OF THE UNIVERSITY OF PETRO ȘANI ∼ ECONOMICS ∼ VOL. IV UNIVERSITAS PUBLISHING HOUSE PETROȘANI – ROMANIA 2004 ISSN 1582 – 5949 EDITOR OF PUBLICATI ON… [615775]

ISSN 1582 – 5949

ANNALS
OF THE UNIVERSITY OF PETRO ȘANI

∼ ECONOMICS ∼

VOL. IV

UNIVERSITAS PUBLISHING HOUSE
PETROȘANI – ROMANIA

2004

ISSN 1582 – 5949

EDITOR OF PUBLICATI ON

Prof. Eng. Io an-Lucian BOLUNDU Ț Ph.D.
e-mail: [anonimizat]

ADVISORY BOARD

Prof . Eng. Ec. Ioan AB RUDAN P h.D. – Technical University of C luj-Napoca , Romania; Prof.
Eng. Ec. Ionel BARBU Ph.D. – „Aurel Vlaicu” Unive rsity of Arad, Romania; Prof. Ec.
Victoria BĂRBĂCIORU Ph.D. – University o f Craiova, Romania; Prof . Ec. Const antin
BÂGU Ph.D. – Econom ic Studies Academy, Bucha rest, Romania ; Prof. Ec. Sorin BRICIU
Ph.D. – „1 Decembrie 1918”University of Alba -Iulia, Romania; Prof. Ec. Anișoara C APOTĂ
Ph.D. – „Tra nsilvania”University of B rașov, Rom ania; Prof. Ec. Dorin COSMA Ph. D. – West
University of Timișoara, Romania; Prof. Ec. Ioan CO SMES CU Ph.D. – „Lucian Blaga”
University of Sibiu, Romani a; Prof . Ec. Horia CRISTEA Ph. D. – West Uni versity of
Timișoara, Romania; Prof . Ec. Ioan Constantin D IMA Ph .D. – „AR TIFEX” University o f
Bucha rest, Romania ; Prof. Ec. Mariana MA N Ph.D. – University o f Petroșani, Romania;
Assoc. Pr of. Mat. Ec. Ilie MITR AN Ph.D. – University of Petroșani, Romania ; Prof. Ec.
Dumitr u O PREA N Ph.D. – „Babeș-Bolyai” Uni versity of Cluj-Napoca , Romania; Prof.
Oleksandr ROMA NOVSKIY Ph.D . – Natio nal Tech nical Un iversity o f Kharkov, Ukraine;
Assoc. Prof. Ec. Aurelia-Felicia STĂNCIOIU Ph. D. – Economic Studies A cadem y,
Bucha rest, Rom ania; Prof. E c. Lász ló TÓT H Ph.D. – University of Mis kolc, Hungary.

EDIT ORIAL BOARD

Editor -in-chie f:
Prof. Ec. Mar iana MA N Ph.D. – University o f Petroșani, Romania

Associate Editors:
Lecture r Ec. C odruța DURA Ph.D. – University o f Petroșani, Romania
Lecture r Ec. Claudia ISAC Ph.D. – University o f Petroșani, Romania
Assist. Prof. Ec. Em ilia MIHĂILĂ – University o f Petroșani, Romania
Assist. Prof. Ec. Alin MO NEA – University o f Petroșani, Romania

Editor Secretary:
Assist. Prof. Ec. Imola DRI GĂ – University o f Petroșani, Romania

Edito rial offi ce address: University of Petroșani, 20 University Street, Petroșani, 33 2006,
Romania, Ph one: (40)254/542.994, 542 .580, 542 .581, 543.382, Fax: (40)254/543.491, 546.238 ,
Telex : 72524 univp, E-m ail: imola_dri [anonimizat].

Annals of the University of Petro șani, Economics, 4 (2004) 3

Contents

Pag
Babucea, A.G. Statistical methods for time series and panel data analysis
Baron, M.; Dobre-Baron, O. The contribution of the „Romanian Bank” to the
„nationalization” of the coal companies in the Jiu Valley
Biber, E. Foreign investments in modern economic activities
Boncea, A. Elements of market economy build-up strategy
Bușe, F. The effect of knowledge on the economic growth
Cîrnu, D; Todoru ț, A. Types of strategies in the field of quality
Cosmescu, I; Cosmescu, D. Service market – the real form of existence for
exchange relations
Cucu, I. Considérations sur le contrôle en marketing
Dima, I.C. The history of EURO
Drigă, I. Means of reducing credit risk
Dura, C. Considerations upon sales force management
Fleșer, A. Characteristics of eco – systemic management
Flităr, M.P. Current trends in social responsibility and ethical standards in
services marketing
Ghicajanu, M. Strategic planning and managerial control
Ghicajanu, M.; Semen, M . Break-even analysis of the enterprise at one
product level
Irimie, S.; Munteanu, R.; Matei, I. Closure of mines. Problems regarding the
environment and the investment efficiency within the context of
environment protection and rehabilitation in Jiu Valley
Isac, A. Aspects regarding file operating systems used in management
Isac, C. Consideration of decisional environment on an international scale
Ivănuș, L. Country risk rating – importance and methodology
Koronka, A.; Dumbrav ă, G. Eminescu and protectionism
Magda, D. Aspects regarding regional disparity reduction policies
Man, M. The structure of expenses and revenues according to International
Accounting Standards
Mihăilă, E. Some aspects about the administration accountancy’s history
Mihăilă, E. Considerations about exporting ware in commission
Mitran, I. About some decisional optimum models of the consumer 5
13

27
31
37
45
51

55
63
69
75
83
89

95
99

105

113
117
125
133
139
147

151
155
161

4 Annals of the University of Petro șani, Economics, 4 (2004)

Molnar-Siposne, T. Analysis of documents representing environmental
awareness in company management
Monea, A. Some aspects of inventory held for sale using statements of federal
accounting Standard no.3
Munteanu, R. Qualifizierung und vermittlung für eine dynamische arbeitswelt
Nedelea, A. The tourism market in Romania
Popeangă, V.; Vătuiu, T. The necessity of achieving the internal audit of the
public bodies
Popescu, M. L’evaluation de l’excedent ou du deficite budgetaire
Preda, M. Informatic system of financial management
Radu, S. Considerations about the strategic outlook on the quality
management of the Romanian high schools
Radu, S.; Dolea, G. Considerations for the mining activity analysis through
the output theory
Răscolean, I. Deontological code of the internal audit
Semen, M. Zur frage der möglichkeit der anwendung der
produktionsfunktion von gutenberg für das studium von
produktionssystemen im bergbau
Silivestru, T.; Dobre-Baron, O. Suggestions regarding financial resources
solutions to credit Romanian agriculture
Silivestru, T.; Dobre-Baron, O. Suggestions regarding the part played by
agricultural credit on mortgage in the foundation of viable
agricultural exploitations inRromania
Slavici, T.; Bivolaru, D. Benutzung der artifiziellen ne uronalen netz (ann) im
konkurs voraussehen
Slavici, T.; Bivolaru, D. Anwendung der artifiziellen ne uronale netz (ann) zur
aktienmarkt der nikko börsesystem
Slusariuc, G. Comparative analyse of the SMEs from Romania and European
Union
Szasz, M. New tendencies in public administration development
Toma, C. Possibilities of improving omniasig activity efficiency
Vătuiu, T. Overview of the administration of oracle databases with
application in the budgetary section 177

185

189
191
197

203
207
223

231

241
245

253

263

271

277

283

289
295
297

Annals of the University of Petro șani, Economics, 4 (2004), 5-12 5

STATISTICAL METHODS FOR TIME SERIES AND
PANEL DATA ANALYSIS

ANA-GABRIELA BABUCEA *

ABSTRACT: Analysis of time series and panel data is a very large area of
methodology. In this brief presentation of these classes of models, I am exchanging depth for
breadth in an attempt to point particular types of models that may need to investigate further in
doing empirical work.

KEY WORDS : time series, panel data, methods, hazard models, Cox regression

1. BASIC PROBLEMS THAT TIME SERIES PRESENT

I’ll start with some basic terminology that’s relevant to longitudinal data
because the term ‘longitudinal data’ implies that one has panel data, that is, data
collected on multiple units across multiple points in time. Time Series typically refers
to repeated observations on a single obser vational unit across time and Multiple Time
Series means multiple observational units ob served across time. This can also be
considered a panel study, although the usag e often differs depending on the unit of
analysis. Generally, micro data is cons idered panel data, while macro data is
considered time series data. Multivariate Time Series means there are multiple outcomes measured over time. A Trend is a general pattern in time series data over
time.
There are really very few differences be tween the approaches that are used to
analyze time series or panel data and the basic linear regression model. However, there
are four basic problems that such data present:
1) Error correlation within units across time . This problem requires
alternative estimation of the linear model, or the development of a different model.
2) Spuriousness due to trending . When attempting to match two time series, it
may appear that two aggregate time series with similar trends are causally related,
when in fact, they aren’t.

* Prof., Ph.D. at the “Constantin Brâncu și” University of Târgu-Jiu, Romania

6 Babucea, A.G.

3) Few units . Som etimes, ti me series da ta are relative ly small. When dealing
with a single time seri es, we often have relatively few measure ments. This makes it
difficult to observe a trend.
4) Censoring . Althoug h our power to exam ine relationships is en hanced with
time serie s and panel data , such data p resents it s own problems in ter ms of ‘ missing’
data.

2. TIME SERIES MET HODS

2.1. The First Differen ces Approach
As a fir st effort to eli minate auto-corre lated errors, and to pro duce stationarity
in a ti me series, we can use the firs t differences approach. In that approach, we
compute . ttyty y ∀−−= , 1*
We also difference the covariates. Then , we can be conducted on the new data
(which has ). We can repe at the differe ncing approa ch if necess ary. 1*−=n n

2. 2. Autoregressive ( AR) and Moving Average (MA) Models
Rather than using difference m odels, we can simply specify structure for the
error ter m. A flexible models’ class that do so ar e Autoregressi ve-Moving Average
Models (ARMA). Ty pically, we first construc t an autocorrelation plot, which is a plot
of the autocorrelation of the data (or errors , if a model was previously specified) at
various lags. The function is computed:

()()
()∑− −∑ −−−
=2) ( θθθθθθ
tLmLt tm
LAC (1)

where m is the num ber of time series data points a nd L is the num ber of lag s. The
shape of this function acr oss L often tells us what ty pe of m odel we need. For
exam ple, if the plot shows an exponential decay of the autocorrelation across lags, an
AR(#) model is needed in which # tell s us the number of lagged terms to incl ude to
reduce the autocorrelation to no nsignific ance.
An AR(1) model sim plifies the error c ovariance matrix for GLS es timation by
deco mposing the original OLS error term into two com ponents: . Here
the error at o ne time point is si mply a function of th e error at the previous time point
plus a random shock at time t(v). Higher order AR models are obtained b y allowing the
error to be a function of errors at lags >1. tvt t+−=1ρεε
Typically , autoregressive models are estimated by incorporating a lagged y
variable into the model. So long as the absolute value of the coefficient for the lagged
term(s) does not exceed 1, the series c an be considered stationary . An MA[1 ] model
specifies structure on the r andom shock s: . tvtvt+−=1σε

Statistical methods for time series and panel data analysis 7

As with the AR models, h igher or der MA models can be obtained b y adding ad ditional
lagged ter ms. Moving average models are more difficult to esti mate than
autoregressive models, however, becau se the e rror ter m depends on the coefficients in
the m odel, which, in t urn, depend on the error.

3. METHOD S FOR PAN EL DAT A

Econom ists and demographe rs often deal with aggregate time series.
Sociologists and others often deal with tim e serie s in the con text of panel data:
repeated measures on m ultiple indivi duals across time.
Panel data approaches real ly aren’ t diffe rent from other time serie s approaches,
but certain models have beco me more popular for soc iologists.

3.1. Event hi story, haz ard m odels, and Cox regression
Event history m odels ar e useful when we have a particular dichoto mous event
(e.g., m ortalit y, marriage, etc.) that we are interest ed in m odeling. If the ti me units in
which the respondents ar e measured for the event are discrete, we can use ‘discrete
time event history methods; ’if the time units are continuo us (or very closel y so), we
can use ‘continuous tim e event histor y methods.’
When tim e units are discr ete, the dichotom ous event of interest naturally puts
us into a logistic or probit modeling fram ework, since the outcome variable is no
longer contin uous. However, we shouldn ’t simply model the dichotom ous outcome,
because w e lose information that is rele vant to the timing of the e vent.
Thus, the pri mary adaptation that these me thods require is the construction of a
unit-tim e dat aset. Every unit is treated as multiple observations, one for each year (or
other time u nit) the unit was observed until s/he experienced the event. If the
indivi dual never experienced the event, then the indi vidual is ‘right censored,’ but this
is not a prob lem. For example, consider a panel stud y with waves in 198 1, 1992, 1997 ,
and 2002. Suppose we were interested in study ing mortality. In that case, we would
give every in dividual up to 22 person-re cords.
The dependent variable would be a “die d” du mmy variable, which would take
value 0 for all person-y ear records until the year in which the individual died. And, if
the respondent didn ’t die during the ti me peri od, sh e/he takes a ‘0’ value on th e d.v. for
all 22 years.
For a person who does di e, at the poi nt of death, the indivi dual would take
value 1 on th e dumm y variable, and no additi onal per son-year reco rds would be added
for that indiv idual. Say we had an indi vidual who d ied in 1995 and who was 65 at
baseline. That person woul d contrib ute the following records to the data:

8 Babucea, A.G.

ID Year Age Died
1 1991 65 0
1 1992 66 0
1 1993 67 0
1 1994 68 0
1 1995 69 1

Someone, on the other hand, who died in 1982 and was 76 at baseline would
contribute:

ID Year Age Died
1 1991 76 0
1 1992 77 1

If we extrapolate this, y ou can i magine exa mining the mean of the ‘died’
dumm y variable for every age (or other va riable) would gi ve yo u a measure of the
‘hazard’ for dying at each age (notice , by the wa y, how the time-vary ing covariate
‘age’ was in cluded in the model – any time varying variable can be included in this
fashion).
More correctl y, it would be a measure of the probability for dying at each age,
but as the ti me interval s became narro wer ( say they were in day s rather than y ears),
this probability becom es a hazard:

ttto survivedt tandt betweendiesp
t ∆∆+
→∆) | (
0lim (2)

When the time periods b ecome very close together, we often use continuous
time hazard m odels. Most continuo us time hazard m odels speci fy a param etric fo rm
for the ‘baseline hazard,’ which is the hazard for individuals with covariate values of
‘0’ on all variables.
Generally , we use either the exponent ial hazard (b aseline hazar d is linear
across ti me: ) exp()( βX th= or the Gom pertz (baseline hazard increases exponentially
across ti me: ) exp()( ct X th + =β . (There are other sp ecifications, Weibull:
))ln( exp()( t ct X th ⋅+ =β . Someti mes specification of a hazard is difficult, because the
param eterization is no t quite right.
Cox regressio n is an approach that does not require specification of a bas eline
hazard function. So long as the hazards are pr oportional across lev els of each co variate,
and there ar en’t many ‘ties’ in the data the model works well (tie s are simultaneous
occurrences o f events). Of course, one could simply specify a discrete ti me logit model
and use dumm y variables to capture the nonl inearity in the baseline hazard. The basic
discrete ti me model can be extended to handle m ultiple types of events via use of the
multinomial logit or m ultinom ial probit models. Repeated events can also be handled,
although such is beyond the scope of this discussion.

Statistical methods for time series and panel data analysis 9

3. 2. Fixed Effects, Rand om Effect s, Growth Cu rve Models
The discrete and continuo us tim e mode ls discussed above have two prim ary
limitations/shortcom ings. One is that we must deal with a dich otom ous (or possibl y
polytomous) event. If w e are interest ed in something other than an event ( income
trajectories), we must move to other types of models.
The other sh ortcom ing is that autocorr elation of ob servations (or unobserved
heterogeneity) is ignored. There may be fact ors within in divid uals that differentiate
them from other individu als but are not picked-up in the models discussed above
because we have ignored t he fact that th ere are multiple observations per person.
A sim ple method t o captur e some of this heterogeneity is to inclu de a dumm y
variable in the model for each individua l (except for one, of cours e). This approach is
called a ‘fixed effects’ model and is eq uivalent to subtracting indi viduals’ scor es fro m
their own m ean and conducting OLS regression.
We can i magine data on a n observation ( i) for two time points, with one fixed
covariate ( x) and one tim e-vary ing covar iate (z):

)( ]1)[( 002 10110
ε γεγββεγββ
fitzitz fidifYitzixitYitzixitY
+−− ++=+−++=−+++=
(3)

The intercept term and the fixed covariates drop from the model. We ty picall y
don’t do this subtraction, especially since with multiple times of observation i t isn’t
clear how we would.
Thus, if we include a dumm y variable for each individual, we capture the
indivi dual’s mean on the outcom e variable a nd the effect of the fixed covariates that
have drop ped from the model above wi thout doing the subtraction. This highlights a
limitation of the model: when we use a fi xed effects model, we cannot use an y fixed
covariates in the model. The effects of such covariates cannot be id entified
independent of the indi vidual-level dumm y’s effect.
A second limitation of this approach is that the results are no longer
generalizable, because the dumm y coefficients are unique to the sam pled individual –
we cannot make inference about the fixe d effects.
As an alternative, we may use a ‘random effects’ model. In order to understand
the random effects m odel as distinct from the fixed effects model, we need to think
from a B ayesian perspect ive. A fixed e ffects model specifies no inform ative prior
distributio n (thus a unifor m prior) on t he fixe d effects. A random effects model, on the
other hand, specifies an informative prior on the random effects. The inclusion of the
inform ative prior allows u s to identify the e ffect of fixed covariates distinct from the
random effect, thus allowin g us to i nclude fixed covariates in the model.

10 Babucea, A.G.

The m odel al so allows generalizable in ference, becau se the random effect s are
realizations from a probabilit y distributi on. Th e drawbacks to the m odel are that a) it is
more co mplicated (although m ost pack ages est imate them ) and b) the random effects
cannot be cor related with any of the regr essors in the model. [On a technical note, m y
understandin g is that they in fact can be correlated in the post erior, but cannot be
specified a priori for being correlated wit h other variables. ]
Someti mes simply capturing individual di fferences i n the mean of an outcome
variable is not sufficient—individuals may vary in their trajec tory of the outcome
variable over time as well. In addit ion to inclu ding a random intercept term for an
indivi dual, w e can also include rando m slopes. This gives rise to random effects
models with random intercepts and slopes, and, b y another name, a growth curve
model. A growth curve m odel can be specified as foll ows:

(4)
⎥⎥⎥⎥
⎦⎤
⎢⎢⎢⎢
⎣⎡
⎥⎦⎤
⎢⎣⎡
⎥⎥⎥⎥
⎦⎤
⎢⎢⎢⎢
⎣⎡
⎥⎥⎥⎥
⎦⎤
⎢⎢⎢⎢
⎣⎡
+ =
keee
ktftftf
kyyy
M MMM21
)( 1)2( 1)1( 1
21
βα

(5) ⎥⎦⎤
⎢⎣⎡
⎥⎥⎥⎥
⎦⎤
⎢⎢⎢⎢
⎣⎡
⎥⎥
⎦⎤
⎢⎢
⎣⎡
⎥⎦⎤
⎢⎣⎡
⎥⎦⎤
⎢⎣⎡+ +=
βζαζ
βγβγβγαγαγαγ
βµαµ
βα
421
2 12 1
xxx
jx x xjx x x
M LL

In equation 4, the errors for the time (k)-specifi c outcome meas ures ( y) are
assumed to be normally -distributed random noise wi th mean vect or 0 and covariance
matrix   can be dia gonal (im plying e i and e j are uncorrelated ∀i≠j), or it can
incorporate additional sources of unmea sured heterogeneity (via er ror correlations).
For a linear specific ation, f(t) m easure s the distance from baseline (in years,
months, or ot her units), wi th t1=0 (so f(t) ≡t).  and  are considered to be nor mally
distributed with mean ve ctor []T
βµαµ, and covariance matrix  . This equation thus
models variabilit y in individual trajectories around the mean trajectory for the
(sub)sam ple. This variability (heterogeneity ) can be then m odeled at a second level, by
allowing []T
βµαµ, to be a function o f covariates/p redictors.
Equation 5 provides us this half of the m odel. In this equation, t he mean vector
has been dec omposed into an adjusted mean and a linear co mbination of covariates [x1
x2 … x j]T ,which are, in thi s case, assu med to be m easured without error.

Statistical methods for time series and panel data analysis 11

The second l evel error vector, []T
βµαµ, , is assumed to have a 0 m ean vec tor
and a cova riance matri x , which repr esents unexplained between-individual
heterogeneity. These m odels can be esti mated using standard structural equation
modeling software. If the covariates/p redictors are allowed to contain m easurement
error, then the full latent variable model presented by Bollen (1989) can be used.
Below, in figure 1, is a graphic depicti on of a growth curve model. Errors of
measurement are not included in the path draw ing, due to space constraints, bu t they
are included in the m odels.

Figure 1. Pa th drawing a nd Graph of Univariate Latent Growth Curve

The growth c urve m odel and the ran dom slopes model are virtually identical,
even thoug h different notation is used.

) 1000,0(~0),0(~),0(~)2, (~
NNiNiti iNity
αβτββαταασβα+
)001,.001(. ~)001,.001(. ~)001,.001(. ~2) 1000,0(~0
IGIGIGN
βτατσβ

This model say s that y for the i-th indi vidual at time t is norm ally distributed
with a mean equal to an individ ual-sp ecific random intercept plus an indi vidual-
specific r andom slope, and a variance. The second level equations specify the structure
of the indi vidual-specific random inter cepts and slopes. The overall means for these
random effects are given v ague h yperpri or dist ribut ions, as are all of the varianc e terms
in the m odel.

12 Babucea, A.G.

The structure placed on t he random effects in the second-level equations
allows the eff ect of fixed c ovariates to be identified. Covariates c an be included at any
level of the m odel; if they are include d in the second level equations, then th e model is
practically identical to the growth curv e above (except in the gr owth curve model, we
gave the second level param eters a bivariat e normal distributio n – we could do that
here as w ell).

REFERE NCES:

[1]. Grenande r U. – Statistical Analysis of stationary Time Series, Almqvist & Wiksell,
St ockholm, 1996;
[2]. Klein L. R., Young R. M. – An Introduction to Econo metric Forecasting and Forecasting
Model, Lexington Books, New Yo rk, 1982
[3]. Tertisco M., Stoic a P., Popesc u T. – Modelarea si predictia seriilor d e timp, Editura
Academ iei, 1985

Annals of the University of Petro șani, Economics, 4 (2004), 13-26 13

THE CONTRIBUTION OF THE „ROMANIAN BANK” TO
THE „NATIONALIZATION” OF THE COAL COMPANIES
IN THE JIU VALLEY

MIRCEA BARON, OA NA DOBRE-BARON *

ABSTRACT: The paper is an attempt to point out the role of a series of Romanian
financial and credit institutions in the transfer of certain industrial compan ies, and in our case
of mining companies from the property of foreign capital into property of the Romanian capital.

KEY WORDS : Romanian Bank, „nationalization”, inter war-period, The Jiu Valley,
mining companies.

The problem of „nationalization” was dea lt with in detail in a previous paper1,
in which we tried to point out the role of the Romanian capital in such an enterprise.
The respective research reveals the importance of the „Banca Românească” =
„Romanian Bank” in the stimulation and co mpletion of this process. The present study
is an attempt to motivate the statement ma de above and the show that the „Romanian
Bank” successfully carried out its role as a „managing”2 bank of the „Consortium” that
was trying to put into practice one of the directions required by the bilateral concept
„Through ourselves” and by the realities of the Romanian society after the Great
Union. We shall deal strictly with the „nationalization” process, without overlooking the fact that the „Romanian Bank” was to continue its presence in the life of the companies to whose setting up it had contributed.
In the inter-war period, the Jiu Valley continues an activity begun after the latter half of the XIX
th century, and the investments made by the Hungarian, Austrian,

* Assoc. Prof., Ph.D. at the University of Petro șani, Romania
Assist. Prof. at the University of Petro șani, Romania
** Transleted by Lecturer Dumbrav ă Gabriela at the University of Petro șani, Romania
1 M. Baron, C ărbune și societate în Valea Jiului (perioada interbelic ă), Editura Universitas,
Petroșani, 1998, p. 131-149.
2 The term used in the period was „directrice”

14 Baron, M .; Dobre-Baron, O.

German, and French capital constituted to expl oit the rich brown coal resources of this
coal basin we re a solid basis for an expanding econom y.
There were mainly com panies constitu ted in time, namely „Salgótarján”
Company, which, since 1 895, had been exploi ting the m ines Petrila, East Petro șani,
West Petro șani, Dâlja, An inoasa and Vulcan Group ( mines: Dr. Chorin, East, West);
„Uricani – Valea Jiului” Com pany, created in 1892, which exploited the Lupeni mines:
North, Ștefan, Ileana, Victoria, Carolina; bot h the se co mpanies were cr eated with
private capital and had owned, since 1903 an equ al share of the „ cuxas” of „ Valea
Jiului de Sus” Co mpany, created in 1895 an d exploiting thre e coal perimeters at
Vulcan. The state w as exploiting, through „ The State Mines Lonea”, coal peri meters in
Lonea, Ci mpa and Jieț.
After the Gr eat Union, the leadership of the Rom anian State, together with
politicians and specialists, was in favour of a new management of the countr y’s
resources, an d thus, the problem of the owne rship and manage ment of useful ores w as
very much debated, in search of solutions for its solving. In t his sense, the legal
process of t he first y ears in the inter-w ar period creat ed the fra mework for the
„nationaliz ation” of the assets owned b y foreign capital, especi ally by the enem y3, for
the transformation of mining enterprises into anonym ous Ro manian co mpanies with
mainly Rom anian capital and m anagement4, and for a better manag ement of the state’s
asset s by selling som e of its enterprises5.
This approach to reality was to affect the Jiu Valley as well, and, after the
Great Union, we witness a reorganization of it s management and pr oduction
structures6; new mining com panies are set up, th us continui ng an activit y begun
previously , but under new manage ment, whic h better represents t he interests of the
Romanian c apital and society ; at the sa me ti me an entirely new com pany is cr eated and
there are minor atte mpts to m ine outside these co mpanies.
The transformations of the Jiu Valley after the Gr eat Union took place mostly
due to the im plication of t he Romanian capital, especially of the liberal one, gr ouped
around t he „Ro manian Bank”.
The „Romanian Bank” (1911- 1948)7 was to play a major role in the
developm ent of the Rom anian bankin g system before and after World War I and in the

3 C. Ham angiu, Codul gener al al României, vol. XI–XII, 192 2–1926, p. 3–20, p. 617–672.
4 Ibidem, p. 626– 627.
5 Ibidem, p. 610– 617.
6 Problem also ap proached by L. B áthory, Contribuția industriei ca rbonifere la dezvoltarea
social-economică a Româ niei între 19 19–1929 (Ph.D. Thesis) , Cluj -Napoca, 1981 , p. 31–53;
Costin Murg escu, N. N. C onstan tinescu, Rad u Paul, Constanța Bogdan, M. Ștefan, Contribuții
la istoria cap italului străin în Româ nia, Editura Acad emiei, București, 19 69, p. 140–144.
7 About the „R omanian Bank” see: xxx, Monografia „Băncii Românești” (1 911–1920),
Atelierele Grafice „Tiparul Rom ânesc”, Bucure ști, 1921; Pant. M. Sitescu, Banc a Ro mânească
1911-1936, București, 19 37; I dem, Băncile co mercia le, in vol. Enciclopedia României, IV,
Imprim eria Națională, Buc urești, 1943, p. 549-580; R. Ionescu, Fondul Banca R omânească S.A.
(1910–1951), Revista Arhivelor, V, 1962, nr. 1, p. 148–160.

The contribut ion of t he „Romanian Bank” to the „na tionalizati on” … 15

ensuring of financial and will resources necessar y to apply the liberal concept
„Through our selves”.
Founded in December 1910 and operational startin g with 1911, the bank was
set up by 23 persons – am ong whom B.M. Missir, dr. C. Angelescu, dr. C.
Cantacuzino, C.C. Arion – who provi ded the entire social capital of 17, 5 m illion lei8.
The bank i ntended to „ facilitate and guid e the participation of the Romanian
capital to the developm ent of commer ce, industr y and all kinds of enterprises, as well
as to provide credits for the banks fou nded with R omanian capital” (art. 2 from the
Statutes)9 and to „take part in the setting up of commercial and industrial companies”
(art. 16, alin. b. from the Statutes)10.
The bank will extract its own resources necessar y for the application of a
polic y adequate to its obj ectives fro m its so cial cap ital and financial rese rves, as well
as fro m the c redits obtained from the N ationa l Bank of Romania, deposits and current
accounts11.
With these r esources, as early as 1914, t he „Romanian Bank” will get involve d
in the foundat ion of num erous industrial , comme rcial and financial co mpanies, and this
polic y will be stressed aft er the Great Un ion in 1918. This polic y was doctrine – based,
as it was considered that t he „Romanian Bank” , as an im portant fi nancial institution of
the countr y, is meant to encourage and facilita te the p articipation of national factors to
all the branches of economic activities, in solid arity with the perm anent interests of the
state, in order to ensure o ur econom ic independence”; that „a big institution shoul d
adopt its econom ic policy to the per manent interest s of the state where it liv es” and
„avoid being a party tool ”; that a big fina ncial in stitution „ doesn’t perform direct
exploitation, either industrial, co mmercial, or agricu ltural, but confines itself to the
financing of such activities”; that „the experience of our comme rcial and industrial
developm ent shows that a big ban k has the role to create and nationalize the economic
life, especiall y in the freed regions … bringing to life different credit institutes”; and
that „ in the setting u p of new co mmercial a nd industrial co mpanies, the „ Romanian

8 R. Ionesc u, Op. cit. , p. 14 9–150; The General Direction of the State Arc hives, Bucharest
Bran ch, The „Ro manian B ank” Fund. Inventory, f. 1 (From now on, Fond „Ban ca
Românească”).
9 „Banca R omânească”, Statute, Atelierele Grafice „Anu arul g eneral”, B ucurești, 1914, p. 3 .
10 Ibidem, p. 5.
11 The cap ital g rows con tinuously: 1 912 – 26250000 lei; 1 916 – 60 mil. le i; 1920 – 160 mil. lei;
1921 – 200 m il. lei; 1922 – 280 m il. lei; 1938 – 350 m il. lei; 1941 – 500 m il. lei; 1942 – 625
mil. lei ( Fond „Ban ca Românească”. Inventar , f. 1; Fond „Ba nca Român ească”. Secreta riat,
Dos. 1/1928–1938, f.f.); the stock fund grows f rom 1237583 lei in 1912 to 2390379 lei in 1 914,
75099251 lei in 1920, 11 9646 001 lei in 1924 etc. ( Ibidem, Dos. 1/1928-1938, f.f.); interest at
B.N.R. raised at 17397722 lei in 1911 and 197486027 lei in 1920 (R. Ionescu, Op. cit, p. 155);
deposits w ere of 697 89043 lei in 1912, 114545637 lei in 1914, 810508470 lei in 1920,
1257443232 lei in 1924 (Fond „Ban ca Românească”, Loc. cit.).

16 Baron, M .; Dobre-Baron, O.

Bank”, as a big instit ution, m ust preserve its national character, even when foreign
capital partici pates to it”12
The report of the Managing Board to the extraordinary general asse mbly of
Dece mber 21 , 1919 showed that the polic y regardi ng consortiu m participation h ad
materialized, up to that m oment, in the i nvolvem ent of the bank in the foundatio n of a
number of 18 industrial, c ommercial, agricu ltural, tr ansport and c redit com panies and
institutions13; it participated to the support of other co mpanies and to the growth of the
social capital of several pro vincial banks. Starting fro m the new econom ic persp ectives
that the new Ro mania had , it was considered that The Ro manian Bank should prepare
to meet all p ossible exigencies. As a first measure t o take, it was necess ary to increase
social capital from 60 to 160 m illion l ei, but two or several issues, this offering the
possibilit y:
1. To conti nue ind ustrial participation and financin g, in order to organize an
industr y able to turn t o account our surf ace and underground resour ces.
2. To m eet th e financial needs of newly freed regions.
3. To m aintain a safe relat ionship between existing resources and the flux of
deposits14.
Having a substantial material and po litical support, t he Romanian Bank will
keep up its policy, and the following years were beneficial fro m this point of vie w. It is
considered that there were nine banks t hat played a major role in the involve ment of
banks in the process of n ationalization, na mely: five with Ro manian capital ( Banca
Românească, Banca Agric olă, Banca G enerală a Țării Rom ânești, Banca Co merțului
(Craiova), Banca de Scont) and other fo ur with foreign capital (Banca de Credit, Banca
Marm orosch –Blank, Banca Chrissoveloni, Ban ca Co mercială Ro mână). The
„Romanian Bank” will initiate i mportant „ partici pation”: 246.4 m il. lei i n 1923
(18.26% of the total „ participation” of the ni ne banks, and 52.76% of t he total
„participation” of the ban ks with Romanian capital) 283. 7 mil. lei in 192 5 (19.23% ;
52.01%), 208 .7 mil. lei in 1927 (9.96%; 45.05%)15. In 1924 , the Ba nk was interested i n
35 sm all and big ban ks, six com panies in mechanical industr y, six in the bui lding

12 xxx, Monografia „Băncii Românești” (1911 –1920), p. 35-36.
13 Rem arkable is th e particip ation to the foun dation of some in stitutions that were t o be later
involved in the „nationalizatio n” of the mining companies in the Jiu Valley: „Cred itul Teh nic”,
„Cred itul Min ier”, „Cred itul Tehn ic Tran silvăneant” (Si biu), „Industria Ardealul ui” (Brașov)
(Fond „Banca Rom ânească”. Secretari at, Dos. 2/1916-1925, f. 109). A st atistics provi ded by
the the „Romanian Bank” rega rding its public funds on Decem ber 31, 1921, shows that it
particip ates in other companies in volved in the process of „nationalization ”: „Ban ca Gen erală a
Țării Ro mânești”, „Banca Franco–R omână”, Banca „Albina” (Sibi u), „Banca Central ă pent ru
Industrii și Comerț” (Cluj), „ Banca Com erțului” Craiova (Ibidem, f. 286).
14 xxx, Raportul Co nsiliului de Admin istrație către adunarea gener ală extraordinară (25
decembrie 1919) , Cartea Româneasc ă, București, 19 20, p. 6-7.
15 Ludovic Báthory, Trăsături generale ale dezvoltării și mod ernizării sistemu lui industria l
bancar, în vol., Dezv oltare și modernizare în Român ia interbelică. 1919– 1939, Editura Politică,
București, 1988, p. 188-198.

The contribut ion of t he „Romanian Bank” to the „na tionalizati on” … 17

industr y and buildi ng materials, seven in food, five in textile industry, nine in wood
processing industr y, nine in m ining industry, three in electrical in dustr y, two tr ansport
companies, three leather processing and shoe factory , 15 other credit co mpanies and
institutions a nd eight agric ultural com panies16.
One of the di rections adopted to get t o this point will be the „ nationalization”
of industrial and banking companies with fo reign capital, which had had connections
with financial groups in C entral Europe . This will be a form of infusion of Romanian
capital in hundreds of co mpanies in the Old Kingdo m, but especially in the pr ovinces
united with t he Countr y, process which saved a part of the ex – enem y capi tals and
prevented the English, French and Italian capitals fr om taking these co mpanies over.
This activity was supported and grinded by the state and the Ro manian National Bank.
A banking u nion was to be created, consis ting of 22 of the big gest banks, under the
leadership of the already mentioned nine banks. This union will sign, in 1920, a
„Convention” with the Min istry of Indus try and Commerce, which stipulated that „The
undersigned Romanian financial institutions will buy shares of th e existing industrial
companies and will not participate to their transformation into new co mpanies, with
participation of Rom anian capital, only pr ovided that least 50% of the capital f the
society should be Rom anian, half of the members of the Managi ng Board sh ould be
Romanian and the president of the Boar d shoul d also be Romanian17.
The „ Romanian Bank” will lead the „ Consortium ” that will nationalize the
main coal companies in th e Jiu V alley: „ Salgótarján ” and „ Uri cani – Vale a Jiului”. It
is interesting that, as early as 1920, it was considered necessary to set up a holding in
the Jiu Valley that should com prise all the mines that existed in the area at that
moment. Fro m a docu ment sent by the Romanian Bank to the Ministry of Indus try and
Commerce o n August 10, 1910, we find out that a pr oject was bei ng studied, according
to which the acquisition of the m ines belongin g to „ Salgótarján” and „ Uricani – Valea
Jiului” co mpanies should be followed b y a merger of the two set up co mpanies; if th e
state wanted to participate with its mines (Lonea) a unique com pany could be founded
for the mining of coal in t he Jiu Vall ey18. In ti me, a part of this road was covered and
the m ining in the Jiu Valley was under the influenc e of liberal finances in the entire
inter – war p eriod In ti me, a part of thi s road was co vered 19 and the mining in the Jiu
Valley was under the influence of liberal fi nances in the entire inter – war period. The

16 xxx, Darea de seamă a Con siliului de Admin istrație. Ex ercițiul 1924, Cartea Rom ânească,
București, 1925 , p. 10–30. Almost th e some situ ation is to be found in 1927: banks – 41;
mechani cal industries – 7; building a nd building m aterials com panies – 6; transportation
companies – 3; food indu stry – 5; textile in dustry – 4; leath er processing – 2; wood industry –
4; mining industry – 11; electrical indust ry – 3; other enterprises – 1 5 (xxx, Darea de seamă…
Exercițiul 1927, Editura Cart ea Rom ânească, Buc urești, 19 28, p. 14–18).
17 V. Axenci uc, Studiu cu privire la întărirea domina ției cap italului fina nciar în România , in
vol., Studii privind istoria economică a României, vol. I, Editura Acad emiei, Bu curești, 1961, p.
197.
18 Fond „Ban ca Românească”. Pa rticipații, Dos. 57 /1919–19 30, f.f.
19 M. Baron , Op. cit., p. 131–170.

18 Baron, M .; Dobre-Baron, O.

„Petroșani” Company is the first Romanian co mpany set up in t he Jiu V alley by the
„nationalization” of the assets belonging to the „ Salgótarján” Com pany. The first step
was taken by the Jiu Vall ey management of t he Com pany, in December, 1918, the
reason being the following the Union Decision at Alba Iulia20, the Journal of the
Council of Ministers nr. 1064/Decem ber 7, 1918 regarding the tran sfer of the mines at
Petroșani to the property of the Romanian State21, the uncertain situation determ ined by
the revolutionary state of the workers22(22), but the main cause was the desire to
preserve the mines intact. Ioan Winklehner, th e gener al manager of the mines in the Jiu
Valley , addresses hi mself t o the Managi ng Co uncil pr oposing that t he latter should buy
the mines wit h 100 crowns. The Council addressed it self to the Mi nistry of Tra de and
Industr y proposing that t he Ro manian State should buy mines, but the go vernment
refuses, Vint ilă Brătianu invo king the lack of money23(23). The refusal was
deter mined b y circum stances, as well as by possibilities and political factors. T ancred
Constantinescu, one of the persons wh o was to part icipate to the talks regardi ng the
„nationalization” of the „ Salgótarján” Com pany said, in 1 937, that „ in 1919, the
eternal Vintil ă Brătianu, summoning us one day, told us that it was intolerable that the
management of the Com pany that own s the biggest m ines and the best coal in the
countr y shouldn’t belon g to the Romanians fro m the beginnin g. He asked us to do our
best for the „nationalization” of this im portant ind ustry”24. At th e same ti me, the
leaders of the „Salgótarjá n” Com pany discussed in 1919 the problem of co mmon
interests they had in Transy lvania, where as dr. Francisc Chorin, the president of the
„Union of Hungarian Manufacturers”, consider ed that „ it would be advantag eous to
transfer the company under foreign owne rship”, thinki ng abo ut the attraction of
English capital. Weiss Fülop, the vi ce-president of the Managing Board of the
„Hungarian Co mmercial Bank”, considered that „it is necessary to carry on discussions
locally and to make a deal with the Romanian capital”25.
Starting from these attitudes, on January 16, 1920, the first talks were to tak e
place at Berna, in Switz erland26. The Romanian side, consisting of the „Romanian
Bank” Group and the „Creditul Extern” was represented by Tancred Constan tinescu
and Jacques Kanitz, and the Hungarian side was represented by Weiss Fülop and dr.
Francisc Chorin. The m inutes of this event su mmariz ed the whole talk and the de cision

20 Șt. Pascu , Făurirea st atului național unitar româ n, vol. II, Ed itura Acad emiei, Bu curești,
1983, p. 193.
21 C. Dam aschin, Contribuțiuni la stud iul comb ustib ilului mineral, vol. I, Im primeria Națională,
București, 1933, p. 226.
22 Dom inic Stanca, Între două fronturi. 1914–1 918, Editura Patria, Cluj, 193 5, p. 286–301.
23 Parchetul Tribunalului Petroșani, Dos. nr. 1043/1947, f. 92–93.
24 Arhi vele Naționale Deva (F rom now o n, Arh. Naț. Deva), Fond Societatea „Petro șani”.
Consiliul de Administrație, Dos. 2/1937, f. 53.
25 Berend T. Ivan , Rank i György, Magyarország gazdasága az alsö vilaghabon után 1919-
1929, Akadémiai K iadó, Budapest, 1966, p. 110–111.
26 Fond „Ban ca Românească”. Pa rticipații, Dos. 57 /1919–19 30, f.f.

The contribut ion of t he „Romanian Bank” to the „na tionalizati on” … 19

reached regar ding „ the founding of a new Ro manian anony mous com panies (S.A.R.)
for the expl oitation of the mines at Petro șani”. The Hungarian s ide reported on the
mines, the coal resources a nd the coal price and wanted to know if the other side wa s
taking this tra nsaction seriously, otherw ise being willing to sell somewhere else27.
The discussions lead to the following agree ment:
– The Hung arian Group (consisting of „ Salgótarján” Co mpany and the
„Hungarian Co mmercial Bank”) evaluates its mines in the Jiu Valley , with all the
investm ent, at 38 m illions Swiss francs, the huge values of the coal deposits and of the
company are not taken in to consideration.

Table of the Jiu Valley M ines Funds „Salgótarján ” Company 28

Year s Account:
acqui sition
building ,
investments Account
real estate
inventory Account:
machines Account:
lands Account
mobile
inventory Account
used
funds
1895–
1918 11.732.124 13.550.264 8.024.537 1.524.081 3.731.069 38.562.075

– The Hungarian Group sells half of the business t o the Ro manian Group
(represented by the „ Romanian Bank” Group a nd „Creditul Extern”) for 19 m il. Swiss
francs, to be paid within f our years, at the Budapest headquarters29.
– The Ro manian Group will found a new Company, within Romanian capital,
half of it being given up in favour of the Hungarian Group; at the sam e the Ro manian
Group offers The Hungarian Group the ba nk vouc hers necessar y to guarant ee the
payment of the 19 m il. Swi ss francs in due time.
– The Managi ng Board of the new Co mpany will consist of an equal num ber of
members, an d the general manager must be accepted by the Hungarian side as w ell.
– The Hungarian Group will benefit by all the possible advantages resulting
from combinations made by the Rom anian sh are holders, it will be able to refuse to
participate to operations it didn’t agree with (eg. stock exchange, operations) and, if
new shores are issued, it will be entitled t o half of t hem.
– The final contract meant to confirm this agree ment was to be c ompleted by
February 25, 1920 i n Bucharest, when t he representatives of two Groups were to meet
at the headquarters of the „Romanian Bank” to com plete and sign t he papers.

27 It is t o be pointed out that, at th e future m eetin g on April 2, 1920 in Bucharest, abou t which
we sh all talk later, Weiss Fü lop, the vice presid ent of the „Hungarian Commercial Bank ”
proposed to the „Romanian B ank” se veral com bination regarding companies the former was
interested in Old Kingdom and Transylv ania (Fond „Ban ca Rom ânească”. Secretari at, Dos.
2/1916–1921, f. 165).
28 Fond „Ban ca Românească”. Pa rticipații, Dos. 57 /1919–19 30, f.f.
29 In M ircea Baron, Op. cit., p. 135, on grounds o f another document we refer to the purchase o f
55% of the selling value by the Romanian ca pital, at the price of 19 mil. Swiss francs.

20 Baron, M .; Dobre-Baron, O.

On groun ds of the full pow er invested in them30, the representatives o f the two
groups m eet again in Buc harest and, o n April 2, 1920, a co ntract is signed between the
two Groups, stipulating t he following:
– The Ro manian Group and „ Salgo – Co mmerce” Group agree to jointl y found
a co mpany situated in R omania, who se obj ective is to purchase and m aintain in
exploitation the coal m ines in Trans ylvania, in the Jiu Valley with all the plants and
pertaining assets, for ming at that m oment the „ Salgo – Co mmerce ” property .
– The new Com pany shou ld foun ded rapidl y, not lat er than a month after the
signing of the Peace Tre aty (the Trianon Treaty , June 4, 1920)31 and its recognition b y
Romania and Hungar y.
– The Co mpany will have a capital of 1 00 m il. lei, consisting of t he 90 m il.
worth asserts brought by „ Salgo – Commer ce” and 10 m il. lei cash, as a shared
contributi on of the two sid es.
– The Statutes will be the result of an agr eement between the two Groups.
– „Salgo – Commerce” participates to the foundin g of the new com pany as a
50% associat e and will enjoy the sam e rights and prer ogatives as the Ro manian Group.
„Salgo – Comme rce” enters the ne w company with the coal mines it owned i n the Jiu
Valley . In com pensation, it will receive 90 m il. lei in shares, keepi ng one half, a nd the
other half, of 40 m il. lei, at the agreed price of 19 mil. Swiss francs, pay able in four
years since the foundation of „ Petroșani” Com pany, will be sold to the Romanian
Group.
– The Managing Board will have equal rights: the Romanian Group will name
the president and has an extra representativ e in com parison with The Hungarian Group;
the two managing representatives in cha rge with the General M anage ment Department
will be nam ed by each Group.
– The mem bers of the Romanian Group acknowledge the „Ro manian Bank” as
„managing” bank and are ready to consider all its communications legally valid.
– The Ro manian Group will be represented by the „ Romanian Bank” in front of
„Salgo – Commerce”, the „Hungarian Co mmercia l Bank” having the same role in the
relation with the Romanian Group.
The contract will be signed for the „ Romanian Bank ” by G.N. Bagdat, m ember
of the Managing Board (19 18-19 24), an d for the „ External Credit” by G.N. Bagdat and
Tancred Constantinescu (managing representative); for „ Salgótarj án” Co mpany it will
be signed by Weiss Fül op and dr. Francisc Ch orin jr., and for t he „Hungarian
Commercial Bank” by Weiss Fülop32.

30 Fond „Ban ca Ro mânească”. Pa rticip ații, Loc. cit. See, for inst ance t he proxies given by
„Salgótarján” Co mpany to Weiss Fülop and dr. Francisc Chorin jr., the general
manager of the Co mpany, on Februar y 19, 1920, as well as the proxy given t o Weiss
Fülop by the „Hungarian Co mmercial Bank” on Februar y 21, 1920 enabling them to
sign a contract.
31 xxx, Tractat de Pace în tre Puterile Alia te și Aso ciate și Ungaria. Protocol și declar ațiuni.
Din 4 iunie 192 0 (Trian on), Imprim eria Statului, București, 19 20.
32 Ibidem

The contribut ion of t he „Romanian Bank” to the „na tionalizati on” … 21

In the m eetin g of April 3, 1920 , the Ma naging Board of the „ Romanian Bank”
authorizes the General Managem ent to accept the deal under the agreed
circu mstances33, the same attitude being adopted by the Hunga rian Group – the
„Hungarian Co mmercial Bank”, on June 16, 1920 and „Salgòtarjàn” Co mpany on June
17, 1920- that authorizes dr. Francisc Chorin jr. to participate at t he foundati on of the
Company in Bucharest34.
As by the Decree nr. 2447/ June 7, 1920 the Alexandru Averescu governm ent
forbade an y transaction of industrial g oods on Ro manian territor y without a special
licence is sued by the Ministry of Industry and Commer ce35, on July 1, 1920 the
„Romanian Bank” and the „ External Credit” will inform the minister about the talks
with the „ Salgo – Comm erce” Hungari an Group, pr esenting the following: t he agreed
principles; be sides the „ Romanian Bank” and the „ External Credit”, other insti tutions
in Trans ylvania and the Ol d Kingdom will par ticipate with capital; t he state was able to
be invited to participate to the foundati on. Finall y, they require a foundi ng licence for
the new Com pany and ask the authorities to in dicate their position regar ding the
participation of the state to the new co mpany36.

33 Fond „Ban ca Românească”. Secret ariat , Dos. 2/1916–192 1, f. 165.
34 Arh. Naț. Deva, Fond Societatea „Salgótarján”, Dos. 56 / 1920, f. 6,12. Th e Gen eral
Assem bly of „Salg ótarján” Company on Aug ust 7, 1920 will d ecide „that the coal mines in the
Jiu Valley will co nstitu te themselves in to an independent anonymous com pany” an d auth orizes
the Gen eral Management to carry ou t all th e discuss ed conventions and agreements, the
presi dent of the Com pany, dr. Fr ancisc Chorin, ass uring the shar eholders that „at the foundation
of the protection of the Company’s interests” (Ibidem, f. 1-2).
35 Mircea Mu șat, Ion Ardeleanu , România du pă Marea Unire, vo l. II, partea I. 1918–1933,
Editura Acad emiei, Bu curești, 1986, p. 273.
36 Fond „Ba nca Rom ânească”. Pa rticip ații, Dos. 57 /1919–1 930, f.f. We don’t know if th e
presence of the state w as really w anted, but there attemp ts in th is sense. On grounds of the
banking agreemen t in January 19 20, which stip ulated th at, in the case o f transpo rtation
companies and the iron and energy industries, th e state wo uld have the right to particip ate with
up to 25% of the capi tal of the Company, both the Romanian and the foreign capital should
field to the state e qual shores (Arh. Naț. Deva, Fond Soci etatea „Salgótarján”, Dos. 53/1920, f.
2). Acc ording to an an nex to the „Contract” signed on April 2, 19 20 the two Groups a greed t o
accept the state’s participation to the capital, provi ded that the state a nnounce d its decis ion not
later th an a year after th e fou ndation of the society and paid t he fielde d shores (Fond „Ban ca
Românească". Pa rticip ații, Do s. 57/1919–1930, f.f.). In a doc ument on J uly 1, 1920 it is
pointed out that th is particip ation was estab lished and the p osition of the government in this
matter was requ ired (Ibidem). If, in t he first instance, the government answers a ffirm atively to
the idea of participation, which is confi rmed by the common doc ument of t he „R omanian
Bank” a nd the „Ext ernal Credit” addressed to the Ministry of I ndustry and C ommerce o n
August 10 , 192 0 (Ibidem) and the notification on Dece mber 16, 1921 of the sam e Ministry
(Ibidem), as w ell as by the pro posed C onvention project, through which the Romanian St ate
was to receive 50,000 s hores (Ibidem), finally, th e presence o f the state in the initial sen se,
remains a project.

22 Baron, M .; Dobre-Baron, O.

Before obtaining the aut horities approval the two sid es37 adopt a Constituti ve
Act38 that estab lishes: the way in which th e sum of 100 mil. lei, representing the capital
of the new com pany, will be covered; the way in w hich „ Salgótarján” Com pany will
transfer its contributi on to „Petroșani” Company. At the sa me time „Salgótarján”
Company agrees that the ownership rights of „ Petroșani” Co mpany over m ines and
asset s should be registered in the cadaster and entered in the m ines r egister.
On October 8, 192 0 an Ad ditional Co nvention39 to the Constitutive Act and the
Statutes of „Petro șani” C ompany is adopted, establish ing the wa ys in which t he new
Company is founded and o rganized, as well as the participation o f the state. It is also
established that the „ Romanian Bank ” should pa y 23.7 50.000 lei to the „ Hungarian
Group” in ad vance, and th at the „ Romanian Bank” and the „ External Credit” should
receive 2 % of the price of shares, r epresenting the expenses connected with the talk s
and the completion of the deal as suc h. The Statutes of „Petroșani „ Company40 are
also validated now.
On grounds o f the agreement and the do cuments elaborated and authenticated
by the Notary Public Office, the Council of Ministers adopt the Jo urnal of the Council
of Ministers nr. 394 3 publ ished in January 5, 1921 i n which it approves the issuing of ,
the special licence require d by the Decree nr. 2447/June 7, 1920; it authorizes the
Ministry of I ndustr y and Commerce to invol ve the state in the participation with 25%
to the capital of the new co mpany and, if this doesn’t happen, t he Ro manian Group
will take over the 25% and will pa y the requi red sums; it also stipulates that, i n case
the state founds a unique com pany, „Petroșani” Co mpany will necessarily have to join
it41.
This creates the legal back groun d for th e taking over the whole inventor y that
exists at the beginnin g of 1921 an d the foundin g of the first Ro manian mining
company in the Jiu Valley .
The foun dation of „Lupeni” Company , starting o n Januar y 1, 192 5 co vers
almost the sam e stages, ex cept the process of „nationalization” lasts longer, until
December 19, 192 442. The leaders and the share holders of „ Uricani – Valea Jiului”

37 The R omanian Gr oup will co nsist of 19 financial in stitutio n, led by the „Ro manian Ban k”,
acknowledged as „ managin g” ba nk: „Banca Agric olă”, Banca „Al bina” (Si biu), „Banca
Comerțului” (Craiova ), „Ba nca Com ercială Română”, „Banca de Credit Rom ân”, Banca
„Chriss oveloni”, „Banca Franco–R omână”, „Banca Ge nerală a Țării Rom ânești”, „Banca
Națiunii”, „Ba nca Rom ânească”, „Banca de Scont a României”, „Banca Țărănească”, „Banca
Vitico lă a României”, Banc a „L. Be rkowitz”, „Cred itul Extern”, „C reditu l Min ier”, „Cred itul
Tehn ic”, „Creditu l Tehn ic Tran silvănean” (Sibiu), „ Industria Ardeal ului” (Bra șov).
The Hu ngar ian Group („Salgo – Comm erce”) will consist of the „Sal gótarj án” C ompany and
the „Hunga rian Comm ercia l Bank” .
38 Societatea „Pe troșani”. Act C onstitu tiv, Cartea Rom ânească, Buc urești, 19 24.
39 Societatea „Pe troșani”, Convenția Adițională, Cartea Rom ânească, București, 19 23.
40 Societatea „Pe troșani”, Statute, Cartea R omânească, Bu curești, 192 3.
41 Analele Minelor din România, IV, 1921, nr. 1-2, p. 42.
42 Arh. Naț. Deva, Fond Societatea „L upeni”, Dos. 2/1925, f. 19.

The contribut ion of t he „Romanian Bank” to the „na tionalizati on” … 23

company, with its headquarters in Budapest tried to delay this m oment as much as
possible, acce pting it only after the valid ation of the Mines Law on July 4, 192443.
As the report presented a t the general assembly of the shareholders at the
„Uricani – Valea Jiului” Com pany on August 2, 1920 shows, the Romanian capital had
proposed, sin ce 1919, the „nationalization” of the mines belongin g to the Co mpany
that existed in the Jiu Val ley. The talk s are considered to have been favorable44, the
same appreci ation resulting from the meeting of the Managing Board of the „ Romanian
Bank” on June 17, 19 2045. However, t he will not have i mmediate results, as the
Ministry of Industr y and Commerce requires that the transformation into a Ro manian
Company should be m ade by yieldin g 50% of its capital to the Romanian capital, and
the Ro manian State should participate to th e new co mpany with n ot more than 25% of
the capital, resulting from the participa tion of each group with 12,5% and the
Hungarian side will not agree with these conditions46.
In the m eetin g of t he Man aging Board of the „ Romanian Bank” o n October 19,
1921 , the general manager N.P. Ștefănescu announce d an agreement with „ Urikany –
Budapest” C ompany47 for the „ nationali zation” of its coal mines in the Jiu V alley,
under foll owing circum stances:
– All the Romanian proprieties of the Company were evaluat ed at 31 mil.
Swiss francs, the equivalen t of 31 mil. Austro-Hungarian crowns on January 1, 1919 .
– A Com pany will be founded, with a c apital of 82 mil. lei, to w hich „ Urikan y-
Budapest” Com pany will participate with 50%, and a group of Romanian institutions
with the other 50%. Of this capital, 74 m il. lei will represent the contribution of

43 Item 33 of th e „Min es Law” on July 4, 1924 estab lishes fou ndation modalities fo r the
anonym ous mining com panies, as well as their acknowle dgem ent conditions, their rights an d
adva ntages (C. Ham angiu, Op. cit., vol. XI–X II, 1922–1926 , p. 626–627).
44 Arh. Naț. Deva, Fond Societatea „L upeni”, Dos. 3/1925, f. 54.
45 Fond „Ban ca Ro mânească”. Secretariat, Dos. 2/1916–1921, f. 187. „Th e General Man ager,
N.P. Ștefănescu, re ports on the res ults of the negotiations regar ding the Uri cani coal mining”
(referring , prob ably, to „Urican i – Valea Jiului” Co mpany, the Ur icani mine being opened only
in 1946 – 1947, thro ugh „Balo mir” pit. (x xx, Uricani XXXV. 194 7–1982, Deva , 1982). In June
23, 1920 there was a meeting of the represen tatives of the institutions that were p art of the
„Consortiu m” which had accep ted to particip ate to the „nationalization” process regarding the
mines at Lupeni (Fond „Banca Românească”. Pa rticip ații, Dos. 46 /1924 –48, f.f.).
46 Arh. Naț. Deva, Fond Societatea „L upeni”, Dos. 2/1925, f. 52.
47 The Ex traord inary General Assem bly of „Uri cani – V alea Jiu lui” Company on October 17,
1921 at Budapest authorized the Managing Board to transform the Co mpany in the Jiu Valle y
into anonym ous com pany an d to transfer ap art of its sho res to the ne w com pany. The chairm an
of the assem bly pointed out that the mines in t he Jiu Val ley were under Romanian „do mination”
and that since 1919 there had been several rounds of negotiations with a group of banks under
the leaders hip of the „Rom anian Bank” and the „Exte rnal Credit” representing t he inte rests of
the important financial in stitutio ns in Romania” and the there was an agree ment reg arding the
foundation of a new Romanian C ompany, named „Lupe ni” (Ar h. Naț. Deva , Fond Societatea
„Uri cani – Valea Jiului”, Dos. 898 /1921, f. 4–7).

24 Baron, M .; Dobre-Baron, O.

„Urikany -Budapest” Co mpany , and the rest of 8 m il. lei will be deposited in cash by
both sides.
– The Rom anian Group will pay the Hungarian Group („ Urikany -Budapest”
Company = „ Uricani-Valea Jiului” Co mpany and the General Hungarian Credit
Bank”), after maxim um six years after the foundation of the Co mpany, 15.5 mil. Swiss
francs and deposits 4 m il. lei imm ediately. The pa yment conditio ns for the 15. 5 mil.
Swiss fran cs as identical with those established at the founda tion of „ Petroșani”
Company48.
– The m embers of the Ma naging B oard will be equa lly designate d by the two
Groups, the p resident being designed b y the Romanian Group.
The Managing Board agreed to participate to the Co mpany to be founded
under these circu mstances, its financial contribut ion re maining to be established49.
The new Com pany is supposed to b ecome operational on January 1, 1922 but,
as talks are n ot final, the y will continue50. A first step towards the co mpletion of the
process will be represented by the Decision of the Ministry of Industry and Commerce
nr. 382 8/May 31, 1 924 t hat approved the operation of „ Lupeni” Co mpany provided
that the state is allowed t o participate to it, and 2/3 of the members of the Managing
Board are Romanian citizens51.
On June 13 a nd 14 , 1924 the „Ro manian Bank” sends documents to a series of
financial institutions and t o „Petroșani” Company, in which it is pointed out t hat, after
a num ber of long talks with „ Urikan y – Bu dapest” Com pany, the condit ions of
„nationalization” are finall y established. It also sends the projects of the Constitutive
Act, the Additional Conve ntion to t he Constitutive Act and the Statute, also inquiring if
the respectiv e institutions are willing to par ticipate t o the foundation of the Com pany
and co me to a meeting, on June 23, 192 4, at the headquarters of the „Romanian Bank”,
when decision will be made regarding the fi nancial contribution of each institution and
the list of the representativ es of the Ro manian Group in the Managing Board and the
Board of Censors. It was also pointed out that the absence fro m this meeting will be
interpreted as givi ng up, the shares of th e respective absents being redistributed among
the other insti tutions52.

48 In the above mentioned m eeting a capi tal of 80 m il. lei is mentioned , consisting of the 70 m il.
lei cont ribution in asset s of „Uricani – Valea Ji ului” Company, the rest of 10 mil. lei being
obtained from equal deposits fro m the two sides; the sum of 15.5 mil. Swiss fran cs will be p aid
in four years (till Jan uary 1, 1926) tog ether with an annual interest of 5%.
49 Fond „Ban ca Românească". Secretari at, Dos. 2/1916–192 1, f. 322–323.
50 Arh. Naț. Deva, Fond Societatea „L upeni”, Dos. 3/1925, f. 12– 18.
51 Ibide m, Dos. 2/1925, f. 40, 50; Fond „B anca Românească". Particip ații, Dos. 46 /1924–1948,
f.f.
52 Ibide m, Loc. cit. Th e Man aging Board of the „Ro manian Ban k” will an alyze o n July 1, 1 924,
the rep ort presented by the general manager N.P . Ștefănescu rega rding the discussi ons with the
Hungarian Group that were concluded with the agreem ent that the new Company should have a
capital o f 280 mil. lei, o f which 260 mil. lei represented by th e assets co ntribution of „Uri kany
– Budapest ” Company, and 20 mil. lei in cash, deposited in equal shares by the two Groups;

The contribut ion of t he „Romanian Bank” to the „na tionalizati on” … 25

Although it was intended thet the Co mpany shoul d be founded on Jul y 1,
192453, this will happen onl y on Janua ry 1, 1925 a fter talks at Budapest between
Richard Fuchs, manager of „ Urikan y – Valea Jiului” Com pany, representing t he
Hungarian Group, an d engi neer Ion E. Bujoiu (the fut ure general manager of „Lupeni”
Company) and Alexandru Alexandridi (the futur e general manager of „Lupeni”
Company) – representativ es the part of the Ro manian Group. The talks are concluded
with a „ Protocol” adopted on October 1 5, 192454.
The results are to be fo und in the d ocuments adopted on Novem ber 24, 192455:
the Statutes, the Constituti ve Act, and the Additional Convention.
Through the Constitutive Act, the Ro manian Group, consisti ng of 12 financial
institutions56 and „ Petroșani” Co mpany on the one hand, and the Hungarian Group
„Urikany – Budapest on the other, decid e to fou nd „Lupeni” Com pany, with its social
headquarters in Bucharest and capital of 400 m il. lei57.
The Additional Conventi on to the C onstitutive A ct and the Statutes o f
„Lupeni” Co mpany established the way in which the Ro manian Group bu ys the
380,000 shares (of the 76 0,000 nom inal shares „Lupeni”, 500 lei each), at the price of
15.5 m il. Swiss franc – the pay ment being due on Januar y 1, 19 29 and the distribution
of shares. Item 5 pointes out that t he mem bers of the Romanian Group irre vocabl y
declares the „Romanian Bank” the representativ e of the whole Group, as well as of its

„Urikany – B udapest” Company sells the Romanian Gr oup hal f of the shares o btained in
excha nge for the asset s contribution for the price of 15.5 mil Swi ss fran cs, pay able aft er ten
years, with a n annual i nterest of 5%; both Groups agre ed to accept t he participation of the
Rom anian State with 12.5% of the cap ital, if th e latter sh ould ask, within a year from the
foundation of the Co mpany; the Co mpany was gran ted a cred it of 50 mil. lei; o f the 10 mil. lei
cash deposited b y the Ro manian Grou p, th e „Ro manian Ban k” will retain 2 mil. lei; the
„Romanian Bank” i s acknowledged as „managi ng” b ank of the Romanian Gr oup. The
Managing Board will ap prove th e sub scription of the 2 mil. lei o f the 10 mil. lei cash and the
purchase of a part of the 130 mil. lei in shar es receive d by the Rom anian Group.
53 In Fond „Banca Ro mânească". Particip ații, Dos. 46 /1924–1948, f.f. are to be found, as d raft
documents, th e Co nstitutive Act, th e Additional Convention and the Statu tes, an d changes were
operated in them. Thus, t he capi tal was rai sed fr om 280 m il. lei to 400 mil. lei by the overrating
of the „Urikany – Budapest” Company contribution from 260 to 380 mil. lei; parag raph V of
the Co nstitutive Act stip ulates th at „Th e handing down of the mines to the new Co mpany will
take place…, at any rate not before J uly 1, 1 924 (this was cros sed a nd replace d by „betwee n
July 1, 1924 and October 1, 1924” and then by „bet ween November 1, 1924 and January 1,
1925”) an d paragraph VI estab lished that „th e day settled for clo sing acco unts…will b e July 1,
1924 “replaced b y „Janu ary 1, 1925”).
54 Ibidem; Arh. Naț. Deva , Fond Societatea „Uri cani – Valea Jiului”, Dos. 908 /1924, f. 1–3.
55 Arh. Naț. Deva, Fond Societatea „L upeni”. Direcția Minelor, Dos. 6/1924 , f. 1.
56 Banca „Al bina”, „Ba nca Agricolă”, „B anca Central ă pent ru Industrie și Co merț” (Clu j),
„Banca Com erțului” (C raiova), „Ba nca Generală a Țării Ro mânești”, „Banca Rom ânească”,
„Banca Țărănească”, Banca „L. Be rkowitz”, „Cre ditul Extern”, „C reditul Minier”, „Creditul
Tehn ic”, „Creditu l Tehn ic Tran silvănean” (Sibiu).
57 Societatea „L upeni”, Act Con stitutiv, Cartea Ro mânească, Buc urești, 19 25.

26 Baron, M .; Dobre-Baron, O.

mem bers, an d acknowledges all its communi cations and declarations as valid and
compulsory…The Ro manian Group is represented in relation with „ Urikan y –
Budapest” by the „ Romanian Bank”. Besid es, all the reciprocal obligations and
operations will be carried out through the „Romanian Bank”. Item 6 of the Additional
Convention e stablishes that the „ Romanian Bank” and „ External Credit” will have the
right to charge the new „Lupeni” Co mpany with 400,000 lei, repr esenting the expenses
regarding the completion of the agreem ent58.
The entering of Rom anian capital in the Jiu Valley through the process of
„nationalization” was a b eginning59 and its presence is felt in the entire tech nical,
social and cultural evolution of this coal basin, turning it into one of the most important
industrial center of the cou ntry.

58 Societatea „L upeni”, Convenția Adițională, Cartea R omânească, București. 19 25.
59 The „Ro manian Ban k” will be present, through „Pet roșani”, „L upeni” and „Cre ditul Minier”
Companies, in whose foundatio n it h ad an essen tial r ole and to which it h ad an important
particip ation (M. Baron , Op. cit., p. 1 42; xxx, Raportul Co nsiliului de Admin istrație către
Adunarea gene rală extraordinară din 21 decembrie 1919, Cartea Rom ânească, Buc urești, 1920,
p. 6), at t he „seelin g” of the „Lon ea State Mines” in 1926, which will lead to th e foundation of
„Lonea” Com pany it will also sti mulate the i nvolvem ent of „Petroșani” Com pany in the mining
of preciou s metals in the Ap useni Mountains (19 32 – 193 6), Mar amureș and Baia Ma re area
(after 193 4) (Fond „Banca Românească”. Secretari at, Do s. 4/1923, f.f .; A.N.D., Fond
Societatea „Petroșani”. Serviciu l Tehn ic, Dos. 6/1932-1947, f. 1-10).

Annals of the University of Petro șani, Economics, 4 (2004), 27-30 27

FOREIGN INVESTMENTS IN MODERN ECONOMIC
ACTIVITIES

EMIL BIBER *

ABSTRACT: Worldwide economies are more and more linked by international
economic and financial flows to globalization and economic integration phenomena that is
effect and cause for them. External investments represent for investors a long-term investment
abroad meanwhile for users these could be di rect investments or portfolio investments.

KEY WORDS: direct foreign investments, portfolio investments, external capital
offer, Request for external capital

Worldwide economies are more and more linked by international economic
and financial flows to globa lization and economic integrati on phenomena that is effect
and cause for them.
External investments represent for investors a long-term investment abroad
meanwhile for users these could be dire ct investments or portfolio investments.
Direct foreign investments are real investments and represents funds put into
an economic objective abroad. Direct investments resources could be material or nonmaterial assets and allowed full control over the company.
Direct investments are a real indus trial package consisted in: capital,
technology, and organization methods, ma nagement methods, which permit control
and in the same time an increasing development for investors.
Portfolio investments are financial investments representing funds placed
abroad in transferable se curity. These investments are acquisitions of compulsory
shares issued by public authorities, state or private companies. Today, financial market
use lots of financial tools both in moneta ry or capital market. These investments don’t
offer any checking for the investors, rea lizing only incomes according to financial
market.
According to finance techniques these tw o types of foreign investments could
be characterized as follows:

* Assoc. Prof., Ph.D. at the University of Petro șani, Romania

28 Biber, E.

– Direct investments could be realized as co-producti on, m ixed capital
associations, sub production, tripartite i nternational cooperation, production by order,
production lic ense transfer, research progra ms, know-how, m ixed banks, corporati ons.
– Portfolio invest ments are in conn ection with capital market, futures
contracts, options, factorin g.
Foreign inve stments could be done in every econom ic field: industr y,
agriculture, exploitation of natural resources, infrastructure, teleco mmunic ations,
scientific research, trading, transportation, tourism ,
bank servicing, insurances, other services.
In some fiel ds there are needed pr evious notific ations (for exam ple fo r
invest ments in telecommunications there is needed a notification fro m
Teleco mmunication Depar tment, and there are fi elds and activities where f oreign
investm ents are prohibited. (State monopole fields, dr ugs trading, occult activities).
Regarding resources provenience there a re some kind of foreign invest ments:
– Invest ments subsidized from own re sources.
– Investm ents subsidized fro m foreign bank s ystem
– Invest ments subsidized by international finance struct ures.
In brief, foreign invest ments are rel ated with Internati onal Capital Market, and
any national finance market cannot be outside inter national fina nce market, some o f
the assets av ailable in one country are invested in other countri es, and the need for
funds are covered by external resources.
External capital offer is related wit h international develop ment strategy ,
external date problem , and international econo mic climate. Thus according to United
Nations strategy for inter national devel opment, it has been d ecided an econom ic
growth with an annual rate of 7% , capab le to ensure a low unem ployment rate
simultaneously with resources ac cumulati on needed for social and environment
protection. F ood pro ducti on shoul d have an annual growth of 4 %, besides solving
demographic and environmental proble ms. In realit y, these proble ms have n ot been
solved because capital off er was not en ough to susta in these issues. There is a f act that
countries that need exter nal funds are avoided because of their non-developed
econom ies.
Regarding Request for ex ternal capital , there are f ew w ays for bringing in
capitals fro m external finance market:
– Subsidized direct invest ment
– External loans contraction
– Develop ment finance help
– Transferable security invest ments
– Financial titles invest ments to foreign boursesf
Cannot be i gnored the rev erse phenomena, on whic h fun ds are going to the
international market, escaping fr om countri es cons ider to be political instable, so
appear the paradox on whi ch the “poor” is o ffering funds to the “rich”. These pr ocesse s
could be realized with the im plication of poor countri es authorities that cannot control

Foreign inv estments in modern economic activities 29

funds going out and the r ich countries au thorities t hat allowed illegal activities like
washing money.
Recent inter national fina ncial flows are chara cterized by several im portant
contradiction s regarding geographic orie ntation, volum e and destinati on on to
developed econom ies, in com pare with those non-dev eloped:
a) First of all, t hese funds are spread out between rich countries, poor countries
being p ush away. Therefore rich count ries are in th e same tim e supplier and
beneficiary of external investm ents funds.
b) In second place, the volu me of foreign i nvestm ents h as had an ascendant trend
for developed econom ies but have had a descendent trend for non – developed
econom ies. Thus, in 20 02, IDN has raised with 68% against 2001, for
developed countries, meantime for u nder develop ment countries IDN has
fallen with 4 %, and eastern-European c ountries have hardly uphold this growth
value with big discrepancies betwe en the m.
c) Under the impact of spectacular developm ent of inte rnational fina nce market,
international funds destination has been modify regarding direct investm ents
and portfoli o investm ents. Thus, on de veloped economies ther e are daily huge
transfers of funds on bourse and extra bourse market. In com parison, for p oor
econom ies p ortfolio inve stments are less significant; take for exam ple
Romania’s bourse very small dail y volume (1-5 billions lei).
The conclusions show the followings:
• International financial flows and achie ve of externa l investm ents are a
characteristic for m odern open d ynamic econo mies, with a high level
of organization and stabilit y.
• The growin g role of internationa l financial market generate an
orientation to wards portfolio investme nts, thus financial market has a
major influence for im provement of econom ic behavior, an d fo r
understanding of necessity for having an investm ent behavior at macro
and m icro econom ic level.
• Appearance of a new form of economic pushing away , due t o the
econom ic flows orientation, which lea d to higher discrepancies at
worldwide level.
The methods of bringin g foreign invest ments depen d either of international
political elements and internal political fact ors. Untill the great ch anges of 1990’s, it
was appreciated that the fact eastern-Eur opean countr ies have cheap natural and human
resources is sufficient to attract foreign investors.
But, the realit y shows that in m odern econom ies there are other new
conditionings for investments. Foreign invest ors ha ve mainly econom ic interests, so
they will pre fer stabile econom ies pro ved by their efficiency level. On other words,
foreign invest ors will not agree econo mies with problem s, because that will i mply risks
or the costs are too big. Therefore, to bring foreign investm ents will be not possible
until the i nternal econom y is not stabile, modern, and efficient.

30 Biber, E.

REFERE NCES:

[1]. Badrus G. – Direct invest ments in R omania , The Economist suppl ementary nr.186/5 June
2 000
[2]. Biber E.G . – Econo mic In vestmen ts Efficien cy, Ed. INFOM IN Deva 2004
[3]. Bonciu F . – Direct Forei gn Invest ments, Lum ina Publishing House Bucharest 2000
[4]. Mun teanu C., Vals an C. – Internationa l Investments, Oscar Print Pub lishing Hou se
Bucha rest 1995
[5]. UN CTA D – World Investment Repo rt 20 00, New-York-Geneva 2000

Annals of the University of Petro șani, Economics, 4 (2004), 31-36 31

ELEMENTS OF MARKET ECONOMY BUILD-UP
STRATEGY

AMELIA BONCEA *

ABSTRACT: The strategy of building-up in our country had to start from admitting
the fact that there are no universal receipes ava ilable for the transition to the market economy,
which imposes the necessity of taking into account the concrete conditions in the country.

KEY WORDS: build-up strategy, transition to the market economy

The transition stage is characterized by the fact that for a certain period of time
two or more forms of propriety, nationa l economy operating mechanisms, types of
antipodeans strctures will coexist. There from emergies the necessity of building-up
new strctures, levers and economic mechanisms, specific to market economy based on
enterprise, simultaneously with the gradua l liquidation of old system structures.
Even if the transition to the market economy has began as soon the last days of
the year 1989 and it has advanced in differe nt rhythms and proportions in each of the
strcture of the property, in prices, in the citizen’s rights and liberties, the problem of
establishing the concret type and model of the market economy towards which
Romania’s economy is heading has remained somehow unsolved. The strategy of building-up in our country had to start from admitting the fact that there are no
universal receipes available for the trans ition to the market economy, which imposes
the necessity of taking into account the concrete conditions in the country. In this case, Romania as well as other countries in Eastern Europe, had to cloose from varous posibilities:
– assuming a reform model used and cheched in one of the countries that went on the same road tahng into consideration the eventual
similitudes concerning economy, historical traditions, natural resources etc;

* Lecturer, Ph.D. at the "Constantin Brâncu și" University of Târgu-Jiu, Romania

32 Boncea, E.

– trying to co nceives a personal strategy , entirely origi nal, which wi ll be
applied thro ugh specific methods. Such an ori entation can be
surtained by the argu ment that till now there has not been any
historical experience such as prossing from soci alism to capitalis m. At
the sa me ti me, such a str ategy would be dased on the charact eistic
features of the Ro manian econom y;
– making a synthesis of some positive aspects of th e experiences that
are acu mulated in contries which traverse the transition from
socialism to capitalism . For elaborating an ori ginal model or for
adopting one that had already been applied it is necessary to settle
some elements. We need, however, to e mphasiz e as well that n ow,
Romania is c ommtted to achieve at leas t three processes.
First of all, it about the tra nsition from the socialist sy stem of a new socio –
econom ic sy stem , which o f course, should be superi or to the previous one. Se condl y,
Romania has settled as major objective the tr ansition from the si tuation of associated
countr y to that of m ember of the E uropean Union. For this, our countr y must assi milate
the co mmunitary norm es and at the sameti me to assure the necessary conditi ons for
applying the m. Thirdly , the outline of this strategical objectives m ust take into account
the fact that the Romanian so ciety must assure as a major objective, the adopti on of the
model towar ds which the human societ y, in ge neral is heading for: the informational,
competitional, ecological and the so cio-hum an society . The achievement of the
reform and the development of Rom ania an the priciples of the market econom y
impose, am ong ot hers, a wide opening to the woeld ’s econom y.
The proper c onditi ons of Romania in toda y’s world, determ inates it to m ake of
the integration in the Eur opean structur es the fundam ental objective of its externe
relations, since this is the this is the only way to ssure its stabilit y and national
integrit y.
First of all i ntegration means adhering to the European strctures, which is
achieved by bilateral agreem ents between Romania and those institutions reprezenting
the me mber – states. This opening is follo wed by the integration proper a com plex
proces states, which is based on the – principles of the co mpatibility contries beco me
compatible a nd at the s ame ti me complementary , conditions that are abs olutely
necess au for their har monious developm ent.
Within the E uropean econom ical strctu res that were creat ed, the European
Union occupies the m ost important place. In the concrete case of adm itting the
countries from Central an d Eastern Eu rope, includi ng Romania, the negociations are
preceded by an exercise of analitic examination form ed of two stages:
– the m ultilateral one with all the ca ndidate countries, has a didactic
purpose, to make the co ndidats get used to the elements of the
communitary acquis;
– the bilateral one (with each one of th e candidate state) in wich they
analy se every dom anin, the progresses that countr y has achieved in

Elements of market eco nomy build-up strategy 33

transposiong the co mmunitary norm es in the hom e office right and in
apply ing the rules that guvernates the function of the the Eur opean
Union.
The states that have begun the negoc iations for adhering in October 199 8
started then right after the end of the s creening exercise at every chapter, their order
being settled by the Eur opean Co mmision. For the countries from the second group,
among which Ro mania, th e bilateral screening was carried out between March and July
1999 (except ing the “farming” chapter, for which the bilateral analitic examination
took place in Novem ber 1999).
As far as me are concerne d, as a result of the adhesion in Helsinki, from 10 –
11 Decem ber 199 9, conc erning the b eguinni ng of the adhesion negociatio ns, the
screening exercise with Ro mania wa s resu med on 04 .02.2000, foll owing to be
examined the progresses that have been registered in the last half of the year 1999 in all
the 31. Domaines that will constit ute the object of the a dhesion negociations,
emphasizing the identification of the difficulties that the Rom anian authoritie s are
confrunted in adopting an d transposing the legislati on of the European Union and
measuresa that ar e imposed to satis fy th e request ed standards for adhesio n. The
spokesm en of the European Co mmissin will present on this occasion, the new element s
that have appeared in the com unita ry acquis in the same period of time.
For the five n ominated countries at Helsinki with a view to begin t he adhesion
negociations (including Romania) their formal launch took place on 14.02.2000,
following t hat the effectiv e opening of the fi rst discussions or tehnical negociations to
take place in April of the s ame year.
The end of the discussion of a chapter means that the negociations have been
finished for the tim e being, but nothi ng is considered final as long as the negociations
of all 31 chapters had not been finished including t he administrative and (diverse)
aspects, whic h include the issues relate d to the earmarh of the places in the execution
and decision organisms from the comunitary institutions.
By closing the associ ation Agree ment to the European Union (the European
Agrem ent) Romania co mmitted hr\erself irre versib le on the w ay to the european
integration. The national strategy to prepare Ro mania’ s adhesion to the European
Union, ad opted at Snago v in june 19 95 had in dicated the pr ocedur al stages and actions
that were to be undertaken in the clos ing process to the co munitary strctures.
The identification of the objectives and priorities of Ro mania’s actions m ust be
grounded on the realisti exa mination of the im plementation’ s degree of these crit erions,
taking into a ccount the conclusions of the European Commission contained in “The
Notice” from july 1997, repeated in “The partenership fo the adhesion”. This,
synthetically , it is considered that Romani a is about to satisfy the whole political
criterions and has made bi g propreses i n creating a viable market econo my, although
this continues to request bi g efforts.
Major difficulties are faced, as well in establishing a genuine com petitional
climat; at th e same ti me there had not been transposed or assu med the e ssential
elements of the communitary acquis, especially in the Ho me offic e dom ain.

34 Boncea, E.

Beginning w ith 200 0, wh en Ro mania began the procedure adhesion to the
European Union, t he Union’ s Comm ision publicises annual m onitorising eports , which
offer meaningful references concernin g our count ry’s economic evolution. The
Romanian officials had insisted and had obtained at the last high-level re union in
Copenhagen, a road m ap which woul d ha ve the mission to autline as detailed as
possible the countr y’s adhe sion roas.
The existence of a functional market econom y represents the fi rst of the t wo
econom ical criteria of adhesion establishe d in Decem ber 1993, at the Eu ropean
Council in Copenhagen, being a pre- condition for accomplishing the second
econom ical criterion, namely the capacity of facing the co mpetitional pressure and the
market’ s for ces from the European Union. Also, obtaining the qualify ing of
functioning market econom y would have pos itive im plications on the negociations to
the adhesion of a lot of chapters, too esoecially the ones with m ajor fi nancial
implications.
The report of the European Comm ision for the year 2003, was released to the
public on 20 October this year, it still has not , rought Romania the long hoped s tatus of
“functioning market econom y”, but a o ntroversed syntagm both in the political and
econom ical Romanian environm ent. The wo rding “Ro mania can be considered a
functioning market econom y once the good profress made has continued decisively ” is
interpreted by the power representants as th e admission of the European Commission
of the functioning m arket econo my buy imposing conditi ons for consolidating this
statusand by the represent ants of the oppos ition a f ailure of Romania’ s indispensable
status for finishing the neg ociation for i ntegration.
As usual, the truth is som ewhere in the middle.
The appreciat ion of the European Commission reco gnises the progreses made
by our countr y and its efforts for integration but until l it is not proved that the road is
ireversable, u ntil the rishs from the evolu tion of the macroeconom y’s indicators taken
into consider ation will not com pletely elimibated, we will not be appreciat ed as a
countr y will a functioni ng market econom y.
Within the a dhesion negociatins, th e European Commission requests alll the
candidate countries to acco mplish two fundam ental criteria: te have a functioning
market econ omy and t o face the co mpetitional econom ical an d financial pressures
within the uni on.
As it is shown in a Report publicl y releas ed by the Acade mic Society in
Romania “the functioni ng market econom y” is a curious word. As a concept it can not
be found in t he econom y books while alll market econom ie functiona better or worse.
The definition of the experts fro m Bruxelles rather refers to a market econom y that
functions well, based on a solid instituti onal strcture which has small costs of
transaction and inform ation.
But analising the m acroecon mic indicators (inflat ion, public t he level of
interests and the fluctuati on of the excha nge rate) we can sust ain that ro mania can
receive this status. The econom ic relau nch re gisters increases of the IBP by 5.7% in
2002; 4.9% i n 2002, for this y ear the inc ease being est imated at abo ut 4.5%.

Elements of market eco nomy build-up strategy 35

The inflation has been constantly redu ced from 30.3% in 20 01 to 17 .8% in
2002 , followi ng that this year to be situ ated under 15% . Public dut y was under 30%
from the IBP, about thre e quarters from this is represented by external credits and
quaranteed by the state credits; and the one on sh ort term is rather low (under 5 %).
The bud getary deficiences was under 3 % in the last three years, although it
must be said, the quasi-fiscals deficits, which express the inefficiency of the public
sector have r emained i mportant – about 2,5% of the PIB. The pri vate sector g enerates
about 7 0% of the PIB, hiri ng of t he workforce and 55 % of the social capital.
Although there still are im portant probl ems that need to be solved like
financial ind iscipline, th e unsteady application of the m arket rules, the law
transparence and stability of the settlem ent’s frame, the inefficiency of the public
administrations and of the justice, Roma nia has registered unchalenged progresses i n
macro-econom y, progresses that give us the right to sustain that Ro mania has already
functional a functional market econo my. Even more, if we analy se one of the co untries
that will join the Union i n 2004 – P oland, Hungar y, the Check Republic have lower
econom ical perform ances budgetar y deficits of over 6% , deficits of current count i n
growth, and these are not the only ones, we c an say that Rom ania deserves a better
mark.
Among the problems that Romania is facing now, corruptio n is a evil noticed
by the i nternational organiz ers and is perm anently under the attention of governmental
authorities. Characteri zed as “sy stemic” in a lot of dom ains suc h as justice, police,
State Property Fun d, Parli ament and Minister ies suc h as health, s ystem (consi dered by
the citizens to be the most corrupt institut ion) corruption represents f or Romania one of
the m ost important bounda ries of the acc ess to NATO and European Union.
In the reports relea sed by the Open Society Institute, are appreciated th e
progresses made in the d evelopm ent of the Anti-Corruption National Strategy even if it
is em phasised that the y have been made under the pr essure of the European Union and
that they have been acquired advance due to NATO adhesion’s pe rspective. Bu t, it is
said in the report the anti-corruption fi ght was focu sed, till now, on the low l evel of
corruption and no progresses have been made to li mit the immunity that the m embers
of the parlia ment and of the ministe ries enjoy or any progresses to obtain the
prosecutor’ s independence. That’ s why it is justified the worry that the government can
be as well a s ource of corruption as of its solution.
From this p erspective, fighting again st the pheno menon of corruptio n is
essential for the materialization of co mmitting without doubt of Romania’ s
Government, of the Ro manian Soci ety to assume and to a chieve co mpletely the
adhesion’ s criteria in the European Union and in NATO.
What is i mportant to all these positive or less positive apprenations is how they
will affect t he negotiations of the ad hesion to the European Union and what the
Romanian authorities m ust do to assure the succes s of these negotiations.
The uncertainty of the European Commi ssion to grant Romania the status of
countr y with a functioning market eco nomy in the conditions in which the figures
prove performance s even better that those of so me countries alread y accepted, c an be

36 Boncea, E.

interpreted through the fact that the politic takes over the economic which will mean
the adhesion process for o ur countr y will be more difficult and harder than it was for
the neighbori ng countries.

REFERE NCES:

[1]. Brzezinski Z. – Europa Centrală și de Est în ciclon ul tranziției, Editura Diogene,
Bu curești, 1995
[2]. Constantinescu N.N. – Reformă și redr esare economi că, Editura Economică, București,
1 995
[3]. Dăianu D. – Încotro se î ndreaptă țările postcomuniste? C urente ec onomice î n pragul
secolul ui, Editura POLIROM, București, 200 0
[4]. Neg ucioiu A. – Tranziția rațională?, Editura Econ omică, Buc urești, 19 99

Annals of the University of Petro șani, Economics, 4 (2004), 37-44 37

THE EFFECT OF KNOWLEDGE ON THE
ECONOMIC GROWTH

FLORIAN BU ȘE ∗

ABSTRACT : The economy of the future will find its support in the progresses of
science and technique, in the technologies of the future, especially in the informatics industry.
In the informational society, the fundamental economical resource will no longer be capital, or
land, or physical labor, but it will be knowledge. The productivity of knowledge will be decisive
in the economic successes of a country or enterprise. Today, the goals of the industrial policy
are more and more related to the imperatives of the informational society.
Recent models of economic growth consider research and development as the engine
of the economic growth. Research and developme nt generates two fundame ntal types of output:
the new product or the new process itself; the technological information incorporated into new products.
Knowledge does not only mean production and export of products which incorporate a
large amount of science and technology, but also the capacity of obtaining in real time
information about markets, distribution channels, consumers’ preferences. In order to be able
to successfully compete on the world market companies must develop a high-performance
informational system, which to be integrated in the organizational structure; a high-performance informational system can only be implemented under the conditions of the
existence of adequate computing equipments, therefore resulting in a positive reinforcement of
the two elements.

KEY WORDS : knowledge, economical resource, production factor, public good,
acquire knowledge, economic growth, international trade

1. KNOWLEDGE AS AN ECONOMICAL RESOURCE

The economy of the future will be in ge neral lines totally different from what
it is today. This new economy will find its support in the progresses of science and
technique, in the technologies of the future , which should have priority, according to
the requests of the environment. This trend appears especially manifested in the

∗ Prof., Ph.D. at the University of Petro șani, Romania

38 B ușe, F.

developm ents of inform atics industr y.
The econo my of the future, on the othe r hand, will have to be a lot more
efficient than the econo my from today ; the reason is already known: population
increas es co ntinuously , and the resources are ofte n lim ited, e ven if an im portant
mutation in the place and role of the production factors appears nowaday s.
We are deali ng here with the process of creating a new kind of civilization
(based especi ally on elements com ing fr om science and technique), but which will find
itself in a permanent conflict with the other existing civilizations toda y, also tr ying to
extend their influences.
In the informational society , the basi c econom ical resource will neither be
capital, nor land, nor physi cal la bor. It is, and it will be knowledge.

2. KNOWLE DGE AS A PR ODU CTION FACTO R

Along with the traditional factors, knowledge i mposes it self as a factor with a
fundam ental role in the econom ic progress. The capacity of a country of profiti ng fro m
its accu mulated knowledge will be deci sive in the success of the econom y of that state.
Knowledge can appear in different shapes: a new manufacturing technolog y, a better
organization of the whole activity (dev eloping managem ent knowledge) progresses i n
the psy chological field, new applications of the boun dary sciences. If the other factors
are characteri zed through s carceness, knowle dge as a production f actor doesn’ t adm it
this character istic.
An aspect tha t is difficult to quantify, becaus e the sc arcene ss or i nexistence of
an adequate set of indicators, is represented by deter mining the effi ciency of the use of
knowledge stock in the reproductive pr ocess. The pr oductivit y of knowledge will be
decisive in the econo mic success of a count ry or enterprise [ 1]. In the future ,
differences b etween rich and less rich countries will no longer be found i n the degree
of equippin g with, and using of classical production factors, but in the pro duction,
accessing and using knowledge.

3. KNOWLE DGE AS A PUBLIC GOOD

The “consum ption” of a quantit y of kn owledg e does not lead to th e
diminishing of the total “ stock”, but it ev en deter mines the increase of the quantity of
accumulated knowledge, c onsidering t he fact, th at onl y through a profound study of a
knowledge f ield, one can brin g im prove ments and develo p new theories and
applications.
Knowledge has all the characteristics of a public good: the consum ption of a
part does not affect the consu mption of a nother person, although, as Stiglitz [ 6] says, a
book in a lib rary can’t be read by two persons in th e same time. But the conte nt of a
book , disk or hard-disk m ust not be remade for anoth er user.
Although knowledge is n ot a p ure pu blic go od, there are nu merous positi ve
externalities associated to this.

The effect of knowledge on the econo mic growth 39

4. HISTOR ICAL VI EW – CAN THE DEVEL OPING COUN TRIES BY-
PASS THE STAGES OF DEVEL OPMENT?

It has been suggested in t he econom ical theor y, that developin g countries can
“skip” over s ome st ages o f the process of econo mical develop ment, directly entering
the inform ational society . We shall argue that this is not possible.
From the historical point of view, the developm ent of the inform ational society
has been poss ible at a certa in stage of the econo mical and social de velopm ent. B ecaus e
of the co mplexity of the econo mic problems, necessities of increasi ng the
communicati on speed, the transaction speed and the m obility appeared. Technical
progress is not the result of the basic scientific research, but is associated to s atisfying
some social n eeds.
In the i ndustr ialized countries, the r esear ch and devel opment process has been
financed wit h resources f rom the surplus of the traditional industrial branch es. The
resources allocation was possible under the conditions of the e xistence of efficient
capital markets, the initial prices of top products and services were high, onl y a part of
the consum ers being abl e to afford them , but in this way contribut ing to the
developm ent of the h igh-te ch com panies. An unfavor able situation for the devel oping
countries can be determ ined b y the creation of a technological dependence of the Sout h
to the North, with the i nstauration of a new type of colonialis m, the techn ological
colonialism .
The developi ng countries can and m ust acceler ate the rhy thm of the econom ic
growth, and governm ents must support those ind ustries considered with go od future
perspectives, but the industrial polic y also has its critics. The polic y of small, but fast
steps, repres ents the best solution.

5. USIN G IN DUSTRI AL P OLICY T O ACQUI RE KNOWLE DGE

The goals of the ind ustrial polic y regard the econo mic growth of a countr y
under the conditions of drawing a developm ent fram ework by the state. The state
intervention c an be supported by a series of econo mical argu ments: econo mies of scale
which are n ot fully accom plished, i ncomplete markets, inc omplete infor mation,
externalities and factors transfer.
During the l ast two decades of the past century , the goals followed b y
industrial pol icies have evolved towards the creation of the conditions requested by the
transition to inform ational society . A special intere st has been therefore manifested for
the program s of prom oting research a nd stim ulatin g intangible invest ments, for the
creation of inform ational networks which to contribute to the rapid dissem ination of
knowledge and for the d evelopment and m odernization of the infrastructures offer.
Toda y, the g oals of the industrial poli cy are strong ly related to the requests of th e
inform ational society .
The instruments of the industrial polic y have also changed. Direct
interventions into the m arket mechanisms , such as price setting and adjusting the

40 B ușe, F.

products quantities on the market, have been gradually abandoned, being pre ferred
those instruments which have the goal of removing th e obstacles in the way of the free
function of the market and the im provement of the com petitive climate.

6. KNOWLE DGE AN D EC ONOMIC GROWTH

One of the recent theoretical developm ents, which bri ng an unexpe cted support
to the prom otion of t he ind ustrial polic y in the develo ped countries is the new theory of
econom ic growth. This supplies a valid j ustification regarding t he more active presence
of the state in stim ulating industrial in novation and f ormation of hu man capital.
The ke y element of this new theor y is represented by including knowledge i n
the category of pro ductio n factors, alon g with capita l, labor force and lan d. By doing
this, technical progress is made endogen, growth itself being able to be explained as an
endogeno us phenom enon.
In the context creat ed by this new appr oach, a diversity of m odels have been
conceived, different between each other , but suppor ted on the same suppositi on, that
the development of knowledge is acco mpanied by positive externalities, it generates
increasing productivities and com es against the slow, but continuous decrease of the
growth proce ss.
The m odels which incorporate knowledge by mean s of the investm ents in the
formation of hum an capit al emphasiz e the f act, that together with the productivit y
increase obtained in the work of indivi duals who benefited from the programs for
professional education, a general i mprovement of the education standard is obtained,
which causes an increase in the produc tivity of all production factors.
The classi c theor y (Sollow) states that, for obtaini ng an econom ic growth, one
would do enough by increasing capital and la bor force inputs. The production function
Cobb-Dougla s quantifies precisely the growth equ ation. It is however difficult to
quantif y the effect of knowledge over the econo mic growth, kno wledge affecting not
only the resulted quantit y, but also the w ay in which products and s ervices ar e made.
Models whic h concentrate on the rese arch and developm ent activity of pri vate
companies as a source of the k nowled ge supplem ent em phasize the fact that these
companies do not keep the result of their resear ches for themselves, but a part of this is
reflected int o the society, leading to positive externalities: the increase in the
productivi ty level of other co mpanies and sectors which benefit fro m the o btained
knowledge su pplement.
The immediate consequence of the inc apacity of completely benefiting from
the investment in knowle dge is represented by its sub-optim al level, the described
situation offering the theoretical justifi cation of adopting ind ustrial policy measures:
because the market doesn ’t allow reaching the opt imal level of knowledge pr oduction,
the state must intervene by subventions i nto the research and devel opment activi ties of
private com panies in high- tech industries and reestabl ishing the optimum in this way .
In the last years’ literature regarding the theory of e conom ic growth, the idea
of the endogenous econom ic growth dire ctly dependent on the m arket forces has been

The effect of knowledge on the econo mic growth 41

discussed more often than not, contrary to the classi c theor y of the exogenous
(independent) econom ic growth. The e ndogen ous models of eco nomic growth have
found t heir utilit y in unde rstanding the implications of growth over a whole set o f
policies (tax polic y, public expenditures, educational polic y, commercial policy ).
Recent models of economic growth co nsider resear ch and devel opment as th e
engine of t he econom ic gr owth. A fundam ental assessm ent of these models stat es the
fact, that research and developm ent activ ity generates two fundam ental t ypes of output :
the new product and t he new process it self; the technological i nformation inc orporated
into new products.
It is supposed that the in novator owns the exclusive trade right, for instance by
means of the protection o ffered by the patent. The legal protection of i ntellectual
propert y rights is necessary in order to a llow innovati ve co mpanies to recuperate their
resea rch and developm ent expenditures and to continue the activity in this field.
Protection of technical infor mation is much harder to acco mplish. For instance
a medicine, even patent-pr otected, can be studied an d its com ponent elem ents can b e
determ ined (“reverse engineering”).
In the fra mework of these models, th e liberaliz ation of trade and foreign
invest ments c an accel erate innovation a nd grow th in certain countries, but stagnation
can be registered in others. A positive eff ect towards econo mic growth is possi ble for
all participating countries in case that in ternational trade and foreign investment s
facilitate the dissem ination of technologi es and knowl edge.
A way of int erconnecting the productiv istic model with m arket laws resides in
the appl ying learning laws: the m ore a countr y produces a cert ain product, the more it
beco mes more co mpetitive in producing it. An example could be the co mponents for
aeronautics and com puter industr y, industries where costs significantly decreased with
the accu mulation of production experience.
In this direction two direct ef fects of trade and investme nts can be
distinguished. First, a countr y will ac cumulate ex perience faster in the expanding
sectors and slower in the declining ones. The net im pact over growth is stronger
influenced by the sphere of learning la ws in the expanding sectors co mpared to
declining sectors. Second, considering t he fact, that invest ment an d trade facilit ate the
dissem ination of high-tech technologies, countries will not onl y learn fro m their own
productio n experience, but also from the one of their e xternal partners.

7. KNOWLE DGE IN INTERNAT IONA L TRA DE

Under the conditions of econom ic globali zation, countries m ust specialize in
producin g high-tech goo ds in order to full y benefit from the comparative ad vantage,
knowledge d oesn’t o nly mean productio n and e xport of prod ucts which invol ve a large
amount of science and technolog y, but also the capacity of o btaining i n real time
inform ation about m arkets, distribution channels, consu mers’ preferences. In order to
be able to succes sfully com pete on the world marke t companies must develop a high-
performance i nform ational system , whic h to be integrated in the or ganizational

42 B ușe, F.

structure; a high-perform ance inform ational sy stem can onl y be im plemented under the
conditions of the existence of adequate computing equipm ents, therefore resulti ng in a
positive reinf orcem ent of the two elem ents.
Competitiveness on the gl obal market doesn’ t only depend on the exceptional
qualit y and utilit y of exported goods. In the new super-sy mbolic econom y,
manufacturing and trade marks will have a major role. The capacity of a countr y of
imposing its own produc ts will depend on the way in which t he products will be
perceived as belongin g to a nation well-known for manufacturing that pr oduc t. On the
world market USA is associated with soft ware products, Italy with fashion articles,
France with wines. A countr y will have to know how to prom ote its culture, s o that t he
mark image o f its products to be as favorably as possible positione d in the m ind of the
global consu mers.
As a consequence of the markets liber alization and the progresses in the field
of teleco mmunications the production will be ration alized on a worldwide scale. Th e
trend of de-locating production aims t o the easy access to production factors: human
resources, material resources. Di minishing prices for international transport and the
even faster terms of del ivery reduce the dim ensions of the world marke t. The
geograph y of knowledge is however different: in order to attract investm ents in this
field, countri es in the world m ust prove the existence of a prepared personnel, able to
handle and develop the stock of data a nd information. International cooperation
stimulates co mmon knowledge in reuni ted cen ters for research and development, the
states having to be pre pared to offer the ne cessary (technical and legis lative)
infrastructure.

8. CON CLUS IONS

1. Knowledge has all characteristics of a p ublic good: t he consu mption of one person
does not affect the consum ption of an other person. Although k nowledge is not a
pure public good, t here numerous positiv e externalities associated to it.
2. From the historical point of view, the de velopm ent of the informati onal society has
been possible at a certain stage of the econom ical and social development. Becau se
of the co mplexity of the econo mic problem s, necessiti es o f increasing the
communicati on speed, the transaction speed and the mobility appeared. Technical
progress is n ot the result o f the fundamental scientific resear ch, but is associat ed to
satisfy ing some social ne eds.
3. The developi ng countries can and must accel erate t he rhy thm of the econom ic
growth, and governm ents must suppo rt those indu stries consid ered with good
future perspectives, but the industrial po licy also has its cr itics. The policy of
small, but fas t steps, repres ents the best solution.
4. In present day s those instruments ar e preferred, whi ch have the goal of re moving
the obstacles in the way of the free func tion of t he market and the im provem ent of
the com petitive cli mate.

The effect of knowledge on the econo mic growth 43

5. The new theo ry states a ne w approach, represented by including knowledge in the
category of p roduction factors, along with capital, labor force and land. By doing
this, technical progress is made endogen, gr owth i tself being abl e to be explained
as an endogenous p henomenon. In the context created b y this new approach, a
diversity of models have been concei ved, differe nt between each other, but
supported on the same supposition, that the development of knowledge is
accompanied by positive externalities, generates i ncreasing productivities and
comes agains t the slow, but continuous decrea se of the growth proc ess.
6. The endoge nous m odels of economic gr owth have found t heir utilit y in
understandin g the im plications of growth over a wh ole set of policies (tax policy ,
public expenditures, educational polic y, commercial p olicy).
In this direction two direct eff ects of trade a nd investm ents can b e
distinguished :
− A countr y will accu mulate experience faster in the expanding sectors and
slower in the declining one s. The net impact over growth is stronger influenced
by the sphere of learning laws in the expanding sectors co mpared to declining
sectors.
− Considering t he fact, that invest ment and trade facilitate the dissemination of
high-tech technologies, countries will n ot only learn from their own production
experience, but also from the one of their external partners.
7. Competitiveness on the gl obal market does not only depend on the exceptio nal
qualit y and utilit y of t he exported goods . In the new super-sy mbolic econom y,
manufacturing and trade marks will have a major role.
8. Manage ment of the co mpanies must be orientated as much as possible towards
strategic a ctivities rather t han towards r outine activities. The lead ers of succ essful
enterprises will be involved in the i nnovation process, product conception, its
bringing to the market and quality improvem ent. These acti vities must be
approached in an integrated manner , related to the s equential process of
completing these st ages, so well-known t oday.
9. The increasing com plexity of the research and developm ent activi ties will request
the joint-vent ures form ing between different com panies.
10. Knowledge contributes to the increase of th e com petitive capacit y of a state. The
export of high value-added pro ducts is preferable to the export of raw materials or
agricultural and food pr oducts. The pos ition of our countr y on its way to
knowledge is not the m ost favorable at present ti me.
11. Our countr y must take advantage of t he low labor f orce costs in order t o attract
productive invest ment, wh ich can represent the starti ng poi nt of a n econom y based
on knowledg e.
12. At present ti me, our country was not able to assu me a position which to insure its
integration into the knowledge-based econom y.

44 B ușe, F.

REFERE NCES:

[1]. Druc ker P . – Societatea postcapitalistă, Editu ra Im age, 1999
[2]. Druc ker P . – Organizațiile viito rului, Editura Te ora, 2001
[3]. Houghton J., Sheehan P. – A Pri mer on th e Knowledge Econo my, Centre fo r Strateg ic
Econ omic Stu dies, Victoria Un iversity, 20 00
[4]. Naisbitt J. – Mega tendințe, Editura Peda gogică, București, 19 89
[5]. Ramonet I. – Geop olitica haosului, Edi tura Doina, Bucure ști, 19 98
[6]. Sti glitz J. – Public Po licy fo r a Knowledge Econ omy, Cen ter for Econo mic Policy
Resear ch, Lo ndon, 199 9
[7]. Toffler A. – Powersh ift, Editura An tet, B ucurești, 1995

Annals of the University of Petro șani, Economics, 4 (2004), 45-50 45

TYPES OF STRATEGIES IN THE FIELD OF QUALITY

DORU CÎRNU, AMALIA TODORU Ț *

ABSTRACT: The strategic thinking is the nucleus of a commercial society’s activity
and it has in view firm’s positioning in th e field of efficiency and competitivity. The
substantiation of strategic management needs a unifying thinking which should give answers to
the questions about the purpose, the motivation of action, the ways to be followed and the
possibilities of achieving the purpose, aspects which are presented in this essay.

KEY WORDS: strategic management, strategy for quality,

1. INTRODUCTION
The competitivity of contemporary orga nisations, whatever their nature and
dimensions, may becomes from the quality of the adopted and applied strategies.
In a world of competition and of sophis ticated demand, quality represents the
way in which the enterprise can survive. That is why the qualitative level of the
products represents an essential strategi c element in the present-day economic
conjuncture, and the establishment of the way to act in order to reach the proposed aim
from the point of view quality, is essential, being the first priority for the strategic
marketing.
The strategy of quality is considered competitive because the mission of
quality is, today, that of dealing with the competition, of being competitive on the market.
Strategy describes the way to use the resources “in order to reach the purposes
established by the policy”, which expresses the skill to combine the necessary means to
achieve the objectives referring to quality.
By strategy, the management has in mind:
•
to meet the social needs and the demands of the
beneficiaries, removing the causes of the defectes;

* Prof., Ph.D. at the “Consatantin Brâncu și” University of Târgu-Jiu, Romania
Prof. at the “Virgil Madgearu”Commercial College of Târgu-Jiu, Romania

46 Cîrnu,D.; Todoruț, A.

to establish t he level of the char acteristics of quality according to
the requirements i mposed by the com petitiveness of the products
or of the services, on different markets; •
•
• to integrate the purposes in the vision and m ission of the fir m;
to change the em ployees’ mentality from mistrust t o trust in the
process of ac hieving and im proving of the quality .
The form ulation of the strategy in the field of qualit y, which is an internal
problem of a fir m, is based on the capacity of the firm of making products or
perform ing services at the level of th e conditions imposed by standards or other
norm ative reg ulations: competitivit y, performance, price, ti me.

2. TYPES OF STRATEGY
In order to establish the strategy of achieving quality , it is nece ssary to answe r
to som e aspe cts which resulted from the anal ysis of the concepts which provi de qualit y
and the control of quality as it is can be seen in fig.1.
We can est ablish a formula for the st rategy of qua lity which shows that the
strategy is a function de pendi ng on the industrial activity (A i), on the ele ments
developed b y the s ystem (E s), on the functions of qualit y (F q), on t he managerial
functions (F m) and on t he degree of severity (G s):

S = f(A i, Es, Fq, Fm, G s)

The diversification of the products can be developed on three lines: horizontal,
vertical and sideway . The horizontal di versif ication of the produc ts is achieved by the
number of product lines of the firm. So, in the glass industry , besides the co mmon
glass products, cry stal products can also be m ade.
The vertical diversification is achieved b y the pro longation “u pstream” and
“downstrea m” of a product line, also including in the manufact uring classified list
some products obtained later, as raw mate rials which use the actual products of the
firm as basi c constituents.
The sideway diversification means a developm ent of the produ ction field in
directions connected to the basic struct ure.

3. ACHIE VING T HE OP TIMUM
Besides the objectives, the options of achieving the strategy , the global
resources as invest ment funds, the ter ms get a valuab le meaning in the actual dy namics
of the economic life when we witness to a permanent and necessary change in all the
econom ic and social fields.
That is why must be identified and respected rigorously all these e lements: the
date of initiating the strategy applie d, the inter mediary terms which mark the
significant evaluations in the achieving the strategic objectives, the ter ms of control
and analy sis of solving the predicted p hases, the fin al term for a pplying the strategy.
These elemen ts can be performed faster and earlier than the established ter ms initially .

Types of strategies in the field of quality 47

Manage rial
functions whi ch
must be de veloped – Prezentation
– Organization
– Directioning
– Coordination
– Control Elements of the
system of quality
can be attache d
to each activity
The fu nctions of
ensuring the quality
which must be
devel oped – Construction
– Chec k
– Improvment
– Gua rantee
– Instruction Elabor ation of
the s trategy
for qua lity
The de gree of
severity
adopted
– Prezentation
– Organization
– Directioning
– Coordination – Marketing
– Planning
– Finance ment
– Scien tifical
researches
– Projection
– Supply
– Fab rication
– Deliv ery
– Services Successi on of activ ities wh ich
contribute to the achi evement
of the quality o f the produ cts
(proce sses)

Fig.1. Strate gic formulation for qualit y

Dr. Josef Wagner, in his article “Th e quality guarantee in the strategic thinking
system”, shows that a proper strategy in the field of quality means:
to perform the quality rather by ideas and design than by using e xpensive export
products; •
•
• to mark the intensive work rather than the activity of the capital;
to anticipate the strategy of a foreign partner so as to have a m anagerial e mpathy
capacity .
In an environment which changes fast , requiring new products and services, in
order to be and rem ain co mpetitive on an ex ternal market, the main care of the qualit y
management must be the choice of the b est strategy .

48 Cîrnu,D.; Todoruț, A.

4. TYPES OF STRATEGIES IN FIELD OF QUALITY
4.1. I n the profile literature there are known a lot of strategies whi ch, according
to the level f or which they are elaborate d, can be deli mited in the f irm’s strategi es and
in the busines s’ strategies. The fir m’s strategy must have a strat egical for mula which i s
tied to a profound i dea indicating the way in which the enterprise acts and must also
have functional strategies showing how th e principal activities will be acco mplished,
referring to the econom ic, organizing and social aspects of the portofoli o. The
business’ strategy is about an activity from the f irm’s portofolio and cons ists of
competitive and plain strat egies.
Plain strategi es allow co mbinations of unitar y factors in industrial activities
such as: projection, developm ent of pr oducts, m arketing, pr oduction. Competitive
strategies describe the way of obtainin g advantages b y the enter prise. Depen ding on
the dim ensions of business and the number and t ypes of products achieved, a
competitive strategy is built for each business.
We can se e a typology of strategies whic h results in the com petitivity of the
organisation, dependin g on the natur e of its orie ntations. Thi s typol ogy contains:
strategies ori ented to low costs, strategi es oriented to t he differentiation of t he
products, str ategies orien ted to obtai ning a m arket niches, strategies oriented to
achieving the product quality, strategies or iented to technological advantages.
Therefore, th e strategies are oriented to the quality and they are co nsidered as a vector
of growth for the fir m’s competitivity and they have the role to face the market
competition.
Because the qualitative level of t he products is considered as an “essential
strategical element”, econ omic theory and practic e identified distinct strat egies o f
qualit y which have the role to build and to im prove the image of the firm on the
contem porary econom ical scene.
So we can talk about strategies for maxim um performance, d ominated by
qualit y, diver sification by qualit y, conc entra tion on the level of q uality and re newal of
the product range. Depending o n the elemen ts of the market conjuncture, on the
specific conditions of each firm , the strate gy aims at an adaptation of the product
quality to the dem ands of each seg ment of th e market, an i mprovement of the q uality
when the enterprise has a strong position on th e market and a continual diferentiation
of production so as to counteract the offer of other com petitors.
The strategy of the maxim um performa nce aims at the fir m getting supreme
qualit y by having m aximum performan ces fro m the point of view of its products or
services, bec oming in this way exclusive lead er on the market. The elaboration of the
strategy of maxi mum performance r equires from the fir m a per manent effort of
research-deve lopment, covered by m aterial resources , a permanent and active concern
for prom otion, a perm anent invol vement of the firm leaders in ensuring the quality.
The strategy of the domination by quality im posed the presentation of a m arket
or a seg ment of a market and b y a hig her am ount of s ales. In order to m ake full use of
these advanta ges it is nec essary to inve st a lo t in the conception and designing of the
product, t o investigate permanently the demands of the users and the custo mers, to

Types of strategies in the field of quality 49

follow the pr oduct in expl oitation, to achieve a flexibilit y to the manufacturing of the
product, t o adapt to specific distributi on channels of the m arket. This strateg y also
involves the existence of a control s ystem of the quality in the different stages of the
production and utilisation of the product by finding out the degree of satisfaction of the
beneficiaries regarding the qualit y of the products.
4.2. The strategies applied in qualit y depend on the other co mpetitive strategies
adopted b y the enterprise, which is t he strategy of developi ng and design ing the
products, m arketing, production. But the strategies in the fi led of quality are
synithetized in a few “vari ants” [1].
“undirect strategy – when attention is paid onl y to the ind ustrial activity,
considering t hat by a better manageme nt a better quality can be obt ained; •
•
•
•
• “immediate strategy ” – when there are applied in the industrial activiti es
procedures for quality that were suc cessfully applies in other enterprises;
“strategy of certification” – when th e required procedures are im plemented as
required b y the standards for qualit y (ISO 9000) . This strateg y leads to the
appearance of a minimal system;
“type strategy”, known for its effici ency , for exam ple the Total Quality ;
“specifi c stra tegy”, – elaborated on the basis of the firm ’s own philosop hy of
quality and of the available resources;
But the selection of one strategy or an other depends, as J. Juran says, on the
elaboration o f a “study of the problem ” beginnin g with knowi ng w hat is the aim of the
enterprise ( M) regarding the quality and p assing through problem s such as market
competition (C), chances of im provement (I), dangers that could com e (D), usage of
the hum an re sources (R). [3]
In this case the mathematical formul a of the strategy of quality can be
expressed as follows: S = f(M,C,I,D,R)
No matter wh at type of strategy may be adopted the com ponents that represent
specific characteristi cs in the filed of quality must be identified and established. Thus
the objectives, the means and options of achieving the objectives, the nec essary
resources and the deadline can be outlined.
The objectives take into consideration lo ng periods an d the y refer to the whole
of the activities of the co mmerci al soci ety or to their major co mponents. In solving the
objectives of the quality strategy , that must be comprehensi ble, clearly defined,
stimulative, achievable, verifiable, the star ting poi nt is the ide a that the quality is
imposed b y the knowledge of the social needs and the consumer’s requirem ents.
The way s of resolving the objectives are refer to the major approaches, with
implications on the content of a big part of the firm ’s activities, on whose basis it i s
evaluated that achieve ment of the strategical objecti ves is possible and reaso nable.
Among the strategic way s frequentl y used, the follo wing ones ar e more im portant: the
diversification of pro ducti on, the achievem ent of new products, t he penetration on new
markets. These means na med “growth vector” indicate the directi on in which the firm
evolves and t hus influence one another.

50 Cîrnu,D.; Todoruț, A.

The practic al achieve ment of diversification needs a wide range of activities
such as: the m ultiplication of t he types and dimensions, m odels, colours, packages, the
enlargement of the functionality dom ain.
4.3. Options of achievement. All th ese strategic way s invol ve options of
achieve ment that are oriented towards the next ele ments:
improving t he constructive and technolo gical conception of t he pro ducts; •
•
•
•
•
• using materials of superior qualit y at the requirements of the designing and
technological docum entation;
the perm anen t qualification and im provement of the firm ’s personn el;
knowing the demand and the market segment;
selecting the suppliers according to thei r suppl y capa city;
storage, transport condi tions.
All these el ements are ad ded up to the variables that influence th e quality and
all of them represent co mponents of the quality strategy .
4.4. In order to substanti ate a strate gy in the file d of qualit y, that m ost
corresponds to the firm ’s stage of developm ent, it is very important to evaluate of the
variables according to this chart:

Quality Strategy Stron g aspects of disfunctionality
Competences
Influences a nd relations with the environment
Fundam ental objectives of the firm
Dem and investigated on the marke t
Complexity of the characterist ics of the quality o f
products and services
Fig.2. Factors that deter mine the e stablishment of strategy in the field of quality

REFERE NCES:

[1]. Olaru M., coordin ator – Management ul calității – co ncepte și principii de ba ză, Editura
ASE, Bucharest, 1999
[2]. Ionescu S. C. – Excele nța industrial ă. Practica și teoria ca lității, Editura Eco nomică,1997
[3]. Jur an J.M. – Calitatea produselor, Editu ra Teh nică, Bucha rest, 1973
[4]. Wa gner J. – Quality Assu rance on the Framework of Strategic Thinking, Editura ASE,
Bucha rest, 1999
[5]. Kélad a J. – La géstion integrale de la qualité, Edition Quefec, 198 6
[6]. Florescu C., coordinator – Marketing , Editura Mek eter, Bucharest, 1992

Annals of the University of Petro șani, Economics, 4 (2004), 51-54 51

SERVICE MARKET – THE RE AL FORM OF EXISTENCE
FOR EXCHANGE RELATIONS

IOAN COSMESCU, DENISA COSMESCU *

ABSTRACT: In a limited way of approaching the term “market” is defined as a
certain geographic place, a physical point where, at certain hours and certain days, buyers and
sellers meet in order to buy and sell goods. In a broad and abstract way of approaching the
word “market” does not mean anymore a point that can be geographically and physically
located, but the universality of relations that take place between the representatives of demand
and supply for a certain product.

KEY WORDS: market, service market, market functions

The large majority of people think th at the term “market” appoints to agro-
alimentary places where peasants sell their products directly to customers. In other
words, the market represents a certain geogra phic position, a physical point where, at
certain hours and certain days, buyers and se llers meet in order to buy and sell goods.
Considering the market as a material, concrete place is a limited way of approaching this term.
At present, the world “market” has more meanings even if it originally comes
from the reason of those points of sell, wh ich can be found today in certain places.
Nowadays, in developed economies, on ly a small part of selling and buying
activities are carried out in concrete market s, the majority of them being achieved
through retail and wholesale, import-expor t firms, salesmen, agencies of large
companies. In such cases, the word “market” does not mean anymore a point that can
be geographically and physically located, but the universality of relations that take
place between the representatives of demand a nd supply for a certain product. This is a
broad and abstract way of approaching the term “market”. If today specialists speak
about market analysis, market making, labour market, capital market, oil, copper,

* Prof., Ph.D. at the “Lucian Blaga” University of Sibiu, Romania
Market expert at the L.C. Welting Marketing Romania

52 Cosmescu, I..; Cosmescu, D.

cereals market, consumer goods and s ervices mark et, the phy sical points of sell for
products are no longer tak en into considerati on, but there is a desire for observing a
higher or l ower bu ying trend relating to a higher supp ly.
In conclusion, we can sa y that nowaday s the term “ market ”, in its abstra ct
sense, refers to general eco nomic relations established between producers that provide
production conditions within the m arket econo my and consumers representin g hum an
necessity bearers, associat ed with people’ s capacity of buy ing offe red goods which ar e
suitable for them, rel ations with fro ntiers not neces sarily defined only through
geographic area or conventional product classifi cations.
Selling and bu ying actions, pointed o ut throu gh market economic relations,
together with processes lin ked with the structure of dem and and suppl y objecti ves, ar e
in connection with the space and time they are taking place.
During its de velopm ent, the market ha d automatized s everal specifi c functions:
– price formi ng – through the confrontation between suppl y and demand for certain
products or services the price for these goods and t he quantit y that is goi ng to be sold
are est ablishe d;
– coordinati on – firm s are guided on the market in accordance with existent data on
demand and suppl y; these inform ation are analy zed giving the possibility of defining
or re-exam ining econ omic plans individ ually and auton omously prep ared b y
companies, s ellers and buy ers, plans that are meetin g on the market;
– companies socio -economic organizati on – the link between suppliers and buy ers is
established through the m arket, thus an econom ic co mmunion being achieved;
– economic rationali ty – the market makes the parties of an exchange relati on to
develop a pro fitable economic activity in orde r to be able to stay on the m arket.
All these functions specifi c to the mark et make possi ble the optimum exchange
of different products, ach ieving in this way the main role of t he market. But it is
utopian to sta te the fact tha t markets are able to mediate these funct ions and role in an
ideal way . Extrem e situ ations, periods of under – and over-productio n or major
technical dis coveries de monstr ate th e fact that markets are no longer able to
automatically fulfil t he role of economic stability regulator. B ut beside the se limit
situations political econo my reached the conc lusion that even in the so called “n ormal
periods” the stability on certain market s can not be defined as being optim um. That is
why today it goes without saying that th e state has to interfere in several markets m ore
or less intensively . This int erference is obvi ous generally on the agricultural market, in
mining, in the credit sy stem and transport.
Sawn in the light of goods nature that represents the objective of co mmerci al
transactions, the go ods market under the for m of flows has as ob ject both
physical/substantial produ cts and non-substantial products. Se rvices as a socio-
econom ic domain is one of those that offer invisible, abstract products which can be
defined quant itatively and qualitatively only in part and indirectl y. However, just like
the other useful econom ic goods pr oducing ac tivities, services had form ed in time a
personal market for the “products” they provi de defi ned throu gh factors with specific
manifestation and determ ined by geogra phic, socio-econom ic and politic nature.

Service ma rket – the rea l form of existence … 53

Sawn in the light of conte mporary sense of the word market, the servic e
market repre sents the eco nomic spher e of interface between the interests of service
suppliers materialized into service productio n and the interests of service bu yers
materialized into consumption. An d as in case of services supply and consu mption
happen at the same place, the interferen ce is going to be transformed in superposition
in tim e and space of these to factors through service consum ption.
But even if the service market is alike through its f unctions and role to other
existing forms of the mark et in general, how ever there are several particularities that
distinguish it from the others, referring to quantitative or qualitative aspects:
a) service market does not include in all the sphere of services becaus e there
are non-good services or noncommerci al service formed of publi c and private services
that are not marketable and free of charge services provided b y people to them selves;
b) the difficulty in measur ing the dim ension and dyna mic of s ervice market
comparatively with possibilities in this fi eld regarding substant ial product market.
Consequentl y, in order to d etermine suppl y, dem and and the volu me of transactions on
the service market we must appeal to a succes sion of indicators. For exa mple, i n order
to evaluate the touris m market as a r epresentative subsy stem of service market we have
to use a subsy stem of indicators regarding to urism resources both t hrough the
occupation p oint of view (the num ber of cultural-histori cal monuments, av erage annual
value of fixed and circulating funds, pr oduction capacity in tourism, working time) and
through t he consum ption point of view ( labour expenses, rent, total expenses, expenses
generated by arranging and main taining tourist objectives). W e must al so use the
subsy stem of indicators regarding t he econom ic and social effects of tourism activities
(net revenue, earnings from offering tourist services, contributio n to national income
and growth of the social labour pr oducti vity);
c) the particu lar meaning of qualitative elem ents in est imating the position of a
producer or c ountr y on the service market. For example, in com parative evaluation of
tourist services regarding acco mmodation pr ovided by several types of tourist
structures, a special position are g oing to have qualitative criteria, meaning:
convenience, safety , hygiene, conditi ons for develop ing social rel ations, the di versity
and quality of co mplementary and food services, the ferven cy and quality of c ultural-
artistic and re creation servi ces;
d) the particular way of competition expressed on the service market, which
presents the following aspe cts:
– if in case of phy sical product market com petition is firstly m aterialized in price,
value being determ ined by subjective n eeds of each individ ual and the rarity of a
certain product, in case of service market the rarity of the service does not ha s a
significant role in price d etermination and accordingly not within com petition
because serv ices are not hom ogenous and can not be com pared. Therefore,
competition by price is more varied, price esti mation being r elated to several
qualitative, phy siological aspects often influenced by personal relation between
service provider and custo mer. Conseque ntly, taking int o consideration the
permanent difference s among services re garding their quality , price s used by

54 Cosmescu. I.; Cosmescu, D.

different fir ms are vari ous, but the ir fairness i n accordance with production
overheads is neither prove d nor i nvalida ted;
– the greater frequency of monopol y and o ligop oly situations determined by
considerable entering an d out put cos ts form the service mark et, by objective
econom ic difficulties regarding free entrance in the branch and capital free
circulation;
– each servi ce enterpriser has a variety of means abl e to distingui sh him from his
competitors, first of all through qualit y even if it is not alway s entirely perceived
by custom ers, and secondly through a mbience fro m the firm and the personal
relation maintained b y the service provider with his clients, also having in m ind
geographical place ment that very ofte n represents the main crit erion in service
choosing;
– in case of service market, transparency is limited by the i mmat erial fe ather of
services, the reality that prevent com petitors to know the secrets of superior
technologies of producing and organizing th eir services or to understand the object
of the dum ping polic y. At the same tim e, service consu mers are not able to
compare rigo rousl y the price-quality relation for every service on the market
because of ti me re strictions.
In conclusion , taking int o account the specific features of service market, w e
must ad mit the general point of view, also embraced by the Rom anian specialis ts in the
field: “taking into conside ration that products are not hom ogeneous, free entrance in
the branch and capital free circulation are of ten restricted, costumers and com petitors
hold lim ited inform ation, each producer being in the position of a small monopo ly, we
are facing a market characterized by imperfect co mpetition”. Thi s reality entail a more
pronounced interference of the state into this sector and a li mitation of free market
throug h regul ations.

REFERE NCES:

[1]. Cosmesc u I. – Turismul – fenomen complex cont emporan, Editura Eco nomică, București,
1 998
[2]. Ionică M. – Piața serviciilo r, vol. Econ omia serviciilo r, Editu ra Uranus, Buc urești, 19 97
[3]. Reboud L. – Moder nisation et services , Cahiers des Sc iences Economiques, nr.9,
G renoble, 1990

Annals of the University of Petro șani, Economics, 4 (2004), 55-62 55

CONSIDERATIONS SUR LE CONTRÔLES EN
MARKETING

IOAN CUCU *

SOMMAIRE: Le contrôle a pour but de vérifier si les réalisations sont conformes
aux prévisions. Lorsqu ‘une différence est constatée, des mesures doivent être prises afin de
combler l’écart relevé. Les contrôles peuvent u tiliser plusieurs instruments: des budgets, des
tableaux de bord commerciaux, le diagnostics sur les activités commerciales.

MOT CLÉS: le contrôles continus, le contrôle budgétaire, les tableaux de bord
commerciaux, l’audit de marketing, le diag nostic commerciale de l’entreprise, les
prescriptions .

La fixation d’objectifs et le choix d’une stratégie, d’un marketing mix composé
de diverses tactiques commerciales, sont fondés sur des hypoth èses que l’expérience
peut infirmer. Les plans de marketing vont alor s être rectifiés, afin de tenir compte des
changements constatés dans le milieu extérieur ou des déficiences internes. En
conséquence, un système de contrôle doit être mis en place. Un tel examen peut être
continu ou périodique.

1. Le contrôles continus

L’existence de différentes étapes rencontrées au cours du processus de
planification (définition des objectifs, choix d’une stratégie, sélection de tactiques)
conduit le responsable commercial à pro céder à diverses opération de contrôle.
Le contrôle a pour but de vérifier si les réalisations sont conformes aux prévisions.
Lorsqu ‘une différence est constatée, des mesu res doivent être prises afin de combler
l’écart relevé. Trois séries d’examens sont généralement effectuées.
1. Il est bon de s’assurer, tout d’abord, que les prémisses du plan de
marketing n’ont pas changé: le marché n’a-t- il pas évolué ? Un nouveau concurrent ne
menace-t-il pas l’entreprise ? Bref, les objectifs sont-ils toujours acceptables ? Si ce

* Assoc. Prof., Ph.D. at the University of Petro șani, Romania

56 C ucu, I.

n’est pas le caEnsuite, si les prix sup posés n’ ont pas changé, i l faut vérifie r que la
stratégie e st bien toujours en accord avec eux.
2. Enfin, il est nécessaire de s’ assurer que les t actiques conviennent à l a
stratégie qui a été choisie.
Les contrôles peuvent être:
– généraux: il s’agira par e xemple de l’examen des r ésultats fourn is par l a
stratégie de marketing à une période do nnée;
3. partiels: citons le contrôl e des résulta ts de l’éq uipe de vente, l e conts,
l’ensem ble d u processus doit être revu.
– rôle du rendement d’une cam pagne de publicité, le contrôle de pénétration
de la marque etc.

2. Les proces sus de contr ôle continu en marketing

Nous savons que, po ur eff ectuer tout c ontrôle, o n rapproche tou t d’abord les
résultats effectifs des prévisions, puis l’on m esure les écarts. Les chiffr es prévus
proviennent d es docu ments écrits – les plans de mark eting par exem ple – dans lesquels
sont contenue s les décision s stratégiques , tandis que le s chiffres ré alises sont obtenus:
– par voie comptable grâce à la co mptabilité analy tique lorsque celle-ci est
adaptée au systè me de planification de marketing;
– par voie extraco mptable: études de marché, p anels de détaillants,
baromètres d e marque, stat iques diverses, etc.
De telles com paraisons sont souvent présentées so us la for me de graphique s
comparables à celui que no us reprisons à figure 1.

Figure 1. Évolutions des ventes des pl ats cuisinés s ur 6 périodes
bimest rielle s
020406080100120
Octobre/Novembre
Decembre/Janvier
Fevrier/Mars
Avril/Mai
Jiun/Juillet
Aout/Septembre
Cassoulet prevu Cassoulet realise Paella prevu Paela realise

Considerations sur le contrôles en marketing 57

Les graphiques sont utiles, parce qu’ils constituent un m oyen visuel, donc plus
direct et plu s rapide, d’apprécier globale ment une situation, avant d’en fa ire une
analy se plus détaillée. En contrepartie, ils im pliquent, par so uci d’efficacité, une
certaine perte d’inform ations. C’est au gesti onnaire qu ’il revient de savoir faire la part
entre le sy nthétique très parlant et l’ analy tique peu lisible.
Pour procéder au contrôle continu, deux instru mentes sont fréquemment
employés: de s budgets et des tableaux de bord.

4. Le contrôle budgétaire en marketing

Les budgets commerciaux se déco mposent en trois gra ndes catégories:
1. Budget des ventes: par produi t, par marché, par client, par territoire, par
rayon, par technique de vente (vente tr aditionnelle, v ente en libre-service) etc.
2. Budget de coûts: par pro duit, par m arché, par clien t, par vendeur , par ray on,
par média publicitaire etc.
3. Budget de s marges: par produit, par marché, par client, par vendeur, par
territoire, par ray on, par service etc.
Les principes et les qualités propres á la gestion budgétaire s’ appliquent au
domaine co mmercial. Chaque budget correspond á une centre de décision confié á une
personne. L’outil budgéta ire a en effet pour objet de mesurer des perform ances et de
stimuler les h omme s.
Selon l ’organ isation, un budget relatif á un pr oduit (ventes, coûts, marges) sera
confié á un chef de produ it ou á un responsab le des ventes. On sait en effet que la
responsabilité ne se partage guère en matièr e budgétaire, et les exemples foisonnent où
l’on constant e que les difficultés proviennent de l ’éclatement des responsabilités.
Le cas plus fréquent s’ob serve au sein d’organisati ons co mmerciales où les
chefs du service des ventes sont responsables des budgets de chiffre d’affaires et où les
chefs de produits n’ont p ouvoir que sur l es budgets des coûts. La question se pose alors
de savoir qui doit rendre com pte des marges, si chacune des parties prenantes ne
détient qu’une part lim itée de la resp onsabilité, les uns s’effor çant de pous ser les
ventes, les au tres s’en tenant á la st ricte gestion des b udgets des coûts.
Tout bien co nsidéré, l’obli gation d ’harmoniser les bud gets est doubl e:
– En prem ier lieu, les budgets de mark eting doi vent être coordonné s avec ceux
propres aux autres fonctions de l ’entreprise ou de la divis ion. Exemple. Il est
nécessaire de vérifier que l e budget des ventes n’est p as contradict oire avec le b udget
des services de production.
– Mais il est aussi opportun de s ’assurer que les budgets co mmer ciaux sont en
harm onie les uns par rap port aux autres. Exemple. On vé rifiera que la somme des
budgets des v entes des chefs de produits correspond bien á l a somme des prévi sions de
chiffre d ’affaires des r eprésentants.
Le meilleur moyen de garantir cett e cohérence consiste á ét ablir l e figure 2 des
articulations budgétaires et á vérifier que le budget gl obal de mark eting rassem ble bien
l’ensem ble de s ventes, des coûts et des marges prévu es.

58 C ucu, I.

Figure 2: Exemple d e division budgétaire (pyrami de)

Direction mercatiq ue
Budget m ercatique Cohérence
autres budgets
Direction
commerciale
Budget des ve ntes Directeur m ercatique
adjoint
Budget des services
mercatiques
Région A
Budget du
chef de région Région B
“
“ “
“
“ Chef des
produits
Budget
Direction
produitServices
fonctionnels
Budget
Représe ntant
Budget Représe ntant
Budget Chef
de
produit
A
BudgetChef
de
produit
B
Budget–
–
– Administratio n
des ve ntes
Budget
Publicité
Budget
Etudes
Budget
Contrôle
Budget
Logistique
Budget

5. Les tableaux de bord comme rciaux

On sait que lorsqu ’on ne dispose pas de contrôle bud gétaire, ou lorsq u’on
souhaite co mpléter les informations fournies par cette dernière méthode, on établit, en
vue du co ntrôle, un document qui fourn it périodiquem ent des indications au
gestionnaire co mmercial pour m ieux acco mplir sa t âche. De manière plus pr écise, le
tableau de bo rd commercial a pour o bjet:
– de procurer avec célérité les renseignements souhaités;
– de s’ en tenir aux écarts signifiants. Pa r exem ple, un chef de produi t ne doit
pas être submergé d’indi cations inu tiles, co mme serait la longue liste d es
écarts de rende ment constat és au cours de tournées d e chaque repré sentant;
en revanche, co mme le montre le tablea u 1 on s’ en tient á l’ essentiel;
– d’être facile á consulter et bien illustré.

Considerations sur le contrôles en marketing 59

Tableau 1. T ableau de bord du chef de produit
REALISAT IONS PREVIS IONS
Jan. Fév. … Dec. Jan. Fév. … Dec.
1. CA Bru t
Cumul
Ecart cumulé
2. Rist ournes
et rabais
Cumul
Ecart cumulé
3. CA n et
Cumul
Ecart cumulé
4. Etude et
recherch e
techniqu es
Cumul
Ecart cumulé
5. Coûts de
fabrication
– Ma tières
Cumul
Ecart cumulé
-Main-d’œuvr e
Cumul
Ecart cumulé
– Autres coûts
de fabr ication
Cumul
Ecart cumulé
6. Marge brute
Cumul
Ecart cumulé
7. Coût s
marketing
– Force de vente
Cumul
Ecart cumulé
– Publicité
Cumul
Ecart cumulé
– Promotion
Cumul
Ecart cumulé
– Etudes
Cumul
Ecart cumulé
8. Autr es coûts d e gestion
spécifiques
Cumul
Ecart cumulé
9. Contribu tion
Cumul
Ecart cumulé

60 C ucu, I.

Comme le systè me de contrôle budgétaire co mmerci al, le docum ent récapitule
périodiquem ent – to utes les semaines ou tous le m ois – divers renseignements:
– sur le ventes et les co mma ndes;
– sur les coûts du m arketing ;
– sur les marg es qui résultent de la di fférence entre les produits et les
charges.
A cette list e de base s’ ajoutent parfois d’autres infor mations:
– sur les résul tats des panel s;
– sur le stocks de l’ entrepris e;
– sur la conjoncture;
– sur les résul tats des conc urrents;
– sur les perform ances du p ersonnel de v ente;
– sur les rende ments de s publicités ou des pro motions etc.
Un certain nom bre de ratios co mplètent toutes ces données. Par exem ple:
– Valeur moyenne de vente: clientsde Nombrenettes Ventes
– Développem ent de la clientèle: 100×clientsdes Totalnoveaux Clients
– Solvabilité de la clientèle:
affairesd Chiffredouteuses Creances
•
– Ventilation des ventes: ventesdes Totalproduitpar Vente
– Chiffres d’ affaires par ven deur: vendeursde Nombrenettes Ventes

La liste serait inépuisable, la for me des ratios prés entes dépendant avant tout
de la nature d es infor mations requises p our acco mplir telle ou tell e tâche commerci ale
particulière. On co mprend donc que la grande difficulté, lo rsq’o n veut construire un
tableau de bord en marketing, consiste á fa ire énoncer clairement, en tout conscience,
par le futurs utilisateurs, l a liste des info rmations qu’ ils jugent essentielles. S’ ajoutant á
ses compétences techniques, le concepteur d’un table au de bord ne peut donc manquer
de posséder un véritable don <maïteque>, sans lequel notre outil, m al conçu, se
révélerait inutile, paperassi er et coûteux.

6. Le contrôle périodique: l’audit de marketing

A l’instar des co mptable s, des financie rs ou des ingénieurs, les responsable s
commerciaux procèdent, à intervalles r éguliers, à un exa men général des activ ités qui
leur incom bent. Une telle appréciation, exceptionnelle et non pas continue, peu t non
seulement porter sur l e plan de marketing, sur la politique co mmerciale, mais elle peu t
aussi s’appliq uer aux hom mes ou à l’or ganisation des service s comme rciaux.

Considerations sur le contrôles en marketing 61

Deux cas peu vent se produire:
1. Des cadr es de l’ entreprise sont d ésignés et ils reçoivent le pouvoir
d’effectuer des examens. L’étude doit aboutir à un bilan détaille, sur l a
base duquel un pr ojet d’ amélioration de la situation commer ciale actuelle
est élaboré.
2. Mais, parfois , la révision e st confiée à des conseill ers extérieurs, q ue l’on
juge plus enclins à faire preuve d’objectivité que les responsables
de l’entrepris e.
Il parait souvent efficac e de co mposer un grou pe de d ifférents spécialistes:
– spécialist es d’études de m arche;
– psychosociol ogues.
– organisateurs;
– anim ateurs de prom otion d es ventes;
– spécialist es du contrôle de gestion etc.

Une fois l ’équipe constit uée, un calendr ier d’inter ventions est établi, car le
processus i mpose de respe cter plusieurs étapes:
1. On co mmence par rencontrer tous les principaux c adres co mmerciaux ;
puis, on enquête auprès d’un échantillon com posé de membres du
personnel subalterne (vendeur, secrét aire, aide acheteur, etc.).
2. Les responsables de la rév ision acco mpagnent les mem bres de l a force de
vente auprès des clients, af in d’apprécier les canaux de distribution choisis.
3. Des visit es d’usines de production sont organisées, dans le but de vérifier
la coordination entre les ser vices techniques et les s ervices co mme rciaux.
4. On tient des réunions aux quelles partic ipent les gestionnaires de p lusieurs
services: vente, publicit é, achat, logistique, etc. Au cours de ces
rencontres, on cherche à mieux connaître l’état des relations entre les
différents act eurs co mmer ciaux.
5. Les principaux docum ents écrits sont minutieusem ent étudies.
6. C’est alors que les experts analy sent tous les faits observés et qu’ ils
établissent un diagnostic.
7. Sur cette base enfin, aprè s des entretie ns avec la directi on générale de la
firme, le groupe de contr ôle propose des remèdes, des am éliorations aux
défauts constatés.

7. Thérapeutique commer ciale de l’ent erpris e.

A. Le diag nostic.
L’enquête peut porter sur toutes les a ctivités co mmer ciales. G. Ser raf propose
ainsi un catalogue com posé de vingt p oints à exam iner.
1. La connaissance du marche (méthode d’ étude, connaissance de la cli entèle,
créneaux vac ants, etc.).
2. La fonction r echerche et développement.

62 C ucu, I.

3. La politique générale de la firm e.
4. La politique de marketing.
5. L’étude des coûts.
6. La politique de produits.
7. La politique de production est-elle co mpatible avec la politique de vente ?
8. La politique de prix.
9. La politique de dy namique co mmerciale (axes, budgets, programmes, cibles).
10. La publicité.
11. Les relations publiques.
12. La prom otion des ventes.
13. La distributio n.
14. La structure des servic es co mme rciaux.
15. La force de vente.
16. L’adm inistration des vente s.
17. Le service après-vente.
18. L’exportatio n.
19. Le sy stème d’inform ation.
20. Les contrôles effectues.

B. Les presc riptions.
Quant au document final, celui qui c ontient les recommandations données a la
direction, il peut s’articuler de la façon suivante :
1. Mise en lu mière des problè mes les plus i mportants : sy mptômes et causes.
2. Justification des dispositions souh aitables : su ppression d’ un produit,
augmentation du b udget de publicité, etc.
3. Evaluation de s coûts des modifications proposées.
4. Moy ens m is en œuvre pour parven ir aux nouveaux buts prescrits.
5. Délais.
6. Organisation: définition des responsabilités permettant de mener a bien les
refor mes suggérées.

BIBLIOGRAPHIE:

[1]. Helfer J. P., Orso ni J. – Marketing , Vuib ert, Paris, 1988
[2]. Kotler Ph . – Management ul marketingului, Editura Teora, B ucurești, 19 97
[3]. Ko tler Ph., Saunders J. , Arms trong G., Wong V. – Principiile marke tingul ui, Editura
Teora , București, 1998
[4]. Lindgren J.H. Jr., Shimp A.T. – Marketing. An Interactive Lear ning System, The Dryden
Press , Orlando, United States of Am erica
[5]. Maxim E., Toader G. – Marketing , Editura Ec onomica, Bucuresti, 2000
[6]. Pride M.W., Ferrel O.C. – Marketing. Con cepts and S trategies, Houghton Mifflin
Company, Boston, 1991

Annals of the University of Petro șani, Economics, 4 (2004), 63-68 63

THE HISTORY OF EURO

IOAN CONSTANTIN DIMA *

ABSTRACT: In 1988 The European Council from Hanover has founded a committee
leaded by Jacques Delors, president of The European Committee about that time, with the task
of formulating proposals concerning legislative and economic arrangements necessary to finish
The Economic and Monetary Union.
Delors recommended a plan involving three stages able to lead at a better coordination of economic and monetary policies from the EU countries, with the intention of
creating a unique European currency under the administration of The Central European Bank.

KEY WORDS: EURO, European unique currency, monetary policy, The European
Monetary System, the common market

Fifty years ago, the founders of The European Community thought that the
Common Market they were about to establish was in great need of commune economic
and monetary policies. For the beginning , such an enormous project seemed
unachievable. Therefore there were severa l attempts of coordinating the economic
policies throughout consulting communitarian in stitutions only that finally the ultimate
responsibility for defining such policies remained a prerogative of each member state
for many years to come.
In 1969, the heads of the states that composed, in that moment, The European
Community, gathered at Haga, officially launched an ambitious initiative of forming
The Economic and Monetary Union. The calendar for achieving this project was elaborated by a committee presided by the Luxembourgian Prime-Minister, Pierre
Werner, who in the next year presented a final report composed of three stage at the
end of which, in 1980, national instrument s of economic and monetary policies should
“merge” into a range of “communitarian instruments” used for commune objective.
Thus, the Luxembourgian Prime-Minister proposed, for the first time, the adoption of a unique monetary policy.

* Prof., Ph.D. at the “ARTIFEX” University of Bucharest, Romania

64 Dima, I.C.

In the following years, the launch of th e second stage of the Wern er Plan was
successively underm ined because of t he oil crisis, the divergence am ong national
econom ic po licies of mem ber states from The European Comm unity , as well as
because of the dollar’ s fall.
In 1979 , the plan of form ing The Econom ic and Monetary Union b ecame again
up-to-date th rough t he creation of Th e European Monetary System . The in creasing
fluctuation of exchange rates persuaded firms from co mmunitarian countries to be very
cautious in making massive or lo ng-term investments in the c ountries outs ide the
community , especially because this thing coul d prevent them to abundantl y profit o f
the advantage offered b y The Common Market.
Through a tr ansfer of monetary auto nomy, The European Monetary System
created a stable and easily adjustable mechanism of exchange r ates through defining
certain standa rd rates in accordance wit h a new monetary unit represented by the ECU
(the nam e of an old French coin).
Experience gained throug h the operation of this sy stem was very useful having
in view the creation of unique currency , because the fluctuations of exchange rates
were significantly reduced . Thus, a new ag e of econom ic stability between mem ber
states of the community began.
As inflation rates in the communitarian countries diminished considerabl y,
reaching a unitary floor, i n the middle of ‘80, it became obvious that it was the ti me for
a new im pulse toward forming Th e Econom ic and Monetary Union.
The e mergence of the unique currency represented an ele mental require ment
for perfecting the unique market through the complete elim ination of non-tariff barriers
which make heavier the ci rculation of goods, capitals, services and persons.
In 1988 The European Council from Hanover has founded a committee leaded
by Jacques Delors, president of The Eur opean Committee about that tim e, with the task
of form ulatin g proposals concerning legisl ative and econom ic arrangements necessar y
to finish The Econom ic and Monetar y Union.
Delors recommended a plan invol ving three stages able to lead at a better
coordination of econom ic and m onetary policies from the EU countries, with the
intention of creating a unique Euro pean currency under the adm inistration of The
Central European Bank. F rom that moment, things begun t o move faster. In 1991 the
heads of EU me mber states signed The Maastricht Treaty laying down a set of six
severe criterions of economic convergence th at must be fulfilled by those countries
which intend ed to adopt the unique Eur opean currency .
The third and last stage of creating The Econom ic an d Monetary Union began
at 1 January 1999 when t he uniq ue Euro pean currency em erged.
In fact, tem porally speaking, these sta ges were bas ed on several im portant
steps that laid the foundations of EURO, such as:

The history of EURO 65

– 18 April 19 51 – the signi ng of The Pa ris Treaty concerning the establish ment
of The European Co mmunity of Coals and Steels;
– March 1957 – the signing The Ro me Treatie s that laid the foundat ions of The
Econom ic European Community and of The European Community for
Nuclear Ener gy;
– Decem ber 1969 – The Hagan Summ it when Pierre Werner recei ved the task
of elaborating a report c oncerning m eans of reducing the inst ability of
exchange rate s;
– October 1970 – the publi cation of the Werner report that reco mmends the
centralization of macro-econom ic policies of mem ber states of Th e European
Community ;
– 1971- 1973 – the abolishment of t he Fixed Exchang e Rates Sy stem – Bretton
Woods, causing a great stroke to hopes of establishing Th e European
Monetary Union;
– March 1979 – the creation of The European Monetary System and its co ming
into force based on a new m onetary unit called ECU;
– February 1986 – the signing of The Single European Act brings modifications
to The Ro me Treaty and institutionalizes cooperation am ong member states in
six new fields includin g monetary cooperation;
– 14 June 1988 – the Hanov er Summit oh The Euro pean Comm unity ensure the
progress of the leaders of The European Co mmittee in planning m oneta ry
study ;
– 1 Jul y 1990 – the establish ment of The European Monetary Union which
allows the free movement of capital;
– 7 Februar y 1992 – the signing of The Maastricht T reaty proposi ng Januar y
1999 as the last term for introduction EU RO;
– 3 June 1992 – the rejection of The Maastricht Treaty by Denm ark;
– 17 Septem ber 199 2 – the suspension of the GBP from the monetary snake;
– 21 Septem ber 1992 – Franc e embraces T he Maastricht Treaty ;
– 12 Januar y 1994 – t he creation of The European Monetar y Institute, the
forerunner of The European Central Bank;
– 1 Januar y 1995 – the ex pand of The European Un ion with thre e members:
Austria, Finland and Sweden;
– Decem ber 1 995 – EURO beco mes the new official name for the unique
currency replacing ECU;
– 1 June 19 98 – the form ing of The Euro pean Central Bank;
– 5 January 1999 – the official launch of EURO which in first day of transaction
reache s the parity of 1,19 USD;
– 3 Decem ber 1999 – financ ial shaking caused b y the breakdown of the EURO-
USD parity under 1;
– 25 Septem ber 200 0 – t he G7 member countries support EU RO in the
competition with USD;

66 Dima, I.C.

– 29 Septem ber 2000 – Dan es categorically declare th emselves against EURO
throug hout referendum ;
– 1 January 2 001 – Greece join the E URO zone giving up to the national
currency .
The one that form ulated t he theories wh ich la y on t he basis of E URO is the
Canadian econom ist Robert Mundell, teacher to The University of Columbia who
received in 1999 The Nobel Prize for Econom y of The Swede Royal Academ y for
Science for his analy sis ab out exchange rate s and the way s in which their fluct uations
affect the monetary policies.
The teacher Robert Mundell doesn't c onsider him self the father of EURO,
rather the godfather and b etter on one f rom several g odfathers of t he European unique
currency .
The scientist set the theoretical bas es of The Mon etary Union , being m ost
enthusiastic supporter of E URO. Paradoxical is the fact that his theor y concernin g zone
with optim um currency was used of several economists in order to countera ct the idea
of creating The European Monetary Union and putting un der unc ertainty the c hance of
succes sful for such ale project.
The scientist didn’t directly participat e to the elabor ation of lau nch plans for
EURO, but he was the first person who, as fa r back as in 1961 , raised a key question:
“In what moment is more advantageous for a state to give up to its monetar y
sovereignt y in favor of a unique currency ?”. He anticipated the motion of Europe
toward a more and more gathered int egration and he estimated that The Monetar y
Union will be a good t hing for the EU mem ber states.
Having the experience o f an activity as econo mic adviser to The United
Nations, The Internationa l Monetar y Fund, The World Bank and as con sulter for
governm ents from Latin Am erica, Eu rope, United States and Canada, the scientist
supports now the idea that Asia should try to create i ts own unique currency based on
USD, the first step in this sense being th e official adoption of USD as the national
currency of H ong Kon g.
He pointed out that Asia could borr ow from the experience of Europe in order
to settle an instrument ab le to ensure monetary stabilit y, declaring: “Asia co uld do
many things as a whole and not as a sum of indivi dual countries. The creation of a
unique Asian currency is a feasible thing”.
Thus, a nu mber of 13 states fro m Asia, strongly affected by the econom ic
crisis from 1997 , alread y made the first steps in the direction of formulating
multilateral agreements am ong their central banks in order to provide them a better
protection in cas e of new possible cris is. The Pri me-Minister of Malaise s, Mahathir
Mohamad, declar ed with the occasion of the Economic Foru m from China, in 2001,
that an Asian m onetary system could allow a better monetary stabilit y in this regi on.
Neverthele ss, several offic ials and anal ysts of the Asian zones c onsider that
form ing an Asian monetary union is still a matter of several decades and not several
years.

The history of EURO 67

The same scientist underlin ed the necessity of a uni que currency world-wide
with fixed exchange rates i n relation with USD, EURO and JPY.
For all that it has a parent, EURO was created by The European Committe e
and it had to be an easy to recognize sym bol for Europe, easy to write by hand with a
nice design.
Once the sy mbol was creat ed, the EU me mber stat es entered into the last stage
of appl ying the Maastricht Treaty , the adoptio n of EURO in 1 Januar y 1999. This was
conditioned by accom plishing three im portant groups of converge nce criterions, such
as:
– price settling, so as to inflation from EU mem ber states do not exceed 1,5 %
given the av erage of the m ost performing three communitarian countries in
this field;
– public financ es, meaning that budget deficit must not exceed 3% fro m the
national GDP and public debt m ust not exceed 60% f rom the natio nal GDP;
– exchange rates must not exceed normal margin of +/-2,25% relating to ECU,
stipulated into The European Monetary System ;
– interest rat es must not exceed 2% r elating to average level of long-term
interest of the m ost performing three countries in this field.
In the final phase of form ing The Econo mic and Monetary Union at least 7-8
countries had to enter t he union by accom plishing all convergence criterions. Even if in
1996 several austerity prog rammers were applie d in alm ost every EU country in order
to allow the m to fulfil adhering criterions, starting with 19 97, in 1 Januar y 1999 only
11 states was able to adopt EURO and two years later Gree ce join them after many
efforts.
The arise of EURO wante d as a stable and powerful currency had the m ission
of re-launchi ng Eur ope in its com petition with U.S.A. and Japan through re-settling
currency influence spheres on the world mark et, being a reunio n of the thre e most
important currencies as vol ume of financial flows.
But in order to achieve this objective, EURO had t o pass the tru st test which
wasn’t ver y prom ising at first. After two years of virtual existence, EURO c ame out
tumbled enough from the direct fight on currency markets with USD.
As EURO is going to consolidate its position as a s tabile currency, it is very
likely to become the currency of r olling co mmercial and financial contracts on a large
scale.
Being the currency of the main co mmer cial power, EURO is able to influence
capital flows to detach more easily from form er currencies of EU countries. The
relatively high fluctuations of these curr encies throw the European companies i nto an
unequal competition with their rivals from beyond the Ocean. Now the y have a real
chance in EU RO.
Entering in circulation EURO cr eates conditions t o dim inish considerable
differences b etween the image r eflected by exchange rates and fundamental econom ic
data, differences that tend to cause sever financial and co mmercial crises. In the sa me

68 Dima, I.C.

time, the grad ual increase of the weight of the countries with money reserves in EURO
is going to ensure the bala nce of the Int ernational Monetary System, which, at present ,
is dom inated by USD.
Changes into investors be haviour is not expected very soon , especially takin g
into account that in the first two y ears of the existence of EURO investors suffered
several loss es by using this currency .
Portofolio re allocations depend mainly on the dir ection given by possible
differences b etween interest rate on the EURO market and those registered on other
national and international financial market s. In addition, t he prem ises of EURO
markets stability and hom ogeneity are going t o act as an attraction pole for investors.
The em ergen ce of EURO is also plan ned to lead t o cooperatio n deepening
world-wide based on convergences in currenc y polic ies of the wor ld econom ic leaders.
This fact was pointed out by tendencies ar isen sever al times on the occasion of effort
coordination by ban ks from EURO zone, U.S.A. and Japan in the direction o f
tempering financial markets by diminishi ng the shocks to which EURO, USD and JPY
were subject ed. We can sa y that this is one of the gre atest benef its of launching EURO,
namely the fact that the le aders of the fi nanc ial world take into consideration the risk of
acting b y themselves and the advantages of coordinat ed approaches.
From these situation several questions arise, such as: will the creation of
EURO be the beginning of the fight for re-settling influence spheres in Europe and
world-wide; are we going to attend t o the em ergence of t he “United States of Europe”
excepting England, which is a well kn own American ally ; will EURO confirm the
recognition o f Germany’s econom ic power and of French’s diplo matic power in the
whole Europe and not only.
These are onl y a few questions, to whic h all Europeans expect an answer, and
most of all Romanians strongl y engaged in the European integration process.

REFERE NCES:

[1]. Anghelache C . – Euro 2000. Ultima bătălie a seco lului XX, Editura Eco nomică, București,
2 003
[2]. Pene a Z. – Moneda Euro, Editura Tehn ică, Buc urești, 2002

Annals of the University of Petrosani, Economics, 4( 2004), 69-74 69

MEANS OF REDUCING CREDIT RISK

IMOLA DRIG Ă*

ABSTRACT: Credit risk represents the possibility that the bank will suffer a loss of
income because some borrowers cannot exactly follow the lender’s repayment terms from
different kind of reasons. In such cases, the account of the customer inevitably becomes
overdue, the granted loan turns into a non-performing credit and the lending bank registers a
decline of its profit. In order to prevent such situations, commercial banks must take certain
measures of reducing credit risk.

KEY WORDS: credit risk, credit analysis, cr edit pursuit, guarantees, prudent
regulation, provisions.

When a bank extends credit to a customer it must face the risk of non-payment
due to the fact that some borrowers will be unable or unwilling to repay the loan at
maturity. This type of risk is called credit risk and it represents the possibility that the
bank will suffer a loss of income because some borrowers cannot exactly follow the
lender’s repayment terms from different kind of reasons.
In such cases, the account of the cu stomer inevitably becomes overdue, the
granted loan turns into a non-performing credit and the lending bank registers a decline of its profit. In order to prevent such s ituations, commercial banks must take certain
measures of reducing credit risk.
A first way of reducing this type of risk is credit analysis which involves the
determination of the potential debtor’s capacity to honor his payment obligations and it
is based on the features of quantita tive and qualitative evaluation, taking in
consideration several factors of risk (figure 1. ) that can negatively affect the capacity of
repaying the loan. So as to make proper lending decisions banks must build their
lending policies around the six C’s of credit management: Character; Capital;
Capacity; Collateral; Conditions and Control. To obtain such information, most
lending banks require both business and indi vidual customers to complete a credit
application.

* Assist. Prof. at the University of Petro șani, Romania

70 Drigă, I.

The term character refers to the borrower’s attitude toward his credit
obligatio ns and can be us ually conside red as the most important factor that may affect
the custo mer’s abilit y to repay the l oan at maturity and to make regular interest
payments. In order to judge a credit a pplican t’s characte r, the l oan officer o r credit
manager must take into account som e typical q uestions concern ing the borr ower’s
attitude toward pay ing bil ls, repay ing credit obligations voluntarily, m aking regular
payments.
Capital is used to define a borrower’ s assets or net worth. Capital position
shows wheth er the cr edit applicant wi ll be able to make regula r loan pay ments as
scheduled in the credit agreement. If the cu stomer is another business, the lender looks
for this infor mation in the client’s financ ial stat ements prepare d or audited by an
independent c ertified publi c account.
As far as individuals are concerned, th e inform ation on their net worth can be
obtained b y requiring t hat the borrow er complete a credit application. In o rder to
determ ine wh ether this information is accu rate or not every lendi ng instituti on should
contact em ployers and any financial instituti ons authorized to release infor mation to
confirm that t he clai ms made in the application by the borrower are correct.
By capacity we mean the debtor ’s fina ncial abilit y to meet credit obligati ons.
In order to evaluate business custo mers’ capacity to repay a loan, the bank checks their
income statement. For individuals, this kind of information is contained in their salary
statements or other source s of inco me such as inter est or dividends. Before c redit is
approved the credit manager must take into account a nother m ajor factor.
Especially for long-term loans and for large am ounts of credit commercial
banks m ust charge so me type of collateral to prevent loss of income in case of
borrower’ s default. The c ollateral repr esente d by real or per sonal property (such a s
stocks, bonds , equipm ent or land) is an alte rnative way of recoupi ng the m oney if the
debtor is unable to pay for his credit p urchases. Th at is, bec ause the se curity can be
sold so as to satisfy the debt.
Conditions refer to general econo mic factors that can obviou sly affect a
potential borrower’s capacity to live up to the terms of the credit agree ment. Any
changes in econom ic environm ent concerning in flation, taxatio n, interest and exchange
rates as well as credit co ntrol may have an i mpact on a client’s ability to re pay the
granted loan.
How well borrowers can withstand an econom ic storm may depend o n the
particular industry they are involved in, for business f irms and on the security of their
job and the com pany they work for, wh en credit applicants are individuals.
Control (the concordance with the legislation in force) consists in verify ing the
impact produced by a change in legislation upon the activity of the custo mer, assuming
that the loan granted satisf ies the standa rds of the ban k regarding it s qualit y.
The lending operation being an ac tivity that produces incomes for a
commercial b ank, credit analy sis must take place per iodically : firstly, before granting
and second, from time to tim e established in terms of credit maturity in order to
maintain it in accordance with settled limits.

Means of reducing credit risk 71

¾ the customer ‘s history concerning loan repayment;
¾ the experience of other banks with the customer;
¾ the custo mer’s perform ance in pred icting the results in
his activ ity;
¾ the existe nce of endorsers .
¾ the history of sales, profits and dividends;
¾ the accuracy of pre dicted fund flows ;
¾ the availab ility of liqu id reserv es;
¾ the rotation speed for st ocks, customers and credit;
¾ the structure of capital and the evolution of shares.
¾ the identity o f the customer and endorsers;
¾ documents that certify th e customer’s leg al capacity to
receive t he loa n;
¾ the description of history, legal str ucture, ow ners,
main custom ers and s uppliers .
¾ the o wnership, a ge spec ialization de gree a nd
vulnerability to moral usage of assets;
¾ deposits, m ortgages, assets in leasing , guarantees
issued; c overing with ass urance;
¾ the bank’s position towards others creditors.
¾ the cu stomer’s po sition within the branch and his
market segm ent;
¾ the custom er’s perform ances;
¾ the competitiv e climate fo r the cu stomer’s produ cts;
¾ the custom er’s exposing to the cycle of activity and to
the cha nge in technologies;
¾ the impact o f inflation on financial situ ations;
¾ settle ments, politica l and environmental facto rs.
¾ the ban king applicable set tlements regardi ng t he
featu res an d the qu ality o f accep table cred its;
¾ credit doc umentation properl y elaborated;
¾ the co ncordance o f the cred it ap plicatio n with the
banking policy concerning loan granting;
¾ information fr om external sou rces re garding e xternal
factors that c ould a ffect t he credit re paym ent. Characte
Capital
Capacity
Collateral
Condition
ControlFactors of risk

Figure 1. Factors of risk in credit analysis

72 Drigă, I.

As a matter of fact, in t his second case, the bank perform s credit following ,
another m ethod of redu cing credit r isk, which h as the objective of ensu ring a
continuo us credit review in order to id entify possibl e deterioratio ns and to allow it to
be re medied immedi ately . The revise of the bank ’s credit portfoli o can be divi ded into
two parts, namely :
– periodical auditing and re vise of granted loans – being verified the following
aspects: if the financial situation of de btors is still acceptable; if the approved
credit is used in accorda nce with the established destination; if the cr edit price
continues to s atisfy the pr ofitability obje ctive of the bank;
– the ad ministration of do ubtful credits – involves loss control and maximu m
possible recovery of granted loans and afferent interests; banks m ust take into
consideration banking pr udence and risk assu mption invol ve by the granting
process so as to reduce the negative effe ct of inefficie nt credits.
Credit risk avoidance ca n be achiev ed by rem oving the causes that are
determ ining it. This is pos sible onl y through efficien t credit policies whish are able to
eliminate the deficiencie s of credit granting. Having in mind the fact that the qual ity of
credit portfol io is the abso lute dim ension of achievin g the objectiv es of economic and
financial growth of a ban k, the credit polic y is a main strategic element, covering the
technical asp ects of managing credit portfolio. It must be flexibl e and subm itted to a
permanent process of update and adjust ment to arisen changes into t he econom ic,
politic and co mpeting environm ent. Its el aboration requires providing several
conditions i n connection with the wa y of drawing up a nd its content .
Generally , credit policies are docu ments structur ed into three main parts. The
first part contains aspects regarding th e tasks of cr edit com partments and optimal
qualities of c redit portfoli o, establishing the general fram e and the objectives of t he
credit policy . The second part refers to principles and procedures on which credit
granting is based and the last part is com posed of credit standards, specific para meters
to each credit type.
The prevention of credit risk is obviou sly in connec tion with the procedure o f
credit guarantee . Whenever a landing operation is perform ed the bank has to tak e
collaterals so as to prevent loss in case of bo rrower’ s default, as an alternative mean of
recouping its money . The re may be cases when banks require borrowers to maintain
compensating balances as collateral, to ope rate their accounts at a certain level.
In order to perform its insurance func tion the collat eral should h ave either a
stable or increasing value, be easy to take and value, be into the civil circuit, should not
impose any liability on the bank and be easy to realize. Generally , commercial banks
operate the f ollowing standard security arra ngement s: mortgage, debentures, pledge,
lien, stocks and bonds, land, life polici es and guarantees. The minimum value of
accepted collateral must cover at least 100% from credit and afferent interests.
The bank can require and obtain in exch ange for credit granting c ollateral with
a higher value than the loan. Only that ex cess must be avoided because a too high level
of a security in relation with the value of th e loan lim its the customers’ acces s to credit.
Requiring g uarantees of an exaggerated value points out the usage of a credit pol icy

Means of reducing credit risk 73

that is exclusi vely based on collateral and not on supporting an efficient activity , which
beco mes dan gerous for the entire econom y.
Because cr edit operations involve the exposure of the bank to the bi ggest risks,
a major i mportance in c redit risk manage ment has the respe cting of prudential
regulation established b y the banking authorit y. It refers to certain aspects, such as:
– the lim itation regarding cr edit granting to one debt or through settling m aximum
expose;
– the total am ount of large c redits;
– the classifi cation of granted loans and the establish ment of specific risk provisions.
The quality of credits fro m the bank’ s portfolio can be esti mated d epending on
their structure. From this point of vie w in classifying their credits banks ta ke into
account several criteria: d uty; financial perfo rmance; initiation of judicial proc edures
for each custo mer that benefits of a cer tain loan. The eva luation of financial
performance s of custom ers not belonging to the banking sector drives to its integration
into a certain category of fina ncial performance (table no.1).
Table 1.
Credit clas sification for loans granted to customer s outside the banking sector
Financial
perfor mances
Duty
A
B
C
D
E

0-15 day s
Standar d

Loss Under
obser vation

Loss Substandar d

Loss Doubtf ul

Loss Loss

Loss

16-30 day s
Under
obser vation

Loss Substandar d

Loss Doubtf ul

Loss Loss

Loss Loss

Loss

31-60 day s

Substandar d

Loss Doubtf ul

Loss Loss

Loss Loss

Loss Loss

Loss

61-90 day s

Doubtf ul

Loss Loss

Loss Loss

Loss Loss

Loss Loss

Loss

Minimum
91 day s
Loss

Loss Loss

Loss Loss

Loss Loss

Loss Loss

Loss Judicial
procedur es
was not
initialized

Judicial
procedur es
was
initialized

In the case of clienteles from the banking sector, fina ncial performance will be
considered into the A category . If banks are unable to esti mate the f inancia l
performance for the customer, it will be placed directly into the E category (table no.2).
In order to deter mine the necess ary speci fic risk provisions due to a credit or
invest ment, the following steps will be covered:
– deter mining the calculati on base for specific cr edit risk provisions;
– appl ying the coeffici ent to the obtaine d calculation base; the corr espondence between
classifi cation categories an d provision c oefficients is shown in the table no.3.

74 Drigă, I.

Table 2.
Credit clas sification for loans granted to customer s from the b anking sector
Financ ial per formanc es
Duty

Banks Cooperative
cred it
organiz ations

A
0-7 working
days
0-30 working d ays Standard

Loss
minimum 8
working day s
minimum 31
working day s Loss

Loss Judicial proc edures was
not ini tialized

Judicial proc edures
was ini tialized

Table 3.
Classification cate gories Coefficient
Standard
Under observation
Substandard
Doubtful
Loss 0
0,05
0,2
0,5
1

Knowing the risk involve d by the credit portfoli o it is possible to take certain
means able t o decreas e credit risk. Specific ri sk pro visions are going to be de termined
for each cr edit category by combining the client’ s financial perfor mances with his duty
towards the b ank. This activit y of form ing f unds in o rder to cover effective loss must
take place in those moments in which there are phenomena that al low and require th e
application of such procedures.
Carry ing out a prudent selection and a perm anent su pervise for granted loans,
requesting collaterals, a cquiring external credit insurances, for ming provisions to cover
losses in advance certainl y represents indisp ensable elements in supporti ng pol ities of
diminishing credit risk and its negative effects.

REFERE NCES:

[1]. Murr ay A. – Analiza cred itului, Editura Expert, Buc urești, 20 00
[2]. Nițu I. – Managementul riscului bancar, Editura Expert, București, 20 00
[3]. Roxin L. – Gestiunea riscurilor bancare, Editura Didactică și Peda gogică, Buc urești, 1997
[4]. Stoica M. – Politica de cred itare, Tribuna Econo mică, nr.33/1998
[5]. B.N.R. – Normele B.N.R . nr.8/1999 privind limitarea riscu lui de cred it al instituțiilor de
credit, M.Of . nr.245/01.06.1999, cu modificările și completările u lterio are
[6]. B.N.R. – Normele Metodologice nr.12/2002 pentru aplicarea R egulamentului nr.5/2002
privind clasific area cre ditelor si plasam entelor, prec um și constitu irea, regularizarea și
utilizarea p rovizioanelor sp ecifice d e risc de cred it, M.Of. nr. 90 6/13.12.2002
[7]. B.N.R. – Regulamentul nr.5/2002 privi nd clasificarea creditelor și plasam entelor, precum și
co nstitu irea, regularizarea și utilizarea p rovizioanelor sp ecifice d e risc d e cred it,
m odificat și completat prin Regulamentul nr.7 /2002, M.Of.n r.906 /13.12.2002

Annals of the University of Petro șani, Economics, 4 (2004), 75-82 75

CONSIDERATIONS UPON SA LES FORCE MANAGEMENT

CODRUȚA DURA *

ABSTRACT: Sales management involves sales planning (the process of establishing
a broad set of goals, policies and procedures for achieving objectives), organizing the sales
function (by establishing sales organizations structured geographically, by product types, by
market or customer classes, or by function), staffing the sales function (including recruiting
salespeople and interviewing, testing and hiring them), directing the sales force (via training
and motivating) and evaluating and controlling sa les force performance and satisfaction.

KEY WORDS: sales management, sales budgets, sa les territories, sales-force quotas,
geography-based sales organization, product-line sales organization, market- or customer-
based sales organization, function-based sales organization, staffing the sales function,
directing the sales force.

Managing a diverse group is both challenging and difficult. In general, sales
management involves acquiring, directing a nd stimulating competent salespeople to
perform tasks that move the organization toward accomplishment of its objectives and
mission. Sales management provides a significant link between an organization’s
corporate and marketing strategies and the salespeople who actuate the marketing transaction. A sales manager translates plants into action, implements sales programs,
directs the sales effort, trains salespeople, appraises their performance, determines their
compensation, and has a longer-term responsibility for market development and account coverage in his or her area.
Sales management involves the performance of five basic functions: planning; organizing; staffing; directing; evaluati ng and controlling sales-force performance and
satisfaction.
Planning the Sales Function
Planning is the process of establishing a broad set of goals, policies and
procedures for achieving sales and marketing objectives. Three of the most important

* Lecturer, Ph.D. at the University of Petro șani, Romania

76 Dura, C.

planning acti vities undertaken b y sales managers are develo ping sales budgets,
designing sal es territories and setting sales-force quotas.
Developing S ales Budgets
The sales for ce budget is t he am ount of money a sales depart ment has assigned
to it f or an annual period. The budget is based on estimates of expenditures duri ng that
period of ti me, with the am ount budgete d depending on t he forecast ed amount of
revenue expected to be gen erated for th e organization during that ti me period.
Designing Sales territori es
Sales territor ies ar e cre ated when pr esent or prospective cust omers a re
assigned to a sales unit such as a sal es branch or to a specific salesperson or selling
team . The ideal situation is to create sales territories of equal sales-generating potential
and equal w orkload. In this way , the sale s manag er can more easily evalu ate and
control each salesper son’s performance. Also, having equal workloads am ong the sales
representativ es leads to greater s ales for ce motivation and m orale.
Setting Sales-Force Quotas
Sales quotas are specific perform ance goals that management sets for
territories, branch offices and individual sal es repre sentatives. T he primary functions
of quotas are to establish goals and incen tives for the sales force and to give
management yardsticks b y which to ev aluate each s alesperson’ s performance on the
job, thus providing a basis for job prom otion, salary raises or co mmissions.
Sales quotas are an extrem ely importa nt aspect of the sales managemen t
function. If set fairly and realistic ally, they can encourage highly motivated sal esperson
performance and reward quota achievers for th eir efforts. On the downside, qu otas set
too low m ay fail to pr ovide sufficient cha llenge or incentive for the sales force; or
quotas set too hig h may serve as a disincen tive because salespeople feel they canno t
possibl y meet what is expected of them . Setting challenging yet realistic quotas is trul y
an art that only the m ost eff ective sal es manager eve r acco mplish.
Organi zing the Sales Function
Most co mpanies organize or specialize their sales de partments in one of four
ways: geogra phically, by product t ypes, by market or custo mer classes or by function.
Geography-Based sales Organizatio n
Specializatio n by geograp hical territories is probabl y the m ost common form
of sales management organization. Figure 1 provi des an illustrative organizational
chart that is based on geographical speci alization.
Depending on the size of the business, the manager who runs a geographical
sales unit is called a regional, divisional or di strict sales manager. In figure 1, regional
sales managers supervise zone managers, w ho in turn supervis e the district sal es
managers to whom salespeople report. In m any case s the sales manager, regar dless of
the title he or she is given, is basically running his or her ow n business within a
business. That is, he or she is like the president of his or her own firm .

Consider ations upon s ales force ma nagement 77

Figure 1. Geography-Based Sales Organization
National Sales Man ager
Sales Trai ning Man ager
Easter n Reg ional
Sales Manager
Zone Sal es Manage rs
District Sales Manage r
Sales people West ern Regional
Sales Manager
Zone Sal es Manage rs
District Sales Manage r
Sales people
Product-Line Sales Organi zation
Although a com pany’s sales organization can be very effective for one product
line, the same type of or ganizational struct ure may not be effective for a company that
carries diverse product offerings. A co mpany that offers a set of unrelated or
heterogeneous products sh ould co nsider organizing or reorganizing b y product types or
groups. Fi gure 2 shows a basic exam ple of a sales organization al structure used in
product specialization. In this case, the company has separat ed sal es activity between
its office-equipm ent and office-supply produc ts. Managem ent’s idea is th at sales
representativ es should use their particular knowledge about specific products to
increas e company profits.
Market- or C ustomer-Base d Sales Organization
This structure em phasizes specific mark ets or customer groups rather than
products. A market-based sales structu re is needed when a co mpany sells to m ultiple
custo mers w hose buy ing needs and procedur es differ greatly . Figure 3 illustrates an
organization based on market-based sp ecializ ation. In this instance, a company has
separated its sales force into one group calling on commercial accounts and another
group that caters to govern ment custo mers.
Companies may find that speciali zatio n by market i s to their advantage when
the needs of customer groups differ s ignificantl y, when the cu stomer groups are
geographically concentrated or when th e com pany uses different channels of
distributio n and therefore wants to minimize friction am ong them .

78 Dura, C.

Figure 2. Product -Line Sales Organization

National Sales Man ager
Office Equipment
Sales Manager
District Sales Manage r Office Supplies
Sales Manager
District Sales Manage r
Salespeople Salespeople

Figure 3. Market-Based Sales Organization
National Sales Manage r
Commercial Acco unts
Sales Manager Government Accou nts
Sales Manager
Sales
Training
Manage r
Zone Sal es Manage rs District Sales Manage rs
District Sales Manage rs Salespeople
Salespeople

Consider ations upon s ales force ma nagement 79

Function-Bas ed Sales Organization
Figure 4 illustrates a sales organization that separates its sales force into field
sales and telemarketing sal es.

Figure 4. Fun ction-Based Sales Organization
National Sales Manage r
Field Sal es Manage r Telemarketing Sales
Manage r
Regional Sales Managers
District Sales Manage rs District Sales Manage rs
Salespeople
Salespeople
As previously discussed, increasing num bers of com panies – es pecially in the
case of business-to-business marketing – have est ablished tele marketing sales force. In
our case the role of the field s ales force is to generate sales and that of the
telemarketing sales force is to pe rform account-servicing activities.
Each form of organizational structur e has advantages and disadvantages which
are su mmari zed in table 1.

Table 1. C omparison of Sales Organization Str ucture

Orga nization
Struc ture Advantages Disadvantages
Geographic Low c ost
No geographic duplication
No customer duplication
Fewe r manage ment levels Limited specializatio n
Lack o f managem ent cont rol
over product or cu stomer
emphasis
Prod uct Salespeople becom e expert s in product
attrib utes an d applicatio ns
Managem ent cont rol over selling ef fort
allocated to products High cost
Geographic duplication
Customer duplication
Mar ket Salespeople devel op bet ter
understanding of unique customer needs
Managem ent cont rol over selling ef fort
allocated to differe nt markets High cost
Geographic duplication
Functi onal Efficien cy in p erforming sellin g
activ ities
Customer duplication Geographic duplication
Need for coodination

80 Dura, C.

Staffing the Sales Function
Staffing a sal es organizati on involves both recruiting prospective salespeople
and interviewing, testing a nd hiring the m. A critical step in this process is creating a
written job description. The job description in clude s a job title, the specific duties and
responsibiliti es of the sales representative, the aut horitative relationship wit h other
immediate mem bers of the organization, and the opp ortunities for advancem ent. Good
job descriptions include the following:
– a description of the produc ts or services the sales repr esentative wil l sell;
– the ty pes of custo mers the sal es representative must call on , the desir ed
frequency of sales call s and the specific personnel the sales representativ e
should co ntact;
– the specific tasks and responsibilities the sales representative must carry out,
including cus tomer service, reports, in formation collection and prom otional
activities;
– the authorita tive relationships betw een the sales representativ e and other
positions wit hin the com pany.
This state ment provides inform ation r egarding who the sales r epresentative
reports to an d under what circu mstances he or she interacts with other departmental
personnel. In addition to the job descri ption, the sales manager should develop a
statement of job qualifications. This docum ent describes th e personal f eatures,
charact eristics and abilities that management believ es a salesperson needs in order to
perform the job effecti vely and effici ently . These qualifications may include
educational background, business exper ience, person ality, work ethic, ability to get
along with ot hers, personal appearance and so fort h.
Dire cting the Sales Force
This sale s-manage ment f unction involves the tr aining of new recruits, th e
continuin g education of exi sting personn el and m otivational and i ncentive plans for all
sales p ersonnel. As following, it will be descr ibe br iefly the elements of sales-force
direction.
Training pro grams vary considerably from co mpany to com pany, but all
succes sful sa les organizati ons have exc ellent training program s for new members of
the sales forc e as w ell as p eriodic refres her courses f or current salespeople. The general
objectives of sales training shoul d be to provide new salespeople with product,
custo mer and competitor knowledge, improve salesperson m orale and reduce tur nover,
establish expected salesperson behavio r, improve customer relations, lower s elling
costs and show sale speople how to use time effi ciently.
These broad sales- manag ement objectives for a sal es-training program should
then be broken down into specific obj ectives for the sales re presentatives. These
objectives may include training sales representativ es to fill out reports, demonstrating
how management uses rep orts, providi ng salespeople how to allocate their selling time
with and among custom ers, suggesting way s to improve pros pecting and ex plaining
how to han dle objections.

Consider ations upon s ales force ma nagement 81

The training techniques a company uses depend on the objectives that sal es
managers want to accom plish and on t he am ount of time that the t rainer has to achieve
these objecti ves. Lectures , discussion, dem onstrations, role pla ying and on-the-job
training are the basic training techniques.
In motivating the sales force , sales managem ent can use both financial and
nonfinancial incentives. Financial rewards ar e extremely important but usually are not
enough. Sale s managers u se three basic co mpensatio n plans: salary plan, commission
plan and a com bination plan (salary plus co mmission).
A straight sa lary plan provides sales r epresentatives with a fixed am ount of
income regardless of sales producti vity. This method of compensation gives
management maxi mum co ntrol over the sal es force’ s activities because managem ent
can dictate t he activities salespeople must perform in servici ng current customers ,
creating new merchandise displa ys and fillin g out reports for the home or district
office. Thus, this plan is best for com panies who hav e a large am ount of work devoted
to nonselling activities and routine selling tasks.
A co mmission plan is pa yment based directly on performance. There are tw o
basic co mmission plans: straight commission or draw against commission. Straight
commissions can be bas ed on a fixed percentage of a sales repres entative’ s dollar sal es
or product units sold or can be based on a multiple percentage r ate that incr eases as
dollar sales v olume or so me other performa nce measure incre ases. The draw against
commission method is ba sed on draw accounts, which are accounts from which the
sales repre sentative rec eives (or dr aw) a fixed su m of money on a regular ti me basi s.
The money in a draw account comes from either earned or unearned commissio ns.
A bonus is usually a lum p-sum pay ment that the co mpany makes to s ales
representativ es who have exceeded a set sal es quota. However, management may use
bases other than sales, such as num ber of new accounts opened, r eduction in e xpenses
and divisio nal profits, to se t the requirements for a bonus.
Within the three basic pla ns, there ar e many possible combinations invo lving
base earnings and incentive pay . Six of the most co mmon methods of pay ing the sal es
force are: str aight salary , straight commi ssion, draw against commi ssion, salary plus
bonus plus commission. Co mbination plans are most commonly used by sales
managers because they provide sales representatives with a broader range of e arnings
opport unities. Regardless o f which specific co mpensation plan is sel ected, it is critical
that the plan be co mpetitive within the indus try, equit able within the co mpany and fair
among mem bers of the sales force.
In addition to financial co mpensati on, salespers on job satisfaction and
motivation rest strongl y on nonfinancial re wards. Achievem ent or recognition awards
are co mmonly presented t o sales representatives at sales meetings and award banquets
as a means of giving sales repre senta tives psychological rewar ds. Com panies also
frequentl y use newsletters, publicit y in local media, published sales results, pe rsonal
letters of commendation and other psy chological re wards to encourage sale s
performance. Some co mpanies also award honorar y job titles to outstanding sales

82 Dura, C.

representativ es, induct them into honor so cieties and present distinguished sales
awards, often in the form of plaques or certificat es.
Evaluating and Controlling Sales Fo rce Perfo rmance and Satisfaction
This management function requires the sales manager to m onitor actual
salesper son perfor mance, to reward the perform ance when it meets expectations, and to
take correctiv e action when performance is below the preestablished standard.
Salesperson perfor mance evaluations are used for at least five rea sons:
1) To ensure that rewards g iven salesp eople are consistent with their
actual performance.
2) To identify salespeople who deserve prom otions.
3) To identif y salespeople who shoul d be te rminated.
4) To determ ine specific training and c ounseling needs of indivi dual
salespeople.
5) To identify criteria for the future recruit ment and selecti on of
salespeople.
Through sale s analy sis, co st analy sis an d personal evaluations, sal es manager s
can deter mine whether a salesper son’s performance meet s prees tablished standards.
When the actual and planned perform ances of a salesperson differ significantly, the
sales manager must deter mine the underly ing reasons and take a ppropriate corrective
actions if necessary .
When atte mpting to correct inadeq uate s alespe rson performance, it i s
important that the sales manager avoid excess negativity . In fact, resear ch evidence
suggest that managers should seek opport unities to provide positive feedback to
salespeople rather than a ccentuating defici encies. Negative feedba ck does not m otivate
salespeople as such as positive feedback do es. More over, positive feedback serves to
clarify what behaviors are e xpected of salespeople.

REFERE NCES:

[1]. Helfer J. P., Orso ni J. – Marketing , Vuib ert, Paris, 1988
[2]. Kotler Ph . – Management ul marketingului, Editura Teora, B ucurești, 19 97
[3]. Ko tler Ph., Saunders J. , Arms trong G., Wong V. – Principiile marke tingul ui, Editura
Teora , București, 1998
[4]. Lindgren J.H. Jr., Shimp A.T. – Marketing. An Interactive Lear ning System, The Dryden
Press , Orlando, United States of Am erica
[5]. Pride M.W., Ferrel O.C. – Marketing. Con cepts and S trategies, Houghton Mifflin
Company, Boston, 1991

Annals of the University of Petro șani, Economics, 4 (2004), 83-88 83

CHARACTERISTICS OF ECO – SYSTEMIC
MANAGEMENT

ALINA FLEȘ ER ∗

ABSTRACT: The real base of management’s development consists in human activity,
the management representing a process of orientation and direction of the human resources’
activity in the aim of achieving certain objectives. Usually, the management is considered in
different ways: as process, as activity, as intervention of a group of persons (managers) and as
an art/science, as object, own specific rules and principles.

KEY WORDS: eco-management, sustainable d evelopment, environment quality

The real base of management’s development consists in human activity, the
management representing a process of orientation and direction of the human
resources’ activity in the aim of achieving cer tain objectives. Usually, the management
is considered in different ways: as process, as activity, as intervention of a group of
persons (managers) and as an art/science, as object, own specific rules and principles.
The recent acceptations consider that the management presupposes: to obtain
results by means of other persons assuming responsibilities for these results; to be
oriented onto the environment; to make decisions aiming the completion of the
economic unit; to trust in subordinates, givi ng them responsibilities in order to obtain
the proposed results, and recognizing for them the possibility of doing mistakes and
receiving positively their initiatives; to de – centralize the organizational system and to
appreciate the employees depending on results obtained by each of them.
Due to the fact the management does not represents a collection of methods
and techniques of standardized rules obligatory to be applied, this assumes a lot of
correctitude, talent and ability from the part of managers. Without trying to build a
definition, it can be considered that the management represents the group of interventions, programming methods and techniques, organization, allocation of resources, control and activation by mean s of which the proposed objectives are
achieved.

∗ Assist. Prof. at the University of Petro șani, Romania

84 F leșer, A.

One of the most im portant requirem ent of the h uman society for the next 10
years consist in convinci ng the m arket forces to act in the ai m of protecting and
improving th e environm ent qualit y – with help of efficiency standard and a proper
utilization of the econom ical instruments.
The co mmon factor of these require ments is “The Business Charter for
Sustainable Develop ment” – bas e of indi vidual, sectorial and inters – sectorial
program s of econom ical activit y.
In this Charter the following 16 principle s are included:
1. Econom ical unit ’s pri orities. It is well recognized that the environm ent
management is one of t he most important priorities of an econom ical unit, representing
the key for a chieving the sustainable d evelopment. On this base there are established
politics, program s and measures afferent fo r operati ve management of manufacturing
processes where the environment protec tion should be present as objective.
2. Managerial integration. It is necess ary to integrate the politics, programs and
measures el aborated into t he sectors cor responding to the unit f unctions.
3. Training process. There should be continuously trained t he politics,
program s and qualitative performances of the environm ent t aking into consideration
the progress of scienc e and technique, the presen t and future needs of individual
consumers a nd of society. The starting poi nt in this process of training c an be
considered the provisions of present standa rds regarding the perfor mances of products
and environm ent.
4. Education of e mployees. It is e mphasized its i mportance and of the training
and em ployees motivation for perform ing thei r activ ity un der a responsible m anner for
the environment.
5. Evaluate e verything! Before starting a new activity or project, changing a
technolog y, locating or re – locating a n ew inst allation, etc., evaluate the im pact of this
activity to the environm ent.
6. Products and services. The products or services should be elaborated or
improved in the way that not t o have a nega tive infl uence to the environm ent, to be
feasible, effi cient in rega rding the consum ption of natural material and ene rgetical
resources, to be recy cled, reused or safe stored.
7. Inform ation of clients. It is necess ary to inform the clients, help for their
education, bu t also education of distri butors and pu blic to use safely the pr oducts, to
provide the transport and storing. These require ments are valid also for services.
8. Facilities and operations . In econom ic practice, there should be elaborated ,
designed and provided the facilities that i nvolves the taken into consideration of
efficient utilization of energy and m aterial s, consu mption i n the sense of sustainable
developm ent concept, of renewable resources, mini mization of im pact to the
environm ent and of quantity of wastes r esulted fro m the manufact uring process . In the
same time the safety and responsibility for stori ng dangerous wastes sh ould be
considered.

Characteristics of eco – syste mic man agement 85

9. Research. To direct or support t he efforts regarding t he research of the
impact of raw material s, products, technological proc esses, em issions and wastes to the
environm ent, and to find methods for minim izing this im pact. This is the essence of
this principle.
10. A precaut ionary approach. It is r ecommended tha t when it is f ollowed the
modification of manufactu ring, trade system , products or services utilization activity
management to be avoided with necessar y scientific and technical knowledge, the
irreversible degradation of environm ent.
11. Purchase and trade. To prom ote an d adapt these principles by the suppliers
of raw materials, materials and utilities, that should act in the same direction with the
company. To be encourag ed and, when it is the case, to be asked for im provement o f
practice in order them to be co me compatible with the co mpany ones; to be enc ouraged
the acceptatio n of these principles also by products and services use rs.
12. Em ergency measure s. The instructions in case of emergenc y should be
elaborated an d kept in ord er to be able to put them in practice. There should be kept in
view the co nnections existing between unit and emergency services of local
authorities. It should be estim ated exten sion potential of dangero us effects outside the
unit areas.
13. Technolo gy transfer. To be transferred the technolo gy and the methods
regarding environm ent protection managem ent fr om the industrial sector (stat e
industr y) onto the public sector.
14. Contri bution to t he common effort. It should be c ontributed f or elaborating
a public polit ics and a busi ness one both at the level governm ental programs an d inter
– governm ental ones to involve also the educa tional aspect in the aim of im proving the
environm ent protection an d conservation.
15. Transparency . The unit should be op ened for dialog with one personnel or
public, antici pating or pr oviding answers to their worry regarding the potential danger
for manufact uring, utilization of products a nd storage of wastes onto peoples, a nimal’s
health or quality of envi ronm ent fact ors. The aspects that hav e regional or global
significance should be em phasized.
16. Conclusi ons and reports. All meas ures needed f or achieving the standard
qualitative efficiencies for the environment s hould be taken. Constant inspection and
evaluation of results obtained b y the com pany shoul d be carried out. Periodic ally, the
detailed reports should be presented to the com pany’s Board of Adm inistration, and
these should be accessible for own personnel, local authorities and public.

86 F leșer, A.

Concept of eco – management
– Quantifica tion of measures in costs
– Set tlement of financial resources
– Eff icient utilization of financial
resources
-Quantifica tionofresul ts
– Environm ent degradat ion
– Infes ted micro – cli mate
– Low efficiency
– Occurr ence of occupational
diseases
™ Managerial int egration int o a unitary whole including environ ment protection’s
politics, progra ms and measures.
™ Struct ural i mprovement of p rogram s depending on endow ment and production type
™ Motivation but also obligat ion of employees to k eep the environ ment clean
™ Estimation of a ne w technology’ s impact t o external environm ent
™ Products a nd services sho uld no t pollute, sho uld not present sho rtcomings in
utilization, exploitation , maintenance , toxic gases, vibrat ions, trepidations , etc.
™ Guarantee in sa fety conditio ns of transport, utili zation without env ironmen t
dysfunctions and in accordance w ith affere nt instruc tions
™ Measures fo r minimizing the impact to the env ironment a nd of the quantity of
wastes resulted f rom the manufac turing process
™ Instructions in case of e mergen cy to equi pments and installations in o rder not to
pollute th e enviro nment
™ Technology t ransfer from the state sector to the privat e one w ithout pollut ing the
environ ment
™ Cooperation in to tal transparency betw een governm ental insti tutions and the
execution ones for protec ting the environ ment Yes
No Measures for
environ ment pro tection
are provided
™ Conclusions, repo rts, reiterat e

Characteristics of eco – syste mic man agement 87

European eco – m anage ment concept
Sustainable development and environ ment quality

The new Treaty on E uropean Union, s igned in Feb ruary 19 92 by all CEE
mem bers provided as main objective the prom otion of susta inable developm ent
concepts, taking into cons ideration the envi ronm ent qualit y (article 2). This involves
the organization of the managem ent sy stem s at macro and micro levels in the way that
the requirem ents regarding environm ent protecti on to be integrated within all Eur opean
Union count ries’ politics, as well as nationa l ones and at the level of industrial
company.
At the level of industrial co mpanies, the tasks to be fulfilled by them , and
which are ari sen fro m the European Union politics, are the followings:
– improve ment of resources manage ment in the mean of their rational
utilization and of increase of the unit com petitiveness degree;
– utilization of inform ation for gaining the customer’s trust in com pany’s
products and services;
– compliance of common standards re garding the qualit y of products,
services, environm ent factors;
– organization of statistic data bases re ferring at the information concerning
the field of science and technolo gy, in direct connection with the p olluting
process. It i s aimed the existence of an unitary monitorization and of a
correct esti mation that are necess ary in the m oment when the environm ent
management is started, considered as unitary concepti on;
– convincement of the compan y to com ply the requi rement of European
Union that pr ovides for th e industry to beco me powerful, innovat ing and
competitive both on regi onal and gl obal planes. Com petitiveness should be
considered on lon g term , in the lig ht of the sust ainable developm ent
concept. It is not in the community’s interest to sacrifice the advantage s
estimated on long term (econom ical and social) of the branch or of the
company in the favor of t he gains on s hort term (especially the f inancial
ones).

European Union’s Eco – labels
Ecological orientation of t he companies within the European Union Market
cannot be organized by means of co opera tion between companies: the competitiv e
principle will act further on, so every co mpany will act independentl y in order to
comply the quality standards, elaborating its own strategy and politics that ar e
convergent to the European Union o bjectives.
It is obvious that the companies with polluting potential will manage even
harder to resist onto the competitive market without invol ving non – pollutant
technologies, non – poll utant products a nd prom otion of renewable resources.

88 F leșer, A.

There will be advantaged the br anches, sub – branches, companies,
manufactures and products that present a lowe r polluting potential . The EU or national
eco – labels ( certific ates r egarding ecological qualit y of goo ds) ha ve an im portant role
into selection of non – pol lutant prod ucts on market. At the level of EU co mpanies it
can be stated that no e volutio n strategy can be elaborated without taki ng into
consideration the restrictive effect, environm ent pollution or favoring factor – lack of
industrial pol lution.

REFERE NCES:

[1]. Ce ausu I. – Enciclopedia Manageriala, Editura ATTR, Bu curesti, 2000
[2]. Nicolesc u O. – Strategii manageriale de firma, Editura Econo mica, Bucuresti, 1998
[3]. Ru ssu C. – Management. Conce pte. Met ode. Tehnici, Editura Expert, Bucu resti, 1996

Annals of the University of Petro șani, Economics, 4 (2004), 89-94 89

CURRENT TRENDS IN SOCI AL RESPONSABILITY AND
ETHICAL STANDARDS IN SERVICES MARKETING

MONICA PAULA FLIT ĂR *

ABSTRACT : Services organizations are part of society and therefore must be
concerned about societal issues such as ethical, responsible behavior toward people and the
environment and sensitivity to the diversity of people in the marketing environment. This view of
the services organizations can be beneficial to the marketing effort. Our paper focus on the
services organization’s accountability to society, especially to the communities in which it
operates and to the environment in the ecological sense, ethical issues regarding each element
of the marketing mix for services, trend toward increased ethical awareness.

KEY WORDS : accountability to society, community relations, positive image in the
community, „green” pricing, „green” channel strategy, „green” communication, code of
ethics, ethics dilemma.

Many economists consider that the primary responsability of a business, in
general, is to earn profits for its owners. The marketing concept adds that a business
should do this by taking into consideration the needs of its customers. The
organization’s responsabilities should extend furt her, to include social responsability.
Social responsability is an organization’s acceptance that it is accountable to
society for its actions. In services marketi ng, social responsability can involve stopping
a negative activity or promoting a positiv e activity. Thus, an organization is
responsible to its shareholders, customers, employees, others in its marketing channel,
society as a whole and the earth’s environm ent. For example, the company Johnson &
Johnson makes the point that its responsab ility extends to the health of nation’s
children: „ Keep the children well and you can heal a nation. America is growing a new
generation of healthier children, thanks to pr ograms like Head Start. It does more than
just educate low-income kids. It also provi des them with important medical, dental and
social services. That is important. We support Head Start by funding management training that helps program directors put government allocations to the wisest and most

* Assist. Prof. at the „Romanian-German” University of Sibiu, Romania

90 Flităr, M.P.

productive us e. We ar e commit ed to addressing critical issues sur oundi ng our nation’ s
health. And we believe it all begins here. With the children.” All these argu ments make
us consider that Johnson & Johnson is a com pany that recognizesit s social
responsability.
Supporters of social responsability typically declare that this stance (approach)
can serve the services organization’s interest s in the long r un. They consi der that
potential consu mers will be in the best positi on to buy if the service organization looks
after their we llfare as individuals and community members. Also, in these ti mes of stiff
competition, potential consu mers who have trouble in choosing from among com peting
products m ay well bu y from the company they most respect.
Taking a soci al responsible posture with regard to the community is not alwa ys
easy. Social responsability to the comm unity can take two forms: ceasing negative
activity , such as polution, or taking a positiv e action, such as st arting an education
program that benefits the co mmunity . Po sitive act ions may consist of consu mer
education, partnerships with schools, e nvironm ental programs or funding for special
program s. For instance, M cDonalds’ s Corpor ation sp onsors Ronald McDonald Houses,
homes located near hospit als that provi de housing at little or no cost to fam ilies of
children that are hospitalized.
Projects undertaken out of social responsability not onl y benefit the
community , they also enha nce community relations , reinforcing a positive i mage of the
organization. There are companies that underwrite public service announ cements
designed to educate the public about a num ber of issues inclu ding u nsafe behavior
(such as drug abuse), illnesses ( such as AIDS ) and the i mportance of stay ing in school.
The services organizations’ efforts are m ost likely to lead to good community relations
when they are related to its strengths and involve the community in som e way.
Some services organizations undertak e cause-r elated marketing , a form al
version of m arketing in or der to support the community. With cause-related mark eting,
charitable donations are tied directedly to the sales or a specific service. Cause-related
marketing is popular and usually addopt ed by the ser vices organizations because it set s
up a win-win situation. The product or service is prom oted an d profits or sales are
increas ed. Customers ar e satisfied, members of t he co mmunity benefit from the
donations m ade and communit y relation s are enhanced.
The approach of adopting the social responsability standards m ust also take
into consider ation the global social responsabili ty. Thus, being a responsible mem ber
of the co mmunity can be more complex for a s ervice organizat ion that operates in
more than one countr y.The organization needs to kno w what the community expects or
wants and must find a way to meet those expectations.
As a result of the consu mers’ increa singl y concer n about the environm ent,
marketers fro m the services sector, have found it necessary (and often profita ble) to
make environmental consciousness part of th eir soc ial responsability effort. I n many
services orga nizations, the se efforts include green marketing – marketing efforts that
are designed to m eet customers’ desire t o protect the environm ent. The purp ose (goal)
of green marketing approa ch is to pro duce and prom ote environm entally soun d

Current trends in social responsabili ty … 91

products and services. Thus, a green marketing strategy can influence all four el ements
of the m arketing m ix.
Green market ing can bring many advant ages to the se rvices organizations that
adopt this str ategy. First of all, it appeals to the valu es of more and m ore people. Not
only do m any consum ers feel better buying a det ergent or air conditioner that is
supposed to b e environmen tally friendl y, but th ey brin g the same value to their role as
organizational buy ers. Organizations that are environmentally conscious can see their
costs fall. Disposing of waste, mailing catalogs or brochures to unintersted peo ple are
expensive; minimizing such waste sav es money .
The relation between green marketin g and the quality approach . Green
services marketing can be considered a natu ral extension of the quality approach to
services marketing. For instance, Procter & Gamble has pioneered the applic ation of
total quality manage ment to environm ental purposes (goals). The com pany uses the
same total quality management tools to im prove its environm ental im pact that it uses
for other areas of business. Another exa mple: at 3M Corporation, environmental
responsability is not handle by som e „envir onmental department” but iti is a part of
every employee’s job responsabilities along with ot her aspects of quality improvement.
Organizations that focus on satisfy ing their custo mers are finding that concern
for environm ent is a neces sary part of their way (drive) to im prove quality . Thus, in the
near future, marketers wh o want to satisfy their customers will h ave to do m ore than
simply meet (respect) the environm ental st andards i mposed b y the governm ent. The y
will have to find out what environm ental „standards” their custo mers require. In other
words, customers’ deman d for „green” products/services and „green” organizations
will eventually surpass the strictest regul atory standards (for instance, McDonalds
Corporation had subscribed to the traditiona l notio n that consu mers wanted their food
delivered in white bags to conve y an i mage of purit y; in fact, con sumers were happ y to
receive their f ood i n recy clable brown paper).
Organizations that practice green mark eting try to e nsure that their products
and services are helpful to the environment or at least cause little or no har m. A
„green” product or service strategy ofte n influences the process of product or service
developm ent. For exa mple, in a service s organization, when a service is developed o r
modified, a group of experts must be as signed to make sure the service is
environm entally soun d.
Green marke ters must be awar e of the fact that making a product or servic e
friendl y to th e environment does not mean they can charge a higher price. Ac cording to
a study made Sy racuse Un iversity’s School of Public Communications, 93 percent of
adults said a product ’s (service’s) environm ental im pact was im portant to them in
making purchase decisio ns, but two- thirds said environm ental ly friendl y products
should not cost more. Com petitive marketers are able to com bine an advantageous
pricing strategy with green marketing in their services offer.
As the consumers show the desire t o buy „green” products and services,
marketers ar e tem pted to positi on products and services as beneficial to t he
environm ent. However, such clai ms, if exag erated or vagues, can misle ad customers.

92 Flităr, M.P.

Besides being unethical, such behavior may violate laws and regulations, in cluding
guidelines developed b y the Federal Trade Com ission for green m arketing.
Marketing ex perts support the idea tha t it is better to keep claims modest
because this approach avoids disappoi nting t he customers. It is also less likely t o
attract one-upmanship from co mpetitors or investigati ons from the governm ent.
Consumers o f products and services are concerned about the large am ount of
paper devoted to m ailing catalogs and adver tisments. Thus, green marketer s who use
the mail in or der to establi sh a long term rel ationship with the ser vices consu mers, ar e
looking for w ays to lim it their mailings without sacrify ing sales.
Social responsability in the services sector fits well with a quality -driven
approach to services marketing. Both conve y that the services organization cares about
doing the rig ht thin g and doing things ri ght.
Ideally , a services organization shoul d carry out its social responsabilities in
ways that reinforce the quality image of its services.
Ethical issues in ser vices marketing. Society expects markete rs to adhere to its
own values, beliefs and principles, and criticism of current businesses practi ces ar e
often harsh. I t is evident t hat marketer s and ot her businesspeople often struggl e with
the solutions to ethical p roblems. Ma rketing ethics are the pri nciples, values and
standards of conduct follo wed by marketers in services sector. La ws, like ethics, are
based on values and principles, but unlike ethi cs, law s are enforce d by the gove rnment
penalities for noncom pliance. A particular serv ices marketing practice might be ethical
but illegal, or unethical but legal.
All these stat ements make it obvious t hat marketer s should beha ve ethically ,
although thes e issues ar e so difficult. One r eason is that ethical standards vary from
one person to another. Sometimes the only available courses of action, contain a blend
of hurtful and helpful acti ons. Even w hen people a gree on what is the m ost ethical
course of action, that alternative may seem very costly – especially to the owner of a
start-up service fir m with little cash or to th e em ployee try ing to hold onto a job during
a rece ssion.
As society ’s values, beliefs and principles have beco me more complicate,
criticism of b usiness practi ces has grown m ore strident. B y obeying the law, marketers
in the servic es sector c an avoid actions th at have legal penalt ies.But not all legal
behavior is ethical; it would be im possible to write enoug h laws to require ethics in all
business deal ings. At the sa me time, an action that a marketer considers ethica l might
violate the law. For exa mple, a marketer might think that customers would benefit
from an arrangement wit h several competitors to avoid price increases, b ut this
arrangement likely would violate federal antitrust laws.
As a pr actic al matter, h owever, most ethical beh avior is legal and many
businesspeople have concl uded that when an industry behaves ethically , its actions are
apt to be regulated. Even m ore important, ethical behavior can avoid the pi tfall of
shifting t he organization ’s focus away fro m where it shoul d be: on custo mers. In
contrast, an organization t hat is sensitive to its customers’ concerns will choos e that –
even when aggresive – are ethical.

Current trends in social responsabili ty … 93

Perhaps in r eaction to th e many business s candals that surfa ced during the
1980’ s, the t rend toda y has been toward increased ethical awareness. Accord ing to
survey s, plen ty of services organizations are try ing to prom ote ethical behaviour b y
their em ployees. Thus, ethical awaren ess i s supported by businesses and marketing
organizations, as well as th e general public.
For instance, The Consu mer Bill of Rig hts (in the United States o f America),
established th at consu mers have rights that marketers must recognize. In other words,
marketers were considered responsible for evaluating the qualit y of products and
services, trut hfulness of prom ises and so on; if som ething was wrong, it was up to the
buyer to fi nd out before co mpleting a transaction.
Ethical actions are more co nsistent with a quality , customer-driven approach to
services marketing. The quality approach to servic es marketing takes the vi ew that
buyers shoul d be pleased with the products and services they receive. There should be
no unhappy surprises about safety , quali ty or comm unication with the seller.
Competition can strain business ethics. In some cases, businesspeople believe
(sometimes corectly ) that ethical behav ior will cost t hem a sal e or prevent them fro m
using an appe aling strategy. This belief can lead to such unethical and illegal practices
as industrial spionage and briber y.
The explosio n of techolo gy in the last half of the twentieth centur y has broug ht
forth new e thical issues and dilemmas, particu larly in the areas of e lectronic
inform ation and medicine . The rapid pace of tech nological de velopm ent c an tempt
marketers to beat com petitors b y introduc ing products before the organization has
thoroughly tested the m to ensure they are s afe or perform as prom ised. The main
dilemmas in the medical field, owing in part to technological change, are rel ated to the
following questions: „Should organ donors or their families be paid?”, „Should
experim ental drugs for AI DS be given quick appro val to be used?”
Partly in response to those trends, m any organizatio ns have ado pted a form al
code of ethics. Such a code is a written stat ement of the services organizations’s ethical
principles and standards of conduct. Et hics codes usually cover confidentiality ,
conflicts of interest, relati onships with other organi zations in th e marketing channel
and other areas. A s ervices organizat ion’s code of ethics must detail standards of
behavior for em ployees’ relationships with fellow em ployees, the co mpany, suppliers
and business custo mers, consumers, t he governm ent, society , the environment and
shareholders.
Recognizing the im portan ce of ethical codes, they can provi de guidelines for
ethical behav ior in the ar eas of mark eters’ responsabilities, honesty and fairness, the
exchange process (including the marketi ng m ix), and organizational relationships. (The
American Marketing Association establis hed its own w ritten code of ethics).
Employees’ ability to adhere to such a code depends in part on how well it
matche s their personal ethics, which may be based on idealis m, utilitarianis m, altruism.
To reconcile any differences, e mployees can appreciate the consequences of a course
of action and discuss the rightness or wrongness of pr oposed actions.

94 Flităr, M.P.

REFERE NCES:

[1]. Ce tină I. – Ma rketingu l competitiv în secto rul serviciil or, Editura Te ora, B ucurești, 20 00
[2]. Du mitresc u L. – Marketingul serviciilo r, Editura Im ago, Si biu, 1998
[3]. Ko tler Ph. – Mang ementul marketingu lui, Editura Teora, B ucurești, 20 00
[4]. Magnet M. – Good News for the Service Econ omy, Fortune, May, 3, 1993
[5]. Mc Carthy E.G., Perre ault W.D. Jr . – Basic Marketing, A Global Managerial Approach,
Boston: Rich ard D. Irwin, 1993
[6]. Olte anu V. – Marketin gul serviciilo r, Editura Uranus, București, 2002
[7]. Z eithaml V.A., P arasuraman A., Berr y L.L. – Deliverin g Qua lity Service: Ba lancing
Customer Pe rceptions and Expectations, (New York: Free Pr ess, 199 0)
[8]. Smart Businesses Are Saving the Planet and Lots of Money, Too, Total Qu ality Newsl etter,
O ctober, 1993

Annals of the University of Petro șani, Economics, 4 (2004), 95-98 95

STRATEGIC PLANNING A ND MANAGERIAL CONTROL

MIHAELA GHICAJANU *

ABSTRACT: In this paper present relationship among strategic planning and
managerial control process. For begin I want present few elements about strategic planning
and managerial control in order to identify link inter these elements.

KEY WORDS: strategic planning, management control, standards, plan, program,
strategic control, planned performance, management control system, organization, information feedback, goals.

1. STRATEGIC PLANNING
Strategy represent a broad general long-term plans of action that governs
enterprise policy formulation and program for action.
Strategic planning consist in make of goals and strategies, of policies to guide
ways of acting and broad programs of activities to pursue goals.
The first thing management needs to do when forming or changing an
enterprise is to determine what enterprise s hould do and how it should do it. The result
of strategic planning is a set of goals for the enterprise and various strategies for
attaining the goals. The strategies develope d include both policies to guide ways of
acting, programs and budgets of activities for touching goals. These decisions are reexamined continuously using various strategic control processes to adjust strategies to change at external environment, to changed technological, economic, social and
political conditions.
Once this programs and policies are in place, management needs some way to
ensure that employees in the enterprise do what they are supposed to do. Control is the
process used to do this. Is a span both strate gy control, which aims to ensure that
employees in enterprise do what management wants them to do.
So, strategic planning identify, fixed and shaped what do we want in the
future, orientation enterprise and management for goals certain.

* Lecturer at the University of Petro șani, Romania

96 Ghicaj anu, M

2. MANAGE RIAL C ONTROL
Managerial control represent all methods, procedures and devices, including
manage ment control s ystem, that manage ment uses to ensure co mplianc e with
enterprise progra ms, policies and strateg ies.
The management in contr ol is called mana gement control, and the system used
to do such things as collec t and analy ze in form ation, evaluate it, and use it an d other
devices to control activities is a management control, system .
Managerial control includ e: strategic control, tactic control and operational
control or tas k control. S trategy sets the guide lines for strategic co ntrol, tactic control
and operati onal control, this thing it is realizatio n by m eans plans, progra ms and
policies.
The goals, str ategies, program s and poli cies are taken as givens in managerial
control process. Manageria l control aim s to implement strategies an d is concerned with
the actions of managers and e mployees in their efforts to achieve enterprise goals .
Principals characteristics of manageria l control. Managerial control includes
both actions to guide and motivate efforts to attain enterprise goals and acti ons to
correct ineff ective and ine fficient perfo rmance. Diff erent manage rial control s ystem s
are ne eded fo r different situations, but all se em to possess the follo wing charact eristics .
In principal t hat it is:
– manageri al control is primarily a process for motivating and inspiring people to
perform enterprise activities that will further the enterprise’s goal;
– it is a process for detecting and correcti ng unintentional performance errors a nd
intentional irregularities, such as theft or misuse of res ources;
– managerial control includes arrange ments organi zational, authorities,
responsibiliti es, perform ance standards and info rmation to facilitate the exercise of
control and to process a set of actions to en sure the ent erprise operat es to re alize i ts
goals and obj ectives;
– managerial control f ocus on pr ogram s and responsibi lity centers;
– managerial control is a to ol for m anagers, who use it in their int eraction with one
another and with subordi nates. It is a people-oriented process;
– it is a total organization system in that it embraces all aspects of enterpri se
operations. It functions to help management maintain all parts of the operation in
balance and operate the enterprise as a coordinated w hole;
– the inform ation processed in a manageri al control is of two general ty pes: planned
date in the fo rm of progra ms, budgets a nd perform ance standards; and actual d ata
on what has or is actually happening, both inside the enterprise an d in the external
environm ent.

3. LINKI NG BET WEEN S TRAT EGIC PLANNI NG AN D
MANA GER IAL C ONTROL
Linking between strategic planning and m anagerial control r esult out of
principal elements:

Strategic pla nning and ma nagerial cont rol 97

™ The goals of on enterprise are set before the strategi c planning process. They are
norm ally timeless and last indefinitel y, although inf ormation obt ained during the
strategic control process may lead to a c hange in goals. After enter prise goals are
in place, the strategic planning process may be used to develop s trategies in th e
form of way s of achieving g oals. Wh ile developing progra ms to im plement
strategies, broad com pany wide policies;
™ The goals, strategies, program s and policies are taken as givens in th e
manageri al control process. Managerial control aim s to im plement strategies an d is
concerned with the actions of m anagers a nd em ployees in their efforts to achieve
enterprise goals;
™ Strategic planning precedes the managerial control process. The manageri al
control process takes th e strategies as given and develops a sy stem for
implementing them ;
™ Strategic planning and managerial control make extensive use of feedback
inform ation. Strategic planning feedba ck informati on is used t o evaluate t he
backgroun d of existing strategies and the environm ental assu mptions on which the
strategies for mulated. Ma nagerial control places more emphasis on he control of
internal variables, while strategic planni ng often deals with shifts in external non-
controllable variables to w hich the enterprise must adjust;
™ Both strategic planning and m anagerial control assu me the existenc e of
strategies and goals and we need to say a few words about t hat relationship;
™ The strate gic planning process is essentially irregular, wherea s managerial
control is a continuous fairly s ystematic process;
™ Strategic planning provi ded performance standards for managerial control;
™ Strategic planning used inf ormati on’s managerial control; etc.
Sketched, linking between strategic planning and m anagerial control present in
next figure.

Figure 1. Relationship strategic planni ng and managerial control

Stategic planni ng
(plans, programs,
policies) Perform ance
standa rds Manage rial
control
feedback information
In next table i t is sy nthesized mains relationship t his two concepts.

98 Ghicaj anu, M

Table 1. Characteri stics p rincipal the s trategic planning and
the manager ial control
Charac teristic Strategic planning Managerial control
1. Foc us of
activ ity Make of g oals and strategies, of
policies to gu ide Devel opment the manageri al
control system what perms
strateg ies im plementation.
2. Ty pe pr ocess Charact er non-regulation Continue, systematic
3. M anagement
level Resp onsibility to p management,
strategic manageri al level (top
managem ent) Implicit work both of at
managem ent strategic level
and of at other managem ent
level (tactic managem ent and
operational managem ent)
4. Time horizon Long time, periods big time, years Week s, months, year
5. Nat ure of
variables External variables, non -controllab le Focus on internal variable
6. Nat ure of
information Used feedback information,
reporting , prognostic, prev ision Used feedback information,
reporting (perform ance
standa rd and real
information)
7. Objectives Emphasi zes the development of
competitive strateg ies fo r
outperforming other enterprise, the
exploitation of techn ological
devel opments, and the adaptation of
the org anization to th e con ditions
for su rvival and growth that the
environment imposes o n it. Directs a nd gui des the
enterprise t o the d esired
goals. It does this by
collecting information ab out
the actu al state, and initiatin g
actio n to alter enterprise
perform ance, if necessary

4. CONCL USIONS
Throug h strategic planning form ulation of broad strategies, princip al goals an d
make means, methods, directions to be used in attaining these goals; and for
implementati on these used managerial control formal and inform al.
Managerial control implements strate gies and presuppose form ulation policies,
program s and budgets, and that invol ve the three activ ities:
– making task plans and fostering task evaluations;
– motivating and assisting employees, usi ng budgets and other means to carry out
program s within p olicy guidelines;
– exercising judgm ental control, using such devices as financial report com parisons
and trends to correct perfor mance as app ropriate.

REFERE NCES:

[1]. Robert Antony – Managem ent Control Systems, Illinois, 19 89
[2]. Ghica janu M. – Methods and procedures of managerial con trol process, 2002

Annals of the University of Petro șani, Economics, 4 (2004), 99-104 99

BREAK-EVEN ANALYSIS OF THE ENTERPRISE
AT ONE PRODUCT LEVEL

MIHAELA GHICAJANU, MANUEL-VIOREL SEMEN *

ABSTRACT : This paper presents some significant aspects regarding the break-even
analysis of an economic organization. The analysis will consider a case study for a company
which produces a certain production volume, considering a certain value of its sales and
determining its Break-Even Point, under two possible hypotheses: the first case by only
operating with a normal profit, and the second one by considering a requested profit (opportunity cost) of 3%.

KEY WORDS : sales, activity level, relevant range, profit/loss, break-even point, fixed
cost, variable cost, semi-variable cost , profitability, efficiency, contribution .

1. INTRODUCTION

The analysis based on the study of the Break-Even Point has some strong
roots in, and tight theoretical connections with the fundamental concept of Cost-
Volume-Profit (or CVP) analysis.
Before a closer approach of the typical for the break-even analysis problems
and themes, one should first clarify some of the basic concepts related to its
stipulations, such as:
‰ Behavior of costs
‰ Relevant range
‰ Activity level
‰ Fixed cost
‰ Variable cost
‰ Semi variable cost
Behavior of a cost – represents the way in which this cost will react (increase,
decrease or remain constant) to changes (i ncreases or reductions) in the level of
activity.

* Lecturer at the University of Petro șani, Romania
Assist. Prof. at the University of Petro șani, Romania

100 Ghicajanu, M .; Semen, M .

Relevant range – the ra nge (interval ) of the activit y level w ithin whose
boundaries the hypot heses regarding the linear behavior of the cost are verified.
Activity level – a decisional indicator a nd the cause and reason for the actual
magnitude (value) of the variable costs. (The term “activit y level” is here preferred to
“production”, in order to e xtend the appli cability of the following considerations, not
strictly for a ctual product ion, b ut to o ther industries as well – we could here name
services and any further i ndustries which don ’t necessarily produce phy sical, tangible
goods).
Fixed costs – costs which re main cons tant in total value; the y don’ t react to
changes in the activity level.
Variable costs – costs which modify in total value in direct p roportio n to
changes in the activity level.
Semi variable costs – costs which have a fixed and a variable co mponent, i.e. a
part of such a costs has a fi xed behavior , and the ot her one a variable behavior.
The analy sis m odel Cost -Volume-Profit considers a num ber of restrictive
hypotheses, s uch as:
– costs and sal es inco mes have a linear behavior ove r the studied relevant
range;
– all costs are separated into their fixed an d variable com ponent;
– the com bination of t ypes of products which are sold remains constant;
– the level of stocks remains unchange d (the manufactured quantit y equals
the sold quantit y);
– the productivi ty remains co nstant;
– inflation is not taken into c onsideration.

2. BREAK-E VEN POINT

The Break-Ev en Point represents the activity level (e.g. production quantity ) at
which the va lue of costs equals the va lue of the r evenues caus ed by the sale s of the
company products.
In an alternat ive state ment, the Break-E ven Point represents the exact level of
the com pany activity , where no profits are registered, but no losses either.
This critical point of any firm’s prof itability called Break-Even Point can be
determ ined through eit her analy tical, or g raphical methods.
In order to bu ild an equatio n for dete rmining the Break-Even Point , one should
start fro m clarify ing the re lations or functions for tot al costs and t otal revenues. The
calculation ele ments contai ned in the equati ons have been sy mbolized as shown below:

sp – Selling P rice per Unit;
vc – Variable Costs per Unit;
TC – Total Costs;
FC – Total Fi xed Costs;

Break-even analysis of the enterprise… 101

VC – Total Variable Costs;
TR – Total R evenues;
Q – Activity Level;
Q* – Activit y Level at Break-Even.

Considering t he notatio ns from above and the defini tion of costs, r evenues and
break-even point, this cri tical point called Break- Even Point can be determined
according to the following steps:

Qsp TR×= ( 1)

VC FC TC+= ; Qvc FC TC ×+= (2)

By definition, at Break-Even Point, the costs beco me equal to the revenues,
which means that:

vcspFCQ Qvc FC Qsp TC TR−=⇒×+=×⇒=* * * (3)

vcspFCQ−=* ( 4)

In order to a achieve a better clarificati on of the con tent, and t o exemplify the
actual use of the fundamental concept Break-Even Point , a case study with tw o
particular situations will be presented below.

3. CASE STU DY

A co mpany which produces and sells tex tile products recorded the following
situation regarding its pro duction, o perating costs and revenues at the end of one the
years of its econom ic life:

Indicator s Measure Units Value
1. Pr oduction Units 92.000
2. Operating revenues 000.000 ROL 13.892
3. Operating costs
– Variable c osts
– Fixe d costs
000.000 ROL
14.100
3.300
10.800
4. Operating profit / loss 000.000 ROL 208
5. Pr oduction capacity Units 150.000
6. Sellin g price per unit ROL / unit 151.000
102 Ghicajanu, M .; Semen, M .

The actual determ ination of the Break-Even Point of the company will have to
be done according t o the following steps:

ROL p er unit Sellin g Price
151.000

ROL p er unit
45.652,17
40.217,40 Varia ble Costs
Raw Materials
Labor C osts
Other Variable Costs 31.521,74
Total Variab le Costs 117.391,74

Fixed Costs 000.000 ROL
Administratio n Salaries 1.500
Overheads 910
Depreciation 780
Intere st 110
Total Fix ed Costs 3.300

Units Produ ction Capacity
150.000

Units Units Units Units Units Units Output
– 50.000 80.000 90.000 100.000 150.000
000.000
ROL 000.000
ROL 000.000
ROL 000.000
ROL 000.000
ROL 000.000
ROL Sales
Potential
– 7.550 12.080 13.590 15.100 22.650

Costs 000.000
ROL 000.000
ROL 000.000
ROL 000.000
ROL 000.000
ROL 000.000
ROL
Fixed Costs 3.300 3.300 3.300 3.300 3.300 3.300
Varia ble
Costs – 5.869,6 9.391,3 10.565,2 11.739,1 17.608,7
Total Co sts 3.300 9.169,6 12.691,3 13.865,2 15.039,1 20.908,7

000.000 ROL Calcul ation of Break -Even Point
Fixed Costs 3.300
Contribu tion per Unit 000.000 ROL
Sales Price per Unit 151.000
Variab le Co st per Unit 117.391,31
Contribution per Un it Sold 33.608,69
Units So ld
98.189
% C apacity Break-E ven Point

65,46 %

Break-even analysis of the enterprise… 103

The analy sis of the Break-Even Poi nt can also be performed under another
hypothesis: the manage ment of the co mpany requests a minimal accepted profit of 3 %
as an opportunit y cost for the use of the capital. A comparative presentation of the two
cases is show n below:

CASE I

CASE II

Indicators

Meas ure
units
Value
Indicators
Meas ure
units
Value

1.Fixed Costs
000.000 ROL
3.300
1.Fixed Costs
000.000 ROL
3.300

2.Selling Price
ROL
151.000
2.Selling Price
ROL
151.000

3.Variable Costs pe r
Unit
ROL
117.391,3
3.Variab le
Costs pe r Unit
ROL
117.391,3

4.Production
Units
92.000
4.Production
Units
92.000

5.Contribu tion p er
Unit
ROL
33.608,6%
5.Contribu tion
per Unit
ROL
33.608,6%

6.Production
Capacity
Units
150.000
6.Production
Capacity
Units
150.000

7.Break- Even Point
(BEP)
Units
98.189
7.Requested
profit
ROL / Unit
4.530

8.Position of BEP
to Production
Capacity
%
65,46
8.Break- Even
Point (BEP)
Units
113.485

9.Position of
BEP to
Production
Capacity
%
75,65
9. Position of BEP
to Production

%

106,72

10. Position of
BEP to
Production

%

123,35

104 Ghicajanu,M .; Semen, M .

CASE I – The com pany operating with a normal profit, wit hout co nsidering an y
opport unity cost of its inve sted capital;
CASE II – The com pany operating with a m inimal a ccepted profit (opportunity cost of
its invested capital) of 3%.

4. CONCL USION

As one can easily observe b y stud ying the data display ed in the tab le above, b y
requesting a minim al accepted profi t, the manage ment of the com pany “moves to the
right” (in gra phical term s) its Break-Even Point, m eaning that t he company will meet
this poi nt late r than i n the first case, under the circumstances of a significantl y higher
activity or pr oduction level (113. 485 instead of 98.1 89 manufactured units).

REFERE NCES:

[1]. Ghica janu M. – Proiecte economice, Minitipografia Uni versității din Pet roșani, 2004
[2]. Jenkins B. – Training Program – Appreci ation of Business, Fi nance & Acco unting,
Petro șani, 19-21 martie 2004
[3]. Sch otter A. – Microeconomics – A Modern Approach, 3rd Edition, New York, 20 00

Annals of the University of Petro șani, Economics, 4 (2004), 105-112 105

CLOSURE OF MINES. PROBLEMS REGARDING
THE ENVIRONMENT AND THE INVESTMENT
EFFICIENCY WITHIN THE CONTEXT OF
ENVIRONMENT PROTECTION
AND REHABILITATION IN JIU VALLEY

SABINA IRIMIE, RAREȘ MUNTEANU, ILIE MATEI *

ABSTRACT: The mining activity performed in Romania until the year 1990 was
focused mainly onto reaching high production level s, fact which has lead to neglect ecological
issue and that has resulted in accumulation in time of very serious damages for the
environment. Rehabilitation of mining wastes repres ents a constant concern of all specialists in
the field of mining, biology and sylviculture, who have cooperated along the years with very
good results. However, the reh abilitation process requires a lot of funds and thus causes
serious economical problems.

KEY WORDS : rehabilitation, environment, investment efficiency, closure of mines,
waste dumps

1. INTRODUCTION

The restructuring process of the mining industry in Romania has the following
objectives:
ƒ to eliminate the dependancy of the mining industry to the subsidies from the
government;
ƒ to promote a mining industry sustainabl e from the environmental and financial
point of view as well as the strong involvement of the private funds;
ƒ to implement programes for regional development and social mitigation.

* Assoc. Prof., Ph.D. at the University of Petro șani, Romania
Assist. Prof. at the University of Petro șani, Romania
Eng. Ph.D. at the E.M. Lonea

106 Irimie, S.; Munteanu, R. ; Matei, I.

2. IMPLEMENTATION OF TH E TECHNICAL PROJECTS FOR
CLOS URE OF MINES

A legislative framework has been cr eated in order to select the mines with low
reserve s as well as the inefficient mines, in order to pass the into the closure /
conservation phases..
202 m ines and quarries have been ap roved for closure by Government
decision, based on the technical documentation re alised by the design and resea rch
institutes.
The closure of the underground m ining works is realized according to the
geological an d mining con ditions as foll ows:
ƒ closure b y dyke of the undergr ound m ining works, usin g isolation d ykes,
resistance dykes, with or without stowi ng the works;
ƒ stowing the mining works that make the connection with the surface or the
conducted flo od of t he underground m ining works.
Closure of the mining works that make the connection with the surface is
realized by using dykes, reinforced concrete boards, or concrete cap s.
The issues related to the s ecurity and environm ent generated by the closure of
the m ines are deter mined by: the influe nce on the underground and surface wat ers; the
existence of the explosi ve and toxi c gas underground; the possibilit y for the
underground fire to occur; the possibilit y to make safe the connecti ons between surface
and underground; the risk of sinking or sliding of the surfaces due to underground
mining; the stabilit y of the waste du mps and the im pact on the envi ronm ent and human
settlements; the degree of safety of the settling ponds and the im pact on the
environm ent and hum an settlements; the existe nce of toxic or dangerouse wast e in the
closed preci ncts; the need to dem olish so me reinforced structures; the need to
rehabilitate the qualit y of the soil and waters affected by the m ining and to create a nice
lanscape.

3. TAKIN G OUT OF US E AND DEMOLOS HING THE
INSTALLATIONS ON THE SURF ACE / BUIL DINGS

During the process of taking out of us e and dem olishing of the fixed assets on
the surface, t he main issues are: evaluat ion of the assets; deter mining the post-closure
destination; determ ining the specific act ivities for taking out of use / dem olishing; the
analy sis of the de moloshing m ethodes; evacu ation of the waste; calculating t he cost
and establishing t he pro gram of the proj ect; issu es co nnected to the health and s afety of
the environm ent.
The destination post-exploitation of th e land represents the m ain issue that
influences the decision on the structure s to be kept a nd those to be recover ed from the
site. The same crite ria infl uences the level of the de moloshing w orks. The agr iculture
has different developm ent require ments for an industrial area.

Closure of mines problems regarding the environment … 107

4. ECOLOGIC RE COV ERY OF THE MINI NG AREAS

The Ministr y for Water and En vironm ent, the Direction for Eco logic Contro l
and Monitor ing together with the Regional Inspectorates for Environm ent have
controlled d uring the perio d october 1 6 – november 30 the m ines proposed for c losure.
The co mmiss ion has verif ied on the sit e the mines in the depart ments: Alba, Argeș,
Bihor, Bistri ța-Năsăud, Cara ș – Sev erin, Covasna, Dâm bovița, Gorj, Ha rghita,
Hunedoara, Maram ureș, Prahova, Sălaj, Suceava și Vâlcea. 51 sites were co ntrolle d
and m inutes have been worked out when the works were finished , the final acc eptanc e
is to be done after the warran ty period is over (24 m onths).
After the controls of the documents an d on the site s we re accomplished, the
following conclusions were stated:
♦ during the stage of cease the activity and desi gn of the closure works, the future
destinations of the land and buil dings were not taken into account. Th is led to
technical projects for closure, approved by the beneficiary , that were not realized
due to t he changings d uring the perio d of execution caused by the requirements of
the public ad ministration for some buildings n ot to be dem olished. The buil dings
that were no t demolished are seriously degraded. Due to the fact that those
buildi ngs were not dem olished, the m ine precincts were not com pletely ecologized;
♦ in all the cases the solutions in the techni cal projects of execution were not based
on specialized studies (geotechnical, hydrolo gical, hidrogeol ogical, pedological
etc.);
♦ in m ost of the cas es, the t echnical projects of execu tion are not according to the
initial designes that had th e approval of the environment authorities. The changings
of the soluti ons in t he technical projects were introduced wit hout t he leg al
approvals, which means with no approval fro m the atuthoriries for environment.
The changing s were carried out by change orders, e xplanator y notes, renunci ation
notes and not es for supplementary work s, all within t he same general estimate;
♦ some closed galleries show cru mbling cones on the surface, on the direction of the
gallery , whic h are due to u nappropriate stowing;
♦ some works for re-shaping the geom etry of the quarries were c arried out shallowly
and as a result land slides and accu mulations of water in the excavated area of the
quarry appeared;
♦ the works for stabilization and ecologization of the waste du mps are not responsive
in most of the ca ses. The gradients of th e wast e dumps wer e not c orrected and as a
result the works for re-vegetation are co mpromised. This also caused a wast e of
labour and m aterials and consecutively a wast e of funds;
♦ for som e waste dum ps which are subm itted to the ecologiz ation process the
vegetation ap pared b y natu ral cause, and some works carried out even damaged the
vegetation ins tead of helping it;
♦ there are w aste dum ps whi ch were prep ared to be plnted with herbs and trees, but
such works can be carried out only during certain periods of the year and so the y

108 Irimie, S.; Munteanu, R. ; Matei, I.

were abandoned and later occupied b y the local co mmunit y and used for agricult ure;
♦ the source of the fertile soil was not dete rmined and as a result the thickness of the
layer of soil s tsted in the te chnical design are not found on the site . There are ar eas
where the fertile soil is not available due to the high altitude, geol ogical structure
and natural configuratio n of the land. In most of the cases the waste re sulted fr om
the exploitati on was used. This determin ed unap propriated vegetation works in
spite of the fact that more works for leveling, ferilizing and trans portation have
been counted and paied;
♦ the plantation of trees are com promised in som e areas due to the unappropriated
gradient of the waste dum ps, lack of fertile soil and fertilizers, use of trees not
appropriated for the area w here they were planted;
♦ the tim e for the works to b e acco mplished was short (average of about 1-6 m onths)
and this caused the works to be done in periods of the y ear unappropriated for the
plantation of the herbs and trees and this process was postponed for the next year.
The succes sful in ternational practice st ate the following term s:
-design, transfer of the objective 12 weeks
-program for conservation / maintenance 12 weeks
-closure (treat ment of the shafts, works for connection
with the surface) 16 weeks
-demolish process 26 weeks
-ecologic rec overy of the surface 2 years for execution and
5 years for maintenance

5. TECHN ICAL ASS ISTANC E AN D POST-C LOSUR E MONIT ORING

The main conclusions draw n after the control carried out by the representatives
of the Ministr y for Water and En vironm ent (M.A.P.M.) are:
ƒ the sum of 200 bil lion ROL which were allocated from the state budget f or the
closure of the m ines (works carried out un til now) were spent mostly inefficiently ;
ƒ the issue of post-closure monitoring a nd who will do it has no answer until now.
Also it is not known who will be responsibl e in f uture for the use and m aintenance
of the stations for cleaning the waters fr om the mines.
The investor (Ministry of Industr y and Ressources, Depart ment f or Conversion
of Capacities Ecological Programs in Mining) was represented on the site all the period
long by speci alists fro m some co mpanies more or less well known, according to the
contracts for technical as sistance. Most of these spec ialists ar e ex- managers of so me
mining com panies or are representati ves of com panies that carried out works for
closure of m ines.
Due to thes e fact s, the objectivity of these s pecialists i s questionable.
Exam ples of companies th at who provi ded technical assi stance: Regional Groups for
Closure of Mines organized by the nati onal com panies: CN MINVEST Deva, REMIN
Baia M are, CNH Petro șani, CNLO Târgu-Jiu, SC A&A TE HNIC GRUP SRL
Petroșani, SC RTS CONS ULT SRL Bucure ști, SC INDPRODCOM SRL Baia Mare,

Closure of mines problems regarding the environment … 109

C OPT SRL Târgu Jiu, S C MONS M EDIUS SRL Baia Mare, SC CRESCEND SRL
Târgu-Jiu, S C CODRU ȚA SRL Bucure ști, Universi ty of Bucharest etc.
Most of the water treatment plan ts the acceptance was done without a
technological test. It is not known if t hese treat ment plants will provide an opt imum
tratm ent of the mine waters, even if they are m odern from technological point of view,
because some of them had problem s during t he technological t ests and this led to
requirem ents for changing the initial design.
At Boița Hațeg, the desig n did not incl ude filter for the precipitat ed, after the
separation it is stored in the gallery that was used for the pipes for h ydrotransport .
In these conditions, and taking i nto account t hat INSEMEX Petro șani gives the
final approv al to the technical docu mentation for closure of mines and ecologic
recovery of the m ining areas (appointed by Minist erial Order 1768/ 98 and adress
1932 00/2000), havin g the experience of a pproving 133 technic al docum entations for
closure of mines, out of which 19 are finan ced by the World Bank, it is
recommenda ble that the technical a ssistance to be carried out by INSEMEX or by a
departm ent within it, or that INSEMEX coor dinates the site works and the post-closure
monitoring.

6. THE ISSUE CONCE RNING I NVESTMENT EFFICI ENC Y WIT HIN
THE CONT EXT OF ENVIRONMENT PROT ECT ION AND
REHABILITATION IN JIU VAL LEY

Environm ent protection and rehabilitation represents, in essence, an investmen t
objective that is consider ed both as technical is sue and as an activity of large
econom ical and social issu e, which requ ires management of a large financial, material
and inform ational volum e of resources. The specific charact eristic of invest ments
concerning t he environment protectio n consists in the fact that exists a lot of non-
quantifiable effects, which only the tim e can quantif y and prove.
Analy sis of efforts or econom ical effects concerning the environm ental
investm ents has as characteristic the addition of many aspects outside the econom ic
field. In this sense, the most relevant are: social field, political field, local traditions,
cultural field and even ecological field. This expression can be proved even by mean s
of collection sy stem concerning the pen alties due of non-com plying the enviro nment
protection laws, or by means of ecol ogical effects propagation, as result of
environm ental investment in the social field.
Environm ental invest ments are, in fa ct, affect ed by the lack of financing
sources that in present are formed on the b ase of own sources of econom ic agent s (self-
financing), i n low percentage from Stat e budget, as well as on t he base of fi nancing
sources provided by different internat ional authorities. The be haviour towards the
environm ental investments is seriou sly infl uenced b y the poor econ omical
developm ent of the different econom ic agents.
It cannot be discussed about economical efficiency under the condition of
minim um investment, onl y for survivi ng, which does not correspon d to the l ong-term

110 Irimie, S. ; Munteanu, R.; M atei, I.

strategy concerning the e nvironm ent p rotecti on. Therefore, it results that the mediu m
term invest ments are very sensitive, depending m ainly on the econom ical progress. For
this reason, it is required that their executi on to be perfor med wit hin a sti mulative but
strict legislative fram e in order to achieve a normal en vironm ent protective behaviour.
In the same ti me, the medi um term invest ments should be based on econom ical
principles, co mparing the efforts with the ec onom ical effects, in order to select those
investm ent projects that are really requir ed and useful.

7. CONCL USIONS

The m ost difficult proble m in achievi ng the econom ical effici ency of the
invest ments concerning environm ent protecti on and rehabilitation, consist in making
the responsibl e factors aware about the f ollowings:
► elaboration of a stim ulative but stri ct legislation regardi ng envir onment
protection;
► provision and responsible usage of certain investment resources in this field;
► promoting the non-polluting tech nologi es into the productive secto r and
monito ring th e risks;
► perform ance of an international coopera tion in the view of achieving larger
support for t he new concept concerning the su stainable development, in opin ion thi s
can be understood as an action concerning the usage of natural re sources in the same
time with environm ent protection and co nservation.
On short term , for the year 2001, in the table 1 , there are p resented the
environm ent rehabilitation m easures and work s carri ed out, as well as the environm ent
costs affer ent for each mining unit in Jiu Valley and total for entire mining com pany.
In table 2 below, th ere are presented the main environ ment p rotection objects
and th eir value, foreseen within th e investment costs. On long term, the inv estment s
requi red for environ ment protect ion should follo w the measu res in the internal pr ograms
of ea ch mi ne apart, approved by the env ironmental authority . These measures should be
putted up to date in accordance with th e possible situation s modify ing the environ ment
elemen ts damaged or affected by the mining activ ity, by program ’s effects upon the line
concern ing th e pro motion of non-pollu ting te chnologies and by all im provemen ts that
can be achieved during the implementation of intern al programs’ stipulation s.

Closure of mines problems regarding the environment … 111

Table 1. Measures Concerning Enviro nment Rehabilitation Environmental –
Factor “Soil” – year 2001 (foreseen within the en vironmental costs)
Mine No. Environ-
mental
factor
Measures / Works Value
(mil.lei) Total value
for mine
(mil. lei)
Arrangement of active w aste dumps (Jiet, Lonea) 100
Arrangement of conservate d was te dumps (Valea lui
Ciort, Defor) 100
Lonea

1 soil
Reintrodu ction of micro-pits into the agricu ltural circuit
(Defor, C impa) 100 300
Waste dump (reintroduction in economic cir cuit) 160
Industrial waste (protection of the soil) 40 Petrila l soil
Protection of the surfac e agains t the inf luenc es of the
underground mining 35 235
Arrangement of active w aste du mps PA 2 și 3 100 Live-
zeni 1 soil Storehouse for carburants and lubrican ts 20 120
Reintrodu ction of terrains o ccupied b y waste dum ps 100 Ani-
noasa 1 soil Collec tion + storage of waste 100 200
Prevention of so il erosion 10
Arrangement of active w aste du mps (V. Arsului) 80 Vulcan 1 soil
Arrangement of non-active w aste dumps (Pu țul Vest) 80 170
Arrangem ent of active w aste dumps (Valea Lupului) 100
Arrangement of non-active w aste dumps (Ropeway
refuse-heaps) 110 Paro-
șeni 1
soil
Protection of the surfac e agains t the inf luenc es of the
underground mining 15 225
Drainage of Kelety swamp 100
Drainage of swamp near Est pr ecincts 100 Lupeni
1 soil
Protection of the surfac e agains t the inf luenc es of the
underground mining 20 220
Arrangem ent of active w aste dumps (Valea M ierlașu) 30
Arrangement of non-active w aste dumps (slpoe-dr ift) 65 Bărbă-
teni
1 soil
Reintrodu ction of micro-pit into the agr icultural circuit
Valea Boncii 65 160
Arrangement of active w aste du mps (Funicular nou) 75
Arrangement of non-active w aste dumps (old
ropeway +Balomir) 70
Reintrodu ction of micro-pits into the agricu ltural circuit 100 Uricani
1 soil
Protection of the surfac e agains t the inf luenc es of the
underground mining 10 225
Reintrodu ction of waste dum ps into th e agricu ltural
circu it 130
Collec tion + storage of waste 30 Valea de
Brazi 1 soil
Protection of the surfac e agains t the inf luenc es of the
underground mining 25 185
TOTAL VALEA JIULUI 2070

112 Irimie, S. ; Munteanu, R.; M atei, I.

Table 2. Main Environment Protectio n Ob jects – Environmen tal Factor “Soil” –
Year 2001 (F oreseen Wit hin The Investment Costs)
Mine No Nam e of objective Value
(mil.lei) Total –
Mine
(mil. lei)
LIVEZE NI 1
2 Consolidation of auxiliary waste du mp-Shaft no.3
Rehabilitatio n works con cernin g the land inside
of Eastern Auxiliary yard 1190
100 1290
VULC AN 1 Consolidation of auxiliary waste d ump-Shaft no .
VII 380 380
LUPE NI 1
2

3 Arrangem ent of waste dum p-Ileana Vec he +Noua
Rein troduction into the agricultural circu it of the
open-pit+waste dump Victoria
Rein troduction into the agricultural circu it of the
lands – Lupeni South 500
5000

500

6000
TOTAL J IU VALLEY 7670

REFERE NCES:

[1]. Berc a M. – Theory re garding the manageme nt of envi ronment and of natural resources,
Ed. Grand, Bucure ști, 19 98
[2]. Berc a M. – Strategies regarding envi ronment protection and management of resources, Ed.
Gra nd, București, 19 98
[3]. Matei I. – Syste matics of Acid Rock Drainage – passive treatment method, Mining Review
no.6, 2001, pp. 40

Annals of the University of Petro șani, Economics, 4 (2004), 113-116 113

ASPECTS REGARDING FILE OPERATING SYSTEMS
USED IN MANAGEMENT

ALIN ISAC ∗

ABSTRACT: Management computerization implies using word processors on a scale
and this leads to major changes in this field of activity, changes that increase the
productiveness of a company. According to speci alists there’s a great variety of conceptual
delimitations regarding file operating systems also called Word Processors.

KEY WORDS: computerized management, word processors, Intranet

The most important of the numerous and heterogeneous components of the
management of a company is information technology. At the beginning of this third
millennium, against a competitive background, a better and more intelligent
information technology makes companies redesign their production, management and informational processes, which are essential fo r the development and survival of most
companies. The definition given to computer ized management says that it comprises
the total of data, information, information flow and network, procedures and ways of
handling all this when gathering, processing, storing and giving out information that lies and the basis of plan elaboration, decision making, supervision and management within the company.
Different points of view in specialized literature regarding the role of
computerized management and the variety of methods used to improve it, especially
the use of computers, which are very important, reveal the necessity of a rigorous
approach of this subsystem. In this r espect, computerized management radically
changes the way information is gathered , stored, transmitted and processed. In a
society “governed” by paper work, which can be endless, this is the right place to
implement an operation system that stocks, controls and finds doc uments very easily.
The series of software, hardware and equipm ent needed to transfer data on electronic
support, to sort and to store data is availabl e for all managers in all levels and is also
indispensable in their activity.

∗ Assist. Prof. at the University of Petro șani, Romania

114 Isac, A.

The main causes that amplified and f acilitated managem ent computeri zation
are: plenty , diversified and cheap co mputers and ope rating s ystems; co mputers with a
larger memory a higher operating speed; it provides ready access t o inform ation for a
constantly increasing num ber of people; efficient software th at measures up to
managers’ requests; a substantially positive im pact upon the activit y of a co mpany,
which has been dem onstrated b y the use of computers that the com pany. According to
specialist s there’ s a gre at variety of con ceptual delimitations reg arding file operating
systems also called Word Processors.
IBM speciali sts fro m Romania state tha t “a complete Word Proce ssor implie s
creating, editing, evaluati ng, approving, transferring, arranging, sorting, sea rching
and retrieving every file of an enterpr ise in a centralized, secu red, configur ed and
extensible en vironment” , while special ists fro m Siveco Ro mania say that “a Word
Processor is used to store and process folders together with their copies and to define
the operations a certain folder has to under go at a certain period of time”. In more
limited sense, Fujitsu specialists think “a Word P rocessor means using adequate
methods and techniques in order to make the file operating sy stem efficient and
rigorous and not recurrent”. In Soli s sp ecialists’ opinion, the meaning of file
management is very broad , and a most appropriate definition wou ld be: “it organizes
inform ation in order to be used very quickly and easily by those who need it.”
The key element of a file o perating sy stem is it s abilit y to fi nd files and folders
on-line within depart ments. At pres ent, there’ s a stro ng tendenc y to co mpress the cy cle
of operations and service s, as well a s paper work. Q uick acce ss to inform ation is the
main purpose of operating sy stems, wh ich se nd files to various places, make r eports,
save and sor t data. This software can be used by small firms that have onl y one
computer, by m edium-sized com panies equipped with local computer networks and
especially by multinational enterprises with subsidiaries in severa l countries, which use
an Internet or Intranet connection in orde r to process a co mmon data base.
A file operating s ystem comprises vario us types of files creat ed with special
programmes used by each co mpany. In order to get benefit f rom a computerized
activity , these files must b e process ed and used adequately and efficiently . Because of
the variety of files it is possible to use other software and several operating sy stems, as
well.
When the quantit y of in formation is very large, a methodolog y must be
implemented to save and stock files and folders, to find them according to certain
criteria, to delete change o r even print them so that a t the end they can be s aved again.
All these programme s have to keep to m aximum-security standards as far as the
procedure of saving and acces sing files is concerned and the y must be based on real
data. In conclusion a W ord Processo r refer s to complex sol utions that include
characte ristic operations with the followi ng functions: quick file sear ch. N o matter
where they are stored on th e hard, they can be found in a directory where one can find
all the information regarding files and onl y certain us ers who have access to the m can
use these folders; to change a printed docum ent into an electronic folder there are
several techniques that can be used: scanning, i ndexi ng, data conve rsion or pr ocessing

Aspects regarding file operating systems used in managent 115

when the fil e is already an electronic folder; cre ating new folders and trans ferring
existing files. Whenever a new folder is creat ed the application connected with the ty pe
of file starts automatically ; dividi ng information within a workgr oup avoi ds duplicates
and controls the development of folder s; the possibilit y to save folders. Whenever a
saved file is needed it can be opened togeth er with all related data; selecting files in
order to pri nt them , copy them , delet e them; securi ty regarding access to files. The
right to access a fil e is settled by the high est-level user; the possibility to make
additions to the files, without actually altering th e folder; watching the changes
different users have made to folders in the long run and the possibilit y to go back to
previous versions of the fil e.
Manage ment computeriza tion im plies using word processors on a scal e and
this leads to major changes in this field of activity , change s that increa se the
productivene ss of a com pany. Ther efore, for each sector (resear ch-devel opment,
production, e conom ic, human resources and fi nanci al-accounting department) there’ s a
specific ty pe of file that ca n easily be acces sed fro m the co mputer’ s database or from
computers in other functio nal departm ents (FD) connected to the network, as you can
see in picture 1.

Picture 1. Management Operating System
Although com puteri zed management in a com pany of the pr esent day s is
influenced by the level of up-gradin g co mputer technolog y, by the num ber of IT
specialist s and last but not least by the proliferation of communic ation sy stem s based
on the Interne t and Intranet.

116 Isac, A

One of the major options for the efficien cy of com puterized managem ent is the
use of the Intranet sy stem, which allows any internal user to select the functions they
desire by double-clickin g on the f ollowing: pr oduction departm ent, econom ic
depart ment, manage ment, financial-a ccounting de partment or human re sources
depart ment, but only after they have acces sed the I ntranet web page and entered the
password in order to go to the main menu.
Data and files in the HR depart ment are organized through the Intranet
according to the functions of this depart ment: a r ecord of em ployees, job evaluation
and analy sis, sala ry rates, staff training, a. s.o. Within the Intranet sy stem there’s a
database avai lable that has inform ation about em ployees. Infor mation provi ded by the
departm ent manager regarding the or ganization chart, the up datin g of organizati on and
operating cod e regulations, a.s.o., as well as statistics referring to em ployee tur nover
can be adde d to the database. This system also enables t he transfer and the
centralization of tim e she ets from all depart ments and sectors. Using the “outgoin g
inform ation” function, the e mployees in th is department can an d have to send tim e
sheets and att endance reports to the ma nage ment de partment, as well as the n umber of
employees on a sick leave and reports re garding work groups, the professional training
and he sex of e mployees, in which case the Extranet sy stem is ac cessed or the
financialacco unting department can sen d the folder c ontaining the pay roll.
The easie st file operating system is Wi ndrea m, whic h has revolutionized the
efficiency of Windows implem entation. Windream is the first prod uct that doesn ’t need
other applications installed, as it is a lready integrated in the Windows op erating
system . Usin g Windows Explorer one can sa ve/stock folders with this operating
system . As it doesn’ t need a specifi c interfac e, it can be easily used by any person that
can work with the Windows operating sy stem. Thus, Windrea m can be used by any
Windows application (16 bites or 32 bites). Other file operating s ystems used in
management, which can be fou nd on the Rom anian market are: AutoManager
WorkFlow 5 produced by Cyco Soft ware, AutoManager Organizer, MicroStation
Team Mate produced by Opti Interconsult, HyperDoc, RxEDM owned b y Rasterex
from Norway .

REFERE NCES:

[1]. Nicolesc u O. (co ord.) – Management Ope rating Syst em of an Enterprise, Econo mic
Printing House, Bucharest, 2001
[2]. Dima I.C., Nedelcu M.V. – Industrial Management, Natio nal Printing Hou se, Bucharest,
2000

Annals of the University of Petro șani, Economics, 4 (2004), 117-124 117

CONSIDERATION OF DECISI ONAL ENVIRONMENT ON
AN INTERNATIONAL SCALE

CLAUDIA ISAC *

ABSTRACT: Dynamic and unpredictable the contemporary decisional document
meets serious changes, so that the disconti nuity of changes and th eir even more complex
characteristic have started to control the environment in which companies of this third
millennium run. In the future, company will be structured according to future strategic
orientation of globalization and will arrive at decisions based on collective estimations, principles and values sh ared by the community.

KEY WORDS: decision theory, decisional subsystem, European management model,
American management model, consensual decisions

The decisional document, a key link of management, is the most active and
dynamic according to which people can take action. Dynamic and unpredictable the
contemporary decisional document meets serious changes, so that the discontinuity of
changes and their even more complex char acteristic have started to control the
environment in which companies of this third millennium run. In this respect,
management specialists are trying to take the notions regarding decision theory beyond
a country’s cultural and geographic frontiers and to point out the importance of an
efficient evaluation of the problems and opportunities deriving from social, economic,
cultural and even political diversity of deve loped countries which imply, of course, our
country, as well.
In this comparative analysis of the decisional problems against managerial and
economic phenomena globalization, we can highlight European countries with a
“European management model” as an alternative for the USA management and for the
Japanese one. The term “European management ” has been brought into use in the last
couple of decades, together with the prom otion of another concept “Unique European
Market”, and its more heterogeneous cultura l dimension is surprising if compared to
relatively homogenous cultures on which the Am erican and Japanese models are based.

* Lecturer, Ph.D. at the University of Petro șani, Romania

118 Isac, C.

European spe cialists say that manageri al and organi zational valu es in Europe
are so me kind of “m osaic” which has a different m eaning accordi ng to each countr y’s
language, o utlooks an d standards and also econom ic performances. They dra w our
attention on the fact th at in the great European cultural diversity , a “cultural
management m odel” is not the m ost appropr iate and a more detailed cultural approach
is needed to d ivide the management not into 2 (North and South of Europe) or 4 groups
(traditional capitalist cou ntries, Scan dinavia, Sou th European countries and ex-
communist countries) but into 5 cultura l groups according to Gurt Hofsede (En glish,
Northern, Ger manic, Latin , South easter n).
On the whol e, European management, which is sai d to be a m anagem ent of
diversity, has the following distinctive features:
• it is based on the cultural, social, econom ic and political diversity and
complexity of the context i n which it operates;
• euro-manager s must have a different trai ning, an int ercultural education that
allows them to work i n a heterogonous cultural envir onment on condition that
the European human resource mobility increases;
• it implies th e conception, elaboration and the i mplementation of several
strategies that expand a cross border s, therefore variables from sev eral
European co untries shoul d be taken in to consideration and com panies outsid e
the E.U. should be regarded as main clie nts;
• decentralizati on in “busine ss units” wh ich attenuate and e liminate undesirable
influences of a c entralized manage ment over management system , in general
and especiall y over the de cisional subsy stem;
• it creates an i dentity based upon economic and soci al values for the European
organizations; it trains spe cialists to manage m odern enterprises a t European
standards.
Trying to define European management K. Thurle y and H. Wirden ius say that
it is a notion referring to p roblem solving and decision m aking for every organization
and it “unc overs” the identit y of European strategies as well as planning ,
implem entation and evalua tion of chan ges.
We can conclude that the decisional su bsystem of E uropean companies is th e
same as far as methods and decision techniques are concerned.
In Ger many, companies ar e based on so cial relation codeter mination and run
according to the “G erman solidarity ” princi ple, which i mplies a f eeling of trust
between managers and e mployees.
Future strategic decisions that have an influence upon em ployees are tackled
throug h adeq uate active decision structures and thro ugh lab our c ouncils (Betriebstat),
which are form ed in prod uction depart ment s and supervising c ouncils (Auf schstat),
within a company . Supervising councils ha ve been enacted by the Law of enterprises
(1952) com pleted in 1972- 1976, which reco mme nds that these councils should consi st
of both representatives of the shareholders and of the employees.

Consideratio n of decision al environment… 119

The board of directors (Vorstand) is ma de up of fi ve managers at the m ost,
who share decisional com petence, as we ll as managerial responsibility. This
characteristic is mainly found in Germ an com panies.
In order to a nalyses the British management type we must have in view their
main features: conservatism , responsibilit y, honest, self-control, a.s.o. This beha vior
mixture has a great ”effe ct on the decisional process, mainly on the manager- e mployee
relationship, as well a s on individualism in the decisional process”.
Although m ost of the western management models are based on takin g
responsibilit y and the y are focused on the individual, the British are different from
other European countries. After WW2 con servatism and traditionalism have affected
Great Britain’s econom ic development, which was reconstructed b y Margaret
Thatcher. In British com panies onl y its president takes major deci sions. The B oard of
Directors and Labour Committees are co ntrolled by the president.
The Dutch management type is, for many specialists, still a mystery , which
proves that corporate managem ent draws its forces from political decisions with social
support, from social and econom ic deci sions based on professional expertise and fr om
decisions within participator y management in vertical and horizontal organizations.
The main purpose of corporate manage ment s tructures characte ristic f or the
Netherlands has proved t o be the correl ation between wages and productivi ty, although
decision i mplementation, strategic deci sion implementation, to be more exact, has
various effect s.
Scandinavian countries (Norway , Sweden , Den mark) represent a special case,
and management is defined b y specialists as a utopian one in which the Board of
Directors co nsult Trade union representa tives, as well as representatives of the
employees before co ming to a decision. In the case of the Swedish participatory
management, when it co mes to sharing out the power of deci sion, the bes t-suited
hierarchical r epresentative s are ele cted in order not to create an organizational and
decisional blockage by trus ting the decis ional com petence of the em ployees.
Unlike Scan dinavia, Germany , Great Britain and the Netherl ands, in South
European countries like France, Spai n, Portugal, Italy and Greece, the decisional
process is characte rized b y high level of centraliz ation. Even though the y aim the same
thing, central ization is different. Thus, in Greek fa mily com panies the hiera rchical
order is follo wed; the organizational structur e of Itali an com panies is divided in order
to be able to follow decisional levels; in Spain and Portugal em ployees have less power
of decision.
The French manage ment m odel is cha racteriz ed by two im portant variables:
indivi dualism and authorit y. Althou gh it is very much like the Scandinavian model as
far as authority is concerned, it hasn’ t been attenuated b y some participatory
manage ment organizations, a fa ct which enables us to co mpare the centralization from
ex-socialist countries in Eastern Europe, where the General Manager play s an
important part, as he makes most of the decisions.

120 Isac,C.

No matter what the struct ure of the “f uture Europe an power” might be it wil l
surely impose European manage ment as an alt ernative for A sian models, which
investigate the miracle of the Japane se econom y or for the successful American
models.
It would be better if Europ e could harmonize the diff erences that appear in the
diversity m anagem ent, the Eastern European valu es thus, bein g integrated in the
western model and if it c ould reach an agree ment w hen making a decision and sho w
concern for quality just like in the c ase of Japan ese manage ment, as wel l as b e
competitive and prom pt like the Am ericans.
American management and Angl o-Saxon m anagement have very much in
common. Ho wever, the A merican model has influenced the evolution of m anagem ent
in most countries in the wo rld. Therefore it is the most frequently implem ented model
and it co mprises more methods, management techniques and case studies, which have
preoccupied specialists in the field.
The chara cteristics of the decisional s ubsystem originate ste mmed for m the
Taylorist m odel, character ized by a dichotom y between manage ment and execution.
Therefore, decisions are made by manage rs onl y. Although em ployees are allowed to
make deci sion in a lim ited num ber of cases r egarding the ir job, participatory
manage ment forms ta sk -forces and “business a ssociates” t eams. In big A merican
companies, a decentralizati on of the decisiona l process is wanted and they also have in
view the am plification of t he power of d ecision of sup ervisors or managers.
Another type of management is the Japanese one , which is influen ced, on t he
one hand, by econom ico-social particular ities and on the othe r hand, by cultural
characteristics of this country. In order t o understand the Japanese cultural elements we
must remember two key -words: IE, a method thro ugh which managers try to make
employees ca rry out certai n objectives and MURA, which organizes a soci al unit, a
group of peo ple whose target is co mmon prosperit y.
In conclusion, Japanese co mpanies are dominated by the so-called paternalis m
or groupism , for which t he relationship be tween employees an d managers i s very
important. Thus, the Japanese behavior is char acterized by “a desire to get work done
very well” and lo yalty towards the group to which we may add a consensual culture
that has the following features: ability to speak freely and reach a decision without
conflicts a national sense of dut y.
The current sy stem of rela tionship in a Japanese company- also considered a
family- dates back in the ‘50s and it is the result of a s eries of event s: historic heritage,
social and cultural environment, the experi ence of the war, borders, natural resource
scarcity and an unpredicta ble geopol itical envi ronm ent, which brought about the need
for harm onization. The s ystem also advises /g rants “ security before every thing” to the
detrim ent of opport unities.

Consideratio n of decision al environment… 121

The Japanes e manage ment is based on a consensus at the com pany level.
People in the West are f ascin ated by the unofficial process of consulting the em ployees
before making a decision and b y the fact that it encour ages group d ecisions. According
to the holistic appro ach, the whole values more than the total of individuals, an d even
though each individual is perfect, the wh ole m ight not be as perfect.
Therefore, this ty pe of manage ment focuses on creating and defining a
philosop hy of the co mpany, and the halonic management sy stem is made up of: holons,
sets of holons and the relation am ong the sets of holon s.
Consensual decisions (ringisei) ch aracterize the Japanese method of
manage ment implementati on. Because of the im portance paid to collectivity , decisions
are rarely made by one per son, the m anage r, and this “top-down” method appears only
in the case of s mall co mpanies.
The process of making a decision start s with a written suggestion (ringi) of a
“middle” manager, which is subm itted to different sectors and departm ents for
approval. The ones who read it may bring cha nges to the initial suggestion in case they
agree with it, and t hen the y forward it to ot her peop le. On princi ple, a sugges tion is
passed around executive managers (su perior leve l – SL) and junior managers (inferior
level – IL) b y mediu m level managers (ML).
The efficienc y and prom ptness of the J apanese de cision process is also bas ed
on the Nem awashi sy stem, which is com pared to “the action of diggin g arou nd the
roots of tree in order to engraft” an d is defined by specialists as a technique for
eliminating conflicts and r eaching an agreem ent. It is important t hat every one shoul d
be inform ed about the decision that is about to be made before the board m eeting,
because this way conflicts can be avoided.
Although for Americans and Europeans th is technique represents ”a ceremony
to acknowledge the decisi on already made behind closed doors”, it works successfully
in Japanese com panies, because as soon as th e decision is accepted it can be quickl y
implem ented as every one i s familiar with it and has approved it.
In this respe ct, a very good exa mple i s Toy ota Com pany that im plemented
between 1960-197 0 a new management sy stem based on three coordinates: the cultural
component, i. e. the total of social values, hi gh productivity in exch ange for low wages,
and specific management im plem entation m ethods.
As y ou can see in the f ollowing chart, the nu mber of annual suggestions
coming from e mployees is increa sing and the rate of their acce ptance has ri sen fro m
39% in 196 5 to 94% in 1990. The n umber of suggestion per y ear per em ployee has
increased fro m 1-2.5 between 1965-1970 to 18.7 suggestion in 1990.

122 Isac,C.

39%
70%
83%
86%
91%
94%
0%10%20%30%40%50%60%70%80%90%100%
1965 1970 1975 1980 1985 1990

Chart 1.
Rates of acceptance for the decisions made at Toyota Com pany

Paradoxically, specialists assert that th e way peopl e make deci sions in the
West is not opposing to the Japanese method because there’ s no clear delimitation
between them and neither of the two m ethods is real. There are so me Japanese
companies in which decisions are made by only one person, and western negotiators
are surprised at the prom ptness of Japan ese deci sions.
In conclusion, each culture and history is unique and they influenc e all socia l
and econom ic organizations. Antagoni stic relations between the governm ent and
business, between trade unions and m anage ment in the Western World are steeped in
tradition and philosophy , completely opposite to the Asian tradition.
A co mparative analy sis of the deci sion theory in the three cases pres ented
above shows that there are major differe nces between the Jap anese ty pe, on the one
hand and t he Am erican an d European model, on the other hand.
Differences can also be found am ong European c ompanies because of the
different points of view when it co mes to invol ving e mployees in t he decision process.
France is cha racteriz ed by an intensified cen tralizatio n, as executive manager s have the
power of de cision, whereas in countri es like Sweden and Germany , employees ar e
allowed to take initiative i n activiti es that concern them personall y.

Consideratio n of decision al environment… 123

Table 1.
Comparative analysis of the decisional characteris tics of Japanese,
American and European types of m anagem ent

Deci sional
char acteris tics The Ja panese
model The Americ an model The European
model
Decisional
process Consensual
decisions Decisions m ade by
managers and passe d on
to exec utors Decisions m ade by
managers and passe d
on to executors
Decisional
authority Reaching a n
agreem ent by
characte ristic
methods The m anage r has the
power of deci sion Centralization
(France, Italy ),
codetermination
(Germany)
The peri od of
time Long term Short term Vary ing from one
country to another
Prevailing types
of deci sion Strategic decisions Current decisions Varying from one
country to another

Vertical hier archies, in w hich decisions go from the top down the “chain of
command”, were considered highl y efficien t and this t ype o f management was
characte ristic for enterprises of the industrial era.
At present, it is losing its efficien cy because deci sion factors face various
decisions, which make the decision task very difficult if not im possible for top
managers. Th at’s way , participatory manage ment and the invol vement of em ployees in
the decision process by grouping people in to teams, whose members are equal,
cooperate and trust each other, is not only a trend of the Thi rd Wave, but it is a
certainty of the current com pany.
This type of team management has th e advantages of high levels of autonom y
and flexibility, including the dem ocratic charact eristi c of the decision process; a
tendency to “flake off” multiple management levels and concentrate decision factors in
each tea m.
In the future, the Fourth Wave co mpany will be structured according to future
strategic orientation of globalization and w ill arrive at decisions based on collective
estimations, principles and values shared by the community .

124 Isac,C.

REFERE NCES:

[1]. Able gglun J.C., Stalk G . jr., Kaisha, – La strategie de s enter prises japonaise , Les
Editions d’Organization, Paris, 1985
[2]. Altm an J. – Mangement European et Internationa l, Economica, Pari s, 1993
[3]. Burdus E. – International Compared Management , Econom ica, Bucha rest, 2001
[4]. Dima I.C., Dur a C. – Strategic Management , Scrisul Romanesc Pu blishing House,
C raiova, 2003
[5]. Dore R. – British Enterprises. Japa nese Enterprises , Technical Printi ng House, Chis inau,
1 998
[6]. Ho dgetts R., Luthans F. – International Management, Third Edition, Mc Graw-Hill Book
Com pany, New Yo rk, 1997
[7]. Mihu t I. – Euromanagement, Econ omica, Bu charest, 2002
[8]. Nicolesc u O. – Compared Management, Secon d Edition, Bu charest, 2002

Annals of the University of Petro șani, Economics, 4 (2004), 125-132 125

COUNTRY RISK RATING – IMPORTANCE
AND METHODOLOGY

LILIANA IV ĂNUȘ *

ABSTRACT: Country risk forecasts are important for individuals holding nearly any
position of responsibility in an internationally oriented firm, business managers, banks,
insurance companies, and public institutions, credit managers, treasurer's offices, risk
management officers, strategic planning, international business officials.

KEY WORDS : country risk, rating, rating methodol ogy, risk indicator, score, risk
factors

The country rating measures the average corporate payment default risk in a
country and indicates to what extent a company’s financial commitments are affected
by the local business, financial and political outlook. However, there are credit-worthy
companies in high-risk countries and companies with poor payments record in low-risk
countries. The overall risk depends on both the company’s and the country’s specific characteristics .
The major component of country risk is political risk, defined as “political
system stability and/or government policy stability”. Three types of factors affect
political risk: social factors, political factor s and economic factors. Social factors are:
regional conflicts and threats, secessionist movements, conflict between ethnic, linguistic or religious groups, significance of social groups outside the political system,
high social violence levels. Political factors are: polarization of the political spectrum,
lack of strong leadership in government, corruption in government and the judicial system, restrictive or coer cive measures to retain power, lack of accountability in
government, police and military, human right s violations. Economic factors are:
deterioration of standard of living, deterior ating levels of foreign investment, current
account deficits and high extern al sovereign debts, disparity of income distribution
among classes or regions, GNP growth a nd inflation levels, unemployment &
underemployment, institutional deficiencies with respect to enforcement of contracts .

* Lecturer at the University of Petro șani, Romania

126 Ivănuș, L.

Individuals holding nearl y any position of responsibilit y in an int ernationally
oriented firm can use political and countr y risk fore casts. Ty pical users include the
president, vice president, manager, director , planner, finance o fficer, intern ational
officer, secur ity officer, econom ist, research er, market analy st, and librarian. This
variety is evidence of the im portance of po litical and countr y risk information. The
many uses al so present co mpanies with a ch allenge to deter mine how to maximize
political and countr y risk inform ation thr oughout the organization, especially in the
major are as of need.
Banks, insurance companies, and public institutions, such as export credit
agencies, frequentl y assess the am ount of exposur e they have in each country in
proporti on to their total exposure. This assessmen t may be necessary because of
internal portfolio managem ent policies or because of governmental reg ulations.
Countr y limits are often established and m odified according t o levels of politi cal and
econom ic risk as well as market factors. Most lenders and insurers recognize the need
to assess political factors along with econom ic data. Many business people use
qualitative descriptions of risk, as well as quantitative indicators, as part of the
weighting sch eme they use to set countr y limits.
Treasurer 's offices are among the m ore frequent users of political and countr y
risk forecasts. Given the constant fluctua tion in international currency values and the
difficulties encountered i n moving capital and pr ofits across national bo undaries, the
decisions made by a finance officer heav ily influence the profitabilit y of most
multinational corporations.
Office s dealing with govern ment affai rs may have a resear ch function or a
public relations function, o r both. Whatever the balan ce of their priorities, government
affairs officers look to political and countr y risk forecasts to p rovide an objective,
independent perspective. If these offices alread y have acce ss to analy sts specializing in
a countr y, independent f orecasts are used as a check on their perceptions and
understanding of evol ving political conditions . From this perspective and their own
analy sis, they can develop public relati ons activities and advise t heir management on
future government actions. G overnm ent affairs offices also find political and countr y
risk foreca sts useful a s a resource in p reparing briefings for top management before
their overseas visits.
Political events and governmental policies can have a direct im pact on stabilit y
and growth i n current m arkets and on the potential for new mar kets. Clients can use
political and countr y risk forecasts to anticip ate patterns in government procur ement,
regulations affecting im ports, and gen eral tr ends that are influe nced by govern ment
decisions, su ch as econo mic growth, unem ployment, and inflation. Marketing analy sts
assess the degree to which polit ical events may increase market opportunitie s. They
must also stay alert for potential threats and the possibilit y that turm oil might disrupt
transportation, communicat ions, and com mercial activi ties.
Someti mes assigned to a single offic e and som etimes dec entralized, the
function of anticipating m ajor risks can be vital. Risk manage ment officers use

Country risk rating – imp ortance and m ethodolo gy 127

political and countr y risk forecast s to help deter mine whether to buy politi cal and
countr y risk insurance, whether to borrow money locall y, and how to structure
contracts in a way that minimizes risk. They can use detailed, qualitative descri ptions
of local polit ical conditions, as well as sy stematic ratings that allow for countr y-by-
countr y com parisons and alert them to changing co nditions.
Strategic planning i nvolves identify ing future trends and analyzing how the
corporation can take advantage of those tren ds. Such analy sis traditionall y
concentrated heavily on econom ic trends, but sinc e political decisions and events
substantially influence these trends, planners now incorporate political and cou ntry risk
analy sis. Curr ent planning activities involve an attempt to assess the i mpact of political
and econom ic trends, but strate gic planners can find it difficult to incorporate political
analy sis int o their traditional econom ic and business research. Poli tical analy sis, by its
nature, is qualitative, dealing with m ore ab rupt and sweeping fact ors. Many planners
have found s ystem atic risk ratings particul arly useful because they allow for the cross-
countr y com parisons that are an integral part of t heir analytical approach. M ost firm s
use risk information for many reasons and in several different offices.
International business officials apply countr y and political f orecasts and
methodologie s in many, varied way s in or der to successfully achieve the same goal—
anticipating and planning for the politi cal, econom ic, and financial risks involved in
international business.
We well present as it follo ws, so me of the countr y risk rating m ethodolo gy .
D&B’s Countr y Risk I ndicator pro vides a com parative, cross-border
assessment of the risk of doing busine ss in a country . Essen tially , the indicator seeks to
encapsu late the risk th at coun try-wid e factors pose to the pred ictab ility o f expo rt paymen ts and
invest ment re turns over a time horizon of two years. The risk indicator comprises a
composite index of fo ur over-arching countr y risk categories:
– Political risk – internal and external sec urity situation, polic y competency and
consistency , and other such factors th at determ ine whether a countr y fosters an
enabling business environment;
– Comm ercia l risk – the sanctity of contract, judicial co mpetence, regulatory
transparency , degree of s ystem ic corr uption, and other such factors that deter mine
whether the business environm ent facilitates the conduct of commercial transactions;
– Macroeconomic risk – the inflation rate, governm ent balance, money supply
growth and all such macro econom ic factors th at determine whether a countr y is able to
deliver sustainable econo mic growth and commensurate expansion in business
opport unities;
– External ris k – the current account ba lance, capital flows, foreign exchange
reserves, size of external debt and all such factors that deter mine whether a country can
generate enough foreign exchange to m eet its trade and foreign i nvestment liabilities.
The DB risk indicator is divided in to seven bands, ranging from DB1 through
DB7. Each b and is subdivided into qua rtiles ( a-d), with an a designation representing
slightly less r isk than a b designation and so on. Only the DB7 indicator is not divided
into quartiles. The meaning of this indicator is:

128 Ivănuș, L.

– DB1- Low est risk, low est degree of uncertainty associat ed wi th expected
returns, such as export pa yments, and foreign debt an d equit y servi cing.
– DB2 – Low risk, low degree of uncertain ty associa ted with expected returns.
However, co untry-wide f actors may result in higher volatilit y of returns at a future
date.
– DB3 – Slight risk, enough uncertainty over expected returns to warrant close
monitoring of countr y risk. Customers sh ould activel y manage their risk exposures.
– DB4 – Moderate risk, significant uncer tainty over expected returns. Risk-
averse custo mers are advised to protect against potential losses.
– DB5 – High risk, considerable uncert ainty associated with expected returns.
Businesse s are advised to limit their ex posur e and/or sele ct high-return transa ctions
only.
– DB6 – Very high r isk, expected returns subject to large degree of volatilit y. A
very high ex pected return is required to com pensate for the additional risk or the cost
of hedgi ng su ch risk.
– DB7 – Highest risk, r eturns are almost impossible to predict with any
accura cy. Business infrastr ucture has, in effect, broken down.
The PRS Group, Inc., publ ishes two sy stem s for eval uating the ris ks faced by
business in countries around the globe. The Politi cal Risk Services sy stem forecasts th e
risks related to the general business concerns of regime stability, turm oil, financial
transfer, direct investmen t, and export markets. The ICRG Sy stem rates political,
econom ic, an d financial risks, breaking each down into its key com ponents, as well as
compiling com posit e ratings and forecasts.
Political Risk Services (P RS) provides a decision-focused political risk model
with three in dustry foreca sts at the micro level. Th e PRS system fore casts risk for
investors in two stages, fir st identify ing th e three most likely future regi me sc enarios
for each countr y over two ti me periods and then by assigning a probabilit y to each
scenario over each time p eriod, 18 m onths and five y ears. For e ach regi me scenario,
PRS’ expert consultants then establish likel y changes in the level of political turm oil
and 11 t ypes of governm ent intervention that affect the business cli mate.
After calculating consoli dated scores for all regim es (100% of possibilities),
the PRS s ystem converts these nu mbers into letter gra des (on a scale from A+ to D) for
three investment are as: financial transf ers (ban king and lending) , forei gn direct
investm ent (e.g. retail, manufacturing, mining), an d exports to the h ost countr y market.
PRS’ unique system provides only industry specific forecasts, n ot a generic macr o
level ass essment, as is usually the case.
There are17 risk com ponents (12 covering our 18-month forecast and five
covering our five-y ear forecast), which are used in com piling the risk scores. T he 12
factors analiz ed for an 18 months period are:
– Turm oil, re presented by the actions that can result in threats or harm to
people or propert y by political groups or f oreign governm ents, operating wit hin the
countr y or f rom an external base su ch as riots and dem onstrations, polit ically
motivated stri kes, disputes with other countri es that may affect business, terroris m and

Country risk rating – imp ortance and m ethodolo gy 129

guerrilla acti vities, civil or international war, street crime that might affect international
business personnel, organi zed cri me having an impact on political stabilit y or foreign
business.
– Equit y restrictions which im ply limitations on t he foreign o wnership of
businesses, e mphasizing sectors where limitations a re especially liberal or especially
restrictive.
– Operations r estrictions ref fering to r estrictions on pro curem ent, hiring foreign
personnel, or locating business activities, as well as the efficiency and honesty of
officials with who m business executive s must de al and the effecti veness and in tegrity
of the judicial sy stem .
– Taxation discri mination represented b y the formal and inform al tax policies
that either lea d to bias against, or speci al advantages favoring international business.
– Repatriation restrictions invol ving f ormal and informal rules regarding the
repatriation o f profits, di vidends, and i nvestm ent capital.
– Exchange c ontrols regar ding form al po licies, infor mal practices, and fi nancial
conditions that either ease or inhibit converting local currency to foreign currency ,
norm ally a firm ’s home currency .
– Tariff barriers reff ering to the average and range of financial costs i mposed
on im ports.
– Other im port barriers such as formal and informal quotas, licensing
provisions, or other restrictions on im ports.
– Pay ment delay s represented by the punctualit y, or otherwise, with which
governm ent and private i mporter s pay their foreign creditors, based on gover nment
policies, domestic econom ic conditions, and international fina ncial conditions.
– Fiscal and monetary expansion regarding an asses sment of the e ffect of the
governm ent’s spending, taxing, interest rate and other monetary policies. The
assessment is based on a judgm ent as to whether the expansion is inadequate for a
healthy business cli mate, acceptably expansioni st, or so excessivel y expansionis t as to
threaten inflation or other econom ic diso rder.
– Labor poli cies involvin g governm ent policies, trade union a ctivity, and
productivi ty of the labor f orce that create either high or low costs for businesses.
– Foreign debt implying the magnitude of all foreign debt relative t o the size of
the econom y and the abil ity of t he countr y’s publi c and private institutions t o repa y
debt service obligations pr omptly.
Four additional factors are analy zed from a five- year forecast perspective.
(Turm oil is included in both the 18-m onth and the five-y ear foreca sts.). These ar e:
– Investment restrictions regarding th e current base and likely changes in the
general cli mate for restricti ng foreign invest ments.
– Trade restri ctions for the current base and the likely changes in the general
climate for restricting the entry of foreign trade.
– Do mestic econom ic problems ilustrated by the ranking of the countr y
according to its most rece nt five-y ear performance record in per capita GDP, GDP
growth, inflat ion, u nemployment, capital investment, and bud get b alance.

130 Ivănuș, L.

– International econom ic problem s illustra ted by the ranking of the countr y
according to its most recent five-y ear pe rformance record in current account (as a
percentage of GDP), the ratio of debt service to exports, and the annual per centag e
change in the value of the currency .
These 17 factors are use d for a sum mary risk ra tings, first e stimating the
current risk level of each factor and then forecastin g the change in its risk level under
each of the three most likely regim e scenarios. Th e nu merical equivalents of these
current and forecast lev els are then use d to calculate the risk sc ores. The 18- month
letter grades are deter mined by com bining the current level and forecast s of change
under the thr ee most likel y regim e scenarios for these four equal ly weighted f actors:
repatriation restrictions on in ternational business, payment de lays facing exports to that
countr y, pol icy related t o fiscal and monetary expansion, governmental f oreign
borrowing .
Five-y ear letter grades are deter mined by three equally weighted factors: t he
average s core obtained from the 18- month calculations, the level o f turmoil fore cast for
the 18-m onth period and the level forecast unde r the three m ost likely five- year regime
scenarios, the average ran k of the country on the indicators of international financial
problem s and the forecasts of change under the three m ost likely regime scen arios.
As a result, the analized countries can be included in one of th e following
groups:
– The "A" Countries . No exchange cont rols, repatriation restrictions, or other b arriers to
financial transfer, and little likelihood t hat controls will increase in the forecast period.
Few restrictions on equi ty ownership in most in dustries; few controls on local
operations, th e repatriation of fun ds, or foreign exchange; taxation polic y that does not
discri minate between foreign and dom estic bus iness. Little likelihood t hat restrictions
will increase, and little thre at from political tur moil.
– The "B" Countries . Mod est or sporadi c delay s in financial transfers, and a reasonable
chance that delay s will be high in the forecast period. Som e threat on equity ow nership,
frequently in the form of a requirem ent for partial ownership b y nationals; restrictions
on local operations, particularly regardi ng local procurem ent; few restrictions on
repatriation, but some ex change controls possible; so me threat to business from
political turmoil; and a possibility that restrictions and turm oil may increase.
– The "C" Countries . Modest to l engthy dela ys a nd even blockage of financial
transfers, a r easonable chance that barriers w ill increase, and little chance that they will
decrease, within the forec ast period. Considerable restriction on equit y own ership,
includin g a requirem ent that nationals hol d a majority percentage; considerable
restriction on local operations, repatriati on, and f oreign exchange; some taxation
discri mination possible; a nd a serious t hreat of politi cal turm oil. A serious chance that
restrictions and turm oil will rem ain high or increase during the forecast period.
– The "D" Co untries . Oppressive exchange controls and long dela ys for the transfer o f
currency , and little chance that conditions will improve within the forecast period.
Considerable restriction on equit y owner ship, including a prohi bition against equi ty

Country risk rating – imp ortance and m ethodolo gy 131

ownership b y foreigners; subs tantial regulation of local operations, repatriation, and
foreign exchange; taxation discri mination; po litical tur moil that ma y present a se rious
threat. A serious chance that restrictio ns and turmoil will rem ain high or increase
during the forecast period.
Political Risk Services produces its ri sk ratings for 100 Countr y Reports, using
the measures of interest to m ost businesses. The sy stem employed by PRS facilitates
cross-country co mparisons. The PRS sy stem can also be used to calculate risk scores
for individual business projects or other specifi c situ ations of concern to an individual
firm. PRS treats each of the 17 underl ying risk factors as equal in calculating countr y
risk ratings, in order to make the system applicable to general use, but individ ual
businesses ca n easily adapt the same syste m by giving variable weightings to the 17
risk factors (includin g, of course, giving zer o weig hting to factors not relev ant to a
particular project).
The International Countr y Risk Guide (ICRG) rating co mprises 22 variables in
three subcategories of ris k: political, financial, and econom ic. A separate index is
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into categories from Very Low Risk (80 to 100 points) to Ver y High Risk (zero t o 49.5
points).
The Political Risk Ratin g includes 12 weighted variables co vering bot h
political and social attributes. ICR G advises users on means of adapting both the dat a
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The ICRG m odel for forecasting financ ial, economic, and pol itical risk is
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individual ratings, the ICRG model al so produces a rating for ea ch of the three risk
factor groups plus an overa ll score for each countr y.

132 Ivănuș, L.

After a risk asse ssment (rating) has b een awarded to each of the 22 risk
components, the co mponents within each category of risk are added together to provide
a risk rating for each risk category (Polit ical, Financial, or Econom ic). The risk r atings
for these cat egories are t hen com bined on the basis of a form ula to provide the
countr y’s ov erall, or co mposite, risk rating. As with the risk com ponent ratings, the
higher the rating com puted for the politi cal, financial, econom ic, or composite rating,
the lower the risk, and vice versa.
Consequently, the ICR G system presents a co mprehensive risk struc ture for th e
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The 22 risk co mponents in the ICRG System , are as follows: p olitical risk
components (governm ent stabilit y, socioeconom ic conditions, investm ent profile,
internal conflict, external conflict, corrup tion, m ilitary in politics, religious tensions,
law and order, ethnic tensions, democratic acco untabilit y, bureaucracy qualit y);
financial risk co mponents (foreign debt, foreign debt service, current acco unt, net
liquidit y as months of import co ver, exchange rate stab ility); economic risk
components (GDP per head of populati on, real ann ual GDP growth, ann ual inf lation
rate, budget balance as a percentage of GDP , current account bal ance as a per centage
of GDP) .
The risk points awarded to each ri sk component or cal culated f or each ri sk
category or the co mposite risk show the degree of risk. In each case, the higher the
number, the lower the risk. This enables the degree of risk to be seen within a single
risk co mponent, a risk categor y or the com posite risk (the relativ e position of the actual
risk points within the total risk points, or in co mparison with one or more other
countries).
To ensure consistency , both betw een countries and over tim e, points are
assigned by ICRG editors on the basis of a series of pre-set ques tions for each risk
component. The ICRG sy stem as it stands is prod uced for the ge neral user, that is, it
looks at t he overall risk of countr y in terms of the general risk it represents. ICRG
provides not only the risk ratings for the countrie s it covers, but also the political
inform ation and financial and econom ic data on wh ich those ratings are based. It i s
therefore possible for the user to check through the inform ation and data so as to asses s
the ratings given against his or her own asse ssments or against some other risk rating
system .

REFERE NCES:

[1]. Păun C., Păun L. – Riscul de țară, Editura Econom ică, Buc urești, 200 2
[2]. D&B Internationa l Risk & Paymen t Review , Aprilie 20 03
[3]. www.countr ydata.co m
[4]. www.trad ing-safely.co m

Annals of the University of Petro șani, Economics, 4 (2004), 133-138 133

EMINESCU AND PROTECTIONISM

ADRIANA KORONKA, GABRIELA DUMBRAV Ă *

ABSTRACT : The paper presents several aspects of Eminescu’s view of free exchange
and protectionism in Romania, in a period wh en every national economy was threatened to be
stifled by the Western economy, which was much more advanced. By taking over progressive
ideas from European economic doctrines, Eminescu boldly elaborates a nationalist doctrine,
his conception relying on the need of a technical education.

KEY WORDS : free exchange, protectionism, nationa list economy, trad e, economic
policy of the state, productive forces, education.

There is an almost shocking contradiction between Eminescu the romantic, as
we discover him in his poetry, and Emin escu the realist, as he emerges from the
articles he published in “Tim pul”, where he described the state of the Romanian people
in a transition period with deep insight and critical spirit.
Analyzing the Romanian economy, the poet bitterly noticed that it is
exclusively agrarian, which leads to an embarrassing dependence on industrialized
states. The value of agricultural work is much lower than that of industrial work, which
is a disadvantage for Romania in the contex t of European competition. In this sense,
Eminescu wrote:” the roads that open to ab solute competition, far from growing the
seeds of national industry, make them wither and degenerate, confining the Romanian
to that limited area within which he is competitive, namely agriculture.”(1)
Eminescu’s articles on the role of political economy in the consolidation of the
Romanian State and nation rely on the careful study of famous economists, from whose writings he summarizes and translates, also taking over certain ideas, which he
enriches in his own style.
Mircea Eliade considers Eminescu and Ha șdeu to be the founders of the
nationalist doctrine that supports the need of a Romanian national economy. (2) The
taking over of the ideas set forth by the European economic doctrines must be moderate and confined to those aspects that contribute to the creation of a national

* Lecturer, Ph.D. at the University of Petro șani, Romania
Lecturer at the University of Petro șani, Romania

134 Koronka, A.; Dumbrav ă, G.

econom y, as these doctrines belong t o states where the indust rial revolution ha d
already taken place.
Eminescu is also the advocate of the protectioni sm theory , set forth in
industrial countries. The econom ic interests of a l ess advanced countr y should be
protected, an d the state should prote ct market econom y, dev elop in dustr y, and
encourage external economic relations. More over, protectionism is to be co mbined
with the free exchange, so that our unex perienced econom y shoul d develop as rapidl y
as possible.
Romania’s involvem ent into an inter-E uropean com petition favored by the free
exchange could destroy the fragile Romanian economy, if the Ro manian interests were
not protected. E minescu fi rmly joined t hose who fought with pol itical and eco nomic
arguments the Trade Con vention signe d with Austr o – Hungaria in 1875, ap preciated
as extre mely disadvantageous for Romania, st ating that “trade is the pioneer of
peaceful, inconspicuous c onquest t hat destroy s by attacking econom ic units, t he state,
and even indi viduals.”(3)
In our cou ntry, indi vidual craftsmen were ruined bot h by internal and external,
as well as subjective and objective factors. The lack of vo cational scho ols, the
elimination of craftsmen unions, as well as the aggressive co mpetition of im ported
products, tran sform ed Ro mania in a market for foreig n prod ucts.
The poet also points out th at the financia l crisis and the very high interests are
impedim ents for the developm ent of ou r industr y and trade. The state didn’t in volve in
the protection of the Ro manian craftsman and merchant, and freedom hadn’t favored
the obtaini ng of credits, but, on the contrary , it had pro ved to be a m eans of
exploitation f or all social classes. The g overnm ent is held responsible for this sit uation,
as its representatives didn ’t understand t he notion of freedo m, and extended it o ver the
econom ic field.
Thus, Em inescu considers it is necessary to com bine external protectionist
measures (cu stoms policy ) with interna l ones, in order to encour age and prot ect the
initiatives of Romanian industr y. He also considers that the official econom ic
conceptions should be revised, together w ith the introduction of ne w measures i n the
field of credit, investments and fiscal policy .
These ideas b elong to the most advanced econom ic thinking in Romania at that
time. Em inescu’s conceptions facilitate a better understanding of the idea of lib erty in
1848 that had a negative i mpact on the econom ic field, b oth on an external an d on an
internal plane.
In order to diminish the im pact of an aggressive free exchange, the Rom anian
econom y shouldn’t rely on exclusivel y on agricult ure, but it sho uld be su pport ed by a
modern industry, having the same laws and institutions as in industr ialized countries.
Eminescu co mbines the philosophical idea of slow, evolutionist development,
free fro m an y external int ervention, with th e economic policy in which the state must
intervene in a decisive way for the creation of a national econom ic civilization. H e also
draws attent ion to the necessity of crea ting a superstructure adequate to the
requirem ents of the ind ustrial development of the cou ntry.

Eminescu and protectionism 135

Pathetic appeals are quite frequent in his articles, wh ich nowada ys may seem
farfetched, but at that time they were a warning signal in favor of the R omanian
econom y. On the other hand, such app eals an d attitudes regarding Romania’s
econom ic situation are to b e found quite frequentl y in the newspapers of the tim e.
Eminescu had a despising attitude towa rds most of the activities of the
Romanian society , and, in his opinion, only the r aw productio n of goods t hat are
absolutely necessary to people should be sti mulated . Some saw i n this statement the
influences of the phy siocratic economic school, according t o which the whole
econom ic activit y of the state is based on the work of the peas ants, the only positive
class, as the other social classes did not hing but transfor m the products resulting from
the work of the former.
Starting from this economic principle and analy zing the evolution of social
relations, he appreciates that peasantry suppor ts the whole society with the agricultural
production achieved with great efforts a nd in primitive conditions. Consequentl y,
peasantry is the histor y bearer of the countr y, it is the nation itself.
The poet performs a co mplex analy sis of the social situation of the peasant and
he points out that “the peasant bears o n his shoulders a heavy structure, which is
nothing but a pretext to create a s many jobs as possible, paid for from the pe asant’ s
pocket, directly or in directly.”(4)
In the same article, appeared in “Ti mpul” and entitled “Fro m the Econo my
Prim er”, dealing with th e relationship between production an d consum ption, he
theorizes on some aspect s of this relati onshi p from the perspectiv e of our agricultural
countr y. In this article he shows that “nature has invested man with lim ited powers,
enough to pr ovide support for himself and his family. He produces slightl y more than
he consumes.
This little something comprises what he needs to reproduce and a small surplus
that he y ields to society under the form of taxes. On this surplus lives the whole
national civili zation. But, i f from this small surplus we feed all the foreign inst itutions
settled in our countr y, nothing will be left fo r the national culture in the real sense of
the word.” T he period t o which Em inescu re fers is characte rized by the invas ion of
foreign capital, the Ro manian trade be ing dominated b y foreign ers who, und er the
protection of their consul ates, easily elim inate by unfair com petition the Romanian
tradesmen who have no so lid financial basis.
Railway building was y ielded b y conce ssion to foreign corporatio ns that made
enorm ous pro fits, while the Ro manian State ha d to resort to external borrowings to bu y
exploitation r ights. At the same time, th e policy promoted by the governm ent reversed
priorities and placed trade before production, which is very dange rous as it facilitates
the entering of foreign capi tal into R omanian economy. Moreo ver, the econom ic life of
the countr y is led b y busin essmen interested only in their own welfare and animated by
the desire to get as rich as possible in a s hort tim e. As a consequ ence of all this, the
Romanians beco me strangers in their o wn countr y.

136 Koronka, A.; Dumbrav ă, G.

In Eminescu’ s opinion, the econo mic issue is not red uced to the movement of
asset s; this is a much more serious problem , and involves two com ponents, nam ely a
social and a historical one. This theor y is to be found with professional economists as
well, and it st ill persists nowaday s. In R omania, there were no adequate conditi ons for
the prom otion of a m arket econom y supported b y industrial development.
Under the ci rcumstances, econom ic liberalism prevents the de velopm ent of
productive forces, as in al l the countries th at were at the beginning of their national
econom y. Thus, the state was sup posed to protect and support these tim id
manifest ations of the Romanian econ omy by initiating a series of actions meant to
protect Romania’s internal and external in terests. By setting forth such t heories,
Eminescu proves to have prof ound knowledge of liberal a nd protectionist doctrines.
The stability and development of a market econom y is condit ioned by the
creation of a certain internal market, an d this pr ocess cannot take place in the absence
of protection. In this sens e, Ivanciu Nico lae – Văleanu shows that “the perpetuation of
protection or its replacement with liberali zation depends on the de gree of maturity of
the modern national econom y, as well as on the position the latter has towards other
econom ies of the continent or of the wor ld.
Protectionism and liberalism do not exclude each other co mpletely, but are
liable to various co mbinations of internal and exter nal planes, s uch as libera lism or
protectionism on either of the two planes, or liberalism on one plane and pro tectionism
on the ot her:
• the agricultur al and/or industrial fields;
• the stressing of liberalism and protectionism on different planes and in
different fields;
• the prom otion of li beralism for so me, whereas protectionism is practiced in the
countr y, eithe r openl y or under disguise.
The ty pes of combinations between liberalism and protectionism are not th e
same at any time and in any place. Pure protectionism or liberalis m exist only in
theor y; in re al econo mic life, such a thing d oes no t exist. Econom ic theory should
result fro m the refle ction of their real combination. Protectionism , as well as liberali sm
in space and ti me, is favora ble for so me and unfavora ble for others.” (5)
An insightful analy st of the Romanian econom ic phenomenon, Em inescu also
wrote a “National Econom y”, which re mained in manuscript, whe re he deals with the
influence of material welfare on man. In his opin ion, the econ omic aspect of our
existence should be pai d much attention and, i n this sense, he defines national
econom y as the science of the world of f ortunes.
The governm ent’s in difference to the R omanian national economy, the great
number of people who want to get rich witho ut working , the infusio n of the
unproductive foreign elem ent in Rom ania, the loss of the Romanian provi nces, and the
impoverishment of the lo wer classes underm ined real work and slowed do wn the
developm ent of a national econom y.

Eminescu and protectionism 137

In the absence of the protectionism directed towards local producers,
liberalism proved to be unfavorable for the Rom anian society. Thus, instead of
diversify ing, the productio n of material goods decreased, finally being confined to th e
direct and pri mitive exploit ation of the la nd.
In Em inescu ’s tim e, agriculture still m aintained certain semi – feudal
relations, which had nega tive influenc es on industrialization. In her book entitled
“Eminescu the Econom ist”, Alexandra Olivia Nedelcea that the poet j oins the
Romanian econom ists that “dem anded the St ate’s intervention in a productive activity
(industr y, agriculture), as well as in the de velopment of co mmunications and trade. In
his opinio n, industrial and agricultural produc tion wa s of utm ost im portance, as it wa s
the creator of values and in come, work being invested with national value.” (6)
Econom ic lib eralism beco mes dangerous only if it is absolute, as well as
protectionism is dangerous if not applied carefully . Thus, exaggerated protectionism
leads to the rising of the price of industrial goods , which become accessibl e to a
limited num ber of people.
Without reje cting the pr otectionist doctrine, Em inescu pleads for a middle
solution, t hrough which Romania could sell its agricultural pro ducts abroad free o f
custo ms taxes or by paying small taxes, offering in exchange the sa me advantages to
the countries with which it had a m utual convention .
Considering that producti on has a leadi ng role in the growth of people’s
welfare, he points out that consum ption s hould become one of th e main factors meant
to stim ulate production .
Moreover, th e developm ent of a stron g econom y, in which free exchange
harm oniousl y co – exists with the real protection of local pro duction, in volves the
developm ent of technical education, meant to support t he na tional econo my. The
training of a generation of educated y oung m en, cap able of contributing to the growth
of productivit y, will stop t he expansion of foreign products that t hreaten to suffocate
the Romanian producti on.
Eminescu’ s conception concerning the com plex problem s raised by
protectionism and free e xchange reveals a modern, scientific thinking, maybe
sometimes a l ittle pathetic, but surely in accordance with the ideas prom oted by famous
European econom ists. Free exchange, in co mbination with protectionism , results in th e
developm ent of a com petitive econom y, possessi ng the necessary instruments that
enable it to take from external econom y only what it needs.

NOT ES
1. Timpul , 13. VI. 187 9;
2. Mircea Eliad e, Despr e Eminescu și Hașdeu, p.87;
3. Timpul , 13. VI. 187 9;
4. Timpul , 21.XII. 187 7;
5. Nicolae V ăleanu Ivanciu, Tratat de doc trine economice , p.93;
6. Alexandra Ol ivia Nedelce a, Eminescu, economistul , p.70.

138 Koronka, A.; Dumbrav ă, G.

REFERE NCES:

[1]. Elia de M. – Despre Eminescu și Hașdeu, Ed. Junimea, Iași, 1987
[2]. Ivanciu Văleanu N. – Tratat de doct rine economice, Ed. Ram o, Buc urești, 199 6
[3]. Nedelcea A.O . – Eminescu, ec onomistul , Fund ația Scrisul Românesc, Craiova, 2000

Annals of the University of Petro șani, Economics, 4 (2004), 139-146 139

ASPECTS REGARDING REGIONAL DISPARITY
REDUCTION POLICIES

DORINA MAGDA*

ABSTRACT : The defining coordinates of our country’s national, regional and local
economic development have been determined by the way people understood the orientation of
our national economy before 1989, by the major changes a new economic system implies
(market economy) and by external factors. In order to ensure a high level of economic
development and a region al disparity reduction, close exami nations must be made concerning
the identification of certain problems characteristic of each geographic area and the elaboration and implementation of programmes and policies referring to the elimination of
inter and inter-regional gaps.

KEY WORDS: sustainable economic development, regional disparities, depressed
areas, economic development potential .

Regional development is a relatively new concept, and it is also one of the
most important priorities of developed societies. The high level of economic
development that is targeted reorganizes the entire activity of the present community.
In Romania, the judicial system of re gional development has been brought under
regulation by act no. 151/1998, which lays down the objectives, the institutional
environment, the competences and the in struments necessary to promote regional
development policies. According to this act, 8 Development Areas that meet the NUTS
II statistic level ( picture 1 ) have been formed by the end of 1998 consequent upon a
voluntary partnership between Bucharest and the other counties. Therefore they are not
administrative regions but they are large enough to be considered the best place to
elaborate and implement regional developm ent strategies, thus, making good use of
financial and human resources. By dividing the territory according to some criteria they wanted to delimit the areas facing social and economic problems and thus, the specific regional policies could reduce inter and inter-regional disparities.
Regional Development Councils (RDC) has been organized for each of the
eight Development Areas. They have a delib erative role as far as the coordination of

* Assist. Prof. at the University of Petro șani, Romania

140 Magda, D.

the regional developm ent polic y is con cerne d. RDC is made up of presidents of the
District Councils and repr esentatives of th e Town Councils (one representati ve fro m
each district in the Area ). RDC also has control over the Regional Developm ent
Agency (RDA), which o perates in each Develop ment Are a. Regional Developm ent
Agencies are entities with judicial personalit y, open to the public, and they carry out
activities specific to regio nal developmen t. The y are non- govern mental organizations
set up in every Developm ent Area. Among th e responsibilities of RDA are: drawing up
programme documents regarding the ar ea, implementing them after RDC’s approval
and forwarding prop osals to RDC concerning pr ojects that ar e to be financed by the
Regional Developm ent N ational Fund and t hus, earning additional resources f rom the
Regional Development Fun d.
The Ministry for European Integratio n (MEI), thro ugh the Head Office for
Regional Developm ent Programmes an d Policies is officially responsible for all the
aspects of the development and for th e coordination of development polic y
implem entati on. MEI is a national negotiato r with t he European Committee when it
comes to regional development and it supports RDC in their institutional organization.
It also initiates and elaborates proposals regarding legislation in regional development,
in cooperation with other r elevant institutions and m inistries.

Picture 1. De velopment Are as in Rom ania

Legend:
1. Region I North-East 5. Region V West
2. Region II South-E ast 6. Region VI North-W est
3. Region III South 7. Region VII Centre
4. Region IV South-West 8. Region VIII Bucharest-Ilfov

Aspects regarding regio nal dispar ity reduction p olicies 141

Regional developm ent im posed the im plementati on of a statistic sy stem,
unprecedented in Rom ania, for m onitoring regi onal differences. This sy stem is
continuo usly improving and re-defined. St atistics show that Romania started the
transition process with a r elatively low level of regional disparities in contrast with
other countri es, either mem bers of the EU or adhering to the EU, but this level has
increased rap idly and diffe rences c an be noticed mainly between Bucharest and the rest
of the country. Inter-regional disparities are relatively low com pared to the EU in
general ter ms. In particular ter ms though, the y reached alm ost the same leve ls as in
Germany and the Netherla nds ( chart 1 ).

Chart 2. Inter-reg ional dispa rities in the EU and in Central and E astern Eur opean
adhering c ountries, accor ding to the GDP for the ye ar 20 00
No. Countr y Areas with a
maximum
GDP Rela tive
GDP Areas with
minimum GDP Rela tive
GDP Max/min
ratio
1 Great Britain Inner London 246.3 Mersyside 71.6 3.43
2 Belgium Brussel s 223.1 Hainaut 71.8 3.11
3 France Ile-de-France 154.1 Réunion 50.9 3.02
4 Germany Ham burg 183.4 Dessa u 63.2 2.9
5 Czech
Republic Prague 121.6 Sredni Cechy 48.5 2.51
6 Hungary Central
Hungary 72.4 Eszak Alfold 32.5 2.23
7 Italy Lom bardy 136.1 Calabria 61.9 2.22
8 Spain Madrid 108.1 Extemadura 50.3 2.15
9 Austria Vienna 150.6 Burgenland 70.9 2.12
10 Poland Mazowi eckie 55.0 Lubelskie 27.6 1.99
11 Portugal Lisbon 101.1 Acores 52.2 1.94
12 Romania Bucha rest-
Ilfov 35.3 North East 19.1 1.85
13 Finland Uusi ma 137.2 Ita-Suomi 74.9 1.83
14 The
Neth erland s Utrecht 143.4 Flevoland 81.3 1.76
15 Greece Sterea Ellada 81.5 Ipeiros 47.3 1.72
16 Bulgaria Yugozapaden 34.0 Seve rozapaden 22.2 1.53
17 Sweden Stockholm 133.9 Vastsverige 89.9 1.49
Source: CE 2002, the first report on social and economic cohe sion and other est imations

From this co mparative an alysis of the regions in th e countr y we can draw 2
conclusions, which are very im portant fo r the settlement of the regi onal polic y:
– although each area has it s own char acteristic featur es and they are different fr om the
other areas, t here ar e no major discr epancies in the level of re gional developm ent;

142 Magda, D.

– every region faces certai n difficulties, which are in fact, experienced by all the areas
on the territor y.
The main regional develo pment problems are analy zed further on, and after
they will have been identified, the methods of actions elaborated o n a national, regional
and local scal e will be pr esented. These methods are meant to cont ract econom ic gaps
and to ensure a harm onious developm ent in all the regi ons of the co untry.
One of the most striking features of econom ic developm ent in Ro mania in the
last 10 years was the attention paid to th e development of Bucharest. Since Buchares t
is inhabited by 5.4%of th e countr y’s population, it has a contribution of 21% to the
GDP and 20% of the Romanian SME are registered here. 51.1 per cent of the total of
foreign invest ments has been drawn up by the capital city . Bucharest is also one of the
areas where a substantial positive m igration is recorded. A thing worthy of attention is
the fact that Bucharest ha sn’t had an influence upo n the neigh bouring districts, as th e
capital city is surrounded by som e of the m ost un derdeveloped counties. Althoug h
statistics show so me variations in t he long run due to certain local factors, it is obvious
that economic development is base d on the geographic co mponent as the
underdeveloped areas are l ocalized in the No rth East, at the Mol davian bor der and i n
the South, al ong the Danube River. Underd evelopment seems to be associat ed with
unem ployment and with t he prevailing rural activities, as well as with the incapacity to
attract direct foreign invest ments. The ch art below analy ses the regional developm ent
by summ ing up the m ain econom ic variables.

Chart 3. Regional development i ndicators in Romania (national average= 100% )
GDP/c apita Unempl oy-
ment FDI*/capita SME**/capita Rural
population Regi on
1998 2000 1998 2001 1998 2001 1998 2001 1998 2001
North-
East 79.8 70.0 133.7 120.5 15.3 14.9 68.7 68.3 123.9 124.7
South-
East 100.1 88.9 112.5 111.4 42.7 74.6 102.5101.5 94.7 95.4
South 85.8 81.5 97.1 101.1 65.5 69.9 78.1 74.4 129.0 128.6
South-
West 90.0 83.8 104.8 118.2 11.9 34.1 92.3 85.0 120.8 120.3
West 100.9 102.6 101.9 108.0 99.1 98.6 86.7 95.9 83.8 82.4
North-
West 95.5 93.0 84.6 77.3 5.8 55.6 107.1107.8 104.9 104.2
Centre 105.9 107.1 98.1 97.7 87.7 57.8 99.2 102.7 87.1 87.7
Bucha-
rest-
Ilfov 162.2 206.8 47.1 53.4 598.3503.5 195.3197.1 24.8 23.8
Source: Romania `s Statistica l Yearbook 20 02
* – Foreign Direct Inv estments ** – Small and Medium-sized Enterprises

Aspects regarding regio nal dispar ity reduction p olicies 143

The NE Region is affected b y both its dependence upon agricult ure and the
close borders with Moldavia and Ukra ine. Almost the sam e thing hol ds true for the
South Regi on, which is a lso dependent on agricult ure and because of the D anube it
cannot carry on a flourish ing external t rade. The eastern and the central parts of the
countr y are much more privileged because of their close location from eastern market s
and because they do not r est so much with the primary industr y. So far, they have
capitalized on the direct foreign investm ents.
We must point out t he fact that there are still major disparities within the
regions where agricultural districts coex ist with m ore developed ones. This
phenom enon has been agg ravated b y the impact of econom ic reorganization in certain
mono-industrial cities, where the rate of unem ployment has increased consequent upon
the closing down of unprof itable public enterprises. The num ber of people w orking
within branches of industr y and engi neering has greatl y decreased i n ever y region. The
South and Ce ntre Regions are representativ e for the decrea se in the num ber of people
working with in branches of industr y (-91.5 and -7 1.2 tho usand people resp ectively )
while the nu mber of workers dism issed from engineering is hig her in the So uth and
South West R egions (-20 a nd –16.1 thousand respectively ).

Chart 4. Employed population – di ffere nces betw een year 19 97 and 2001
-140-120-100-80-60-40-200204060
North-
EastSouth-
EastSouth South-
WestWest North-
WestCentre Bucharest
RegionsThousands P ersons
EconomyAgricultureIndustryEngineeringServices

Source: Romania`s Statistical Yearbook 2002

144 Magda, D.

As far as the service depar tment is conc erned, there have been variations fro m
one region to another. The number of people working within this depart ment has fallen
in western and southeastern regions (-55.6 and –40.8 thousand people respectively ).
A slight redu ction has also been registered in the So uth (-21. 1 tho usand), South
West (-15.5 t housand peo ple) and in the North East (-12.8 t housan d people).
A positive phenom enon like an increase in the nu mber of people working in
the service depart ment ca n be noticed in the North East and in Bucharest-Ilfo v (+22.4
and +46.5 t housand people respectively ).
Other factors that had a great im pact upo n regio nal developm ent norm ally
include the frontier areas a nd the Danube – regions bordering Moldavia and Ukraine
and underdev eloped region s along the D anube River.
This unequal developm ent in each region of the country togethe r with fiscal
polic y mechanism s led to an intensif ication of the underdevelopm ent and the
exacerbation of the disparities.
We can very well say that, at present, in every region in Rom ania there are
counties, which are up ag ainst industrial re organization problems, but in many other
districts they coexist with rural underd evelopment problems, both being the r esult of
unem ployment and poverty. As a consequence, each area is confronted with proble ms
generated by ind ustries in decline and al so by difficulties chara cteristic of
econom ically and sociall y depressed areas. In order t o concentrate financial resources
received from the EU, the Government toge ther wit h Regional D evelopment Councils
has identified eleven (11) priority zones within seven of th e total of eight Develo pment
Areas; thus they were called Industrial Re organization Areas and th ey concentrate 25%
of the countr y’s population. The identif ication of these zones was based on two sets of
criteria: the first one refers to serious i ndustrial reorganization di fficulties with which
they are faced and t he second set of c riteria has in view the econom ic developm ent
potential of these are as:
ƒ Each sel ected zone has limited urban concentration with serious
industrial reorganization difficulties-as a consequence of a massive
concentration of industri al ac tivities and labour power in big
enterprises (c ompanie s that have m ore than 1000 employ ees) and the
concentration dism issed manpower.
ƒ The zone is highl y polluted and thus , it affect s peo ple’s health and it
has a negativ e effect upon the im age of the area and even of t he entire
countr y.
ƒ The zone is mono-industrial, with no possibilit y at all to diversify its
activity for the ti me being.
ƒ Each s elected zone has a road networ k and railwa y system and it is
crossed by European highway s or at least it is localized near one.
ƒ The cities within t he zone are traditionally bound t ogether and t hey
cooperate because of the same ty pe of business carri ed out or because
of the com plementary of their activities.

Aspects regarding regio nal dispar ity reduction p olicies 145

ƒ The are a has communications sy stems at Eur opean standards,
extrem ely important for t he attraction of Romania of foreign in vestors;
a great nu mber of cities within the area have digital telephone
networks.
ƒ The area has material r esources to support t he acco mplishment of
national deve lopm ent priorities rev ealed in the National Development
Plan (the developm ent of t ouris m and inf rastructure, the
encouragem ent of SME and of t he youn g po pulation i n their
integrations i n a intelligent society , a.s.o.)
ƒ Local co mmunities are cha racteriz ed by dynamism and concern in the
developm ent of their towns and in the im provement of life standards
through a suc cessful implementati on of developm ent programmes and
projects.
The presence of such zones as the on es presented above generates and keeps
up a territorial inequality of performance s and an inequity in the chances of
developm ent for each area and for each citizen . Fro m what we hav e said so far we can
conclude that the neces sity of an active regional polic y applie d by the Romanian
governm ent is entirely justified on the one ha nd, by a disequilibrium and depression of
the territories in o ur count ry and, on the other hand, by the variety of t he relief and
natural resources a s well a s by the demographic potential of the regions.
Therefore, the i mplementation of certain m easures, programmes and projects
in each area sets its priorities on:
¾ Econom ic diversification, including t he improvem ent of tourism potential b y
encouraging t he developm ent of SME;
¾ Human reso urces developm ent: vocational school m odernization and
providi ng soc ial services;
¾ Improving the quality of the regional i nfrastructure; the development of the
regional and local infrastructure, making much of the environment restoratio n
and tourism development;
¾ Restructuring of small urban and to urism infrastructure.
Besides sever al steps taken in order to support areas facing difficulties, which
can harm the general eq uilibrium , regional devel opment al so implies measures for
regions with special proble ms. The ne cessity of such actions derives its force s from a
new notion of the territor y.
Thus, regiona l polic y represents the for mula for the i nterference o f the state in
restoring territorial equili brium , in ge neral term s, and in supp orting regi ons facing
difficulties, in particular t erms. Fro m this point of view, unequa l developm ent of the
territories is thoug ht to poi nt out econo mic weakness, a thing that cannot possibl y be
accepted because it brings about political a nd economic instability and it stand in the
way of national and inte rnational develo pment.
These are only internal reasons for the encourage ment of regional polic y, but
there ar e also external c onsiderations of great i mportance in r egional policy. This
represents Ro mania’ s option for the inte gration in the European structures.

146 Magda, D.

Regional development is one the prioriti es of the E U for the ti me being. In
conclusion, a countr y that wants to be a me mber of the EU m ust integrate with the
European spirit and realities, that is to say it has to prepare its territories in order to
measure up to European standards an d it should c arry out an active and coherent
regional polic y.

REFERE NCES:

[1]. Constantin D. – Economie reg ională, Editura Oscar Print, Bu curești, 1998
[2]. Constantin D. – Introdu cere în teoria și practica dezvol tării reg ionale, Editura Econ omică,
București, 2000
[3]. Moșteanu N. – Problematica de zvoltării reg ionale în România, Editura Sylv i, București,
2 001
[4]. Nicol ae V., Constantin L. – Bazele econo miei reg ionale și urbane, Editu ra Oscar Print,
București, 1998
[5]. www.mie.ro
[6]. www.andr.ro

Annals of the University of Petro șani, Economics, 4 (2004), 147-150 147

THE STRUCTURE OF EXPE NSES AND REVENUES
ACCORDING TO INTERNATIONAL ACCOUNTING
STANDARDS

MARIANA MAN *

ABSTRACT : This article presents the recognition of revenues and implicitly of the
expenses linked to the ceding of the capital assets according to I.A.S. 16 and I.A.S. 38, as of the
revenues and expenses linked to th e sale of the obtained produc tion according to I.A.S. 18 and
I.A.S. 2, a parallel with the Romanian accounting influences.

KEY WORDS : revenues, expenses, ca pital assets, I.A.S.

A great variety of economic operations cau ses the change of certain elements
of economic properties within the economic a nd financial outcomes, which, in a broad
sense, are materialized into expenses a nd revenues and, in a limited sense, are
represented by profit and loss.
Expenses , in the main, mean an “impoverishme nt” of the firm generated either
by the decrease of certain assets or by the increase of certain liabilities. The general
framework of International Accounting St andards defines expenses as of economic
benefits diminutions registered during the accounting period as outputs or assets value
decrease or liabilities increase, which are ma terialized into reductions of equity
capitals, other than those resulted from distributing them to shareholders.
Revenues , in the main, mean an “enrichment” of the firm obtained either
through the increase of certain assets or th rough a movement of certain liabilities. The
general framework of International A ccounting Standards defines revenues as
economic benefits growth registered dur ing the accounting period as inputs or assets
increase or liabilities decrease, which are materi alized into growth of equity capitals,
other than those resulted from contributions of shareholders.
The general framework of International Accounting Standards classifies
economic and financial results into the following categories: current results (operating

* Prof., Ph.D. at the University of Petro șani, Romania

148 Man, M .

and financial results) and extraordinary results . Extraordinary elements are def ined as
revenues or expenses res ulted from events and transactions c onsisting of current
activities of the firm which, consequentl y, are not expected to repeat frequently or
regularly .
From the definition given t o revenues follows that revenues include:
– current incomes involvin g incom e from sales, co mmissions, debts, dividen ds,
royalties, rents;
– benefits fro m other el ements which can arise or n ot from current activities
carried out by the firm ; these consist of : benefits obtained as a rent from cedin g asset s
on m edium or long term ; unachieved benefits arisen from not ass essing securit ies and
asset s on long-run.
Benefits, unlike revenues, are presente d at their net value that is the value
obtained after deducing expenses fro m revenues.
From the defi nition given to expenses follows that expenses include:
– current e xpenses consisting of sales cost, am ortizations, pa yments and other
debts;
– losses turned up or not as a result of carry ing out current activ ities by the
firm, such as: losses resulted from natural disasters , losses registered as a result of
ceding assets.
In the same manner as be nefits, losses are refle cted at their net va lue that is the
value obtained by algebraically totalizi ng revenues and expenses , in case exp enses
exceed affe rent revenues.
For exa mple, the selling (c eding) a cer tain tangible asset le ads to inco mes from
selling it, but also to expenses regarding the unam ortized value until sale date, as well
as other costs of sale. The result of com paring expenses and revenues can be
materialized into benefits, which are registered into the profit and loss account as
revenues from ceding as sets or losse s, which are r egistered into the profit and loss
account as expenses fro m ceding assets.
For exem plification we consider the fol lowing h ypothetic exam ple: a co mpany
sales a means of conve yance with a registering value of 500 m illion lei, the amortized
value being 350 m illion lei.
In case the sale (cede) price is 300 million lei, in accounting suc h operation
has to be registered as foll ows:

650.000.000 % = % 650.000.000
300.000.000
350.000.000 461 “Diverse debtors”
2813 “Equi pment, means
of conve yance, anim als
and plantations
amortization” 2133 “Me ans of
conve yance”
7583 “Inco mes fro m
selling asset s and other
capital operations” 500.000.000
150.000.000

In case the sale (cede) price is 125 million lei, in accounting such operation has
to be registered as follows:

The structure of expenses and revenues according … 149

500.000.000 % = 2133 “Means of
conve yance” 500.000.000
125.000.000
350.000.000

25.000.000 461 “Diverse debtors”
2813 “Equi pment, means
of conve yance, animals
and plantations
amortization”
6583 “Expenses fro m
ceding asset s and other
capital operations”

The general fram ework of Internati onal Accounting Standards c onsiders the
acknowledgment of revenues as part of the profit and loss account when a growth of
future economic benefits takes place du e to the increase of an asset or the decrease of a
liabilit y, whic h can be esti mated in a believa ble way . In practice, there are ad mitted, as
a rule, achieved revenues that are the reve nues which can be asses sed in a belie vable
way and have an adequa te rate of certaint y.
As part of the profit an d loss account, reve nues have t o be evaluated at the fair
value of received or receivable pay ment means. The fair value is defined as the am ount
at which an asset can be tr ansacted or a liability can be settled of t he parties’ own will
that are consciously involved into a tran saction that has an obj ectively deter mined
price.
In accounting, revenues are established in the following m oments:
– when the production of fixed asset s on l ong-run are obtained;
– when goods a re sold;
– when service s are perfor med;
– when asset s that create int erests, divide nds, roy alties are used by other units.
In accounting, expenses ar e recognized when a reduction of f uture econom ic
benefits corr esponding t o the decrease of an asset or the increase of a li abilit y,
believably assess ed, takes place.
The acknowl edgem ent of expenses i s carried out having in m ind the principle
of “connecting costs to re venues”, meaning the simultaneous recogniti on of revenues
and expenses arising from the same trans action.
There ar e also expenses acknowledged in accounting as a result of sy stematic
and rational allocation when future econom ic benefits are exp ected to be obtained
during several periods. For exa mple, the a mortization of tangible a nd intangible asse ts
is registered i nto the pr ofit and loss account during the entire usage period of the asset.
In conclusion, expenses are established into the profi t and loss account in the
following m oments:
– when they are correspondent to certain r evenues;
– during t he period when th e firm obtain s future econ omic benefits fro m using an
asset;
– as soon as a cost doesn’t ge nerate future econom ic benefits;

150 Man, M .

– when a liabi lity occurs without acknowledging an asset (guarantees for sol d
goods).
As a result of the acknowledging way presented by the general fr amework of
International Accounting Standards, expe nses can be classifie d into the following
categories:
– production expenses o r costs that include the total am ount of costs
corresponding to revenues of sold goods, work or services which are acknowledged in
accounting when revenues are est ablishe d;
– period expenses or costs , which are acknowledged i n accounting when the y
are actually made because either they are deter mined by assets o n long-run or they are
not connected to revenues and these are dir ectly covered fro m the result of the activit y
carried out by the firm .

REFERE NCES:

[1]. Standardele Internaționale de Contabilitate, Editura Eco nomică, București, 200 1
[2]. Ghid de aplica re a S tandard elor Internaționale de Con tabilitate, Editura Eco nomică,
Bu curești, 2001
[3]. Ordinul Min istrului Finanțelor Publice nr.306/2002 pentru ap robarea Reg lementărilor
contabile si mplificate, armonizate cu Directivele eu ropene
[4]. Ordinul Min istrului Finanțelor Publice nr. 94/2001 pentru apr obarea Regl ementărilor
contabile armonizate cu Directiva a IV-a a Comunității Economice Europene și cu
S tandardele Intern aționale de Con tabilitate

Annals of the University of Petro șani, Economics, 4 (2004), 151-154 151

SOME ASPECTS ABOUT THE ADMINISTRATION
ACCOUNTANCY’S HISTORY

EMILIA MIH ĂILĂ *

ABSTRACT: The gestion accountancy evolved from historical point of view, as the
production of goods and the competion evolved .

KEY WORDS : cost, the administration accountancy, public informations;
confidential informations

The big majority of conceptions concerning the cost and the administration
accountancy, used in the specialty literature and practice of the XX century, were developed between 1880 and 1925. Many of the first approaches concerning costs are
following the profitability of a firm on each product and are using this information to
take strategically decisions.
The shaping of the administration accountancy and the calculation of costs was
preceded by the development of the calculation technique of the cost, implied to the internal gestion of the productive unit and, first, to the industrial units.
The technique used to determine the cost came to complete the sphere of the
matematical calculations applied in econom y only in the modern era, when the
objective conditions of the society’s historical development gave birth to the economical category named cost.
The gestion accountancy evolved from historical point of view, as the production of goods and the competion evolve d. In the conditions when the market
was owned exclusively by the producer, as a follow-up of the penury of goods
requested by the consumers, the admi nistration accountancy’s role could be
summarized at the complete calculation of costs, which allow the producer to adapt his
prices to the movement proces of costs. In time, as a follow-up of the competition’s intensification, modifications were produced in the market’s dominant position, respectively of the economical power from the bearers to the consumers, but also
because of the emergence of some new management techniques, the acceleration of the

* Assist. Prof. at the University of Petro șani, Romania

152 Mihăilă, E.

technologies evolution, all of these are influe ncing t he evolution of the adm inistration
accountancy systems, oriented on the f oresight of t he level and t he structure of costs
and especialy on their operative control.
In the west -european doctrine, an d especialy in France, a dministration
accountancy can be defined as an analy sis technique of an enterprise’s activities and of
it’s pr oducts, which’s o bject is: the evaluati on of the produced objects, of the executed
jobs or of the services pe rformed by an en terprise and the control of the internal
production conditions, thru costs.
In our countr y, the first ro manian aut hor which approaches and debates in the
accountancy literature the problem of the im portance, structure and form ing of the
production’ s cost, is the professor Constantin Petrescu fro m Iasi. In hi s paper
“Accountancy and adm inistration treaty ”, Iasi 1901, he nam es the cost the same as the
french author s: co me back price. Const antin Petresc u treats, in pre miere, the problem
of the general expenses di stribution on the produced values, promoting the idea to use
some reparti on bases, differenced a ccording to the type of the expenses whi ch form
this expenses category . He sustains the id ea of dis tributing the general expenses in
costs, on the considerent that “these ex penses are no thing else but parts of the value of
the goo d for which the y were made.”
Due to this idea, Constantin Petrescu finds him self in an oposed position to
some economists fro m eastern Europe, which su stained, 2 – 3 years ago, the separation
of the fixed expenses in a colector account and their passing i n direct mode on the
results.
From the y ear 192 5, most of this theori es were aban doned, i n the favor of t he
deter mination of the costs on each product.
The inform ations extracted from the fina ncial reports became the leading force
of the costs accountancy system . The managers an d the firms are orientating to use
more detailed and exact ope rations about the product ’s cost. In the case of the
enterprises with a relativel y hom ogeneous production, the proble m was si mplier, the
consumed resurses beeing of the same k ind, the infor mations about costs, ali mentated
by the dates extracted from the financi al repor ts were pretty good. At the ent erprises
with hom ogeneous pro duction appears the dificult y, where, even if the di versity of
products is increasing, the need to have inform ations as exactly as possible is covered
by the increased cost of obtaining these inform ations.
Between 1950 and 1960 ef forts were made to enhance the costs system , for the
manager’ s use. These eff orts were ori ented more to make the inform ations of the
financial accountanc y usefull to sup ply some informations and pr ocedures com pletely
new, besides the ones resulted from the f inancial reports.
In the period 1980 – 1990 we could tell that the tra ditional praqt iques of the
administration accountancy no longer served fo r the managerial needs, so me people
even pretend that the existing sy stem of the ad ministration accountancy is obsol ete and
efectively unuseful. Managers needed m ore concret e inform ation s, more useful, m ore
detailed about the costs of products, works and services, to enhance quality ,
productivi ty and the reducti on of t heir costs.

Some aspe cts about t he administratio n account ancy’s history 153

The accountancy inform ational s ystem is organized in two big subsy stems:
financial acco untanc y subs ystem and the adm inistration accountancy subs ystem.
These subsy stems are diffe rent both from the objecti ves point of view, but also
from the sy stem inputs an d the type of the proceses used to transfor m the in puts in
outputs. Fina ncial accountancy is different from the objectives po int of view and from
the type of pr oceses used to transform outputs in i nputs. Financial accountancy offers
inform ations to the exte rnal users, having as main purpose the establish ment of
financial situations and reports, and the adm inistration accountanc y produces
inform ations for the internal users, using as main information source the informations
supplied b y the financial accountancy .
No matter of the inconveni ents or the advantages of one or another of the two
accountancies, our cou ntry adopted in theor y and practice the organization of
accountancy in double circuit. Regarded as a sci entific discipline, accountancy must
ensure two ca tegories of informations, which are:
– public inf ormations;
– confidenti al inform ations.
Public informations – they are usualy systematizated in docu mnents of
accountancy sy nthesis, such as: account ancy balance, loss and profit account,
explicative and other reports, are designe d especialy for the us ers fro m outside the
patrimonial area, respe ctively to the associat es or shareholders, clients and suppliers,
financial and credit organizations, state administration, especialy to the fiscal one and
to the necesit ies of aggregation of intermedia ry adm inistration balances, in the national
accounts sy stem. Suppl ying these inf ormations is an im perat ive action of the
patrimonial unit’ s activity transparence, of the their’s legiblit y by the external users of
the accountancy information who wish to be interested on it’s econo mico-financial
bonhom ie, in their decisions in vari ous business transactions. This appea rs as a
necesity in c oncurential econom y conditions, so the organization and the leadi ng of a
financial accountanc y, relatively unitary, w ho ensures these informations, is im posed
by norm ative reglementations em ited by nati onal organizations with atributions in
accountancy norm ation.
By it’s objec t, financial accountancy doesn’t ensure the cost calculation of
products, wor ks or executed services an d doesn’ t allow their lucrat iveness analy sis. To
find out their cost and lucrativeness, informa tions must be extracte d from inside of the
patrim onial unit, appealing to adm inistration accounta ncy.
The confidential informat ion are usua lly system atized in documents and
analy ses desi gned for the internal use of the managers of patr imonial units fro m
different organizatorical levels. Only based on this information it is possible to take at
the right tim e all the decisions which allow the uni t’s adaptation at the condit ions of
the concurent ial market, to resist to the exogeno us and endogen ous perturbator y factors
of each patrim onial unit.
The neces sity of this information is f ully confirmed by the practice of the
countries with developed market econom y, where the supplia nce of confidential
inform ation is the main att ribute and the declared purpose of the administration

154 Mihăilă, E.

accountancy . As we mentioned bef ore, the administration accountancy allows
evidencing the constitutive elements of costs and results, ver y important aspect for the
enterprise’s direction. So, the ad ministration accountancy situates among its
fundam ental objectives the ones who co ncern knowing the obtained product ’s cost, the
effectuated works and the perfor med services, and, if the obtained results aren’ t
satisfy ing, this offers the possibility to analyze the de ficiency’ s causes.
In contem poraneous econom y theor y there are two currents who define t he
accountancy’s object of study in general and especially of the ad ministration
accountancy , which are:
– philosophical scientist curr ent;
– philosophical pragmatic cu rrent;
The philosophical scientist or materialist current considers as object of a
science “a category of facts, a special group of phenom ena, studied onl y by the
respective sc ience, interpreted from a certa in point of view, establishing i nvariable
reports betwe en the phenomena and their cau ses, in a frame of spe cific cat egories”.
In the plain of accountancy doctri nes, the research es which started from this
desiderate lead to the conc eption according to which “the accountancy (including the
administration accountan cy) has as object the r ecording, t he following and the
docum ented control, chro nologicall y and systematic, in m oney etalon, of th e social
reproduction in existence form , the m ovement and the tr ansform ation of the
econom ical patri mony of each unit or organizing chai n of the national econom y”.
The philosophical pragmatic current, predom inant especially in U.S., defines
the object of knowledge as “an instru ment of biolo gical adaptatio n of the m an to the
mediu m”. Sta rting from the so called “genetic theory of truth”, the prag matism su stains
that there are n’t true ideas, but only ideas which be come true in the activity of an
indivi dual, as long as the y have a good e fficiency .
The object of the adm inistration accountanc y can be defin ed as the
identification, the gathering, the m easuring, the classifi cation, the recording, the
analy sis and the reportin g of the int ernal accountancy data, with the pur pose of
establishing the right decisions.
As a conclusion, we coul d say that t he ad ministration accounta ncy has as
objective the recording and the anal yses of in ternal ac countanc y data, with the purpose
of suppl ying to the enterprise’s leading board the information about the products costs,
works and services execute d to take the right decisions .

REFERE NCES:

[1]. Oprea C ălin, Gheorghe Cârstea – Contabilitatea d e gestiu ne și calculația costurilor,
Editura Genicod , București,2002
[2]. Crăciun Sabău, Ion Per eș, Dumit ru Co tleț, – Con tabilita tea întreprinderilor –de comerț,
turism și servicii, Editura Eu rostampa; Timișoara, 2001

Annals of the University of Petro șani, Economics, 4 (2004), 155-160 155

CONSIDERATIONS ABOUT EXPORTING WARE IN
COMMISSION

EMILIA MIH ĂILĂ *

ABSTRACT: The object of the commission contract is represented by performing
some services regarding the settlement and the ongoing of the selling contracts at exterior.

KEY WORDS: the commission, exporting ware, the exterior commerce society.

When exporting ware in commission, th e exterior commerce society has an
intermediary role. The exterior commerce soci ety sells the ware to the exterior in its
own name, but on the account and the risks of the ware producer. It doesn’t become
owner of the exported ware based on the commission contracts concluded with the
producer.
So, the object of the commission contract is represented by performing some
services regarding the settlement and the ongoing of the selling contracts at exterior.
Based on these contracts is realized the payment with the producer of all the
performed services, payment which is made di rectly by paying the sums owned to the
producer or indirectly, by retaining from the external collecting of some payments made in the producer’s account.
The wares which are the object of the commission export are circulating from
the producer to the external client. So th e external commerce society doesn’t manage
these wares and doesn’t reflect them wi th the help of the stocks accounts.
An external commerce society exports ware in commission, which have the following known characteristics:
– external value FOB: 21.000 €, at the exchange rate: 1 € = 40.000 lei;
– interest included in cost: 1.000 €;
– specialized unit commission: 2% from POB net;
– exchange rate when collecting th e ware’s value is 42.000 lei / €;
– salary expenses are in amount of 20.000.000 lei;
– utilities at the specialized exterior commerce unit: 12.000.000 lei;

* Assist. Prof. at the University of Petro șani, Romania

156 Mihăilă, E.

Accountancy reflection:

1 The billing of the beneficiary ware is recorded, according to the “ external
bill for the internal use”.

411
“Clients” = % 840.000.000
401 824.000.000
“Suppliers”
704 16.000.000
“Inco mes fro m executed
works and made service s”

Brute FOB: 21.000 € x 40.000 = 8 40.000.000
Interest: 1.000 € x 40.000 = 40.000.000
FOB net: 20.000 € x 40.000 = 8 00.000.000
2% commission from FOB net: 400 x 40.000 = 16.00 0.000
Value owned to the pro ducer unit: 21.000 € – 400 € =
20.600 € x 40.000 =
= 824.0 00.000

2. The reflectin g in adm inistration account ancy of the commissions incomes
is recorded, according to the “Ext ernal bill for the internal use”:

931
“Obtained production cost” = 902 16.000.000
“Internal payments for the
obtained pr oduction”
931.x
“Inco mes fro m the export
activity ” = 16 .000. 000 902.x
“Internal payments for the ware s
sold at export ” = 16.000 .000

3. The pa yment of the external value bill is recorded, based on the account
extras, taking in consideration the variati on of t he exchange rate:
21.000 € x 42.000 lei/ € = 8 82.000.000
5124
“Bank accou nts in estimat e” = % 882.000.000
411
“Clients” 840.000.000
765
“Inco mes fro m exchange
rate differenc es” 42.000.000

Considerations about exporting ware in co mmission 157

4. The reflecting in adm inistration acco untanc y of the incomes fro m exchange
rate differences is recorded :

931
“Obtained production cost” = 902 42.000. 000
“Internal payments for the
obtained pr oduction”
931.x
“Inco mes fro m the export
activity ” = 42 .000. 000 902.x
“Internal payments for
the wares sold at export”
= 42.00 0.000

5. The pay ment of ware s to the internal wares supplier is recorded, based on
the account e xtras, pa yment disposition and on the “external bill for t he
internal use”:
– the value owned to the producing unit, i n lei, at billing:
20.600 € x 40.000 lei/ € = 8 24.000.000
– the value owned to the producing unit, in lei, at cashing:
20.600 € x 42.000 lei/ € = 8 65.200.000
– exchange rate difference: 865.2 00.000 – 824.000.000 = 41.20 0.000
or
20.600 x (42.000 – 40.000) = 41.20 0.000

% = 5124 865.200.000
“Banking accounts,
in esti mates”
401
“Suppliers” 824.000.000
665
“Expenses fr om the excha nge
rate differen ce” 41.200.000

6. Recording the refl ection in ad ministrat ion accountancy of the expenses
with exchange rate differe nce:

925
“Opening expenses” = 901 41.200.000
“Internal payments
for expenses”

7. Recording the expenses with pers onnel salaries , according to the
accountancy formula:

158 Mihăilă, E.

641
“Expenses wi th
personnel salaries” = 421 20.000.000
“Personnel – owned salaries”

8. Recording, according to the accountan cy bills, the expenses with the
specialized exterior commerce unit utili ties:

605
“Expenses re garding
energy and water” = 401 12.000.000
“Suppliers”

9. Recording in the ad ministration account ancy of the units general expenses
processing, according to t he following a ccountancy formula:

925
“Opening expenses” = 901 32.000.000
“Internal payments
for expenses”

10. Recording the closing of t he expenses accounts:

121
“Profit and loss” = % 73.200.000
605 12 .000.000
“Expenses re garding
energy and water”
641 20.000.000
“Expenses wi th personnel
salarie s”
665 41.200.000
“Expenses fr om the
exchange rate differences ”

11. Recording th e closing of t he incom es accounts:

% = 121
“Profit and loss” 58.000.000
704
“Inco mes fro m executed w orks
and performed services ” 16.000.000
765
“Inco mes fro m exchange
rate differen ces” 42.000.000

Considerations about exporting ware in co mmission 159

12. Recording the reflection in the ad ministration accountancy of the payment
of exterior c ommer ce act ivities expe nses, according to the accountanc y
form ula:

902
“Internal payments about the
obtained pr oduction” = 925
“Opening expenses” 73.200.000
902 . x
“Internal payments about the
export sold w are”=73.200. 000

13. Recording the refle ction in the ad ministration acco untanc y of the profit
established b ased on the sold of the account 902 “Internal pay ments about
the obtained productio n”:

903
“Internal payments about the price
differences” = 902
“Internal payments about
the obtained productio n”
903.x
“Internal payments about the
export econo mic-financial results”
= – 15.2 00.000 902.x
“Internal payments about
the wares sol d on export”
= -15.20 0.000 1520000

14. Recording th e reflection in the adm inistration accountanc y of the closing
of the account on the business su m obtained from the exterior commer ce
activity , according t o the f ollowing accountanc y formula:

901
“Internal payments about
expenses” = 931
“Obtained production cost” 58.000.000
931.x
“Inco mes fro m the export
activity ”= 58. 000.000

15. Recording th e reflection in the adm inistration accountanc y of the closing
of results acc ount:

160 Mihăilă, E.

901
“Internal payments about
expenses” = 903
“Internal payments on the
price differences”
903.x
“Internal payments on the
export econo mic-financial
results” = – 1 5.200.000 1520 0000

REFERE NCES:

[1]. Ne gruțiu M., Dumitr ana M. – Contabilitatea în comerț și turism, Editu ra Max im,
Bu curești, 1998
[2]. Dum bravă P., Atanasiu Pop A . – Contabilitatea d e gestiu ne în comerț și turism” , Editura
Intelcred o, Dev a, 1995
[3]. Sa bău C., Pere ș I., Colteț D. – Contabilitatea întreprinderilo r – de comerț, turism și
servicii , Editura Eurostam pa, Tim ișoara, 20 01

Annals of the Universit y of Petroșani, Economics, 4 (2 004), 161-176 161

ABOUT S OME DECISIONAL OPTIM UM
MODELS OF THE CONS UMER

ILIE MITRAN *

A BSTRAC T: This models type make the objective of a references d omain of deci sions
theory applicab le in the finan cial domain. In the speciality litera ture has an alyzed two d istinct
situations: the static case and t he dynamic case, si tuation in which it will be anal yze two
model’s type (the dy namic model of consumer w ith monetary m arket; the dynamic model of
consumer with mon etary a nd capital market).

KEY WORDS: the dynamic model of consumer with monetary and capital market.,
the utility function.

1.1. The opti mum static m odel of consum er

The for mal frame for this model el aboration is based on the following
elements:
a) x1, x2,…,x n represent the neces sary possesions quantity, fixed by the
consumer;
b) U represent t he utulity function, so we will have U = U(x 1, x2,…,x n);
c) p1,p2,…,p n represent the unitary prices of input;
d) A represent a fixed budget.
Practically , it set the problem of maximise the con sumer utility in condit ion
based on a fi xed budget, otherwise, we are lead to resolve the following optim ization
problem :

(P)
⎪⎪
⎩⎪⎪
⎨⎧
≥=∑
=
0) ,…,,( max
12 1
in
iiinx
xAxpx xxU

* Assoc. Prof., Ph.D. at t he University of Petro șani, Ro mania

162 Mitran, I.

Because the utility function is unlinea r in general, the problem (P) solving
realize usual using the Lagra nge’s m ultiplications method.
From this reason, first we will build Lagrange functi on, defined
throug h the n ext equalit y: , :1R RLn→+

⎟⎟
⎠⎞
⎜⎜
⎝⎛− − = ∑
=n
iii n n Axp x xxU x xxL
12 1 2 1 ) ,…,,( ); ,…,,( λ λ

We will det ermine the stationary points of Lagrange function, solvi ng the next
system :

⎪⎪⎪⎪⎪⎪
⎩⎪⎪⎪⎪⎪⎪
⎨⎧
=∂∂=∂∂=∂∂=∂∂
00…00
21
λLxLxLxL
n beco me

⎪⎪⎪⎪⎪⎪
⎩⎪⎪⎪⎪⎪⎪
⎨⎧
=−++=−∂∂=−∂∂=−∂∂
0 …0…00
22 112
21
1
A xp xp xppxUpxUpxU
nnn
nλλλ
(1.1)

Practically , the co mplete solution of ( 1.1) sy stem can’t be reso lved without
knowing the analy tic expression of ut ility function U, but it can be form ulated an
important econom ical interpretation, and also it can give a principle solution of (P)
problem .

About some d ecisional opti mum models of the consum er 163

First, it can be observe that from the fi rst n equations of this sy stem , we have:

nn
pxU
pxU
pxU
∂∂
==∂∂
=∂∂
= …
22
11λ

There fro m, result that all reports betw een marginal utilities in reference with
goods quantit y and th ose g oods prices are constant.
Except this econom ical interpretation fo r special particular sy stem s can study
with precisions the budget A influence, as well as unitary prices p1,p2,…,p n influence
on the o ptimum point: of problem (P). *) *,…,*,(*2 1 nx xx x=
Before solving (1.1) sy stem it can re mark that this sy stem all ow a unique
solution and from this reason is actually the
solution of (P ) problem . ), ,…,,(* * *
2*
1 λnx xx ) ,…,(* *
2*
1*
nx xx x=
The (1.1) s ystem can be written in the equivalence form:

⎪⎪
⎩⎪⎪
⎨⎧
===∂∂
∑
=n
iiii
i
Axpn ipxU
1,1,1
λ

from where, i mmedi atelly result:

⎪⎪
⎩⎪⎪
⎨⎧
=∂∂=∂∂=
∑
=AxUxn ixUp
n
i iiii
11,1,1
λλ
.

If is the searched optim um solution of (P) problem , then
are the next sy stem solutions (unlinear, i n general): ) ,…,(* *
2*
1*
nx xx x=
* *
2*
1,…,,nx xx

⎪⎪⎪⎪⎪
⎩⎪⎪⎪⎪⎪
⎨⎧
∂∂=∂∂∂∂=∂∂∂∂=∂∂
∑∑∑
===
n
i in
nn
i in
i i
xxUxApxxUxxUxApxxUxxUxApxxU
1* *
1*1* *
12 *
21* *
11 *
1
)( )(…)( )()( )(

164 Mitran, I.

and the optim um “shadow” price is given b y the follo wing equalit y: *λ
∑
=∂∂=n
i ii xxUxA1* * *)(1λ .

Particular case
We will solve the (P) problem for a Cobb – Dougla s type utilit y function in
general form :

n
n n x xax x xxUααα… ) ,…,,(2 1
2 1 2 1 =

where a repre sent the stair factor and . 1 ,0 ,…,,
12 1 =>∑
=n
ii nα ααα
We will build the Lagrange function of (P) problem in this particular case:

⎟⎟
⎠⎞
⎜⎜
⎝⎛− − = ∑
=n
iii n n Axp x xax x xxLn
12 1 2 1 … ); ,…,,(2 1 λ λααα

The sy stem
⎪⎪⎪⎪⎪⎪
⎩⎪⎪⎪⎪⎪⎪
⎨⎧
=∂∂=∂∂=∂∂=∂∂
00…00
21
λLxLxLxL
n beco mes

⎪⎪⎪⎪⎪
⎩⎪⎪⎪⎪⎪
⎨⎧
==−=−=−
∑
=− −−−
A xpp x x xap x xxap x x xa
n
iiin nnn
nnn
11
21
1121
2 111 21
11
0 ……0 …0 …
2 12 12 1
λ αλ αλ α
ααααααααα

About some d ecisional opti mum mode ls of the consum er 165

from where
⎪⎪⎪⎪⎪⎪
⎩⎪⎪⎪⎪⎪⎪
⎨⎧
=+++=−=−=−
A xp xpxppxxxxap xxxxap x xxxa
nnn
nnnn
nnn
…0 ……0 …0 …
22 112 112
22
111 2
11
1
2 12
121
λ αλ αλ α
α
αααα
αααα
.

Reporting the first equation to the following n- 1 equati ons, we obtai n:

⎪⎪⎪⎪
⎩⎪⎪⎪⎪
⎨⎧
=⇒==⇒==⇒=
11
11
111
31
13
3
31
13
311
21
12
2
21
12
21
…
xppxpp
xxxppxpp
xxxppxpp
xx
nn
n
nn
n αα
αααα
αααα
αα
(1.2)

Entering x1,x2,…,x n given by previousl y equalities in the last sy stem equality
(1.2), we obta in:

A xp xp xpxpn= ++++
111
13
11
12
11 11 …αα
αα
αα,

from where result the equalit y:

A xpn=⎟⎟
⎠⎞
⎜⎜
⎝⎛++
12 1
11αααα (1.3)

Having in view the condition 1 …2 1 =+++nααα we obtain
immediatelly
11
1pAxα= .
So, the searched optim um solutio n (opti mum input) i s:

166 Mitran, I.

⎪⎪⎪⎪
⎩⎪⎪⎪⎪
⎨⎧
===
nn
npA xpA xpA x
ααα
*…**
22
211
1
(1.4)

For this opti mum input w e obtain the optim um value of utili ty (the m aximum
utilit y):

n
n
nn
np p paA x xxUα α α
ααα ααα
⎟⎟
⎠⎞
⎜⎜
⎝⎛
⎟⎟
⎠⎞
⎜⎜
⎝⎛
⎟⎟
⎠⎞
⎜⎜
⎝⎛=+++… *) *,…,*,(2 1
2 1
22
11 …
2 1 ,

that is n
nn
np p paA x xxUα α αααα
⎟⎟
⎠⎞
⎜⎜
⎝⎛
⎟⎟
⎠⎞
⎜⎜
⎝⎛
⎟⎟
⎠⎞
⎜⎜
⎝⎛= … *) *,…,*,(2 1
22
11
2 1 (1.5)

It can be ob serve that fo r the Cobb-Douglas utility function t he maximum
utilit y is direct proportion with the budget A a nd is as well bigger as the unitary prices
are smaller.

1.2. The dyn amic model of co nsumer with moneta ry market

The problem is analising just for two si tuations, all the other could be deduced
very easy from these:
a) the case in which the utilit y depends on the two consecutive inputs;
b) the case in which the utilit y depends on inputs for an unlim ited period.

1.2.1. The case in which t he utility depends on two consecutive inputs

We will repo rt, for calculations commo dity at t = 0, t = 1 moments, and we
will note:
C0,C1 represent the inputs at t = 0 m oment, respectively t = 1;
V0,V1 represe nt the incom es at t = 0 m oment, respect ively t = 1;
d represent actualization rate;
1+d represent the actualizat ion factor.
In this case the utilit y function depends onl y on C 0 și C 1 variables, so
. We will l ead to a maxi mization utilit y probl em in which the
restrictions are given by the inco me equation at t = 0 moment, respectively the input
equation at t =1moment: ),(1 0CCUU=

About some d ecisional opti mum mode ls of the consum er 167

(P)
⎪⎪
⎩⎪⎪
⎨⎧
>++=+=
0 ,) 1(),( max
1 00 1 110 00 01 0
CCEd VpCE pC VCCU

The second equation of problem (P) represent the income equati on at t = 0
moment, but the third equa tion represent the inpu t at t = 1 m oment.
We note with E 0 the eco nomy of realized goods at t = 0 moment to be
consum ed at t = 1 m oment; p 0 and p 1 represent the unitary prices concordant with t= 0
and t = 1 m oments.
Having in vie w the restricti on form s of problem (P), after eli minating E 0 value,
we will being lead to the equivalent pr oblem :

(P)
⎪⎩⎪⎨⎧
>−++=
0 ,) )( 1(),( max
1 000 0 1 111 0
CCpC Vd VpCCCU

As well as in static model case, the pr oblem can be resolved using Lagrange’s
multiplicatio n methods, C 0,C1 being t he current variables.
Lagrange function allow in this cas e the next analy tic representatio n:

)) 1( ) 1( ( ),( ),,(0 1 00 11 1 0 1 0 d VVd pCpC CCU CCL +−−++− = λ λ

We will put the first degree optim um conditions (that is we will specify the
obtainin g conditions of stat ionar y points for Lagrange function):

⎪⎪⎪
⎩⎪⎪⎪
⎨⎧
=∂∂=∂∂=∂∂
000
10
λLCLCL
, from wher e
⎪⎪⎪
⎩⎪⎪⎪
⎨⎧
+−−++=−∂∂=+−∂∂
) 1( ) 1(00) 1(
0 1 00 111
10
0
d V Vd pC pCpCUd pCU
λλ
(1.6)

As well as in static model case, th e com plete resolve of (P) problem suppose
the exactly knowing of utility functio n U. In absence of this infor mation, from the first
two equalities of the last system , it can de duce a similar relati on with the relation
obtained in st atic model case:

168 Mitran, I.

11
01
) 1( pCU
d pCU
∂∂
=+∂∂
=λ

The last fraction represents the report be tween marginal utilit y and the input at
t = 1 m oment and it ’s price at this m oment.
The first fraction represent the report between the marginal utilit y concordant
input at t = 0 moment and the updated pr ice at this moment.
For solving the sy stem (3.6) , we firs t remark that it take place the relation:

) 1() 1() 1(
0 1
00
11d V VxU
dd C
CU C++=∂∂
+++∂∂
λ λ,

where fro m it will be obtai ned the next e qualit y:

11
001 0 ) 1( 1
CUCCUCVd V
∂∂+∂∂++=λ.

It observes that the opt imum solution of problem (P) coincide with
the unique key of system (3.6) and after an immediat elly calculation, it result t hat the
search ed optim um key is the following system one: ),(*
1*
0CC

⎪⎪⎪⎪
⎩⎪⎪⎪⎪
⎨⎧
∂∂
+∂∂+∂∂++=∂∂
+⎟⎟
⎠⎞
⎜⎜
⎝⎛
∂∂+∂∂++=
),(
) 1)(,( ),() 1(),(
) 1(),( ),() 1(
*
1*
0
1 *
1*
0
1*
1*
1*
0
0*
01 0 *
1*
1*
0
0 *
1*
0
1*
1*
1*
0
0*
01 0 *
0
CCCU
d CCCUC CCCUCV VdCCCCU
d CCCUC CCCUCV VdC

and the optim um “shadow” price is:

1 0*
1*
0
11*
1*
0
00
*
) 1(),( ),(
Vd VCCCUC CCCUC
++∂∂+∂∂
=λ .

Particular case
Practically , we will solve the proble m (P) for a Cobb-Dougla s type utilit y
function:

About some d ecisional opti mum mode ls of the consum er 169

αα−=1
1 0 1 0),( C aC CCU

Solving the problem (P) in this particular case, after solving the s ystem (3.6) it
immediatelly obtain the o ptimum inputs:

[ ]
[] ) 1() 1(*) 1( *
0 1
111
1 0
00
d VVpaCd V VpaC
++−=++=−
αα

Observation 1.1.

The two brackets which appear in C 0* și C 1* expressions represe nt in fact the
maximum incom es which the consum er can realized at t = 0 and t = 1 m oment.

1.2.2. The case in which the utility depends on the input function for a
very long pe riod.

In this situati on, the consumer utility is practically analy zed for an unlim ited
period.
The optim um model (the efficiency and restrictions function) is given i n the
following f orm:

(P)
⎪⎪
⎩⎪⎪
⎨⎧
=−++=⎥⎦⎤
⎢⎣⎡⋅⎟
⎠⎞⎜
⎝⎛
+⎟
⎠⎞⎜
⎝⎛
+
+=∑
,…2,1,0 , )1(11
11max
100
tCVi a aC U
t t t ta
ttt
π δ

There are add opted the next notations:
– Ct represents the inpu t con cordant t peri od;
– at represents t he balance on current acco unt cash patrim ony of t m oment;
– Vt represents the incom e at t m oment;
– i represents t he nom inal interest rat e;
– π represents the inflation r ate;
– represents a correction factor and it suggests the preference
throug h tim e factor. ()11−+δ
Having in vi ew the problem form (P) is obvious that we are in situation of a
dynamic optim ization problem . This thing em erges im mediately followi ng the
restriction function in wh ich appear the balance on current account m arked out at
different m oments.
The problem (P) solving is reali zed usi ng so-called optim ization principle of
Pontriaghi n. It will follow t he next steps:

170 Mitran, I.

a) it build the Ham ilton function:

[]t t tt tt t
CVi a C U H −+++
⎥⎥
⎦⎤
⎢⎢
⎣⎡
⎟
⎠⎞⎜
⎝⎛
+⎟
⎠⎞⎜
⎝⎛
+= )1(11
11µπ δ

Observation 1.1.

The Ham ilton function is built in a simila r way with Lagrange function, t he
essential difference consist in fact that in Lagrange’ s multiplicat ion place (co nstant
values) appear variables whic h depend on tim e (in our case is tµ).
b) it put t he opti mum conditions:

⎪⎪⎪
⎩⎪⎪⎪
⎨⎧
=∂∂=∂∂=∂∂
+−
110
tt
tt
aHuaHCH
µ

Making the c alculations for the left part of previous s ystem , we obtain:
⎪⎪⎪
⎩⎪⎪⎪
⎨⎧
=−++=+=−
⎥⎥
⎦⎤
⎢⎢
⎣⎡
⎟
⎠⎞⎜
⎝⎛
+′⎟
⎠⎞⎜
⎝⎛
+⎟
⎠⎞⎜
⎝⎛
+
+−
11
)1()1(011
11
11
t t t tt tt tt t t
a C Vi aiC U
µ µµπ πδ

⎥⎥
⎦⎤
⎢⎢
⎣⎡
⎟
⎠⎞⎜
⎝⎛
+′⎟
⎠⎞⎜
⎝⎛
+⎟
⎠⎞⎜
⎝⎛
+==+
⎥⎥
⎦⎤
⎢⎢
⎣⎡
⎟
⎠⎞⎜
⎝⎛
+′⎟
⎠⎞⎜
⎝⎛
+⎟
⎠⎞⎜
⎝⎛
+=−
⎥⎥
⎦⎤
⎢⎢
⎣⎡
⎟
⎠⎞⎜
⎝⎛
+′⎟
⎠⎞⎜
⎝⎛
+⎟
⎠⎞⎜
⎝⎛
+
−− − −
11 1 1
11
11
11)1(11
11
11
11
11
11
tt t ttt t t
t tt t t
C Ui C U C U
π πδπ πδµπ πδ

t t t tt t
CVi a ai
−++=+=
+−
)1()1(
11µµ

For the notati ons convienc e and their purport, we will note:

About some d ecisional opti mum mode ls of the consum er 171

tnot
tt
C C=⎟
⎠⎞⎜
⎝⎛
+π11

and in this way the first s ystem equality beco me:

) (11
11)(11
11)1(11 1
−− −
′⎟
⎠⎞⎜
⎝⎛
+⎟
⎠⎞⎜
⎝⎛
+=′⎟
⎠⎞⎜
⎝⎛
+⎟
⎠⎞⎜
⎝⎛
++tt t
tt t
CU CU iπδ πδ (3.7)

Observation 1.2.

From econom ical point o f view tC represents the present value of input for t
period, m eaning the real in put.
After si mplifications from (1.7) equalit y, it will result:

) ( )() 1)( 1(1
1−′=′
+++
t t CU CUi
πδ

from where i CUCU
tt
+−+=′′
− 1) 1)( 1(
) ()(
1πδ (1.8)

From (1.8) equalit y it can come away the following important conclusion: the
marginal utility repport of two consecutive i nputs is constant, this being defined by the
left part of (1 .8) relation and depends o n nom inal int erest r ate and on preferenc e factor
for tim e.
If we are going to use Fischer relatio n )1)( 1()1( r i ++=+π , r being the
interest rate, t he (1.8) equal ity becom es:

r CUCU
tt
++=′′
− 11
) ()(
1δ (3.9)

From (1.8) and (1.9) equa lities it can țt determ ine the optim um input but i t can
only explain a marginal relation attached b y the initial input and by the inp ut at any
wished moment. More exactly, given succes ive values to t index in relation:

rCU CUt t++′=′−11) ( )(1δ

we obtain:

172 Mitran, I.

⎪⎪⎪⎪
⎩⎪⎪⎪⎪
⎨⎧
⎟
⎠⎞⎜
⎝⎛
++′==⎟
⎠⎞⎜
⎝⎛
++′=′⎟⎟
⎠⎞
⎜⎜
⎝⎛
++′=++′=′++′=′
−t
t trCUrCU CUrCUrCU CUrCU CU
11)( …11) ( )(…)11)(11)( )(11)( (
0 12
0 1 20 1
δ δδ δδ
(1. 10)

Practically , the relations (1.10) show the dependence between t he marginal
utilit y of input for 1,2,…,t periods and t he marginal value of initial input utilit y.

Obse rvația 1.3.

It can also realise the dependence between the bala nce on current account cash
patrimony at a certain m oment and the the balance on current account initial
patrim ony, th is dependence depending on the incom es and on the interm ediary inputs:

t t t t CVi a a −++=+ )1(1 (3. 11)

Practically we will determine this dependence given succesive values at t
index:

1 1 2 2 1 12
0 01
01 1 12 2 1 1 0 02 3
0 2 2 2 31 1 0 02
0 1 1 1 20 0 0 1
) )(1() ()1() ()1( )1()1(…) )(1() ()1()1( )1( 2) )(1()1( )1( 1)1( 0
− − − −− −− − −
−+−++− ++− +++==−++=⇒=−+−++−+++=−++=⇒=−+−+++=−++=⇒=−++=⇒=
n n n nn n nn n n n
C V C Vi C V i C V i i aC Vi a a ntC V C Vi C Vi i a C Vi a a tC V C Vi i a C Vi a a tC Vi a a t

The above equalit y can b e explicit in tw o very important practical situation,
more exactly in the case in which all differences V i-Ci are constant (that is the situation
in which for every perio d the difference between inco mes and inputs are equal or
approxim ate equal).
For calculati on commodity, we note 1,0,−=−= n iCVAi i . We obtain the
following equality :

[ ]1)1(… )1( )1( )1(2 1
0 +++++++++=− −i i i A i a an n n
n

About some d ecisional opti mum mode ls of the consum er 173

that is: []1)1( )1(0 −+++=n n
n iiAi aa

Obvious, i n the case in which the in terest I is enough sm all, then
and in co nsequence, the cash patrim ony level at n moment is given b y
the following equalit y: () ni in+≈+ 1 1

nA i a an
n ++= )1(0

Econom ical point of vie w, this last equality show s us that the accu mulated
propert y at n moment depends on initial one, on the practicated interest, on the
accumulation at every moment and on n accu mulation period.

The effective calculation of real input utility

A first result can be obtained directly fro m the l ast equalities from (1.10).
More exactly , it note the value *C which realize the equalit y:

)( lim*)(ttCU CU ′=′
∞→

and taking eq uality (1.10) into account, we obtain

t
t rCU CU ⎟
⎠⎞⎜
⎝⎛
++′=′
∞→11lim)( *)(0δ

From this last equalit y is obvio us that C* can be fi nite just i n case in which
111≤++
rδ , so, in sit uation r≤δ .

1.3. The dynamic mode l of the co nsumer with monetary and capital
market

We will analy se only the situation in which we reported at two succesive
period, for co mmodation, these are: t = 0, t = 1.
It makes the following notations:
C 0, C1 represent the inputs according this period;
U(C 0, C1) represent the utility functio n according at given inputs.

Observation 1.4.
The problem will be general treated, but the most oft en practical situations the
utilit y function is the linear t ype one, or polinom inal type.
Practically we are led at the next optim ization proble m:

174 Mitran, I.

(P)
⎪⎩⎪⎨⎧
+++=++=
)( ) 1(),( max
0 0 1 110 0 00 01 0
If Ed V CpI E Cp VCCU

The second equation of pr oblem (P) is the incom e equation at t = 0 m oment,
and the third one represents the input eq uation at t = 1 moment.
The restriction equatio ns (the incom e and input eq uation) were bui lt using the
following not ations:
– V0, V 1 represent the inpu ts at t = 0 and t = 1 m oments.
– p0, p1 represent the unitar y prices of in put at t = 0 moment to be co nsum ed
at t = 1 m oment.
– 1+d represent the fructification factor
– I0 represent the investm ent vol um at t = 0 m oment which will bring
pozitive flux at 1 m oment
– f(I0) represent the positive f low volum e brought at t = 1 m oment by I0.

Observation 1.5.

The difference co mparative with the dynamic model of the c onsum er wit h
capital market, in this case we ha ve three control variables: C 0, C 1, I0, the function f is
assumed to b e known.
The problem (P) solving realise after eliminating the co mun value of the two
restrictions, E 0, and practiccally we will lead to an optim ization pr oblem . With a
simple restriction and it can be resolve through Lagrange’s m ultiplication m ethod.
From the incom e and inp ut equation through elim inating of E 0 it will result the
next equation :

)( ) )( 1(0 0 00 0 1 11 If I Cp Vd V Cp +−−++=

Practicc ally we are l ead at the next proble m solving:

⎩⎨⎧
=−−−+=− 0)( ) )( 1(),( max
0 0 00 0 1 111 0
If I Cp Vd VCpCCU

We build Lag range functio n:

[ ])( ) )( 1( ),(0 0 00 0 1 11 1 0 If I Cp Vd V Cp CCUL −−−+−−− = λ

It put the opti mum condition of first de gree (that is, determ ining the stationary
points for La grange functi on):

About some d ecisional opti mum mode ls of the consum er 175

⎪⎪⎪
⎩⎪⎪⎪
⎨⎧
=−−−+−−+=′=−∂∂=+−∂∂
⇒
⎪⎪⎪⎪⎪
⎩⎪⎪⎪⎪⎪
⎨⎧
=∂∂=∂∂=∂∂=∂∂
0)( ) )( 1(1)(00 ) 1(
0000
0 0 00 0 1 1101
10
0
010
If I Cp Vd V Cpd IfpCUpdCU
LILCLCL
λλ
λ (1. 12)

From the third sy stem equation (3.1 2) results

d If+=′ 1)(0 (1. 13)

that is an equation in I 0 searched variable.
The equation (1.13) solving lead practiccally at the opti mum level
determ ination of investm ents which will lead at maximum positive flows.
Econom ical point of vie w, the equalit y(1.13) sh ows that the marginal
efficiency of investm ent have to be equal with the fructification factor.
From the first two sy stem equations (3.12) will result:

λ=+∂∂
=∂∂
) 1(00
11
d pCU
pCU
(1. 14)

In these equ alities p 0 (1 + d) represent in fact the pri ce at initial moment t = 1.
Similar, we h ave:

00
11
CUp
CUp
∂∂=
∂∂ (1. 15)

equality that show in fact the relati on between the marginal units prices.
The last equalit y allow an i mportant eco nomical interpretation

) 1(/
01
0 1 d pp
CU
CU
+=∂∂
∂∂ (1. 16)

The left part of (1.16) equality repr esent the marginal utilities of inputs report
for the two succes sive peri od, the right part represent the report between the two prices,
the initial one being capitalized or fructified.
This model can’t be com plet resolve only in situatio n in which are known the
analitics expressions of util ity function U and th e efficiency functi on. It lead jus t at

176 Mitran, I.

practical resu lt which reffer at econom ical inte rpretation b ut at m arginal values level.
More exactly , from system (1.12) will re sult:
More exactly , from the sy stem results i mmediately :

⎪⎪⎪
⎩⎪⎪⎪
⎨⎧
=+−−++∂∂=∂∂
+=
0) 1( ) 1(1) 1(1
0 1 00 111100
d VVd Cp CpCUpCU
dp
λλ

REFERE NCES:

[1]. Mitr an I. – Optimalité mi nmax, mon ographs, AMSE, Fra nce, 1992
[2]. Str oe R. – Modeling of Financial Deci sion, Ed. ASE, Bucharest, 20 01

Annals of the University of Petro șani, Economics, 3 (2004), 177-184 177

ANALYSIS OF DOCUMENTS REPRESENTING
ENVIRONMENTAL AWARENESS IN COMPANY
MANAGEMENT

TÍMEA MOLNÁR SIPOSNÉ *

ABSTRACT : One of the serious problems of the future is that ever growing
production and consumption demand more and more natural resources so that in the last 100
years the exploitation of these resources has reache d such a level that the running out of certain
resources (minerals, fossil fuels) endangers th e living conditions of future generations. The
environmental awareness of the society has been enhanced and environment protectional
considerations have gained greater importance in judgements about social issues.

KEY WORDS : environment protection, environmental management system,
environmental auditing

The social judgement of environment protection, public opinion concerning
environmental issues have undergone a substan tial change in recent years. As a result,
the environmental awareness of the society has been enhanced and environment
protectional considerations ha ve gained greater importance in judgements about social
issues. This is due to the fact that pe ople are becoming increasingly aware of what
damage and probably irreversib le changes may be caused in the flora and fauna of the
Earth, in the global ecosystem, by human interference.
One of the serious problems of the future is that ever growing production and
consumption demand more and more natural re sources so that in the last 100 years the
exploitation of these resources has reached such a level that the running out of certain resources (minerals, fossil fuels) endangers the living conditions of future generations.
The assessment of environmental perf ormance first appeared in the United
States in the 1970s. Ever toughening environmental regulations and the need to meet the expectations of society both contribut ed to the emergence of environmental
auditing. A special reason was represented by accidents taking place at different US companies.

* Ph.D. student at The Department of Mi ning and Geotechnology, University of
Miskolc, Hungary

178 Molnár Si posné, T.

Initiall y, cases of environm ental au diting were exclusively targeted at
compliance with environ mental regulations. In the USA the nu mber of audit ing cases
kept on increasing with chemical co mpanies t aking the lead first and all t he other
industries foll owing suit at the end of t he 198 0s.
One of the exa mples of environm ental performance assessment is th e
Environm ental Self Assessm ent Program me (ESAP). ESAP was created in the USA
with the objective to help co mpanies w ith the continuo us evaluation of their
environm ental perform ance. After the exam ple of the USA, environm ental audits have
spread all over the world.
In Europe t he European Bank for Rebuilding a nd Developm ent (EBRD)
published its guidelines on environm ental auditing i n 1992 .
A possible d evice of the perm anent im provem ent of corporate environm ental
perform ance is the docum ented sy stem of environm ental managem ent, which is
actually a controlli ng s ystem incorporating enviro nmental con siderations into the
managem ent sy stem and operations of the com pany and thus making envir onment
protectional activities more effici ent. This way, an environm ental managem ent system
may be an efficient device in solvin g environm ental problem s and tasks.
With the help of the enviro nmental management sy stem , the managem ent:
• sets up the environm ental organisation,
• coordinates environm entally related planning , co ntrol, m onitoring and
inform ation suppl y,
• ensures the proper docum entation of the system and its operations.
The setting u p of the env ironm ental managem ent sy stem requires team work where:
• every body does his/her best to im prove the com pany’s en vironm ental
performance,
• therefore environm ental perform ance is continu ously getting better,
• succes s is be coming a per manent ele ment and m otivational factor of corporate
culture.
The environ mental managem ent sy stem must be set up in the way that it shoul d be
able to enforce environm ental considera tions (m axim ising favourable effects) and
decrease the burden o n the environm ent (minimising adverse effe cts).
The adoptio n of enviro nmental managem ent sy stem s involv e a nu mber of
advantages for the com panies, which are as follows:
• work becom es better organised;
• inform ation flow is im proved;
• a higher level environm ental awareness is developed;
• a better co mpliance with legal regulations beco mes typical;
• there are fewer fines or lawsuits;
• an econom ical use of resources beco mes typical;
• costs go dow n;
• pollutant em ission decreas es;
• environm ental risks decrea se;

Analysis of documen ts representing environmental … 179

• confidence in the com pany increase s;
• the co mpany’s assessm ent by credit ba nks im proves (it can get credit under
better conditi ons);
• insurance fees go down;
• there are better chances of conquering markets, market share increases (here,
of course, the environmental a wareness of cu stomers is of decisive
importance). This advantage will proba bly be elim inated parallel with th e
increase of the num ber of participants;
• a better relati onship is de veloped with t he authorities and local com munities;
• company image improves.
The advantages listed ab ove are close ly related. Advantages present them selves
during t he operation of the sy stem but setti ng up m ay involve cons iderable expenses. It
is even more important than the advant ages for the companies th at the application of
environm ent m anagem ent sy stem s brings positive results for bot h the environm ent and
society . Such results are: compliance with environ mental regulations; reduction o f
environm ental risks; im provement of th e em ployees’ e nvironm ental consciousness.
As a result, the qualit y of the environm ent also i mproves.The ele ments of an
environm ental m anagem ent sy stem are:

Environmen tal Management System

environmental
educat ion, further
educat ion organisation, scope of
activ ities an d
respon sibilities environmental policy,
environmental planning
documentation
(guide on
environmental
issues) monitoring environmental in formation
syste m communication
correctio nal
measures
internal aud its

Figure 1. Auditing, m anagement system s, 1997

COMPARIS ON OF EMAS AND ISO 14001
Features of EM AS
• it can onl y be registered in the countries of the Euro pean Union and in Switzerland
• prem ises-oriented enviro nment control,
• perform ance-oriented so it requires the appli cation o f the best available and econom ically
viable solutio n (EVABAT: “econo mically viable appli cation of best available technolo gy”)

180 Molnár Si posné, T.

• it requires prelim inary environm ental assessm ent,
• it sets the requirem ent of the declaratio n of envir onmental policy,
• it requires issuing an envir onmental declara tion certif ied by an external party , the
content of wh ich is fixed,
• its objective is to meet the dem ands and expectations of the governm ents,
populati ons and custom ers of the EU m ember states,
• it is incorporated in the legal and regulatory system of the me mber state s, whi ch
makes its much m ore prescriptive envir onmentally ,
• the regulation dem ands im mediate co mpliance with its requirem ents, otherwise
registration is im possible,
• prem ises fulfilling t he requirem ents are registered and becom e entitled to using a
certification m ark,
• in external co mmunication it sets much stricter requirem ents than the standard; not
only rem arks from the outside are to b e docum ented, in vestigated and answered
but it should be attested to the certifier, as well, that the co mpany conducts an op en
dialogue with the custom ers, the authori ties, the press, professional organisation s,
that is, with anybody int erested in the environm ental im pacts of the activities,
products and services of the co mpany,
• it requires a declaration cer tified by an e xternal party ,
• its certifiers are auditors and environm ental experts at the sam e time, allowed to
work in all th e EU countries but onl y in the sector defined in their a ccreditation,
• it is a requirem ent to have an aud it perfor med by an e xternal expert
• it is a requirem ent to have an internal audit with its content precisely defined
• pressure groups have greater confidence in EMAS
Features of the standard I SO 1400 1
• certification is possible in any countr y all over the world,
• it is applicable to any orga nisation,
• it is not restricted to industrial com panies, takes into account the ecologi cal
features of the product, it i s more practi cal, can be better adapted to qualit y control
systems,
• certification need not be done f or premises but can be done for the wh ole
organisation, as well,
• in setting their objectives and assessing them, companies should take into account
technical possibilities and avoid putting a burden on t he environm ent,
• it mentions continu ous im provem ent as a major requirem ent,
• it does not prescribe prelim inary envir onmental assessm ent,
• it requires the declaration of environm ental polic y,
• it assu mes the volunteership of the parties concerned and therefore must maintain a
balanced relationship between the dem ands and expectations of these parties,
• it does not require im mediate co mpliance w ith legal regulations, the organisation
merely has to undertake th e obligation for com pliance,

Analysis of documen ts representing environmental … 181

• it does n ot require the issuing of an enviro nmental report checked b y an
independent e xternal party, moreover it onl y makes vague references to the form of
external inform ation dissem ination,
• it is supporte d by econ omic pressure groups,
• its auditors are pri marily managem ent experts; if there is no suitable certifier
available in the given cou ntry, he/she can be invited from abroad, as well,
• it requires an internal audit but sets no requirem ents as to how often it should be
performed,
• it does not re quire an y audit perform ed by an externa l party,
• it does not set any environ mental requirem ents so the company which possess es a
certification under ISO 14001 is not n ecessarily environment-friendly.
Certification merely indicates that the com pany operates a proper environm ent
control sy stem, checks and assesses its environm ental perform ance and undertakes
continuo us im provem ent. When certificati on is perform ed under ISO 14001, t he real
environm ental performanc e of the co mpany is hardl y investigated. What is put i n focus
is what kind of control t he system exerts under the assu mption th at otherwise there is
no pr oblem with the environm ental burdens origi nating from the activities of the
company. In accordance with the principles of the standard, it is to be expec ted that
operations o n the basis of the enviro nment control sy stem will be efficient in the
future, which results in the reduction a nd elim ination of negative environ mental
impacts. Thus, in t he case of ISO 14001 the pr oblem is not s o much getting t he
certification, keeping it is a harder task (e xperience shows that it i s less problem atic to
get the certificate than to fulfil the requi rements of regular supervi sions.)
ISO 14001 of fers several possib ilities of controlling t he system:
• the co mpany issues a de claration form ulated so mething like: “Our co mpany
possesses an environm ent-focussed cont rol s ystem in a ccordance with the
requirem ents of ISO 14001 .” Such a declaration is less reliable for the
surroundi ngs but m ay have a favourable effect within the com pany;
• the com pany may ask some major custo mers or even suppliers to cond uct an
official audit. This way it is possible to convince custo mers as well as suppliers
that the com pany does operate an environment control sy stem;
• certification by an independent external party is the most widespread and most
reasonable s olution, and likewise t he m ost attractive fo r market a nd
communication p urposes.
If a com pany possesses an ISO 14001 ce rtificate issued by an exter nal, accredited
party , it only has to m ake a few extra attestations for getti ng EMAS certification
(naturally where the institution exists):
• honest inform ation dissem ination to the parties concerned and to the public
• improvem ent of environm ental perform ance
• full legal com patibilit y
EU regulations are not only clearer but “fully ISO 1 4001 com patible”, as well;
annex 1 describing t he set of requirem ents of an envi ronm ent control s ystem adopts the

182 Molnár Si posné, T.

text of ISO 14011 verbatim . Besides, it sets further requirem ents (e.g. registration and
issuing an environm ental declaration).
Experiences, possible prob lems
Although it is voluntar y to adopt ISO 14001, it is obvi ous that the introductio n
of enviro nment m anagem ent system s is a practice spreading rapidl y all o ver the world.
Shortl y after the publicatio n of the ISO 1400 1 interna tional standard, in autum n 1996 ,
the European Organisation for Standa rdisation (CE N) published it u nchange d as a
European standard, thus superseding the s lightl y different BS 7 750 standard on the
same is sues. It is to be expected that t he certification or registration of envir onment-
focussed co ntrol sy stems will b e a pri mary requirem ent for maintaining
competitiveness on the m arket. In the future, ISO 14001 and E MAS will com pete for
popularit y. However, it can be predicted th at ISO 14001 will spread all over the world
as approval and registratio n under EMAS is only possible in the Eu ropean Union .
The followin g diagram s show the number of EM AS registrations and ISO
1400 1 certificates.
Figure 2.

In countr ies not shown in th e diagram: Au stria: 500 ; Czech Repub lic: 471 ; Singapore: 441;
Poland: 434; Mexico: 369; Malay sia: 367; Norway : 366; Argentina: 308; Hong Kong: 365; Belgiu m: 264;
South African R epubli c: 264; In donesia: 229; Sl ovenia: 192; Philippines: 189 ; Ireland : 170; Port ugal: 151;
Turke y: 135; Israel : 112; Eg ypt: 101; New Zeala nd: 100; United Arab Em irates: 92; Greece : 90; Iran and
Chile: 80; Slovakia: 73; Columbia: 69; Estonia: 67; L ithuan ia: 51; Croatia: 42; Costa Rica: 40 ; Russia,
Vietnam: 33; Ur uguay : 32; Luxemburg: 23; C yprus, Pakistan: 21 ; Latv ia, Liech tenstein, Peru : 20; Tunisia:
18; Venezu ela: 17; Jordan: 16; Morocco: 11; B ulgaria, Niger ia, Zimbabwe: 10; Yugoslavia: 9; Saudi
Arabia, S yria: 8; Trinid ad & To bago: 7; Om an: 6; Bolivi a, Lebanon, Rom ania, Sri Lanka, Maur itius: 5;
Brunei, Namibia, Para guay , Pue rto Rico, Ukrai ne: 4; Nigeria, Azerbaijan, B anglad esh, Barb ados, Guyana,
Iceland, Kuwait , Malta, M onac o: 3; Andra, Bahrein, B elarus , Belize, Bo tswana, Cameroon , Ecuador ,
Greenland , Gua temala, Hondura s, Macau , Qatar, Seneg al, Zambia: 2 ; Bosnia- Herzegovin a, Dom inican
Republic , Mac edonia, Ghan a, Kenya, Jam aica, Kazakhsta n, Mianmar, Nigeri a, Palestine , Pana ma, Saint
Lucia, Sudan, Turkmenistan:1 2364
300
289205
146 1248076 40 2724 20 99 85432 2 1 11 1 1 1 1
05001000150020002500
Németország
Ausztria
Spany olország
Svédors zág
Olaszország
Dánia
Egyesült Királyság
Norvégia
Finnors zág
Hollandia
Franc iaország
Belgium
Görögors zág
Csehors zág
Írország
Portugália
Magy arors zág
USA
Szingapúr
Marokkó
Luxenburg
Románi a
Svédors zág
Szlovák Köztársaság
Malajzia
Kína
MáltaThe number of companies audited under EMAS in July 2003.
Total: 3,744

Analysis of documen ts representing environmental … 183

However, crit icism s have also been form ulated in relation to EMAS :
ƒ low participation rate of sm all-scal e enterprises (due to, a mong others,
participation fees, although it is a m isbelie f that auditing would onl y concern large
companies a s the interest of s mall scale enterprises c an be enhanced by state subsidies),
ƒ only partial realisation of the advantages expected.
Regarding confidentialit y issues, the expert who gets insight into co mpany
matters and records has a high responsibilit y. Onl y after clarify ing all significant
environm ental issues can the expert certify the declaration. Therefore it would be
necess ary to standardise the contents of the declaratio ns, as well.
It is a negative experience in connec tion with declarations that a significant
percentage of these is hard to un derstand.
A more publicity -efficient form of th e participation declaration should be
elaborated as this would boost not only company images but would also enhance thei r
reputation.
The text of the participation declarati on reveals that t he system does not ass ess
the perform ance of co mpanies outside the Eur opean Union, which means that t hey may
show up as the cham pions of environm ent protection at hom e even if they show
complete environm ental in sensitivity outside the Union.

Figure 3.

It discrim inates against co mpanies already endorsing hi gher qualit y
requirem ents. The s ystem may distort com petition on both t he corporate and member
state levels as not only do co mpanies disp lay different levels of environm ental
sensitivity but the y also have to undertake in their polic y com pliance with
environm ental regulations diffe rent from countr y to countr y. 12392
39603820
30322961291728022405
1780
13081269114311121016900835800711703605597
020004000600080001000 01200 01400 0
Japán
Spany olors zág
Németország
USA
Svédors zág
UK
Kína
Olaszország
Franciaors zág
Taiwan
Korea
Hollandia
Kanada
Svédors zág
Brazí lia
Ausztrália
Finnors zág
Dánia
Thaiföld
India
Magyarors zágThe number of companies possessing an ISO 14001 ce rtificate in July 2003 .
Total: 53,620

184 Molnár Si posné, T.

It does not settle properly the relations hip between the right of t he public to
corporate environm ental inform ation and th e right of com panies to corporate and
business confidentiality (according to Article 5, the environm ental declaration should
include data related to pol luting emissions , waste production and raw material im port
“to the necess ary extent”. To define this is a source of conflicts in itself.)
It would be likewise necessary to extend the scope of the regulation, i.e. that
besides the industrial sectors listed in it, other sectors could also tak e part in the sy stem
of EMAS (the regulation itself makes it possi ble for me mber stat es to extend the scope
of enterprises eligible for participation in the EMAS on their own in the area o f trade
and services. Several member state s, e.g. Germany, Great Britai n, Spain and Austria
are consideri ng it currently.)
The requirem ents of the re gulation towa rds experts should be co ncretised, e.g.
it could defi ne the maximum number of a udits an expert can perform in a given
company without l oss of i mpartiality .
A considerab le part of the literature considers volunt arihood a dis advantage of
the sy stem and does not exclude the pos sibilit y of participation in t he EMAS beco ming
mandatory later, althoug h it is possible that participation sh ould rather be m ade more
attractive as mandatoriness is alien to th e system. As a matter of fact, when the
regulation was passed, Germ any and so me industrial pressure groups prevented
making it m andator y.

REFERE NCES:

[1]. Bándi,Gyula, 2000: Körn yezetjog (‘Enviro nmen tal law’) , Osiris Kiad ó.
[2]. Bez egh, András , 1996: A környezetvéde lem sz abványosítá sa a gaz dálkodó szervezet ek
irányításában (‘Standardising environment pro tectio n in the ma nagement of eco nomic
o rganisations’), Környezet és fejlődés VI/ 7-8.
[3]. Fo dor, László, 1998: Öko-audit: A környezetvédel mi teljesítményértékelés eur ópai
rendszere (‘Ec o-audit: t he European sy stem of the assessment of e nvironment
prot ectional performance’) , Sectio Jurid ica et Po litica, Misko lci Eg yetem i Kiadó .
[4]. Fo dor, László, 2000: Integratív környezetjog (‘Integrative envir onmental law ’), Bíbor
Kiad ó.
[5]. Kó si, Kálmán; Kovács, Endre; K őmíves, Józ sef; Varga, József, 1997: Auditálás,
Mene dzsment r endszerek (‘A uditing, M anage ment systems ’) (Környezetvé delmi
K iskönyvt ár 5.), Közgaz dasági és Jogi Könyvkiadó.
[6]. Kun -Szabó, Tibor, 199 9: A kör nyezetvé delem minőségmen edzsmen tje (‘Qu ality
management in en vironment pro tectio n’), Műszaki Kön yvkid ó.
[7]. Nádudvari, Zoltán, 199 7: Az öko-aud itálás gyakorlati példái (‘Pra ctical examp les of eco
a uditing’), Ors zágos Műszaki Inform ációs Kö zpon t és Könyvtár.
[8]. Várnai, M ónika, 1996: A vállalati környezet men edzsmen t rendszer e urópai sz abály ozása
(‘European regulation of corporate environment management systems’), Környezet és
fejl ődés VI/7-8.MSZ EN ISO 14001, 1997
[9]. “EMA S” regulation No. 761/2001 of the Eur opean Parliament and Council
[10]. Prepa ratory and aud iting ma teria ls for environmen tal co ntrol systems
[11]. www.ecolo gy.or.ip/isowo rld/english/analy1 4k.htm

Annals of the University of Petro șani, Economics, 4 (2004), 185-188 185

SOME ASPECTS OF INVENT ORY HELD FOR SALE USING
STATEMENTS OF FE DERAL ACCOUNTING
STANDARD NO.3

ALIN MONEA ∗

ABSTRACT: This paper reveal some aspects of inventory held for sale according
statments of federal accounting standard no.3. This statement provides accounting standards
that apply to several types of tangible property, other than long term fixed assets, held by
federal government agencies. The standards require historical cost or latest acquisition cost
valuation of inventory held for sale and inventory held in reserve for future sale. The standards
permit use of any other valuation method (e.g., standard cost) which reasonably approximates
historical cost.

KEY WORDS: inventory held for sale, statement, accounting standards, latest
acquisition, valuation method, historical cost, goods for sale, cash, cash equivalents .

Inventory is tangible personal property that is (1) held for sale, (2) in the
process of production for sale, or (3) to be consumed in the production of goods for
sale or in the provision of services for a fee. The term "held for sale" shall be
interpreted to include items for sale or transfer to (1) entities outside the federal government, or (2) other federal entities. The principal objective of the sale or transfer of inventory is to provide a product or service for a fee that generally recovers full cost
or an identified portion of the cost. "Other federal entities" may include entities within
the same organization/agency. Sales transacti ons may be executed through transfer of
funds between federal entities; it is not essentia l that the transaction be an exchange of
goods for cash or cash equivalents. In addition, inventory may be acquired through
donation or barter. Inventory excludes some other assets held for sale, such as (1) stockpile materials, (2) seized and forfeited property, (3) foreclosed property, and (4)
goods held under price support and stabilization programs. These items may be sold; however, the purpose of acquiring them is not to provide a product or a service for a fee.

∗ Assist. Prof. at the University of Petro șani, Romania

186 Monea, A.

Inventor y shall be categorized as (1) inv entory held for sale, (2) in ventor y held
in reserve fo r future sale, (3) exces s, obsolete and unserviceabl e inventory , or (4)
inventor y hel d for repair.
Recognition. Inventor y shall be recognized wh en title passes to the purchasing
entity or whe n the go ods are delivered to the purch asing entit y. Upon sale (when the
title passes o r the goods are delivered) or upon use i n the provisi on of a service, th e
related expen se shall be recognized and the cost of those goods shall be rem oved fro m
inventory. De livery or cons tructive delivery shall be based on the te rms of the contract
regarding shi pping and/or delivery.
Valuation. Inventor y shall be valued a t either (1) historical cost or (2) latest
acquisition cost.
(1) Historical cost shall include all appropriate purchase, transp ortation and
production costs incurred to bring the item s to their current condition and l ocation.
Any abnorm al costs, such as exce ssive handli ng or rework costs, shall be char ged to
operations of the period. Donated invent ory shall be valued at its fair value at th e time
of donation. I nventor y acquired through ex change of nonm onetary asset s (e.g., barter )
shall be valu ed at the fair value of the a sset received at the ti me of the exchang e. Any
difference between the recorded am ount of the asset surrendered and the fair va lue of
the asset received shall be recognized as a gain or a loss.
The first-in, first-out (FIFO); weighted average; or m oving avera ge cost flow
assumptions may be applied in arriving at th e historical cost of ending inventory and
cost of goods sold. In addition, any other va luation method may be used if the results
reasonably approxim ate those of one of th e above historical cost methods (e.g., a
standard cost sy stem ).
(2) The latest acquisition cost method provi des that the last invoice price (i.e.,
the specific ite m's a ctual c ost used in setti ng the current year stabilized standard sales
price) be applied to all like units held including th ose units acquired through d onatio n
or nonm onetary exchange . The invent ory shall be revalued periodically but at l east at
the end of each fiscal y ear. Revaluation r esults in r ecognition of unrealized holding
gains/losses i n the ending inventor y value. Upon adjustment for unrealized holding
gains/losses, the latest acquisition cost method the n results in an approxim ation of
historical cost.
An allowanc e for unrealized holding gains/losses in inventory shall be
established to capture these gains/losses. The e nding balance of this allowance shall be
the cu mulative difference between the historical cost, based on esti mated or actual
valuation, and the latest acquisition cost of endin g inventor y. The balance shall be
adjusted each time the inventory balance is adjusted. The adjust ment necess ary to bring
the allowance to the approp riate balance shall be a component of cost of goods sold for
the period as described below.
The cost of g oods sold f or the period sh all be co mputed as follows:
Beginning inventory at be ginning-of-the-period latest acquisition cost less:
beginning allowance for unrealized holding gains/losses plus: act ual purchases Cost of

Some aspects of inventory held for sale using statements… 187

Goods Available for Sale less: ending i nventor y at end-of-the-period latest
acquisition cost plus: ending allowance for unreali zed holding gains/losses Cost o f
Goods Sold
Exception to Valuation. Valuing inve ntories at expected net real izable value
is acceptable if there is (1) an inabilit y to determ ine approxim ate costs, (2) immediate
marketability at quoted prices, and (3) unit interchangeability (e.g., petroleu m
reserve s). A pplication of this exception m ay resu lt in inventories being valued at
greater than historical cost.
Inventory Held in Reserve for F uture Sale. Inventor y stocks may be
maintained because they are not readi ly available in the market or because t here is
more than a rem ote chance that they w ill event ually be nee ded (although not
necess arily in the norm al course of operations). These stocks shall be clas sified as
inventory held in reserve for future sale. I nventory held in reserve for future sale shall
be valued using the same basis as invent ory held fo r sale in normal operatio ns. The
value of inventory held in reserve for fu ture sale shall be either included in the
inventory line ite m on the face of the f inancia l state ments with s eparate discl osure in
footnotes or s hown as a separate line ite m on the fac e of the financial state ments.
The criteria c onsidered by manage ment in identify ing inventory held in reserve
for future sal e shall be disclosed. Exam ples of factors to be considered in developing
the criteria are all r elevan t costs a ssoci ated with holding these ite ms (including the
storage and handling costs), the expec ted replace ment cost whe n needed, the ti me
required to replenish inven tory, (4) t he poten tial for deterioration or pilferage, and the
likelihood tha t a suppl y of the item s will be available in the future.
Excess, Obs olete, and Unservic eable Inventory. "Excess inventory " is
inventor y stock that exceeds the dem and expected in the norm al course of operation s
because the am ount on hand is more than can be sold in the foreseeable future and that
does not meet manage ment's criteria to be held in reserve for future sale.
"Obsolete in ventor y" is inventor y that is no longer needed due to changes in
technology, l aws, custo ms, or operations . "Unserviceable inventor y" is da maged
inventory that is more economical to di spose of than to repair. Th e category "excess,
obsolete and unserviceabl e inventory " shall be either included i n the inventory line
item on the face of the financial state ments with s eparate discl osure in footnotes or
shown as a se parate line ite m on the fac e of the financial state ments.
Such invento ry shall be valued at its expected n et reali zable value. The
difference between the carry ing am ount of t he inventor y before identification as
excess, obso lete or unserviceable an d its expected net realiz able value s hall be
recognized as a loss (or gain) an d either separately reported or disclosed. An y
subsequent adjustments to its net realizab le value or any loss (or gain) upon di sposal
shall also be recognized as a loss (or gain).
Managem ent shall develop and disclose in the financial statements its criteri a
for identify ing excess, obsolete and uns erviceable in ventory .
Inventory Held for Repair. Inventor y held for repai r may be treated in o ne of
two way s: (1) the allowance method or (2) the direct method.

188 Monea, A.

(1) Under the allowance method, invent ory held for repair shall be valued at the same
value as a serviceable item . Howev er, an allowance for repairs contra-asset account
(i.e., repair allowance) sh all be establish ed. The annual (or othe r period) credit(s)
required to bring the repai r allowance to the current estimated cos t of repairs shall be
recognized as current peri od operating expenses. As the repairs are made the cost of
repairs shall be charged (debited) to the allowance for repairs account.
(2) Under the direct method, invent ory held fo r repair shall be valued at the same value
as a service able item less the esti mated repair costs. When the repair is actually made,
the cost of th e repair shall be capitalized in the in ventor y account up to t he value of a
serviceable it em. Any difference between the initial estimated rep air cost and the actual
repair cost shall be either debited or credited to the rep air expense account.
Transition to either of t hese two methods may result in recognizing an
accumulated am ount of needed repairs that were not previousl y accounted for. To
avoid overstating repair ex pense for the first pe riod th at repair expense is accrued, prio r
period am ounts are to be separately identif ied or estimated. The estimated amount t o
repair inventor y that is attributable to pr ior periods shall be credited to the repair
allowance under the repair allowance method or to the inventor y account under the
direct method and reported as an adjustment to equit y.
Disclosur e Require ments.
– General co mposition of inventor y.
– Basis for determ ining inventor y valu es; including t he valuation method and
any cost flow assu mptions.
– Changes from prior y ear's accounting methods; if an y.
– Balanc es fo r each of the following categor ies of inventory ; inventory held for
current sale, inventory held in reserve for future sale, excess, obsolete and
unserviceable inventory, a nd inventory held for repa ir unless othe rwise pres ented on
the financial state ments.
– Restrictions on the sale of materi al.
– The decisi on criteria f or identify ing the catego ry to which inventor y is
assigned.
– Changes in the criteria for identify ing the categor y to which inventor y is
assigned.
The provisions of this statement need not be applied to immateri al ite ms.

REFERE NCES:

[1]. ACCA – The Acc ounting Framework International Stream , BPP Pu blishing, Lond on,1999.
[2]. GA O’S Office – Statements of Fede ral Financial Acco unting Concept s and Standards,
GAO, Washington D.C. , 1997.

Annals of the University of Petro șani, Economics, 4 (2004), 189-190 189

QUALIFIZIERUNG UND VE RMITTLUNG FÜR EINE
DYNAMISCHE ARBEITSWELT

RAREȘ MUNTEANU *

ABSTRACT : It is well known that Germany has a wide experience regarding the
mining field. But as mining becomes more and more expansive, this industrial field is facing
closure. This makes Germany to be in a position somehow similar to Romania. Of course, the
specific conditions are different and the financial ressources of Germany are higher than
Romania’s, but we consider that the german experience regarding economic reconversion of the mining areas and the re-qualification of those who worked in the mining industry is very
usefull to be studied by the romanians; good ideas should be implemented in our economy, too.

KEY WORDS : Ruhrkohle Aktiengesellschaft, new activities, old mines, responsibility,
R.A.G. Bildung

Den Strukturwandel gestalten heißt auch, bei der Aus- und Weiterbildung
flexibel auf veränderte Anforderungen des Ar beitsmarket zu reagieren. Die RAG trägt
als der grösten Ausbilder in den Bundeslä ndern Nordrhein- Westfalen und Saarland auf
diesem Gebiet besondere Verantwortung. Mit einer Vielzahl von Ausbildungsberufe
eröffnet das Unternehmen jungen Menschen Chancen für einen erfolgreichen Einstieg
ins Berufsleben.
Umsteiger haben dank innovativer Kon zepte für die Weiterqualifizierung und
Vermittlung gute Aussichten auf einen Wechsel in Berufe mit Zukunft. Mehr den je ist
heute eine gute Ausbildung der Schlüssel zu einem gelungenen Start ins Berufsleben.
Die RAG ermöglicht Jahr für Jahr mehreren Ta usend jungen Menschen, ihre berufliche
Karriere mit einem Ausbildungsplaz in eine m der Konzernunternehmen oder mit einer
berufsvorrbereitenden Maßnahme der Toch tergesellschaft RAG BILDUNG GmbH zu
beginnen. Im Jahr 2002 nahmen 2.269 Schul abgänger eine Ausbildung bei der RAG
auf, weitere 2.535 Jugendliche wurden in berufsvorbereite nden Maßnahmen an
verschiedene Berufsprofile herangefürt. Insgesamt befanden sich zum Jahresende
2002, zählt man alle Ausbildungsjahrgänge zusa mmen, 9.258 junge Menschen in einer
Berufsausbildung oder –vorbereitung bei der RAG. Mit 2.380 Ausbildungsplätzen ist

* Assist. Prof. at the University of Petro șani, Romania

190 Muntea nu, R..

innerhalb des RAG-Konzerns nach wie vor die Deutsche Steinkohle AG (DSK) der
größte Ausbil der für den ei genen Bedarf.
An zehn Standorten im Ruhr und Saarre vier sowie in Ibbenbürre n befanden
sich i m Jahr 2002 i nsgesamt 2.380 junge Menschen in der Ausbildung zu eine m von 24
Berufen. Spezielle Angebote wie die Ko mbination von Ausbil dung und S tudium in
einer beschleunigten Kom paktausbildung mit Fachingenieurabschluss gewähren
interessiert en Bewerbern weiter gehen de Zukunf tsperspektiven. Im RAG- Konzern
werden derzeit rund 7 0 Ausbildun gsberufe angebot en. Die am häufigsten gewühlten
Berufe sind nach wie vor Industriem echanik er und Energieelectroniker, d och Berufe
aus dem Bereich IT wie IT -Systemelektroni ker oder I T-Kaufm ann haben in der l etzten
Zeit deutlich aufgeholt. Una bhängig davon, für welchen Be ruf sich ein Auszubildender
letztlich entscheidet, kann e r stets sicher sein, dass sich ihm durch die hohe Qualität der
Ausbildung beste Zukunftschancen eröffnen. Gute perspektiven für Jugendliche bieten
auch die berufsvorbereitenden Maßnah men der RAG BIL DUNG GmbH. Das
Unterneh men der RAG engagiert sich mit ei nem vielfält igen Angebot in
Strukturschwachen Regionen m it hoher Jugendarbeitslosigkeit, z. B. i n
Ostdeutschland. Für die Teilneh mer enden die Lehrgänge zur Berufsvorbereitung i n
der Regel mit großem Erfolg. Der überwiege ndeTeil der Mädchen u nd Jungen, di e von
RAG BIL DUNG für de n Start ins Berufsleben fit ge macht werden, findet i m
Anschluss an die Maßnahme einen Ausbildungsplatz.
Über das so genannte RAG personalClear ing werde n deshalb auch innerhalb
des Konzerns Mitarbeiter vermittelt. Se it 1991 habe n bereits 2.800 Beschäfti gte von
dieser Möglichkeit Gebraucht gemac ht. Die Mitarbeiter können nicht nur an
Stellenangebote reagieren , sondern auch sel bst Stellengesuche aufgeben und sich so
nach einer neuen Tätigkeit im RAG Konzern umsehen. Dies gilt ebenso für die
Führun gskräfte des Bergbaus, die ü bereinen Personalentwiklungspo ol au f neue
Aufgaben im Konzern vorbereitet w erden.
Der Konzern hilft zusätzlich bei der Jo bsuche. Wichtige Unterstützung leistet
dabei der JobExplorer, ein Stellenverm ittlungss ystem auf de r Basis des Internets, das
RAG BILDUNG 1999 für die DS K entwickelt hat. Säm tliche Mitarbeiter des
deutschen Steinkohleberg baus wurden und werden seitdem zu ihren speziellen
beruflichen Kentnissen, Fähi gkeiten und Neigungen befragt.
Es ist schw er alle diese Ideen in Ru mänien zu applizieren. Di e Finanzfähigkeit
Deutschlans ist viel höher als Ru mäniens, aber Deutschland gilt als einen guten
Beispiel für alle Länder die eine St ruktur wandel der Industrie erfahren.

LITERATURVERZ EICHNIS:

[1]. www.ra g.de
[2]. http://www.rag bildun g.de

Annals of the University of Petro șani, Economics, 4 (2004), 191-196 191

THE TOURISM MARKET IN ROMANIA

ALEXANDRU NEDELEA *

ABSTRACT : The Romanian international touristic demand registers a diminuation
tendency due to some causes such as: the low qua lity level of the offered touristic services, the
touristic services non-diversification, the re duced amusement possibilities. The Romanian
tourism promotion strategy is structured at th ree levels: national (the Ministry of Tourism),
local (the regional promotion associations), micro (the touristic operator`s).

KEY WORDS : market, demand, tourism, strategy, the touristic operator`s,
patrimony, quality level

The Romanian international touristic demand registers a diminuation tendency
due to some causes such as: the low quality le vel of the offered touristic services, the
touristic services non-diversification, the reduced amusement possibilities.
The internal touristic demand register ed a diminuation tendency caused by the
low sales power of the population and a lack of correlation between the practised tax
levels and the service qualities.
Some of the possible ways of tourism relaunching constitutes the elaboration
of some efficient marketing strategies and politics starting from a marketing
environment analysis.
In order to conceive and promote a competitive Romanian touristic product the
adoption of a quality rise strategy is essential. In Romania the Q Mark National Application Program was conceived.
On the local market we notice the hor izontal integration (concentration)
phenomenon manifestation which is concretized in some hotel chains development.
The Romanian tourism promotion strategy is structured at three levels: national
(the Ministry of Tourism), local (the regional promotion associations), micro (the touristic operator`s)
We recommend to the Bukovina receiving structures to promote some small
prices for minimum services offered to attract tourists at the destination,and here to
determine them to spend more money by offering them some supplementary services.

* Lecturer Ph.D. at the “ Ștefan cel Mare”University of Suceava, Romania

192 Nedelea, A.

The Rom anian tourism success depen ds on conceiving and and apply ing a
positive-aggressive market ing by creating regional prom oting strategies and building
some powerf ul brands to impose the mselves on a market chara cterized by a fierce
competition.
Among the countries from the East and Center Europe, Ro mania is considered
the countr y which possesses the richest and most varied natural touristic resources
created by man and this gives a great disposabilit y for tourism . The general secretary
of the International Touris m Organization states that: ”Such a countr y which o wns th e
Danube Delta, the Black Sea, The Buk ovina monasteries could live and prosper fro m
tourism only .”
Like any strategy, the analy sis of t he activit y dom ain taken into c onsideration
and the final objectives of the esti mated changes for a cert ain period of tim e are two
essential moments of the strategy in the tourism domain.
Without an y notable exceptions the Roma nian specialists and the foreign ones
agree upon the fact that the Ro manian tourism potential could com pete with the
touristic supp ly of an y other countr y in the world thu s significantly contribut ing to the
income growth.
Let`s re member that in the 60s Rom ania was a succ essful touristic destination
especially due to the Bl ack Sea. The regres s started with the comunist n ational
isolation. Its fall has not broug ht the supposed go od changes and toda y the t ourism
Romanian industr y is m easured b y a series of parametres which explain its peripheral
position i n international context.
The econom ic, social and political context of the period after 1990 has not
been one that contributed t o the Romanian tourism developm ent. Toda y, the Ro manian
hospitalit y industr y confronts itself with proble ms s uch as: the decline of the internal
and external touristic dem and, an old t ouristic product, the low stan dard in the services
which do not satisfy the tourists` expecta tions, the pay ment and too h igh prices
compared to the quality of the ser vices, a n insufficient prom otion.
Moreover after 1989 because of the population low income level a
restructuration of the cons umption prior ities took pla ce and this di d not fav our tourism .
The foreigners` perception upon accomm odation, upon prices, is for Romania
lower than in the case of Turke y and Greece. They consider that our country is
deficitary because of the too high ta xes for a reduced range of services.
One of the reasons of the touristic demand decre ase is the Romanian hotel
keepers` tend ency to incre ase the pric e of the servi ces when the num ber of clients
beco me less. Generally the Romanian tourism managers not often proceed to cost
analy ses or market rese arch.
Moreover, the visa eli mination for the Romanians w ho travel in the European
Union countr ies – starting with January the1st – im plies the destin ation m odifications
preferred by the Romanians.

The tourism market in Romania 193

The international to uristic demand registered a diminuation tend ency due t o
some causes such a s the relatively low leve l of t he touristic s ervices, the touristic
program nondiversification, the reduced am usement possibilities.
The official satisfactions r egarding the external touristic circulation offer data
whose releva nce is relative as they register also the persons who practice frontier
traffic .
In the future it is believed the num ber of the foreign tourists will rise due to
the invitation for our countr y to adhere to OT AN but also because Ro mania is
considered an attractive countr y. This is ve ry important if we take into account the
general situat ion on the touris m interna tional market , in the case of Middle East for
example the s ituation is different.
We consider t hat as far as the Romanian hospitalit y industr y is concerned is the
elaboration of so me marketing stra tegies to co ntribute to the internal market
flourishm ent.
As far as the internal market is concerned we can notice a migration tendency
of the t ouristic demand t owards the t ouristic prod ucts import which reflects the
spectacular growth of the number of vo yages made by the Ro manian tourists abroad.
Here we must draw the attention t owards the “pseudotourists” proliferation, tha t is of
those persons who travel abroad with pur poses which are connected to their jobs and
who actually cannot be con sidered tourists at all!
The adopted marketing strategies must presuppose regaining the touristic
market which has been lost in 1980-1989: Germ any, France, Belgi um, Holland, USA,
Canada etc.
Nowaday s the major touristic reasons wh ich attract the foreign tourists in
Romania are The Black S ea, The Carp athian s, bussiness activities, cultural-historical
circuits (such as the monasteries fro m Bukovi na).
Without any fiscal f acilit ies, without the privatisation of the patri mony in
tourism , without an aggressive provocation, without qualit y services, without a modern
infrastructure, the Rom anian tourism remains a perpe tual chance.
It is certain that for Rom ania tourism represents a great opportunity which
must be exploited at the beginning of t he third m illenium .
One of the possible way s of tourism relaunching constitutes the elaboration of
some efficient marketing strategies and politics starting from a marketing envir onment
analy sis.
This m ust presuppose:
¾ the rise of the services quality level offered to touri sts especi ally for
the services where it is re quired their diversification;
¾ the enlarge ment of the Romanian tour ism agencie s supplies in order to
succeed in dr awing the att ention of a greater nu mber of tourists ; this is
how the focus will be on the introducti on or the conception of some
touristic prod ucts to correspond to the m otivational t ourist profile;

194 Nedelea, A.

¾ redim ensioning the co nnection between the service qualit y and their
price such as to be justified all the taxes;
¾ the intensification of the touris tic pr oducts and a ctions of service
prom otion choosing modern way s to promote like the Internet; t his is
how the possibilit y of tour ists inform ation on the touristic services is
created.
Unfortunately, as a Horwath British firm specialized in consultancy has
pointed ou t, Ro mania is for the foreign t ourists “an expired touristic prod uct, an
inadequate offer for time s pending, which reflects th e lack of invest ment.”
Thus Rom ania has reached an e xpensive touristic destination.
The Ministry of Tourism has established a series of strategical objectives at the
national level:
¾ the im provement and the touristic pr oduct consolidation in those areas,
stations, localities, which are the most familiar for the Ro manian and
foreign tourists and where there is alread y a certain str ucture;
¾ the development and modernization of the touristic product in such a
way that Ro mania would distinguish i tself fro m another countries;
¾ the rise of the standard level of services in accordance to the touristic
category and the used pa yment.
Therefore we can adopt fo ur main types strategies of the Romanian touristic
product:
• As far as the differentiation strategy is concerned we believe that it is
recommended to have as a starting point the o riginalit y through which the
Romanian tourism must be characterized without b eing able to co mpete with th e
experienced countries.
In order to confer originality to the touristic products we reco mmend the
combination of the circuits and sejours in the mountain area with those fro m the
Danube Delta, Bukovi na, Maram ureș, the Black Se a, the balneoclimateli c statio ns,
the center of Transy lvania, the m onast eries are a in the north of Oltenia etc.
• Adopting a diversifi cation strategy in the hospitalit y industry in Romani a
presupposes the demand satisfaction of more tourist segments by conceiving some
varied touristic activities an d form s.
If we take into consideration the varied and com plex character of the native
touristic pote ntial we consider that the fo llowing could be pa rticular touri stic
products:
– the seaside s ejour,
– the m ountain and cultural circuits the rural tourism ,
– ecotourism (the green tou rism),
– the bussiness tourism ,
– the sports pr actising touri sm, and other sports and activities,
– the scientific tourism etc.

The tourism market in Romania 195

• As far as the quality growt h strategy we could m ention the existence of the Q Mark
Applicatio n National Pro gram which has criteri a allowing the full qualit y measure
and of all factors which can assure a high degree of client satisfa ction.
The reco mmended sy stem has in vie w the valorifica tion of some associations
from the hospitalit y industry to prom ote qualit y marks. In order to beco me members of
such an association the operator should r espect a certain qualit y standard.
The associati on will have to respect a certain quality standard. Its members
will own a qualit y mark which will certify the exi stence of a certain standard. That
association will also have the role to prom ote this mark and the touristic structures.

The Romani an Touristic Products
In the last tw o years a series of new tou ristic product s have been l aunched b y
the Tourism Ministry. Thus, the social pr ogram s were generally success ful. “The Sun
Children”, “May the 1st at the Seasid e” “N ew Year`s Eve in Romania”, “H olida y in
the countr yside”, “A Cru ise on the Danube Delta”, “Dracula Park” have been
appreciated by the Rom anian tourists.
Within t he product politics of Rom anian tourism units there m ust be achieved
a growth of t he touristic v alencies by means of:
¾ the growth of service qualities and the confort degr ee of the touristic
structures;
¾ completing the com plementary services (sports, international
telephon y, cable television, aerobics gym , conference halls etc.);
¾ includin g within the touristic products of so me new touristic activities,
except the regularly ones: river-ra fting, treking, skating etc.;
¾ the diversification of som e activities: cultural-artist ic manifest ations,
traditional holida ys specific to a certain geogra phical area, folk
program s, taking part in the local p eople`s activities, various and
attractive trips etc.

REFERE NCES:

[1]. Brent J.R., Goeldner Ch. – Travel, Tou rism and Hosp itality Resea rch, Wiley, New
Y ork, 1994
[2]. Nedelea A l. – Marketing direct p rin Internet în tu rism, Marketing-Managem ent, vol.1
2 /2000
[3]. Nedelea A l. – Politici d e marketin g în turism, Ed. Economică, București, 20 03
[4]. Nedelea A l. – Piața turistică, Editura Didactică și Pedagogică, București, 20 03
[5]. World T ourism Or ganiz ation – Tourism Market Trends W orlwide, 2002
[6]. World T ourism Or ganiz ation – Tourism to the Year 20 00 and Beyo nd, Madrid, 1998
[7]. http://www.info travelroman ia.ro
[8]. http://www.m turism.ro
[9]. http://www.m ediafax .ro
[10]. http://www.eTu rism.ro

196 Nedelea, A.

[11]. http://www.turism info.ro
[12]. http://www.info -turism .ro
[13]. http://www.turism .ro
[14]. http://www.ro travel.com
[15]. http://www.ro maniatravel.co m
[16]. http://www.world-tou rism.org
[17]. http://www.e-pro mo.ro

Annals of the University of Petro șani, Economics, 4 (2004), 197-202 197

THE NECESSITY OF ACHIEV ING THE INTERNAL AUDIT
OF THE PUBLIC BODIES

VASILE POPEANG Ă, TEODORA V ĂTUIU *

ABSTRACT: Reforming the public bodies of a country is the hard core of any
economic reform. In this paper, through public bodies we underst and public authorities, public
institutions, national companies and societies and public corporations. Internal audit is the first
tool of the top management of the public body in examining the whole decision making system
(strategy and tactics), the efficiency, efficacy and economical aspects of every operation and
decision.

KEY WORDS : internal audit, public bodies, objective, financial products

NECESSITY OF THE INTERNAL AUDIT OF PUBLIC BODIES

Internal audit of the public bodies is a functionally independent and objective
activity witch gives assurance and advise for the top management about good administration
of public funds and public expenditures. Internal audit first objective is to help the public
body to achieve its objectives, by:
• Improving activities;
• Building procedures;
• Securing procedures;
• Seizing opportunities and prescribe recommendations.
Internal audit has been imposed as a com pulsory activity in the field of public
finance of the European Community, because of the globalization of public financial services.
If the social and unemployment insurance system, the health insurance system, the
industrial structural adjustment programs, sustained from public and communitarian funds,
may be considered as merchantable financial products, then these products must have four
essential characteristics:

* Prof., Ph.D at the “Constantin Brâncu și” University of Târgu-Jiu, Romania
Lecturer at the Romanian Management Academy, Bucharest, Romania

198 Popean gă, V.; Vătuiu, T.

ƒ Standard design;
ƒ Fitted for the most flexible ad ministration,
ƒ A convenient and com fortable relati on between the “purchaser” and the
“supplier”;
ƒ Protection ag ainst fraud.
Internal audit focuses on the internal c ontrol s ystem of the public body, for a
reasonable appreciation of the quality and th e performance of the managem ent, related
with the publi c body’s objectives.
Thus, identif ication of al l of the public bod y’s objectives is a task quite
difficult. For any privat e econo mic bod y, havi ng an y kin d of legal form of
organization, the main objective is the profit.
For a public bod y, the obj ectives may be very different, dependin g on the field
or the branch of social activit y in wi tch the publi c body activities, as well as its
organization (the public body acts in an autonom ic manner or as a decentralized
structure of a governm ental bod y).
Managem ent performance evaluation beco mes a necessity when p ublic bodies
are financed from public revenue formed from taxes that, in m ost civilized countries,
goes beyond 40% from gross dom estic product.
Generally , the activity of the public bodies is exam ined in external audit
missions, made by the suprem e audit institutions of every countr y (for exam ple, the
Court of Accounts).
However, a well-known truth states that the supreme audit institutions are
exam ining “dead phenomenon”, past fiscal y ears and closed operations. Onl y internal
audit can face a concom itant exa mination of an operation or an activity , being the
fastest tool f or top m anagement of the public body , which can co llect and sy nthesize
data, provide unbiased infor mation and make first recommendations.
Internal audit exam ination s are consider ed to be ex-post when ar e rel ated to
operations an d concom itant when are related to the public body’s activities. Main
results of the internal audit examina tion concern risk identification, and
recommendations for risk r esponse actio ns, procedures and plans.

REAL E CONOMY AND ALLOCAT ION E CONOMY

A major request of the development of the informatics society is the
automation of the m ost complicates s ystem of administrative data processi ng of an
econom y and more precisely the adm inistrative data processing from the budgetary
activity . The execution o f the budget consists in the sales of the incomes and the
accomplishment of the spending acknowledged by the legislative forum .
The achievement of an a dequate info rmatic s system comes in the auditor’ s
support, which has to give its verdict in a real time o n what concerns the justifiabilit y
and the opportunity of the a dministrativ e data processi ng of the public money .

The necessi ty of achieving the internal audit … 199

Analy zing the nature of th e relations and flows inside and outside the national
econom ic spaces, contemporar y economic theory makes a clear difference between
real econo my (or exchange econom y) and pu blic econom y.
If the exchange economy com prises r eal, monetary and fi nancial flows,
generated by the relations of exchange, produ ction, consu mption, distribution ,
propert y, labor, and so on, public econom y com prises flows of distribution of the
public income, as drawings fro m the income realized in the exchange econom y,
established th rough pu blic decisions, an d monetary flows connected with the relations
of financing t he deficit of t he public b udget.
After the pub lic income is re-distribut ed on ever y destination, t hose funds are
depersonalized, being used for covering the pub lic ne eds, offering public utili ties to all
social subject s.
Internal audit must exa mine the w ay in which the public bod y- as an operator
in both the public and exc hange econom y – uses the monetary and financial flows, the
forces and the rules of the market , in ac hieving its objectives.
In addition, a task of the internal aud it is the process of adjusting the needs and
resources, r ealized, at all levels, by decisions and constraints of public authorit y. Those
decisions are , themselve s, object for t he internal audit exam ination. Through the
internal audit missions include auditing of the projects of budget, of the budgetary
execution, concessions and public acquisitions , spendi ng the communitarian funds, and
so on.

CON TINGENCY A ND C ONFIGURATIVE APPR OAC H

Classi c managem ent app roach of pu blic bodies strives to explain that
maxim izing the efficacy of the organiza tion depend s on mutual harm onizing of its
activities, policies and projects. The disadvantag es of this approach are materialized, a t
the top managem ent level, in inappropria te decisions; inadequate to the complex
reality , by ta king i nto account only a few variables and sim plistic relations between
them (linear or proportional).
Toda y’s environm ents in which public bodies must operate do not rely on on e
strategic proj ect, but sev eral parall el initiatives t hat must combine to meet their
objectives.
In fact, today’s official, political a nd financial co mmit ments i mpose that the
manage ment of Ro manian public bodies must face, to acco mplish their objectives, both
operations (ongoing and r epetitive) and projects (tem porary endeavors undertaken to
create unique products or services or to r espond to requests that cannot be addressed
within the organization’ s norm al oper ational lim its.) With decentralized and global
work forces, projects must coordinate the efforts of m ultiple cross-functional teams
operating in different environm ents. In this dynamic environm ent, traditional models
of m anaging and organize the public bodies stagger, and project-based organizations
thrive.

200 Popean gă, V.; Vătuiu, T.

Project managem ent relay s on tem porary adapti ve structures, resulting from
the d ynamic interactions of the organization ’s environ ment variables and intra- or over
organizational strategies. The evolution of a project-oriented organization is a
succession of sequences of punctual equilibrium points, sy nthesizing the influence of a
great num ber of variables.
As the first counselor of the top management of the public bod y, internal audit
must adapt it s procedures and techniques to th e project context. I n that cas e, internal
audits may reveal the real causes of failure, prevent failure of projects through proper
and operative reco mmendations, and improve project processes. F or capital projects,
together with revisions, internal audits must be perf ormed after each work package
from the Work Breakdown Structure and/or after each project pha se.

STRAT EGY AND T ACT ICS, EFFIC IENCY AND EFFICA CY

Functional structures or cross-functiona l and adaptive structures of the public
bodies m ust be exam ined by internal audits, as methods for fitting the organizations to
achieve their objectives. The com plex envi ronm ent, in which public bo dies m ust
perform their activities, and the increased complexity of the objectives they must
accomplish, i mposed frequent changes of thei r structure, to fa ce the challe nge of
“shooting at moving targets”.
Strategic cha nges of the objectives of public bodies often translate into
changes of functional structures. Obse rvations sugg ests that in a public b ody of an y
size, three to five years are necessary for the new organization to settle down and
people to become co mfortable with it. Well- defined strategic decisions avoid frequent
changes of strategy . Actual responses to those risks are the adaptive structures.
Internal audit m ust examine both strategy and tactics. Tactic al decisions ca n
only be successful if they are made w ithin the context of the strategic plan. Public
bodies are created to carry out l ong-ter m general econom ic and soci al functio ns, thus,
when exam ining the via bility of actual perform ing actions, internal audi t must
emphasiz e the strategic co ntext.
Efficiency is defined as a ratio betwe en results and t he cost of th e resources
used to obtain these results. Efficacy is defined as the degree in which stated objectives
are fulfilled and as a relation between expected impact and effective im pact of an
operation an d/or activit y. As Paul Drucke r stated , is more important to do well
something that we intend to do, than to do well any thing else.

INTE RNA L AUDIT IN COMPUT ER INFOR MATION SYSTEMS
ENVI RON MENT

Most of t he administrative and financi al functions of the public bod ies are
supported b y computer information sy stems (CIS). Internal audit must provi de detailed

The necessi ty of achieving the internal audit … 201

knowledge o f CIS used i nside the p ublic b ody, which data an d decisions f lows are
supported b y CIS, what is the actual paper circuit provided b y CIS.
Besides the c ase when the object of an in ternal audit missions is the CIS itself,
knowledge ab out CIS is a p art of data gathering audit procedures.
The subjects are the s et of require ments of the users o f the CIS, the application
system that should confor m to these require ments and t he software and hardware for
the input , stor age, processi ng, displa y, output and communication of data.
Risk evaluation in CIS environm ents inc ludes:
– Lack of audi t proofs for s ome operations, if the CIS is not pr operly
designed:
– In case of programmi ng bugs or other malf unctions, uniform
processing of the same op erations can conduct to error propagati on in
the processed data;
– If the acce ss procedures of the CIS are not properly designed, this may
lead to una uthorized access and the lack of separation between
execution, c ontrol and a uthorization of the o perations. In manual
procedures, distinct individuals perfor m these actions;
– Errors and irr egularities of data, due to human m isuse and/or o perating
errors. This risk can be limited if th e CIS provides procedures of
validating dat a and is fault tolerant. In some c ases, suc h errors can lead
to system failures;
– Batch process ing provides insufficient audit proofs;
– Manual control procedures depend upon correctness and accurac y of
computer processing;
– CIS procedur es can offer tools foe anal ytic and s ynthetic management
controls. The efficacy of those controls depends upon the accurac y of
the data provi ded b y the CIS.

REFERE NCES:

[1]. CaupinG ., Knopfel H. , Morris P., Motzel E., Panen backer O. – ICB, IPMA
Competence Baseline , International Project Managem ent Association, Monmouth,
U.K., 199 9
[2]. Cor dune anu C. – Sistemu l fisca l în știința finanțelor, CODECS, B ucharest, 1998
[3]. Ghiță M., Mareș V., Ghiță E. – Auditul într-un med iu cu sisteme d e informații
computerizate , Controlul economic financi ar nr. 9, Tribuna Economică, București,
Sept embrie 2002
[4]. Lockyer K., Gor don J. – Project Manag ement and Project Netwo ek Techn iques, Pitman
Publishing, London, U.K., 1996
[5]. Geor gia Institute of Technol ogy – Depa rtmen t of Internal Auditing, Depa rtment Review
Guide, Ge orgia, USA, 2000

202 Popean gă, V.; Vătuiu, T.

[6]. Guidelines on Best Practice fo r the Aud it of Economic Regu lation, INTOS AI Working
Group on the Au dit of Privatization, Oct ober 2001
[7]. A Gu ide to th e Pro ject Ma nagemen t Bod y of Kno wledge, 2000 Edition, Proj ect
Management Institute, Newt on Square, Pennsylv ania USA, 2000
[8]. The auditing process in co rporate control, Standard of the Office of the Au ditor General of
Norway, Oslo , Norway, 2002
[9]. Legea nr. 672/2002 privin d aud itul pub lic in tern, Mon. Of. nr. 953/2002

Annals of the University of Petro șani, Economics, 4 (2004), 203-206 203

L’EVALUATION DE L’EXCE DENT OU DU DEFICITE
BUDGETAIRE

MIRELA POPESCU ∗

RESUMÉ: Dans cette œuvre se présente les principaux notions concernant l'exécution
du budget, la relation entre les ressources financières et leur destination qui peut indiquer un
état équilibre, un excèdent budgéta ire, ou un déficit budgétaire.

MOTS CLEF: budget, ressources financières, revenus est dépenses, l'excèdent
budgétaire, le déficit budgétaire, le budget équilibre .

Au cadre de l’exercice financier, sous la direction et responsabilité de
l’ordonnateur principal des crédits, dans les conditions de la Loi concernant les
finances publiques et de la loi budgétair e annuelle, on élabore, on approuve t’on
exécute le budget local.
Exécution du budget finit en 31 décembre chaque année
Tout revenu qui n’a pas été encaisse et toute dépense qui n’a pas été effectuée
jusqu’a 31 décembre sera paye, selon le cas, dans le compte du budget d’année
prochaine.
Les crédits budgétaires, qui n’ont pas ét é utilises jusqu’a la fin d’année, sont
annules.
Les ordonnateurs principaux des crédits sont légalement responsables de:
a. l’utilisation avec le maximum e fficacité des crédits budgétaires
b. la réalisation des revenus
c. l’utilisation efficacité des sommes reçues du budget d’état
d. l’intégrité des biens reçu s par unité qu’il conduit
e. l’organisation et l’actualisation de la comptabilité et la présentation,
quand c’est le cas, des justifications sur les budgets

∗ Lecturer at the University of Petro șani, Romania

204 Popescu, M.

A l’aide de la co mptabilité budgétaire et des docu ments évidence comptable
budgétaire o n rédige des bilans co mptables trimestriels ou annu els dans lesq uels on
met en évidence les r evenus planifies e t réalise s, les dépenses pla nifiées et r éalisées ,
l’excèdent planifie et réali se ou le défi cit planifie et réalise d’un budget local.
Apres la fin d’année, a l’aide des da tes du bilan comptable et du com pte annuel
exécution du budget local , on établit et on anal yse la manière d 'exécution du budget
respectif pour année budgét aire expirée.
Le co mpte an nuel exécution du budget local co mprend:
1. pour la partie des revenus: des reve nus groupes dans des chapitres et
des sous chapitres
2. pour la partie de dépenses: des dépenses groupées dans des chapitr es
et des souschapitres en mettant en éviden ce les crédit s et les dépen ses eff ectuée s
3. excèdent ou le déficit budg étaire, et, dan s la situation ou la so mme des
revenus est égale avec le t otal des dépe nses effectuées, le budget est équilibre

2. EX CÈDENT BU DGÉ TAIRE

La relation entre les resso urces financi ères et leur destination peut indiquer un
état équilibre, un dépassement des dépen ses par l es ressources – excèdent, ou un
dépasse ment des ressource s par les dépe nses – déficit
Si les budge ts déficitaires sont cr itiques par de nom breux économ istes et
hommes politiques et tolères involontair ement, les budgets excédentaires ne so nt pas,
non plus, très favorablem ent caractérises.
L’appréciation d’ un excèdent budgétaire peut être nuancée en fonction de s
facteurs qui l’o nt génère. En principe, excèd ent budgétaire peut être le résultat de la
réalisation de revenus au-delà des esti mations ou des dépenses moins que prévu
Dans le premier cas, il est le résultat de la productivité supérieure du travail, de
la réduction de la cons ommation de matériaux, de la valor isation des matières
prem ières et des matériau x, de l’uti lisation de la capacité de pro duction etc dans des
meilleures co nditions que ce qu’on a prévu lo rs de la rédaction du programme et du
budget.
Dans le deu xième cas, e xcèdent est l e résultat de la réalisation de certains
objectifs ou actions: constructions, modern isations et rép arations de routes,
systématisation et urbanis ation, le dév eloppe ment de l’enseignement et de la culture
avec une conso mmation réduite de m atériaux et resso urces, sans affecter le s par amètres
qualitatifs et quantitatifs.
En réalité, on rencontre des situations quand les ressources qui n’ ont pas été
utilisées, a causes de la réalisation des obectifs pour l esquels on les a prévues
Dans tous le s cas mentionnes, le s ressources monétair es restées util isées, qui se
trouvent à la f in d’année so us forme excède nt bud gétaire, ne sont p as disponible s.

L’evaluation de l’excedent ou du deficite budgetaire … 205

L’apparition d’excèdent budgétaire c onstitue un i ndice pour re marquer que,
dans exécution du progra mme économique on a co mmis des fautes ay ant un effet
économ ique positif ou né gatif. Cela exige une anal yse approfondi e des causes et des
mesures pour élim iner les défauts et les difficultés.
Un budget l ocal peut se trouver dan s n’im porte quelle situation des celles
présentées ci- dessus:
a. équilibre
b. excédentaire durant to ut l’exercice budgétaire
c. excédentaire durant les trimestres et éq uilibre a la fin d’année
Dans les tabl eaux suivants, on présente ces situations :

Le budget équilibre
Trimestre I II III IV Total
Revenus 1000 1500 1500 500 4500
Depenses 1000 1500 1500 500 4500
Excedent 0 0 0 0 0

Le budget ex cédentaire durant tout l ’exercice financier
Trimestre I II III IV Total
Revenus 1500 2000 3000 2000 8500
Depenses 1000 2000 2500 1500 7000
Excedent 500 0 500 500 1500

Le budget excédentaire/déficitaire durant les trimestres et équilibre a la fin
d’année
Trimestre I II III IV Total
Revenus 1000 1500 1500 500 4500
Depenses 800 1700 1000 1000 4500
Excedent 200 -200 500 -500 0

Excèdent annuel du budge t local qui résulte à la fin de l’exercice budgétaire,
est reparti de la manière suivante: le ra mboursement des em prunts éventuels des années
précédentes ou d’ année actuelle et le paiement des interets qui en proviennent, la
constitution du fond de roulement propre cu mule dans la lim ite de 5% des revenus
propres, y com pris la cote des so mme s divisées de certains r evenus du budge t d’état
réalise par le bu dget pr opre dans année en questio n, des paiements au fond de la
trésorerie du départem ent en conform ité avec les norm es méthodologiq ues approuvées
par l’ ordre du Ministère de Finances Publiques.

3. LE DÉFICIT B UDGÉTAIRE

Le déficit budgétaire est devenu un phénom ène caractéristique du m onde
contem porain.

206 Popescu, M.

Le déficit budgétaire est caractéristi que pas seulement des pay s développes
mais aussi de ceux m oins développes Plus leur développement est faible plus ils
arrivent difficilement a faire face au x besoins de fonds en utilisant leurs propres
ressource s. Les facteurs q ui déterm inent l’augm entat ion du niveau des dépenses d’ une
année a l’ autre sont expliques par l’ influence différente des conditions écono miques,
sociales, politiques, organisationnelles, pa r les objectifs de la politique interne du
gouvernem ent.
Parmi ces facteurs on peut énumérer:
– facteurs dé mographiques
– facteurs économ iques
– facteurs soci aux
– facteurs militaires
– facteurs histo riques et politiques
Pour couvrir les dépenses b udgétaires on fait appel a des diverses sit uations:
– réexa miner l es revenus afin de les majeurer
– réexa miner l es dépenses afi n de les dim inuer
– augmenter les cotes im pôt et introd uire d es nouvelles cotes
– emprunts contractes sur la marche intern e et externe

REFERE NCES:

[1]. Halpern P . – Finanțe manageriale, Editura Econo mică, Buc urești, 199 8
[2]. Țâțu A. – Fisca litate, Editu ra AllBeck , București, 2004
[3]. Văcărel I. – Finanțe publice, Editura Di dactică și Peda gogică, București, 2000

Annals of the University of Petro șani, Economics, 4 (2004), 207-222 207

INFORMATIC SYSTEM OF FINANCIAL MANAGEMENT

MIRCEA PREDA *

ABSTRACT: The financial management of an economic activity is one of the most
important tasks as part of the Financial Accountancy function. The management of the relations
with Customers and Suppliers holds an important place in this activity.
The large number of both Suppliers and Customers and also the object and the
relationship conditions between the Economic Agent and then make it a rather intricate
problem.

KEY WORDS: informatic sistem, financial management

1. PROBLEM PRESENTATION

If we take also into account the quantitative aspects, such as:
– Number of customers;
– Number of suppliers;
– Number of invoices issued or received;
– Number of Notices of Receipt and Advises of Dispatch;
– The number of positions and operations they are subject to;
– Number of intermediary documents to be made out according to the Accountancy
Law: Purchase Journal, Sales Journal, Suppliers/Customer Record Cards, VAT
Journal and other documents require d for relationships management;
– Number of operations the above mentioned information is subject to, we come up
to impressive figures to be calculated, manipulated, recorded and managed by
people under the current legislative conditions.
Many of these elementary operations are simple and entail simple operations,
transcriptions accounts but, at the same time, they require care, responsibility, record-
keeping and expertise.

* Lecturer Ph.D. at University of Petroș ani, Romania

208 Preda, M .

If these operations ar e not done according to est ablished norms and
agree ments, suspicions a nd lack of trust may arise betw een partners an d their
creditworthiness di minishes or is lost and th is eve ntually results in the decrease of
turnover and their being o usted from the market.
The Sy stem of Financial Managem ent has been develo ped in order to solve th e
above mentioned activities in better cond itions by reducing routine operations,
improving performance sp eed, qualit y of record-keeping and efficiency .

2. THE GOALS OF T HE SYSTEM

The sy stem ensures the management of relations among partn ers fro m the
angle of connecting infor mational elements: invoices, notices of receipt, ad vises of
dispatch and by considering the m anner the relations between partners unfold by means
of settlem ents of accounts.
Moreover, the sy stem enables us to m anage the relation between ad ministrator
and manager s, by a sy stem of value settleme nts of accounts. In order to attain these
objectives, the specific acti vities have been st ructured in a sim ple and suggestive menu
presented below.

3. THE MAIN SYSTEM MENU

The main menu is the connection ele ment between t he user and the Financia l
Managem ent System . It enables the user to choose the group of activities he wants to
carry out nex t. Selecting is sim ply done b y using the navigation arrows ( ↑↓) followed
by Enter or H ot Key s ( Bri ght Lig hts) or using the m ouse.
After having selected the desired option and Enter has been pressed a ne w
specific menu is opened out of which the desired option , or group of opti ons, is
select ed if th e option ends with “  “. Leaving the current menu is done by pressing
the ke ys “ESC” or choosin g the opt ion “ Terminate”.
The main menu structure is the following:

Informatic syst em of financia l management … 209

The role signi ficance and the operation mode of each optio n is sho wn below:
• Invoices – contains a large num ber of activities that ensure the
management of relations with sup pliers and customers: updating
invoices, set tling them up, consulta tion, occasional and regular
services, the balance of invoices descri bed in 3.1.
• Receptions – co mprises activities specific to updating receptions,
visualizing the main bases, gene rating recep tion centralizer,
consultation a nd special ser vices describ ed in 3.2.
• Managements – co mprises activities specific to the management of
administration–m anager relations and includes: updating management
entries, sal es (by settling up) and dra wing up m anagem ent reports
described in 3.3.
• Exit – is the o ption t hat sig nifies dialogu e ending with SGF after which
the relation with the Operation S ystem is established.

3.1. INVOICE SUBMENU .

It ensures the activities o f updating invoices, their settling up, c onsultation,
special services and balance of invoices through the f ollowing m enu:

3.1.1. UP DAT ING

It activates t he activity of updating i nvoices, which i mplies collecting the
inform ation necess ary to their management in a simple and co nvenient form . The
system accepts using the same co mputing instrum ent of m anaging the issue d and
received invoices by stating the t ype of invoices transmitted at the present moment:

210 Preda, M..

– P – received invoices
– E – issued i nvoices

Communicati ng the necessary inform ation is done by means of the invoice
updating screen whose structure is shown below:

The user communicates to the sy stem the infor mation managed by the sy stem
with the following signific ance and feat ures:
– Invoice type – the t ype of invoices transmitted in this dialogue; P or E
– Initialization of the next record [Y/N) :
ƒ D – the fields updated at the end of each invoice are initialized.
ƒ N – the info rmation of the previous i nvoice is stored, it is
useful for the invoices issued when the invoice num ber and
invoicin g date are stored .
– Customer – the first letter of the customer,s nam e is punched, th en a list of the
partners beginning with t he requested lette r is provided, after which the desired
partner is located. The navigation arrows (up, down ) can be used for selecting and
then Enter must be press ed . If the part ner does not exist, the key Ho me is pre ssed
and the record “ Add “ is l ocated and th en the partner updatin g ope ration is started
for which the requested inform ation is transm itted without m odify ing the code,
afterwards the key s CTRL+W are punc hed for resuming the current position.

Informatic syst em of financial management … 211

– Invoice – the invoice num ber is entered, if it exists in the data base it is transferr ed
into the m odification m ode of the available inform ation.
– Invoicing dat e – is the date of inv oicing under the for m dd/mm/yyyy
– Term of payment in days: in relation t o the invoicing date, if entered, reports can be
requested depending on the date . Which are the invoi ces to be settl ed up in the x- y
period ;
– Unincluded V AT – inv oice value without VAT is introduced.
– VAT value – the VAT value fro m the invoice is filled in;
– Total amount to be settled is autom atically com puted by summ ing up t he above
values.
– Shop – the code of the sh op the merchandise was d istributed to is filled in. Is it
right [ ? the answer is Y if it is right and N if it isn’t right . ]Ny/
Note 1. Is the user consult ed if the invoice is settled up ? if the answer i s “ y “,
the settlemen t of accounts updating screen is activated and then we r eturn to the
fallowing invoice .
Note 2 Wh en the inv oice updating operation is com pleted the ke y ESC is
pressed .

3.1.2. SETTLEMENT

It makes possible to settle up invoices i n order to establish balance per invoice,
partner, m onth.
The invoice can be settled up in several installm ents and in various way s ( by
Cheque, Rec eipt, Pay Order, Co mpensation ) lending the sy stem a great d eal o f
flexibilit y and convenience in the process of managing the above documents and also
of managing i nvoices .
The structure of the up datin g screen is given below.

– Invoice Settlem ent

212 Preda, M .

It is a double-structured screen, on the right there is the information relevant to
the settlement and on the left there is the inform ation relevant to the account which
makes it possible to check quickl y the operation to be done.
The significance of the fields is the fallowing:
• The Invoice – the number of t he settled up invoice is punched, unless
there is a window displa yed with invoi ces arranged to current balance
number.
• Document number – the settlem ent document num ber is given.
• Document ty pe – the t ype of settlem ent docum ent is given ( C heque,
Receipt, Pay Order, etc ) which makes it possible to manage settlements
better according to type . Appended to the receipt the docum ent series
can be printed if necessary ;
• Date – the d ate of settings up u nder the same form dd/mm /yyyy .
• Sum – the settled up am ount. Is it right [ Y/N] the answer is Y or N
according to whether the inform ation is correct or not.
Note 1. The cy cle of settlem ent upda ting is repeated until the key ESC is
punched.

3.1.3. CONS ULTA TION

It is the most widely used sy stem function that ensures the retrieving of
inform ation from the Dat a Base and display ing or printing it in various form s-as a rule
the most necessary and useful ones for the ac countancy activit y, while for other for ms
or types the assistanc e of the author is requested.
This function ensures the filtering of in formation from the data bases, ordering
it eventuall y centralizing and correlating it in accordance with the t ype of repor t
requested and with the parameters provid ed by the user.
In drawing up the reports the user’ s assist ance i s requested in order to
accurately establish the conditions of solving the de mand the list type requested or the
choice of report ordering .
The destination of the rep ort made is es tablished b y the user through a standard
menu which can be foun d at: the network pri nter, i n a file, at t he Local pri nter or
Subscriber.
The structure of menu is the following.

3.1.3.1. L1 I SSUED/RE CEIVED INVOICES

It allows making a list of issued or received invoic es, which have or haven’ t
been settled- up also of all the invoices made in a time interval and ordered acco rding to
date, partner or inv oice nu mber.
In order to draft the report, the followin g param eters are required:
• Invoices Issued/Received [I/R ];
• State [ T/D/N]-state of requested invoices

Inf ormatic syst em of financial management … 213

o T-all invoices
o D-those settled up
o N-those which haven’t bee n settled up
• Time interval requested for invoice date, defined b y:
o Inf Date-date at the beginni ng of t he inte rval
o Sup Date- date at the end of the interval
• How to order {D/P/F}estab lished the order of invoice presentation:
o D – according to the i nvoicing Date
o P – according to the Partne r’s nam e
o F – according to the Invoic e num ber
Note.1.On the message lin e the requeste d para meter is explained.

3.1.3.2. L2 SETTLEM ENT OF INVOICES

This function retrieves from the data bases the spec ific para meters defined
with the above significance , while additi onall y two lis ting variants are offered:
U – list per unit
G – list per managem ents

214 Preda, M .

3.1.3 .3. L3. MATURE INVOICES

This function retrieves the invoices to be settled up in a future period of time
depending on the settlement term in day s and the invoicing date. The significance of
the para meters used is the sa me as in L1.
Note.1. The report is arranged on da ys and invoices a nd has a total per day and
a general total that enables the ad ministrato r to prepare the action required for fulfilling
his engagement.

3.1.3.4. L4 I NVOICES AT THE PARTNER

It retrieves from DBF’s required in th e interval of tim e for one or several
partners, marking t he desired partners is done, putting INS on 1 at t he desired partners,
who are ordered alphabetically .
After marking, CTRL+W or ESC is pressed, aft er the cursor has been shifted
from the last marked partners.
Note1. A tot al per partner is m ade and at settlem ent only the late st pay ment
docum ent is presented.

3.1.3 .5. L5 P ARTNER FILE

It prepares th e file of a partner wher e all the invoices and settlements can be
checked, an d additionall y the balance e volution per each invoice is presented.
Eventually , the balance per partner a nd th e general total is presented: su m total
invoiced, settled and the ba lance due.

3.1.3.6. L6 THE SETT LEMENT SI TUATI ON

It retrieves th e settlements made in a given period and it offers two variants of
presenting results:
– List 1 – un structured – arranged per ty pe of settlem ent docu ment and
settlement date with total am ount per day and document t ypes;
– List 2 – structured in two zones – invoice settlement in the previous
period and i nvoice settlement of the cur rent m onth.
The inform ation is put in order accordi ng on the level of docum ent type, period
and report.

3.1.3 .7. L7 R ECEIPTS LIST

It retrieves the pa yment docum ents whose num ber is com prised within an
interval given by the user and which are or dered accor ding to the docu ment num ber. It
allows checking the pa yment docum ents.

Informatic syst em of financia l management … 215

3.1.4 SERVI CES

This option comprises activities that ensure i mproved s ystem reliability ,
security of the main infor mation stored or spotting certain incidents of the index
alternation t ype.
The main acti ons specific to the option a re:

– Invoice archiving – it allows keeping archives of invoices an d of the
settlements due to t hem for a specified m onth. The saving m ode is
requested:
– T – All: bal ance – free invoices in the solicited month settlem ent.
– D – Settlement in the required interval it is useful for older
variants when only invoices we re kept in the archives.
– DBF saving – it saves only the m ain ba ses of the sy stem. Implicitl y the
flopp y disk is solicited but saving I can b e made on the hard disk i n a
directory chosen by user. The acceptan ce for saving each base is r equested
and finall y the archiving result is displa yed;
– Reindexing – it remakes t he indices afferent to the data base s and
display s the result. It is useful when indices have been altered as re sult of
incidents.

216 Preda, M .

3.1.5 INVOICE BAL ANCE

It offers the possibilit y of generating the balance for the issued or received
invoices each month. The generation equation is observed:

Preceding balance + current entries – current settlement,

and their listi ng.
These functi ons allow the preceding balances to be remade, an aspect which
does not result from the current balance provided b y the other r eports, The structure
and significance of the corresponding m enu is:

• Invoice Balance Listing – it lists the b alance of inv oices is sued in a
month for which generation has been carried out;
• Monthly Bal ance Generated – it generates the invoice balance p er
solicited m onth for customers and suppl iers. The preceding balance
is supposed to exist, if it does not, zero is added to the current month
invoices and the corresponding am ounts are settled up, afterwar ds
the balance per invoice is com puted.
• Invoice Balance Centrali zer – it li st the balance of centralized
invoices per partners and it com prises invoice per partners and it
comprises in voice num ber, invoiced val ue, value sett led and balance
due per suppl ier.

3.2. RECEPTION SUB MENU

It co mprises updating activities of Receipt Notice o r Advices of Dispatch, of
goods classi fied lists bu t also of in voices and corresponding settlement s by a
consulting s ystem of user and also visualiz ing functions of date bases, centralizer
generation consultation and specific ser vices included in the following m enu:

Informatic syst em of financia l management … 217

The role and t he function of menu are given further o n.

3.2.1. UPDATIN G

It allows updating (adding or m odify ing) the notices of receipt and setting the
cash price aft er apply ing tr ade mark up and the V.A.T. The updati ng screen com prises
all the information that will be the obj ect of data processing and has the following
structure:

218 Preda, M .

The significance of the updated fields is:
– No – t ype of docum ent updated NR – notice of Reception, AE –
Advice of Dispatch;
– Current month – the month when the NR was made out is required, the
day which is t ransm itted individuall y does not matter.
– Managem ent – the code of the da ta managemen t which made the
reception is punched or 99 to add a new commission ;
– No – notice of reception num ber which is unique per unit;
– Day – the da y the Notice of Receipt or the Advice of Dispatch was
made out;
– Contract – information regarding the contract or order, if such is the
case;
– Supplier / Cu stomer – the partner in the relation is chosen b y keying
the first letter , then we proceed the same way as for Invoice Updating;
– Docu ment Type – the do cument ty pe taken as a basis for making out
NR, usually the Invoice, is established;
– Invoice No.- t he num ber of acco mpanying invoice;
There follows a list with ele ments fro m the NR which finalizes by “0” or ESC.
• No. – current number position in t he inv oice ;
• Product – the first letter of the item is keyed and then a list of prod ucts
appears, but if 1 is put at t he account these ar e not taken into account
on listing invoices (discount, Taxes, etc.);
• U/M – unit of measure;
• Quantity – quantit y checked and signed for;
• Unincluded VAT price – price without VAT;
• %VAT – the specific VAT percentage for the item , implicitly 19%;
• %Trade mark -up – t he mark-up percentage used, is ori entate;
• S Price + VAT – selling price +VAT after which the m ark-up is
computed again.
Note 1. The list is continue d till 0 is pressed at no or ESC is pressed .
Note 2. With F3 a document is visualized wher e co mmon deletions or
modifications can be made.
Note 3. Addit ional docum ents and enclo sure are requ ested.
Note 4. The inform ation pertaining to the invoice is recorded and it is seen
whether the invoice is receipted.
Note 5. The trans mission of Notice of Receipt ends w ith ESC.

Informatic syst em of financia l management … 219

3.2.2 . BASE VISUALIZ ING

It enables us to visualize the main specific ba se SGF and allo ws to delet e
records by display ing a “.” ( point ) in front, witho ut having t he correlations checked.
The menu structure is the following, and si gnificance is suggestive so it doesn’t need
explaining:

3.2.3. CENT RALI ZER GEN ERATING

It generates a centralizing base in or der to list a r eport on m anagement with
invoce issued and received over a period, as a rule a month.
Note 1. It is o bligator y before launching the report.

3.2.4. CONS ULTA TION

It allows to prepare a large num ber of specific reports useful to the
accountancy activity or managing the three domains: suppliers, customers,
management.
The structure of the correspondin g menu is the followi ng:

220 Preda, M .

The role of the options i n the menu is the following:
• L1 – List of receptions O – lists the rece ptions on A 4 horizontall y;
• L2 – List of receptions V – lists the rec eptions on A 4 vertically , two
on the page;
• L3 – Document list – centraliz er of receptions per nu mber of
docum ents;
• L4 – Manage ment list – ce ntralizer of receptions per manage ments ;
• L5 – Pro duct list – a kind of warehouse file;
• L6 – V/C journal – prepares the journal of sales or purchase s;
• L7 – Partne r Top – pre pares a top list of part ners (Suppli ers /
Customes);
• L8 – Lists fo r excise duties – prepare s a list of it ems for which ex cise
duties have to paid;
• L9 – Central V. Journal – centralized sales journal;

Informatic syst em of financial management … 221

Note 1. Each of the rep orts requires al so the user’s attention in order to
establish the conditions of preparing the reports and some specific parameters that are
similar to those previously presented.

3.3 MANAGEMENT SU BMENU

It allows th e management of the relation adm inistrator – manager and
comprises the activities mentioned in the menu below.
Same of the inform ation are taken directly from previous activiti es: invoices,
receptions but the y are processed in the sp ecific records at the user’ s request. In
addition, the daily settlements write the ad ministration have to be updated by cash
deliveries. Setting out from them two mana gement reports are drafted by m eans of
which the ba lance of e ach manage ment is establis hed based on the sa me pr inciple:
previous balance + current entries – current.

The significance of the activities in the menu is:
• Updating entries – re cords the notices of re ceipt register ed to
management, it is an operation which can be resu med, the records of
the current month being de leted;
• Sales updating – updates the daily settlem ents in management and
establishes the daily balance. The settlements are transm itted dail y and
the balance ar e automatical ly remade.
• L1 – Managem ent Report A – it lists the management report
analy tically per day and for each manage ment register ed;

222 Preda, M .

• L2 – C Man agement Report – lists the centralized report per month
and m anagements. It is useful for m anagement.

REFERE NCES:

[1]. Ionescu T. – Graphs, app lications, E.D.P. Bucharest 197 3
[2]. Knu th D. – Fundamental algorithma s, E.T. B ucharest 1974
[3]. Man M. – Bazele co ntabilității, Ed. Sc risul Rom ânesc, Craiova , 1998
[4]. Documentation of FoxPro 2.6 pro duce

Annals of the University of Petro șani, Economics, 4 (2004), 223-230 223

CONSIDERATIONS ABOUT THE STRATEGIC OUTLOOK
ON THE QUALITY MANAGEMENT OF THE ROMANIAN
HIGH SCHOOLS

SORIN RADU *

ABSTRACT: The mission formulating has as purpose the personalization,
particularization of university. It reflects through what it will be differentiate by other
university, wich will has their own identitate, the character and the way that it will traverse in
its development.

KEY WORDS: high scholl, mission, university

1. Strategical outlook of the university.
The mission characterizes the outlook of what a university intend to do and
become, on a long term. Through mission are decl ared the specific of activities, wich it
will enterprise and the way wich mana gement will take in the future.
A correct mission formulated has to answer to the following questions:
• who is that university?
• what is it doing?
• where is it going to?
The mission formulating has as purpose the personalization, particularization
of university. It reflects through what it w ill be differentiate by other university, wich
will has their own identitate, the character and the way that it will traverse in its
development. Without the clear precisation about what it wish on what it doesn’t wish,
about the direction that next activity will has, a university can’t become a lider in its
activity domain. The mission can be establish both for the whole university and for any component in part.
The definitation of university mission, as well as each faculty, partly has to
permite the understanding and definitation of educational activities domain and types
in wich is implicated a university. Because a university develops both teaching activity
and scientific research or a lot of specialized services, the mission’s orientation to

* Prof., Ph. D. at the University of Petro șani, Romania

224 Radu, S.

organized quality makes n ecessary taken in cons ideration all the factors that influences
the quality level of those process/s ervices.
Through m ission of unive rsity must precization the moment when it will give
the strategic direction another way . In the sa me time, the mission has to co mmunicate
in a clear, interesting and concise content.
The outline of mission, in a detail way , realises through strategic direction of
universit y in each of fundam ental do main: teaching activity , scientific research, other
specific servi ces. For exam ple: the concept of teaching activity may be conceived as a
compromise resultant between the following ele ments: what do managers want; what
do the students want; what do the teaching staff want; what the managers and teaching
staff can d o.

Figure 1. Strategic position of a university

Consideratio ns abo ut the s trategic … 225

The strategic direction m ust be in concor dance with what the m anagers want to
do. If what make do a university doesn’t cor espon de with managers aspiration, there
are all chanc es that their interests and thei r implicat ion in m anagerial process to be
reduced, process organiza tion to be inadecv ate and the results are minim. In these
circu mstances, both num ber and teaching and administrative staff loiality will b e
continue dim inuated, will increase their unthanksfull and some of them , probably the
most capable, will leave the university or they will carry on adiacente acti vities,
decreasing the qualit y of their works. The m ost efficient student s will orient ate to
another unive rsities, the on ly atraction ele ment of ne w students being an easy obtaining
of a universit y dipl oma.
What do the students want . If the wishes and aspirations of candidates at the
admission tes t or of students are not sa tisfied, they aren’ t candidate at the admission
test or they will leave th e faculty . Once with the candidates or students loss, the
universit y will be in im posibilit y to conti nue its activity.
The students wishes a re very com plex and different, so metimes even
contadictor y, and that’s why a unive rsity wich is concern on qualit y, must give a
special im portance study ing of differents groups o f students reasonings, and m ust
orientate about “ target g roups ”. Through student s reasonings should be teaching
process quality and corespondance of their ac tivities with the most performances
standards of european universities , but also the easiness of admission acces, the
facility of exams promotion and obtai ning a universitary diploma or the posibility of
benefit some social faciliti es (scholarshi p, hostel).
In some situa tions, both the manager s and the teaching staff wish to m aintain
or even extend of one particular kind of teaching activity, forget to take in
consideration the m utations that take places in reque st’s structure. In industrial units ,
such a conception m eans “stock production”. If there is still a chance that over a y ear,
or two or ten years, so mebody buy however that product, i n higher education such a
thoug ht has immediate effects. “The overpr oduction” of u niversit y diplom as can lead
quick to degradation of the university im agine and to request decre ase even under
norm al limits. These structural disfunctions ar e the heaviest to overtake, esspe cially in
state university, in case in wich doesn’ t exist a fast feedback in what depend of activity
cicle potentional, and the d ecision organism at a natio nal level are proved n ot capabl e
to use a set of lever that a re very used in european s ystem . Due this fact, acco rding to
World Education Report (1993), elabor ated by UNESCO, ro manian higher education
structure continue to carry , in a pregnant way, the mark of organization conception of
soviet education.
What does the teaching staff want. If university direction i s contrary to
teaching staf f values and aspirations, the managers’ decisions will meet t he staff
resistance an d the y will l ose fro m efficacitate, the teachers try ing to realise only not to
get in trouble. The nu mber of control atri bution pers on and of tho se fro m ad ministrate
activities wil l have to increase and t he ope rators efficacitate will decrease fast .
Students will notice the interests absence of teachi ng staff and the activity quality
degradation, t he best of them make their choice for another uni versity.

226 Radu, S.

What can do the managers and the te aching staff . The most fre cvently, the
romanian universities are confrunted with the sa me sit uation. In the ir desire to maintain
or increase the num ber of teaching staff a re orientated to developm ent some
specialities and t ypes, for wich the request is ex cedentary , but their universitary
preparation, and especial ly m entality and experiences fro m former periods ar e
limitated in a delicate way the efficienc e of activities. In a current way, The objectives,
dimensioned depending on request, are ove rtaken the hum an potential necessa ry the
quality of teaching staff is decrea se in continue way even if organization objecives ar e
directionated to excelence and quality . With a such of situation are confrunted both
universities a nd faculties a t wich the nu mber of stud ents increa se by far over the level
wich can assume both the quality standards and t hose, wich in standards absence,
invent new sp ecializations with “ comme rcial names ”.
The stategic outlook of a c ompetitive uni versitary must be position in t he place
in wich there are intersect ed all of four ty pes of factors wich deter mined the es sence,
the contant and prop ortio n of higher educati onal activities. The strategic orientation of
universit y has two esential co mponents: outside outl ook and i ntern outlook.
The outside outlook resulting from reporting a t students necesiti es and
requests, co nsist in> the establish ment the target students group, positi on in
educational system , detai l definition of educational services concept, operational
strategy , integration way s of strategical system , offering sy stem of educat ional
services.
The internal outlook , resulting from reporting of te aching and adm inistration
staff necessiti es and requests, consist in: establish ment the personal segment; position
of hum an resources management; detail definition of educational services concept; the
specification of strategic orientation abo ut difference between financial and unfi nancial
rewards values got by teaching staff; the integration way s of strat egic sy stem in hum an
resources ma nage ment; operational strategies on its own personal.

2. The quality manageme nt of the university
After 1989, as a result of laws development process, the university autonom y is
extending in a continue way , getting to include both decisions, wich refer to
programme structure, curricula, groups of stud y, and those concern the expenditure
way of financial resources.
Simply that, this extension of uni versity autonomy made that in decision
adoption at university level, the directio n place and nationality rationament, centralize d
to be taken by specific interests of te aching staff and leadership f rom ea ch university ,
being neglige nt in the most part the req uests on market work. The public control, as a
practise form of persons right, of civilian society is al most like non-existent.

Consideratio ns abo ut the s trategic … 227

Figure 2. The direction of deciding ra reasonings at university’s level in
development conditions of autonomy degree

The m ission form ulation haven’t to be flat. From mission have to result why
the university reorientates to a new dire ction in quality manage ment. The expression
has to be simple, concise and display ed with clarity . It hasn’t to let any doubt on the
way that managem ent will take in future . For a best co mmunication of m ission, this
has to:
• to cry stallize the points of view of top-m anagers about unive rsity
direction on a long term ;
• to specify the support t hat the university leadership will gi ve to
teaching and administration staff and to students;
• to communicate the organization obj ectives about quality and t he fact
that the teaching staff and t he students have the abilit y of challengi ng a
change in the ir work;
• to show how the universit y is prep aring f or its future direction.
After the mission and stategic outlook have been defined, the managers have to
act for obje ctives and s trategies materialization. All of these are come t o their
knowledge th rough specifi c means of communication.

228 Radu, S.

RECTO R
QUALITY MANAGEMENT COU N
OF UNIVERSI TY (CMC)
iRector
ivice-re ctor
iScientif fic secre tary
i Administrative General Director
iDeans of faculties
iDirecto r calit ate
Pro-quality
Department of
UP
(P-Q-CU)
– Director pro-quality
– Reprezentatives of
Vice-r ectors, AGD ,
Deans
– IT expert
– Sec retary Administrative
General Direc tor
(AGD) Dean
Facu lty 1Dean
Facu lty iDean
Facu lty n
QUALITY MA NAGEME
COU NCIL OF
ADMINISTRATI VE
DEPARTMENT
-AGD
-Deputy AGD
-Departm ent Heads
-Reprez entative of
AGD in P-Q-CU
-Quality m anagen ment
responsible in Adm . dept QUALITY MA NAGEMEN
COU NCIL OF FACULT Y
-Dean
-Deputy Dean
-Scienti fic secretary
-Deads of Dep artments
-Quality man agement
responsible of the
Facult y i
-Reprez entative of dean
in CMC
Pro-qualitat y dept of
administr ative departm
– Quality Managem ent
Responsible
-1 – 2 members
-Secretari ate Pro-qualitat y dept of
Facult y i
-Quality m anage ment
responsible of the Faculty i
-Reprezentatives of
depar tments
-Secre tariate
Head de p. 1 Head de p. j Head De p. n
Quality manage ment group o f
depar tment – 1- 2 members

Figure 3.

Consider ations a bout the strategic … 229

3. The quality manageme nt at the University of Petrosani
The problem of a new wie w of the university manage ment appeard because of:
• The necessit y of im plementing qua lity manage ment sy stems in highe r
education establish ments
• The structures to be activated in this matter at the University of Pe troșani
• The principle s and m ethods to be used
Introducing qualit y management sy stems in Rom anian Universities takes into
account:
• The relations between university and soc iety,
• The relations between different com ponents of the Uni versity .
Necessity of a quality management system and of an ins titutionalized
framework im posed by the following factors:

Internal
The existenc e of a body which insures the accredit ation periodi cally : National
Council of A ssessment and Academ ic Accr editation (CNEAA) i mpose the necessity of
an entity which insures between two consecutive ac creditations:
• continuit y of performances and their im proving
• adaptation of universities t o the cha nges of the expectations of societ y
and labor m arket
• At National l evel:
National Council of Quality Mana gement in Higher Education
(CNMCIS). CNMCIS prom otes the Qu ality management sy stem , guaranteeing
the activities in the University towa rds publicl y expressed competencies
prepare the U niversity for Accr editation.
• At institutional level:
Structures pro-qualit y

External
Priority observed and encouraged by E.U.
The sintethic presentation of the quality m anage ment at the University of
Petrosani is shown in fi g.3
Main sub-sy stems envisag ed for the qua lity manage ment are:
• didactic,
• resea rch
• administrative
For the im plementation and developm ent of a quality manage ment sy stem reque sts
• a climate of institutional econom ic and social stability alowing the individual
and colectivities to aprecioate the qua lity m anage ment and assimilate it as
prom otor of t he perspective
• existence of appropriate to ols, methodol ogies and stru ctures
Introducin g the qulit y management sy stem the following o utcom es are foreseen:

230 Radu, S.

• coherence an d consistenc e of m anagement,
• creation of mechanis ms to i mprove educational services,
adaptation of individual and collective offers of teach ing staff to
the labor m arket demands
• involvm ent of students and staff in the establish ment of
guaranteed goals and outc omes
• motivation of regional and nationa l role of the uni versity and
fulfillm ent on a transparent use of ressources
• god placem ent in the intern al hierarchy .
• compatibility and harm ony with foreign universities.
• international recognition.

REFERE NCES:

[1]. Bu rton R.C. – Towards a Antre prenorial University , Editura Paideia, Bucure ști, 2000
[2]. Iliaș N., Andraș I., and so – The Quality Mana gement at the University o f Petrosan i,
Proceedi ngs of the Interpartner Confere nce, Alușta, Ucraina, Sep tember 2002
[3]. Pa naite N. – The Qu ality Management and the Ranking o f the Romanian Universities ,
Paideia, București, 20 00

Annals of the University of Petro șani, Economics, 4 (2004), 231-240 231

CONSIDERATIONS FOR THE MINING ACTIVITY
ANALYSIS THROUGH THE OUTPUT THEORY

SORIN RADU, GABRIEL DOLEA *

ABSTRACT: In this paper it makes appeal to the output theory and the definition
output function is characterized by some economical-mathematic indicators. The output
concept is quite large and it refers at both material goods production through economical-
industrial processings, and at work execution on service performances.

KEY WORDS: output theory, efficiency, mining activity

Each output activity has a both technical aspect and an economical one. The
both aspects are in mutually interaction and thus, both the engineer’s target and the
economist’s one is to appreciate from the both points of view the output activity and to
act on it.
In this paper it makes appeal to the output theory and the definition output function is characterized by some economical – mathematic indicators as: the total output, (the total productivity), the average productivity, the limit productivity, the gradient vector of output function.
For instance it has considered the hypothetical case of one output system
(mechanized mining), and the acquired results allow us to set off the way in which
must lead the output activity with a view to improvement the output system
performances.
The output concept is quite large and it refers at both material goods production through economical – industrial processings, and at work execution on
service performances. In all these cases, the output theory focuses on efficiency using
of entering elements or of inputs, to realise the outputs.
The output theory observes the techni cal and economical characteristics of
utilized systems to provide goods/services, having as purpose the optimum methods of
combine the inputs like that a certain quantity of outputs are obtained with minimal

* Prof., Ph.D. at the University of Petro șani, Romania
Assoc. Prof., Ph.D. at the University of Petro șani, Romania

232 Radu, S.; Dolea, G.

costs. So, the output theory is the input – process – output theory and it defines an
output functi on which put in correlation the i nputs with the o utputs. T his output
function specify the possible maxi mal output that can be realized with certain outputs
quantit y resul ted from certain inputs or inver se, that is the minimal quantit y of inputs
necess ary for a certain output volum e.
For instance, let’ s consider a c ertain o utput s ystem (the mechan ized mining
system ) with the output function P, by the following form :

P = X1 · X 2 ·X3 (1)

where: X 1, X 2,X3 – represent the output factors at the activity’s level display ed in the
system cadre (respective at mechaniz ed mining level).
In general, throug h ou tput factors, which can be also named input factors,
understand the goods put i n func tion for producing and retailing, also for obtaini ng the
functional stocks of sy stem . The outputs mean the goods which result throug h some
output factors co mbination. The output factors ar e distributed in two classes: th e
decision fact ors and the ele mentary factors. The e lementary factors are divided in:
consum ption factors, which enter in go ods com ponence (substantial or unsubs tantial)
and potential factors. Co nsequentl y, the perform ed posts per day (X 2) represent a
potential factor. The other two present factors in output function are:
X1 [day s] – factor of extensive nature representing the period taking for analy sis
X3 ⎥⎦⎤
⎢⎣⎡
posttones – factor of intensive nature representi ng the work productivit y.
Taking all these aspects in account, it can descr ibe an output function in
microecono mical theory , thus:
“If the quantities of each output factors 1, 2, 3, …, m are noted wit h V1, V 2, …,
Vm and are considered as determinati ons variables, and the obtained quantities as
dependent variable then at the producin g of one sing le kind of pr oduce (for exam ple:
the coal) in P(t) values, the output fu nction is obtained from an eq uation s ystem by the
following f orm:

() m, R/ V,…,V,VfPm R 12 1 = = (2)

The right pa rt of the equation s ystem extend at a determ ined num ber of
different outp ut factors: 1, 2, 3, …, m .
Consequentl y, the (1) equation of outp ut it can consider as a component part of
such an equat ion sy stem , in accordance with the P p roduction has the possibility of to
alternate depending on the three influen ce values: X 1, X 2,X3 – variations which return
different aspe ct of costs.
If in the (1) output eq uation m odify the output factor X 2 with the λ quantit y,
then result fo r X 1and X 3 factors (constants) the outpu t quantit y: λ · P = λ1 · P. T hrough
this, the partial output function (1) represent a fir st degree o mogene function, so a
partial output function l inear o mogene.

Considerations for the mining activity analysis … 233

For a C degree om ogene o utput f unction, result:

( )o C o
Vo
Vo
V X ,…,, X X
m⋅= = λλλλ
2 1 (3)

where Xo – represents the good quantit y for λ = 1.
If all the three variables X 1, X 2 and X 3 are measure each with the same quantity
λ, then result the output quantity λ3 · P. As concern the three influence values X 1, X 2
and X 3 the ou tput fu nction is thus a third degree om ogene function.
If the influence values of the output qua ntity X1, X 2 and X 3 are noted with V j/j
= 1,2,3, variable, then result for the o utput functio n, the next gener al way of writ ten is:

(4) () ∏
=≥⋅ =⋅⋅=3
13 2 1 0
jj jX/X XXXtP

For a sy nthesis of each relations dedu ced here and of parameters for each
treble index (1, 2, 3) according with numerica l values for j/j = 1, 2, 3 – define the index
pair [a = a(j); b = b(j) ] as a complement respective for j, that is le t to express t hrough
(a, b, j) = (1, 2, 3)/ j = 1, 2, 3 thus for example for j = 2 the index pair (a, b) is equal with
(1, 3) rem ain the sam e if a = 1 and b = 3 or if a = 3 an d b = 1.
That is, the output f unction (4) can also write in the next general form :

()()()
021
3 2321
≥=⋅⋅==
X,X,Xj,, j,b,aXXXtP
j,,j
b a j (5)

The output function is characte rized by an econom ical – mathe matical
indicators ser ies.
That is, a first indicator – the total produce (PT) utili ze for no minate the total
output of a pr oduction s ystem in a fixed period. The total produce is the indicator that
measure the input elem ents quantit y or the total pro duction which result as an answer
of using som e resources specify quanti ties in a production s ystem . The total produce
relation by one sim ple var iable show that the input elem ents quantity in according with
a simple input “ceteri s paribus”.
For this relat ion type the function is known as the productivi ty factor, return
factor or answer factor. The productiv ity factor is the key elem ent for the determination
of the opt imum input elements co mbination, whic h must use at the obtaini ng of a
certain produce. Through the total productiv ity of one output f actor at production
realization P (in case of realization one simple produce) understand the P quantit y
which obtain throug h the p roduction fac tor cons iderated when the others are remainin g
constant. Reported at prod uction fu nction P = X 1·X2·X3 result that the total productivit y
of X j variable is:

()j)c(
b)c(
a tot X X X)t(Pj⋅⋅= (6)

234 Radu, S.; Dol ea, G.

where (c) rep resents the co nstant sy mbol.
For exe mplification, we ta ken the cas e of a hy pothetical mechani zed mining,
for which we consider the following:

[]
⎥⎦⎤
⎢⎣⎡=⎥⎦⎤
⎢⎣⎡==
posttoneXdaypostsXdays X
)()()(
53020
0
30
20
1
(7)

We obtain the following values for the total productivity.

()1 1 1 3 2 150 530
1X X X X X)t(P)c( )c(
tot ⋅=⋅⋅=⋅⋅=
()2 2 2 3 1 100 520
2X X X X X)t(P)c( )c(
tot ⋅=⋅⋅=⋅⋅= (8)
()3 3 3 2 1 600 3020
3X X X X X)t(P)c( )c(
tot ⋅=⋅⋅=⋅⋅=

Another indic ator, the medium productivity Pmedj of variable calculate reporting
its total productivit y Ptotj at X j, that is:

)c(
b)c(
atotj
med X XdayP
Pj⋅=⎥
⎦⎤
⎢
⎣⎡ (9)

For the considered exa mple, we have:

1503 21=⋅=⎥⎦⎤
⎢⎣⎡)c( )c(
med X XdaytP
1003 12=⋅=⎥⎦⎤
⎢⎣⎡)c( )c(
med X Xday/ptP (10)
6002 13=⋅=⎥⎦⎤
⎢⎣⎡)c( )c(
med X Xp/ttP

Another very im portant indicator used in productio n function analy sis is the
limit productivit y of a X j variable. Also nam ed marginal, P limj is the variation rate of
the general p roductivit y of X j variable reported at X j variations and is defined throug h
the productio n quantit y derivate P after X j vari able (the partial derivate of P in report
with X j). That is:

b a
jlim X XXPPj⋅=∂∂= ( 11)

Considerations for the mining activity analysis … 235

For given val ues: and , the right part of relation (11) i s the
same with the right part of relation (9). )c(
a aX X=)c(
b bX X=
So:
(12) )c(
b)c(
a med lim X X P P
j j⋅==

Another analy sis in dicator of out put f unction is t he output elasticity ωj in
comparison with Xj variable. With this indicator it can recognize how much depend th e
relative variable of pro duction q uantity P of the relative variation of X j variable.
The output elasticity ωj is defined as:

j j j jXjj
XjXP
XP
XP
XPlimXX
PPlim
j j ∂∂=∆∆=∆∆=
→∆ →∆ 0 0ω (13)

Consequentl y, the output elasticity is defined as a report between the lim it
productivi ty and the m edium one:

medjjlim
jPP
=ω ( 14)

For P = X 1 · X 2 ·X 3 = X j · X a ·X b results:

ω = X a · X b/Xa · X b = ω1 = ω2 = ω3 = 1 (15)

The su m of the three output elasticities is equal with 3 and also equal with the
omogene deg ree of the out put fu nction.
Another indi cator is the l imit product ∆Plim of variables X 1, X 2 and X 3 that
show how at small variations dX 1, dX 2 and dX 3 modify in the sam e time the prod uction
quantit y P.
The lim it total product ∆Plim correspond mathematical to total differentiate dP
of the prod uction functio n and it is equal w ith the sum of the partial lim it products
(νP/νXj) · dX j, that is:

3 2 1 2 3 1 1 3 23
13
1
dX X X dX X X dX X XdX X X dXXPdP P
)c( )c( )c( )c( )c( )c(jj)c(
b)c(
a j
j jlim
⋅⋅+⋅⋅+⋅⋅==⋅⋅=∂∂==∆ ∑ ∑
= = (16)

For the supposed exa mple:

P lim = dP = 150 dX 1 + 100 dX 2 + 600 d X1 (17)

The total dif ferentiate is the general form of tan gential plan at area (or
hiperarea) wh ich represent the function:

236 Radu, S.; Dol ea, G.

If:
)c(
j j j j X X X dX −=∆=
( 18) )c(
jPPP dP −=∆=

then the expression:

(∑ ∑
= =−∂∂=−=∂∂=∆3
13
1 j)c(
j j
j)c(
j
j jX XXPPP dXXPP ) (19)

Represent the tangential hiperplan equati on at hiperare a of third degree in
coordinate po int ( ). )c( )c( )c( )c(P, X, X, X3 2 1
The outpu t function P = X1 · X 2 ·X3 in the coord inate point d efined above
correspond t he producti on constant q uantity P = P(c) and for which the pr oduction
quantit y variation dP = 0.
The tangen tial plan at issoquan tum X 1·X2·X3=P(c) in the point
( ) will result from (19) and will be express fro m equat ion: )c( )c( )c( )c(P, X, X, X3 2 1

() ()03
13
1=− ⋅=−∂∂∑ ∑
= =)c(
j j
j)c(
b)c(
a)c(
j j
j jX X X X X XXP (20)

For infinitesi mal variations X j – X j(c) = dX j, the production q uantity P rem ain
constant and equal with P(c) and so dP = 0.
In these conditions the relation (16) becomes:

03 2 1 2 3 2 1 3 2 =⋅⋅+⋅⋅+⋅⋅ dX X X dX X X dX X X)c( )c( )c( )c( )c( )c( (21)

If one of t he determ ined variable variations dX j is equal with 0, then ( 21)
reduce at a bidimensional relation:

(22) 01 3 2 1 2 3 1 = ⋅⋅+⋅⋅ dX/ dX X X dX X X)c( )c( )c( )c(

which correspond the issoquantum curves equation.

in coordi nate plan (OX
)c()c( )c(
X XP XX X
1 13 2 1
==⋅⋅
2, OX 3) with:

From relation (22) we obtai n:

01 3
32
2 = ⋅−= dX/ dX
XXdX)c()c(
(23)

Considerations for the mining activity analysis … 237

The report: – dX m/dX n can be considered as a techni cal substitution rate (that is
a quantit y variation of t he output factors).
If we will transm it this not ion a bout the determ ination variable X 1, X 2 and X 3,
we obtain:

000
3
21
21
212
31
31
311
32
32
32
= −=−=⎥⎦⎤
⎢⎣⎡= −=−=⎥⎦⎤
⎢⎣⎡= −=−=⎥⎦⎤
⎢⎣⎡
dX/
dXdX
dXdX
Ptday QdX/
dXdX
dXdX
Ptday QdX/
dXdX
dXdX
Pt
dayPQ
)c()c(
,)c()c(
,)c()c(
,
(24)

For the hypot hetical exam ple, result the next substitui te:

0 66030200 45200 6530
3
21
212
31
311
32
32
= ==−== ==−====−=
dX/,
dXdXQdX/
dXdXQdX/
dXdXQ
,,,
(25)

In pro ductive practical, the output days num ber X 1 in com parison with X 1(c)
value, as a rule oscillate a little or even not oscillate. Contrary , the perfomed
productio n points variatio n X 2 and of the prod uctiv ity X 3 need to keep permanently
under observation. From these considerence, the substituite rate is returned a pr actical
value.
A last analy sis indicator is the math ematical ope rator, which indicate the
increase dire ction of the powerful function P = X 1 · X2 ·X 3.
This is the gr adient vector of functio n P = X 1 · X 2 ·X 3, which is d efined thus:

3
32
21
13
1eXPeXPeXPeXPP gradj
j j ∂∂+∂∂+∂∂=∂∂=∑
= (26)

where: 3 2e,e,ej – represent the unitary vectors of chartezian coordinate axis: OX 1,
OX 2, OX 3.
For the coord inate point ( ) result: )c( )c( )c( )c(P, X, X, X3 2 1

3 2 1 2 3 1 1 3 2 e X X e X Xe X XP grad)c( )c( )c( )c( )c( )c(⋅+⋅+⋅= (27)

238 Radu, S.; Dol ea, G.

The given tot al differential throug h (16) can be considered as a scalar product
between the vector “grad P” and the unit ary vector of coordinates axis (vectors).

3 3 2 2 1 13
1e dXe dXe dX e dX Sdj
jj ⋅+⋅+⋅=⋅=∑
= (28)

For variation dP in Sd direction, we obtain :

SdP grad dP ⋅= ( 29)

If we choose the Sd direction in such manner that Sd to fall in a issoquantu m
area P = P(c)= constant, so that dP = 0 that is the gradient “grad P” is perpendicular in
comparison with the issoquantum P = P(c), then result:

Ψ⋅⋅ =⋅= cosSdP gradSdP grad dP (29)

And from this relation result that the function P = X 1 · X 2 ·X3 for Ψ = 0 (that
is in gradient’s direction) increas e the most.
For the consi dered exam ple, result explicit:

3 2 1 600 100 150 e e e P grad ⋅+⋅+⋅= (30)

This vector “stay ” in the point ( X 1 = 20; X 2 = 30; X 3 = 5) on issoq uantum area
X1 · X2 ·X3 = 20 · 30 · 5 = 3. 000 [t], and thr ough this is perpen dicular also o n the
tangential plan:

150 dX 1 + 100 dX 2 + 600 dX 3 = 0 (31)

or more exactly :

150 (X1 – 20) + 100 (X 2 – 30) + 600 (X 3 – 5) = 0 (32)

The variation dP is maximum if the change of place’ s vector Sd is on the
same direction with the ve ctor “grad P”, that is then when:

P gradC dS=

where: 2
32
22
1 dX dX dX Sd dS ++== , C – positive const ant.
Reporting the com ponents of these two vectors, we obtain:

Considerations for the mining ac tivity analysis … 239

C
XPdX
XPdX
XPdX
P graddS=
∂∂=
∂∂=
∂∂=
33
22
11 (33)

For the considered exa mple, we have:

600 100 1503 2 1 dX dX dX== ( 34)

and from here, result:

3,2 323,1 312,1 21
116,0600100125,060015015,1100150
Q Pt
dayP
dXdXQ Ptday
dXdXQ dayPday
dXdX
===⎥⎦⎤
⎢⎣⎡===⎥⎦⎤
⎢⎣⎡===⎥⎦⎤
⎢⎣⎡
(35)

The “grad P” vector value, that is P grad indicate the biggest variation of P
reported at Sd, that is:

2
32
22
1⎟⎟
⎠⎞
⎜⎜
⎝⎛
∂∂+⎟⎟
⎠⎞
⎜⎜
⎝⎛
∂∂+⎟⎟
⎠⎞
⎜⎜
⎝⎛
∂∂= =XP
XP
XPP graddSdPmax (36)

and for the considered exam ple:

498626 600 100 1502 2 2, P graddSdPmax)c(=++= =

For findin g the biggest variation of fun ction P = X 1 · X 2 ·X3, we will express
the variation dX 1 and dX 2 in com parison with dX 3 and obtain:

3 32 2 20431 1 160 250 dX , dX , , Sd dS ⋅=⋅++== (37)

so that, we obtain:

⎥⎦⎤
⎢⎣⎡= ⋅= =Ptt, , , P grad,
XddPmax 4653 498626 0431 0431
3 (38)

240 Radu, S.; Dol ea, G.

In com parison with relation (10) an d (11) result:

⎥⎦⎤
⎢⎣⎡=⋅=∆=∂∂=∆Ptt PmedXPlimP 600 30203
33 (39)

From comparison the relation (38) and ( 39) follow that the existent increase
3XP
∂∂ and the parallel at the coordinate OX 3 approach of maximum corresponding wi th
grad P vector ’s direction re ported at dX 3 component ( max3dXdP ).

REFERE NCES:

[1]. Bu sse von Colbe, G. L assman – The economical the ory of output, Vol.I, E ditura Spriger,
Berlin Heidelberg
[2]. Schneider D. – Investments an d financials, Editura Springe r, Berlin Heidelberg
[3]. Wo he E. – Introductio n in gene ral ec onomy science of output, Editura Franz Vohler,
M unchen

Annals of the University of Petro șani, Economics, 4 (2004), 241-244 241

DEONTOLOGICAL CODE OF THE INTERNAL AUDIT

ILIE RĂSCOLEAN ∗

ABSTRACT: The function of Internal Audit is executed according to the Norms
defined by the Profession. It is organized at inte rnational level and it complies with common
rules which are self-imposed.

KEY WORDS: internal audit, The Institute of Inte rnal Auditors, norms of internal
audit

The function of Internal Audit is ex ecuted according to the Norms defined by
the Profession. It is organized at international level and it complies with common rules
which are self-imposed.
In the year 1941, “The Institute of In ternal Auditors” (I.I.A.) was founded in
the United States and it gradually developed to international level as the number of
affiliated national Institutes grew.
Thus, this world-wide organization gathers today almost 70.000 members from
110 countries, having a particularly important activity in the field of professional
training and research, publishing papers and their own magazine called “The Internal
Auditor”. Also they organize a professional examination which is more appreciated
every time: The Certified Internal Auditor examination (CIA); they organize
conferences and colloquies, and define no tions for all its members, including those
adhering to the International Fede ration of Accountants (IFAC).
The Internal Audit is the object of other groups as well, like: the European Confederation of Internal Audit Institutes and the Francophone Union of Internal
Audit. These two groups allow frequent and useful exchanges for the benefit of the
International Community of Internal Audit.
The Norms of Internal Audit have b een periodically revised, and the last
revised variant came into effect on the 1st of January 2002.
The Norms of Internal Audit propose the following objectives:
– to define the fundamental principles;

∗ Assoc. Prof., Ph.D. at the University of Petro șani, Romania

242 Răscolea n, I.

– to provide a frame of ref erence;
– to establish the criteria of appreciation;
– to be an elem ent of im provem ent.
The Norm s of the Internal Audit are divi ded in 5 parts:
● Deontolog ical Code
● Qualificati on Norms which reveal t he characteri stics that must be fulfilled
by the internal audit services as well as the persons in volved;
● the Operat ion Norm s which describe the internal audit activities and also
define the criteria of appreciation;
● Implem enting Norm s which exclude the previous ones concerning the
specific m issions;
● the practic al application Procedures, which are optional but considered as
authorised.
The deontol ogical code subm its to four fundam ental principles:
– integrit y – as a foundatio n of the confide nce granted to the auditors ;
– objectivit y – ensured by the internal audit ors’ attrib ute of “totall y independent”;
– confidentialit y – which is i mperative, wi th the exception of legal obligations ;
– competence – which im plies the c ontinuous updating of their knowledge.
These principles can also be found in the co nduct rules belo nging to the
Deontological Code, which are:
– to carry out the missions correctly ;
– to respect the law;
– not to participate to illegal activities;
– to respect the ethics;
– to be im partial;
– not to accept anything that can co mprise the decision;
– to avoid si gnificant actions;
– to protect the inform ation and n ot to seek any personal privilege;
– not to do only what can be done and to improve their abilities;
– to respect the Nor ms.
Referring to t he Deontolog ical Code of t he Internal Audit, Jacques Renard, an
authorit y in this field, m akes the following remarks :
“In these agitated ti mes when ethics are often he avily put to the test, the
internal audit ors wanted t o indicate the strict path of ri gour. To this purpose, the
docum ent cl early summa rizes the principles which the internal auditor must not
withdraw him self fro m; otherwise he woul d betr ay his mission. Certainl y, these
principles can im pose redoubtable cases of conscience when the practise will find itself
in balance opposed to ob eying the rul es.” ( Jacques Renard, Theory and practice of
internal audit, Published b y the Ministr y of Public Fi nance, Bucharest, 2003).
The Ro manian Cham ber o f Auditors has elaborated the Code concerning the
ethical and p rofessional conduct i n the fiel d of fi nancial audit starting wit h a few
essential considerations:

Deontol ogical code of the internal a udit 243

◘ due t o the differences of culture, la nguage, legis lative and so cial sy stem
from various countries, the assign ment of elaborating the ethical norm s firstly belongs
to the specifi c organisms from every countr y. They also have responsibilities regarding
the im plem entation of such Standards;
◘ the i dentity of t he internal auditor profession is characteris ed at world-wide
level b y setting a certain num ber of co mmon goals and also abiding by certain
fundam ental principles for this purp ose.
The Code includes three parts:
● Part A – applies to all pr ofessional financial auditors;
● Part B – ap plies onl y to public financi al auditors;
● Part C – applies to the em ployed fina ncial activities.
The fundam ental principle s and the con duct rules established thro ugh t he IFAC
International Audit Standards are used in the Ethical and professional conduct code
concerning th e financial audit elaborated b y the Rom anian Auditors ’ Cham ber.
For appl ying the ethical requirem ents in the int ernational activities, the
following procedure will be used:
– when the ethical requirem ents of the countr y whe re the services are being
rendered are less severe than the IFAC Ethical Code, then the IFAC Ethical Code must
be applied.
– when the ethical requirem ents of th e countr y where the services are being
rendered are more severe than the IFA C Ethical Co de, then the ethical requir ements
from the certain countr y must be applied .
– when the ethical requirements of the origin co untry are m andator y for t he
services rendered outsid e that count ry and they are more severe than the ones
mentioned above, t han the ethical requirem ents from the origin countr y must be
applied.
At present i n Romania t he internal audit activit y is controlled through the
Governm ental Ordinance no. 1 19/1999 and ap roved with m odifications and ad ditions
by the law n o. 301/2002 concerning t he public int ernal audit and the gener al norm s
concerning th e exercise of the public i nternal audit activit y, aproved by the or der of the
Ministry of P ublic Finance no. 38/2003.
The public internal audit is organized as follows:
– the Committ ee for the Internal Publi c Audit (CAPI), organis m with advisor y
character, wh ich takes acti on with regard to defining the strategy and im proving the
internal audit activity , in the public sector;
– the Central Unit of Harm onization for t he Internal Public Audit ( UCAAPI), divided
in specialty compartments, directly subordinat ed to th e Ministry of Public Financ e.
– public interna l audit com partments belonging t o the public entities.
UCAAPI has am ong its responsibilities also that of elaborating the Ethical
Conduct Co de of the i nternal auditor, as well as resp ecting the pri nciples and c onduct
rules im posed. The purpose of the Eth ical conduct code for the internal audit or is to
prom ote an ethical culture as a part of the globa l image of the internal auditor
profession.

244 Răscolea n, I.

These principles are:
– independence – revealed by the fact that the public internal audit co mpartment is
directly subordinate to the leader of th e public entity, exercising a distinct and
independent f unction fr om the activities of the public entity;
– objectivity – according to which the intern al auditors must have an i mpartial
attitude, not to have prejudice and to avoid conflicts of interests;
– competence – which considers that the tr aining and experience of the internal
auditors represent an es sential ele ment in reaching the effective ness of the a udit
activity ;
– professional conscience – according to whic h the internal auditor m ust disp lay
increased vig ilance with regard to the si gnificant risks susc eptible to affect t he
objectives, activities and resources of the public entit y.
According to the Procedural Guide of the public internal audit activity the
principle of objectivit y ensured b y the independence of the auditor is protected th rough
a distinct procedure called the “Independence Decl aration”.
Thus, the ind ependence of the internal aud itors chosen to participate in a public
internal audit mission must be declared . To this purpose every internal auditor m ust
draw up a declaration of independence becau se their personal incom patibilities must be
verified.
An auditor will not be assigned wher e there are personal incom patibilities,
unless his appointm ent is absolutely necessary , and to this effect the leader of the
public interna l audit com partment w ill provide written justification.
If during t he audit m ission a real or presumed inco mpatibilit y shoul d occur, the
auditors have the obli gation to ur gentl y inform the managem ent.
Among the existing personal incom patibilities there are:
– official relati ons, financial or personal, with so mebody who coul d lim it the ability
of the auditor to discover and establish audit debili ties by any means possible;
– preconceived ideas concerning differ ent persons, grou ps, or ganizations or
objectives that could i nfluence the audit mission;
– possessing a job or an y involvem ent in the last three y ears in the activity of the
audited structure;
– having previo usly organized the account ing of t he aud ited structure;
– having previ ously done the approval of invo ices, cheques or other pa yment
instruments for the audited structure.

REFERE NCES:

[1]. Ren ard J. – Theory and practice of t he internal audit, Ministry of Public Fina nce,
Bucha rest, 2003
[2]. *** Finan cial Audit – 20 00 Standard s, Code re garding the eth ical and professional
conduct, R omanian C hamber of Auditors, Bucharest, 2000
[3]. *** Order of the Public Fina nce Mi nistry n o. 38/2003 with rega rd to the app roval of the
Gene ral N orms concerning t he exercise of the Internal public audit activity , Official
Gazette no. 130/2003

Annals of the University of Petro șani, Economics, 4 (2004), 245-252 245

ZUR FRAGE DER MÖGLIC HKEIT DER ANWENDUNG
DER PRODUKTIONSFUNKTIO N VON GUTENBERG FÜR
DAS STUDIUM VON PRODUKTIONSSYSTEMEN
IM BERGBAU

MANUEL-VIOREL SEMEN *

ABSTRACT: The complex conditio ns and realities of the production processes of the
mining industry require equally complex and hi ghly developed theoretical-abstract instruments
for their scientific inves tigation and research. On e of these instruments could be identified in
the production function of type B (Gutenberg ). The present approac h tries to outline a
historical evolution of the concept of production function, to describe the main stipulations of
Gutenberg’s concep t, and finally, to advance some considerations regarding the possibilities of
using this function for the study of processes in the mining industry, drawing rather valuable
conclusions from this attempt.

KEY WORDS: production function/factor, consum ption function, optimal, mining,
process

1. EINE KURZE HISTORISCHE EINORDNUNG DER
PRODUKTIONSFUNKTIONEN

Der Begriff und die ganze Diskussion über die Produktionsfunktionen stammt
aus den Betrachtungen der Volkswirtschaft, insbesondere aus der Landwirtschaft: in
diesem Rahmen wurde von Turgot (1768) die Idee der landwirtschaftlichen Erträge als
Funktion der eingesetzten Faktorenmengen fü r das ersten Mal angenommen. Turgot
bemerkte eine weniger proportionale Zuna hme des Ertrags unter der Voraussetzung
des wachsenden Einsatzes der Produktionsfakt oren, die er als Gesetz des abnehmenden
Ertrages, oder Ertragsgesetz zusammengefasst hatte.
Gutenberg (1951) stellte diese erste Betrachtung in Zweifel: als er seinen
eigenen Begriff von Produktionsfunktion oder Funktion der Produktionsfaktoren im
Gegensatz zu der von Turgot entwickelten Produktfunktion darstellte, schlug er auch

* Wissenschaftlicher Mitarbeiter an der Universität Petro șani

246 Semen, M .

eine alphabetische Einordn ung v or, als Produkti onsfu nktionen von Typ A und B. Dies e
Einordnung kannte später auch eine wesen tliche Po pularität in der Fachliteratur und
wurde in viel en weiteren Betrachtungen übernom men.
Die alphabetische Einordn ung wurde w eiter von Heinen (196 5) ergänzt, durch
die Entwicklung der Prod uktionsfu nktion vo n Typ C: diese Funktion verbesserte die
Funkti on v on Typ B, dur ch die Übernah me einiger Eigenschaften der sogenannten
Engineering Produktionsf unktion .
Die von Kloock (1969) e ntwickelte Produkti onsfunktion von Typ D, ähnlich
wie bei der Produkti onsfunktion von T yp C, betonte aber insbesondere die
Zusam menhänge zwischen den eingesetzte n Faktoren mengen und dem tech nischen
Leistungsgrad der Betriebsm ittel und zwisch en diesem Grad und den resultierenden
Outputm engen.
Im Rah men neuerer Betrachtungen sind vo n Küpper und von M atthes
dynamische Modelle der Pro duktio nsfunktion v orgeschlagen worden, im
mathem atisch en Ausdruck der Produkt ionsfunktio nen von T yp E und F.

2. DIE PRODUKTI ONS FUNKTI ON VON T YP B (GUT ENB ERG)

Der Ausgangspunkt des gutenbergschen K onzeptes in der Entwicklung dieser
Funkti on ist die Idee der „Anpassung“ der Produkti onsfunkti onen mit den objektiven
Bedingungen der industriellen Untern ehmen. Als Zentrum der Produktio nsfunktio n
Typ B gilt di e individuelle Maschine , deren technische Produ ktionsgesetze als Grund
für eine kostenorientierte Entscheidung e rforscht werden m üssen.
Die Rede hier ist von ei ner lim itationa len Produ ktionsfunkt ion, basiert auf
technisch determ inierte Eins atzm engen der Produktionsfakt oren; als Konsequenz ist
die Grenzproduktiv ität die ser Faktoren gleich Null.
Die Produkti onsfunkti on von T yp B unterscheidet zwischen einem direkten
Input-Outp ut-Zusam menhang für einen Teil de r eingesetzten Faktorenm engen, bzw.
einem indirekten Zusam menhang für den a nderen. Diese Hypothese erlaubt eine
Betrachtung des Produ ktionsprozesses auf zwei Ebenen: auf der ersten Ebene
offenbaren sich die Zusam enhänge zwischen der Leistung der in dividuellen Ein heiten
des Unternehm ens (Maschinen, m aschinelle Einrichtungen, Arbeitsplätze usw.) und
den eingesetzten Faktorenverbrä uche, durch die sogenannten technischen
Verbrauchsfunktionen ; auf der zweiten Ebene werden diese technischen
Verbrauchsfu nktionen als linear-hom ogene Prod uktionsfu nktionen vo n Typ B
umgewandelt.
Indirekte In put-Output Beziehung – wird durch die Einfügun g einer
technischen Einheit (Maschine) zwisch en dem Faktorenverb rauch und Output
charakterisiert; die Gesamtheit solcher Ei nheiten bildet die eigentlich studierte
Produkti onsk apazität. Die eingesetzten Fakt orenm engen für eine bestim mte Leistung
der Maschine sind in grossem Ausm aß von deren technischen Charakteristiken
abhängig, kurzfristig verm utet als konst ant. Die Verb rauchsm engen jedes Faktors auf

Zur frage der möglichkeit der anwendung … 247

jede Maschine hängen von der Int ensität (Produkti onsgeschwindigkeit) des
Maschineneinsatzes ab.

Bild 1. Technische Verbrauchsfunktion (Bsp: der Trei bstoffverbrauch ein es Autos)

c ij/bj

O dj min d j0 dj max d

cij/bj – Verhältnis zwischen den Verb rauchsm engen des Faktors i auf
Maschine j und der Zahl d er physischen Leistungseinheiten der Maschine j;
dj – Prod uktionsintensität der Maschi ne j (m inimal, optim al, maxi mal).
Direkte Input-Output Beziehung – diese Beziehung kann auch mit Hilfe der
technischen Verbrauchsfu nktionen betrachte t werden. In der graphischen Darstellun g
sind diese al s Abszi ssenp aralellen zu beschreiben, weil der Faktorenverbrauch je
physische Leistungseinheit unabhän gig von der p hysisch-techni schen Intensität der
Produkti on is t.

Bild 2. Um gerechenete Verbrauchsfunktion j e Zeiteinheit

c ij/tj

O α d j0 d j

Optimaler Leistungsgrad
Es gibt f ür jede Maschine des Produk tionsprozesses so viel e
Verbrauchsfu nktionen , wieviele Faktorenarte n verbraucht werden. Für einen einzige n
Faktor hat die korrespondente technische Verbrauchsfunktio n ein Minim um, als
Ausm aß des optim alen Leistungsgrades des Einsatzes dieser Maschine. Betrach tet man
jetzt gleichzei tig alle Faktoren, so ist der

248 Semen, M .

optim ale Leistungsgrad d er Punkt, indem die Su mme aller Faktorenverb räuche,
bewertet durch ihre Preise und im Verhä ltnis mit der ph ysischen Leistungseinheit,
seinen Minimalwert trifft.
Als allgem eine Behauptung, ist das Optim um des Leistungsgrades in dem
Punkt getr offen, ind em das Kost enwachstu m wegen zunehm ender
Verbrauchsfu nktionen durch das Ko stenabnehm en we gen abnehm ender
Verbrauchsfu nktionen kom pensiert wird.
Die graphische Darstellung eines Sy stem s mit drei Produkti onsfak toren wird in
Bild 3. gezeigt:

Bild 3. Ge ometrische Determ ination de s optimalen Leistun gsgrades ei ner Maschine

k j k ij
kj=k1j+k2j+k3j

k 1j

k 2j

k 3j

0 dj min d 1 d 0 d 2 dj max

kij – Kosten des Verbrauchs des Faktorar tes i je phy sische Lesitungseinheit der
Maschine j.
Produktionsf unktion vo n Typ B als S ystem der Verbrauchsfunktionen von
Produktionsf aktoren
Die Produkt ionsfunkti on von T yp B wird aufgrun d der technischen
Verbrauchsfu nktionen der Faktoren ge bildet , darf a ber nicht konzeptuell m it diesen
verwechselt werden. Der Untersch ied besteht darin, daß eine Verbrauchsfunktion den
Zusam menhang zwischen dem Verbrauch von einem der n Arten von Fakt oren je
physische Leistungseinheit und Maschine und der ph ysisch-technischen Intensität des
Einsatzes der Maschine beschreibt; auf der a nderen Seite erfolgt innerhalb des Begriffs
Produkti onsfunktio n die Konfrontatio n aller n Arten von Fakto renverbräuche mit der
Outputm enge des Sy stem s.
Aktionspara meter der Produktionsf unktion von Typ B
Jedes Untern ehmen (und insbesondere ein Unterneh men der Berg bauindustrie )
konfro ntiert sich sehr of t mit der Notwendigkeit, seine Prod uktion an e xternen
Bedingungen anzupassen, die nich unm ittelbar m it dem eigentlichen
Produkti onsprozess zu tu n haben. Ste llt man die technischen Bedingungen seiner
Produkti on als Ausgangspunkt seiner Betrachtungen, so hängt die produzierte
Outputm enge von den fol genden Grössen ab:

Zur fra ge der möglichkeit der anwendung … 249

M – Zahl der (identisch verm uteten) eingesetzten Maschinen;
d* – öko nomischer Leistun gsgrad;
t – Betriebszeit.

(1) t d Mq ××=*

Man redet von einer Intensitätsanpassung , wenn das Unterneh men sein Output
nur durch ei ne Veränderung des ö konomischen Leistungsgrades, mit konstanten
Betriebszeiten un d Zahl de r einge setzten Maschinen m odifiziert.
Die zeitlich e Anpassung erfolgt durch eine Modifizierung des Outputs als
Ergebnis der Veränderung von Betriebszeiten, m it konstanter Zahl der Maschin en und
ökon omischem Leistungsgrad.
Es handelt si ch um eine quantit ative Anpassung , wenn d ie Modif izierung des
Outputs als Ergebnis der Veränderung der Za hl der Maschinen, m it einer konstanten
Betriebszeit und ö konomischem Leistun gsgrad erfolgt .

3. ANWENDU NGS MÖGLIC HKEIT EN DER GUTE NBER GSCHE N
PROD UKTI ONSFU NKT ION (T YP B) FÜR DA S STUDIU M DER BE RGB AU
PROZ ESSE

Das unter dem Nam en Bergbaupro duktion bekannte Mensch-Maschine-Natu r
System erweist eine außergewöhnliche und extrem e Komplexität. Nur selten kann m an
in anderen In dustrien Prod uktionspr ozesse tr effen, die durch einen breiteren Bereich
der Skalengr öße un d dem Mechanisierungs grad, durch eine s tärkere Auswirkung,
Veränderlich keit und Unv oraussagbarkeit der Umweltbeding unge n, durch eine stärkere
Restriktion d er Standortve rteilung und durch eine br eitere und schwerer kontrol lierbare
räumliche Au sdehnung als die der Bergbauprodu ktion , charakterisiert werden kön nen.
Aus diesem Grunde wird es schon offens ichtlich, dass sogar das Vorgehen, der
Versuch u m diesen Prozeß aus dem Sichtpunkt der Grundsätze der Produkti ons- und
Kostentheorie zu m odellieren, eine gr oße Herausforderung und gleichzeitig eine
schwere und komplexe Au fgabe darstellt.
Die Überlegungen, die auf der Basis der Zusam menfassung von Str ukturen des
wissenschaftlichen Denkens aus der Mik roöko nomie und industriellem Ingenieurwesen
mit Bezug auf die sechs Funkti onsarten e rfolgen k önnen, zeigen die guten bergsche
Funkti on von Typ B als einen gu ten the oretischen Ausgangspun kt für das Studi um der
Bergbauprod uktion .
Diese mögliche wissenschaftliche Entscheidung kann relativ genügende
Unterstützungspunkte im Gegensatz zur Produkti onsfunkti on von T yp A finden:
obwohl Tur got diese Funk tion als Instrum ent für das Studium der Urprodukti on (also
des Bergbaus und der Lan dwirtschaft) entwic kelt hätte, kann sie seine Rolle heu tzutage
nicht m ehr so gut wie früher, im Rahm en der gegenwärtigen, hochm echan isierten
Prozesse der Bergbauproduktio n, spielen. Der technolo gische Vorsprung ist dafür
verantwortlich, dass das Sy stem der Bergbauprodukt ion aus einem Mensch-Natur

250 Semen, M .

System zu ei nem Mens ch-Maschine-N atur System umgewandelt wurde. In diesem
Sinne, erscheint der grundsätzlic he Vorschlag Gutenbergs als perfekt gerechtfertigt, die
Maschine und ihre technischen Produkt ionsgesetze in dem Mittelpunkt der
Betrachtungen des Studiu ms zu stellen.
Es ist offensichtlich, daß die Fakt oren und Erträge der Bergbauproduktion
wenigstens teilweise Subjekt indirekte r Input-Out put Zusam menhänge werd en: das
Verhältnis Faktoreinsatzmenge – Ertragsmenge wird durch die technische und
wirtschaftlich e Leistung der eingesetzten Masc hinen verm ittelt. Daraus ergibt sich die
Notwendigkeit der ernsten Untersu chung u nd Betrachtun g dieser indirekten
Verhältnisse m it Hilfe der Faktorenverb rauchsfunktionen , um die theoretischen
Elem ente der Produkti on technisch zu f undam entieren. Weil sie fähig ist, den
Produkti onsp rozeß in seinen Bestandt eilen zu „ diskretisieren“, kann die
Produkti onsfunktio n von Typ B richtig und pr äzis, die zwischen dem eingesetzten und
dem produzierten Mengen existierenden Zusa mmenhänge beschreiben, und das hier
entstehende limitationale Verh ältnis bess er erklären.
Weiter kann auch behau ptet werden, daß die E xistenz einen op timalen
Leistungsgrad des Maschinene insatzes, der auch die Möglichkeit und die Chance eines
Minim ums der Verbrau chsmaterialkosten versichern würde, eine zusätzliche
vorteilhafte Voraussetzun g der optim alen Kombination der Produktio nsfaktoren
darstellen könnte.
Die objektiven Merkmale der Realitä t des Bergwerks erklären mindestens
einen Teil der grundsätzlichen Hy pothesen der Turgot-Pro duktionsfunkt ionen als
ungült ig, und zwar:
– die Dauer d er Produktion ist nicht fest: dara uf kann durch die Einsatzintensität oder –
Leistung der Maschinen ein besti mmter Einfluss ausgeübt werden;
– die Merk male der Faktoren der Ber gbauprod uktion beweisen deren b egrenzte
Teilbarkeit; das gilt für den Produktionsfaktor Arbeit, sowie für Kapital und f ür einem
großen Teil d er Verbrauch sstoffe;
– die Hy pothese der perfekten Grenzsubstitu tion der Produkti onsfaktoren gilt nicht für
die Bergbaurealität, weil deren Kom bination nur an gut begründeten (i m tech nischen
Sinne) Einsat zebenen erscheint, m it rela tiv geringen Änderungs möglichkeiten; zu m
Beispiel ist die Zunah me der Arbeitskräfte – oder der Betriebsm itteleinsatz über ein e
technisch und technologi sch gerechtfertigte Gren ze un möglich, auch wegen der
räumlichen Beschränkung, die sogar Stör ungen der Arbeit verursachen k ann. Im
Bergbau soll m an lieber eine Subs titutio n der Prozesse, der Verfahren, der
Organisationslösungen betr achten, statt eine r der Prod uktionsfaktor en. Eine Diskussion
über die Kom bination der Produkti onsfaktoren erscheint also vernünftiger als eine über
deren Substit ution;
– aus dem Sichtpunk t der technischen Gr ündun g und der relativen „ Starrheit“ der
technisch möglichen Einsatzm engen der Pr oduktio nsfaktoren erscheint die typische
Hypothese der gutenbergschen Funkt ion – di e gleich Null oder an der oberen Grenze
sogar negativen Grenzertrag – für den Be rgbau gültig. Der Teil mit positivem Gefälle
des graphischen Pfades vom Gesam tertrag (für gering e Einsatzm engen der Fakto ren)

Zur fra ge der möglichkeit der anwendung … 251

scheint nicht im relevanten Bereich der Be rgbaubetriebsgröße zu existieren. Hier kann
nur die Rede von wirtschaftlich vernünf tiger Pr odukti on sein, wenn bestimmte
Minim aleben en und Kom binationen des Fakt oreneinsatze s als Au sdruck spezifischer
technologisch en Verfahren und Pro zesse erreicht werden. Jeder zusätzlich e
Faktoreneinsatz über diese Spezifik ationen des Verfahrens würde nicht ein
überprop ortionales, sondern im besten Falle ein
– proportio nales oder an der Grenze sogar ein negatives Wachstum der Pro duktio n
verursachen;
– die q ualitative Hom ogenität de s Endpro duktes ist k ein Merkm al der
Bergbauprod uktion ; der Abbau wird kon frontiert mit ständig un d un absehbar
veränderlichen geologisch- bergbaulich en Bedingungen, erfolgt gleichzeitig in
unterschiedlichen Abbaublöcke n oder Teilen der Lagerstätte , durch unterschiedliche
Verfahren u nd Technolo gien innerhalb s ogar des selben Bergwerks, und hat als
Konsequenz die Erhaltung eines Rohprodukt es mit ständig veränderlicher Qualität.
Das Phäno men ist gleichgülti g im Falle des zweiten möglichen Outputs der
Bergbauprod uktion – die Grubenbaue; dies e könn en auch wegen den getroffenen
unterschiedlichen geologi sch-bergbaulichen Bedingungen u nd d er mechanischen un d
physischen Charakteristiken von Gestei nen, sowie wegen d er unterschiedlichen
eingesetzten Technologien, aus qualitativem Sichtpunkt differenziert werden;
– der Einfluß des Ertragsgesetzes kann auch hier getroffen und erkannt
werden, und zwar, nicht n ur auf den gesam ten, kom plexen Bergbauprozess, sondern
auch für jede Abteilung, B etriebsm ittel und Ei nsatzpunkt des Bergwerks.

4. SCHLUSS FOLG ERUNGEN

Als Schlußfolgerung de r oben dargestellten Ideen und wegen der
Charakteristiken der gute nbergschen Produkt ionsfu nktion , kann man behaupten, dass
diese Funktion eine richtige und u mfangreiche Beschreibung der em pirischen
Verhältnisse und der Merk male d er Bergbauprodukti on darstellen kann. Die
gutenbergsch e Funkti on bringt einen orig inellen Beitrag aus dem Sichtpu nkt v on
Variablen, die einen bestim mten Einfluß auf den F aktoreneinsatz haben kön nen: im
Zusatz zur Outputm enge wird hier auch die tech nische Intensität des
Betriebsm itteleinsatzes als eine solche Variable vorgeschlagen, die eine Grundlage für
weitere Verbesserungen d er Gestaltung de s Bergbauprodu ktion sprozesses werden
könnte.
Ein m öglicher Einwand, der gegen diese Argu mentation erheben werden
könnte, beha uptet, daß di e gutenbergsche Funktion nicht die dynam ische Dim ension
der Produktionsfunktion enthülle n kann: sie sei eigentlich eine statische Funktion, di e
unfähig wäre, jene zeitlich bedingten Ä nderungen des Modells in Betracht zu ziehen.
Der Einwand ist nicht unbedingt gerechtfertigt: die Produkti onsfunktio n vo n Typ B
zieht eigentlich die tem porale Variable i n Betracht, obwohl nicht e xplizit, aber indirekt
durch den Begriff von Leistungs- oder Intensitä tsgrad des Betriebsm itteleinsatzes als
zeitlich bedingte Größe.

252 Semen, M .

Weiter ist die hier dargestellte Betr achtung der Meinung, dass eine Übernah me
von zusätzlichen d ynamischen Variablen nich t em pfehlenswert wäre: es besteht die
Gefahr der unnöti gen Ko mplikation eines Modells, das sich als Ziel ein e
Vereinfachung der sowieso hoch kom plexen R ealität des Bergbaus erklärt hätte. Auf
diesem Grun d erscheint zumindest in der gegenwärtige Phase der Forschungen die
Produkti onsfunktio n von Typ B als geeignet für diese Aufgabe, b esser als die Funkti on
von T yp C (diese entspricht besser der Realität der Fertig ungsindustrie) und
insbesondere als deren von T yp D, E und F, die zur Gestaltung von kom plizierteren
und schwierig kontrollierbaren Modellen führen könnten.

LITERATURVERZ EICHNIS:

[1]. Fa ndel G. – Produktio n I, Springer Verlag, B erlin, Heidelberg, 1991
[2]. Gu tenber g E. – Grundlagen der Betrie bswirtsch aftslehre – Band I: Die Pr oduktio n,
Springer Verlag, Berlin, 1983
[3]. Heinen E. – Industriebetriebslehre, Gabl er Verlag , Wiesbaden, 1991
[4]. Küp per, H.-U. – Interdependenzen zwisch en Prod uktionstheorie und d er Orga nisation des
Pro duktio nsprozesses , Dunc ker und Hum blot Verla g, Berlin, 1991
[5]. Sch otter, A . – Micr oeconomics – A Modern Approach, 3. Auflage, Ne w York, 2000
[6]. Simionesc u, A., Mangu, S. – Microeconomie, Litogra fia Unive rsității din Petroșani, 1999
[7]. Wa hl S. – Bergwirtschaft – B and I, Verl ag Glüc kauf GmbH, Essen, 1990

Annals of the University of Petro șani, Economics, 4 (2004), 253-262 253

SUGGESTIONS REGARDING FINANCIAL RESOURCES
SOLUTIONS TO CREDIT ROMANIAN AGRICULTURE

TRAIAN SILIVESTRU, OANA DOBRE-BARON*

ABSTRACT: The main task of the banker is to act, no matter the circumstances, as a
real professional, that is w ith thorough know ledge (in applying th e legal and traditional
norms), prudently (without exposing himself to futile risks), and diligen tly, with moderation and
balance; such qualities are considered to be opportune by the Swiss c ode of bank behavior.

KEY WORDS: banker, finance, risks, credit

The finance and credit of agriculture, in this period, cannot be conceived, nor
realized, without having as a basis the principles of market economy. Bank credits for
agriculture can be granted only on commercial grounds, taking into account the
rigorous financial analysis of the solvability of companies in agriculture, banking
prudence, the real costs of bank resources changed by the banks of commerce into
investments or credits for which they require a ‘credit price’ expressed by the interest
level asked by each bank; on principle, it is determined from resources cost to which
functioning costs and profit can be added, although it is known that part of the
functioning costs and of the profit are covered, in the case of a bank, by other sources of income (commissions and banking expens es); nevertheless we should take into
account the fact that the part shared by the credit product within the whole amount of services and bank products reaches 85/90 %.
The main task of the banker is to act, no matter the circumstances, as a real
professional, that is with thorough knowle dge (in applying the legal and traditional
norms), prudently (without exposing himself to futile risks), and diligently, with
moderation and balance; such qualities are c onsidered to be opportune by the Swiss
code of bank behavior.
The links of the banking system with the companies in agriculture allow the
bank to accede to the inner information of the company and determine the

* Assoc. Prof., Ph.D. at the University of Petro șani, Romania
Assist. Prof. at the University of Petro șani, Romania

254 Silivestru, T.; Dobre-Baron, O.

improvem ent of the latter’s activity when the credit is granted in order to im prove the
company’s activit y and not to bankrup t it as it was the situations in a series o f cases.
This part the banks want to pla y, nam ely to mobilize certain resources tem porarily
available and to invest them in credits, stimulated th e interest in creating and extending
the banks of co mmerce in the countries in transition, although, at present, not all such
banks are well trained and equipped, not necessa rily with com puter sy stem s, but with a
staff of high probit y, correctness and, last but no t least, professionalism .
Taking i nto account th e seasonal character of agrarian pro duction and,
especially , of the vegetable one, agr iculture needs a huge am ount of financial
resources, d uring certain periods, preem inently during t he spring and autum n
campaigns, as well as to create autu mn and wi nter food pro ducts stocks; a large part of
these resources should be provided by banks.
We must str ess the fa ct that, at the beginnin g of such spring or autum n
campaigns o r when creat ing the stocks, th e banks are co mpletely unprepared, not
knowing the amount of th e financial resources need ed, and grant ing the existe nt ones
with great delay s. Yet, it is well known that, for agriculture, to lose the best moment of
starting working, as a result of lack of fi nancing resources, means to lose the crop. The
present form of financing agriculture th rough credits, especial ly the large crops
(vegetable production) did not manage to settle the se vital problem s for Romanian
agriculture.
Comparatively to the present form of credit used in agriculture, I suggest a
different manner of financing agricultur e through ba nk credits that has to notice th e
following fi ve stages:
1.- establishing the necessary financ ing resources taking into a ccount the
amount of ex penses that should fi nanced b y bank credits on the basi s of both the spring
crops and the autu mn crops technolo gies within which the expenses are monthly
recorded;
2. – ri gorously establishing, on the basis of crop technolo gies, the credit
percents for e ach crop and each month;
3. – establish ing the part of the credit percent of each crop within the spring
crops expenses and the autum n crops ex penses;
4. – establishing the part of the credit percent of each crop within the mediu m
credit percent for each autum n and spring ca mpaign;
5. – establishing the part of the credit percent of ea ch crop within the medium
credit percent for both ca mpaigns.
According to the above m anner we can determ ine the resour ces the banks need
in order to start the credit of crops both for the spring and autum n cam paigns and for
creating food stocks. After wards it is necessary to cor relate credit r epayments fo r each
campaign, which is the taking over of a part of the credits for ea ch crop as se asonal
stocks credits; the rest of the credit is used to further finance the crop, which is to
restart the cro p prod uction process.

Suggestions r egarding fi nancial res ources solutions … 255

Consequentl y, credit financing resources are correctly distributed, a voiding the
so called overcharge and allowing the credit gran ted com panies in agriculture to t urn to
good account their food products all y ear long. Thus they are not forced to sell all their
food products at harvest when the price is quit e low; the y can avoid such an
unseasonable moment of selling prod uction b y elim inating the ob ligation of re paying
the credits wi thin 30 da ys from harvest.
Compared to the present form of credit, this new form is a revolv ing ki nd of
credit (which m eans the mobilization of a m edium term loan, thro ugh renewable short
term credits) co mbining the taking over of a crop shor t term credit for another seasonal
stocks short t erm credit wi th the correlation of repaym ent of this credit on the basis of
capitalizing the stock in case of selli ng it neglecting or according to the ter ms of
capitalizing anim al products, when such stocks are used in anim al breeding, dep ending
on the anim al category the stock is used to (horned cattle – m ilk, meat; sheep – milk,
meat, wool; s wine – meat; fowl – m eat, eggs).
This new form of credit meant to financ e vegetable crops can be illustrated by
the following hypot hetical case: both autum n and spring cam paigns should be no ticed,
giving as an exa mple the main crops in the autum n campaign, which are: wheat,
barley , rye, barley corn and the main crops in the s pring ca mpaign, which are: corn,
sunflower, soy, white beet, potatoes and taking i nto account the ex penses required b y
those crops per hectare, according to the technological data of each crop. The
following tab les show the situation of e xpenses taking into accoun t a 100 % credit for
the expenses according to technological reports of ea ch crop, per month, expressed in
percents out of the whole amount of ex penses for each crop.
Next I exhibit the share of each cred it percent for each crop within the total
amount of autum n and spring crops. At the sam e time I present the share of the credit
percent of each culture within the total am ount of the two cam paigns, spring and
autum n, (per agrarian y ear), the way it is s hown in th e table called ‘The situation of t he
share of cred it percents pe r crops and ca mpaigns an d according to the m edium credit
percent’ .
This h ypothetical exam ple shows the fact that in the case of repayment of the
credits grante d for autum n crops, that takes place at h arvest ti me, in summer, a part of
the credits is repaid in or der to start again the produc tion process of autum n crops; the
rest results in another credit, nam ely the au tumn and spring ‘stocks credit’; its effectiv e
repay ment is done with the gr adual turning to good account of stocks outside or within
anim al breeding, as food fo r different ty pes of anim als; their repay ment is connected to
the turnin g to good accoun t of anim al products such stocks were used for.

256 Silivestru, T.; Dobre-Baron, O.

Table 1.
The situation of nominal expenses pe r crops and months
during an a grarian year

Total Autumn 2002 Spring 2003 Summer 2003 Crop
sep oct nov mar apr may jun jul aug
Autumn Crop
Wheat 2070 390 245 – 151 153 110 83 938 –
Barley 2177 390 185 – 164 147 103 1180 – –
Rye 1226 162 169 – 71 139 109 – 576 –
Barley –
corn 2143 391 185 – 164 147 103 1153 – –
Total (A) 7616 1333 784 – 550 586 425 2424 1514 –
Spring Crop
Corn 2117 – 346 – – 544 268 225 – –
Sun-
flower 4096 – 2061 – 584 254 413 – – 784
Soy 2960 – 311 – – 1090 295 238 135 178
White
beet 7828 – 3526 – 982 696 943 804 321 321
Potatoes 14303 – 3130 – 388 4688 1016 1008 638 600
Total (S) 31304 – 9374 – 1954 7272 2935 2275 1112 1883
TOTAL 38920 1333 10158 – 2504 7858 3360 4699 2626 883

Autumn 2003 Total
sep oct nov A
2002 S
2003 S
2003 A
2003

– – – 635 414 1021 –
– – – 575 414 1188 –
– – – 331 319 576 –
– – – 576 414 1153 –
– – – 2117 1561 3938 –

734 – – 346 812 225 734
– – – 2061 1251 784 –
695 – – 311 1385 569 695
235 – – 3526 2621 1446 235
2835 – – 3130 6092 2246 2835
4499 – – 9374 12161 5270 4499
4499 – – 11491 13722 9208 4499

Source : Ministry of A griculture, A nnual Re port, 2003

Suggestions r egarding fi nancial res ources solutions … 257

Table 2.
The share of expenses pe r months and ca mpaigns within the total amount of
expenses p er crops and campaigns

Crop Total Autumn 1996
sep. oct. nov. Spring 1997
mar. apr. may Summer 19 97
jun. jul. aug.
AUT UMN Crop
Wheat 100 19 1 – 7 7 6 4 45 –
Barley 100 18 8 – 8 7 5 54 – –
Rye 100 13 14 – 6 11 9 – 47 –
Barleycorn 100 18 9 – 7 7 5 54 – –
Total ( A) 100 18 10 – 7 8 5 32 20 –
SPRING Crop
Corn 100 – 16 – – 25 13 11 – –
Sunflower 100 – 50 – 14 6 10 – – 19
Soy 100 – 10 – – 37 10 8 5 6
White beet 100 – 45 – 12 9 12 10 4 4
Potatoes 100 – 22 – 3 33 7 7 5 4
Total (S ) 100 – 30 – 6 23 10 7 4 6
TOT AL 100 3 26 – 6 20 9 12 7 5

Autumn 1997
sep oct. nov. Total
A S S A

– – – 31 20 49 –
– – – 26 19 54 –
– – – 27 26 47 –
– – – 27 19 54 –
– – – 28 20 52 –

35 – – 16 38 11 35
– – – 50 30 18 3
23 – – 10 47 19 23
3 – – 45 33 18 3
20 – – 22 43 16 20
14 – – 30 39 17 14
12 – – 29 35 24 12

Source : Ministry of A griculture, A nnual Re port, 2003

258 Silivestru, T.; Dobre-Baron, O.

Table 3.
The situation of the share of credit pe rcents p er crops and campaigns and
according to the mediu m credit pe rcent

Crop Total A
2002 S
2003 S
2003 A
2003 Credit % of crops per cam paign
A S S A
Wheat 100 31 20 49 – 31 20 49 –
Barley 100 26 19 54 – 26 19 54 –
Rye 100 27 26 47 – 27 26 47 –
Barleycorn 100 27 19 54 – 27 19 54 –
Total ( A) 100 28 20 52 – 111 84 204 –
Corn 100 16 38 11 35 16 38 11 –
Sunflower 100 50 30 19 – 50 30 19 –
Soy 100 10 47 19 23 10 47 19 23
White beet 100 45 33 18 3 45 33 18 3
Potatoes 100 22 43 16 20 22 43 16 20
Total (S ) 100 30 39 17 14 143 191 83 81
TOT AL 100 29 35 24 12 254 275 287 81

Crops share in % of credit per
campaign
A S S A Crops share in medium % of
credit per cam paign
A S S A
28 24 24 – 8 5 12 –
23 23 26 – 6 4 14 –
24 31 23 – 7 6 12 –
25 22 27 – 7 5 14 –
100 100 100 – 28 20 52 –
11 20 13 43 3 8 2 –
35 15 23 – 11 6 4 –
7 25 23 28 2 9 4 4
31 17 22 4 9 7 4 1
16 23 19 25 5 9 3 3
100 100 100 100 30 39 17 14
200 200 200 100 29 35 24 12

Source : Ministry of A griculture, A nnual Re port, 2003

Suggestions r egarding fi nancial res ources solutions … 259

The situation above is sugg estiv ely exhi bit in fig ures 1 and 2.
The sam e procedure is v alid for spri ng crops that are harvested in autum n
when a part of the credit is repaid in order to start again the pr oduction process of
spring crops; the ot her par t of the credit is changed from a crop cr edit into a seasonal
stock credit (autum n – autum n) and is effec tively repaid when these stocks a re turned
to go od account within or outside anim al breeding.
The situation is suggestively presented in figures 3 an d 4.

Figure 1. Credit Repayment for Autumn Crops

100%
90%
80%
70%
60%

50%
40% Summer
2003

Spring
2003 Stock s gatheri ng
Autumn-sum mer

17%-bread making wheat
19%-barley corn
18%-barley
18%-rye
72%-TOT AL Stocks ca pitali zation
outsi de animal bree ding

15% + 2%
19%
18%
18%
(34% + 38%)

30%
20%
10% Autumn
Prod ucts capitaliz ation Cycle resuming 52
72
20
28
0%

Figure 2. Repaym ent Rate According to Seasons

52%
28% 20%
Summer 2003
Spring 2003
Autumn 2003

260 Silivestru, T.; Dobre-Baron, O.

Figure 3. Credits Repay ment for Spr ing Crops

Autumn Products Capitalization Cycle Resu ming
2003

Summer
2003

Spring
2003 Stocks gathering
autumn-autumn

10%- sunflo wer
11%- white beet
12%- potatoes
18%- soy
10%- corn
56 % -TOTAL Stocks capitalization
Outside ani mal
breeding

10%
11%
12%
8% + 5%
10 %
(41% + 15% ) 100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

Autumn
2002

Products ca pitaliz ation Cycle resu ming 14
17
56
39
30
0%

Figure 4. Repaym ent Rate According to Seasons

30%
39%17%14%
Autumn 2002
Spring 20 03
Summer 2003
Autumn 2003

Suggestions r egarding fi nancial res ources solutions … 261

Figures 5 an d 6 ex hibit a credit module f the crops within the tw o cam paigns
as well as the manner of capitalization of the prod ucts obtained b y both cam paign s.

Figure 5. Credit Module of the Two Cam paigns

521714
28
30
2039

Autumn
2002
Spring
2003 Summe r
2003 Autumn
2003
Figure 6. Ca pitaliz ation Module of th e Two Cam paigns Produ cts

Full c ycle per agrarian y ear
28
20
520303917
14
Autumn 2003
Spring 2003
Summer 2003
Autumn 2003
Autumn 2002
Spring 2003
Autumn 2003
Summer 2003
Autumn Crop Spring Crop

262 Silivestru, T.; Dobre-Baron, O.

The advantag es of puttin g into practice such a credit form in agriculture, for
vegetal crops, are more than evident and determ ine the following e ffects:
– They allow the exact k nowledge of the resources required for agrarian
campaigns;
– They allow t he elim inatio n of certain supplem entary resources making use of
the taking over of a credit for another credit as a re sult of changing the credit
object; as a consequence there is no need of new credit files, new approvals,
new answers or resources distributio n.
– They elim inate bureaucrac y in drawing out credit files and increas e prom ptnes s
in granting credits;
– They determ ine a genuine adaptation o f credit to the crop, respectively to the
stock, elim inating the stress in granting and repay ing the credit;
– They allow the peasant ( far mer) to capitaliz e the credit gra nted agrarian
products at th eir best;
– They elim inate the arbitrary character of crediting veg etal agrarian productio n;
– They allow a perfect cooperation between bank and the credit granted agrarian
producer regarding t he credit negotiatio n, grant and rep ayment;
– They allow the banks of co mmerce to know the necessary resources of
financing agrarian cam paigns and to pe rmit to several such banks to credit this
field, taking into account the resources that each ban k of co mmer ce can invest
into credits; t his way the m onop ole of a single bank is broken.

REFERE NCES:

[1]. Siliv estru T. – Rolul creditului în dezvo ltarea agriculturii române ști, Editura SIGMA
PLUS, 2001

Annals of the University of Petro șani, Economics, 4 (2004), 263-270 263

SUGGESTIONS REGARDING THE PART PLAYED BY
AGRICULTURAL CREDIT ON MORTGAGE IN THE
FOUNDATION OF VIABLE AGRICULTURAL
EXPLOITATIONS IN ROMANIA

TRAIAN SILIVESTRU, OANA DOBRE – BARON ∗

ABSTRACT: Taking into account the process of transition fr om a planned
centralized economy, almost entirely based upon a state monopolist property and controlled by
a unique political force, to an economy founded on private pr operty ,economic liberalism,
competition and the real use of economic and so cial resources, a special attention should be
paid to credit and especially to the banking agri cultural credit, taking into consideration the
part and place it detains within the financial and economic mechanism of adjustment and
stabilization of economic processes that take pla ce in agriculture in this extremely restless
period.

KEY WORDS: transition, economic liberalism, the banking agri cultural credit

Taking into account the process of tr ansition from a planned centralized
economy, almost entirely based upon a state monopolist property and controlled by a
unique political force, to an economy founded on private property ,economic
liberalism, competition and the real use of economic and social resources ,a special
attention should be paid to credit and esp ecially to the banking agricultural credit
,taking into consideration the part and place it detains within the financial and
economic mechanism of adjustment and stabilization of economic processes that take
place in agriculture in this extremely restless period .
Under these circumstances, the suggest ed themes have been approached under
two aspects:
– on the one hand, according to the significance of agriculture credit, as an integrated
system within market economy functioning, on a macroeconomic level as well as on a
microeconomic one (state agricultural units, farms, agricultural companies and private

∗ Assoc. Prof., Ph.D. at the University of Petro șani, Romania
Assist. Prof. at the University of Petro șani, Romania

264 Silivestru, T.; Dobre-Baron, O.

producers), h aving in view the detailed kn owledge of agrarian econom y and of th e
society we tend to and have as a model;
– on t he other hand, the scientific app roach gives em phasis to the part play ed by the
system of ba nking agriculture credit at pres ent, wit hin the proc ess of solving the
problem s sp ecific to thi s transition period, an d especially within t he pr oblem s
connected to the process of im plem enting pr ivate property in agriculture, that took
place more rapidly as compared to other fields.
Starting from the fact that food security of ever y people should be mostly
provided by the natural resources of each state, and sequentially analy zing the
components of food secur ity on the individual level or according to social groups and
categories, t he existent situation does not deter mine a feeling of optim ism and
quietness, bot h concerning a global level a nd concerning Rom ania. The co mponents of
food securit y, as they have also been defined b y the United Nations Food and
Agriculture Organization (F.A.O.) are : f ood suppl y, food suppl y stabilit y, population’s
access to food.
Taking into account these co mponents and referring to the situation of
Romanian agriculture after 1989, t he resources o f food su pply (the first factor),
unfortu nately show a dim inishing tende ncy. Regardi ng the second factor – resources
stability – we can infer tha t in Rom ania unf avorable climate condi tions determ ined a
sudden dr op of pro duction. The thir d factor (po pulation access to food supply ),
according to the incom es, represents th e defi ning element of food security estimation;
in keeping w ith som e estim ations, the r eal inco me of Rom ania’s populatio n dropped
every year, af ter 1990.
Having in vie w these grounds and drawi ng a retrospective of the changes that
took place in Romania’s agriculture after 1989, we can infer that the starting point was
the ‘bet’ with agriculture, and the firs t reaction was the furious devastation of the
patrim ony of the previous agricultural p roduction co-operative farm s.
Then follow ed the elaboration and i mplem enting of the Law of Landed
Propert y (18/1991), meant to give p ossession to th e form er owners of agricultural
grounds, a law that was d eficiently applied, being acco mpanied by abuses and painful
convulsions; it determ ined the turning up of million of peasant subsistence households
that im plied the return to manual work and anim al traction, excessive costs fo r poor
quality mechanized works providing precarious cro ps, the ever – prom ised state
financial support that so hardly reached the producers. In exchange, during this period
an absurd d iscrepancy among the price s of native ag ricultural pro ducts appeared and a
totall y wrong polic y of license grants for cereal im ports was im plem ented.
The bet with agriculture was ‘won’ by burdenin g transition on those who also
had to face industrialization duri ng socialism (the peasants).
During the transform ing process undertak en by agric ulture after 1989 a series
of changes could be seen; am ong these, so me were positive, as the one regarding
farm ers and their descendents’ gi ving posse ssion, but there also were less positive
changes such as the general disorganizing of activities and the rui n, to a great extent, of

Suggestions r egarding t he part played b y agricultural … 265

the material means in agri culture, as well as the cri sis that appear ed in organizing the
management of agrarian production as a resu lt of the unprecedented dividing into lots
and dim inishing of agricu ltural groun ds, as it could be inferred from the table The
structure of agricultural ex ploitations i n Romania.
One can say , without fear of being wrong, t hat, during this period, the tr uth
that agriculture owns a perpetual potentia l vitalit y has been alm ost prag matically
ignored, no matter if it is about a tendency or a neglect; this clean econom ic source of
national salvation has beco me the object of ‘political bets’, an d it continues to be
‘attacked’ by the so-called ‘transition injure rs’ that are the fo llowing: the lack of
legislation (i n case it exists, it is full of gaps an d hesitating), investm ent penur y,
pompous reforms, work devaluation, la rge scale embezzlement and technical progress
ignorance.

Table 1. The structur e of agricultural exploitations in Romania
Type of
exploitation MU for
number No. Medium
size
[ha] Farming
ground

[thousands
ha] % Arable
ground

[thousands
ha] %
1. Indiv idual
farms thousands 3600 1.96 7072 47.8 5104 54.7
2. Family
Associations number 13700 112 1531 10.4 1120 12.0
3. Associations
& com panies
constitut ed acc.
to the law number 3970 446 1770 11.9 1280 13.7
I. Private sector
Total thousands 3618 2.8 10373 70.1 7504 80.4
II. State sector
& actionaries of
which: number 627 2882 1807 12.2 1440 15.4
-indiv idual
actionari es thousands (230) (2) (470) (3.2) (300) (3.2)
III. Public sector
of which: number 3500 748 2616 17.7 394 4.2
– pastures (2286) 15.5 – –
Total thousands 3851 3.8 14796 100.0 9338 100.0
Source : Ministry of A griculture, A nnual Re port, 2003

266 Silivestru, T.; Dobre-Baron, O.

The problem that worries humankind every 20 years is the ‘food m atter’. All
the events that took place during the last years agree to Malthus ’s paradigm according
to which ‘the planet’s population incr eases in a rh ythm superior to the rhy thm of
growth of the global food productio n’. China, for exam ple, needs an am ount of cereals
that surpasses the world cereals production, a fact that determ ines the increase of the
prices and the di minution of the existent cere als stocks. Lets ad d to these facts the
danger of accu mulating and stressing the shortc omings of agric ulture, together with
anti-econom ic mentalities and behavior s, ignor ance of the general interests regarding
the part pla yed by agriculture in assuring national food security .
Agricultural polic y that should be im plemen ted in this period m ust be one of a’
lasting and ecological developm ent of agric ulture’, as acade mician N. N.
Constantinescu asserts. In order to be vi able and lasting the acti vities in agriculture
have to accom plish three fundam ental conditio ns: it should be ec onom ically efficient,
ecologically efficient and socially efficient. Romania is a count ry with lim ited land
resources; it can afford only the practice of an inten sive agriculture, chara cterized by
the supplem entary allocation of production factors. The use of a nother strateg y of
developm ent in agriculture is, in m y opinion, bound to failure.
Among the productio n factors, the lan d, that is t he landed pr operty, is the
essential elem ent in increasing the agricultural prod uction, Rom ania owning a medium,
if not sm all, such proper ty; accordingly, the entire use of agricultural lands should
beco me the s tate’s per manent concern; unfor tunately, this does no t happen as year by
year lands re main uncultivated, in a st ate of neglect, a fact that determ ines significant
losses of crops.
Likewise, at least one third of agricult ural grou nd is not efficiently used and
another thir d is inadequat ely used; bes ides, one m ay add the com pletely inadequate
productio n structure. In m y opinion, it would be of interest to im plem ent during this
period a so-called ‘econom ic leadership’ of th e stru cture of agricultural produ ction also
having i n view the paedologic and clim ate conditions of the coun try.
Romania faces a high percent of the populatio n inv olved in agri culture, a fact
that is determined by lack of m odern mechaniz ed and automatic proces ses in
agriculture; from a structural point of view the popul ation involve d in agriculture does
not m atch the dem ands, being characterized by a pr ocess of ageing and fem inization
that did n ot stopped with t he implem entation of the r eform s in agriculture, but becam e
more obvious .
The settlement of this negative phenome non that m anifests itself in Romanian
agriculture was partly solved by the 1994 La w 16 (The Lease Law) which, in its turn ,
is subm itted t o certain changes in or der to im prove it by allowing a sub-lease. In order
to stim ulate youn g labor to work i n agriculture a viable alternative might be the
concession of farm ing g rounds t o young families being trai ned in t he domain
(graduates of Agricultural High Schools); acco rding to the statistics, between 1981 and
1992 218500 medium educated personnel gr aduated such hig h schools. T he grounds
meant for co ncession to such fam ilies may belong t o old owner fam ilies and especially
to those with no foll owers.

Suggestions r egarding t he part played b y agricultural … 267

The obtainm ent of the funds necessary to sell and buy land in orde r to increase
the size of p easant households as a result of the changes broug ht to Law 18/199 1,
changes regarding t he free circulatio n of land, t he process of bu ying la nds b y
Romanian citizens, exhibit two major disadvantages, under the present credit
conditions:
ƒ it dem ands a long period of accu mulations, according to the
consum e restrictions within the peasant household in order to bu y
new lands, a fact that diminishes the chance of modernizing
agriculture as a result of incr easing the lands throug h buying;
ƒ it dem ands th e use of funds in the field of bu ying lands instead of
their use in the field o f technical and advanced technolog y
investm ents; as a result, the expenses dem anded by the process of
buying lands represent a sort of u nproductive capital on short term
that could be used to increase production throu gh buying tractors,
agricultural machines, ani mals.
The sell and buying of lands could be solved, i n my opini on, by resorting to
credits on mortgage, gran ted for a period of 15-30 y ears, a fac t that would per mit
peasants to benefit fro m important su ms in order to modernize their farms.
The credit on mortgage is a relation be tween creditors (different banks) and the
owners of debit accounts (the owners of real estates – lands). In o rder to grant such a
credit the part of material guarantee is played by the propert y (the land) belonging to
the owner to be granted. The credit rela tions and the repay ment possibilities follow
starting from this principle.
An essential characte ristic of the credit on m ortgage is the fact tha t in case of a
‘financial incapacity’ or bankruptc y of the owner of debit account s the creditor has the
right to turn the loan into good account by selling the goods of the owner (that is the
land) who can thus l ose the propert y. It means that this type of credit becom es the main
means of supporting real estate.
The credit o n mortgage i mplies a con vention between the credi tor and the
person to be c redited that stipulates the following:
ƒ the propert y is a means of guaranteeing the credit;
ƒ the conditio ns of repay ment and term of pay ment;
ƒ the penalties in case of anticipated or partial repay ment of the
credit;
ƒ the circu mstances under which, due t o the neglect of the credi t
conditions by the person who got the credit, the pr opert y can be
lost.
The main cre dits on m ortgage are the following:
• credit on m ortgage with variable interest s;
• credit on m ortgage with pr ogressive repay ment.

268 Silivestru, T.; Dobre-Baron, O.

I have in view the follow ing groun ds that are based up on the r eal case of
Romanian agriculture:
ƒ the existence in the count ryside as well as in towns of a large
number of families made up of retired persons who own lands and
have no follo wers or had followe rs wh o em igrated or abandoned
them ;
ƒ their im possi bility of working the land due to old age;
ƒ the sm all incomes of the large majority of t hese families, their
living standar d being under the lim it of povert y;
ƒ their uncertai nty of getting sure and stable inco mes, as a result of
capitalizing the land on lease to persons who m ight prove to be
impostors or speculators, and their impossibilit y of checking the
crops due to old age.
As an alternative I suggest the settling of this matter with the help of creative
bankers who, due to t he banks the y lead , eag er to increase their in comes and to have a
safe capital investm ent an d ready to support the families of retired persons as well as
other peasant fam ilies in the countr yside or t hose who want to sett le in the country side
and from whom the banks demand the f inance under the form of deposits, will be able
to understand the opport unity and will make th em offers in order to obtain a sure
incom e out of the land the y own.
This transact ion between the land owner and th e bank does not im ply a
classical sell and bu y contract, but one owing to which the land owner maintains,
during his life, the land’ s usufruct and receives, in e xchange, from the bank he made
the transaction with a certa in sum of money every m onth.
The am ount of this sum is established by the bank , on the basis of the level of
the incom es the land o wner would obtain from leasing or selling the lan d. The
advantage for the land owner who proceeds lik ewise consists in the safety of getting
every month the su m prom ised by the bank, irrespective of the production obtained or
of the land ’s exploitation c onditi ons.
It also consists in the regu larity (every month) and the perm anen ce of getting
the sum s till the owner’s death. It shoul d be mentioned that during the life of the first
land owner the bank cannot alie nate, through selling, this land; it can only lease it to
professional leaseholders or lease it, in order to fr uctify and c ultivate it, to young
families or to those who w ant to settle i n the countr yside and live from agricult ure but
who lack the means nece ssary for buying such lands. At the same ti me the bank can
create for these fam ilies facilities concerning the possibilit y of buy ing the land on
leasing when the first owner dies. In fa ct, the bank c an sell the land on lease after the
death of the fi rst owner.

Suggestions r egarding t he part played b y agricultural … 269

Leasing

Leasing durin g the first ow ner’s life

Lease

Lease Leasing durin g the first ow ner’s life

Land value

Sel ling after the death
of the first owner
Selling

Value of sold land

Leaseholder
Retired owner
without followers
LAND
Monthly payment o f a
non transferable pension Leasin g
during the owner’s life instalm ent

Bank of
commerce
– leaseholde r;
– other land
owner’s
– other persons – youn g peasant f amilies;
– youn g families settled in
the countryside

Figure 1.

270 Silivestru, T.; Dobre-Baron, O.

This form of credit presents advantages both for t he bank and for t he person or
the co mpany who get the c redit as it assures a safe capital investm ent in land made by
the banks an d it grants a substantial sup port to youn g peasant fam ilies or to t hose who
want to settle in the countr yside to li ve on agriculture. This schem e of the banks ’
capital investm ent in the land of the retir ed owners without fol lowers is properl y
display ed in t he image bel ow.

REFERE NCES:

[1]. Siliv estru T. – Rolul creditului în dezvo ltarea agriculturii române ști, Editura SIGMA
PLUS, 2001

Annals of the University of Petro șani, Economics, 4 (2004), 271-276 271

BENUTZUNG DER ARTIFIZIELLEN NEURONALEN NETZ
(ANN) IM KONKURS VORAUSSEHEN

TITUS SLAVICI, DOINA BIVOLARU *

ABSTRACT: Der Artikel stellt die Möglichkeiten dar, Verfahren der artifiziellen
Inteligenz (artifizielle neuronale Netze, Ex pertsystemen) im Bereich der Finanzen und
Buchhaltung, anzuwenden.

KEY WORDS: klassische methoden für prognose

1. Vorwort. Klassische Methoden für Prognose
In die Geschichte der Konkursvorausse henbereich wurden mehrere wertvolle
Behandlungen aufgrund diversen Paradigmen und spezifischen Algoritmus
vorgeschlagen:
– die Bahnbrechende Werke der F, Fitzpatrick (1932);
– die liniare diskriminierende Analysis (A-H-N, Altman-H aldermann-Naraynan
1977; A, Altman 1968; B, Beaver 1966; E, Edminster 1972; R-F, Ramser-Foster 1931; E-M, El Hennawy-Morris 1983); Bl, Blum 1974);
– die rückgängige Analysis (Korobw, Stubr, Martin);
– logische Regression (W-S, Winakor-Smith 1935, D, Deakin 1974);
– Wahrscheinlichkeitsmethoden (T, Taffler 1982).
Die bekanntesten sind die Methoden der r eelen rückgängigen Analysis, die zu
einen Modell dieser Form führen:

Z = c 0 + c 1 * r1 + c 2 * r2 + ….. (1)

ci – sind Koeffizienten, r i – sind die Variablen der Mode ll (bzw. Raten), z – ist der
Ergebnis der Modellierung
Die benutzte Raten sind : Begleichungsfähigkeit (L), Zahlungsfähigkeit (S)
und Profitbringung (P). Die Nutzung dieser Rate n in die verschiedenen Modellen ist in
die Tabelle 1.1 gezeigt:

* Prof., Ph.D. at the "Ioan Slavici" University of Timi șoara, Romania
Assist. Prof. at the "Ioan Slavici" University of Timi șoara, Romania

272 Slavici, T.; Bivolaru, D.

Tabelle 1.1
Raten Laufende
Gröβe Benutzt vo n
R1 cash / laufen de Passiv en L E,D
R2 cash flow / laufe nde Pass iven L E
R3 cash fl ow/ Gesam tsumme Aktiven L E-M
R4 cash flow / Gesam tschulden L Bl,B,D
R5 cash / Nettoverka uf L D
R6 cash / Ge samtsumme Aktiven L D
R7 laufe nde Aktive n/ laufende Passi ven L M,B,D,A-H-N
R8 laufe nde Aktive n / Nettoverkauf L D
R9 laufe nde Aktive n / Gesa mtsumme Aktiven L D,E-M
R10 laufe nde Passive n / Ei genen Kapital L E
R11 eige nen Kapital / fixe Aktiven S F
R12 eige nen Kapital / Nettoverka uf S R-F,E
R13 Inventur / Nettove rkauf L E
R14 langzeit Schul den / Eige nen Ka pital S E-M
R15 eige nen Kapital / Schulden S A,A-H-N
R16 Gesam tschul den / Eige nen Kapital S M
R17 Nettoei nkommen / Eige nen Kapital P B,D
R18 laufe nde Aktive n / Inventur L Bl
R19 Nettoverkauf / Gesam tsumme Aktiven P R-F,A
R20 Nettoei nkom men / Gesa mtsumme Aktiven P A,T,A-H-N
R21 EBIT / Ausga ben m it Zinsen L A-H-N
R22 laufe nde Aktive n (quick’s) / laufe nde Passiven L D,E-M
R23 laufe nde Aktive n (quick’s) / Netto verkauf L D
R24 laufe nde Aktive n (quick’s) / Gesam tsumme Aktiven L D,T,E-M
R25 Rentabiliä tsrate für la ufende Aktien P Bl
R26 Bruttoeinkom men / Ges amtsumme Aktiven P A,A-H-N
R27 Aktienre ntabilität P F,T
R28 Gesam tschul den / Ge samtsumme Aktiven S B,D
R29 Arbeitska pital / Nettoverkauf L E,D
R30 Arbeitska pital / Eigene n Kapital L T
R31 Arbeitska pital / Gesam tsumme Aktive n L W-S,M ,B,A,D

2. Benutz ung der Ar tifiziellen N euronalen Wahrscheinl ichkeitsnet z
(ANW N)
ANWN benutzt der Prinzip der Rückv erbreitung, a ufgrun d der Fakt das ein
ununterbr ochenes Reaktionsignal (feedback) zwischen den Mod el und der laufende
Antwort besteht / die Differenz zur Au sgang ist pro voziert von M odellfehlern).
Die Fehlern sind gerechnet m it Wahr scheinlichkeitsregeln im Form :

L = -ln (c) = -ln (p (t 0 | c)) , wo (2)

P ( t 0 | c ) ist die Dichtheit der Vorgeseh ene Wahrscheinlichkeit der t Vektor in
den Fall einer Kondition c.

Benutzung der Artifiziellen Neuronal en Netz (ANN) … 273

Wenn t der Antwort des Models zur eine r Fehler die als ri chtig angenommen
wurde gegen der Zielwert (target) ist, dann P ( t | c ) ist die mathem atische
Wahrscheinlichkeit der Fehler.
ANWN funktioniert auf dem Prinzip der Wahrscheinlichkeitsdichtheit. Di e
erwartete Dichtheit für die Prüfung eine r Must er ist gerichtet zur bestim mte Klassen .
Es wird identifiziert ob einen getestete Muster Teil einer besti mmter Kla sse ist, oder
abhängig der Antwort der Muster zur Wahrscheinlichkeitsverteilung. Dieser P rinzip ist
in der Figur 1.1.

∆α
γ
Figur 1.1.

Der Arbeitsprinzip der ANWN ist in Zeichen 1.2 ange zeigt.
(b) (a)α γ
Figur 1.2.

274 Slavici,T.; Bivolaru, D.

Für den Test des ANWN Model wurden 122 Firmen geprüft , welcher
Prognose vo rher mit klassische Modelle n statgefunden habe n, benutzen d fünf
Eingangsvari ablen:
– cash flow bezogen auf total Aktiven
– die Sum me der Schulden b ezogen auf to tal Aktiven
– Ausgaben für Benutzung b ezogen auf to tal Reserv en
– Laufende Passive bezogen auf total Schu lden
Tendenz der Reserven berechnet als Ve rgleich der t otal Reserven im Jahr 1
und 2, bezoge n auf total Reserven im Jahr 2 un d 3.
In diese Stru ktur der klassische Modell war von Pl att und Pedersen (1994)
vorgeschlagen.
Im Bezug der Test für den ANWN Mode ll, die 122 Firmen wurde wahllos in
drei Kategorien geteilt:
– ein Teil für tr aining (1 1 in Konkurs+33 nicht in Kon kurs);
– die zweite fü r die Feststellung der Mo dell erreicht n ach die trainings (26
nicht im Konkurs + 14 im Konkurs);
– letzte Kategorie für die Prüfung de r Firmen und nachher den Ergebnis
Vergleichen mit die traditionellen Me thoden (30 im Konkurs + 8 nicht im
Konkurs).
Für den Vergleichen der Effizien z verschiedener Methoden wurden
nachfolgende Methoden st udiert:
– FISHER – lineare Di skriminierende Analy sis;
– RAN-BP – Klassische ANN mit rückwärts Verbreitung;
– RANP – Neu ronale Netze Wahrscheinlichkeit;
– RANP * – Neuronale Netze Wahrschein lichkeit mit die norm alisierung der
Ergebnisse.
Die Ergebnisse sind im Tabelle 1.2 ange zeigt, in zwei Varianten :
– in deflatierte Werten
– in nedeflatierte Werten.

Tabelle 1.2
Deflatierte We rte Nichtde flatierte W erte
Global
(n=38) Nich tkonkurs
(n=30) Konk urs
(n=8) Global
(n=38) Nich tkonkurs
(n=30) Konk urs
(n=8)
27 20 7 33 26 7 FISHER
71% 67% 88% 87% 87% 88%
28 24 4 30 30 0 BP
74% 80% 50% 79% 100% 0%
25 24 1 26 24 2 PNN
66% 80% 13% 68% 80% 25%
28 24 4 32 27 5 PNN*
74% 80% 50% 84% 90% 63%

Benutzung der Artifiziellen Neuronal en Netz (ANN) … 275

3. Benutz ung der Nichtw arscheinlich keits AN N
Obwohl die Benutzung de r ANN in diesem Bereich relativ neu ist, können wir
eine chronolo gische Entwiklung machen:
– Wilson un d Sharda vergl eichen ANN m it die lineare diskrim inierende
Analy sis und merken eine höhere Prezisi onsniveau zur RAN 96% , als die anderen
91%. Es wurden 129 Firm en geprüft, 6 5 im Konkurs, 64 nicht, d ir finanziellen Raten
waren genau wie die im Altm an Muster;
– Serano- Cinca (1993) zeig t dass der Rü ckwärtsverbreitung Algor ythm und
Selbstorganisierung geb en bessere Ergebnisse (91% , bzw. 96% die
Selbstorganisierungsm ethode) als die Methode der diskrim inierende Analy sis. Es
wurden 66 sp anische Bank en, daraus 29 im Konkurs,analy siert;
– Back (1996) hat ANN und der Rückwärtsverbreitung Algor ythm benutzt,
und einen Pre zisionsniveau von 95% erreicht;
– Für einen besser en Prez isionsniveau, Back hat eine Hy brid ANN-
genetische Algorithm en benutzt, un d ein e Prezisionsniveau von 97% erreicht.
Für die Prüfung der ANN wurden 36 Firmen für lernentraining benutzt und
andere 38 für testen; in den Set für training, 18 ANN war en nicht i m Konkurs, und 18
mit 1,2,3 Jahren vor den Konkurs. Es wurden 9 ANN Ty pen mit Vorbereitung. Der
Neuronenzahl der Eingangslay er ist gleich mit den Zahl der Eingangswerten(die
gewählte Raten aus der Tabelle).
Der Ausganglay er hat einen einzigen Neuron – entsprechend der Firm enstatus,
mit nur zwei Werten: 0- für Konkursstatus, 1 – für nicht Konkurs. Im Fall jeder ANN
wurden m ehrere Sy stem e mit zwischenlay eren getestet, jede mit 9-12 Neuronen.
Für die Prezisionsverbesserung wurde n Hybrids ystemen benutzt, bestehend
aus zwei Ele mentarsy stemen:
– ein S ystem wurde für d en Auswahl der Eingangs werte, in diesen Fall
wurden benut zt:
– DA – die Diskrim inierende Analy sis
– GA – die Methoden der g enethischen Algorithm en
– der andere wurde für vora ussehen benut zt, in diesem Fall NN – Neuronale
Netz.
Synthetisch, die Ergebnisse wurd en im Tabelle 1.3 verfasst:
– die Fehlern wurden in zwei Kategorien geteilt:
a) Typ I – wenn die Vorhersagem ethoden geben “nicht Konkurs”, aber in
Wirklichkeit wird Konkurs sein;
b) Typ II – wenn die Firm a Konkurs pro grammiert ist, aber in Wirklichkeit
nicht Konk urs ist;
c) Die drei Linien sind die Jahrenzahl, bevor der Konkurs, aufd em die
Vorhersage gem acht wird.

276 Slavici,T.; Bivolaru, D.

Tabelle 1.3
Jahrza hl die
vorgesehe n
wurden bevor
der Ergebnis Typ I Fehler Typ II Fehler Gesam t Fehle r
DA/NN GA/NN DA/NN GA/NN DA/NN GA/NN
1 10.5 5.6 5.3 0 7.9 2.7
2 47.4 27.8 5.3 26.3 26.3 24.3
3 36.8 5.6 34.2 26.3 31.6 16.2

Als Schlussv olgerung , nachdem die Tab elle analy siert wurde, kann man sagen
dass die beste Ergebnisse/k leinste Fehlerpro zent) m it die Kom bination GA/NN erreich t
wird, oder die Eingangswerte mit genetischen Algorithm en gewählt sind und die
Voraussicht mit ANN erf olgt.

REFERE NCES:

[1]. Sla vici T. – Calculato are pers onale, Editura Mirton, Timișoara 1 999
[2]. Sla vici T. – Eleme nte fundame ntale ale proiect ării asistate de calculator , Editura
Eurobit, Timișoara 1999
[3]. Haz kin S. – Neural Networks: A Comprehensive Fo undatio n, Sec ond Edition, IEEE Press
1 999
[4]. Hertz J., Krogh A., Palmer R. – Introductio n to the Theorz of Neural Computation,
Lectures Notes, Sa nta Fe Institute, Addison-Weslez Publishing C ompany, 1995

Annals of the University of Petro șani, Economics, 4 (2004), 277-282 277

ANWENDUNG DER ARTIFIZI ELLEN NEURONALE NETZ
(ANN) ZUR AKTIENMARKT DER NIKKO BÖRSESYSTEM

TITUS SLAVICI, DOINA BIVOLARU *

ABSTRACT: Der Artikel stellt die Möglichkeiten dar, Verfahren der artifiziellen
Inteligenz (artifizielle neuronale Netze, Ex pertsystemen) im Bereich der Finanzen und
Buchhaltung, anzuwenden.

KEY WORDS: Vektor, Rentabilitätsevolution, Wertebereich, Wachstum

1. Allgemeines. Problembereich

Es wurden die folgende Entitäten be nutzt, mit die folgende Abkürzungen:
– einen Vektor (eindimensionales Matrix ) bestehend aus Regresionsfaktoren
mit der Zeit, Dow Jones(DJI)
– das medium Wert der langfristige Zi nsen der Schatzschein für den Land
(JGB)
– einen Vektor mit die JGB Werte in eine Zeitspanne.
– einen Technischer Indikator spezifisc h der Börse, IT in diesem Fall.
In der Tabelle 1.1 ist die Rentabilitätsevolution der Aktien gezeigt: der erste
Wertesatz zeigt die Wochentliche Verä nderung der jährliche Mittelwert der
Rentabilität, abhängig dem Wertebereich für DJI; zum Beispiel, damit er im Bereich
[0,0.1] liegt, die Rentabilität ist 26.83%, di e Standardabweichung in diesem Fall ist
9.06% und wird erreicht durch die Verarbeitung 14 Klassen . So wird in diesem Bereich der grö βte Verfall für DJI bemerkt,der kl einste Niveau für JGB und der
korrekte Niveau für IT.
Aufgrund dieser Tabelle, kann man beha upten, dass der Wachstum der DJI in
einer Woche beursacht nächste Woche einen TOPIX Wachstum und wenn die Zinsrate
JGB klein ist, oder ein Verfall einander bedingt zu eine kleine Wert des IT in einer
woche meldet, dann TOPIX wird nächste Woche wachsen .

* Prof., Ph.D. at the "Ioan Slavici" University of Timi șoara, Romania
Assist. Prof. at the "Ioan Slavici" University of Timi șoara, Romania

278 Slavici, T.; Bivolaru, D.

Tabelle 1.1
Rang DJI
Evoluti on der
Vektor JGB
Langfristige
mittelwert
Veränderung JGB
Langfristige
Veränderung IT
Die m ittelwert der
Gesam tverän derung
0 – 0.1 26.83 -26.57 51.93 0.00
9.06 10.14 6.33 0.00
14 8 16 0
0.1 – 0.2 -106.9 3 31.45 48.44 41.47
0.00 5.50 9.10 6.16
1 64 30 65
0.2 – 0.3 -43.47 25.47 35.19 10.39
10.26 6.46 6.03 7.53
12 77 32 46
0.3 – 0.4 1.74 29.76 -2.44 3.14
8.95 7.92 6.24 6.57
40 40 31 20
0.4 – 0.5 20.85 -34.16 9.14 -0.70
6.95 14.17 11.14 10.48
51 17 18 14
0.5 – 0.6 4.83 -5.17 14.92 -5.24
7.99 8.04 6.71 9.00
62 30 34 12
0.6 – 0.7 18.49 -26.49 18.08 4.59
6.96 10.97 6.28 7.25
27 38 21 18
0.7 – 0.8 14.89 12.85 17.11 -0.06
8.53 6.88 6.56 7.81
48 21 53 25
0.8 – 0.9 17.11 0.00 -16.21 11.23
9.93 0.00 9.17 8.34
30 0 33 68
0.9 – 1.0 57.20 0.00 -47.34 -19.61
10.52 0.00 10.88 13.76
10 0 27 27

Diese erste Schlussfolgerung gi bt uns die Voraussetzung f ür die Möglichkeit
einer Voraussehung der Aktienm arkt, in die er ste Phase, durch elem entare statistische
Methoden.
Es wird bem erkt in diesem Fall dass di e Benutzung der ANN sehr effizient ist,
weil ANN flexibel im lernen ist, im Beziehung m it die kom plexen Abhängigheit en von
Eingang und Ausgänge.

Anwendung der Artifiziellen Neuronale … 279

2. Die Architektur d er ANN Voraussehungsystem

Die Ba sis Str uktur ist in die nächste Figur angezeigt. Der sy stem besteht aus
mehrere ANN modulen die im Lern proze ss “Geschichte”- Daten benutzen. Jeder
Modul wird eine Voraussehung m achen, die Rentabi litätsrate für nächste Woche, und
diese wird der Ausgang der ANN s ein.
In die Figur 1.1 wird die prinzipielle Struktur der benutzte AN N gezeigt; es
wird bem erkt die Rangordnun g, best ehend aus drei Schichten (lay er), ei nen für
Eingang, einen interm ediär (versteckt) und einen f ür Ausgang. Der Ausgang ist eine
Analogische Wert zwis chen [0,1].
Fig.1.1 .

Es wurde die Methode m it die Verbesse rung der Lern geschw indigk eit benutzt.
Im Fall einer gro βer Menge der Eingang werten wird die Methode der
Komplementärlernen benutzt. Diese erlaubt die autom ate Aktualisierung der w Faktor,
interaktiv während der Le rnprozess.
Die Eingangswerten für ANN sind Sätze bestehend aus:
– Umsatz (turnover);
– Die Werten der Aktien zur Zeit;
– Zinsrate;
– Devisenstand im Bezug zur Hauptm ünzen;
– Dow Jones stand.

280 Slavici,T.; Bivolaru, D.

Der Datenset benutzt für Training sind gewählt aus einen breiten Spektrum ,
nachdem sind sie in Zeitserien verändert. Für die Verringerung der System störung ,
wird einen Satz aus Wochentliche m ittelwerte indem jeder Eingang Index i n drei
Werten verändert ist :
– eine mittelwert die veränderlich ist;
– ein Verfallkoefizient;
– die Differenz zwischen den laufenden In dex und das Medium wert.
In die nächste Tabelle we rden die Ei ngangsätze angezeigt, ob sie benutzt (B)
oder unben utzt (UB) werden:
Der Ausgang der ANN ist die Mittelwert der gem äβigten Koefizienten w ij,
und die wöchentliche mittelwert erzeugt von TOPIK S ystem .
Falls eine Serie aus gesch äftliche Zeit maβ benutzt wird, (grö βere Zeitspannen
inclusiv für einen grö βen vorausgesehenen Horizont) werden Störungen auftreten
(gröβere Geräusche (noise)) und eine kleinere Inform ationsm enge.
Es kann nachgewiesen sein dass di e Störungsschwin gungswerten proporti onal
mit der radik al der benutz te Zeitspanne ist, die Vora ussehung sch werer zu realisieren
ist. Infolge d er ANN – testen wird be merkt dass der optim ale Voraussehunghorizont
ungefähr 10 Wochen ist.

T abelle 1.2
Eingangswerten Niveau Tendenz
(trend) Relative Niveau
Aktienpreis UB B B
Transaktionsvolum e UB B B
Langfristige Zinsrate B B B
Wechselkurs Yen/Dollar UB B B
Prozent der Transaktionen gegen die
meist transaktionierte Aktien B B B
DJ (Dow Jones) UB B B

3. Testen und Auswertun g der System

Wie in die obere Absät ze erwähnt wur de, die Benutzung einer ANN best eht
aus zwei Pha sen:
– die lern-training Phase;
– die Benutzun g-Phase, in u nser Fall die Voraussehungphase.
In der Tabelle 1.3 werden die Korrelati onskoefizienten angezeigt, die zwischen
der Lernphase und der Vo raussehungph ase eintre ten, im Bezug zur gesam tzahl (N) der
Wochen dafü r die Voraussehung stattfin den soll.
Man kann merken dass im Fall einer monatliche Lernphase, die
Korrelationskoefizienten sind gro β :0.4 – 0.5, und in ei ne drei m onatige Lernphase die

Anwendung der Artifiziellen Neuronale … 281

werten fallen unter 0.2. Diese Ergeb nisse suggerieren dass die Regeln die ANN
ausgeben sind sehr w echselhaft, so das s eine trainierte ANN nicht mehr als 1-3 Monate
benutzt werden kann.

T abelle 1.3
N 8 10 12 Mittelwert
L M
1 6 0.442 0.421 0.416 0.435
12 0.417 0.483 0.446 0.458
18 0.341 0.386 0.449 0.414
24 0.415 0.473 0.458 0.457
Mittelwert 0.498 0.533 0.529 0.528
6 0.287 0.236 -0.119 0.175
12 0.184 0.215 -0.303 0.043
3 18 0.080 0.065 0.019 0.060
24 0.119 0.078 0.047 0.063
Mittelwert 0.207 0.185 -0.124 0.106

Aus der Benutzung der S ystem wurde zur nächste Schlu β gekom men:
– infolge ANN – Benutzung wurden einige Zeit spannen bemerkt, mit
schwachere Leistungen . Diese Zeitspannen sind al eathorisch, scheinend o hne Grund
und wurden keine effiziente Mitteln gefunde n die es ausscheiden liessen. Aufgrund
dieser Stand, wurden m ehrere Lerndaten in paralell benutzt, un d in Voraussehungphase
wird der Mittelwert der vorausgesehene Ergebnisse berücksichtigt;
– insgesam t wurde ein Mit telwert der Korrelationskoefizient in Höhe von
0.5 bestätigt, zwischen die vorausgesehen e Werten und die vorh erige Ergebni sse. Es
muβ erwähnt werden dass einen solchen Ne tz nicht m ehr als eine Monat benutzt
werden konnt e;
– gegenseitig, für die bestimm ung der Nützung der Netz zu eine
Korrelationskoeffizient u m 0.5, es hat sich eine Sim ulation der Verkauf und Kau fwerte
in dieser Mode: wenn die vom System vorausgesehene Wert grö βer als einen Niveau
ist, wird ein en Aktien-Geschäftsberei ch der TOPIX Index angeboten; wenn die
vorausgesehe ne Wert unter dieser Nivea u liegt, der G eschäftsbe reich wird verkauft;
– auf eine läng ere Zeitspanne, der S ystem wurde für die Voraussehen der
145 Werten benutzt, und wurde ein Korrelationsko effizient von 0.293 (R2 = 8.6% )
erreicht, und eine Richtigkeitsrate der Voraussehung vo n 62 .1%. Der Test R2 war
zwischen 8% und 10%;
– es wurde die Verbindung zwischen die Voraussehung der ANN mit eine
Hedging Str ategie gem acht, dam it die Riskrate n och m ehr verm indert wird. Die
Fondsm anagern haben die Evolutio n der TO PIX In dex verfolgt: sie haben “futures”
verkauft wenn ein Marktfall erwartet war, und haben zurück “futures” gekauft wenn
eine Marktwa chstum erwartet war. So wu rden die NI KKEI futures im Handel benutzt.

282 Slavici, T.; Bivolaru, D.

REFERE NCES:

[1]. Sla vici T. – Calculato are pers onale, Editura Mirton, Timișoara 1 999
[2]. Sla vici T. – Eleme nte fundame ntale ale proiect ării asistate de calculator , Editura
Eurobit, Timișoara 1999
[3]. Haz kin S. – Neural Networks: A Comprehensive Fo undatio n, Sec ond Edition, IEEE Press
1 999
[4]. Hertz J., Krogh A., P almer R. – Introductio n to the Theorz of Neural Computation,
Lectures Notes, Sa nta Fe Institute, Addison-Weslez Publishing C ompany, 1995

Annals of the University of Petro șani, Economics, 4 (2004), 283-288 283

COMPARATIVE ANALYSE
OF THE SMEs FROM ROM ANIA AND EUROPEAN UNION

GABRIELA SLUSARIUC ∗

ABSTRACT Comparing the definition of small and medium-sized enterprises from
Romania with the one recommended by the EU, it is observed the fact that the point of view of
number of employees, this is identical. From po int of view of turnover , the Romanian definition
is more restrictive, the maxim level of this be ing at 8 million EURO, com paring with the similar
condition from UE

KEY WORDS small and medium-sized enterprises, turnover, employees, enterprises,
founds, candidate countr ies, turism, capital .

An enterprise fits in the category of sm all and medium-sized enterprises if all
condition about turnover and employees.
Comparing the definition of small and medium-sized enterprises from
Romania with the one recommended by the EU, it is observed the fact that the point of
view of number of employees, this is identi cal. From point of view of turnover, the
Romanian definition is more restrictive, the maxim level of this being at 8 million
EURO, comparing with the similar condition from UE (7 million EURO for small
enterprises and 40 million EURO for medium-sized enterprises).
In Romania, does not exist restrictions concerning maxim capital of the small
and medium-sized enterprises. In UE exist th is restriction, but this is progressive: 7
million EURO for small enterprises a nd 27 million EURO for medium-sized
enterprises. So, the definition used in Romania is in concordance with the one
recommended in European Union.
In 2001, in all 13 candidate countries had been recorded approximately 6
million active SME, so an average of 460. 000 for every candidate country. The number
of jobs proceeded from these enterprises had been of almost 30 million with an average
of 2.307.035 jobs per country. A comparison on the same date (2001), in Romania had
been recorded a total number of 404.675 enterprises, from which 402.359 with private

∗ Assist. Prof. at the University of Petro șani, Romania

284 Slusariuc,G.

capital having 1. 905.035, respectively 1.844.312 em ployees. ving 1.905.035,
respectively 1.844.312 employees.

Table 1.
The definition of SME in Romania an d EU
Conditi ons fo r IMM Micro Small Medium
ROMANIA
– maxim num ber of em ployees <10 <50 <250
– turnover <8 <8 <8
– other conditions 25% 25%
EURO PEA N UNI ON
– maxim num ber of em ployees <10 <50 <250
– turnover (million E URO) n/a 7 40
– total m axim founds (million E URO) n/a 5 27
– other conditions n/a 25% 25%

Most of SME fro m Romania, like in the member countries, are micro-
enterprises. In Romania, from the tota l num ber of SME, 91,2 % had been micro-
enterprises in 2001.
From the poit of view of l abour share angage.in the sector of the SME in the
total em ployees from econ omy, the situ ation is presented in t he table no2

Table 2.
The labour share angage.in the sector of the SME
Euro pe
(European Un ion+ AELS) State candidate Romania
66% 72% 40%

It is obvio us the fact that the labour fro m Romania employed in S ME is 50%
lower than in Europe – 19 and in other candidate coun tries.
The average of the em ployees in the SME is presente d like this:

Table 3.
The average of the employees in the SME
Euro pe
(European Un ion+ AELS) Candid ate countries Rom ania
5,5 6,9 4,8

Comparative analy se of the SM Es … 285

It can be observed that in Romania, the SMEs has in av erage, les s 5
employees, situating un der the european av erage. T here is a diff erence bet ween the
average of SME from the candidate countri es and the member countries. In Malta,
Cyprus, Turk ey – 3 candi date countries th at don ’t have a planified econom y, the
number SME s is at the same level of the states in EU. In t he Sout h part of t he continent
– Greece, Ita ly, Spain and Portugal is char acteriz ed by a bigge r ponderosity of the
micro-enterpr ises.

Table 4.
Branch Romania State candi date Europa
(Eu+ AEL S)
Indus try 11,6% 12% 10%
Agricul ture 2,0% – –
Constr uction 3,3% 16% 13%
Trade 63,0% 19% 25%
Tourism 0,5% 5% 6%
Transp ort 3,6% 12% 6%
Services 16,1% 36% 30%

The percent of the SME in candidate countries and in Euro pe includes the
SME which activates in financial services dom ain (banking services, insurance)
The situation of the SM Es repartition on activit y categoriesin Romania is
presented in the figure no. 1
The situation of the SMEs repartiti on on activity categories in Romania
Rom ania
Industrie
Agricultură
Construcții
Comerț
Turism
Transport
Servicii

Figure 1.

The situation of the SMEs repartition on activity categoriesi n European Union
is presented in the figure no.2

286 Slusariuc,G.

The situation of the SMEs repartition on activity categories in Eur opean Union

Figure 2. Candidate states
Indus try
Agricultură
Constr ucții
Comerț
Turism
Transport
Servicii

Comparing the definition of small and medium-sized enterprises fro m
Romania with the one recom mended by the EU, it i s observed the fact that the point of
view of num ber of em ployees, this is identi cal. From point of v iew of turnover, the
Romanian definition is m ore restrictiv e, the maxim level of this being at 8 million
EURO, comparing with the si milar co ndition from UE (7 million EURO fo r small
enterprises an d 40 m illion EURO for medium -sized enterprises).
By com paratively analising the weight of the Romanian SME with the SMEs
from the candidate countr ies and SMEs from EU results so me particularities of SME
from Romani a:
– the m ost of the SMEs from Romania are implicated in trade activity , the
percentage in EU being lo wer by 2.5 times
– „the turism ” branch is very poor repres ented, respectively only 0.5% comparative
with 0.5% respectively 6%, so 10 tim es poorer represented
– the percent of the SME from the „constructi ons” sector is 4 tim es lower than the
european average recorded in candidate countries and in Euro pe ;
– the percent of the SME i n „industry ” category is 11,6%, com paratively with the
one recorded in EU (10% ) and in candid ate countries (12% )
Work pro ductivity (in Eu) – in 2 001 – is presented below:

Table 5.
Work productivity
Micro
Enterpri ses Small
Enterpri ses Medium
Enterpri ses TOT AL
Europe 40.000 75.000 105.000 65.000
Romania 2.688 3.688 3.542 3.278

Compa rative analyse of the SM Es … 287

It can be o bserved the fact that the average value of work productivi ty
recorded in SME in Romania is 19 times lower than t he one recorded in Europe. In size
types the situation is the sam e. However, in evaluating these differences we must
consider the fact that the definition of SME in Rom ania is not ide ntical with the one in
EU, concerning tur nover.
For developi ng fast and harm onious of th is sector, in Ro mania it came into
being the National Agency for Sm all an d Me dium -Sized Enterprises and Cooperatives.
The National Agency for Sm all a nd Medium -Sized Enterprises and
Cooperatives (NASMEC) is established by the Governm ent Decision No. 75 3 / 2003,
and too k over the organiz ational structure, all the attributions and functions of The
Ministry for Small and Medium -Sized Enterprises and Cooperatives
The NASMEC purpose is t o implem ent the Governm ent's program of SMEs,
cooperatives and dom estic trade developm ent.
Basic funct ions of the National Agency for S mall and Medium -Sized
Enterprises and Cooperatives:
– Strategic fu nction – defining, develo ping and im plem enting developm ent
strategies an d program s for s mall an d m edium-sized enterpris es and
cooperatives, as well as domestic tr ade developm ent and harm onization
strategies;
– Regulating function – creating the legal and institutional framework
required for achieving obje ctives and im plem enting program s in its sector
of activit y;
– Management function – managing state budget and non-bu dget funds and
distributin g such funds for the develo pment of the SMEs, cooperatives and
domestic trad e sectors;
– Representati on function – representing Rom ania national ly and
internationall y in its field of activity ;
– State authority function – supervising t he enforcem ent of legal pr ovisions
in its field of activity .
According to the Govern ment's program , the Natio nal Agency f or Sm all and
Medium -Sized Enterprises and Coop eratives has set cert ain objectives that it is
pursuing in the SMEs, dom estic trade an d cooperatives sectors:
• In SMEs sector creating the busines s environm ent favorable to
stimulate private investors in establishing and developi ng SMEs;
• Stream lining the develop ment of SMEs' productive and inno vative
activities;
• Improving the services av ailable to SMEs to increase their business
performance also in international markets;
• Improving t he SMEs' access to financing;
• Improving t he SMEs' access to foreign markets
So, on one hand there are sensible disp arities bet ween Ro mania and Europe –
19 and on the other han d from the poin t of view of t he structure o n activit y categories
and absorbtion of labour in di ffrent sectors of the econom y.

288 Slusariuc,G.

REFERE NCES:

[1]. Marin D. – Economia Ro mâniei. Sistem ul de companii.Dia gnostic str uctural, Editura
Economică, București, 2001
[2]. Marin D. Mereu ță C. – Economia României 1990-2000. Compendiu, Editura Econom ică,
Bu curești, 2000
[3]. Nicolesc u O. – Managementul întrep rinderilor mici și mijlocii, Editura Econom ică,
Bu curești, 2001

Annals of the University of Petro șani, Economics, 4 (2004), 289-294 289

NEW TENDENCIES IN PU BLIC ADMINISTRATION
DEVELOPMENT

MELINDA SZASZ *

ABSTRACT: After 1989 our country strongly experienced the public administration
reform necessity. One of public administrations refo rm’s objectives was to attract the citizens in
planning and checking activities developed in the public sector and to create "an electronic
administration" trying to impr ove the quality and the rapidity of services offered, using
electronic aids.
Public authorities are frequently assisted in promoting the social partnership process
by the NGO. We must recognize that the NGO begin to have a main role in promoting a real
relation between governs and citizens. In the eyes of public opinion the NGO present great
credibility, because they are no t submitted to governm ental politics, commercial or political
ambitions. They also have more fl exibly structures, that aren’t subdue to bu reaucracy and
hierarchies and the personal usually is volunteer, and no t financial motivated ones.
The IT society development and the introduction of communication technologies create
"an electronic administration". Pu blic administration will be mode rnized and the main goal of
authorities will be to increase the efficiencies of public services and to make them compatible
with European standards. Through IT public administration w ill be able to co llect local taxes
on-line, to make public acquisitions through electronic auction and to create advantageous
conditions for communi cation through vide oconference system ,

KEY WORDS: reform, public administration, IT, NGO, electronic, paying taxes on-
line, videoconference.

Starting with 1990 our country experien ced the reform necessity. Although
initially whole attention fo cused on accomplishing economic reform, soon it became
obviously that economic reform is impossibl e without the previous, or at least the
concomitant, public administration reform.
The public administration modernization, from structural and functional point
of view, was generated by some factor s. The above mentioned factors were: e conomic
(the creation of a public, modern and flexib ly administration, opened to public-private
partnership), technological (introduction of new technologies, such as Information

* Assist. Prof. at the University of Petro șani, Romania

290 Szasz, M .

Technolog y), sociological (attracting the citizens i n taking administrative decisions)
and instituti onal ones (th e public ad ministration resty ling requested b y European
Union).
The public administration reform was also generated by internal factor s
(manage ment, social and econom ic problem s), and extern al ones (the quick
developm ent of technolo gies).
One of the public adm inistrations reform ’s object ive is to determ ine the
existing prob lems from his spheres, to propose the optim um solutions and im plem ent
them .
Another objectives is to encourage ci tizens to attend the process of taking
public decisions, to attract citizens in pl anning and c hecking activities from the publ ic
sector, and to create an “ electronic ad ministration”.
This is the reason for which the NGO were attracted in public a dministration
reform from beginni ng. Another im portant step of reform was to accept new
technological middles used to pa y taxes on- line, to make public acquisitions throug h
electronic procurem ent and to facilitate communication through videoconference
system .
The constituti onal principle† enounced in the item 37 give legal form to NGOs
– citizens can free-associ ate in politic parties, in trad e unions, in syndicates and in any
other form s of partnership. The right of association is a fundam ental one containing the
possibilit y for Ro manian citizen s to free-associate i n formations or organizations to
assist in social, political, scientifically and cultural l ife or to achieve so me legitimate
commune interest‡.
The NGO can have an im portant role in prom oting public-private partnership.
This kind of public-private partnership has a main social i mpact, becaus e allows
citizens, beside m unicipal authorit y, to take decisions with m ajor im pact on pop ulation.
The NGO can acco mplish this objective through finding new methods for the
public politi cs’ im provement and im plicati ng citizens in decisional process. The
decisions must be em braced by the closer au thorities to the citizens, in the conditions
in which relation am ong g overnm ent an d populatio n beco mes more co mplicated, d ue
to facts that the politic decisions pass th rough m any levels of ad ministrations, and
finally when are adopted, the decisions beco me untim ely.
Citizens feel they have littl e influen ce regarding decisions took to national and
local level, so the y consider there is a “d eficit of democracy " – so in these m oments the
concrete inter vention of NGO would be opportune.
As a rule the public ad ministrations authorities are involved obligatoril y in
relations with the NGO on the basis of legal disposals§. Therefore, the public

† Constituția României modific ată prin legea de reviz uire a Constituției nr . 429/2003 – publicată
în Monitorul Oficial nr. 758 /29 octom brie 2003
‡ Constitu ția Rom âniei co mentată și adnot ată – M . Constantinescu , Ion Delea nu, , Antonie
Iorgovan, Ioan Muraru, Ioan Vida, Florin Vasilescu, B ucurești – 1992, pagina 9 3-94.
§ Ordonanța 26/ 2000 – cu privire la asocia ții și fundații, pu blicată în Monitorul Oficial nr. 39/31
ian.2000, modificată și com pletată prin Or donanța 37/2003 publicată în M. O. nr . 62/2003

New tend encies in publ ic administration … 291

administrations authorities are enforced to co me into relations with these organizations
and to accept the NGO’ s representatives with a view to a permanent cooperation.
Among town council attributions is to decided coop eration or association with
NGO s to re alize project s of public local interest . This partnership with NGOs,
Romanian or foreign legal persons, will alwa ys be di scussed in town council ’s public
meeting and will be adopt ed with at l east two thirds vote from councillor ’s num ber**.
According to public adm inistration law, local author ities must su pport NGOs,
by giving the m business spaces, natural ly depending on possibilities, to encourage and
support t heir activity .
NGOs that unfurl an activit y of gener al interest fo r at least three y ears and
present a report from which result the y devel oped a series of activities, proje cts and
significant program s, specify to their ai ms, and they carried out the proposed o bjective,
can be recognized through Government’s decision as an “NGO of public utility ”.
The Governm ent has a special departm ent, that prom ote and estim ate th e
governm ental politics in the ar ea of social life, form ulate reco mmendations considering
these, centralize the applications concerni ng requests of recognizi ng the public utilit y
statute of NGOs and annually analy ses the activity of associati ons and f oundations
recognized as “NGOs of public utility ”, revoki ng this statute to the foundations who
are not accom plishing the im posed con ditions any more.
The teacher Ives Beigbeder shows in “ International role of NGO ” that at
NGO’ s base stands the respect of their i ndependenc es, as well a s the observance of
fundam ental human rights. The author underlines t he compliant h ypothesis that the
NGO can't scroll his program s and p roject s in optim um condition, without public
authorities’ help.
Regarding NGO’ s activity is require d a tight c ollaboration with public
authorities, obviously without enclosing NGO’ s spirit of independence and autonom y.
Lately NGOs have the tendency to exercise stro ng influences on public
administrations, so we can un derline t hat relations between the public adm inistration
and the NGOs is vast, alternating between cooperation and pressure.
NGOs shouldn ’t exercise pressures on public ad ministration, but should
orientate thei r activities in try ing to info rm citizens and find opti mum solutions for
their problem s.
Concom itantly with t he IT society developm ent and the intr oduction of
communication technol ogies, new challenges appear for the p ublic adm inistration
modernization. Through t hese new technolog ies the authorities want to increase the
efficiencie s of public services and to ma ke them compatible with European standards.
IT offers to publ ic administration the possibilit y to create "an electronic
administration". The goal of the "electronic administration" is to im prove the q uality
and the rapid ity of services offered, usi ng electronic aids, m anaging to approa ch the
citizens and to take the opportune decis ion, in accordance with their expectations.

** Legea 215 /2001 a ad ministrației publice l ocale, publicat ă în Monitorul Ofic ial nr. 204 din 23
aprilie 2001

292 Szasz, M .

Trough new technological means is possible to collect local taxes on-line, to
make public acquisitions t hrough electronic au ction, to create adva ntageous conditions
for com munication thro ugh videoconference sy stem , create a modern, pliant public
administration, which off er a perm anent connection between ci tizen and the public
authorities, and change the rapport betw een these two public characters.
IT in public a dministration presents a seri es of advantage. The benefits are: the
reduction of many specific ad ministrative docum ents, obtaining more accuracy and
real stati stical inform ation , reducing administrative employee num ber, increa sing the
transparencie s of ad ministrative docu ments, reducing the bureauc racies and ad vancing
qualified labor levels.
Local and central “ele ctronic adm inistration” mad e his debut by creating
portals containing the p ublic ad ministration ’s form ulary used in relation with citizens
and businessm en, making also possibl e to deliver docum ents in electronic form at to
public authori ties.
In 2001 a Government decision created the juridical, institutional and technical
backgroun d for IT in adm inistration b y improving a dministrative docum ents qualit y
and m odify ing relations between pub lic ad ministration and citizens.
To raise publ ic ad ministration ’s activity efficien cies is necessary to modernize
communication between institutions thr ough new technologies and teleco mmunication
middles. In this sense it’s obvious that local authorities must hav e and know how to
use a PC an d must be co nnected to one of the regional network, acces sible to local
level. Above all, in the same ti me, must be accelerated the possibilit y to transm it
docum ents o n-line. The key elem ent fo r the su ccess of pu blic adm inistrations reform is
to optim ize IT fluxes, by making an electronic circu it of docum ents and to create an
electronic arc hive for documents.
Ordinance 24†† created the juridical necessary background to im plem ent the
payment of l ocal taxes through electronic sy stem s. Local public administration m ust
offer to citizens electronic accessible middles, portals on Internet, so they can vis ualize
the provenan ce of their du e taxes and pay them through electronic m iddles, too.
To develop in good co nditions the en cashment of taxes throug h electronic
middles‡‡ the financial authorit y has some si gnificant responsibilities: to create a
proper sy stem, to offer advices and techni cal support regarding its utilization and the
transactions that can be made using it, to supervise and to check up the conform ity of
its utilization with legal norms, to assure the confidentiality , the integrity , the access
and the information per manent availability during the transaction, in accordance to our
legislation. The fiscal authorit y offers fac ilitations to Sy stem ’s users without perceived
any taxes. Public authorities must also creat e an elec tronic Register of local taxes that
will contain i nform ation regarding t he users.

†† O.G. nr. 24/2002 – priv ind încasarea prin mijloace electronice a im pozitelor și taxelor locale,
publicată în M onito rul Oficial nr . 81 din 1 februarie 2002
‡‡ Hotărârea 181 din 28 februarie 2002, pentru aprobarea No rmelor m etodologice p rivind
implementarea Sistem ului elect ronic de încasare a impozitelor și taxel or locale, publicat ă în
Monito rul Oficial nr. 158 din 5 martie 20 02

New tend encies in publ ic administration … 293

Another im portant step for IT in ad ministration was made through an order§§
which im posed the obligation for tax p ayers to use electronic declarations co ncerning
the obligati ons for national budget, for th e deduction c oncerning value-added tax es and
other contrib ution.
IT has an important rol e in the attributio n of public acquisition contracts
throug h electronic auctions.
E-procurem ent contains many stag es: the pub lication of participation
announcem ent, the registration and selection of ap plicants, the co mmunication and
presentation of docum ents, the offer evaluation, a nd the com munication o f results
(specify ing t he contractors). Every stage of e-procurem ent has its own rules im posed
by the electronic Sy stem operator.
Introducin g IT in public adm inistration was a necessity, but we must underline
there are a s eries of deficie ncies appeare d during this process.
Thus at central ad ministrations level st ill exist an i nefficient communication
between the central public ad ministrations instituti ons, financial funds to cr eate an
“electronic a dministration ” are insuffi cient, the int erconnection of databases is not
ready yet, the ad ministration electronic sy stem is not secure and hum an specializ ed
resources sho w a deficit.
As for local administration level finan cial funds to create a “local electronic
administration” are also insufficient, hum an spe cialized resour ces ar e inadequate,
unprepared a nd badl y rem unerated, and local adm inistration does not have specialized
departm ents regarding IT i n adm inistration.

REFERE NCES:

[1]. Ioan Alexandr u – Administrația publică, , Editu ra Lumina Le x, București, 2002,
[2]. Ioan Alexandr u – Criza administr ației, Editura All Be ck, B ucurești, 2001
[3]. Iorgovan Antonie – Tratat de dre pt administrativ , Ed. Nem ira, 1996
[4]. Ives Beigb eder – Rolul interna țional al organizațiilor nonguvernamentale , Bruylant
LGDJ, Paris 1992,
[5]. Le gisla tion:
– Legea 455/2001 – pr ivind sem nătura electronic ă, M.O. nr. 429/2001;
– Legea 365/2002 privind comerțul electro nic, M.O. nr. 483/2002,
– Regulam entul 4 din 13 iunie 2002, privind tra nzacțiile efectuate prin interm ediul
instrum entelor de plat ă electronic ă și relațiile dint re participan ții la aceste tranzacții, publicat în
Monitorul Oficial nr. 503 din 12 iulie 2 002
– O.G. nr. 24/ 2002 – privind încasar ea prin mijloace elect ronice a i mpozitelor și taxelor locale,
publicată în M onito rul Oficial nr . 81 din 1 februarie 2002
– Hotărârea 181 din 28 februarie 2 002, pentru aprobarea No rmelor m etodologice p rivind
implementarea Sistem ului elect ronic de încasare a impozitelor și taxel or locale, publicat ă în
Monitorul Oficial nr. 158 din 5 martie 2002

§§ Ordi nul n r. 529/2003 – privind de punerea în fo rmat electro nic a declara țiilor de i mpozite și
taxe, publicat în Monitorul Oficial nr. 277 di n 19 aprilie 2003

294 Szasz, M .

– Ordinul n r. 529/2003 – privind depunerea în form at electro nic a declara țiilor de im pozite și
taxe, publicat în Monitorul Oficial nr. 277 di n 19 aprilie 2003
– Ordonanța 26/ 2000 – cu privire la asocia ții și fundații, publicată în Monitorul Oficial nr.
39/31 ian.2000
– Ordonanța 37/2003 – privind m odifica rea și com pletarea ordona nței 26/ 2000 (cu privire la
asociații și fundații), publicat ă în M .O. nr. 62/2003
– Legea de revizuire a C onstituției Ro mâniei nr. 429 /2003 – pub licată în Monitorul Oficial
nr.758 /29 octombrie 20 03 .
– Constituția Rom âniei co mentată și adnot ată – M . Constantinescu , Ion Delean u, , Antonie
Iorgovan, Ioan Muraru, Ioan Vida, Florin Vasilescu, B ucurești – 1992,
– Legea 215/2001 a adm inistrației publice locale, publicată în M onitorul Oficial nr. 204 din 23
aprilie 2001

Annals of the University of Petro șani, Economics, 4 (2004), 251-296 295

POSSIBILITIES OF IMPROVING OMNIASIG
ACTIVITY EFFICIENCY

CONSTANTIN TOMA *

ABSTRACT: Using actuarial calculation based on mathematical statistics and
economics in order to elaborate and substantiate the tariffs t hat should be applied by the
company. The business environment for the insurance- reinsurance companies is totally
inadequate, being turbulent, beca use lots of companies are settin g prices without any efficiency
calculations.

KEY WORDS: share, market, tariffs, mathematical statistics

Increase the company market share:
¾ Continuing the acquisition process of othe r insurance companies (example Agras)
or insurance portfolio takeovers (example BTR) ;
¾ Using actuarial calculation based on mathematical statistics and economics in
order to elaborate and substantiate the tariffs that should be applied by the
company. The business environment for the insu rance- reinsurance companies is
totally inadequate, being turbulent, becau se lots of companies are setting prices
without any efficiency calculations, thus disturbing the market. In spite of this,
OMNIASIG makes efforts to sell his products at the right prices, even if the prices
are sometimes higher than the market average, trying to compensate by high quality services;
¾ Implementation of adequate marketing, PR and advertising programs for retail
sector upon which the company decided to focus;
¾ Paying a special interest to the market re searches in order to identify the products
becoming popular on the market and with satisfactory efficiency. The purpose of
such studies will be mainly to identify ne w profit sources more than to add a new
position in the company’s portfolio;
¾ The expansion plan is part of the company business plan exteded on 10 years, that
is until 2012. Thais is why it is unappropriate to assimilate products that doesn’t
positively influence company’s actual and forecasted results;

* Chairman of the OMNIASIG, Romania

296 Toma ,C..

¾ Developing activities with social character : sportive events sponsorships; charity
involvem ents in health and teaching field, acts that bring a supplem entary image
benefit.
¾ Opening age ncies and slaes points in order to have a better cover all over the
territory .
Increase the quality of claims assessment:
¾ Continu ous training of the claims inspectors;
¾ Paying the i ndemnity in due time to the clients, according t o the insurance
contracts ter ms;
¾ Decreasing thenumber of insurance frauds by collaborating with Ministr y of
Internal Affai rs and other insurance co mpanies;
¾ Undertaking preventive activities (sti pulated in the new Road Code) which
contributes to deacreasing the overall loss ratio;
Reorganize the company human resou rces structur e
¾ Taking into consideration the stipulati on of the ne w Labor Code regarding the
abrogati on of civil contracts the company has to dee ply reconsider its own sales
force. Up to now an im portant part of com pany’s inco me (approx. 7 2%) was
achieved by agents. Given this new situati on it is im portant to develop the concept
of direct sales, which invo lves recruiting and traini ng an own su pplementary force
that has to be compensate t he loss cau sed by the decrease in agents num ber.
¾ Setting a b alance between the increase of employees number and the increase of
the activity volume;
¾ Performing an efficient management policy in human resources aria. That would
lead to the increas e in the quality of claim assessing activit y and to a shorter period
needed for the insured to be indem nified.
Complete the informatization process of OMNIAS IG activity
¾ Including all branches in the o nline system (presently only 1 0 bra nches are
functioni ng o nline) would allow the c entralization of all data in real time and
support the m anagement ta ke prompt an d adequ ate d ecisions.
¾ Updating current versions of t he applic ations used by the company- Insis
(technical ap plication) and Wizcount ( accounting applicatio n) and u ndertaki ng
multiple improvements in order to answer more properly to the company needs of
centralizing a nd analyzing data.
Transition from cash to accrual accountancy
¾ Stating 2002, OMNIASIG will harmoni ze its accountancy to IAS. This implies to
report the written gross premium and not cash gr oss premium as it did until
December 31, 2001, meani ng that will apply accrual accountancy principles.

REFERE NCES:

[1]. Bis triceanu G. – Siste mul asig urărilor din Ro mânia, Editura Econom ică, București, 2003
[2]. www.omniasig.r o

Annals of the University of Petro șani, Economics, 4 (2004), 297-302 297

OVERVIEW OF THE ADMINI STRATION OF ORACLE
DATABASES WITH APPL ICATION IN THE
BUDGETARY SECTION

TEODORA V ĂTUIU *

ABSTRACT: The paper suggests the presentation of an informatics system for the
automatic administrative data processing of th e budgetary activity prop osed foe im plementation
at the Court of Counts, Romania, through which there can be achieved and arranged the
information in a real time, so that the negati ves phenomenon that can appear to be cleared .

KEY WORDS: databases, console, instances, storage

INTRODUCTION

The Console's Databases folder allows you to administer database instances,
schemas, security, and storage, and other da tabase features from a unified tree view.
The unified access to administration func tions offered by the Databases folder
makes it easy to switch between tasks and to gain an accurate overall view of database
configuration status.
You can use the Database folder featur es with or without connecting to an
Oracle Management Server (OMS). (Figure 1.)

THE PRESENTATION OF THE APPLICATION:

Reforming the public bodies of a count ry is the hard core of any economic
reform. In this paper, through public b odies we understand public authorities, public
institutions, national companies and societie s and public corporations. Internal and
external audit are the first tools of the top management of the public body in examining
the whole decision making system (strategy and tactics), the efficiency, efficacy and
economical aspects of every operation and decision.

* Lecturer at the Romanian Manageme nt Academy, Bucharest, Romania

298 Vătuiu, T.

Figure 1.

A major request of the developm ent of the informatics society is the
automation of the m ost complicates s ystem of adm inistrative data processing of an
econom y and more precisely the adm inistrative data processing from the budgetary
activity . The execution o f the budget consists in the sales of the incom es and the
accomplishment of the spending acknowledged by the legislative forum .
The achievem ent of an a dequate info rmatics sy stem comes in the auditor ’s
support, which has to give its verdict in a real time o n what concerns the justifiabilit y
and the op portunity of the a dministrative data processing of t he public money .
The paper suggests the presentation of an inform atics sy stem for th e auto matic
administrative data processing of the budgeta ry activit y prop osed foe im plem entation
at the Court of Counts, R omania, through which t here can be achieved and a rranged
the inform ation in a real tim e, so that the negatives p henom enon that can appear to be
cleared.
It is ind icated an adaptatio n of the dates with the most dynam ic product for the
administration of relational Or acle databases. Oracle has conceived the fam ily products
Oracle9i for offering a com plete software in frastructure for the a dministration of the
Internet’ s content, the deve lopm ents and circul ations of the applications for Inter net.
The analy ze of the dates has started wit h the study of the structure of incom es
and spending from the law of state b udget which is organized on parts, ch apters,
subchapters, titles, articles and breaks. For th e systematization of dates in tables which
can be interrogated and which can answer to ou r needs and im peratives of the
application, we suggested the followin g levels (Figu re 2.):

Overview of the administra tion of oracle data bases… 299

Figure 2.

This structuring of the dates gives the opportu nity to introduce the dates at the
lowers level, trim estrial circu mvention a nd m onthl y sales; and, on the other hand, you
can co mpare the trimestrial circu mvention and the trim estrial acco mplishments.
For the im plem entation has been used the generator of form s ORACLE Form s,
organized on pages (Figure 3.):

CON CLUS IONS

The applicati on was conc eived so that the auditor could have acces s to the
date’ s system of the credit sequencer, allowing the n oticed contributors with Internet
access to see the results o f a financial exerci se and to draw the c onclusions in what
concerns the justifiabilit y and efficiency of the manner of ad ministering of the public
money .

300 Vătuiu, T.

Count y Budgetary Unit

Incomes or Sales The page of sales
and cash fl ows
T he type of situati on

The P age of Chapt ers
The Page of Articles
Break Page

Figure 3.

Overview of the administra tion of oracle data bases… 301

In the end, t here can be acquired reports like the follo wing one (Fi gure 4, 5):

Figure 4.

Figure 5.

302 Vătuiu, T.

The presente d managerial strategy wants to be a advocacy in favors of the
achieve ment of such an informatics system, based on this theor y and realized throug h
the application of the relati onal databases, using the O racle9i.

REFERE NCES:

[1]. Caupin G., Knopfel H ., Morris P., Motzel E., Panen backer O. – ICB, IPMA C ompetence
Baseline , International Project Managem ent Association, Monmouth, U.K., 1999;
[2]. Corduneanu C. – Sistemul fiscal in stiinta finantelor , CODECS , București, 1998;
[3]. Ghit a M., Mare s V., Ghita E. – Auditul intr-un mediu cu sisteme de informatii
computerizate , Controlul economic financia r nr. 9, Tribuna Economica, Bucu resti,
septem brie 2002;
[4]. Hotk a D. – Dezv oltare a bazelor de date în Oracle9i , Editura ALL, București, 2004;
[5]. Geor gia Institute of Technol ogy – Department of Infernal Audition , depa rtment Review
Guide, Ge orgia, USA, 2000,
[6]. The auditing process in corporate control, Standard in the Office of the Auditor General of
Norway, Oslo , Norway, 2002 .
[7]. Guidelines on Best Practi ce for the Audit of Ec onomic Regulation , INTOS AI Working
Group on the Au dit of Priv atization, Octobe r, 2001;
[8]. A Guide to the Project M anagement Body of Knowledge, 2000 Edition, proj ect
Managem ent Institute, Newt on Square , Pennsylvania USA, 2000;

Annals of the University of Petro șani, Economics, 4 (2004) 303

Index of Authors

B M
BABUCEA A.G. (5) MAGDA D. (139)
BARON M. (13) MAN M. (147)
BIBER E.G. (27) MATEI I. (105)
BIVOLARU D. (271, 277) MIHĂILĂ E. (151, 155)
BONCEA A. (31) MITRAN I. (161)
BUȘE F. (37) MOLNÁR SIPOSNÉ T. (177)
MONEA A. (185)
C MUNTEANU R. (105, 189)
CÎRNU D. (45)
COSMESCU I. (51) N
COSMESCU D. (51) NEDELEA A. (191)
CUCU I. (55)
P
D POPEANG Ă V. (197)
DIMA I.C. (63) POPESCU M. (203)
DOBRE-BARON O. (13, 253, 263) PREDA M. (207)
DOLEA G. (231)
DRIGĂ I. (69) R
DUMBRAV Ă G. (133) RADU S. (223, 231)
DURA C. (75) RĂSCOLEAN I. (241)

F S
FLEȘER A. (83) SEMEN M.V. (99, 245)
FLITĂ R M.P. (89) SILIVESTRU T. (253, 263)
SLAVICI T. (271, 277)
G SLUSARIUC G. (283)
GHICĂJANU M. (95, 99) SZASZ M. (289)

I T
IRIMIE S. (105) TODORU Ț A. (45)
ISAC A. (113) TOMA C. (295)
ISAC C. (117)
IVĂNUȘ L. (125) V
VĂTUIU T. (197, 297)
K
KORONKA A. (133)

The authors are entirely responsible for the content and the quality of the papers.

304 Annals of the University of Petro șani, Economics, 4 (2004)

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[1]. Nicolesc u O. – Sisteme, metode și tehnici ma nageriale ale organizației, Editura
Eco nomică, București, 1999
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