ISSN 2345-4954

Transcription

ISSN 2345-4954
ISSN 2345-4954
Editorial Office Address: Toroudshomal Research
Company, Technological Enterprises Incubators
Center, University of Mazandaran (UMZ) Head Office,
Babolsar. Iran Postal Code: 4741613519,
Tel: (+98)1135259653, Telefax: (+98)1135303671
Web: http://www.oajre.com
Email: [email protected]
The Open Access Journal of Resistive Economic (OAJRE)/
Volume 4, Number 22-28, 2014 Published Online October 25
The Open Access Journal of Resistive
Economics (OAJRE)
Toroudshomal Reseach Company
25 October 2014
Iran\Mazandaran\Babolsar
2
The Open Access Journal of Resistive Economic (OAJRE)/
Volume 4, Number 22-28, 2014 Published Online October 25
Publisher: Toroudshomal Research Company
the Open Access Journal of Resistive Economics
(OAJRE)/electronic publishing Toroudshomal/
Iran / Mazandaran / Babolsar/ 25 October 2014
Home / illustrations/ diagrams
No electronic publishing shomal: J/22-28/2014
Subject: Volume 4 Journal
ISSN 2345-4954
Editorial Office Address: Toroudshomal Research Company, Technological Enterprises
Incubators Center, University of Mazandaran (UMZ) Head Office, Babolsar. Iran
Postal Code: 4741613519, Tel: (+98) 1135259653
Telefax: (+98) 1135303671
the Open Access Journal of Resistive Economics(OAJRE)
Editors: Zahra Yahyatabar, Zahra Azimi
*Printed Electronics, 25 October 2014* No. 22-28 * Price: Free Version
*Toroudshomal Electronic publishing*
Supervisor: Fatemeh Yahyatabar, Solmaz Sabbaghi
No Toroudshomal Electronic publishing: J/22-28/2014 ISSN 2345-4954
http://www.oajre.com
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The Open Access Journal of Resistive Economic (OAJRE)/
Volume 4, Number 22-28, 2014 Published Online October 25
Contents
Contents .............................................................................................................................................. 4
The Words of Managing Editor: ...................................................................................................... 6
The Words of Economics Editor in Chief:....................................................................................... 7
The Words of Management Editor in Chief:................................................................................... 8
Aims and Scope: ................................................................................................................................. 9
Editorial Board:
18
Members:
18
Pathology of Technology-Based Business in Iran In Terms Of Economic Sanctions ................ 20
Hussein Fakhari, Aliakbar Jowkar and Mohammad Reza Daraei
Prioritizing Risk Treatments on a Given Subterranean Oil Pipeline Project Using Fuzzy
Decision Making Technique ............................................................................................................ 35
Nafiseh Falahi, Farshid Abdi and Sadigh raissi
Investigation Of Effective Factors On Bilateral Trade Costs Of Agricultural Product .......... .51
Mitra Jalerajabi and Reza Moghaddasi
Presenting a Suitable Pattern to Transfer Technology from Armed Forces to Defense
Industries for Mass Production ...................................................................................................... 60
Ali Shaebani, Hassan Rajabi Masroor, Mohammad Mardani, Soheil Emamyian
Economic Valuation Of Water Resources Using The Evaluation And Planning System “Weap”
............................................................................................................................................................ 78
Rahil Rahimi, Leila Ooshaksaraie and Hasan Karimzadegan
Non-Oil Export Development, Iran’s Sustainable Development Key Element In Global
Business Environment ..................................................................................................................... 88
Saman Raji
Providing Innovative Model of Research and Development in Guerrilla Marketing and
Emphasis on Its Role in the Global Village ................................................................................. 105
Mohammadreza Shahbazi, Leila Abdollah Zadeh Ramhormozi, Elham Khatibi Taleghani
4
The Open Access Journal of Resistive Economic (OAJRE)/
Volume 4, Number 22-28, 2014 Published Online October 25
Introduction:
Recently, resistive economics joined the economics literature. One of the main requirements for
such economy is self-reliance, due to achieve excellence. Some definitions of resistive economics
regard the persistence against sanctions. And other ones emphasize on reinforcement of national
economy. First time, in 2005, resistive economics was introduced after the blockade of Ghaza, And
in recent years, tighten sanctions against some countries causes to promote this approach and takes
into consideration. The goal of resistive economics is to use the internal sources potential against
sanctions and restrictions with minimal crisis
The approach and process of Protecting the national production, labor and capital has different
economic, political and social aspects. The main one is resistive economics which could be
effective due to the development and uprising of economy‘s activities. Resistive Economic can be
evaluated as one of the pillars that support the national production which neutralizing sanctions by
relying on domestic production. And implementing its principles lead to revolution in the national
production
According to rapidly growth of scientific connections which comes from promotion and usage of
online web, we aim to publish an open access journal. Nowdays, regarding many open access
journals indexed in Citation Indices and high impact factor of some of them, authors became eager
to them
On the other hand, the open access movement‘s attempts to start rising level of scientific journals
which includes professional evaluations. This entire increases the attractiveness of participating in
the movement
By using the open access publishing, this journal is looking for promoting discussion about
resistive economics. All published papers are peer reviewed and would have acceptable scientific
standards and also would reveal the various aspects of resistive economics according to economics
literature.
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Volume 4, Number 22-28, 2014 Published Online October 25
The Words of Managing Editor:
Toroudshomal Research Company According to its missions for protecting and promoting the
intellectual heritage of humanities aims to establish annual conferences in order to cover the new
and critical humanities Themes. Also we would publish the outcome of these events which are
accessible for all researchers to improve the scientific boundaries and to remedy the increasing realworld problems .
So, for the first time, we publish the international journal of resistive economics in five scope:
Economy under sanctions, Oil and gas economics and management, Military Management and
Economics, Green economics and Entrepreneurship. And we are trying to introduce the object of
resistive economics‘ discussions to international R&D centers and make it popular between
economists.
We are pleased with the open access, because:
• It is publicly accessible on the web.
• Readers have right to read, print and share it with others freely.
• In traditional publishing, authors leave many of his/her rights to publishers. But in open
access, all rights belong to authors.
• This open access journal is peer reviewed.
• It needs fewer cost and time to accept article.
Mohsen Kelich,
Director of Toroudshomal Research Company
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The Open Access Journal of Resistive Economic (OAJRE)/
Volume 4, Number 22-28, 2014 Published Online October 25
The Words of Economics Editor in Chief:
History of scientific journal in Iran began from 3 decades ago. And so far it has remarkable
progress In terms of quantity and quality. Retrospect at journals published in developed countries;
we face to Evolution of screening and evaluating of paper and method of publishing which moved
from traditional ones to electronic publishing. However, the vision and purpose of authors from
publishing papers and publishers' responsibilities in this scope has been somewhat changed. Maybe
part of this improvement could be attributed to legislation which itself is acceptable. Providing
access to scientific and scholarly content placed readers in a potential and strategic situation which
plays a fundamental role in informing.
The potential Background of resistive economics _like special committees to develop scientific
papers, scientific centers against sanctions for compiling new strategic approaches in the economics
literature and also scientific journal management method, implementing electronic publishing could
be found in the goals of Toroudshomal Research Company as a scientific collection. Open access
journal of resistive economics would publish regularly despite of many ups and downs in the
International events. In this way we need the Cooperation of professors, teachers and researchers.
We hope to be able to draw bright prospect in this field by benefit from the valuable comments
of teachers, students, and researchers and take large steps in this path.
Dr. Pedram Davoudi
Economics Editor in Chief
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The Open Access Journal of Resistive Economic (OAJRE)/
Volume 4, Number 22-28, 2014 Published Online October 25
The Words of Management Editor in Chief:
Sustainable growth and development in general and economic development specifically, is one
of the most important and most controversial issues and challenges in the world, and the national
aspirations of the people of all nations.
One of the most important effective factors of such a noble aspiration is having an effective and
efficient interaction among countries. And resistive economics, sanctions (economic, political,
cultural, social), regardless of their causes, are the most important challenges (opportunities and
threats) in this field.
Management of sanctions challenges and turns them into good opportunities in different
countries and it depends on the function of the effectiveness of three M. Top Management, Middle
Management and Operational Management
(Malaysia's new economic architect, Mahatyr M)
Although managers can take many tools to manage the challenges associated with the sanctions
that may be applied, but certainly in the role of creativity, innovation and idea creation, the most
unique feature of entrepreneurs (economic, political, cultural, social) is undeniable and unmatched.
Talent and creativity, innovation and idea creation found in all humans, but the degree of
expression, appearance, and use it in different ways is not based on a specific rule. And conferences
are ideal place to hunt for any kind of creativity, innovation and ideas.
Creativities, innovations and ideas targeted and trapped at the journal and opportunities and
new solutions will be facing managers and administrators, so that they can use them to create
knowledge-based wealth (economic, political, cultural, and social) to manage the different aspects
of the sanctions act.
Dr. HassanAli Aghajani
Management Editor in Chief
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The Open Access Journal of Resistive Economic (OAJRE)/
Volume 4, Number 22-28, 2014 Published Online October 25
Aims and Scope:
Themes and Sub-themes
- Military Economics and Management
The economics of war:

War military expenses

Background and state of economy prior to war

Peacekeeping funding

Recent wars and world economy

Most military countries and their economy

Value of economic lost in war

Defense budget

Defense subsidy
Military service:

Relation between Military service and GDP, Entrepreneurship, Unemployment, …

Troops costs

The impact of Conscription on economic growth
Military treaty organization:

North Atlantic Treaty Organization (NATO) and world economy

Southeast Asian Treaty Organization (SATO) and world economy

Nuclear Non-proliferation Treaty (NPT) and world economy
Military Markets:

International arms market

Global military expenditures

Arms producing companies

Arms trade

Arms race model

Small arms market

Global military expenditures

FDI in military project

Ratio of military expenses to GDP

Black market arms

World arms exporters and imports

Money laundering in arms market

Military new technologies and economic growth
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The Open Access Journal of Resistive Economic (OAJRE)/
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Military companies/institution:

Private military companies/forces (PMCs/PMFs)

Military labor market

Joint military projects expenditures or joint Military project costs

Military pay scale
Military management:

Human Resource Management

Management of Financial Resources

Industrial Management

Business Management

Knowledge Management

Production Management

Risk Management

Strategic Management

- Time Management

Crisis Management
Cyber war and economy:

Economic infrastructure and cyber war

International monetary transactions and cyber war

Economic Information Warfare
Terrorism and world economy:

Financial flows of terrorist organization

Expenditure of national & international security

Terrorism operations and world economy

September 11, 2001 attack and world economy

The effect of weapons of mass distruction(biological, chemical, Nuclear, …) on world economy

History of military-economic thought and theories

Militaristic Keynesianism

Golden arches theory
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Volume 4, Number 22-28, 2014 Published Online October 25
- Economy

under Sanctions
Explain the economic conditions of sanctioned countries (China, Libya, India, Cuba, Iran, Iraq, Pakistan,
South Africa, Syria, Sudan, Afghanistan, Russia, North Korea, etc.) from the perspective of macro-Economic
variables (exports, imports, privatization, inflation, interest rates, exchange rate, GDP, per capital income,
economic growth, tax, unemployment, etc.)

Explain the economic conditions under sanctions from the perspective of micro economic variables (market,
consumer, manufacturer, price, utility, and the price elasticity of production, replacement and return of …)

Economic sanctions and social variables (general health, health, Racism, Poverty, migration, food security,
environment, Social Capital, etc.);

Economic sanctions and international politics and law (human rights, democracy, humanitarian aid, etc.)

The impact of sanctions on the production and trade of energy (oil, gas, etc.);

Terms of economic sanctions and international monetary and financial systems;

The impact of sanctions on banking and international trade;

Economic sanctions and Doing business, entrepreneurship, SMEs;

The impact of international sanctions on international organizations and companies, FDI & FPI;

The Nature and Models of Sanction;

Sanctions Management;

Typology of Sanctions;

Sanctions and Resistive Economics;

Management of Organizations and Companies In Terms Of Sanctions;

Reduce the Social and Economic Effects of Sanctions;

Geneva Agreement and Its Consequences;

Military Economy;
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The Open Access Journal of Resistive Economic (OAJRE)/
Volume 4, Number 22-28, 2014 Published Online October 25
- Oil and Gas
Economics and Management
Theories and Concepts:

Economic Development and oil and gas

Geoeconomics and oil and gas

Oil and gas planing
Oil and gas’s demand and supply

Trade and markets

Market Forecasting

Oil and gas pricing

Consumption of oil and gas product

The analysis of international energy demand and supply
Alternative Energy sources

Renewable Energy

The global climate change and international cooperation on reducing carbon emissions;

New energy saving technology

Other sustainable energy

Ecological economy, circular economy and low-carbon economy;

New technologies and design for energy efficiency
Investing in oil and gas

Financing of oil and gas

Contracts

Energy Security and Risk Assessment

Project management and investing

Investment in related projects such as refineries and petrochemical
Domestic and international Policy making

Exporter‘s policies

Importer‘s policies
International organization

OPEC

GPEC

G20
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The Open Access Journal of Resistive Economic (OAJRE)/
Volume 4, Number 22-28, 2014 Published Online October 25
- Green
economics
Theories and Concepts:

Environmental Economics

Environmental Management

Green industries

Welfare Economics

Development Economics

Agricultural Economics

Eco Socialism

Green tourism

Eco Feminism And Women‘s Economics

Strengthening economic competitiveness,

Foreign Direct Investment

Game Theory
Structural Questions:

privatization

Good Governance

Doing Business

NGO‘s

Consumerism

Civil Society And Attitudes To Acceptable Economic Activity

Environmental Management As An Industry

Taxing

Off Shoring

Outsourcing

Multinationals And Tariff Barriers

Polluter Pays

…
International Institutions and Corporate Activity:

Bretton Woods

EU

UN

IMF

World Bank

WTO
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
UNCTAD

GATTS

Sovereign Wealth Fund

Trading Blocks

New Protectionism

International Governance

Roles And Activity Within Multinationals

Procurement

Processes Of Globalization At A Practical Level

Limiting The Power Of The Multinationals
New Initiatives and Cases, Experience and Applications:

Green Solutions

Green intelligence

Eco Taxes

Resource Management

Renewable Energy

Green Management

Green building

New Economic Indicators

Zero Waste

Reuse

Recycle, Repair

Quality Of Life And Consumerism

Information Technology and environments
New Paradigms of the Economy:

Biosphere, Non-Human Species

Women and Minorities

Post Agricultural Social And Economic Requirements And Organization

Planning To Reduce Surplus And Not To Harness It For Power Over Others

New Fertilizer and environmental effects
Social Justice:

Less Developed Countries

Subsistence Economies

Purchasing Power Parity

Income Distribution
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
Poverty: Its Definitions And Effects

Quality Of Life Indicators

Tools For Ensuring That Policies Involve Justice

Environmental Justice And Consequences Of Lack Of It

….
- Entrepreneurship
Entrepreneurship:

Theoretical and Empirical principles about entrepreneurship and value creation

Entrepreneurship and its role in sustainable development (economic, political, cultural, social)

Entrepreneurship in various areas of science and technology (With the goal of creating jobs and creating value
and wealth).

The role of entrepreneurship in resistive economics.

Entrepreneurship, from the perspective of Islam and Quran.

Green Entrepreneurship.

Entrepreneurship under sanctions.

Military Entrepreneurship

And ……..
Incubator centers and science and technology parks:

Theoretical and Empirical principles about Incubator centers and parks

Specialized clinics for consultation and brokerage firms, operating and maintaining knowledge-based
businesses.

Knowledge -based Businesses (companies) and commercialization of science and technology

And ……..
Management in the knowledge Based SMEs:

Theoretical and empirical principles about knowledge – based SMEs

Production, financial markets, innovation, legal issues, strategic management, management consulting for
SMEs.

Business clusters

Green business.

And ……..
The relationship between universities, industry and society:

Theoretical and experimental study on the relationship between universities and industry.

University and industry mutual expectations (community)

Community/ Models / Patterns / Frameworks for effective communication between universities and industry
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
And ……..
Third Generation Universities (entrepreneur and value creation):

Theoretical and Experimental Community on Third Generation Universities.

The role of universities in society development of (economic, political, cultural, social).

The role of Third Generation Universities in Resistive Economics

Academic entrepreneurship and entrepreneurial University – Commercialization of knowledge and academic
technology.

Universities, Colleges, departments, new generations‘ courses.

Programs and entrepreneurial training systems in universities.

University and industry mutual expectations (community)

Community/ Models / Patterns / Frameworks for effective communication between universities and industry

And ……..
Commercialization and academic goods & services sale (education, research and technology):

Knowledge- based wealth creation (economic, cultural, social and political) in the different academic areas.

Shops, exhibitions, academic products markets technology (didactic, research and technology),

Academic products sales and after-sales service chain (supply chain management) (didactic, research and
technology),

Businesses clusters, unions, guilds and organizations which support academic goods and services (didactic,
research, technology).

Models / frameworks / patterns of employment and money making in the various spheres of academic
production (education, research, technology and others).

And ……..
Entrepreneurial relationships with various academic courses:

Theoretical and Empirical principles about entrepreneurship and academic courses.

Entrepreneurship, employment and money making in different humanity courses (management, economics,
accounting, law, political science, geography, literature, language, religion, theology, jurisprudence and
Islamic law, physical education and sports science, etc.).

Entrepreneurship, employment and money making in various fields of basic sciences (chemistry, physics,
biology, mathematics, biochemistry)

Entrepreneurship, employment and money making in various fields of Agricultural sciences (Agronomy,
Horticulture, Soil Science, Landscape, Animal Science, etc.).

Entrepreneurship, employment and money making from various fields of engineering (Electrical engineering,
Civil engineering, Mechanical engineering, Industrial engineering).
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Volume 4, Number 22-28, 2014 Published Online October 25

Entrepreneurship, employment and money making in various art courses (architecture, urban planning,
tourism, restoration and archeology, industrial design, painting, graphic design, clothing design and sewing,
cinema, film, theater, acting, script-writing, crafts, art research, public relations.)

Entrepreneurship, employment and money making in various medicine courses (medicine, nursing,
physiotherapy, laboratory, dentistry)

Entrepreneurship in defense and military fields and others…..

And ……..
And other freebies in line with the objectives of the conference:

Knowledge Based Economy.

And ……..
17
The Open Access Journal of Resistive Economic (OAJRE)/
Volume 4, Number 22-28, 2014 Published Online October 25
Editorial Board:
“Science does NOT know Borders”
The Open Access Journal of Resistive Economics (OAJRE) kindly invites distinguished research
scientists (only with PhD) to join in and work on the scientific committees and editorial review
boards of the journals and conferences. Membership in the Open Access Journal of Resistive
Economics (OAJRE) scientific committees and editorial review boards can open windows of
opportunity for your professional growth and development as free-of-charge. Through special
scientific committees and editorial review boards, and numerous occasions for scientific exchange
with colleagues, journal of resistive economics gives distinguished research scientists the power to
enhance their knowledge, skills, and professional options.
ISSN 2345-4954
Members:
Managing Editor:
Mohsen Kelich Director of Toroudshomal Research Company
[email protected]
Management: Editor-in-Chief:
Dr. Hassanali Aghajani, Iran
[email protected]
Economics: Editor-in-Chief:
Dr. Pedram Davoudi, Iran
[email protected]
Green Economics Editors:








Dr.Sedigheh Kelich
Dr. Azhar Bin Harun, Malaysia
Dr. Salman Dastan, Iran
Dr. James Meckler, India
Dr. Ebrahim Javdan, Iran
Dr. Younos Vakilaroaya, Iran
Dr. Hamid Reza Feili, Iran
Dr. Samira Aligholi, Iran
Oil and Gas Economics and Management Editor:



Dr. Samson Adeniyi Aladejare, Nigeria ([email protected])
Dr. Kamal Sadeghi, Iran
Dr. Bostan D. Ionel, Romania
18
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Volume 4, Number 22-28, 2014 Published Online October 25




Dr. Naser Feghhi Farahmand, Iran
Dr. Saeed Darab, Iran
Dr. Sina Karam, Iran
Dr. Niaz Bashiri Behmiri, Italy
Military Economics and Management Editors:






Dr. Aboulfazl Shahabadi, Iran ( [email protected] )
Dr. Davoud Kiakojori, Iran
Dr. Azhar Bin Harun, Malaysia
Dr. Alireza Shahpari, Iran
Dr. Mohammad Reza Zeynoddini, Iran
Dr. Mohammad Mohhammadi, Iran
Economy under Sanctions Editors:








Dr. Carmen Bizzarri, Italy ( [email protected] )
Prof. Mansour Zara Nehjad, Iran
Dr. Mohamad javad zare, Iran
Dr. OJO. Afolabi Micheal, Nigeria
Dr. Khiji Bashir Ahmad, Pakistan
Dr. Rasool Yarifar, China
Dr. Mohammadreza Poorghorban, Iran
Dr. Mandana Saniee, Iran
19
The Open Access Journal of Resistive Economic (OAJRE)/
Volume 4, Number 22-28, 2014 Published Online October 25
Pathology of Technology-Based Business in Iran In Terms
Of Economic Sanctions
Hussein Fakhari *1, Aliakbar Jowkar 2 and Mohammad Reza Daraei 3
__________________________________________________________________________
ABSTRACT: In this era, technology-based business (TBB) is the driving force of knowledge based
economies. Accordingly, planning to improve the environment of TBB is an effective factor for the
sustainable development in any country. However, due to economic sanction and inflation, in our country,
TBB are the focus of various environmental challenges. Using a qualitative and practical approach, this study
based on Fuzzy Delphi Method, investigated the pathology of national TBB environment in economic
sanction. This study aims to find challenges from the sanction in front of national TBB for growth and
development of their activities. The process led to extract and prioritize challenge of sanction on these
businesses in direct negative and indirect negative impacts category. The study results are a preface to solve
problems of TBB and strengthen national ability against sanctions.
KEYWORDS: technology-based business, economic sanctions, negative effects
1
MS Student of MBA, Payame Noor University, Tehran, Iran. P.O. Box19395-3697, E-mail: [email protected]
2
PHD of management, Department of Management, Payame Noor University, Tehran, Iran. P.O. Box19395-3697;
E-mail: [email protected]
3
PHD of management, Department of Management, Payame Noor University, Tehran , Iran. P.O. Box19395-3697;
E-mail: [email protected]
20
The Open Access Journal of Resistive Economic (OAJRE)/
Volume 4, Number 22-28, 2014 Published Online October 25
1. INTRODUCTION
The introduction of the revolutionary evolution of knowledge in modern economy and its key role in
producing productions has generally changed the face of economy so that not only the production volume is
not a precise criterion for assessing a country's economic power, but also the rate of production and export of
knowledge and technology-based products is considered as a modern criterion for measuring the national
power of a country (Sobhani & Rizvandi, 2012). Technology-based enterprises are the main factor in
increasing productivity and economic growth and active and stable presence in scientific fields and
international trade in a country (Behbudi & Amiri, 2010). Therefore, the prosperity of knowledge-based
enterprises will lead the country to achieving sustainable, technology-based and pioneer economy.
Accordingly, in our country, to make a fundamental change, the main approach of the national development
programs has also been targeted to technology-based economy and on Iran‘s Holistic Scientific Map and also
the principle of resistive economy; the development of technology-based enterprises has gained special
attention. Despite all unique features of small technology-based enterprises and their main role in sustainable
development of communities and economic growth in the world, unfortunately, they have much higher
probability of failure compared to large enterprises (Azar et al.2010).
Therefore, on one hand, small technology-based enterprises are considered as the main factor of countries‘
economic growth and industrial development and on the other hand, they are highly susceptible to numerous
problems and high failure rate. Obviously, this can be exacerbated in economic sanctions and inflation. In
other words, unstable economic conditions and environmental stresses such as sanction challenge can create
multiple threats, quite different situation and even opportunities for technology-based enterprises.
Since our country is involved in policies for coming out of pressures from sanction for years, so, given the
fundamental role of technology-based enterprises in national economic plans now and in the future, these
enterprises will obviously be the focus of positive and negative effects of economic sanctions. In the current
study, by a qualitative approach and based on a scientific and systematic process, it is tried to identify
challenges from sanction on such enterprises in national technology-based business environment including
direct and indirect negative effects and present these effects in an appropriate context. Thus, through proper
planning to solve these problems, the national ability to cope with sanction will significantly rise within the
framework of resistive economy.
2. LITERATURE REVIEW
Regarding several stages of sanctions on Iran's history, some researches have investigated the several effects
of economic sanctions in Iran. Most of these studies focus on trade and economic characteristics. For an
overview, Table.1 shows some these researches on the base of subject and year category. Survey research in
the field of sanctions in Iran shows that despite the importance of TBB on developing of the country,
scientific study of the sanctions effects on the TBB performance has not been yet performed in Iran.
In fact, the present study with an applied and scientific approach tries to determine the threats facing Iranian
TBB in terms of sanctions.
Table.1 Effects of economic sanctions on Iran, in several researches
Ref.
Subject
Impact
year
(Ajily &
Keshavarz,2010)
Impact of sanctions on Economic
Development in Iran
Economic
2014
(Farahani &
Shabani,2013)
The Impact Of Sanctions On Iran's
Tourism
Tourism
2013
Economic
2013
Trade
2013
Human rights
2012
(Husseiny,2013)
(Bigdeli et al.2013)
(Emadi .2012)
Iranian Economy in terms of sanctions
The effect of economic sanctions on
Iran Trade
The impact of economic sanctions on
human rights
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(Valizad,2011)
Theories of international sanctions
Performance in political economy
Political economy
2011
(Miremadi,2011)
Coping with sanctions from the
National Innovation System view
Innovation
2011
Foreign trade
2010
Economic
2010
(Aziznejad,2010)
(Motaghi et al.2010)
The effect of sanctions on the Iranian
economy, emphasis on foreign trade
Effect of 19 resolutions on Iran's
economy
(Mehregan et al.2004)
Impact of sanction on Iranian Hi-Tech
Industries
Technology
2004
(Motaghi ,2000)
Impact of economic sanctions on Iran's
national security
National security
2000
3. THE IMPORTANCE OF TBB IN NATIONAL ECONOMY
After passing digital and network economies, the third wave of information age is based on economy and
technology-based organizations (Halawi, 2005). Based on studies by APEC, the most stable economies in the
world are related to technology-based economies (Memarnejad,2005) and among them, small technologybased enterprises are the driving motor of the development of these economies(Massa & Testa,2009). Given
the key role that Small and Medium Sized Enterprises (SME) have so far played in the field of technological
progress in the world, in the knowledge-based economy, a special approach has also been formed in such
institutes (Carson, 2005). The activity of small technology-based enterprises in developed or developing
countries indicates a type of close and effective relationship between economic-social progress of these
countries and development of the enterprises. Small technology-based enterprises are usually established to
transform ideas and innovations into product, create sustainable technology-based jobs, commercialize
researches and guide graduates for successful entrance into business environment by entrepreneurs who have
specific proficiencies (Momenti et al.2012). On the other hand, technology-based enterprises are the main
factor to increase productivity and economic growth in a country (Behbudi & Amiri, 2010), (Arabi and
Dehdashti, 2009). Therefore, prosperity of technology-based enterprises will lead the country to achieve
stable and pioneer economy. In addition, through increasing technological export in a country, technologybased enterprises will cause to increase the country‘s share and role in international trade (Sobhani &
Rizvandi, 2012). Other role of technology-based enterprises is in social and political dimensions.
Technology-based enterprises will be a factor in creating added value, expanding social welfare and
decreasing poverty (Nezamian, Aslamifari, 2010). These entrepreneurial companies provide proper
opportunity for employment in community through combining resources and cause more balanced wealth
and income and contribute to their happiness (Mehralizadeh, Sajadyi, 2009).
Finally, since the knowledge-based enterprises have a direct role in creating the added value and exchange
technology, they are considered as important enterprises for national economy in developing (Fakour &
Ansari,2010),(Karimi & Hassanpour,2011). Therefore, technology-based enterprises are the main factor for
creating sustainable development and growth in global arena and economic development in countries. Thus,
creating proper environment for flourishing such businesses and preventing serious environmental threats
facing these enterprises are one of the basic strategies in many developed and developing countries.
Unfortunately, in terms of knowledge based economic development, World Bank studies shows that our
country has no good status among regional countries. Table2. shows results of this ranking in 2012.
Accordingly, it is necessary to more consider development of technology-based enterprises as the driving
force of technology-based economy.
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Table2. Ranking of regional countries in terms of knowledge based economy
Oman
Saudi Arabia
Qatar
Kuwait
Turkey
Armenia
Kazakhstan
4
5
6
7
8
9
10
199
5
1
3
2
9
11
4
5
7
10 12
Iran
Bahrain
3
Lebanon
UAE
2
Azerbaijan
Israel
1
Jordan
Rank of Country
201
2
11 12 13 14
6
15
8
18
Since in our country, sanction has been one of the most important political-economic challenges in the past
35 years and has led to severe economic tensions in the environment of national businesses, therefore,
challenges from economic sanctions in technology-based business environment and problems and barriers of
these enterprises in sanction conditions are studied.
4. DYNAMIC INVESTIGATION OF THE EFFECT OF ECONOMIC SANCTIONS
Within the past 35 years, Iran has been the focus of sanctions in 6 stages: hostage period (1979-1981), IranIraq war (1981-1988), Re-construction Period (1989-1992), Presidency Period of Clinton, Dual Containment
(1993-2001), September, 11 Attack (2001-2006) and Presidency Period of Ahmadinejad until now that five
resolutions have been adopted against Iran in UN Security Council. One of the significant issues in this field
is the rate and way of affecting these sanctions.
The outcome of survey and review of the study literature, integration of multiple scientific sources and
various ideas on the likelihood of sanctions and its dynamic effect is the diagram presented as a model in
Figure 1. However due to the complexity of political–economic issue, neither this diagram nor other models
can alone cover all the issues. Obviously, there exists even a considerable controversy between traditionalist
theorists and revisionists on how to influence sanctions. Therefore, many researchers seek to prove the
uncertainty in predicting the performance and influencing the economic sanctions (Hufbauer et al. 1990)
while it is thought that the framework proposed in this study obtained based on reviewing the study literature
and summarizing the results of previous research is useful in explaining the political behaviors of sanctions
from the economic perspective despite simplicity.
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Figure1. Diagram of probability and influencing sanctions from the economic perspective
The diagram introduced as ―the diagram of probability and influencing sanctions from the economic
perspective‖ includes two quality axis of effective turnover and axis of dependence coefficient. Dependence
Coefficient qualitatively shows the rate of economy- and industry dependence in a country compared to other
countries in terms of the supplement of basic commodities, raw materials, needed technologies for the
country, information systems, etc. The axis of effective turnover also indicates the sum of the products of
two internal markets and export of strategic commodities as an effective turnover. Strategic commodities are
products which have many applicants; are produced in few countries and usually their effects on the
economy of other countries are tangible. In addition, the mentioned diagram includes a border line indicating
the probability boundary of success in sanctions.
In this model diagram, four modes can be observed: in the case that a country has low effective turnover
(small internal market or no export of strategic commodity) and on the other hand, its dependence level is
also high, the country is in the red situation. In this situation and in terms of political conflicts with powerful
countries, with respect to economy, the possibility of sanction against the country is very high and being
affected by sanctions and the likelihood of success of the sanctions is also high. However, if a country has
big internal and external markets and high effective turnover, its dependence coefficient is low and
reasonable such country is in white condition. Certainly, the likelihood of success and impact of sanctions
against the country is very low.
Modes 2 and 3 are a bit more complicated. If a country has a small turnover and low ratio of dependency or
vice versa, such countries will be placed on the diagram border and in the yellow status. The Likelihood of
the effect of economic sanctions will be high in the possible international conflicts but it will be dependent
on other factors. In the case of sanctions, one of the common issues in such circumstances is that the
sanctioned country may not be submitted in any form but sanctions will cause detrimental effects on the
economy of these countries. Years of sanctions and its non-submission clearly specify its certain economic
conditions in the border of the diagram.
According to the diagram, in vulnerable positions (positions 1, 2 and 3), by increasing the rate of internal
production, the production of technological products and access to international markets and reducing the
country's dependency coefficient, especially in technological products (because of the limited replacement in
the world countries as sanctions) these conditions can be modified toward safer conditions (position 4). If
technology-based businesses are in a country, properly functioned, they will truly have such potentialities in
themselves. Therefore, improvement and promotion of these businesses environment can substantially
modify the status of a country in terms of vulnerability coefficient of sanctions.
As mentioned, the proposed model is based on the review of the study literature and is quite consistent with
theories in the study literature. For instance, researchers believe that the more the subject is dependent on a
particular commodity in international trade (high dependency coefficient), the more the possibility of
sanctions would be against that country (Jentleson, 2001). The higher the proportion of countries in
international trade (great effective turnover), the less the possibility of sanctions would be against them
(Hafner & Montgomery, 2008). Localization of production technology and reduction of importing
technological products (reducing the dependency coefficient) is one of the basic approaches to deal with
sanctions (Aziznejad, 2010). One of the key aspects in the power of the target country for defending against
sanctions is the ability to mobilize its economy for supplying internal need (Valizad, 2011). This causes the
dependency coefficient and to increase the internal market.
As a genuine example, North Korea with low per capita Gross National Product and non-visible proportion
of the global market and lack of exporting strategic commodity (small effective turnover) and small import
rate (low dependency), is in the position 3 on the diagram. However, China and India with very large internal
and external markets and low and reasonable dependency coefficient show position 4 on the diagram.
Economic sanctions of the two countries in1989 and 1998 were completely negative and almost failed. The
main reason for the success of India and China at the disposal of sanctions was the government's policy and
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timely recognition of the opportunity for the growth and development of technology and their innovation
system (Miremadi, 2011).
So, it can be said that the regime of sanctions is effective on the technology-based business environment and
knowledge-based enterprises are effective in the control of pressures from sanctions. Therefore, the effects of
sanctions on the performance of components of technology-based businesses will be as an interaction and in
contrast with each other that the challenges will be addressed at following.
5. METHODOLOGY
Pragmatically and descriptively as well as using a qualitative and functional approach, the current study has
investigated the pathology of national technology-based business environment under sanctions. The present
study aims to find challenges from sanction in the national technology-based businesses environment for
sustainability, growth and development of practices of these enterprises in knowledge chain from idea to
product. In this study, after examining the vital role of these enterprises in national economy on one hand
and reviewing the sanctions literature on the other hand, through analysing data including statistics of valid
internal and external units and the convergent results of related research, threats of growth and development
of technology-based businesses in Iran were extracted as the primary factors by the reference group and then,
in addition to editing these factors as the initial questionnaire, the negative effect of sanction on the
performance of technology-based institutions were explored. Then the reliability of the questionnaire was
confirmed by SPSS software. Then, by selecting 19 experts, the issue was evaluated in the country via a
targeted method and Delphi Fuzzy Method during two phases of fuzzy poll and required consensus was
achieved. Finally, the fuzzy results were analysed using computational MATLAB software which led to
present a framework for negative effects of economic sanctions on the growth and development of TBB.
5.1. Research Process
After reviewing the position of technology-based companies in the country‘s development and the
importance of technology-based enterprises in national economy, we now examine the impacts of sanctions
on the performance technology-based companies. To evaluate the issue from a qualitative perspective, the
present study tries to scientifically use the opinions of experts in the country in order to draw a real good
picture of the threats. Then, the negative impacts of economic sanctions on the performance of technologybased enterprises in the country have been evaluated using the Delphi method.
In the Delphi method, the use of structured guidelines gives more accurate results than that of conventional
surveys. But since in the real world, problems cannot be regarded merely as digital and "zero-one" and are
generally included in a range, the use of crisp numbers in the Delphi method may also lead to the results that
are not consistent with reality.
Thus, it would be useful to use linguistic variables by experts. This has led to the creation of a fuzzy Delphi
method, which covers many obstacles related to lack of clarity, by providing a flexible framework. In this
technique, the data are represented as fuzzy (rather than absolute numbers). Figure.2 shows the relationship
between these linguistic variables and respective fuzzy numbers.
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Figure2. relationship between linguistic variables and respective fuzzy numbers.
To perform this method, the choice of qualified members for the Delphi panel is considered one of the most
important steps of the method. Contrary to what is common in quantitative surveys, experts are not chosen
based on probability sampling, because the Delphi method is an expert decision mechanism that requires the
highly qualified specialists who have a deep knowledge and understanding of the subject of study. Purposive
or judgmental sampling is one of the methods used in the selection of experts. The purposive sampling is
based on the assumption that the knowledge of researcher can be reliable to select the panel members. This
method was used on the basis of practical knowledge and experience of the authors. In this regard, twenty
Iranian experts were selected as four groups of Delphi panel:
1 - Managers of technology-based enterprises selected in prestigious national festivals, which objectively
face with a variety of challenges and opportunities under sanctions and are considered the most reputable
authorities on this subject.
2 - Incubators and technology parks managers who involve a lot of problems of technology-based enterprises
in the country due to protectionist policies.
3 – Managers of risky financial and credit funds, which are intimately familiar with the threats and
opportunities of the firms, because of investments in innovative projects and participation in the
establishment and development of technology-based firms.
4 - University lecturers who can offer opinions as expert researchers and theorists on the economy under
sanctions.
Then, according to the analysis made in the previous research, all information and statistics were examined
by a small group of experts as the reference group, and nearly 30 indicators were extracted as the impacts of
sanctions on the performance of technology-based enterprises in the country.
After the reference group was confirmed, the indicators were classified into three groups:
Direct negative impacts and indirect negative impacts. Then, with further research and the extraction and
integration of similar indicators, 14 indicators were finally selected according to Table 3, based on which a
questionnaire was prepared by the reference group for the implementation of the Delphi technique.
The questionnaire was developed based on the 5-point same as Likert scale (from unimportant to very
important, by linguistic variables); and the collective opinions of experts were used to increase its validity,
and then the questionnaire was finalized. In addition, the above questionnaire was formed as semi-structured
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in order to use the possible opinions of all the experts during the Delphi process. Thereafter, the Delphi
process was carried out step by step.
Table 3. The indicators selected by the reference group
5.2.
Direct negative effects
Initial indicators of the sanctions negative impacts on TBB
1
Limiting access to high quality equipment, special research and laboratory
tools, parts and raw materials required by knowledge-based companies.
2
Crippling the Iranian banking system, and making difficult the international
financial relations of knowledge-based companies through the banking system.
3
The problem of exporting technological products, and the loss of export
markets for certain knowledge-based companies
4
5
6
7
Indirect negative effects
8
Increasing risk of investing on localized technologies by knowledge-based
companies
Exchange rate fluctuations, inflation and economic instability, impossibility of
planning, and unpredictability of the future
Stabilization of unofficial routes for the import of goods such as imports of
intermediate goods, international black market and ―draft economy‖
Restrictions on the processes of technology transfer, business communication
and cooperation with large companies having technology and scientific centers
in the world.
Lowering government revenues and thus reducing research budgets and
government support
9
The high interest rates on Iranian bank loans compared to other countries due
to the inflation intensified under sanctions
10
An increase of intermittent pressures caused by sanctions and frequent changes
in economic and bureaucratic government policies to confront these problems
11
Providing unreal statistics to make the economic conditions look normal, and
lack of KBFs‘ access to accurate information
12
Stagnation of the industry and decline in the boom of domestic market,
numerous problems with sales and marketing and as a result, financial
problems for SMEs and especially knowledge-based enterprises
13
More acute manifestations of the problem of mediation and brokerage under
sanctions, due to economic instability and the tendency of capitals from the
creation of technology to brokerage
14
Taking away the incentive from technology entrepreneurs due to the
exacerbated problems
Implementation of Fuzzy Delphi Method
After coordinating with the group of experts, the experts' opinions were collected in the first round by
offering the questionnaire based on the linguistic variables and the complete cooperation of panel members.
Based on the results, for each of the indicators, the fuzzy average was calculated by following formula
(Cheng & Lin, 2002):
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.
()
(
()
()
/
)
(1)
. ∑
()
∑
()
∑
()
/
(2)
In this equation and
are ith expert opinion and average of experts opinions respectively. Due to the
large volume of computing in fuzzy Delphi method, to increase the accuracy and speed of information
processing, an algorithm for the calculation of ―fuzzy sets‖ based on their equations, was adjusted. The
algorithm is shown in Figure 3. Software algorithms to compute the corresponding code in MATLAB(R2010b) software as a computer program was written. So, proper software program to calculate the
triangular fuzzy numbers, fuzzy mean and fuzzy average with the help of MATLAB software was provided.
Its input is experts Views, based on linguistic variables. The output of the program is fuzzy result that
evaluated for each character.
Figure3. Algorithm adjusted for the calculation of ―fuzzy sets‖
Accordingly, among the 14 indicators discussed, one very less important indicator, two controversial cases
and 11 important indicators were recognized in the first Delphi round. First round results show in Fig.4. In
addition, considering the semi-open nature of the questionnaire, the experts confirmed the generality of the
questionnaire, which is a sign of its reliability.
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1
0.8
0.6
0.4
0.2
0
1
2
3
4
5
6
7
8
9
10 11 12 13 14
Figure4. First round results
In the second Delphi round, all the results of the first round, along with the questionnaire, were again
provided for the panel members. According to the opinions of the experts in the second round, an indicator
was identified as not important, two indicators as less important, and other indicators as important factors
affecting the performance of technology-based enterprises under sanctions. Second round results show in
Fig.5.
1
0.8
0.6
0.4
0.2
0
1
2
3
4
5
6
7
8
9
10 11 12 13 14
Figure5. Second round results
Although there is a consensus of opinion on the threshold of agreement in the Delphi method, some of the
references explain that the change percentage of less than 15% in each round is also considered as a sign of
consensus (Culley, 2011). Other ones explain if the difference between tow round is less than ―very low
threshold‖ (0, 1), Survey stops (Cheng & Lin, 2002).
Difference between tow round is calculated by following formula:
(
)
[(
)
(
)]
(4)
Since the second Delphi round in this study, satisfied both conditions, the consensus in the Delphi process
was obtained with a very good approximation. Results are listed in Table 4.
Table4. Result of implementing fuzzy Delphi process
Average triangular fuzzy
Indicators
Direct
negative
effects
Final result
4
5
6
7
First round
Second round
Deviation
Percent change
0.7094
0.7531
0.5844
0.7594
0.7599
0.7664
0.5921
0.7730
0.0505
0.0133
0.0077
0.0136
6%
1.7%
1.3%
1.7%
Ok
Ok
Not ok
Ok
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Indirect
negative
effects
8
9
10
11
12
13
14
15
16
17
0.8375
0.7469
0.7813
0.750
0.750
0.750
0.8421
0.7368
0.7862
0.7763
0.7763
0.7401
0.0046
0.0101
0.0049
0.0263
0.0263
0.0099
0.5%
1.3%
0.6%
3.3%
3.3%
1.3%
0.575
0.5954
0.0204
3.4%
0.8281
0.7469
0.5719
0.8224
0.7599
0.5888
0.0057
0.013
0.0169
0.6%
1.7%
2.8%
Ok
Ok
Ok
Ok
Ok
Ok
Not ok
Ok
Ok
Not ok
5.3. Analysis of the Study Results
The final list confirmed by the Delphi experts shows two categories of impact on the performance of
technology-based companies under sanctions (Fig. 6). The first category is the negative impacts of sanctions
that can directly affect the performance of technology -based companies. The second category includes the
negative impacts of the sanctions that, indirectly and/or by exacerbating existing structural problems, have an
impact on the performance of technology-based enterprises. In fact, these categories, which show a wide
range of problems, are facing the threats to technology-based enterprises under sanctions. According to the
experts view, the indicator of "exchange rate fluctuations, inflation and economic instability, impossibility of
planning and forecasting of the future" is the greatest direct impact of sanctions, and finally, the indicator of
"stagnation of the industry and decline in the boom of domestic market‖ is the greatest negative and indirect
impact of the sanctions on the performance of technology-based enterprises.
Results obtained by the Delphi panel in this study are consistent with the findings of other studies. Scientific
studies show that "exchange rate fluctuations, inflation, economic instability and economic uncertainty" - as
one of the most important impacts of the sanctions - can increase the risk and reduce investment, valueadded of the industry, the rate of output growth and economic growth. This has been emphasized in a great
number of studies (Abbasian et al. 2012), (Georji & Madani, 2002), (Eltejaee, 2012). The results of this
study also show that the most important negative and direct impact of sanctions on the performance of
knowledge-based enterprises is "the exchange rate fluctuations, inflation, economic uncertainty, and
impossibility of planning and prediction of the future." Therefore, because of extensive impacts on the main
factors in the growth of the economy, industry and technology in the country, this factor is also a serious
obstacle to the growth and development of TBB.
The limited production of domestic enterprises, stagnation of the industry and thus the reduced boom of
domestic market and national production are the major problems of startup TBBs under sanctions, which, in
fact, are the result of previous problems. This is precisely one of the objectives of the countries imposing
sanctions against embargoed countries (Miremadi, 2011), (Lopez & Cortright, 1996).
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Figure6. Diagram of implementing Fuzzy Delphi result
As was noted in Figure (1) in this study, lowering the boom in domestic markets is one of the factors that
increase the impacts of sanctions. By limiting the domestic exchanges, this creates multiple problems with
sales and marketing and then financial problems for almost all industries in general and the startup
(especially technology-based) companies in particular due to the fragile conditions. Delphi expert members
in this study have introduced this as the most important indirect impact of sanctions.
6. SUMMARY AND CONCLUSION
In this study, the challenges of growth and development in technology-based business environment in
sanctions have qualitatively and functionally been explored based on Delphi Fuzzy Method. The result of all
previous discussions has been schematically summarized in Figure 7.
According to the study results, index of ―exchange volatility, inflation and economic instability‖ are the
greatest negative and direct effect of sanctions; while index of ―industry recession and declining of internal
market‖ are the greatest negative and indirect effect on national technology-based businesses environment.
The main accepted hypothesis about the objectives of this study is that due to the structural problems and
vulnerability of the economy, sanctions have caused to create relatively large volume of threats for
technology-based enterprises. Also, despite the history of sanctions and announcing policies of resistive
economy in the country and a great deal of academic research, unfortunately, the opportunities created in the
technology-based businesses environment for strengthening the economic status and sustainable growth and
coping with sanctions in our country have had major problems in transforming these studies to the
technological products because of the weakness of technological system and that the technology-based
business environment is inappropriate and compared to many countries, it has inappropriate status in terms
of sustainable growth and development.
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Figure7. Results of all discussions as a schematic diagram.
Obviously, delays in this issue will hinder progress despite the Perspective Document. The best solution
addressed in the study is to use polices of resistive economy and development of technology-based business
environment as the motor of development of knowledge-based economies and eradication of their problems,
especially in sanctions condition. It is obvious that if the environment of such businesses improves, the
country will accomplish additional ability to cope with sanctions.
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Washington D.C.: Institute for International Economics .
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Jentleson Brucew (2001), ―Economic Sanctions and Post-Cold War Conflicts‖, the National Academy of Science.
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Persian)
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Ali Akbar Rezaei, Ministry of Foreign Affairs, Bureau of Political Studies.
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Massa, Silvia. Testa, Stefania " A Knowledge management approach to organizational competitive advantage: Evidence
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Prioritizing Risk Treatments on a Given Subterranean Oil
Pipeline Project Using Fuzzy Decision Making Technique
Nafiseh Falahi4, Farshid Abdi5 and Sadigh raissi6
__________________________________________________________________________
ABSTRACT: Following dangers limitation strategies to reduce incidence possibility, intensity traces, and
increase assessment capability happens in oil and gas industries have kept on focus by managers. The scope
of this project is choosing the most suitable cases which reduce expenses of risks in Ilam-Ahvaz transmit
pipe line reparation project. Firstly, by using the three-point Delphi method, these were recognized the most
criticism dangers, and then with the help of smarts‘ ideas, several choices were identified against them, and
finally based on fuzzy TOPSIS method, many preference strategies were introduced. Research results show
that ―preparation of article and equipment by go-betweens for risk prohibition‖, ―installation control valves
for earthquake risk‖, ―quarrel resolve group prediction at the start of the agreement for deferment risk to
resolve opponent pension cases‖, ―payment credit security of external stuff to change the amount of
payment‖, ―amendment written safety recipes at the start of the project to explore and fire risks‖, ― forecast
for torrent and water eclipse‖, are the most important policies that following them can cause noticeable
reduction in crisis dangers.
KEYWORDS: Risk reduction strategy, oil and gas industries, TOPSIS method, phase logic, risk reply
strategies.
4
Master,
Industrial
Engineering,
[email protected]
Islamic
Azad
University,
South
Tehran
Branch,
Email:
5
Assistant professor and member of the faculty, Department of Industrial Engineering, Islamic Azad University, South
Tehran Branch, Email: [email protected]
6
Associate professor and member of the faculty, Department of Industrial Engineering, Islamic Azad University, South
Tehran Branch, Email: [email protected]
35
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1. INTRODUCTION
Oil industry is the most important industries in the world and in our country that these projects in industry
based on their strategic and sensitive nature and also their complex technology performance attend with
multiple risks. Nowadays, despite extending methods and risk management tools, it is perceptible the lack of
systematic and integrated approach. Also, non-recognition of real crisis risks and also low focus on
decision analysis and risks influences on project results because some disharmonies in operative usage from
procedures in oil projects such as pipe lines projects (shahriari et al, 2010). Pipe lines projects are one of the
most important projects in oil and gas industry that are faced in different phases (manufacturing, beneficing
and reparations) with various risks which their results should be evaluated and studied (Mubin and Mubin,
2008). Considering the fact that management risk in the oil and gas pipe lines projects have been focused
from many years ago by many researches, but in the responding to risk step it is seen that the decision in this
context is significantly based on managers and experts ideas.
Since decision-making about response to risk is a multi-scale decision issue, so in this article by choosing
suitable scales and receiving opinion of experts, the best strategy was chosen for responding to all the crisis
risks. So the purpose of the current study was evaluating and prioritizing the risk management strategies to
contrast with expenses risks of oil transmit pipe lines, to choose the best response.
In the second part of this paper, the theoretical fundamentals and the applied methodology are presented.
Then, the studied project is explained and followed by introducing research process method and presenting
research analysis. Finally, the results of subjects are presented.
2. RESEARCH OF VISIONARY BASIS
2.1. Risk Management
Risk in the project is events or probable incidence situations that if operate, they have positive or negative
effect on project purposes (Project Management Association, 2005). Project risk management is ―all process
correlated with identification, analysis, and response to any misgiving that contains maximizing favorable
results of idealistic events and minimizing unfavorable results‖. Risk always is an unavoidable operative in
projects, and around us. Thus, the risk management in cognition step and project design and in some words
before risk event can strongly make high yield. If project risks management is unseen and does not manage
correctly, the control of the work will be lost (PMBOK, 2008).
Based on work schedule that was presented by standard project management and a lot of knowledgeable
persons, this project contains six following steps:
1. Planed risk management: containing decision about selecting approach, plans and risk management steps
2. Risk identification: containing specified and highlighting project risks and
3. Documentation of its features
4. Qualitative risk analysis: doing a qualitative risk analysis and conditions in order to prioritize theirs effect
on project purposes
5. Quantitative risk analysis: measuring probability and consequences risks and estimate their effect on
project purposes
6. Planning response to risk: production and distribution of options and proceedings to increase opportunities
and decrease threats on project purposes
7. Control and monitoring risk: Tracking identified risks, residual risk monitoring, identification new risks,
implementation of response to risk and evaluating their effects in project period are happened in this step
(Project Management Association, 2005).
2.2. A Review of the Research Literature
The risk management in the oil and gas pipeline projects has been discussed by many researchers. There are
so many researches for evaluating and ranking the risk of pipeline projects. Table 1 summarizes many
investigations and some models presented in this field.
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Table1. Conducted research in the field of risk assessment, oil and gas pipelines
(Source: Findings of research)
Author and
Row Method
Target
Source
Year
Assess the risks and
Adjectival phrases
consequences in the
Josh, 1998
44
1
- Tree Event
pipeline
Risk-based model for
Analytical
inspection and
Hierarchy Process
Dey, 2001
29
2
maintenance of
(AHP)
pipelines
Fire risk analysis in
Mathematical
Seleznev &
3
industrial power
67
simulation
Alshinm,2006
systems for gas pipeline
Impact assessment and
Leopold Matrix environmental impacts
Salehi
Czech List
of construction and
Moaied &
10
4
Anatomy - RS and
operation of gas
Karimi, 2007
GIS tools
pipelines
Provide a simple model
Probability
for the analysis and risk
Mubin &
distribution curves
58
5
management projects
Mubin, 2008
- the Risk Priority
for gas pipeline
Provide a decision
Multidimensional
Brito &
model to evaluate and
Utility Theory
Almiada,
21
6
ranking risks of natural
(MAUT)
2009
gas pipelines
Geotechnical and
The relative
Environmental Risk
numerical weight Fillho et al,
Assessment and
34
7
Multi-criteria
2010
Management of Oil
decision analysis
Pipelines
Indexing Risk assessment of
8
Geographic
safety, health and
Malmasi et al,
52
Information
environmental gas
2010
System (GIS)
pipelines
Pipeline Risk
Nwosu &
Failure Mode
9
Assessment
Enyiche,
61
Analysis (FMEA)
2011
Risk analysis of oil and
Shariari et al,
10 Fuzzy bow
68
gas pipelines
2012
Environmental risk
11
Jozi et al,
45
Indexing - AHP
assessment of gas
2012
pipelines
Developing a new fuzzy
Relative risk score
12
inference system for
Jamshidi et
43
(RSS) - Fuzzy
risk assessment of
al, 2013
Logic
pipelines
landslide susceptibility
Analytical
assessment when
13 Hierarchy Process
Ma et al,
51
choosing the
- the method of
2013
appropriate route for oil
least squares
and gas pipelines
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In general, the phase respond of the risk has been rarely discussed in this research, which the following
shows examples of these studies.
Ben & Raz (2001) used an integer programming mathematical model for reduction of the risk. The main aim
of this model was to select the strategies for the risk mitigation, so that the overall costs of project risk can be
minimize. Thus, this model only takes into the effects induced the costs of risk. In other words, the timedependent effects are not considered. Kujawski (2002) developed the best strategy approach for minimizing
the total project costs, by using some methods like the Decision Tree, Monte Carlo simulation, and
cumulative risk profiles. Also, Kujawski divided the total project risks into two technical and managerial
risks, in accord with some previous studies, which in its project only has concentrated to the technical risks
(ref). Fan & co-workers (2008) designed a mathematical cost model, regarding the characteristics and other
related parameters of project. The purpose of the model was to identify an optimal strategy to decline and to
minimize the project risks. Wang & Hsu (2009) by using the cumulative prevision theory (CPT) planned an
operational module including two sub modules, risk analysis and responding to risk modules. For analyzing
this module, four risk parts, corresponding to their risks, were defined. Then, in the response step, the best
strategy was chosen for each risk, according to the area corresponded to the risk. Finally, to assess the
response module, an integer programming model was used. Based on an oil field development project,
Darrei & Hamzei (2010) have published an article to determine a risk response strategy by the analytic
network process (ANP), In order to prioritize and select the best strategy for the most important risk. A
summary of these studies is shown in Table 2.
Table2. Research conducted in the field of responding to project risk
(Source: Findings of research)
Row
Author
and Year
1
Ben &
Raz,2001
2
Kujawski,
2002
3
Fan et al,
2008
4
Wang &
Hsu, 2009
5
Darrei &
Hamzei,
2010
Target
Presented a mathematical
model to select a set of
measures to reduce risk
Select the best response to
the risk
Identify an optimal
strategy to reduce project
risk
A module consists of two
sub-modules designed for
operational risk analysis
and risk response
Determine risk response
strategies to manage risk
Method
Integer programming
Decision tree, Monte
Carlo simulation and the
cumulative risk profiles
Mathematical model of
cost
Cumulative Forecasting
theory (CPT)
Analytic network
process (ANP)
2.3. Fuzzy Multi-Criteria Decision-Making Methods
Decision making is the process of finding the best procedure among other options. It is clear that in most
decision problems, the decision maker is confused, due to the multitude of criteria. In the other words, the
decision maker expects to reach more than one target (Zeleny, 1992).
In the classical multi-criteria decision, it is well known the weighting of criteria, but also definitive data are
not adequate to express, due to the confusion and uncertainty in the decision-maker statements. Since human
judgment cannot be estimated accurately by numerical values, then, it is not possible to apply the classic
decision-making methods (Mirzai chaboki, 2009). Recently, numerous attempts have been done for
overcoming to these ambiguities and uncertainties, and finally it led to apply the theory of fuzzy sets (Chen
and Hwang, 1992).
Fuzzy set was introduced by Professor Lotfi Zadeh in 1965. This theory is appropriate for variable and
incomparable conditions. In general, people statements are unclear, and verbal expressions such as being
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equal, relatively strong, very strong, infinitely strong and so on, have the same importance. The fuzzy set
theory can mathematically express the qualitative statements (Smih et al, 2009). The fuzzy numbers implies
the desirability of options, which it is known as fuzzy utility. This means that ranking of the options is based
on comparison in their fuzzy utilities (Yeh and Deng, 2004).
2.4. The Fuzzy Topsis Method
The TOPSIS has been known as one of the classical multi-criteria decision-making methods, which was
originally developed by Hwang and Yoon in 1981. This method is based on the shortest and longest
geometric distance of the chosen alternative from the positive ideal and negative ideal solutions, respectively
(Hwang and Yoon, 1981). The TOPSIS process is carried out as follows:
Step I- Calculation of the weight indices matrix-vector
Step II- Normalization of the calculated matrix and formation of a new matrix (R), as given in Eq. 1.
̃
)1(
[ ̃ ]
The B and C symbols specify the cost and benefit criteria collections, which they can be non-scaled from
equations 2 and 3. Accordingly, all the triangular fuzzy numbers are ranged in 0 to 1.
)2(
̃
(
)
̃
(
)
)3(
Step III- Definition of the weighted matrix by the equation 4.
)4(
̃
[̃ ]
̃
̃
̃
Step IV- determination of the positive and negative ideal solutions, according to Eq. 5.
(̃
(̃
Where
̃
̃
)5(
̃ )
̃
̃ )
(
) and ̃
(
) ate for j =1,2, ..., n.
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Step V- calculation of each alternative distance from the positive and negative ideal solutions.
)6(
∑
(̃
̃ )
∑
(̃
̃ )
Where the distance between two fuzzy numbers,
̃
̃
and
̃
̃
can be obtained from Eq. 7.
)7(
(̃
̃ )=√ 0( ̃
)
(̃
(̃
̃ )=√ ,( ̃
)
(̃
)
)
(̃
(̃
) 1
) -
Step VI- calculation and ranking the relative closeness to the ideal conditions by Eq. 8.
)8(
3. DESCRIPTION OF THE CASE STUDY
The repairing and coating the 18 in. underground pipeline transport oil from Elam to Ahwaz is one of the
most important projects in the field of pipeline repairing in Iran. The covering and maintenance operations
(including excavation, canaling, embankment, removal of the old covers, great blast, development and
implementation of polyurethane coatings, welding, cutting, concreting, running CCW, etc.) were carried out
in the length of about 20 km. The time and location of project were ilam, Dasht Abbas- Ahwaz and 9 month,
respectively. According to the fact that the project was completed by a further cost rather than the approved
cost, so we examined the risks that directly or indirectly could increase the total costs. Also, we prioritized
the critical risks and give the procedures to overcome them, and finally select the best procedure ones.
3.1. Project Methodology
The aim, nature and data collection method of this research are functional, exploratory, and survey method,
respectively. In order to determine the best strategy, some parameters were selected for prioritizing the
strategies. For this purpose, the four parameters, i.e., cost, time, quality, and resistance managers were
chosen, by applying the brainstorm way and interviews with experts and managers. In final, by using the
fuzzy TOPSIS method, the strategies corresponded to the critical risks, were prioritized, and the best ones
was selected. It should be noted that in this research library, the inventory, individual, and group interviews
were the applied tools for the data collection.
3.2. Data Analysis
A) Identification of Project Risks
By applying the three stage Delphi method, it was prepared a list of risks that may occur during project
performance. Next, regarding the risk impact assessment in the earlier projects, and comparing them
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together, the six risks were specified as critical risks. In the Table 3, the encoded risk breakdown structure
has been presented.
Table3. The encoded risk breakdown structure (Source: Findings of research)
Risk
Project
Risk items
Type of risk
Groups
Risk
Earthquake (+5 Richter) R1-1
Heat (+50 o c) R1-2
Strong winds and dust storms
R1-3
Flood and flooded R1-4
Landslides R1-5
Fire and explosion R2-1
Existence minefields due to the
war zone R2-2
Cultural conflicts and sabotage
residents R3-1
Litigation of organizations from
each other R3-2
Sanctions R4-1
Administrative bureaucracy R4-2
Change Currency R5-1
Changes in inflation R5-2
Technical error executive
workforce R6-1
Equipment failure R6-2
Delays in resolving legal cases
opponents R7-1
Delays in payment based on
contracts R7-2
Lack of access to records land
R7-3
Errors in the timing and
sequencing of project activities
R8-1
Errors in the tender bid R8-2
Delay in supply of goods and
equipment needed for project R8-
Natural C1
Safety C2
Cultural / social
C3
Political C4
Economic C5
Technical C6
underground
pipeline
repairs Elam
- Ahvaz
Legal and
contractual C7
Contractor C8
3
Project
Internal
Risk
Failure to supply high-quality
and standard of goods and
equipment R8-4
Administrative changes in the
work ordered by the employer
R9-1
Despite the weak system of
assessment and selection of
contractors R9-2
Injury or damage during
transportation R10-1
Delays in transportation R10-2
Insufficient number of suppliers
R10-3
Project
External
Risk
Employer C9
Supplier C10
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Table 4, displays a list of the critical risks.
Table4. Critical risks affecting the project cost (source: Findings of research)
Risk items
Class
Sanctions
Political
Earthquake (+5 Richter)
Natural
Delays in resolving legal Legal and
cases opponents
contractual
Change Currency
Economic
Fire and explosion
Safety
Flood and Flooded
Natural
B) Determination of Response Strategies for Critical Project Risks
In the repairing project of the 18 in. underground pipeline transport oil from Elam to Ahwaz, the sanctions,
earthquake (+5 Richter), delays in legal issues, change currency, explosions and firing, and flooding were
recognized as the most critical and effective risks on project costs. Accordingly, the underlying strategies
were prepared to deal with each risk (Table 5).
Table5. Strategies to counter critical risks (Source: Findings of research)
Row
Critical Risk
1
Sanctions
2
Earthquake
(+5 Richter)
3
Delays in
resolving legal
cases
opponents
4
Change
Currency
5
Fire and
explosion
6
Flood and
flooded
Solution
Established R & D unit
Protect domestic producers
Procurement of goods and equipment
through intermediaries
Using the same sample of internal
Use LBV (Lions Gate)
Predict storage fuel tank for necessary
cases
Reconciliation and compensation
Legal proceedings by regulatory
authorities
Forecasting department of dispute
resolution at the beginning of contract
Currency financing of foreign goods
Supply of alternative goods similar
from types of internal
Use LBV
Use of safety and fire machinery
Develop a written safety instructions at
the beginning of the project
Use LBV
Reinforced concrete lining around the
pipeline
Postpone parts of the project until the
dry months of the year
Forecast of drain pump on specific
months
Planning based on the weather forecast
C) Prioritizing Management Strategies to Critical Risks Using Fuzzy TOPSIS Method
In reality, due to incomplete or inaccessible information, the data are usually not certainty, and they are
mostly in the form of fuzzy data. Therefore, in the current study, in order to control the critical risks of oil
pipelines projects, it has been tried that by using the fuzzy TOSIS method, the best strategies be prioritized
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and selected. Hence, the linguistic variables and Weighting of criteria are given in Table 6, and Table 7,
respectively.
Table6. Linguistic variables for paired comparisons of criteria (Ganguly & Guin, 2013)
Verbal expressions
(1,1,1)
Reverse of
triangular fuzzy
numbers
(1,1,1)
( ,1, )
( ,1,2)
(1, ,2)
( , ,1)
( ,2, )
( , , )
(2, ,3)
( , , )
( ,3, )
( , , )
The triangular
fuzzy numbers
Equal importance
The importance of
very weak
Weak importance
Much importance
Too much
importance
Perfect or absolute
importance
Table7. Linguistic variables for valuation of each option (Wang & Chang, 2007)
Linguistic
variable
Very low
Low
Average
High
Very high
The triangular
fuzzy number
(0,1,3)
(1,3,5)
(3,5,7)
(5,7,9)
(7,9,10)
First, the Chang analysis method was applied to determine the importance level of criteria. The stages of
estimation of the importance level of criteria are included:
Step I: For each row of the paired comparison matrix (Table 8), the S as a triangular fuzzy number was
evaluated by Eq. 9:
)9(
∑
,∑
∑
-
S1 = (3.81, 4.52, 5. 35) × (0.04816, 0.05903, 0.07107) = (0.1538, 0.2668, 0.3802)
S2 = (4.02, 4.97, 6.25) × (0.04816, 0.05903, 0.07107) = (0.1936, 0.2933, 0.4441)
S3 = (3.95, 4.73, 5. 89) × (0.04816, 0.05903, 0.07107) = (0.1902, 0.2792, 0.4186)
S4 = (2.29, 2.72, 3. 27) × (0.04816, 0.05903, 0.07107) = (0.1102, 0.1605, 0.2323)
Table8. The consensus matrix of expert opinion in the case of paired comparisons of criteria
(Source: Findings of research)
Cost
Time
Quality
Resistanc
e Leaders
Cost
Time
Quality
(1,1,1)
(0.80,0.90,1.0
0)
(0.79,1.02,1.2
7)
(0.84,1.22,1.2
7)
(1.00,1.10,1.2
3)
(0.78,0.96,1.2
5)
(0.47,0.62,0.8
1)
(1,1,1)
(0.59,0.81,1.1
8)
(0.42,0.60,0.8
3)
(1,1,1)
(0.40,0.50,0.6
3)
Resistance
Leaders
(1.22,1.60,2.0
8)
(1.18,1.65,2.3
4)
(1.58,1.96,2.4
6)
(1,1,1)
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Step II: After calculation S, it must be obtained the large degree of them, Calculated as follows:
(10)
V(
)
{(
)
(
)
(
‫سایر موارد‬
)
Table9. Large degree (s) relative to each other (Source: Findings of research)
Cost
Time
)
)
V(
V(
V(
)
Quality
V(
)
V(
)
V(
)
V(
V(
V(
)
)
)
Resistance
Leaders
V(
V(
V(
)
)
)
According to second step for calculation weighted criteria matrix:
*
( )
(
)11(
)+
Min V (S1> S2, S3, S4) = Min (1, 1, 0.426) = 0.426
Min V (S2> S1, S3, S4) = Min (0.875, 0.941, 0.225) = 0.225
Min V (S3> S1, S2, S4) = Min (0.938, 1, 1) = 0.938
Min V (S4 > S1, S2, S3) = Min (1, 1, 1) = 1
So the non-normalized weight vector calculated as follows:
)12(
( )
,
(
)
(
)
(
)-
Step IV: At the end, the non-scale weight vector of the third step and weight vector of criteria calculate as
follows:
)13(
( )
,
(
)
(
)
(
)-
W = (0.164, 0.086, 0.362, 0.386)
In accord with the weighting of criteria, the resistance of managers has the greatest impact.
In the Table 10, which is the initial step of the decision-making process, the importance of each solutions
corresponded to the six critical risks with respect to the four criteria (cost, time, quality, and resistance of
managers) is measured, and the Quantitative variables are replaced with the corresponding value, according
to Table 7.
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Table10. Integration matrix of expert opinion (Source: Findings of research)
Established R & D unit
Protect domestic
producers
Procurement of goods
and equipment through
intermediaries
Using the same sample
of internal
Use LBV (Lions Gate)
Predict storage fuel
tank for necessary
cases
Reconciliation and
compensation
Legal proceedings by
regulatory authorities
Forecasting department
of dispute resolution at
the beginning of
contract
Currency financing of
foreign goods
Supply of alternative
goods similar from
types of internal
Use LBV
Use of safety and fire
machinery
Develop a written
safety instructions at
the beginning of the
project
Use LBV
Reinforced concrete
lining around the
pipeline
Postpone parts of the
project until the dry
months of the year
Forecast of drain pump
on specific months
Planning based on the
weather forecast
Cost
Time
Quality
(4.50,6.50,8.25)
(4.50,6.50,8.00)
(3.25,5.00,
6.75)
(6.00,8.00,9.50)
Resistance
Leaders
(5.50,7.50,9.00)
(3.00,5.00,7.00)
(3.50,5.50,7.50)
(3.75,5.50,7.25)
(2.75,4.50,6.50)
(4.00,6.00,8.00)
(1.75,3.50,5.50)
(3.50,5.50,7.25)
(2.25,4.00,5.75)
(1.00,3.00,5.00)
(2.50,4.00,6.00)
(4.25,6.00,7.75)
(4.00,6.00,7.75)
(4.50,6.50,8.00)
(2.25,4.00,6.00)
(4.00,6.00,7.75)
(1.75,3.50,5.50)
(0.75,2.50,4.50)
(3.25,5.00,6.75)
(4.50,6.50,8.00)
(0.75,2.50,4.50)
(3.50,5.50,7.50)
(3.75,5.50,7.25)
(4.00,6.00,7.75)
(6.00,8.00,9.50)
(2.00,4.00,6.00)
(1.25,3.00,5.00)
(1.75,3.50,5.50)
(1.50,3.00,5.00)
(3.00,5.00,7.00)
(2.25,4.00,6.00)
(3.00,5.00,7.00)
(0.25,1.50,3.50)
(6.00,8.00,9.50)
(3.25,5.00,7.00)
(3.00,5.00,6.75)
(2.25,4.00,6.00)
(0.75,2.50,4.50)
(2.75,4.50,6.50)
(4.25,6.00,7.75)
(3.75,5.50,7.25)
(5.50,7.50,9.00)
(3.25,5.00,7.00)
(2.00,4.00,6.00)
(0.25,1.50,3.50)
(4.00,6.00,8.00)
(0.25,1.00,3.50)
(0.75,2.50,4.50)
(0.25,1.50,3.50)
(5.00,7.00,8.75)
(1.25,2.50,4.50)
(4.25,6.00,7.75)
(3.00,4.50,6.25)
(3.25,5.00,6.75)
(3.75,5.50,7.50)
(3.25,5.00,7.00)
(3.00,5.00,7.00)
(5.00,7.00,8.75)
(1.75,3.50,5.50)
(3.50,5.50,7.50)
(5.00,7.00,9.00)
(5.00,7.00,8.75)
(4.00,6.00,7.75)
(2.50,4.50,6.50)
(1.75,3.50,5.50)
(2.50,4.50,6.50)
(1.25,3.00,5.00)
(1.00,2.50,4.50)
(1.00,2.50,4.50)
(6.00,8.00,9.50)
(1.75,3.50,5.50)
(4.50,6.50,8.25)
The non-scaled fuzzy matrix is given in Table 11.
Table11. The fuzzy weighted normalized matrix (Source: Findings of research)
Established R &
D unit
Protect domestic
producers
Procurement of
goods and
Cost
Time
Quality
Resistance
Leaders
(0.068,0.086,0.126)
(0.024,0.029,0.043)
(0.228,0.304,0.362)
(0.073,0.088,0.119)
(0.068,0.086,0.126)
(0.028,0.038,0.059)
(0.112,0.188,0.264)
(0.088,0.119,0.193)
(0.078,0.103,0.152)
(0.029,0.043,0.069)
(0.152,0.228,0.304)
(0.119,0.193,0.386)
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equipment
through
intermediaries
Using the same
sample of internal
Use LBV (Lions
Gate)
Predict storage
fuel tank for
necessary cases
Reconciliation
and compensation
Legal
proceedings by
regulatory
authorities
Forecasting
department of
dispute resolution
at the beginning
of contract
Currency
financing of
foreign goods
Supply of
alternative goods
similar from
types of internal
Use LBV
Use of safety and
fire machinery
Develop a written
safety instructions
at the beginning
of the project
Use LBV
Reinforced
concrete lining
around the
pipeline
Parts of the
project until the
dry months of the
year
Postpone parts of
the project until
the dry months of
the year
Planning based
on the weather
forecast
(0.078,0.103,0.164)
(0.033,0.048,0.086)
(0.036,0.112,0.188)
(0.111,0.165,0.270)
(0.083,0.108,0.154)
(0.018,0.024,0.036)
(0.202,0.293,0.362)
(0.142,0.216,0.386)
(0.083,0.108,0.164)
(0.026,0.043,0.086)
(0.032,0.112,0.202)
(0.127,0.173,0.266)
(0.034,0.042,0.062)
(0.010,0.020,0.080)
(0.166,0.264,0.362)
(0.065,0.084,0.127)
(0.036,0.047,0.070)
(0.006,0.007,0.010)
(0.094,0.191,0.289)
(0.096,0.158,0.386)
(0.050,0.082,0.164)
(0.012,0.021,0.043)
(0.144,0.238,0.336)
(0.077,0.119,0.212)
(0.068,0.098,0.164)
(0.006,0.013,0.086)
(0.228,0.304,0.362)
(0.150,0.212,0.324)
(0.072,0.098,0.164)
(0.003,0.005,0.009
(0.025,0.094,0.170)
(0.162,0.235,0.386)
(0.014,0.019,0.027)
(0.002,0.003,0.005)
(0.220,0.300,0.362)
(0.011,0.019,0.027)
(0.019,0.029,0.060)
(0.006,0.013,0.086)
(0.159,0.238,0.318)
(0.027,0.061,0.386)
(0.026,0.049,0.164)
(0.006,0.013,0.086)
(0.199,0.278,0.351)
(0.019,0.038,0.077)
(0.019,0.026,0.037)
(0.013,0.018,0.028)
(0.123,0.188,0.257)
(0.061,0.084,0.127)
(0.022,0.032,0.049)
(0.012,0.017,0.028)
(0.188,0.264,0.333)
(0.084,0.135,0.274)
(0.021,0.029,0.045)
(0.009,0.012,0.017)
(0.188,0.264,0.333)
(0.061,0.077,0.119)
(0.024,0.036,0.065)
(0.015,0.024,0.049)
(0.094,0.170,0.246)
(0.096,0.158,0.386)
(0.036,0.065,0.164)
(0.018,0.034,0.086)
(0.228,0.304,0.362)
(0.084,0.135,0.274)
In the third step of the decision-making process, the non-scaled weight matrix was obtained by equations 2,
3, and 4, in accord with Table 11. In the next step, the positive and negative ideal point set can be calculated
by applying equations 5 and 6. The positive and negative ideal points represent the distances from positive
and negative ideal solutions, respectively. Then, whatever the indices respectively have more and less
distance from negative and positive ideal solutions, they have higher priority. The closeness coefficients,
46
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calculating from Eq. 8, show the importance of indices. This means that, whatever the closeness coefficients
be higher, the variables are better ranking.
Table 12 gives the positive and negative ideal points, the closeness coefficients, and the final ranking
strategies corresponded to each critical risk.
Table12. Set of ideal points of positive, negative and final weights of alternatives
(Source: Findings of research)
Solution
Established R & D unit
Sanctions
Earthquake
(+5
Richter)
Delays in
resolving
legal cases
opponents
Change
Currency
Fire and
explosion
Flood and
flooded
Protect domestic
producers
Procurement of goods
and equipment through
intermediaries
Using the same internal
sample
Use LBV (Lions Gate)
Predict storage fuel tank
for necessary cases
Reconciliation and
compensation
Legal proceedings by
regulatory authorities
Forecasting department
of dispute resolution at
the beginning of contract
Currency financing of
foreign goods
Supply the alternative
goods similar to the
internal types
Use LBV
Use of safety and fire
machinery
Develop a written safety
instructions at the
beginning of the project
Use LBV
Reinforced concrete
lining around the
pipeline
Postpone parts of the
project until the dry
months of the year
Forecast of drain pump
on specific months
Planning based on the
weather forecast
Rank
3.485
0.526
0.131
2
3.547
0.476
0.118
4
3.392
0.658
0.162
1
3.540
0.500
0.123
3
3.335
0.705
0.174
1
3.531
0.511
0.126
2
3.566
0.465
0.115
3
3.550
0.514
0.126
2
3.507
0.535
0.132
1
3.335
0.709
0.175
1
3.534
0.513
0.126
2
3.665
0.402
0.098
3
3.665
0.341
0.085
2
3.570
0.482
0.118
1
3.675
0.337
0.083
5
3.526
0.504
0.125
3
3.610
0.402
0.100
4
3.504
0.504
0.125
2
3.411
0.643
0.158
1
Based on table (12) it is seen that by considering time, cost, quality and managers resistance as four
yardsticks to prohibit risk, stuff preparation and equipment by go-betweens for earthquake risk (+5), use
LBV (control valves), for subsequence risk to solvers the opponents‘ rights, quarrel solvers prospect at the
first step of agreement, for expenses rate changes risk, abroad stuffs of security estimate expenses, for fire
and explore risk, safety written edition recipes at the first step of the project and for flood risk, planning
based on forecast is selected as the best reply strategies.
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4. CONCLUSIONS
Utilizes opinion of experts result ideas in Delphi method in three stages, a list of elementary expenses risks is
identified that is written in table (13). In this table among all risks, six crisis risks are identified that has the
maximum happening effect in increasing project expenses which are different from the others in this table.
Table13. Lists of the main and critical risks (Source: Findings of research)
The main risks and crises affecting the project cost
Equipment failure
Earthquake (+5 Richter)
Delays in resolving legal
Heat (+50 c)
cases opponents
Delays in payment based on Strong winds and dust storms
contracts
Lack of access to records
Flood and flooded
land
Errors in the timing and
Landslides
sequencing of project
activities
Errors in the tender bid
Fire and explosion
Delay in supply of goods
Existence minefields due to
and equipment needed for
the war zone
project
Failure to supply highCultural conflicts and
quality and standard of
sabotage residents
goods and equipment
Administrative changes in
Litigation of organizations
the work ordered by the
from each other
employer
Despite the weak system of
Sanctions
assessment and selection of
contractors
Injury or damage during
Administrative bureaucracy
transportation
Delays in transportation
Change Currency
Insufficient number of
Changes in inflation
suppliers
Technical error executive
workforce
Table14. Measures to deal with the critical risks and their priority index
(Source: Findings of research)
Priority
rating
Solution
2.131
2.123
2.118
Procurement of goods and equipment
through intermediaries
Established R & D unit
Using the same sample of internal
Protect domestic producers
2.174
Use LBV (Lions Gate)
2.126
Predict storage fuel tank for necessary
cases
Reconciliation and compensation
Legal proceedings by regulatory
authorities
Forecasting department of dispute
resolution at the beginning of contract
Currency financing of foreign goods
2.162
2.132
2.126
2.115
2.175
risk
Sanctions
Earthquake (5 + Richter)
Delays in resolving legal
cases opponents
Change Currency
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2.126
2.118
2.298
2.285
2.158
2.125
2.125
2.122
2.283
Supply of alternative goods similar to
internal types
Develop a written safety instructions at
the beginning of the project
Use LBV
Use of safety and fire machinery
Planning based on the weather forecast
Reinforced concrete lining around the
pipeline
Forecast of drain pump on specific
months
Postpone parts of the project until the
dry months of the year
Use LBV
Fire and explosion
Flood and flooded
By reviewing papers in the field of oil and gas pipe lines risk projects it is viewed that generally in reply to
decision step based on managers, experts and researches has been scheduled in reply field and choosing the
best answer to the risk are not done in these projects. So in this project the fuzzy TOPSIS method was used
for priorities methods against crisis risks and choosing the best answer.
Recommended method has these advantages:
1- Participating of experts and decision-makers in decision process, causes increasing acceptance of results
to work.
2- Recommended method based on fundamentals of scientific decision which give this possibility to
managers to choose suitable options from presented options focused on limitations and presented resources.
Use a phase logic in decision caused math modeling to cover uncertainty of votes from the mind of experts.
49
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REFERENCES:
Hwang, C. L., & Yoon, K (1981), ―Multi attribute decision making methods and applications: a state-of-the-art survey‖,
Berlin, Springer.
Chen, S. J., & Hwang, C.L (1992), ―Fuzzy multiple attribute decision making methods and applications‖, Berlin; New
York: Springer-Verlage.
Zeleny, M., (1992), ―Multiple Criteria Decision Making‖, McGraw-Hill, New York.
Ben, D., & Raz, T (2001), ―An integrated approach for risk response development in project planning‖, The Journal of
the Operational Research Society, 52(1), pp. 14-25.
Kujawski, E (2002), ―Selecting of technical risk responses for efficient contingencies‖, Journal of Systems Engineering,
5(3), pp. 194-212.
Yeh, C.H, & Deng, H (2004), ―A practical approach to fuzzy utilities comparison in fuzzy multi-criteria Analysis‖,
International Journal of Approximate Reasoning, 35 (2), pp. 179-194.
Project Management Association (2005), ―Book of project management body of knowledge‖, version 2000- translators:
Seied Hosein Osouli, Ali Bayat, Hosein Naseri, Ali Afkhami- Publishing Petrochemical company industries, Research
and development of project management, first print(In Persian).
Wang, T. C., & Chang, T. H (2007), ―Application of TOPSIS in evaluating initial aircraft under a fuzzy environment‖,
Expert Systems with Applications, 33(11), 870-880.
Fan, M., Lin, N., and Sheu, C (2008), ―Choosing a project risk-handling strategy: An analytical model‖, International
Journal of Production Economic, 112(2), pp. 700-713.
Mubin, S., & Mubin, G (2008), ―Risk analysis for construction and operation for gas pipeline projects in Pakistan‖,
Pakistan Journal of Engineering and Applied Science, Vol. 2, pp. 22-37.
Project Management Institute MI. (2008), ―A guide to the project management body of knowledge (PMBOK Guide)
(4ed.)‖, USA: Project Management Institute Inc.
Smih, O., Selin, S., & Elif, I (2009), ―Long term supplier selection using a combined fuzzy MCDM approach: A case
Study for a telecommunication company‖, Journal of Expert Systems with Applications, Vol. 36(2), pp. 3887-3895.
Wang, H., & Hsu, F (2009), ―An integrated operation module for individual risk management‖, European Journal of
Operational Research, 198(2), pp. 610-617.
Derri, B., & Hamzei.A (2010), ―Strategy appointment of risk reply in manager by ANP technic (case study: oil square
development of Azadegan north‖, Industrial management, second course, number 4, 75-92(In Persian).
Mirzai Chaboki, Mohsen (2009), ― Strategy edition for Chooka company and strategies ranking with phase Topsis
technic‖, Nourbakhsh, Seied Kamran, MSc thesis of Islamic Azad University, Central Tehran Unit, management
college(In Persian).
Shahriari, A., Sadigh, R., & Tesfamariam S (2012), ―Risk analysis for oil & gas pipelines: a sustainability assessment
approach using fuzzy based bow-tie analysis‖, Journal of Loss Prevention in the Process Industries, Vol. 25, pp. 505523.
Ganguly, K., and Guin, K. K., (2013), ―A fuzzy AHP approach for inbound supply risk assessment‖, Benchmarking: An
International Journal, 20.
50
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Volume 4, Number 22-28, 2014 Published Online October 25
Investigation Of Effective Factors On Bilateral Trade Costs
Of Agricultural Product
(Case Study: Iran's Bilateral Trade With Developing Countries)
Mitra Jalerajabi 7 and Reza Moghaddasi8
__________________________________________________________________________
ABSTRACT: This study concerns with calculation of Iran's agricultural bilateral trade costs and major
influential factors on it in Iran's Bilateral Trade with Developing countries group over the period 1995-2010.
Main findings reveal that over the period 1995-2010 weighted average of agricultural trade cost with
developing partner has declined by 44 percent. This reduction, however, was greater for UAE and Brazil
from developing countries. Based on estimated regression, agricultural bilateral trade costs with distance,
bilateral tariff rate and lag of agricultural bilateral trade costs variables are positively related whereas island
and adjacency variables have the opposite effect on Iran s agricultural bilateral trade costs. Finally based on
results is suggested that for increasing power contest of export, agricultural products must be destined based
on trade costs.
KEYWORDS: Bilateral trade costs, Gravity, Agricultural products, Panel data.
7
Ph.D Student, Agricultural Economics Department, College of Agriculture, Tehran Science and Research Branch,
Islamic Azad University, Tehran. Iran. E-mail:[email protected]
8
Associate Professor, Agricultural Economics Department, College of Agriculture, Tehran Science and Research
Branch, Islamic Azad University, Tehran. Iran. (Corresponding author). Email: [email protected].
51
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1. INTRODUCTION
The expansion of agricultural trade has helped to provide greater quantity, wider variety and better quality
food to increasing numbers of people at lower prices (Pinstrup-Andersen and Babinard, 2001). Agricultural
trade is also a generator of income and welfare for the millions of people who are directly or indirectly
involved in it. At the national level, for many countries it is a major source of the foreign exchange that is
necessary to finance imports and development; while for many others domestic food security is closely
related to the country's capacity to finance food imports. The relationship between trade and output in
general underlies the growing interdependence and integration of the world economies. This is the case also
for agriculture. On a global basis, the long-term growth rate of agricultural trade has tended to be
significantly greater than that of production. Agriculture is often the economic driving force in developing
countries. In the course of globalization, foreign trade of Iran as a Caspian region countries and developing
country is known with high dependence on a single export crop and foreign exchange earnings from oil
exports and high imports. The need to avoid and get rid of the problems caused by the single-product
exports, diversify export products, supply problems exchange for imports and increasing share in global
trade and investment and international markets, clearly indicates The importance of exports, especially
agricultural exports and imports depreciation. In between expanding and thriving business, especially
agricultural trade would not be possible without regard to the costs associated and undoubtedly one of the
most successful strategies and compete in the global arena can be attributed to a reduction in trade costs.
Novy (2012) in his article derived a micro-founded measure of bilateral trade costs that indirectly infers trade
frictions from observable trade data. He showed that this trade cost measure is consistent with a broad range
of leading trade theories including Ricardian and heterogeneous firms models. In an application he showed
that U.S. trade costs with major trading partners declined on average by about 40 percent between 1970 and
2000, with Mexico and Canada experiencing the biggest reductions. Hoekman and Nicita (2011), reviewed
some indices of trade restrictiveness and trade facilitation and compared the trade impact of different types
of trade restrictions applied at the border with the effects of domestic policies that affect trade costs. Based
on a gravity regression framework, the analysis suggested that tariffs and non-tariff measures continue to be
a significant source of trade restrictiveness for low-income countries despite preferential access programs.
The results also suggested that behind-the-border measures to improve logistics performance and facilitate
trade are likely to have a comparable, if not larger, effect in expanding developing country trade, especially
exports. Miroudot et al (2012) provided the first evidence linking lower international trade costs with higher
productivity in services sectors. Baised on results, on average, lowering trade costs by 10% is associated with
a gain in total factor productivity of around 0.5%, which is an effect of similar magnitude to that for goods
sectors. Amiti et al (2008) examined the determinants of entry by foreign firms, using information on 515
Chinese industries at the provincial level during 1998–2001. The analysis was based on new economic
geography theory and thus focused on market and supplier access within and outside the province of entry,
as well as production and trade costs. The results indicated that market and supplier access were the most
important factors affecting foreign entry. Access to markets and suppliers in the province of entry matters
more than access to the rest of China, which was consistent with market fragmentation due to
underdeveloped transport infrastructure and informal trade barriers. Reimer and Li (2010), developed a
simulation model of world crop markets that was based upon Ricardian comparative advantage. They applied
the model to twenty-three countries and provided measures of the degree of globalization in this sector, the
gains from trade, and the elasticity of trade volumes to trade costs. The distribution of the gains from trade
across countries was uneven due to important differences in openness to imports, productivity, and other
factors, some of which appear to be related to a country‘s level of development. Distance limited the extent
by which changes in one country were transmitted to others. Duan and Grant (2012) estimated an indirect
measure of multilateral trade costs for tradable goods in agriculture. Using production and bilateral trade data
along with plausible values of the elasticity of substitution, they found that median global agricultural trade
costs were 285 percent in 1965, on an ad-valorem equivalent basis, before declining dramatically to a 118
percent ad-valorem equivalent in 2010. There was considerable variation in agricultural trade costs,
bilaterally, and within various policy arrangements such as regional integration and the GATT/WTO.
Statistical analysis of the determinants of agricultural trade costs largely confirmed this variation: bilateral
and regional free trade initiatives lowered international trade costs by 36 percent on average, whereas
GATT/WTO membership lowered trade costs by nearly 20 percent.
52
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Sourdin and Pomfret (2009), developed an Index of Trade Costs for ASEAN Member Countries, 1990-2007
based on the gap between cif and fob values of ASEAN exports to Australia. The cif/fob gap is a commonly
used aggregate measure of trade costs, and Australia is a useful benchmark for ASEAN countries because it
is a large trading partner whose major ports of entry are roughly equidistant from the ASEAN countries. The
case for using this Index as a measure of trade costs was set out in the first section. The second section
examined the raw data for the ASEAN countries. The third section reported econometric analysis of the
cif/fob measure to better understand why trade costs vary across countries and to compare the ASEAN
members‘ record to the global average during the period 1990-2007. The final section presented the two
versions of the Index, discussed some reservations to using the cif/fob measure of trade costs, and suggested
how the Index could be upgraded, maintained and extended.
Accordingly, the present study sought to measure the cost of bilateral trade of agricultural products in Iran
with partners in developing partners and to survey effective factors on it.
2. MATERIAL AND METHODS
2.1. Measure of Bilateral Trade Costs
Anderson and van Wincoop (2003) develop a multi-country general equilibrium model of international trade.
Each country is endowed with a single good that is differentiated from those produced by other countries.
Optimizing individual consumers enjoy consuming a large variety of domestic and foreign goods. Their
preferences are assumed to be identical across countries and are captured by constant elasticity of
substitution utility.
As the key element in their model, Anderson and van Win coop (2003) introduce exogenous bilateral trade
costs. When a good is shipped from country to , bilateral variable transportation costs and other variable
trade barriers drive up the cost of each unit shipped. As a result of trade costs, goods prices differ across
countries. Specifically, if is the net supply price of the good originating in country , then
is the
price of this good faced by consumers in country , where
is the gross bilateral trade cost factor (one
plus the tariff¤ equivalent).
As the key element in their model, Anderson and van Win coop (2003) introduce exogenous bilateral trade
costs. When a good is shipped from country to , bilateral variable transportation costs and other variable
trade barriers drive up the cost of each unit shipped. As a result of trade costs, goods prices differ across
countries. Specifically, if is the net supply price of the good originating in country , then
is the
price of this good faced by consumers in country , where
is the gross bilateral trade cost factor (one
plus the tariff¤ equivalent).
Based on this framework Anderson and van Win coop (2003) derive a micro-founded gravity equation with
trade costs:
(
)
(1)
Where denotes nominal exports from to ,
is nominal income of country and
is world income
∑
defined as
.
is the elasticity of substitution across goods. And are country ‘s and
country ‘s price indices.
The gravity equation implies that all else being equal, bigger countries trade more with each other. Bilateral
trade costs
decrease bilateral trade but they have to be measured against the price indices
and .
Anderson and van Win coop (2003) call these price indices multilateral resistance variables because they
include trade costs with all other partners and can be interpreted as average trade costs. Is the outward
multilateral resistance variable, whereas is the inward multilateral resistance variable.
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(
)
⁄
(
⁄
.
And
/
)
(2)
As an example supposes two countries and face the same domestic trade costs
and are of the
same size
but country is a more closed economy, that is,
. It follows directly from (2) that
multilateral resistance is higher for country , (
). Equation (2) implies that for given it is easy
to measure the change in multilateral resistance over time as it does not depend on time-invariant trade cost
proxies such as distance.
The explicit solution for the multilateral resistance variables can be exploited to solve the model for bilateral
trade costs. Gravity equation (1) contains the product of outward multilateral resistance of one country and
inward multilateral resistance of another country,
, whereas equation (2) provides a solution for
. It
is therefore useful to multiply gravity equation (1) by the corresponding gravity equation for trade flows in
the opposite direction, , to obtain a bidirectional gravity equation that contains both countries‘ outward
and inward multilateral resistance variables:
(
.
)
And
/ (
(
)
)
(3)
Substituting the solution from equation (2) and rearranging yields:
(
)
(4)
As shipping costs between and
can be asymmetric (
) and as domestic trade costs can differ
across countries(
), it is useful to take the geometric mean of the barriers in both directions. It is also
useful to deduct one to get an expression for the tariff¤ equivalent. I denote the resulting trade cost measure
as :
(
)
(
)
(
)
(5)
Where
measures bilateral trade costs
relative to domestic trade costs
. The measure therefore
does not impose frictionless domestic trade and captures what makes international trade more costly over and
above domestic trade.
The intuition behind
is straightforward. If bilateral trade flows
increase relative to domestic trade
flows
, it must have become easier for the two countries to trade with each other relative to trading
domestically. This is captured by a decrease in
, and vice versa. The measure thus captures trade costs in
an indirect way by inferring them from observable trade flows. Since these trade flows vary over time, trade
costs
can be computed not only for cross-sectional data but also for time series and panel data.
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This is an advantage over the procedure adopted by Anderson and van Win coop (2003) who only use crosssectional data. It is important to stress that bilateral barriers might be asymmetric (
) and that
bilateral trade flows might be unbalanced
.
Indicaters the geometric average of the relative
bilateral trade barriers in both directions.
2.2. Panel Regression
In addition, panel regressions was run to understand whether the trade cost measure is sensibly related to
common trade cost proxies from the gravity literature. Those proxies can be divided into two groups. The
first group consists of geographical variables including logarithmic bilateral distance between the two
countries in an observation, a dummy variable that indicates whether the two countries are adjacent and share
a land border, and an island indicator variable that takes on the value 1 if one or both of the trading partners
is an island, and 0 otherwise. The second group consists of institutional variables capturing various historical
and political features. They include a common language dummy, currency union dummy, the free trade
agreement dummy and a tariff variable combining the ratings of tariff regimes for the two trading.
2.3. Data
As an illustration of the relative trade cost measure
derived in the previous section, measure was
computed for Iran's major developing partners using annual data for the period 1995 to 2011. Table 1 reports
trade share of each country in agricultural product group.
Table1- Trade share of each partner (percent) in agricultural products
Developing countries
Kenya
South Africa
Brazil
China
Korea, Republic of
Indonesia
Philippines
Thailand
India
Pakistan
Sri Lanka
Kuwait
Oman
Turkey
United Arab Emirates
0.16
0.43
4.46
3.38
0.38
0.31
1.79
5.38
5.98
4.92
1.79
2.27
1.24
1.29
24.63
58.32
All bilateral aggregate data are taken from the UNCTAD in U.S Dollars. Data for intra-national trade are
not directly available but can be constructed following the approach by Shang-Jin Wei (1996). Due to market
clearing intra-national trade can be expressed as total income minus total exports,
, where total
∑
exports are defined as the sum of all exports from country ,
. Total agricultural production in
dollars was taken in constructing . The trade cost measure potentially depends on the elasticity of
substitutionσ , Anderson and van Win coop (2004) survey estimates of σ and conclude that it typically falls
in the range of 5 to 10. Given these estimates I proceed by following Anderson and van Win coop (2004) in
setting σ = 8.
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3. RESULTS
Figure 1 illustrates the relative Iran s agricultural bilateral trade cost measure for sample countries.
450
120
350
400
100
300
80
250
350
300
250
200
60
200
safrica
UEA
150
turky
150
40
100
100
20
50
50
0
180
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1995
250
1996
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0
400
160
350
140
200
300
120
250
150
100
80
200
oman
kuwait
100
60
40
srilenka
150
100
50
20
50
250
250
200
2011
2010
2008
2009
2007
2006
2005
2003
2004
2002
2001
2000
1999
1997
1998
1996
1995
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1995
0
1996
0
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
0
300
250
200
200
150
150
150
pakistan
100
india
100
Thailand
100
50
400
350
300
250
400
450
350
400
300
350
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
0
1995
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
0
1997
0
1996
50
1995
50
300
250
250
200
200
indonesia
200
500
500
450
450
450
400
400
400
350
350
350
300
300
250
250
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
0
1997
50
0
1996
50
0
1995
50
2009
2010
2011
100
2005
2006
2007
2008
150
100
2002
2003
2004
kenya
200
150
100
1998
1999
2000
2001
1998
250
150
1995
1996
1997
1997
300
brazil
200
1995
skorea
1996
1995
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
500
200
china
150
1995
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
0
2001
50
0
2000
50
0
1999
50
1998
100
1997
100
1996
100
1995
150
1996
philippine
150
Figure1-The Iran's relative bilateral trade cost measure in trade of agricultural products with developing
countries (1995-2011)
Stability and instability of the bilateral trade cost trading partners was realized from figure 1. Based on
results, Iran s trade cost with Turkey, Pakistan, India and Indonesia were more stable. Based on costs of
bilateral trade of agricultural products between Iran and UAE and Brazil, despite the instability has been
decreasing.
Table 2 reports level and percentage variation in Iran relative bilateral trade cost measure between 1995 to
2011 with developing partner in trade of agricultural.
Table 2- The trade cost measure (percent in tariff equivalent)
Country
Kenya
South Africa
Brazil
China
1995
465
234
449
327
2011
277
218
214
243
Variation
-40
-7
-52
-26
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Korea, Republic of
Indonesia
Philippines
Thailand
India
Pakistan
Sri Lanka
Kuwait
Oman
Turkey
United Arab Emirates
Simple Average
Weighted Average
361
354
282
167
190
194
339
153
148
234
110
267
192
299
279
339
202
154
167
213
116
139
165
26
203
124
-17
-21
20
21
-19
-14
-37
-24
-7
-29
-76
-22
-44
It is important to stress that these numbers represent a measure of bilateral relative to domestic trade costs.
For example, take the result that Iran.-Turky measure of agricultural products stands at 165 percent in the
year 2011. Suppose that a particular good produced in the Iran costs $10.00 and A domestic consumer could
therefore buy the product for $10, whereas a consumer abroad would have to pay $26.5 ( =2.65). Of
course, this particular example is based on an aggregate average and should be interpreted as such. In
practice, trade costs can vary considerably across goods and across countries. For instance, perishable goods
are more likely to be transported by air freight instead of less expensive truck or ocean shipping (see Chen
and Novy, 2011).
Based on the results of measuring the costs of bilateral trade of agricultural products, the costs of Iran's trade
with the UAE and Brazil during the period 2011-1995 had the greatest reduction. In the costs of agricultural
trade, Iran's Kuwait, Oman and the UAE in both periods of Arabic has been minimal.
Table 3 presents the regression results of the trade cost measure on observable trade cost proxies. The
dependent variable is the logarithmic relative trade cost measure, ln( ).
Table3: Regressing the trade cost measure on observable trade cost proxies
trade cost proxies \Selected model
Ln(distance)
Adjacency
Island
Ln(tariff)
Ln(
F
)(-1)
Pooled
0.03
(0.03)
-0.12*
(0.06)
-0.03
(0.60)
0.04*
(0.02)
0.77**
(0.05)
0.81
112.92**
The dependent variable is the logarithmic tariff equivalent ln ( )), robust OLS estimation.
Standard errors given in parentheses. Constants not reported.
** And * indicates significance at the 1 and 5 percent level, respectively
Due to not variation, common language dummy, currency union dummy, the free trade agreement dummy in
both regressions was eliminated.
The explanatory power of the trade cost proxies is fairly high, with the
ranging between 81 percent. The
repressors have the expected signs Distance is positively related to trade costs, whereas adjacency is
associated with lower trade costs. Moreover, trading relationships involving island countries are also
associated with lower trade costs since those countries have easy access to the sea and traditionally tend to be
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relatively heavily involved in international commerce. Tariffs and lag of relative trade cost measure, ln(
are naturally associated with higher trade costs.
)
4. DISCUSSIONS
Considering the importance of agribusiness management, we aimed to measure the pattern of Iran's trade
with developing countries and its effective factors accordingly, the following results were obtained:
Main findings reveal that over the period 1995-2010 weighted average of agricultural trade cost with
developing partner has declined by 44.
Based on results, Iran s trade cost with Turkey, Pakistan, India and Indonesia were more stable.
Based on the results of measuring the costs of bilateral trade of agricultural products, the costs of Iran's trade
with the UAE and Brazil during the period 2011-1995 had the greatest reduction.
The results showed in the costs of agricultural trade, Iran's Kuwait, Oman and the UAE in both periods of
Arabic has been minimal.
The results showed, Iran's agricultural trade costs in developing countries, is positively related with distance,
agricultural bilateral tariff rate and lag of agricultural trade costs and is negatively related with, adjacency
and island dummy.
According to the results of bilateral trade costs of agricultural has experienced a downward trend.
Therefore, some of the main suggestions are offered as follows:
Due to the high dependence on import to oil export And the impact of bilateral trade costs on commodity
prices and Resulting in the withdrawal of currency, It is recommended that in trade of different products,
different markets are selected according to bilateral trade costs between countries.
It is recommended that costs of bilateral trade in goods are calculated a more detailed groups and trade of
products is navigation based on calculated bilateral trade costs.
Based on relationship between Iran's agricultural trade costs and common trade cost proxies, It is
recommended that in order to expand agricultural trade with developing countries, Tariffs and trade costs
through preferential trade agreement letters was changed.
The effect of lag of agricultural trade costs the needs to perform different actions on decrease the bilateral
trade costs are shown.
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REFERENCES:
Amiti M and Javorcik BS (2008). Trade costs and location of foreign firms in China, Journal of Development
Economics 85 (2008) 129–149.
Anderson J (1979). A Theoretical Foundation for the Gravity Equation. American Economic Review 69, pp. 106-116.
Anderson J and Van Wincoop E (2003). Gravity with Gravitas: A Solution to the Border Puzzle. American Economic
Review 93, pp. 170-192.
Anderson J and Van Wincoop E (2004). Trade Costs. Journal of Economic Literature 42, pp. 691-751.
Broda C and Weinstein D (2006). Globalization and the Gains from Variety. Quarterly Journal of Economics 121, pp.
541-585.
Chen N and Novy D (2011). Gravity, Trade Integration and Heterogeneity across Industries. Mimeo, University of
Warwick.
Duan S and Grant J H (2012). Agricultural Trade Costs: 1965-2010. Selected Paper prepared for presentation at the
Agricultural &Applied Economics Association‘s 2012 AAEA Annual Meeting, Seattle, Washington, August 12-14,
2012
Hoekman B and Nicita A (2011). Trade Policy, Trade Costs, and Developing Country Trade. World Development
Vol.39, No.12. pp. 2069-2079.
Miroudot S, Sauvage J and Shepherd B (2012). Trade Costs and Productivity in Services Secrors. Economics Letters.
114. pp. 36-38
Novy D (2012). Gravity Redux: Measuring International Trade Costs with Panel Data. CEP Discussion Paper 1114, pp.
1-27.
Pinstrup-Anderson, P., Babinard. 2001. Nutrition. In shaping globalization for poverty alleviation and food security, ed.
E. Diaz-Bonilla and S. Robinson. IFPRI 2020 focuses 8. Washington, D.C.: International Food Policy Research
Institute.
Reimer JJ and Li M (2010). Trade Costs and the Gains from Trade in Crop Agriculture. American Journal of
Agricultural Economics Advance Access published June 10, 2010
Sourdin P and Pomfret R (2009). Monitoring Trade Costs in Southeast Asia. ERIA Discussion Paper Series. ERIA-DP2009-12
Wei S (1996). Intra-National versus International Trade: How Stubborn is Nations in Global Integration? NBER
Working Paper .5531.
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Presenting a Suitable Pattern to Transfer Technology from
Armed Forces to Defense Industries for Mass Production
Ali Shaebani9, Hassan Rajabi Masroor10, Mohammad Mardani11, Soheil Emamyian 12
__________________________________________________________________________
ABSTRACT: One of concerns in research organizations is to convert the research projects to production
procedures, since the prophecy , nature and mission of these organizations is, to convert an idea to research
plan and to carry out research cycle from Needs assessment to develop a research sample and as the lack of
industrialization and production infrastructure, so the managers of these organizations always face the
concern of why the research plans will not be produced and what the obstacles are. This has resulted in
problems for most organizations. In the literature of this research, first, it is tried to study the principles and
bases of technology , the principles and concepts of technology transmission, acquaintance with industrial
products manufacturing methods in industrialized countries (the US and Russia) , familiarity with the
technology transmission models, current problems on technology transmission of research projects to
industry, explaining the technology transfer obligations in armed research organizations including type of
sample definition in industrial research and executive phases of a research project. Then, according to the
recognized problems and theoretical studies, with study (survey) of the types of technology transfer patterns
in industrialized countries and Iran, and the successful investigation of research centers, a model is proposed
consistent with national research organizations, and is validated by using viewpoints of 40 experts in the
form of questionnaire and through analyzing the collected data in two ways. The Cornbrash's Alpha obtained
for the model was 0.901. The model was then finalized and presented by adding two new procedures.
KEYWORDS: technology, technology transfer, technology transfer vertical
9
Graduate student in project management Imam Hossein University [email protected]
10
PHD student in Industrial Engineering-Material and Energy Research Center - [email protected]
11
Member of Scientific Board, Imam Hossein University - m- [email protected]
12
Member of Scientific Board, Imam Hossein University- [email protected]
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1. INTRODUCTION
Technical knowledge (or technology) is a main component in results of every research project. It involves
information on planning and designing stages including preliminary, conceptual and engineering steps,
fabrication and montage methods and employing and maintenance instructions. Each research project is
basically defined with mass production view and has to have a certain framework in the form of a pattern to
achieve this goal. There is a wrong conception that technical knowledge is only transferred at the end of a
project life span and the resulted knowledge must be transmitted to industry as a full package to enable
information-based production.
Knowledge of a research project must be managed from starting point. This management begins from
identifying producer industry and interacting with it during project implementation and proceeds to making
use of industry's ideas on the type of knowledge to be produced, its size and other required factors in
production area. At the beginning steps of receiving an idea production and knowledge transfer should be
considered while processing that idea. This indicates the importance of technical knowledge transfer.
Therefore, the pattern of technology transfer is a document specifying the routes of technology transfer
which assigns functions of each section involved. The pattern has a considerable and necessary impact and
prevents personal interests. Consequently, research results come into practice instead of being archived and
this prevents wasting research costs. Some of important outcomes of conducting this pattern are growth in
industry, supplying country's internal needs, independence from foreign countries, improving researchers'
incentive, etc.
Nowadays, industrial growth of most developing countries is highly dependent upon technology transfer and
there is a direct relationship between technology transfer and a country's economic, social, political and
cultural advances so that technology is considered as a necessary factor in creating wealth, capability and
knowledge in most countries and a strong tool for national development. Technology is a set of interrelated
factors and elements. Moreover, technology transfer means employing technology in a location other than
the initial one. In other words, a procedure which results in flowing technology from the source to the
receiver is called "technology transfer" (Ali Ahmadi, 2000).
2. THEORETICAL PRINCIPLES OF TECHNOLOGY
2.1. Definition of Technology
Technology is targeted and structuralized composition of "human, informational and organizational"
capabilities which leads to production of a valuable product (Ali Ahmadi, 2000).
2.2. Technology Components
Based on above definition, technology is composed of four following components:
(1)
(2)
(3)
(4)
Human-ware (creative, experienced, knowledgeable and skillful human resources)
Hardware (tools, vehicles and equipment)
Software (all information, documentations, theories and plans)
Management or organization-ware (including managerial skills, flexible organizational structure,
developing a proper environment for growth and effectiveness of the other three components).
In most cases, technology is subcategorized into different types to describe the compound word of its name
(Ali Ahmadi, 2000)
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2.3. Types of Technology
Figure 1: different types of technology
Classification of technology types is based on: origin, nature, human forces, complexity, innovation,
composition, historical career, capability, age, type of exploitation, life cycle, level, documentations, types of
use, consistency, measure(Ali Ahmadi, 2000).
Figure1. Classification of different types of technology
Scale
Usage
Origin
Document
ation
Nature
Lifetime
Manpower
Classification of
different type of
technology
Level
Complexity
Type of
operation
Compatibi
lity
Archaism
Innovation
Ability
History
Compositio
n
3. THE CONCEPT OF TECHNOLOGY TRANSFER
Technology involves all knowledge, products, processes, tools, methodologies and systems being used in
producing a product or service. One of the fields of technology management is technology transfer which
requires a comprehensive, deep look. Today, industrialization is highly dependent on technology transfer. As
mentioned earlier, there is a direct relationship between technology transfer and a country's economic, social,
political and cultural advances in the present world so that technology is considered as a necessary factor in
creating wealth, capability and knowledge in most countries and a strong tool for national development. This
is why military war is globally replaced by technological economic. Therefore, adopting technological
development strategies in different economic sections is a main requirement for economic reconstruction of a
country. Besides, this is a factor without which it is not possible to achieve goals such as self- sufficiency,
national development and improvement of life standards. Technology transfer is a complicated, difficult
procedure. If technology is purchased or transferred without prior examinations and investigations, it is not
useful and leads to weakening of national technology beside wasting time and costs. Having a look on
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technology transfer is a procedure through which imported technology is acquired in a way that is employed
to produce products and develops a background for creating new technology. Technology is usually
transferred in two manners: vertical and horizontal. In vertical transfer or transfer of research and
development, technical data and findings of applied research are transferred to engineering development and
planning levels and then are commercialized to enter production process. In horizontal technology transfer,
technology is transferred from an empowerment level in one country to the same level in another location. In
this case, the higher the level of technology receiver, the lower the transfer costs (and technology is being
received more effectively)( Tavakoli,2008). Table 1 presents nature and concept of technology transfer in
every level and its costs compared to other levels (Arabi, 2009).
Table 1: A comparison of concept and costs of technology transfer in technology and empowerment levels
Costs of technology
Concept of technology
Nature of research
Level
transfer
transfer
activity
Very low
Knowledge transfer
Research
Applied research
Research and
Low
Knowledge transfer
Incremental research
development
Proper
Capability transfer
Engineering activities
Planning engineering
Fabrication
Acceptable
Capability transfer
Engineering activities
engineering
High
Machinery transfer
Management
Production
Very high
Product transfer
Business
product
3.1. Essential Points in Technology Transfer
3.1.1. Principles of Technology Transfer
Technology transfer is a procedure through which technology receiver (applicant) achieves required
hardware, a desired level of software, technical knowledge and skills hidden in technology transferred by the
sender (supplier) and hence it can reach better methods of production or serving by paying the costs of
relative technology. Therefore, it is of great importance to determine and separate principles of technology
transfer in transfer procedure. The principles are presented in Fig.2 (Manteghi, 2010).
Figure 2: Principles of technology transfer
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3.1.2. Technology Transfer Method
Technology transfer method is a set of predefined activities during which the required technology is
transferred to the applicant. Technology transfer methods differ depending on technology type and status of
receiver and sender (a huge variety in most cases). Among all books and articles on the subject there are
various classifications indicating direct and indirect, internal and external, official and unofficial, commercial
and noncommercial, packed and unpacked, depicted and non-depicted methods (Hadavand, 2004). The
present paper considers the official method of technology transfer.
3.1.3. Models OF Technology Transfer
Technology transfer models are divided into two groups:
3.1.3.1. Horizontal models
The following five models are among the most well-known vertical transfer models:
A)
B)
C)
D)
E)
Chiza and Mansini's model (Chiesa.V and Manzini. R,1998)
Ford's model ( Ford, David,1988)
Roberts and Berry's model (Roberts.E and Berry,1985)
Gilbert's model ( Gilbert, A.lee,1995)
Stock's model (Stock's,1996)
3.1.3.2. Vertical models
Among all available horizontal models, the present paper mentions models proposed in some industrial
countries such as the US and Russia which are more consistent with Iranian research organizations and, also,
two models presented in Iran.
A) Methods Of Producing Industrial Products In The Us And Russia
Based on earlier investigations, the US and Russia manufacture industrial products according to Fig. 3.
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Figure 3: Methods of manufacturing industrial products in the US and Russia
Methods of
manufacturing
industrial products
in the US and
Russia
Method of
manufacturing in
the US
Method of
manufacturing in
Russia
Systematic planning
centres
Designing offices
Centres R&D
Montage centres
Full impendence
on the product
monitored by
systematic
planning centre
Manufacturing factories
Russian method
of manufacturing
in which planner
are present in all
manufacturing
stages
Test and control
centres
Full impendence
on the product
monitored by
systematic
planning centre
Mass production
centers
Triangular patterns presented in figures 4 and 5 are related to activities required to define the route from
project to production line of a product in the US and Russia (and some other countries) which are depicted as
follows (Saad, Mohammad,2002).
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Figure 4: Triangular model of Russia
Figure 5: Triangular model of the US
B)
Vertical Model Of Technology Transfer In Iranian Defense Industries
In the vertical method (procedure to production), there is still no standard or comprehensive model in Iran
and every organization or research center acts on a pattern consistent with its environment. The statistics of
research project leading not to technology transfer to production suggest that vertical transfer of technology
lacks a universal pattern. Blow is the model used in Iranian defense industries (Industrial research vicepresidency of armed forces, 2012).
.
Figure 6: The patterns used in Iranian defense industries
Research
centre
Factory
Military users
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A research center is developed in every industry and collects needs of armed forces and converts them into
research, designing and fabrication projects of research, engineering and production standard samples with
the help of factory's experts. It is noteworthy that the presented pattern used in Iranian defense industry is a
novel and young one.

(1)
(2)
(3)
(4)
Advantages of the pattern
Close relationship between research center and the factory
Preparation of production requirements along with the project life cycle
Consistency of planners with fabrication and production procedures
Presence in the factory because of familiarity and close relations to industrial section
(5) Lack of need to conduct additional and unnecessary documentation
 Disadvantages
(1) Research center usually predicts military users' needs and does not met their exact requirements
(2) Lack of close relationship between research center and users
(3) Weakness in technical attachment of research projects because of users' inability in defining their
needs with technical language
(4) More attention paid by industries to commercial products instead of military ones (higher
profitability of commercial section)
(5) Insignificant tendency of defense industry toward military section as a result of limited number of
new technologies demanded by military forces.
C) The (present) pattern used in research organizations of armed forces(Industrial research vicepresidency of armed forces, 2012)
In this pattern (Fig. 8), research organizations, first, collect operational requirements of all forces and
accordingly define research projects. In the next step, defined projects are approved in the Headquarters of
industrial research and abandoned to specialized centers of research organizations for implementation.
Having the project implemented and confirmed by operational users the specialized centers transfer its
documentations to the manufacturer industry in the form of a letter of understanding (approved by
headquarters of industrial research).
Figure 8: The (present) pattern used in research centers and organizations
Requirements of
operational forces
Approval and
financing in credit
office
Delivery to forces
Production in
defense industry
Implementation
in research
organization of
forces
 Advantages
In this pattern, research organizations of armed forces are the main references of adopting operational
requirements and defining and approving research projects. Interaction and close relationship between
research organizations and operational users and recognizing and defining precisely in technical language
lead to define and approve accurate research projects. Therefore, the pattern is more advantageous than the
present presently used defense industries. Moreover, technology is transferred to industry through the letter
of understanding and hence military forces (owners of project knowledge) can supply their requirements
with lowers costs and getting higher discounts from defense industries.
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 Disadvantages
(1) Lack of standard documentations of industrial production
(2) Inconsistency between projects' research stages and fabrication and manufacturing stages; elongated
time of transferring technology to industry
(3) Lack of incentives in defense industries to receive technology of research projects because of low
number of orders and consequently uneconomic production
(4) Lack of proper interaction between research and manufacturing chains
(5) Lack of trust in research organizations to transfer technology to manufacturing industries because of
deficient definition of project's ownership rights.
3.2. Problems of Available Models of Technology Transfer From Research Organizations of
Armed Forces to Defense Industries For The Sake Of Production
1) Lack of proper standards to prepare documentations of a product in each step (engineering,
industrial, manufacturing)
2) Lack of suitable management and leadership in research projects
3) Lack of incentive in research centers and among researchers to transfer project knowledge from one
project to another (ownership rights)
4) Lack of defined and approved credits to accomplish and improve research projects from engineering
model to industrial product
5) Long time required to transfer technology and technical knowledge from research to production
6) Keeping project secrets in research centers as a result of lack of trust (required for transferring
technology to production)
7) Denying research results by operational users (The engineering model which is considered as the
product or result of research does not meet users' real requirements and hence it must turn into
industrial product and presented to users after approval)
8) Lack of incentive in defense industries to receive technology of research products (reasons:
unprofitability of production, lack of foreign and local companies to compete and challenge the
industry, lack of trust of the industry in continual research result production)
9) Lack of proper interaction between research and manufacturing chains
10) Permanent and unpredictable changes in the structure of research categories leading to discrete
planning
11) Lack of sufficient focus of researchers and research centers on probable problems in post-research
steps resulting in doubt in long-term production of research results
12) Lack of sufficient predicted credits for purchasing products of research projects in long-term plans.
This leads to suppressed industrialization and production
13) Lack of integration and proper interaction between authorities and practitioners of research,
production and equipment field which results in lack of support from local research and
manufacturing projects
14) Weak definition on engineering, industrial and manufacturing products among research and
manufacturing categories and users (for instance, users expect an engineering product to be
responsive in every operational condition)
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4. REQUIREMENTS OF TRANSFERRING TECHNOLOGY
ORGANIZATIONS TO DEFENSE MANUFACTURING INDUSTRIES
FROM
RESEARCH
4.1. Developing a Common Technical Language among Researchers in All Implementation
Stages (From Idea to Production) and Defining Model Type in Industrial Research
4.1.1. Lab Model
This model (sample) is:
1) A research sample (model) of major and unknown parts of the main sample being examined in vitro.
2) A sample similar to the main sample
in which the three main components (from, size, function)
are typically respected. Besides, its characteristics are determined based on requirements of the
research team and to demonstrate effectiveness of employed theories and technologies.
3) A model development of which aims to create a sample which ensures validity of main decisions
with lowest costs. In some cases, hence, standard life cycle or repeatability are not necessary for
samples.
4.1.2. Engineering Sample / Pilot
The product is finalized in terms of engineering characteristics and ultimate performance but its life cycle,
supplied items and production procedures. Sample characteristics include:
1) A one-to-one model of the final product so that it is finalized (respecting engineering sample)
respecting operational sample. The model can be used to evaluate expected key capabilities and test
them in their related operational environment.
2) It is a final model in system's real dimensions and involves all subsystems and ultimate
characteristics of the product. Still, it lacks expensive equipment (with military standards) irrelative
of activity principles and authorities of
3) Most operational – technical capabilities of the system are expressed. For example, the task can be
performed during an experimental exploitation period by the customer with direct and indirect
monitoring and cooperation of representatives of the research organization.
4) It is necessary to control and approve integrated performance of main interacting subsystems in an
acceptable level.
5) Performance of subsystems is directly controlled and its stages are confirmed.
4.1.3.
Operational Model / Production Standard Model / Advanced Engineering
The model is entirely similar to the engineering model in terms of operational and technical features. It may
not be practice in research procedure. In other words, operational model is a sample with finalized
engineering and performance characteristics and main system items. But, it has not been stabilized in terms
of lifecycle and production procedures. Characteristics of such a model are as follows:
1) It is capable of responding to general operational expectations of users
2) Product fitness (in terms of sample and documentations) is enough to initiate technology transfer in
order to enter production phase
3) The model is highly a representative of the final system but it still lacks characteristics of a
manufactured product (such as price, supportiveness, mounting main parts, production repeatability,
etc.).
4) All experiments (in the factory, at work and field experiments) should be performed and probable
problems solved
5) Customer documents (maintenance, fixing, operation, etc.) are provided and used by the customer,
except in some limited cases
6) Operations are performed in a successful and repeatable manner
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7) Users and operational experts must successfully acquire enough experience and skill to employ the
system
8) In this model, all technical / operational capabilities of the system are expressed. The task can be
performed during an experimental period by the customer with direct and indirect monitoring and
cooperation of representatives of the research organization.
4.1.4. Semi Industrial Model / Limited Production / Pilot Plan
Semi industrial or limited production (Pilot Plan) is a step prior to industrial production or even foundation
of the factory. It is, in fact, the limit between research production and industrial production with a production
rate smaller than that of industrial and greater than that of experimental productions. Research on semi
industrial production is a kind of investigation on production in micro scales compared to industrial
manufacturing so that required data is gathered through test and error on sample fabrication and production
method correction (this means what is needed to build and initiate an industrial factory). Pilot Production
enables planners, researchers and investors to revise their ideas and estimations in order to optimize
production methods and characteristics of products and procedures. It is possible to present products, while
accomplishing and examining production period, in order to perform an experimental marketing and finalize
market feedbacks. Meanwhile, users' feedback is considered in ultimate evaluation of production and its
scales. When a laboratory sample product successfully passes through initial stages it is carried to Pilot Plan
production step where production limit is low. Here, the Pilot Plan analyzes deficiencies, loss and profit,
capacity, accuracy, facilities and equipment.
A) Objectives of the Pilot Plan
1) To optimize production procedure
2) To gain technical knowledge on production procedure and realize research results
3) To train employees and develop trust in management
4) To estimate production expenditures prior to industrial production with a close approximation to the
real estimations of industrial production
5) To investigate product application in the market
6) To test capacity and sensitivity of machinery and equipment to determine their properties for mass
production
7) To find the best transportation mode
8) To access technology data. This enables identifying effective production factors and parameters and
developing an industry for that product.
B) Characteristics of Pilot Plan sample
1) A sample or model all features of which are finalized and all equipment used in it have standards of
a real system
2) It has sufficient life cycle, maintenance support services, extensive training services, competent
operational power and durability in vivo and limited production. It also is generally responsive to all
operational expectations of customers
3) Because of limited orders and demands, the product is manufactures only in a certain period of the
year. Hence, production capacity of other industrial lines is usually used to manufacture the product
(and vice versa)
4) In order to economize the product some parts (subsets) are provided from external sources
5) All factory/on work/operational experiments are implemented successfully and probable deficiencies
removed
6) Entire technical documentations including maintenance, operation, etc. are completely produced and
accessible by customers
7) Logistic items and their production procedures are finalized with economic components. In other
words, the sample is ultimately stabilized in terms of performance, age, production, item supply and
finished costs.
4.2.
Common Definition Of Implementation Phases Of A Research Project (industrial
research vice-presidency of armed forces, 2012)
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First phase: possibility evaluation (evaluating requirements and conceptual designing)
Second phase: preliminary designing
Third phase: detailed designing and sample examination
5.
THE PROPOSED PATTERN
The proposed pattern of the present research is suggested (Fig. 9) respecting mentioned problems of
available patterns and according to items below:
-
Performing theoretical studies
Investigating different types of available models of technology transfer and identifying their
strengths and weaknesses
Exploring the procedures used by successful research centers and organizations
The 20-year experience of researchers on technology transfer
Figure 9: The proposed pattern
According to the proposed pattern the beginning sections of which are similar to the pattern depicted in
figure 8, research organizations of armed forces, collect operational requirements of all forces and
accordingly define research projects. In the next step, defined projects are approved in the Headquarters of
industrial research and abandoned to specialized centers of research organizations for implementation. Then,
the engineering sample is transferred to the Center of Self-sufficiency and Industrial Affairs (CSIA) of
research organizations along with research documentations of project management sample phase.
The mentioned Center revises the engineering sample performs an operational test. If the test result is
desirable, the Center issues an inquiry for a (limited) number of required products. Having approval
procedure accomplished by commanders and receiving the final certificate, the credit required for limited
production is financed and technical capacities and available equipment are used to plan for production of
that limited number of products. While limited production is accomplished, required documentations are
conducted according to imparted standards and samples are fabricated based upon the documentations and
delivered to supplying centers (Preparations Unit) to be handed over to selected sections according to
distribution tables. The CSIA is responsible for educations on employing produced samples and user sections
send their feedbacks after a period of six months or 1 year.
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If the required number exceeds a certain limit (for example, a number of 10 samples; a number which
depends on the nature and type of the product), a model of produced samples along with its technical data is
sent to a manufacturing industry through CSIA management in the form a Letter of Understanding among
four authorities (Headquarters of Industrial Research, Vice-president of Preparations and Logistic, Director
of the Executive Research Organization and the President of Organization of Defense Industries). Defense
industry cooperates with CSIA and, first, produces "production criterion" sample having exerted required
modifications and then, launches mass production after the final approval of criterion sample.
5.1.
Tool-Making (Validity Test) And Collecting Data From Experts (Questionnaire
Design) To Evaluate And Modify The Proposed Model And Present The Final Model
5.1.1. Research tools
Because of weak documentations in projects and lack of access to recorded data individual experience is
considered as one of the richest and most reliable information sources. But this source is somewhat dispersed
and requires a scientific research tool and method to gather the raw data and process them.
Therefore, questionnaire and interview are used as research tools respecting various articles on the subject
and other scientific methodologies. The applied questionnaire is designed using Likert Scale. Answer items
of this scale usually represent agreement or disagreement of the respondent on a certain subject. Moreover, a
total number of 27 interviews are conducted in order to establish a direct relationship with experts. The
interviews were performed on the following topics:
1- Necessity and importance of producing research projects
2- Implementation methods and procedures of technology transfer from research organizations
3- A proper model for technology transfer
5.1.2. Questionnaire Design
A questionnaire containing 54 questions was conducted to collect experts' ideas on technology transfer.
Every question represents a measure of proposed patterns. The respondent should express his/her rate of
agreement or disagreement on every measure (in the form Likert Scale).
5.1.3.
Questionnaire Validity
A questionnaire is valid which its content exactly evaluates studied subject. First, a questionnaire is designed
based on the subject and its questions were evaluated in different steps. Ten experts were surveyed on
questions comprehensiveness, relativity of test objective to proposed questions and omission of irrelative
ones. Finally, required modifications were exerted on the questionnaire and its questions (according to ideas
and viewpoints of advisor professor). Thus, the questionnaire possesses sufficient content validity.
5.1.4.
Population Selection And Sampling
Research population consists of individuals with different education levels in the field of manufacturing,
fabrication and management of technology transfer. Around 1000 researchers work in the mentioned
population of which approximately 25% are directly practicing in manufacturing and technology transfer.
Therefore, the sample was selected from 250 experts of technology transfer among whom 40 questionnaires
were distributed. Thus, respecting completed questionnaires, omitting uncompleted and deficient ones, the
total number of 30 questionnaires was selected to be analyzed. Effort was made to select the population from
those organizations having research process of technology transfer.
Random sampling was used in the present research. A list of experienced managers and experts in
manufacturing, documentation and technology transfer was prepared and, then, some individuals (40
individuals) were selected randomly.
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5.1.5.
Determining Reliability Of Questionnaire Data Using Cronbach's Alpha Method
Cronbach's Alpha is one of the methods used to estimate reliability. It is a coefficient representing positive
correlation between members of a collection. The closer the Alpha to 1, the greater is the internal consistency
reliability.
Having 30 questionnaires completed, their Cronbach's Alpha (0.901) was estimated using SPSS 19 (Table 2).
Hence, the used questionnaire is reliable. Results are presented in tables below.
Table 2: Determining questionnaire reliability using Cronbach's Alpha
Case Processing Summary
Cases
--
N
Valid
30
Excludedٍ
0
Total
30
%
100.0
0
100.0
A. list wise deletion on All variables in the procedure.
Reliability Statistics
Cronbach's Alpha
.901
N of Items
54
5.2. Data Analysis
Following statistics and test were used to analyze data statistically, having collected experts' viewpoints and
determining questionnaire reliability using Cronbach's Alpha.
5.2.1. Data analysis using mean value
In order to compare results of completed questionnaires to mean and maximum scores, aggregate scores of
each questionnaire and its mean score was calculated. The resulting mean value (379.62) is greater than
questionnaire mean (270) indicating desirability of experts' ideas framework (the mean of questionnaire is 5
and that of answers is 7.03).
Chart 1: Comparison of mean value of experts' ideas to the mean of questionnaire
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5.2.2 Data Analysis Using Binomial Test
Likert Scale is used here. The reason (objective) is to convert respondents' qualitative ideas to quantitative
numbers intelligible for a machine. Since the numbers lack quantitative meaning, nonparametric methods
should be employed to analyze them.
Item
Score
Very low
1
Low
3
Medium
5
High
7
Very high
9
Since descriptive methodology and quantitative data were used to perform the present research, binomial test
is used for data statistical analysis. Binomial analysis has following characteristics:
-
The test has only two states (success, failure)
Success probability is constant (p and q are probabilities of success and failure, respectively so that p
+ q = 1).
- Experiments are independent from each other
- Experiments are repeated for n times
If the binomial distribution leads to success with probability of p and failure with probability of q = 1 – p,
then the probability distribution of variable x, number of success in n independent experiments, is obtained
as follows:
n
b( x, n, p)    p x q n  x
x
x  0,1,2,3,..., n
To analyze data pertaining to completed questionnaires, hypotheses were defined for all questions.
Moreover, in all questions   6 and   6 were considered as H0 and H1, respectively.
Examples of binomial test on some questions:
Question one: having enough number of procedures
H0: number of procedures is not enough
H1: number of procedures is enough
Question five: economic justification of model implementation
H0: model implementation is not economically justified
H1: model implementation is economically justified
Question fifty four: necessity of presence and supervision of research center/organization until the end of
mass production phase in industry
H0: presence and supervision of research center/organization until the end of mass production phase in
industry is not necessary
H1: presence and supervision of research center/organization until the end of mass production phase in
industry is necessary
Analysis is performed through a strict hypothesis in this test. This means that means smaller than (or equal
to) 6 are rejected and those greater than 6 are accepted. Except for questions 12, 35, 36, 38, 39, 45, 50 and
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54, the null hypotheses of all questions are rejected. Respecting questionnaires' results and performed
analyses, two results are mentioned here:
Question 8: 90% of experts confirmed the necessity of predicted procedures in the pattern.
Chart 2: Percentage of respondents to Question 8
Question 12: 60% of experts confirmed the necessity of revision on standards of documentation in revision
procedure of the engineering sample.
Chart 3: Percentage of respondents to Question 12
The same methodology was used for other questions.
5.
CONCLUSION
The most important factor suppressing production of industrial research projects of armed forces' research
centers is the lack of proper structure or pattern in research-to-production procedure. A primary pattern (Fig.
9) is presented in this research reliability and is modified and turned to model presented in Fig. 10 after
validation and collecting experts' viewpoints. The following items were added to the preliminary pattern
(according to experts' ideas):
1) Fabrication of operational sample after revising engineering sample and before limited production
2) Fabrication of operational sample based upon experts of provisions, operations and industry
3) Establishing a mutual interaction during production procedure between manufacturer research
organization and technology-receiving industry (on fabrication processes and completing
documentations according to the pattern accepted by the industry).
The important point of the pattern is creation of an intermediate between research and production so that
engineering sample resulting from implementation of research projects is improved and converted to
operational sample. Then, having the Pilot Plan implemented and feedbacks of operational sections
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collected, the technology is transferred to defense industry in the for a Letter of Understanding and comes to
mass production after finalizing production criterion sample.
Therefore, consequences and achievements of the present research are of great significance and prevent
exerting personal interests. It seems that by implementing the proposed pattern research results come into
practice instead of being archived and this prevents wasting research costs. Other outcome of this pattern
include the growth in country's industry, meeting needed of armed forces locally and independence from
foreign countries, development of incentive in researchers, etc.
Figure 10: the Final pattern of technology transfer from research organizations of armed forced to defense
industries for mass production (Ali Ahmadi, 2000).
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REFERENCES:
Ali Ahmadi, A. et al. 2000. "A comprehensive look on technology transfer". Tadbir scientific educational monthly.
Issue 109(In Persian).
Arabi, S. A. "Technology transfer methods". Thesis. Islamic Azad University, Science and Research Branch.2009(In
Persian).
Tavakoli, A. "Regulations, principles and proper methods of transferring technology to Iran". Thesis. Iran Elm – o
Sanaat University.2008(In Persian).
Manteghi, M. "Different methods of technology transfer". First course of technology management in Iranian Aerospace
industry.2010(In Persian).
Hodavand, M. "Technology transfer protocols". Tadbir scientific educational monthly. Issue 167.2004(In Persian).
Industrial research vice-presidency of armed forces. 2012. "The comprehensive act of research project documentations".
Sample definition(In Persian).
Saad, Mohammad, ―Technology transfer projects in developing countries-furthering the project‖, management
perspective, International of Journal of project management 20, 2002, PP. 617-625
Chiesa.V and Manzini. R, ―Organization for technological collaborations: a managerial perspective‖. R & D
Management 28(3), PP.199 - 212. 1998
Ford, David, ―Develop your technology strategy‖, Long Rang Planning 21(5), 198, PP. 85-951988
Roberts.E and Berry. C, ―Entering new business: selecting strategies for success‖, Sloan Management. Review 26(3),
PP. 3-17, 1985
Gilbert, A.lee, ―Negotiating technology acquisitions: getting the tools you need to succeed‖, Nanyang technology
university, 1995.
Stock's, ―Negotiating technology acquisitions: getting the tools you need to succeed‖, 1996.
77
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Economic Valuation Of Water Resources Using The
Evaluation And Planning System ―Weap‖
(Case Study: Masouleh River)
Rahil Rahimi13, Leila Ooshaksaraie 14 and Hasan Karimzadegan 15
__________________________________________________________________________
ABSTRACT: A high amount of water demand nearby Masouleh River in the Guilan province of Iran – in
spite of high flow rate of this river – is supplied by Sepidroud Dam and a significant amount is supplied from
underground water that finally it leads to the Anzali Wetland. A part of the surplus water of this river is
wasted, evaporated or changed to flood water. WEAP software submits a model for simulation of flow rates
and water demand in the future. In the designed model, it was determined that the amount of lack of rural
water need will increase from 27.76 million square meter to 32.67, and lack of agricultural water will
decrease from 153 million square meter to 96.6, during next 25 years. Additionally, in this research, software
efficiency for economic evaluation was studied, based on exciting economic data. The results gained from
the designed model indicated that in the economic discussion, benefit rate is 28$ per square meter in 2011
and 29.5 $ in 2035. Through comparing of expenses between different scenarios, the scenario of ―change of
priority of supply resource of agricultural water need‖, submits the minimum amount (24$) and the scenario
of ―growth population‖, submits the maximum amount (29 $) per square meter.
KEYWORDS: Economic evaluation, Masouleh River, WEAP Water Evaluation and Planning System,
Water resources management, Sustainable development
13
Master Student, Department of Environmental Engineering, Faculty of Natural Resources, Lahijan Branch, Islamic
Azad University, Email: [email protected]
14
PHD of Environment, Department of Environmental Engineering, Faculty of Natural Resources , Lahijan Branch,
Islamic Azad University; Email: [email protected]
15
PHD of Environmental Economics, ;Email: [email protected]
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1. INTRODUCTION
The existing evidences indicate that water resources‘ status is critical. This matter needs necessity of more
consideration to water resources management and optimization of utilization (Arabi and et al, 2008).
Although, management of cultivation water consumption is presented, only in 20% of the world cultivable
lands but 50% of world food requirements of the current population is provided from these lands. In Iran,
about 60% of lands are under water cultivation that provides 90% of state foodstuffs production (Ghaemi and
Hossein Abadi, 2003). Regarding to unsuitable local distribution of rain in the country and lack of time
accordance of raining with irrigation season, water crisis is a serious problem. Certainly in a near future, Iran
would encounter lack of renewable water resources for continuation of agricultural activities and providing
its necessities. Consequently, in order to counter with this crisis, water resources must be managed through
the most economized and executable methods (Shamsaei, 2003).
Application of surface running waters is in two sections of domestic consumption, irrigation, industrial and
urban consumptions as well as breeding of aquatics, resource of surface waters and wetlands. Quantity and
quality of surface waters are managed with management methods similar to the adjacent and upper lands
(Droogers et al, 2011). Limited resources of water have caused some worries about provision of water with
favorite qualification. Implementation of sustainable strategies of water consumption has caused increasing
pressure for planners of water resources management. WEAP wholly acts in the framework of a tool for
analyzing of water resources policies and planning. The gained results are a complete useful tool to study
different options of water management and development (Yates et al, 2009). Water Evaluation and Planning
System (WEAP) has been designed with the objective of sustainable management of water resources through
description of different long-term scenarios, in this regard, in the year 1989. The first major application of
WEAP has been formed by Raskin and et al in Aral Sea in the year 1990 (Mahamadu et al, 2011). WEAP
software, a model for simulation of the amount of water flow and demand in future, submits water supply
and demand system. In this system, different rules and regulations related to water resources, such as surface
and underground waters, water demand, reusing the consumed water, sewage treatment and transfer and as
well as evaluation of real value of water resources and valuing them on the basis of real cost caused for the
environment, may be studied (McCartney et al, 2011). Cost estimation and assessment of environmental
advantages are not simple. Assessment of environmental items with the real economical meaning of markets
has not been fulfilled, and if some efforts are fulfilled for estimation of these types of costs, the related
results are not accepted by everyone. Important specification of environmental expenses is that, they will
happen in future and sometimes so far from now and as the time horizon will be longer, dimensions of these
expenses are appeared so greater (Karimzadegan, 2010). Existing defect in establishing the relation between
markets and environment has caused to give up valuable natural resources in lieu of receiving a trifling
amount. Masouleh is a watery and permanent river in Guilan Province (Map 1). Origin of this river is in
3,000m height of the region. Its length is about 60 kilometer that more than 35 kilometer thereof flows in
plain (Kankash Omran Consulting Engineers Co., 2009). Hypothesis of this research is that with
consideration to the present information and using the WEAP software, economical evaluation is possible in
the limitation of Masouleh River in order to manage an important water resource.
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Map1. Masouleh Basin and River (Guilan Environment Protection Agency, 2013)
2. MATERIALS AND METHODS
Region of the Case Study is Masouleh River. Masouleh River, as the most important agricultural water
supply of Formant Plain, located at the north side of the Country and west side of Rasht County in Guilan
Province, is one of the main and permanent rivers in the region. Drain basin of this river is located at the
north part of the country and a part of drain basin grade 2 of Talesh-Anzali that is ended to Anzali Lagoon in
the north, Great Sefidroud Drain Basin in the south, Ghalehroudkhan River Drain Basin in the earth, and
Roudbar River Drain Basin in the west. This river is ended to Anzali wetland after passing through
Masouleh, Fouman and Someesara Cities. Basin of this river has an area equal to 426.77 square kilometer.
About 96% of water is consumed for agriculture and 4% is used for potable and industrial consumptions.
(Sazeh Pardazi Iran Consulting Engineers Company, 2010). Masouleh River Basin Information consisting
regional information (Ghalehroudkhan, Kasma and masal Stations), monthly and annually hydrometric
statistics (Chomesghal, Koumadoul and Zoudel Stations), monthly and annually average flow rate (Komadol
Station) have been collected and classified from Guilan Province Regional Water Co., for the Water Years of
1986 to 2011 that have been presented in Table No. 1.
Table No. 1. Average Annual and Monthly Flow Rate in Masouleh River, Komadol Station (Guilan
Regional Water Co., 2013)
Annual
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
Dec
Nov
Oct
Water year
3.64
7.57
2.02
2.72
1.68
3.74
7.93
7.19
3.61
1.49
0.761
3.81
2.42
0.90
1.11
1.78
7.58
5.69
4.93
3.87
3.00
4.78
3.01
2
2010-2011
4.25
5.45
4.77
4.20
2.83
1.64
3.79
6.45
6.02
4.25
5.91
4.66
2009-2010
6.33
8.33
2.88
2.66
2.12
1.98
3.36
1.29
1.86
3.85
6.16
3.35
2008-2009
2.35
3.28
1.07
1.25
5.26
1.43
2.05
5.28
3.83
10.40
14.90
6.52
2007-2008
3.82
3.85
4.54
2.75
3.72
2006-2007
3.03
2.38
0.71
1.25
1.42
4.65
3.77
5.80
3.52
0.97
1.83
5.18
6.50
9.67
3.24
7.07
2.15
2.63
5.04
2.08
2005-2006
16.60
4.73
5.44
4.35
3.44
7.34
6.15
4.68
3.46
4.24
4.66
11.90
12.40
2004-2005
4.90
5.19
4.75
9.02
4.19
4.37
5.18
6.17
1.89
3.04
7.31
13.10
2003-2004
12.50
7.64
2.99
5.13
1.58
0.49
0.37
4.66
3.77
1.02
1.15
2.77
2002-2003
11.60
7.90
3.20
1.70
2.20
6.50
6.00
8.10
3.89
1.82
0.80
0.95
2001-2002
1.56
2.17
5.15
4.69
3.83
2.78
4.51
9.83
8.57
2000-2001
4.07
3.96
0.16
3.21
2.21
1.01
0.82
1.09
2.52
10.40
7.38
5.56
3.20
4.74
5.51
3.47
1999-2000
1.55
1.97
5.41
4.90
2.17
2.70
2.70
3.70
4.09
6.16
5.43
6.89
1998-1999
1.61
2.55
2.25
5.59
14.30
10.80
5.01
3.14
5.96
3.31
3.74
4.58
1997-1998
10.60
2.97
5.15
1.53
3.91
8.47
5.52
2.63
1.35
2.37
5.10
5.40
1996-1997
5.18
1.22
3.37
2.00
2.86
9.12
17.00
6.29
6.67
1.55
1.28
4.49
6.28
1995-1996
3.67
1.53
1.42
1.84
1.47
4.64
3.08
3.39
2.31
2.37
8.54
11.30
2.17
1994-1995
6.27
3.79
2.04
5.13
2.84
5.97
7.66
8.83
3.46
7.77
9.38
10.50
7.90
1993-1994
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4.75
5.48
1.83
3.55
4.73
7.16
7.24
5.84
3.01
3.12
4.69
3.93
6.47
1992-1993
2
3.14
2.54
3.69
5.41
14.40
12.20
6.66
3.27
2.60
2.21
2.36
5.32
1991-1992
3.34
2.13
0.78
1.19
1.96
3.89
9.07
7.68
2.44
2.51
1.15
2.48
4.84
1990-1991
4.69
4.13
2.94
2.06
2.65
10.40
12.90
6.87
3.83
1.77
2.20
4.53
2.01
1989-1990
4.29
1.85
0.94
0.86
1.43
5.17
10.60
10.40
4.15
2.47
1.59
4.54
7.48
1988-1989
6.16
4.13
3.16
1.09
1.79
6.36
11.70
11.20
5.85
4.43
3.54
10.90
9.72
1987-1988
3.57
5.40
1.17
0.63
1.00
2.70
5.19
4.09
2.53
4.87
6.52
5.92
2.86
1986-1987
WEAP ―Water Evaluation and Planning System‖ is able to manage limited water resources among
agricultural demands, industrial needs, urban necessities and environmental needs. In this software, there are
some schematics to show river, demand points, water going and returning flow, drain domain, underground
waters and so on that through installation of each one in the model, new data can be inserted. The sample
Model for the region of case study has been shown in Fig. 1. In the presented model, Masouleh Basin,
Sefidroud Network Basin, Masouleh River, three demand points (agricultural, industrial and rural),
environmental minimum need point and supplier resources (river, underground water and Sefidroud Dam),
have been identified. Minimum environmental need has been defined at the end of direction of River Flow in
the connection point of the river to Anzali wetland.
Fig.1. Model presented for Region of Case Study by WEAP Software
Minimum environmental need was calculated with evaluation of 10% of average water of the River from
Sept. 23 to Mar. 20 and 30% of average water of the River from Mar. 21 to Sept. 22. (Fig. 2). The scenarios
have been designed based on the existing conditions and their effects were studied on the amount of water
availability and consumption in future. Through considering the existing data (25 years, 1986-2011), time
distance has been considered from 2012 to 2035 in designing of scenarios. Consequently, the Software can
predict the conditions up to the year 2035. Through providing the scenario tree, some scenarios may transfer
some specifications and conditions to other scenarios. Heritage scenario is the same subset of a scenario that
means specifications and conditions of the previous scenario can be transferred to another, additionally new
conditions may be described for it or new data may be inserted.
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Fig.2. A scheme on inserting the monthly data of minimum environmental needs
The designed scenarios consist of:
- Reference scenario: this scenario is formed by data of the years 1986-2011 (heritage of this scenario has
been considered from the base year). Rate of population growth in this scenario is calculated similar to base
year with rate equal to 0.7%.
- Scenario for change of priority of water supplier for agriculture: this scenario is a subset of reference
scenario. Priority for supplying of water need from surface water resource, underground water and dam, are
separately determined. The first priority is considered for river due to high capacity of watering, the second
and third priorities are considered for underground water and canal on Sefidroud Dam.
- Scenario of Population Growth: Information heritage in this scenario is from reference scenario. In this
scenario, it is supposed that with consideration to increasing development in the boundaries of Masouleh
Roudkhan, population growth will be increasingly, too, rate of population will increase from 0.7% to 2% in
the year 2011. Through assumption the flow of constant input of water to the region, rate of population
growth is estimated 2% up to year 2035 that rate of unsupplied demand and need are studied.
2.1. Method of Economical Evaluation in WEAP System
A- Through applying this model, five types of expenses for water resources systems may be defined: 1constant expenses of annual operation, 2- variable expenses for annual pumping, 3- expenses for replacement
and improvement of planned capital, 4- connection expenses, and 5- costs to eliminate noises. Constant
expenses of annual operation are gained through calculation the difference of variable expenses of human
resource and pumping expenses from annual budget. It will be predicted that in those projects that
development is associated with wide extent, calculation of expenses for replacement and improvement of
capital is necessary, too (Cubed and Davis, 2008).
B- WEAP System may design three models of expenses and incomes. Expenses consisting of: 1- expense of
preliminary investment, 2- constant expense of operation and maintenance, 3- variable expense of operation
and maintenance of incomes consisting of: 1- constant incomes, 2- variable incomes, 3- incomes raised from
electricity production.
WEAP may study the average expense of water and also effective factors on changes of monthly or annually
expenses. Monthly changes in average of water expense is raised from changes of remainder of water
consumption (especially in agriculture section), while the constant expenses are without changes. Annual
changes are raised from change in expenses in preliminary investments (Cubed and Davis, 2008).
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In the present research, modelling of income has been fulfilled on the basis of data related to the existing
point of rural district need (such as income of water sales dollar/square meter). In modelling of electricitywater storages, the related data can be inserted (such as incomes gained from electricity production) and the
related results will be calculated. Through inserting the data, current expenses and incomes may be compared
that net value of the project is determined. Current value of the net expenses may be compared with incomes
and economic success of the system may be calculated. If the current value of the net expenses will be less
than net value of incomes, system will have less profit, and if the current value of net expenses will be more
than net value of incomes, system will have more profit in comparison with average expenses of the project.
Existing data in studying of the region consist of: A- Amount of water-rights of operation in Masouleh
Roudkhan: traditional stream, every hectare 125,900.—Rls, integration method, every hectare, 251,800.—
Rls, concrete channel method (modern method), every hectare, and 377,000.—Rls. in the study area for
pressurized irrigation, water-right is received based on irrigation of modern method (Sazehpardazi
Consulting Engineers, 2007). B- Evaluation the income in the agriculture and industry sections: harvesting
from rice paddies is 3.5 to 5 Tons (2 Tons per hectare) that through deduction of wage of rice-threshing
worksites will be 1,900 Kg. Tourism application is 5.9 hectares that along with forest area, equal to 44.06 is
allocated in the boundary of river direction to recreation and tourism regions. Economic structure of the
region consisting of agriculture, animal husbandry, agricultural services and workers resources in the area of
1,503.77 hectare in the margins of Masouleh Roudkhan is 18,900 hectares of pasture and forest lands that
more than 5,600 Tons of UN husked rice, 180 Tons of tobacco and about 275 Tons summer-corps are
produced. Incomes of tobacco and silk-worm are variable and due to low production are not so important.
Domesticated animals of the region are more than 17,596 heads but there is not definite amount of
production of meat and domesticated animals products, therefore the related economic income may not be
calculated (Sazehpardazi Consulting Engineers, 2007).
2.2. Calculation of Profit and Expense at Agricultural Section
Variable Operational Expense: about 7,500 Dollars have been considered for expenses of leakage-finding,
keeping and maintenance (Cubed and Davis, 2008).
Constant Operational Expense: This section of expense, was calculated based on the method of expenses in
shade, due to lack of real data (Karimzadegan, 2010). Total annual expenses of human resource (833,000.—
Dollars) and pumping expense (460,000.—Dollars) were deducted from annual budget (1,300,000.—
Dollars) and constant operational expense (4,000.—Dollars) was calculated (Karimzadegan, 2010) (Cubed
and Davis, 2008).
Variable Profit: in order to profit calculation, at first, the amount of income must be determined and deducted
from the amount of expense. About 6.9 Dollars for each square meter was calculated that this amount must
be deducted from variable operational expense for each square meter. Consequently, variable profit is
calculated equal to 6.8 Dollars for each square meter.
7500$÷1641 ha=4.5 $/ha
4.5÷12000cm=0.000375 $/cm
6.9-0.000375=6.8 $/cm
Constant Profit: constant profit was calculated equal to 132,203.—Dollars per year for total agricultural plots
of the region, from difference of annual income (136,203.—Dollars) and constant operational expense
(4,000.—Dollars).
3. CONCLUSIONS
- Comparison between reference scenario and changing priorities for agricultural water supply needs
scenario: as it has been presented in Diagram 1, the amount of agricultural need reaches from 7.1 million
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square meters at the reference scenario to 3.7 million square meters at the scenario of change of priority of
agricultural water supplier. Totally in 25 years, lack of water need will decreased as from 153 million square
meter to 96.6.
Diagram1. Comparison of Lack of Water between Reference Scenario and change of priority of agricultural
water supplier (years 2012 to 2035)
- Comparison between Reference Scenario and Scenario of Population Growth: unsupplied needs are
observed due to difference of water needs suppliers and demands. On the basis of Diagram 2, lack of rural
districts' needs reach from 1.21 million square meters at reference scenario to 1.64 at scenario of population
growth. Totally in 25 years, lack of water will increase as from 27.76 million square meter to 32.67.
Diagram2. Comparison of Lack of Water between Reference Scenario and Scenario of Population Growth
in Rural Districts' Needs (2012 to 2035)
- Economic evaluation in WEAP System: results of economic evaluation of the years 2011 and 2035 have
been presented in Diagrams No. 3 and 4. In economic discussion, the amount of profit for each square meter
of water in the year 2011 is about 28 Dollars, and in the year 2035 is about 29.5 Dollars. Comparison of the
expenses between different scenarios indicates that the scenario of change of water supplier priority has
minimum profit (24 Dollars) and the scenario of population growth has the maximum profit (29 Dollars) for
each square meter of water. Results of average monthly expense of water in each square meter per years
2011 and 2035 have been presented in Tables No. 2 and 3.
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Diagram3. Comparison of average expense between scenarios in the year 2011
Table No. 2. Average monthly expense of water per each square meter in the year 2011
Diagram4. Comparison of average expense between scenarios in the year 2035
Table No. 3. Average monthly expense of water in each square meter in the year 2035
. M.Cubed, Davis, CA defined five types of water system annual expenses in the years 2007 and 2008 using
WEAP Model for the town of Sharon, Massachusetts and studied the operation constant expenses, pumping
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variable expenses, replacement expenses and development of planning capital, connection expenses and
harvesting expenses and predicted water system expenses for the year 2014. In the research on Masouleh
Roukhan, the pumping variable expenses and harvesting expenses were studied in the network of this basin.
In the case of development of water transfer in the basin of case study, operational constant expenses and
connection expenses must be calculated, too. Calculation of the other cases has been calculated through the
Expense in Shadow Method. George et al have used the modeling method in uniting the allocation network
model and social expenses and studied the physical and economic results of allocation of water in Musi river
basin (one of the sub-basins of Krishna Basin in India). This Model studied on the relationship between
calculated surface and underground waters resources in the hydrologic, surface and underground viewpoints,
for the first time that water transfer from agricultural resources to urban application is increasing in future;
therefore cultivable regions will be decreased. Simulation in Masouleh river basin indicated that in the case
of population growth, water demand will increase. But due to pollution of the river water, the amount of
underground water harvesting will be increased. On the other hand, as noticeable amount of agricultural
necessities are supplied from underground waters, if population growth would not be correctly managed,
population in this region may cause to decrease the under cultivation area due to water shortage.
4. DISCUSSION AND CONCLUSION
In the map of Masouleh River Basin, some points have been studied and applied in modelling: - layout of
demand points has been fulfilled based on existing natural conditions in the region and manner of point's
position with consideration to the direction of river flow. – Layout of the points has been fulfilled because of
applying of water of Sefidroud Dam. – In order to design the different scenario, water supplier has been
determined based on division of natural locations on the map. – At the end of the river direction, and at the
location of connection to Anzali wetland, the point of minimum environmental need was determined.
Evaluation of the water volume that must normally be entered to Anzali wetland, confirms that river
pollution removing is important.
- Input flow rate to the software was extracted from Komadol Station (this station has the minimum distance
to the demand points, in comparison with the other stations and the most important input branches to the
river is located before this station. Therefore, input flow rate of this drainage is calculated, too).
Simulation at Masouleh River Basin indicated that: - through comparison between reference scenario and the
scenario for change of priority of agricultural water supplier, it was determined that the amount of
agricultural need reaches from 7.1 million square meter at the reference scenario to 3.7 million square meter
at the scenario of change of priority of agricultural water supplier. During 25 years, lack of water need will
decrease as from 153 million square meter to 96.6.
Through comparison between reference scenario and scenario for population growth, it was observed that
lack of rural districts' needs reach from 1.21 million square meters at reference scenario to 1.64 at scenario of
population growth. During 25 years, lack of water will increase from 27.76 million square meter to 32.67. –
Economic evaluation at WEAP System indicates that the amount of profit for each square meter of water in
the year 2011 is about 28 Dollars and in the year 2035, is about 29.5 Dollars. Through comparison of the
expenses between different scenarios, it is indicated that the scenario of change of water supplier priority has
minimum profit (24 Dollars) and the scenario of population growth has the maximum profit (29 Dollars) for
each square meter of water.
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REFERENCES:
Arabi Yazdi, A, Alizadeh, A, Mohammadian, F, (2008), "Study on Water Ecological Trace at Iran Agricultural
Section", Water and Soil Magazine (Agricultural Sciences and Industries), Volume 23, Version 4, winter 2009, Page
No. 15. (In Persian).
Cubed. M, Davis, CA. (2008), ―Applying Economic Analysis within WEAP: A Case Study for the Town of Sharon,
Massachusetts‖, pp 1-11
Droogers, P.,J.E. Hunink,J.H. Kauffman and G.W.J. van Lynden. (2011), ―Costs and Benefits of Land Management
Options in the Upper Tana, Kenya Using the Water Evaluation and Planning system WEAP‖- Green Water Credits
Report 14- www.futurewater.nl- pp 12- 36
Ghaemi, AEin, M, (2003), "A view on Under-pressure Water and Irrigation Resources", Collection of Articles of the
Third Regional Congress of Khouzestan Province Irrigation and Drainage. – Under-pressure Irrigation System (In
Persian).
Guilan Environment Protection Org., (2013) (In Persian).
Guilan Regional Water Co., (2013) (In Persian).
Kankash Omran Consulting Engineers Co., (2009), "Updating Report on Combination the Water Resources Studies of
Great Sefidroud Rivers Drain and Anzali Pool", the third volume: Analysis of Water Statistics, Information and
Balance, Fifth Section: Combination of Water Studies and Balance, Attachment No. 2: Water Balance at Foumanat
Study Limitation (In Persian).
Karimzadegan, H, Khoshakhlagh, R, (2010), "Foreign Expenses of Land Transportation (Identification and Study)
Transportation and Development Economics", Ministry of Road and Transportation, Transportation Research Center,
Page 396 (In Persian).
Mahamadou Mounir, Z., Ch. Ming Ma and I. Amadou. (2011), ―Application of Water Evaluation and Planning
(WEAP): A Model to Assess Future Water Demands in the Niger River‖ ,(In Niger Republic) mas Modern Applied
ScienceVol. 5, No. 1; --pp38-49- http://www.weap21.org/Downloads/Niger.pdf
McCartney, M., Y. Ibrahim, Y. Sileshi and S. Bekele Awulachew. (2011), ―Application of the Water Evaluation and
Planning (WEAP)‖, Model to Simulate Current and Future Water Demand in the Blue Nile, pp 80-88http://ideas.repec.org/p/iwt/conppr/h042509.html
Sazehpardazi Iran Consulting Engineers Co., (2007), "Study on Determination the Bed Limitation and Boundary of
Masouleh River", Guilan Regional Water Co. (In Persian).
Shamsaei, M, (2013), "Necessities of under Pressure Irrigation in the Country, Priorities and Procedures", collection of
the articles at the Third Regional Congress Committee of Khouzestan Province Irrigation and Drainage, Under-pressure
Irrigation Systems (In Persian).
Yates,D., J. Sieber, P.David & H.Annette. (2009), ―WEAP21—A Demand-, Priority-, and Preference-Driven Water
Planning Model Part 1: Model Characteristics- Water International‖, pages487-500
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Non-Oil Export Development, Iran‘s Sustainable
Development Key Element In Global Business
Environment
Saman Raji16
__________________________________________________________________________
ABSTRACT: One of the key features of the modern business environment is globalization which has
mainly changed functional areas of economic enterprises. Among the key areas we can mention
organizations and enterprises activities territory in various fields of industry and services. In fact, in order to
maintain the level of sale, profit and their competitive advantage, many enterprises with increased
competition and competitiveness in domestic markets which is caused by globalization of business
environment, national borders removing and the creation of cross-border markets and business environment
in this area, have developed and expanded their activities out of their former territories and also have entered
into the global markets through the use of different strategies, including development of export. In fact,
today, the development and application of this approach is considered as a key element for sustainable
development in a global business environment. Hence, in this paper we first provided an overview on the
Islamic Republic of Iran performance in the field of Oil and non-oil export in recent years and adaptive
comparison of Iran‘s non-oil export and OIC countries and then, in order to map the route and realization of
desired prospect to sustainable development of Iran‘s non-oil export, we have investigated key success
factors in this way at two levels: macro (Macro policies and strategies of the country) and micro
(Requirements and enterprises components of the country).
KEYWORDS: Globalization, Sustainable Development, Export Development, Non-Oil Export, Success
Key Factors, The OIC, The Islamic Republic of Iran
16
MSc of Executive Management, Strategic Studies Expert in Daroupakhsh holding company, Tehran, Iran, Email:[email protected]
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1. INTRODUCTION
From a macro perspective, every enterprise follows three main activities in its business. A part of any
business activity is development of new products. Accordingly, enterprises try to design some products or
import some products through the license and credit or duplication mechanisms from other firms to keep
active that part of their business that is involved in designing new products (Nahavandian, 2003).
Establishing relationship with customers is another business activity. The main basis of such relations is how
businesses can continue serving a certain set of customers since they create the most value and income for
enterprises. Another part of organizations' activity set is production and service infrastructure. Therefore, if
organizations are looked from the highest level, every business in the world can be categorized as one the
three mentioned businesses (Nahavandian, 2003). Organizations and enterprises determine and follow their
various strategic and operational objectives based on their views on the different businesses types.
The global economy and business markets have experienced various transformations during different
periods. Paradigms predominant on each period were completely different and, hence, organizations
considered unique and individual approaches during each period. Various periods of global economy can be
divided into three groups: classical economy, neoclassical economy and modern economy. In the 21st
century economy and business markets significantly transformed again. The transformation removed many
prior limitations in global markets and moved them toward liberalization and removing all constraints. These
evolving procedures resulted in formation of global modern economy. Some of the most essential "modern
events occurred in global economy" can be categorized as follows (Nahavandian, 2003):
1.
2.
3.
4.
5.
6.
7.
Globalization
Increase in competitiveness
Financial and economic crises
Serous technological changes
Changes in market structure
Changes in match principles (manner of structure control)
Development of information technology and expansion of digital gap
Altogether these components lead to numerous transformations in the main three areas of business among
which the strongest effect results from globalization; so that it puts enterprises, from customer relationship
viewpoint, in the face of new customers from outside of available domestic borders. Identification,
recognition and meeting needs and expectations of these customers appeals for extensive planning and effort.
Respecting development of new products and services, enterprises have to specifically consider developing
and presenting innovative and unique products and services with permanent competitive advantages. Finally,
from viewpoint of service and production infrastructures, developing effective and efficient infrastructures to
realize above mentioned objectives (developing innovative products and services and meeting customers'
needs and expectations in global markets) is of great importance (Nahavandian, 2003). Therefore, the present
paper aims to study theoretical principles of globalization of economy and business environment and its
consequences in export area (especially non-oil export) first and identify and determine success key factors
of Iran non-oil export to realize this goal.
2. LITERATURE REVIEW
2.1. The Concept of Globalization
Globalization is not solely an economic phenomenon but also a social, political, cultural, economic and
technological one requiring consistency among all high objectives in areas of science, technology, culture,
commerce, etc. in order to enable using appropriate opportunities to change potential facilities to actual ones.
Our knowledge of globalization is essentially dependent on our definition of this phenomenon and process.
Among various definitions of globalization some define it only based on characteristics of realized and
current procedures and some others describe it respecting potential capacities to be realized in the future.
Scolt identifies globalization as the process of establishing and expanding over national bounds between
people on a global basis. Waters defines globalization as a social process in which geographical constraint
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shading on social and cultural relationships are removed and people increasingly become aware of removal
of the constraints. David Henderson recognizes globalization as integration of markets defines the following
prerequisites: free movement of goods, services, labour, capital and developing a unified market; no one is
economically foreign and all individuals are equal in the market (Saemian & Arghande, 2007).
David Held and Anthony Mc Grow define globalization in this way: "globalization is simply expanding the
scale, growing the size, speeding up and deepening over continental effects of social interaction flow and
currents". Globalization indicates movement or diversification in human organization measures which
connect far societies and expand power relations all around the world. But, it must not be considered as
indicating advent of a globally coordinated community or as a general procedure of global aggregation in
which cultures and civilizations are increasingly convergent since awareness of increasing compactness not
only leads to new struggles, but also it may expand reactionary policies xenophobia (Economic Studies
Office of Ministry of Commerce, 2004).
Helm and Sorenson identify globalization as intensifying borderless economic, political and cultural
relations. Proton defines globalization as a process of evolution through which economic and political
borders are less significant, relations are expanded and cultural interactions are increased. Globalization is a
multidimensional phenomenon the effects of which can be generalized to social, economic, political, legal,
cultural, military and technological activities and, also, social tasks such as environment conservation.
Simoez present a comprehensive definition of globalization. He characterizes globalization as follows
(Economic Studies Office of Ministry of Commerce, 2004):

National borders become less important to separate markets

Over national production activities become more specialized, hence, lead to formation of
multinational manufacturing networks

Multi-base technological powers are formed which finally result in more cooperation between
international enterprises

Global information networks connect the entire world

Stronger correlation is seen between world's financial centers
In a general conclusion, main characteristics of globalization can be summarized as items below
(Akbarosadat and Farghdani, 2007):

Tendency toward capitalist economy

Prosperity of trades and commercialization of the world so that countries can take their goods to
other countries without any obstacles and limitations

Capital cycle in the whole world, namely, growth of world's monetary markets and rapid prosperity
of countries' monetary markets and a global increase in capitals over national government
frameworks

Evolution in consumption and consumption market, namely, integration of consumption market
through developing cooperation between commerce and investment and financial markets and
consequently mass production and mass consumption

Population migration, namely, global mobility of people as a result of increasing immigrations

Global adherence; globalization reflects intensification of global awareness and indicates formation
of a global family
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
Access to communication facilities; growing communications and communication devices in the
world
2.2. Globalization of Economy and Business Environment
As mentioned earlier, globalization is not only an economic phenomenon and its specific features indicate its
effect on various economic, cultural, social and political areas. However, it is evident that globalization of
economy is the most prominent type of globalization all around the world. In other words, globalization of
economy is of more expansion, depth and speed. On one hand, it involves a set of procedures expresses
throughout the world and, on the other hand, it requires a high level of interaction and correlation between
governments and communities forming the global society. Globalization of economy, in such conditions, is a
progressing process in which over national interactions are forming and expanding and the mutual economic
dependency among actions of globalizing units are deepening (Ramzanpoor and Shirinkam, 2007).
In fact, in economics, globalization is an increase in liberty of individuals and enterprises to trade with
individuals and enterprises of other countries. In this process, local markets are opened up to foreign
suppliers and domestic suppliers will have access to foreign markets. The key feature of the process is the
decrease of obstacles of trading with over national individuals and enterprises. Hence, investigating
components and aspects of globalization of economy is of great importance for organizations practicing in
today's modern business environment. In general, the components and aspects include (Economic Studies
Office of Ministry of Commerce, 2004):
Significant growth of global commerce: Statistics indicate that global commerce has been growing since
1950 (with growth more rapid than that of global production). The important point is that the more the global
economy is opened up to global commerce manufacturing units are turning to a part of the global network of
production and trades (Economic Studies Office of Ministry of Commerce, 2004). Thus, this component
which is as old as the globalization process is tolerating the main and primary burden of the process and, in
fact, international trades is the first symbol of economic globalization (the history of which can be traced
back to the middle of 19th century). Free trade is the desired and efficient form of economic globalization the
principles of which base upon ideas of scholars and scientist such as Adam Smith and Ricardo. In the era of
economic globalization, commerce breaks its traditional form and limitations and continues to grow and
progress in new forms, namely, global management by the WTO (World Trade Organization) and the advent
of regionalism in connection with other global economic phenomena such as direct foreign investment and
financial markets. This cycle is very significant in economic globalization so that some define globalization
as production, distribution and marketing of goods and services and, also, expansion of international trades
between all countries (Ramzanpoor & Shirinkam, 2007).
Internationally increased mobility of capitals: Capital transfer, whether in the form of direct foreign
investment or as transfer of financial capitals in the form of portfolio, is employed as a main resource of
investment and technology transfer (Economic Studies Office of Ministry of Commerce, 2004). In the
globalization era, in fact, independence and functions of national financial markets are considerably
decreased (affected by international monetary and financial factors). This is naturally considered as a main
area of challenge in policy-making and management of monetary and financial structure for governments'
national governance. The volume of financial markets is rapidly growing compared to that of trades and is
turning to an important factor in economic globalization. So that Dracker believes capital mobility is the
running force of global economy instead of trades in goods and services (Ramzanpoor & Shirinkam, 2007).
Increased immigration: internationally increased immigration is another aspect of economic globalization.
Although immigration is not a novel phenomenon, it has increased more rapidly during the two past decades.
Besides, some background factors speeded up the development of globalization the most important of which
include (Economic Studies Office of Ministry of Commerce, 2004):

Reduction of trade obstacles: Reduction of trade obstacles has significantly helped trade volume (a
feature of economic globalization). Conducting the General Agreement on Tariffs and Trade
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(GATT) and the advent of World Trade Organization (WTO) aiming at removing trade obstacles and
freeing international trade are among key components in this area.

Technological developments: These accelerate globalization by reducing transportation costs and
expanding communications. One of technological areas with significant impact on economic
globalization is the information and communication technology revolution. In fact, this results from
dynamic technological development and facilitates the procedure of over national aggregation and
ownership. It also removes physical and geographical limitations so that many services are transport
in shortest time with lowest costs through digital capital and financial markets (Ramzanpoor &
Shirinkam, 2007).

Multinational companies: Along with global organizations such as the World Bank and International
Monetary Fund, these companies play an important role in economic globalization. Global economic
developments are so that, nowadays, intermediate industrial goods form a main part of international
trade. This indicates that industrial and economic enterprises are not located as before. At present
time, organizations or industries entering international trade are not located solely in one country.
Multinational companies with increasing roles provide their raw material from various countries and
sell produced goods in different countries, too. In such a case, concepts of national production,
national company or national industry are changed and countries have to try to gain the highest rate
of profits in each production step (Ramzanpoor and Shirinkam, 2007).
2.3. Consequences of Globalization of Economy and Business Environment in Countries and
Economic Enterprises
In general, globalization is followed by fundamental results some the most important of which include
(Ramzanpoor & Shirinkam, 2007):
1. The process of transparency and showcasing of the world: technological advances of information
and communications help emergence of a globally open information system. The system bases upon
a diversity of communication tools and has a multi-core and multi-side (interactive) nature.
2. Advent of an economy over the conventional world economy: The growth of industrial economy
leads to advent of weightless economy (which is of great importance). While physical volume of raw
material and goods traded throughout the world is as same as that of three decades ago but the added
value resulting from these economic activities in five times greater. Seemingly, weightless economy
which bases upon electronic information and communications acts over borders.
3. Advent of risk with global aspects: Sociologists speak of the advent of a risky community, one in
which no one knows what is going to happen in the future. The world faces risk resulting from
technological and scientific capacities the full control of which is not available and countries and
organizations are totally involved in their consequences.
On the other hand, globalization of economy and business environment is particularly associated with unique
outcomes some which are (Economic Studies Office of Ministry of Commerce, 2004):
Income distribution: Free trade is a main goal of economic globalization and changes income distribution to
relatively high production factor profit and to rare production factor (effective in production of exporting
goods).
Employment: Economic globalization and the move toward efficiency and optimization of resource usage,
no one is employed in inefficient tasks such as those supported by the government. Of course, the
transformation is expected to improve production structure in long term but it short terms it results in
unemployment and movement of labour.
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Reduced effect of domestic policies on national economy: This is one of the most serious effects of
globalization. For instance, after a country became a member of WTO, international regulations replaced
domestic ones and such conditions it is less possible to use policy tools such as profit rate. As a result,
domestic policies have weaker effects on economy.
Accordingly, globalization creates justified economic opportunities among which are (Economic Studies
Office of Ministry of Commerce, 2004):

Development of markets over national borders and expansion of trades

Extended competitiveness and specialize production in countries provides for economic growth

Capital moves with more freedom and, hence, if there are susceptible backgrounds, the capital
moves toward them

Technology transfer to various regions and generation of new technologies
In general, effects and consequences of globalization can be discussed from two viewpoints: 1) from
viewpoint of national infrastructures (macro level); and 2) from viewpoint of organizational infrastructures
(micro level). For each level some subsets are defined by investigating of which countries and economic
enterprises can become consistent with globalization procedure and exploit it in a complete manner. The
figure below depicts consequences of globalization from both viewpoints (Saemian & Arghande, 2007).
Figure 1: Areas influenced by globalization and its requirements in micro and macro levels (Saemian &
Arghande, 2007).
2.4. Position of Export Development Approach in Globalization of Economy and Business
Environment
The issue of globalization significantly affects various micro and macro functional areas in countries and
economic enterprises and they have to make use of effective and efficient strategies to be consistent with
these changes. One of the most important functional areas in economic enterprises (changed significantly
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because of globalization) is organizations' activity scope in different fields of industry and service. In fact,
many enterprises tend to continue their operational activities in local markets to realize their sales and
considered profit. But, the increase in competition and competitiveness resulting from globalization, removal
of national borders and formation of over national markets and businesses they have to extend their activities
over prior scopes and enter the global market to be able to maintain their sales, profit rate and competitive
preference. This requires obtaining and developing considerable capabilities in different functional areas
such as quality, effectiveness, pricing, advertising, branding, etc.
This is of great importance since globalization and formation of over national markets leads enterprises
incapable of consistency with the changes toward two essential challenges. First, they deprived from
customers and opportunities of global markets because of inability to enter them. Second, they face problems
with maintaining their share of current markets as a result of prepared conditions for new and strong rivals to
enter potential domestic markets. Therefore, it is necessary to comprehensive plans and efforts to improve
capabilities and preparing the background to expand activities on a global basis in today's high globalized
business environment since in this way enterprises are capable of producing and presenting goods and
services in global levels and try to gain more shares in aggregated foreign markets (the only way to achieve a
competitive position) while maintaining local markets. In order to realize this, enterprises face different
approaches and chose them depending on situation in which they are. Some of the most typical of these
approaches include: export development, receiving certificate, conventional production, common
cooperation and full ownership. However, employing each approach requires possessing a certain level of
capabilities and potentials.
Figure 2: different approaches to enter global markets based on risk rate and investment (Bennett and Bleit,
2002)
Among these approaches, export development is associated with least risk and requires lowest rate of
investment. Thus, it is one of the most applicable approached to be employed by enterprises to enter global
markets. In other words, in almost all enterprises the approach is considered as the gate to global markets.
Therefore, the present paper employs export development approach as an efficient and effective approach to
investigate globalization of economy and business environment.
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During 1950s and 1960s, it was generally believed that developing countries must create their industrial
bases only by replacing local industrial goods for import. From mid 1960s it was increasingly manifested
that there is another proper way for industrialization and that is export development. Moreover, countries
developed in this way achieved high rates of economic growth. Effects of foreign trades can be classified
into two parts: direct effects including international job sharing, market extension, increased side effects of
investment and resource allocation, and indirect effects such as providing require items, transferring modern
technology and knowledge, transferring foreign capital, and developing and encouraging competitiveness
(Tavakil & Dehghani, 2010).
Export development is (and has always been) an essential strategy employed by different countries and
industries. It is noteworthy that the industrial structure and nature of some countries leads them toward
focusing on exporting some certain items. For example, Iran (as the third oil reserve-owning country of the
world) has always focused on exporting oil and oil products and despite efforts on developing non-oil export
there is a significant difference between the two areas. Thus, efforts to achieve objectives of the 20 –year
perspective and generating new capacities to develop non-oil export has always been among long term
economic strategies of Iran during recent years. The reason is advantages of non-oil export along with oil
export among the most important of which are (Tavakoli & Dehghani, 2010):

Abandoning single-product export and independence from economic and political tricks

Preventing increasing immigration of villagers, farmers and craftsmen to urban areas

Improved production quality and the ability to compete respecting more supply ability
Here, we first present an overview on Iran's performance in oil and non-oil export areas during recent years
and then investigate success key factors in this path to determine the route for sustainable development of
non-oil export.
3. METHODOLOGY
3.1. Adaptive Comparison of Iran's Performance in Exporting Oil and Gas and Non-Oil
Export
Iran is one of the overriding countries of the world in terms of gas and oil reserves and this has been
associated with significant income for the country during past years. According to last reports on countries
with oil reserves, Iran is the third oil-owning country of the world. Based on the mentioned reports, the first
and second ranks belong to Venezuela and Saudi Arabia and Iran and Iraq are in the third and fourth ranks.
This is while Iran, passing Russia, gained the first rank of gas-owning countries during recent decades.
Having this amount of oil and gas and trying to extract and exploit the resources resulted in appropriate
backgrounds for export of such items in Iran. Hence, oil and gas export is a main income source for this
country. Following is an overview on Iran's export performance during past years.
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Chart 1: Iran's oil and gas export (Iran's Economy monthly, 2012)
Chart 2: Per capita oil and gas export of Iran (Billion dollars) (Iran's Economy monthly, 2012)
As the charts show, the procedure of oil export has a relative stability from 2007 to 2011 and this is while
Iran faced numerous political challenges such as partial sanctions from western countries. Although the
stability indicates the ability of Iran to cope with challenges, it can represent considerable risks (especially
political risks) of relying on single-product export. Furthermore, these resources are irreversible and limited
ones the use of which must be made with future considerations. All together, these factors demonstrate that
Iran has to respect exporting other items than oil and gas and this realized through non-oil export. Improved
performance of the country in non-oil export not only is considered as another main income source, but also
can lead to an enhancement in country's position in other regional and global markets of industry and
services. Therefore, this is specifically considered in policy making and macro and strategic planning of the
country and results indicate efficiency and effectiveness of policies and plans; so that Iran has increased its
non-oil export rate from 15 billion dollars in 2007 to higher than 33 billion dollars in 2011 (with an average
annual growth of 24% during 5 years).
Chart 3: Iran's non-oil export (Iran's Economy monthly, 2012)
Chart 4: Per capita non-oil export of Iran (Billion dollars) (Iran's Economy monthly, 2012)
Table 1: Iran's performance in oil and gas export, non-oil export and goods and services export (Iran's
Economy monthly, 2012)
2007
2008
2009
2010
2011
Indicator
Oil export (billion dollars)
84.51
86.62
69.90
86.70
86.70
Non-oil export (billion dollars)
15.60
18.40
21.30
26.60
26.60
Population (million individuals)
71.53
72.58
73.65
74.73
74.73
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Per capita oil export
Per capita non-oil export
The ratio of oil export to non-oil export
Goods export (billion dollars)
Services export (billion dollars)
Goods and services export (billion dollars)
1.18
1.19
0.95
1.16
1.16
0.21
0.25
0.29
0.36
0.36
18%
21%
30%
31%
31%
97.67
101.29
87.53
108.61
108.61
6.93
8.01
6.78
8.28
8.28
104.60
109.30
94.31
116.89
116.89
Despite significant progress in non-oil export it is considerably weaker compared to oil export so that in
2011 the ratio of non-oil to oil export is 34%. As mentioned earlier, Iran non-oil export grew more than
120% during the 5-year period. This figure leads to an annual average of 24%. Thus, if the target ratio of
non-oil to oil export is determined to be 40%, with an estimated oil export rate of 115 billion dollars for
2012, non-oil export rate must reach 46 billion dollars. This indicates that in order to achieve this goal nonoil export should experience a 36% growth during 2012, a number greater than average annual growth of
non-oil export of the country. This requires comprehensive planning to develop non-oil export.
3.2. Adaptive Comparison of Iran's Performance in Non-Oil Export and Member Countries
of OIC
Organization of Islamic Cooperation (OIC) is the second intergovernmental organization (after the UN) with
57 member countries and expanded throughout four continents. The organization involves the Middle East
and Northern Africa (MENA), Europe and Central Asia (ECA), Eastern Asia and Atlantic Ocean (EAP),
Southern Asia (SA) and Central and Southern Africa (SSA). One of the most important characteristic of
member countries is their economic, political, cultural and social similarities and their close beliefs and
approaches. These factors facilitate export development throughout the region effectively. Thus, enhancing
the position and export status of Iran must be considered as an essential and key strategy. So, selecting
patterns to optimize export development and to recognize Iran's main rivals in this path (among OIC-member
countries) is associated with higher efficiency and effectiveness (the Center of Education, Social Research
and Economic Studies of OIC, 2012).
Table 2: Performance of overriding countries of OIC in non-oil export from 2007 to 2011 (Adopted from the
Center of Commercial Interactions, www.interacen.or)
2007
Country
Saudi
Arabia
Turkey
The
U.A.E
Indonesia
Malaysia
2008
2009
2010
NonNonOil-to
oil
oil
export
export
Nonoil
export
Non-Oil
to oil
export
Nonoil
export
Non-Oil
to oil
export
Nonoil
export
Non-Oil
to oil
export
28
14%
32
11%
29
18%
36
102
2040%
124
1550%
98
2450%
79
101%
107
104%
38
85
151
291%
604%
97
163
243%
447%
84
134
2011
Nonoil
export
Non-Oil
to oil
export
17%
42
14%
110
2750%
129
2150%
59%
72
82%
61
47%
253%
577%
111
168
238%
532%
134
187
1950%
465%
A look on export performance of member countries of OIC indicates that during 2011 the highest rate of
non-oil to oil export ratio belongs to Turkey, Indonesia, Malaysia, Jordon, Lebanon, Bahrain, Tunisia and
Egypt. This means that these countries have a higher rate of non-oil export than oil export. But, since the
main basis to select Iran's rivals in the area of non-oil export is countries' capability to develop non-oil export
and their performance in this area, Turkey, Malaysia and Indonesia are selected in this respect. In fact, these
countries can be considered as pioneering ones in the area of non-oil export in OIC region.
Following these countries are Saudi Arabia and the U.A. E with non-oil export rates of 42 and 61 billion
dollars, respectively and respecting Iran 40-billion dollars performance they are considered as its main rivals
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in this area. Saudi Arabia and the UAE had an average annual growth of 11% in their non-oil export during a
4-year period (2008 – 2011) which is lower than that of Iran (24%). Thus, assuming continual annual
average growth in these countries, Iran can reach an export rate of 65 billion dollars (during three years) and
pass Saudi Arabia with 59 billion dollars of export. Moreover, it reaches the rate of 123 billion dollars in 6
years and also passes the UAE with export rate of 114 billion dollars.
Still, respecting Iran's performance in non-oil export two key issues (target 40% ratio of non-oil to oil export
as a desirable figure and recognizing that rivals can have greater growth rates than prior ones), developing
Iran's non-oil export to rate larger than its annual average growth during past years can, on one hand,
improve the country's ratio of non-oil to oil export and, on the other hand, enhance Iran's position compared
to that of rivals and make it possible to pass them in shorter periods of time. Realization of this can also help
achieving 20-year Perspective Document of Iran. Therefore, it is necessary to elevate annual average growth
of Iran's non-oil export to at least 35%. This increase of 12% appeals for innovative planning and actions in
both country's macro policy making area and producing and servicing procedures in economic enterprises.
Of course, it is not simple to achieve this objective but it requires sympathy and efforts of all sections (public
and private) of the country. The first step toward identification and make effort to realize this important issue
is to determine success key factors of non-oil export. The factors, in fact, represent empowerments the
enhancement of which leads to higher performance in non oil export. Below is a detailed description on
success key factors of developing non-oil export from both viewpoints of macro policies and producing and
servicing requirements in enterprises.
4. RESULTS
4.1. Key Factors of Success in Development of Non-Oil Export in the Global Business
Environment
Perspective of developing Iran's non-oil export in the conducted strategic document indicates that this
country relies on export-oriented productions and considers non-oil export as the running force of country's
economy in developing a sustainable growth, expanding job opportunities and removing poverty and is
among 5 countries with the highest rate of export growth in the region. Therefore, Iran, under support of all
section of the government and having capacities of growing export production prepared, uses a strong,
concentrated and supportive organization on non-oil export to express its presence in the global market with
a diversity of products especially those with advanced technologies and high added value. Besides, the
government aims to enhance capacities of its own and of private section, develop capacities for exportoriented production, realize competitiveness of goods and services in domestic and foreign markets and
develop proper mechanisms for removing obstacles of non-oil export to help it grow continually. Essential
macro objectives to develop non-oil export can be described as follows (The Office of Commercial Planning
of Iranian Organization of Trade Development, 2007):
1. Sustainable growth of export-oriented productions
2. Having infrastructures facilitating non-oil export
3. Reducing risks of non-oil export
4. Having empowered private section in non-oil export
5. Extending products' competitiveness
Obviously, development of non-oil export requires simultaneous empowerment and enhancement of both
state and private sections and, hence, identification of success key factors must be realized as a result of
simultaneous consideration of the sections. In other words, the state and private sections help Iran enhance
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its position in this area by efficient policy making and planning in the considered area and meeting
requirements of developing goods and services export, respectively.
4.1.1. Key Factors of Success in Macro Level
Key factors of success in macro level include those factors concerning country's macro policies and plans. In
general, the government plays the most important and typical role in this area. The Strategic Document for
Development on Non-Oil Export of Iran conducted by The Office of Commercial Planning of Iranian
Organization of Trade Development mentions the key functional role of government in developing non-oil
export as providing social and cultural environment for non-oil export. For this, the following key policies
must be particularly considered (The Office of Commercial Planning of Iranian Organization of Trade
Development, 2010):
Developing export culture: by employing strategies such as enhancing society's knowledge and culture of
export, developing culture aimed at export-oriented production in member organizations of business support
network (customs, ports and shipping, and other executive organizations), advertising to institutionalize
export culture in the country, holding national days of national or provincial export, other culturedeveloping events, awarding national symbols to overriding exporters, educating principles of productivity,
quality, export, competition, entrepreneurship, social discipline and works on primary, junior high and high
schools, universities, enterprises and organizations.
Developing the culture of export-related issues: through strategies such as developing and promoting
entrepreneurship culture and especially entrepreneurship in export among young people, developing and
promoting productivity concepts using Islamic lessons and emphasizing productivity in export processes in
human resources, kids, adolescents and adults, developing and promoting quality culture emphasizing export
quality, developing and promoting concepts and principles of competition, developing and encouraging work
and effort and customer-orientation from the lowest levels of executive organizations and economic sections
and the population.
Institutionalization (festivals, medals, etc): by strategies such as holding festivals and awarding medals and
quality signs in export, holding festivals and awarding prizes and symbols of export productivity, holding
festivals and awarding prizes for customer respect in export, festivals on entrepreneurship in export,
establishing relationships between rewards and favourable performance.
General education on export-related issues: through strategies such as educating principles and concepts of
productivity in export from primary school, education on principles and concepts of competitiveness and
entrepreneurship in export, principles and concepts of customer respect in export.
Another key functional area of the government in the field of non-oil export is to enhance technology in
national level for which there are numerous policies and strategies such as helping exporting producer
enterprises conduct technological strategies in which technological transformations of among key factors of
success, encouraging and subsidizing technology enhancement in other parts of value chain of exporting
producing enterprises, enhancing production technologies to improve quality, flexibility and reduction of
finished price, employing new technologies of transportation vehicles of export section, renewing
transportation fleet, employing information and communication technology in member organization of trade
support network (customs, ports and shipping, banks, etc.), developing, improving and enhancing national
innovation infrastructure with a tendency toward innovative process and export-oriented products,
developing and improving electronic commerce infrastructure, vast employment of information and
communication technology to facilitate trades, expansion of E-government in all areas.
Another key functional area of government's responsibility is on trade regulations, disciplines and policies
conducted in national level. The general policies of this part include:
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Conducting and updating regulations directly related to export: by strategies such as regulating the detailed
law for Iran's foreign trades based on essential revision of the available law of import and export and
integrating all regulations for the sake of stabilization, regulating and implementing regulations on Ecommerce, formulating regulations, instructions and administrative procedures to facilitate Iran's trades,
modifying regulations of customs export and import, free trade and special economic zones and border
markets based on new trade law and future laws on Iran's foreign trades, integrating all trade-related
regulations.
Reducing and removing regulations on conflicting and waste procedures: through strategies such as
modifying or cancelling regulations contradicting objectives of foreign trade development, reducing and
removing obstacles resulting from regulations on export and removing waste and contradicting regulations
and instructions, stabilizing proper regulations and avoiding frequent changes based on personal interests,
evaluating regulatory consequences affecting export and investment.
Other regulations: through strategies including revising and modifying structure of regulations concerning
objectives of developing economic and manufacturing activities to facilitate presence and competition in
international markets, modifying regulations concerning financial markets, the Stock Exchange and goods
exchange, revising and modifying the law of work and social welfare to provide for a competitive
atmosphere in direct and indirect exporting productions, adapting monetary and banking regulations to
provide required equipment to develop production and export.
Regulations consistent with WTO: through strategies such as investigating and evaluating regulations
concerning trade and investment of selected countries by the WTO and regulating, improving, modifying and
cancelling regulations inconsistent with values and principles (ownership rights, regulations concerning
trades, investment, etc).
In the area of conducted trade policies in the national level the followings must be considered:
Conducting trade policies fitting objectives of export development: by employing strategies such as regular
and annual publishing of Iran's trade policies inside and outside the country, making commercial profit
(entering rights) of especially imported inputs (consumed in producing exported goods) logical, avoiding
severe changes in rates of commercial profits and pre-announcement of necessary changes, removing nontariff obstacles respecting economic sections and subsections' interests, conducting plans for tariff changes
based on trade policies and in the framework of requirements of the WTO, preparing sections and
subsections to join this organization, continual evaluation of trade policies of partner countries and
embedding their mutual items in trade policies, reinforcing expertise principles of regulating trade policies,
reinforcing presence of private institutions in decision-making on trade policies, providing exporters with
access to required imported inputs in exporting production in a competitive manner similar to rival exporters
in other countries in trade policies, avoiding forbidding regulations on export unless in certain cases
approved in the High Council of Non-Oil Export Development, deepening the process of removing non-tariff
obstacles in foreign trade (export and import).
Mutual actions in trade policies: through strategies such as regulations against exceeding approved prices,
integrating political and economic relations in trade policies and predicting available tools in policies
respecting effects on local production and markets, avoiding rapid decisions weak in terms of specialized
principles from viewpoint of effects on local production and market in applying tools of trade policies such
as sanctions, tariff increases and putting decisions in the framework of a comprehensive and well-designed
regulations, exerting sanctions in trade policies in certain cases and against countries' animosity.
Finally, another functional area of government in development of non-oil export is competitiveness of
national economy for which the following general policies are considered:
Privatization and competition: through strategies such as enhancing business environment in the country
throughout the 20-year horizon, developing competitiveness in business environment as a prerequisite of
export development, implementing Article 44 of the Constitution and accelerating privatization, cancelling
government monopolies.
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Foreign investment: by employing strategies such as encouraging and supporting foreign investors especially
foreign direct investors, trying to reduce risks of economic activities of foreign investors.
Financial and monetary policies: by employing strategies such as enhancing capital market and making it
competitive, competitiveness of services of banks, providing legal backgrounds required for presence of
foreign banks in Iran to make country's banking system competitive, reducing inflation rate to the average
level in trading partner countries, making profit rate legal using conventional mechanisms especially through
connecting to financial markets.
Currency Policy: Through the use of strategies such as the establishment of an appropriate currency system
due to inflation, in order to encourage non-oil export and export profitability compared to foreign non-trade
sectors and if not possible, predict other methods; Arranging the inputs oil revenues to the national economy
in order to reduce the effects of Dutch Disease Economics and reduce damages to manufacturing,
agriculture, mining sectors; Continuous movement toward harmony between trade policy and Currency
policy, monetary and financial country.
Productivity: Through the use of strategies such as policies to increase labour productivity; adopt policies to
increase the productivity of capital.
Along the policies and strategies that are suggested at the country's macro-level, Economic enterprises
should also consider some of the requirements and key components and by improving its position on these
issues, the further development of the country's export are realized. Through this synergy, the country will
move in the direction of sustainable development. In the following, the requirements will be discussed in
detail.
4.1.2. Key Success Factors at the Micro Level
Key success factors at the micro level include the factors that are operational requirements and
characteristics of the enterprises in the relevant field. Active economic enterprises play a major role in
various sectors of countries industry in this area. In fact, these active enterprises are in various industrial
fields that must realize the development of the country's non-oil export by enhancing the capabilities and
capacity utilization. This is important while in many studies and researches that have been done, mostly it
has been paid to the key success factors at the macro level and in other words to how planning and policy in
this area and key success factors at the micro level has remained somewhat neglected. Hence, it has been
tried to explain and review the major key factors that must be followed seriously and with a special focus by
economic enterprises. Generally, the key success factors for developing country export of economic
enterprises, is the change in attitudes of management in these enterprises. In the past, the prevailing attitude
of economic enterprises focused on the internal space and general business environment were considered
stable environment and without fundamental changes and while today the attitude and thinking of the
organizations is strategic vision that its focus is mainly focused on the external environment because it
believes that the level and intensity changes and transformations in this environment is so pervasive and fast
that in case negligence of the organization will be faced with extinction. Change in the attitude of the senior
management of economic enterprises, which is the main policymakers and determinants of policies in
organizations, Significant impact on all areas of functional and operational will exert a significant impact
that export promotion policies is also one of the areas. In other words, as long as the attitude of the top
management of economic enterprises is not an approach based on export-oriented production, even with the
availability of other key areas these firms will not have much success. Among the key strategies to achieve
this important is upgrading knowledge management in economic enterprises in country. Employing creative,
dynamic and having academic education managers in the field of management, attendance at training
courses, conferences, practical pedagogical seminars and also the development of university-industry
interactions can remarkably contribute to the promotion of knowledge management in the firms.
After the development of export-oriented attitude of the senior managers of economic enterprises, other areas
and functional areas related to these categories would also be renovated in line with this approach that in the
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meantime the development of the concept of quality and customer-orientation has undeniable effects. Due to
the expansion of export and entry into the global markets, organizations will be faced with a wide spectrum
of competitors that only by having a sustainable competitive advantage will be able to compete with the
formidable competitors. Among these advantages that functions extremely well are development of the
concept of quality in the manufacturing, service delivery and customer interaction. The realization of this
important also requires many other substrates that among them the following can be mentioned:

Appropriate access to raw materials required: By improving relationships with current suppliers in
order to develop long-term cooperation and also the development of relationships with formidable
internal and external suppliers to increase bargaining power in the supply of raw materials required.

Entitlement of effective financial resources: Through the development of relations between the
monetary and banking institutions to provide liquidity and financial resources required in a desirable
and inexpensive way (good facilities), and attempt to apply new methods of financing such as stock
market and so on.

Entitlement of the technical knowledge and expertise: Through the efforts in the field of excellent
human resources and knowledge and investment in order to improve the knowledge and expertise of
available human resources through providing the conditions for participation in regional and
international training and scientific communities in order to learn about the global science and also
initiatives programs and actions of world leading companies in relevant to business areas

Entitlement of technology in the field of production: through development and improvement of
mutual relations with internal research institutions In order to access the technologies required for
native who can prevent the currency out of the country and at the same time put the country in a
unique competitive position. In cases where internal access to internal technologies is associated
with limitations, development of mutual relations with the leading countries in line with the
development of investment is necessary to conduct research jointly or the technology transfer to
inside the country.

Development of an efficient operational infrastructure: In fact, the cornerstone of economic
enterprise activities is considered infrastructure activities and hence the development of the
infrastructure efficiently considered to be a key issue for firms. Achieving this requires taking into
consideration all aspects of infrastructure including institutional infrastructure such as organizational
structure and culture, information infrastructure such as enterprise knowledge management and
human infrastructure such as innovation management and intellectual capital in enterprises is on the
way of export development strategy.
Changing of management attitudes is the main stimulus of export development approach in the country
economic enterprises and develops the concept of quality and customer-orientation and fulfilment of the
requirements and components, aspects of the process and functional development of export enterprises but
nonetheless if the products cannot offer so desirable and pleasant to international markets despite having a
competitive advantage, market share, sales and profitability will not achieve expected. Thus, another key
component of development strategy of export economic enterprises is the development of marketing
concepts and sales globally. Achieving this requires the use of all of the key approaches and strategies in the
field such as marketing research, advertising, pricing, distribution and supply, sales promotion, public
relations, etc. Effective marketing research, underlies the identification of markets will have the capacity and
high potential. The price advantage is achieved by using efficient pricing approaches particularly in markets
with price elasticity can be turned to a key competitive advantage. Appropriate distribution and supply of
products in various markets in different regions, could be grounds for access to a wider range of consumers.
Finally, using the techniques of integrated marketing communications such as advertising, public relations,
sales promotion and etc will facilitate interactions with customers and consumers.
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The key point in the development of export is the continuing upward trend in the growth and expansion of
export activities in target markets and new markets and the most important challenges along the way is to
develop and maintain relationships with clients and reputation of the firm in different markets. The main
cause of these challenges is also the lack of proper attention to the issue of after-sales service. Failure to
provide satisfaction after-sales service will become existing customers to sectional customers, While the
desirability of after-sales services, underlies to promote customer loyalty toward the brand economic
enterprise and becoming permanent and continuous customers.
Finally it can be stated that because of all these components (Attitude of the management, development of
the concept of quality and customer-orientation, development of the concept of marketing and sales,
development of the concept of after-sales service); The human factor plays a key and decisive role, efficient
and capable human resources development will be the basic infrastructure development of the country's
export economic enterprises. Therefore, economic enterprises must in every field according to the
requirements, to develop and exploit certain level of education and empowerment programs human
resources. In fact, the different nature of different functional areas, will lead to differences in the nature of
these applications in different organizational sectors and departments but whatever in all these sectors should
be applied jointly, induction of export outlook is in all policies, programs and actions and activities of the
organization in every department and division, working Group, the operational and individual levels.
An overview of the components has been explained in terms of the key success factors for the development
of export at the micro level (economic enterprises) suggests that in fact, all aspects and dimensions of the
value chain of these enterprises must change in line with this policy and be along with the nature and
requirements of the export development approach. In fact, enterprises must reconsider and modernize their
own value chain in order to achieve success in the field of exporting our products to world markets. In fact
this will represent a change in value chain enterprises from the classic form to an export-driven value chain
approach.
5. CONCLUSION
Emerging trends in the business environment of the New World especially of globalization have propounded
export development approach as one of the basic strategies adopted by countries and industrial development
but what is noteworthy is that the structure and nature of some industrial countries have caused these
countries to emphasize their attention on the export of certain species of the products. The Islamic Republic
of Iran is considered as one of the world's top countries in terms of oil and gas reserves in the world and over
the years this has accompanied many sources of foreign exchange earnings for the country. Entitlement of
substantial resources of oil and gas reserves in the world and efforts in exploitation and utilization of these
resources have caused suitable ground for export of these items to be created in the country. Despite the
advantages mentioned in the country's oil export, exclusive focus on these areas, and a reliance on export to
countries with single-product can also be dangerous. Hence, trying to reach 20-year-old prospect targets and
the creation of new capacity in order to "The development of non-oil export," has always been one of the
long-term methods in recent years. The importance of this area is also advantages of sustainable
development in the country's oil export besides oil export in the country.
A review of the performance of the Islamic Republic of Iran in the development of non-oil export in recent
years compared with OIC countries indicates that despite the favourable outcomes has been achieved
through the planning and actions taken in this field but actually in this field we are faced with strong
competitors that surpassing them requires codified policies and strategies formulation in this regard. In this
study these strategies and policies were discussed at the macro and micro levels. Through these studies it was
determined that at the macro level, which is in charge of the government, issues such as environment
conducive to the social and cultural export, promote technology at the national level, laws, regulations and
trade policies developed at the national level and competitive advantage of national economy must be
aggressively pursued. Also at the micro level that is in relation to the country's enterprises also issues of
change management approach, quality, and customer-orientation concept development, marketing and sales
concepts developed global sales and development of human resources is efficient and capable of remarkable
importance. In fact, due to the synergy between these policies and requirements, favourable prospects for
developing country export will be achieved and country can improve its position against regional
competitors.
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REFERENCES:
Nahavandian, M., (1382), The World Modern Economy, competitive intelligence agencies and organizations, Tadbir
magazine, Issue 141(In Persian).
Saemyan, S., Arghandeh, R., (1386), Evaluation of globalization based on the SWOT, journal of Management, No. 124123(In Persian).
Bureau of Economic Research, (1383), Globalization and its consequences, vice president of planning and economic
studies, Department of Commerce (In Persian).
Akbaralsadat, Z., Ferqdany, M., (1386), Globalization, definition, characteristics and principles, the sixth conference of
Industries and Mines Research and Development Centers(In Persian).
Ramezanpoor, I, Shirinkam, F, (1386), Globalization Economics: Principles and indicators, the sixth conference of
Industries and Mines Research and Development Centers(In Persian).
Bennett, R., Blythe, J., (2002), International marketing strategy, market entry & implementation, Kogan Page Limited.
Tavakoli, A., Dehghani Sanyj, J., (1389), Evaluation of the factors influencing the development of textile export (Case
Study: Yazd Province Textile Industry), Journal of Knowledge and Development (scientific research), Eighteenth year,
No. 31(In Persian).
Iranian Journal of Economics, (1391), the Iranian economy at a glance, the fifteenth, No. 161(In Persian).
Statistical Economic and Social Research and Training Centre for Islamic Countries (SESRIC), (2012), Pharmaceutical
Industry in OIC Member Countries: Production, Consumption and Trade, Organization of Islamic Cooperation (OIC)
Business Planning Office, (1386), Summary of non-oil export development strategy document J.A. Iran, Trade
Promotion Organization, Ministry of Commerce
Business Planning Office, (1389), National strategy to develop non-oil export J.A. Iran, Trade Promotion Organization,
Ministry of Commerce
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Providing Innovative Model of Research and Development
in Guerrilla Marketing and Emphasis on Its Role in the
Global Village
Mohammadreza Shahbazi17, Leila Abdollah Zadeh Ramhormozi18, Elham Khatibi Taleghani19
__________________________________________________________________________
ABSTRACT: Understanding and development of marketing programs for products and services, is one of
the essential needs of managers in organizations. But many of managers are unresponsive to this aspect and
observing the subject of numerous studies, indicates that one of the main reasons for the failure of small
businesses, is the lack of comprehensive marketing program that do not distinguish some differences
between the two concepts of "sales" and "marketing". Given that nowadays in organizations are conditions of
uncertainty ruling, so any changes in commodity prices, exchange and interest rates, stock prices and other
economic changes, can change organizations. Therefore, one of the tasks of research and marketing
development unit is minimizing uncertainty and risks by innovation in products and services. Therefore, this
study is based on priority:
1-providing a model for innovation in product marketing that is combination of new strategic management
and marketing models. 2-Study the effect of strategic communication factors in organizational innovation
which is provided in the form of guerilla marketing. 3- With different attitude of design, engineering
research and development, sales and marketing and beside of the description model, this study is focused on
impact of research and marketing development, in the global village. This study has been presented to collect
information about the different attitudes of manpower (which is the main source of product and innovation
development) to offer to senior managers of organization and to improve future decisions.
KEYWORDS: strategy, research and development, marketing, guerrilla marketing (Partisan).
17
M.A in industrial Engineering, Alborz Campus University of Tehran, Iran, ,Email: [email protected]
18
Ph.D. ,Economic Sciences, Islamic Azad University, Isfahan(khorasgan)Branch , Iran,
Email: [email protected],
19
M.A student, executive management, Islamic Azad University, Iran, Email:[email protected]
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1. INTRODUCTION
Marketing is process of planning and running process of development, pricing, promotion and distribution of
goods and services to meet organizational goals. "Kenith Hatchinson" believes: The fact that marketing for
the formation of a unique theory was slow, there is a real reason. That simple reason is that marketing is not
a science, but it is an art or a profession and is similar to engineering, medicine and architecture more than
physics, chemistry or biology. Active members of the medical profession are called practitioner in this field
and word ―scientist‖ is not used about them. They use many findings from science to solve problems. This
subject matter can be held about marketing, too. Of course, relating scientific search of a scientist to search
of a customer in market will be a funny generalization. In most of organizations, development of new
products and services is taken into account as a random and non-program process. Instead of making order
structures to extract new ideas and development and coincided choice among them, this process is mostly
temporary and without program. Only in a few parts, there is an organized approach to develop new services.
Organizations that have done process of their innovations as more organized and prevented its non–planning,
can better identify opportunities of innovation and organize process of development of new product/service
as more effective and efficient. So, successful innovation should be a controllable event in products/services.
2. LITERATURE
Usually, design and development of physical products, have been more common than development of
services and people have a clear picture of it in their minds. Productive companies allocate a part as research
and development unit in general for this purpose, that they do new design for new products based on today‘s
needs of consumption market in coordination with the Sales and Marketing division. In contrast, financial
establishments and services collections notice this problem less and have not arranged a systematic process
to develop their service products. In view of Philip Kotler, a famous clear sighted of this area, marketing is a
human activity to meet needs and desires through exchange process. In fact, basic origin and base of
marketing system is needs and desires of human.
To use discussion of marketing, an organization should:




Identify its customers and specify their needs and priorities. (investigation of market)
Analyze its competitive advantages.(strategy of market)
Choose special markets to cover. (target marketing)
Specify how can meet its customers need, finally.(mix marketing)
2.1. Basic Concepts and Functions of Marketing
Six basic functions that discussed by Finch, have much similarity with process of mental operation. These
are: environmental analysis, customer analysis, product planning, price planning, improvement planning and
promotion, physical distribution planning.
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Table 1.Comparison of organizations
Diagram1. Environment of market (Kotler and Armstrong, p107)
2.1.1. Analysis of Environment of Marketing
Environment of marketing includes all factors that are effective on ability of an organization on the given
market. These factors include actors and existing conditions in environment. Stakeholders, distributors, the
given addressees and any other person that play a role in production and distribution of products, are called
active actors in an environment. Environment of marketing is divided into six smaller environments that play
a role in them. In opinion of Kotler, these environments are: statistical environment, economical
environment, natural environment, technological environment, political–lawful environment and social–
cultural environment.
These exist in analysis of the given address.
2.1.2. Consumer analysis
Consumer analysis is equal to analysis of the given addressees in military science. In consumer analysis, an
organization should analyze effective factors to accept a product from a consumer. These effective factors
may be political, social, economical, cultural and technological. These factors should be studied completely,
that how to affect the given addressee is understood.
Buyer’s reactions
Block box of buyer
Product choice
Choice of product mark
Choice of seller
Choice of purchase time
Choice of purchase rate
Process of
buyer‘s
decision
making
Buyer‘s
features
Marketing and other stimuli
Other
stimuli
economical
technological
political
cultural
Marketing
Product
price
place
promotion
Cultural
social
Personal
buyer
Psychological
motivation
conception
education
Beliefs and
initiatives
Age and stage of
life
job
Economical
situation
Lifestyle
Personality and
self-confidence
Reference groups
family
Roles and situations
culture
Secondary culture
Social class
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2.1.3. Product Planning
Product planning is a process to design the given product for stakeholders, for addressees that will buy that
product. There are differences among sale and concept of marketing.
Diagram 3.Sale in comparison with marketing (Koher & Armstrong, p. 13)
This
concept has an important role in making alignment among mental operation and operational forces. If mental
operation is in service of goals of operation commander and the given addressees are not important in doing
operation, mental operations will sell product that the given addressees may be reluctant and unwilling about
it and do not understand it and do not need it. In different operations like marketing, the given addressees
should be noticed and operations should be planned in view of them and their needs.
Diagram 4.Sale in comparison with marketing
2.1.4.
Price Planning
It is a process that in which, organization determines a price for the given product by taking interest and
prices of competitors. In marketing based on financial affairs, various strategies exist to determine price. But
when subject of discussion is mental operation price seems an abstract concept. In this subject, price can be
freedom, power and even death. Mostly, mental operation cannot have control over paid price by the given
addressee. But mental operation should understand this price and take actions that the given addressees
assess value of action to be taken and cost to be paid by them.
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2.1.5.
Promotion Planning
Promotion planning means using combinatorial communications. Marketing is not limited to printed and TV
advertisements, but includes public relations, spread and promotion of sale, personal sale, direct marketing
and guerilla marketing, too. In mental operation, convergence and alignment should be made among
different methods, too. But mental operation is victim to focus on products and as a result, it emphasizes on
advertisement aspect of promotion.
2.1.6.
Distribution Planning
This planning is how to send or supply product to people. This product may be sold through internet
websites, retailing units, consumer–to–consumer networks and or any other way. This point can be practical
to find the most effective and useful tool to effect the given addressee. Certainly, mental operation has good
information in this area. Researchers have focused on describing different paces that should be considered in
developing new product and many models have been made to develop products such as the following cases
can be noted: Vermeulen models: stage–department, stage-activity, conversion and response, Showing and
Johnson, Booz et al stage –activity model, four–stage model of Becker and Whisler, waterfall models, spiral
models, All above models have defects that insufficient level of details, lack of capability of array making,
lack of practical evidences, no using tool of strategic management in innovation of product and lack of
support for information technology and communications can be noted.
Diagram5. Sale in comparison with marketing
In this research, it is tried to provide model that dissolves these defects as much as possible.
3. GOALS OF RESEARCH AND DEVELOPMENT
Before we take more details of research in innovation of products and marketing, more, we will look at goals
of research and development, research and development in Iran and concept of innovation in order to further
understanding. In general, goal means quality or a desired point that person or organization tries to reach it.
This goal is determined based on understanding necessities, priorities and needs in personal, organizational
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and national framework and based on this, some goal of research and development can be mentioned. -Meeting human‘s needs and making welfare and convenience.
-Finding potential uses for serious achievements and awareness
-increasing self-reliance beside facilitation and acceleration in doing things
-Increasing knowledge and culture of society by invention, initiative and innovation –
-Increasing productivity of human activities which includes increasing incomes.
-Increasing competitive ability inside and outside of the country and presence in neighbor market and other
countries (Haeri, 1379).
3.1. Research and Development in Iran
Today despite that economical forces in the world have accepted leading science and technology, in Iran
there is a long to reach this end by potential forces of society .Partial economic weakness that is result of
severe dependence on exports of oil, has obstructed this that a consolidated structure is made to develop
science and technology in scalable level with industrial companies and main feature of our economy is
scarcity and exclusiveness with low quality of goods and services, so there is no innate motivation for
research and development in most of economic enterprises; and even small industries are not exceptional in
this case. Some limitation in this area is as follows:
Worn out machineries and equipment‘s that have an important role in lowering quality of production and
increasing cost. Financial problems that companies are faced with them most and they need financial
supports to augment and spread their activities. Lack of copy right which in part of research and
development is faced by companies and organizations for new innovations. In other words, lack of spiritual
ownership of inventions causes lowering assurance for investors for innovation of products. Lack of equal
commercial opportunities for companies is of other existing obstacles. Because for all companies there is no
possibility of presence in global markets and as a result they don‘t have the opportunity to improve the
quality of their products .in general, these problems have changed the concept of development and research
in Iran with what flows in developed countries, and researches, invention and innovation is toward reverse
engineering.
3.2. Concept of Innovation
Innovation has been extracted from Latin word ―innovate‖ means building a new thing. Schocheati was the
first person who discussed innovation in frame of scientific concept. In fact he sought to know effective
factors on economical growth of countries that in this end, understood vital role and importance of
innovation in growth of countries. Based on his theory, innovation is appeared in one of the following forms:
1) Opening doors of new market.
2) Making basic changes in industrial and organizational structures.
3) Introducing processes of new production or basic improvement in existing working processes.
4) Developing new securer sources like raw material, equipment‘s and other inputs.
5) Introducing and commercializing product/service or basically improving in using of existing products and
services.
Innovation is a process in which, at first a person allows, his /her imaginations ascends to sky, then lands it
on ground and engineers it (engineering of idea) to convert to idea, then converts ideas through management
of idea to practical, useful and suitable ones.(creativity).
Followed by that, he/she converts ideas to goods, services and process and finally by commercialization of
new or developed products, services and processes in market, process of innovation is ended. In other words,
creativity needs innovation; but it should be noted that there is a long way from creativity to innovation that
usually entrepreneurs facilitate this way.
3.2.1. Forming Collections of Innovation in R&D Unit of Marketing
The first step in innovation of product is to form collections for innovation of product. Collection of
innovation of product is formed inside R&D unit and will have duty of development and innovation of a new
product. Most of activity of R&D department in innovation of a product refers to idea making and
determination of product strategies; but if for processes of management of portfolio and development of
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product, a separate management is not taken, R&D unit will be responsible for these processes, too. Formed
team should be composed of people with various duties, knowledge and abilities. Using multi-duty teams
helps general effectiveness of innovation of product, directly. Also, flexible teams with cross jobs are more
successful in developing new activities; since they have mixture of new knowledge and supply new
capabilities to organizations. These teams increase ability to solve problem while emerging problem and
obstacles in way of execution. Organizations with cross and consolidated jobs run development projects
sooner and with less effort than companies that are separate dutifully.
3.2.2. Effective Factors on Forming Innovation Processes
By summing up investigations which have done for this research, in general effective parameters and factors
on innovation processes of organizations can be divided into two main groups:
1) Internal factors of companies
2) External factors of companies
Internal factors are called engine of innovation that includes a complex system of effective internal factors
on innovation process. Internal factors include ability and capability of companies‘ learning to develop and
create products and new processes. External factors are also abilities that spread power of competition and
supply suitable with need of customers. Andrea‘s Herman, Torstein Tomzak and Rene Befort in results of
research, have announced internal factors on innovation as technological power of organization, tendency of
managers and staff to release their knowledge, strategic communication of organization with customers,
securers and rivals, no special investments on previous technologies, focus on customers‘ desires, focus on
market by relying on basic competences, being market–based of organization and capability of learning of
organization.
4. GUERILLA MARKETING
Guerilla marketing is a term that was described by J.kenrad Levinson in a book with title of ―guerilla
marketing‖ in 1982 for the first time; he knows marketing from guerrilla view as an opportunity for
marketers that help their present and future customers that are successful to meet their goals. Guerrilla
marketing is an unusual way to measure and predict behavior, impressing people and test and determination
of quality and quantity of business based on a less budget. Indeed guerrilla marketing is a type of disorder
marketing to get maximum results by using minimum sources and involves initiatives, innovation, laws
breaking and search of alternative solutions for traditional marketing methods. Success key of guerrilla
marketing is art to notice and awareness of all types of information such as newspaper, magazines, radio,
TV, rivals, customers, current and present events should be done, constantly.
4.1. Basic Principles of Guerilla Marketing :
1) Search cooperation and synergy.
2) Focus your sources to achieve temporary superiority.
3) Sell ideology with product, instead of product selling alone.
4) Identify set patterns, analyze them and overcome them.
5) Instead of building parapet and castle, try to be flexible and clever and brisk. (Levinson, 2009)
6) Try; pass from all filters of awareness and reception placed in target group and provide concept.
7) Do not move from direct path; try to find deviated paths providing alternative solutions.
By looking at these principles, different aspects can be found that haven‘t much distance from standard
marketing strategies. Some aspect though have completely different approaches, e.g., in search of
superiority of being temporary, i.e., overcoming on customer‘s attention in all times through a special
marketing activity and in opposite of effort based on ideology, means no putting effort for direct sale of
goods. (Lebing, 2008) In the following, whenever word ―marketing‖ is noted it means guerilla or partisan
marketing.
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5. CREATIVE PROCESS IN FINANCIAL PRODUCTS
Making a new competitive product needs to make a correct balance among three elements: ideal process of
product innovation, effective leadership from senior management and a supportive working environment
.Provided model in figure 1 that can be known as inside part of supposed engine of innovation by using
strategic management, portfolio management and technical discussions, helps making coordination and
balance among mentioned elements.
Figure 1.Inside part of supposed innovation engine
Process of strategic programming and portfolio management gather knowledge related to process of market,
customer‘s needs and technology and develop them that can be used better. Strategies of product lead
programs of product family, flow and direction of efforts related to new product. In figure 1, lower part of
dotted line specifies special opportunities of market and defined activities of project. This part is started with
identification and development of new opportunities of business. New needs of customers and technologies
that affect a special part of customers are investigated as possible opportunities. After investigation of
possible opportunities by using portfolio management, a number of projects are accepted and budget of them
is financed. If design has a few potential or faces with limitation of available sources, it would be discarded.
By mixing strategic and technical part, the given process can be converted as more organized as figure 2. At
core of provided model, a dynamic model includes 6 dependent processes together. These processes work to
each other to maximize efficiency of shareholders, by identifying, investing and managing best portfolio of
innovation projects. Three key elements: feedback, strategic alignment and central point of control of
portfolio support above process.
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Figure 2.Strategy model in product innovation
6. DETERMINING STRATEGIES OF NEW PRODUCT
At the beginning of providing new product process, senior managers of organization with cooperation of
R&D unit will have duty to direct new product. Directing through design of perspective, goals, strategies,
and intentions and the given intentions is done from new product. Determining perspective, strategy and
goals to make new product is based on strategy and general goals of organization and large strategies
obtained in product innovation. Definition of product is taken as a vital start point in making a new product.
Many defects and flaws that exist in many companies are due to defect in definition of product. These
defects can be noted such as follows:







Strategy of program of product has not been defined.
Lack of necessities as a base to start development of product.
Necessities of product without receiving a correct input from customer have been developed.
Determining necessities of marketing is done lately.
Determining necessities of marketing is done as defect, ambiguous or very ambitious.
Slowly movement of developing products that needs to repeat process of re–design.
Engineering department has no participation or has a slightly little one in developing
determination of necessitates of marketing that in both cases, a true understanding from
necessities is not obtained.
Organizations do not respond needs and opportunities of customers, blindly. Strategy of business provides a
framework to assess potential opportunities. Process of product definition is shown in figure3. This process
is started in left hand by injecting information from processes to search opportunities and research and
development. Then process is continued with steps to know customer‘s need bout new product. Primarily
gathering information makes coincided searches to identify potential of market, approval of technical
possibility or product and making competitive levels of performance of new product possible. These
activities should be tied together severely since situation and direction of any depend on another.
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Figure 3.Process of product definition
Various criteria can be mentioned that help us in doing true definition of product. The more precise and
rigorous these criteria are, definition of new product will be more precise, and consequently, the
probability of success of product development project will be more. The most important critical criteria
in definition of new product are:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Organizational support.
Understanding situation of rivals.
Technical assessment of risk rate.
Situation and position of product.
Understanding the legal restrictions.
Alignments with organizational strategy.
Understanding necessities of customer and user.
High-ranked management support.
Assessment of different alternatives of distribution channels.
Criteria of reconciliation and adaption in clear decision making.
7. IDEA MAKING (OPPORTUNITIES TO CREATE NEW PRODUCTS)
Figure 4 shows process to search opportunities to make a new product. In searching opportunities of product,
attention to technology, knowledge related to production and knowing stakeholders of product is very
important. Investigation of any one of aforementioned factors can give ideas good and aligned with strategy
of organization in affair of production or development of production to us.
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Figure 4.search of opportunities to make a new product
Research and development in existing knowledge and technologies, is one of required and necessary parts in
process of product innovation. In this end, existing and related knowledge and technologies are identified
and assessed by receiver antenna and considering factors like organization strategy, ability to absorb
knowledge, and …, we progress level of knowledge and technology of organization to make product. This
increases probability of success of project, too. Figure 4 shows a schema of this process. As shown in figure
5, research and development is started in knowledge and technologies with search of existing and related
knowledge and technologies. Candidate knowledge and technologies are obtained from 2 ways of search and
creatively using fundamental bases. Knowing desired strategic directions helps this work for an organization
and knowledge of necessitates of organization market helps to focus on a special product. Result of this
process is a series of knowledge opportunities and possible technologies that among them, the most
providential opportunities are chosen for more researches.
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Antenna of receiver of technology and existing knowledge
Organization strategy
Search and creation of knowledge and
technology
Necessities of
organization market
Possible
opportunities
Research and
investigation
Transfer of
knowledge
Approval of knowledge
or practical technology
Investigation of commercial
unit
Management of portfolio of knowledge and technology
Input to strategy of
organization
Figure 5.Research and development of knowledge and technology
8. MANAGEMENT OF PORTFOLIO
Management of portfolio is used to choose a portfolio of projects to develop new product/products that its
goal is to achieve maximum profitability or value of portfolio, making balance and support of strategy of
organization. In this process projects of innovation of product are scored and ranked as per clear criteria and
projects lacking possible minimums, are discarded. For each project, different criteria can be identified.
Assessors in product committee score projects and then, calculate score average in related report card uses
weight factors to calculate general score of project. Maximum weight score is 100 for any project. In figure
3, this method is shown.
Table 3.Scoring method to assess projects
Scoring method – project (A)
criteria
Score of
persons
A
… Z
Averag
e score
%
weig
ht
Weigh
t score
Strategic alignment
Suitability of product with organizational strategy
Levering axial competences: marketing , technical and
manufacture of product
Making balance in support of product among commercial
units , geographical areas and product group
Product advantage
Effective identification of customer‘s needs and its
placement in product
Making exclusive advantages by product and meeting
customer‘s needs better
Market attraction
Meeting criteria of market such as competitive situation
and customer‘s acceptance
Existence of opportunities of growth in market
Making competitive advantage in market with this product
Making exclusive advantages by product and meeting
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customer‘s needs better
Meeting an existing need in market or need that is made
easily
Technical justifiability
Product is justifiable, technically
We have required knowledge and specializations or can
obtained them
Gaps, complexities and technical risks are manageable,
sufficiently
risk
There is no obstacle
Risk and uncertainties are manageable and accountable,
effectively
Efficiency
Efficiency of investment than its risk is acceptable
Ratios of profitability
Ratios of profitability exist in meeting predicted
quantitative goals
Legal and legislative
It satisfies product , legal, security, health and
environmental polices
General score
Probability of success (%)
Process of portfolio management is started with a comprehensive commercial project that determines capital
rate, sources and expected sale of new product. Fore commercial units, products and types of development an
allocation process should be done based on commercial project. This allocation should allocate programmed
capital to commercial units, product group, markets, and geographical areas or to types of developments like:
technology development, platform development, and new products. After doing this work, an index of
portfolio is made that includes information related to portfolio. Method to choose portfolio is to use
development productivity index (DPI) or scores producing from scoring method. DPI index multiplies NPV
by probability of success and divides result by residue of cost of development. Thereby, projects that are
tending to be ended, gain more weights than projects with percentage of less progress. After that
organization extracts prioritized index of its portfolio, should determines that based on commercial plan and
programmed level of investment of existing sources , where is cut off point. Then, this subset of projects
with high priority should be analyzed more. In short, process of portfolio management can be defined in
form of figure 6.
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Figure 6.Comprehensive process of portfolio management
9. SUPPLYING RESOURCES
Existence of a process is necessary to allocate limited sources among demands that are in contradiction to
each other. These demands are made by projects of product innovation, researches of technology and market,
efforts of developing capabilities. Leadership team of product portfolio is responsible for detecting use of all
existing sources of product innovation and allocation of them to these demands. The most important sources
of product innovation are financial sources, technology and human force.
10. DEVELOPMENT OF PRODUCT
Process of design and development of product is started with information of product and plan of project and
then, orderly makes and documents knowledge related to detailed plan of product (how product works); key
suppositions made in product development and applied limitations on operation of product. Information
gathered by this process should be enough to continue cognition of product and support of operation all over
age of market of new product. If changes occur in future information gathered by process of product, efforts
to support improvement should be enough. Two–ways information flow exists among process of product
development and efforts of market development. A point that is important here, is that as development team
learns things about customer‘s needs and his/her requests, mostly he/she tries to change definition of product
that has a better performance; while change in definition of product in this moment in project will remove a
major percentage of engineering effort in product development, unavoidably. Design of new product should
be co- aligned with axial competences of company that makes competitive advantage of sustainability and
succeeds product, financially. These competences may include exclusive technologies of product, strategic
directions of business or distribution of product and support rate. Productive product is tested with - test to
assure authentication of function and facing public welcome.
In - test, product is supplied as pilot and in limited level until by receiving feedback from probable
problems of product, they can be solved before final supply.
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11. PERFORMANCE MANAGEMENT AND PROMOTION PROCESSES
This process seeks measurement and improvement of efficiency and effectiveness of innovation. Hence,
suitable measurements should be defined that detect performance and predict output all over process of
innovation.
11.1. Promotion Processes
Processes of promotion also confirm that innovation of a new product is not ended at the end of development
and company should still learn more things before new product can be supplied. Processes of effective
promotion do this learning quickly and effectively and institutionalize it. Promotion includes market making
and promotion of production.
12. MARKET MAKING
Process of market making makes information in sale market and approaches order rate to target level.
Primary response of customer to a new product provides organization with a vital opportunity that
understands how customer senses new product and uses it to meet his/her needs. Supply of new product and
its accompanied propagation massages will be based on suppositions that have been obtained in process of
development of market before. The given suppositions are tested during process of market making and their
credit or no credit will be clear. So, process of market making should include steps to measure this primary
response from customer, learning it and do required balances.in this end, the following questions should be
responded:







Have customers understood product and its benefits, truly?
Are suppositions of purchase patterns and criteria of decision making true and valid?
What features or benefits cause that customers say ―yes‖ to product?
What other uses of product are done by customers?
How organization can help customers that use product to meet their needs, efficiently?
Are there other products or features that customers may want them in future?
What action can be done to improve how to order?
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Also, those who have not accepted product should respond to the following questions:
 What factor has caused that they say ―no‖ to product?
 What options will be followed by them instead of this product?
 What changes will be turned out in project of their ―no‖ to ―yes‖?
In a process of effective market making, responses that are given to above questions, are gathered and used
to do reforms in operations of sale and advertisement. Also, above information are used to form followed
activity of new product, too. Figure 8 shows a graphic view of process of market making. This process is
started with types of different information that have been gathered during activities of development of
market. This input information can include: information of sale and education of after sale services,
strategies to make awareness in customer and projects to assess effectiveness of primary sale and activities of
after sale services. Market making is started with education of sale agents, brokers and personnel of after sale
services, to transfer knowledge of new product to them and prepare them to extremely effectively do their
duties.
Figure 8.Process of market making
After determination of sale project and its support channels, strategies are regulated to make awareness in
customer. Advertisements transfer important information through different media, about features of product
to target customers. These activities are done to make demand and customers‘ reaction to these activities,
will provide information that is vital to update sale predictions and increase precision.
This information can lead to do reforms in spread and propagation activities and even in pricing structures of
product. Assessment and reform activities should detect activities related to sale, precisely and then, do
required performance reforms quickly. Customers after receiving and starting use of product may have
questions about uses of product and organization should be able to respond these questions. Learning made
of activities of market making, adds information of product to collection. This information is very vital for
future activities of after sale services.
13. PROMOTION OF PRODUCTION
Process of Promotion of production removes any uncertainty or shortage of self-confidence that sellers,
brokers and personnel of after sale services may have it. If process of development is done completely, no
promotion will be required in production since all certainties are removed in development.
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Figure 9 shows a process of promotion of production. Primary projects and predictions provide scheduling
for activities to secure necessities and trigger production. Assessment of experiences made of this process
causes to increase knowledge that finally, leads to do required reforms. Meeting customers specifies
satisfaction rate of them from product. For example it specifies that whether product is reached to customer,
punctually and qualitatively? Do they satisfy from their purchase?
In addition primary assessment of products by sellers , shows reforms that are required in process of
purchase .for example it specifies that has quality been as expected ?sellers receive any feedback to reform
their process and place any learned teaching in set of information of product that is valuable for process .
Figure 9.Promotion of production
14. MEASURING AND IMPROVING PORTFOLIO PERFORMANCE
After getting enough feedbacks of processes of introduction of market and promotion of production,
balanced portfolio of productive products is assessed by commercial project that rate of achievement to goals
is measured. Figure 10 shows this process. In view of major required investments to develop new products
and related risks, portfolio management has been turned into an important tool to adopt strategic decisions
about development of product and investment of sources of organization. In many organizations, incomes of
current year have been based on new products developed during 1 to 3 recent years, majorly. So, decision
making about portfolio has a significant influence on interest of organization, and even survival of
organization in future year can depend on it.
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Year Year Year Year Year
5
4
3
2
1
Cost of project
Remained cost
Capital / non-capital
cost
Length of
investigated period
income/cost-saving
during period
Interest during period
Cost of production
IRR
NPV
R-Factor
Figure10. Measuring rate of goals
achievement
15. EFFECT OF GLOBALIZATION OF RESEARCH AND DEVELOPMENT ON PROCESS OF
PRODUCT INNOVATION
By developing technology of production, quick changes in business environment and shortening age cycle
of product, modern industries should do more efforts in development of technologies of their research and
development that can meet existing demands and reach success in performance of new product. Today, by
connecting events in national and over national levels and pressure of industrial developed countries,
globalization of research and development has occurred. Reduction of effectiveness of spent costs in research
and development in national level has caused companies have tended to outsourcing and secure a part of
their activities related to their research and development for effectiveness of costs from outside. Reaching
experience of scientific institutes and different technical environments can lead to growth of separate
scientific and technical cultures of any of institutes and releases innovation along lines as joint. Complex
inter-discipline nature of most of used research projects shows necessary need of service of researchers of
different fields like statistics, computer science, genetic, nanotechnology,. using technique of these
specialists in permanent work place with a fixed salary is not cost–effectiveness, costly; since sometimes and
considering conditions of market, strategy of market and scheduling of special projects has their used
specializations. Hence companies today have tended to outsourcing and external security of required skills in
research and development. Figure 11 shows cellular structure of a company in which any cell states assigned
duty to a product or service. Total effect of outsourcing/external security of productions, services, research
and development with re-organization of duties by taking cells as basic independent units forces structure of
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company to be changed. Any of single cells can be separated from matrix structure of company and
transferred to another place. For example based on figure 11, test of product W can be done outside
boundaries of organization.
Re-definition of duties in new structure shows that horizontal lines of matrix are floodable and changeable,
and so future of innovative companies can be imagined as a cellular structure that is different from
consolidated and multi-segmental organized structures. Single cells are placed in places that accompany
maximum interest and benefits are. Generally it can be said that a competitive company, indeed is a company
that can use this approach and analysis for maximum number of organizational cells, change them and then,
re–array them and transfer them to global scale.
Figure 11.Organization with cellular structure (c-form)
One of points that are important in innovation of product is forming innovation team of product from
different fields. By not taking globalization of R&Ds, role of these teams finds dual importance. These teams
should be composed of people with different specializations that this increased number of people of team and
can lead to reduce speed of innovation and increase cost of human force. as it was said some specialization
are used less along process of innovation of product that of course that little value may be vital for success
of innovation. So a remedy should be thought that quality and effectiveness of product innovation are kept
and costs and speed of innovation of are optimized. Hence by taking cellular structures for innovative and
modern organizations and also globalization of research and development, it is recommended that
organizations focus on their main moved force that has taken as their strength and in process of product
innovation, if necessary to other specializations, take outsourcing or external security. In this case costs of
innovation of product are reduced and speed and quality of innovation are increased due to being specialized
and permanent of forces of R&D. (Bullinger, 2003)
16. CONCLUSIONS
In this paper a general model was provided for innovation of product in guerilla marketing that is a mixture
of models of product innovation and strategic management. These processes are used together to maximize
efficiency of shareholders and other stakeholders with identification, investment and management of the best
portfolio of project of product innovation. previous models of product innovation, either typically
accompanied with defects like insufficient level of details, lack of arraying capability, lack of practical
evidences, no use of tool of strategic management in product innovation and lack of support of information
technology and communications that provide in model, it was tried that above defects are removed as much
as possible.

One of important defects of model is dynamics and existence of feedback system in model itself, that
by changing any of steps, other steps are updated in following it. Also in following of paper,
investigation of effect of globalization of research and development was done on innovative
process of product and organization. In this investigation, it was clear that organizational structure of
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


innovative companies in future will go toward dutifully–cellular structure that in which, any house
states assigned duty to product/service. In this structure, any of duties can be secured from any point
of the world that has the best quality with reasonable cost that this will cause to improve
performance of product innovation and its more effectiveness.
Growth of business is due to leading reserves to the most favorite economic activities and
organization should choose their aim as expanding Communications Range in market by placing
this problem as criterion and this is owe to constant contact with customers and provision of quality
services to them. These are managers and staff of organizations that help augmentation of face of
company in customer‘s mind and by making satisfaction, make a path to transfer and convert
produced knowledge in their institutes to different types of profitable and long term business
activities.
Carrying out research activities and development necessarily does not mean being pioneer in
product technology and principally, most of organizations do not follow such dangerous strategy.
Some organization that have technological capability of strong execution management and enough
financial facilities; in strategy of research and development, follow development a new product and
use of environmental opportunities as pioneer.
Invasive strategy requires extensive use of the features and functionality that many organizations are
not able to provide it. So many companies search new technology and Copyright, with defensive
strategies of them. These companies have more ability in marketing and production than research
and development, in practice. Defensive strategy has less risk and cost but is not necessarily
executable, technically. Success of defensive strategy is provided with high capability in reverse
engineering processes and copying. Organizations that follow this strategy should have capability to
do this process quickly that obtains their given portion of market. Emergence of revolutionary
innovations, patent of invention and copyright are form obstacles to adopt this strategy. However
many organizations, especially industrial organizations of third world have to adopt such defensive
strategy in field of research and development. So knowledge of nature and mechanisms of this
strategy should try to at optimize their own. Research and development activities may involve
product development and process development. In conditions that strategy of organization focuses
development of new products unit of research and development tends projects in field of product
development. In case that strategy of organization is to keep existing products and production with
higher quality and more economy of them, unit of research and development tends to projects
focusing on production process. Investigations unit can construct basic practical and developmental
researches.
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17. SUGGESTIONS FOR FUTURE RESEARCH
According to the new issue, especially in the country, particularly the issue of coordination model of product
and process innovation strategy in guerrilla marketing, work in this area is a mix of me many opportunities
for scholars, attractiveness and more usage of following issues however regard to the researcher starting a
series of comprehensive research and innovation are helpful:
- Model innovation strategy effectiveness (fit indices measuring the performance depending on the types of
innovation strategies).
-―CVF‖ implementation stages of new product development strategies implemented with the proposed
innovative strategies at each stage of the life cycle .
- Implementation Life Cycle (organization, industry or product) with different innovation strategies
- Provide a strategic plan based on the type of guerrilla marketing innovation.
It should be mentioned that this type of research can be considered as a new domain name.
A comprehensive research program is needed in the country, and the author hopes that the program will be
developed in the not too distant country.
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