience
7. Company size
8. Education
9. Job position
10. Job seniority
11. Sex
,410
**
,421
**
,438
**
,388
**
-,049
-,012
-,030
,122
11
1
-,042
-,237** -,219** -,134*
*
10
1
-,054
,073
9
,061
,056
-,001
,082
-,016
,049
-,032
*
,492
,133
-,002
-,011
,045 ,239
-,023
1
,102 ,157**
**
,040
**
1
**
1
-,069
-,087
**
**
,007 -,184
,122
*
1
12. Age
,092 ,059 ,112 ,120
,018 ,033 ,300
,041 -,258 ,507
-,025
* p < 0.05, ** p < 0.01
The results of the research entitle to claim that there is a significant statistical relationship between the factors of
innovative behavior and psychological capital. It concerns all the dimensions of psychological capital: efficacy,
optimism, hope and resilience.
Source: Author‟s own data.
The most powerful positive relationship was observed in self-efficacy. This result is not
surprising, particularly in the context of analyses of the relationship between creativity and
personality traits, where one of those traits is self-confidence (Barron, Harrington, 1981).
The belief in capabilities to undertake and continue effort needed to succeed in difficult tasks
seems to play an essential role in generating, promoting and realizing ideas. It has been shown
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A. Wojtczuk-Turek
that the belief in self-efficacy has an influence not only on professional qualifications, but
also directly or indirectly, on the efficient performance of professional goals, similar to the
effects of optimism and hope (Stajkovitch, Luthans, 1998).
Self-efficacy, optimism and hope may stimulate employees to initiate activities and to
achieve fixed goals (connected with creating and implementing ideas). This is significant for
one of the innovative behavior dimensions, namely “recognizing problems and initiating
activities”. In contrast, psychological resilience enables one to cope with stressors during the
implementation of solutions and to maintain a high level of performance when setbacks
occur, providing the mechanism to limit or eliminate the loss of functioning and allowing
employees to “bounce back” to goal directed efforts (Avey, Nimnicht, Pigeon, 2010).
Therefore, it seem that resilience has a greater significance for “generating and implementing
ideas”, which is confirmed by the study‟s results.
The variance analysis of innovative behavior factors and psychological capital revealed
the influence of its individual dimensions on creative activity.
Table 2
Results of multiple regression analysis for predictors of innovative behavior
Dimensions of
innovative behavior
Predictors
B
SD
Beta
T
p
Self-efficacy
,475
,114
,278
4,175
,000
Hope
,316
,120
,177
2,636
,009
Resilience
,198
,122
,106
1,627
,105
Optimism
,164
,105
,100
1,565
,119
Self-efficacy
,332
,105
,214
3,153
,002
,272
,111
,168
2,452
,015
Resilience
,357
,113
,210
3,172
,002
Optimism
,048
,097
,033
,500
,617
Recognizing problems
and initiating activities
Generating ideas and
implementing them
Hope
Model
Adjusted
R2 = 0,28;
F(4,273) =
27,739;
p < 0,000
Adjusted
R2 = 0,25;
F(4,273) =
24,078;
p < 0,000
Source: Author‟s own data.
The first model for the factor of “recognizing problems and initiating activities” is wellfitting and reliable (F = 27,739; p = 0,001). It explains 28% of the variance of the obtained
results.
The most powerful predicator of innovative behavior turned out to be the self-efficacy
dimension of psychological capital and it explains 8% of the variance of the obtained results
( = 0.278). Thus, the stronger the employee self-efficacy is, the more often they manifest
innovative behavior.
83
The second model for the factor of “generating ideas and implementing them” also
appeared to be well-fitting and it explains 25% of the variance of the obtained results. In this
case, the strongest predictors are the three following dimensions of psychological capital:
self-efficacy – explaining 5% of the variance of the obtained results, resilience – explaining
5% of the variance of the obtained results and hope – 3%.
The obtained results allow to claim that the key determinant of innovative behavior
related to psychological capital in the regression model turned out to be self-efficacy, which
mostly explains the variability of results related to problem recognition and initiation of
activity, as well as (although to a lesser extent) idea creation and implementation. In view of
the aforementioned results, H1a might be acknowledged as confirmed.
In the case of the second stage of the innovative process (generating ideas and
implementing them), resilience is quite essential in the regression model. It constitutes the
basis of H1d positive verification.
The other two factors of psychological capital, i.e. hope and optimism, are weaker
predicators of innovative work behavior, although they are linked with innovative activity.
Therefore, based on the obtained results, it can be claimed that also H1b and H1c research
hypotheses are empirically supported.
3.4. Discussion
The conducted study concentrated on the relationship between innovative work behaviors
and subjective factors, expressed as psychological capital.
In the context of verified research hypotheses it was determined that manifestations of
innovative behaviors related to problem solving, initiation of activity and implementation of
ideas are connected with all the dimensions of psychological capital.
The obtained result indicates that the specific character of innovative activity, related to
big cognitive effort, the performance of various and long-term activities, the necessity of
gaining resources needed to conduct the idea and the construction of relationship capital for
idea implementation, explain the significant role of all factors of psychological capital in
creating innovative behavior. However, with a particular indication of self-efficacy (including
creativity efficacy), which reflects the belief of individuals in their own capabilities of
obtaining creative results (Tierney, Farmer, 2002). This result is convergent with data
determined in other studies, in which individual innovativeness is combined with the sense of
personal worth and self-acceptance (Robertson, Myers, 1969). A confirmation of the obtained
results are also drawn from the analyses performed by Yuan and Woodman (2010), who
determined the relationship between innovative behavior and another subjective variable –
“expected positive performance outcomes”. This variable is connected with personal traits
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A. Wojtczuk-Turek
(self-confidence, self-control) that reinforce the employee's belief in their self-efficacy. High
creativity efficacy and high self-expectations for creative behavior were strongly related to
creative work involvement (Carmeli, Schaubroeck, 2007). Activation of self-efficacy is much
influenced by highly cognitive capabilities (observed in creative people); these capabilities
increase the likeliness of positive experiences related to the performed tasks, which, in turn,
increases self-efficacy and leads to gaining new skills. Then, self-efficacy plays
a motivational role in the aspect of creative activity initiation. The regulatory role of selfefficacy is expressed by the fact that its high level favors long-term effort to perform tasks
and, thus, also related to efficacy. Both aspects are essential in the case of tasks specific to
creative activity – recognizing problems and initiating activities and generating ideas and
implementing them.
Studies on self-efficacy as a moderating variable in the analysis of the influence of
cognitive ability and conscientiousness on efficacy show that cognitive ability and
conscientiousness relate to self-efficacy but it depends on the task complexity. The study
results show that self-efficacy mediates the relationship of cognitive ability and
conscientiousness with performance on simple tasks, but not on complex tasks (Chen, Casper,
Cortina, 2001).
The obtained study results allow for the assumption that the influence of the individual
dimensions of psychological capital varies in the context of different forms of activity that
compose innovative behavior. While self-efficacy is fundamental for initiation of activity,
that is activities oriented towards the creation of ideas and their implementation, the influence
of resilience is more accentuated in the “generating ideas and implementing them” stage.
At this stage, the employee undertakes various activities that may be related to stress, e.g. the
necessity to overcome barriers that hamper innovations, conflicts being the result of
dysfunctional cooperation of the innovative team, lack of access to necessary resources, etc.
When such difficulties occur, resilience provides mechanisms to limit or eliminate
“deficiencies” in employee functioning and allows to come back to goal directed efforts
(Avey, Nimnicht, Pigeon, 2010).
In the presented studies, optimism and hope had lesser impact (compared with the other
factors of psychological capital) on innovative behavior. Their meaning became more
significant in relation to “problem recognition and initiation of activity”. This point is
confirmed with data quoted in literature that both optimism and hope are related to setting
goals, planning and promoting actions (Peterson et al., 2011).
To summarize. In view of the analysis of the relationship between psychological capital
and innovative work behavior it can be stated that the synergy of all dimensions of
85
psychological capital shall be fundamental to both the individual stages and the effectiveness
of the innovative process.
3.5. Limitations and directions for future research
The review focuses mainly on individual (psychological) aspects of innovative work
behavior in organizations as published in research papers. In future studies for determining
innovative behavior, other organizational aspects related to psychological capital should be
taken into account. It seems that further research in the field in question should also cover
a larger group of variables of individual and organizational character, analyzed within an
interactive model, since the expression of organizational innovative behaviors occurs in
a specific context, which may include factors of facilitatory nature, and also factors of
inhibitory nature.
It would be crucial to include psychological capital in those analyses as a moderator of
impact of subjective and organizational variables.
From the perspective of research limitations, it should be pointed out that the analyzed
results were limited by the lack of control over the variable of “social desirability”, which in
the case of the scales based on a self-report may lead to a distortion of empirical material.
Another limitation concerns the scope of the performed study. It would be interesting to
include cross-cultural analyses, related to the influence of psychological capital on innovative
behaviors in various countries. Such analyses should be conducted on big groups of
respondents, who represent different market sectors.
Bibliography
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Avey J.B., Nimnicht J.L., Pigeon N.G.: Two field studies examining the association
between positive psychological capital and employee performance. „Leadership &
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Joanna SITKO
Lublin University of Technology
Faculty of Management
Department of Enterprise Organisation
INTELLECTUAL PROPERTY MANAGEMENT IN ENTERPRISE
Summary. Management of intellectual property is a set of intertwined activities
subordinate to major business goals of an enterprise. These activities cover
identifying, acquiring, creating, protecting, using and disposing of intellectual
property assets, which are applied together with analysis of applicability, expediency
and possible consequences. These activities, similar to knowledge management, may
be implemented according to general or detailed strategies. General strategies
determine a framework for intellectual property protection activities in an enterprise,
which include development strategies of the entire organisation, whereas detailed
strategies are developed for the implementation of general strategies and relate to
specific, defined intangible assets.
Keywords: intellectual property, intangibles assets, knowledge management,
strategies of the intellectual property management, inventions, utility models,
industrial designs, trade marks
ZARZĄDZANIE WŁASNOŚCIĄ INTELEKTUALNĄ
W PRZEDSIĘBIORSTWIE
Streszczenie. Zarządzanie własnością intelektualną to zbiór, podporządkowanych
zasadniczym celom przedsiębiorstwa, wzajemnie ze sobą powiązanych działań,
polegających na identyfikowaniu, pozyskiwaniu, kreowaniu, ochronie oraz
korzystaniu i rozporządzaniu dobrami własności intelektualnej, których realizacji
towarzyszy jednocześnie analiza możliwości, celowości i konsekwencji ich
podejmowania. Działania te, podobnie jak zarządzanie wiedzą, mogą być realizowane
według strategii ogólnych lub szczegółowych. Strategie ogólne wyznaczają ramy
postępowania w zakresie ochrony własności intelektualnej w przedsiębiorstwie,
uwzględniając jednocześnie strategie rozwojowe całej organizacji. Strategie
szczegółowe są opracowywane w celu realizacji strategii ogólnych i odnoszą się do
konkretnych dóbr niematerialnych.
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J. Sitko
Słowa kluczowe: własność intelektualna, dobra niematerialne, zarządzanie
wiedzą, strategie zarządzania własnością intelektualną, wynalazki, wzory użytkowe,
wzory przemysłowe, znaki towarowe
1. Introduction
Being aware of existing conditions and possibilities to protect intellectual property that
are available to businesses is very important not only for the entities using technological
innovations but also to almost any economic entity that would like to protect at least its
commercial name. Lack of this knowledge may often not only result in losing significant
income but also hinder introducing a thorough intellectual property management process.
The most common mistakes made by entrepreneurs, is first of all: neglecting applying for
protection of intellectual property assets they create, thus unknowingly damaging the novelty
of an invention, utility or industrial model1 (by disclosing the solution before the date of
application for protection in a proper patent office); neglecting transferring the author‟s
rights, for example, on a graphic design project for a trade mark or interior design of an
enterprise‟s premises, an enterprise didn‟t transfer rights (from creator to user) due to the lack
of knowledge that the agreement of transfer of author‟s rights must be in writing to be valid.
Obviously, complete knowledge of existing protection possibilities and actual use of those
doesn‟t guarantee full success. The protected solution may not become attractive to
customers, or simply may be ahead of its time, as happened with the prototype of today‟s
famous iPod designed by Kane Kramer, who applied for protection and was granted a patent
from UK Intellectual Property Office in 1981 for „Digital audio player‟. A picture included in
the application was almost a perfect reflection of today‟s iPod. However, Kramer‟s device
could be equipped with no more than 8MB memory, which allowed for recording only 3.5
minutes of music. This prevented the project from winning popularity and finally led to its
early attempted market failure since the invention was too innovative considering the
technical capabilities available at that time. Yet, market or technology obstacles should not be
mistaken for neglecting proper procedures in intellectual property management, especially if
they could be prevented by better knowledge of available means of intellectual property
protection and basic intellectual property management systems.
1
Novelty of a specific solution, examined worldwide, is a premise for granting an exclusive right for the solution
via its registering with the Polish Patent Office as well as patent offices in most other countries.
Intellectual property management…
91
As we move towards the analysis of issues related to intellectual property management,
I would like to define basic terms of strictly legal nature, especially the concept of intellectual
property2. Property is a civil law term. Property is understood as a right giving the entitled
person the most extensive control over a thing3. According to the Article 140 of the Civil
Code (hereinafter CC4) „The owner may, within the limits specified by statutory law and the
principles of community life and to the exclusion of other people, use a thing in accordance
with the socioeconomic purpose of this right, and in particular may collect the fruits and other
incomes from this thing. He may dispose of that thing within the same limits.” It should be
emphasised that a thing within the meaning of the Civil Code is a material object (Art. 45
CC). Intellectual property though is the ownership of intangible assets (assets, which being
products of human intellect, have no material form), such as for example an invention,
industrial design, trade mark, etc. Intangible assets exist independently from objects that are
merely media allowing for their perception and usage (e.g., a book for a literary work or
a device for an invention). Because of this distinction between the objects of property, we
cannot acknowledge that Art. 140 CC includes intellectual property in its definition5. There
are, however, significant features common for both the property of a thing as a physical object
and all intellectual property rights, which are the exclusive rights of the owner to use an asset
and dispose of the ownership rights of that asset.
In legal doctrine, a dual conception of exclusive rights to intangible assets created by
J. Kohler6 is accepted. According to the conception, intangible assets‟ sensu largo (in a wide
sense) cover both personal interest (e.g., surname, pseudonym, image, dignity, freedom, etc.)
and intangible assets‟ sensu stricto is defined as industrial property assets, or wider as
intellectual property assets7. This article analyses intangible assets in its narrow sense,
because intangible assets, as having patrimonial character (financial value), are the most
commonly used in business activities, often significantly influencing the economic value of
the entire enterprise.
2
3
4
5
6
7
See Skubisz R. (ed.): Własność przemysłowa w systemie prawa, [in:] Prawo własności przemysłowej. System
prawa prywatnego. Vol. 14B, C.H. Beck, Warszawa 2012, p. 66-67.
Skowrońska-Bocian E.: [in:] Pietrzykowski K. (ed.): Kodeks cywilny. Komentarz do artykułów 1-44911,
Vol. 1, C.H. Beck, Warszawa 2005, p. 484.
Law of 23 April 1964. „Journal of Laws”, No. 16, item 93 with changes.
Skubisz R., op. cit., p. 67.
Quoted after Kopff A.” Prawo cywilne a prawo dóbr niematerialnych. Zeszyty Naukowe Uniwersytetu
Jagiellońskiego, Vol. 5, 1975, p. 15.
See ibidem; Poźniak-Niedzielska M.: Kodeks cywilny a prawo na dobrach niematerialnych. Zeszyty Naukowe
Instytutu Badania Prawa Sądowego, Vol. 19/20, 1983, p. 226 and next.
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J. Sitko
In Polish law, the numerus clausus rule of intangible assets is applied, which means that
the catalogue of intangible assets is closed, and may be extended only by introduction of the
proper provision of Law. Protected intangible assets in the narrow sense, as intellectual
property assets may be divided into three categories: solutions, signs and works8. Solutions
include innovations, utility models, rationalisation projects, industrial designs, topography of
an integrated circuit and new plant variations. Signs include trade marks, geographical
indications, legal names of economic entities and their enterprises. Works are intangible
assets protected by the copyright.
2. The essence of intellectual property management
Intellectual property management falls into the wider field of knowledge management.
In doctrine there are various definitions of knowledge management, therefore, it is sensible to
refer its general idea appearing in different works as an accepted definition. Henceforth,
organisational strategy as far as knowledge management is concerned covers two major
elements: first, the exploitation and usage of knowledge already in possession and secondly,
the generation of new knowledge9. We may also find an opinion that knowledge management
may be interpreted on three different levels, depending whether the knowledge is considered
as:
a) product, which is both an innovation and outcome of the enterprise‟s activities and
a good that is produced and then sold by a business,
b) resource collected, distributed and protected by the organisation as a part of an
organisation‟s memory,
c) limitation, which, by influencing the organisation‟s activities, stimulates learning and
adaptation to the imposed conditions.10
Intellectual property management may also be considered within the above three
categories. In the first case, intellectual property management should be seen as creating new
intellectual property assets. In the second, we may think about intellectual property
management as taking actions aimed at:
8
Promińska U. (ed.): Wprowadzenie do prawa własności przemysłowej, [in:] Prawo własności przemysłowej.
Difin, Warszawa 2004, p. 16.
9
Van der Spek R., Kingma J.: Achieving successful Knowledge Management Initiatives, [in:] Liberating
Knowledge.CBI Business Guide, 1999; quoted after Evans C.: Zarządzanie wiedzą. PWE, Warszawa 2005,
p. 234.
10
Tuomi I.: Corporate Knowledge: Theory and Practice of Intelligent Organizations. Helsinki 1999, p. 294.
93
a) identifying intangible assets existing in an enterprise,
b) identifying intangible assets existing in the market, protected by other entities and the
possibility of acquiring rights to use them,
c) protecting available intangible assets:
 identifying protection capability and possibility,
 analysing the needs of protection,
 acquiring protection,
d) using intangible assets within own enterprise and disposing of them for use by other
entities.
In a situation when knowledge is seen as a limitation, then applying the opinion of
K. Klincewicz11 to the field of intellectual property management, we should accept that
intellectual property management means first of all analysing, interpreting and practical use of
knowledge relating to intellectual property law (both in the meaning of the domain of law and
the market situation) and the enterprise modifying its activities accordingly.
Thus, intellectual property management covers first of all:
a) identifying the importance and function of intellectual property in enterprise
activities,
b) creating intellectual property assets,
c) developing intellectual property protection strategies,
d) use of own intellectual property assets,
e) acquiring intellectual property assets from other entities,
f) developing a system of information collection and its flow to obtain, use and protect
intellectual property in a proper way,
g) preventing and combating intellectual property rights‟ infringements,
h) developing systems supporting intellectual property creation,
i) developing rules and regulations for protection and use of intellectual property assets
covering both the employee-employer relationships and the authors‟ remuneration12.
On the basis of the above considerations we should assume that intellectual property
management is a set of intertwined actions supporting major business goals of an enterprise.
These actions cover identifying, acquiring, creating, protecting, using and the disposing
intellectual property assets and they are applied together with analysis of applicability,
expediency and possible consequences.
11
Klincewicz K.: Cele zarządzania wiedzą, [in:] Jemielniak D., Koźmiński A.K. (ed.): Zarządzanie wiedzą.
Wolters Kluwer, Warszawa 2012, p. 86.
12
Okoń-Horodyńska E.: Zarządzanie własnością intelektualną, [in:] Adamczak A., Vall du M. (ed.): Ochrona
własności intelektualnej. Uniwersytecki Ośrodek Transferu Technologii Uniwersytetu Warszawskiego,
Warszawa 2010, p. 341.
94
J. Sitko
3. Intellectual Property Management Strategies
3.1. General Strategies of Intellectual Property Management
Similar to knowledge management, intellectual property management is effective when
implemented according to a certain strategy. The strategies, depending on how detailed they
are, may be general or detailed. General strategies provide a framework for intellectual
property protection activities in an enterprise, including development strategies that fall
within the scope of the strategic management of the entire organisation. Detailed strategies
are developed for the implementation of general strategies and cover specifically defined
intangible assets13.
While developing a general strategy, one should decide, first of all, whether the
enterprise‟s development relating to the intellectual property should be based on intangible
assets created by the enterprise, or rather on the ones acquired from outside. Then, a strategy
of use of the goods in possession of the enterprise should be defined. Considering this,
general strategies may be divided into:
1) expansive strategies: based on protecting intellectual property created within the
enterprise,
2) conservative strategies: using intellectual property that are resources of other entities,
3) continuation strategies: using intellectual property that are resources of the enterprise,
both acquired from other entities or created within the enterprise.
As a rule, the intellectual property management process should begin from identifying
intellectual property assets both within resources of the enterprise and from other entities on
the market, and then further selecting a method of intellectual property development for the
enterprise by:
 initiation or continuation of protection of intellectual property assets that are already
part of the enterprise‟s resources,
 acquiring intellectual property assets from other entities active in the market,
 creating new intellectual property assets within the enterprise or via cooperation with
other entities.
13
Kotarba W., Żurawowicz L.: Zarządzanie własnością intelektualną, [in:] Adamczak A., Vall du M. (ed.):
Ochrona własności intelektualnej. Uniwersytecki Ośrodek Transferu Technologii Uniwersytetu Warszawskiego,
Warszawa 2010, p. 347.
95
In selecting an intellectual property management strategy based solely on the use of
intellectual property assets already available in the enterprise, the following should be
performed prior to initiating action for applying for protection of a specific asset: the analysis
of its protection capacity taking into account different variants and the expediency of
acquiring such protection. Similar activities should also be performed when deciding on
a strategy based on creating new intellectual property goods. After a new asset is created, one
should make sure whether it meets the requirements necessary to obtain protection and then
consider the expediency of such protection and select the method that will be most profitable
for the entire enterprise. The above discussed actions for selecting the most profitable method
of intellectual property asset protection are advisable not only for the companies relying on
creating and implementing technology innovations, like spin-offs or venture capitals, but for
almost any business that creates any sort of intellectual property asset, such as, for example
trade marks. This will further be discussed in this article in the section on detailed strategies
of intellectual property management. A business using intangible assets owned by other
entities on the basis of an agreement, is relieved from taking all the above discussed
decisions, as all issues regarding selecting the method of protection, acquiring and
maintaining protection have been dealt with by the owner of the intangible good. Such an
operational model is used mainly by franchising companies14.
Additionally, in every case when intellectual property assets are used (both created by the
enterprise and acquired by transfer from other entities), it is necessary to assess the usage
regularly. The assessment should contain conclusions for relevance of further use of the
intellectual property goods according to current rules. This may make it necessary to take
decisions for creating new intellectual property assets or acquiring them from a new source.
In such cases, the entire management process as discussed above needs to be repeated.
The discussed basic types of activities contributing to general intellectual property
management strategies are show in figure 1.
14
See Fusch B.: Umowy franchisingowe. Zakamycze, Kraków 1998, p. 45; Bagan-Kurluta K.: Umowa
franchisingu. C.H. Beck, Warszawa 2001, p. 57 and next.
96
J. Sitko
General intellectual
property management
strategies
Acquiring
intellectual
property from
other entities
Creating new
intellectual
property assets
Identifying intellectual property
assets within own resources
and resources of other entities
Identifying
capacity for
protection of
intellectual
property assets
Identifying capacity of
protection of own
intellectual property
assets
Examining expediency
of protection of own
intangible assets
Acquiring
protection
Using intellectual
protection and possible
disposal of it (transfer)
Assessment of use of
Examining
expediency of
intangible assets
Failing to
acquire
protection
Acquring or
continuation of
protection
Using intellectual
Using intellectual
Fig. 1. Intellectual property management system in an enterprise
Rys. 1. System zarządzania własnością intelektualną w przedsiębiorstwie
Source: own work.
97
3.1.1. Expansive Strategies
General expansive strategies discussed above, based on protecting intellectual property
created in an enterprise include:
a) complete protection strategy (all intellectual property assets of an enterprise are
protected),
b) limited protection strategy (only selected intellectual property assets of an enterprise
are protected ) that may be divided into two categories:
 basic effect protection strategy,
 expanded effect protection strategy.
While undertaking intellectual property management within a specific organisational
structure, an economic entity must first of all consider whether to protect all or only selected
intangible assets that the business owns, then consider to what extent they should be protected
(narrowly, only to a minimal extent or widely, in a comprehensive way using different
variants of parallel protection for a specific intangible asset). A good example of such
comprehensive protection for technology innovations may be a strategy resulting in
constructing an intellectual property shield impenetrable by a potential infringer. Thus, it is
possible to apply for protection of the technology solution itself as an invention or utility
model and for the industrial design by protecting the outer look of a device produced
according to the invention or utility model. Additionally, for innovative technological
solutions, it is advisable to also apply at the same time for trade mark protection of the name
given to such a device by its creator. It is worth mentioning though that while a patent expires
after 20 years (and the right arising from registration of an industrial design after 25 years),
the exclusive right to a trade mark may be extended every 10 years without a final expiration
date.
Using a strategy limited to the protection of selected intellectual property goods, an
economic entity should consciously take decisions regarding the goods excluded from
protection, choosing either a basic effect protection strategy or extended effect protection
strategy. Choosing a basic effect protection strategy, an economic entity must be prepared to
face the possibility of losing the unprotected goods to another organisation. Choosing an
extended effect protection strategy, an economic entity takes purposeful actions to prevent its
competitors from expropriating the unprotected intellectual property goods. The simplest
method of implementing such a strategy is the disclosure of unprotected solutions because, as
was mentioned above, the novelty of a solution (with no earlier public disclosure) is
a necessary condition to register intangible assets with a patent office. Such intangible assets
were included in one of the above discussed categories of solutions (like inventions, utility
models, industrial designs). It should be emphasised, however, that this strategy cannot be
98
J. Sitko
implemented with regard to trade marks or commercial name, as it is not novelty which is
a condition necessary for protection but the risk of confusion by the customers as to the origin
of goods or the identity of the enterprise or entrepreneur.
3.1.2. Conservative Strategies
General conservative strategies using intellectual property that is owned by other entities
include first of all:
a) strategy of patent clarity,
b) strategy of acquiring the assets from another entity,
c) waiting strategy.
Strategy of patent clarity is based on legal use of an intangible asset protected for the
benefit of a third party, by using it on the territories where the exclusive right of the entitled
person does not extend. Implementation of this strategy requires examining so called patent
clarity in a country where production and distribution of a given solution is planned. Such
examination may be applied for both categories of intangibles goods: solutions and signs as
industrial property asset protection is executed on a territorial basis, most often within
a country15. It should be emphasised that with regard to situations when novelty is a condition
for protection of a solution (determined worldwide), it is only possible to use the asset on
territories not included in the owner's monopoly, and it is impossible to obtain protection for
such an asset again, as it would not meet the criteria of novelty.
If it is impossible to use the discussed above strategy based on examination of patent
clarity, an economic entity most often decides for a strategy to acquire the assets from another
entity by concluding agreements allowing them to legally use intellectual property of those
entities on territories covered by the exclusive right. Such agreements usually are constructed
as licence or sale agreements16. We should bear in mind that a licence grants only
authorisation to use an intangible asset, so, as opposed to the agreement of sale of a right,
does not result in transfer of the ownership right.
The last of the above mentioned strategies is the conservative strategy – the waiting
strategy – which applies only to intangible assets covered by the solutions category, and it is
based on waiting until the protection period is finished (e.g., 20 years for inventions). Then it
is possible to use a solution that, after the expiration of protection, is open for public use.
Protection given by registration cannot be extended with regard to assets in the form of
15
See Szewc A., Jyż G.: Prawo własności przemysłowej. C.H. Beck, Warszawa 2003, p. 148 and next;
Kostański P. (ed.): Prawo własności przemysłowej. Komentarz. C.H. Beck, Warszawa 2010, p. 333.
16
Szewc A., Jyż G., op.cit., p. 211 and next.; Vall du M.: Prawo patentowe. Wolters Kluwer, Warszawa 2008,
p. 278 and next; Szymanek T.: Umowy z zakresu własności intelektualnej i przemysłowej. Europejska Wyższa
Szkoła Prawa i Administracji, Warszawa 2009, p. 20 and next; Szewc A., Zioło K., Grzesiczak M.: Umowy
jako prawne narzędzie transferu innowacji. Polska Agencja Rozwoju Przedsiębiorczości, Warszawa 2011,
p. 21 and next.
99
solutions, excluding so called supplementary protection right, which is a possibility to extend
patent protection by 5 years at the most. This applies only to medical products and plant
protection products17. A waiting strategy is very often applied in the pharmaceutical sector
where producers wait for the patent to expire to produce and market so called generic
medicines.
3.1.3. Continuation Strategies
The rules for using intellectual property within the resources of a specific enterprise may
be characterised as:
a) transfer strategy, or
b) strategy of monopolizing: protection of intellectual property assets.
An economic entity, obtaining protection of an intellectual property good for its benefit
should take into consideration whether it would like to use it exclusively or would like to
authorise other market entities to use it18. Each way has its advantages and disadvantages
depending on the good under protection and the type of protection given. Granting licences,
or even developing franchising networks, is an opportunity to extend the customer base and
maximise income, but on the other hand, it requires building systems to control quality of
new outlets to keep its reputation. Monopolizing gives an opportunity to control prices,
for example, of products produced according to the protected solution, but, at the same time,
it may have its downside in the form of opportunity cost: for example, in the case of a short
market life (short time of popularity caused by fashion or rapid technology development) of
a solution, income could be higher with the transfer strategy, as it would rapidly expand the
sales network.
It should also be emphasised that the above discussed strategies may be applied in
parallel, giving various hybrid strategies.
3.2. Detailed Strategies of Intellectual Property Management
Detailed strategies, as earlier discussed, apply to taking decisions regarding the type and
scope of protection of specific intellectual property assets within an enterprise. Thus, they
mainly require:
a) choice of the sign, solutions or works to be protected,
b) defining the system and scope of protection (in the territorial and temporal meaning).19
17
Vall du M.: Prawo patentowe. op.cit., p. 344 and next; Nowicka A.: Dodatkowe prawo ochronne. „Studia Prawa
Prywatnego”, Vol. 3(14), 4(15), 2009, p. 75 and next.
18
See Kotarba W. (ed.): Zasady korzystania z ochrony wiedzy, [in:] Ochrona wiedzy a kapitał intelektualny
organizacji. PWE, Warszawa 2006, p. 151 and next.
19
Kotarba W., Żurawowicz L.: op.cit., p. 349.
100
J. Sitko
Deciding for the type of protection of a specific technical solution, an economic entity
should consider first of all whether to make the protection public (obtained via registering the
solution with the appropriate patent office) or whether to protect the solution by not
disclosing it and keeping as know-how20. Which of those two methods will be chosen
depends on numerous factors, foremost on whether it is easy to copy a solution. In the case
when it is possible to reproduce or imitate a product containing protected solutions it is
advisable to rely on protection based on registration rather than based on trade secret. In
a situation when it is not possible (nor easy) for a potential competitor to become acquainted
with the produced product (device) and to copy it, protection based on know-how may be
considered. Another factor to be taken into consideration is the anticipated period of market
life of the solution (protection period). Protection by know-how has no time limit and may be
continued until the solution is disclosed. Know-how should be chosen when, first, the
anticipated market life of a solution is shorter than waiting for granting protection by a patent
office21 (procedure for granting a patent by the Polish Patent Office takes approximately
5 years) or when it is significantly longer than the time of protection by a patent (in Polish
law it is 20 years from the date of filing application with the Polish Patent Office) or
protection right for utility model (in Polish law 10 years from the date of filing an application
with the Polish Patent Office). Significant differences in both protection systems may be also
seen in the costs: protection based on trade secret is much less expensive than protection by
registration. A good example of protection based on know-how is the formula of one of the
world‟s most famous soft drinks: Coca-Cola, which have remained secret for almost 120
years.
Deciding for protection of a technology solution within the registration system, an
economic entity should first decide whether to file an application for an innovation or utility
model. While taking this decision the following should be taken into consideration:
a) whether the solution has features of innovation (innovation level),
b) what are the costs of protection,
c) what protection period would be sufficient for effective use of the solution.
In deciding for protection by registration, the territorial scope of protection should also be
considered. De lege lata is the system of country patent protection, which means that an
economic entity must obtain as many patents as the number of countries in which it wants to
have exclusive patent protection rights (also for so called „European patent‟ it is necessary to
20
Sołtysiński S.: Umowy know-how, [in:] Skubisz R. (ed.): Prawo własności przemysłowej. System prawa
prywatnego. Vol. 14A. C.H. Beck, Warszawa 2012, p. 657 and next.
21
Reitzig M.: Strategic Management of Intellectual Property. “MIT Sloan Management Review”, spring 2004,
p. 37.
101
validate the patent separately in every member-country of the European Patent Convention22,
in which the rightful owner would like to obtain exclusive rights)23. The issue of territorial
scope of protection is especially important because extending the patent‟s protection is
possible only within the first 12 months form the first application date, according to the
convention precedence rule, as given by the Paris Convention on Industrial Property24.
Also, detailed strategies of management with regard to intangible assets within the
category of signs should focus first of all on deciding on the most appropriate method of
protection. For example, an enterprise logo, a purely graphical symbol or a graphical-lexical
symbol distinguishing the enterprise, may be protected as a commercial name on the basis of
the Unfair Competition Law25 without the need for registration, according to Art. 5 of the
Law, by the fact of use of the mark in business activity alone is sufficient to obtain protection.
However, an economic entity may decide for extended protection, filing an application for
protection of the graphical or graphical-lexical symbol as a trade mark and, possibly, as
industrial design as well26. Numerous businesses protect the same mark or outer look of
a product both as a trade mark and an industrial design (e.g., BP petroleum stations symbol as
a yellow sun, outer look of packaging of JERZYKI cookies, etc.).
Also, the objective scope of protection of a specific sign may be differently constructed,
which applies especially to signs consisting of both words and graphics, as it is possible to
apply separately for protection of the word mark (obtaining exclusive right to use the word for
goods enumerated in the application) and for the graphical mark (obtaining exclusive right to
use the graphics for goods enumerated in the application). It is also possible to apply for
protection of only one form of the mark: as a graphical-lexical mark (obtaining exclusive
right for using the mark as a compilation of different lexical and graphical elements, which
results in a weaker protection of the word itself). Another variant, based on one application of
the mark as a whole, as a rule results in more narrow protection than the protection provided
by applying separately for the graphical element and the word.
22
The Convention on the Grant of European Patents (EPC) Adopted on October 5, 1973 at München, Entry into
Force on October 7, 1977 Amended on December 21, 1978 Amended on December 17, 1991 Amended on
December 13, 1994 Amended on October 20, 1995 Amended on December 5, 1996 Amended on December
10, 1998 Amended on October 27, 2005
23
Vall du M.: Wynalazki i wzory użytkowe w prawie międzynarodowym i prawie Unii Europejskiej. Studia
Prawa Prywatnego, Vol. 4(19), 2010, Vol. 1(20), 2011, s. 67 i in.
24
Paris Convention for the Protection of Industrial Property of March 20, 1883, as revised at Brussels on
December 14, 1900, at Washington on June 2, 1911, at The Hague on November 6, 1925, at London on June
2, 1934, at Lisbon on October 31, 1958, and at Stockholm on July 14, 1967, and as amended on September
28, 1979.
25
Law of 16 April 1994. „Journal of Laws”, No. 47, item 211 with changes.
26
Sitko J.: Kumulacja i kolizja prawa do znaku towarowego i wzoru przemysłowego w prawie krajowym
i unijnym. Zeszyty Naukowe Uniwersytetu Jagiellońskiego. Prace z Prawa Własności Intelektualnej,
Vol. 116, p. 89-97.
102
J. Sitko
Economic entities may also choose, from many possibilities, the territorial scope of
protection: they may decide for protection only on the territory of Poland (protection granted
by the Polish Patent Office) or in selected countries (application for protection may be filed
individually to every national patent office or filed within international trade mark protection
system by virtue of the Madrid Agreement27 or the Madrid Agreement Protocol28)29.
Economic entities may also decide for a uniform protection in all EU Member States filing an
application for a Community trade mark (protection is performed by OHIM – The Office of
Harmonization for the Internal Market, which, by registration of the Community trade mark,
grants the applicant exclusive right for a given mark automatically effective in all EU
Member States).
4. Conclusion
All the above considerations lead us to the conclusion that intellectual property
management may be defined in different ways and implemented at different levels. Moreover,
intellectual property management, similar to knowledge management, may be implemented
according to various strategies, which may be divided into general and detailed strategies.
General strategies first of all draw a framework for intellectual property activities in an
enterprise as far as intellectual property protection is concerned, taking into consideration
holistic strategies of the development of the organisation. Whereas, characteristic features of
detailed strategies is their relation to the protection of specific intangible assets. Nonetheless,
detailed strategies are often strictly related to general strategies, as they are developed for the
implementation of general strategies.
In conclusion, intellectual property management, as a subject interfacing various scientific
disciplines, is a complicated subject that requires knowledge and experience of both
management and legal nature, especially concerning intellectual property law. Not
overestimating the importance of the subject, it seems advisable that economic entities, in
order to improve efficiency and profitability of their activities, should create within their
organisational structures special units responsible for intangible asset management. Smaller
27
Madrid Agreement Concerning the International Registration of Marks of April 14, 1891, as revised at
Brussels on December 14, 1900, at Washington on June 2, 1911, at The Hague on November 6, 1925, at
London on June 2, 1934, at Nice on June 15, 1957, and at Stockholm on July 14, 1967, and as amended on
September 28, 1979, „Journal of Laws”, No. 116, 1993, item 514.
28
Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks adopted at
Madrid on June 27, 1989, as amended on October 3, 2006 and on November 12, 2007, „Journal of Laws”,
No. 13, 2003, item 129.
29
Application to the system of international protection is filed with World Intellectual Property Organisation
(WIPO) located in Geneva.
103
entrepreneurs, or economics entities for which intangible assets are not an important factor in
their operations, may find it useful to consult specialists within appropriate fields.
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Technologii Uniwersytetu Warszawskiego, Warszawa 2010.
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Nowicka A.: Dodatkowe prawo ochronne. Studia Prawa Prywatnego, Vol. 3(14), 4(15),
2009.
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M. (ed.): Ochrona własności intelektualnej. Uniwersytecki Ośrodek Transferu Technologii
Uniwersytetu Warszawskiego, Warszawa 2010.
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Naukowe Instytutu Badania Prawa Sądowego, Vol. 19/20, 1983.
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własności przemysłowej. Difin, Warszawa 2004.
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Review”, spring 2004.
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w prawie krajowym i unijnym. Zeszyty Naukowe Uniwersytetu Jagiellońskiego. Prace
z Prawa Własności Intelektualnej, Vol. 116.
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artykułów 1-44911, Vol. 1. C.H. Beck, Warszawa 2005.
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przemysłowej. System prawa prywatnego, Vol. 14A. C.H. Beck, Warszawa 2012.
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przemysłowej. System prawa prywatnego, Vol. 14A. C.H. Beck, Warszawa 2012.
18. Szewc A., Jyż G.: Prawo własności przemysłowej. C.H. Beck, Warszawa 2003.
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Polska Agencja Rozwoju Przedsiębiorczości, Warszawa 2011.
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Wyższa Szkoła Prawa i Administracji, Warszawa 2009.
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[in:] Liberating Knowledge, CBI Business Guide, 1999.
Sebastian BAKALARCZYK
Lodz University of Technology
Faculty of Organization and Management
Department of Management Systems and Innovation
LONGSTAFF-SCHWARTZ MODEL AND FACILITY PRICING IN
MANAGEMENT – FINANCIAL ANALYSIS AND DATA SOLUTIONS
Summary. The ability to adequately select instruments used in financial analysis
plays an important role in the management process. The Longstaff-Schwartz model
has been created taking into account option spreads with their present and identifiable
risks. This paper provides a review of the literature, historical development of key
concepts and data analysis which are based on them.
Keywords: Longstaff-Schwartz Model, management, financial analysis, options
MODEL LONGSTAFFA-SCHWARTZA I JEGO WYCENA
W ZARZĄDZANIU – ANALIZY FINANSOWE I ANALIZY DANYCH
Streszczenie. Istotne znaczenie w procesie zarządzania odgrywa umiejętność
adekwatnego dobrania instrumentów wykorzystywanych w analizie finansowej.
Model Longstaffa-Schwartza został stworzony z myślą o spreadach opcji,
uwzględniając występujące, identyfikowalne ryzyko. W opracowaniu zaprezentowano
badania literaturowe, zmiany historyczne podstawowych koncepcji oraz analizy, które
na nich bazują.
Słowa kluczowe: Model Longstaffa-Schwartza, zarządzanie, analiza finansnowa,
opcje
106
S. Bakalarczyk
1. Introduction
Longstaff and Schwartz1 derive a simple closed form solution to value credit spread
options and assume that the logarithm of the credit spread, on which the option is based,
follows a mean reverting process. What is more, a riskless rate is assumed to follow
Vasicek’s2 assumptions. The authors use monthly observation for the credit spread between
highly graded Moody’s bond indices and long-term U.S. Treasury bond yields over the years
1977-1992. Longstaff and Schwartz define the value of a European credit spread call option
as C(X, r, T), where X is the logarithm of the credit spread and K is the strike level of the
spread.
Additionally the payoff function is:
H ( X )  max( 0, e x  K ) ,
(1)
After a number of transformations one obtains the closed form solution for the value of the
European call option credit spread:
C ( X , r , T )  D ( r , T )e

n2
2
N (d1 )  KD (r , T ) N (d 2 ) ,
(2)
where N( ) stands for the standard normal distribution function with mean μ and variance η2
and D(r, T) is the riskless discount bond with maturity T.
2. Implications of the Longstaff and Schwartz (L-S) Model
The authors noticed that due to the mean reversion of the log spread and riskless rate,
the model possesses interesting properties. The Value of the call option can be smaller than
its intrinsic value, if the option is in-the-money. Once the credit spread is above the long run
mean, it is expected to approach its mean value, and hence, decline. So, in-the-money call
options are less likely to remain in this state over time and the value of the option can be
below it φnsic value because of the expected decrease in the credit spread. Longstaff and
Schwartz3 note that this fact is contrary to the Black and Scholes4 model where the underlying
asset appreciates following the riskless rate in the risk neutral valuation framework. What is
more, with time to maturities ranging from 0.5 to 1.5 years it was found that there might
1
Longstaff A., Schwartz E.: Valuing Credit Derivatives. „Journal of Fixed Income”, 1995.
Vasicek O.: An equilibrium characterization of the term structure. „Journal of Financial Economics”, No. 5,
1977, p. 177-88.
3
Longstaff A., Schwartz E.: op.cit.
4
Black F., Scholes M.: The pricing of options on corporate liabilities. „Journal of Political Economy”,
No. 81(2), 1973.
2
Longstaff-Schwartz Model…
107
appear a negative convexity when it comes to the price of the call option due to mean
reversion. Longstaff and Schwartz found an interesting implication of the mean reverting
motion on Delta. They state that similarly to the Black-Scholes formula, Delta on a call
spread option remains positive. However, as the time to maturity goes to infinity, Delta
reduces its value to zero. The authors also noted that Delta is decreasing as a function of
credit spread, meaning the function becomes convex from concave as time to maturity
increases. L-S model implies that a long-term (over 12 months) option written on the credit
spread may not be a good hedging instrument. Moreover, they find that for some options,
price change is more sensitive to changes in the underlying when being out-of-the-money
than in-the-money. Following is the Longstaff and Schwartz mean reverting processes of the
log spread and risk-free rate are of the form shown in the fig. 1.
dX = (a – bX)dt + sdZ1
Dr = (α – βr)dt + φdZ2
dX
Change in the natural logarithm of
spread level
dr
Change in risk-free rate
a
Equilibrium parameter
α
Equilibrium parameter
b
Spread of adjustment
β
Spread of adjustment
S
Volatility of the logarithmic spread
φ
dt
dZ1, dZ2
Volatility of the short-term interest
ratio
Time period when change commences
Wiener processes of the log spread and risk-free ratio rate respectively
Fig. 1. Parameters describing the mean reverting processes of the log spread and risk-free rate
Rys. 1. Parametry opisujące średnią procesu powracania log spread i stopy wolnej od ryzyka
Source: own study.
It should be mentioned that two methods of parameter estimation will be used: Ordinary
Least Squares (OLS) and Maximum Likelihood (ML). There is a difference in notation in the
mean reverting process equations between the original representations made by OrnsteinUhlbeck and the one depicted in the previous data. It originates from the multiplication of the
term b(X X ) from the former approach, leading to the formula: (bX bX ). This, in turn is
equivalent to (a bX), as a bX. The log spread mean reverting process coefficients,
and 1, are estimated with the use of regression. Coefficients X and b are obtained from
formulas of the form shown (Dixit and Pindyck5).
0
5
Dixit A.K., Pindyck R.S.: Investment under Uncertainty. Princeton University Press, New Jersey 1994.
108
S. Bakalarczyk
Riskless rate rt mean reverting process coefficients will be estimated after running
the following OLS regression:
rt 1   0   1r1   t , r ,
where, r
t+1
(3)
– is the daily change in the risk-free rate; rt – is the riskless interest rate of the
previous day. It should be stressed that the remaining procedure and coefficient estimation is
analogical to the log spread coefficient estimation and is done with the use of:
ˆ
r 0 ,
ˆ1
(4)
ˆ   r ,
(5)
  1n(1   1 ) ,
(6)
 , r
1n(1   1 )
,
(1   1 ) 2  1
(7)
where ,r (also notated as ,r) corresponds to the standard deviation of errors from equation
above. All estimations are made with the use of Eviews 5 software.
This method also uses discrete data to estimate coefficients of the mean reverting
processes. The Maximum Likelihood method consists of fitting a mathematical model to
historical data. In other words, the maximum likelihood function is responsible for finding the
coefficients of the given equation by maximizing the likelihood of their occurrence. The ML
estimation is done for both the log spread and riskless rate with the use of Matlab v 7.5.
Having estimated the mentioned parameters, one has to calculate the correlation
coefficient between the two Wiener processes dZ1 and dZ2, as follows from Longstaff and
Schwartz. The Correlation coefficient indicates the strength and direction of the relationship
between both processes and is of the form:

1 n
 (dZ1  dZ1 )(dZ2  dZ 2 )
n i 1
,
 dZ  dZ
where dZ1 and dZ2 are obtained after rearranging equation 8 respectively,
1
(8)
2
Moreover 1 1.
Bearing in mind the assumptions of the model, the L-S approach allows for the possibility
that the interest rate risk and changes in spread are priced by the market: hence, the market
risk premiums are incorporated in a and α terms. With this framework, the value of the
European call written on the credit spread F(X, r, T), with payoff function H(X) and
109
expiration time T, must solve the following Partial Differential Equation (PDE), according to
Longstaff and Schwartz:
s 2 Fxx
2
 sFXr 
Frr  (  r ) Fr  (a  bX ) FX  rF  FT  0 ,
2
2
(9)
where the initial condition is F(X, r, 0) H(X)
The closed form solution for the value of the call option is as follows:
C ( X , r , T )  D ( r , T )e

2
2
N (d1 )  KD (r , T ) N (d 2 ) ,
(10)
where N(d) stands for standard normal distribution function. Moreover, X is conditionally
normally distributed with mean μ and variance η2 given by the following equations:
1
b
  Xe bT  (a 
D
s
s
)(1  ebT ) 
(1  e (b   )T ) ,

 (b   )
D
2 
D
s 2 (1  e2bTD )
,
2b
(11)
(12)
Additionally the payoff function for the call option buyer is:
H ( X )  max(), e x  K ) ,
d1 
 1nK     2

,
d 2  d1   ,
(13)
(14)
(15)
It should be mentioned that D(r, T) is the price of the risk-free discount bond, or in other
words the discount factor at which the option is discounted to its present value, and equals e
rT

; where r is the riskless rate (yearly basis), here assumed equal to the 3-month LIBOR rate
from the last day of the estimation period. As follows, (Hull6) one can define:
TD  trading  days  until  maturity ,
T
calendar  days  until  maturity
.
calendar  days  per  year
(16)
(17)
Both T and TD are equivalent and denote the same period of time. The difference between
these formulas comes from the fact that the risk-free rate is compounded on a yearly basis and
the option is counted on a trading day basis. Considering the number of trading days in
6
Hull J.C.: Options, Futures and Other Derivatives. Prentice Hall, New Jersey 2002.
110
S. Bakalarczyk
a year, as stated by Hull equals 16-17. One has to remember, however, that the number of
trading days should be calculated separately for each year, to produce accurate results.
Mun implies that sensitivity analysis shows the outcome of the option price change with
respect to the unit change of the underlying variable. Due to the complexity of the pricing
model, most of the sensitivity measures are hard to estimate. However, following
Longstaff and Schwartz, it is possible to obtain the Delta. The sensitivity of the option
with respect to other coefficients will be performed with the use of graphs.
This is an important parameter used for option hedging. As mentioned by Hull, Delta is
the rate of change of the price of the option with respect to change in the underlying.
Following the author, it is the number of units of stock (when stock is the underlying) that
should be kept for each short position in an option in order to create a riskless hedge
(the whole process is also called Delta Hedging). Delta (can be depicted as a slope of the
function-relating price of the option to the underlying price.

C
,
X
(18)
where, C is the price of the call option, and X is the underlying.
As implied by Hull, it can be shown that for the European call option following GBM, written
on non dividend paying stock Delta equals:
 B  S  N (d1 ) ,
(19)
where, N(d1) is related in this case to Equation (2).
Delta hedging, when buying the European call option, involves maintaining a short
position equal to N(d1) in the underlying asset. In the case of the L-S approach, since the
formula for the option price is different than the original Black-Scholes7, the Delta will be
different as well.
Longstaff and Schwartz found that after differentiating according to equation 20, one
obtains the closed form solution for Delta in L-S approach.
  D (t , T )e
7

2
2
N (d1 )  e  bT  e  X .
(20)
Black F., Scholes M.: The pricing of options on corporate liabilities. „Journal of Political Economy”,
No. 81(2), 1973.
111
3. Results Obtained After Applying the Model
A cursory look at the log TED spread series (fig. 2) suggests that it follows a mean
reverting process. It should be stressed that it is especially well visible when looking at time
periods like those of years 1997-2001 and 2005-2007 (including the estimation period). Even
during the time of the “credit crunch”, data seem to be mean reverting, although being slightly
above the 10-year TED spread mean (which is close to -1). It can be also seen that the
coefficients of this processes will vary throughout time but are impossible to be estimated by
just looking at the series. One can notice that similar conclusions can be drawn when looking
at the raw TED spread data.
Fig. 2. Log TED spread (1997-2008)
Rys. 2. Log TED spread (1997-2008)
Source: own study.
Since it is suspected that data follow a mean reverting process characteristic, one can
proceed to running the statistical tests. Following the methodology, first one should test
whether the whole available series is mean reverting.
Table 1
Regression results, daily changes in the log the TED spread
Log TED
Spread (X)
p-value
Augmented D-F
γ0
γ1
t-stat γ0
t-stat γ1
R2
–0.01926
–0.01926
–5.19315
–5.242199
0.009475
(0.000)
(0.000)
S.E.
regression
0.127058
–3.12472
Looking at the value of the coefficients as well as the t-statistic, it can be shown that γ1 is
significantly negative (99% confidence interval). Moreover, Dickey-Fuller test rejects the null
hypothesis at the 95% confidence interval implying that the 10-year log spread does not
112
S. Bakalarczyk
follow a random walk process which, consequently, leads to the conclusion that it is mean
reverting. When it comes to testing for a mean reverting process using data from the
estimation period, the results are as follows in tab. 2
Table 2
Regression results, daily changes in the log of TED spread
Log TED
Spread (X)
p-value
Augmented D-F
γ0
γ1
t-stat γ0
t-stat γ1
R2
–0.01935
–0.03415
–2.21359
–2.228168
0.016387
0.0275
0.0266
S.E.
regression
0.068989
–2.64332
Having in mind the previous reasoning, it can be deducted that the log TED spread from
the estimation period follows a mean reverting process. It should be stressed, however, that
the random walk hypothesis can be rejected at 90% confidence interval, indicating a bit
weaker, but still significant proof of the mean reverting process. What is more, all estimated
coefficients are statistically significant at a 95% confidence interval. One can notice that in
both OLS regressions made, R 2 is very small, indicating that the regression does not
describe the deviation from the sample mean (of changes in the log spread) very well.
However, coefficient values estimated using the ML method (in Matlab v 7.5) gave
exactly the same values, increasing credibility of the obtained results. Since it can be shown
that the data is mean reverting one can proceed to testing for homoscedasticity. It should be
stressed that testing will be done using the log spread as well as risk-free rate data from the
estimation period 03/14/2006 – 05/22/2007.
Looking at fig. 3, one can notice that the series is characterised by small variability
within the estimation period. The logarithm of the TED spread oscillates within a narrow
range of (-6, -5) implying that the data is homoscedastic.
Similar conclusions can be drawn depicting the behaviour of the riskless rate. The rate
moves around a relatively tight range of (4.6%-5.2%) suggesting that the variance of the
series is constant throughout the estimation period and implying that one can use the
Vasicek’s model to represent the behaviour of the riskless rate.
The cursory testing provides only the preliminary, and not very precise, proof that the
data has a constant variance. One should now proceed to statistical testing to confirm or
contradict the results from the initial analysis.
113
Fig. 3. Testing for homoscedasticity – The log TED spread Cursory Testing
Rys. 3. Testowanie homoscedasticity – The log TED spread Cursory Testing
Source: own study.
Table 3
ARCH LM test results – ARCH LM test
Riskless rate r
F-stat
N*R2
1.570268
30.2762
0.059942
0.0655
Value
Probability
Log spread X
F-stat
N*R2
1.683287
13.26274
0.102138
0.103124
The data implies that the null hypothesis of no heteroscedasticity cannot be rejected at
a 95% confidence interval for the riskless rate and a 90% confidence interval for the log
spread. Hence, the ARCH LM test proves the observation made when eye-balling the data,
leading to a final conclusion that both can be assumed to be homoscedastic. Last but not least,
one should check the distribution of the log spread, to find the model that best fits the data.
Table 4
Summary statistics for the TED spread and changes in log spread
Spread (S)
Log Spread (X)
Mean
0.003
0.001
Std Dev
0.001
0.069
Kurtosis
2.513
3.942
Skewness
0.2
–0.086
No of observations
300
300
The data shows that the Kurtosis coefficient of the log spread is a bit higher than in
a normal distribution (it should be 3) and that there is a negative skewness. However, since
the values do not differ from the normal distribution to a large extent, it is assumed that the
log spread is approximately normally distributed.
Following steps stated in the previous section, from the analyses shown so far, one can
conclude that it is appropriate to use the Longstaff and Schwartz’s (1995) model. However,
before applying the model to stand-by facility pricing, one has to first estimate the
coefficients of the model.
114
S. Bakalarczyk
It should be reminded that coefficients estimated in regression of the log spread changes
have already been shown in the data when testing for the mean reverting process. Regression
of the risk-free rate changes, in turn, as follows.
Table 5
Regression results, daily changes in the riskless rate
Riskless rate
r
p-value
ψ0
0.001185
ψ1
–0.02359
t-stat ψ0
2.591971
t-stat ψ1
–2.571761
(0.01)
(0.01)
(03/14/2006-05/22/2007)
S.E. regression
R2
0.021784
0.000221
It should be stressed that all coefficients presented in the data are statistically significant
at the 99% confidence interval. As it was in the case of previous regressions, goodness of fit
attains very small values. However, the coefficients obtained from ML estimation (in Matlab
v 7.5) are of the same values as from the OLS, raising the credibility of the obtained results.
Applying regression results to the set of formulas mentioned in the previous section, one
obtains.
Table 6
Estimated parameters
Log TED spread (X)
Riskless rate (r)
a=
–0.19124
α=
0.001185
b=
0.033825
β=
0.023876
s=
0.049417
Φ=
0.000158
Moreover, the correlation coefficient (ρ = –0.90976) shown below, implies that the
riskless rate and the log TED spread react adversely to changes in one of the instruments. It is
fully justifiable by the fact that the benchmark for the spread and risk-free rate consist of the
same data. Construction of the TED spread implies that when the value of the spread
increases, the distance from the riskless rate must increase as well. Having estimated model
parameters one can apply them to the European spread call option pricing formula. Fig. 4
shows the sample spreadsheet to calculate the price of an at-the-money 1-year option.
115
Fig. 4. European spread call option price spreadsheet
Rys. 4. Europejska opcja spread call w arkuszu ceny
Source: own study.
Changing the time to maturity and keeping other factors constant, one can calculate
distribution of the option prices. It should be mentioned that both TD and T (cells B14 and
B15 respectively) should be changed when using different maturity options. Moreover,
changing the TED spread value S (cell B13), immediately alters the log spread value X (cell
B16) and enables one to price the option when it is in, at or out of the money. It should be
mentioned that in the particular case shown of this data, K is equal to the mean of the spread
S. Results of the call option price (cell B20), with different underlying levels and time to
maturity are summarised.
Table 7
Sample prices of the CSO call option values of the spread and option price are in BPS
TED spread
(S)
25
35
45
T=1/12
(1 month)
0.58
2.63
5.78
T=3/12
(3 months)
2.35
3.04
3.63
(Changing spread and time to maturity, other factors constant)
T=1
(12 months)
3.01
3.01
3.01
116
S. Bakalarczyk
The data shows only certain option prices. The whole option payoff dependent on the
underlying and time to maturity is shown in fig. 5. This graph shows features of the model
that are consistent with observations made by Longstaff and Schwartz and Tahani 8. One
can notice that the option price may fall below the intrinsic value as the spread widens
above 37 BPS. What is more, the option may have a negative convexity (as shown by the
3-month option). Above the certain time to maturity, the price of the option remains almost
constant, independent of the underlying (as shown by the 1-year option). This behaviour is
explained by the fact that with large values of the underlying and time to maturity it is
expected that the spread will revert to its mean (which equal 35 BPS). One can notice on
fig. 5 that given the estimated parameters, the price of the T = 1 option approaches a constant
value much faster than observed by Longstaff and Schwartz, where the 1-year option was
only becoming convex. This fact can be justified by the use of different data, and
consequently, different estimated coefficients.
Fig. 5. European credit spread call option payoff (K = 35 BPS)
Rys. 5. Spread kredytowej opcji europejskiej wypłaty (K = 35 BPS)
Source: own study.
It may seem that in general the price of the option is very small. However, one should
remember that the TED spread, or originally CP spread, is in BPS as it denotes the rate at
which money will be borrowed. It is hard to compare the obtained prices with results obtained
by other researchers. So far none of them used the TED spread as input data.
8
Tahani N.: Credit Spread Option Valuation under Garch. Working Paper, July 2000, www.hec.ca/gestiondesrisques/
papers.html.
117
4. Implications to stand-by facility pricing, conclusions and
recommendations
As mentioned before, the proposed model might be used in a wide variety of applications.
It is applicable to all types of ABCP programs mentioned in section 1, whether the fund
provider is the conduit-issuing bank or the third party institution with a stand-by facility
agreement. It should be stressed, however that the model can be used as a liquidity rather than
credit enhancement facility. For simplicity, the discussion on pricing stand-by facilities will
be based on a single-seller ABCP program. Further on, the SPV will be referred to as the fund
borrower, and bank as the fund provider.
The SPV is a European call option buyer, as it has the opportunity to obtain funds from
the bank when the option matures. The bank in, turn, is the European call option issuer as it is
obliged to provide funds to troubled SPV, with whom it has a liquidity support agreement.
One should remember that the calculated price of the option is equivalent to the possibility of
borrowing 1£ from the fund provider at a given rate. Therefore, the obtained price should be
multiplied by the amount of money that is going to be transferred in case of liquidity
inadequacy. It is assumed that the SPV needs to borrow 1 bn £ to roll over issued Commercial
Paper. For such a possibility it has to pay the bank the amount given:
Table 8
Price of the contingent claim per 1 bn £ (K = 35 BPS)
TED
spread (S)
25
35
45
T=1/12
(1 month)
162 000
263 000
578 000
T=3/12
(3 months)
235 000
304 000
363 000
T=1
(12 months)
301 000
301 000
301 000
From the point of view of the bank, it is the sum that should be reported in the “off
balance sheet activities” and taken into consideration together with Delta when planning for
the future liquidity needs. Moreover, the price of the contingent claim should be taken into
consideration in liquidity risk management of the bank because of regulatory issues. It should
be stressed that due to lack of literature on the topic it is difficult to assess the obtained price
of the contingent claim with respect to other agreements that the conduit might have with the
fund providers.
The payoff of the European call option, from the point of view of the SPV is equivalent to
the rate at which the conduit will borrow money from the bank compared to the rate at which
it would borrow funds at given time from the other party, without initial agreement. Another
very important implication is that for options with longer maturities (above 6 months), the
118
S. Bakalarczyk
price approaches a certain, almost constant, level irrespective of the value of the
underlying, as depicted on the fig. 6.
Fig. 6. European call option price with respect to changing T and S other parameters constant
(K = 35 BPS)
Rys. 6. Cena europejskiej opcji ceny z wpływem na zmiany T i S, inne parametry stałe (K =
35 BPS)
Source: Own study.
The graph indicates that the price of the contingent claim will be the same for a large T,
throughout different spread and strike levels. From the point of view of the bank, on one
hand, it is a simplification in that the price of the claim will not change since it is
independent of the level of the underlying (within a certain period of time). This in turn has
a useful impact on medium term liquidity planning of the bank as well as on fulfilment of
the regulatory requirements. On the other hand however, it should be stressed that as the
option approaches maturity, its price might significantly change in value. This is especially
well visible on fig. 6 for the deep in-the-money option (K = 65 BPS), as goes from T = 12
months down to T = 1 month, the price appreciates about 5 times. For a deep out-of-themoney option (K = 15) with the same time difference, the price of the contingent claim
depreciates from 3 to almost 0 BPS. A bank’s management should take into consideration
that the price of the option will change from constant, towards a higher or lower value
depending whether it is in- or out-of-the-money.
One can also observe that when the option is out-of-the-money, its value will be smaller,
the lower the time to maturity. The situation is the opposite when pricing an option that is inthe-money (bearing in mind that the exercise level of K is at the level of the mean value of the
119
TED spread). The given data implies that differences of the contingent claim prices within
various time intervals can be significant. The same table shows how significant changes in the
balance sheet of the bank might appear as the option approaches maturity.
Table 9
Difference between various contingent claim prices, per 1 bn £
S (BPS)
15
25
35
45
55
1 year – 1 month
299 000
243 000
38 000
–277 000
–628 000
1 year – 3 months
147 000
66 000
–3 000
–62 000
–114 000
3 months – 1 month
151 000
177 000
41 000
–215 000
–514 000
From a regulatory point of view, it is recommended to impose restrictions on banks to
monitor the price of options over short intervals, to avoid liquidity shocks when the option’s
time to maturity diminishes. Failure to do so, for example when the option is in-the-money
(S = 55 BPS) and its maturity goes from 1 year to 1 month, might cause a significant jump in
the option price and influence the liquidity of the bank.
Bibliography
1. Black F., Scholes M.: The pricing of options on corporate liabilities. „Journal of Political
Economy”, No. 81(2), 1973.
2. Dixit A.K., Pindyck R.S.: Investment under Uncertainty. Princeton University Press, New
Jersey 1994.
3. Hull J.C.: Options, Futures and Other Derivatives. Prentice Hall, New Jersey 2002.
4. Longstaff A., Schwartz E.: Valuing Credit Derivatives. „Journal of Fixed Income”, 1995.
5. Tahani N.: Credit Spread Option Valuation under Garch. Working Paper, July 2000,
www.hec.ca/gestiondesrisques/papers.html
6. Vasicek O.: An equilibrium characterization of the term structure. „Journal of Financial
Economics”, No. 5, 1977.
Dorota CHMIELEWSKA-MUCIEK
UMCS
Faculty of Economics
Division of Management
KNOWLEDGE MANAGEMENT IN SMALL ENTERPRISES
IN THE INFORMATION TECHNOLOGY SECTOR IN POLAND
Summary. The present article discusses the results of research focused on
the condition of knowledge management in small enterprises active in the information
technology sector in Poland. The assessment is based on selected aspects describing
knowledge management, such as e.g. the degree of advancement regarding
the implementation of the analyzed concept by a company, the reasons for becoming
interested in that particular concept, barriers in its implementation and diagnosing
the process of knowledge management.
The research involved 79 enterprises and a group of 242 managers and specialists
employed in the analyzed sector.
Keywords: knowledge management, information technology sector
ZARZĄDZANIE WIEDZĄ W MAŁYCH PRZEDSIĘBIORSTWACH
BRANŻY INFORMATYCZNEJ W POLSCE
Streszczenie. W artykule zaprezentowano wyniki badań, dotyczące stanu
zarządzania wiedzą w małych przedsiębiorstwach sektora informatycznego w Polsce.
Ocena ta opiera się na wybranych aspektach, opisujących zarządzanie wiedzą,
np. takich jak poziom zaawansowania przedsiębiorstw we wdrażaniu analizowanej
koncepcji, przyczyny zainteresowania nią, bariery jej stosowania, oraz na diagnozie
procesu zarządzania wiedzą.
Badania zostały przeprowadzone wśród 79 przedsiębiorstw na grupie 242
kierowników i specjalistów zatrudnionych w analizowanej branży.
Słowa kluczowe: zarządzanie wiedzą, branża informatyczna
122
D. Chmielewska-Muciek
1. The essence of knowledge management
The literature on the subject offers numerous proposals for determining the essence of
knowledge management, which suggests the complex character of this term. It reflects
multifaceted and mutually related elements of creating and implementing knowledge
management. It includes the issues of the foundations of the concept, practical actions on
knowledge and developing conditions for such activities, the human and technical aspect of
knowledge management, the practical character of knowledge in many areas of functioning of
the organization and its management, as well as managing human resources. The issues
presented in the definitions of knowledge management suggest that:
 it has got different faces which change depending on what becomes accepted as
knowledge,1
 it changes the perception of the organization and processes, all processes in an
organization are perceived as processes related to knowledge,2
 it must be treated and implemented in the category of a comprehensive idea for
management which includes in its structure – in the vertical arrangement – the concept
and its development in the form of a general method, as well as techniques and tools
for carrying out selected functions and processes,
 its nature is utilitarian and it supports solving problems related with knowledge, as
well as decision taking,3
 it is based on the corporate strategy which assumes that knowledge as intellectual
capital is a key resource, necessary for achieving economic aims,
 it makes use of the process-based approach within in which information is acquired,
processed, organized, analyzed and synthesized, and then circulated in a form which is
adequate for the users. Such an approach helps the organization to become
horizontally integrated and provides conditions for co-operation between all
the functional areas,
 it promotes the culture of sharing values and knowledge everywhere in the enterprise.4
1
2
3
4
Panasiewicz L.: Kontrowersje w sprawie zarządzania wiedzą. „Ekonomika i Organizacja Przedsiębiorstwa”,
No. 7, 2004, p. 42-49.
Szaban J.: Zarządzanie wiedzą, [in:] Szaban J. (ed.): Ze współczesnych problemów zarządzania ludźmi.
Wydawnictwo Wyższej Szkoły Przedsiębiorczości i Zarządzania, Warszawa 2003, p. 47.
Morawski M.: Wiedza jako przedmiot zarządzania w przedsiębiorstwie, [in:] Kobyłko G., Morawski M. (ed.):
Przedsiębiorstwo zorientowane na wiedzę. Difin, Warszawa 2006, p. 39, 58.
Grudowski P.: Zarządzanie wiedzą w systemach zarządzania jakością. „Ekonomika i Organizacja Przedsiębiorstwa”, No. 12, 2007, p. 63.
Knowledge management in small enterprises…
123
Thus, developing a commonly accepted definition should take into account that
complexity and emphasize such features of knowledge management as systematization,
complexity, purposefulness or productivity.
The basic role of knowledge management is perceived mainly from the angle of the
growing significance of knowledge resources in developing the competitive advantage.
Managing knowledge in all its spheres has been suggested by numerous experts as a means of
optimizing a company’s efficiency and functioning in the situation of quickly growing
complexity and ambiguity of our modern world.5 F. Land claims that we live in a world in
which knowledge is the most significant source or agent of production and success in
the stormy and competitive global system.6 Knowledge management consists of making use
of and improving the knowledge capital of an organization in order to implement more
effectively the activities related to knowledge, to improve organizational conduct, to make
better decisions and enhance the organization’s functioning.7 “Thus, the aims of knowledge
management could be defined as an assistance in acquiring, accumulating and using
knowledge in order to achieve success, competitive advantage and to increase the value and
affluence of the company.”8 Knowledge management reveals the excess of knowledge which
is not taken advantage of by the organization or, on the other hand, its deficiency or
insufficient acquisition. Possessing useful knowledge becomes a foundation for new
knowledge which becomes materialized in the form of innovation.
In the awareness of those who popularize knowledge management, this concept
becomes:9
 the basic tool for managing the future of the enterprise,
 a chance for radically changing the orientation in thinking,
 a tool for efficient identification and elimination of the competitive gap,
 a tool for supervising knowledge resources in order to facilitate accessing and using it,
 a plane for creating and absorbing new experiences and information,
 a set of specific activities and initiatives undertaken by companies in order to increase
the amount of their corporate knowledge.
5
6
7
8
9
Smith P.: A Performance-Based Approach to Knowledge Management, „Journal of Knowledge Management
Practice”, Vol. 3, 2002.
Land F.: Knowledge Management or the Management of Knowledge? [in:] King W.R. (ed.): Knowledge
Management and Organizational Learning. Springer, New York 2009, p. 18.
King W.R.: Knowledge Management and Organizational Learning, [in:] King W.R. (ed.): Knowledge
Management and Organizational Learning. Springer, New York 2009, p. 4.
Kotarba W.: Istota zarządzania wiedzą, [in:] Kotarba W., Kotarba M. (ed.): Ochrona wiedzy a kapitał
intelektualny organizacji. PWE, Warszawa 2006, p. 27.
Skrzypek E.: Rola wiedzy we współczesnym zarządzaniu, [in:] Sitko-Lutek A. (ed.): Polskie firmy wobec
globalizacji. Luka kompetencyjna. PWN, Warszawa 2007, p. 98.
124
The observation of economic tendencies provides us with a reflection, or view, that these
are the aims for which companies are implementing the concept of knowledge management.
Obviously, the intensity of this phenomenon varies in particular sectors of economy, but its
influence is clearly visible in the information technology sector. This branch is characterized
by its growing share in GDP, improved results on stock exchange listings and good practices
of the enterprises active in this sector in using knowledge to achieve success.
2. The condition of knowledge management in small enterprises
in the Information Technology sector in Poland
2.1. Selected aspects of knowledge management in small enterprises in the IT sector
in Poland
The starting point for analyzing the condition of knowledge management in the studied IT
enterprises was to determine the degree of a company’s involvement in applying knowledge
management, resulting from the replies given by respondents asked if knowledge
management was present in their companies (fig. 1). Among 242 managers and experts,
28.92% replied positively. The most numerous group of people (29.33%) decided that their
enterprises were not involved in knowledge management, though there was a need for
implementing this type of management. 21.9% of the respondents answered negatively.
Knowledge management was not an element of the adopted strategy in some cases. Out of
70 people who declared that their enterprises were involved in knowledge management,
60% expressed an opinion that knowledge management was not included in the strategy.
A significant minority of the respondents (40%) believed that knowledge management was
a component of the strategy.
The implementation of knowledge management should be carried out by people
occupying positions directly related with this concept. Out of 70 people who claimed that
their firms were involved in knowledge management, 52.85% mentioned the existence of
such posts. The remaining 47.14% of the respondents were of the opposite opinion and said
that their enterprises were not offering special positions for knowledge management.
125
Legend: A – we have implemented knowledge management, B – we are planning to
implement knowledge management, C – there is no knowledge management, but we
can see such a need, D – there is no knowledge management and we do not think it is
necessary.
Legenda: A – zarządzamy wiedzą, B – planujemy wdrożyć zarządzanie wiedzą, C – nie
zarządzamy wiedzą, ale widzimy taką potrzebę, D – nie zarządzamy wiedzą i nie
widzimy takiej potrzeby.
Fig. 1. The degree of advancement in using knowledge management by enterprises
Rys. 1. Zaawansowanie przedsiębiorstw w wykorzystywaniu zarządzania wiedzą
Source: own elaboration.
The efficiency of knowledge management can be measured using different systems (made
up of indices). A definite minority (37.15%) of the 70 respondents confirmed the existence
and the use of measurement systems in reference to knowledge management. Those who
claimed not to use a system for measuring efficiency of knowledge management in their
companies made up 62.85% of all the opinions expressed.
An interesting issue is the reasons for implementing knowledge management, which
usually include a vision of improving some particular areas of the organization’s functioning.
Among the indices whose improvement was/could be the reason for applying the concept of
knowledge management, 242 respondents mentioned the following ones:
 improved quality of the services offered –15.43%,
 improved management– 12.39%,
 increased work efficiency– 12.3%,
 time saving – 12.13 %,
 higher competitiveness – 10.97 %,
 better satisfaction of client’s needs – 10.88 %.
126
The remaining proposals regarding the indices whose improvement would result from
knowledge management made up a small percent of the respondents’ choices. The lowest
approval in the respondents’ opinion was given to the possibility of increased motivation and
satisfaction of the employees (3.92%) and the acquisition of qualified employees (2.31%) as
a result of practicing knowledge management. Detailed percentage values of the respondents’
choices regarding the individual reasons for implementing the concept of knowledge
management are presented in figure 2.
Legend: A – improved satisfaction of clients’ needs, B – increased quality of services,
C – improved management, D – higher work efficiency, E – increased employees’
motivation and satisfaction, F – increased innovativeness, G – image creation,
H – higher competitiveness, I – time saving, J – cost reduction, K – acquisition of
well-qualified employees.
Legenda: A – lepsze zaspokajanie potrzeb klientów, B – wzrost jakości świadczonych usług,
C – usprawnienie zarządzania, D – wzrost efektywności pracy, E – wzrost
motywacji i satysfakcji pracowników, F – wzrost innowacyjności, G – budowa
wizerunku, H – wzrost konkurencyjności, I – oszczędność czasu, J – redukcja
kosztów, K – pozyskiwanie wykwalifikowanych pracowników.
Fig. 2. Reasons for implementing the concept of knowledge management (%)
Rys. 2. Przyczyny wdrożenia koncepcji zarządzania wiedzą (%)
The implementation of knowledge management comes against barriers which reduce its
efficiency. The employees of the IT sector were asked where the problems related to
knowledge management in their enterprises resulted/could result from mentioned most
frequently (19.06%) inefficient communication. A similar percentage, 18.25%, of managerial
staff and experts pointed at an inadequate managerial style. Among other significant obstacles
for the application of knowledge management, the respondents listed insufficient financial
means (15.83%) and the lack of measurable profits resulting from the implementation of
knowledge management (14.37%).
127
Detailed readings of particular barriers in knowledge management are presented in figure 3.
Legend: A – inefficient communication, B – inadequate managerial style, C – lack of
financial means, D – lack of measurable profits from the implementation of
knowledge management, E – fluctuation of specialists, F – poor information
technology infrastructure, G – motivation system which does not favor team work
and knowledge sharing, H – other.
Legenda: A – nieskuteczna komunikacja, B – nieodpowiedni styl zarządzania, C – brak
środków finansowych, D – brak mierzalnych korzyści z wdrożenia zarządzania
wiedzą, E – fluktuacja specjalistów, F – słaba infrastruktura informatycznotechnologiczna, G – system motywacyjny niesprzyjający pracy zespołowej
i dzieleniu się wiedzą, H – inne.
Fig. 3. Barriers in the implementation of knowledge management (%)
Rys. 3. Bariery wdrażania zarządzania wiedzą (%)
The foundation for knowledge management is provided by the sources in which data and
information are stored. The respondents were offered 22 possible options and asked to select
the sources they were making use of. According to the managers and experts, the most
frequently used sources of knowledge were the data bases existing in their enterprises
(8.60%), their own experience (7.53%) and the Internet (7.41%).
On the other hand, the sources that were least frequently used were strategic investors
(1.35%), external employment of highly-qualified employees (1.69%) and the employees’
own conclusions (2.49%).
Figure 4 shows the respondents’ choices of the particular sources of knowledge.
128
Legend: A – system of document circulation in the enterprise, B – data bases in the enterprise,
C – company’s own Research and Development Division, using company’s own patents
and licenses, D – purchasing other patents and licenses elsewhere, E – benchmarking,
F – interpersonal contacts with research-and-development centers, G – acquiring
knowledge from external experts (consultants), H – learning from previous experience,
I – employees of long standing with rich experience, unique knowledge and skills,
J – meetings of managerial staff with employees, K – employees’ ideas collected e.g.
in the form of suggestions, L – external recruitment of highly-qualified employees,
Ł – external training courses, M – market research, N – co-operation with other
companies within the sector, O – strategic investors, P – contacts with clients and using
the feedback, R – contacts with deliverers and partners, and using the feedback,
S – studying the literature and magazines, T – Internet monitoring , U – participation
in trade fairs, W – participation in trade congresses.
Legenda: A – system obiegu dokumentów w przedsiębiorstwie, B – bazy danych w przedsiębiorstwie, C – własny dział badań i rozwoju, wykorzystywanie własnych patentów,
licencji, D – zakup cudzych patentów i licencji, E – benchmarking, F – interpersonalne
kontakty z ośrodkami badawczo-rozwojowymi, G – nabycie wiedzy od ekspertów
(konsultantów) zewnętrznych, H – uczenie się na wcześniejszych doświadczeniach,
I – wieloletni pracownicy firmy o dużym doświadczeniu, unikalnej wiedzy
i umiejętnościach, J – spotkania kadry kierowniczej z pracownikami, K – pomysły
pracowników zbierane np. w formie wniosków, L – rekrutacja z zewnątrz
pracowników o wysokich kwalifikacjach, Ł – szkolenia zewnętrzne, M – badania
rynkowe, N – współpraca z innymi firmami z branży, O – inwestorzy strategiczni,
P – kontakty z odbiorcami i śledzenie ich uwag, R – kontakty z dostawcami i firmami
współpracującymi oraz śledzenie ich uwag, S – studia literatury i czasopism,
T – monitoring Internetu, U – udział w targach branżowych, W – udział w kongresach
branżowych.
Fig. 4. Using the particular sources of knowledge (%)
Rys. 4. Wykorzystywanie źródeł wiedzy (%)
Taking advantage of sources of knowledge is possible due to the tools which support
quick penetration of the systems of information and its transmission. The results of
the analyses suggest that two of them are particularly frequently used. These are the Internet,
pointed out by 24.15% of the respondents, and the e-mail, marked by 22.62% of
129
the respondents. The managers and experts often pointed at data bases (12.89%) and systems
supporting group work (10.03%) as tools facilitating knowledge management.
On the other hand, the least frequently marked option was the Extranet, with 0.61% of
readings. The details of the percentage illustrating the use of the particular tools for
knowledge management are presented in figure 5.
Legend: A – Internet, B – Intranet, C – Extranet, D – data bases, E – systems supporting
management e.g. CRM, MRP, F – systems of document circulation, G – video
conferences, H – teleconferences, I – systems for supporting group work, J – e-mails
Legenda: A – Internet, B – Intranet, C – Extranet, D – bazy danych, E – systemy
wspomagające zarządzanie, np. CRM, MRP, F – systemy obiegu dokumentów,
G – wideokonferencje, H – telekonferencje, I – systemy wspomagania pracy
grupowej, J – e-maile.
Fig. 5. Usage of tools for knowledge management (%)
Rys. 5. Wykorzystywanie narzędzi zarządzania wiedzą (%)
2.2. The process of knowledge management in small enterprises in the IT sector
in Poland
On the basis of the study results it may be concluded that individual stages of knowledge
management are carried out with different intensity in the analyzed organizations (figure 6).
The respondents gave the highest rating to knowledge generation and the lowest to its
practical use. Arranging the stages of the knowledge management process on the basis of
percentage readings, they could be listed as follows:
 Knowledge generation – 66.65%.
 Knowledge locating – 64.77%.
 Knowledge sharing – 60.63%.
 Knowledge maintenance – 60.48%.
 Knowledge acquisition – 53.73%.
 Practical use of knowledge – 47.42%.
130
Fig. 6. The process of knowledge management (%)
Rys. 6. Proces zarządzania wiedzą (%)
Knowledge location was highly assessed by the respondents (64.77%). The managers and
respondents believe that the only stage of knowledge management that is implemented more
frequently is knowledge generation.
The diagnosis of knowledge locating is based on several issues. They concerned being
familiar with the sources of knowledge which could be individuals or data bases, access to
information, information protection and the relationships between data bases and key
processes. Generally, the respondents’ opinion on them was positive. The managers and
experts very highly assessed the degree of adequacy between the content of data bases and
the key processes implemented in their organizations. They had a positive perception of
the employees correctly identifying both the individuals possessing specific knowledge and
the information recorded in the data bases and the systems of document circulation. They also
confirmed the practice of distinguishing knowledge which should be protected. Shortcomings
in the sphere of knowledge location result from the lack of specific information in data bases.
The phase of knowledge acquisition in the studied organizations was assessed relatively
poorly by the respondents (53.73%) in comparison to knowledge location, its generation,
sharing and maintenance. Only the practical use of knowledge was given a worse assessment
by the managers and experts.
The study of the analyzed stages in the knowledge management process concerned a few
methods of knowledge acquisition, such as employee recruitment, services offered by
consulting companies, co-operation with other organizations, outsourcing or purchasing
products related to knowledge.
The assessment of the activities listed above and related to knowledge acquisition varied
among the respondents. To the managers and specialists, a very important source of
knowledge acquisition was the purchase of products related to knowledge. Another positively
perceived source of knowledge acquisition was co-operation with other organizations,
131
services offered by consulting companies and outsourcing particular processes. On the other
hand, the recruitment of employees equipped with specific knowledge was used insufficiently
in the opinion of the respondents.
Knowledge generation is the most commonly applied stage of knowledge management
(66.65%). In order to diagnose the stage of knowledge generation the following issues were
considered: possessing a research-and-development base, purchasing of achievements in the
area of R+D, an environment favoring knowledge generation by the employees, a possibility
to make mistakes, and undertaking activities for developing employees’ individual
knowledge.
While analyzing the results of the study on the issues mentioned above, it is possible to
notice the multi-directional activities which enable knowledge generation. The managers and
specialists decided that purchasing the latest achievements in research and development was
the main source of knowledge generation. Knowledge is also created through a company’s
own research and development base. Besides, creating new knowledge is favored, in
the respondents’ opinion, by an environment which encourages the employees to think
independently, carry out experiments and develop their skills, which is reflected e.g. in work
placements abroad, different forms of education or practicing problem-solving in groups.
On the other hand, criticizing and punishing the employees acts as a hindrance.
The stage of knowledge sharing and circulating was highly rated by the respondents
(60.63%).
The issues which helped analyze the stage of knowledge sharing focused on the scope of
information spreading, the role of the unit dealing with information circulation, the forms of
information exchange, activities facilitating knowledge sharing and the eagerness to share the
knowledge.
The results of the analyses regarding the issues listed above create a very positive picture
of the activities involved in knowledge sharing. The respondents assessed most highly the
initiating activities and forms which facilitate knowledge sharing by the members of an
organization. Besides, the studied enterprises tend to systematize the activities related to
knowledge transfer through determining who should obtain a particular type of information
and by limiting the range of circulating information to that which is indispensable for
the employees to perform their duties. A positive signal is also the employees willingness to
share their knowledge with others.
The stage of the practical usage of knowledge was perceived less intensely by
the respondents (47.42%) among the other stages.
132
The diagnosis of the stage of knowledge usage was based on the following issues:
the purpose of new knowledge, preferred methods of action, convenience of taking advantage
of knowledge sources, and the activities stimulating the application of new knowledge.
The results of studies concerning the analyzed issues suggest a varied assessment of
the stage of knowledge usage. Positive manifestations include well-organized sources of
knowledge, regarding their accessibility, the environment inspiring employees to use new
knowledge in their work and in encouraging inquiries. Knowledge application is limited,
at the same time, by the employees’ strong preference to use the existing methods and
associating new knowledge only with its innovative uses.
The final stage of the process of knowledge management, its maintenance, was assessed
relatively highly (60.48%) by the respondents. Knowledge maintenance was analyzed on
the basis of the following aspects: information selection, data base updating, archiving
the knowledge of the key employees, tests evaluating the utility of knowledge, personal data
bases.
Summarizing the results of the study on knowledge preservation, it may be concluded that
many activities are undertaken in order to record relevant information in the archives.
The knowledge to be stored is subject to selection, data bases are systematically updated, the
knowledge of the key employees in the organization is recorded and, besides formalized data
bases, the employees create their own systems of knowledge storage. The weak side of
knowledge preservation is the limited use of periodical tests meant to verify the employees
knowledge and its utility.
3. Conclusions on the condition of knowledge management in small
enterprises in the IT sector in Poland
The results obtained from the study let us claim that the conception of knowledge
management is practiced among the analyzed enterprises. This is confirmed by a large group
of managers and experts (28.92%) who regard the purposeful practice of having knowledge at
their disposal in their organizations. The practice of knowledge management may also be
supported by the opinions on the implementation of the analyzed concept, or planning such
implementation, as expressed by 19.58% of the respondents. Also, the perception of the need
to introduce knowledge management, declared by 29.33% of the respondents, is a positive
symptom for the future of knowledge management.
In most cases (60%), practicing knowledge management was not related to the company’s
strategy, which means that knowledge management is not treated as a tool for strategy
implementation. However, this conclusion is not isolated as in the studies conducted by
133
G. Gruszczyńska-Malec and M. Rutkowska, where only 34% of the respondents confirmed
developing strategies for knowledge management.10
The results obtained in the study also show that the majority of the respondents (52.85%)
see knowledge management as a systematized function in their organizations. Knowledge
management was situated in the organizational structure, which was expressed by creating
work positions specialized in knowledge management.
A negative symptom of knowledge management in the studied organizations of the IT
sector is reflected by 62.85% of the managers and experts not being aware, or denying
the existence and application of measurement systems in the area of knowledge management.
The results of the study also suggest a low differentiation in using the sources of
knowledge. Among the potential sources of knowledge listed in the analyzed enterprises only
a few are being exploited at a significant level (the Internet, internal training courses, own
experience, data bases) and a few at a moderate level (literature studies, contacts with clients,
acquiring knowledge from external consultants, managerial staff meetings with employees).
The remaining dozen sources of knowledge were rarely or very rarely used by
the respondents.
The degree of utilization of the tools supporting knowledge management looks similar.
The most frequently used tools in the analyzed enterprises were the Internet and e-mail.
The remaining tools were used less frequently or hardly ever.
While analyzing the results obtained in reference to knowledge management, a few
observations can be made. The first one concerns the fact that all the studied organizations are
implementing all the stages of the knowledge management process, yet with different degrees
of intensity.
The respondents gave the highest rating to the activities related to knowledge generation,
then to its locating, sharing, maintaining, acquiring and, finally, its application, respectively.
It can also be observed that among the studied indices for evaluating the process of
knowledge management, 83.33% of them were positively evaluated by the respondents.
Among them, the majority were related to knowledge generating and sharing. On the other
hand, 12.27% of the manifestations reflecting the process of knowledge management were
negatively assessed and they concerned mainly the practical use of knowledge.
On the basis of the results obtained in the study it is also possible to single out the best
and the worst expressions of the process of knowledge management. The former ones
include:
10
Gruszczyńska-Malec G., Rutkowska M.: Strategie zarządzania wiedzą w wybranych przedsiębiorstwach
województwa śląskiego – wyniki badań empirycznych. Wydawnictwo Uniwersytetu Ekonomicznego
w Poznaniu, Poznań 2009, p. 215.
134
 adequate adaptation of data bases to the key processes implemented in
the organization – 79.76%,
 isolating knowledge which requires protection – 70.60%,
 taking advantage of collaboration with other organizations to acquire knowledge –
75.18%,
 purchasing latest achievements in the sphere of research and development from
specialist organizations – 77.59%,
 creating
the
environment
favoring
employees’
independent
thinking
and
experimenting – 70.18%,
 updating data bases systematically – 69.64%,
 archiving the knowledge of the employees who are of key importance for the course of
the processes – 70.85%.
On the other hand, the most significant shortcomings of the process of knowledge
management are connected with:
 data bases or systems with insufficient circulation of documents including
the information necessary for the employees – 66.52%,
 insufficient use of sources of knowledge acquisition, such as recruitment –52.77%,
outsourcing – 53.01%, and products related to knowledge – 53.25%,
 applying new knowledge mainly in innovative solutions – 65.06%,
 lack of periodical tests verifying knowledge possessed by the employees, meant to
evaluate its utility – 58.76%.
Considering the above conclusions, it may be claimed that the studied organizations are
interested in knowledge management. Knowledge management is attributed, which is
a positive phenomenon, with the implementation of specific purposes. The respondents most
frequently mentioned enhanced quality of their services and improved management. In order
to implement this concept organizations initiate activities in the form of creating posts for
knowledge management or tools facilitating knowledge management. This in turn means
the beginning of a systematic approach to knowledge management.
Obviously, knowledge management in the studied enterprises comes across some
obstacles which reduce the efficiency of this conception. Among these hindrances, the most
important ones are poor interpersonal communication and inadequate style of management.
Significant limitations for implementing the initiative of knowledge management are also
posed by insufficient financial means.
The practice in the scope of knowledge management in small enterprises in the IT sector
in Poland is at the stage of becoming interested in this conception and developing
the foundations for the system of knowledge management.
135
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i Organizacja Przedsiębiorstwa”, No. 12, 2007.
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przedsiębiorstwach województwa śląskiego – wyniki badań empirycznych. Wydawnictwo
Uniwersytetu Ekonomicznego w Poznaniu, Poznań 2009.
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(ed.): Knowledge Management and Organizational Learning. Springer, New York 2009.
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(ed.): Knowledge Management and Organizational Learning. Springer, New York 2009.
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wiedzy a kapitał intelektualny organizacji. PWE, Warszawa 2006.
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Morawski M.: Wiedza jako przedmiot zarządzania w przedsiębiorstwie, [in:] Kobyłko
G., Morawski M. (ed.): Przedsiębiorstwo zorientowane na wiedzę. Difin, Warszawa
2006.
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Panasiewicz L.: Kontrowersje w sprawie zarządzania wiedzą. „Ekonomika i Organizacja
Przedsiębiorstwa”, No. 7, 2004.
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Smith P.: A Performance-Based Approach to Knowledge Management. „Journal of
Knowledge Management Practice”, Vol. 3, 2002.
9.
Szaban J.: Zarządzanie wiedzą, [in:] Szaban J. (ed.): Ze współczesnych problemów
zarządzania ludźmi. Wydawnictwo Wyższej Szkoły Przedsiębiorczości i Zarządzania,
Warszawa 2003.
10. Skrzypek E.: Rola wiedzy we współczesnym zarządzaniu, [in] Sitko-Lutek A. (ed.):
Polskie firmy wobec globalizacji. Luka kompetencyjna. PWN, Warszawa 2007.
Urszula SKURZYŃSKA-SIKORA
Maria Curie-Sklodowska University in Lublin
Economic Faculty
The Institute of Management
COMPETENCE IN THE MANAGEMENT OF AN ORGANIZATION
AND ITS EFFECTIVENESS
Summary. The paper presents the results of empirical studies performed in order
to determine the activities leading to identifying and reducing the competence gap in
Polish enterprises. The analyses were carried out on 56 companies with the use of
a specially designed questionnaire in the form of a categorized interview. While
analyzing the obtained results special attention was paid to the method of interpreting
the idea of a company’s effectiveness, the effect of interpreting effectiveness on
a company’s performance, actions undertaken in order to reduce the competence gap
and the influence these actions have on a company’s effectiveness.1
Keywords: organizational competencies, competence gap, reducing competence
gap, company’s effectiveness
KOMPETENCJE W ZARZĄDZANIU ORGANIZACJĄ
A JEJ EFEKTYWNOŚĆ
Streszczenie. W artykule przedstawiono wyniki badań empirycznych
przeprowadzonych w celu określenia działań zmierzających do identyfikacji
i zniwelowania luki kompetencyjnej w polskich przedsiębiorstwach. Badania, przy
wykorzystaniu specjalnie opracowanego kwestionariusza do wywiadu skategoryzowanego, przeprowadzono w 56 przedsiębiorstwach. Analizując uzyskane wyniki,
szczególną uwagę zwrócono na sposoby rozumienia pojęcia „efektywność przedsiębiorstwa”, wpływ interpretacji tego pojęcia na rezultaty działalności przedsiębiorstwa,
a także działania podejmowane w celu zmniejszenia luki kompetencyjnej i ich wpływ
na efektywność firmy.
1
The paper was prepared as part of the research project of the National Center for Science – Project No.
NN 115419840 “Competencies and the organizational culture of innovative enterprises in an international
perspective”.
U. Skurzyńska-Sikora
138
Słowa kluczowe: kompetencje organizacji, luka kompetencyjna, redukowanie luki
kompetencyjnej, efektywność organizacji
1. Introduction
Contemporary companies operate in a turbulent environment, and this forces them to
continuously adapt to current conditions. An important role in gaining and maintaining such
a competitive advantage by enterprises is played by their knowledge-based internal resources,
known as corporate competencies.
The idea of “corporate competencies” has been defined in many different ways, however,
it can be stated generally that they consist of a combination of skills and knowledge that
belong to the organization itself. They are embedded in company processes and systems and
absorbed by all its members and structures, and they tend to remain even when individuals
leave the company.2 Corporate competencies of an organization include elements such as its
unique, specific knowledge, experience and skills which have all been developed by this
organization and which give it a competitive advantage. In an economic system based on
knowledge the role of such competences is, and most probably will be, increasingly important.
The difference between the competencies currently at a company’s disposal, assuming
their optimal use, and the competencies which are necessary to meet the company’s
aspirations is defined as a competence gap.
Both the competitive position of an enterprise and its effectiveness depend to a high
degree on the correct identification of the competence gap and on initiating adequate actions
aimed at reducing such a gap. The problem is in deciding what particular activities should be
undertaken and according to which criteria their effectiveness will be evaluated.
2. Organizational competencies
The idea of „organizational competencies” is defined in many different ways, however,
there is an agreement that they are one of the vital factors determining the company’s success.
In the most general definition, competencies can be described as abilities to develop, co-
2
Turner, D., Crawford M.: Managing current and future competitive performance. The role of competency, [in:]
Hamel G., Heene A. (eds.): Competency-based competition. The Strategic Management Series. Wiley,
Chichester 1994, p. 241.
Competence in the management…
139
ordinate and apply the available resources in order to implement the tasks and reach
the objectives set by the company.3
Competencies are understood from two different perspectives, namely:
 as assets, skills, or resources belonging to the company that allow an activity to be
performed systematically;4
 as the activities themselves, that is, the operations that the firm is able to carry out by
integrating a series of assets, emphasizing what the company does as opposed to what
the company has.5
M. Bratnicki distinguishes the idea of “abilities” which are attributed to individual human
beings and the idea of “competence” which refers to the level of the whole organization.
According to him, competence consist of integrating knowledge (the abilities of
the individuals and resources) to reach a particular objective. Competencies understood in this
way are in fact the abilities of the people managing an organization, who have an influence on
the most important decisions that are made. These are the abilities to acquire the right
resources, including people, and to use them adequately to implement the adopted strategy.6
However, they are immanently hard to imitate as a potential follower would have to copy
the whole complex process of creating and accumulating such resources.7
Competence distinguishes an organization in its environment and equip it with
a competitive advantage. As in the case of other resources which determine competitiveness,
competencies have to be assessed from the perspective of the type of business activity they are
utilized for. They need to have the quality of rare goods and they must be difficult (or/and
costly) to imitate. Thus competence of an organization:
 may be understood as an opportunity, an ability to reach a definite result at a particular
level (an ability to perform particular assignments or to reach definite objectives),
 are always relative in nature and have to be seen in relevance to some standard,
an assumed goal or assignment (competence to do what? and/or within what range?),
 are manifested through the ability to react in a way which is adequate to
the requirements of a particular situation.8
3
Amit R., Schoemaker P.J.H.: Strategic Assets and Organizational Rent. „Strategic Management Journal”,
No. 1(14), 1993, p. 33.
4
Sanchez R., Heene A.: Competency-based strategic management: Concepts and issues for theory, research, and
practice, [in:] Heene A., Sanchez R. (eds.): A Model for Evaluating Organizational Competencies.
Competence-based strategic management. Wiley, Chichester 1997, p. 7.
5
Hamel G.: The concept of core competence, [in:] Hamel G., Heene A. (eds.): Competence-based competition.
The Strategic Management Series. Wiley, Chichester 1994, p. 12.
6
Bratnicki M.: Kompetencje przedsiębiorstwa. Od określenia kompetencji do zbudowania strategii. Placet,
Warszawa 2000, s. 13.
7
Urbanek G.: Kompetencje a wartość przedsiębiorstwa. Zasoby niematerialne w nowej gospodarce. Wolters
Kluwer, Warszawa 2011, s. 37.
8
Sitko-Lutek, A. (ed.): Polskie firmy wobec globalizacji. Luka kompetencyjna. PWN, Warszawa 2007, s. 19.
140
To sum up the considerations concerning competence, they may be defined as
a combination of knowledge and abilities which reflect both the layers of basic (hidden)
knowledge and the abilities which are indispensable to implement all the necessary tasks.
Competence is based on the knowledge inherent in the sets of abilities of individual
employees and the knowledge remaining at the disposal of particular organizational units.
Generally, it may be said that competence determines a company’s specific abilities in
the distribution of its resources, its cognitive potential, enabling it to take action towards
reaching its goals. Organizational competence should be characterized by including:
 an organizational component, i.e. they should refer to coordinating and distributing
the resources,
 an intentional component – they should result in deliberate actions aimed at ensuring
coordinated distribution of the resources,
 a target component – coordinating the resources has to be aimed at reaching
the company’s aims.9
The difference between the current status of a company’s competence and their desirable
level is defined as the competence gap. The idea of a “gap” is understood as a lack,
a deficiency having a pejorative tone as such. Likewise, a competence gap results in
the following key negative effects in a company:
 it hinders or even makes it impossible for a company to develop, or even poses a threat
to its further existence,
 it hinders improving a company’s competitive position,
 it hinders creating innovation: of products, processes or business models.
It should be noted, however, that a competence gap may motivate to introduce changes in
a company and it can orientate an organization towards process improvement.
It is necessary to adequately identify and analyze the signals coming from
the environment, taking into account their influence on the current and future situation of
the company as a whole, and also predicting on the basis of such signals the directions of
the changes in the environment and core competencies which condition a company’s
functioning in the future. Although knowledge acquired in this way is indispensable in
preparing a necessary strategy and a consistent construction of a set of adequate competencies,
for Polish enterprises, unfortunately, this is not so much the case. For many firms, such
signals and corresponding knowledge do not provide a basis for the design and direction of
future activities. The results of empirical studies carried out by different teams suggest that
the development of many companies is a consequence of an accident, a sudden opportunity,
such as a possibility to buy some exceptionally cheap tangible assets, an unexpected offer of
9
Ibidem, s. 18.
141
co-operation from a big company, using aid funds from the European Union, finding a new
investor, a company merger, favorable systemic solutions, etc.10 Such an opportunity
provides an impulse to act. Yet a company’s level of competence determine if, and to what
extent, a company will take advantage of it.
The identified competence gap may be reduced in many ways which include:
 acquiring tangible assets,
 acquiring financial resources,
 introducing elements of knowledge management,
 finding specialists on the job market,
 acquiring competences from a business partner,
 cooperation with consulting companies,
 cooperation with research institutions,
 training (internal and external),
 building the company’s own research-and-development potential,
 learning in action,
 learning from competition,
 outsourcing.11
3. Enterprise’s Effectiveness
Effectiveness is one of the basic categories used to assess a company’s performance,
however, there are significant discrepancies concerning its definition in practice. Still, quite
recently, the effectiveness of an enterprise was identified with its productivity, understood as
production volume, turnover or sales volume. However, it was observed that the effectiveness
of work is affected by qualitative factors, such as e.g. the employees’ qualifications, their
education or experience. Effectiveness understood in this way should be assessed by means of
other measures, e.g. the effects of work (quantity/quality of work) or work expenditure (costs
of work, time, laboriousness or the number of the employees).12
The diversity of approaches in the definition of effectiveness results in a number of
approaches concerning its measurement. Generally, it should be stressed that the key role is
played by a precise identification of the aims and expectations. The measures used here are of
double character:
10
Krupski R.: Redefiniowanie strategii organizacji. „Przegląd Organizacji”, nr 3, 2007, s. 9.
Sitko-Lutek A.(ed.): op.cit., s. 250.
12
Kożusznik B.: Psychologia zespołu pracowniczego. Doskonalenie efektywności. Akademia Ekonomiczna,
Katowice 2002, s. 95.
11
142
 predictive – they concern planning some expected results and identifying any
interferences which make the results obtained different than those intended (both
above and below expectations); such measures play the role of a system of early
warning;
 corrective – related to creating standards of improved activities in future projects.13
In order to make the measures genuinely significant, they have to be adapted to
the organization’s objectives, in terms of its effectiveness or productivity, and referred to
suitable personnel implementing those objectives who have a real influence on the degree of
the objectives’ realization. In practice, effectiveness depends on many factors, which makes
its assessment much more complicated.
The issues of assessing a company’s effectiveness in a multi-criteria formulation makes
the subject of a number of specialized works. R.E. Quinn and J. Rohrbough developed the socalled model of competitive values which is an attempt to integrate different effectiveness
criteria and to distinguish four coherent sets created on the basis of the values taken into
consideration by the subject which is involved in the assessment.
While constructing this model, an assumption was made that there is no single best
criterion for assessing effectiveness and the choice of the measures used in practice for such
assessment is subjective and is made depending on the values, preferences and interests of
the subject making the assessment:
 structural: controlling (preferring values such as order, stability, predictability) as
opposed to flexibility (change, adaptation to the expectations of the environment),
 organizational: people (preferences for the people in the organization and their
interests) as opposed to the organization (preferences for effectiveness and the results
of the organization as a whole).14
In recent years a growing popularity among the concepts of multi-aspect assessment of
a company’s effectiveness has been enjoyed by the Balanced Scorecard (BSC) developed by
R.S. Kaplan and D.P. Norton, in which they observed a need to adopt a holistic view on the
company in the process of formulating its strategic objectives and assessing effectiveness
understood as the degree of implementing the company’s strategy and analyzed in four areas –
apart from the financial aspects, it is necessary to take into account the market perspective
(the client), internal processes and innovations and learning.15
An interesting approach to assessing the effectiveness of an organization was put forward
by G.A. Rummler and A.P. Brache (11). Bearing in mind the fact that an organization is
13
Buchanan J.: Measuring up. „PM Network”, Vol. 22, No. 9, 2008, p. 52.
Bielski M.: Podstawy teorii organizacji i zarządzania. C.H. Beck, Warszawa 2004, s. 69-71.
15
Kaplan R.S., Norton, D.P.: The Balanced Scorecard: Measures That Drive Performance. „Harvard Business
Review”, Vol. 83, No. 7/8, 2005, p. 174.
14
143
a system and that there are different processes implemented inside it, occurring among
the individual spheres of the organization, they paid special attention to the necessity to
correlate the activities within the whole organization and to eliminate problems relating to
inter-functional relationships. In their concept the effectiveness of an organization is analyzed
in a two-level system – the dimension of the organization and the need for effectiveness.
As a result, nine variables have been distinguished which influence the effectiveness of an
organization. Thus it may be claimed that skillful effectiveness management requires
a suitable formulation of objectives, designing and managing on each of the following three
levels: the organization, the processes and the work place, with all the three levels being
interrelated, e.g. a job cannot be adequately described without understanding the processes in
which it is involved. Any attempt to define an organization’s objectives without relating them
to the processes and the system of employee effectiveness must end in a failure.16
In order to help an enterprise meet the changing requirements of the environment and also
the owners’ expectations, managers have to care about its effectiveness. In these
circumstances a company has to be very flexible in order to continue functioning, and
significant difficulties are faced when trying to transmit a formulated strategy into actual,
practical actions, as well as in measuring the effectiveness of their implementations in context
of the company as a whole.
4. Company’s effectiveness in the light of research
4.1. Research methods
The empirical studies aimed at determining (among other things) the following: A set of
key resources and capabilities necessary to develop and maintain a permanent competitive
advantage; methods of identifying a competence gap and to take up activities towards its
elimination as a result of corporate learning; to recognize differences in learning processes;
and also to determine factors which support or hinder the identification of changes in
the competence gap.
The research was done on 56 Polish companies of different sizes. The structure of
the research sample is as follows:
 14.3% of the companies were small firms (employing less than 50 people),
 51.8% – medium-size companies (employing from 50 to 249 people),
 33.9% – large enterprises (employing more than 250 people);
16
Rummler G.A., Brache A.P.: Podnoszenie efektywności organizacji. PWE, Warszawa 2000, s. 43-46.
144
The competencies of the companies were analyzed in 9 functional areas: operating
activities (manufacturing, services,
trade), technology, research and development,
marketing/sales, finance, human resources, supplies, quality and management (including:
strategic planning, operational planning, corporate structure, corporate culture).
4.2. Respondents’ interpretation of company’s effectiveness
Professional literature, as mentioned earlier, presents the idea of effectiveness in a number
of different ways. The results of the empirical studies confirmed the fact that managers also
interpret the idea of effectiveness in a variety of ways. The respondents were presented with
a list where they could select a number of different ways of understanding “effectiveness”.
The results, presented in figure 1, show that the perception of the essence of effectiveness
slightly differs.
A prevailing number of the respondents (66.1%) sees effectiveness as effective actions,
that is, the degree to which the intended objectives can be reached. More than 57% of
the respondents believe that a company is efficient when it obtains a positive financial result
and when it increases its market share.
A relatively low percentage (19.6%) of all the respondents understand effectiveness as
a tool for improving the company’s competitiveness. Only 14.3% of the respondents believe
that effectiveness is related to the company’s balanced functioning in the environment.
In comparison to big and medium-size organizations, managers in small companies pay
more attention to their clients’ satisfaction and how fast they adapt to the latter’s needs. What
is vital to them, is also an increase in sales income and a systematic improvement of
the financial performance.
Definitely, the most popular way of perceiving effectiveness in companies is identifying it
with gaining a competitive advantage, increasing number of clients and increasing competitive
advantage.
None of the respondents representing small businesses believe that gaining a competitive
advantage proves the company’s effectiveness. In a global competitive market it is extremely
difficult for a company to gain a competitive advantage. This may be why the managerial
staff, being rationalistic, do not assume that this type of organization may gain a competitive
advantage as this is a rather impossible option for them.
Big enterprises adopt a long-term orientation. What matters to them is implementing the
plan (intended objectives). They are less oriented towards obtaining a positive financial result
in the short term. As a consequence, the managerial staff in big companies see effectiveness as
related to the organization’s stable functioning and development.
145
Fig. 1. Understanding effectiveness in the studied companies
Rys. 1. Rozumienie efektywności w badanych przedsiębiorstwach
Source: own work.
4.3. Competence of enterprises in the opinion of the respondents
The companies carried out self-assessment regarding their competence, using a five-level
scale (l- very low, 2- low, 3- average, 4- high, 5 – very high). The obtained results are
presented in table 1.
Table 1
The assessment of companies’ potential in individual competence areas
No.
1.
2.
3.
4.
5.
6.
7.
8.
Competence area
Operating activities (manufacturing, services, trade)
Technology
Research and development
Marketing/sales
Finance
Quality
Human resources
Supplies
Total
3,98
3,96
3,00
3,79
3,8
4,14
3,98
3,93
Small
4,13
4,25
3,50
4,13
3,75
4,38
4,38
4,14
Enterprises
Medium
3,83
3,79
2,82
3,55
3,66
4,03
3,83
3,86
Large
4,16
4,11
3,05
4,00
4,05
4,21
4,05
3,95
146
cont. tab. 1
9.
10.
11.
12.
13.
14.
Management – average
Management – strategic planning
Management – operational planning
Management – corporate structure
Management – corporate culture
Average
3,98
3,98
4,13
3,87
3,82
3,86
4,25
4,25
4,38
4,00
4,00
4,11
3,83
3,83
3,90
3,76
3,69
3,70
4,11
4,11
4,37
4,00
3,95
4,00
Source: own work.
Respondents assessed the potential competence of its enterprises as being “almost” high
(average 3.86). The maximum potential has been assessed in small businesses (average 4.11)
and only in the areas of operations and finance did large enterprises indicate the highest level
of competence. It should be noted that medium-sized companies assessed all competence
areas the lowest. On the whole (as shown in the Total Column), the top assessed capacity of
competence are in the field of quality (average 4.14) and operational planning (one of
the components of the management – average 4.13), the least in the area of research and
development (3.00).
4.4. Actions initiated to reduce competence gap and their influence on company’s
performance
Among the methods applied to reduce a competence gap for the analyzed companies
(see table 2), the largest influence on improved effectiveness resulted, according to
the respondents, from training (42.5%), learning in action (40%) and in acquiring additional
tangible assets (31.9%). The lowest advantage resulted from the companies’ co-operation with
research-and-development institutions (11.6%), outsourcing (13.6%) and building their own
research-and-development potential (17.5%).
Table 2
Popularity of the methods of reducing a competence gap to improve company’s effectiveness
Method used to reduce competence gap
Acquiring additional tangible assets
Acquiring financial assets
Introducing elements of knowledge management
Acquiring specialists on the job market
Acquiring competences from a business partner
Co-operation with consulting agencies
Co-operation with research-and-development institutions
Training
Building your own research-and-development potential
Learning in action
Outsourcing
Learning from competitors
Source: own work.
Total
32,85
31,42
33,40
29,64
18,75
20,00
11,61
42,69
17,48
39,99
13,57
24,43
Companies
Big
Medium
29,47
32,07
24,74
29,66
36,32
25,86
25,79
26,55
16,84
16,55
20,53
16,21
13,68
9,31
40,53
38,96
11,58
20,34
34,21
42,42
12,11
10,35
19,47
21,72
Small
43,75
53,75
53,75
50,00
31,25
32,50
15,00
60,00
21,25
45,00
28,75
46,25
147
The meaning of the particular methods for improved effectiveness is assessed differently
depending on the size of a company. Training was most important in big and small
companies, while medium-size companies regarded learning in action as more vital. Big and
small businesses decided that introducing elements of knowledge management was the second
most important issue. Small companies emphasized the role of acquiring financial assets as
significantly affecting improved effectiveness of their functioning.
5. Conclusions
To handle the dynamically developing requirements of the environment, an organization
has to ensure some adequate competence potential. Thus it is necessary to systematically
monitor the requirements put forward by the environment and to identify the existence of
a competence gap. The awareness of a competence gap initiates the processes of its reduction.
While selecting suitable actions aimed at reducing the gap, it is necessary to pay attention to
the effectiveness of undertaken activities.
The studies revealed that, according to the respondents, the effectiveness of their
companies was influenced primarily by training, and much recognition was also given to
learning in action. Thus it can be concluded that the role of corporate learning is appreciated.
It seems indispensable to introduce mechanisms which would lead to permanent corporate
learning and at the same time guarantee the expected level of effectiveness. In order to achieve
this, the following recommendations are suggested:
 Paying special attention to identifying objectives and determining precise measures,
as well as correlating them adequately within the company.
 Analyzing the obtained results in due course; when a gap arises between results and
the intended objectives, it is necessary to identify its reason and to initiate suitable
corrective action.
 Creating a bank of information which should be used while taking decisions and
constant improvement of the organization’s effectiveness.
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Competence-based competition. The Strategic Management Series. Wiley, Chichester
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„Harvard Business Review”, Vol. 83, No. 7/8, 2005.
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Akademia Ekonomiczna, Katowice 2002.
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Krupski R.: Redefiniowanie strategii organizacji. „Przegląd Organizacji”, nr 3, 2007.
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Rummler G.A., Brache A.P.: Podnoszenie efektywności organizacji. PWE, Warszawa
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Aneta ALEKSANDER
Agata STACHOWICZ-STANUSCH
Politechnika Śląska
Wydział Organizacji i Zarządzania
Katedra Podstaw Zarządzania i Marketingu
CORPORATE BRAND REPUTATION REBUILDING AFTER
THE COMPANY’S CRISIS
Summary. The paper examines the consequences a company may suffer when
brand reputation is threatened by crisis situations and the possibilities of brand
reputation rebuilding after a crisis. Presented herein is a broad literature review in
the area of company reputation, company crisis, brand reputation and its influence on
company performance. Following this are presented two contrary case studies of
Polish enterprises, both of which show different methods of crisis management from
a brand reputation point of view. On the basis of the cases and literature analysis,
the authors suggest a 4-phase model of brand reputation rebuilding after a crisis,
which may find practical applications or insights for an enterprise faced with a crisis.
Keywords: reputation, corporate brand, reputation rebuilding, crisis
ODBUDOWA REPUTACJI MARKI W NASTĘPSTWIE KRYZYSU
W ORGANIZACJI
Streszczenie. W artykule przeprowadzono analizę konsekwencji sytuacji
kryzysowych dla reputacji marki, a także możliwości odbudowy marki po kryzysie.
Zaprezentowano tu szeroki przegląd literatury w zakresie reputacji przedsiębiorstwa,
kryzysu, reputacji marki oraz jej oddziaływania na funkcjonowanie przedsiębiorstwa.
Przedstawiono dwa studia przypadków polskich przedsiębiorstw obrazujące
przeciwstawne modele zarządzania kryzysem z punktu widzenia reputacji marki.
Na podstawie studiów przypadków oraz analizy literatury przedmiotu zaproponowano
4-fazowy model odbudowy reputacji marki po kryzysie, który może znaleźć
praktyczne odzwierciedlenie w zarządzaniu przedsiębiorstwem w obliczu sytuacji
kryzysowej.
Słowa kluczowe: reputacja, marka przedsiębiorstwa, odbudowa reputacji, kryzys
150
A. Aleksander, A. Stachowicz-Stanusch
1. Introduction
Crises usually adversely affect companies in different respects, e.g. its organizational
culture, image, identity, integrity, trustworthiness, or its goodwill. The public disclosure and
exposure of a series of scandals in companies has uniquely highlighted the issues of a crisis
of a company itself as well as its corporate brand reputation. Therefore a significant research
question emerges: How should a company manage its corporate brand reputation after
a crisis, especially when its source is from within the organization? This paper aims at
presenting a model of corporate brand reputation rebuilding for companies that face a crisis
caused mainly by the unethical internal actions of the company‟s leaders and employees
(Two case studies of selected Polish enterprises were conducted). The paper provides a deep
literature review on reputation, corporate brand and crisis, as well as presenting a method for
an effective process of rebuilding the corporate brand reputation of a company.
The methodology of the research was based on the stage model of reintegration proposed by
Pfarrer et al. in order to reintegrate a company that was brought down by corrupt actions1.
A model of corporate brand reputation rebuilding following a crisis is characterized by
the occurrence of four phases: Phase 1: Recognition of the crisis; Phase 2: Clarification of
the causes; Phase 3: Penance; Phase 4: Rehabilitation, i.e. what to do to rebuild a good
reputation.
2. Reflections on reputation – theoretical background
Selected literature provides many explanations of what reputation is. According to
Greyser “(…) everything an organization does, and does not do, has a direct impact on its
reputation.”2 Balmer and Greyser define corporate reputation as “judgements made of
the organization over time based on the organization‟s behaviours, performance, and
collective experiences of the organization.”3 Corporate reputation can be defined in terms of
“a number of attributes that form a buyer‟s perception of the extent to which a company is
well-known, reliable, trustworthy, reputable, believable and generally good or bad.”4 Roberts
and Dowling define corporate reputation as “a perceptual representation of a company‟s past
1
Pfarrer M.D., Decelles K.A. Smith K.G., Taylor M.S.: After the fall: Reintegrating the corrupt organization.
„Academy of Management Review”, Vol. 33, No. 3, 2008, p. 730-749.
2
Greyser S.A.: Corporate reputation: aid to growth and shield. Inside PR and Reputation Management, January
– February 1995.
3
Balmer J.M.T., Greyser S.A.: Multiple Identities of the Corporation, [in:] Balmer J.M.T., Greyser S. (eds.):
Revealing the Corporation. Perspectioves on Identity, Image, Reputation, Corporate Branding and Corporatelevel Marketing. Routledge, London 2003, p. 15-29.
4
Levitt T.: Industrial Purchasing Behaviour: A Study of Communication Effects. Harvard Business School,
Boston, MA 1965.
Corporate brand reputation…
151
actions and future prospects that describe the firm‟s overall appeal to all its key constituents
when compared to other leading rivals.”5 It determines how an organization is valued in such
terms by its various stakeholders over time, and can provide the firm with a valuable source
of competitive advantage6. A positive reputation is an important driver of successful
organizational relationships with clients, which can have a significant impact on the business
performance of a firm.7 The reputation will grow gradually depending upon how
the organization deals with the public, its distributors, the media, employees, shareholders
and everyone else in an open, honest way8. Traditional culture places great emphasis on its
association with a set of core values: virtue, moral consciousness, integrity, trustworthiness,
the sense of shame and the fear of loss of face.9
Reputation constitutes an assessment of company‟s value made by the external
environment and therefore it may be treated as a particular kind of resource that can generate
future profits. Hence, it is a significant factor in reinforcing or weakening of a company‟s
effectiveness. In principle, one may single out two dimensions of corporate reputation:
1. recognizability, that is the degree to which a company‟s activity is identified with itself;
2. reliability, that is the quality of the opinions about the company among those who know it.10
To start the deliberations about the issue of reputation management it should be
emphasized that reputation may be managed only partially. A company may try to build or
create reputation by its behaviors, activities, declarations, attitudes towards different groups,
quality of goods and services etc., broadly speaking by its corporate identity, but it never will
be able to drive ones‟ mind and opinions into one direction. Davies et al. (2003) write that if
the organization builds a positive identity, the natural result could be a positive reputation11.
“Corporate reputation is no longer viewed as a result of mere manipulation by the company,
but as the outcome of a joint process of image construction in which both the company itself
and its various stakeholder take part.”12
5
Roberts P.W., Dowling G.R.: Corporate reputation and sustained superior financial performance. „Strategic
Management Journal”, Vol. 23, No. 12, 2002, p. 1077-1093.
6
Fombrun C.J., van Riel C.B.M.: Fame and Fortune: How Successful Companies Build Winning Reputation.
Pearson Financial Times, London 2004.
7
Ewing M.T., Caruana A., Loy E.R.: Corporate reputation and perceived risk in professional engineering
services. „Corporate Communication. An International Journal”, Vol. 4, No. 3, 1999, p. 121-128.
8
Howard S.: Corporate Image Management. Butterworth-Heinemann, Singapore 1998, p. 41-53.
9
Fan Y.: A classification of Chinese culture. „Cross Culture Management. An International Journal”, Vol. 7,
No. 2, 2000, p. 3-10.
10
Paliwowa-Matiolańska A.: Odpowiedzialność społeczna w procesie zarządzania przedsiębiorstwem.
C.H. Beck, Warszawa 2009, p. 179.
11
Davies G., Chun R., Da Silva R., Roper S.: Corporate Reputation and Competitiveness. Routledge, London
2003.
12
O‟Neil H.W.: How opinion surveys can help public relation strategy. „Public Relations Review”, Vol. 10,
No. 1, 1984, p. 3-12.
152
3. Corporate brand understanding
There is a close link between the notion of reputation and the very idea of a brand, and in
particular, a corporate brand. It would be difficult to lead a discussion on the topic of
reputation without some reference to the elements which determine the identity of a company
(a brand being at the top of the list of these elements). The significance of that issue rises in
time when the product brand is also the corporate brand13, which concerns actually
the greatest majority of companies. As Bosch et al. write, most companies that are ranked
high in global reputation studies use the same brand at both levels, corporate and product14.
They claim that according to a survey of the world‟s most valuable brands, in 19 of the top 20
companies, the corporate and product brand were identical.
Keller and Lehman say that a brand is often mentioned as a firm's most valuable asset,
therefore the term brand itself is widely described in literature15. Kapferer provides a brand
identity model in which he proposes brand components or dimensions (brand elements) such
as physique (a product's objective and tangible basis), personality (the character), culture
(set of values feeding the brand's inspiration), relationship (love and friendship), reflection
('the customer should be reflected as she/he wishes to be seen as a result of using the brand')
and self-image (one's own internal mirror stimulating an inner relationship with ourselves)16.
A very interesting view of brand is presented by Raggio and Leone who differentiate the
notions of brand equity and brand value. They interpret the brand equity as an intrapersonal
construct that moderates the impact of marketing activities and brand value, which is the sale
or replacement value of a brand. Brand equity represents what the brand means to the
consumer, whereas brand value represents what the brand means to a focal company17.
Nevertheless, for the purpose of that article, we will adopt a definition following Franzen and
Bouwman18, and state that “a brand is a network of associations with a name in the brain of
a person”. Brands, according to this view, are pieces of information, meanings, experiences,
emotions, images, intentions, etc., interconnected by neural links of varying strength.19
13
Keller K.L., Lehmann D.: How do brands create value? „Marketing Management”, Vol. 12, No. 3, 2003,
p. 26-31.
14
Bosch van den A.L.M., Jong de M.D.T., Elving W.J.L.: How corporate visual identity support reputation.
„Corporate Communications: An International Journal”, Vol. 10, No. 2, 2005, p. 108-116.
15
Keller K.L., Lehmann D.: op.cit.
16
Kapferer J.N.: Strategic Brand Management: Creating and Sustaining Brand Equity Long Term. Kogan Page,
London 1997, [in:] Ind N., Bjerke R.: The concept of participatory market orientation: An organization – wide
approach to enhancing brand equity. „Journal of Brand Management”, No. 15, 2007, p. 135-145.
17
Raggio R.D., Leone R.P.: The theoretical separation of brand equity and brand value: Managerial implications
for strategic planning. „Journal of Brand Management”, No. 14, 2007, p. 380-395.
18
Franzen G., Bouwman M.: The Mental World of Brands: Mind, Memory and Brand Success. Oxfordshire
World Advertising Research Center 2001.
19
Walvis T.H.: Three laws of branding: Neuroscientific foundations of effective brand building. „Journal of
Brand Management“, No. 16, 2008, p. 176-194.
153
As Meffert and Bierwirth write, on one hand competition between companies is no longer
confined to product markets but has now expanded to include procurement and labour
markets as well. On the other hand, the corporate brand is generally of particular importance,
as it is often used to support other brands within the portfolio20. This perspective seems to be
important from the point of view of this paper where there is a focus on the threats brought by
a crisis to the very corporate reputation which equals the corporate brand reputation.
However, Hatch and Schulz make a step ahead and suggest that there can be observed a shift
from corporate branding, which represents what the corporate brand does, to „enterprise
branding‟ which represents also all stakeholders engaged by its purpose and in its activity.
They define brand co-creation as an “emergent phenomenon based in networks of different
and constantly changing stakeholder configurations. Many brand co-creation researchers
conceptualize the phenomenon as a new branding paradigm.”21
4. Corporate brand reputation and business performance
It is universally known that reputation is a difficult concept to measure, however it is
frequently assumed that there is a positive relationship between business performance and
corporate reputation.22 “A company with a good reputation is more likely to stand out in
the marketplace as a beacon drawing both repeat customers and trial users.”23
Good reputation creates the goodwill of a company and reinforces kindliness towards it.
It allows for management to have better possibilities to recruit and select the most talented
and educated employees, offering jobs in a prestigious company for a competitive
remuneration. In such companies the atmosphere of innovativeness is increased since
employees tend to work in more effective and efficient ways, which will bring about new and
innovative solutions. This in turn ensures the company‟s evolution, increase of its operational
effectiveness and creation of good relationships among stakeholders (partners, suppliers,
regulators, dealers, creditors) who often express their support to a company by e.g. lower
prices of raw materials and services which then create the possibility of establishing higher
prices for final goods. Furthermore, higher prices increase rates of return, which results in
higher grading granted by financial analysts, which in turn induces shareholders to buy
20
Meffert H., Bierwirth A.: Corporate Branding – Führung der Unternehmensmarke im Spannungsfeld
unterschiedlicher Zielgruppen, [in:] Meffert H., Burmann C., Koers M., (eds.): Marken-Management.
Wiesbaden, Gabler 2005, p. 143-162.
21
Hatch M.J., Schultz M.: Toward a theory of brand co-creation with implications for brand governance.
„Journal of Brand Management”, No. 17, 2010, p. 590-604.
22
Ewing M.T., Caruana A., Loy E.R.: op.cit.
23
Connor D., Davidson J.: Marketing Your Consulting and Professional Services. John Wiley & Sons, New
York, NY 1997, p. 3-37.
154
a company‟s equities. Moreover, scientists from the University of South Wales in Australia
conducted long-lasting surveys (between 1984 and 1995) which proved that companies
holding strong reputations have greater potential to maintain a high level of outcomes from
their operational activities, and such companies have more capabilities to improve their
operational performance in time.24 Greyser identifies three major benefits of a positive
corporate reputation. These are: a) preference of doing business with a company when several
companies‟ products or services are similar in quality and price; b) support for a company in
times of controversy; c) a company‟s value in the financial marketplace25. According to
Paliwowa-Matiolańska good reputation constitutes an economic guarantee and is a tool of
development for an enterprise. At times it may play the role of a safety barrier when faced
with crisis situations. Factors which play the largest role in contributing to reputation building
are as follows26:
 personality of managing directors;
 norms and values which create the corporate culture;
 methods and techniques of human resources management;
 social engagement, company‟s and employees‟ activities in that scope;
 the way that company cooperates with partners, suppliers and cooperants.
As Ewing et al. write, “firms that have earned a well-respected reputation over the years
are getting much larger in size, while new entrants often struggle to gain awareness in
the marketplace.”27 Companies with good reputation attract qualified workers, increase
motivation, effectiveness and efficiency and provide a sense of mission. Good reputation
causes that the enterprise‟s equilibrium is based on both social and economic factors. Thus,
companies with a positive reputation are less likely to experience fluctuations in demand due
to the high loyalty of their customers. Those firms are characterized by the transparency of
activities, the fulfillment of their commitments, honesty and responsibility towards society
and the environment. However it is worth noting that reputation is acquired over time and
constantly needs to be worked on. Reputation itself is fleeting, elusive and very easy to lose,
so it needs to be constantly renewed. As Benjamin Franklin noted “It takes many good deeds
to build a good reputation, and only one bad one to lose it”28.
24
Krawiec F.: Kreowanie i zarządzanie reputacją firmy. Difin, Warszawa 2009, p. 29, 54.
Greyser S.A.: Advancing and enhancing corporate reputation. „Corporate Communications: An International
Journal”, Vol. 4, No. 4, 1999, p. 177-181.
26
Paliwowa-Matiolańska A.: Odpowiedzialność społeczna w procesie zarządzania przedsiębiorstwem. C.H.
Beck, Warszawa 2009, p. 179.
27
Ewing M.T., Caruana A., Loy E.R.: op.cit.
28
Benjamin Franklin Quotes, Thinkexist.com: http://thinkexist.com/quotes/benjamin_franklin/2.html,
10.01.2012.
25
155
5. The destructive strength of a crisis
In the course of a company‟s life there may occur situations which threaten the reputation
of the company or its brand. Sometimes it may be very difficult to identify the sources of
those threats. When society receives (or is abound with) more and more negative messages,
some established ingredients of reputation may be lost29. These negative messages may be
triggered by crises occurring within an enterprise. In the past, crisis events were often defined
as low-probability, high-consequence events that could threaten organizational legitimacy,
profitability, and viability30, and were characterized by ambiguity of cause, effect, and means
of resolution, as well as by a belief that decisions must be made swiftly31. Seeger et al. write
that “crises are specific, unexpected, and non-routine events or a series of events that convey
a fundamental threat to system stability, a questioning of core assumptions and beliefs, and
are threats to high priority goals, including image, legitimacy, profitability, and even
survival”. The same authors prove then that “the term crisis evokes a sense of threat, urgency
and destruction, often on a monumental scale. The term crisis suggests an unusual event of
overwhelmingly negative significance that carries a high level of risk, harm and opportunity
for further loss. (…) For managers, employees, community members, and victims, a crisis
often represents a profound personal loss. Careers may be threatened, livelihoods
jeopardized, and health, wellbeing, and sense of security and predictability shattered.”32
As the aforementioned definitions show, crises are usually destructive events for an
organization. They happen immediately and in many situations can not be predicted or
planned. The higher the level of unpredictability, the more disruptive results a crisis can bring
upon for the organization as a whole, or for its separate departments or functions. Crises may
differ from one another. There are many kinds of crises, depending on applied criteria. KnapStefaniuk propose the following division33:
1. According to the speed and time of duration – a sudden or lengthy crisis.
2. According to the place of sources – internal and external crisis.
3. According to the effects that may result from a crisis – destructive or constructive
crisis.
4. According to the causes of a crisis – real or virtual crisis.
29
Wieeneder S., Cerny T.: Skuteczne zarządzanie reputacją i spójny image. Wyd. BestPress, Warszawa 2008,
p. 11-13, 76.
30
Shrivastava P.: Bhopal: Anatomy of a crisis. Ballinger, New York 1987 [in:] Fowler K.L., Kling N.D., Larson
M.D.: Organizational Preparedness for Coping with a Major Crisis or Disaster. „Business Society”, Vol. 46,
No. 1, 2007, p. 88-103.
31
Pearson C.M., Clair J.A.: Reframing crisis management. „Academy of Management Review”, Vol. 23, No. 1,
1998, p. 59-77.
32
Seeger M.W., Sellnow T.L., Ulmer R.R: Communication and Organizational Crisis. Praeger Publisher,
Westport, USA 2003, p. 4.
33
Knap-Stefaniuk A.: Kryzys w organizacji – i co dalej? Biuletyn Polish Open University, „Zarządzanie
Zmianami”, Nr 1, 2006, www.wsz-pou.edu.pl/biuletyn/druk.php?p=&strona=biul_kryz&nr=, 19.01.2012.
156
“The shocking events leading up to the US government‟s bailout of financial institutions
in 2008 show how even the most well-known and seemingly financially strong organizations
can disappear in essentially the blink of an eye. The subprime mortgage fallout is the latest
example but there have been many others, such as when a corporation‟s reputation comes
under attack because of a rogue employee, boardroom scandal, product recall, or government
investigation.”34 Problems with reputation may take on different forms. They may be
triggered by short, incidental events or be developed for a longer period of time by longlasting process of events. They may arise just in time when the negative event happens or be
hidden at the beginning and revealed after some time, in most cases by journalists or reporters
or some discerning investigators. The voices of disapproval of a company‟s actions may
come from dissatisfied customers, institutions, regulators, groups of support or the public
opinion. Greyser submits some categorization of occurrences that may become the source of
a crisis of brand reputation. He singles out e.g. products failure, social responsibility gap,
corporate misbehaviour, executive misbehaviour, spokesperson misbehaviour and
controversy, poor business results and others35.
Although a crisis may affect almost every company, even if it is an enormous corporation
with a strong market position, appropriate actions could be undertaken to manage it.
According to James and Wooten a crisis is “any emotionally charged situation that, once
it becomes public, invites negative stakeholder reaction and thereby has the potential to
threaten the financial wellbeing, reputation or survival of the firm or some portion thereof.”36
Many crises however could be: 1) avoided at all; 2) minimized in terms of results they cause.
Furthermore, not every crisis carries with it serious consequences for a company‟s reputation.
It would be unjustified to claim that, for example, a natural disaster which undoubtedly can
be critical to the organizational being threatens its reputation. Although there may be some
external crises which are the cause of internal crises, like the world financial recession which
society and companies faced between 2007 and 2009, that caused a number of companies
worldwide to fall into trouble.
There are also crises which may create new chances and possibilities for a company. “It is
interesting that the Chinese have an appropriate phrase for crisis, wei ji, which brings together
danger and opportunity.”37
34
Krueger T.M., Wrolstad M.A., Dalsem Van S.: Contemporaneous relationship between corporate reputation
and return. „Managerial Finance”, Vol. 36, No. 6, 2010, p. 482-490.
35
Greyser S.A.: Corporate brand reputation and brand crisis management. „Management Decision”, Vol. 47,
No. 4, 2009.
36
James E.H., Wooten L.P.: Leadership an (Un)usual: How to display Competence in Times of Crisis.
„Organizational Dynamics”, Vol. 34, No. 2, 2005, p. 142.
37
Magit D.: Crisis? Oh, that crisis! Shell and Wendy‟s discover the dangers of too little action too late.
„Strategic Direction”, Vol. 23, No. 4, 2007, p. 6-9.
157
On the basis of an in-depth literature review, former research, and on our observations
and cases we studied, we pose a thesis that a crisis which is a real threat corporate reputation
has its origins inside an organization (internal crisis) and needs to be highlighted by
the public media.
6. Case studies
The cases selected for the analysis were appointed deliberately with the aim of showing
two examples of different methods of crisis management. Both examples present a crisis that
has its origins inside the company (Company X – unethical practices in the production
(re-production) process38; Company Y – unethical practices in treating its employees39).
Both crises had been extensively highlighted by the media, which influenced the opinion of
the public and therefore undermined the corporate brands‟ reputation of both companies.
However, each of those crises had been managed and communicated in considerably different
ways, which resulted in different market positions thereafter attained by each company.
The first case of Company X submits the example of wrong crisis management while
the second one of Company Y, in contrast to the first one, gives the example of an
appropriate way of crisis management. The case studies in the presented paper are worked
out on the basis of the following model:
1. Type of the company.
2. The source and the cause of the crisis event.
3. How the crisis was publicized?
4. The characteristics of the crisis.
5. Crisis management actions.
6. The state of the company after the crisis.
Table 1
Case study1 – Company X
1. Type of the company
A Polish company in the meat industry; a major Polish meatpacking plant, the biggest exporting meat plant in
Poland.
2. The source and the cause of the crisis event
The crisis was triggered off by the unsanitary practices at Company X‟s plants, consisting of “refreshing”
sausages by scraping mould (mold) of expired sausages and sending them back to the retailers.
Company X‟s workers were secretly filmed by one of the most well known Polish TV stations, then
the scandal was exposed by all types of media for a number of months.
38
The case characteristic was based on the Animal Welfare Institute‟s information, press releases
(Rzeczpospolita, Gazeta Wyborcza) and TVN programme‟s reports.
39
The case characteristic was based on the press releases (Gazeta Wyborcza, Rzeczpospolita, Gazeta Prawna),
TV programme‟s and Author‟s own observations. The names of the Company X and Company Y are known
to the paper‟s authors.
158
cont. tab. 1
4. The characteristics of the crisis
The biggest private television channel and a major Polish daily newspaper in April 2005 caught workers
at the Company X‟s plant on hidden cameras, debating whether expired products sent back by stores should
be thrown out or cleaned up and sent out again. After shocking revelations of unsanitary practices at Company
X, i.e. the system of scraping mould off expired sausages and sending them back to its retailers was revealed,
the plant was closed for 11 days.
The Polish government launched an investigation conducted by food safety inspectors. Moreover,
the Company X‟s owner, headquartered in the USA, hired a third party, Poland's former top veterinarian,
to oversee an investigation of the incident and the inspection of Company X‟s plant. The European
Commission was awaiting the results of the Polish investigation before deciding whether to take any action.
In addition to it, an internal audit had been introduced. But to make things worse it appeared that the
“independent” expert, a professor used to perform duties on behalf of Company X‟s US owner was
a chairman of the board of trustees.
It is worth noting that the situation that took place in Company X was not commented on by the executives
at all. Not before the management were on the verge of decline that they called a press conference to explain
their behaviour and to blame production supervisors. During the conference the chairman of the board of
trustees announced that Company X‟s director had been suspended from performing his duties and that
production had been halted until the matter was cleared up and the meat had been withdrawn from the
markets. Nobody (apart from the Company X‟s president) had been made redundant. During the conference,
nothing which had not been known to the public, was said. The chairman of the board of trustees had trouble
in answering questions. He did not want to make a confession relating to one of the most popular of Company
X‟s brands, which the company was awarded some time earlier. He could not even say where, at that moment,
was the food which had been removed from the markets. He replied tritely that it was being transported
somewhere around Poland in long vehicles.
The crisis situation was communicated in a completely wrong way. Instead of approaching the media and
trying to explain the misbehaviours, the organization made mistake after mistake. Some time after the crisis
came to its climax, Company X wanted to rehabilitate and made an effort to engage in solving social
problems. It decided to offer food packages to the poorest inhabitants of one of the Polish cities. As one can
imagine, this situation did not appease the public.
This occurrence undoubtedly can be labelled as an organizational crisis as it put a real threat to a company‟s
wellbeing and even existence.
5. Crisis management actions
The example of Company X clearly shows many mistakes made unconsciously and the reason why the crisis
became more intensive. Management did not deal with the situation in a proper way, did not deal properly
with the press because of a badly-prepared conference after 5 days of the scandal‟s explosion, blaming
innocent people and lack of efforts to save the plant‟s good name are only a few factors why the crisis
negatively influenced Company X‟s identity.
6. The state of the company after the crisis
As one of the Polish daily newspapers reported then, Company X had been working on improving its identity
and therefore create an image to rehabilitate its former reputation. The enterprise was rehabilitating, trying to
rebuild its position on the market and to restore its previous reputation. Before the crisis the scale (presence)
of Company X‟s products was twice as high as right after the crisis. They believed that all would be improved
by an advertising campaign aimed at associating the plant‟s brand and their products with the motto:
“Considerably the highest controlled pork company in Poland” and “We are better, thanks to you”. This was
in hopes of changing the defamed image of the company and its reputation.
The scandal involved customer‟s health and product‟s quality. This scandal reflected badly not only on this
particular company but on the whole meat industry in Poland and proved that large, high-tech slaughterhouses
do not make for a safer food supply.
The identity and therefore the reputation of innovative, high-tech organization, meeting the highest market
demands was completely lost. This incident became embedded in Polish customers‟ memory and lasts till
today. The company made and still makes every effort to rehabilitate and rebuild identity and therefore
influence its reputation, but as it is supposed, will be a long-lasting process.
Source: Authors‟ own study.
159
Table 2
Case study 2 – Company Y
1. Type of company
Chain of Polish supermarkets, part of a Portuguese group.
2. The source and the cause of the crisis event
The crisis was triggered of by employees‟ expressing dissatisfaction with working conditions. The employees
were treated badly by their supervisors and directors, they received low salaries, worked overtime for free and
were physically overburdened with work.
The crisis was publicized by groups of workers who were brave enough to voice their opinions and
displeasure. Some of them sued the company for moral damages. The real icon of the crisis appeared to be a
women, an employee of Company Y in one of the biggest cities in Poland, who as a first, sewed the company.
4. The characteristics of the crisis
Disputes on the worker-employer line seem to be a quite normal occurrences in any business, therefore
as well as in a business such as a huge market chain. However, the scale of the lawsuits brought against
Company Y‟s Portuguese owner – mainly by its former employees, the formation of an association of persons
affected by the chain, and the media fuss associated with those happenings, caused that Company Y‟s chain
had become, in the public opinion, synonymous with the exploitation of Polish workers by international retail
operators. The head of the association was a former supplier for Company Y, who was in a purely business
dispute with the Company Y. The peculiar icon of the whole venture was the employee mentioned above
who, as a first, sued Company Y for moral damages. The allegations against the chain even suggested
that the bad behavior towards the employees was a part of a conscious policy. All these accusations “met with
a favourable response”. That is the Company‟s Y chain had become a peculiar “whipping boy”.
The chain itself and its employees had became the subject of a number of jokes undermining the diligence and
reliability of the business. Nobody aspired to work for the chain and, if anybody did, he/she was exposes to
mockery from one hand and sympathy from the other. Despite the fact that nothing was said about the goods
offered by the chain, simultaneously with the negative reputation of Company Y as an employer, negative
light was cast on the quality of the business as a whole. One could observe the untidiness and unpleasant
smell in particular store locations. The situation caused customers to resign from shopping in the chain and
shifted to the others.
The general director‟s responsible for the operation of the Company Y‟s chain was truly tested during the
period of a difficult crisis and he appeared to be a really good manager for these times.
5. Crisis management actions
The general director had to cope with the smear campaign against the chain, with multiple trials and
simultaneously had to start to restore the company‟s image. Company Y changed its information policy for
a more open and, at the same time, introduced changes in the shops aimed at improving the working
conditions by e.g. launching an electronic system of a work-time measurement or arranging for special trucks
for transporting goods. The chain started to create good relations with employees. The trials that were being
conducted demonstrated that most of the accusations made were unjustified. The transparency of operations
introduced by the general director resulted in the considerable improvement of its corporate image.
6. The state of the company after the crisis
It appeared that the media and judicial confusions did not stop the company‟s development. The chain started
to focus on improving the quality of goods offered and on creating long-term relations with suppliers (which
is proven by the fact that it has suppliers who have been cooperating with the company for over 10 years,
which means they are satisfied with the cooperation, i.e. the financial, business and social conditions).
The chain has grown to over 1520 discount stores and 8 distribution centers in 2010, the value of its sales in
the first half of the year (2010) amounted to almost 9 billion zlotys. The chain employs more than 29 000
workers. It even intends to open 150 discount stores yearly. Currently Company Y is seen and awarded as one
of the best employers on the Polish market. The corporation was even acknowledged as being one of the most
innovative companies in Europe. Such honourable mention was justified by company‟s awareness of its
customers‟ needs, its simplicity, low prices and the scale of operation.
Source: Authors‟ own study.
160
7. 4-phase model of corporate brand reputation rebuilding – the method
and its application
On the basis of the aforementioned two cases, opposite in terms of the actions
the enterprises took to manage the crisis, reintegrate the ingredients of their corporate identity
and therefore influence their market reputation, we propose to apply a 4-phase model of
corporate brand reputation rebuilding created on the basis of the model of reintegration of
the corrupt organization, built by Pfarrer et al40. Nowadays corruption practices constitute a
real problem for corporations around the world and are vivid subjects of in-depth scientific
examination by many researchers41. Corrupt behaviors, if revealed in the company, first of all
trigger off a scandal, and secondly they initiate a crisis, and thirdly, which is the result of
these two, they threaten the corporate reputation. Corruption as well as unethical practices
with products and the inappropriate treating of employees are transgressions that are harmful
to the internal and external perception of a company, regardless its size, type of production or
services, location, structure, voiced policy of operation etc. Therefore we find a broader
application of an organizational reintegration model as a model of corporate brand reputation
rebuilding after an internal crisis. Following the authors of the stage model of reintegration
we focus on the actions that an organization might take in a particular phase in response to
the varying environmental demands while attempting to reestablish its reputation.
We theorize that since the environment‟s demands change as the crisis goes through different
phases, so too must an organization‟s actions. This change in environmental demands or
questions and organizational actions signify the evolution of the reputation rebuilding process
from one phase to the next. We base the 4-phase model on four assumptions that are also
boundary conditions for the propositions. First, we assume that a crisis has its origins inside
an organization (internal crisis), is caused by misbehaviors of employees or management,
constitutes a transgression and is publicly exposed so the society who is aware of the event.
Second, since the model was adjusted and based on the case studies conducted in Polish
organizations, the model depicts a corporate brand reputation rebuilding process that can
occur in similar cultures (Middle and Western Europe, USA). As Pfarrer et al. suggest,
following Farh et al.42 and Hasegawa43 „the importance of saving face as well as the
ignominy of public shame in Eastern cultures may alter the course of action as shown here.”44
40
Pfarrer M.D., Decelles K.A. Smith K.G., Taylor M.S.: op.cit.
Comp. Stachowicz-Stanusch A. (ed.): The Katowice Branch of the Polish Academy of Sciences, Katowice
2009.
42
Farh J.L., Hong C.B., Organ D.W.: Organizational citizenship behavior in the People‟s Republic of China.
„Organization Science”, No. 15, 2004, p. 241-253.
43
Hasegava A.: The consequences of Japan‟s shame culture. „Business Week”, No. 19, February 2001.
44
Pfarrer M.D., Decelles K.A. Smith K.G., Taylor M.S.: op.cit.
41
161
The following quote provides and example to illustrate this statement: “Bridgestone‟s CEO
Yoichiro Kaizaki‟s decision to avoid disclosing the company‟s problems despite a highly
publicized recall of faulty tires, which seems likely to have been influenced by aspects of
the Japanese culture, where silence is generally viewed as an appropriate way to convey an
image of calm and control”. Third, the model is developed under the assumption that
attaining and maintaining positive reputation are important to an organization being in crisis
– and that it is therefore willing to take the steps necessary for reputation rebuilding. Finally,
time and speed play important roles in each stage of the model. Ideally, an organization
would like to be reintegrated as quickly as possible, because time spent under suspicion may
impact its ability to acquire resources and, consequently impact its very survival45. Therefore
the more time the organization spends in any one phase can jeopardize the organization‟s
chances of rebuilding its reputation.
The model refers directly to actions that were taken or which taking was missed by the
enterprises described in the case studies. Company X‟s example depicts the wrong way of
meeting the crisis management process requirements, therefore is synonymous with negative
actions taken, while Company Y as a successful company that managed to restore its
reputation or even improve the company‟s perception in the environment, constitutes
a synonym of positive actions, worthy of being followed. Particular phases of reputation
rebuilding are presented in table 3.
Table 3
4-phase model of corporate brand reputation rebuilding
Phase
Interested
environment‟s
groups
Interested internal
groups
Key environment‟s
and internal
groups‟ questions
45
Ibidem.
I Recognition
Media
Regulators
Consumers
Society
Employees
Management
Investors/
Owners
What happened?
II Clarification
Consumers
Media
III Penance
Consumers
Media
Society
Investors/
Owners
Employees
Investors/
Owners
Why did it happen?
What
consequences
should be
suffered by the
organization?
IV Rehabilitation
Consumers
Media
Regulators
Society
Employees
Management
Investors/
Owners
What organizational
changes have been
made?
162
cont. tab. 3
Additional
discourse of the
environment
groups
How egregious the
transgression was?
Was the company
forthcoming and
cooperative?
Do we have all
the facts?
Were there any
codes and norms
in the company?
Does the
explanation fit
the transgression?
Could the
transgression
be prevented?
What are the
weakest areas
of the company?
May there occur
other
transgressions?
Possible actions by
the organization
Voluntary
disclosure;
Internal
investigation;
Internal audit;
Public cooperation.
Acknowledge
wrongdoing;
Justification,
Express regret;
Accept
responsibility;
Offer amends;
Apologize;
Open and
transparent
communication
with media.
State of reputation
Loss of positive
reputation and
company‟s
goodwill
If an organization
takes the actions
proposed,
its reputation stops
decreasing
Did the
organization
acknowledge
the transgression?
Do the
consequences
equal the
transgression?
Should the
organization
be punished
officially and/or
unofficially?
Does the
organization have
any recovery
plans?
Accept verdict;
Acknowledge that
Verdict
is equitable;
Serve time
without
resistance;
Change the
information
policy.
Start the
reputation
rebuilding
Are internal and
external changes
consistent?
Do symbolic changes
reflect real behavior?
Are changes real or
simply window
dressing?
Did the organization
learn anything from
the situation?
How the
organization is going
to prevent future
crises?
Changes in line with
transgression;
Internal changes in
management; reward
structures; social
benefits and
personnel
(if needed);
New projects and
procedures;
External portrayal
of new ethical image;
Corporate
responsibility;
New mission
statement;
Code of conduct;
New corporate
values.
Further reputation
rebuilding;
Regaining positive
reputation;
Improving former
reputation.
Source: Author‟s own study on the basis of „Model of Reintegration”, Pfarrer M.D., Decelles
K.A. Smith K.G., Taylor M.S.: After the fall: Reintegrating the corrupt organization.
„Academy of Management Review”, Vol. 33, No. 3, 2008, p. 730-749.
8. Summary
What can be done to exit a crisis and rebuild the lost reputation as a consequence of
a crisis which was the result of a transgression? The approach takes the form of a detailed set
of examinations and interpretations of recognized corporate reputation rebuilding phases.
163
It lays out the choices of aim and the strategies in carrying out the appropriate means and
certain behaviors, e.g. providing a justification, confession, expressing regret, apologizing,
ensuring the improvement, transparency and openness. Organizations that need to rebuild
their reputation must devote time and effort to improving the relations with consumers and
employees and other interested groups in the environment as well as with their stakeholders.
A company should first make public the circumstances and causes of the transgression and
second, the actions taken to gain understanding. The 4-phase model suggests that rebuilding
a corporate brand reputation is a complex process involving multiple actions to be taken by
an organization, and also involves external as well as internal groups. Specific columns in
the model‟s table present which questions can be posed to the organization, what actions
the organization could take and what is the state of the reputation at given phases.
The model may have some limitations resulting from the fact that the focus was put on
crises arising from committing a transgression by a company, and that the examination didn‟t
involve companies which lost their reputation during defamation or in other circumstances.
Moreover, all the crises described above were media driven, therefore it can be recommended
for further research to examine in what way smaller companies, who had lost their reputation
due to a crisis they faced, may recover and rebuild their external perception in
the environment.
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Article was financed from the founds of National Science Center within the project No. N115
416140, detailed in the agreement 4161/B/H03/2011/40 from 04.05.2011.

organizacja i zarządzanie

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