MANAGING AND ORGANIZATIONS IN CHANGING CONTEXTS

February 2, 2021/in Posts /by admin

MANAGING AND ORGANIZATIONS
IN CHANGING CONTEXTS
OPENING, THINKING, CONTEXTUALIZING
LEARNING OBJECTIVES
This chapter is designed to enable you to:

Appreciate the current contexts in which managingand organization occur
Identify the impact that changes in the contemporary world are having on managing
Provide a rough guide to the themes of the book

INTRODUCTION
We all learn to make sense of the situations we are in. However, just like a fast-flowing river, these situations are often changing in imperceptible ways. Before too long we find that the ways we have been using to make sense leave us out of our depth! Managers find that what they took for granted no longer helps them survive as well as it did in the past. Well-established techniques of the past, such as management by rules and instructions, by oversight and surveillance, by command and control, on the part of hierarchical managers, are changing. When everyone can be connected to anyone everywhere, when the value basis of employees is shifting radically, and when the organization laces itself over the globe and employs many of the diverse peoples that the globe has to offer, the old certainties are harder to hold. Today, more indirect techniques, such as managing in and through vision, mission, culture, and values, leading to a lot less imperative instruction and command and a great deal more dialogue and discussion, are fashionable: the switch is from ‘hard power’ in the form of imperative commands to ‘soft power’ in the form of getting people to do what we want them to do through indirect methods, such as induction into an organizational culture, training and strategy workshops, or leadership courses.
We often refer to different paradigms when discussing systematic approaches to some practice. The term derives from its use in the history of science, where different paradigms or models for analysis have been identified at different periods (Kuhn, 1962). The term can have broader application, however, having spread to fields such as management (Clarke and Clegg, 1998). Academic paradigms are ways of theorizing about an activity such as physics; in business the idea of there being different paradigms applies to the spheres of business practice, such as management. For something to be a paradigm it must be accepted as an ideal example and exemplar, something that shows people how to practice something. Hence, there is an element of fashion to management paradigms – they frame what is thought of as legitimate ways to conduct business at any given time.
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CHANGING PARADIGMS
ORGANIZATIONS AND TECHNOLOGICAL CHANGES
The shift to a world in which digital capabilities enable elements of organizational practices to be moved offshore has led to the spectacular rise of Bangalore in India, as well as other places, as an IT and call centre ‘district’. Often when you phone the help desk of an organization that you are dealing with you will be speaking to someone from a region of the global economy in which English-language skilled graduates are available to work at rates much lower than in the country in which the organization is headquartered. Since it is much cheaper to live somewhere with a much lower standard of living, employers are able to pay far less. They outsource work to third-party organizations in cheaper labour zones.
Outsourcing involves contracting the provision of certain services to a third-party specialist service provider rather than seeking to deliver the service from within one’s own organization. Usually, outsourcing is entered into to save costs and to deliver efficiencies and productivity benefits. By not concentrating on services and tasks that are peripheral to the main business, an organization can better focus on those things it needs to do well while leaving the peripheral tasks to organizations that specialize in the delivery of those services. Often, areas such as HRM, catering, IT, and equipment and facilities maintenance are outsourced. Outsourcing may not necessarily entail moving some subset of operations to another country. Instead, it may be that some elements of what an organization regards as non-core business are hived off to a specialist contractor that concentrates on doing the outsourced activity efficiently, at the lowest costs, and to a contracted standard. Outsourcing is not a new phenomenon: in major production industries such as automotives, the outsourcing of initially non-core and latterly core functions and services has been progressively used since the 1930s (Macaulay, 1966).
The development of outsourcing, burrowing away at the innards of organizations, hollowing them out, and networking them into other organizations’ capabilities and competencies, has accelerated in organizations since the late twentieth century. The imperative to outsource – as distinct from the opportunity to do so – was a result of globalization and increased competition, leading to a continual need to improve efficiency and to increase service levels. Thus, vertically integrated services were no longer seen as the best organizational arrangements for gaining competitive advantage. Extending the organization’s capabilities, whether core or non-core, to a third party, became synonymous with efficient and effective management. Outsourcing became fashionable.
Many new industries have developed on the back of the digital revolution, often referred to as knowledge-intensive industries, those which we find at the forefront of contemporary global competition, such as Google, IBM, Microsoft, and Dell. In these organizations we find new organizational forms that challenge the older, more bureaucratic structures of the past, structures that we will explore in Chapter 15.
Digital capabilities have transformed the world – some journalists such as Friedman (2005), of the New York Times, suggest that digital capabilities have made the world ‘flat’ – by which he means that advances in technology and communications now link people all over the globe. In part this explains the rapid development of India and China, and the growth of global businesses that exploit the opportunities of the Internet to create and design goods and services on a 24/7 cycle – globally – taking advantage of different time zones to work on accounts, data, and designs seamlessly. The world has sped up to a state of immediacy: any reader of this book would know how to find its authors’ email addresses in a matter of seconds.
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MANAGING TECHNOLOGICAL CHANGES
Shorter life cycles, virtual connectivity, and disaggregation spell many changes in ways of managing. The dominant trend is an increasing separation of routine processes from more essential work, which is often reflected in a spatial division of labour. Thus, for instance, as we will see in Chapter 16, in call centres the work is as routine and scripted as in any work process designed in an early twentieth-century bureaucracy by one of F. W. Taylor’s scientific managers (see Chapters 14 and 15). The means for storing the rules may have shifted from paper to software and the nature of the work may be less physical, but there are still essential similarities.
There are consequences for other jobs when much of the routine is extracted and repositioned elsewhere. The remaining core staff – rather than those that are peripheral – will need to be more skilled than before. They will be working in technological environments subject to rapid and radical change. New competencies and skills will be required. Managing will mean more developmental work oriented to renewing staff’s specific skills and general competencies rather than seeing that they follow the rules, issuing imperative commands, and generally exercising authority. Managing will mean negotiating the use and understanding of new technologies, contexts, and capabilities, and facilitating the understanding of those who will be operating with the new tools and environments. Changing technological paradigms mean that managers must be able to make sense of the new technology for all those who will use it. Sandberg and Targama (2007: 4) note, citing Orlikowski’s (1993) influential work on Japanese, European and US firms, that many technology implementation projects fail because of what the employees do – or do not – understand.
Traditionally, organizations were neither very responsive nor flexible because of their bureaucratic nature, as we will see in Chapter 14. They had tall hierarchical structures, relatively impermeable departmental silos, and many rules. Such organizations offered little incentive for innovation and, typically, innovation was frowned on because precedents went against the rules. Such organizations could hardly be responsive – they were not designed to be.
More responsive organizations should have employees who are capable of problem solving rather than having to refer any problem, deviation, or precedent to a higher authority. Such people need to be trained and engaged in styles of managing and being managed that reinforce empowerment, using far more positive than negative approaches to power, as we will see in Chapter 9.
New technologies attach a premium to a flexible, timely approach to customer requirements. In order that such flexibility can exist in an organization it has to be premised on ways of managing employees that allow them to be responsive to customer requirements in developing products and services. As we will see in Chapters 14 and 15, the critique of bureaucracy has been particularly acute in the areas of public sector management. Especially in the Anglo-Saxon countries, from the 1980s onwards, the extensive adoption of strategies of deregulation, privatization, and contracting out, often on the back of significant changes in technology, have led to profound changes in the nature of public sector work. Something known as new public management (Osborne and Gaebler, 1992) has had a profound impact on the public sector, in the public (or civil) service, education, universities, and health care, especially. The clarion call has been for more entrepreneurial managers and less rule following. Whether this is a good or bad thing has been the subject of lively debate, which we discuss in Chapter 15.
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CHANGING RELATIONS OF SERVICE AND PRODUCTION
Look at your computer; check the clothes you are wearing; what about your shoes? Where do your things come from? Bet they were made in several countries and none of them may be where you live. Bet also that China was one of the countries. Today, ‘Made in China’ is a ubiquitous label – we find it on virtually any manufactured product that we are likely to wear or use in the office or home.
Supermarkets such as Walmart represent the end of a supply chain that invariably starts somewhere in China. The concentration of much global manufacturing in China is a relatively recent phenomenon, which really gathered pace in the 1990s. Just as much of service work has been disaggregated into lower value-adding elements such as call centres that can be located anywhere, much of what was once produced by a domestic blue-collar labour force in the heartlands of Europe or the USA, is now produced globally, often in China.
One consequence of the shifting international division of labour is that employment and organizations in the developed world are increasingly based on the production of services rather than goods. Material things – such as computers, clothes, and household goods – are being produced in the developing world while the most developed parts of the world economy switch to services, such as financial services. One consequence is that the nature of work and organizations is changing rapidly in both worlds. In the developing world peasants are rapidly becoming factory workers; in the developed world there has been an explosive growth in what is referred to as knowledge work, done by knowledge workers in knowledge-intensive firms. Chief among these are IT firms (Alvesson, 1995; Starbuck, 1992), global consultancy, law, and accounting firms, as well as the universities, technical colleges, and schools that produce the new knowledge workers.
SHIFTING LOCATIONS; SHIFTING MANAGING
An increase in knowledge-intensive work means that organizations have to employ – and manage – different kinds of employees. Brains not brawn, mental rather than manual labour, are the order of the day. Employees need to be capable of working with sophisticated databases, software, and knowledge management systems. These have to be related to customer requirements often on a unique and tailored basis that deploys a common platform while customizing it for specific requirements. Thus, technical and relational skills will be at a premium.
Knowledge-intensive work, according to Alvesson’s (2004) research, depends on much subtle tacit knowledge as well as explicit mastery. In such a situation, working according to instruction and command will not be an effective way of managing or being managed, especially where the employee is involved in design and other forms of creative work on a team basis, often organized in projects. In such situations, increasingly common in contemporary work, ‘because of the high degree of independence and discretion to use their own judgment, knowledge workers and other professionals often require a leadership based on informal peer interaction rather than hierarchical authority’ (Sandberg and Targama, 2007: 4). As we will explore in Chapters 5 and 6, some of the old theories and approaches to leadership and project work need updating.
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GOING GLOBAL
Digital technologies and a growing international division of labour between economies specialized in services and production make the world economy increasingly globalized. Competition is based less on traditional comparative advantage as a result of what economists call ‘factor endowments’, such as being close to raw materials, and more on competitive advantages that arise from innovation and enterprise. IT means that enterprise and innovation can now be globally organized. No industry is more indicative of this than the financial services industry, where firms such as American Express, Citicorp, and HSBC span the globe. These multinational behemoths operate as integrated financial services providers almost everywhere. Global competition goes hand in hand with outsourcing in industries such as these, as such firms exploit technology to disaggregate ‘back-office’ routine functions and locate them in cheaper labour markets, as we discuss in Chapter 17.
The rise of India and especially China has seen a major restructuring of the global economy. As Martin Jacques said in 2010 in a TED Talk on ‘Understanding the rise of China’:
The world is changing with really remarkable speed … in 2025 … Goldman Sachs projections suggest that the Chinese economy will be almost the same size as the American economy … [By] … 2050, it’s projected that the Chinese economy will be twice the size of the American economy, and the Indian economy will be almost the same size as the American economy. And we should bear in mind here that these projections were drawn up before the Western financial crisis.
Jacques makes the point that for 200 years Europe and North America dominated the global world but that now, with the awakening into capitalist development of countries such as China and India, who between them have over one third of the global population, as well as other newly emerging states such as Indonesia and Brazil, civilizations and cultures that have for the past 200 years been marginal and minor players on the world stage are now at its centre. If the future managers reading this book want to have stimulating and successful careers in the future they are as likely to be forged in these countries as in Europe or North America. The managers that you will become will have to be truly global in experience and outlook.
MANAGING GLOBALLY
Doing business internationally in real time, enabled digitally, produces ample opportunity for cultural faux pas and misunderstanding. Work groups may be working in serial or in parallel with each other on projects that are networked globally. Global organization means managing diversity: it means developing appropriate ways of managing people who may be very different from each other – from different national, ethnic, religious, age cohort, educational achievement levels, social status, and gender backgrounds (Ashkenasy et al., 2002). One consequence of globalization and diversity is that HRM must be both increasingly international and equipped to deal with diversity, as we will see in Chapter 6.
Diversity is increasingly seen as an asset for organizations: people with diverse experiences can contribute more varied insights, knowledge, and experience than can a more homogeneous workforce. (In the terms that we use in Chapter 10 we can say that it is a good thing to introduce more polyphony into organizations but it can also introduce more conflict: see Chapter 8.) An evident reason is that if a business wishes to sell globally it must understand all the specificities of the local markets into which it seeks to trade. One good way of doing this is to ensure that the organization has employees that understand that market. Moreover, in certain markets, such as the Middle East, where etiquette and rituals are of considerable importance in everyday interactions, it is enormously beneficial to have employees who do not have to learn through making costly mistakes because they have an intuitive understanding. Moreover, as we will see in Chapter 14, organizations whose members are not representative of the populations the organizations draw on and serve risk being seen as discriminatory in their recruitment policies. There are ethical issues concerned in managing diversity as well.
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CHANGING CONCEPTIONS OF TIME AND SPACE
Technological developments such as the Internet and other telecommunications seem to make the whole world something that can be present here and now – as users of Google Earth no doubt know. Email can fly around the world in seconds, as quite a few people can testify who have pressed the send button inadvertently on something they might have preferred not to share globally.
While time and space are two fundamental coordinates of the way we relate to the world, the ways in which we make this representation are not fundamental but socially constructed. The earliest concerns of modern global management were with the centrality of clock time in the time and motion studies of F. W. Taylor. Indeed, in these studies the central motif was that of time–space relations, as we will see in Chapter 14. Stopwatches measured in terms of microseconds to prescribe ways of doing tasks. Space was rigidly defined in order to maximize the speed of work. These notions of space and time as phenomena under strict organizational control are hardly relevant in the age of the Internet. With a computer, camera, and broadband connection any organization member can simulate immediacy with anyone anywhere in the world similarly equipped. In such a situation time and space are eclipsed. Organizations can be global, navigating anywhere.
MANAGING TIME AND SPACE
Immediacy through the eclipse of space presents problems. Work is much more accountable and transparent as others can be online anytime, anywhere, challenging the understandings that the other has developed. Often these understandings will be embedded in a sense made in a cultural, linguistic, religious, ethnic, and age and gendered context that is simply foreign to partners elsewhere. Great cultural sensitivity, as well as a capacity to handle circadian rhythms, is needed in the interest of global business. In such contexts there will be a great deal of doing by learning as managers seek to make sense of others whose cues are not only unfamiliar but often mediated by the limitations of Internet communication. Managing communication in these circumstances poses especial challenges, as we will see in Chapter 10.
CHANGING DEMOGRAPHICS, CHANGING VALUES
The era from the 1960s onwards has been dominated by the ‘boomer’ generation, who are now slowly moving out of the workforce, to be replaced with people drawn from Generation X and Y. Generation X, broadly defined, includes anyone born from 1961 to 1981. In the West, Generation X grew up with the Cold War as an ever-present backdrop. During their childhood they saw the dismantling of the post-war settlement and the advent of neo-liberal economics (such as Thatcherism) and the collapse of communism. They often grew up in single-parent households, without a single clear or guiding moral compass. They had to negotiate the hard years of global industrial restructuring when they were seeking their first jobs; they experienced the economic depression of the 1980s and early 1990s; and saw the decline of traditional permanent job contracts offering clear career structures. Instead of careers they were invited to accept insecure short-term contracts, unemployment, or junk jobs in McDonaldized organizations, or get educated. Many of them ended up overeducated and underemployed, with a deep sense of insecurity. Not expecting that organizations will show them much commitment, they offer little themselves.
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Generation Y includes anyone born in the late 1980s and 1990s, sometimes to professional boomer couples who left childrearing later than previous generations or, as a result of boomer males mating with much younger women, maybe procreating with a new partner for the second or third time, celebrating the attraction of old money for young flesh. Young people born in this bracket are the first digital generation for whom the computer, Internet, mobile, iPods, DVDs, and the Xbox were a part of what they took for granted growing up. While Generation X was shaped by de-industrialization in the West and the fall of communism globally, Generation Y developed into maturity during the War on Terror, grew up reading Harry Potter, and has enjoyed relatively prosperous economic times, in part because of the success – for the West – of globalization. If you want to know more about the generations and the differences they are inscribed in you could talk to your parents or grandparents – if they haven’t already talked to you about these things!
MANAGING CHANGING VALUES
The employment of Generation X members offers real challenges for managers seeking to motivate and gain commitment from employees. As we will see in Chapter 3, the issues of commitment and motivation are increasingly central to managing. The X generation will be more cynical than its predecessors and less likely to accept rhetoric from management that is not backed up by actions. For Generations X and Y, according to Sennett (1998: 25), there is a predisposition towards high uncertainty and risk-taking as defining features of the challenges they want from work because they do not expect commitment. In part this is because they do not expect anything solid or permanent: they have seen casino capitalism at close quarters as brands they grew up with moved offshore or were taken over, or radically changed by new ownership, and so tend to distrust prospects of long-term or predictable futures.
Using traditional management control and command devices to manage people who desire to explore is not appropriate. Instead, the emphasis will have to be on creativity and innovation, as we explore in Chapter 12.
If there is one value that binds these disparate generations together it is the sense that the previous generations have really made a mess of the planet; green values are very strongly held, and saving the environment through sustainability is high on the list of value preferences. Consequently, as we discuss in Chapter 13, issues of corporate social responsibility, especially those addressed to sustainability, are high on the values agenda. Such changes pose major implications for how organizations attract, select, retain, and treat employees, as we see in Chapter 6 on HRM.
CHANGING CONCEPTIONS OF THEORY AND PRACTICE
One of the trends that readers of the book may not be so well aware of as the people who set it as a text is the changing nature of the relation between what academics do, funding arrangements from government, and conceptions of the usefulness of academic work. Academics do research. This is what defines them as academics. In the past, they worked in circles that were largely self-referencing: if successful, they published a book or two, some academic papers and, if they were really successful, others would read them and cite them in their research. Times are changing. Academic researchers in all fields are increasingly expected not just to produce outputs in the way of publications but also to have an impact.
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Impact is usually defined in terms of having a positive effect on a specific sphere of practice beyond academia, including being able to demonstrate the contribution made to society and the economy (see Nutley et al., 2007). It is generally agreed that there are three main ways of making such an impact. Academic research can have an instrumental impact, influencing changes in policy, practices, and behaviour; it can have a conceptual impact, changing people’s knowledge, understanding, and attitudes towards social issues; or it can have an impact through capacity building where involvement in research develops the skills of those involved. The debates about impact are quite generic and are found in many OECD nations in recent years, as the costs of higher education and research funding have grown, so the clamour for demonstrations of relevance and impact have grown from politicians and the public. In the following article you can find an interesting account of how this debate has been addressed in the field of management, the field in which the work considered in this book seeks to make its impact.
EXTEND YOUR KNOWLEDGE
In Jean Marie Bartunek and Sara Lynn Rynes’ (2014) ‘Academics and practitioners are alike and unlike: the paradoxes of academic–practitioner relationships’, Journal of Management, 40 (5): 1181–1201, which is available at the companion website https://edge.sagepub.com/managingandorganizations4e, rather than seeing the academic–practitioner gap as essentially dichotomous they identify and suggest ways of working with the divide that foster research and theory building. Several different tensions are associated with the gap, including differing logics, time dimensions, communication styles, rigour and relevance, as well as interests and incentives. Initiatives of national governments, ranking systems, and special issues of journals have exacerbated these gaps, which they suggest ways of bridging.
USING MANAGING AND ORGANIZATIONS
The basic themes of this text are now established. In this book, as we have foreshadowed, we will introduce you to the main lines of management and organization theory, and we will situate these in the major changes marking the present-day world. These, we will argue, make the ideal of the wholly rationalistic organization evermore difficult to believe in principle and secure in practice. However, most of what you will learn as a management student makes assumptions about the rationality of organizations and management. Organizations go to great lengths to try and ensure that stocks of knowledge are shared as widely as possible within the organization, as we will see in subsequent chapters, and do so in ways that are reflected in each of the subsequent chapters:

Managing the most basic organizational and managerial capability – how to achieve common sensemaking (Chapter 2).
Creating induction programmes that socialize individuals into an organizational frame of reference (Chapter 3).

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Training individuals in teamwork and groupwork (Chapter 4).
Hosting leadership development, coaching, and training for common understanding (Chapter 5).
Building highly rationalistic HRM plans and seeking to implement them (Chapter 6).
Emphasizing strong, common cultures (Chapter 7).
Designing lots of rules to frame everyday behaviour in the organization and manage conflicts (Chapter 7).
Managing organizational conflicts, so that the goal-oriented elements of organization can come to fruition, despite countervailing tendencies, schisms, and frictions in an organization (Chapter 8).
Managing power, politics, and decision-making so that plans are implemented, not resisted, and so sectional and specific interests are well aligned with rational plans (Chapter 9).
Communicating these rational plans, their culture, and other messages to organization members (Chapter 10).
Capturing all of what their members know and embedding it in management systems as they try and practise organizational learning (Chapter 11).
Managing change, introducing and effectively using new technologies, and ensuring innovation (Chapter 12).
Incorporating new mandates arising from social issues and concerns articulated by new stakeholders and influential social voices, such as sustainability, ethics, and corporate social responsibility (Chapter 13).
Implementing global management principles in the organization (Chapter 14).
Adjusting the structure of their organization to fit the contingencies it has to deal with, be they size, technology, or environment (Chapters 15).
Designing the organization in ways that seem best fit for purpose (Chapter 16).
Managing to manage globally, to manage globalization, and to deal with the added complexities that managing in a global world entails (Chapter 17).

SUMMARY
In this chapter we have staked out the territory that the book covers. We have dealt with nothing in depth – the rest of the book does that – but we have provided an indicative guide to the topics that we shall address subsequently. Managing and organizing is very dynamic – its world never stays still – so innovation, change, and tension are often characteristic of the way that events pan out.
EXERCISES

Having read this chapter you should be able to say in your own words what each of the following key terms means. Test yourself or ask a colleague to test you.

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Paradigms
Outsourcing
‘Flat’ paradigm
Supply chains
Globalization
Digitalization
Organizations
Theory–practice gap
Generation X and Y
Values

Why do organizations become globalized?
What do you think are the major changes that are shaping the contemporary world and what do you think their impact is on management?

TEST YOURSELF
Review what you have learned by visiting:
https://edge.sagepub.com/managingandorganizations4e or your eBook

Test yourself with
multiple-choice questions
Revise key terms with the interactive flashcards
CASE STUDY
This is a very simple case study to get you started. Think about the last organization that you were a member of for some time. It might have been a school, a church, or an employing organization. What were its main routines? How were these organized in terms of some of the factors that might frame organizations? Think about factors such as how standardized, timetabled, or ritualized the flows of time and organizational effort were in the organization in question. What were the characteristic markers of identity of the different people and groups in the organization? What were the goals of the organization?
ADDITIONAL RESOURCES
If you want to know more about the major changes shaping the contemporary world of business you could take a look at Clarke and Clegg’s (1998) Changing Paradigms. It is dated now, but still has several interesting points to make about globalization, digitalization, and so on. This book is not too difficult for the introductor

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Title: Identifying and engaging audiences through online conversational discourse: An analysis of social media usage within small medium enterprises (SMEs).

February 2, 2021/in Posts /by admin

PhD Research Proposal

Identifying and engaging audiences through online conversational discourse: An analysis of social media usage within small medium enterprises (SMEs)

Contents Page

The broad field within which my MPhD topic falls                                            Page 3
An outline of the subject matter of my proposed thesis (Abstract)                   Page 3
Reasons for interest in this field                                                                       Page 4
The main theorists                                                                                            Page 5
The framework upon which my research will be based                                    Page 10
How my thesis will extend their work                                                                Page 11
Methodology                                                                                                     Page 12
Carrying out the research – the specific techniques                                        Page 13
Timescale                                                                                                         Page 16
An explanation of the original contribution to knowledge                                 Page 16
References                                                                                                       Page 18
Bibliography                                                                                                      Page 23

The broad field within which my MPhD topic falls
Title: Identifying and engaging audiences through online conversational discourse: An analysis of social media usage within small medium enterprises (SMEs).
An outline of the subject matter of my proposed thesis
Abstract
With an increasing body of literature (Fill, 2009, Kozinets et al, 2010, Jobber, 2010) highlighting the importance and influence of word of mouth communications and how it can assist and enrich the communications process; it may be argued identifying and engaging audiences through online conversational discourse is now just another facet of the ‘day job’ for many organisations, including SMEs. Woodside and Delozier (1976, p.12) for example link WoM with consumer risk, while others establish links with complaining behaviour (Blodgett et al, 1995: 32) product judgements (Bone, 1995, p.214) consumer attitudes (Bickart and Schindler, 2001, p.31) and as an integral aspect of the customer relationship (Wangenheim, 2005, p.154). Furthermore, as Goldenberg et al (2001, p.212) suggests the increasing use of the internet, enables surfers to communicate quickly with relative ease, establishing the contemporary version of this phenomenon, known as electronic word of mouth (eWoW) as an intrinsic marketing communication channel. However for many SMEs, as Bulearca, (2010, p.298) suggests using social media and especially micro-blogging sites such as Twitter is only a recent phenomenon, as it is mainly since 2008 that social networking sites ‘exploded’ in user numbers and marketing applications. It may therefore be considered that there is limited academic research into this area (Zhao and Rossen, 2009; Jansen et al, 2009) and much of it is focussed on the user side, with little known from the companies’ perspective. What is evident from recent studies (Singh et al, 2008, Harris et al, 2008, Dwyer, 2007, Young at al, 2007) as Sashi (2012, p.267) confirms is that new technologies and tools spawned by social media have altered the roles of buyers and sellers; unlike traditional market exchanges in which the seller largely controlled marketing mix decisions relating to product, price, promotion, place and developed strategies to meet the needs of customers, social media helps shift control of some of these decisions directly to customers (Sashi, 2012).Not only that but social media enables customers to participate in value adding and marketing decisions as Sashi, 2012, p,.267 intimates by connecting and interacting not only with sellers but also with other customers as well as non-customers, an important facet of eWoM.
The objectives of this research will therefore focus on mapping how far SMEs can and are adapting their practices to identify and engage audiences through conversational discourse, utilising social media channels and networks, and with what implications for the future of marketing strategies. In order to expand the expediency of current literature one strand of future research will include a broader analysis of social media practice among business professionals, (aged 35-45) in order to establish how this may influence the identification and engagement of audiences (prosumers) through social media networks. An analysis of views and experiences from industry experts is also proposed, as well as a more detailed case study evaluation of SMEs, specifically in terms of eWoM on Twitter and blogs, as well as how they may be used to meet strategic objectives, as compared with traditional marketing methods.
Reasons for interest in this field
As a marketing communications professional working for more than 15 years – I have worked both from a consultancy basis and within SMEs, so I can definitely relate to the challenges and opportunities available through social media and specifically how to manage electronic word of mouth (eWoM) communications. A specific difficulty, evident in working practice is the ability to engage, develop and maintain conversational discourse effectively with business to business groups via social media. I am also interested within a broader spectrum as to how social media is effecting and influencing interpersonal relationships outside of the work environment which will also be explored expediently as part of this study, together with the experiences of other marketing communications professionals to inform recommendations. I am particularly enthusiastic about having the opportunity to analyse the influence and impact of social media within SMEs, as marketing communications, specifically word of mouth, social media and the impact on
customer engagement and reputational management in the UK and Internationally are areas which I hope to continue research and teaching within. Also, within the context of the current financial crisis and continuously emerging social network sites, it can be argued that there is a need to redefine models of eWoM communications, in order to more effectively target stakeholders so as to better serve the needs of managers, entrepreneurs, firms and society.
The main theorists who have made a contribution to this area of research
Identification of the relevant literature
An increasing body of literature has highlighted the importance and influence of word-of-mouth (WoM) communications and how it can assist and enrich the communications process (Fill, 2009, p.51/52). WoM has been related to many aspects of marketing. For example, Woodside and Delozier (1976, p.12) link WoM with consumer risk, while others establish links with complaining behaviour (Blodgett et al, 1995: 32) product judgements (Bone, 1995, p.214) consumer attitudes (Bickart and Schindler, 2001, p.31) and as an integral aspect of the customer relationship (Wangenheim, 2005, p.154). Historical definitions such as Helm and Schlei (1998, p.42) define WoM as: “Verbal communications (either positive or negative) between groups such as the product provider, independent experts, family, friends and the actual or personal consumer.’ As Fill (2009, p.52) highlights organisations now use WoM techniques commercially in order to generate a point of differentiation. Mazzarol et al (2007, as cited in Fill, 2009, p.52) identify the ‘richness of the message’ and the ‘strength of the implied or explicit advocacy’ as important triggers for WoM.
Latterly, organisations such as Stanomedia (2011) have developed this argument a stage further to suggest that when people communicate with each other by many more means than just orally “word of mouth” no longer fits in such a small definition, at least not for marketing purposes. Furthermore, as Goldenberg et al (2001, p.212) establishes the increasing use of the internet, enabling surfers to communicate quickly with relative ease, has established the contemporary version of this phenomenon, known as ‘Internet WoM or ‘word of mouse’, as an important

marketing communication channel. In what is sometimes labelled as ‘viral marketing’ as Goldenberg et al (2001,p.212) suggests, companies are currently investing considerable efforts to trigger an electronic word of mouth process and accelerate its distribution (Schwartz 1998; Oberndorf, 2000). And because channels like email, Facebook, Twitter or text messages most likely communicate information from ‘trusted’ sources the person receiving them is very likely to believe them and a situation is created in which the customer takes on the role of a type of ‘consumer-marketer hybrid’ (Kozinets, 2010, p.83). In this instance other participating customers have the power to approve “the communicator” or the people voluntarily sign up to listen, which means they already trust the organisation to some degree, (Stanomedia, 2011).
As Goldenburg et al (2001, p.212) suggests social media is able to foster the exchange of word of mouth messages, by creating a virtual community for consumers to interact with each other. When compared with the effect of external marketing efforts (e.g advertising) in this study, information dissemination is notably dominated by eWoM paths. Trusov, Bucklin and Pauwels (2009) also compared eWoM to ‘traditional marketing efforts’ when analysing methods to increase the quantity of users on a particular social networking site. On the whole it can be ascertained from this paper that eWoM referrals have a strong effect on new customer acquisition, influencing more individuals and lasting over a longer period than more ‘traditional marketing.’ Importantly, this study also offers managers a tool to improve the metrics they use for assessing the effectiveness of traditional marketing when WoM effects are present, while also offering a mechanism to quantify eWoM through outgoing messages. As a technique to measure the transition of conversational discourse, this methodology should prove advantageous to SMEs. Plus there is the opportunity to build on some of the ‘limitations’ from this data, including the analysis of more than just one large social networking site, which in this instance has prevented analysis of the effects of WoM for – and marketing actions by – competing sites. Modelling heterogeneity in order to clarify segmentation or specific audiences, is also an important aspect, to identify more detailed engagement strategies, pertinent for SMEs, particularly those operating within the business to business typology, which are primarily focussed on attracting, engaging with and building long-term relationships with specific interest groups, including ‘networked narratives’ (Kozinets et al, 2010) rather than ‘customers’ per se.
While the main concerns of SMEs in relation to the identifying and engaging of audiences through social media are likely to be related to the generic characteristics of limited time/resources and expertise, the e-marketplace provides a favourable environment, including; lower operating and marketing costs, better opportunities to promote their products/services, and enrich their overall marketing communications mix, (Chong et al 2010, p.5). Overall, the principle benefits of the SME e-marketplace as reported by many academics and practitioners are cited in Chong et al (2010, p.6) including: reducing search costs by facilitating comparison of price, products, and services (Kandampully, 2003; Bakos, 1998; Kaplan and Sawhney, 2000); improving production and supply capability (Barua et al., 1997; Albrecht et al., 2005); improving personalisation and customisation of product offerings (Bakos, 1998); enhancing relationships with customers (Kierzkowski et al., 1996); reducing marketing costs as compared to traditional marketing media (Sculley and Woods, 2001); reducing numbers of marketing staff (Gloor, 2000); operating 24/7 and around the clock over 365 days per year (Ngai, 2003); facilitating global presence (Laudon and Laudon, 2002); exploring new market segments (Murtaza et al., 2004); and interactive conversational discourse is more effective in terms of services marketing communication (Petersen et al, 2007).
SMEs are often categorised as having fewer resources, as Centeno (2012, p.253) confirms, which may include not only financial, but also marketing knowledge (Gilmore et al, 2001, Mount et al, 1993) as well as marketing communications personnel to undertake the day to day implementation. Centeno (2012, p.253) acknowledges, paradoxically that SMEs may also have a short-term focus with flat and informal organisational structures, which may also be suitable for a more dynamic and innovative responses to the market (Gilmore et al, 2001, McGaughey, 1998). Importantly, one shift facilitated by social media channels for the benefit of SMEs as Qualman (2011, p.193) outlines is financial, in that the money previously dispersed to ‘middlemen’ is now being redistributed to the companies themselves and direct to consumers.
However for many SMEs, as Bulearca, (2010, p.298) suggests using social media and especially micro-blogging sites such as Twitter is only a recent phenomenon, as it is mainly since 2008 that social networking sites ‘exploded’ in user numbers and marketing applications. It may therefore be argued that there is limited academic research into this area (Zhao and Rossen, 2009; Jansen et al, 2009) and much of it is focussed on the user side, with little known from the companies’ perspective. Despite this, as Israel (2009, p.147) states a new business located in a spare bedroom or less-than-prime former industrial space can build a network of customers at little or no cost. However, as an interviewee from an SME within a recent study (Bulearca, 2010) reiterates ‘Twitter needs consistency and commitment, a clear understanding of its purpose, functionalities and tools, and a strategic implementation if it is to yield the best results. ‘Return-on-investment (or value) is also difficult to quantify as results are ‘more people orientated than financial’ and the tools provided by Twitter are still perceived as ‘very basic’, (Bulearca, 2010, p.304).
Chua, (2009, p.119) also outlines growing evidence that Social media mechanisms are being used by business as part of their customer relationship management strategies (Singh et al, 2008, Dwyer, 2007) as well as managing reputation and trust (Gordon, 2006, Gray, 2006), niche marketing (Singh et al, 2008) and gathering market intelligence (Habermann, 2005, O’Flaherty, 2008). Schoble and Israel (2006, p.232) take this a stage further in their analysis when they highlight that in their view blogging is vital for companies, not just in terms of outbound communications, but inbound as well, describing their role as multifaceted in terms of; a crisis firefighter, a superior research aggregator, a tool for recruiting, a product builder and customer service and support enhancement. In addition, blogging, it is argued by Schoble and Israel (2006, p.232) will help companies to ‘win’ not just by talking to people but also by listening. Recent examples of studies as cited by Chua (2009, p.120) includes; a 2007 Forrester survey of 119 chief information officers working in SMEs and larger companies in the USA (Young et al, 2007) in which 89% declared that they had adopted at least one Web 2.0 tool (out of blogs, wikis, podcasts, RSS, social networking and content tagging).
While, Harris et al (2008) conducted a telephone survey of 400 SMEs in the UK concerning their use of Web 2.0 tools, including 30 case studies of small firms which were early adopters of blogs, although the study did not explore specifically how blogs could be used to support marketing objectives. Singh et al (2008, as cited in Chua, 2009, p.120) presents a general discussion of the marketing potential of blogs for businesses primarily focused on large firms, which includes a couple of anecdotal examples of small businesses which have made effective use of blogs for marketing.
What is evident from these studies as Sashi (2012, p.267) confirms is that new technologies and tools spawned by social media have altered the roles of buyers and sellers; unlike traditional market exchanges in which the seller largely controlled marketing mix decisions relating to product, price, promotion, place and developed strategies to meet the needs of customers, social media helps shift control of some of these decisions directly to customers (Sashi, 2012).Not only that but social media enables customers to participate in value adding and marketing mix decisions as Sashi, 2012, p,.267 intimates by connecting and interacting not only with sellers but also with other customers as well as non-customers, an important facet of eWoM.
Chua et al (2009, p.119) makes a significant point in relation to future research paradigms with SMEs, as it is argued that much of the existing eBusiness research tends to treat them as a homogeneous group (Parker and Castleman, 2007, Castleman, 2004 and Martin and Matlay, 2001). Part of the challenge in investigating social media usage in SMEs is therefore to at least in the first instance form a better understanding of the complex internal and external SME contexts governing whether or not the adoption of social media makes sense for specific types of SMEs, and for specific purposes such as facilitating and mapping eWoM conversational discourse and whether this is more appropriate for certain purposes such as establishing and maintaining customer engagement in predominantly B2B SMEs.
It is suggested that in order to expand the expediency of current literature that one strand of future research could include a broader analysis of social media practice among business professionals, ‘prosumers’ (aged 35-45) in order to establish how this may influence the identification and engagement of audiences through social media networks. An analysis of views and experiences from industry experts is also proposed, as well as a more detailed case study analysis of current engagement levels with online conversational discourse in SMEs, specifically in terms of eWoM on Twitter and via blogs and how they may be used to meet strategic objectives, as compared with traditional marketing methods.
The conceptual/theoretical framework or approach upon which my research is based
In summary this research is intended to analyse and develop a new model for SMEs in terms of approaches to identifying and engaging audiences through online conversational discourse that considers the suitability of specific social media mechanisms i.e micro-blogging sites such as Twitter and blogs. Due consideration will be given to the importance of eWoM in terms of attracting and retaining customers, as well as return on investment measurements. As Jones (2010, p.150) suggests the Web 2.0 world poses a number of challenges to small businesses and the ways in which they communicate; how best to operate successfully in this new landscape is an issue that small businesses have to address at an individual level, from experience and on a ‘need to manage’ basis. It is concluded by Jones, (2010, p.150) that a more grounded, empirically informed, evidence-based case-study analysis of specific small business practice of using Web 2.0 is the best way forward for impact assessment and further research areas are recommended as: ‘real-world’ small business practice of Web 2.0 use, via in-depth case study analysis; the role of Web 2.0 in the co-creation of value for small businesses; evaluating consumers and prosumers views of small business Web 2.0 marketing activities. It is the intention of this research to investigate and analyse these areas, as well as understanding current practice withn SMEs as informed by marketing communications ‘experts’, which will add a third analytical dimension in order to deliver a detailed overview of this subject matter.
An outline of how my thesis will extend, elaborate upon or provide a critique of their work
Key research questions
The research questions will be refined after the full literature review and (baseline study), from the following:

What are the challenges and opportunities for SMEs in terms of identifying and engaging audiences through online conversational discourse, in light of the concept of the ‘participative web’ (OECD, 2007) that empowers users to contribute to developing, rating, collaborating and distributing internet content and customising internet applications?
What factors create successful online conversational discourse through social media usage/networks?; Understanding: current practice and future developments from the perspective of marketing communications professionals
How can eWoM be effectively harnessed by SMEs to help promote their business offerings, in terms of differentiation from competitors; communicating with publics and stakeholders to co-create value, raise their profile, build trust and enhance reputation, research and better understand the markets in which they operate; generate trade with other businesses and overall develop and grow their business as compared with traditional marketing materials and in order to meet marketing objectives?
How can SMEs better understand the role of prosumers in entrepreneurial marketing? Evaluating prosumers’ views of small business social media activities, including the influence of ‘participative web’ activity in the co-creation of value for SMEs, but also considering the impact on social outcomes, orchestrated by a mutual dependence on social networks
What are the implications for the future of social media usage by SMEs? What deters SMEs from adopting eWoM techniques? What factors create successful eWoM social media programmes? What is the process of audience engagement and SME implementation and monitoring? What is defined as an effective return on investment and how does this contribute to meeting overall marketing objectives? This could include: analysis and development of a new business model that supports SMEs in the planning and development stages of any social media strategies in order that they can effectively map participation, outcomes and value propositions as a way of building international competitive advantage and generating economic dynamism, growth and jobs to support the knowledge economy.

Methodology
At this point, the working title: ‘Identifying and engaging audiences through online conversational discourse: An analysis of social media usage within small medium enterprises (SMEs)’ is not in the form of a research hypothesis. The questions outlined earlier do, however, help to identify key areas for further analysis and investigation.
In order to put the influence of SMEs on the UK economy into perspective the latest statistics from the Federation of Small Businesses (2011) are included below:

There are 4.5 million small businesses in the UK
SMEs account for 99 per cent of all enterprise in the UK, 58.8 per cent of private sector employment and 48.8 per cent of private sector turnover
SMEs employed an estimated 13.8 million people and had an estimated combined annual turnover of £1,500 billion
Businesses with employees account for a quarter of all enterprises – a fall of 29,000 since 2010
There are 876,000 businesses in construction – a fifth of all UK enterprises
London has 748,000 enterprises – more than any other region
The South East has the second largest number of enterprises with 745,000. Combined with London, a third of all businesses are based here
45.3 per cent of businesses are registered for VAT and/or PAYE
The number of sole proprietorships increased by 87,000 in 2010 and the number of companies, 6,000

Micro: 0-9 employees, small: 10-50 employees, medium: 50-249 employees (updated November, 2011).
Carrying out the research – the specific techniques of investigation and analysis I plan to use
The utilisation of qualitative and quantitative data, a ‘sequential mixed methods’* (Cresswell and Plano Clark, 2007, cited in Creswell, 2009, p. 14) approach to research will be utilised throughout the compilation of this study. As Jogulu and Pansiri (2011, p.688) state the mixed methods research approach, also referred to as the third path (Gorard and Taylor, 2004, as cited in Jogulu and Pansiri, 2011, p.688), or the third research paradigm (Johnson and Onwuegbuzie, 2004, p14) is widely used and recognised by management scholars.
Cresswell and Plano Clark (2007, p.5) define mixed methods as: a research design with philosophical assumptions as well as methods of inquiry. Further substantiating this vision, by stating: “As a methodology, it involves philosophical assumptions that guide the direction of the collection and analysis of data and the mixture of qualitative and quantitative data in a single study or series of studies” (Creswell and Plano Clark (2007, p.5). Its central premise as cited by Creswell and Plano (2007, p.5) is that the use of quantitative and qualitative approaches in combination provides a better understanding of research problems than either approach alone.
In addition, it is argued by Jogulu and Pansiri (2011, p.688) that a mixed methods approach, advocates the use of both inductive and deductive research logic, which is a great strength in itself, as having an inductive-deductive cycle allows the equal undertaking of theory generation and hypothesis testing in a single study, without compromising one for the other.
It is also expected given the relatively new concept of social media usage in SMEs that any methodology will be to some extent exploratory and inductive. Initial analysis will focus on the implementation and analysis of online questionnaires based on a standard format (e.g. Likert scale model) to obtain mainly quantitative responses, which will be complimented by a qualitative approach in the form of case-study analysis which will include in-depth interviews and observation, as detailed in the provisional diagram below.
The first stage of this research paradigm is to collect primary quantitative survey data via two different online questionnaires aimed at: marketing communications professionals (chartered institute of public relations members) and prosumers (aged 35-45) as a sample segment of ‘participative’ social media users. According to Easterby-Smith et al (2009, p.90) there are three main types of survey: factual, inferential and exploratory. Inferential surveys as Easterby-Smith et al (2009, p.91) confirms are aimed at establishing relationships between variables and concepts whether there are prior assumptions and hypotheses regarding the nature of these relationships.
For the purposes of this study SMEs in South East England, including the following counties: Suffolk, Essex, Norfolk, Kent, Sussex, Surrey, Berkshire and Cambridgeshire will be targeted in order to provide a targeted analysis of case-studies.
Eisenhardt (1989, p.534) defined case study ‘as a research strategy that focuses on the dynamics present within a single setting.’ According to Eisenhardt (1989) there are three ways case studies could be used to accomplish the researcher’s aims – case studies provide description whilst testing and/or generating theory. Case study data can also come from a variety of sources. Stake (1995) identified six sources from which qualitative research data are collected for case studies. First, the nature of the case, particularly its activity and functioning, second, its historical background, third, its physical setting, fourth, other contexts, such as economic, political, legal, and aesthetic; fifth, other cases through which the case is recognised; and sixth, those informants through whom the case can be known. Interviewing ‘experts’ in the subject, such as senior managers, marketing/PR and communications managers, as well as observation at various intervals, will form a key element of the case-study preparation.
Collecting primary data as a priority is suggested as there is unlikely to be a large volume of published statistics or texts available that encompasses a detailed picture of how SMEs have adapted their practices and priorities to encompass social media activity, as well as the monitoring of its effectiveness as compared with traditional marketing materials as a means of meeting strategic objectives.

Timescale

Activity	Words	Duration
Literature review	20,000	6 months
Methodology	15,000	8 months
Data gathering		12 months (overlapping with methodology)
Data analysis	20,000	8 months
Conclusion, implications and recommendations for further research	15,000	5 months
Introduction and abstract	5,000	2 months
Amendments and revisions		2 months
Total	75,000 (200 pages approx.)	36 months (3 years)

What specifically do you hope this thesis will discover or explain that will make it an original contribution to knowledge?
Social media as a research paradigm, with its many facets is still very much in its infancy. As McQuail, (2000, as cited in Daugherty et al, 2008, p.16) highlights ‘consumers are active and in charge of their media experiences, making it more important than ever to understand motivational factors’ in this instance that drive consumption and interaction with organisations and individuals. This power shift as Severin and Tankard (1992, as cited in Daugherty et al, 2008, p.16) describes, challenges media theorists (and organisations, specifically SMEs) to change the way they traditionally have identified (and engaged with) audiences, with a lesser focus on examining the theoretical effects of media and a greater focus on understanding why and how consumers use media. From the SME’s perspective, engaging
audiences through online conversational discourse, deploying the tools of Web 2.0, will facilitate communications in new ways with their varied stakeholders. As Jones (2010, p.149) states communication methodology has changed significantly to promote mutual value between the organisation and their ‘audience’: ‘Where once businesses communicated to their customers and other stakeholders, they now communicate in partnership with them.’ The views, experiences and recommendations of marketing communications experts will also be considered in order to inform current and future practice.
In light of this, this study is designed to examine and analyse the opportunities, challenges and barriers to utilising social media channels effectively by SMEs, within the B2B context primarily, by testing existing implementation and quantifying the outcomes from the perspective of senior internal employees and marketing communications experts. An important element of this analysis is to explain the influence and expedience of eWoM as a means of influencing engagement and the distribution of messages via a primary framework analysis, utilising the case-study examples. Plus, to underpin this study a broader investigation of social media usage by professionals aged 35-45 will be undertaken to ascertain attitudes, motivations, objectives and outcomes to inform engagement and eWoW behavioural traits as well as the impact on wider social relationships. This approach is intended to broaden understanding and primary data related to the use of social media specifically within the B2B context to better inform future implementation and practice.

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The Audit Expectations Gap in the Public Sector of Turkey

February 2, 2021/in Posts /by admin

University of Essex
Essex Business School

The Audit Expectations Gap in the Public Sector of Turkey

December 2014

BE951-7-AU: RESEARCH METHODS AND METHODOLOGIES IN ACCOUNTING AND MANAGEMENT
COURSEWORK 2

Summary:

The concept of audit expectations gap has been widely used in private sector studies. However, in the public sector, it has not been received much attention. Until now, only a very limited number of researches on the audit expectations gap in the public sector have been carried out. Similarly, in Turkey, researches on audit expectations gap generally focus on the private sector. With regard to the public sector of Turkey, research on audit expectations gap has not been undertaken at all. This study aims to identify the existence of the audit expectations gap in the Turkish public sector in terms of performance audit by providing answer to the following questions: Whether or not the audit expectations gap exist in the Turkish public sector relating to performance auditing? If it exists, what is the nature of audit expectations gap?

Background:

Liggio (1974, p.27) first used the term of audit expectations gap in the literature and
defined it as the difference between ‘the levels of expected performance as envisioned both by the independent accountant and by the user of financial statements’. In 1978, Cohen Commission Report (1978, p.xi) broadened the definition as ‘a gap between the performance of auditors and the expectations of the users of financial statements’. However, Porter (1993) criticized previous definitions as they were too limited and did not consider inadequate performance, and made a definition as ‘the gap between the public’s expectations of auditors and auditors’ perceived performance’ (p.50). Although these definitions are private sector oriented, in a broader sense, they could also be used in the context of public sector as the nature of audit is apparently similar.
In general, to examine the audit expectations gap, two approaches are available. In the first approach, based on private sector auditing, Porter (1993) specially investigated opinions of auditors and public, regarding the roles and duties of auditors. In the second approach (Chowdhury and Innes, 1998), based on the public sector auditing, the audit expectations gap is investigated in the context of accountability. In this approach, accountability is regarded as fulfilment of standards in the process of auditing and reporting. Since this approach aimed to investigate the perceptions of auditors, seven concepts were chosen in the context of accountability: auditor accountability, auditor independence, auditor competence, audit materiality and audit evidence, truth and fairness, and performance audit (p.247).
As mentioned earlier, unlike the literature on private sector auditing, research on audit expectations gap was very limited in the context of public sector. Until now, only Pendlebury and Shreim (1990; 1991), Chowdhury and Innes (1998), and Chowdhury et al. (2005) have conducted research on the audit expectations gap in the public sector of different countries.

Aims and Objectives:

In Turkey, researches on audit expectations gap in the public sector have not been carried out at all. This study will attempt to fill this research gap in the auditing literature. In order to establish a sound research framework, an approach based on ‘accountability’ has been employed for this research. This study will be concerned with the TCA[1] auditors’ accountability to the PBC[2] and the auditees in the context of performance audit. The following objectives are set in order to achieve the aim of the research:

To evaluate TCA auditors’ and the report users’ opinions about the performance audit function and the performance audit reports in the context of accountability,
To assess performance audit reports produced by TCA in the context of accountability.

Methods:

This study aims to investigate the presence and the characteristics of the audit expectations gap in the public sector of Turkey. It also seeks to understand participants’ perspectives, perceptions, and interpretations. This study, therefore, has an explorative approach. For these reasons, interpretivist paradigm will be employed. To accomplish the aim of this study, a qualitative methodology will be selected owing to its connection with the research paradigm and appropriateness in identifying objectives of the study. The researcher will choose two different methods to accomplish the objectives of the study. The first method will be composed of semi-structured interviews with the auditors of the TCA and two groups of users: PBC, as the recipient of the TCA audit, and the auditees. The purpose is to explore the perceptions of auditors and other users which may cause expectations gap and to identify the characteristics of the gap. The second method will be the analysis of performance audit reports of TCA as a secondary source. The purpose is to support the findings gathered from the interviews in respect to the reasons and components of the gap. A software will be used in order to analyse both interview transcripts and audit reports.

References:

Chowdhury, R., and Innes, J., 1998. A qualitative analysis of the audit expectations gap in the public sector of Bangladesh. International Journal of Auditing, 2(3), pp.247-261.
Chowdhury, R. R., Innes, J., and Kouhy, R., 2005. The public sector audit expectations gap in Bangladesh. Managerial Auditing Journal, 20(8), pp.893-908.
Cohen Commission, 1978. AICPA Reports, Conclusions, and Recommendations of the
Commission on Auditors’ Responsibilities. New York: American Institute of Certified Public Accountants. Available at: http://documents.routledge-interactive.s3. amazonaws.com/9780415508117/articles/commission.pdf [Accessed 05 December 2014]
Liggio, C. D., 1974. The expectation gap: The accountant’s legal Waterloo? Journal of
Contemporary Business, 3(3), pp.27-44
Pendlebury, M., & Shreim, O., 1990. UK auditors’ attitudes to effectiveness auditing. Financial Accountability & Management, 6(3), pp.177-189.
Pendlebury, M., & Shreim, O., 1991. Attitudes to effectiveness auditing: Some further evidence. Financial Accountability & Management, 7(1), pp.57-63.

[1] Turkish Court of Accounts, Supreme Audit Institution of Turkey.
[2] Plan and Budget Committee of Turkish Grand National Assembly.

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The Factors Affecting E-Business Companies

February 2, 2021/in Posts /by admin

The Factors Affecting E-Business Companies

Introduction
The business and commerce transactions have been transformed by the advances of the information and communication technology (ICT) and more specifically by the Internet. As the Internet presents a broad spectrum of information and payment mechanisms to the users, it could also increase the level of product and service purchases. Globally reaching trillions of USD, e-commerce has enabled businesses to operate beyond the geographical boundaries, to reach more customers and to compete with other companies not only at national level, but also international level. Developed countries could adopt e-commerce more easily than the other countries as they have sound economic and technological infrastructure. However, even today in some regions of developed and developing countries the level of Internet penetration which affects e-commerce transactions directly is lower. Moreover, there are several inequalities between some groups in terms of Internet usage. Culturally beliefs and attitudes of the consumers are also affect e-businesses. Today even in developed states there is lack of trust to online transactions. As e-commerce is not in a vacuum, it is also affected by politic factors. Politic decisions embody in laws and laws follow social, cultural and technological developments. Since advances in the Information and Communication Technology are the driver of e-commerce, legal environment have been adjusting itself to new digital era. Thus ebusinesses are also affected by the new understanding of legislation. This paper will try to evaluate the several factors (economic, demographical, cultural and politic) affecting ebusinesses success.

Economic Factors

The economic sustainability and competitiveness of a country determines its e-commerce potential. The countries which have a sound economic infrastructure and improved technological environment could easily adopt online trade. Therefore, key macro-economic

indicators, such as per capita GDP; the improvement in ICT infrastructure, such as computer and the Internet penetration and the speed of online transactions; and the advanced payment methods, such as the level of credit card use, affect e-commerce adoption of a country at macro level (Hariharaputhiran, 2012). The development level of a country’s economic structure and its economic stability have also played a crucial role in the adoption of new technologies. Therefore economically developed countries seem to have higher Internet penetration and online trade transactions (Wunnava & Leiter, 2009). For example, income level which is one of the key indicators of a developed economy, affects expansion of the ecommerce because it is directly related to the purchasing power of people (Karimov, 2011).
Globalisation which leads elimination of trade barriers, decline in the costs of the transportation and communication, increased investment opportunities in new markets and more competitive trade environment, is another factor affecting and forming e-commerce transactions. In the globalising world, thanks to the advances in telecommunication and transportation, e-commerce is regarded as a new and easy way to access markets. Today only the businesses which adopt and implement global communication and transportation links, utilize the benefits from the competitive trade environment (Aydin and Savrul, 2014). In addition, the local firms which face foreign competitors in the domestic market, prefers adoption of e-commerce to compete them. However, it is also argued that e-commerce has not changed the actors which have the advantages from the competitive international trade. Global firms still dominant actors of international trade and it is claimed that limited resources of local and small sized firms^[1] might put them at a competitive advantage in their domestic markets (Totonchi and Kakamanshadi, 2011).

Demographic factors

In order to enjoy benefits from the Internet in terms of commercial transactions, the users should have the opportunity and the skills of using the Internet. Thus, skilled users would make the right choice consciously to use the Internet for their purposes. With this perspective demographic factors such as gender, age, education and income become the crucial element of any e-commerce company’s success. If there is an inequality between social groups to access and use the Internet, the level of online transactions will be limited and this will affect e-commerce companies negatively.
In this context, the digital divide has been a critical issue in ICT since the massive usage of the computer. The digital divide has two dimensions. First, the divide addresses the availability of groups to access computers, and other ICT products and services. Moreover, digital divide could be a matter of disparities between countries and the regions in a country. As a political, cultural and socio-economic reality, some groups have better opportunity to access computers and the Internet. For example, this inequality could arise between female and male, young and old, rich and poor and educated and uneducated. Although digital divide exists, due to the increasing usability of Information Technologies (IT), it is argued that the gap is closing between male and female, young and old, and rich and poor due to the governmental actions and socioeconomic improvement (Lee, 2010). Accordingly, a recent survey by OxIS^[2] reveals that as the use of internet is increasing in the UK, the digital divide for low-income households, lower educated groups, older, and disabled people is getting narrower (Dutton and Blank, 2013). However, in underdeveloped and some developing

countries, even in some regions of the developed countries the digital divide still exists. For example, across Africa in 2014 only 9.8% of the inhabitants can access the Internet (IWS, 2015). Empirical studies show that in developing countries, there have been a digital divide between regions as well. For example even in Croatia, the newest member of EU, between urban and rural areas the digital divide exists in terms of broadband^[3] adoption (Krizanovic, 2013). Moreover even between EU countries, with regard to fixed and mobile broadband penetration, it is argued that there has been a significant digital divide and the efforts could not close the gap successfully (Polykalas, 2014 ).

Cultural factors

The intention of shopping online is affected both technological and socio-cultural factors. Although the level of economic and technological development of a country or a region is directly determines the degree of online consumption, even in developed countries some people still tend to do face-to-face shopping rather than online shopping. Those people still want to touch or test the products or they do not trust in online transactions especially payment systems.
Especially the countries which have lower levels of e-commerce transactions, online payments, credit cards and e-money are regarded as risky. Actually, in some countries the majority of the population could not be familiar with these concepts. In such countries to overcome general belief and increase e-commerce transactions some mixed (traditional and electronic) methods are applied. For example, in Jordan many online traders implement cash on delivery option in their transactions (Abu-Shamaa and Abu-Shanab, 2015). Interestingly, a

recent survey reveals that even in the UK, 14% of the Internet users, termed as Adigitals, overwhelmingly negative beliefs and attitudes about the Internet (Dutton and Blank, 2014)
Trust is regarded as one of the prominent factors that affect the success of the e-commerce companies (Zhu et al., 2011). In online shopping trust means ‘having confidence that the store will offer fair prices, insert the right product information, reserve consumer’s privacy, and handle credit card and transaction information securely.’ (Abu-Shamaa and Abu-Shanab, 2015, p.2).
Another significant issue that affects online shopping attitudes of the individuals is trust in online payment system. Due to the fraud concerns some people might not want to pay online in their transactions. Moreover online payment is regarded as a complex method for some people. However, implementing safer and simpler online payment methods will encourage the potential e-customers to shop online (Bahaddad et al., 2013)

Political Factors

E-businesses are also affected by the governmental policies and regulations. Actually, all businesses must comply with the governmental regulations especially with the laws. Moreover, they must aware of the effects of any forthcoming legislation on their operations. Political factors affecting e-businesses include any legislation, initiative or funding to support the adoption and improvement of e-commerce and information technology.
Politically, the governments encourage and regulate online trading in several ways. Firstly, amendment of the laws and the regulations help to the functioning of e-commerce. Moreover, the existence of governmental incentives and programmes which encourage the development new technologies and improve technological infrastructure also have an impact on the success of e-commerce implementations (Permwanichagun, 2015).

With regard to legislation, Chaffey (2011) categorize the laws governing e-commerce into six groups: (1) Data protection and privacy law, (2) Disability and discrimination law, (3) Brand and trademark protection, (4) Intellectual property rights, (5) Contract law and (6) Online advertising law. In this paper data protection, contracting and jurisdiction issues will be discussed.

Data protection and privacy regulations

Although e-commerce presents many benefits to the economies and the people, the open structure of the Internet also brings some problems. Misuse of personal data might be one of the most important problems in online trading. E-commerce firms generally collect and use personal information of online shoppers in order to form their marketing strategies by meeting the personal needs of the individuals (Boritz and No, 2011). In order to complete ecommerce transactions, crucial personal data is required to be shared which has raised privacy and specifically fraud concerns. Hence, online shoppers’ trust in the e-commerce transactions would be decreased and this would affect the performance of online traders negatively.
While completing online shopping the customers are required to share personal information such as name, address and credit card number. In some cases, some additional information such as, preferences, income, and consumption behaviours are required to be shared. These are the simplest methods of collecting data. Another method is gathering the Internet Protocol (IP) number during visiting the Website. By this way, it could be possible to track visitors’ future web surfing. Another important approach to collect personal information of Website visitors is ‘cookies’, which are small text files that are set on an Internet user’s computer when one browses the Internet (Luzak, 2013, p.547). Cookies are beneficial because they ease the verification of identity. However, they are generally used to collect individual’s long

term browsing histories including payment information. Cookies are also an appropriate tool for online behavioural advertising (OBA) which could be defined as ‘[a]djusting advertisements to previous online surfing behaviour’ (Smit et al., 2014, p.15). Today almost all advertisement platforms are used this mechanism in their online advertising strategies (eMarketer, 16 May 2013). Although the advertisers are eager to implement OBA by using cookies, without informed consent, the cookies could violate the privacy of the individuals. Due to these privacy concerns, policy makers in US and Europe focussed on implementing opt-in regime which requires explicit consent of users (Bennet, 2011). Recently, the information which is shared in social networking Websites such as Facebook and Twitter, could be also collected and used (Jaafor et al., 2014). More recently, since the launch of the GPS (Global Positioning Systems) integrated mobile phones, it is possible to track users’ movements without any permission (Maekawa, 2014). Furthermore, it is possible to gather and transfer personal data during cloud computing processes (Sahin, 2013). Aforementioned procedures which enable customer tracking, could assist the firms to individualise customer transactions. However, the gathered data could also be transferred to third party organisations without the permission of the consumer. This would increase the concerns about confidentiality of data.
In order to respond to the privacy concerns, some legislations and procedures are entered into force by the governments. Moreover, there are also self-regulation efforts to overcome the privacy concerns. Data protection and protection efforts could be categorised into two groups: the market-driven, as used in the US and the government-driven, as used in the United Kingdom. In the self-regulation or market-driven approach, data protection procedures are determined by the private norms of the industry. The companies release the degree of information to be collected and used in their privacy policy statement according to industrial guidelines. In the US, no legal regulation is applied on the data collection procedures of the

companies. However, in order to assure customers’ trust, web seals such as TRUSTe and WebTrust are used. The Websites which conform to privacy organisations’ procedures display a sign (Adelola, 2014).
In the government regulation approach, data protection procedures are set by the laws which include regulations in terms of collection, use, and transfer of personal data to different countries which have not privacy regulations (Boritz and No, 2011). Several data protection and privacy laws in term of online transactions are put into effect by several countries, such as the United Kingdom, Germany and Canada. One of the outstanding legislations is Directive 95/46/EC of the European Council which was enacted by European Union in 1995.^[4] The Directive focuses on ‘the protection of individuals with regard to the processing of personal data and on the free movement of such data.’ One of the prominent features of the Directive is prohibition of transferring personal data to the jurisdictions which have not satisfactory protection mechanisms. The Directive also aimed to constitute a single data protection regulation among the member states (Kshetri and Murugesan, 2013).
After the promulgation of the Directive of 1995, due to the significant technological developments, the mechanisms of accessing, collecting, storing, transmitting, processing, sharing, and using personal data in online transactions has transformed. In order to respond to these developments, new regulations and amendments were entered into force. In 2002, the Directive 2002/58/EC of the European Parliament and of the Council which dealt with the processing of personal data and the protection of privacy in the electronic communications sector was entered into force (EU, 2015). In 2006 and in 2009, the Directive of 2002 was

amended by the Directive (2006/24/EC) and the Directive (2009/136/EC) (as known as ‘cookie’ directive) respectively. The EU’s Data Protection Directives are regarded as the major legislative mechanism to protecting consumer data in online transactions (Kshetri and Murugesan, 2013).
The 2009 amendment which was put into force in all member states^[5] in 2011, is so crucial, as it regulates one of the biggest challenges of confidentiality data, ‘cookies’. According to this directive, ‘explicit consent’ is required to launch cookies on the devices of Website visitors. Therefore, the personal data of visitors could not be collected unless they explicitly accept it (opt-in). Hence, the e-commerce companies based in the EU should design their data collection procedures from opt-out to opt-in according to this regulation (Smit et al., 2014). A research from ‘QuBIT’, customer data platform company, suggests that 60% of Internet users polled refuse to accept cookies if asked to opt in, but 99.9% give ‘implied consent’ if they are simply notified that a visited site uses cookies, but take no further action (Heyes, 2012, p.68). The results of this research reveal that implementing explicit consent is so crucial in order to ensure Web users’ privacy.

Contracting

E-commerce transactions are completed via contracts, just like the traditional commerce transactions. However, e-commerce needs electronic contracts as the way of agreement on the contracts have transformed due to the technological developments. In traditional commerce, the way of forming contracts vary. Contracts could be formed in written or be

negotiated orally. The contract law generally ignores the way of forming contracts; instead intention is regarded as the main issue of the cases. Intention is generally embodied in the offer and acceptance tools. As the e-commerce transactions are fulfilled through online network, the transforming offer and acceptance approach could be viewed as an obstacle to the sound contracts (Mik, 2013). Another controversial issue about contracting is signature. In the traditional contracting regime, signature is a mark that states the agreement to the terms of a contract. However, in online commercial transactions as there is no paper-based contract, completing transactions could not be possible with traditional signature. In order to overcome this obstacle, digital signature is started to be used in e-commerce transactions (Gu and Zhu,

2014).

Besides traditional contracting procedures, there have been also new methods. These are Shrink-wrap, Click-wrap and Browse-wrap. Shrink-wrap licence had been used especially by the software manufacturers, before widely use of the Internet. Terms and conditions are generally attached to the software package. In this type of contract, by using the software, the customers agree to be bound by the terms of the licence (Garcia, 2013). After the rise of the Internet, a new type of contract emerged called Click-wrap (or Web-wrap). In this type, the user is required to scroll through the terms and conditions of the contract and click an onscreen button such as I agree or I accept to complete transaction. More recently, a new contracting mechanism, similar to the Shrink-wrap, has arisen: Browse-wrap. In Browse-wrap type of contracts, it is not necessary to take a specific action, such as clicking or ticking, to state agreement. By merely browsing or using a Website, the user agrees to be bound by the Terms of Service located elsewhere (Palanissamy, 2013). Browse-wrap is built on the success of Click-wrap. However, the user might be bound to a EULA (End-User License Agreements) merely by browsing the Website. Hence, the concerns arose with regard to

enforcement of browse-wrap contracts. Browse-wraps sometimes could be subject to an appeal.^[6]

Jurisdiction

Today, offer and acceptance, more specifically click-wrap and even browse-wrap^[7] is regarded as essential elements of an enforceable of electronic contracts (Palanissamy, 2013). However, some issues such as choice of law and jurisdiction are still problematic. To address these issues is very complicated as the Internet has a borderless nature and it transforms the pace and the manner of business communications. In traditional commerce, geographical borders generally identify the commercial relations. Moreover, territorial borders usually overlap with the legal and cultural borders (Davidson, 2009). Today, due to the borderless nature of ecommerce, in terms of legal disputes some controversial questions have arisen: ‘Which country’s court will hear the disputes? or ‘Which country’s law will be applied to resolve disputes?
Jurisdictional issues became complex, due to the global context of the Internet. Legal theorists evaluate jurisdiction mainly in two groups (Ward and Sipior, 2010a): Personal jurisdiction and long arm statute. Personal jurisdiction refers the power of the courts over resident individuals or businesses within a country or a state. However, in some cases, the courts could have an authority over non-resident individuals and businesses which refer long arm statute. In the US, the widely use of the Internet and more specifically e-commerce transactions leads the courts to apply long arm statute on the Internet and the e-commerce disputes (Ward and Sipior, 2010b)

As e-businesses could easily operate beyond borders, their operations might face different or multiple jurisdictions which creates an uncertainty. Therefore, they should be aware of jurisdictional risk ad try to reduce it. To do so, legal analysis and evaluation should be done in their operations (Ward and Sipior, 2010b)

Conclusion

ICT and more specifically the Internet affected all aspects of our lives. The way of conducting businesses has also changed in the new digital era and the phenomenon of ebusiness emerged. Today, commercial transactions occurred through online channels and the Internet. Therefore even small sized businesses could operate beyond borders, regardless of time. In developed and developing countries the level of e-commerce adoption is very high. However rest of the world could not even meet the Internet. Also there are disparities even in developed countries in terms of the Internet and e-commerce adoption. In addition belief of the individuals to the online transactions is another prominent factor. Even in developed countries there is a lack of trust in online shopping. Politic decisions also affect e-commerce with legislations. Confidentiality of data, contracting and jurisdiction are the prominent issues that legal environment dealt with. These factors bring both advantages and disadvantages to the e-businesses. In this context, e-businesses should utilize the opportunities and try to overcome threats.

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^[1] E-commerce is also a crucial issue for small sized firms, especially SMEs, to operate in a competitive environment. Although e-commerce presents valuable opportunities to SMEs, there are several limitations which affect successful adoption and implementation of online trading. Primarily, as their products and the services are not generally suitable for online trading, SMEs could not adopt e-commerce easily. Secondly,
SMEs have problems in terms of logistics and payments. Lastly, security issues and the legal framework affect adoption of e-commerce. Some of these problems could be solved by adapting new strategies to the small sized businesses. However, the structural obstacles, such as legal framework, poor technological infrastructure could only be eliminated by the efforts of the governments (Savrul et al., 2014).
^[2] Oxford Internet Surveys, Oxford Internet Institute of University of Oxford
^[3] ‘Broadband can be defined as anything with a bandwidth larger than 4 Hz (…) Broadband technology is an umbrella term which covers varying high-speed access technologies including ADSL, cable modems, satellite and Wi-Fi’ (Oni and Papazafeiropoulou, 2014: 729)
^[4] After this regulation, there were several attempts to improve data protection procedures in line with the new technological developments were made by the EU. For example, in 2012, the Commission proposed a major reform of the EU legal framework on the protection of personal data. The new proposals will strengthen individual rights and tackle the challenges of globalisation and new technologies. (see, Available at: <http://ec.europa.eu/justice/newsroom/data-protection/news/120125 en.htm> Accessed:26/04/2015). Another significant development is a landmark ruling of 2014 which dealt with the ‘right to be forgotten’, in relation to online search engines. (see, Available at: <http ://ec.europa. eu/justice/data-protection/files/factsheets/factsheet data protection en.pdf> Accessed:26/04/2015)
^[5] As other member countries, in the UK, e-privacy legislation developed in line with the EU norms. In order to align with the EU Directive of 1995, the United Kingdom put into force Data Protection Act of 1998. Although in the Act, the concept of ‘privacy’ is not mentioned, as a fundamental right, processing of citizens’ personal data is regulated. In practice the Act provides opportunity to the citizens to control their personal data processing. In the UK, the privacy law is enforced by the Information Commissioner’s Office (ICO), a governmental institution. If a Website based in the UK collects personal data, it should inform ICO in line with the principles of the Act which regulates the procedures of collecting and using personal information and privacy policies which inform online visitors how the personal information will be processed and removed (Adelola et al., 2014).
^[6] For example, the court in Ticketmaster Corp. v. Tickets.com, Inc. stated ‘[i]t cannot be said that merely putting the terms and conditions in this fashion [listed on the website] necessarily creates a contract with anyone using the web site’ (see. Ticketmaster Corp. v. Tickets.com, Inc. (Ticketmaster I), No. CV99-7654 HLH, 2000 U.S. Dist. LEXIS 4553, at *8 (C.D. Cal. Mar. 27, 2000))
^[7] As Garcia (2013, p.31) indicates; ‘ Browsewrap now stands poised to build upon the legal success of online licensing and become as accepted as Clickwrap in American courts.’

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