Inclusive Innovation and Innovative Management

International Conference on Inclusive Innovation and Innovative Management (ICIIIM 2012)
I

International Conference
Proceedings
Inclusive Innovation and Innovative Management
(ICIIIM-2012)

Miracle Grand Convention Hotel, Bangkok, Thailand
December 14-15, 2012

Watana Patanapongse
Editor-in-Chief

Without these organizations, ICIIIM-2012 would not be able to take its
place in the international conference arena.
Supporting Partners:
Valaya Alongkorn Rajabhat University under Royal Patronage (VRU);
College of Innovative Management (CIM), VRU;
Thailand International Development Cooperation Agency (TICA),
Ministry of Foreign Affairs (MOF)

Organizing Partners:
Valaya Alongkorn Rajabhat University under Royal Patronage (VRU);
Governance Innovation for Sustainability Institute (GIS);
National Science Technology and Innovation Policy Office (STI);
National Innovation Agency (NIA);
Asia-Pacific Finance and Development Center (AFDC);
The Association of Researchers under the Patronage
of the National Research Council of Thailand;
Association of Development Financing Institutions in Asia and the Pacific (ADFIAP);
Yunnan University of Finance and Economics, China;
Tianjin University of Finance and Economics (TJUFE), China;
Lyceum of the Philippines University;
Universiti Teknologi MARA (UiTM), Malaysia;
University of Management and Economics, Cambodia

II

"First they ignore you.
Then they laugh at you.
Then they fight you.
Then you win."

Mahatma Gandhi

III

ACKNOWLEDGEMENTS

On behalf of the ICIIIM 2012 organizing partners, I would like to express my deep
appreciation to H.E. Mr. Woravat Auapinyakul, Minister of Science and Technology, who was
here on behalf of H.E. the Prime Minister Miss Yingluck Shinawatra, to preside over the
opening ceremony and to confer trophies and certificates of thanks to our supporting partners.
My appreciation should also go to Mr. Rathin Roy, Director and Regional Manager for
the Asia Pacific Regional Center of the United Nations Development Programme (UNDP). In
addition, my thanks should go to UNDP Thailand which appointed two speakers for the
Conference, that is Ms. Elise Bjastad and Mr. Somchai Yensabai. Without these speakers to
give color to our Conference, this ICIIIM 2012 Conference would not have got off to so fine a
start. Our special thanks should go to H.E. Robina P. Marks, Ambassador of the Republic of
South Africa to Thailand, who spoke on the theme Inclusive innovation: A case study of South
Africa. In addition, she introduced the distinguished Professor and Research Professor Dr.
Mammo Muchie who has been an editor of many international journals and who has much
experience of innovation and international political economy.
Next, I would like to thank the Rector of Valaya Alongkorn Rajabhat University under
Royal Patronage (VRU) and the Dean of the College of Innovative Management (CIM) which
provided the principle financial support for the Conference. In addition, the Thailand
International Development Cooperation Agency (TICA), Ministry of Foreign Affairs, which
sponsored financial support for the attendance of selected participants from Asia and other
neighboring countries. An important person behind the success of the Conference is Professor
Dr. Boonthan Dokthaisong, who was Deputy Senate Speaker of the Thailand Parliament and
Professor of Public Administration at the National Institute of Development Administration
(NIDA) and now is Chair of the Doctoral Programme in Public Administration at CIM, VRU
who motivated and inspired faculty members and students to take part in this Conference.
VRU has played a very important role in helping this Conference achieve success. They
assigned project management personnel to undertake the required tasks at every stage of the
Conference, that is at the ex ante stage to prepare in readiness before the Conference days, at
the on-going stage, to be ready to work effectively on the Conference days, and after, and at the
ex post stage, to assess the results of the Conference in order to improve on Conferences of this
kind to be held in future.

(1) At the ex ante stage, I should not forget to mention Dr. Pimprapai Intaravitak (Pim)
who designed the contents of the website as well as Ajarn Sorge Vincent who designed the
webpages. (By Ajarn we mean a lecturer or professor in English). Both Ajarn Pim and Ajarn
Vincent worked very hard and skillfully on designing and improving the website. Without their
efforts, our website would not have the attractive look we see now. Apart from website
preparation, providing hardcopy brochures for public relations and coordination with organizing
partners was a main activity. I have to take this opportunity to thank Dr. Phorntippha
Prathumratana Kerr, Ajarn Wang Tiansong, Mr. Theeraphol Kamsaen, Ms. Supattra Apichart
and many others who helped on document preparation, and coordination with persons and
organizations concerned. I sincerely thank you all for your dedication to your work in the back
office on behalf of the ICIIIM 2012 Conference. Last but not least, Dr. Sa-ard Bunjerdrit, the
Dean of the College of Innovative Management who supported personnel to be responsible for
communication, coordination and documentary work especially the database for approaching
prospective authors and audience for this Conference.
In addition, our organizing partners have played an important role in making this
Conference successful. My thanks should go again to Dr. Pim Intaravitak from the Governance
IV

Innovation for Sustainability Institute (GIS) who worked very hard in order to solve the
problem of insufficient budget due to the withdrawal of some prospective financial supporting
partners. GIS has also played an important role behind the scenes by supplementary support for
the budget for travel both within and outside Thailand for the ICIIIM 2012 Executive Director
and ICIIIM 2012 Deputy Executive Director to join International Conferences and forums
related to Inclusive Innovation in Phuket, Shanghai, Beijing, and Indonesia in order to create
networks with people within the inclusive innovation circle.
Regarding the problem of insufficient budget due to the withdrawal of some prospective
financial supporting partners, I myself had to apply leadership skills to solve the challenging
problems encountered. While I was trying to find the best solution to these challenging
problems and sometimes felt disappointment and despondency, Mahatama Ghandhis saying
came into my mind: "First they ignore you, then they laugh at you, then they fight you and then
you win and at the same time Professor Ronald Heifetzs words: A leaders real duty is to
solve challenging problems, not the problems other experts can solve, as well as the Japanese
KAIZEN principle, Where there is a problem, there is progress. Thanks should go to all of
these inspiring words, which helped motivate and inspire me to find the right solutions. I found
that the best way was to fully devote myself to work with dedication to the success of this
Conference. The outcome of our hard work has been achieved as expected. At the period before
the ICIIIM 2012 Conference days, there were many international conferences on inclusive
innovation in neighboring and regional countries, that is in Malaysia, India and China. We are
happy to know that many organizers are paying attention to inclusive innovation which will
help increase the opportunity to disseminate a body of knowledge on inclusive innovation.
My thanks also should go to the following organizing partners: the National Science
Technology and Innovation Policy Office (STI), the National Innovation Agency (NIA), the
Association of Thai Researchers under the Patronage of the National Research Council of
Thailand, the Asia-Pacific Finance and Development Center (AFDC), Yunnan University of
Finance and Economics, Tianjin University of Finance and Economics (TJUFE), the Lyceum of
the Philippines University, Universiti Teknologi MARA (UiTM), Malaysia, and the University
of Management and Economics, Cambodia. Without these partners, the ICIIIM 2012 would not
have been so varied and colorful. Apart from these organizations, many individual persons
helped the ICIIM 2012 by forming a network of different regions. First and foremost, my thanks
should go to Mr. Enrique Murari, Fluyt Knowledge Brokers, recently a key person of the Task
Team for South-South Cooperation, who helped advertize the ICIIIM 2012 via networks in the
Latin American and Caribbean Region (LAC); Mr. Adik Bandoro, a key person of the same
Task Team for South-South Cooperation who likewise helped advertize the ICIIIM 2012 via his
South-South Cooperation network in Indonesia; Dr. Samnieng Muangnil who was a former
Consul to the Thai Embassy in Madagascar, Mr. Constant Gasstsar and Mr. Nicolas Blanchais
who were working for our networks in Madagascar and Africa. Mr. Gasstsar raised funds for
attendance at the ICIIIM 2012 Conference by participants from Madagascar. We sincerely hope
that he will be successful in his endeavor to organize a regional forum on inclusive innovation
policy in 2013 in order to help Madagascar to go in the right track of inclusive development.
Last but not least, Professor Dr. Krishna, a former professor in the United Nations University
and present Editor-in-Chief of SAGE International for Science, Technology and Society who
exchanged ideas on editorial work and attended the Conference as a speaker.
Our thanks should also go to our academic colleagues in the Philippines who, over a
space of only three weeks developed and submitted seven articles based on their research work.
Thanks for your impressive work conducted within so limited a time constraint. Last but not
least, my special thanks also go to Professor Dr. T. Keisei Tanahashi who was one of my
advisors for my post doctoral research under scholarships granted by the Japan (JSPS) and
Thailand (Thailand Research Fund and National Research Council of Thailand), who
V

endeavored to help create networks and raise funds for ICIIIM 2012 as well as also responding
to my request to write a paper for this Conference, though he was very busy on consulting work.
These organizing partners and individual persons played a very important role in the
success of the ICIIIM 2012 Conference. Without these organizations and people, this
Conference could not have taken place.

(2) At the on-going stage over the Conference days, December 14-15, we have to thank
various groups of people:
1) All paper contributors. Many papers help produce innovative work for academic
circles. Some paper authors were requested to write for this particular Conference. Our thanks
should go to all who submitted papers including those whose work does not appear in the
Proceedings. We have to apologize for being unable to accept some due to the relative
remoteness of the paper content and insufficient space.
2) All Conference committee members who were present at the Conference venue and
other relevant spots in order to perform their assigned roles, like musicians who play different
pieces but for a common purpose: the optimum satisfaction of the audience.
3) Last but not least, all guests who participated in the Conference. Without the guests
and audience, what would have happened to the Conference? Many invited guests attended the
Conference to strengthen cooperation and collaboration with us, at the ICIIIM 2012 as a
consortium, with the hope that a Conference of this kind will itself be sustainable.

(3) At the ex post stage or following the Conference days, our thanks should go to the
evaluation team led by Assistant Professor Chavana Pavaganun and his co-workers who are
responsible for Conference evaluation in order to search for more appropriate ways to prepare
and organize further Conferences on this scale or larger in future.
ICIIIM was designed to be a consortium to which every member belongs. Everyone and
every organization can be members of ICIIIM. We believe that inclusive innovation should
come from all walks of life, not from just a particular group of people.
We are the world. We are one family, a big family. While we have to help ourselves in
order to survive and thrive proudly in society, we also have to seek for opportunities to help our
brothers, sisters, and relatives. History has told us that God will reward those who produce
goods and services at a price affordable to the bottom of the pyramid. For example, Japan, who,
after World War II, produced and sold products at affordable prices, quickly became rich. Now
that China and India are doing inclusive business their economies are growing fast. To pay
attention to inclusive business does not mean you sacrifice or lose yourself to help the have-
nots, but you are making a good choice, one which will help both you and your stakeholders to
achieve sustainable success.

Watana Patanapongse, Ph.D.
Editor-in-Chief,
ICIIIM 2012 Proceedings
Bangkok, Thailand
December 2012

VI

If you always do what you always did,
you will always get what you always got.
-Albert Einstein

VII

PREFACE

The International Conference on Inclusive Innovation and Innovative Management
(ICIIIM 2012) is intended to motivate and inspire those who are responsible for inclusive
development. In preparing for ICIIIM 2012, we always keep in mind that inclusive development
cannot be achieved by just brainstorming among government agencies, academics and NGOs.
Information must be based on research findings.
Additionally, we believe that the incubation of knowledge on inclusive innovation must
go hand in hand with innovative management. On the one hand, inclusive innovation helps
developers to create innovation in the nature of both software and hardware. Both kinds of
inclusive innovation will lead to inclusive growth. On the other hand, innovative management
is a tool for applying both types of inclusive innovation to development.
Development administration is a dynamic system dealing with a changing and uncertain
environment. Innovative management knowledge workers must understand existing systems
based models, such as logical framework analysis (LFA) or its ZOPP (German), or JPCM
(Japanese) models. These systems-based model approaches will help development
administrators, especially project team members, understand how to successfully execute
projects under the umbrella of results-based management (RBM). We have potential for
innovation but, without real understanding of how to use innovative management effectively,
the innovation we have is not fully effective.
In the beginning, this Conference was designed to present two types of papers: on
inclusive innovation and innovative management with the emphasis on inclusive innovation.
Initially, we expected to have more on inclusive innovation and less on innovative management.
But on the contrary, papers on innovative management outnumbered those on inclusive
innovation. This is because inclusive innovation is new among academia in the ASEAN
community. In terms of paper contributors, we expected to have professional and expert
authors. However, comparing among paper contributors, we found three types of author: (1)
experienced, (2) moderately experienced, and (3) greenhorn authors who were post graduate
students.
In trying to classify papers into these two types, we set ourselves a task. It is often
difficult to identify a paper as concerned specifically with either inclusive innovation or
innovative management. The two themes are interrelated and overlap. Many contributions have
something to say about both. It is often very difficult to decide whether or not to accept a paper
as relevant to our theme. However, our basic objective is to encourage prospective contributors
to take part in a Conference such as this to contribute something from their experience and at
the same time to develop their own skills.
In an international conference such as this, language can present a challenge. It has
become customary to use English as an international medium. But many contributors who are
fluent in their native speech may be less familiar with expressing themselves in English. The
fact that contributors may be less familiar with English does not mean that they do not have
very clear ideas to present in the fields of inclusive innovation and innovative management.
This itself is a developmental challenge.
In consequence, the members of our reviewing committee had to work hard. There were
at least two phases to review. First was the need to assist some authors with their English usage.
Second, the reviewers must then turn their attention to the content. This is the most difficult part
since, in fact, there is no-one who does not have some interesting innovative development to
report. So, we worked on the principle that inclusive innovation should come from people at the
grassroots level and from researchers who work with people at the grassroots level. These
innovations are the achievement of local intellect at the community level throughout the world.
VIII

We have to apologize to those authors who worked hard during the course of their
interaction with reviewers. Some authors were requested to consider and recast their papers
more than 5 times. Among the papers submitted, only 45 percent were finally accepted. In fact,
we would like to reward all authors for joining with us but we had limited time to work with
them. In fact, we tried to search for papers which showed evidence of innovation, either new
breakthroughs or spin-offs. If they presented such evidence, we would give them an opportunity
to take part in this Conference.
The world at present is encountering many challenges which call for leaders who can
create inclusive growth, growth that enables the have-nots to access the fruits of development,
not only basic public services but also financial sources and services for investment in small and
medium enterprises (SMEs) that can thrive. The value of human beings lies in dignity: to live
by self-dependency rather than always depending on others. Hence, the best way to promote
inclusive development is to enable the BoP to create their own inclusive innovations and apply
them to development of themselves, their families, their communities, and their society as a
whole.
We hope that the knowledge gathered in these Proceedings will inspire some readers to
create innovations or spin-offs from innovation. It is our great pleasure to know that many
academics from many countries are now interested in undertaking research or other
development initiatives on inclusive innovation. Some participants, especially our friends from
Madagascar, have plans to organize Conferences like this in their countries in the near future.
The road to our destination is not short and not smooth, it is long and with many obstacles. We
have to walk and work together in order to reach our destination some day.

Watana Patanapongse, Ph.D.
Editor-in-Chief,
ICIIIM 2012 Proceedings
Bangkok, Thailand
December 2012

IX

TABLE OF CONTENTS

No. Detail Page
I Acknowledgements III
II Preface VII
III Table of Contents IX
IV ICIIIM-2012 Conference Agenda XIV
1 Part One: Papers under Inclusive Innovation Theme XIX
1.1 Inclusive Innovation Through Learning and Capacity Building of Extension Agents to
Provide Quality Services to the Excluded Farming Population (Bhutan)
1
By Samdrup Rigyal and Chaicharn Wongsamun
1.2 Community Forests: An Inclusive Innovation for Household Income Generation in
Western Bhutan (Bhutan)
10
By Dechen Choden, Penporn Janekarnkij and Kampanat Vijitsrikamol
1.3 Inclusive Innovation on Health: The Support to the Pregnant Women Before and
During Childbirth (Cambodia))
18
By Men Pauravy and Luch Sreyleak
1.4 Inclusive Poverty Outreach by Microfinance: Evidence from AMK (Cambodia) 25
By Thun Vathana and Pum Sophy
1.5 Transaction Cost, Policy Option and Inclusive Innovation (China) 31
By Rui Ji and Runzhong Peng
1.6 On the Reconstruction of the Chinese Rural Innovation System from the Perspective
of Inclusion Innovation (China)
37
By Zhang Jiachen
1.7 Scaling Inclusive Businesses Successfully: Lessons from Emerging Markets (India) 45
By Raghav Narsalay and Leandro Pongeluppe
1.8 South Innovation: Unlocking Country Potentials (Indonesia) 60
By Adik Bandoro
1.9 Inclusive Innovation and Systems Approach: Comrade-in-Management for New
Development (Japan)
68
By T. Keisei Tanahashi
1.10 An Inclusive Approach to Environmental Conservation and Human Development in
Madagascar: Build Friendship First and Then Work Together Sustainably (Madagascar)
81
By Gasstsar-Rakotondrandira Constant and Pr. Rakotomria Andrianirina Etienne
1.11 Retail Sukuk: An Innovative Instrument for Inclusive Growth (Malaysia) 87
By Saadiah Mohamad, M. Fahshah F.M. Haslan, Nurhuda A. Fathil, Uni Afiqah M.
Azam and Fatin N. Husni
1.12 Inclusive Handwriting Learning Aid Game on Touch Screen for Myanmar
Kindergartens (Myanmar)
96
By Nandar Pwint Oo and Ni Lar Thein
1.13 Maternal Near-Miss in North Okkalapa General Hospital, Yangon, Myanmar: An
Inclusive Innovation (Myanmar)
102
By Nang Mya Thuzar Maung, Mya Thida, and Kyu Kyu Than
1.14 Inclusive Innovation: A Case Study Using Creative Problem Solving (Portugal) 110
By Fernando Sousa and Ileana Monteiro
1.15 Inclusive Innovation in Thailand and Its Relationship with the Sufficiency Economy
and with the Commencement and Development of the ASEAN Economic Community
(AEC) in 2015 (Thailand)
119
By Brian Sheehan
1.16 Inclusive Development for Living in a Changing World 125
By Vinai Veeravatnanond, Som Na-saan, and Thongchai Nilkham (Thailand)
X

TABLE OF CONTENTS (CONT.)

No. Detail Page
1.17 A Decent Work Approach for Advancing Inclusive Innovation in Informal Sector
Employment under a Global Production System: A Study of Thailand (Thailand)
133
By Chokchai Suttawet
1.18 Inclusive Innovation The Case for Those in Rural Area for Sustainable
Development in Vietnam (Vietnam)
138
By Ha Van Su and Trieu Do Kien
2 Part Two: Papers under Innovative Management Theme 143
2.1 Policy and its Implications for ICT Innovations: The Case of e-Government in Brunei
Darussalam (Brunei Darussalam)
144
By Hazri Kifle
2.2 A Proposed Innovative Leadership Model of Cambodian High School Directors
(Cambodia)
156
By Mok Sarom, Sunthorn Kohtbantau, and Nawamin Prachanant
2.3 Developing an Innovative Population Management System (Cambodia) 168
By Samboeun Hean and Narida La
2.4 Human Resource Leadership for Effective Schools in West Malaysia (Iran and
Malaysia)
174
By Dr. Golnaz Saeidi and

Sanaz Haghsefat
2.5 Is the Restoration of Japans Fisheries Possible ? Can ITQ and Liberation of Fishery
Right help? (Japan)
182
By Masayuki Komatsu, Ph.D
2.6 Innovative Transformation In a Knowledge Intensive Industry: A Case Study of an
Organizational Learning Based Enterprise (Japan)
190
By Yang Liu, Sanetake Nagayoshi and Junichi Iijima
2.7 I-Sight Mouse: An Innovative Aid for Disabled People with Limited Use of Hands
Using Image Processing Technique (Malaysia/ United Nations University)
199
By Hasrul Reeza, W. M. Syahrir, S. M. Aljunid, Zafar Ahmed, and S. M. Hamzah
2.8 The Influence of Innovativeness Organizational on the Performance of Organizations:
An Analysis among Selected Malaysian Private Universities (Malaysia)
207
By Noorlaila Hj Yunus, Ismayaza Noh, and Che Norlia Hassan
2.9 Leadership and Business Performance of Technology Based SMEs in Malaysia
(Malaysia)
213
By Azlin Shafinaz Mohamad Arshad and Amran Rasli
2.10 Transformational Leadership Style and Business Performance: The Mediating Role
of Entrepreneural Innovation (Malaysia)
218
By Samsudin Wahab, Roslan Abdul Aziz, and Rosli Mahmud
2.11 Smart Guardian: An Innovative Way to Security in a Mobile Society (Myanmar) 223
By Thiri The` Wut Yee and Ni Lar Thein
2.12 An Innovative Context and Preference Aware Location Based Services System for
Tourism in Myanmar (Myanmar)
228
By Tin Maung and Ni Lar Thein
2.13 A New Clustering Algorithm for Innovative Management System (Myanmar) 235
By Hnin Wint Khaing and Mie Mie Khin
2.14 Demonstrating Profile of Urinary Tract Infection in Pregnant Women With
Innovative Approach (Myanmar)
241
By Htun Min Latt and Tin Maung Hlaing
XI


No. Detail Page
2.15 Innovative Study on Determining Risk of Noncommunicable Diseases among
Migrant Workers for Better Healthcare (Myanmar)
246
By Tin Maung Hlaing and Ye Thwe Hlaing
2.16 An Innovative Bio-Assessment Tool for Application in River Water Quality
Management (Nepal)
255
By Subodh Sharma
2.17 Innovation Management of Higher Education Institutions in the Philippines: LPU
Experience (The Philippines)
263
By Flora V. Javier and Esmenia R. Javier
2.18 Talisai (Terminalia catappa L.) Leaf Extract: Potential Innovative Cure for Cancer
(The Philippines)
270
By Carina R. Magbojos, Oliver Shane R. Dumaoal, Karmelle Louise C. Lontoc, Christine
D Fallaria, Isaiah Joyce L. Flores, Dyan P. Gaddi, Ma. Errin A. Magpantay, Rodrigo
M. Villacrucis Jr.
2.19 eMedCalc: A Mobile Application for Innovative Drug Calculation (The Philippines) 276
By Rosaly B. Alday, Cecilia C. Pring, and Olive E. Sandoval
2.20 ePatient: An Innovative Medical Record System for Hospitals (The Philippines) 282
By Cecilia C. Pring and Rosaly B. Alday
2.21 A Proposed Innovative Model For Upholding Human Rights among Street Children:
A Collaborative Intervention (The Philippines)
288
By Francis Kayode Ashipaoloye
2.22 A Redesigned Innovative Faculty Performance Evaluation System: Inputs from
Feedback (The Philippines)
294
By Dr. Flora V. Javier and Dr. Norma L. Meez
2.23 Innovative Management of Cross Sectional Stock Returns in the Philippines (The
Philippines)
301
By Ramon George Atento
2.24 Data Envelopment Analysis Method Applied to Service Employees of the
Department Store: The Problem of Multi-Criteria Assignment (Taiwan, China)
309
By Chiao-Pin Bao, Shu-Chuan Chen
2.25 Team Creative Driving Force and Innovation Imperceptibly Acquired Lead the
Sustaining Innovation of Team Knowledge-A Case Study on The Product Developing
Team of Apple Inc. (Taiwan, China)
316
By Jing-Lin Huang, Shang-Ping Lin and Justine Chang
2.26 National Innovative Climate and Strategy of Innovative Development in the Context
of Economic and Cultural Globalization (The Case of Thailand) (Thailand)
329
By Denis Ushakov
2.27 An Innovative Approach to Crime Reduction Through Architectural Design: A Case
Study of Bangkok Metropolis, Prathumwan District (Thailand)
336
By Amorn Wanichwiwatana
2.28 Innovative Human Resource Practice: A Functional Framework and Causal Model
for Psychological Climate, Occupational Self-Efficacy, Employee Engagement, and
Organizational Performance (Thailand)
345
By Kijpokin Kasemsap
2.29 Innovative Knowledge Management: A Synthesized Framework and Causal Model
for Organizational Learning, Organizational Innovation, Knowledge Management
Capability, and Organizational Performance (Thailand)
352
By Kijpokin Kasemsap
XII


No. Detail Page
2.30 Innovative Approaches to Financial Risk Management: Performance of the Price
Expectation Model in the SET50 Futures Market (Thailand)
360
By Abhisit Vejjayanvivat
2.31 Innovative Management of Collaborative Value Creation (Thailand) 369
Pawarin Tuntariyanond, Pongpun Anuntavoranich, Tartat Mokkhamakkul, and Sageemas
Na Wichian
2.32 Innovative Depression Prevention in Thai Adolescent Mothers During Pregnancy
(Thailand)
378
By Somsri Nawarat
2.33 Innovative Thai Buffalo Conservation Strategies for Sustainable Local Development
(Thailand)
386
By Sakorn Songserm
2.34 Factors Affecting Academic Achievement of Nursing Students: A Proposed
Innovative Learning Environment (Thailand)
392
By Kerdsiri Hongthai and Kanitha Jodnok
2.35 The Thai Royal Forestry Department: The Need for Reform (Thailand) 399
By Auschala Chalayonnavin and Somboon Sirisunhirun
2.36 Innovation Paradox or Escape from Feararchy: Exploratory Research Why
Innovation Cannot Happen in the Modern Organization (USA)
409
By Sergey Ivanov
2.37 Assessment and Measurement of Innovative Performance at the Regional Level in
Vietnam (Vietnam)
415
By Nguyen Hien Than
2.38 Supporting Work Innovative Behavior in Vietnam Equitized Firms (Vietnam) 422
By Ta Thi Hong Hanh, Truong Thi Lan Anh, and Sununta Siengthai
2.39 Inserting Innovation Tools into the Curriculum of Universities in Response to the
Requirements of the Innovation Process of the Provinces in Vietnam (Vietnam)
431
By Dr.Che Dinh Ly
2.40 The Influence of Communism on Ethical Decision Making (Vietnam) 436
By Ngo Thai Phuong , Bahaudin G. Mujtaba, Greg Fisher
2.41 Exploring SMEs Perception and Trust toward HRIS for a Sustainable HRM
Performance: Case Study of SMEs in Vietnam (Vietnam)
443
By Nguyen Ngoc Duc
2.42 Vietnam Higher Education Reform: Challenges and Solutions (Vietnam) 448
By Vu Ngoc Tu
3 Part Three: Abstracts under Inclusive Innovation and Innovative Management Themes 455
3.1 Innovative Management for Prevention of Mother to Child Transmission (PMTCT)
through Linked Response (LR) Approach (Cambodia)
456
By Svay Somana
3.2 Inclusive Innovation and Development: Case Studies from Indian Experience (India) 457
By V. V. Krishna
XIII


No. Detail Page
3.3 The Surveillance of Tobacco Use and Second Hand Smoking among High School
Students in Lao PDR/ 2011 Global Youth Tobacco Survey (GYTS, CDC/WHO):
Innovative Policy for the Effectiveness of Tobacco Control Programs in Schools (Lao
PDR)
458
By Angkham Ounavong, Samira Asma, James Rarick, Bounlay Phommasack, Bounlonh
Ketsouvannasane, and Katthanaphone Phanhduangsy
3.4 Inclusive Education, the Way to Innovations in Education: A Case Study of Myanmar
(Myanmar)
459
By Win Myat Aye
3.5 An Innovative Model of Electrical Energy Saving in Households and Communities
in the Central Region of Thailand (Thailand)
461
By Wasan Srisaard
4 Part Four: Appendices 463
4.1 Resume of Speakers, Session Chairs and Reviewers 464
4.2 List of Authors 473
4.3 Host Committees 481

XIV

ICIIIM-2012 CONFERENCE AGENDA

XV

ICIIIM-2012 CONFERENCE AGENDA

Day 1: Friday 14 December 2012
Time Details
08:30 - 09:30 Registration
09:30 -10:30 Session I : Opening Ceremony
Welcome and Opening Speeches:
By H.E. Mr. Woravat Auapinyakul, Minister of Science and Technology
-Trophies conferred to supporting partners, Minister of Science and
Technology (On Behalf of Prime Minister)
10:30 - 10:45 Coffee Break
10:45 - 11:25 Special Keynote Speech: ASEAN and Inclusive Development
By Associate Professor Dr. Sakarindr Bhumiratana, Former President,
National Science and Technology Development Agency; At Present,
President, King Mongkuts University of Technology Thonburi
11:25 - 12.00 Session I I : I ntroduction to I nclusive I nnovation
Rapid growth in developing countries in the past three decades has brought
about a huge gap of income distribution and inequality between the rich and
the poor. The gap is much wider when the economy grows continuously. As a
result, access equality is necessary and is a fundamental purpose of inclusive
innovation which further leads to inclusive development and inclusive
growth. Without inclusive innovation, the Bottom of the Pyramid (BoP)
cannot access basic services such as health, water and education, and
resources such as finance, technology, and skills. Major issues discussed in
this session include:
- What is inclusive innovation?
- What is the difference between inclusive innovation and other types of
innovation?
- Why is inclusive innovation important?
- How does inclusive innovation lead to inclusive growth?
Chair: Dr. Watana Patanapongse, I CI I I M 2012 Executive Director
Keynote Speaker: Why inclusive innovation? Mr. Rathin Roy, Manager,
UNDP Asia-Pacific Regional Centre (Previous Director of the
I nternational Policy Centre for I nclusive Growth in Brasilia, Brazil)
12:00 - 13:00 Lunch
13:00 - 14:00 Session I I I : I nclusive I nnovation Policies and Promotion
Policies for inclusive growth are most important for promoting grassroots as
well as business sector innovations for those at the Bottom of the Pyramid to
gain access to fundamental services. The government should take a role in
creating a favorable policy environment for inclusive innovation besides
fiscal and financial policies. Experiences from different governments and
private sectors in promoting inclusive innovation will be shared in this
session. Major issues include:
- How to develop effective innovation policies for inclusive growth?
- How to strengthen innovation capacity?
- How to scale-up inclusive innovation from the business sector into national
and global markets?
- What are the key challenges in promoting innovation?
Chair: Prof. Dr. Boonton Dokthaisong, Chair of Public Administration
Program Committee, College of I nnovative Management
13:00 - 13:20 Presenter: Dato Dr. Sharifah Zarah Syed Ahmad, Deputy Secretary-
General (Policy),Minister of Science, Technology and I nnovation (MOSTI )
- Creating a desirable environment for promoting inclusive innovation
- The key challenges in promoting innovation
XVI

Day 1: Friday 14 December 2012 (Cont.)
Time Details
13:20 - 13:40 Presenter: Mr. Somchai Yensabai, Programme Manager, Governance Unit,
UNDP Thailand
- Promoting inclusive innovation in Thailand
- Scaling-up inclusive innovation from the business sector into national &
global markets
13:40 - 14:00 Questions and Answers
14:00 - 15:00 Session IV: Fiscal and Financial Policies for Inclusive Innovation
Fiscal and financial policies are essential for promoting inclusive innovation.
Various types of fiscal policies such as tax incentives or subsidies can
enhance the innovation atmosphere and dissemination of innovation. In
addition, financial incentives for innovation play a major role in creating and
disseminating inclusive innovation. The challenge lies in the design and
implementation of fiscal and financial policies. Major issues discussed in this
session include:
- What types of fiscal policies can support inclusive innovation? And what
are the key challenges and solutions in using fiscal policies to support
inclusive innovation?
- What is the role of financial policy in creating and disseminating inclusive
innovation?
- What are the major challenges and solutions in financing inclusive
innovation?
Chair: Prof. Dr. Brian Sheehan, President, Asian Forum on Business
Education (AFBE)
14:00 - 14:15 Presenter: Dr. J i Rui, Senior Economist, Asia-Pacific Finance and
Development Center
- Fiscal policies to support inclusive innovation
- The key challenges and solutions in using fiscal policies to support inclusive
innovation
14:15 - 14:30 Presenter: Mr. Octavio B. Peralta, Secretary General, Association of
Development Financing I nstitutions in Asia and the Pacific (ADFI AP)
- The role of financial policies in creating and disseminating inclusive
innovation
- The key challenges and solutions in financing inclusive innovation
15:00 - 16:30 Session V: I nclusive I nnovation Improves Access to Fundamental Services
The development gap between the urban and rural areas is widely recognized.
Equalizing access to fundamental services is necessary in order to share
economic growth. Even though many government programs and activities are
initiated, they are still limited in their scale as well as quality and many social
groups are excluded. Unless the innovative ways are adapted to cover access
to high quality service by a wider range of those at the Bottom of Pyramid,
the government policies cannot achieve nationwide success. major issues
discussed in this session include:
- How to develop innovation that serves the needs of the BoP and their
quality of life?
- How to utilize innovation to gain access to fundamental public services?
- What are the challenges and solutions in utilizing innovation to improve
access to fundamental services?
- What are the lessons learned?
Chair: Prof. Dr. Fernando Cardoso de Sousa, Research Centre for Spatial
and Organizational Dynamics (CI EO), University of the Algrave, Portugal
XVII

Day 1: Friday 14 December 2012
Time Details
15:00 - 15:15 Inclusive Innovation: A Case Study of South-Africa, Prof. Dr. Mammo
Muchie, Pretoria and South-Africa on Innovation Studies and Professor &
Coordinator of Research Centre on Innovation and International Political
Economy.
15:15 - 15:30 Inclusive Development and Innovation-Case Studies from Indian
Experience, Prof. Dr. V.V. Krishna, Professor in Science Policy and
Chairperson, Centre for Studies in Science Policy, School of Social Sciences,
Jawharlal Nehru University, New Delhi.
15:30 - 15:45 Scaling Inclusive Business Successfully: Lessons from Emerging Markets
(Brazil, China, Ghana, India, and Nigeria), Mr. Raghav Narsalay, India
Lead, Accenture Institute for High Performance, Mumbai, India
15:45 - 16:00 South Innovation: Unlocking Country Potentials, Mr. Adik Bandoro,
Expert on Task Team South-South Cooperation
16:00 - 16:15 Community Security and Social Cohesion through Inclusive Innovation
and Inclusive Growth: The Case of Mae Hong Son, Elise Bjastad, UNV
Project Officer,United Nations Development Programme
17:30 - 20:00 Event Buffet (Thai Cultural Dance Show)

Day 2: Saturday 15 December 2012
Time Details
09:00 - 10:15 Session VI : Challenges in I nclusive I nnovation Evaluation and
Sustainability
Innovations that create a product or service of good quality with a price
affordable to the Bottom of the Pyramid are termed inclusive innovation.
The challenge is how such innovations are scalable and replicable to suit the
requirements of the changing county environment and its complexity. This
session aims to gather knowledge through various country experiences and
make a systematic approach to transform innovative activities into more
measurable performance that has wider impact and improves peoples
livelihoods and to explore steps needed toward sustainable inclusive
innovation, main challenges, and solutions. Major issues discussed in this
session include:
- What are the priorities and challenges of inclusive innovation evaluation?
- What are the strategies for fostering and scaling up inclusive innovation?
- How can we create open, transparent, and inclusive innovation?
- How can we develop a green growth strategy and inclusive innovation?
- What are the main challenges and how can we develop sustainability for
inclusive innovation?
Chair: Prof. Dr. Keisei Tanahashi, School of Management Science, Tokyo
Keizei University
XVIII

Day 2: Saturday 15 December 2012 (Cont.)
Time Details
09:00 - 10:00 Presenter: Mr. Rathin Roy, Manager, UNDP Asia-Pacific Regional Centre
(Previous Director of the I nternational Policy Centre for I nclusive Growth
in Brasilia, Brazil)
- Priorities and challenges for evaluation of inclusive innovation
- How can we create open, transparent, and inclusive innovation?
- What are the strategies for fostering and scaling up inclusive innovation?
- How can we develop a green growth strategy and inclusive innovation?
- What are the main challenges and how to build sustainability for inclusive
innovation?
10:30 - 12:00 Session VI I : Paper Presentation
This session provides the opportunity for scholars and professionals to submit
papers for ICIIIM 2012. Paper presentations are arranged around general
topics on inclusive innovation and innovative management. Each participant
will make a 15-minute presentation. Topics for paper presentation include
inclusive innovation or innovative management in these areas:
- Policies and Promotion, Systems and Evaluations, Sustainability, Cases in
Public and Private Organizations
- Issues in Education, Health, Social Development, Environment, Agriculture,
Tourism, Energy, etc.
Paper Presenters : In Room A,B,C,D,E
12:00 - 13:00 Lunch
13:00 - 14:30 Session VI I : Paper Presentation (continued)
Paper Presenters : In Room A,B,C,D,E
14:45 - 15:15 Concluding Remarks
15:30 - 21:00 Meet at Hotel Lobby (OTOP Exhibition)

XIX

Part One:
Papers under Inclusive Innovation Theme

1

Inclusive Innovation through Learning and
Capacity Building of Extension Agents to
Provide Quality Services to the Excluded
Farming Population

Samdrup Rigyal
Director: Office of the Vice Chancellor, Royal University of Bhutan
Thimphu, Bhutan, samdrup.ovc@rub.edu.bt

Chaicharn Wongsamun
Associate Professor: Department of Agricultural Extension, Khon Kaen University
Khon Kaen, Thailand, chaichrn@kku.ac.th

AbstractThe agricultural extension agents in Bhutan
are the key facilitators for generating inclusive
innovation to provide quality extension services to the
largely excluded farming population and creating
livelihood opportunities for a good quality life. To
enable extension agents to provide creative non-
technological innovation demands efficiency and skills.
The system under which the extension agents work
should enable them to build the capacity for efficient
performance, knowledge management, effective
services delivery, increased efficiency in building
linkages and networking, enterprise and ultimately
contributing to increased output and innovation. This
study was conducted to find out whether this working
system provided scope for learning, knowledge
creation, motivation and a consistent feedback
mechanism to build the capacity of extension agents to
generate inclusive innovation and improve the quality
of services. A structured questionnaire-based survey
was administered to a sample of 150 extension agents at
the grassroots level. Overall, it was found that
extension agents recognised that knowledge
management practices are vital to improve quality of
services. However, there was less scope for extension
agents to interact with external experts or institutions.
There was not much opportunity to participate in
project activities and interact with experts. The
networks of contacts as sources of extension
information were accessible only within the same
organisation. The extension agents believed that
feedback to reports submitted was a key to learning
and gaining knowledge and skills although the
frequency of feedback was very little.

Keywords---Inclusive innovation; knowledge
management; extension agents; learning; networking;
feedback

I. INTRODUCTION

The agricultural extension agents (EAs) in
Bhutan assume the role of facilitators and providers
of inclusive innovation to the largely farming
population who form the base of the pyramid. The
EAs are responsible for providing public extension
services by facilitating the delivery of agricultural
technologies and innovations generated by research
to the excluded farming population who remain as
the primary beneficiaries of inclusive innovation.
Bhutan is a small landlocked country with an
area of 38,394 square kilometres. It is predominantly
an agrarian country. About 72.5% of its area is
covered by forests leaving less than 7.0% of the land
suitable for cultivation. Yet, almost 70% of the
population of 0.708 million (National Portal of
Bhutan, 2012) people are dependent on agriculture.
This poses a big challenge to increasing productivity
and creating livelihood opportunities for a good
quality life.
Agriculture and its allied activities play a vital
role in the growth, balance and stability of Bhutans
economy accounting for about one fifth of the gross
domestic product (GNH Commission, 2008). The
agricultural programmes are implemented through
the Renewable Natural Resources (RNR) sector of
the Ministry of Agriculture and Forests (MoAF). The
RNR sector comprising agriculture (AG), animal
husbandry (AH) and forestry (FO) sub-sectors
advocates an integrated approach to delivering
agricultural development services.
The effective delivery of public extension
services is the key to the success of rural and
agricultural development programmes in improving
the livelihoods of farmers. The delivery of quality
extension services, however, remains a challenge.
The field level EAs are often subjected to critical
review over issues of technical incompetency and in-
effectiveness in the delivery and facilitation of
services and innovations.
Generally, a somewhat unhealthy perception of
extension prevails in many developing countries,
caused by a weak extension lobby, a faulty initial
organizational set-up, an inherent lack of trust in
extension by most of the research organizations, and
traditionally poor career development conditions in
the profession of extension. The extension system in
Bhutan operates within this purview, more so as the
2

extension framework functions within the
conventional system of technical innovation transfer,
wherein the EAs were believed to be involved in
merely passing on the recommendations released by
the research system to farmers.
The MoAF in Bhutan also believes that the
effective delivery of public extension services is the
key to the success of rural and agricultural
development programmes to improve the livelihoods
of farmers through the dissemination of inclusive
innovations and technologies.
However, the implication that grassroots level
EAs are technically incompetent and lack efficiency
for effective delivery of quality services raises a
number of uncertainties about the job performance of
EAs. It raises questions about standards of training
provided in training institutions, the professional up-
gradation opportunities offered once employed and
environments conducive to continued learning,
networking and knowledge management (KM)
created for further enhancement of their knowledge
and skills. In other words, it questions the capability
of the EAs to generate inclusive innovation and
improved quality of services to create livelihood
opportunities for the large but excluded farming
population in Bhutan.
Given the above scenario and with the aim of
improving the capability of EAs to generate
inclusive innovation to provide quality services, the
Royal Government of Bhutan has finalised a
National Monitoring and Evaluation System
containing various procedures for monitoring and
evaluation of development programmes and projects
under a standard national M&E system. Since this
could be the standard system adopted for providing
the overall guidance for systematic monitoring and
evaluation of development programmes, the
agricultural extension system in Bhutan was also
mandated to use the same system to monitor and
evaluate extension programmes and agricultural
development activities.

II. THEORETICAL FRAMEWORK

The application of the new M&E system has yet
to bring about any visible improvement in the
performance of extension and address issues of
extension personnel and organisations. All problems
recorded are still associated with the weaknesses of
the system in properly monitoring and evaluating
programmes.
Given the above facts, it can be assumed that the
current M&E system requires to be further refined
and made more user-friendly to the EAs. It
presupposes that if the M&E system is able to take
into consideration social and human aspects
through the adoption of participatory approaches, it
could provide scope for learning and improvement of
the stakeholders. That would require changes in the
focus for evaluating the performance indicators of
EAs. Besides measuring routine performance and
progress, the M&E system should provide scope for
learning and capacity building. The focus of the
system for improved performance should be to
measure the ability to manage knowledge and
intellectual resources and engage in networking with
other stakeholders / partners or institutions for
development.
According to Oakley & Garforth (1985), there
are certain types of knowledge and personal skills
that EAs should have to make them undertake their
responsibilities effectively. The four main areas of
knowledge include (1) technical knowledge, (2)
knowledge about rural life, (3) policy, (4) and adult
education. In addition to knowledge, extension
personnel should have personal skills to efficiently
deliver their services and certain qualities to make
themselves committed and reliable in working with
the farmers.

FIGURE I: ILLUSTRATION OF THE CONCEPTUAL FRAMEWORK

3

Figure I illustrates that necessary input should
be provided to design an effective M&E system. An
effective M&E system should further provide scope
for learning, knowledge creation, motivation and
construction of a consistent feedback mechanism for
all stakeholders of development. The presence of
such a system will enable an EA to build the capacity
for efficient performance, knowledge management,
effective services delivery, increased efficiency in
building linkages and networking within workgroups
and enterprises and ultimately contributing to
increased output which could be equated to inclusive
innovation. An extension agent with the above
capacity should be creative with aptitude for critical
reflection and capable of reorganising experiences
and ideas into new insights and agreed practices.
To operationalise the conceptual framework
illustrated in Figure I requires a number of activities
one of which is to study whether the M&E system
provides the scope for learning, networking,
knowledge management and feedback.

III. OBJECTIVES

This study was part of a larger research
concerned with examining the monitoring and
evaluation system for improving the job performance
of grassroots level EAs in Bhutan. Opinions were
sought from EAs at the grassroots level. This
particular study, however, was focused only on the
capacity building of EAs to generate inclusive
innovation and provide quality services to the
excluded population. The areas measured included
sources of knowledge and information, knowledge
management practices, networking / workgroup
relationships / linkages and feedback mechanisms for
learning. The primary objectives of this study were:

1. To identify the sources of knowledge and
information for EAs.
2. To assess scope for knowledge management
practices.
3. To identify the workgroup relationships /
networking maintained by EAs with extension and
other organisations.
4. To assess the scope of feedback for learning and
capacity building of EAs.

IV. MATERIALS AND METHODS

A total of nine districts were selected out of the
total 20 districts as a study sample based on cluster
sampling. Cluster sampling was employed by
subdividing the districts distributed in the four
regions covered by the RNR Research and
Development Centres (RNR R&DCs) of the MoAF.
The R&DCs in Bhutan are distributed to cover the
whole of the country through the four regions of
East, East-Central, West and West-Central. The
national mandates of R&DCs are horticulture
research for the east with six districts, cereal crops
research for the west with five districts, forestry
research for the west-central with six districts, and
livestock research for the east-central with three
districts.
Having stratified the districts in the four regions,
two sample districts were each selected from all the
regions through simple random sampling. One
additional sample was selected from the west-central
region, as its mandate extended to one of the largest
research areas, thereby making a total of nine sample
districts. As the total number of districts in Bhutan is
20, the nine sample districts were equivalent to 45%
of the total size.
There are three extension agents representing
AG, AH, and FO in each extension centre in every
block. As indicated in the introduction, there are a
total of 205 blocks in the various districts. Since
there are three EAs in each extension centre in every
block, a blanket count of a total of 615 EAs was
taken. From this total number of EAs, 29.27% of the
EAs totalling 180 EAs was taken as a sample for the
study. These many EAs covered 60 blocks in the
sample districts. These 60 blocks were apportioned
to the nine sample districts based on the size of the
sample (29.27% EAs) and size of the districts in
terms of the number of blocks.
A structured questionnaire was designed and a
mostly self-administered questionnaire survey was
executed from October - November 2009.
Out of the nine sampled districts with 180 EAs,
a sample size of 150 was retained. The data analysis
was carried out using SPSS.
To obtain a quantitative measure of respondents
perceptions on sources of knowledge and
information for EAs; knowledge management
practices; workgroup relationships / networking;
participation and linkages with other RNR
institutions; and scope of reporting and feedback
mechanisms for learning, three different types of
survey formats were used including ranking format,
Yes, No and Not Sure response scales and fixed-
response items providing choices for the respondents
to select one or more than one of the choices.

V. RESULTS AND DISCUSSIONS

A. Personal Characteristics

The personal characteristics of the EAs showed
that there were 127 male and 23 female respondents
with ages ranging from 21 to 53 years. The average
age was 32.9 years out of which 138 of them were
married with some of the spouses also working as
EAs. The EAs had joined the service from 1971 to
2009 with a range of 38 years. There were 53
respondents from AG, 56 from AH and 41 from FO
sub-sectors. About 92% of the EAs have diploma-
level education and training skills with the rest
4

possessing post-graduate diplomas or merely
certificates.

B. Sources of knowledge and information for EAs

This part of the study attempted to find out
whether the EAs are working within the extension
system in Bhutan where it contributed to favourable
learning. The conceptual framework illustrated in
Figure I above shows that an effective M&E system
should provide scope for learning, knowledge
creation, motivation and construction of a consistent
feedback mechanism for all stakeholders of
development. It suggests that the presence of such a
system will enable the EAs to build the capacity for
efficient performance, knowledge management,
effective services delivery, increased efficiency in
building linkages and networking within
workgroups, and ultimately contribute to increased
output and inclusive innovation.
Table I shows the scores of knowledge and
information sources for the EAs. As many as 14
sources were ranked from 1 to 14 with 1 being the
most important. Respondents ranked the same
number in more than one source given its
appropriateness and relevance. For the purpose of
analysis, the scores of the first three most important
ranks (R) orders (R1 Imp, R2 Imp and R3 Imp) were
chosen for each item, multiplied by 3, 2 and 1
respectively and the sub-scores summed to get the
total score.

Most important sources of knowledge and
information
The results presented in Table I show that the
most important sources of knowledge and
information for EAs were: the College of Natural
Resources; RNR SHs; and, in-service training, that
ranked R1. The statements: attending workshops;
seminars; and conferences ranked as R2 important
sources of information. The third most important
source was: regular sector-specific meetings in the
district / district (R3) followed by extension
materials (R4) and RNR R&D at R5.
The results revealed that the use of media and
media products has yet to gain value as an important
source of knowledge and information. For example,
radio and television which are the most popular
media outlets ranked the lowest as sources of
information and knowledge at No. 10 and No. 11
respectively.
Other sources of knowledge and information
ranked were peer groups (who are the other EAs in
other blocks) at No. 6; government policy directives
from technical departments at No. 7; village leaders
and farmers at No. 8; and external visitors including
both RNR and non-RNR (visitors) to the block, at
No. 11.

TABLE I: SCORES OF KNOWLEDGE AND INFORMATION SOURCES IN ORDER OF IMPORTANCE (n = 150)

S/N
Sources of knowledge and
information
No. 1 Imp
(No. of
scores x 3)
No. 2 Imp
(No. of
scores x 2)
No. 3 Imp
(No. of
scores x 1)
Total
scores
(1+2+3)
R
1. RNR research centres 72 32 20 124 5
2. College of Natural Resources 136 42 10 188 1
3. District RNR sector heads 108 66 14 188 1
4. Regular sector-specific meetings
in the District
84 64 15 163 3
5. Attending workshops, seminars
and conferences
90 52 23 165 2
6. Policy directives from technical
departments
39 34 17 90 7
7. External visitors (both RNR &
non-RNR)
24 24 13 61 11
8. Extension materials 87 44 21 152 4
9. Peer groups (other EAs in the
block)
51 34 11 96 6
10. In-service training 108 60 20 188 1
11. Village leaders and farmers 45 30 11 86 8
12. Media: television 27 22 12 61 11
13. Media: radio 36 24 9 69 10
14. Media: newspapers 39 28 9 76 9

Note: Imp = Importance; R = rank

5

C. Knowledge management (KM) practices

This part of the study aimed to find out whether
the extension organisation in Bhutan, which is the
MoAF, enabled staff to work in an environment
where they were able to generate knowledge and
created interactions for exchange of ideas and
technology within the organisation. The various
institutions that constitute the extension organisation
in Bhutan are the MoAF, RNR R&DCs, district RNR
sub-sectors and other RNR programmes under which
EAs are working.

KM practices are important in extension
The results shown in Table II indicated that EAs
highly agreed that KM practices are important to
increase efficiency by using knowledge to improve
extension services delivery with 88% having said
Yes. Therefore, there was high agreement on the
statement: you regularly use knowledge received
from farmers, research or extension, with 82.7% Yes
responses followed by: KM practices are critical to
improve sharing or transferring new technologies
and practices with 79.3% Yes responses.
About 72% of the respondents said they agreed
that KM practices are critical to improve the
competitive advantage of your organisation. Almost
75% responded Yes, to the statement: your
organisation has a programme intended to share
knowledge among the staff. On the statement:
regular RNR meetings are important KM practices in
your district, 76% responded Yes. There are only
39.3% Yes responses over the statement: your
organisation provides formal training related to KM
practices, added to the highest No response of 36.%
and 24.7% of Not Sure responses on the same
statement.

TABLE II: KNOWLEDGE MANAGEMENT PRACTICES IN WORK PLACE (n = 150)

Sl.
No.
Knowledge Management Practices

Yes
(%)

No
(%)
Not
Sure
(%)
1. Your organisation has a programme intended to share
knowledge among the staff
74.7 13.3 12.0
2. You regularly use knowledge received from farmers, research
or extension
82.7 8.7 8.7
3. Your organisation encourages you to participate in projects
and with external experts
57.3 19.3 23.3
4. Your organisation provides formal training related to KM
practices
39.3 36.0 24.7
5. Regular RNR meetings are important KM practices in your
district
76.0 15.3 8.7
6. Your organisation encourages experienced workers to transfer
their knowledge to new or less experienced extension staff
62.7 16.7 20.7
7. In your district, EAs share knowledge and information by
regularly updating databases of good practices, lessons
learned or listing of experts
51.3 28.0 20.7
8. In your district, EAs share knowledge and information mainly
through written documents of lessons learnt and training
manuals / extension materials
56.7 22.7 20.7
9. In your district, EAs share knowledge and information by
attending workshops, seminars, conferences, etc.
74.0 14.0 12.0
10. KM practices are critical to improve competitive advantage of
your organisation
72.0 9.3 18.7
11. KM practices are critical to improve sharing or transferring
new technologies and practices
79.3 6.0 14.7
12. KM practices are important to increase efficiency by using
knowledge to improve your extension services delivery
88.0 2.7 9.3

6

Sharing knowledge and scope for interaction
There was fairly strong agreement on the
statement in your district, EAs share knowledge and
information by attending workshops, seminars,
conferences, etc. with 74% Yes responses, while the
statement: in your district, EAs share knowledge and
information mainly through written documents of
lessons learnt and training manuals / extension
materials scored only 56.7% Yes responses with
equally high No and Not Sure responses of 22.7%
and 20.7% respectively.
The result of the study showed that there was
less scope for EAs to interact with external experts or
institutions. There were only 57.3% Yes responses
and 19% No responses to the statement: your
organisation encourages you to participate in projects
and with external experts. There were also only
62.7% Yes and 16.7% No responses over the
statement: your organisation encourages experienced
workers to transfer their knowledge to new or less
experienced staff.

D. Workgroup relationships / networking

Building professional relationships through
networking is important to maintain linkages with
people in any working environment. This part of the
study aimed to find out whether work group
relationships / networks of contacts are maintained
by the organisation / districts as sources of extension
advice and support. The results in Table III showed
that under the category: access to known sources of
information, more than 60% Yes responses were
observed from all the four sub-categories, with the
sub-category: have access to other extension
networks at blocks/ districts scoring the highest
72.7% Yes responses.

TABLE III: WORK GROUP RELATIONSHIPS AND NETWORKING IN THE DISTRICT (n = 150)

Sl.
No.
Extension networking Yes (%) No (%)
Not sure
(%)
Access to known sources of information
1. Nurtures and develops key contacts as sources of
information
64.0 11.3 24.7
2. Have access to farmers network / groups 69.3 20.7 10.0
3. Have access to research RNR network and resources 65.3 20.7 14.0
4. Have access to other extension networks at blocks / districts
/ HQs

72.7 13.3 14.0
Building personal contacts and networks
5. Have personal network with other development / extension
workers
77.3 15.3 7.3
6. Always seeks out the expertise of others and builds linkages
with other agencies
58.0 29.3 12.7
7. Invites informal teams of experts, researchers, consultants to
address problems

47.3 33.3 19.3
Facilitates networking
8. Makes efforts to develop new alliances and formal networks 43.3 29.3 27.3
9. Regularly shares successes and best practices with other
people
76.7 11.3 12.0
10. Develops and nurtures strategic alliances with other block
extension centres
62.0 16.0 22.0

Personal contacts and facilitating networking
On the category: building personal contacts and
networks, the sub-category: have personal network
with other development / extension workers, scored
the highest Yes response of 77.3% while that of:
invites informal teams of experts, researchers and
consultants to address problems, scored as low as
47.3% Yes responses with 33.3% and 19.3% No and
Not Sure responses respectively.
Under the category: facilitate networking, the
sub-category: make efforts to develop new alliances
and formal networks, scored a very low Yes response
of 43.3% along with a high 29.3% No and 27.3% Not
Sure responses. Both the sub-categories: regularly
7

shares successes and best practices with other
people, and: develops and nurtures strategic alliances
with other block extension centres, scored fairly high
Yes responses of 76.7% and 62% respectively.

E. Participation and linkages with other RNR
institutions

This part of the study attempted to find out the
involvement of the district extension organisations in
implementing various activities that help to fulfil or
lead to acting as processes for specific linkage
building functions such as extension and training
linkages, knowledge seeking linkages, services
seeking linkages, marketing linkages, research
linkages, and information sources linkages /
networks. The results which are described
individually are as shown in Table IV.

Extension and training linkages
The results showed that 88% of the respondents
said they were involved in activities such as farm
visits, field days, demonstrations, workshops and
training programmes that contributed to building
extension and training linkages. Minimal No and Not
Sure ratings of 3.3% and 8.7% respectively, were
observed in this study.

Knowledge-seeking linkages
More than 75% of the respondents said they are
involved in activities that sought solutions to specific
problems from departments, researchers and RNR
research centres that contributed to knowledge
seeking linkages but there were also about 15.3% of
the respondents who said they were Not Sure about
those activities and a 9.3% No rating.

Service seeking / providing linkages
Service seeking/ providing linkages included
seeking information, services and inputs from other
agencies like commission agents, agribusiness, etc.
Although there were more than 60% respondents
who said they have service seeking / providing
linkage functions, more than 14% rated No and 24%
responded Not Sure.

TABLE IV: LINKAGES MAINTAINED BY THE DISTRICTS WITH OTHER INSTITUTIONS (n = 150)

Sl.
No.
Linkages among various actors
Yes
(%)
No (%)
Not sure
(%)
1. Extension and training linkages (activities such as farm
visits, field days, demonstrations, workshops and training)
88.0 3.3 8.7
2. Knowledge-seeking linkages (seek solutions to specific
problems from departments, researchers and RNR research
centres)
75.3 9.3 15.3
3. Service seeking/providing linkages (seek information,
services and inputs from other agencies (commission agents,
agribusiness, etc.)
61.3 14.7 24.0
4. Marketing linkages (access to markets to help farmers sell
their products)
63.3 22.7 14.0
5. Research linkages (RNR research centres and researchers to
develop solutions for farmers problems)
66.0 17.3 16.7
6. Information source networks (various sources of
agricultural information including media, government
agencies, farmer-farmer extension, etc.)
68.0 12.7 19.3

Marketing linkages
These are linkages with other institutions that
helped to gain access to markets where farmers could
sell their products. The highest No rating of 22.7%
was observed with the marketing linkages building
function although there was a more than 63% Yes
rating.
About 66% of the EAs reported that there were
linkages maintained with RNR research centres and
researchers to develop solutions for farmers
problems. However, there were also fairly high
17.3% No and 16.7% Not Sure ratings over this
linkage.

Information source networks
Information source networks included various
sources of agricultural information including media,
government agencies, farmer to farmer extension,
etc. The results showed that 68% responded saying
Yes, with 12.7% and 19.3% No and Not Sure ratings
respectively.

8

F. Scope of reporting and feedback mechanism for
learning

The existence of a reliable feedback mechanism
in the M&E system is important to correct the course
of action or solve the problems encountered while
implementing activities. The study was aimed to find
out the scope of the existing reporting and feedback
mechanism, used by extension for learning.
Feedback received included feedback on the reports
submitted and implementation of routine activities.

Multiple use of reporting forms
Although it varies from district to district, many
of the EAs are engaged in implementing additional
activities which are mostly for project-based
programmes besides their own regular extension
activities. Almost 83% of the respondents said that
the current progress reporting format presented in the
M&E system is suitable for submitting quarterly
progress reports, both for regular and project-based
activities.

Feedback as key to learning
The statement: feedbacks to progress reports you
submitted are key to learning for an extension agent,
received 42% strongly agree and 44.7% agree ratings
from the respondents. Only an aggregate of 13.3%
said they only slightly agree or dont agree.
More than 65% of the respondents said only
sometimes they received feedback to the reports they
submitted every time to their supervisor. Only 24.7%
responded, Yes, Every Time.
The respondents said feedback to the reports
they submitted is usually received mainly from the
RNR Sector Head (SH) (91.3%) where 92% of the
feedback received from the SHs is most useful. The
results showed that the frequency of feedback
received second to that of the SHs is through the
Gups / Headman (12%) where they added that their
feedback is also the most useful (10.6%).
The respondents said that feedback from the
various sources is received through personal contact
in the field (39.3%), through letters (20%), through
phones (16%), and sector specific meetings and
workshops (75.3%). The most important feedback
that contributed to the success of their activities
included feedback on technical advice (66.7%),
activity implementation (49%), and providing clear
directions (21.3%).
The lessons learnt or the knowledge gained
through the feedback system from the various
sources are that EAs were able to get new ideas
(47.3%), correct mistakes (53.3%) and judge self-
performance (34%).

VI. CONCLUSION

The in-service training along with the College of
Natural Resources and RNR SHs at the districts,
were rated as primary sources of information and
knowledge for EAs. The opportunities to participate
in formal and informal forums like workshops,
seminars, conferences and regular sector-specific
meetings were found very useful and knowledgeable.
Mass media have yet to play a key role although
electronics and media instruments like radio and
television sets are getting accessible at the block
level.
The study on KM practices showed that
extension and EAs recognised that KM practices are
important to increase efficiency for delivering
extension services. EAs also thought KM practices
are critical to improve the competitive advantage of
the extension organisation and staff. They agreed
that their organisation had programmes intended to
share knowledge among the staff and regular RNR
sector specific meetings in the districts enabled them
to adopt KM practices. However, it indicated that the
district extension organisation does not have a
system to offer formal training related to KM
practices.
The results of the study also showed that there
was less scope for EAs to interact with external
experts or institutions. There was not much
encouragement from the organisation to participate
in project activities and interact with external
experts. Opportunities for less experienced staff to
learn from experienced workers were also minimal.
Information documentation and retrieval systems
through databases were not apparent in the districts.
The study on workgroup relationships /
networking, indicated that networks of contacts as
sources of extension information, advice and support
were more accessible within the blocks and at the
district HQs level but not with external agencies and
experts. There are EAs who dont have access to
research institutions, researchers and external
experts.
The study showed that EAs believed that
feedback to progress reports they submitted to their
superiors were a key to learning and gaining
knowledge and skills. However, the frequency of
feedback received every time they submitted their
reports was very little.
The RNR SHs are the main source of feedback
for the EAs besides their feedback being very useful.
The EAs greatly valued the feedback received on
technical matters.

VII. RECOMMENDATIONS

Based on the study on workgroup relationships /
networking, the district extension organisations have
to strengthen network building capabilities,
knowledge management and institutional linkages
with external agencies including research, experts
and farmers groups.
The study on the sources of knowledge and
information, participation in workshops, seminars
9

and conferences indicated the need to strengthen
institutional linkage building and enable as many
EAs as possible to participate in seminars, meetings,
workshops and conferences to gain good exposure
and prospects for learning.
The in-service training was rated as one of the
number one important sources of information and
knowledge. Thus, the significance of in-service
training for extension! The mass media, which
otherwise are the most powerful communication
channels, were rated as the least important sources of
knowledge and information. Therefore, to take
advantage of these media products for wider
dissemination of information and knowledge, the
MoAF should make more investments in producing
RNR related media programmes that could be
broadcast through television and radio.
The study also showed that feedback to progress
reports submitted was the key to learning, correcting
mistakes, providing new ideas and building
confidence for improved job-performance of EAs.
However, it was reported that feedback is only
sometimes received. Therefore, the feedback-
providing mechanism should be effectively executed
in the various layers of the hierarchy to enhance the
capability of extension agents involved in the
knowledge management system and ultimately
facilitate generating inclusive innovation and
improve the delivery of quality extension services to
the excluded farming population in Bhutan.

REFERENCES

GNH Commission. (2008). Tenth Five Year Plan
(2008-2013): Volume 1, Main Document. Thimphu:
Royal Government of Bhutan.

National Portal of Bhutan. (2012). Government fact
file for 2011. Retrieved October 6, 2012,from
http://www.bhutan.gov.bt/government/aboutbhutan.p
hp.

National Statistical Bureau of Bhutan. (2007).
Poverty analysis report, Bhutan 2007 Report.
Thimphu: Royal Government of Bhutan.

Oakley, P., & Garforth, C. (1985). Guide to
extension training. Rome: FAO.


10

Community Forests: An Inclusive Innovation for
Household Income Generation in Western Bhutan

Dechen Choden
College of Natural Resources, Royal University of Bhutan
Lobesa, Punakha. Bhutan.deda_cst2000@yahoo.com/dechen.choden.cnr@gmail.com

Penporn Janekarnkij
Department of Agricultural and Resource Economics, Faculty of Economics, Kasetsart University
Bangkok 10900, Thailand. fecoppj@ku.ac.th

Kampanat Vijitsrikamol
Department of Agricultural and Resource Economics, Faculty of Economics, Kasetsart University
Bangkok 10900, Thailand. fecoknv@ku.ac.th

Abstract--This study evaluated the contribution of
inclusive innovations such as community forests to the
household income in Punakha district, Bhutan. The study
also investigated the participation of community forest
management groups in conservation and community
forest protection activities. Data were collected using
semi-structured questionnaires from 180 household
members of the community forests. Descriptive analysis
using a market price technique for valuation was
employed. Four community forests, Waku Damchi,
Lumsum, Yargay and Mangizingkha, all established in
2005 in Punakha district, western Bhutan were selected.
The district has the oldest and highest numbers of
approved community forests in the country. There was
strong support from community forest members for
forest conservation and protection activities mainly
through labor contribution. The benefits derived from
inclusive innovations (community forests) were
distributed among members both in kind and as cash.
The contribution from forest resources to each household
per annum were Nu. 1,501 in Waku Damchi, Nu. 377 in
Lumsum and Nu. 681 in Mangizinkha. Households in
Yargay received no cash income from the forest resources
due to its early stage of plantation. The first three
community forests contributed on average about 0.3% to
the total household income of the members, which was
relatively low compared to that of neighboring countries.
There is a policy challenge in terms of meeting both the
goals of environmental sustainability and of income
generation simultaneously. The policymakers should
revisit restrictions on the use of forest resources and
explore opportunities to generate more benefits from
them, alongside the environmental sustainability
outcome. The Government should continue to provide
support for forest conservation activities and also
promote wider participation through more educational
programs and awareness campaigns.

Keywords: Inclusive innovation, Community forest,
Management, Participation, Income

I. INTRODUCTION

Forests cover 30% of the global land area with
rich terrestrial biodiversity. Forests contribute
enormously to the global energy supply as well as
providing food, fodder, medicines, building materials,
paper products etc. Furthermore, forests have cultural,
spiritual and recreational value. They are also vital for
climate mitigation and soil and water protection. In
fact, 1.6 billion people worldwide rely on forest
resources for their livelihoods (FAO, 2012). Globally
about 70% of rural communities live in extreme
poverty (World Bank, 2009). These people lack the
basic necessities to maintain a decent standard of living
such as sufficient and nutritious food, adequate shelter,
and access to health services, energy sources, safe
drinking water, adequate education and a healthy
environment.
Bhutan has abundant forest resources with forest
covering a total of 26,826 square kilometers which
constitutes 73% of the total land area (Food and
Agriculture Organization [FAO, 2012]). About 69% of
the total Bhutanese population live in rural areas
(Temphel & Beukeboom, 2006). It is also known that
rural communities are directly or indirectly dependent
on natural resources for their livelihood. The reduction
of poverty is a theme of the development program in
Bhutan. The Poverty Analysis Report of 2007 revealed
that almost 23% of the Bhutanese population lives
below the national poverty line of about Nu 1,100 per
person per month. Thus, enormous potential lies in
inclusive innovation by exploration of natural
resources to improve the livelihoods of the rural poor.
An inclusive innovation like the community forest
program is one of the regimes for forest management
in Bhutan (Wangchuk, 2011). The Social Forestry
Division (SFD) under the Department of Forest and
Parks Services Ministry of Agriculture and Forests,

11

is the main government agency responsible for
supporting the community forestry programs in all 20
dzongkhags (districts) of Bhutan. A community forest
(CF) is managed by local people who are the
traditional users of the forest, called the Community
Forest Management Group (CFMG). On approval of a
community forest management plan, the Royal
Government provides CFMG members the right to
utilize forest products from their designated
community forest in return for taking responsibility for
its management and protection. The management
plans, which are formulated by the CFMG with the
help of District Forestry Sector staff and approved by
the Department of Forest Park Services, form the basis
for execution. This management plan act as an
agreement between the CFMG and the Royal
Government of Bhutan.
Punakha district is situated in western Bhutan. The
altitude of the district ranges from 1,200 meters to
4,800 meters above sea level. As stated in Schindele &
Dheki (1996), Punakha has a forest cover of about 819
square kilometers accounting for 84% of the total area.
The same report reveals that about 50% of the total
forest in Punakha district is accessible and usable for
forest management. Broad-leaved forest is the main
vegetation type in the forest of Punakha and accounts
for 89% of the total forest cover. The rest is chir pine
forest.
However, how CF members contribute to the
viability and sustainability of CFs through
conservation and protection activities as well as how
an inclusive innovation such as community forest
resources contributes to household income of CF
members in Punakha district is not fully explored.
Taking this into consideration, this study aimed to
investigate the participation of CF group members in
conservation and protection activities, and the benefits
if any, derived by CF members from the forest
resources under their management.

II. LITERATURE REVIEW

A. Benefits of forests ecosystem

Forest ecosystem services are defined as services
provided by the natural environment that benefit
people. While there is no single, agreed method of
categorizing all ecosystem services, the Millennium
Assessment framework is widely accepted and is seen
as a useful starting point. Some of these forest
ecosystem services are well known, including food,
fiber and fuel provision and the cultural services that
provide benefit to people through recreation and
appreciation of nature. Other services provided by
ecosystems are not so well known. These include the
regulation of the climate, purification of air and water,
flood protection, soil formation and nutrient cycling.
These are not generally considered within policy
appraisal at present and represent an area where a
greater and more systematic focus would be very
useful (DEFRA, 2007).

B. Total Economic Value
TEEB (2009) stated that the functioning of
ecosystems and their services affect many aspects of
human welfare, and hence a broad set of indicators
should be used to measure the magnitude (value) of
their impact. All the aggregate values as defined in
Total Economic Value (TEV) are integral to derivation
of actual worth of the biodiversity and ecosystem
services as these are important to humans for many
reasons. Total Economic Value comprises both use
values (including direct use such as resource use of
timber and NTFPs, recreation, tourism and indirect use
from regulating forest services such as protection of
watersheds and carbon storage) and non-use values,
e.g. the value people place on protecting nature for
future use (option values) or for ethical reasons
(bequest and existence values).
The forest has non-use economic value in the benefits
from the existence of and leaving of resource shares for
future generations. The bequest value is the value of
rights to the benefits of natural resources now and in
the future. Non-use value is further categorized as
option value and existence value. The option value
represents the benefits due to uncertainty and estimates
the potential future benefits of avoiding irreversible
damage to resources. Existence value represents the
benefits derived from the forests existence regardless
of actual uses, such as cultural, aesthetic and spiritual
values as shown in Figure 1.

FIGURE 1 TOTAL ECONOMIC VALUE OF FOREST ECOSYSTEM
FRAMEWORK

Source: Adapted from MA (2005)
C .Community forest and rural poverty
Total Economic
Valuation
Non-Use Value Use Value
Indirect
Value
(e.g., soil
erosion
control,
carbon
sequestra
tion)
Direct
Value
(e.g.,
timber,
NTPFs)
Option Value
(e.g.,
recreation
value, such as
eco-tourism,
landscape
beauty)
Existence
Value
(e.g.,
cultural
and
aesthetic
values)


12

According to RECOFTC (2004) community
forestry involves governance and management of
forest resources by communities for commercial and
non-commercial purposes, including for subsistence,
timber production and collection of non-timber forest
products, wildlife protection and conservation of
biodiversity and environment, as well as for social and
religious significance. It also incorporates the
practices, art, science, policies, institutions and
processes necessary to promote and support all aspects
of community based forest management. Vyas (2000)
defines community forestry as forestry by the people of
the people, for the people. Utilization and management
of forests by the local community is not a recent
inclusive innovation but it is rather a new attempt to
enhance sustainable supply of forest and natural
resources by involving local people aiming towards
meeting their own objectives. It is also perceived as
first meeting the peoples objectives and later aiming
to fulfill the conservation policy of the government.
In Bhutan community forestry began as an attempt by
the government and aid agencies to provide an
alternative way for forest departments to manage
forests, that is, by including local people (Gilmour and
Fisher, 1991). The development of community forestry
was also partly motivated by a desire to allow forest
dependent people to obtain legitimate access to a major
source of their livelihood, as well as by the recognition
that forests could not be properly managed without
some level of active support from local people. Behind
this, there was also increasing pressure on forest
departments to become more efficient in their uses of
government funded resources.
According to Dhaka and Masuda (2008), the
community forests supply the basic needs for forest
products such as firewood, fodder/grass and timber to
local people on a regular basis. The proper
management of a community fund is crucial for
sustainable community forest management and
livelihood, where forest resources have higher
economic potential.

III. STUDY METHODS

A. Sampling

There are 23 CFs in Punakha. The four oldest CFs,
namely Lumsum, Yargay CF under the Lingmukha
block, Waku Damchi CF under the Kabjisa block and
Mangizingkha CF under the Talo block(Figure 2), were
selected as the sample for the study using a purposive
sampling method. Punakha district was selected for the
study because Punakha district has the oldest and
second highest number of CFs established in Bhutan.

FIGURE 2 THE ADMINISTRATIVE MAP OF PUNAKHA DISTRICT
WITH COMMUNITY FORESTS

Source: National Statistic Bureau (NSB) (2009)

B. Source of the data

Interviews with the members of the CFs, their
leaders and the executive committee members were
conducted. Structured and semi-structured
questionnaires were pre-tested and revised making
changes where it was felt necessary. Other sources of
information for this case study included the following:
existing literature and plans of the Social Forestry and
Extension Division of the Department of Nature and
Park Services under the Ministry of Agriculture and
Forests. Data were also retrieved from office records
and reports of the District Forest Office, Block Forest
Offices, and the Forest Division, Punakha District.

C. Data analysis

The data were analyzed after error correction and
data editing from each questionnaire. Microsoft Excel
was used for data entry in order to perform descriptive
analysis. Microsoft Excel was also used for
quantitative data analysis. For economic valuation of
forest resources, the data obtained were converted to
monetary terms for all tangible goods by using market
prices. The unit used for monetary terms was
Bhutanese Ngultrum (Nu). At the time of valuation,
one US$ was equivalent to Nu 45.

D. Economic analysis

(i) Calculation of direct use values
Direct use values refers to values derived from
actual use of particular goods either for direct
consumption or the production of other commodities.
Market prices are used for goods that are traded. In the
case of forests, direct use values would include the
direct value of timber being extracted and NTFP
collected. The value of timber and non-timber forest
1 CF from
Talo
(Mangizingkha
)
2 CFs from
Lingmukha
(Lumsum and
Yargay)

1 CF from
Kabjisa (Waku
Damchi)

13

products for both domestic purposes and sale in the
market was estimated. The study did not capture
indirect values as the estimation of indirect values was
difficult because most products and services cannot be
traded in the market, and hence they do not possess
market prices. Net income was valued in units of
Nu/household/year. The direct use value at the
household level is expressed as follows:
(1)
Where: DUV
T
are the direct use values accrued to
the total households in the CF using resources in
activity

j of forest utilization in the i
th
household, in the
time period of annual contribution. T is for the time
period of one year.
R is the gross return from timber, poles, posts, fuel
wood and NTFP both for domestic purposes and for
sale per year: (amount of forest products collected
from forest (Kg) x price (Nu/Kg)/household/year.
C is the cost incurred during the collection of forest
resources, such as transportation and cost of hired
labour: (hour/time x amount of time/month x amount
of people)/household/year. The data were collected in
2011.

IV. RESULTS AND DISCUSSIONS

A. Socio-demographic profile of the households

The background information on household
respondents (gender and education level) is presented
in Table 1. About 38% of the household respondents
were female. Regarding the educational status of the
respondents, about 73% of the total households were
illiterate. About 11% of the respondents had completed
high school, 9% completed secondary school and 6%
completed primary school. Only 1% of the respondents
reported having attended non-formal education. The
average age of the respondents was 44 years.

TABLE 1: GENERAL SOCIO-DEMOGRAPHIC PROFILE OF THE
RESPONDENTS IN THE STUDY SITES (PERCENTAGE)

C
r
i
t
e
r
i
a

W
a
k
u

D
a
m
c
h
i

L
u
m
s
u
m

Y
a
r
g
a
y

M
a
n
g
i
z
i
n
g
k
h
a

A
v
e
r
a
g
e

Gender (female) 48 45 35 24 38
Education
None 67 69 75 82 73
High school 12 14 10 6 11
Sec. high school 5 10 15 6 9
Primary 14 3 0 6 6
Non-formal 2 3 0 0 1
B. Community forest management

An inclusive innovation program community
forest is managed by a group of local people, including
the traditional users of the forest, called the
Community Forest Management Group. On approval
of a Community Forest Management Plan, the Royal
Government gives CFMG members the right to use
and benefit from their designated community forest in
return for taking responsibility for its management and
protection. A CFMG elects representatives to function
as their CFMG management committee. Each CF
committee comprises a chairperson, a secretary and a
treasurer and normally has five to eight members.
Committees are selected bearing in mind that there are
considerable responsibilities involved, and the
committee members are expected to attend meetings
and implement tasks on a regular basis. The CFMG
members raise their funds through different CF
activities, such as the sale of timber and non-timber
forest products. The amounts received from
organizations or government, other grants, donations or
funds received from any person contribute to CFMG
funds In accordance with the CF rule, fines/penalties
for the violation of rules and regulations are also
collected and all funds are deposited in the CFMG
account. The committee decides on the use of funds,
which is normally for community development
activities such as rural road construction.

C. Community forest conservation and protection
activities

During the household survey, the respondents
were asked about their participation in various
community management activities regarding natural
resource conservation and CF protection (Table 2).
Forest fire control, protection against illegal logging
and NTFP collection, fresh water protection and re-
plantation showed full participation. Committee
members mostly attended conservation meetings with
92% of respondents participation. The participation in
patrolling CFs was shown as 90%. The participation in
wildlife conservation was about 65%. The lowest level
of participation of the households was in wildlife
conservation because wildlife causes damage to
agricultural crops.


14

TABLE 2: PERCENTAGE OF PARTICIPATION IN CONSERVATION
AND PROTECTION ACTIVITIES BY CF MEMBERS

A
c
t
i
v
i
t
i
e
s

W
a
k
u

D
a
m
c
h
i

L
u
m
s
u
m

Y
a
r
g
a
y

M
a
n
g
i
z
i
n
g
k
h
a

A
v
e
r
a
g
e

Protection
against illegal
harvesting
100 100 100 100 100
Forest fire
control
100 100 100 100 100
Protection of
fresh water
100 100 100 100 100
Re-plantation 100 100 100 100 100
Attending CF
meetings
90 90 100 88 92
Patrolling of CF 90 86 85 100 90
Wildlife
conservation
60 52 70 76 65

D. Households income earning

About 90% of the rural communities in the study
area depended on farming, such as crops and livestock
for their livelihood in the study area. Other off-farm
sources of household income include weaving, wage
earning labour, money remittances and pensions. The
net annual family income from various activities
ranges from Nu. 101,748 to Nu. 489,200 per
household (Table 3). The incomes from crops and
livestock were estimated to Nu. 1,217,175 and Nu.
145,289 respectively. The estimated net farm income
was Nu.1,362,464 per household per year. The other
sources of income came from non-farm activities such
as salary, remittances, weaving and small household
business, from which estimated non-farm income was
Nu. 15,891 per household per year. The annual income
from forest resources (timber and NTFPs) was
estimated at Nu. 2,559 per household. The other
household cash expenditures such as on food,
education, health, cultural events, house rent,
electricity and telephones were calculated and
amounted to Nu. 352,865 per household per year.

TABLE 3: NET HOUSEHOLD INCOME AND EXPENDITURE IN
STUDY AREA (NU/HOUSEHOLD/YEAR)

I
t
e
m
s

W
a
k
u

D
a
m
c
h
i

L
u
m
s
u
m

Y
a
r
g
a
y

M
a
n
g
i
z
i
n
g
k
h
a

A
v
e
r
a
g
e

Farm income
Crops
Livestock
578,822
563,413
15,409
189,755
174,209
15,546
251,400
159,342
92,058
342,487
320,211
22,276
340,616
304,294
36,322
Non-farm
income
4,810 5,821 510 4,750 3,973
1. Forest
income
1,501 377

0

681

640

Household
expenditure
95,932 94,204 120,918
41,811
88,216
Net family
income
489,200 101,748 130,992 306,107 257,012

E. Household benefits from community forests
In this study, forest income includes the income
derived from the use and sale of forest products from a
community forest, and the monetary value of the
products consumed and sold by the users (Table 4).
Among the four CFs, Waku Damchi CF had the
highest annual net income from forest resources of Nu.
1,501 which was estimated at Nu. 36 per household
and Nu. 20 per hectare. The net annual income of
Mangizingkha CF was Nu. 681 which mounted to
Nu.40 per household and Nu. 17 per hectare. The
lowest annual income was that of Lumsum CF with net
income of Nu. 377 which was estimated a Nu .13 per
household and Nu. 6 per hectare. Yargay CF has not
been included as Yargay CF had not made any
contribution from its forest products as it is still at the
plantation stage.

TABLE 4: NET INCOME FROM FOREST RESOURCES IN THE
STUDY AREA (NU/HOUSEHOLD/YEAR)

I
t
e
m
s

W
a
k
u

D
a
m
c
h
i

L
u
m
s
u
m

M
a
n
g
i
z
i
n
g
k
h
a

A
v
e
r
a
g
e

Timber 152 154 373 189
NTFP 591 38 20 289
Poles 353 65 139 210
Fuel wood 260 38 112 153
Posts 145 81 38 100
Forest income
(Nu/year)
Forest income
(Nu/household/year)
Forest income
(Nu/hectare/year)
1,501
36

20
377
13

6
681
40

17
941
10

5

Note: NTFP include mushrooms, bamboo shoots, orchids,
ferns and betels


15

F. Discussion

(i) Management and participation in
conservation activities of community forest in Punakha
district

One of the purposes of an inclusive innovation
program for instance CF is to generate income and
reduce rural poverty through the sustainable
management of the forest. The CFMG has given rights
to manage the CF in its own area and the benefits
derived from the CF were distributed among members.
The failure of some community-based management
systems can be traced to a number of problems, such as
the inability to truly develop power at local levels. This
happens when local communities are given rights to
forest use but decisions are usually made by forest or
other officials outside the community. For example,
CFMGs are responsible for forest protection but have
limited rights to access forest resources. For a CF
program to capture this untapped potential, wide
ranging and phased reforms are required at both local
and national levels. As stated by Shyamsundar &
Ghate (2011), a good part of the success of CF in
Nepal was attributed to local foresters banding around
the concept, and community institutions being more
accountable locally. Communities with more secure
rights over their forest are able to use funds raised from
forest-related activities with less interference from the
state.
The 10
th
Five Year National Plan states that it will
adopt an effective inclusive innovation strategy in
which the communities and the prospects of the forest
complement each other in such a way that communities
are closely and gainfully involved in all of the CF
activities relating to regeneration, afforestation,
protection and management of forest areas and other
CF programs. When it comes to forest conservation
and protection, the compromise within the research and
policy communities is generally positive
(Shyamsundar & Ghate, 2011). The results of the four
CFs in the Punakha district are shown in Table 2. It
was found that a majority of households contribute to
forest regeneration and fresh water protection. The
vigorous patrolling and awareness campaign has
resulted in decline of forest fires, illegal logging and
NTFP collection.

(ii) Contribution of CF to communitys household
income

The present study indicated that the forest plays a
good role in contributing to rural household incomes.
Most of the communities in the study areas, however,
did not depend solely on the forest and its products as
sources of sustenance and income. The greater
proportion of their livelihood derived from agriculture
but they also depend on the forest for certain products.
The study revealed that the principle sources of income
for the majority of households were from agriculture.
Forest utilization is a supplementary source of income
to agriculture. This result was similar to what one
would expect: free forest utilization by households are
additional sources of income in rural areas and fuel
woods was the main source of energy (Kaale et al.,
2002). The communities were aware of the economic
potential of CFs but do not optimally benefit from
them economically at least as of now. Some small-
scale timber harvesting does occur at the local level for
construction of houses, but any profit from timber
extraction has been strictly forbidden until there is a
surplus of timber available (Temphel & Beukeboom,
2006).
It was found that forest resources contributed
about 0.3% to the total household income of the
members. It is relatively very low compared to other
countries (Chhetri, 2005). This may be because
communities depend mainly on forest products which
are restricted by regulations imposed by the CFMGs.
The impact of CFs is limited, particularly with respect
to income because of restrictions on timber harvesting;
the returns from timber and non-timber forest products
are small.
Tshering, (2009) stated that the annual harvesting
limit did not allow the harvesting of any timber if the
basal area was below 10 square meters per hectare
because it was classified as degraded forest. However,
it was found that the resources were under-utilized. In
a protected forest, the challenges were higher as
harvesting was restricted and local benefits were
minimal (Zahabu., Malimbwi., & Ngaga. 2006).
Further, Wangchuk and Back (2008) argued that
the area ceiling of 2.5 hectare per household is a
limiting factor as the maximum area for a CF program
failed to take into account the large differences in the
growth and yield potential of different forest types in
the country. The area ceiling also severely limits the
ability of communities to manage their forests to
produce an excess of timber that can be sold to
generate income.

V. CONCLUSIONS AND RECOMMENDATIONS

The rural communities heavily rely on forest, and
good management can play a crucial role in poverty
reduction. The CFMGs were given rights to manage
community forest in their own areas and the benefits
derived from the community forest were distributed
among the members. There is strong support for
conservation and protection activities in CF. It offers a
degree of confidence about the long-term positive
impact of an inclusive innovation such as a CF
program on the environment. The net family income

16

for households ranges from Nu. 101,748 to Nu.
489,200 per year. The contribution from forest
resources was Nu. 2,559 per year, accounting for 0.3%
of total household income. This is relatively low
compared to that of other countries. At the time of this
study, the contribution from CF activities to household
income was marginal.
There is a policy challenge in achieving the goals
of both environmental sustainability and poverty
reduction at the same time. Therefore, the challenge
needs to be acknowledged. The policymakers should
rethink the restrictions on the use of forest resources
and explore opportunities to capture more benefits
from the forest alongside the environmental
sustainability outcome. The government could help by
supporting small-scale processing plants to diversify
and add value to CF products, such as making timber
into furniture and by providing relevant and timely
information to help households access local and
regional markets for their CF products. The
government should continue to support conservation
activities and promote wider participation through
more education and awareness campaigns. Further this
study did not attempt to consider the indirect value of
the forest, such as biodiversity, which should be further
researched.

ACKNOWLEDEMENTS

The author is grateful to Thailand International
Development Cooperation Agency (TICA) for
providing the funds for this study.

REFERENCES

Chhetri, B. B. K. (2005). Community forest program in
the hills of Nepal: Determents of user participation
and household dependency. Department of
International Environment and Development.
Norwegian University of Life Sciences (UMB). May
2005.

DEFRA (Department for Environment, Food and Rural
Affairs). (2007). An introductory guide to valuing
ecosystem services. (online) www.defra.gov.uk

Dhaka, M., & Masuda, M. (2008). Role of
participatory forest management in rural livelihood
improvement: A case of Nawalparasi district, Nepal

FAO (Food and Agriculture Organization). (2012).
Global forest resources assessment 2012. Progress
towards sustainable forest management. Rome, Italy.

Gilmour, D.A. & R.J. Fisher (1991) Villagers, forests
and foresters: The philosophy, process and practice of
community forestry in Nepal. Sahayogi Press,
Kathmandu, Nepal.

Kaale, B.K., Ramadhani, H.K., Kimariyo, B.T., Maro,
R.S. & Abdi, H. (2002). Participatory forest resources
assessment. Misitu Yetu Project. CARE-Tanzania.

MA (Millennium Ecosystem Assessment). (2005). A
framework for assessment. Washington: Island Press.

NSB (National Statistical Bureau). (2009). Statistical
year book of Bhutan, 2009. Royal Government of
Bhutan, Thimphu.

RECOFTC (Regional Community Forestry Training
Center. (2004). Strategic plan, 2004. Kasetsart
University, Bangkok

Schindele, W., & Dheki, K. (1996). Forest resource
assessment for the Dzongkhags of Gas, Punakha and
Wangdue Phodrang. Bhutan-German Integrated Forest
Management Project, Lobesa, Thimphu.

SFD (Social Forestry Division). (2010). National
strategy for community forestry: The way ahead.
Social Forestry Division, Department of Forests and
Park Services, Ministry of Agriculture and Forests,
Thimphu.

Shyamsundar, P., & Ghate, R. (2011). Is community
forest management good for the environment and the
poor. A Review, June 2011

TEEB (The Economics of Ecosystems and
Biodiversity). (2009). The economics of ecosystems
and biodiversity for national and international policy
makers. Summary: Responding to value of nature.
2009

Temphel, K. J., &. Beukeboom, J.J. (2006).
Community forestry in Bhutan contributes to poverty
reduction while maintaining the sustainability of
resources. Social Forestry Division, Thimphu.

Tshering, D. (2009). Community forest in Bhutan:
Directions for the future. Proceedings of a national
workshop on community forestry Bhutan directions for
the future. Department of Forests and Park Services,
Ministry of Agriculture and Forests, Royal
Government of Bhutan. 33-46 2009

Vyas, G.P.D. (2000). Community forestry. Chopasani
Road, Jodhpur, India. GROBIOS


17

Wangchuk, T. (2011). Analyzing governance of
community forestry in Bhutan: A case study of
Punakha Dzongkhag (District). MSc. Thesis (Draft).
The Graduate School, Kasetsart University, Bangkok.

Wangchuk, T., & Back M. (2008). Community forests
in Bhutan need to fulfill the minimum timber
requirement and provide income: Recommended area
for community forestry. Royal Government of Bhutan,
Ministry of Agriculture, Thimphu.

World Bank. (2009). Poverty reeduction strategies
(PRSP) Sourcebook. Retrieved from http://data.
worldbank.org

Zahabu, E., Malimbwi, R., & Ngaga, Y. (2006).
Payments for environmental services as incentive
opportunities for catchment forest reserves
management in Tanzania. Winrock International,
November 2006


18

Inclusive Innovation on Health:
The support to the pregnant women before and during childbirth
MEN, Pauravy
Medical Doctor (Student): International University
Phnom Penh, Cambodia; menpauravy@gmail.com

LUCH, Sreyleak
Phnom Penh, Cambodia; l.sreyleak@gmail.com

Abstract Though a report from the Ministry of Health
indicated a dramatic decrease of maternal and child birth
mortality for the past 5 years, the remaining level is still
considerably high compare to the neighboring countries,
plus that the maternal mortality ratio remains high with
huge poor-rich inequalities. The aim of this study is to
observe the accessibility to healthcare service among
pregnant women in rural areas and in the city; plus that the
determination to solve the problems which causes
mortality during delivery must be strongly promoted. Thus
4 midwives from Phnom Penh and 4 midwives from
different provinces were randomly selected for the
interview. The same process was applied a to 20 pregnant
and current post partum women from different health care
centers in Phnom Penh and different provincial areas. The
data was analyzed using a simple Excel formula. After the
data was collected, the results shows that 100% of
pregnant women living in rural and urban areas have
access to the healthcare service, yet the same percentage
also believed the same quality is not reached. The failure
to meet the patients satisfaction accounts for 75% of all
cases. Also, 70% believed that poor management occurs in
rural areas and traditional birth attendants still cause 50%
of deaths according to the medical officers in rural areas.
Thus, all of the candidates argue that the need of further
equipment and training is a must to resolve these problems.
Hence, our study illustrated that women in urban and rural
areas have unequal access to health care during labor.
Mortality is high in rural areas compared to the city and
poor management and service delivery by both skilled
birth attendant and medical officers also occurs, which
calls for the need of a new innovative system where the
same access to healthcare is reached. Public health
education, improvement of infrastructure and increased
salary for the staff to eliminate corruption and stealing play
an important role in solving the problem to embrace a
better future.

Keywords Innovation, support, pregnancy, childbirth,
maternity, rural.

I. INTRODUCTION
Cambodia has been a well-known and delightful
country for the past century. During the 1960s, it was
the most advanced country in Southeast Asia, until
the era of darkness covered this country so that it
blocked all certain development from the root to the
top. Cambodia then started from zero point
(AseanChat, 2012). Not later than 1987 did
Cambodia begin to revitalize its economy again and
the population in Phnom Penh grew from 50,000 to
7,000,000 (Cambodia-Economy). After the
revitalization of the economy, Cambodia progressed
in a slow but firm manner in all sectors. Health was
also one of the important targets for the government
during that time. Yet, the limitation of healthcare
service provoked many deaths during the past
decades. Among all, maternal and child healthcare
has been the key scope for the Ministry of Health
(MOH), and it turns out that the mortality rate of
mothers and children was still 206 among 1,000.000
lives (Cambodia Demographic and Health Survey
2010, 2011). This number is noticeably high
compare to neighbor countries like Thailand 44 and
Vietnam with 95 (Ith P. D. A., 2012).
Furthermore, a current study in Pubmed (Ith,
Dawson, & Homer, 2012) also indicated that
malpractice by skilled birth attendants (SBA) during
labor and the immediate post-partum period still
exists.
Their usage of partograph was low, birth
companions were not permitted, cleanliness during
birth was lacking, management of the third stage of
labor was inappropriate, monitoring of mother and
baby in the early postnatal period was lacking,
lacked skills in neonatal resuscitation, skin-to-skin
contact with the newborn and early breastfeeding
were rare and intramuscular injection of vitamin K
varied (Ith P. D. A., 2012).
Similarly, according to the Cambodia
demographic and health survey of the Ministry of
Health of Cambodia in 2010 (CDHS 2010), delivery
by undertrained health officers (doctors, physicians,
midwives) has increased to 71% compared to the
year 2005 when it was only 44%. This statistic
concluded that most traditional birth attendants live
in rural areas, that women who live in urban areas
have no access to traditional birth attendants, but has
the opportunity to meet with more advance health
care than women in rural areas.
More than this, the World Health Report 2005,
illustrates that only 9% of pregnant women in
Cambodia have more than four antenatal check-ups,
and 44% have just one (Chatterjee, 2005). At the
same time, as to women's satification with maternal
services and skills, the richer women seem to have a
choice between public and private health facilities.
As a study had shown, women's choice of health

19

75%
25%
Failure to meet the patients'need
Able to manage well
facility was influenced by their perceptions of safety
and staff attitudes (Ith P. D. A., 2012).
Many researches related to maternal issues have
been done in Cambodia, but until now there is still
none conducted about the different and the unequal
health care that women can get between rural and
urban areas, and health facilities in both areas.

II. METHODS
In order to conduct a mini study on how people
get access to health care service in the city which is
different from the rural areas, an interview was
conducted among twenty pregnant and current post-
partum women. Ten samples units were randomly
selected from Phnom Penh Municipal Referral
Hospital and a private clinic called the Nursing
Services Centre. The remaining ten were randomly
selected from Bonteay-Meanchey Province,
Cambodia. At the same time, eight midwives were
also chosen to be part of the interview, equally
divided between city and rural areas. Four midwives
were selected from referral hospitals in the four
provinces such as Batdombong Province,
Kampongspeu Province, Bonteay-Meanchey
Province and Krati Province. Another four were
picked from Phnom Penh Municipal Referral
Hospital, the Nursing Services Centre and National
Maternal and Child Health Center. The interview
was structured in open-ended, close-ended and semi-
ended questions. The whole interview was divided
into three sections. First, the introduction part which
provide general information like age, sex,
educational background, and occupation. As for the
second part, the content contains general specifying
and direct questions. They were asked about the
general concept and their perception toward
healthcare in the particular area. Finally, the
participants were asked about their suggestion for
further progress. The whole process took about
fifteen minutes for each candidate. Prior to the
interview, ready-made questionnaires were prepared
to ask the candidates and they all were initially
informed about the purpose of the study to establish
privacy and confidentiality. The total survey was
collected and analyzed using percentage and
proportion.
III. RESULTS
A. Characteristics of participants:
According to socio-demographic data presented
in the table below, of all 20 participants, 21% of all
females were at an age of less than 20 years. Not less
than 30% were in the 1
st
trimester of pregnancy and
35% were currently post partum. Regarding
educational background, 65% of total candidates had
only been educated to primary school, while only
10% among all continued higher education after high
school. The table also illustrates that 50% came from
farm settings. Surprisingly, 30% were housewives
and the remaining 20% were people coming from
business or working background. Finally, according
to an income resource, only 30% of total families
were supported solely by the husband. The
remaining 70% supported by both husband and wife.

TABLE 1: THE PARTICIPANTS CHARACTERISTICS

Age
[Years]
<20 21-30 >30
21% 58% 21%
Gestational
Age
1
st

Trimester
2
nd

Trimester
3
rd

Trimester
Current
post
partum
30% 20% 15% 35%
Education Primary
School
High
School
Higher
Education
65% 25% 10%
Occupation Housewife Farmer Other
30% 50% 20%
Income
Resource
Husband Both
30% 70%

B. Inequality in medical access in urban and rural
areas
According to the study, all the participants share
the same idea of health care accessibility. Yet, the
same customer satisfaction is not reached. Among all
selected midwifes, 75% responded that they were not
able to meet the needs of the patients in regard to the
lack of human resources, facilities like an anti-septic
room, and functional instruments. On the other hand,
health centers in the urban area do not have any
difficulty in meeting the needs of the customers. No
problem was found as reported from the candidates.

FIGURE 1: INEQUALITY TO MEDICAL ACCESS IN
URBAN AND RURAL AREA

C. Management over complications:
In rural parts of Cambodia, 50% of all midwifes
elaborate an meeting with complications as 2-3 cases
in a month, while the remaining 50% meet
difficulties about 5-6 times during a month. The
complicated cases as described were at twin fetus,
pre-eclampsia, eclampsia, postpartum hemorrhage,
delayed cervical dilatation, pre-delivery bleeding,

20

primipara, pre-rupture of membrane, abnormal
presentation (breech, transverse) and mother too old.
Further investigation implies that the
problems/complications encountered in the city were
all manageable due to there being enough equipment,
appropriate human resources, and techniques to
handle the situation on time. On the contrary,
problems occurring during labor in rural areas were
not successfully solved to about 30%. The cause of
this high level is due to late admission, no antenatal
care during pregnancy, limitations of transportation
and malpractice by traditional birth attendants prior
to hospital admission. The Chi Square below also
indicates that its value 0.35 is less than the critical
value 0.85 which can clearly assumed that there is no
significant difference. Finally, we could concluded
that our sample support with the hypothesis of a
difference.

TABLE 2: CHI SQUARE INDICATES THE
COMPARISON OF MANAGEMENT IN URBAN
AND RURAL AREA

D. Perspective for future improvement
As the interview went further, every candidate
sharply pointed out that the improvement of medical
equipment plays a vitally important role in the
betterment of their work places. Those facilities
count from simple set of equipment for labor,
sterilized clothes, antiseptic room, sterilizers to
ultrasound machine used to monitor the baby before
labor. At the same time, 75% of the total
interviewees suggested the need for training and
skilled to medical staff. The same number of people
also seek for re-evaluation of staff structure
especially punctuality over working time. Also, half
of the candidates believed that increasing salary for
the medical staff would help to enhance future health
care. Finally, 25% of the total candidates implied
that the transportation service is vitally important for
transferring the patients during an emergency. In the
end, the unavoidable factor is the hygiene; of total
candidates, 25% hope suggest more hygiene and
sanitary in the centre. It accounts from general
environment inside the health care centre to the toilet
and delivery room.

FIGURE 2: PERSPECTIVE FOR FUTURE
IMPROVEMENT

100%
75%
75%
50%
25%
25%
Equipment improvement Training
Staff structure evaluation Salary increase
Transportation Hygience
IV. DISCUSSIONS

A. Health center management
Health care management is something easily
said than done. The main actor for this issue is the
government. What are the key roles the lead
authority has here? The government, for instances,
should make sure there are enough healthcare center
that localize correctly. According to figure 2 above,
75% of all the interviewees suggest to have the
improvement of transportation which implies that
there are problems people still face for example, long
distance traveling and long time to reach the
destination. Therefore, they have no other choice, but
to have the delivery done at home by a traditional
birth attendant where appropriate facilities do not
exist. Thus, the mortality rate is likely high given the
fact that complication occur. Hence, improvement of
the road will collaborate a lot to the accessibility to
the health care center. In addition to improvement of
roads and transportation, strengthening the quality of
the health care itself is another crucial issue. In this
regards, customer satisfaction, human resource
management, and education are combine together to
make it happen. Initially, to gain customers
satisfaction, the health care center should strengthen
its internal policy beforehand. Responsibility is a
prioritized concept for success. Once responsibility is
built in within the medical healthcare officers, errors
like false practice and lost are reduced accordingly.
Furthermore, internal relation between staff-staff and
staff-boss are essentially important for an
organization to run smoothly. From the interviews,
the difficulty in getting along between staff and staff,
acts of carelessness by the superior and a self-
centered boss were the main problems preventing the
referral hospital from providing its best quality
services. Also, an effective staff should be put into
action. Precisely, to produce an effective staff, the
best training to be professional is vitally needed.
Education, in this regard include, vocational training,
exchange program and other public education that

21

are able to improve the skills as well as share new
technology to the staffs. A statement can be drawn
from and online article:
A skilled attendant would however be able to
provide appropriate triage and thus help minimize
delays in receiving appropriate treatment, as well as
institute timely action at all points of the potential
delay chain. (Razzak, 2002).
Razzak, only wants to implies that once the staff
are equipped with appropriate skills, they are able to
manage the complication effectively. Similarly, the
interviewees also suggest the need for medical
facilities. Those facilities count from simple set of
equipment for labor, sterilized clothes, antiseptic
room, sterilizers to ultrasound machine. These
described facilities are simple equipments, but the
health care centres in rural area are still in lack of it.
In the end, to eliminate stealing and corruption,
factors like payment increase and on-call reduction
in hours are to be implemented. Once people earn
more and work less, a tendency to produce the most
fruitful results is found.

B. Socio-economic status
Educational level and family income reflected
socio-economic status. Almost all maternal deaths
(99%) occur in developing countries and the majority
of them are preventable (Berg, Harper, Atkinson,
Bell, & Brown, 2005; Kilpatrick, Crabtree, Kemp, &
Geller, 2002). The MMR in developing countries is
290 per 100 000 live births, to be compared with 14
per 100 000 live births in industrialized countries
(Mogan et al., 2010). This is a powerful indicator of
inequity and varying access to quality care and
highlights the gap between rich and poor. Because of
the duty to fulfill the needs of survival, the rural
population pays no attention to health care. Likewise,
the age at first marriage is linked to womens
reproductive health and maternal mortality. The
average age for first marriage in Cambodia is
relatively young compared to other countries in the
region (UNICEF 2005), at 20 for women and 22 for
men. According to CDHS 2010, the median age at
first birth (22.3 for all women age 25-49) is higher in
urban areas than in rural areas, with a difference of
two years among women age 25-49. Phnom Penh has
the highest median age at first birth (24.8), and
Mondolkiri/Rattanakiri has the lowest (21.0). The
evident from the study also revealed that 21% of all
women were having their child under the age of 21
years old. Early age at childbearing has a detrimental
effect on the health of both mother and child. Once
again, there is the need to call for the improvement
of socio-economic status of average people in
Cambodia. Thus, the national reduction program has
been implemented since 2003 in Cambodia and now
is in the progress of elevating the social well fare.
Aside from internal strengthening, the government
also encourages the corporation with international
organization who helps raise the quality of life of our
people.
C. Education
Government once again plays the most
important role in improving educational system to
enrich the educational border line at ninth grade.
According to the study, table 1 also indicated that
total of more than 65% of all pregnancies were
educated up to primary school only. Plus, about 25%
were able to get access into high school. This study
implies that the overall population still encounters
limited educational background. As a result, more
school should be built to make accessibility for
people in remote area. Also, the government has the
duty to implement a system to encourage the mother
to send their kids to school. Also, the government
should improve the quality of general education
starting from elementary to graduate program. The
government again should also strengthen the medical
school system to produce more effective and
qualified people after school. Hence, seeking more
corporate partners to send the students abroad for
further education and more advance technology is
another reasonable plan. Coming back, they will be
the pillars for further progression of the nations
healthcare.
V. CONCLUSION
The overall study implies that women in urban
and rural area have no equal access to health care
during labor. The reasons which described the
inequality are the limitation by various ways like
literacy, transportation, delay referral, medical
equipments and skills for traditional birth attendants,
staff management inside the center and finally
corruption existence. The existing problems are on
the call for the new innovation which will eliminate
the gap of medical accessibility between rural and
urban area. For one thing, healthcare management
from the top authority will provide best result for
further progression of accessibility and quality to the
healthcare center in rural area. Also, adequate facility
should be equipped in rural area to be able to control
the complication well. In addition, intensified
education is to be established throughout the country
as well to improve general knowledge and healthcare
related knowledge. Final and most importantly,
governments policy in developing economical
sector between rural and urban area effects both
materno-fetal healthcare and mortality. Believing
that the suggested solutions are to be implemented
soon, we are looking forward to see the equal access
to medical healthcare for pregnancies between urban
and rural area.

22

ACKNOWLEDGEMENT

We, MEN Pauravy and LUCH Sreyleak would like
to express our gratitude to all those who gave us the
possibility to complete this project.

First and foremost, we would like to express our
appreciation to Mr. Ek Darariddh for given us this
opportunity to conduct this study, without whom the
information would not be distributed.

Secondly would like to convey thank to Dr. Pim
intaravitak and Dr. Watana patanapongse and the
reviewers for the support and help throughout the
time. We feel motivated for the comments and
support for the whole time. Without their
encouragement and guidance this project would not
have materialized.

We are deeply indebted to our colleagues whose
help, stimulating suggestions, knowledge, experience
and encouragement helped us in all the time of study.

We are sincerely thankful for our parents who have
contributed to the economic and general education so
far. Also, a very special thanks to medical staff
(midwives) who work in Phnom Penh Referral
Hospital, Nursing Service Centre, Battambang
Referral Hospital, Anlongvil Health Center, and
Oudong Referral Hospital for providing us this
honest information during the interviews. We are
also grateful to the selected pregnant and post partum
women for the magnificent time and effort answering
each and every question during the interview.

Date 31, October 2012.

REFERENCES

AseanChat. (2012). Looking back to the past:
Cambodia in its late 1960s, retrieved October
Monday 2012, from AseanChat: http://aseanchat.com/
default.aspx?g=posts&t=259.
Berg, C. J., Harper MA, Atkinson, S. M., Bell, E.A,
& Brown, H. L. (2005). Preventability of pregnancy-
related deaths: results of a state-wide review,
Obstetrics and Gynecology 106: 12281234.

Cambodia, U. (2009). Situation analysis of youth
Cambodia. N/A.
Chatterjee, P. (2005) Cambodia tackles high
maternal mortality, The Lancet, 366 (9482), pp. 281-
282.

Ministry of Health. (2010) Cambodia Demographic
and Health Survey 2010, retrieved October Monday
2012, from Ministry of Health: http://www.moh.
gov.kh/?lang=en
Hogan, M. C., Foreman, K. J., Naghavi, M., Ahn, S.
Y., & Wang, M. (2010). Maternal mortality for 181
countries, 19802008: A systematic analysis of
progress towards Millennium Development Goal 5,
Lancet 375: 16091623.

Ith P, Dawson A, & Homer C. (2012) Quality of
maternity care practices of skilled birth attendants in
Cambodia, International Journal of Evidence-Based
Healthcare.
Ith P, Dawson A, & Homer CS. (2012) Women's
perspective of maternity care in Cambodia, retrieved
October 2012, from Women and birth: Journal of the
Australian college of midwives :
http://www.womenandbirth.org/article/S1871-
5192%2812%2900035-2/abstract.
Kilpatrick, S. J, Crabtree, K. E, Kemp, A, & Geller,
S., 2002, Preventability of maternal deaths: comparison
between Zambian and American referral hospitals.
Obstetrics and Gynecology 100: 321326.

Mongabay, n.d., Cambodia- TheEconomy, n.d.,
retrieved October Monday 2012, from Mongabay:
http://www.mongabay.com/reference/country_studie
s/cambodia/ECONOMY.html.
Razzak, J., & Kellermann, A. (2002) Emergency
care in developing countries: is it worthwhile? Bull
WHO 2002; 80: 9004 Medline Web of Science.

23

APPENDICES

FIGURE A1: PERSONAL DATA OF PREGNANT WOMEN

Age Educational Level Occupation Family income/month Child Birth
<20 21-
30
>30 Less
than
primary
High
School
More
than
high
school
House
wife
Farmer Other <100 100-
200
>200 Primipara Multipara
Rural Area 3 5 2 8 2 0 10 10 6 4
Urban
Area
1 7 2 3 5 2 6 4 5 5 5 5

FIGURE A2: WOMEN PERCEPTION ON HEALTH SERVICE

Rural area Urban rea
Plan on delivery
Health Center 10 10
Traditional 0 0
Other 0 0
Antenatal Care
As Appointed by doctor 9 6
When she has free time 0 1
Rarely 1 0
Idea on health service
Very good 0 2
Good 5 3
Fair 5 5
Unsatisfied 0 0
Very Unsatisfied 0 0
Service of Health center
Fast 4 6
Acceptable 6 4
Slow 0 0
View about Medical staff
Friendly 4 8
Fair 5 1
Bad attitude 1 1
Is health reachable
Yes 6 10
No 4 0
Request toward medical staff
Be on time 1 0
Pay more attention to patients 0 0
More polite 0 2
No discrimination between rich and
poor
0 2
No comment 9 4
Have you ever meet
complication case
Yes 1 0
No 9 10
Fetal death during labor Yes 1 0
No 9 10
Fetal ultrasound Never 7 0

Used to
3 10


24

FIGURE A3: MIDWIVES INTERVIEW DATA

Numbers of deliver per
day
Numbers of
Complicated cases
Able to Manage on
time

<5 5 to 10 >10 <2 2 to 4 >4 Yes No
Rural Area 4 0 0 0 3 1 0 4
Urban Area 2 2 0 4 0 0 4 0

FIGURE A4: MIDWIVES IDEA TOWARD CAMBODIA HEALTH SERVICE

Rural Area Urban Area
Able to meet the patients need
Yes 1 3
No 4 0
Idea for improvement health
service for support pregnant
women
More Training skills 2 1
Increase salary 2 0
Staff structure evaluation 1 0
Equipment 3 2
Hygiene 1 0
Transportation
(Ambulance)
1 0
Laboratory 0 1
Equality of health facility
between rural and urban area for
pregnant women
Yes 0 0
No 4 4

FIGURE A5: CHI-SQUARE OF THE RESEARCH STUDY

Rural
Area
Urban
Area
Total Chi-Sq 0.352941 Rural Area
Expected
Urban
Area
Expected
Able to
deal with
problem
70% 100% 170% p 0.552453 0.85 0.85
Failure
to take
control
30% 0% 30% a 0.05 0.15 0.15
Total 100% 100% 200% Variables are
Independent


25

Inclusive Poverty Outreach by Microfinance
Evidence from AMK
THUN Vathana
Research Department, Angkor Mikroheranhvatho Kampuchea
Phnom Penh, Cambodia; thunvathana@yahoo.com

Pum Sophy
Research Department, Angkor Mikroheranhvatho Kampuchea
Phnom Penh, Cambodia; pum.sophy@amkcambodia.com

AbstractThe microfinance business is supposed to
work closely with the poor. It is viewed as an effective
way of helping unbanked people. This article is to
assess the poverty outreach and then analyze the depth
of outreach for AMK. This article assesses the depth of
outreach through two main measures: the Wellbeing
Score and Daily Food Expenditure per capita. The
analysis is based on both secondary data and primary
data from Survey in 2012. The results of AMKs depth
of poverty outreach for group clients based on the
Wellbeing Score indicate that AMK reaches more
medium level households than is found in the control
group of nonclients. The results based on the number of
clients spending on food below FPL confirm that
indeed AMK clients are poor with 45% of below FPL.

Keywords--Microfinance, Loans, Clients and Poverty

I. INTRODUCTION
In developing country like Cambodia, where the
majority of the population resides in rural areas,
access to formal financial products and services is
constrained by the absence of banks and lack of
collateral accepted by banks. Consequently, the poor
have to depend upon informal channels to finance
like private moneylenders who generally provide
loans with high interest rates, which often, leads to
indebtedness among borrowers. Microfinance is one
such intervention that aims at poverty reduction by
providing basic financial services and products to the
underserved segment of the society at affordable
rates.
Assessment of the poverty level of microfinance
clients is necessary to understand how many poor are
served. This study assesses the depth of poverty
outreach of AMK through two measures: the AMK
Wellbeing Score and Daily Food Expenditure per
capita.
II. METHODOLOGY
The Wellbeing Score is AMKs main tool
because it is a multidimensional measure of poverty
and thus provides a better picture of the wellbeing
situation of client households. Client households are
then classified into wellbeing groups according to
their particular wellbeing scores and information is
disaggregated into these groups for decision-making.
However, the Wellbeing Score is a relative measure.
In order to provide an absolute measure of poverty,
AMK also compares the Daily Food Expenditure per
capita with the Food Poverty Line in rural areas.
This year for the first time, data on the
government sponsored ID Poor Project is also
presented as an absolute measure of poverty and
tested across other results in order to help
management in deciding whether to use it instead of
the current Daily Food Expenditure per capita as an
absolute poverty proxy. The Identification of Poor
(ID Poor) Households Programme is led by the
Ministry of Planning (MOP) in collaboration with
the Department of Local Administration (DOLA) of
the Ministry of the Interior. The program is
implemented with funding by the Federal Republic
of Germany, the European Union, AusAID, UNICEF,
and the Royal Government of Cambodia, with
technical assistance provided and coordinated by
Deutsche Gesellschaft fr Internationale
Zusammenarbeit (GIZ). ID Poor, according to the
procedures used by the MOP and partner
organizations, seeks to determine which households
are poor and the poverty level of these individual
households in rural villages, there are three
classifications of poverty level including Poor I, Poor
II and Other.
The ID Poor beneficiary can get free or
discounted medical services (e.g. through Health
Equity Funds or Social Health Insurance),
scholarships or other financial support to poor school
pupils and students, rural development and
agriculture-related services, allocation of social
concession land to the poor, and many other services.
There is also potential for developing a conditional
or unconditional cash transfer program. As to date
the ID Poor study has been carried out in 9,865
villages, some provinces were covered partially,
others fully, remaining villages will be covered
accordingly.
The AMK Wellbeing Score is based on Principal
Component Analysis and was defined in 2006. The
final 22 indicators that compose the AMK Wellbeing

26

Score cover three main poverty dimensions:
expenditure, assets (physical and human assets as
well as social capital) and vulnerability/ food
security. The specific indicators selected are the
following:

TABLE 1: PRINCIPAL COMPONENT ANALYSISS
INDICATORS

PHYSICAL
ASSETS:
- Total Land Area
owned by the
household
- Floor, Wall and
Roof materials for
the house/dwelling
- Household owns a
television, a
motorcycle and
ownership of assets
of modest, mid or
high value
EXPENDITURE:
- Expense in clothing and
footwear PC
- Total household
expense in food
- Outflow of the
household includes:
inputs/reinvestment for
non-farm income
activities, buying
household
materials/equipment and
durable assets.
- Main HH expenditures
include food
HUMAN
ASSETS:
- Number of adults
[~income earners]
- Health: Strategies
for paying for
healthcare
- Education:
Literacy of head of
household
SOCIAL CAPITAL:
- Number of good
friends/neighbors in
community
VULNERABILITY AND FOOD
SECURITY:
- Food security
- Household diet in the last year
- Self-reported level of difficulty in affording
large expense Ordinal
- Incidence of reducing nutritious quality of
food
- Main income-generating activities include
casual labor (agricultural and non-agricultural)
or temporary migration (domestic and
international)
- Savings and re-investment behavior
- Coping strategies include reducing food
consumption/eating worse foods/eating fewer
times a day, reducing other non-food expenses
(school, clothing, etc) or selling personal
property (land, house, cattle, transport, farm or
household equipment)

The AMK-PCA model was based on the IFRI/CGAP
Poverty Assessment Tool but was adapted to the
rural Cambodian context and used food security as
the main poverty benchmark. The AMK-PCA model
has achieved a rather high level of adequacy
1
.
This report shows the result of applying the
AMK Wellbeing Score to a 315 household samples
(252 are new AMK VB clients and 63 are non-AMK
clients
2
) collected from March to April 2012 in 21
villages in 11 provinces. While the adequacy test for
nonclients (the control group) remain at acceptable
levels, the composition of the wellbeing score will be
tested later in the year in order to establish the
validity or the need to update the score composition.
Graph 1 shows the distribution of the wellbeing
score in standardized form
3
, with a range from -2.86
the minimum to 2.13 the maximum.

GRAPH 1: DISTRIBUTION OF WELLBEING SCORE

Source: Survey 2012

1
The Kaiser-Meyer-Olkin (KMO) index was 0.818 when applied
to the non-clients and 0.848 when applied to the total 450
households. The KMO test is an index for comparing the
magnitudes of observed correlation coefficients with the
magnitudes of partial correlation coefficients. The smaller the
value of the index, the less appropriate the model. In general,
scores above 0.60 are acceptable, above 0.70 are good, above 0.80
are commendable, and above 0.90 are exceptional.
2
In 2012 the adequacy of the model for AMK sample remains
acceptable, with a KMO for nonclients of 0.631 and 0.745 for the
overall sample. The update of the scoring methodology will apply
to a larger sample, including also data from the change study
2012.
3
Standardizing a variable strips away the units in which a variable
is measured. A standardized variable has a mean of zero and a
standard deviation of 1.

27

GRAPH 2: CUMULATIVE FREQUENCY OF CLIENT
AND NONCLIENT

1.88448
1.49081
1.34492
1.24898
.98591
.92194
.84091
.73650
.69037
.64512
.57935
.49690
.42793
.34472
.24712
.17047
.03420
-.07587
-.15340
-.29605
-.37781
-.50595
-.61728
-.68699
-.80672
-.93980
-1.06821
-1.19046
-1.38719
-1.67475
-1.90354
-2.86235
w
e
l
l
b
e
i
n
g

s
c
o
r
e
100.0% 80.0% 60.0% 40.0% 20.0% 0.0%
cumulative percent
Client
Non client

Source: Survey 2012

Graph 2 shows the cumulative frequency for non-
AMK clients (note that this sample includes clients
of other MFIs) and AMK new group clients, showing
negligible margins of difference in poverty levels
between the two groups. The only exception is new
client households in the medium wealth category (in
the 30-55% wealth bracket) who seem slightly
wealthier than nonclient households. In the
aggregate, the average wellbeing score of nonclient
households is lower than for new clients (-0.03 vs.
0.01).
III. RESULTS
1. RESULTS OF RELATIVE POVERTY BENCHMARK:
TERCILE AND QUARTILE ANALYSIS
The AMK Wellbeing Score is a relative poverty
score and measures whether a household is worse off
or better off compared to other households. Each
household sampled has been assigned a wellbeing
score: the lower the score, the poorer the household
relative to all other households with higher scores.
These results are now divided into three separate
groups of client and nonclient households so that
they can be compared: the poorer group, the middle
group and the better-off group. The following steps
were taken to analyze the tercile results for the new
group clients:
The 63 nonclient households were sorted in
ascending order according to their wellbeing
scores (i.e. the greater the value of the score, the
relatively wealthier the household).
The 63-household sample was divided into
terciles based on the wellbeing scores: the
bottom third of the nonclient households are
grouped into the poorer group, followed by
the middle-ranked group, and finally, the
better-off group. Since there are 63 nonclients,
each group contains 21 households. The cutoff
scores for each tercile define the limits of each
poverty group and these scores were -0.53731
and 0.56207.
The 252 new client households were then
categorized into the same three groups based on
their household scores using the cutoff scores
defined above for the AMC-PCA case (i.e. -
0.53731 and 0.56207).

Statistically, if the pattern of poverty among new
client households matches exactly that of nonclient
households, then households will divide equally
among the three wellbeing groupings in the same
way as nonclient households, with 33 percent falling
into each group. Any deviation from this equal
proportion would signal a difference between the
new client and nonclient populations. The results are
shown in Graph 3 below: AMK client households
closely mirror the general poverty profile of rural
Cambodia with a slight concentration on the medium
wealth households and a slight underrepresentation
in the poor tercile (given similar representation
among the better-off).

GRAPH 3: TERCILE ANALYSIS: POVERTY
GROUPING NEW VB CLIENT AND NONCLIENT

Source: Survey 2012

Graph 4 confirms that new AMK clients were
overrepresented only in the medium category and
slightly underrepresented in the poorest and poor
with comparable representation among the better-
off
4
.

4
The significance tests for both tercile and quartile analysis cannot
confirm that the difference is statistically significant. Terciles:

28

GRAPH 4: QUARTILE ANALYSIS: POVERTY
GROUPING OF NEW VB CLIENT AND NONCLIENT

Source: Survey 2012
1. RESULTS OF ABSOLUTE POVERTY BENCHMARK
The AMK Wellbeing Score calibrates relative
poverty but does not provide information on the
absolute level of poverty, i.e. it measures the extent
to which a household is worse off or better-off
compared to other households, but does not assess
the actual level of deprivation of the poorer category
of households or the level of affluence of the better-
off. To provide an estimation of absolute levels of
poverty, AMK compares its data on Daily Food
Expenditure per capita with the Food Poverty Line in
rural areas as well as with the results of the ID Poor
Project.

Daily Food Expenditure per Capita below the
Food Poverty Line in Rural areas
AMKs Daily Food Expenditure figures include
not only cash expenses in food items but they also
quantify consumption from households own
production (including rice and other crops,
vegetables or animals) and from other food items
gathered, collected or fished. The overall Cambodian
Poverty Line for rural areas was set at KHR1,753 per
person/per day and the Food Poverty Line for rural
areas at KHR1,389 per person/per day in 2004. The
Cambodian Food Poverty Line represents the amount
of Riels a person must spend to consume a food
basket that provides at least 2,100 calories of energy
per day. Therefore, someone who must consume less
food than this is not receiving the minimum amount
of calories necessary to maintain their health. Since
there are no rural inflation figures in Cambodia, in
order to update the 2004 Food Poverty Line to the
higher prices at the time of the fieldwork, AMK uses
a proxy: the rural food poverty line is updated with

(Chi-Square (2, N = 315) 0.909, p = 0.754). Quartiles: (Chi-
Square (3, N = 315) = 0.877, p = 0.797).
the Phnom Penh Consumer Price Index (CPI) for
food and beverages only
5
(Table 2).

TABLE 2: RURAL FOOD POVERTY LINE
(NATIONAL): AMK PROXY FPL 2012

Riel (per
day)
[2004]
Riel (per
day)
[2012]
US$ (per
day) [2012]
Phnom
Penh
1,782 3,318 $0.83
Other
Urban
1,568 2,920 $0.73
Rural 1,389 2,587 $0.65
Source: World Bank, Cambodia: Halving
Poverty by 2015? Poverty assessment 2006 (page
21) and MoP, CPI Phnom Penh, 1USD =
KHR4,004 (field work period: March to
April 2012)

Graph 5 shows the histogram of the average
daily food expense per capita of new AMK village
bank clients (KHR2,856), which is higher than the
AMK rural food poverty line KHR2,587 (Proxy May
2012).

GRAPH 5: DAILY FOOD EXPENSE PER CAPITA
FOR NEW CLIENTS

Source: Survey 2012

5
Phnom CPI for Food, beverage and tobacco Dec 2004 =
109.54, Phnom Penh CPI for Food May 2012 = 166.9 Food
inflation update. Proxy Food Poverty Line (May 2012) =2,587 .
The CPI of May 2012 was released by the NIS.

29

The poverty headcount index for Cambodia as a
whole relative to the overall poverty line decreased
from 34.7 in 2004 to 14.9% in 2009 (Knowles,
2012). Table 3 describes AMK clients consuming
food below the national food (rural) poverty line
KHR2,587. About 45% of new village bank clients
are consuming below the national (rural) food
poverty line KHR2,587. The figure was higher at
58% (Thun Vathana 2010). On the other hand,
clients living in rural areas have the higher
percentages of consumption less than the national
rural food poverty line compared to the clients living
in peri-urban areas, 48% from rural Vs 42% from
peri-urban)
6
.

TABLE 3: NEW VILLAGE BANK CLIENTS BELOW
NATIONAL (RURAL) FOOD POVERTY LINE (NFPL)

AMK clients
Overall
[N=252]
Rural
[N=132]
Peri-
Urban
[N=120]
Number of
households below
NFPL
113 63 50
Percentage of
households below
NFPL
45% 48% 42%
*Peri-urban households are defined as those located
less (or equal) than 15 minutes of traveling time
from the branch office

Source: Survey 2012

Number of New Group Clients classified as poor
by the ID project
277 out of 315 households were able to track
their ID poverty level while for the remaining there
is no data available. Table 4 illustrates the poverty
level amongst clients and nonclients.

6
2004 figure released by RGC the Cambodian food
poverty headcount is estimated at 20%, 22% in Rural, 14%
other Urban and only 3% in Phnom Penh. The new
estimation are still not available but seem to indicate a
reduced trend in poverty rate every year.
TABLE 4: ID POOR CLASSIFICATION BY HOUSEHOLD

ID Poor Classification
N/A
Tota
l
Poo
r I
Poo
r II
Non
Poo
r
Tot
al
Noncli
ent
4
(6%)
9
(14
%)
44
(70
%)
57
6
(10
%)
63
AMK
New
Client
32
(13
%)
32
(13
%)
156
(62
%)
220
32
(13
%)
252

Source: Survey 2012

When the ID project classifications are applied
to the sample, results show only small differences
between the control group of nonclients and new
group client households, with new client households
slightly poorer than the control group (26% of new
group clients are poor compared with 21% of
nonclients, and 62% of new group clients are
classified as nonpoor while 70% of the control group
are classified as nonpoor). This result further
corroborates previous findings on the relative
poverty measurement (with little differences among
both groups) and the finding of the other absolute
poverty measurements (with new group clients
slightly poorer than the control group on entry).
IV. CONCLUSIONS
Therefore, the results of the three measures of
depth of poverty (the wellbeing score, the rates of
absolute poverty compared with the food poverty
line for rural areas and the comparison with the
results of poverty cards according to the ID project
results) allow a conclusion that:
The results of AMKs depth of poverty outreach
for clients on entry based on the wellbeing score
indicate that there are only minimal differences
between the new client and nonclient
populations: AMK depth of poverty outreach
closely mirrors the general poverty profile of
rural Cambodia with a slight concentration on
the medium wealth households and a slight
underrepresentation in the poor tercile (given
similar representation among the better-off)
Please note that poverty remains a rural
phenomenon in Cambodia, and thus, this result
does not imply an overall reduction in poverty
outreach (i.e. reaching similar levels of the poor
in rural Cambodia still grants higher overall
depth of poverty outreach nationally)


30

for clients on entry based on the number of new
client households who consume less than the
Rural Cambodian Food Poverty Line (RFPL),
confirm that indeed AMK new clients are poor
(with 45% of new client households vs. 33% of
nonclient household consuming less that the
calories intake required for healthy living).
for clients on entry based on the number of new
client households who are classified as poorest
or poor according to the Cambodia ID poor
project confirm only small differences among
new clients and the control group, with more
new group clients classified as poor than the
figures found for the nonclient/control
population.
REFERENCES
Thun Vathana, Pum Sophy and Say Samath. (2010).
Assessing poverty outreach of microfinance
institutions in Cambodia A case study of AMK.
International Journal of Environmental and Rural
Development, 1(1), 125-131.
Knowles J.C. (2012). Poverty profile for Cambodia,
2009. Prepared for and under the direction of the
Poverty Reduction and Economic Management
Sector Unit, East Asia and the Pacific Region,
Poverty Cluster of the World Bank.


31

Transaction Cost, Policy Options and
Inclusive Innovation
Rui Ji
Asia-Pacific Finance and Development Center
Shanghai, China; jerry@afdc.org.cn

Runzhong Peng
Shanghai, China; pengrunzhong@afdc.org.cn

AbstractInclusive innovation refers to innovation
based on the needs of low-income populations. New
Institutional Economics provides us an analytical
framework for inclusive innovation. This article
analyzed some characteristics of low-income
populations and concluded that high transaction costs
in inclusive innovation could be traced back to asset
specificity, uncertainty and low market transaction
level. High transaction costs, on the other hand, lead to
resource allocation mechanism failure in the inclusive
innovation market. Government policy options should
focus on reducing transaction costs and compensating
market failure. Practices to promote inclusive
innovation in China are also discussed in this paper.
Based on the analyses and experience in China, the
authors also give some suggestions about fiscal policies
for inclusive innovation in the future.

Keywords Inclusive innovation, Transaction cost,
Policy option, New institutional economics
I. INTRODUCTION
Inclusive innovation, also called the MLM
(getting more performance from less cost for more
people) mode, is innovation that addresses the needs
of populations with low incomes. It can be high
technology or low technology. Its key characteristic
is that the innovation is accessible to the low income
population or crowd at the bottom of pyramid (BOP).
Equivalent to the resource reallocation process and
thanks to the externality, the inclusive innovation
process requires more sophisticated economic system
protection compared to other economic activities. As
North (1978) emphasized, even though technological
innovation injects vitality into economic growth,
long-term economic growth and social development
are inconceivable if there are no impulses for
institutional innovation and institutional change, nor
are they consolidated by a series of systems
(including property rights, legal systems, etc.)
thereafter. Norths argument reflects the idea that
institutional factors can influence economic
development.
New Institutional Economics provides us with
an analytical framework for inclusive innovation. A
property-right system and allocation system are
basically two concepts for an economic system
promoting inclusive innovation. The Coase
Theorems put clear property rights as prerequisites
for effective resource allocation. However, the
property right establishment process might be
preoccupied by transaction costs, which could result
in even higher resource allocation costs when
transaction costs are high enough to hinder fully
determined property rights (Barzel, 1997). The more
general sense of transaction costs occurs in the
resource allocation process (trading) after property
rights establishment.
Williamson (1979) believed transaction costs
were costs incurred in information collection,
condition negotiation, quality control, trading
supervision and other costs involved in the trading
process. Those transaction costs are potential losses
accruing to one party in trading and built upon
bounded rationality, opportunism and asset
specificity. This paper claims, due to the special
nature of transaction objects (low-income
population), the inclusive innovation process is born
with more tendency to uncertainty and opportunism
compared to traditional innovation, and therefore,
higher transaction costs. Hence, it is necessary to
analyse the transaction costs in inclusive innovations
and propose appropriate institutional arrangements
and policy frameworks to promote better inclusive
innovation.
II. TRANSACTION COST ANALYSIS IN INCLUSIVE
INNOVATION
Inclusive innovation is respecting the low
income population. Current studies on low-income
populations are usually accompanied with poverty
issues and identify poverty through a series of
criteria. Scholars usually measure the population
structure, distribution and characteristics through
systematically studying natural features such as
gender, age, educational level or employment
situation and race, immigrant status etc.
Concerning the particularity of innovation
behaviour, low-income population characteristics
which might hinder market mechanisms are: (1) low
income. Customers might be too poor to afford

32

products and services, which limits the maximum
price and market level overall; (2) low knowledge
level. Customers lack the capacity to accept some
new innovative products; (3) geographically
scattered. Typical rural market locations might
negatively affect market scale; (4) information
asymmetry. Low-income persons do not have the
necessary knowledge and means to access
information; (5) behaviour uncertainty. Thanks to the
income and expectation instability, it is common for
low-income people to have unstable consumer
preferences. Williamson (1979) proposed that
trading dimensions, including asset specificity,
uncertainty and frequency, determine transaction
costs. The low-income population characteristics
described above enhance the complexity in three
dimensions and also the intricacies of transaction
cost analysis.
A. Transaction Costs for Intellectual Property
Rights Acknowledgement
Innovative behaviours, especially those basic
activities that can be noted as non-competitive and
non-exclusive public goods, have extremely strong
externalities and are difficult to provide through a
pure market. Innovative behaviours often result in
intellectual property that is usually difficult to clarify
because of the high costs involved in property right
acknowledgement. Even if they are established,
intellectual property rights also need the government
to lock out the risk of being pirated and copied.
B. Transaction costs caused by asset specificity
Asset specificity refers to the extent to which an
asset could be used for different purposes and by
different users without sacrificing production value.
It is concerned with sunk costs. (Williamson,
2002).Williamson believed asset specificity level
determined governance structure and recommended
taking advantage of internal organization resource
allocation to avoid more serious market failure
traced back to higher transaction costs caused by
higher asset specificity. Upfront innovation
investments are often presented as sunk costs.
Research, probably because of the dim market
prospects, becomes quite risky. In addition, high
transaction costs might also be caused by the strong
opportunism among low-income populations, where
continuous contracts are difficult to sign to guarantee
the recovery of specific assets.
C. Transaction cost caused by uncertainty
Strong information asymmetry exists in
inclusive innovation. On the one hand, it is difficult
for the enterprises to obtain low-income population
information such as income, background and
preference etc.; on the other hand, low-income
populations also lack the mechanism and capacity to
get transaction information. Whereas information
asymmetry would bring uncertainty into trading,
other characteristics of the low-income population,
such as unstable income and expectations, especially
decide the strong uncertainty of their consumer
behaviour. The above uncertainties might sustain the
possibility that transaction contracts are not capable
of being standardized among all potential
alternatives. Frequent occasional events increase
transaction costs.
D. Transaction costs caused by trading frequency
Trading frequency is the times transaction
occurs in a period. According to Williamson (1979),
trading frequency is a factor influencing transaction
cost and organizational governance structure
considering investment cost recovery is impacted
when transaction itself becomes specific asset.
Additionally, in inclusive innovation, we can broadly
comprehend trading frequency as the degree of
market transaction. Therefore, market transaction
degree determines whether the sunk cost and hence,
transaction costs could be recovered. These cost-
related factors mainly include: (1) Market price
formation. The poverty of low-income people
possibly limits their capacity to support product and
service purchase and further locks the maximum
price. (2) Market size. Sunk cost involved in
innovation is seeking for a certain market scale to
maximally share the cost and cut down the price.
Unfortunately, it is hard to ensure a stable and
expectable market due to low-income population
features. (3) Market trading. High market transaction
costs arise among ignorant low-income populations
in distance places. Therefore, the governments
construction of infrastructure is very important.
III. GOVERNMENT RATIONAL DECISION MAKING
AND POLICY OPTIONS IN INCLUSIVE INNOVATION
Theoretically, based on market failure,
government intervention could feasibly lift social
welfare by achieving double satisfaction on
productivity improvement and resource allocation
through correcting market failure. Given the analysis
made above, transaction costs and market failure
present in inclusive innovation need to be redressed
by government policy interventions. But surely we
should avoid government failure when promoting
inclusive innovation. The government could not
completely replace the role of the market and
enterprises showing low efficiency, or even
kidnapping and corruption in government operations.
Rational and non-rational attributes of government
decision-making depend on whether the government
has systematically thought through, which is
presented as a procedure for collecting, processing
and integrating, informational and environmental
factors affecting decision making; and whether the
government has specific cognition of behaviour
choices. On this basis, we should balance market
failure and government failure to build a
comprehensive monitoring and evaluating system in

33

order to ensure the smooth running of the policies
and related systems.
The government could promote inclusive
innovation through fiscal policies on the demand and
supply to reduce the transaction costs that cause
market failure.
E. Policies on the demand side
Inclusive innovation demand policies are
centralized on forming a consumer market with
stable expectations through controlling transaction
costs traced back to uncertainties and frequency.

a. Government procurement
Polices on the demand side, mainly represented
as government procurement, could instrumentally
provide a solid market potential for innovation.
Firstly, government is usually willing to bear higher
prices for innovative products; secondly, economies
of scale could be achieved as government purchase
provides clear incentives to product providers and
simultaneously reduces their risk. Three government
procurement methodologies are usually followed to
promote inclusive innovation: (1) Governments buy
innovative products and services; (2) Pre-commercial
procurement (technical procurement) that focusing
on long-term demands; (3) Contract procurement.
Governments act as pioneer-purchasers to set a good
example so as to promote the use of products among
a larger population.
b. Price subsidy policies
Governments could tailor payment of innovative
product producers or subsidize customers to sustain a
certain price level. Thus, to some extent, this would
solve the issue that customers are too poor to afford
the products and meanwhile assist producers to
decide on a higher price level.
c. Policies to promote market dealing
Policies could possibly include the following
aspects: (1) Establish a basic information
infrastructure and build a networked market; (2)
Provide technical training to low-income populations
to improve their internal quality; (3) Construct an
information platform to bridge information gap
between enterprises and customers. Therefore,
enterprises would better understand customer
demands and customers would get more information
on supply.
F. Policies on the supply side
The core of inclusive innovation supply policies
is to give enterprises the incentive to innovate by
reducing transaction costs involved in intellectual
property right establishment and asset specificity.
a. Policies supporting basic research and
innovation
Government could back up basic research and
other innovation using financial subsidies, payment
transformations, etc. and could even organize basic
research when necessary. What needs to be
emphasized here is that tax and financial incentives
are not always proper for many grass-roots
innovators and entrepreneurs since they often do not
profit and could not enjoy the tax benefits.
b. Policies to reduce innovative risks
Huge sunk cost not only pushes innovators to
face great risk, but also to some extent blocks
innovation. It is feasible for the government to
constitute innovation funds to invest into innovative
activities directly and assume some risks for main
innovators meanwhile. The government is also
advised to devise bridge-like institutions such as
science and technology parks and business
incubators to encourage inclusive innovation.
Furthermore, offering commercial support to
inclusive innovation, stimulating enterprises to
promote technologies and expand markets,
controlling the hazards coupled with the
commercialization procedure for innovation are all
the activities that governments are capable of
applying.
IV. INCLUSIVE INNOVATION PERSPECTIVES IN
CHINA
As inclusive innovation is highly matched with
harmonious development concepts in China, The
Chinese government has, in many respects,
positioned inclusive innovation as an important
mechanism to inspire innovation and realize public
service equalization, etc. such that, the Chinese
government has accumulated a wealth of practiced
policy experience.
G. Practices Using Technology to Benefit Peoples
Livelihood
Opinions of accelerating peoples livelihood
development through S&T, a paper issued by the
Ministry of Science and Technology in 2011,
emphasized benefit of people, including the low-
income population, by encouraging technology
innovation in peoples livelihood and spurring
livelihood related technology applications. The
High-tech, rural specific S&T and social
development are three major territories receiving
favour (as shown in Figure I). Through some specific
cases, the following part of this article will illustrate
policies concerning the low-income population.
a. Golden Sun Project
This project is known as Golden Sun to people
living in areas without electricity. Jointly supported
by the Ministry of Finance, the Ministry of Science
and Technology, the National Energy Board and
other departments, and mainly serving the low-
income populations in remote areas, this program has
supported in total 343 photovoltaic power generation
projects with a total installed capacity of 1.3 million
kilowatts. In 2011 in annual Golden Sun
demonstration projects, 15 independent photovoltaic
power plants, located in six provinces including

34

Qinghai, Tibet, Xinjiang, Inner Mongolia, Hunan
and Yunnan, with installed capacity of 31095 KW in
total, were constructed in remote areas without
electricity to benefit local low-income populations.
b. Spark Program
In 1986, the Ministry of Science and
Technology started the Spark Program, the first
policy-guided technology plan facing the Three
Rural (Rural areas, Agriculture and Farmers). The
overall objective was to help transfer technological
and managerial knowledge from more advanced
sectors to rural enterprises and farmers. The Spark
program is mainly focused on:(1)Supporting
technology upgrading of town and village enterprises
(TVEs);(2) Providing training services for rural
farmers;(3) Supporting agricultural R&D and
technology diffusion that covers many domains (See
table I);(4) Recently supporting rural ICT
development.
TABLE I
SPARK PROGRAM IN 2010
TECHNOLOGYAREAS %
Agricultural product processing 24%
Efficient planting 25%
Efficient breeding 19%
Featured agricultural industry 18%
Environmental protection technology 6%
Building materials industry 1%
Agricultural chemicals 3%
Farming machinery and equipment 4%
Source: http://www.cnsp.org.cn/
The Spark Program established 5,700 projects
during the Eleventh Five-Year Plan (2006-2010)
with a total investment of CNY 19.4 trillion,
including CNY840 billion contributed by central
government funding. It absorbed a90 million labour
force, trained 50 million farmers (Engineering),
carried Spark Science and Technology 12396
Information Service Pilot Projects in 13 provinces
(autonomous regions and municipalities) and
launched new socialist countryside construction
demonstrations in 193 villages. This program is
vividly introduced as a mechanism that enables
farmers to get acquainted with it and rich.
c. Rural Informatization
Taken as a key measure to nurture the rural
market and reduce transaction costs, information
technology construction is being promoted
aggressively in China. (1) Infrastructure installation
has been basically completed. In 2010, China's rural-
area network, television, and telephone coverage
were 98%, 97.62% and 100%, respectively.
(2)Comparatively complete rural information service
system was built. The Ministry of Agriculture had set
up 19 provincial, 78 prefecture-level and 344 county-
level "Three Rural integrated information service
platforms up to 2010. (3) Rural information
technology application in rural areas has gradually
deepened.
To give a project in rural areas in Shanghai as an
example, since 2006, Shanghai has been gradually
allocating integrated information service terminals
for each administrative village. Till now, of all the
integrated rural information service stations allocated
in 1,400 administrative villages in Shanghai, each is
equipped with a computer and a smart terminal,
FIGURE I
THREE MAJOR FIELDS OF LIVELIHOOD BENEFITING FROM TECHNOLOGY DEVELOPMENTS.
lHealthcare: The medical robotic surgery; regional
collaborative healthcare
lEducation: "Internet-based Education"
lGreen Energy: Golden Sun Project (To provide solar
equipment for farmers.)
lGovernment-assigned professionals for job creation in
S&T fields in rural area.
lNational Agriculture Science and Technology Park
lRural informatization
lSpark program
lNew rural technology service system
lPopulation Healthcare: Healthcare technology, new
medicine innovation,etc.
lPublic Safety: Science and technology of disaster
reduction
High-tech
Rural Specific S&T
Social Development
lEcological Environment: Clean drinking water supply
technology, etc.

35

TABLE II
PUBLIC SECTOR PROGRAMS AND INITIATIVES
Agencies Sector Programs and initiatives
Shenzhen Institute of
Advanced Technology,
CAS
Healthcare
Low cost medical care equipment for rural clinics, such as a
multifunctional diagnosis table
MOF, MOST, NEA Energy
Golden Sun program that builds photovoltaic power plants in
remote area without electricity access
Institute of Computing
Technology, CAS
ICT Low cost and low energy CPU
MOST, MOA, CAAS Agriculture BT cotton that raise small households productivity
MIIT ICT
Universal access to ICT infrastructure including broadcasting,
telephone and internet in rural area
MOST Transportation Electric car and new energy vehicles
MOST, MOE Education Building a public education platform for distance learning
MOST, MOA Agriculture National S&T project for increasing crop yields
MOST, MEP Sanitation Drinking water purifying technology
MOSTMOH Healthcare
Promoting R&D in traditional medicine
Organizing pilot project on new medical equipment
Note: Abbreviation: CAS China Academy of Science; MEPMinistry of Environment Protection; MIITMinistry of
Industry and Information Technology; MOAMinistry of Agriculture; MOFMinistry of Finance; MOHMinistry of
Health; MOSTMinistry of Science and Technology; NEANational Energy Administration
Source: Fan Jianping, Li Kouqing and Wang Jun, A landscape for promoting inclusive innovation in China, Working
Paper, 2012.6

through which farmers can enjoy online medical care,
online training and online information search
services.
H. Latest projects and initiatives
Recently, relevant departments, individually or
jointly, launched inclusive innovation projects
covering healthcare, energy, transportation,
education and information (see table II). Government
departments would likely facilitate these projects
among low-income populations by financial
subsidies or payment transformations.
I. Some Thinking on Promoting Inclusive
Innovation in China
Firstly, building a sound policy framework to
encourage inclusive innovation. This is usually based
on the behaviour of various central ministries and
local governments. Current programs incubating
inclusive innovation in China are characterized by
dispersion and randomness. Hence, not only an
institution to coordinate inclusive innovation is
needed, but also a systematic framework, including
fiscal and financial policies and society service
policies promoting inclusive innovation, is required.
Secondly, government functions penetrate
various stages of inclusive innovation and especially
focus

on popularizing and commercializing innovation.
Operated in a manner different from traditional
undertakings, the role of government should be run
through the entire cycle of inclusive innovation to
regulate the market failure caused by the strong
public good nature of inclusive innovation.
Thirdly, the government should actively
encourage private sectors to participate in inclusive
innovation activities. While most inclusive
innovation activities in China so far over-rely on
government funds and strength, the major drive for
innovation is the private sector, according to global
practice experience. Therefore, the private sector is
supposed to play the leading role in a successful
inclusive innovation system.
Finally, pay attention to policy implementation
on the demand side. What is distinct from traditional
supply policies is that government functions, such as
government procurement, are more highlighted in
demand policy. At present, China has introduced a
number of government procurement policies to
promote inclusive innovation, such as an
independent innovative product procurement policy,
and a procurement policy for SMEs. However, how
to build a sophisticated government procurement
system to develop inclusive innovation is still an
important challenge we come to.

36

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Commercial Press.

International Conference on Inclusive Innovative Management (ICIIM 2012)
37

On the Reconstruction of the Chinese
Rural Innovation System from the
Perspective of Inclusion Innovation
Zhang Jiachen
Center for Innovation and Entrepreneurship; Tianjin University of Finance and Economics
Tianjin, China; edify1592@gmail.com

Abstract-- The traditional emphasis of innovation
activities on technological innovation relies on strong
financial support. These innovative activities are not in
line with China's rural economic and social
development from the status quo. Inclusive innovation
is the way out for China's rural innovation. It is not
only conducive to narrowing the gap between the rich
and the poor, but also to promoting sustainable
economic growth and social harmony and stability.
This paper focuses on the current plight of the rural
innovation system , through empirical research and
case analysis, the innovation system of China's rural
reconstruction, and the protection of intellectual
property, the ideal grassroots innovative legislation,
established civil innovators organizations, building
people-to-people exchange platforms and other aspects
of the proposal to improve the rural innovation
system.
Keywords--inclusion innovation; grassroots innovation;
rural innovation system; harmonious society

1. INTRODUCTION
In recent years, China's economy has seen rapid
growth, and has made remarkable achievements.
Rapid economic growth driven by knowledge and
innovation, however, does not automatically achieve
abatement of poverty, and even leads to the income
gap widening. The inequitable distribution of wealth
polarization phenomenon persists. Many
governments and international institutions to
promote sustainable development of the economy
and maintain social harmony and stability, are
reshaping development goals, steering from the pure
pursuit of GDP growth to more pro-poor and
inclusive growth (Inclusive is Growth), stressing
economy to increase the growth in job creation and
social wealth and to eliminate inequality in personal
background and environmental differences and
opportunity inequality. This emphasis on social
equity and the development of the concept to
promote innovative system construction must also
have a corresponding service change, not only for
economic growth, but also to become an important
mechanism to address environmental and social
issues.
Therefore, economic globalization and
economic growth at the same time to achieve
inclusive innovation, and allow the poor to get rich
through their own innovation with a reasonable share
of the economic growth, becomes China's top
priority.

2. THE PLIGHT OF CHINAS INNOVATION
SYSTEM, TRADITIONAL INNOVATIVE IDEAS
Traditional innovation is by changing
technology, markets and business models to gain a
competitive advantage over and other competitors.
The basic tradition of innovation as the core
component of enterprises, government agencies and
University Institutes pays attention to technical
efficiency and economic benefits, and emphasis on
scientific and technological innovation, which are
behind more than rely on strong financial support.
Scientific and technological innovation has a huge
R&D cost, to be recovered by raising the price of the
product, and the pursuit of innovation costs to be
recovered in the shortest possible time.
Technological innovation is expensive, has a smaller
success probability, high barriers to entry, and the
cost is also high. The traditional innovation of
ordinary people is rarely taken into account, for the
majority of the rural innovation activities in China
are facing a strong funding gap, which is a huge
obstacle hindering entrepreneurial start-up and
development of Chinese grassroots innovation.

2.1 Innovative ideas deviation
Traditional innovative ideas pursue
sophisticated technology, rely on a huge amount of
investment in research and development of low-cost,
low-profit, low-tech innovative products, so that the
majority of the farmers grassroot innovative behavior

38

is not an innovation, but a small invention, small
creation, and even entertainment, completely
ignoring its huge economic and social value, with
lack of recognition .So this tradition of innovative
ideas suppresses the passion and enthusiasm of
farmers grassroots innovation, so urgently needed as
this innovative concept changes.
2.2 Innovation has a serious shortage of funds
In recent years, a large number of civil inventor
inventions have led to poverty and even to the
extreme phenomenon of more and more exposure.
No matter whether to engage in scientific research,
or engage in technical invention, from data
collection, literature search, to the dissemination of
principle experiments and sample trial promotion, it
incurs a lot of expense. For people of working-class
and who have no fixed income, whose the amount of
money is small , it is very difficult to take on so
many expenses. Some of the original items of great
value fall due to lack of funds and can only stay in
the assumption, program design or schematic model
stage, and cant change vision into reality. Although
China has established four state-owned banks as the
main financial system, these financial institutions,
guard against financial risks, the low success rate, the
risk of large rural innovation venture capital and
more prohibitive technological innovation. In this
vibrant grassroots innovator, could not get the
support that should be by funding. In the capital
markets, although with the establishment of the SME
board and GEM, the high access threshold shuts out
the majority of the civil innovative economic
activities. The corporation conditions of the civil
innovator make it difficult to obtain the favor of the
capital market.
2.3 Poor communication channels
Scientific exchanges and discussions: Exchange
and discussions can brainstorm, learn from each
other and improve together. In many cases, a good
idea, discovery and revelation emerges from
exchange and discussion. Grassroots innovators own
academic perspectives and technological
achievements in academic journals or participate in
professional conferences, discussions and exchange
of experts and scholars with the same fields of study,
academic criticism and identity through
dissemination and exchange, looking forward.
However, for a civil innovator it is difficult to get
this kind of opportunity. They seek mainstream
academic community exchange, like a bird chirping
in the wilderness, and to hear any comments. At the
same time, civil innovation has the lack of an
exchange platform, they can only go it alone.
2.4 The promotion and application of the
outcome is difficult
Grassroots innovators, due to being scattered all
over and in all walks of life in urban and rural areas,
are in financial difficulties, unable to do marketing or
advertising and publicity, coupled with the fact that
social science and technology intermediary profit for
the purpose charges a lot of money. Such and such
award are the part of criminals "intermediary
transfer", "authority chosen, write argumentation
report," on behalf of all sorts of packaging, in the
name of targeting civil innovator cheat over money
to make matters worse. Sometimes even contacting
the manufacturers, will be constrained by the
manufacturers bargaining and unequal conditions,
and so on. Some civil innovator resignedly said:
promotion is difficult, extremely difficult!
2.5 Lack of test conditions
Civil innovators validate these scientific
feasibility, in order to conduct scientific research,
and the need for more complex experiments or tests.
Their own conditions are only to find research
institutes, universities for contact. However,
unexpectedly, most of the units are all kinds of
excuses politely decline. May be the reality is that
China's state-owned research institutes, colleges and
universities, research facilities are extremely severe.
People cant help asking: using taxpayer money to
buy research facilities, why would they rather be
idle, nor let grassroots innovative used, people call
for social equity and justice! A grassroots innovator
sighed: "informal research institutions" " grassroots
innovation" are descendants of the same root,
fratricidal?
2.6 Guide the evaluation of helplessness
A considerable number of people have no
professional training, and lack expertise in civil
innovation, have difficulties and would like to ask
for advice from experts and scholars in the study.
Some innovations over a long period of study, have
been fruitful, the science and technology sector,
experts and scholars would like to be invited into the
evaluation. They painstakingly went to the science
and technology departments, research institutes,
colleges and universities, but get in most cases a cold
shoulder. The technology sectors say, we are only
responsible for the evaluation of the plan within the
project, we were not included in the plan of the
project we do not care; research institutes say: as to
subject evaluation we are looking for the agency
responsible for the evaluation, we only carry out
scientific research; tertiary institutions say: our
scholars are busy, not receptive. Really in order to
shirk, hang word ah! Huge in China, which claims to
have the world's first professional scientific and
technical personnel for a civil innovator, it is difficult
to find guidance and evaluating teachers and units. Is
it not strange?


39

3. INCLUSIVE INNOVATION, RURAL
INNOVATION, A MAGIC WEAPON FOR
FARMERS TO GET RICH
Inclusive innovation brings the poor into the
process of innovation through a variety of
innovative ways of technology, the market, value
chain, system, culture and business model to serve
the needs of the poor, in order to improve the quality
of life for the poor and in production capacity to
achieve remission even the actual effect of the
elimination of poverty and make a productive
contribution to the national economy.
Inclusive innovation exist in the following three
business activities: A. poor as entrepreneurs: the use
of existing knowledge and skills of the poor, the
regularization of their R & D activities, and to
facilitate and spread grassroots innovation; B. poor
as consumers: consumption characteristics of the
poor as well as the inaccessible external market
environment, radical innovation or incremental
innovation provides a new cost-effective
combination of products or services, or the use of
new transport and distribution and sales methods; C.
the poor as producers: in the process of cooperation,
in order to reduce transaction costs, organizational
structure, business model innovation, and to learn
from each other through knowledge and technology
to improve both production capacity and the ability
to innovate. According to the direction of the
diffusion of innovation, inclusive innovation can be
divided into the following two categories: one is
"top-down" that is based on technology. This
business model has been applied in mature markets,
for poverty groups a new market environment, the
adjustment of product and process, to re-establish the
cost structure, the development of the poor can
afford acceptable products and services. These kind
of inclusive innovation activities emphasize the
choice of technology, improvement and diffusion.
The other is the "down-top", the so-called civil
society innovation, that is the poverty groups are
involved in commercial activities to generate many
innovative activities, these innovations have not
occurred in other markets.
3.1 Inclusive innovation to help solve the problem
of the livelihoods of the poor.
Various types of poverty alleviation assistance
or charitable relief help for poor areas or people that
are only concerned about the low level of poor
material needs and the needs of survival, can to some
extent alleviate the problem of poverty, but the aid
that is not simply a "blood transfusion" to solve the
problems of poverty, will encourage poor likes and
dislikes and lazy habits of work. As in the old saying,
"Give a man a fish, this grants only temporary
relief .it is better to teach him to fish, fishing can be
the solution to a lifetime of need."
3.2 Inclusive innovation helps to play on the
grassroots wisdom of the grassroots masses.
The Chinese are good as an innovation nation.
For thousands of years, the four great inventions of
the Chinese nation have promoted the development
and progress of China and world civilization. Based
on this civil innovation is an important force in
China's independent innovation. In developed
countries for service invention and non-service
invention, the ratio is about 9:1, but in China from
1985 to 2005 the proportion has been inverted. This
shows that civil innovation has daring, tolerance of
failure and the burden is very light to take advantage
of the collective wisdom of the majority of people to
achieve inclusive innovation, will have huge social
and economic effects.
3.3 Inclusive innovation helps ease the income
gap and social conflicts
Inclusive innovation allows the poor to enjoy
more products and services, and allows them to share
scientific and technological progress and economic
development. It can be that inclusive innovation
commercialization or industrialization not that only
can realize their dreams, but can also get economic
profit out of poverty, narrow the income gap between
the poor. It can also help the grassroots innovative
home business to solve social problems away from
home to work and study in children, solving the three
problems, reducing social disharmony factors.

4. THE MAIN ACTIVITIES OF THE RURAL
INCLUSIVENESS INNOVATION SYSTEM
The subject of the inclusive innovation system
includes farmers, government, and corporate, NGO
and innovation activities, including technological
innovation, market innovation and service
innovation.
4.1 Main innovations
A. BoP groups. In IIS, the BoP population as of
opportunity missing instead of income missing
persons, the poor is not the object helped but
valuable consumers, potential producers and
innovators, has the key to the innovation system
needs to run resources and capabilities. China now
has 900 million farmers, a considerable part in the
BoP population. From the specific point of view, the
poor use innovation to help companies to develop
product prototypes or construction and improvement
of new business models. As a marginal interest
related BoP people, enterprises can gain critical
knowledge and perspectives to foresee potential
opportunities for innovation and business models.
Farmers with the help of the government, NGOs and
financial institutions can also work with corporate on
valuable original innovation, commercialization and
promotion in other BoP regions.
B. Government. Government has to assume a
variety of roles in IIS. First, the makers of rules as to

40

BoP Regional Innovation activities, the government
needs to design and provide a new policy to
encourage innovation activities of the various main
innovators in the BoP region, such as a lower system
threshold for enterprises to enter the BoP market,
support and protection of local grassroots innovation,
promote innovations in cooperation between the
different innovative subjects with relevant agencies
and actively promote the success of BoP and mode.
Secondly, the behavior of the Government to
supervise and evaluate various innovative bodies of
the local social and ecological environment, and take
timely and appropriate measures to avoid the
occurrence of negative effects. Finally, the
government itself has to take part in BoP innovation
C. Enterprise. Enterprise is the main driver of
innovation activities within IIS and commitment is
the enterprise to enter the BoP region makes IIS
construction enterprise motive into the BoP region is
not mere charity and social responsibility, to a large
extent based on the internal logic of the pursuit of
commercial profit. But many companies operating in
the senior pyramid have accumulated resources and
capabilities and are not ready to serve the poor. They
do not really know what the needs of the poor, and do
not know how to profit in providing products and
services for the poor. Leveraging the wealth of the
bottom of the pyramid, enterprises must develop new
resources and capabilities that can be applied to the
BoP areas with populations, mainly through the
identification of the BoP market opportunity, to build
alliances, to mobilize and integrate a variety of
resources and to build a new business model.
D. NGOs. NGOs are to make up for the failure
of important public welfare organizations in the form
of market failure and government failure. Both
failures become main features precisely in many BoP
regions. This is also why the NGOs become the main
reason of the IIS innovation. Many NGOs long-term
poverty alleviation work in the BoP region, has
accumulated a large amount of social capital and can
play an important role as a bridge to the other
organizations with BoP population exchanges, and
other organizations can be improved by providing the
necessary knowledge, facilities and social relations
innovation and efficiency. In this process, the NGOs
also have interdisciplinary cooperation and
interaction of new knowledge and capabilities to help
improve the funds operational efficiency, enhance
staff professional quality and skills and increase
social influence. In IIS NGOs often have the dual
identity that the facilitator is supposed to have.
4.2 Innovation activities
A. Technological innovation. Requirements and
constraints of the BoP population through technical
innovation to meet breakthroughs, and due to the
harsh environmental conditions of the BoP region,
many cases, direct application of mature technologies
and products of the market and it is very difficult to
maintain the quality and integrity of the need to
develop apply to the local environment and demand
characteristics of the new technology. The real
breakthrough in innovation is only in the application
to the new non-traditional customers and their low
requirements. There is a mainstream markets that
ignores or isnt related to the low-end market
segments evolutionary process. In this sense, the BoP
becomes a natural laboratory for disruptive
innovation. Therefore, the technological innovation
activities within the IIS are not always achieved by
reducing the function or reducing the quality of the
prior art. More exploratory innovation is the use of
new concepts and modes, and only for those who are
familiar with the local variety of hidden organizations
and groups of resources into the innovation process
was likely to be successful.
The vast majority of farmers make technological
innovations. In Tongzhou District, a farmer Wu Yulu
only in the third grade cultural decade developed 48
different functional robots in Beijing, able to pull a
cart, pour water, cigarettes, ignition, flowers, play the
fiddle, somersault, beat back, wipe climb telephone
poles, automated patient care robots to turn around.
His robots had been bought by some scientific
research institutions or some business owners to be
the treasure. Mr. Wu is best to start generating the
idea of making mechanical people in a time of 11 or
12. When at home sitting around, suddenly someone
came from the front hastily. As he watched the back
of the pedestrian, while pondering the principle of
people walking in coordination he thought to see
what they could do as a walking machine, and
embarked on the road of innovation. He has been
through participation in the innovation game winning
sales machinery, employed as a technical consultant
on a variety of methods to obtain a considerable
income for research and development of a high-
altitude robot cleaning company.

FIGURE 1: WU YULY AND HIS MECHANICAL
INVENTION

Source: http://baike.baidu.com/view/2663445.htm

41

B. Market innovation. IIS successful operation
objective results nurture an inclusive market system
in the BoP. The BoP population participates in
formal market activities, as consumers, producers or
entrepreneurs to make full use of resources,
capabilities and creativity. This requires companies
to build new business models to develop products
and services for the BoP market or to adjust the value
chain the inclusion of BoP producers example,
through the production of affordable, acceptable,
produces obtained with the perception of new
products or services and to expand the scope of
consumption of the BoP population, can also be in
the purchase of raw materials and channel
construction and other sectors related BoP the people
treated as miniature suppliers and micro-channels or
retailers, or by cooperation with BOP innovation to
perfect and original innovation commercialization by
the poor, which not only improves the quality of life
for the poor or production capacity, but also creates
new opportunities for growth and expansion of its
innovative vision and pattern. In this process, the
government, NGOs and other professional
organizations (such as financial institutions) by
providing credit guarantees and incentive expertise
with local social networks, and in other ways to
reduce market transaction costs, and reduce market
failures.
In 1996, a farmer in Sichuan complained that his
Haier washing machine drain was always clogged.
Maintenance staff found that the farmers bought the
washing machine not for the laundry, but to wash
sweet potatoes, as a joke which was widely
circulated. Later, the Haier Group carried out an
investigation, and found that the farmer had reason
enough to buy a washing machine to wash sweet
potatoes. When he washed sweet potatoes in the
market the price of cleaning per kilogram of potatoes
was more than two cents less, and interest-driven
rural people changed the use of the product, which
was through changing the nature of the washing
machine equipment. This will improve the standard
of living in the city for production purposes, rather
than a purpose in life, never buy into an innovative
new market. After that, Haier Company, for the
needs of the rural market, sold drainage channels.
The innovation is that the washing machine can wash
sweet potatoes and fruit, expanding consumption of
the BoP population areas, and create new
opportunities for growth.
C. Institutional innovation. Critical
institutional arrangements and related infrastructure
in the BoP region: There are varying degrees in
which missing or unable to play its due role, such as
in information channels, clear property rights,
definition of a complete legal system and effective
enforcement, making innovation a body facing great
uncertainty. Parties involved in building an effective
trading system of governance through institutional
innovation have to take the initiative to fill the
institutional void, instead of waiting for the BoP
market is natural evolution to a Western-style system
environment. In the BoP region there are rich social
and moral norms, customs, and other informal
institutional arrangements. The main innovation
should fully respect and take advantage of these
informal systems to embed innovation activities in
BoP original social norms, and in the asymmetry of
the long-term cooperation and consultation process
of resolving differences which has gradually
developed based on trust and a shared commitment
to the transaction governance capacity, reduce
information, select, and be able to perform the
contract and social status. This institutional
innovation reflects the essential characteristics
interwoven in the BOP regional social and economic
system.
Since the reform and opening up, China's
economic development has made amazing and
remarkable achievements. In such a success, "small
property" is a magic weapon, more worthy of the
most classic institutional innovation. So-called
"property rights" refers to a set of rights, including
possession, use, income and disposal capability. Who
completes something with the four powers that he
has the complete property "of the matter, namely the
large property. If only part of the power, then he is
part of the property, namely the "small property".
Therefore, the generalized "small property" means
the possession, use, income, and disposal of the
separation of the four powers to achieve the best use.
Starting from the vision of "small property" can
be explained by the successful experience of China's
rural economic reform. In 1978, the Third Plenary
Session opened a prelude to China's reform and
opening up the vast rural areas in the country from
1983, the household contract responsibility system to
full implement. Soon, about 98% of farmers had
implemented contracts to households. The household
contract land area accounts for about 97% of the total
area of cultivated land. The core of the household
contract responsibility system, to achieve the
separation of land ownership and use rights, is that
farmers on the land have typically a "small property".
Small property greatly mobilized the enthusiasm of
farmers in China, the vast rural areas to quickly take
off the hat of poverty and backwardness, gradually
embarking on the road to prosperity, and has thus
astonished the worlds with 7% of the world land to
feed the world's miracle of 22% of the population.
D. Organizational innovation. For specific
organizations to achieve their goals in the BoP region,
often requires resources and capabilities of other
organizations, bringing the two or more parties into
collision and cooperation to solve the problem and
overcome obstacles to effectively integrate all

42

resources or reduce uncertainty, and thus gradually
form new forms of organization and in other ways to
create more value. Similar to many rural areas in the
industrialization process of the formation of the
government + company + farmers or cooperation /
intermediary organization + farmers form of
management of innovation, organizational
innovation not only in the BoP region but also
between the different organizations, institutions and
communities interactive learning gradually evolves.
Both rely on their own unique resources or
knowledge, but also the nature of the relationship
between the organization and structure. This
organizational innovation often needs a specific
innovation subject to promote awareness of the
original independent action and lack of
communication between parties connected.
Tianjin Jinghai farmers Wei Hongxi in 2003
founded the Tianjin Jinghai Chi Cow Breeding Co.,
Ltd., and innovation of a new bundled Company
farmers dairy farming business model, with the
corporate nature of a joint-stock company. The
company is jointly funded by all the shareholders.
Companies provide farmers with free housing, barns,
milking facilities and feed as well as immunization,
disinfection, breeding, technical support and training.
The company is for cattle ranchers milking and milk
cooling for pre-storage and transport and sales. The
company not only handles cow dung sales to rising
mushroom growers in Anhui, but also in the fall
when the acquisition of a large number of corn
stoves for cost saving, and also to protect the
environment. This farming model isnt only
innovative, but is also in the regional economic
industrial chain of innovation, so is inclusive
innovation.
From the above, the company is relatively
similar to business incubators, just hatched smaller
dairy farmers tied to the interests of the company and
the interests of cattle ranchers, the company's
development and economic benefits depend on the
size of the cattle. Companies and cattle ranchers are
closely linked, Fang Yirong all glory, and a loss for
both sides. Therefore, the next big move is that
farming costs continue to increase, and there is a
general downturn in dairy farming. New cattle
ranchers continue adding dairy farmers admitted 10
years from 19 in 2003 to 55 in 1000 bulls, cows .
They are both local villagers and cattle farmers from
the Northeast and Inner Mongolia, and elsewhere.
The system has the kind of organizational structure,
clear property rights, a clear division of
responsibilities, and it mobilize various stakeholders
operating enthusiasm. This is a useful operating
system mode to explore.

5. THE CHINESE GRASSROOTS INNOVATION
CASE AND COMMENT
In Yangyuan County, Zhangjiakou, Hebei
Province, an ordinary farmer Cui Runquan invented
an Altman noodle robot. His previous work in noodle
shop delivery, found that the work of the noodle chef
is very busy and very tiring, and thus germinated the
invention of the sliced noodle robot idea. His
invention of the sliced noodle robot has two features,
one is a mechanical simulation of an artificial
surfacing process. According to the car wiper
principle, the right arm of the robot (waving hand) is
driven by a motor, constantly back and forth through
the crankshaft linkage surfacing action; The left
arm(rotary surface hand) is responsible for delaying
the dough, with the surfacing operation ongoing the
left arm can fit the right arms slicing action swing
around and automatically complete the surfacing
process. Second, its blade. The traditional surfacing
knife has only one notch, but Cui Runquans
homemade knife has two grooves, the equivalent of
two blades connected together, the sharp curvature
can be back and forth on a continuous surfacing disk,
able to adapt to the different faces of Flex; cutting
knife design into the best surfacing Master posture
and practices, the both well analog sliced action, but
also to ensure the surfacing and quality, work
efficiency is greatly improved. The noodle robot
structure is simple, economical and practical, priced
at only ten thousand dollars. Relying on electricity to
drive the robot a human limit does not exist, long-
distance windup surfacing action long enough, the
facets longer cut out, tested. Work efficiency is more
than 3 times the artificial; and energy saving, 10 the
many hours of power consumption is only 1 degree.
Due simulate real sliced noodles, cut noodles slender
uniform, thick edge thin, angular, color, taste and
smooth bite. Practicality is much better than the
surfacing machine on the market. The cartoon shape
not only Altman, Pig and radiant, the cartoon
appearance is very eye-catching, to attract consumers
to come and spend. In one year it can save more than
thirty thousand RMB on labor costs. The invention
has obtained a national patent and sales cooperation
with enterprises put into operation, the annual output
value of more than five million.
Farmer Cui Runquans wholly independent
technological innovation,the invented Altman noodle
robot not only replaces the artificial, saving labor
costs and improves the work efficiency of the
surfacing, the subversion of the business model,
accelerates the dissemination of information through
media widely reported to attract enterprises
cooperation with mass production, so as to achieve
the farmers "bottom-up" inclusive innovation, and
embark on a road to riches. This case of inclusive
innovation has not only the poor as entrepreneurs,
but also the poor as producers and consumers.

43

Altman, radiant cartoon image involves copyright
use issues. At the same time, there suddenly
appeared a lot of similar products on the market.
These simulators seriously undermined the market
order the intellectual property rights of the invention
not being effectively protected (See Figure 2).

FIGURE 2: CUI RUNQUAN AND HIS NOODLE
ROBOT

Source:http://www.jdol.com.cn/gongying/4280105.
html
6. PROMOTING FARMERS GRASSROOTS
INNOVATIVE SUGGESTIONS
6.1. To strengthen the protection of intellectual
property rights
China's Intellectual Property Rights Protection
Act, such as the Patent Law, Trademark Law is very
sound, but the phenomenon has often occurred of
infringement of intellectual property rights.
Experience guides the masses to the Government of
India to establish awareness of intellectual property
rights. Our government should strengthen intellectual
property rights publicity by a sound intellectual
property management system. Adhere to the
government by the leading enterprises as the
mainstay, at the government level to strengthen the
protection of intellectual property rights and at the
same time, encourage, and guide more enterprises
and universities in terms of innovation and
intellectual property, to set an example, of the
effective implementation of corporate intellectual
property protection strategy. The integrity of China's
intellectual property protection system and facing the
development of a process from the quantitative to
qualitative level. By nurturing the culture of
intellectual property, strengthening of intellectual
property and cultural propaganda, and gradually
forming a good environment that is conducive to
promoting independent innovation and own
intellectual property rights, and to promote the
orderly forming of intellectual property, to protect
the smooth implementation of "grassroots
innovation" to achieve inclusive social growth.
6.2. The introduction of empowering civil
innovative development policies and regulations
The Chinese government in recent years has
introduced a lot of innovation policies, and given a
lot of incentives and subsidies to support innovation
and development, but farmers grassroots innovation
has had no specific policy support. I hope soon for
the establishment of civil government innovation
support mechanisms, vigorously develop venture
capital and the establishment of a multi-level capital
market, set up a special fund to provide funding for
innovation activities of private inventors and
technical experts, to reward outstanding innovation,
and gradually improve the civil environment for
grassroots technological innovation activities carried
out in concert.
6.3. The established grassroots innovator
association to build a people-to-people exchange
platform
The status of grassroots innovative management
is the lack of effective management agencies and
management personnel, and the low level of
organization, a large number of non-governmental
innovations scattered for the civil personnel and
institutions to organize and manage. This has
become the biggest obstacle to the promotion of civil
innovation effectively. Therefore, it is very important
to strengthen the management of civil innovation.
The government should organize establishment civil
innovator of organizations, set up a bridge and link to
communicate with the government, to reflect the
voice of the civil innovator and recommendations, to
provide them with guidance, assistance and services.
At the same time, the government should establish a
civil innovative exchange platform, and means of
communication, communication experts and scholars
engaged in the same field of study, and get their help
and guidance; look through this platform, release
information, share their experience with all aspects
of innovation to discuss and share their achievements
and experiences, reach and help each other to jointly
achieve the purpose of improving the relative risk
investment platform supporting innovation and
development with civil better docking. We can
learn from the
successful experience of Indias "Little Bee
Network" to create a suitable system for China's civil
innovative network structure to promote a private
innovation cooperation exchange platform for private
innovation systems to contribute to a force for
China's economic prosperity and development.


44

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World Bank. (2008). Global economic prospects[R].
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Shulin Gu, Lundvall, Bengkt Oke. (2006). Chinas
innovation system and the move toward harmonious
growth and endogenous innovation[D]. DRUID
Working Paper.

Leadbeater Charles, Wilsdon James. (2007). The
atlas of ideas how asian innovation can benefit us
all[M]. UK: DEMOS.

Rangan, V.K.,Quelch, J.A,Herrero, G.,et al. (2007).
Business solutions for the global poor: Creating
social and economic value [M]. New York: John
Wiley & Sons.

Prahalad, C.K. (2005). The fortune at the bottom of
the pyramid: Eradicating poverty through profits
[M]. NJ: Wharton School Publishing.

Pitta, D, Guesalaga, R., Marshall, P. (2008). The
quest for the fortune at the bottom of the pyramid:
Potential and challenges [J]. Journal of Consumer
Marketing, 25(7): 393401.

Iain Begg. (2011). Inclusive growth [N]. Analytical
Paper, New Atlantic Capitalism, 2011-03-04.


45

Abstract Scalability is critical to the success of inclusive
businesses. Without scale, inclusive businesses cannot
become commercially viable or deliver benefits to large
enough groups of people. Achieving desired scale has
proved to be a daunting challenge, especially for large
companies. This is because large companies have found
it difficult to harness key stakeholders strengths in ways
that influence low-income consumers preferences and
gain local communities trust. This paper provides a
three-step method that can be executed by senior
leadership and innovation managers to leverage
stakeholders strengths to achieve deeper localization and
scalable adoption of solutions by low-income
populations. The insights generated are based on a first-
of-its-kind qualitative comparative analysis (QCA) of 18
inclusive business initiatives (I BI s). These initiatives
bridge the infrastructural and institutional deficits
encountered by low-income populations across five major
emerging markets: Brazil, China, Ghana, I ndia and
Nigeria.

Keywords inclusive business initiatives, QCA,
scalability, leveraging stakeholder strengths, low-income
populations

Stakeholder strengths: key to commercially viable
scale
Over the last decade, inclusive businesses have
grown a reputation as viable alternatives to
conventional approaches to the practice of corporate
social responsibility (Porter & Kramer, 2011).
Unfortunately, doubts continue to be raised about the
commercial viability of such initiatives and their
ability to provide sustainable solutions to the
challenges faced by low-income populations
i
.
The big question that continues to haunt many
inclusive initiatives is: How can a venture achieve
the desired scale and become commercially viable?
Managers and leaders of inclusive businesses are
finding that the answer resides in mobilizing the
assistance of communities, NGOs, small
entrepreneurs, government departments and their
own top leadership viz. stakeholders, external and
internal to the firm (Gradl & Knobloch, 2010;
London & Hart, 2011; Jackman, 2010; SNV &
WBCSD, 2008).
The conditions for engaging these stakeholders
have never been so favorable. Affordable business
and communication technologies that can help them
deepen and expand their reach within low-income
markets are now available (World Bank, 2012b).
Within emerging economies, governments have
demonstrated growing support for policies that
encourage inclusive innovation because of their
positive impact on the pace and quality of achieving
inclusive growth targets. This is creating a positive
policy environment for businesses to experiment
with new strategies for scale (GoI, 2011; World
Bank, 2012a). Communities are now more open to
the idea of co-creation with large companies. NGOs
and small entrepreneurs, armed with robust
knowledge of social constructs, processes and
technologies are now accessible not only at the
national but also at regional and local levels (Radjou,
Prabhu & Ahuja, 2012). And all of this is helping
managers and leadership of inclusive businesses to
put forward a more convincing case before their
boards and top management to invest in inclusive
businesses.
But managers and senior leaders in charge of
managing inclusive businesses are learning that they
and their organizations need to be quick. If they are
late, they will find themselves in a crowded market.
The margins they stand to earn on their inclusive
business will be burdened with high costs to acquire
and retain relevant stakeholders.
The challenge is therefore two-tiered. The tier
one challenge is to quickly identify the appropriate
stakeholders that will help achieve a robust scale,
and the tier two challenge is to adopt measures to
leverage their strengths to achieve robust scale
rapidly.

I. OBJECTIVES OF THIS PAPER

Based on a comparative analysis of 18 inclusive
business initiatives (IBIs) aimed at bridging
infrastructural and institutional deficits in five
emerging markets, this paper proposes a three-step
method that showcases how inclusive businesses
Scaling Inclusive Businesses Successfully:
Lessons from Emerging Markets

Raghav Narsalay
India Lead, Accenture Institute for High Performance,
Mumbai, India, Email: raghav.narsalay@accenture.com

Leandro Pongeluppe
Research Scholar, Institute of Education and Research (INSPER)
So Paulo, Brazil, Email: leandro.pongeluppe@gmail.com


46

within large companies can leverage stakeholder
strengths to achieve deep localization and desired
scale
ii
.
This paper utilizes the qualitative comparative
analysis (QCA) method to arrive at its results,
making the analysis more generalizable as compared
to those based on simple case study methods.
In presenting this research we first provide a
brief overview of literature discussing the linkages
between stakeholders and scalability of inclusive
businesses. We then discuss our conceptual
framework, research questions, methods and
findings.

Linkages between scalability and stakeholders of
inclusive businesses Literature review
Achieving sufficient and rapid scale is integral
to commercial and social viability of inclusive
business. Large companies strive to achieve scale in
their inclusive ventures to make up for the thin
margins with high volumes (Prahalad, 2004; UNDP,
2008; Voveryte, 2011). Scalability is also important
in the context of franchisee-based inclusive
initiatives. The success of the franchisee operational
model is a function of exploiting economies of scale
associated with large organizations while being
flexible enough to localize products, processes and
delivery models (Li & Garnsey, 2012).
However, the achievement of scale is
complicated when it comes to inclusive business
because many different stakeholders need to be
mobilized. As identified earlier, communities,
NGOs, small entrepreneurs, governments and top
leadership of large companies sponsoring inclusive
initiatives are the key stakeholders to any inclusive
business.
(a) Communities: The active participation of
local low-income communities in the co-creative
process helps companies gain vital insights into how
to ensure scalable adoption of their proposed
solutions. Co-creation also accelerates the entire
product development process. Co-creation can also
help communities discover new avenues of growth
and also the market value of some or their unique
skills and knowledge (Kandachar & Halme, 2008;
Simanis & Hart, 2008; Trujillo, Orozco, & Gutirezz,
2009).
(b) NGOs and small entrepreneurs: Through
partnerships with NGOs, companies gather insights
they need to build commercially viable business
models for their IBIs. Moreover, collaboration with
these stakeholders can give inclusive ventures access
to disruptive technologies and processes at much
lower costs. For NGOs and small entrepreneurs,
collaboration with large businesses opens up gates to
doing predictable and scalable business with larger
players with established market credentials
(Karamchandani, Kubzanksy, & Frandano, 2009;
Prahalad & Hammond, 2002).

(c) Governments: Governments are critical
stakeholders for inclusive businesses. They can
partner with an IBI; they can also push through
business-friendly policies. Governments sometimes
have their own established networks of local
suppliers and workers that can be harnessed at very
low cost points. Partnering with them can help
innovation sponsors and managers address on-the-
ground hurdles associated with scaling (Gradl &
Jenkins, 2011).
A balanced regulatory environment protects
the rights of consumers without unduly burdening
industry, and provides a predictable policy climate in
which to operate. Balanced regulation that promotes
inclusive innovations in a particular industry can
help governments promulgate similar regulation in
other industries (Krmer & Herrndorf, 2012).
(d) Top leadership: Top leadership buy-in
provides an inclusive business manager with the
space and resources to experiment with pioneering
business practices. An inclusive business must
operate like a hybrid between a startup and a mature
business. To strike this balance, the leadership has to
be willing to modify its organizational structure to
accommodate both mindsets among employees
involved in inclusive innovations (Gupta & Narsalay,
2010; Prahalad & Mashelkar, 2010).
It needs to be recognized that merely inking
partnerships with reputed non-governmental
organizations and influential entrepreneurs does not
necessarily create the trust in local communities
needed to change consumer preferences. Managers
driving inclusive businesses have come to realize
later that the reputation of many large NGOs and
entrepreneurs does not travel beyond their existing
domain into untested markets (Garette & Karnani,
2010).
Moreover, large companies on many occasions
have been just some of the many clients these
external stakeholders are working with. That has
made it hard for them to attract the lions share of a
stakeholders available resources. In addition,
stakeholders incentive structures have been different
from those of large businesses, leading the former to
pursue different strategies from the latter towards
revenue maximization (Berger & Darmohraj, 2009;
Christensen & Thomas, 2008).
The toughest stakeholder to deal with on many
occasions has been the internal one. Within large
organizations, sponsors and managers of inclusive
businesses have found it extremely difficult to secure
a differentiated treatment for their initiatives from
their directors or boards. Further, when doubts about
an inclusive businesses potential surface, they wont
allocate necessary financial resources to the venture
(Simanis, 2010).


47

Conceptual framework and research questions
Stakeholder theory is the conceptual framework
in which the comparative research in this paper is
grounded. Stakeholder theory and analysis is based
on the assumption that reciprocal relationships exist
between an organization and certain groups and
individuals (Marstein, 2003).These groups and
individuals are called stakeholders, as they have a
stake or claim in the outcome of decision-making.
The stakeholder view of strategy helps define
specific stakeholders and the value they bring to the
business and vice versa. It also examines conditions
under which these parties should be treated as
stakeholders such that their value is maximized
(Donaldson & Preston, 1995).
Based on the literature review conducted, the
linkages of key stakeholders to scalability of
inclusive businesses give rise to six key stakeholder-
driven processes:
1. Sustained buy-in from top leadership and
senior management;
2. Organizational structure reform to suit
business model needs;
3. Co-creation with local communities;
4. Collaboration with governments;
5. Collaboration with NGOs and/or small
entrepreneurs; and
6. Balanced regulatory environment.
However, existing research does not provide a
clear prioritization of these factors and even a close
reading of the (mostly) case study-based literature
does not yield a clear sense as to which conditions
are essential and which are helpful but not essential.

Our research paper investigates:

i. Whether each of the stakeholder-driven
processes is equally important towards ensuring
scalability of inclusive businesses;
ii. The combinations of stakeholder-driven
processes which when applied by inclusive
businesses can yield robust scale.
iii. If the stakeholder-driven processes are
sensitive to the geography in which they are
deployed.
Utilizing the insights gathered from this
investigation, the paper identifies actions which can
be taken to leverage the strengths of these
stakeholders and designs a method that can help
managers and leadership of inclusive businesses
leverage strengths of their key stakeholders to scale
successfully.

Method of analysis
The case study method is the dominant
qualitative analytical tool utilized to generate deep
insights on various dimensions of inclusive
businesses. This is because of the paucity of publicly
available quantitative data on key aspects of
inclusive business. Strictly speaking, therefore,
conclusions based on case studies should be
restricted to the specific companies being discussed.
In other words, a case study approach enhances
ourunderstanding ofcomplexity but cannot be relied
upon to provide generalizable insights (Ragin, 1992).
However, newer analytical techniques such as
qualitative comparative analysis (QCA) allow us to
gain generalizable insights from case studies without
losing their richness and complexity (Rihoux,
Rezshazy and Bol, 2011).
QCA is based on two important assumptions:
(1) that causality in the social reality is complex, i.e.
that different combinations of causal conditions can
lead to similar outcomes; and (2) that the effect of a
condition is dependent on its combination with other
conditions. The method formally presents the values
for the outcomes and the conditions in a so-called
truth table. This table is then reduced by
eliminating redundant factors and finally identifies
combinations of conditions that lead to an outcome.
The goal is to be able to explain all the cases under
study or to explain as many cases as possible. In
order to achieve this, the researcher needs to have the
best possible case knowledge and must be in a
position to conduct repeated dialogue between theory
and evidence. In our research we use the basic form
of QCA, known as crisp-set QCA, in which the
conditions and the outcome can take on only
dichotomous values 0 or 1 (Rihoux & Ragin,
2009).

Sample selection, data collection and application
of QCA software
One of the ways IBIs can address developmental
and livelihood challenges is by bridging
infrastructural and institutional deficits that low-
income communities face. Inadequate infrastructure
hurts the ability of low-income populations to lead
safe, healthy, dignified and productive lives (Juma,
2012; Ghani, 2010). Weak institutions prevent
interaction between low-income communities and
businesses in organized markets (Khanna & Palepu,
2010).
Classic examples of how large companies are
addressing these deficits are as follows: (a) E-
Choupal of ITC Ltd., which has developed physical
and technological infrastructure to aggregate the
collection of local agricultural produce and has made
pricing information readily available to farmers; (b)
Inove Initiative of VALE S.A., which has not only
created business infrastructure for middle and low-
income suppliers from remote locations, but has also
bridged institutional deficits by providing training to
small entrepreneurs in remote locations through
organized partnerships.
A diverse yet comparable sample of 18 inclusive
business initiatives (IBIs) across Brazil, China,
Ghana, India and Nigeria, was constructed (See
Appendix-1). All IBIs in the designed sample:


48

(a) Actively bridge either an institutional and/or
infrastructure deficit as their core business activity;
(b) Have a minimum sales threshold of US$
300 million;
(c) Have won public accolades/praise for their
business model solutions that resolve infrastructure
or institutional deficits; and
(d) Provided us access to senior and middle-
level executives willing to share critical details of
their IBIs on a repetitive basis a critical aspect
towards being able to use the QCA methodology.
The sample did not contain IBI startups or IBIs
launched by NGOs or by communities. It comprised
seventeen companies and one industry collaborative
in sectors such as agriculture, automotives, consumer
products, mining, medical equipment, telecom,
banking and e-commerce.
The contributions of each of the six processes
towards achieving scalable commercial and societal
gains were mapped based on interviews with senior
and middle-level executives from companies in our
sample (see Appendix-2).
The achievements of IBIs in the sphere of
scalable commercial and societal gains were
compared to those of similar inclusive businesses in
the same region. These comparisons were based on
discussions with third-party assessors, academics and
(on some occasions) with local communities
themselves. The IBIs in the sample were marked on
a scale of 1 to 3 towards their societal and
commercial achievements. Illustratively, in the
context of the table mapping commercial gains
(enclosed in Appendix-2), if a company has been
able to create a new market for a product or service
by affecting few households as compared to a similar
inclusive venture, it has been given a score of one.
As a next step, the contribution of each process
to the IBI based on its contribution to scalability (see
Appendix-3) across social and commercial
dimensions was captured. Illustratively, if top
leadership was not providing any support to IBI-
scalability, its contribution was scored as one. These
scores were utilized as inputs in the QCA analysis.
A dichotomous data table mapping the
contribution of processes toward the outcome was
developed. Proper thresholds were created toward
allocating Boolean expressions of 1 or 0, signifying
the intensity of a process towards achievement of a
scalable outcome based on criteria discussed in
Appendix-3.
Using the TOSMANA software, a truth table
(see Appendix-4) mapping the relationship amongst
stakeholder-driven processes with scalability
outcomes was constructed. The truth table helped
identify similar sets of process configurations which
IBIs across different geographies and/or sectors
could be deploying to scale successfully. For
instance, IBIs at Natura (Brazil) and ITC (India), in
spite of being in different geographies, and IBIs at
Haier and Alibaba, from the same geography but
operating in completely different sectors, were found
to be adopting the same combination of stakeholder-
driven process to succeed.
To clearly identify the individual stakeholder-
driven processes and their combinations, we
employed the TOSMANA software to arrive at
expressions to be analyzed.The software provided 8
expressions indicating different combinations of
stakeholder-driven processes driving success in the
configurations descripted in the truth table. These
eight expressions are presented in Appendix-5.

II. ANALYSIS AND RESULTS

Our analysis (in Appendix-4) reveals:
1. seven different configurations (out of a total
of twelve) leading to successful IBI-scalability;
2. one unique configuration (referred to in
theoretical literature as contradictory) being
utilized by a successful initiative but also being
simultaneously deployed by companies on the path
to success; and
3. four configurations compelling companies
to remain on the path to success.

The most significant stakeholder amongst all is top
leadership
As is evident from the truth table (in
Appendix-4) and from the eight expressions (in
Appendix-5), gaining buy-in from top leadership is
the most important process amongst all towards
defining IBIs successful scalability.
On mapping the frequency of appearance of
each of the process-combinations across the eight
expressions in Appendix-5, one comes across three
other process-combinations which occur with the
same level of frequency (i.e. 4 times in the eight
expressions). These combinations are:

1. RECONFIGURING ORGANIZATIONAL
STRUCTURE * COLLABORATING
WITH NGOS/SMALL
ENTREPRENEURS

2. GAINING TOP LEADERSHIP BUY-IN *
COLLABORATION WITH
GOVERNMENT * FOSTERING
BALANCED REGULATION

3. CO-CREATING SOLUTIONS WITH
COMMUNITIES * COLLABORATION
WITH GOVERNMENT * FOSTERING
BALANCED REGULATION

These three process-combinations are also
consistent, i.e. the capability of these combinations
to explain success in cases where there are present is
100%.
To map the most complete (i.e. expressions
capable of fully explaining the IBIs successful

49

scalability), as well as mutually exclusive and
collectively exhaustive (MECE) minimal
expressions, the select if possible option was
utilized to arrive at a list of prime implicants.
Through a manual selection of each prime
implicants in the manual selection window the
following MECE-expressions were arrived at:

MECE expression one: (GAINING TOP
LEADERSHIP BUY-IN * co-creating solutions with
communities) + (RECONFIGURING
ORGANIZATIONAL STRUCTURE *
COLLABORATING WITH NGOS/SMALL
ENTREPRENEURS)

MECE expression two: (GAINING TOP
LEADERSHIP BUY-IN * co-creating solutions with
communities) + (CO-CREATING SOLUTIONS
WITH COMMUNITIES * COLLABORATION
WITH GOVERNMENT * FOSTERING
BALANCED REGULATION)

Paths to successful scalability involve combinations
of stakeholder driven processes
The formats in which stakeholder-driven process
combinations appear in the eight expressions in
Appendix-5 clearly show that none of the process
combinations can sufficiently explain IBI-success
independently.
Moreover, the two MECE-expressions captured
above show that there are two paths which have been
adopted towards achieving successful scalability:

Path one: With a clear focus on gaining a
buy-in from top leadership, some successful IBIs
have reconfigured their organizational structure to
effectively collaborate and leverage the capabilities
of appropriate NGOs/small entrepreneurs.

Path two: With a clear focus on gaining a
buy-in from top leadership, some successful IBIs
have struck effective collaborations with
governments and in parallel worked towards
fostering a balanced regulatory environment to
achieve robust co-creation of solutions with
communities.

Paths to successful scalability are geography
sensitive
Based on further analysis of expressions in
Appendix-5 and the truth table in Appendix-4, the
paths to successful scalability were also seen to be
geography sensitive.
In Brazil and India, NGOs continue to play a
central role in spurring social change within
communities, and small entrepreneurs are driving
next-generation technologies. Here, sponsors and
managers of the inclusive initiatives in our sample
were seen to achieve scale by combining two
processes: collaboration with NGOs and small
entrepreneurs, and organizational structure reform.
By contrast, in China, balanced regulation and active
governmental support helped the ventures in the
sample achieve rapid scale.

III. FINDINGS

Based on our analysis till now, we can say that:

i. The most significant stakeholder is within the
firm, viz. the top-leadership of the parent firm. IBI-
leadership and managers must work very closely
with the board and senior management of their
parent firm. Securing their sustained buy-in is vital
for IBI-scalability.
ii. Stakeholder-driven processes yield the best
results when they are deployed in combinations and
not singularly. We saw only one contradiction to this
result in the context of a successful Indian IBI,
wherein besides having top leadership support, the
IBI had successfully scaled only by reconfiguring its
organizational structure. On further inquiry we found
that this exception had occurred as the organizational
structure reform carried out by the top leadership to
support the IBI was so deep that it spun out
entrepreneurial-cells within the larger organization.
The organization therefore never felt the need to
collaborate with entrepreneurs external to the
organization.
Along with support from top leadership of the
parent company, there are two typical combinations
of stakeholder-driven processes that IBI-leadership
and managers can explore:
a. Co-creating with communities to achieve
desired scale by effectively partnering with
government departments and through balanced
regulation; and
b. Collaborating with NGOs and smaller
entrepreneurs to achieve desired scale through
organizational structure reform.
iii. The combinations discussed above are
sensitive to IBI-geography. Hence IBI-leadership
and managers cannot afford to be location-
insensitive while making a choice of process
combinations.

Integrating these findings to design actions
IBI leadership and managers must integrate
these findings to design actions towards achieving
robust scale. To help them achieve this goal,
enclosed below are a few actions taken by successful
IBIs in our sample to leverage the capabilities of all
stakeholders. These insights have been derived from
interviews conducted across the business entities in
the sample.
iii

Driving scale through top leadership support
Its critical to encourage top leadership to have
a personal stake in building venture scalability. In
India, Hindustan Unilevers CEO fostered high-level

50

commitment to IBIs by building a decision-making
structure that appealed to the boards entrepreneurial
spirit. After a 15-month exploration process, HUL
selected six ventures for further investment over the
next three years. HULs board effectively operated
as venture capitalists, granting project managers
resources in the form of people, money and
specialized company expertise. Team leaders were
also given scalability milestones, and teams were
allowed to move to the next level of venture funding
only after reaching them.
This competitive, entrepreneurial environment
kept board members heavily involved in the
inclusive ventures, even though these ventures
accounted for only a small part of the companys
bottom line. Board members readily provided
guidance to project teams and used their contacts to
open doors both within and outside HUL.
Only two out of the six IBI ideas survived the
three-year test period. One was Pureit, a water
purifier. The other was Project Shakti, the
landmark inclusive business initiative in which
thousands of village women (and now men) have
brought HULs products to rural India.
In most cases, leaders take a keen interest in the
near-term impact of a new initiative on the
companys bottom line. Yet, sponsors and managers
of the most successful inclusive business initiatives
also encourage top leadership to take a longer-term
view.
Consider the example of Natura, a large
Brazilian consumer goods and cosmetics company.
The cosmetics giant has made the need to preserve
biodiversity in the Amazon a key tenet of its business
model and organizational culture. As one company
executive noted during the interview, the model was
built on a single question: How can we create a
business that helps develop Amazon communities
without jeopardizing the ecosystem?
Through the Murumuru seed project, the
company contributed to the preservation of more
than 37,500 trees and supported more than 700
families. The initiatives success encouraged top
management to promote additional similar
initiatives. Several thousand families are
participating in these new efforts, and the projects
have helped preserve valuable flora in the Amazon.
Adopting this long-term view has helped the
firm build unique competitive strengths. For
example, it has been able to launch a new line of
natural cosmetics, Natura Ekos, by drawing on local
knowledge. It has also developed a supply chain, and
high-quality relations with communities and multi-
sectoral stakeholders that competitors cant match.

Leveraging government support and regulation to
co-create with communities
Co-creating with communities can get a fillip
and scale if government regulations are seen as an
opportunity to extract better terms of partnership.
In 2009, the Chinese government passed a law
that offered rural consumers subsidies on the
purchase of fuel-efficient vehicles.
SAIC-GM-Wuling, the joint venture of General
Motors, Shanghai Automotive Industry Corp., and
Liuzhou Wuling Motors Co., capitalized on this
opportunity. It developed a series of sturdy minivans
selling in the neighborhood of US$ 5000. These
became especially valued in rural China not only for
personal transportation but also for business; and
with their small engines1.6 liters or smallereach
minivan qualified for a government subsidy of up to
RMB 3,000 (US$ 470).
The affordability of cars for low-income
communities stimulated sales and interest in the
vehicle in remote regions of China. Small
entrepreneurs and farmers using this vehicle to
transport their goods have made valuable suggestions
to the company which in turn help the company
make the vehicle more customer friendly and usable.
The speed with which the Chinese government
acted to improve the viability of the companys IBI
encouraged the firm to take on the Guangxi
provincial government as a key stakeholder. That
government currently owns a 5.9 percent stake in
SAIC-GM-Wuling. And it has been instrumental in
providing the company with timely access to land,
funding and utility infrastructureall of which are
critical for SAIC-GM-Wulings production
expansion plans. By the end of 2009, GM Wuling
had become the only Chinese manufacturer in this
segment to have produced and sold over a million
automobiles in a single calendar year; the company
continues to be the segments leader.
Another way of leveraging government support
to co-create with communities is by developing win-
win-win solutions.
UNICAan association that represents more
than 140 Brazilian sugarcane millsis a case in
point. In Brazil, the sugarcane industry has long
relied heavily on laborers who cut cane by hand. In
2007, Sao Paulos Department of Environment
demanded that the industry gradually eliminate the
burning of foliage in sugarcane fields prior to their
harvest. Mechanization of the harvesting process
therefore became an imperative.
But this change would put thousands of cane
cutters out of work. In 2009, sugarcane producers,
under the umbrella of UNICA and the cane-cutters
union, and with the support of companies from the
sugarcane supply chain, launched the RenovAo
(Renewal) program aimed at providing specialized
training for about 3,500 cane cutters in Sao Paulo per
year. Courses offered by RenovAo were developed
through an analysis of local communities needs
conducted by UNICA and the cane-cutters union.
The information collected was submitted to an
executive committee comprising representatives of
organizations, local unions and partner companies,
who collectively define the programs objectives,

51

determine the courses to be offered, select
educational institutions that will offer them and
monitor the outcomes.
RenovAo has become a win-win-win
initiative. It benefits cane cutters, the sugarcane
industry and the local government.

Scaling with NGOs and small entrepreneurs through
organizational-structure reform
Because a for-profit organization may be able to
achieve scale faster than a nonprofit initiativeit
will certainly have the incentive to do soIBI
leaders may want to rethink their NGO relationships.
Changing the ownership model is one way of doing
so.
Africa-based Esoko shows how this can be done.
Initially established as part of FoodNet, a nonprofit
food initiative, Esoko uses SMS messaging to gather
and disseminate market datasuch as produce and
meat pricesthrough mobile devices among traders
and low-income farmers in Africa. As a not-for-
profit initiative, Esoko relied heavily on NGO and
government financing to bring its low-cost,
subscriber-based service to African farmers.
In 2009, the initiative was rebranded as Esoko
and began efforts to transition to a profit-driven
venture. Although the company possessed a
sophisticated technology platform in agro-
informatics, it lacked the financial clout and local
relationships to achieve scale on its own. In an effort
to increase its reach and guarantee long-term
commercial viability, the company launched a
franchise model, which aimed to build on its existing
relationships.
Esokos model encourages governments, NGOs
and private-sector organizations to become
franchisees and to use their local connections to
build a profitable agro-information service based on
Esokos technology platform. Esoko provides
franchisees with a tool-kit, which contains marketing
materials and information about Esokos
standardized pricing for its service. Currently,
franchisees have been authorized in fifteen countries
across Africa.
Providing IBI managers with the flexibility and
freedom to make decisions about a projects
organizational structure is critical to ensuring
effective collaboration with local non-business
stakeholders. The organizational structure created for
ITCs e-Choupal project offers an apt example.
While drawing heavily from its original business
model, ITC realized that it had to modify the model
to support the e-Choupal initiative. The firm did so
by adding two new layers of responsibilities to
employees and managers roles. The first new layer
was designed to address the lack of detailed and real-
time information about low-income customers tastes
and preferences. ITC employees were tasked with
investigating farmers aspirations, and senior
managers were charged with making business-model
innovations.
These new responsibilities streamlined the
innovation-to-execution process by enabling project
team members to draw more useful insights from on-
the-ground market realities. As e-Choupals business
expanded into low-income markets across India, the
firm added the second new layer of responsibilities,
aimed at exploiting operational efficiencies from the
initiatives growing scale. New supply chain duties
for middle management enhanced efficiencies in the
IBIs back-office operations. Meanwhile, higher-
level management focused on capturing synergies
between the e-Choupal business and ITCs
traditional business.

The three-step approach for inclusive businesses
Based on the analytical journey in this paper, the
authors recommend a three-step process to be
adopted by IBI-managers and leadership to scale
successfully.
Step 1: Map stakeholder-driven processes
relevant to the IBI: This paper already identifies six
such processes. The inclusive business managers and
leadership could utilize these processes, identify new
ones, or choose those amongst the six by examining
their relevance to their inclusive venture.
Step 2: Identify those stakeholder-driven
processes and stakeholders which can help you
achieve robust scale: It is recommended that
inclusive businesses use robust methods to identify
the most vital stakeholder-driven processes and, with
the help of these, the critical stakeholders for scaling
their ventures. IBI leadership and managers must be
very sensitive towards the local palatability of these
identified processes.
Step 3: Design actions to leverage the strengths
of identified stakeholders and achieve scale: On
identifying the vital stakeholders, it becomes
pertinent for the IBI-leadership and managers to
design a set of actions to leverage the firepower of
their key stakeholders. The paper identifies actions
which can be emulated, but recommends that each
IBI design its own set of actions based on
organizational and local realities.

IV. CONCLUSIONS

This paper began with highlighting the two-
tiered challenge faced by leadership and managers of
inclusive businesses in the context of achieving
quick and robust scalability through involvement of
external and internal stakeholders.
The tier-one challenge identified was about
being able to quickly choose appropriate
stakeholders relevant to achieving robust scalability;
and the second-tier challenge was about identifying
actions required to be taken to leverage the strengths
of these stakeholders to scale rapidly and robustly.
Using the conceptual framework of stakeholder

52

Using the conceptual framework of stakeholder
analysis and deploying the crisp-set QCA technique
on a sample of 18 comparable IBIs, bridging
infrastructure and/or institutional deficits this paper
has provided insights in addressing the tier-one
challenge.
The paper reveals that the most significant
stakeholder in the context of IBIs analyzed is the top-
leadership of the parent firm. The study also found
that stakeholder-driven processes yield the best
results when they are deployed in combinations.
Most importantly, the analysis revealed that
process combinations of IBIs are sensitive to IBI-
geography. Hence, IBI-leadership and managers
cannot afford to be location-insensitive while making
choice of process combinations.The results obtained
from the analysis have wide applicability: they can
be applied to IBIs with similar descriptions, given
the robustness of the method applied towards the
analysis.
The paper also lists a set of actions which IBI
leadership and managers can take to leverage the
strengths of their stakeholders in order to achieve
rapid and robust scale, thereby addressing the tier-
two challenge.
Based on the cumulative insights acquired
through the analytical journey, the research
culminates by recommending a three-step method
which can be applied by inclusive businesses to scale
successfully.

Recommendations for future research and related
actions

i. More robust comparative empirical research
is required to be carried out at a sectoral and
geographic level to specifically explore the role of
stakeholders in shaping scalability of inclusive
businesses. This will help governments to design
policies that foster inclusive innovation in individual
sectors.
ii. A collaborative effort is required towards
creating an authentic and comparable database of
inclusive businesses. This database needs to contain
data on key financial and social variables associated
with the initiative.

----------------------
(Our sincere thanks to our co-researchers: Dirk Boehe and
Sergio Lazzarini, INSPER, Brazil; John Gong, University
of International Business and Economics (UIBE), China;
Femi Giwa and Tunji AdegbesanLagos Business
School, Nigeria; and Aarohi Sen, Cherry Lu Cui, Manisha
Sahni, Smriti Mathur, and Soh Kai Wee, Accenture and to
our research advisory team: Robert J. Thomas, Accenture
and Tarun Khanna, Harvard Business School)

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-----------------------------------------
i
In the context of this research, low-income populations are
those with a per capita income of less than US$ 4500 per
year in terms of purchasing power parity.
ii
The authors recognize that there are three dominant
approaches to scaling: (a) scaling-up; (b) scaling-out; and
(c) combinational approach. This research follows a
slightly different approach to scaling which has been
covered in Appendix-2.
iii
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discussed in this section and others in the sample is being
developed by Accenture and will soon be launched.


54

APPENDICES

APPENDIX 1: SAMPLE OF COMPANIES

No.
Company/
Country
Sector
Key infrastructural deficit
addressed
Key institutional deficit
addressed
IBI business
structure
1 Vale/Brazil Mining
Created business
infrastructure for middle and
low-income suppliers from
remote locations.
Provided training to small
entrepreneurs in remote
locations through
organized partnerships.
Homegrown
2 Natura/Brazil
Consumer
products
Developed supply chain and
innovation infrastructure to
build onindigenous
knowledge and materials with
the goal of creating wealth in
and through low-income
communities.
Developed systems to link
local knowledge and
indigenous communities
to markets.
Homegrown
3 Itau/Brazil Banking
Collaborated with local
vendors to provide finance to
small entrepreneurs and low-
income households.
N/A Homegrown
4 UNICA/Brazil
Agricultural
products
N/A
Collaborated with
sugarcane cutters, their
unions and companies to
create institutions for
training cane cutters and
identifying suitable job
opportunities for them.
Industry
collaboration
5 Klabin/Brazil
Agricultural
products
Provided collateral to farmers
to help them access credit
facilities through organized
banks.
Created new institutions to
secure better returns on
forestry products produced
by farmers.
Homegrown
6 Siemens/China
Medical
equipment
Built healthcare and
diagnostic centers across parts
of rural China.
Developed an extensive
program to train doctors in
rural locations.
MNC
subsidiary
7 Haier/China
Consumer
products
N/A
entrepreneurs to create
reliable franchise
networks in remote
villages.
Homegrown
8
SAIC-GM-
Wuling/China
Automotive
Created an affordable
transportation platform for
rural farmers and enterprises
to engage with urban markets.
N/A
Joint venture
among
government, a
domestic
private-sector
company and
a foreign
company.
9 Nokia/China
Telecommunic
ations
partners to develop handset
applications connecting low-
income populations to
organized markets.
Established an extensive
sales channel in third- and
fourth-tier townships as
well as rural areas in
China with the support of
local communities.
MNC
subsidiary
10 Alibaba/China E-commerce
Developed an e-marketplace
platform that helped furniture
makers overcome poor
physical infrastructure and
reach urban markets.
N/A Homegrown


55

APPENDIX 1: SAMPLE OF COMPANIES (CONT.)

No.
Company/Co
untry
Sector
Key infrastructural deficit
addressed
Key institutional deficit
addressed
IBI business
structure
11 ITC/India
Agricultural
products
Developed physical and
technological infrastructure to
aggregate the collection of
local agricultural produce and
make pricing information
readily available to farmers.
N/A Homegrown
12
Tata Motors/
India
Automotive N/A
Created an accessible
training platform for rural
youth.
Homegrown
13
Hindustan
Unilever/India
Consumer
products
N/A
Created a sustained
platform for training
women from remote rural
villages to become
successful entrepreneurs.
MNC
subsidiary
14
YES Bank/
India
Banking
Created technological and
business infrastructure in
collaboration with warehouses
and vendors to make financial
services accessible to remote
and low-income populations.
N/A Homegrown
15
Idea Cellular/
India
Telecommunic
ations
Partnered with local grocery
stores to overcome poor sales
infrastructure in rural markets.
Created institutional
mechanisms as part of its
business model to train
and employ rural
graduates.
Homegrown
16 Esoko/Ghana
Agricultural
products
Facilitated agricultural e-
commerce through a web-
based market information
platform.
N/A Homegrown
17
Promasidor/
Nigeria
Consumer
products
Created a distribution system
to acquire and distribute milk
at affordable rates.
N/A Homegrown
18 Nestle/Nigeria
Consumer
products
Provided farmers with
technical assistance to reduce
costs related to pesticide use.
Created courses to train
farmers on how to
increase their income
through more effective
crop planning.
MNC
subsidiary


56

APPENDIX 2: SCALABLE IBIs

Companies and communities stand to benefit in many ways through IBIs. The gains may be intangible or tangible. They
could be commercial or largely societal in nature. This scorecard allows IBI managers to rate the success of their own
initiatives. We rated benefits accruing to companies and society from the implementation of shortlisted IBIs, based on the
scale at which they realized these gains in comparison to similar initiatives in their respective countries. In many cases, not
all gains accrued to either communities or companies implementing IBIs.

Benefits to the company from
execution of an IBI
Ratings provided to the company by comparing its gains with those
accruing to other companies implementing comparable inclusion
initiatives in the same geography
Total score
On the Path to
Success: The
company achieved this
benefit by affecting a
few households rather
than a large section of
the community.
Successful": The
benefit by affecting a
large section of the
community in the
context of the sector(s)
directly linked to the
initiative.
Very successful": The
benefit by affecting
various communities
across different sectors.
1 2 3
Gaining respect from peer
businesses

Gaining respect from the IBIs
beneficiaries

Creating a new market for a product
or service

Forming profitable partnerships with
vendors, small entrepreneurs or
NGOs

Cementing public or private
partnerships or other collaborative
arrangements with government
bodies

Getting the government to
promulgate relevant regulations or
pass favorable legislation

Conserving resources or reducing
consumption of resources

Finding and tapping skilled and
more affordable pools of labor

TOTALS

57

APPENDIX 2: SCALABLE IBIs (CONT.)

Benefits to local communities from
execution of an IBI
Ratings the initiative as compared to other similar initiatives conducted
by other companies in the same geography
Total score
"On the path to
success": Benefit is
being enjoyed by a few
households or
individuals.
"Successful": Benefit
is being enjoyed at a
community-wide level
but restricted to
sector(s) directly
linked to the initiative.
"Very successful":
Benefit is spread across
communities or sectors
over and above those
directly linked to the
initiative.
1 2 3
Helping people acquire or strengthen
skills required by the market

Making organized markets
accessible to communities

Helping communities complete
transactions affordably and safely in
organized markets

Improving the performance or
convenience of resources, products
or services, or lowering the cost of
using resources, products or services

Elevating peoples social and
economic prestige

Creating alternative job
opportunities for local residents

Helping local communities conserve
resources or reduce consumption of
resources

Helping collaborators gain access to
new networks or markets

TOTALS


58

APPENDIX 3: EVALUATING THE SUCCESS OF AN IBI AGAINST KEY PROCESSESS

The figures below can help IBI managers assess their own ventures, or understand what it will take to achieve success.

Scores
Stakeholder-driven
processes
1 2 3 4
Sustained buy-in
from top leadership
and senior
management
Top leaders such as the
CEO or board members
provided no support.
Top leadership helped
conceptualize the IBI
but did not take an
active interest in
implementing it.
Top leaders participated
at a moderate level in
conceptualization and
implementation of the
IBI.
Top leaders
participated actively in
the conceptualization
and helped the IBI
achieve scale.
Organizational
structure reform to
suit business model
needs
Organizational
architecture was not
changed to implement
the IBI.
Senior managers
adopted additional
responsibilities to
implement the IBI.
Senior, middle and
junior-level managers
adopted additional
responsibilities to
implement the IBI.
A completely new
organizational architecture
emerged as the IBI
evolved to successfully
scale the initiative.
Co-creation with
local communities
No one generated
knowledge, solutions or
programs with targeted
communities.
Targeted communities
participated only in the
execution stage of the
IBI.
Targeted communities
helped conceptualize
and execute the IBI.
Active participation of
targeted communities
was essential for
enabling the IBI to
achieve scale.
Collaboration with
governments
Government had no
involvement in the IBI.
Government provided
support but no resources
or any other direct
support to the initiative.
Government provided
resources to execute the
IBI or made policy
changes to support
execution and scaling
of the initiative.
The initiative owes its
scalability to support
from government.
Collaboration with
NGOs and/or small
entrepreneurs
NGOs and small
entrepreneurs had no
involvement in the IBI.
They collaborated but
did not share any risks
associated with the IBI.
They had a stake in and
assumed sufficient risks
related to the IBI.
The initiative owes its
scalability to collaboration
with NGOs and/or local
entrepreneurs.
Balanced regulatory
environment
The formal or informal
regulatory environment
created barriers to
execution of the IBI.
The regulatory
environment had no
impact on execution of
the IBI.
The regulatory
environment provided
indirect support for
execution of the IBI.
The regulatory
environment was
directly responsible for
execution and scaling
of the IBI.

APPENDIX 4: TRUTH TABLE

P1 Sustained buy-in from top leadership and senior management;
P2 Organizational structure reform to suit business model needs;
P3 Co-creation with local communities;
P4 Collaboration with governments;
P5 Collaboration with NGOs and/or small entrepreneurs; and
P6 Balanced regulatory environment
A companies based in Nigeria and Ghana
B companies based in Brazil
C companies based in China
I companies based in India
P1 P2 P3 P4 P5 P6 Companies*
1 1 0 0 1 1 B1, I1, A1
1 1 0 1 1 1 B2
1 1 1 0 1 0 B3, 12
1 0 1 1 1 1 B4
0 0 0 1 0 1 B5
1 0 1 1 0 1 C1, C2
1 1 1 1 0 0 C3
1 1 1 1 0 1 C4
1 1 0 0 0 0 I3, I4, C5**
1 0 1 0 1 1 A2
0 1 0 0 1 0 I5
1 0 0 0 1 1 A3

* Names of companies have not been disclosed due to reasons of confidentiality.
**The highlighted row contains configurations leading to contradictory outcomes

59

APPENDIX 5: EIGHT PROCESS CONFIGURATIONS BASED ON QCA ANALYSIS

(Mention of a particular process in capital letters implies presence of a process, and in small letters implies its absence from
a process-combination)
EXPRESSION ONE: GAINING TOP LEADERSHIP BUY-IN * co-creating solutions with communities +
RECONFIGURING ORGANIZATIONAL STRUCTURE * COLLABORATING WITH NGOS/SMALL
ENTREPRENEURS + GAINING TOP LEADERSHIP BUY-IN * COLLABORATION WITH GOVERNMENT *
FOSTERING BALANCED REGULATION
EXPRESSION TWO: GAINING TOP LEADERSHIP BUY-IN * co-creating solutions with communities +
RECONFIGURING ORGANIZATIONAL STRUCTURE * COLLABORATING WITH NGOS/SMALL
ENTREPRENEURS + CO-CREATING SOLUTIONS WITH COMMUNITIES * COLLABORATION WITH
GOVERNMENT * FOSTERING BALANCED REGULATION
EXPRESSION THREE: GAINING TOP LEADERSHIP BUY-IN * co-creating solutions with communities +
COLLABORATING WITH NGOS/SMALL ENTREPRENEURS * fostering balanced regulation + GAINING TOP
LEADERSHIP BUY-IN * COLLABORATION WITH GOVERNMENT * FOSTERING BALANCED REGULATION
EXPRESSION FOUR: GAINING TOP LEADERSHIP BUY-IN * co-creating solutions with communities +
COLLABORATING WITH NGOS/SMALL ENTREPRENEURS * fostering balanced regulation + CO-CREATING
SOLUTIONS WITH COMMUNITIES * COLLABORATION WITH GOVERNMENT * FOSTERING BALANCED
REGULATION
EXPRESSION FIVE: RECONFIGURING ORGANIZATIONAL STRUCTURE * COLLABORATING WITH
NGOS/SMALL ENTREPRENEURS + co-creating solutions with communities * COLLABORATING WITH
NGOS/SMALL ENTREPRENEURS + GAINING TOP LEADERSHIP BUY-IN * COLLABORATION WITH
GOVERNMENT * FOSTERING BALANCED REGULATION
EXPRESSION SIX: RECONFIGURING ORGANIZATIONAL STRUCTURE * COLLABORATING WITH
NGOS/SMALL ENTREPRENEURS + co-creating solutions with communities * COLLABORATING WITH
NGOS/SMALL ENTREPRENEURS + CO-CREATING SOLUTIONS WITH COMMUNITIES * COLLABORATION
WITH GOVERNMENT * FOSTERING BALANCED REGULATION
EXPRESSION SEVEN: co-creating solutions with communities * COLLABORATING WITH NGOS/SMALL
ENTREPRENEURS + COLLABORATING WITH NGOS/SMALL ENTREPRENEURS * fostering balanced regulation +
GAINING TOP LEADERSHIP BUY-IN * COLLABORATION WITH GOVERNMENT * FOSTERING BALANCED
REGULATION
EXPRESSION EIGHT: co-creating solutions with communities * COLLABORATING WITH NGOS/SMALL
ENTREPRENEURS + COLLABORATING WITH NGOS/SMALL ENTREPRENEURS * fostering balanced regulation +
CO-CREATING SOLUTIONS WITH COMMUNITIES * COLLABORATION WITH GOVERNMENT * FOSTERING
BALANCED REGULATION

60

South Innovation: Unlocking Country
Potentials

Adik Bandoro
Jakarta, Indonesia
adikbandoro@gmail.com; abandoro@southsouth.org

Abstract--This paper is a contribution to the discussion
on the Agenda forSouth-South Cooperation for
Inclusive Innovation. South countries are rich in
innovations and innovation takes place outside formal
institutions. South innovation, whether indigenous or
adapted innovation is vibrant, but South countries do
not realize its full potential. South countries are rich in
local innovations,but some of them are marginalized
though they may be more appropriate to local
conditions. South countries are facing challenges in
promoting their innovations and this is due to lacks of
institutional support, recognition, accessibility and
funding. For South innovations to be sustained, they
should move from the periphery to the center of
development.

Key words-- South countries, innovation, marginalized,
sustainable.

INTRODUCTION: FROM MARGINALIZATION
TO SUSTAINABLE INNOVATION
The term innovation popularized by Joseph
Schumpeter,has now become a new icon in
development agenda. In the early era of innovation,
innovation usually referred to activities with
emphasis on technological progress and radical
innovation. Innovation which wasderived from
research and development attracted more audience
because it is dominantly linked to economic as
stated by Joseph Schumpeter innovation is a
process by which new products and techniques are
introduced into the economic system. (Schumpeter
1947). These views have led to an understanding
that innovation is much related to technology and
thus focues more on research and development as the
commercial and competitive possibilities for
economic growth. Schumpeter was not alone in
defining innovation. In the late 1940another author
explicitly addressed changes or novelties of rites,
techniques, costumes, manners and mores as
innovation (Kallen,1949; Hochgerner, 2009).
The two tracks of thought:one track of
innovation related to economics and technology
which relates to the Schumpeterian and the other
track of innovation related to social and cultural
changes (Kallenian), have their own followers.
However, it seems that theSchumpeterian concept of
innovation was more accepted by companies and
industrialist in North America and Europe since they
were trying to rebuild their economy and industries
torn by the Second World War. The Schumpeterian
concept has received a lot of attention until today.
An OEDC literature reference on the study of
technological innovations best captures the essence
of innovation: Innovation is an interactive process
initiated by the perception of a new market and/or
new service opportunity for a technology-based
invention which leads to development, production,
and marketing tasks striving for the commercial
success of the invention (OECD, 1991). It is
undeniable that technology innovation has deeply
affected the dynamics of global production chains,
with large implications for both fast emerging and
least developing countries.
Though, the Kallenian concept of innovation
has not received much audience as compared to
Schumpeterian in the 60s and 80s and still up to now,
however, with globalization and development
challenges becoming so complex and altering not
only economic but social and cultural development,
the issue of cultural and social innovation is
prevailing and getting more attention. The
perception that innovation emphasizes technology
and is related to economics has now broadened,
taking into account non-technological aspects of
innovation that do not primarily aim at economic
output, or to address it more explicitly profits
(.Hochgerner, 2009). Many findings in development
issues showed that the pillars of development
encompass a very broad spectrum of innovations
including social, cultural and indigenous innovation.
The complexity of globalization has influenced the
development of innovation in South countries.
Globalization and economic liberalization have
fuelled the rapid economic growth of economies of
many South countries, but they have also increased
the vulnerability of these economies to external
61

shocks. The current multi complex challenges have
encourage South countries to find solutions to
their development challenges that can well fit their
local context by creating innovative solutions not
only based on science and technological advance.
Srinivasa, Smita and. Sutz,Judith, argued that
technological innovations originating from
industrialist countries do not support such
optimism that innovation and invention will reect
the particular needs of the economic environment in
this case in South countries (Srinivasa, Smita and.
Sutz, Judith, 2008). Moreover, technologies from
abroad may not be appropriate for the economic and
social conditions of developing countries. (Fu,
Pietrobelli, Soete, 2011 ).
The issue in this paper is not to debate on
whether technological innovations from abroad are
appropriate or not for developing countries, or
debating between technological innovation versus
social or indigenous innovation. Both innovations
have their own merit as strategic variables in any
development process. Combining technological
innovation with social and indigenous innovation can
actually create innovation symbiosis that can lead to
developing creative and innovative solutions that are
culturally acceptable, economically feasible and
environmentally sustainable for the society being
aided (Mehta and Mokashi-Punekar, 2008). No
doubt that some South countries are catching up with
current technological development such as Brazil,
China, and India. These countries are quickly
catching up with the leading industrial countries, and
this process is becoming a remarkable economic
force that is influencing the world economy. On the
other hand, it has now been recognized that
indigenous and social innovations are crucial
especially for low income economies in order to
achieve their national development goal.
Most of the technology innovations in
developing countries are generically imported or
generated abroad; therefore, most of the
technological innovations are based on adopting,
adapting, imitating and improving foreign
technologies, (Maharajh,and Kraemer-Mbula,2009)
and the generation of innovations in South countries,
takes place largely outside of formal sectors and
institutions, in the informal economy. The informal
economy constituted the livelihood of an average of
half to three quarters of the urban active population
in LDCs from 1990 to 2004 (Maharajh,and
Kraemer-Mbula, 2009). Moreover, current trends in
urbanization, unemployment and population growth
suggest that the informal economy in South countries
especially LDCs can be expected to grow.
Regardless of technological innovation or
indigenous and social innovation, many of these
innovations are emerging in South countries. The
emergence of these diverse innovations in South
countries, whether it is local and rooted innovation or
localized imported or adopted innovation, indicates
the presence of innovations as important componens
in the development process. However, the real
strength and value of these innovations that can play
a strategic role in development process and
contribute to the competitiveness of national
economy need to be reveal. There are many South
innovations which have been proven to contribute to
the economic and social empowerment of local
communities, but remain isolated from the
mainstream of the development process. In fact there
are innovations supported by the government that
remain in the shade because there is no systematic
planning on how to diffuse these innovations.
Equally, technological innovation in small-scale
informal urban and rural businesses has not received
the necessary attention. With so many innovations
scattered in a developing country, efforts are needed
so that innovation can significantly contribute to
national development. Beside the need to unearth
the marginal innovative activities generated by local
community and businesses, whilst not pursued
further in this paper, there is a need also to unlock
their potential so that they can be part of the national,
regional and global endeavor.
This paper therefore, is much concerned with
how the isolated and unreachable innovations are
directed and uplifted as potential innovations in
development process. There are fourareas that this
paper will try to observe:
1. Political and Policy Framework
2. Recognition
3. Accessibility
4. Funding
This paper will observe, among other
examples, policies that have resulted in the
scaling up innovations and examines the factors that
influenced the successful scaling up of the
innovations. It will also look at the impediments in
scaling up the innovations. The paper therefore
provides a starting point for further research about
how the four areas could transform marginal
innovative activities into sustainable innovations that
have wider impacts and stronger links with the
formal sector and potentially generate improvement
62

and enhancement of strategic innovation in response
to emerging challenges in developing countries.

UNLOCK # 1: POLITICAL AND POLICY
FRAMEWORK
When the President of Uganda Yoweri Kaguta
Museveni, visited the College of Engineering, Art,
Design and Technology, Makerere University in
2009, he was very impressed with the variety of
innovations developed by the College. This inspired
the President that such innovation will help the
countrys development program. To support the
College activities, the President then issued a
directive to financially support the innovations at the
College by allocating UGX 25 Billion which were
spread over a five year period with UGX 5 Billion
committed to the Financial Year Starting July 2010.
The Presidential Innovations Fund for the College of
Engineering, Art, Design and Technology was then
adopted by the Government of Uganda as part of its
strategy to build the countrys scientific and
technological innovation capacity to facilitate its
development efforts on a sustainable basis.
In 2010, Indian Prime Minister Manmohan
Singh declared the years 2010-20 as Indias
Innovation Decade. He followed this up by
appointing a high profile National Innovation
Council to evangelize the cause of innovation and
spread an innovation culture across the country. The
President wanted innovation to address the issues of
problems of poverty, health and environment rather
than focusing on the needs of the rich. Innovation
can be a game changer to move from incremental
change to radical change, he said. The government
then followed up by creating the National Innovation
Council to draw a national innovation road map.
Speaking at a forum on innovation in
Barranquilla in 2009, the Vice President of
Colombia, Francisco Santos said that the country's
needs to rapidly accelerate the progress of its
innovation system launched in the early 1990s to
help the country compete on the international stage.
His announcement was well-received by the science
and technology community as a sign that the
government is taking innovation seriously.
During the High-Level Meeting on South-South
Cooperation, in July 2011, the Vice President of
Indonesia, announced Indonesia's readiness to
become a Knowledge Hub for South-South and
Triangular Cooperation in three areas: development
issues related to energy and food security, and
community-driven disaster mitigation; governance
and peace building; and macro-economic
management. This initiative can encourage other
nations to work with Indonesia and other emerging
countries in order to expand innovation.
The above are a few examples of how a
countrys leader can inspire, encourage, play a
catalytic role and resourceful in supporting
innovation. They also show the importance of
innovation in addressing the emerging issue of
developing countries such as poverty, health and
environment. The political commitment of a
countrys leader mentioned above is clearly
concomitant with the increasing recognition that
knowledge, new technology and innovation are
crucial to progressive socioeconomic development
and vital for a countrys competitiveness in
international markets. However, political
commitment needs to be backed by policies,
instructions and incentives that translate commitment
into action. In many cases while the top of the
political tree produce enthusiastic visions about the
importance of innovation to development, the
branches of the government may not be in the same
line of vision. A fragmented policy on innovation is
one of the challenges facing developing countries to
promote and enhance innovation. The whole tree of
government needs to understand that innovation goes
far beyond traditional science and technology but it
actually addresses the overall innovation climate
which needsthe functional role of the government
that facilitate, reduced obstacles, responding to the
need and demand of businesses and community.
The government initiatives have a significant
impact on innovation activity. Government policies
which seek to increase the rate of innovation have
become more widespread and have deepened with
feedback from the learning-through-implementation.
Innovation policy is therefore increasing its
significance in generating initiatives for the
promotion of improved the country-level innovation
(OECD, 2012). Therefore, governments should
establish a sound policy on innovation which ensures
that new innovations are developed and diffused
throughout the country and suited to the local
context. This entails that fostering innovation
involves joint participation of multi stake holders
including working with civil society and parliaments,
coordination, and coherence of policies.
Coordination to innovate needs to be vertical as well
as horizontal. Innovation, even at the individual
level, will only be successful if integrated into the
broader development process.
Most of the innovation policies in developing
countries are generally geared toward incremental
knowledge rather than innovating at the technology
frontier: they target the acquisition of technological
63

capabilities that allow developing economies to
benefit from the existing backlog of knowledge.
Nevertheless, the long-term goal is to progressively
move up the technology ladder through a virtuous
interactive and cumulative process that links foreign
knowledge to domestic knowledge (Wamae, Watu,
2006). With the complexity and dynamism in
innovation the government needs to design
innovation policies that are flexible, participatory
and anticipatory and that target marginal and isolated
innovations.
In essence, to be able to achieve sustainable
innovation, political leaders must establish an
environment conducive to encouraging creativity and
innovation in all level of the development process.
A well designed and planned policy framework to
support innovation should take into account local
conditions, economic inequities, demographic
challenges and informal economic activity.

UNLOCK # 2: RECOGNATION
In 2001, an earthquake caused destruction to
most of the Morbi area, in Gujarat, India. Many
people of Morbi, Rajkot who are mostly poor
depended for their daily activity on earthen pots to
store water, cook and for other household uses.
Mansukh Prajapati, a local of Morbi, whose family
run a traditional business in pottery, one day saw
broken earthen pots appear in newspaper. This
inspired him to create earthen pots which are
affordable by the local people of Morbi who are
mostly poor. He then designed storage type
refrigerator made entirely of clay to store vegetables,
milk and fruits without deteriorating quality for 2 to
3 days. The storage type clay refrigerator Mitticool
requires no electricity or any artificial energy and
therefore no recurring cost. He also designed other
innovative houseware such as a clay cooker and non-
stick earthen tava. Mansukh Prajapatis innovative
clay houseware received support from Gujarat
Grassroots Innovation Augment Network (GIAN)
that promoted the productsand also ensured that
products met safety standards by conducting testing
at Institute of Chemical Technology, University of
Mumbai. Mansukh Prajapatis innovation received
various form of recognition among others from
Bosch and Siemens Hausger (BSH), Germany and
later Mitticool (GIAN,2011) was awarded ISO
certification.
The 2004 Indian Ocean tsunami was one of the
deadliest natural disasters in history. There are many
tales of heartbreaking loss and some remarkable tales
of survival emerged from telling the experiences of
those who managed to survive and avoid the impact
of the tsunami. Some people were saved not by
technologically advanced early detection systems,
but by simple observation and even reliance on local
wisdom. One of the success stories comes from
Simeulue an island off the coast of Sumatra,
Indonesia. The Simeulueans used local wisdom
known as Smong (tsunami in the local language)
aknowledge passed on orally from their ancestors to
survive the devastating tsunami. The local and
central government recognized that this local
wisdom or indigenous knowledge Smong played
an important role in saving many lives in Simeulue.
Later the government translated the tacit knowledge
of the local wisdom Smong into explicit
knowledge and subsequently used it in training
activities for the local communities. Smong has
now become an integral part of Indonesias tsunami
early warning system and has received international
recognition.
Those are a few examples of successful
innovation in South countries. There are many more
successful innovations and indigenous knowledge in
developing countries, but unfortunately some of
them are scattered, unnoticed, unrecorded and
sometimes neglected because they have no
technological dimension and do not have economic
benefit such as in the case of Smong. From these
cases, we can see that indigenous innovation is
place-based innovation (Drahos and Frankel, 2012 ).
It is the place where the people observe and interact
with the environment, as in the case of Miiticool
where the innovator found that there was a strong
need for earthen pots in Morbi, while Smong is an
indigenous knowledgeg that observes the changes in
surrounding environmental before the tsunami. For
those people their local area where they live is their
laboratory (Drahos and Frankel, 2012 ), where they
observe, create and implement. The cases show
another important point, if innovation more
accurately the innovatoris rewarded and recognized,
this will encourage further innovative activities.
Recognizing and rewarding innovation will help
maintain the culture of innovation through
dissemination of knowledge of new initiatives and
fostering adaptation, adoption or simply create fresh
thinking (Drahos and Frankel, 2012).
As shown in the above cases, innovation
flourishes in well-defined regions or locations where
there is a concentration of talent, energy, and vision
64

(Aubert, 2004). Recognizing this special nature,
innovation will create a climate conducive to
innovate. Most innovative activities in developing
countries emerged due to necessity, changing
conditions and curiosity, doing informal experiments
on new ideas either from their own and/or learned
from other, researchers, and other information
sources like the mass media (Mehta and Mokashi-
Punekar,2008). Successful indigenous innovations,
according to Paula Puffer, quickly become
permanent local knowledge of the community
(Mehta and Mokashi-Punekar, 2008). However, for
innovation to be recognized and accepted, it
should fits tolocal context or be adaptable to the
needs of the locality; contain a solution or
alternative solution to emerging challenges as in the
case of Smong; have been attested through
several events; has a combination of modern and
traditional perspectives as demonstrated by
Mitticool; must be affordable; meet and keep up
with the latest innovation both technological and
non-technological; and fostering the ecosystem.
Consequently, innovation schemes have to be
tailored to countries specific characteristics in line
with the recognized fact that one size does not fit
all, and the recognized need to work more on
national peculiarities in all walks of development
economy and policy (Aubert, 2004).

UNLOCK # 3: ACCESSIBILITY
The emergence of diverse innovations in South
countries, whether it is local and rooted innovation or
localized imported or adopted innovation, indicate
the presence of innovations as an important
component in thedevelopment process. Some
innovations are able to gain recognition at the local
or national level, even some at the regional and
global level, but others are still untapped and
marginalized although these innovations bring
benefits to the people, especially the poor as
demonstrated by Mitticool. It is therefore crucial
to recognize the untapped potential of innovations
that exit in the community and to build on this
potential to empower marginalized populations and
communities to improve productivity and
employment generation and thereby reduce poverty,
particularly in rural and remote areas. Encouraging
the use of innovative solutions to solve local
problems is one way of creating a dynamic process
of development. Actually this is the dream of most of
South innovators not only to be a player at the local
and national level but to reach for regional and
global level .
However, being recognized is one thing, but
getting access to information, training facilities,
research institutes, government regulation and
policy, and funding is another question. Although,
innovations aim at providing solutions to the local
problem, lack of accessibility, detrimental attitudes
towards indigenous innovations and knowledge, and
inappropriate policy and funding, have resulted in
many innovations developed by communities in
developing countries not being able to survive and
gain recognition, although, once again, the
innovations they have developed are more suitable
or fit to the local context in comparison with
innovations generated from abroad. For innovation to
be sustained, scalable and replicable, innovation
need an environment that can facilitate its growth
and this environment we call accessibility.
Access to I nformation:
Access to information is a key resource for local
communities in initiating and creating innovative
activities. Access to information is also critical to let
the community and individuals know that their
innovations receive a response from wider audience.
By getting feedback from outside the community,
they can develop further their innovative results for
benefits and welfare of the community and
businesses. The government needs to provide
communities and small businesses with access to
publicly-funded information which include scientific
and technological, economic and social research that
is produced with the support of public funds. Access
to information means also for the communities,
individuals, small businesses to gain access to
information which was previously not available to
them such as information on patent and IPR. The
case of Smong (indigenous knowledge related to
warning of atsunami) is an example of how access to
information on an early warning system has
empowered the people to prepare for an unpredicted
tsunami.
Access to Training Facilities:
In Chinese proverb, Confucius said, give a
person a fish and you feed him for a day. Teach a
person to fish and you feed him for a lifetime. This
Confucian saying is most relevant to the activities of
the community and small businesses in South
countries in developing their innovative activities.
Given todays challenges in the business climate and
65

the technological advances with their effect on the
economy and society especially the local and
marginalized community, the need for training at the
community level is more pronounced than ever. It is
important that communities and small businesses are
given the opportunity to find training centers or
facilities that meet their demand and are deemed
adequate in the ability to provide assistance in
empowering their human resources. Training, in the
most simplistic definition, is an activity that changes
peoples behavior. Therefore, access to training
facilities is important for an innovative community
and individuals not only to enrich their innovative
ideas but also to motivate and inspire community
by letting them know how important their
innovations are. The role of government is to
facilitate the access to government training facilities
and support innovative activities that have the
potential to empower the community to be self-
reliance. Equally important is the role of
intermediaries in finding access to appropriate
training facilities. Innovation intermediaries are seen
as third parties that play an integral part in
collaborative activities supporting any aspect of the
innovation process. They can play a key role in
finding appropriate training facilities and the market
for knowledge in relation to the transfer and
translation of knowledge and technologies from
creators to users in a business context.
Access to Partnership:
Communities, or individual or groups of
innovators need help in identifying and approaching
partners whether these are a research institutions or
non-government organizations, funding institutions
and even government institutions that have the
capabilities to support their innovations technically
and financially and they need help in building
relationships and developing collaborative
innovative activities. Partners to the innovator such
as academia, research institutions, and government,
will play a greater role in facilitating these
interactions and creating a strong foundation for
future support to indigenous and marginalized
innovations. There is a need to create greater
opportunities for innovators to get to know other
innovators and their innovations that reside in other
local communities or at the national, regional and
global level. In order for innovators to be more
active in approaching partners, they will need
qualified human resources as mentioned previously
in the part Access to Training Facilities. Exchange
of knowledge with partners and among innovators
enable individuals innovators to cross fertilize their
ideas and improve their innovations. The exchange
also will provide innovators access to experienced
partners and increase understanding of the
importance of commercializing the innovations, and
resulting in more creative innovations.
UNLOCK # 4: FUNDING
Innovations developed by local innovators or
communities in South countries are facing challenges
of sustaining their innovations. One of the problems
they are facing is the difficulty in raising financial
support. Some innovation will grow to become
highly accepted product such Mitticool but many
become unsuccessful and in some cases, though the
innovation is considered to be useful for the
community, it ends up in a waste bin because it
lacksfinancial support. The characteristics of
funding of innovations in South countries is that it is
mostly generated from their own sources in the
family or voluntary donations they received from the
local environment. Though the funding comes from
the personal funds of the founders as well as of their
families or voluntary donations from friends, they
actually represent an important source at the seed
stage of innovative activities, but is often
insufficient to cover the needs of the innovators as
the innovation showed an increasing
promises(United Nations Economic Commission for
Europe, 2009)
Local innovation in South countries is not a
result of complex process and does not involves
various actors compared to innovations in developed
countries where innovations are developed through
various stages of development. However, they still
need to be nurtured and developed to meet the need
for anticipating changes in the future that occur in
the community and to be able to compete both from
domestically and abroad. This is the point where
innovators need financial support at an early stage to
develop and test their ideas in the market place.
Unfortunately, access to capital is a major hurdle
towards the growth of innovation in most South
countries, especially because many South innovators
have little or no collateral to offer while attempting
to raise financial support for their innovations. They
also lack documentation on the process of their
innovations which causes difficulties for their
innovations to be accepted.
66

With access to financing, innovators are
provided with resources that allow them to develop
and transform new ideas into large-scale innovative
activities while at the same time link them with the
various actor to make the process of innovation
possible. Financing innovation is not only about the
availability of financial resources. It is also about
skills to present projects, to assess them and to
provide the complementary managerial and technical
expertise that is required to nurture emerging
innovative enterprises(United Nations Economic
Commission for Europe, 2009). Here the role of the
policy maker is imperative to provide both a sound
innovative environment and the institutional
infrastructure that enables and supports the
innovative activities. Financing support such as
venture funds which have been recognized globally
could be a suitable form for providing capital for the
growth of innovative activities and breakthrough
ideas. Other financial support such as microcredits
can be used to support initial concept development or
feasibility studies. Public support instruments can be
deployed to increase the flow of financing, including
the use of grants and technical support to
microfinance institutions, guarantees, tax incentives
or co-financing (United Nations Economic
Commission for Europe, 2009).
Creating innovation funds is another solution.
The fund is aim to advance the innovators and the
communitys capacity to develop innovations that
can be commercialized and have economic impact.
Innovation funds which is establishment and
managed at community level could encourage local
innovators to experiment and innovate by covering
certain risks and improving links with external
sources of information. Innovation funds not only
provide innovators access to funding, but they will
provide mentoring and business support to enhance
their chances of commercial success and increase the
contributions to national innovation in the country.
Countries such as India have created national
innovation fund India Inclusive Innovation Fund
which is built on the principle that innovative
enterprise can profitably, scalably, and competitively
engage citizens at the bottom of the economic
pyramid by providing goods and services that will
transform them to a better life. Many South countries
are now engaging in creating inclusive innovation
fund to support local initiatives and innovations.

FINAL NOTES

Across the developing world, innovations are
emerging whether they are local and rooted
innovation or localized imported or adopted
innovation and they are helping the community to
distribute resources for health, education, economy
of the community, energy, social, and environmental
issue. South Innovators are finding ways to make
their innovations simpler, adaptive and
technologically cheaper and therefore accessible to
millions previously excluded from accessing such
innovation or technology. In many cases, innovation
in all its forms has become a crucial driver of
development, enhancing competitiveness and
increasing social well-being of the community. In a
broad and diversied sense, South innovation not
only comprises both indigenous innovation and
technologies that are generated elsewhere, but even
more important, it includes the diffusion and use of
innovative products, processes, and practices that are
new in a given local context. Innovation is one of the
key avenues by which individuals at the base of the
economic pyramid can be brought out of poverty.
Unfortunately, not all South countries
especially the grassroot communities or individuals
at the base of the economic pyramid are benefiting
from the innovations developed in the country. As
shown in many cases, South innovation, whether
through indigenous or adapted innovations is vibrant,
but South countries do not realize its full potential.
This is due to several challenges: the leadership and
policy framework; recognition; accessibility; and
lack of funding.
South innovation should move from the
periphery to the center of development.
Marginalization of local innovation should be
avoided and innovative solutions developed locally
to solve local problems should be given a chance to
be part of development activities.

REFERENCES
Aubert, J-E, (2004). Promoting innovation in
developing countries. World Bank.
Drahos, P and Frankel, S. (2012). Indigenous
peoples innovation and intellectual property: the
issues.http://papers.ssrn.com.
Gujarat Grassroots Innovation Augment Network
(GIAN), http://www.west.gian.org/case_study.php.

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Hochgerner, Josef, ZSI. (2009). Innovation
processes in the dynamics of social change, centre
for social innovation,Centre for Social Innovation,
Vienna, http://www.socialinnovation2011.eu.

Long ,Doris Estelle. (2011). Crosing the innovation
Divide. http://sites.temple.edu/ lawreview/
files/2011/07.

Kallen, H. (1949). Innovation. In encyclopedia of
the social sciences, Vol. 8; pp. 58ff.

Maharajh, R and Kraemer-Mbula, E. (2009).
Innovation strategies in developing countries.
http://www.oecd-ilibrary.org.

Mehta, S and Mokashi-Punekar, R. (2008).
Exploring indigenous innovation: ascertaining the
scope for design interventions for their successful
commercialization, http://www.shashankmehta.com.

OECD (1991). The nature of innovation and the
evolution of the productive system. technology and
productivity-the challenge for economic policy.
Paris: OECD, 1991. p. 30314.

OECD Working Paper No.1 (2012), Policy
framework for policy coherence for development.
www.oecd.org/dataoecd.

Schumpeter, J. A. ( 1947). The creative response in
economic history, The Journal of Economic History,
Vol. 7, pp. 149-159,journals.cambridge.org/article

Srinivasa, S, and Sutzb, J. (2008). Developing
countries and innovation: Searching for a new
analytical approach,http://papers.ssrn.com

Wamae, W, (2006). A survey of innovation policies
in developing countries, IPS Professional
Development Awardee, IDRC, http://idl-bnc.idrc.ca

Fu, X and Pietrobelli, C. (2011). The role of foreign
technology and indigenous innovation in emerging
economies: technological change and catching up,
www.sciencedirect.com/science/article/.

United Nations Economic Commission for Europe.
(2009). Policy options and instrument for financing
innovation: A practical guide to early
financing.www.unece.org/ceci/publications.


68

Inclusive Innovation and Systems Approach:
Comrade-in-Management for New
Development

T. Keisei Tanahashi
International Creative Consultants, Ltd.
Kobe, Japan; tanahasi@kba.att.ne.jp

Abstract Recent attention to inclusive innovation
reflects a paradigm shift in development and its
management. It is, in a nutshell, the shift from a
facility-centered developmental endeavor to a society-
centered new development endeavor, as exemplified
by growing attention to social capital and natural
capital. Its management entails enhanced
understanding of the dynamic relationship between the
facility at issue and the society. This dynamic
relationship typically manifests in the number and
complexity of stakes and stakeholders in the
development at issue. Management must not only
recognize those stakeholders and their claimed stakes,
but also appreciate their inherent and compounded
relationships. As such, effective management calls for
systems approach and inclusive innovation, or
innovation by inclusion. Systems approach helps the
management with pertinent recognition and
appreciation, and inclusive innovation with
enhancement of partnership and cooperation with
stakeholders. The most promising area of innovation
by inclusion is the cooperation between the public
sector and the private sector for new development and
for utilization of natural capital toward societal
progress. However, this capitals full potential and
utilization cannot be realized without a modal shift in
governance system, and that in turn faces both political
and technical challenges. A few developmental projects
are thus presented, to illustrate the application of
systems approach for innovation by inclusion, and the
management of such challenges.

Keywords globalization, development paradigm,
innovation by inclusion, business inspired development
(BID), glocalism, modal shift in governance.

1. NEW AGE OF DEVELOPMENT

1.1. Long Shadow of Globalization
Globalization is an epochal change. Its impact
on human society is profound, but not fully
understood or perhaps revealed. If anyone can look
back 50 years, many of us will find a great deal of
changes in our living milieu. Collectively speaking,
these changes represent progress or development of
human society. However, these terms can be
misleading in that such changes have always brought
on positive effects to peoples life or livelihood.
Their negative ramifications have been rather muted.
For example, economic progress in the recent years
is impressive if measured by the growth of GDP or
trade figures. However, this progress has also
compounded the growth of economic disparity
within a nation, as well as between nations. Current
attention to inclusive innovation may be viewed as a
manifestation of political concern for attenuation of
such implications from economic development. It is
important, therefore, in the discourse on inclusive
innovation to elucidate this political concern.
The first step for such elucidation is to make
clear the distinction between progress and
development. In a nutshell, progress refers to the
outcome of human endeavors, while development
refers to the human endeavor that aims at realizing
certain progress in society. It is worth noting here
that this definition includes business or commercial
activities, because the products or services provided
through such activities are valued in some quarters of
the society, if not by the society as a whole.
Furthermore, even a developmental endeavor by a
public sector organization does not promise to
benefit the public at large.
Development of a nuclear power plant is a case
in point. The proponents of nuclear plant develop-
ment have emphasized its cost advantage over
conventional methods of power generation and,
lately, its contribution to the reduction of greenhouse
gases. However, the recent calamitous event at the
Fukushima nuclear power plant in Japan has forced
the world to face the inherent risk of this nuclear
technology. The proponents have argued for the
technology by expediently delineating the boundaries
for concern. If such an artificial boundary setting is
removed, a very different picture emerges. For
example, the claimed cost advantage is totally an
illusion, once the cost for decommissioning an
obsolete plant, or the safe disposal of nuclear waste,
is included. Likewise, the claim for not aggravating
global warming is illusory: two-thirds of the heat
generated by nuclear combustion escapes into the
environment, thus surreptitiously contributing to
global warming. Of course, enormous environ-
mental and economic costs of the eventuality such as
the Fukushima disaster have never been reckoned.
As the above example illustrates, linking
developmental endeavor to societal progress is not
simple or straightforward. Rational behavior of any
organization is to effectively achieve its organi-

69

zational goals or objectives, while satisfying its
stakeholders. The narrower the organization sets its
boundary for concern, the easier its management
becomes. In other words, the system under the
purview of management makes all the difference in
the significance of organizational action to the
society. One of the tenets of inclusive innovation is,
therefore, to expand the systemic purview and, thus,
to enhance the organizations contribution to societal
progress. However, no organization does so
willingly, unless such practice is obligatory, or
benefits itself. What circumstance is drawing
organizations into practice in, or promotion of,
inclusive innovation? It is globalization.

1.2. Accelerating Societal Evolution
Globalization has been interpreted in many
ways, but there is a common understanding that it
has considerably changed the economic system and
the business practice worldwide. However, to ensure
its sustainability, the social ramifications of such
changes must be better understood. Studies on such
issues abound, but few have elucidated the
evolutionary process that has led to such changes and
impact in human society.
One study (Tanahashi, 2006b) has taken steps
toward such elucidation. This study begins with the
characterization of globalization, as follows:
(a) Global espousal of free-market economy;
(b) Democratization of information, finance and
technology; and
(c) Unprecedented geographical expansion of
human interaction.

The first feature has widely been acknowledged
as the prominent feature of globalization. This
economy-centered view needed some correction, and
Friedman offered a new theory; i.e., the second
feature (Friedman, 1999). He further claimed that
such democratization promotes not only
emancipation of individuals, but also democrati-
zation of decision-making and decentralization of
political power. On-going political upheavals in the
Middle East strongly suggest that his analysis of
globalization and prognosis of its societal impact
have proven correct. While that may be the case,
this feature does not offer any good prospect or
prognosis with regard to globalizations
sustainability. In essence, globalization does not
have any inherent mechanism to prevent dichoto-
mous growth of haves and have nots or societal
cleavage. (Tanahashi, 2006a). Thus the third feature
is proposed to find effective preventive measures.
This feature may sound almost tautological. That is
because it is so fundamental in describing the
evolutionary process of human society.
This point becomes clearer by removing the
adjective, unprecedented, from this characterization.
Geographical expansion of human interaction is
almost synonymous with the evolutionary history of
human society itself. As a social animal humans
have always interacted with one another, to enhance
their safety or sustenance. Although not every
interaction is constructive or socially productive and
some can be destructive or aggressive by nature or
intention, human wisdom has helped us learn that
such vitiating interaction is unstable and often
counterproductive in the long run, and that it is
possible to foster constructive or productive
interaction for mutual benefit, by developing suitable
social compact. In doing so, mankind has formed
communities and societies, or even nation states,
while developing various means to improve
productivity of their interaction.
History also shows that mankind has constantly
strived to invent or develop various instruments to
enhance the productivity of its action or interaction
with others. Over time human interaction expanded
both in scale and scope, with attendant sophistication
in instruments. Indeed, once mankind had begun to
form a group, be it a tribal group, community or
society, it needed instruments that aimed at
facilitating intra-group interaction. They are
henceforth referred to as facilities. Effective usage
of such facilities, however, cannot be left to an
individuals liberty. It calls for certain measures of
control or governance. Indeed, the larger the
membership of a group or society, the higher the
chance of competition or conflict being engendered
among its members. Therefore, the presence of
some institutional system is necessary for exercising
control or governance over the stakeholders in such
competition or conflicts, and for channeling their
energies to productive cooperation. This symbiotic
relationship between facility development and
effective governance system has been well
demonstrated by such great civilizations of the past
as the Egyptian, Roman and Mongol civilizations.

1.3. Shifting Paradigm and Tenet for Development
It is now in order to explicate socio-economic
dynamism of globalization, and the above discourse
leads to the illustration in Figure 1 in the appendix.
At the center of this figure is Human Society, which
embodies the dynamic world of human interaction.
The driving force for such dynamism stems from
Human desire for better livelihood, and it is
indicated in the oval and placed at the top of human
society. Such a force is nowadays globalization, but
in the 19th century, it was probably the Industrial
Revolution. Advancement and sophistication in
human interaction come hand-in-hand with the
advancement and sophistication in the two other
change agents; namely, instrument and control, or in
more familiar terms, facilities and governance. The
former is defined as a collective term for physical
and metaphysical facilities for human interaction,
while the latter is defined as a collective term for
formal and informal measures for controlling or

70

governing human interaction and the use of its
facilities.
Next in order is how to express the inherent
dynamism in human society, and Figure 2 is such an
expression. The essence of this picture is two-fold.
Firstly, it represents the fact that the facility and
control factors complement each other for promotion
of productive human interaction. Secondly, their
complementary relationship is closely interwoven to
form societal fabric. This is illustrated as the two
dimensional portrayal of society. One dimension is
the control axis, which stretches from the
individuals moral sentiment at one end to the public
governance system at the other. The other dimension
is the facility axis, which stretches from instrument
to civilization. These stretches represent the
individuals at one end and the entire society at the
other, and they reflect the complexity of societal
configuration.
The word, society, refers to an aggregation of
individual people who submit to a common
governance system. However, they are individuals
nonetheless, with different abilities as well as
different material needs and demands for their
livelihood. As such, they interact in order to satisfy
such needs and demands. Naturally, their interaction
is purposeful and targets certain individuals or
groups, while using the existing societal fabric as the
framework of such interaction. They may even go
further by developing certain facilities, as well as
social compact, to make intra-group interaction more
effective or productive. This combination of group-
specific facilities and social compact is called culture
or social fabric. In other words, any sizable society
finds many groups, each with distinctive culture or
social fabric.
The third characterization of globalization
implies heightened dynamism in group formation
and cultural evolution. Likewise, the second
characterization implies that such group formation
no longer remains as the prerogative of its
leadership, and even intra-group interaction invites
the scrutiny of other stakeholders in such interaction.
For example, construction of a new highway route in
a region will inevitably invite the scrutiny of people
who are concerned with its environmental impact or
with its potential for altering the economic fabric and
peoples livelihood in the region. This example
suggests a significant paradigm shift in management
of developmental endeavor. Traditionally, such a
construction project would have aimed at
quantitative expansion of road traffic and trade.
Nowadays, however, such a project must be
managed with the qualitative expansion of socio-
economic interaction. If expressed in reference to
Figure 2, the project would traditionally have been
regarded as a development of facility, but nowadays
it must be regarded as an introduction of new culture
or social fabric in the region.
This paradigm shift in development, which is
henceforth referred to as new development, naturally
entails a strategic change in its management. This
change is twofold. One is the increased emphasis of
the control or governance aspect, and the other is the
expansion of systemic boundaries and consideration,
in the management. It is obvious that successful
development calls for innovative management and it
is likely to entail inclusive innovation.

2. NEW SCOPE OF INCLUSIVE INNOVATION

2.1. Symbiosis between New Development and
Inclusive Innovation
The above discourse may give the impression
that new development calls for inclusive innovation.
While they are related, it is not a cause and effect
relationship, but rather a symbiotic relationship.
Indeed, inclusive innovation helps promote new
development and, hence, foster societal progress
more effectively. Furthermore, inclusive innovation
offers new scope for societal progress in the
developing world. Conventional wisdom alleged the
deficiency in pertinent technology and technical
skills in the developing world as a major stumbling
block in its drive for socio-economic progress.
However, such perception is fast becoming obsolete.
Indeed, globalization and democratization of
information, finance and technology has
considerably reduced such blocking effects.
What is needed now is innovative management
that can open a new horizon and scope for new
development by taking full advantage of
sophisticated facilities and control or governance
institutions found in todays societal fabric. Practice
of such management calls for two managerial
instruments; namely, systems approach and inclusive
innovation. These instruments have a synergic
relationship with each other, as later explained. For
now, it is in order to elucidate the prospective role of
inclusive innovation in such management. The
conventional view of innovation tends to place
technological element at its core. Such a view is
linked to modern history, in which industrial
development has been regarded as the key to socio-
economic progress. Over time, however, the
environmental cost and social cleavage that the
capitalistic approach to industrial development has
engendered have begun to threaten the aimed
progress. Thus, the paradigm shift to new
development is taking place, and inclusive innovation
has emerged as a new driving force for socio-
economic progress.
Now the question may be asked; If not
technology, what would be the main thrust for
inclusive innovation? The answer is innovation by
inclusion. Innovation by inclusion differs from the
conventional view of innovation, and the core
element of innovation is inclusion itself. Here,
inclusion means more than just a physical or

71

metaphysical association, and connotes functional
integration. In other words, inclusion signifies
expansion of the systemic boundary and operation,
so as to enhance the prospect of veritable socio-
economic progress from developmental endeavor.
That being said, management of such endeavor
still faces a critical issue of boundary delineation. In
other words, it entails the clear demarcation of the
system under management purview and the attendant
environment. Such demarcation also means the
separation of stakeholders into two categories:
namely, those inside the system, and the others who
are outside the system or who are regarded as
belonging to its environment. Significance of such
demarcation is well illustrated in the development of
a nuclear power plant. As it has been argued earlier,
given the current stage of nuclear technology, such a
developmental project can only be justified by the
political predilection to disregard the long-term
implication of nuclear hazards and waste. Future
generations of people are likely to receive no benefit
(supply of electricity) but all the environmental
hazards and degradations that the plant has caused
during and after its operation. Such blatant disregard
is allowed because, even in democracy, future
generations form no political constituency, and they
cannot raise their voices or claims as veritable
stakeholders in the development.
This example also suggests the relevance of
inclusive innovation, or innovation by inclusion for
promotion of new development. The relevance stems
from the expanded management purview that the
principal agency for a developmental endeavor
adopts. Management purview is closely linked to the
agencys tenet and the objective(s) of its
developmental endeavor at issue. Besides such
management principles, management practice that
features innovation by inclusion is equally important,
because it touches on the livelihoods of more people
than those directly associated with the endeavor, and
that it enhances its beneficial effect quantitatively or
qualitatively. In other words, the beneficial effect
will be shared by a wider circle of people in society.
This will certainly be the case, if the expansion of
managerial purview need not be limited to
geographical dimensions, and it may also include the
extension of time horizon and future generations in
society.

2.2. Power of Innovation by Inclusion
If innovation by inclusion is merely to improve
the altruistic image of the agency at issue, then it is
unlikely to be espoused by the private sector. There
are in fact three features that make innovation by
inclusion an attractive management strategy and
practice for organizations in the private sector, as
well as in the public sector. One such feature is
already mentioned; i.e., innovation by inclusion can
be initiated or practiced without calling for any new
technological innovation. The second feature is the
broad systemic purview for management, which
enhances the organizations ability to adapt, or
resilience, to changing environment. This feature
stems from the management that utilizes the
knowledge of systemic relationships of active
components within the system, and of interaction
between such components and environmental
factors. The third feature stems from system design
or structure itself, which serves as an operational
framework for collaboration among the stakeholders
with diverse interests in and capabilities for the
developmental endeavor at issue. The involvement
of many stakeholders implies that the developmental
endeavor will be subjected to diverse scrutiny, which
in turn impels innovative management. Thus, it
improves the chance of achieving the designed
developmental objective and intended societal
progress.
While these features of innovation by inclusion
deserve wider recognition and appreciation, there is
another factor that explains the increased global
interest in inclusive innovation. It is the financial
factor. The importance of business entities and their
prospective participation and contribution to societal
progress has been stated earlier. However, they do
not act in the similar manner as their counterparts in
the public sector. The difference is that the formers
participation or contribution can be designed or
directed to selected segments of society, while the
latter tends to be mandated to ensure social fairness
or equality. However, the financial reality of today
implies the diminishing scale and scope for
developmental initiatives by the public sector, as
exemplified by the current financial crises in the
Euro zone. In contrast, the financial resources
available in the private sector have increased so
much as to face difficulties in finding attractive
investment opportunities, and to flow into
speculative money games. The rational solution to
this financial issue is the expansion of cooperative or
collaborative relationships between the two sectors
and their organizational entities. This idea is not
new, and it has already been practiced in the form of
BOT (build-operate-transfer) projects.
Reflecting the diverse nature of developmental
endeavors, many different schemes have been
devised under the banner of BOT, to make such
projects attractive to the private sector enterprises.
Nonetheless, the majority of BOT schemes have
been applied to physical infrastructure development.
This suggests that many such projects have been
initiated by the public sector. In other words, there
still remain many prospective areas for socio-
economic development if the private sectors
entrepreneurial initiatives are encouraged and
supported by the public sector. For example,
enterprises in the private sector can take initiatives in
the development of facilities, with effective support
by the public sector in the development of control or
governance mechanisms for use of such facilities.

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The importance of such cooperation or collaboration
will only increase in the future and, in due course,
such style of developmental effort will become a
mainstay of societal progress and enrichment of
peoples livelihood. This approach is hereafter
referred to as Business Inspired Development or
BID.

2.3 Putting Business Inspired Development into
Practice
This BID may not sound like any breakthrough
in development strategy, but its implications suggest
otherwise. For example, the facility to be developed
may be physical or metaphysical, and it need not be
designed or operated for public use. However, its
development must meet two essential criteria to
deserve support of the public sector. One such
criterion is that the facility at issue must be useful in
enhancing or promoting productive interaction in the
society concerned. The other criterion is that the
accessibility to the facility is, in principle, open to
any members who can take part in such productive
interaction in the society. Health care system is a
good case in point. In the majority of nations, health
care is largely provided by private institutions, under
strict government regulations and supervision. As
such, its development will call for facility
development by the private sector and attendant
adjustment in the control or governance of its use by
the public sector. Similar relationships exist in
information or communication systems and their
development.
Prospective areas for BID are many, and they
are found, or rather created, by entrepreneurial
entities in the private sector and their innovative
management. Its significance to the private sector
may be better explained by contrasting it with
business process re-engineering, or BPR by
acronym, which came to be widely known during the
1990s (Davenport & Short, 1990). BPR focuses on
the analysis and design of workflows and processes
within an organization, and it aims at rethinking and
re-engineering business process and operation, in
order to dramatically improve its performance,
through a holistic approach toward realization of its
business objectives. For such business entities, the
main difference of BID to BPR is the scope of
rethinking and re-engineering, and it looks beyond
organizational boundaries. It employs a systems
approach to elucidate the organizations roles and
objectives in a broader societal context, and aims at
redesigning its operational structure to enhance its
performance. It must also be emphasized that such a
systems approach and redesigned operational
structure may very well lead to inclusion of new
partners in both private and public sectors.

3. SHAPES OF INNOVATION BY INCLUSION IN
ACTION

The management of developmental endeavor
may not find the above theoretical discourse very
easy to put into practice, and it may wish to see some
kind of manual for practice of innovation by
inclusion. However, the wish is unlikely to be
realized, because not only the prospective areas of its
application are so diverse, but also because the basic
system structure for its application varies
significantly with the organizational tenet and the
objective of the developmental endeavor at issue. As
such, the exchange of relevant ideas and experiences
will be the most practical approach for its promotion.
In this respect, the organization of this Conference
on Inclusive Innovation and Innovative
Management is very timely. As one of such
exchange efforts, three interesting projects, in which
the author has played a role, are now introduced, and
the pivotal role of systems approach in innovation by
inclusion is illustrated.

3.1 Health Service Coverage and Development
In management, there is a saying that anything
measured can be improved. One measure of
national health is the life expectancy at birth, and this
measure shows clear differences in health status
between nations with advanced economies and those
in the developing world. Furthermore, much of this
difference can be attributed to the high infant and
child mortality rates in the latter. Accordingly,
under the auspices of Millennium Development
Goals (MDG), set by the United Nations in 2000,
many developing nations have instituted health
services that aim at improving child health.
Naturally, some relevant performance measure
is required for management of such health services.
Although the mortality rates can serve as such a
measure, their application in the management is not
very practical for two reasons. Firstly, these
mortality rates can be seriously affected by socio-
economic conditions that are beyond the control of
any health service system. Secondly, the timely
compilation of pertinent statistics entails a rather
sophisticated governance system, which is often
lacking in the developing world. In short,
measurement of these rates is subject to so many
delays and errors that it may not be applied
effectively in the management. Health service
coverage can be a more direct and practical measure
of performance.
Health service coverage is a concept that
quantitatively expresses the extent of interaction
between the service offered and the people for whom
it is intended. In this sense, improvement of this
measure can be a veritable measure of the health
service at issue. However, caution is advised for its
application in management. While the concept may
appear simple and straightforward, its actual

73

measurement is not. Indeed, its application in health
service management entails systemic comprehension
of the process that effects the aimed interaction
between the health service and its target population
(Tanahashi, 1978).
It is normal for any kind of health service to
show a material gap between its theoretical capacity
and realized outcome. Such a gap arises from a
number of factors that affect the interaction between
health service and its target population, or the
utilization process. This relationship is illustrated in
Figure 3, in which the triangular area represents the
sphere of interaction. Utilization process begins with
resource allocation for provision of the health service
at issue, and ends with achievement of its service
objective. In between, it is possible to recognize a
few key stages towards achieving the objective, with
each stage indicating the realization of certain
important conditions for service provision. Health
service coverage can be defined for each stage, as the
ratio between the number of people for whom the
condition is met and the target population. In other
words, this set of coverage measurements depict the
dynamics of the utilization process, as illustrated in
Figure 4. For example, if the operational curve
declines notably to the left, it implies the presence of
bottlenecks in the process.
It is worth noting in this illustration that the
progression from one stage up to the next calls for
some specific efforts that involve different skills,
staff, or organizations, as well as different facilities.
The figure also indicates that effective service
management entails balanced deployment of such
resources on one hand and, on the other, operational
coherence between service provision and behavioral
characteristics of the target population. In short,
effective management will benefit from exercise of
innovation by inclusion, so that complementary and
targeted allocation and organization of limited
service resources to remove any serious bottlenecks
in the utilization process can be effected. Nowadays,
with renewed interest in health service development
under the MDG banner, many national governments
and international agencies have adopted Marginal
Budgeting for Bottlenecks (MBB) as a managerial
tool for such developmental endeavor. In this
management tool and exercise, the above systemic
concept of health service coverage is referred to as
the Tanahashi Model, and it provides the
theoretical basis for analysis.

3.2 Research and Development for Health Care
System
In innovation, research and development
(R&D) is widely acknowledged as its essential part
and parcel. What is not fully appreciated is the
difficulty in moving from research to development.
This is true even for an organization with a well
established management framework. Provision of
health or medical care to a population may fall on the
responsibility or management of the ministry or
regional authority concerned, but it typically
involves many different service entities and their
effective cooperation. Furthermore, the quantitative
or qualitative advancement in such care involves
different institutional entities, such as those engaged
in research or in manpower development. As such,
innovation or R&D in health care system can always
face a challenge of systemic management, and such
management will call for innovation by inclusion, as
exemplified above.
The case to be presented here is based on an
actual project that was carried out in an African
country in 1995. The project aimed at evaluating a
Japanese ODA program that had provided technical
and financial assistance to a medical research
institute in the country over several years. At the
same time, this exercise was expected to find a
prospective ODA program that could build on the
past assistance and on the research capability of the
institute. Although the evaluation effort itself did not
have high stakes for anybody, the resulting
recommendations might have a serious impact on
some stakeholders. The principal stakeholder was
the medical research institute itself, and other
stakeholders included the two national governments
and their agencies that had been involved in the
ODA program, as well as some other agencies or
organizations that could benefit from a new ODA
proposal that might be recommended from the
evaluation effort. In order to assure objectivity in the
effort, the evaluation team was formed with only
those experts who had experience in ODA programs
but no involvement in the program at investigation.
Furthermore, in order to avoid any national interest
or bias of the donor nation, approximately one half
of the team members were dispatched by the aid
agency of another country.
Even with such care being taken in the
composition of the evaluation team, the objectivity
of evaluation effort cannot be guaranteed. The main
reason for this problem arises from individual
experts. They cannot be free from their inherent
biases that arise from their respective professional
knowledge and experience. One prospective
approach toward enhanced objectivity is to bring
their expertise under a sound and shared conceptual
framework of reference for the evaluation task at
hand. There is a saying; Research for the sake of
research. This saying suggests that researchers
have a strong predisposition to value research
activity, far more than its contribution to the real
world. As such, the conceptual framework for the
evaluation effort should not be confined to the
medical institute. Instead, the framework should
place the health care system in the country in its
purview, and the evaluation criterion should be how
to enhance the potential contribution of the institute
and its research capability to the nations health care
system.

74

The applied conceptual framework is best
described by a few illustrations. The first one is
Figure 5, which depicts the systemic foundation of
health care. In the same vein, the systemic
relationship between different research efforts, which
collectively help realize veritable development of
health care system, is depicted in Figure 6.
Knowledge and methodology that such research
efforts may provide, must be widely disseminated
and practiced, and that entails education and
deployment of health manpower. In this regard, the
evaluation effort must focus its attention to the
research institutes existing institutional framework
and conditions under which the research institute had
to operate. The institute at issue was part of the
national university and the nations veritable center
for higher education, and the university includes the
medical faculty and the school of public health, as
well as the teaching hospital. Accordingly, this
institutional framework must be taken into
consideration of the research institutes prospective
roles and activities and, thus, of the evaluation effort.
The illustration in Figure 6 depicts the
institutional framework applied in this effort. Worth
noting in this figure is the presence of health
research unit (HRU), that has nationwide
organizational structure within the Ministry of
Health. Its organizational tenet is to serve as a vital
institutional link between research and development
in health care. However, relevant research capability
is under the jurisdiction of the Ministry of Education
and its affiliated research institutions. In other
words, for this HRU system to become the veritable
institution for promoting R&D process in the
national health system, the institutional boundary,
depicted in Figure 6, must be overcome and
collaborative relationships must be established with
other organizational entities in the system.
A major contribution of the evaluation exercise
was to elucidate the fundamental policy issue
concerning the medical research institute. The
institute was already well recognized as a leading
medical research institute in Africa, and it had
become a regional center for excellence in medical
research. From the institutes point of view,
furthering such excellence would be a rational
choice, and that would in turn contribute to the
national prestige. From the nations point of view,
however, its research capability should be utilized in
advancing the nations health care system. Such
utilization could only be realized by putting
innovation by inclusion into practice. If the national
government at that time had such policy
predisposition in socio-economic development, it
might have found it easy to resolve the above policy
issue.

3.3 Inclusive Innovation for Development of Cultural
Tourism
Tourism is widely recognized as a growing
industry and many nations, with advanced economy
or developing economy, have instituted a variety of
policy initiatives and institutional support for tourism
development. However, it is the private sector that
dominates tourism industry. As such, its
development must adapt the earlier mentioned BID
scheme. Its effective adaptation inevitably entails
congruous actions by all the stakeholders concerned
in tourism development. Such congruity can only be
expected if they share common understanding with
regard to the perspective and prospect for such
development.
Not surprisingly, the main development thrust
stems from globalization. One of its attendant
trends, i.e., the unprecedented geographical
expansion of human interaction, implies significant
increase of cross-cultural interaction. For such
interaction to be productive, it helps for the
interacting parties to have cross-cultural sensitivity,
empathy and com-munication skill. Indeed, it has
been pointed out that promotion of such productive
cross-cultural interaction is important in making
globalization sustainable (Tanahashi, 2009b).
Cultural tourism, therefore, has a potential to
contribute to such enhancement. In order to fully
realize such a potential, its development strategy
must make good use of two features of globalization;
namely, the growing need for people to nurture
humanitarian bonds, and expanding facilities for
networking.
Now the key issue is to articulate an effective
development strategy. The initial step for this effort
is to admit that tourism does not have an intrinsic
mechanism to promote cross-cultural understanding
or communication. Such promotion must be
designed into tourism and, therefore, cultural tourism
has attracted the attention of both policy makers and
practitioners of tourism. This trend is best
exemplified by the growing popularity of the
UNESCO World Heritage Program, in which
cultural heritage plays the major part.
As before, systemic approach is also helpful in
such articulation effort, and that may start from the
definition of tourism. Tourism is defined as the
activities of persons who travel and temporalily stay
in places outside their usual environment for leisure
purposes (Tanahashi, 2008). This definition indi-
cates the three essential components that make up
tourism, besides tourists. They are leisure activity,
transportation, and accommodation. Accommo-
dation normally means the facility for temporary
stay, such as hotels, hostels and pensions. However,
in this context, it means all sorts of services and
facilities that help tourists fully enjoy their leisure
activities at their respective destinations. The
systemic relationships between these components
and tourists are illustrated in Figure 7, which should
be viewed as a two-dimensional image of a
triangular pyramid, with tourist at its apex.

75

Tourism may be broadly divided into two
categories according to the tourists primary
objective; namely, cultural tourism and leisure
tourism. It is also useful to differentiate cultural
tourism into two categories according to the tourists
interaction with cultural properties; namely passive
cultural tourism and active cultural tourism.
Sightseeing tourism is the typical form of the former.
In contrast, the latter features the tourists initiative
in experiencing cultural traditions and practice. The
latter is sometimes called creative tourism, to
emphasize individual efforts on the part of tourists.
Such tourism shows a departure from the
conventional style of tourism operation in which a
travel agency performs the pivotal role. In contrast,
the new or more progressive style of tourism features
the tourists initiative in designing and effecting
tourism. This style of tourism is clearly increasing,
because of the advancement in communication
technology that is exemplified by the phenomenal
expansion of the internet in recent years. Such a
modal shift in tourism is illustrated in Figure 8.
The promotion of this new kind of tourism calls
for two-pronged efforts, namely development of
accommodation facilities by local tourism operators
in partnership with tourists, and expansion and
enhancement of this accommodation sector, with
regard to tourism services. The unique assets of
local tourism operators are their familiarity with
local culture, and their ability to present, or share
with visitors, their cultural properties and practice.
In short, innovation by inclusion and their expanded
participation in tourism could materially help make
the locality as a desirable destination for cultural
tourism. Furthermore, such tourism development
does not require a large-scale investment. However,
it does require a convenient communication link for
the partnership and cooperation. That is nowadays
possible with the internet providing an effective
physical link for such communication, as illustrated
in Figure 8(b). The link enables local tourism
operators the long tail marketing for geographically
scattered customers.
This strategy can and should be applied well
beyond any particular locality, although this aspect is
little appreciated by most local tourism operators.
They tend to regard their counterparts in other
localities as competitors, instead of collaborators.
However, if local tourism operators aim at fostering
a true partnership with those tourists who are
interested in active cultural tourism, they should
collaborate in providing pertinent services that help
such tourists enrich their cultural experience and
understanding. Enrichment comes in two forms,
i.e., depth and width. Some tourists may have
interest in certain cultural experience, such as
traditional performance arts or culinary culture. Its
enrichment will then come with visits to many
different localities that offer their distinctive cultural
traditions, respectively. Similarly, other tourists may
be interested in traditional community life and get
well acquainted with people and their life-style. In
that case, its enrichment comes with diverse and
close interaction with the local people.
Whichever kind of cultural enrichment the
tourist may desire, the pertinent service can only be
effected through organized collaboration of local
tourism operators. Such collaboration is usually
attributable to the strategy of innovation by
inclusion. A few successful examples of this
practice exist in Japan. The first example is the case
of cultural enrichment in depth. A community that is
endowed with several cultural properties within itself
has established a program called Machi-Yado, or
township for accommodation. The essence of this
program consists of the lodging facility and
information service that allow tourists to stay
relatively inexpensively and to experience and enjoy
a variety of cultural interaction in the locality. Such
features are effected by the participation of local
families who offer their spare rooms for lodging, and
of local business enterprises which extend their
hospitality to tourists.
Examples of cultural enrichment in width also
exist. One such example is the networking of local
inns that share some geographical features, such as
hot springs, distinctive local foodstuff and dishes, or
cultural heritages. More often than not, such inns
regard each other as competitors, and not
collaborators, and their networking may appear
counter-intuitive. However, such behaviors tend to
reduce the chances for tourists to fully appreciate the
local culture and, in turn, the attractiveness of the
locality itself. The networking should, therefore, aim
at provision of pertinent information for such
extension of tourism and the enabling transportation
links are typical of such facilities. Again, innovation
by inclusion is the key to such network development.

4. PROGNOSIS FOR NEW DEVELOPMENT

There is one key component that greatly affects
innovation by inclusion and its prospect for success.
That is the governance system. Its operational
characteristic can be broadly divided into two
categories; i.e., centrifugal governance and
centripetal governance (Tanahashi, 2011). The
former style of governance has been the norm for
historical reasons, but globalization is gradually
making it obsolete and calling for the modal shift to
the latter.
Nation has been the framework of governance
for centuries. In much of the last century, nation
building has been the central issue for governance in
many countries, and limited national resources have
to be mobilized and utilized to strengthen its
nationhood. For such purpose, centrifugal
governance, which emanates controlling force from
the central government, is effective. Indeed, it has
been widely practiced in Asia, where many countries

76

have experienced the stage of nation building or re-
building in the 20th century. Japans rapid rise to an
economic power, after the devastation during WW II,
certainly gave credence to centrifugal governance.
Today, however, Japan no longer serves as a
model nation in governance. Instead, Japan has
become an exemplary case of failure in adapting its
governance to the change of time. What has changed
and what adaptation is necessary? Globalization
increases the mobility of economic resources and
activities, and it is significantly changing the
livelihood of people. Furthermore, this mobility
transcends the geographical delineation of society or
state where governance is normally exercised.
Therefore, any governance that aims at restricting
such mobility is likely to be confounding the societys
developmental potential.
The alternative to centrifugal governance is
centripetal governance. It features the increased
autonomy of localities in the governance of local
affairs, and the flexibility of the central or higher
authority of governance in providing support for
localized development. It is worth noting here that
such style of governance is better suited for inclusive
innovation, because such innovation is very likely not
to be compatible with established bureaucratic
divisions and boundaries. Needless to say that the
modal shift in governance is easier said than done, as
it inevitably faces political and technical challenges.
The political challenge stems from the bureaucracy
that is accustomed to the power and privilege of
centrifugal governance. The technical challenge is the
lack of expertise and experience in governance for
development at the local government level. Such
governance entails effective promotion, control and
coordination of developmental changes along the
designed developmental goal or milestones. However,
this again poses both technical and political
challenges; namely, the technical challenge to design
such a developmental future, and the political
challenge to muster public consensus for such a
future.
None of these challenges can be easily overcome,
as human society has always been governed by
domestic realpolitic. This being said, globalization
has come to pressure even such realpolitik to change.
In the economic sphere, any government policy or
business strategy for viable development cannot be
formulated without an appropriate global vision. In
the societal sphere, peoples awareness of, and desire
for, better livelihood is manifesting in their demand
for democracy and self-determination, so that the
economic and social assets available in their localities
will be utilized for improving their livelihood. In
short, the nation is no longer an effective unit of
governance for expanding human interaction. This
certainly holds true if society is sizable enough to
coexist with cultural diversity. As such, society with
cultural congruity should become such a unit, and
promotion of productive human interaction within the
society and without, by establishing pertinent social
compact, should be aimed at. This is glocalism
(Tanahashi, 2011), and the essence of its practice is
innovation by inclusion. Although the challenges for
such societal change are as formidable as ever, there is
no stopping in progress. After all, Future never
comes to us, but future always welcomes the
innovative.

REFERENCES
Davenport, T. & Short, J. (1990). The new industrial
engineering: information technology and business
process redesign. Sloan Management Review, Summer
1990, pp. 1127
Friedman, T.G. (1999). The Lexus and the olive tree,
London; Harper Collins
Tanahashi, T. K. (1978). Health service coverage and
its evaluation. Bulletin of the World Health
Organization, 56(2), pp. 295-303
Tanahashi, T. K., et al. (1997). In search of effective
health research and development policy. Japan-USA
Joint Evaluation Report, Ministry of Foreign Affairs,
Japan
Tanahashi, T. K. (2006a). Lexus and olive tree in
new perspective. Tokyo Keizai University Journal,
248, pp. 75-87.
Tanahashi, T. K. (2006b). Globalization and
civilization. Tokyo Keizai University Journal, 250, pp.
197-232.
Tanahashi, T. K. (2008). Roles of culture and
civilization in globalization. Proceedings of the 25th
Conference of the Pan-Pacific Business Association,
San Jose, Costa Rica
Tanahashi, T. K. (2009a). A new perspective for
sustainable globalization. Proceedings of the 11th
Conference of the Society for Global Business and
Economic Development, pp. 115-125
Tanahashi, T. K. (2009b). Global and strategic
perspective for cultural tourism. Tokyo Keizai
University Journal, 264, pp. 15-28.
Tanahashi, T. K. (2010a). A Strategic outlook of
tourism for sustainable globalization. Proceedings of
the 27th Conference of the Pan-Pacific Business
Association, Bali, Indonesia.
Tanahashi, T. K. (2010b). A theoretical profile of
globalization and its sustainability. Int. Journal of
Sustainable Society, 2(3), pp. 306-324.
Tanahashi, T. K. (2011). Prospect of glocalism in
governance for development. Proceedings of the 22
nd

Pacific Conference of the Regional Science
Association International, Seoul, Korea.

77

APPENDIX (FIGURES)

Individuals
Morale
Societys
Code of Conduct
Civilization
Culture
I nstrument Axis
Control Axis

FIGURE 2: STRUCTURAL ILLUSTRATION OF SOCIETAL FABRIC
(Source: Tanahashi, 2009b)

Human
Society
Globalization
Instrument<
Facilities>
Control
<Governance>
FIGURE 1: PROFILE OF EVOLUTIONARY DYNAMISM IN
HUMAN SOCIETY (Source: Tanahashi, 2008)


78

(5) EFFECTIVENESS COV.

TARGET POPULATION

THEORETICAL GOAL OF SERVICE PROVISION
FIGURE 4: SCHEMATIC RELATIONSHIP BETWEEN THE PROCESS OF SERVICE PROVISION
AND COVERAGE MEASUREMENT (Source: Tanahashi, 1978)

P
R
O
C
E
S
S

O
F

S
E
R
V
I
C
E

P
R
O
V
I
S
I
O
N

NUMBER OF PEOPLE
(4) CONTACT COVERAGE

(3) ACCEPTABILITY COVERAGE

(2) ACCESSIBILITY COVERAGE

(1) AVAILABILITY COVERAGE

People for whom the service is available
People who receive effective service
People who are willing to use the service
People who use the service
People who can access the service
PERFORMANCE CURVE
POTENTI AL
COVERAGE
ACTUAL
COVERAGE
UTI LI ZATI ON
POPULATION
TARGET POPULATION
(SERVICE TARGET)
SERVICE CAPACITY SERVICE OUTPUT
FIGURE 3: SCHEMATIC MODEL OF HEALTH SERVICE COVERAGE AND UTILIZATION
(Source: Tanahashi, 1978)

79

FIGURE 6: AN INSTITUTIONAL CONFIGURATION FOR HEALTH RESEARCH AND
DEVELOPMENT PROCESS (Source: Tanahashi et. Al., 1997)

Ministry of Health
jurisdiction
Ministry of Education
jurisdiction
Institutional
boundary
Institutional
boundary
Vocational
boundary
Vocational
boundary
Functional
boundary
Operational sphere
S
c
i
e
n
t
i
f
i
c

s
p
h
e
r
e

Scientific sphere
O
p
e
r
a
t
i
o
n
a
l

s
p
h
e
r
e

Public health sphere
P
u
b
l
i
c

h
e
a
l
t
h

s
p
h
e
r
e

M
e
d
i
c
a
l

s
p
h
e
r
e

Medical sphere
Functional
boundary
Regional Health Research Unit
(RHRU)
HRUs
Teaching
hospital
Medical
School
Medical Research Institute
School o f
Public Health
HEALTH
INFRASTRUCTURE
SYSTEM
CARE FOR
PATIENTS
HEALTH
SCIENCE
CARE FOR
PEOPLE
FIGURE 5: TWO CONCEPTUAL DIMENSIONS OF HEALTH CARE SYSTEM
(Source: Tanahashi, et .al., 1997)


80

Tourism Asset
Accommodation
Transportation
Tourist
Tourist Agency
(a) OPERATIONAL MODEL OF CONVENTIONAL TOURISM
(b) OPERATIONAL MODEL OF PROGRESSIVE TOURISM
FIGURE 8: MODAL SHIFT IN TOURISM OPERATION

Accommodation Tourist
Internet
Tourism Asset Transportation
Primary interaction
Secondary interaction
Practical interaction
Theoretical interaction
Leisure Activity
Accommodation
Transportation
FIGURE 7: CONCEPTUAL STRUCTURE OF TOURISM

Tourist

81

An Inclusive Approach to Environmental
Conservation and Human Development in
Madagascar: Build Friendship First and Then
Work Together Sustainably
Gasstsar-Rakotondrandria Constant
Trilingual writer and Madagasan Traditional Public Speaker - President, NGO ECODEV Madagascar
Antananarivo, Madagascar;entelekia.madagascar@gmail.com

Pr. Rakotomaria Andrianirina Etienne
University of Antananarivo, Ecole Suprieure Polytechnique
Antananarivo, Madagascar;andrianirina.rakotomaria@yahoo.fr

Abstract Madagascar is at the same time one of the
poorest countries in the world, but also amongst the
richest in terms of biodiversity. This biodiversity is
suffering from huge human pressures, which cause
disastrous effects on the environment but also on social
and economic development. The Malagasy NGO
ECODEV is thus implementing specific programs in
various areas of this vast country, in order to combine
both environmental conservation (natural resources
being also the main source of economic growth and
development for the country) and inclusive human
development in rural areas. This approach combines
well-proven techniques in terms of ecological
reforestation and water engineering, with an innovative
focus on cultural specificities of each area where the
program is implemented.

Keywords Human development - Biodiversity
conservation - Cultural approach - Market oriented
strategy - Implication of rural communities - Education
I. INTRODUCTION
Pressure on the environment and its progressive
and fast degradation is a worldwide phenomenon,
but is even more dramatic in Madagascar which is
still ranked as a hotspot of biodiversity, with an
incredible abundance of indigenous flora and fauna.
Consequences for human development in rural
areas are obvious (and 70% of the Malagasy
population lives in these areas).
In order to fight against this evolution caused by
human pressure, ECODEV sets up programs
associating ecological reforestation and intercrop
culture, to fight against bushfires (these fires are
traditional in Madagascar where slash-and-burn
agriculture is very popular), and water engineering.
These actions cannot be successful without full
support from local populations. And we need to
underline here that 85% of these people are living
with less than two USD a day. It simply means that
they need to receive short term profit from these
programs. And financial profit of course, that will
obviously lead afterward to access to basic services
(education, sanitation, health, etc) and to human
development in the area.
Moreover some techniques we need to
implement in order to reach our conservation goals
sometimes can be seen as contradictory to local
culture.
Therefore, ECODEV has set up a sustainable
and inclusive approach, giving local cultural
specificities a central role (the title of the article is
the translation of a Malagasy proverb, illustrating the
importance we give to culture), associated with much
more pragmatic and well-tested methods.
This document will then explore and share our
experience in this matter.
II. ENVIRONMENTAL CONSERVATION AND
HUMAN DEVELOPMENT
A. Ecological reforestation and intercrop culture of
cassava and Paulownia
Because of its huge potential, forest in
Madagascar has been for years hosting legal and/or
illegal operators looking for timber; firewood,
charcoal, and lands for slash and burn agriculture
(tavy). These forests are indeed very rich in various
species of desired quality timber (rosewood, ebony,
etc).
Forest and environment in general are therefore
suffering from strong human pressure, most of the
time in a very anarchic and irrational way. From
these pressures degradation of the environment is
fast, bringing various hazards such as climate change
but also having obvious negative impacts on human
development.
Following a partnership with the Chinese
Academy of Forestry, ECODEV has started to
implement a reforestation program based on
intercrop culture of Paulownia and cassava,

82

surrounding endangered and protected areas. The
goal is to protect forests and simultaneously create
economic development on site.
Paulownia is a wonderful tool for protecting
forest in our country. It is a very fast growing species
(it reaches twelve meters high in only five years, and
diameter at breast height - D.B.H. - is from twenty
five to thirty centimeters), and therefore it can be
quickly used as firewood, construction or charcoal
wood, which allows us to protect precious species in
the area from the everyday needs and use of local
population. It needs to be stated as well that
Paulownia is ranked in the world top five for carbon
dioxide sequestration.
But dealing with reforestation, and fighting
against long term traditions or beliefs, cannot be
successful without support from the population. And
this support can be achieved only by developing the
area quickly, so that people can immediately realize
the profit they can get in contributing to our projects.
We therefore implement various complementary
actions to achieve economic and human
development :
We create jobs immediately, by training and
hiring locals in the reforestation programs;
We use intercrop culture of cassava and
Paulownia ; this of course provides food locally, but
we also give locals access to markets, as we directly
buy their cassava production for various uses
(ethanol, cassava flour without gluten);
We assist and give training on developing
other food crops (such as vegetables) and short cycle
livestock on the sites ; it gives opportunities for the
people to sell these on the local market and improve
diet in the whole area;
We also focus on valuable non-wood
products (e.g. honey, essential oils, medicinal plants);
We train and educate people for
development of ecotourism activities on site.

Of course we cannot deal with such ambitious
programs on an individual basis, and we therefore
collaborate closely with selected local associations.
In the same way, ECODEV has developed a
network of very specialized partners (companies or
associations) in order to take care of specific training
or technical matters. Networking is then a very
important issue in our actions.
Education is also a key issue in a country where
43% of the population is under 15 years old. In rural
areas, a lot of children leave school at a very young
age, and there is an obvious and proven relation
between education and degradation of forest. As the
conventional / governmental education system
appears sometimes to have very limited capacity, we
do need to work directly with local communities,
providing various training programs adapted to the
specific environment of the selected area.
When ECODEV starts a program in a selected
area, we pay special attention to three major points:
Rural communities should be the ones
asking for our intervention;
We implicate them in the decision process
at all stages of the program, from diagnostic to
implementation;
They need to contribute to the program in
any way they can (e.g. human resources, raw
materials) as we are not talking about humanitarian
action but sustainable human and economic
development of the area.

Our contribution is then designed as a five -year
plan, re-established (and improved) eight times in
succession, which should allow Madagascar to reach
a strategic inflexion point in the process of
reforestation. Forty years may appear as a long
period. But it took France three centuries to reach a
well balanced forest system independently of natural
cataclysms or human conscious or unconscious
destruction. It took South Africa one century to reach
the same level.
Nevertheless, our programs are indeed long term
actions, in a country where economic difficulties
lead the people to have very basic and short- term
views and priorities. It is crucial to ensure their
understanding and involvement to reach inclusive
development in the area.
That is why taking into account specific socio-
economic and cultural values becomes so important.
Our special approach on this matter is developed
later on in this article.

FIGURE I: FOREST COVER MADAGASCAR 1950-2005

B. Zero bushfire techniques and alternatives to slash
-and- burn agriculture
The goal is to reduce, and in the long run to
eradicate, slash- and- burn agriculture that inevitably
causes:
deterioration of the air we breathe ;
climatic change disorders ;
destruction of the structure of the soil and the
living process of microflora and microfauna ;
increase of poverty among rural communities
due to ever reducing crops.


83

Conversely, the introduction of sustainable zero
bushfire techniques mainly aims at the preservation
of biodiversity, of fertility and structure of the soil,
particularly its macroporosity, protects forest seeds
and microfauna living under the soil, tends to
increase all along year and alternate crops.
Main steps are : demonstration sites, three plots
of one hectare each per district; spreading plots,
500sqm per associated family.

Year 1:
only soil preparation for Year 2, when the
rainy season starts (that is November to
December every year);
cut down the trunks of trees, keep them from
burning ;
put these trunks across, in order to tighten
erosion up ;
then grow soil enriching plants such as an
Bracheria, Stylosenths, Mucuna, Tsiasisa.

Year 2:
grow Malagasy indigenous rice (Manjamena,
Rojomena) under green bio compost from
Year 1 ;
keep the quantity of green compost and
Leguminosae under control ;
once harvest is completed, cultivate alternate
crops and re-establish the same level of
Leguminosae of year 1.

The first small scale experiments have been
carried out around 2005 in Madagascar, after a two
months training of ten Malagasy farmers at
Sukamandi Research Institute and the Service
Training Centre, West Java Indonesia (Country
member of the ASEAN community), among whom
was Jacques Rajaonera, ECODEV farming specialist
and delegate for the Alaotra Mangoro region.
This experimental process is an integral part of
our five year plan re-established eight times on end.
Each associated family signs a contractual
commitment to implement sustainably dissemination
plots. In this context, we would consider annual
ICIIIM conferences as check points in this
sustainable program.
The Regions and Districts concerned are :
Amparafaravola, Ambatondrazaka, Zahamena forest
corridor, Anosibe An'ala, in east central of
Madagascar, and also Nosy Be and Ambanja districts
in the north west.
It is worth mentioning that alternatives to slash-
and burn agriculture have been sustainably carried
out on a large scale both in Indonesia and Brazil.
Starting this December 2012 in partnership with
FOFIFA, the national center for applied research,
ECODEV will operate wider and wider
demonstration sites and dissemination plots.

C. Water engineering and management for
sustainable development

Introduction
Water management and used water sanitation in
the context of sustainable development are
considered as worldwide challenges, especially in
developing countries and this situation has led the
United Nations to set up "Millennium Goals for
Development" in these fields.
As for Madagascar, the situation presents both
common and specific characteristics, some probably
to be observed in other developing countries: an
abundance of potentially exploitable resources,
unequal geographic distribution, a very low level of
satisfaction of many needs. The rapidly evolving
situation brings real challenges, as regards
predictable characteristics of communities (e.g. rapid
demographic growth, urbanization, rapid growth of
the middle class social category). At the same time,
challenges are generated by ever growing human
needs linked to economic development in the fields
of agriculture, industry and tourism.
Starting with a quick survey of the global
situation, we will focus on a number of relevant
issues due to generated challenges and emerging
opportunities for innovation.

Situation
A good number of studies have been carried out
about access to drinking water and used water
sanitation in Madagascar. We believe that a study by
Razafinantonina (2010) is worth mentioning. It has
been conducted by the General Director of the
Ministry of Water Supply and Water Sanitation. It
gives a deep accurate analysis of the subject.
Moreover the author of this chapter, Pr. Rakotomaria,
has been a member of the jury for the academic
presentation. The study is in accordance with his
own observations and experiences during the periods
of his various leading positions, as a senior
researcher, as a director of research for the
University and at the National Centre for Industrial
and Technological Research (C.N.R.I.T.). In addition,
he has been the contracting authority then leading
manager of a unit of industrial used water sanitation.
Major elements of the case are as follows:
Madagascar is rich in water resources that should
allow national needs to be met and even potential
export. But geographical and social distribution
remains very poor: only 39% of Malagasy population
has access to drinking water. 95.6% of available
water is oriented to agricultural supply, only 4.3%
devoted to other purposes (industry, housekeeping).

Problems and challenges
When applying a simplified systemic analysis to
the global problem of water and sanitation in
Madagascar, it becomes much easier to spot the
problems. They are located at the level of resources,

84

production and distribution, availability and
durability of access, quality of water, servicing and
pricing policy, and the political, institutional, legal
environment in which the process of access to water
and water sanitation operates.
If we now have good knowledge of the global
system of rivers and water courses, we are lack
national specialists in hydrogeology and hydraulics
to handle current and predictable public and private
needs. Therefore education, capacity building,
empowerment of people and learning centers at
various levels are sought after. Moreover, we must
mention the poor level of investment financing if we
take into account geographic / climatic data and the
scattered nature of rural population. Other factors are:
short term durability of roads and infrastructure work,
lack of follow-up and maintenance servicing, and
low level of participation.
Consequently, an efficient social management
must be set up rapidly to secure a clean sustainable
ruling system of public water management, suitable
revenue, capable to secure the durability of water
servicing, efficient and reliable partnership between
local authorities, operating bodies and local users.
Three new laws must be cited: the Environment
Chart, the law concerning management transfer of
irrigated areas, and the Water Code.
The Malagasy policy on water is inspired by the
international approach of GIRE (Integrated
Management of Water Resources). The four major
concepts are :

water is rare and vulnerable;
a participative approach is required;
a gender approach in water management;
water is an economical good.

For implementation of this approach, the
Ministry of Water has adopted decentralized
management and concerted planning. The basic
territory unit is the hydrographical basin. And the
town (or village) council acting as the local authority
in Madagascar is the contracting authority.
"User pays" and "polluter pays" principles
generate the appropriate revenue for the
sustainability of servicing. The implementation of
such an approach creates new challenges concerning
improvement of the regulatory system and
participative management.

Opportunities for innovative management
As previously illustrated, the various challenges
can lead to new sectors of innovation, such as
international partnerships in sharing experiences,
know-how and technology:

capacity building and reinforcement of local
technicians at different levels in the fields of
drinking water management and sanitation;
spot the best practices in the field and set up a
network of partnerships;
empowerment of learning and training
institutes.
New and more technical topics of innovation
can be identified and implemented such as: low cost
pumping systems for irrigation and water control,
populating drip irrigation technology, mass
marketing the use of ferrates in water processing
(Sharma, 2008).
III. INCLUSIVE, INNOVATIVE...AND ENDEMIC

We will now proceed with a comparative study
between ECODEV experiences since 1997 to date
and current approved concepts of 2012 Inclusive
Innovation and Innovative Management.

A. Inclusive innovation
List and empower mothers and children, from birth
to the age of six.
Since 1999, we have been running 21 centers of
public health care for mothers in the district of
Ambohidratrimo, with an average number of 150
mothers per center. Healthcare is based on ongoing
weight monitoring, food supplementation, and
"watch and do" culinary demonstrations. After 13
years of practice we have gathered over 3,150 pre-
trained mothers, ready for further appropriate and
relevant training in other fields;

Market-oriented training and production
The ECODEV procedure is to start by first
securing long lasting markets, then initiating training,
and ends in launching production : Current markets
and previous training are in handicrafts (bags,
baskets, leather, raffia), plant nurseries (Silk
Mulberry trees,Royal Ficus, Eucalyptus Citriodora,
etc), local catering services, school catering services,
yoghurt and snacks supply to French secondary
school. Soon to come markets and training are :

large scale cassava growing for gluten-free
flour (for the European market) ;
cassava-based ethanol plants in partnership
with pre-identified Thai companies ;
ongoing empowerment of women in rural
areas ;
large scale raffia growing ;
flower / orchid farming and ikebana ;
approved ethnic food restaurants (sakaf gassy
units) ;
bed -and- breakfast units in rural areas ;
pre-school education based on step-by-step
local biodiversity awareness directly in three
languages (Malagasy, French, English); this
program will run during the period of our eight
times five - year plan, accompanying the
natural Paulownia biocycle.


85

B. Innovative management
Fixing negatives first
Instead of running straight ahead into capacity
building programs, ECODEV starts with first
identifying and then fixing negatives. This is a first
"worm inside fruit" program.

Implementation of sustainable five year
planning
During the First Republic period (1960-1972),
President Tsirananas administration used to apply a
method of five year planning. Likewise, from 2010
onwards, ECODEV and partners have kept on using
Paulownia bio plan which is eight times five - year.
The period of 40 years is currently acknowledged as
allowing for an efficient, rational, profitable human,
environmental and economic deep quantum change.

2013-2015: City of 1,000 Jacarandas Antananarivo
program.
Antananarivo literally means "the city of 1,000".
During this period, we'll grow 1,000 three year old
jacarandas to replace the old ones dating back from
80 to 100 years. This program will be the visual
symbol of the new 4th Republic, the new
Constitution and the end of the political transition
period.

Innovative process of multiplying specific hotel and
cookery schools around Madagascar.
Since 2007, we've been operating the very first
cookery school in the North of Madagascar, in Nosy
Be (C.F.T.H), in partnership with the Fondation
Suisse-Madagascar (F.S.M.). The new ECODEV
concept starting from 2013 onwards is to initiate
never before experienced 3 in 1 ethnic food cookery
schools : Malagasy, Thai or Asian KJC, European
(French, Italian) in accordance with the innovative
eight times five - year ecotourism program, during
which ECODEV and partners will be cooperating
with Thailand and KJC countries.

Rice production gap reduction program.
Unbelievably, Madagascar for the past 30 years
has imported 200,000 metric tons of rice annually. It
is known worldwide that the SRI system or intensive
rice growing system was discovered in Madagascar
by the Jesuit Father De Laulani and then has been
successfully applied in Japan, Sri Lanka, Pakistan,
India, USA, etc. Starting from 2013 together with
WUJA (World Union of Jesuit Alumni), Father De
Laulanis family, ECODEV Madagascar, supported
by FOFIFA, plan to reduce then eradicate the annual
gap within 2 to 3 periods of the five- year plan.

Building capacity to increase quantified self-
sufficiency for our 3P programs (Private Public
Partnerships).
Through the UN and UE concept of "efficiency
of grants and funding", ECODEV plans to gradually
increase the percentage of self- sufficiency, starting
from 10% up to 25% of the global projects cost. For
example, by innovative fund raising 5 participants in
ICIIIM 2012, the President of ECODEV has saved
and will make a personal deposit of 2,100 USD for
an estimated overall budget of 21,000 USD for 5
participants before any action to raise funds for 2012
in Bangkok, and 2013 potentially in Madagascar.

International standards-based sustainable development
Since 2003, ECODEV has developed a
sustainable close cooperation with national and
international quality and standards certifying centers,
such as OMAPI, ECOCERT, ISO, WUP (ECODEV
is an active member since 1991); AMFORTH, and
World Union of Hotel Schools.

Potential new innovative reading of III Management.
Hopefully, starting December 15, 2012,
ECODEV and partners in Madagascar, Indian Ocean
and Worldwide (United Nations, European Union)
are already implementing preparations to achieve the
requirements for election to host ICIIIM in 2013. If
so, starting from there, and depending on concerted
agreement, ICIIIM would also mean for us the
"International Centre for Inclusive Innovation and
Innovative Management", Madagascar, Indian Ocean.

C. Endemism
In addition to inclusive innovation and
innovative management, we've chosen to apply what
we call the "80% Malagasy endemic bio
environment-like approach".

1. Build friendship first (Ny fihavanana no aloha
fa tsy nivarotra).
To achieve translation into Malagasy of the
famous Thai writers book entitled "The Chameleon
Man", a super hero from the wilds of Madagascar.
To achieve creation of "Thai-Madagascan
friendship association",possibly including from the
Thai side: Pr WATANA, Professor Pim Intaravitak,
the famous writer and congressman Paul Adirek, Dr
Samnieng Muangnil, HE Tosaporn Arjunata, etc.
And on the Malagasy side, Pr. Emeritus Andrianirina
Rakotomaria, Malagasy speaking Mr. Nicolas
Blanchais (MBA Birmingham), lexicologist Agns
Rakotoson, Pr. Isabelle Andrianjohany, Pr. Sahondra
Ranomenjanahary, junior academic proactive
partners (Mrs Faneva, Mrs Isaa, and Mrs Tiana
Lalaina, graduated soprano at the Korean Brahms
Conservatorium, Iandro Rakotondrandria, Diderot
University in Paris, first contributor to the
preparatory documents to the Convention of Beijing
Agreement August 23 2010).

2. Start identifying then fixing what has been
specific persistant negative trait of Malagasy people
for centuries (1896-2012).


86

3. Produce and publish Madagascan public
speech books (Kabary Betsileo, Betsimisaraka,
Sakalava) translated into Italian, English and French
exclusively by ECODEV members, then later on,
into Chinese, Thai and Korean languages.

4. Ny Ntaolo Rahagola eight times five - year
program in cooperation with Dr Peter H. Raven
scientific team.

5. "Roots and routes" application program.
Deeply rooted into Malagasy cultural diversity and
more and more open to international partnerships and
achievements.

6. 2TM Foundation.

7. 2013-2018-2023. 2013, the first year of The
Decade of Jubilees.

IV. CONCLUSION
Quoting five spirit-like close friends (free
translation from French into English):
"What I know, I don't exactly know what to do
with anymore. What I don't know yet, that's what I
exactly deeply need." Goethe

"What do I know ?" Einstein.

"Understanding comes along with ongoing
practice" ; "This is not to change opponents' behavior,
this is to bring corrections into our own spirit".
Ueshiba, founder of Aikido.

"To change life, change the way you express,
including the way you express to yourself". Gibran

"What shall we implement and achieve together
this forthcoming brand new year so that it could be
celebrated again and again and again for centuries on
end"? Cardinal Philippe Barbarin, Lyon-France.

The Malagasy answer to this last question will
soon be delivered by ECODEV to friends and new
partners.
ACKNOWLEDGEMENT
Jacques RAJAONERA, ECODEV specialist and
delegate for the whole region of Alaotra Manogoro
This paper has been professionally proof-read by :
Pr. Isabelle Andrianjohany, PhD Botanical
Physiology, University of Madagascar.
Pr. Sahondra Ranomenjanahary, PhD Phyto-
pathology, approved presenter at World Congress of
Phyto-pathology, Beijing, August 2013
REFERENCES
Ramahavalisoa, V. B., (2008) Infrastructures
sociales, matrise douvrage et dveloppement
territorial dans la commune rurale dAnkaraobato
(Rgion Analamanga) Antananarivo, Dpartement
de Gographie, FLSH, Universit dAntananarivo
Madagascar.

Razafinantoanina, A (2010), Le problme de leau
Madagascar. Sa rpartition et sa gestion, face
laccroissement dmographique, lirrigation,
lurbanisation et lindustrialisation Antananarivo,
ENAM (Ecole Nationale dAdministration de
Madagascar), Section Administrateur Civil,
Promotion, FANASINA 2008-2010.

Sharma, V. K. (2008). Ferrates: synthesis
,properties and applications in water and waste
water treatment ACS Symposium Series Volume
985; American Chemical Society Division of
Environmental Chemistry.

87

Retail SUKUK:
An Innovative Instrument for Inclusive Growth

Saadiah Mohamad
M. Fahshah F. M. Hasl an
Nurhuda A. Fat hi l
Umi Afiqah M. Azam
Fatin N. Husni

Institute of Business Excellence/Arshad Ayub Graduate Business School
Faculty of Business Management, Universiti Teknologi MARA
saadiah228@salam.uitm.edu.my

Abstract--The last decade has witnessed rapid expansion
of Islamic financial instruments with notably the
proliferation of innovative Islamic investment certificates
called sukuk. Currently sukuk is subscribed by
institutional and corporate investors, hence does not serve
to benefit retail investors. Despite its rapid growth in the
Islamic financial space, sukuk development does not
impact the ordinary people, hence does not contribute
toward growth with financial inclusion. The Malaysian
government has recently announced an initiative to
structure a new sukuk which could be distributed to
retail investors. This paper examines the factors that
influence the adoption of retail sukuk based on Diffusion
of Innovation Theory. The exploratory study is
conducted in the city of Shah Alam, Malaysia. The
findings show that the explanatory variables are
consumer awareness and perceived relative advantage
which points to the importance of public education on
retail sukuk. This study is among the pioneers in retail
sukuk research.
Keywords: retail sukuk, shariah compliant instrument,
Diffusion of Innovation Theory

1. INTRODUCTION
Southeast Asia continues to dominate the sukuk
market with Malaysia leading the poll by being the top
issuer in terms of amount and number of issues (310
issues worth USD 15.4 billion in 2010). This is
followed by Indonesia with 16 issues amounting to
1.75 USD billion. In spite of its rapid development,
there are challenges with respect to sukuk as an
instrument. The first problem to be addressed is the
availability of sukuk to the ordinary people. In other
words, can sukuk be used to promote inclusive growth
by inclusion of retail investors in addition to
institutional and corporate investors. A wider investor
base besides promoting financial inclusion can also
enhance financial stability and sustainability in the
capital market.
The second issue is the awareness of the existence
of sukuk among ordinary people excluding those in the
corporate world. This is because sukuk is only
appealing to those who can afford to buy it, such as
large corporations. These problems are to be answered
in this research.
The purpose of this paper is to review the
evolution of the sukuk market, to determine the level
of awareness among ordinary people towards sukuk
development in Malaysia and to examine whether
sukuk is suitable for use as a wealth management tool
for individual investors.

2. MARKET FOR SUKUK
Sukuk offerings are a fast-growing Islamic product
development in the world. Sukuk is a rapidly growing
business with involvement by private companies, state
enterprises, sovereign governments, Islamic Financial
Institutions and increasingly Western based
International Investment Banks (Abdel-Khaleq A. and
Christopher F., 2007). The terms Islamic capital
market or sukuk market would have been
meaningless a decade ago, aside from a general desire
for the Islamic finance industry to raise capital on a
long-term basis using the efficiency and transparency
of the capital markets. Today, sukuk is among the most
successful Islamic financial product in the industry and
one of the fastest-growing sectors in the global
financial landscape.

Table 2.1 shows that Malaysia is the largest
country issuing sukuk in the year 2011.
TABLE 2.1: SUKUK ISSUANCE BY COUNTRY 2011

Country Percentage (%)
Malaysia 71.6

88

TABLE 2.1: SUKUK ISSUANCE BY COUNTRY 2011
(CONT.)

Country Percentage (%)
Gambia 0.04
Hong Kong 0.10
Pakistan 2.24
Qatar 10.9
Bahrain 2.70
Yemen 0.02
Saudi Arabia 3.20
Sudan 0.30
Turkey 0.40
UAE 4.81
Indonesia 3.00
Iran 0.03
Jordan 0.10
Kuwait 0.40

Source: Accounting and Auditing Organization for
Islamic Financial Institutions (AAOFII, 2011)

With regard to Malaysia, Table 2.2 depicts sukuk
outstanding from the year 2007 until 2011.

TABLE 2.2:MALAYSIAN SUKUK OUTSTANDING

Year Total
Outstanding
(%)
Share of
Global
Outstanding
(RM)
Total Value
of Sukuk
Outstanding
(RM)
2011 90.0 342.3 billion 380.3 billion
2010 70.6 286.6 billion 405.9 billion
2009 60.0 250.0 billion 416.7 billion
2008 50.0 200.0 billion 400.0 billion
2007 48.0 180.0 billion 375.0 billion

(Source: Accounting and Auditing Organization for
Islamic Financial, 2011)

3. MAQASID SHARIAH AND FINANCIAL
INCLUSION
The shariah principle can be understood as the
purpose of Islamic law (maqasid al-shariah). It can be
understood that Maqasid al-Shariah is the objective
and the rationale of the shariah. According to Imam
Al-Ghazli (d.1111) The objective of the Sharah is
to promote the well-being of all mankind, which lies in
safeguarding their faith (dn), their human self (nafs),
their intellect (aql), their posterity (nasl) and their
wealth (ml). Whatever ensures the safeguarding of
these five serves public interest and is desirable.
(Chapra, 2000). Al-Shatibi approves Al-Ghazalis list
and sequence, thereby indicating that they are the most
preferable in terms of their harmony with the essence
of Shariah. Generally, Shariah is predicated on
benefits of the individual and that of the community,
and its laws are designed so as to protect these benefits,
and facilitate improvement and perfection of human
living conditions on earth. This perfection corresponds
to the purposes of the Hereafter. The uppermost
objectives of Shariah rest within the concept of
compassion and guidance, that seeks to establish
justice, eliminate prejudice and alleviate hardship. It
promotes cooperation and mutual supports within the
family and society at large. This is manifested in the
realization of maslahah (public interest) which the
Islamic scholars have generally considered to be the
all-pervasive value and objective of the Shariah and is
to all intents and purposes synonymous with
compassion. Maslahah sometimes connotes the same
meaning as maqasid and scholars have used the two
terms almost interchangeably (Kader A, 2003).
Maslahah is one of the juristic devices that have
always been used in Islamic legal theory to promote
public benefit and prevent social evils or corruption.
The plural of the Arabic word maslahah is masalih
which means welfare, interest or benefit. Literally,
maslahah is defined as seeking benefit and repelling
harm. The words maslahah and manfa`ah are treated as
synonyms. Manfa`ah (benefit or utility), however, is
not the technical meaning of maslahah. What Muslim
jurists mean by maslahah is the seeking of benefit and
the repelling of harm as directed by the Lawgiver or
Shariah. In the sukuk market situation, sukuk is not
fully in the public interest at large since sukuk belongs
more to the corporate body and also to the highly
networked individuals (HNI). Eventhough sukuk
comprises all the objective of maqasid syariah, to date
sukuk has never been issued to the ordinary people.
The Quran prescribes that so that the wealth does not
circulate only among your rich folk (Al-Hashar 59:7).
Financial inclusion is a process of ensuring access
to financial services and adequate credit needed by
vulnerable groups such as weaker sections and low
income groups at an affordable cost (Agrawal A,
2008). Financial inclusion is important because it is a
necessary condition for sustaining equitable gross.
Furthermore, financial inclusion also provides an
avenue for bringing the savings of the poor in to the
formal financial intermediation system and channels
them into investment (Subbarao, 2009).
In this sense, if the Islamic capital market is not
going to accommodate the ordinary people for example
to make room for financial inclusion in improving
wealth and economic growth, it indicates that there
exist some weaknesses in the system. Eventhough
sukuk is a shariah compliant instrument, at the
moment it does not serve the benefit of the ordinary
people. Since the opportunities for sukuk will continue

89

to grow there is a need to develop retail sukuk that is in
line with the changing needs and demands of
customers to remain competitive in the market.

4. RETAIL SUKUK
In order to remain competitive in the market, there
is a need to adapt Sukuk to make it available for
ordinary people in the retail market.
There are many reasons why sukuk should be
retailed to ordinary people. Firstly, retail sukuk can
become wealth acquisition. Ordinary people
accumulate wealth and distribute this to society in
many forms. If Sukuk is available in the retail market
people can invest it as an element to accumulate
wealth. Economic activities in Islam must conform to
Islamic principles of which riba, gharar, maisir and
others are prohibited in order to receive blessings from
the Almighty.
Secondly, retail Sukuk can improve productivity
for ordinary people. Sukuk has great potential for
promoting risk sharing thereby increasing savings
mobilization and investment, spurring growth leading
to enhanced welfare. Sukuk is based on an underlying
transaction which creates a close link between financial
and productive flows. The financing must be channeled
for productive purposes such as project financing.
Thus, the risk exposure is to the project and not to the
uncertainties or activities that have no real economic
benefit. This contributes to the greater stability of the
financial system (Azam A., 2007).
Finally, retail sukuk can increase the ability for
ordinary people to satisfy their own needs (Azam A,
2007). Generally, sukuk is for corporate use and not for
the ordinary people. But, Sukuk itself can become an
instrument that will help ordinary people to satisfy
their own needs and reduce poverty in the country as a
result. (Irfan Syauqi Beik, 2009).
For the above mentioned reasons, Sukuk should be
retailed for ordinary people because it can improve the
involvement of ordinary people with Sukuk and can
represent another asset class for ordinary investors.

5. ADOPTION OF RETAIL SUKUK

Understanding customer needs is the key factor
that determines the consumer demand and successful
marketing of a product or service (Mettawa &
Almossawi , 1998; Naser et al., 1999). In other words,
it is important in order to create awareness of sukuk by
individual investors. So this study also aims to address
the question of factors affecting innovative sukuk
adoption not only for corporate investors but most
importantly for the individual investors or ordinary
people as well.
A theory that is related to innovation adoption is
Rogers Diffusion of Innovation theory (Rogers,
1999, 2003). In general, the adoption process has been
defined as the process through which individual
adopters pass from awareness to full acceptance of a
new innovation (Rogers, 1999; 2003). It is difficult to
get new ideas adopted, even though it has obvious
advantages. Many innovations require a lengthy period
of time, from the time when they become available, to
the time when they are widely adopted. Rogers (2003)
identified five main characteristics of innovations:
Relative advantage, compatibility, complexity,
observability and trialability as the most important
explanation of the rate of innovation adoption (Yusuf,
1999; Rogers, 2003). Therefore, the dependent and
independent variables of primary interest to this
research are derived from the theory of Diffusion of
Innovation (Rogers, 2003).

5.1 Adoption of Sukuk
Adoption is the acceptance and continued use of a
product, service or idea and is seen as the first or
minimal level of behavioral utilization (Rogers, 2003).
In order to create awareness and make sukuk available
at retail level for ordinary people we must do an
innovation or restructuring of sukuk to create an
acceptance of the product among them.

5.2 Consumer Awareness
Consumers will go through a process of
knowledge, persuasion, decision and confirmation
before they are ready to adopt a product or service.
Knowledge occurs when an individual or other
decision-making unit is exposed to an innovations
existence and gains an understanding of how it
functions (Rogers, 2003). Gerard (1997) and Kamal et
al (1999), in their study stated that Muslim
respondents, though aware of fundamental terms in
Islam, were unaware of the meaning of specific
financial terms like Mudaraba, Musharaka and Ijara.
Meanwhile, before the individual investors or ordinary
people are ready to adopt a product such as sukuk, they
must have knowledge about the product.

5.3 Perceived Relative Advantage
Relative advantage is defined as the degree to
which an innovation is perceived as being better than
the idea it supersedes (Rogers, 1999). Potential
adopters want to know the degree to which a new idea
is better than an existing one. According to Yusof
(1999), diffusion scholars have found relative
advantage to be one of the best predictors of an

90

innovations rate of adoption. Rogers (2003) found that
adopters invariably perceived relative advantage in
terms of the economic benefits and the costs resulting
from the adoption of an innovation and improvements
that are afforded to their social status. In addition to
these, economic profitability, low initial cost, decrease
in discomfort, social prestige, savings in time and
effort and the immediacy of the reward, have been
described as the sub dimensions of relative advantage
(Gerard, 2003).

5.4 Perceived Compatibility
Compatibility can be defined as the degree to
which an innovation is perceived as being consistent
with existing values, the needs of potential adopters
and past experiences (Rogers, 2003). Compatibility is
also a measure of the values or beliefs of consumers,
the ideas they have adopted in the past, and the ability
of innovations to meet their needs (Gerard, 2003).
Black et al (2001) conclude that past experience and
the values of consumers in the UK appear to have
significant impact on their willingness to adopt Internet
banking. Thus, in order to introduce sukuk in the retail
market for ordinary people, we must measure the
values or beliefs of consumers, the ideas they have
adopted in the past, and the ability of innovations to
meet their needs.

5.5 Complexity
Complexity is the degree to which an innovation is
perceived as difficult to understand and use. Some
innovations are readily understood by members of a
social system. New ideas that are simpler to understand
are adopted more rapidly than innovations that require
the adopter to develop new skills and understanding
(Roger, 2003). Some innovations are clearly
understood by potential adopters whereas others are
not. Therefore, complexity has been measured in
relation to perceptions about the purpose of the
respective innovation, its intended use and the ease
with which it can be used (Gerard, 2003). Thus,
complexity will be measured in order to know whether
or not sukuk is also suitable for ordinary people, not
only for corporate people .

5.6 Trialability
Trialibility is the degree to which an innovation
may be experimented with on a limited basis. An
innovation that is trialable can dispel uncertainty about
an idea (Rogers, 2003). Previous study by Gerard et al
(2003) and Rogers (2003) stated that there is a positive
relationship between trialability and adoption. If an
innovation can be designed so as to be tried, it will
have a more rapid rate of adoption (Rogers, 2003). As
such it is crucial to test the trialability of sukuk as it
may have significant impact on the consumers
willingness to adopt it.

5.7 Observability
The characteristics of observability have been
defined by Black et al. (2001) as the extent to which an
innovation is visible to other members in a social
system. The significance of customer awareness,
product knowledge and innovative advertising
campaigns will be useful determinants for consumers
to perceive and understand upon observation (Gerard
& Cunningham, 1997). Observability can be defined as
the degree to which the results of an innovation are
visible to others (Rogers, 2003). Some ideas are easily
observed and communicated to others, but other
innovations are difficult observed or described to
others.

5.8 Uncertainty
Uncertainty is the degree to which a number of
alternatives are perceived with respect to the
occurrence of an event and the relative probabilities of
these alternatives. Uncertainty motivates individuals to
seek information, as it is an uncomfortable state of
mind. A kind of uncertainty is generated by an
innovation that is perceived as new by an individual or
another unit of adoption. The perceived newness of an
innovation, and the uncertainty associated with this
newness is a distinctive aspect of the innovation
decision making process, that is, either to adopt or
reject an innovation. The more consumers feel
uncertain about an innovation; the lower would be the
rate of adoption (Rogers, 2003). Hence, if the
individual investors or ordinary people are uncertain
about the restructuring or the innovation of sukuk, the
lower would be the rate of adoption.


91

6. CONCEPTUAL MODEL
Independent Variables Dependent Variable

FIGURE 6.1: THEORY OF DIFFUSION OF
INNOVATION MODEL (ROGERS, 2003)
Figure 6.1 shows the research model derived from
the propositions. The model offers the conceptual
foundation of the research to be conducted. The
conceptual model of this research aims to explain how
the perceived attributes of innovation determines the
adoption of sukuk, in particular, retail sukuk for
ordinary people in Malaysia.
Based on the theoretical framework, the dependent
variable is the adoption of sukuk by ordinary people
while the independent variables are consumer
awareness and relative advantage.

7. FINDINGS
7.1 Reliability Statistic
Based on Sekaran (2003), reliability refers to the
extent to which a scale produces consistent results if
measurements are made repeatedly. The Cronbachs
Alpha test was employed to measure the reliability of
the measurements used in the study. The result is
shown in Table 7.1.

TABLE 7.1: RELIABILITY STATISTIC
Cronbachs
Alpha
N of
Items
.665 14

According to Sekaran (2003), the closer reliability
coefficients are 1.0, the better the result is. In general,
reliabilities less than 0.6 are considered to be poor,
those in the 0.7 range are acceptable and those over 0.8
are good. Thus, the internal consistency reliability of
the measures used in this study can be considered to be
acceptable since Cronbachs Alpha is 0.665.

7.2 Profile of Respondents
The sample of this study consists of individuals in
Shah Alam with all ages starting from 18 years old to
60 years old and above. This study not only involved
UiTM Shah Alam students but also other individuals in
Shah Alam.
Table 7.2 shows the majority who answered the
survey were males (53%) and 47% of the total 200
respondents were females. Majority of the respondents
were between 18 to 25 years old (51%). This is
followed by the age of 36 to 45 years old (12%). 8.5%
of respondents aged 46 to 59 years old and 60 years
old and above were only 5%. The results also show the
different level of the respondents education of which
the majority level of education was Bachelor Degree
(61.5%). This was followed by diploma (18.5%)
Master level (8%) which was the lowest percentage of
respondent who were postgraduates answering the
survey, and SPM was only 12%.

Consumer Awareness
Relative Advantage

Adoption of
Retail Sukuk
Compatibility
Complexity
Trialability
Observability
Uncertainty

92

TABLE 7.2: FREQUENCY TABLE
Respondents
Profile
Details Frequency Percent
1. Gender

Male
Female
Total
106
94
200
53.0
47.0
100.0
1. 2. Age

18-25 years old
26-35 years old
36-45 years old
46-59 years old
60 and above
Total
103
46
24
17
10
200
51.5
23.0
12.0
8.5
5.0
100.0
3. Education SPM
Diploma/Certificate
Degree/Professional
Master
Total
24
37
123
16
200
12.0
18.5
61.5
8.0
100.0

7.3 Relationship between Customer Awareness and Adoption of Retail Sukuk.

TABLE 7.3: CROSSTAB FOR RELATIONSHIP OF CUSTOMER AWARENESS AND ADOPTION OF RETAIL SUKUK

Adoption of Retail
Sukuk

Customer Awareness
Low Moderate High Total
Low 4 1 0 5
Moderate 1 46 10 57
High 7 61 70 138
Total 12 108 80 200

Table 7.3 indicates the relationship between
customer awareness and adoption of retail sukuk. The
finding shows that the majority of the respondents
(138 respondents or 69% strongly agreed with the
relationship and 57 respondents (28.5%) moderately
agreed. On the other hand, only 5 respondents (2.5%)
did not agree with the relationship. The results clearly
show that there is relationship between customer
awareness and attitudes toward retail sukuk.

7.4 Relationship between relative Advantage and
Adoption of Retail Sukuk
Table 7.4 shows the relationship between relative
advantage and adoption of retail sukuk. The finding
indicates that 106 respondents (53%) moderately
agreed with the relationship or slightly agreed. Only
89 respondents (44.5%) strongly agreed with the
relationship and 5 respondents (2.5%) showed that
they did not agree. Hence from the findings, there is a
relationship between Relative Advantage and
Adoption of Retail sukuk since only 2.5% of
respondents did not agree with the relationship.

TABLE 7.4: RELATIONSHIP BETWEEN RELATIVE ADVANTAGE AND ADOPTION TOWARD RETAIL SUKUK

Adoption of
Retail Sukuk

Relative Advantage
Low Moderate High Total
Low 4 1 0 5
Moderate 6 71 29 106
High 2 36 51 89
Total 12 108 80 200


93

7.5 The Most Influential Factors Affecting the Adoption of Retail Sukuk

TABLE 7.5: THE MOST INFLUENCE FACTORS AFFECTING ADOPTION OF RETAIL SUKUK

Model

Unstandardized
Coefficients
Standardized
Coefficients

T

Sig. B Std.Error Beta
(Constant) 3.226 .766 4.211 .000
Customer Awareness .265 .051 .390 5.171 .000
Relative Advantage .178 .083 .162 2.142 .033

Based on Table 7.5, the findings show that all the
independent variables (consumer awareness and
relative advantage) are significantly related to the
dependent variable (adoption of retail sukuk). The
findings also show that customer awareness is the
most influential factor affecting the adoption of retail
sukuk as compared to perception of the relative
advantage regarding sukuk.

7.6 Adoption of Retail Sukuk
Respondents were asked to indicate their
adoption of retail sukuk, represented by the
statements, Sukuk is only for rich persons and Sukuk
should be made available to individual investors (1
for low awareness to 3 for high awareness). The
responses obtained from the sample are summarized
in Table 7.6.
It can be seen that only slightly more than half
(75.5%) of the respondents claimed to be moderately
aware about the adoption of retail sukuk which means
that they are not really sure whether sukuk should be
retailed or not. The awareness of adoption towards
retail sukuk of 13.5% of the respondents was low
while the awareness of the rest of the respondents
(11%) was high. The mean of 2.34 also supports the
above conclusions.

TABLE 7.6: ADOPTION OF RETAIL SUKUK
Level of Adoption Category %
respondents
1. Low 1 13.5
2. Moderate 2 75.5
3. High 3 11
Mean
2.34

7.7 Level of Awareness of Sukuk
Respondents were asked to indicate their level of
awareness of sukuk, represented by the statements,
Sukuk is a shariah compliant Islamic Bond;
Investing in Sukuk will avoid involvement in riba;
Sukuk has been established in Malaysia since 1990,
Malaysia is the largest country that has issued Sukuk
and Ijarah Sukuk is most popular type of Sukuk in
Malaysia (1 for low awareness to 3 for high
awareness). The responses obtained from the sample
are summarized in Table 7.7.
This shows that only slightly more than half
(69%) of the respondents claim to be moderately
aware about the development of Sukuk. About 28.5%
of the respondents were highly aware about sukuk
while 2.5% of the respondents were very slightly
aware about the development of sukuk. The mean of
2.66 also support the above conclusions.

TABLE 7.7: LEVEL OF AWARENESS TOWARDS
SUKUK
Level of
Awareness
Category %
respondents
1. Low 1 2.5
2. Moderate 2 69
3. High 3 28.5
Mean
2.66

7.8 Perceived Relative Advantage of Retail Sukuk
Table 7.8 shows the perceived relative
advantage. There are 53% of the respondents
moderately perceived the relative advantage of retail
sukuk. 44.5% of the respondents highly perceived
the relative advantage, while only 2.5% of the
respondents had low perception of the relative
advantage. The mean value of the perceived relative
advantage is 2.42 and supports the above
conclusions.


94

TABLE 7.8: PERCEIVED RELATIVE ADVANTAGE OF RETAIL SUKUK

Perceived Relative
Advantage
Category %
respondents
1. Lower 1 2.5
2. Moderate 2 53
3. High 3 44.5
Mean
2.42

7.9 Correlation of Variables
TABLE 7.9: CORRELATION OF VARIABLES
Adoption of Retail
Sukuk
Consumer
Awareness
Relative
Advantage
Adoption of
Retail
Sukuk
Pearson Correlation 1 .618
**
.386
**

Sig. (2-tailed) .000 .000
N 200 200 200
Consumer
Awareness
Pearson Correlation .618
**
1 .576
**

Sig. (2-tailed) .000 .000
N 200 200 200
Relative
Advantage
Pearson Correlation .386
**
.576
**
1
Sig. (2-tailed) .000 .000
N 200 200 200

**. Correlation is significant at the 0.01 level (2-tailed)

TABLE 7.10: RULE OF THUMB ABOUT CORRELATION COEFFICIENT SIZE
Coefficient
Size
Strength Of The
Relationship
0.8-1.0 Strong
0.61-0.8 Moderate
0.41-0.6 Weak
0.21-0.4 Very Weak
0-0.02 None

Adopted from: Alvin C. Burns & Ronald F. Bush (2006)

Table 7.9 shows the correlation between
consumer awareness and perceived relative
advantage, and attitude towards retail sukuk. There is
a positive relationship between the consumer
awareness and attitude towards retail sukuk.
Based on Table 7.9, by using Pearsons
Correlation, the correlation coefficient between
consumer awareness and attitude towards retail sukuk
is r = 0.618 and it is a positive and moderate
relationship. Thus, there is a relationship at the 0.01
level of significance which proves that consumer
awareness does influence attitudes towards retail
sukuk.
Perceived relative advantage and attitude
towards retail sukuk also have a significant
relationship with a coefficient of 0.386. There is a
positive but very weak relationship (not significant at
the 0.01 level) between perceived relative advantage

95

and attitude towards retail sukuk. This shows that
perceived relative advantage does not influence
attitudes towards retail sukuk.
It is also found that there is a positive
relationship between perceived relative advantage
and consumer awareness of 0.576, at the 0.01
significance level. However the relationship is weak.

8. CONCLUSION
In conclusion, it is found that the significant
variables that explain the possible adoption of retail
sukuk in this study are consumer awareness and
perceived relative advantage. Findings suggest that
the respondents are aware of the existence of sukuk.
However, they do not know the advantages of retail
sukuk. In order to make retail sukuk as one of the
accepted asset classes it needs efforts to influence the
public about the availability and advantages of sukuk.
This is due to the fact that sukuk is being perceived
as an investment tool for institutional and
corporations. Also, there appears to be confusion as
to whether there is an opportunity for common people
to venture into sukuk.
This study indicates that the level of public
awareness and knowledge of retail sukuk is still low.
In order to attract more consumers to venture into
retail Sukuk, the marketing of the product is vital.
Ordinary people are aware of the existence of sukuk
but are not really aware that there are opportunities
for them to purchase sukuk for their own investment.
And yet with rapid increase in the growth of Islamic
Finance and the issuance of sukuk in Malaysia and
the world over. The development of retail sukuk
would clearly bring an involvement of the ordinary
people into the sukuk space hence providing another
avenue for an inclusive growth. The inclusion of the
public and ordinary people as opposed to just the
institutional and corporate investors would widen the
investor base and promote financial stability and
sustainability.

REFERENCES
Agrawal A. (2008). The need for financial inclusion
with an Indian perspective. pp. 2-10.

Azam A. (2007). Enhancing the role of Islamic
financial institutions in alleviating poverty.
Ayman H. Abdel-Khaleq and Christopher F.
Richardson (2007). New horizons for Islamic
securities: Emerging trends in Sukuk offerings
Chicago, Journal of International Law ,Vol 7 No. 2,
pp 410-420.

Black, N.J., Lockett, A, Winkihofer, H., Ennew, C.
(2001). The adoption of internet financial services: A
qualitative study. International Journal of Retail &
Distribution Management, Vol. 29 No 8, pp 390-8.
Gerrard P. and Cunningham. (1997). Islamic
Banking: A Study in Singapore, International
Journal of Bank Marketing, Vol 15 No.6, pp 204-16.

Hapra. (2008). The global financial crisis: Can
Islamic finance help minimize the severity and
frequency of such a crisis in the future.

Irfan Syauqibeik. (2009). Poverty eradication: An
Islamic perspective.

Kader A., (2003). Modernity, the principles of public
welfare (Maslaha) and the end goals of Shari'a
(Maqasid) in Muslim legal thought. Islam and
Christian-Muslim Relations, 14(2), 163-174.

Metewa, SA and Almossawi, M. (1998). Banking
behavior of Islamic bank customers: Perpectives and
implications, International Journal of Bank
Marketing, Vol 16 No. 7, pp 299-313.

Naser Naser, k. Jamal, A. and Al-Khatib L. (1999).
Islamic banking: A study of customer satisfaction and
preferences in Jordan, International Journal of Bank
Marketing, Vol 17 No.3, pp 135-50.

Rodney Wilson (2008). Innovation in the Structuring
of Islamic Sukuk Securities, Vol. 24 No. 3,, pp 170-
179.

Sekaran, Uma (2003). Research methods for
business. A Skill Building Approach. 4
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Edition.New
York, NY: John Wiley & Sons.

Subbarao D. (2009). Financial inclusion: Challenges
and opportunities.
Yusuf M.Y.R (1999). Islamic banking: Adoption of a
service innovation.

International Conference on Inclusive Innovation and Innovative Management (ICIIIM2012)
96

Inclusive Handwriting Learning Aid Game on
Touch Screen for Myanmar Kindergartens

Nandar Pwint Oo
Ph.D Candidate: University of Computer Studies, Yangon
Yangon, Myanmar;nandarpwintoo@gmail.com
Ni Lar Thein
Rector:University of Computer Studies, Yangon
Yangon, Myanmar;nilarthein@gmail.com
AbstractThis paper presents an inclusive e-learning
game that can help in learning handwritten letters of
different languages for Myanmar kindergartens.
Learning to write is considered a fundamental
requirement for literacy and for integration into
society. Many children have difficulty in learning how
to write with traditional paper aided training methods
because of the lack of interaction as can be given in
multimedia learning. Today children are exposed to
advanced technology at an early age, with tablets, e-
readers, smart phones and mini-notebooks, etc. Many
educators and parents have expressed interest in
unprecedented learning opportunities with a device
driven game for teaching letters and handwriting. The
approaches in this game include: (a) learning by
studying (b) learning by playing (c) learning by doing
and (d) inclusive assessment of progress. These
proposed approaches are evaluated with 25
kindergarten children. The results indicated that the
children, especially those who have difficulty in writing
legibly, progressed in handwriting and had fun in
learning handwritten letters in different languages.

Keywords Handwriting, Touch Screen, e-learning,
Mobile Phone, Language Learning

I. INTRODUCTION
Language characters are usually formed by
sequential strokes that have to be performed in a
certain order (Bara, Bentaz & Cole, 2004). The
traditional learning method is by tracing around a
dotted outline with the aid of arrows on a printed
handwritten training book. The children need to
practice again and again through practice and
refinement to get an exact match of the standard
handwritten characters. However, checking that the
child formed the letters in the correct sequence is
difficult for a trainer as it is not possible to monitor
all the childrens sequence all the time. Moreover,
most of the children feel boring with the traditional
way without the interactive learning method. It is
required to learn writing letters formed using a
particular sequence of pen strokes (Plimmer and et
al., 2008). Teachers and parents are unable to
continually monitor every second to ensure that they
are using the correct sequence. A computer
application needs to be developed to give interactive
learning and to monitor the childs progress with
appropriate feedback (Nicol & Snape, 2003).
Nowadays, advanced technology gives a way to
unprecedented learning opportunities for children.
The technology cannot reach its full potential support
for childrens learning and development, if there is
not a way of technology embedding an educational
component (McManis & Gunnewig, 2012). By using
the advantage of technology, teachers or parents can
help children focus on tasks by telling them to look
carefully at an action on the screen and observe what
is happening or by asking them what they need to do
in a particular situation presented while using a
software program on their mobile phone. This paper
discusses an interactive e-learning game for helping
learning the handwritten letters of different
languages for Myanmar kindergartens.

II. RELATED WORK
A way of teaching how to write is to explain the
form and the order of letter strokes in addition to
copying exercises. Actually, at the beginning of
learning movements are slow and guided by visual
clues. With practice, writing becomes automatic and
the control of movement is mostly proactive (Paullel-
Germain, & et al., 2007). Without the proper
monitoring of the childrens correct sequence, the
handwriting merit of children is difficult to correct
when they are adults. Thus, many researchers have
tried to explore technology assisted handwriting
learning methods.
Most of the handwriting learning aids try to use
haptic. In 2005, James Mullins and his group utilized
low cost haptic technology and custom control
software to build a handwriting aid for training and
rehabilitation (Mullins, Mawson & Nahavand, 2005).
Their aim of a handwriting aid interface is to
simulate re-learning in the brain, recovery of muscle
strength and ultimately achieve functional goals that
improve independence. Later, Florence Bara and his
followers compare two training programs, visual-
haptic (VH) and visual (V) to better understand the
role of perceptual and visuo- motor skills
97

in handwriting (Bara & Gentaz, 2011). Their
evaluation results revealed that improvements of VH
training on letter recognition and handwriting quality
were higher than improvements after V training.
The next similar vein is the multimedia
handwriting learning of Mohammed Mansour,
MohamadEid and Abdulmotaleb El Saddik
(2007).Their multimedia handwriting learning aid
design is to facilitate learning of alphabetical
handwriting of various languages by incorporating
visual, auditory and haptic feedback. They also
introduced an XML based schema to easily introduce
new characters from other languages. In addition, for
children with handwriting difficulties, Younhee Kim
and et al. have proposed a virtual hand-writing
teaching system (Kirriemuir; 2004). Their main
objective is to use a haptic interface that could
provide a neutral, repetitive engaging approach to
letters. To take the incentive of drawing a childs
attention, visual and audio cues are used to increase
the user feedback. However, there are still
underdeveloped facets in developing a learning aid
especially for under 5years old children. In addition,
to make a language learning aid especially for3 year
old children, it is necessary to consider more. For
example, in commercial mobile phone game of
Talking Tom, to get the attention of the user, the cat
usually sneezes every minute and takes the users
attention in an interactive manner. The proposed
inclusive handwriting learning aid is designed to give
interactive learning environment by playing games
and to make fun learning in learning (Kirriemuir;
2004) especially for under 5 years old children.

III. STATE OF THE ART
Educational games and simulations are
experiential exercises that transport learners to
another world. They apply their knowledge, skills
and strategies in the execution of their assigned roles
(Magaret Gredler, 2004). In 2002, the world market
for games and edutainment reference software
realized 16.9 billion US dollars with 3.3 million
game consoles being sold in the UK only
(Kirriemuir; 2004). Games are very popular among
the wide range of people including parents, teachers
and educational specialists. For early childhood
players, it is very important to select an appropriate
technology to gain knowledge and skills. The
objective of this work is to foster childrens literacy
and emotional development with the help of
technology that already is around the parents and
educators.
In Myanmar, pre-kindergarten starts from the
age of 4 or 5 years and the literacy rate of Myanmar
stands at 89.7% (males 93.7% and females 86.2%),
according to the UNESCO Institute of Statistics
(Wikipedia; 2005). English is taught as a second
language. Most of the text books at primary level are
in Myanmar language. But, starting from the late
2000, many private kindergarten have been set up
and let the parents choose other foreign languages
such as Chinese, Japanese and Hindi as part of their
childrens curriculum. For the kindergarten children,
the necessary to memorize a different language
letters names, shapes, trajectories and patterns will
be a big job. A learning aid game is needed that can
fill the gap between the children and the educators.
Meanwhile, a growing body of research points
out the games will be the most frequently used
interactive media among children. It is needed to
develop the educational potential of games especially
for children. There are four key steps to successfully
evaluate the educational technology such as
establishing learning goals for the children,
identifying the hardware devices, analyzing features
and contents and planning how the educational
technology will be integrated into the curriculum
(Savidis & Grammenos; 2006).The proposed system
is embedded with the features shown in Table 1.

TABLE I: FOUR KEY FACTORS WITH FEATURED OBJECTIVES

Fact Featured Objectives
Goal To memorize and learn handwritten
letters of different languages for
pre-school children
Target
Device
To use parents or educators mobile
phones
Fact Featured Objectives
Content To give knowledge of languages
characters and basic numbers in
different languages (Myanmar,
English, Japanese, and Thai, etc.)
Engagement To enjoy the exercises and lessons
by playing through easy steps use of
the learning aid game

IV. IMPLEMENTATION
The childrens development is also greatly
influenced by factors in their environment. Most of
the children under 5 years old can learn through
primary exploring. While they are playing
interestingly, they can ignore distractions around
them and can focus on the task at hand. They can
learn a lot of new letters and words from their first
hand environment. Although, there are a lot of
multimedia learning aids for kids, an innovative way
of a learning environment using a device that is
already in the parents hands is necessary. The
parents can give the first learning environment via
their smart phone touch screen. Similarly, the
children can learn the basic steps of different
languages by playing the game.

98

FIGURE 1: OVERVIEW OF AN INCLUSIVE LEARNING AID

The proposed learning aid game introduces
letter/character names and number names and can
learn about individual shapes before using them to
make patterns. These should be an association for
children between the internal rewards such as feeling
satisfaction in helping a peer or mastering a skill and
the external rewards, such as giving an animated gift
instead of star points.

A. Leaning by Studying: The e-learning system
should emphasize content delivery rather than the
delivery of a new teaching style. The proposed
system can take the leverage of building the learning
skill by choosing. The system lets the children make
a simple choice of characters and the system will
present the correct pronunciation and GIF animation
of the intended letters trajectory. The life of the
children is always in touch with parents. The
interactive game can provide the children pronounce
the presented animated character to the father
(daddy) and the mother (mommy) in the game
console as depicted in Figure 2.

FIGURE 2 (A): LEARN BY STUDYING SCREEN

FIGURE 2(B): LEARN BY STUDYING SCREEN

B. Learning by Playing: Playing is a fundamental
activity of children that allows them to acquire the
foundations of self- reflection and abstract thinking,
develop complex communication and meta-
communicational skills, learn to manage their
emotions and explore the roles and rules of
functioning in adult society. Educational software
employs multimedia interaction methods to deliver
the knowledge by playing games. In this game, it
uses memory boards and lets the child flip and match
the correct letter pairs as displayed in Figure 3. After
a correct match, the child can hear the correct
pronunciation of the characters. This approach can
instill the shape and pronunciation of characters in
childrens brain by only playing a game.

FIGURE 3: LEARN BY PLAYING SCREEN

C. Learning by Doing: In learning by doing,
assigning the children to real working tasks and
activities are the primary objective. After introduce
these two interactive language learning aid
mentioned above, the children will be very familiar
with the characters, shapes and pronunciations and
want to participate themselves by sketching
handwritten characters on the screen. The system
needs to match the childrens sketch with the
standard template trajectory as to whether it is the
correct trajectory or not. To implement this in reality,
the pseudo code of Algorithm 1 as shown as follows
has been embedded in this learning by doing session.
99

Algorithm .1
Input {templates_sketch, children_sketch}
// is a point in the template sketch
trajectory.
, , , ,
// is a point in the children sketch
trajectory.
= , , , ,
// j is the total number of templates sketch
in the template.
// SED is the Square Euclidean Distance of
two trajectory.
// SED_values is the array of SED values
between the children sketch trajectory and
templates sketch.
//index is the current character index.
// min is the minimum value of SED.
double [] SED_values;
float[] children_sketch = Sampling(C);
for(i=0; i<j; i++)
{
float[] template_sketch = Sampling
( );
double SED=
SED_values[i]= SED;
}
min=Search_minimum(SED_values);

if(get_sketch_name(min)==get_sketch_name(ind
ex))
{
notify_Success();
save_in_Log();
}
else
{
notify_TryAgain();
}
Return(Assessment_Log);

As shown in Algorithm 1, if the childs recent
sketch matches with the standard template
trajectories, the system will announces the childrens
work is successful by giving a gift award and will
record the childrens process in the assessment log
file. If not, it lets the children try again. Therefore,
the system can be said to use a trial and error
method to learn one character by character. The
following two figures show the square Euclidean
distance comparison for the intended handwritten
characters.

FIGURE: 4 THE SED DISTANCE COMPARISON OF THE
MYANMAR CHARACTER

SED =
0.011504157
SED =
0.012448053
SED =
0.012716061

SED
=0.012893077
SED =0.013545144 SED
=0.013862954

SED =
0.014285811
SED =0.014904964 SED
=0.015961703

FIGURE: 5 THE SED DISTANCE COMPARISON OF THE ENGLISH
CHARACTER

f F J
SED
=0.008373774
SED =
0.008961687
SED =
0.008783904
H K E
SED
=0.009824107
SED
=0.009965168
SED
=0.010204191
B S A
SED =
0.012291603
SED =
0.010438415
SED =
0.0106761195

FIGURE 6: LEARN BY DOING SCREEN

As shown in Figure 6, the children can imitate
and learn the individual character by tracing around
the standard template outline. Whenever the children
sketch, the system evaluate the correct sketch or not
and save the children progress in assessment log.

D. Inclusive Assessment: According to the log results
from the previous activity, the parents or the
educators can review the childrens development in
every letter or character of different languages as
shown in Figure 7. By using these inclusive
assessments, the parents can distinguish easily if the
100

child has got writing difficulty and can give manual
attention to this.

FIGURE 7: INCLUSIVE ASSESSMENT

V. USABILITY EVALUATION

To measure the usability evaluation of the
proposed inclusive e-learning game in reality, the
game is developed with Android version 2.2 Froyo
and tested on Samsung Galaxy Note and ViewSonic
Tablets. The sounds that are used in this game are
changed to children voices with the help of Voice
Changer for Skype V.2.0.0 from AthTek
Corporation, 2012. The animation GIF of
handwriting trajectories and character patterns that
are used in this game were developed by using GIMP
2.8. In the evaluation process, 25 children under 5
years old (male 12 and female 13) from 4Street
kindergarten, from Htauk Kyant were recruited
during the evaluation session. Before evaluation,
each of the children was tested for their pre-
knowledge and familiarity with characters and
handwriting skills. After filling the initial pre-
knowledge survey form, let the children to try the
proposed game on demonstration devices. Most of
the children in the evaluation session were already
familiar with Myanmar and English alphabets. Thus,
the evaluation only emphasizes on Japanese and Thai
languages.

FIGURE8: PERCENTAGE OF ANALYSIS ON 25 STUDENTS

As depicted in Figure 8, on playing the game
and an initial study of about 2 and a half hour, 18
children out of 25 can pronounce the characters of
the new languages. In writing, an average 9 children
showed their progress and the rest were unfamiliar
with the touch screen. But, they all preferred to use
this learning aid rather than traditional paper work.

FIGURE 9: CHILDREN IN EVALUATION SESSION

VI. CONCLUSION AND FUTURE EXTENSION

A focus in this area can substantially an increase
a childs the understanding of children language
characters and numbers start from the age of 3 years,
so that the technology is truly a learning tool. The
evaluation results revealed that incorporating the
proposed learning aid game can increase learning
ability and fluency of handwriting alphabets in
various languages. Moreover, the children felt fun in
this learning environment and made progress in
learning characters and numbers. This learning aid
game can be extended to include different language
characters and numbers. In addition, the animation
sequence of spelling words and their related pictures
will also be combined to get a wider learning
environment for children.

ACKNOWLEDGEMENT
We would like to give special thanks to Ms.
Than Than Yi, the head of 4Street kindergarten,
Htauk Kyant, Yangon, Myanmar, for her valuable
support in the evaluation session.

REFERENCES

Bara, F., &Gentaz, E. (2011). Haptics in teaching
handwriting: The role of perceptual and visuo-
motor skills. Human Movement Science, Vol 30,
Issue 4, 745-756.

101

Bara, F., Bentaz, E., & Cole, P., (2004). The visuo-
haptic and haptic exploration of letters increases the
kindergarten-childrens understanding of the
alphabetic principle. Journal Article from
Cognitive Development, Vol 19, Issue 3, 443-449.

Kim, Y., Duric, Z., Lynn Gerber, N., &Palsbo A.,
R., & Susan E. P. (2009). Teaching letter writing
using a programmable haptic device interface for
children with handwriting difficulties. IEEE
Symposium on 3D User Interface.

Kirriemuir, J. (2004). Literature review in games
and learning, FutureLab Series.

Mullins, J., Mawson, C., &Nahavandi, S., (2005).
Haptic handwriting aid for training and
rehabilitation. IEEE International Conference on
Systems, Man and Cybernetics, Vol. 3, 2690-2694.

McManis, L., D., and Gunnewig, S., B. (2012).
Finding the education in educational technology
with early learners. NAEYC Publication.

Mansour, M., Eid, M., &Saddik, A. E1. (2007). A
multimedia handwriting learning and evaluation
tool, International Workshop on Educational
Multimedia and Multimedia Education, Augsburg,
Germany, 103-108.

Nicol T., &Snape, L. (2003). A computer based
letter formation system for children, IDC03
Proceedings of the 2003 Conference on Interaction
Design and Children, 165-1652003.

Paullel-Germain, R., Bara, F., Hillairet de
Boisferon, A., Hennion, B., gouagout P. & Gentaz,
E. (2007). A visuo-haptic device- telemaque-
increases kindergarten childrens handwriting
Acquisition. Second Joint EuroHaptics Conference
and Symposium on Haptic Interfaces for Visual
Environment and Teleoperator System (WHC07).

Plimmer, B., Crossan, A., Brewster, S., A., &
Blagojevic, R. (2008). Multimodal collaborative
handwriting training for visually-impaired people,
CHI08 Proceedings of the TwentySixth Annual
SIGCHI Conference on Human factors in
Computing System, 393-402.

Savidis, A., &Grammenos, D. (2006). Developing
inclusive e-learning systems. Universal Access in
the Information Society, Vol. 5, No. 1, 51-72.

APPENDIX

The following survey form was used in the evaluation session of the proposed handwriting learning aid
game. For each child, the pre-condition and post condition of language fluency is recorded and measures the
average progress not only in verbal but also in written skills.

Name:
Age Level: .
Language Fluency: Myanmar English Japanese Thailand
No Myanmar English Japanese Thailand
Verbal Written Verbal Written Verbal Written Verbal Written
Pre Post Pre Post Pre Post Pre Post Pre Post Pre Post Pre Post Pre Post


102

Maternal Near-Miss in North Okkalapa General
Hospital, Yangon, Myanmar: An Inclusive Innovation
Nang Mya Thuzar Maung
Specialist Assistant Surgeon, Department of Obstetrics & Gynaecology, University of Medicine (2)
Yangon, Myanmar; nangmyathuzar@gmail.com

MyaThida
Professor & Head, Department of Obstetrics & Gynaecology, University of Medicine (2)
Yangon, Myanmar; profmyathida@gmail.com

Kyu Kyu Than
Research Scientist, Department of Medical Research, Lower Myanmar
Yangon, Myanmar; kyukyuthan.@gmail.com

AbstractThis paper aims to review the maternal near-
miss cases admitted to North Okkalapa General
Hospital during a year period from 1
st
January 2010 to
31
st
December 2010 as an innovation to improve the
maternal and child health inclusively. Method: It is a
hospital-based cross-sectional descriptive study.
Maternal near-miss (MNM) cases were identified
according to WHO criteria (2008). The prevalence of
MNM, the obstetric complications and the
circumstances leading to MNM condition were
determined. Thirteen purposively sampled patients
were interviewed in-depth to explore the reasons for
delay. Data analysis was done by thematic content.
Results: There were 90 maternal near-miss cases. The
prevalence was 19.97 per 1000 total births. Maternal
near-miss to maternal mortality ratio was 5:1 and the
maternal mortality index was 16.7%. The prevalence
was highest in the 20-34 year age group (52%), in
parity-1-4 group (61%), in early pregnancy group
(43%) and in unplanned pregnancy group (78%) and
in the group with no antenatal care (61%). Abortion
related complications contributed 43% of MNM cases.
Other obstetric complications were severe hypertensive
disorders of pregnancy in 28%, obstetric haemorrhage
in 19% and puerperal sepsis in 8%. Transfusion of 5
units of blood within 24 hours in ten patients (13.7%),
cardiopulmonary resuscitation in 3 patients (4.2%),
continuous use of vaso-active substances in 34 patients
(46.5%), ICU care in 59 patients (65.6%), intubation
and ventilation for 60 minutes not related to
anaesthesia in 6 patient (8.2%), hysterectomy in 20
patients (27.4%) were necessary to save the life of these
mothers. Level one delay was found in 73 cases
(81.2%). The commonest reason for level one delay was
found to be misconception and misbelief. Major themes
used in analysis were antenatal care, lack of knowledge
about danger signs, contraceptive practice, reasons for
induced abortion and transport problems. There were
many overlaps among the reasons for near-miss in this
study. Conclusion: This study highlights the magnitude
of problems of mothers admitted to hospital with life-
threatening conditions after delay in seeking health
care. The study also explored the obstetric causes, the
levels of delay and reasons for the delay that led to life-
threatening conditions. These findings can be used in
health planning for implementation of intervention and
to improve quality of obstetric care in future to prevent
maternal near-miss and maternal death, leading to
comprehensive inclusive health care for mothers in
Myanmar.

Keywords-- Maternal near-miss, Maternal death
Abbreviations: MNM - Maternal Near-Miss, MM -
Maternal Mortality, MMR - Maternal Mortality Ratio,
MDG - Millennium Development Goals, NOGH - North
Okkalapa General Hospital, WHO World Health
Organization, ICU Intensive Care Unit

I. INTRODUCTION
Improving maternal health and reduction of
maternal mortality is one of the key targets of the
Millennium Development Goals (MDG). MDG Goal
Number 5 in the Millennium Declaration is a 75
percent reduction in maternal mortality worldwide
by 2015. Maternal mortality is described as just the
tip of the iceberg and the vast base to the iceberg
is maternal morbidity. For every woman who dies,
many suffer serious life-threatening complications of
pregnancy and nearly die but, with good luck or with
good care,

survive. That category could be defined as
near-miss morbidity. Near-miss morbidity provides
more cases for case review or for auditing health care
as it occurs more often than maternal death and may
provide more information because the women herself
can be a source of data. It can allow more robust
conclusions on risk factors and substandard care.

103

Cases of near-miss morbidity also provide an
appropriate comparison group both for clinical case
review and for epidemiologic analysis. Since severe
maternal morbidity precedes maternal death, the
systematic identification and the study of near-miss
cases may provide further understanding of the
determinants of maternal mortality. It can give
lessons to be learned from the management of cases
who survived which may be as useful as from those
who died. The factors surrounding the death or
contributing to death are difficult to get from
relatives or neighbours after death. But this
information can be easily and completely elicited
from the women who recover after illness.
Knowledge gained on review of near-miss cases can
improve treatment and can prevent progression to
more severe morbidity and mortality.
In Myanmar, previous studies on maternal near-
miss cases are those of Khin Thein Oo (2001), Yu
Yu Aung (2002) and Saw Lwin et al (2005) which
identified the causes of maternal near-miss
morbidity, but the factors surrounding or leading to
near-miss morbidity were not included. MNM
review will explore the reasons for the delays in
arriving at a hospital. Inequality in access to health
care services secondary to the gap in income
distributions may be the main reason for these
delays. If the findings can be utilized in planning and
implementation of maternal and child health care
services, it will prevent near-miss events and
maternal death. The findings of MNM review will
lead to inclusive health care.
II. AIM AND OBJECTIVES
Aim
To study maternal near-miss cases admitted to North
Okkalapa General Hospital (NOGH) in the year 2010

Objectives
1. To determine the prevalence of maternal near-
miss cases among women admitted to the maternity
and gynaecological ward of NOGH during
pregnancy, during delivery and during the postnatal
period
2. To calculate the ratio of maternal near-miss cases
to maternal deaths
3. To determine the obstetric complications in
maternal near-miss cases
4. To explore health care before admission
and the circumstances leading to the maternal near-
miss condition
III. METHODS
This is a hospital-based cross sectional
descriptive study using both quantitative and
qualitative research methods. This study was carried
out in the Obstetric and Gynaecological Ward of
NOGH. All women with maternal near-miss
conditions as identified using WHO criteria (2008)
during the study period were included in the
quantitative study. It took a year period from 1
st

January 2010 to 31
st
December 2010. For the
quantitative analysis, patients background
characteristics, reproductive history reproductive
history and history of present pregnancy and present
illness were summarized and studied using
descriptive analysis.
For in-depth interviews, sampling was done
purposively and in two dimensions: (1) Stage of
pregnancy at the time of near-miss event (2) The
leading causes of near-miss event. Qualitative data
analysis was by thematic content analysis. Major
themes used in analysis were antenatal care, lack of
knowledge about danger signs, contraceptive
practice, reasons for induced abortion and transport
problems. There were many overlaps among the
reasons for near-miss in this study. The final results
are presented using both qualitative and quantitative
interpretations.
IV. RESULTS
There were 18 maternal deaths and 90 maternal
near-miss (MNM) cases among 4424 live births
(LBs) and 4507 total births in NOGH in 2010.
Maternal mortality ratio (MMR) was 406.87 per
100,000 LBs. The prevalence of MNM was 19.97
per 1000 total births. MMN to Maternal Mortality
(MM) ratio was 5:1 and the maternal mortality index
was 16.7%. There were 786 abortion cases admitted
during the study period and these contributed 9
maternal deaths (50% of total MDs) and 39 maternal
near-miss cases (43.3% of total MNM). The case
fatality rate of abortion was 1.15% and MNM to MM
ratio was 4.3:1. Maternal mortality index was 18.7%.
The remaining cases were related to obstetric
complications of late pregnancy, delivery and
puerperium. If abortion cases are excluded, MMR
was 203.4 per 100,000 LBs and MNM to MM ratio
was 5.6:1.
Back-ground characteristics of maternal near-
miss cases
Back-ground characteristics of the study
population are shown in Table 1.

TABLE 1: SOCIODEMOGRAPHIC CHARACTERISTICS
AND REPRODUCTIVE CHARACTERISTICS OF
MATERNAL NEAR-MISS CASES

Sociodemographic
characteristics
N Percent
Age groups (Years)
<20 11 12.2
20-34 47 52.2
35 32 35.6
Education
Illiterate, Can read & write 10 11.1
Primary school 17 18.9
Secondary school 32 35.6
High school 27 30.0
Graduate 4 4.4

104

Sociodemographic
characteristics
N Percent
Occupation
(Non-working) Dependent 62 68.9
Working 28 31.1

Husbands Occupation
Labourer 63 70.0
Semiskilled 20 22.2
Skilled 7 7.7
Total family income/month (Kyats)
< 100,000 79 87.8
100,000 11 12.2
Reproductive characteristics
Parity groups
0 27 30.0
1-4 55 61.1
5 8 8.8
Current pregnancy status
Planned 20 22.2
Unplanned 70 77.8
Antenatal care during pregnancy
No ANC (including
miscarriage)
55 61.1
ANC < 4 22 24.4
ANC 4 13 14.4
Place of AN Care
UHC 12 34.3
RHC 7 20.0
Consultant lead ANC 16 45.7

The 20-34 year age group was 52% of MNM
cases and the non-working (dependent) group
contributed to 68.9% of cases. About two-thirds had
education level of secondary school level and less,
and 87.8% were in low-income group with monthly
family income of less than 100,000 kyats. Seventy
eight percent had unplanned pregnancy. Sixty-one
percent of MNM cases had no antenatal care.
Another 24.4% had ANC of less than 4 visits.
Forty three percent occurred in early pregnancy
as abortion related complications. The remaining
fifty seven percent occurred in late pregnancy.
Twenty six percent occurred during the antepartum
period, twelve percent in the intraparum period and
nineteen percent in the postpartum period.

Obstetric complications in MNM cases
Figure 1 and Table 2 show obstetric
complications leading to near-miss conditions in the
study population.

FIGURE 1: OBSTETRIC COMPLICATIONS OF MNM
CASE
43%
20%
28%
8% 1%
Early pregnancy related
complications
Haemorrhage
Hypertensive disorders of
pregnancy
Puerperal sepsis
Obstructed labour

TABLE 2: NATURE OF OBSTETRIC COMLICATIONS
IN MNM CASES
Nature of obstetric
complications
N Percent
Massive obstetric haemorrhage before 22 weeks
Ectopic pregnancy with shock 1 1.1
Cervical pregnancy 1 1.1
Haemorrhage due to morbid
adhesion
1 1.1
Total 3 3.3
Massive obstetric
haemorrhage after 22 weeks

Antepartum haemorrhage due to
placenta praevia
2 2.2
Antepartum haemorrhage due to
abruptio placenta
5 5.6
Primary postpartum
haemorrhage due to uterine
atony
5 5.6
Primary postpartum
haemorrhage due to trauma and
morbid adhesion
2 2.2
Primary postpartum
haemorrhage associated with
retained placenta
2 2.2
Total 16 20
Hypertensive diseases
Eclampsia 16 17.8
Severe pre-eclampsia 5 5.6
HELLP syndrome 4 4.4
Total 25 27.8
Obstructed labour (uterine
rupture)
1 1.1
Severe sepsis
Puerperal sepsis 7 7.8
Septic abortion with septicemia 38 42.2

Management of maternal near-miss cases
Transfusion of 5 units of blood within 24
hours in ten patients (13.7%), cardiopulmonary
resuscitation in 3 patients (4.2%), continuous use of
vaso-active substances in 34 patients (46.5%), ICU
care in 59 patients (65.6%), intubation and
ventilation for 60 minutes not related to
anaesthesia in 6 patient (8.2%), hysterectomy in 20
patients (27.4%), bilateral internal iliac artery
ligation in 3 patients (7%), B-lynch suture in 2
patients (4%), emergency laparotomy and drainage
of pus, resection and anastomosis of intestine, and
salpingectomy for ectopic pregnancy in 11 patients
(24 %) were necessary to save the lives of these
mothers.

Fetal outcome of MNM cases
There were 53 babies born to 51 mothers with
MNM and their outcomes shown in Table 3.


105

TABLE 3: FETAL OUTCOME OF MNM CASES NOT
RELATED TO ABORTION

Fetal outcome N Percent
Alive 43 81.1
Mortality
Fresh still birth 9 17.0
Macerated still birth 1 1.9
Asphyxiated not revived 2 3.8
Early neonatal death 4 7.5
Birth weight
Normal birth weight 36 67.9
Low birth weight 17 32.1
Gestational age
Term 40 75.5
Prematurity 13 24.5
Admission to SCBU
No 27 50.9
Yes 26 49.1

Levels of delay and reasons for the delay that led
to life-threatening conditions

Level one delay was found in 73 cases (81.2%).
Level two and level three delays were in 4 (4.4%)
and 5 (5.5%) cases respectively. Combination of
level 1, 2 and 3 delay was found in eight cases.
Forty two percents were self referral cases.
Nearly 10 percents were referred by traditional birth
attendance (TBA) and another 13.8 percents were by
midwives.
The commonest reason for level one delay was
found to be combination of misconception and
misbelief resulting from low education and financial
problems to access health care. A quarter of cases
were admitted through antenatal clinic of NOGH.
Most of them were late booker and admitted on their
first visit. Nearly 10% were transferred from other
hospitals and late referrals contributed to more
severe conditions although they had emergency
obstetric care in primary hospitals. There are many
reasons for unmet needs of health care during
pregnancy, delivery and puerperium.

Health care expenses in MNM cases
North Okkalapa General Hospital is a public
hospital and cost sharing system is practiced.
Government provides the infrastructure and pays
salaries to doctors and staff. Basic essential drugs are
also provided. Other health care expenses are to be
paid by patients out of their pockets if they are
affordable. The majority of near-misses in this study
were hand to mouth daily wage earners and they are
not able to pay for medicine. The expenses for care
of MNM cases in this study depends on charity and
were paid from the trust fund of the hospital, fund
donated by individual person and fund contributed
by community based organization founded by well
wishers. Those with high income usually go to
private hospital if they need health care.

Findings of in-depth interview regarding
antenatal care
Some pregnant women did not get antenatal care
because there were no services where they lived.
Some said that they could not afford the services
because they are too expensive and some said that to
reach the health facility was too costly. They had to
earn for the family and they could not spend time for
antenatal care at health facilities. Some women did
not use services because they are not satisfied with
the quality of care.

I have five children, I delivered all my children
with Let the (Traditional birth attendance) at home.
No problems occurred during previous pregnancies
and deliveries. I am quite trusted her care, so I
decided to do the same in this pregnancy
(38 years, grand-multiparous woman with PPH)
I was supposed to attend regularly since my
booking visit. But there was no one at home and I
didnt have the heart to leave my young child alone.
So I missed my follow up appointments
(28 years, multiparous woman with eclampsia)

I know that I should take antennal care, but I
was thinking of taking antenatal care in later part of
pregnancy at about seven month
(30 years, multiparous woman with abruption
placenta)

There were some women who perceived that
antenatal care was not an important factor because
all previous pregnancies were normal and they have
easy births. Moreover, some said that almost all
women they know had no regular antenatal care and
had home deliveries without any problems. Some
patients had little knowledge about the importance of
antenatal care and misconceptions and belief still
overwhelmed them.

This is my second marriage and my parents-in-
law didnt agree our marriage. This pregnancy was
unplanned and unwanted one and both my husband
and my mother-in-law didnt like this one. Because
of social and marital problems, I am fed up with this
pregnancy, and take no antenatal care at all
placenta)

Social, marital and financial problems also
influence the use of health services.

At about eight month of pregnancy, I couldnt
walk any more because of the swollen legs. Last
three days, I noticed the puffiness of the face and the

106

whole body became bloated. Urine output became
very little. So I asked my neighbors and they said it
was usual process of late pregnancy. This morning, I
had a very severe headache, and strange sounds in
my ears; I saw lights in front of my eyes. But I dont
think that it could be dangerous
(28 years, primigravid woman with eclampsia)
The majority of the study population had little
knowledge about danger signs and symptoms during
pregnancy, during delivery and during puerperium.
MNM cases with severe pre-eclampsia or eclampsia
did not know that headache, blurring vision and pain
in the epigastrium were the danger signs.

Findings from in-depth interview about
contraceptive practices

Contraceptive knowledge
My husband is a merchant, he come back two
or three times a month, so I use emergency
contraception whenever we had our relations. I think
it can prevent pregnancy.
(25 years, primigravid woman with abortion)

I have three children. Previously I used
injection form of contraception every three month
regularly to prevent pregnancy. Later I think I was
too old and pregnancy was unlikely to me, so I
stopped contraception by myself without any
discussion with others. Later I conceived this
pregnancy unexpectedly
(40 years, multiparous woman with abortion)

Actually I dont want to get pregnancy, but I
had no idea to take contraception I just heard about
oral and injectalble forms of contraception, but I
didnt know how to take the pills properly
(17 years, primigravid woman with puerperal sepsis)

Previously I used injectable form of
contraception three monthly, but it made me fat so I
switch to once a day pills. I conceive this pregnancy
while taking oral contraceptive pills, due to missed
pills. I thought a few missed pills will not make me
pregnant

Although most of the women in the study had
basic contraceptive knowledge, in-depth knowledge
on contraceptive use seemed to be limited. Their
knowledge was based mainly on anecdotal and
hearsay information.

Cost for contraception
In order to take contraceptives regularly, they
must be affordable, accessible and feasible.
According to the informants interviewed, most were
hand to mouth workers and even the low cost of
contraception was a burden to them because they had
other more important daily needs to be met.

I want to have injection, and it suits me well.
But the problem is that I have not enough money.
The truth is that I decided not to get injection
because with that money I can cook curry for two
days

I work as a sale girl and I can earn money and
can support my family. To get a job with good salary
is quite difficult these days and our Boss prohibited
that sale girls must not get pregnant. So when I knew
about my pregnancy, I was shock and then I had no
choice but to terminate this pregnancy as I cant let
go of my job
(25 years, primigravid woman with abortion)

Ignorance
Taking a pill or using injection contraception
regularly is just complicated and it costs a lot. The
quick and easy way to solve the unwanted pregnancy
is to do abortion, and it costs just a little. I have seen
many women who use this method to solve their
problems. They are doing very well and I have never
seen any complications

Ignorance was due to poor health knowledge
and education. When pregnancy was suspected, they
went to an abortionist to get rid of unwanted
pregnancy.

Easy access to an abortionist

Even though abortion is illegal in Myanmar,
there are abortionists in all places. Access to an
abortionist is very easy with an affordable cost.
My husband is a trishaw drivers and he said
that he had to send many women who want to go to
the abortionists. Abortionists are readily accessible
in our town

Problems in transportation
Delays in arriving at health care center to have
appropriate treatment were significant problems.
Some had difficulty getting to their chosen place for
care due to a lack of transportation. Some level two
delays were due to financial problems.
When I got sick, at about 12:00 noon, my
mother decided to bring me to the hospital, but she
didnt have enough money and she had to start
borrowing money from neighbors and it took quite a
while. We looked for a means of transport; we live
quite far away form Main Street, so it took an hour

107

to get a Taxi. , and only at 3:00pm, we reached the
hospital
placenta)

Late referral
Late referral from primary care center to health
facility with higher level care was also important
factor.
I delivered my baby at 10:55am at x township
hospital with forceps delivery by a staff nurse,
bleeding occurred at 12:30pm, total of 11 bottles of
blood were given at this hospital and referred me
only after 24 hours, thanks God, the monk near the
hospital helped me a lot and arrange transportation,
it took about an hour to reach to NOGH

Examples of selected MNM cases

(1) A MNM case with level one delay
A thirty four year old primigravida came to the
NOGH with eclamptic fits during her last trimester.
She had only two antenatal visits. She lived much
closer to NOGH. It took about 15 minutes to reach
the hospital. But she arrived at hospital only after
having fits and HELLP Syndrome. Emergency LSCS
was done and a 1.4kg baby was delivered. She was
on a ventilator for nine days in ICU. Platelet rich
plasma 7 units and fresh blood 3 units were given
DIC.
Although she lived quite close to the hospital,
she had misconceptions and did not know the
importance of ante-natal care and did not take proper
ante-natal care. Although she was a high risk case
and she lived near the hospital, she had no idea of
hospital delivery.

(2) A MNM case with delay at more than one
level
A 33 year old lady was admitted at 12:30 pm on
28.12.10 for traumatic PPH (extension of episiotomy
wound and broad ligament haematoma) after forceps
delivery of her first baby at X township hospital at
10:55am on 27.12.10. She arrived at NOGH 24 hours
after having PPH. A total 11 units of blood were
given at this hospital. There was also a financial
problem but a monk of the township helped to send
her to hospital. It took more than an hour to reach
NOGH. She was in a state of shock with marked
pallor. After resuscitation, emergency laparotomy,
subtotal hysterectomy and bilateral internal iliac
artery ligation were done. Another five units of blood
were given at NOGH and the woman survived. The
reasons of delay were a combination of delay in
referral from the township hospital (level 3 delay), a
financial problem and transportation problem.
Although there was delay in referral to a higher level
hospital, the patient had emergency obstetric care
such as resuscitation and blood transfusion in X
hospital.
V. DISCUSSION
The prevalence rate of MNM of 19.97 per 1000
total births of this study was higher than in other
studies. The prevalence rates of 14 per 1000
admissions, (Khin Thein Oo, 1992), 10.5 per 1000
admissions (Yu Yu Aung, 2002) and 15.4 per 1000
deliveries (Saw Lwin et al, 2005) were reported in
other studies in Myanmar. The prevalence of MNM
in high-income countries was reported to range from
3.8 to 12 per 1,000 births (Roosmalen & Zwart,
2009). The difference in prevalence may be due to
the difference in definitions and the denominator
used and the countries health care levels.
Mean age of maternal near-miss cases in this
study was 30.18 years with a standard deviation of
7.86. All age groups were involved in MNM cases.
This finding shows that all age groups are at risk.
The risk of maternal morbidity was higher in
persons of low educational status. This finding was
similar to the other studies in Myanmar. Most of the
study population had education up to middle school
level. Maternal education has an important influence
on maternal morbidity and mortality. The low
maternal education has an adverse impact on health
of mothers.
Low income of the family contributes to low
utilization of health care. They did not seek health
care even in public hospital where the expense is
much less than private hospital and they arrived at
hospital very late in life threatening conditions.
Some of them can be saved with residual health
problems but some may die. People are in fear of
economic ruin following in-patient treatment for an
illness and that contributes to delay in access to
health care. They need to depend on charity for their
health care expenses. If health services are free of
charge, there will be no barrier to health services
because they cannot afford to pay. A model of
healthcare financing that will achieve fairness and
protect people from financial risks is necessary. The
public insurance system, either through general
taxation or compulsory social insurance premiums
should be introduced to improve maternal and child
health by improving access to health services without
any delay.
Women who had no antenatal care were found
to be more susceptible to near-miss situation. The
finding was agreed with a study done in Saudi
Arabia (Nasrat, Youssef, Marzoogi & Talab, 1999).
If pregnant women had regular antenatal care, early
danger signs can be detected during antenatal visits
and information regarding danger signs can be given.
Birth planning and emergency preparedness can be
arranged, especially in collaboration with community
members and NGOs if women have financial
problems.
To reduce maternal morbidity and mortality, the
lack of knowledge and negative attitudes of pregnant
mothers on antenatal care should be promoted
through effective advocacy, pamphlets and media.

108

Early and regular antenatal care, proper health
education, detection of high risk pregnancy, planned
modes of delivery, awareness of complications, and
joint care with a physician over medical disorders of
pregnancy can reduce the number of maternal near-
miss cases. This study highlights the need of health
education in peri-urban areas, as the knowledge and
health education status of people in this study is quite
poor.
Abortion related complications occurred in
nearly half of the MNM cases and in about half of
maternal deaths in this study. Termination of
pregnancy is not allowed in Myanmar and most of
the cases were induced by abortionists. The unmet
need for contraception is the main reason of
unwanted pregnancy. If the underlying causes of the
unmet need can be explored by in-depth interviews,
the findings can be applied in provision of effective
contraceptive use in the community. That will
internally lead to reduction of MNM and MM related
to unsafe abortion.
In this study, the mean total duration of hospital
stay was 10 (10.2 0.87) days and more than half of
the near-miss cases were admitted to the ICU. These
findings are higher than those of the study done by
Mantel, Buchmann, Rees & Pattinson (1998). A total
of 57 patients required blood transfusion and about
10 patients needed five Units or more within 24
hours. The maximum requirement was 16 units.
On reviewing fetal outcome, the take-home baby
rate was 73 percent and the still birth rate of 19
percent in this study was quite high. About one third
of the neonates were preterm babies which was due
to termination of pregnancy in cases with eclampsia
and abruptio placenta.
Social, financial, and cultural problems
influence the health seeking behavior of these
abortion patients. Most of the women who had
unplanned and unwanted pregnancies did not
practice any type of contraception. This may be due
to unwillingness to use modern contraception as they
perceive it as harmful to them. This study
highlighted that awareness does not always lead to
practice of contraception. Regarding attitudes on
contraception, they failed to use it because of many
socioeconomic problems which were observed in the
qualitative findings. Most of the patients solved
unplanned and unwanted pregnancies by having
induced abortion. They felt a sense of relief that their
immediate problem had been solved although they
felt it was not a good thing.
Most maternal near-miss women have one or
more detectable obstetric or other complications
before they develop a life threatening complication.
Although there were many cases of level one delay,
there was only a few level two delay. Late referral
due to transportation problem was found in two cases
in this study. This finding may be due to the drainage
townships which are very near to NOGH and have
no transportation problem. Study population did not
include patient from hard-to reach area. Since the
maternal death review was not included in this study,
comparison cannot be made between the findings of
MNM review and maternal death review. The types
of avoidable factors were reported to be similar on
review of MNM cases and maternal death cases by
Pattinson, Buchmann & Mantel (2003).
Delay in referral from primary care center to
health facility with higher level care was found in 5
cases with inadequate basic emergency care.
Low maternal educational status, lack of health
knowledge, unplanned pregnancy, unhealthy health
seeking behavior, misperception, misbelief, lack of
knowledge of the importance of antenatal care,
unawareness of early danger signs by the women and
their families, socio-economic difficulties, and
inaccessibility of health care services were major
factors contributing to level one delay. Level one
delay is the most common cause and it was found in
82 percent of total near-miss cases.
Most of the maternal near-miss cases did not
take adequate and proper ante-natal care because of
so many factors. They have problems with arranging
care of their own children during antenatal visits.
Most of the women in this study gave birth at home
with unskilled birth attendance. To improve maternal
and child health, gaps in the capacity and quality of
health systems and barriers to accessing health
services must be identified and tackled at all levels,
down to the community.
There were few communication and transport
problems in this study and a few cases of level two
delays were due to financial problems. Combination
of level 1, 2 and 3 delay was found in eight cases.
Cases transferred from other hospitals had late
referral.
Review of maternal near-miss cases assessed the
quality of obstetric care as well as the community
utilization and the barriers to health care. Routine
MNM review will help to fill up the gaps between
user (community) and provider (health care
services). Through an increased understanding of
preventable events, interventions necessary to
improve the health care delivery system can be
developed and this can decrease the associated risk
of maternal mortality and morbidity.
VI. CONCLUSION
The surveillance of maternal near-miss is now
internationally accepted as a core component in
programs of maternal health. Maternal mortality and
maternal near-miss can be prevented through one of
three mechanisms: prevention of unwanted
pregnancy, prevention of the complications during
pregnancy, and appropriate management of any
complication that does occur. Prevention of
unwanted pregnancy and management of unsafe
abortion are key interventions for safe motherhood.
Although this study was conducted in periurban
area of Yangon, the findings will reflect the health

109

seeking behavior of women in area with similar back
ground characteristics. The dissemination of the
findings of this review lead to improvements in
clinical care as well as beneficial health system
changes leading to comprehensive inclusive health
care for mothers in Myanmar.

ACKNOWLEDGEMENT
The authors would like to thank all maternal
near-miss patients included in this study. Without
their help and co-operation, this study would not
have been possible.
We would also like to extend a heartfelt thanks
to all staff and our colleagues of NOGH for their
help during data collection and interviewing the
women.
REFERENCES
Khin Thein Oo (2001). Review of near-miss
maternal mortality and morbidity to improve quality
of obstetric care. Proceeding of Obstetric and
Gynaecological Conference, Mandalay, Myanmar:
pp14-20.

Mantel, G.D., Buchmann, E., Rees, H., & Pattinson,
R.C. (1998). Severe acute maternal morbidity: A
pilot study of a definition for a near-miss. Br. J.
Obstet. Gynaecol., 105(9): pp 985 990.

Nasrat, H.A., Yousssef, M.H.M., Marzoogi, A., &
Talab, F. (1999). Near-miss obstetric morbidity an
inner hospital in Saudi Arabia. East Miditerr Health
J, 5(4): pp 717-26.

Pattinson, R., Buchmann, E., Mantel, G.D. (2003).
Can enquiries into severe acute maternal morbidity
act as a surrogate for maternal death enquiries? Br. J.
Obstet. Gynaecol. 110: pp 889-893.

Roosmalen, J.V & Zwart, J. (2009). Severe acute
maternal morbidity in high-income countries. Best
Practice and Research Clinical Obstetircs and
Gynaecology, 23: pp 297-304.

Saw Lwin, Win Pe, Yu Yu Hlaing, Mya Mya Mon
(2005). A profile on near-miss cases in Central
Women Hospital, Mandalay. Proceeding of
Myanmar Medical Association 4
th
Medical
Conference, Taunggyi, Southern Shan State,
Myanmar: pp 5

Yu Yu Aung (2002). A study of maternal near-miss
morbidity in Central Women Hospital Mandalay. A
dissertation submitted to the Academic Board of
Study, University of Medicine, Mandalay, Myanmar.
pp 36

110

Inclusive Innovation: A Case Study Using
Creative Problem Solving

Fernando Sousa
Research Centre for Spatial and Organizational Dynamics (CIEO), University of the Algarve
Faro, Portugal; cardoso_sousa@hotmail.com
Ileana Monteiro
Research Centre for Spatial and Organizational Dynamics (CIEO), University of the Algarve
Faro, Portugal; ileanamonteiro@hotmail.com

Abstract-- This research is aimed at providing tips to
improve the facilitation process, when stakeholders
who have limited power and project-relevant
knowledge take an active part in inclusive innovation
projects, using the creative problem solving (CPS)
method.Following adaptation of the CPS method, our
research involved an organization that enabled us to
bring managers and volunteers to work on a project.
The organization is the only private museum in the
Algarve region of Portugal; it is involved in regional
culture and, despite competent management, faces
serious financial difficulties. A team of 22 people was
established, representing both immediate and remote
geographical communities, cultural organizations, and
representatives of innovative projects related to the
hospitality industry. From the interventions, and the
follow up procedures, we learned that some project
failures could have been prevented by a more thorough
team facilitation, considering the teams size, and a
better handling of the clients ownership of the
problem. The analyses and conclusions allowed the
development of principles that will be applied in future
interventions, giving rise to improvements in the
facilitation process, bringing in important implications
for developing collaboration between organizations.
Team composition and the handling of client-team
relationships seem to be promising areas for future
research.

Keywords-- creative problem solving; team facilitation;
organizational innovation; collaboration in
organizations; inclusive innovation

I. INTRODUCTION

Innovation tends to occur mainly through
research and development initiatives, sponsored by
private or public funds, and resulting in products and
services aimed at those who can afford them,
normally at the end of the value chain. Inclusive
innovation breaks from this perspective and focuses
on wealth creation for the populations at the bottom
of the pyramid (BoP), other supply chain actors and
final consumers (George, McGahan, & Prabhu,
2012). This sort of Gandhian innovation (Prahalad,
2010) type of business model focuses on producing
services and goods for those at the end of the value
chain, even though not always including them as
participants in the decisions and processes that affect
their livelihoods.
As in the works of Prahalad (2009), or Utz and
Dahlam (2007), inclusive innovation addresses
mainly macro-level issues of state policies, and
business models or R&D activities addressed to the
BoP populations. What we propose here is coming
down to the micro-level, explaining how a simple
tool can be used to include those who have little
power or project-relevant knowledge together with
other stakeholders, i.e., as those who know about the
issue, want to be engaged, have the power to block
or to promote it, or can be affected by the outcomes
(Chrislip, 2002).
This simple tool, called creative problem solving
(CPS), can be used to transform group creativity into
profitable innovation, and requires little more than
gathering appropriate stakeholders under the same
objective. Even though a simple process, it requires
complex facilitation procedures, especially when the
team is big and heterogeneous.
Therefore, this research is aimed at providing
tips to improve the facilitation process, when those
who have limited power and project-relevant
knowledge take an active part in inclusive innovation
projects, using the creative problem solving (CPS)
method.
The evolution of CPS
Since Alex Osborn introduced brainstorming
and creative problem solving (CPS) (Osborn, 1957),
these procedures have been subject to investigation
and improvement. These improvements can be
determinant for the development of organizational
innovation systems, collaboration between
organizations, and change and organizational
development. CPS evolved from Osborns three-step
model (Osborn, 1963) to the Osborn-Parnes five-step
model (Parnes, 1967), comprising fact-finding,
problem-finding, idea-finding, solution-finding and
acceptance-finding. Later, the sixth stage of mess-
111

finding was added (Isaksen &Treffinger, 1985), and
specific roles were allocated to stakeholders of
client, facilitator and group member (Gordon, 1961).
Based on the Osborn-Parnes CPS approach, Basadur
(1994) proposed his variation, the Simplex model,
which views CPS as a cyclical process, comprising
three phases and eight steps. Each step includes a
divergent thinking phase, when individuals generate
as many ideas as they can, followed by a
convergence phase, when participants use judgment
and select ideas to carry on to the next step.

Process Adaptations
Practitioners often adapt CPS to suit specific
situations (Buijs, Smulders, & Meer, 2009; Van
Gundy, 1987; Buijs, 2002). Due to time restrictions
imposed by clients, because of the difficulty of
assuring continuity of the five to ten managers or
technical specialists as team members, we reduced
Basadurs eight-step model (Basadur, 1987) to four
steps, in order to reduce the implementation time to
four hours, as explained in Sousa, Pellissier, and
Monteiro (2012). The new four-step model:
objective-finding, problem-definition, action-
planning and the action itself, was designed and tried
with good results. In addition, the objective-finding
step was completed during the initial consulting
stage with the client, and the action stage was
configured to occur after the CPS session (and
represents the actualisation of the project goals).
During the session with the team, then, the
actual CPS procedure comprises two steps: problem-
finding and action-planning. These two steps are
seen as an iterative loop, where not even the
solution step takes place, being replaced by a
series of actions needed to solve the selected
problem or achieve the selected goals. This new
cycle allows for the focusing of the team resources
on the all-important action plan. This includes
reflection on how to develop the execution of the
plan, its different steps and milestones, management
control measures, acceptance and communication
tasks.
Although the sequence of divergence and
convergence is maintained, it is only used during the
problem-definition step. During this step the team
enumerates all possible barriers to reaching the
objective and then selects a final problem definition
to work with, beginning with the expression What
are the steps necessary to .? This question focuses
the team on seeking concrete tasks.
During action-planning the team starts by listing
all actions needed to achieve the goal, and then puts
them in order of execution. For each task, the how
to? question is defined in such a way as to include
any actions necessary to overcome resistances that
might arise. Each task is assigned to a sub-team,
which defines deadlines as well as the person or
entity responsible for evaluation of the final output.
Management controls (e.g. return-on-investment
[ROI], project milestones), when appropriate, and
communication tasks, are important inclusions in the
final task list As well as improving team
commitment to the ongoing nature of the project,
ROI also provides feedback with regard to the
impact of the project on the organization as a whole.
The establishment of an effective
communication structure within the team facilitates
the collective awareness of each team members
tasks. Also, advertising the project within the
organization (e.g. via an intranet newsletter) reduces
organizational resistance to task accomplishment and
increases peer pressure for the team to comply with
the projects milestones and goals.
The acceptance tasks, aimed at overcoming
resistances external to the team, which are
sometimes considered the most likely reason for
failure (e.g. Buijs, Smulders, & Meer, 2009), are
included in this approach, but the most important
factor is that every pertinent stakeholder may take
part in the decision making process.

Facilitation and Group Factors
Many factors can facilitate or hinder group
functions: the physical and organizational
environment, the problem-solving content and
method, the decision making, the nature of the group,
and the immediate forces that play upon group
members. Helping a group develop and use its
resources efficiently invariably involves changing
many factors that affect the group and alter the group
process. First called leaders, then trainers, then
facilitators, and now facilitator-intervenors, these
people perform the very delicate and significant
function of helping a group to cope with its
processes. A facilitator is a self-reflective, process-
person who has a variety of human, process,
technical skills and knowledge, together with a
variety of experiences to assist groups of people to
journey together to reach their goals (Hogan, 2002,
p. 57) or, to say it more simply, someone who makes
team work easier to do (Chrislip, 2002).
Interventions include tools, tactics, and processes
that help a group accomplish its tasks and expand the
groups capacity and may also be categorized as
helping a group to do something (i.e., generate and
evaluate ideas) compared to those that develop the
groups skills or efficacy (i.e., cross-training and
teambuilding).
The intervention function of the facilitator is a
very delicate one. According to Argyris (1970, p. 15),
to intervene is to enter into an ongoing system of
relationships, to come between or among persons,
groups, or objects for the purpose of helping them . . .
the system exists independently of the intervenor.
The nature of the role or relationship between the
112

facilitator, the group, and the client, is a unique role
not comparable to most of the other roles in human
relationships. Benne, Bradford, Gibb, and Lippitt
(1975) suggest that this is not equivalent to leader-
follower, manager-subordinate, colleague-colleague,
or friend-to-friend relationships.
Regarding CPS, several variables, which have
the potential to influence project output, have been
studied. Group size, for instance, was studied by
Quinn (1988), who mentions that small teams, with
five to seven members, are more flexible and
maximize communication and creativity. On the
other hand, West &Anderson (1996) showed that
larger teams (more than ten members) produce more
radical innovations. As to group heterogeneity, West
(2002) proposed that diversity of team members
knowledge and experience encourages creativity.
Regarding the facilitation process, Basadur
(1994) suggested that the client participates in the
team decision making processes, and stressed the
need for problem ownership, meaning the capacity
to handle possible solutions within management and
team resources. In the view of Drazin, Glynn, and
Kazanjian (1999), to negotiate the order between
the client and the team seems to be of critical
importance to the final result.

II. METHODOLOGY

Research Goals
The goal of the present study is to get answers to
the following questions:
Q1: What would be the consequences of working
with a large, heterogeneous group of stakeholders,
regarding CPS effectiveness?
Q2: How can the facilitator improve problem
ownership with the client and the team?

To achieve these goals we decided to solicit
participation from an organization that would bring
managers and creative volunteers together to work
on the same project. The participant organization
was the Costume Museum (Museu do Trajo) which
is an example of creative work around regional
culture, in the city of Saint Bras of Alportel, in the
South of Portugal. Despite good management,
Museu do Trajo faces serious difficulties as the only
private museum in Portugals Algarve.
The Museu do Trajo (Costume Museum)
The Museum is owned by the Santa Casa da
Misericordia of St. Bras de Alportel. The Santa Casa
da Misericordia is a Portuguese charity organization,
founded in Lisbon in 1498, with an essentially social
welfare mission. As such, the emergence of the
Museums cultural component has pulled the
institution into a new and unknown area. Thus, the
Administrative Board of the Misericordia grants a
high degree of autonomy to the cultural management
of the Museum, while still participating in its
improvement, and investing and closely following its
successes and failures. The Misericordia, then,
provides basic services to the Museum, including
staffing its office during opening hours as well as
providing some promotional activities in the
municipality. The Board manages the Museums
resources which include volunteers, the support of
government officials, patronage, sponsorship, ticket
revenues, revenues from its store and from providing
services to external entities.
The Museums staff consists of three people (a
director, a receptionist and a ubiquitousemployee),
delivering services within a total space of 5000m
2
,
875m
2
of which is exhibit space. There is also an
auditorium of 110m
2
, 380m
2
for other activities,
350m
2
for services and 2000 m
2
of garden. No
professional manager is included in the staff.
There is also a Friends of the
Museumorganization, with 260 contributing
members, some of whom volunteer in the course of
organizing events and club activities. The Institute
for the Employment is also an important resource,
since, through various occupational programs, they
provide specialized workers and interns through
programs such as the Portuguese Youth Institute.
Exhibitions at the Museum are often commissioned
by local personalities, which provides revenue, as do
the training and the various other activities
conducted by a group of eight educators.

Preparatory Activities the Pre-Consult
The pre-consult is a preliminary activity in
which the administration is interviewed in order to
draw out the objectives of the intervention. It
consists of an initial presentation of the facilitators
portfolio, and an explanation of the aims, method
and structure of the CPS. A strategic map of
objectives is generated so that a coherent picture of
the organizations aims becomes clear, and a specific
objective can be chosen. The project team is also
defined as are the setting and timing of the initial
session. Other factors may also be addressed such as
factors related to material requirements and venue, or
the existence of HR policies or leadership factors
that might hinder team work (e.g. significant
individual money awards; autocratic or centralized
leadership style; or the existence of a performance
evaluation system that encourages individual
competition). In the present study, the administration
accepted the intervention and, during the pre-consult,
a broad objective was defined How to make the
Museum a sustainable project.

Setting up the Project Team
Even though team members must be specialists
in tasks related to the objective, many other details
are also important, and can influence factors such as
innovation. In fact, it could be argued that innovation
113

does not come from a particular idea that the team
generates but from team member diversity of
knowledge, skills and creativity. Diversity of
knowledge, background and interests, commitment
and learning capability, are key characteristics for
team innovation and success during project
implementation. Again, creativity and problem
solving will apply mostly during project
implementation, rather than the building of the initial
idea.
Besides these key factors, other details may
influence the ability of the group regarding project
performance and output. From literature and
experience, we know some of the general factors that
benefit team composition (such as diversity).
However, these are generally applied to small groups
(5 to 12 people, say) and may not offer the same
advantages to larger groups, such as the team chosen
in the present intervention. Our solution, then, was to
work with the larger group while keeping a small
group rationale. Specifically, this involved breaking
the large team into smaller groups to enable a
heterogeneous group to still benefit from being a
cohesive team.
Other than group dimension, diversity and
market orientation, we knew that the team had to
comprise members representing the whole chain of
suppliers-products and services-clients. We also
needed to include gatekeepers who could block the
groups decision, support it or be affected by it.
Thus top managers from the invited organizations
were seen as crucial for problem identification,
resource allocation and results control, but we did
not know to what extent we could rely on them for
decision implementation. Above all, every group
member had to be willing to participate in the project
on a volunteer basis.
With these factors in mind, the present
researchers and the Museums management came up
with a list of individuals related to the four circles
identified: immediate geographical community
(local, schools and associations, church and city hall
authorities), remote geographical community (similar
but from other cities), cultural organizations
(regional cultural authorities, specialists, artists and
galleries/cultural centres), and innovative projects of
companies related with the hospitality industry.
Choices were made on a personal value basis rather
than as representatives of their organizations, but the
majority were managers. Of the 27 people
contacted, 22 accepted and only one did not show up.
Even though the Museum had an appropriate
space for the workshop, it was decided to choose
somewhere that could represent the need for
development as well as providing appropriate
conditions. The small (800 people) and beautiful
village of Tor was chosen, since it had a community
centre with good facilities (e.g. auditorium,
gymnasium and catering possibilities), and the local
management were glad to host us for a small
donation.
The program was constructed and everyone
received photos as well as articles describing the
Museum one week before the session.
III. ANALYSIS AND RESULTS
After a welcome presentation by the Museum
manager the problem solving session started, with
the stated objective How to make the Museum a
sustainable project. Participants were asked to list
potential problems that they thought might be
barriers to achieving the objective.
As the whole team was too big to allow for full
participation as one group, members were allocated
to two smaller groups, and each sub-group went to a
separate room. Facilitators took care to try and
prevent the natural tendency of newcomers to make
speeches, disagree with other team members, or to
converge prematurely on possible routes to the
objective. Even though some of the participants
were, at first, frustrated because of the difficulty of
having to condense an extensive concept into a short
sentence, everyone adapted easily to these requests.
Care was taken to maintain momentum, include
everyone in the listing task, and provide problems
instead of solutions (i.e. using short questions with a
verb and an object, without the use of negatives,
and, or, or, if possible). Within each group,
members were asked to choose two items from their
list that they considered important and tractable as
regards possible solutions. After each member
justified their choices, the facilitators came out with
2-3 possibilities (starting with the expression What
are the steps needed to?), and the two sub-groups
gathered together again to consider the list of
challenges. After a short discussion, the Museum
manager (client) was asked to choose one challenge,
and the choice was - What are the steps needed to
define the management model of the Museum?

Action Planning
The session continued after a half-hour break,
when everybody had the chance to taste first class
cookies and natural locally made refreshments,
which put them in an appropriate mood for the rest
of the work.
The second half of the session dealt with the
action plan, which consists of: defining the tasks to
be executed; sequencing the tasks; suggesting ways
to execute each task (including eventual additional
tasks in order to overcome possible resistances);
defining a sub-team responsible for the task; setting
up a deadline for task completion; suggesting
someone outside the group to evaluate thetask
(which, it was agreed, should be carried out to a
114

professional standard, regardless of the members
initial expertise). In this case, management control
measures (e.g. ROI) did not apply and milestones
were not defined.
The result was the following action plan (Chart 1):
Tasks:
1 - SWOT Analysis;1-Set Features; 1 - Benchmarking;
1 - Know the users;
2 - Set goals;2 - Define mission / vision; 2 - Structure /
team
3-Set consolidated partnerships and dependencies;3 -
Definition of content/ products;3 - Define
Stakeholders;3 - Operating strategy;3 - Communication
Plan;3 - Objectives of Sales;3 - Positioning;
4 - Set up monitoring

CHART 1: ACTION PLAN FOR THE MUSEUM

Coordination tasks were also defined, namely
the designation of a group coordinator, an internal
and external communication system, and the date
and place of the next meeting, at the end of the
project. The person in charge of the group must be
chosen by the administration and well accepted by
the group as someone who is able to show a
supportive approach to leadership, as well as a good
balance between team members and management
requirements. The coordinators tasks are aimed at
facilitating achievement of the goals, and perhaps
more than 50% of the projects success may be due
to his or her actions. The person is also responsible
for preparing interim reports and for the final
debriefing.
A permanent communication needed to be
maintained, so that every member of the group knew
what was being done without the need for further
meetings. Besides the group, the project must be
known either within and outside the organization, so
that the impact of each task as regards external
members might appear easier to handle (to reduce
the not invented here syndrome), and group
members feel responsible for accomplishing the
tasks before a wider audience.
The final debriefing is a formal meeting,
organized by the groups coordinator, and must
reflect all the work done, in terms of task
accomplishment; management control, evaluation
and measures of performance; main innovations and
competitive advantages attained; project re-definition
for the next period.
Team final meeting and debriefing - Sept. 30,
2011
Team co-coordinator - A. B.
Communication sub-team - A.; P.; V., A. B.,
M.; R. P.
IV. FOLLOW UP
As no intervention could be complete without
including the Friends (Amigos) of the Museum, it
was decided to design another project with this
group. The Friends of the Museum comprise some
260 members, with a diversity that encourages
effective collaboration, sometimes in specialized
areas, through responsible volunteering. The group
also plays an important role in cultural promotion
that revives the concept of a House of Culture that
figured in the founding documents. The Museum
Task How Who When Quality
Standard
1) SWOT;
Resources;
Benchmarking;
Users

Team within a team out + 1;
Work + off;
Analysis of existence in the Museum;
Ask public about other experiences
R. P.; L.M.;
C. S.; A. B.;
July 1
A. company

2) Objectives /
mission and
vision

Structure; Discussion and debate with
friends of the Museum;
Maintain comprehensive definition;
Ask public about other experiences;
V.; C.; D.;
A. B.; D.;
A. M.

July 18
S. Bras City Hall
Administration

3) Common
strategy,
positioning
partnerships +
sales team
Compromise between detail and action;
Tourism
S.; M.; A. B.;
P.; A. P.; A. F.
September 16

D. P./TA
4) Monitoring Indicator measured after project
F.; V.; C. September 26

J. A./CRIA

115

administration puts no restriction on the Friends
activities and they try to respond positively to any
desires or expectations of the local population and
museum patrons. Areas as diverse as history,
archaeology, fine arts, crafts, ethnomusicology,
photography, music, Portuguese language for
foreigners, yoga, maintaining gymnastics, Chi Qung,
literature, Tai Chi, dancing, lecture cycles, and
thematic discussion groups are part of the recent
programming. Activities are mostly paid for by
participants, but the Friends benefit from privileges
including reduced participation costs. The Friends of
the Museum are important to the Museum for
fundraising, organizing events and the provision of
general manpower.
During the pre-consult with the board, an
objective was drawn To serve the community. The
session was prepared, scheduled and run much like
the previous one. The challenge defined was - What
steps are needed to resolve the Amigos
identity?and the action plan depicted on Chart 2 was
defined.

CHART 2: ACTION PLAN FOR THE FRIENDS OF THE MUSEUM

After a short while, it became clear that the
deadlines for the tasks, on both projects, were not
going to be met, except for those that did not require
considerable homework. Regarding the Museums
project, instead of designing detailed working plans,
each sub-team was left with only the overall
planning, and the only tasks accomplished were the
ones that did not require previous preparation, or that
could be executed by the Museum personnel. Even
though many tasks were executed, the overall plan
was considerably delayed and a full business plan
was not generated. As to the Amigos group,
internal conflicts prevented the last and most
important step, which was that they were to become
a fully legal entity.
One year after the start of the intervention, many
tasks had been accomplished but only those that did
not require individual team members, outside the
Museum, to do homework, leaving Museum
personnel with management tasks they were not
prepared to carry out with expertise. Also, the
Amigos are now preparing to become a legally
ratified association, not because of the intervention
but because of a considerable donation in property
which has to be put under the administration of a
legal identity. As such, some planned project tasks
were not carried out, leaving the impression of
project failure. In the overall we had forgotten the
fact that the Museums volunteers and director were
not prepared to execute management tasks for which
they were not prepared.
V. CONCLUSION
Overall, we found that factors such as team
commitment, divergent thinking, performance and
process output, did not suffer from the reduction in
CPS process steps, as explained in Sousa, Pellissier,
and Monteiro (2012). However, from our
interventions, and the follow up procedures, we
learned that some project failures could have been
prevented by a more thorough team facilitation.
Factors contributing to this include the large size of
the team along with its heterogeneity and the fact
that the majority of its members were not a part of
the Museums structure. Client ownership of the
problem was probably critical to the success of the
project in view of these factors. Also, a high degree
of detail was also necessary with regard to the final
plan. Therefore, we concluded that the following
principles should apply to future projects:

Top managers should attend the CPS
session if they are needed to decide or bring input.
Trying to bring ideas to work, or develop
important initiatives, without management approval
Task How Who When Standard
1) Define the role of the
Amigos
2) Develop a sustainable
organisation
3) Make a joint venture
with the Museum
Ask the Museum and the community
Who owns the Museum? Bring them in
(administration)
Analyse the type of events. Make a
comprehensive list of requirements
Define what the organisation should
deliver
C. ;V.; I. August 16

P. S.
4) Change the way
community regards the
Amigos

Speak with community representatives
(eg. schools, other associations, music
groups, scouts, library)
Make inquiries
L.; D.; E.;
M.
October 17 C. S.

5) Legalize it

Raise money and define representatives A.; A. P. December 2 Lawyer of the
Bombeiros
116

and support, may be an heroic act but is probably not
effective. To promote organizational innovation,
managers must establish a general positive
orientation to new ideas, agree with the solutions
proposed, allocate the necessary resources to the
project teams, and measure the results in terms of
their impact on the organizations profits. Moreover,
they must be involved in innovative projects from
the beginning, so that they feel them to be their own.
If this applies to managers in charge of the
organization, it is an entirely different issue to ask
managers outside the organization to contribute with
their expertise. Although their opinion might be of
great value during project preparation, it is very
difficult to ask them to do homework, or commit
other resources. In the present study, although they
were fundamental in orientating the Museum to be
run like a business, these external managers did not
provide all the necessary support afterwards, which
left the Museums staff feeling unsupported and
dependent on their own resources. The need for the
presence of these so called queen bees (Winer and
Ray, 1994) must, then, be balanced between their
difficulties in continuing to support the project and
their ability to attract others who will work hard.
Also, if this had been a company project, selected
external managers should have had a business
interest in it, and not just their sympathy for the
organization, as in this case.

Get team members committed to being
results-driven.
Many CPS advocates suggest that it is ideas that
are the most important thing a group can produce.
Lots of brainstorming sessions, under various
formats, seek to find the idea that will promote an
innovation. If these ideas are not implemented
appropriately, however, or people start the
implementation step but give up prematurely, then
everything remains the same, people get discouraged
and little, if anything is achieved.
Having an idea that works, then, may be more
important than generating the brightest idea. In
other words, real innovations come from solving
many problems during project implementation,
which requires persistence, imagination and
knowledge and, above all, team and management
support. Managers, then, must commit to results and
not just to ideas.
In our study, the team should not have left the
meeting without defining individual tasks precisely.
Facilitators helped in defining sub-teams tasks and
presumed that each sub-team leader would do the
same afterwards, however this did not happen,
simply because the Museums staffwere not prepared
to do it. What may seem easy for a trained and
experienced facilitator, or even a manager, may
prove difficult for an inexperienced person.
It is good to have diversity in organizations
and specialists, so that innovation can surface from
different knowledge and creativity capabilities.
However, the client should be advised not to choose
orientations that cannot be carried out by internal
staff.
The secret for innovation lies in the mix of
knowledge and skills that may be put together to
achieve a specific end. If these knowledge bases are
too far apart, however, a communication path is
difficult to establish. If that path is established, the
resulting concept might be really innovative.In other
words, belonging to some field of activity is not
enough to guarantee knowledge sharing. To be able
to share, a person must not only be an expert in the
field but know enough in other areas, to be able to
make the necessary knowledge transfer.
When the majority of the project collaborators
work within the same organization it is easier to
designate those who should be part of the team, and
to expect them to maintain their contribution during
the project. But when only a few people belong to
the organization, the challenge of knowing who
should be included and how to maintain their
commitment to the project, is more difficult. That is
why, during the pre-consult, a discussion regarding
who should be part of the project team is so
important, as care must be taken to balance expertise
and emotional links to the project.
Also, even if a proposal seems promising, if the
client does not have the appropriate resources within
the organization then care must be taken to select the
right proposal. Nevertheless, if the client makes a
risky choice, the facilitator must help the group to
increase its probability of success, which did not
happen in this case.

Stay focused on the problem defined
throughout project implementation.
It is not as trivial as it may seem to remind
people to stay focused on the defined problem. As
the action plan lists tasks to be executed by different
sub-teams, it is easy for people to concentrate on
those tasks and forget the larger problem they are
trying to solve. It is important, then, to define
milestones for the project, which ensure the team
gathers together regularly so that tasks and objectives
can be reformulated. In the present study the whole
team should have met at least once before the project
deadline, which did not happen.

Overall, this was a good opportunity to learn
from mistakes, and since the reported interventions,
we have been more careful in everything that
influences the potential success of the project;
specifically, the pre-consult, the selection of the
team, and the handling of client-team relationships
during sessions. We believe that the more we know
117

about how to bring in large groups with specific
objectives, as well as everything that has to do with
client ownership and interface with the project team,
the more we increase the probability of success.
Future research should concentrate on tackling these
issues, and in improving the technical aspects of the
group decision making process by adopting tools
from the universe of the group support systems
(GSS).
As to the project implications for inclusive
innovation, we believe that bringing in people from
outside the organization, to help improve results,
especially when we deal with small and medium-
sized organizations, can be a valuable resource to
reach goals that would be impossible without
extensive financial resources (e.g. in order to hire
consultants). Especially in these difficult times,
collaboration within and between organizations can
be a possible solution to providing innovation and
competitiveness, and to overcome financial hurdles.
Nevertheless, collaboration practices should be
regarded as a sophisticated technology, requiring a
careful approach and effective processes such as
those discussed here.
As to the fiasco in the intervention, we are
happy to learn that the Museum is doing well, in
terms of its managerial processes, in part due to our
intervention, although not within the time limits that
were predicted. The majority of the tasks decided in
the first meeting have been done and a business plan
is now one of the main orientations for its
development, as the Museums staff took some time
but they have succeeded in learning some essentials
of management they needed for this project.

ACKNOWLEDGEMENTS
This paper has been partially supported by the
Portuguese Foundation for Science and Technology
(FCT).

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119

Inclusive Innovation in Thailand and Its
Relationship with the Sufficiency Economy
and with the Commencement and
Development of the Asean Economic
Community (AEC) in 2015
Brian Sheehan
Asian Forum on Business Education (AFBE)
Bangkok, Thailand, brian.sheehan9@gmail.com

Abstract The theme of this Conference is concerned
with Inclusive Innovation in Thailand which is an
important topic in its own right but in this paper I wish
to try to marry the concept of Inclusive Innovation with
the concept of the Sufficiency Economy in Thailand
coupled with its entry into the ASEAN Economic
Community (AEC) as one of its founding members, in
2015. Of course, Inclusive Innovation is important
without attempting to directly or indirectly associate it
with the Sufficiency Economy, however, in my view,
one can see a relationship or a relationship can be
developed between these two important concepts. The
commencement of the AEC will impact on Thailand
and its Inclusive Innovation, as well of course, on that
of the other members of the AEC.

Keywords Thailand Inclusive Innovation, Sustainable
Innovation, Sufficiency Economy, NESAC, Disruptive
Innovation, Gross National Happiness, New Economics
Foundation, Education, U.N. Millennium Goals, Ready
or Not? Market Responsiveness-Innovation.

I. INTRODUCTION

As indicated, the theme of this Conference is
concerned with Inclusive Innovation in Thailand and
this concept has been discussed in earlier sessions.

I will begin by discussing this concept and the
present situation as far as I and others can assess it as
it currently applies in Thailand and then try to
marry this concept, at least to some extent, with
the Sufficiency Economy and with Thailands entry
into the AEC in 2015.

As I have already said, we have already heard in
earlier sessions discussion of the concept of
Inclusive Innovation, but I want to briefly cover
some more definitions.
Gupta (2007) indicates that inclusive or
harmonious development is recognized as an
important goal to socioeconomic development in
most developing countries. (World Bank, 2010, p.
335). Prahalad (2005) says inclusion can take place
by treating economically poor and disadvantaged
people as consumers of public policy on assistance
and aid for basic needs or as consumers of low-cost
products made by large corporations or by the state
or other corporations. (World Bank , 2010, p.335).

Inclusion can also take place by building the
capacity of the poor to produce what they already
know how to and do produce, as well as building the
capacity of the poor to use their innovations and
outstanding traditional knowledge either as it is or by
bundling it with knowledge of others into products
marketed by them or other enterprises World Bank,
2010, pp.335-336).

An example of this in Thailand is OTOP (2012),
another example is micro-lending, initially
developed in Bangladesh by Muhammed Yunas but
now extended to many other countries (Yunas, 2007
reprint).

II. SUFFICIENCY ECONOMY

Some writers prefer to use the term sustainable
innovation rather than inclusive innovation and,
truth to tell, I rather prefer the term sustainable
innovation, mainly because I think this term fits
well with or can be more readily identified with His
Majestys concept of the Sufficiency Economy.

The Sufficiency Economy is a philosophy that
stresses the middle path as an overriding principle
for appropriate conduct by the population at all
levels. This applies to conduct starting from the level
of the families, communities, as well as the level of

120

nation in development and administration so as to
modernize in line with the forces of globalization.

Sufficiency means moderation, reasonableness,
and the need for sufficient protection from impact
arising from internal or external changes. To
achieve this, an application of knowledge with due
consideration and prudence is essential. In
particular, great care is needed in the utilization of
theories and methodologies for planning and
implementation in every step. At the same time, it is
essential to strengthen the moral fibre of the nation,
so that everyone, particularly public officials,
academics, businessmen at all levels, adhere first
and foremost to the principle of honesty and
integrity. In addition, a way of life based on
patience, perseverance, diligence, wisdom and
prudence is indispensible to create balance and to be
able to cope appropriately with critical challenges
arising from external and rapid socioeconomic,
environmental, and cultural changes in the world.
(Thai Working Definition, 1999).

The focus of inclusive or sustainable innovation
then is innovation that is based on ethically,
socially, economically and environmentally
sustainable principles. (Hautamki, (2008, p.2).

In September, 2012, I was invited to a
Conference in Bangkok organized by the National
Economic Advisory Council of Thailand (NESAC).
This conference was conducted in Thai language so I
was unable to follow all that was said but essentially
its theme was to outline and discuss progress in
implementing strategies for the further development
of the Sufficiency Economy in Thailand.

NESAC is a Thai governmental agency and it
has the duty to provide advice and make suggestions
to the Cabinet with regard to economic and social
issues in order to facilitate the Cabinets execution of
the fundamental policies of the State as proscribed in
the Constitution. One of the government policies is,
of course, the adoption and promotion of His
Majesty the Kings concept of the Sufficiency
Economy.

NESAC has 99 elected members who are
representatives of all walks of life in Thailand.

The Concept of the Sufficiency Economy has
some parallels with the concept of Gross National
Happiness (GNH) which was initially coined in
1972 by Bhutans fourth Dragon King. It was
designed in an attempt to define and as an indicator
that measures quality of life or social progress in
more holistic and psychological terms than only the
economic indicators of national wealth such as Gross
Domestic Product (GDP).

Another body, the New Economic Foundation
(NEF) is a think-tank organisation, based in London.
It was founded in 1986 with the aim of working for a
new model of wealth creation, based on equality,
diversity and economic stability. Its programs
include work on well-being, new kinds of
measurement and evaluation, sustainable local
regeneration, new forms of finance and new business
models, sustainable public services and the
economics of climate change.
(en.wikipedia.org/wiki/New Economics_Foundation)

In July, 2006, NEF launched the Happy Planet
Index, intended to challenge existing indices of a
states success, such as GDP and the HDI (Human
Development Index). (Simms, Johnson, Chowla,
2010). NEF appears to combine aspects of the
Sufficiency Economy and Gross National Happiness.

In addition to the definitions and practices of
inclusive or sustainable innovation, there is another
definition of innovation. This is called disruptive
innovation. A disruptive innovation is an
innovation that helps to create a new market and
value network, over a period, sometimes, a lengthy
period, it displaces the existing technology.

III. DISRUPTIVE INNOVATION

The term disruptive is perhaps, unfortunate,
as we generally think of disruption as being
something unpleasant and perhaps not in the interest
of society generally. However, disruptive innovation
that introduces cheaper, better goods or services, and
those that use less resources in achieving their
results, and particularly, goods and services that are
socially, economically and environmentally
effective, would represent a worthwhile innovation.
The main author concerning destructive innovation is
Christensen (2000, 2003, 2006).

After all this then is how well Thailand been
going in terms of its innovation?

I was asked to write a chapter in a book about
innovation in Thailand which was published by the
National Innovation Agency (Thailand) in 2005. At
that time, both the editors and the chapter authors
had difficulty in identifying many really innovative
factors applying in Thailand. Unfortunately, in
writing this paper 7 years later, I have found myself
faced with a similar problem and I have also found
myself agreeing with some other authorities who
have found a similar problem.


121

IV. INNOVATION-PROBLEMS FOR THAILAND

Frederico Gil Sander of the World Bank who
has lived in Thailand for some years, has researched
and referenced on innovation in Thailand recently.

He has identified the following problems:

(1) The complexity of the products made in
Thailand has increased drastically over the past 30
years.
(2) It is the sophistication of tasks, not products,
that is important. Tasks have tended to become
simpler or remained simple in Thai industry even as
products themselves have often become more
complex. Simple tasks do not add much to the value
chain or to improve the overall quality of labor
performed.
(3) Most product innovations in Thailand have
come from parent organizations and sometimes
subsidiaries in other countries.
(4) Moving up the value chain means getting
Thai workers to perform more complex tasks.
(5) He asks, what is constraining innovation in
Thailand? In answer to this question, he says that
that Research and Development (R&D) is a key
aspect of innovation, but Thailand is lagging behind.
He says that this is where innovation comes in or
should come in.
(6) He goes on to be critical of the Thai
education system, at school level, tertiary level,
technology level, and at sub-professional technical
education level (i.e.,training and developing highly
skilled technical workers). His claims about the
inadequacy of the Thai education system are echoed
by other scholars and by practicing managers and
professionals.
As indicated, some others have also been
somewhat critical of the Thai education system, for
example, Schiller and Liefner, (2007). However,
they did indicate that the relationships between
higher education and industry in Thailand, were
gradually improving. Doner, Intarakummnerd, and
Ritchie, cited in the World Bank Report Putting
Higher Education to Work, 2012, and in an earlier
draft paper (not to be cited at present) indicated a
number of problems particularly in relation to higher
education and its relationship with industrial
innovation.
The World Bank Report, 2012, p.2, indicates
five disconnects as follows:

A gap between higher education
institutions and the skill needs of employers
A weak research and technology nexus
between higher education and companies
A separation between teaching and research
institutions (or more generally teaching and
research functions)
A disconnect among higher education
institutions themselves and between the
institutions and training providers
A separation between higher education
institutions and earlier institutions (schools)

Of course, this report was not only concerning
Thailand but covered all the East Asian countries.

Also, in a number of places in the Report it
specifically mentioned the role of higher education in
innovation and again, considered that closer
relationships between higher education and industry
would contribute significantly to industry innovation.
It would, of course, be quite wrong to say there is no
innovation occurring in Thailand. In some industries
some significant innovation may have occurred or is
occurring. Some examples may be in the tourism
industry, including medical and dental tourism, in the
fashion industry, where Thai materials and Thai
designers appear to be up with some of the best in
the world, in the gems and jewelry industry, where
again Thai quality and Thai designs appear to be
internationally recognized. Thailand also appears to
perform well in logistics, although most of the firms
are international rather than Thai. Obviously, also
some large Thai companies such as the CP Group,
Siam Cement and Double A (copying paper) appear
to be innovative and competitive.

Richard F. Doner has written some interesting
material on innovation in Thailand and in some other
Southeast Asian and other developing economies.

In his book, The Politics of Uneven
Development, he proposes an interesting political
explanation for the uneven nature of Thai economic
development. He argues that Thailand has succeeded
well at diversifying its economy but not in the
particular difficulties of upgrading (increasing value
added with high efficiency and local linkages). He
emphasizes the particular difficulties of upgrading
and Thailands lack of institutional capabilities to
address such difficulties.. These institutional
weaknesses, he says, reflect two sets of conditions:
the large numbers of veto players and political
interests with the ability to block reform, and the
lack of structural pressure on government leaders,
especially from local business and labor, to
undertake needed reforms. The paper concludes
with a rather pessimistic view of the countrys
capacity for sustainable growth. (Doner, 2009).

This is an interesting and somewhat different
viewpoint from views expressed by other scholars
and researchers and certainly requires further
investigation and comment.

122

The Sitra Report 87, (2010), discusses
innovation broadly and talks about sustainable
development, participative innovation, continuous
innovation, global innovation, and innovative
management. This is specifically related to Finland
but it has wider implications on innovation which
can also be applied to other countries.

Kuah (2012) has also written about economic
policymaking and the pursuit of happiness. His paper
specifically relates to Singapore but may also have
wider implications.

V. UNITED NATIONS MILLENNIUM
DEVELOPMENT GOALS (MDG), 2000

Thailand is a signatory to the United Nations
Millennium Development Goals (MDGs), 2000.
These are a set of eight goals adopted by most UN
member countries including Thailand.

Thailand has made significant progress in
meeting the MDGs and is likely to meet most of the
MDGs on an aggregate basis (by 2015)

None of the MDGs specifically mentioned
innovation but the eighth goal is Develop a global
partnership for development and this goal certainly
covers the need for innovation.

VI. ASEAN ECONOMIC COMMUNITY (AEC)

I want now to move on to the formation and
operation of the ASEAN Economic Community
(AEC) in 2015 and its relationship to the need for
Thailand to improve its innovation performance.

In an article in the Nation newspaper, on
September 1, 2012, there was an article written by
Nophakhun Limsamarnphun about comments made
by Sutapa Amornvivat entitled Ready or Not?

Supatra Amornvivat is the Chief Economist and
Executive Vice President of Siam Commercial Bank
and the article was talking about her views as to
whether Thai companies are ready and prepared to
enter the AEC.

The article does not specifically mention
innovation but it is certainly implied, i.e., those
companies which are innovative are more likely to
make a successful transition into the AEC.

She indicates Welooked atthose (Thai)
companies that have the ability to expand their
presence in foreign markets. The leading names
include CP Group and Double A and she talks of
contract farmingof these types of companies as
being suitable for expansion in the AEC. (The
Nation,2012).

She goes on to say In terms of threats from the
advent of the AEC, small and medium-sized
enterprises (SMEs) will find it more difficult to go
outside the country and compete due to lack of
economies of scale , but the big companies have
already sharpened their skills and expanded into
foreign markets. (The Nation, 2012). Wannapa
Kyaopa, (2012), also writing in The Nation
newspaper, refers to the ASEAN Community
Preparation Centre at Dhurakijpundit University in
Bangkok, and its Director, Visanu Vongsinsrikul,
which is working with the Thailand Development
Research Institute on the state of preparation of
institutions in basic, vocational and higher education
in Thailand compared with other AEC countries.

George Abonyi is a visiting professor in the
School of Public Administration at the Maxwell
School of Syracuse University, New York, and
Senior Advisor, Fiscal Policy Research Institute ,
Ministry of Finance, Thailand. He has written
extensively on the AEC and on innovation. In his
paper, The Emerging ASEAN Economic
Community (AEC) 2015 in the wider region and
global economy A Micro view-*, written in June
this year, he concludes his remarks by saying East
Asia including the emerging ASEAN Economic
Community, present significant growth opportunities
over the longer term. However, consumer needs and
constraints in these markets are different than those
of developed economies. The challenge is not simply
exporting, but strengthening market-responsive
innovation to take advantage of particular
opportunities in emerging ASEAN markets. This
implies the need to invest in innovation along the full
value chain. For small -and medium-scale
enterprises (SMEs) for emerging Asia the absorption
of proven knowledge and technology, adapted to
market demand, may provide the most reliable route
to commercially viable innovation for emerging
markets. (page not numbered).

VII. CONCLUSION
I find myself in agreement with these views
expressed by Professor Abonyi and I hope that Thai
business and industry will develop along these lines
as it enters the AEC. There are, however, many
problems and difficulties ahead and Thailand needs
to address these. In the short term, adequate
measures of flood control, in the medium term there
needs to be continuing improvements in the political
system, improvements in the schooling and
education and training system, particularly with
respect to the supply of technical and professional
diplomats and graduates, improvements in

123

education-business relationships and in R & D, and
in the social security system, and in the longer term,
addressing the question of anageing population
which will mean that there will be a decreasing
proportion of people in employment supporting an
increasing proportion of retired and non-working
people.

This is, of course, happening in many countries
including China.

Thailand will also have to concentrate on
foreign language learning, particularly English and
Chinese.
These are all important issues which Thailand
faces or will have to face but I am confident that
Thailand can and will address them successfully over
time. Thailands geography, its central position in
East Asia, and the skills, competencies and
adaptability and the hard work of its human
resources, will all, I believe, help it to overcome
these problems and difficulties over time.

I do not know if I have been able to develop a
relationship between the Sufficiency Economy and
Thailands inclusive technology and its entry into the
AEC just over one year from now, but it should be
realized that the Sufficiency Economy is an
innovative idea itself and if we can move along the
lines suggested by Professor Abonyi, I personally
think that this would represent an example of putting
the Sufficiency Economy into practice in the wider
community of the AEC!

Thank you for your attention.

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125

Inclusive Development for Living
in a Changing World

Vinai Veeravatnanond

President of the Environmental Education Association of Thailand,
Chairman of Environmental Education Program at Valaya Alongkorn
Rajabhat University under Royal Patronage, vinai.vee@gmail.com

Som Na-saan

Public Health Technical Officer (Senior Professional), Kalasin Public Health Office

Thongchai Nilkham

Environmental Education Program, Environmental Education Program Board
Valaya Alongkorn Rajabhat University under Royal Patronage, printer_pote@hotmail.com

Abstract-- Current development has emphasized
economic growth rather than the happiness of the
people in society. It he present modal of development
that has brought disbalance and sufferings in the life of
rural communities and thus unsustainable
development. This development has caused
environmental problems, agricultural pesticide
residues, and has had impacts on ecological systems.
Essential food resources for living have been destroyed.
The food crisis situation is significantly different from
that in the past. Flow of labor has mostly moved to the
industrial sector. The development of risk assurance
criteria for natural resources and the environmental
bask should be based on sustainable development of life
quality, economy and society of rural communities. It
has been an important guideline used for establishing a
framework for sustainable development of the country
according to the strategy for building security of
natural resources and the environmental basic. The
sustainable development of life quality focuses on
personal development including looking after health
and mind, having a warm family relation, and living
together in society or community. Development
emphasizing only the economy has been considered
unsuccessful if individuals cannot find happiness and
peace in themselves. For the people knowing how to live
happily then means moving close to the goals of
sustainable development by taking care of themselves,
the environment and their own society. The development
can be done by promoting consciousness, intellect,
environmentally friendly ways of life, sufficiency of
living, and ethics. It can be carried out by using
education management process in order to provide
people with insights into the truth of things as well as
themselves.

Keywords: sustainable development, sustainable
development of life quality, Risk assurance criteria,
changing world

I. INTRODUCTION

This article presents the findings of research on
development of risk assurance criteria for natural
resources and the environmental bask for the
sustainable development of life quality, economy and
society of rural communities. The study revealed that
the changes of the present world have been results
from the unsustainable development of the past
which has currently caused impacts on the
environment and living of people in the world.
According to the research (Veeravatnanond, Vinai et
al. (2012)), factors and indicators that are able to
assure the risk of world disasters can be obtained.
They are the factors and risk assurance criteria
indicators for utilization as base for natural resources
and the environment based on sufficiency principles.
There are 3 main factors as follows. In the area of
natural resource conservation and rehabilitation,
there are 5 sub-factors and 23 indicators. In the area
of danger prevention, there are 4 sub-factors and 17
indicators. In the area of community resource
utilization management, there are 4 sub-factors and
17 indicators. There are in total 13 sub-factors and
57 indicators. The factors and indicators for
sustainable development comprise of 3 main factors
as follows. Under the development of life quality,
economy and society, there are 6 sub-factors and 29
indicators in the area of life quality, 4 sub-factors
and 18 indicators in the area of economy, and 4 sub-
factors and 19 indicators in the area of society. There
in total 14 sub-factors and 66 indicators. These
factors and indicators could be used in determination
of the framework for sustainable development of the
country according to the strategy for developing the
security of natural resources and the environmental
bask is the 10
th
National Economic and Social
Development Plan (2007-2011) (Office of the
National Economic and Social Development Board,
2006). They can also be used as criteria for concrete
development at the community level, to be consistent
with the sufficiency economy philosophy of the King
of Thailand. The findings gained from this research
will be beneficial to the establishment of country
development policies and widely applicable to future
practice.


126

II. CHANGING WORLD

Many environmentalists and organizations made
warnings about the world crisis not less than 20 years
ago. For example, in 1991, an international
conference on global warming was organized in
Thailand (Thairath Online, 2006) . In a later year,
a conference on the environment and its development
was arranged in Brazil (Veeravatnanond, Vinai,
2012).. Many other relevant topics concerning the
world crisis have been continually disused up till
present, especially around the topics of global
warming and natural disasters. During the last 5
years, violent natural disasters have happened more
frequently as follows.
1. Earthquakes and volcanic epiphanies:
Earthquakes have occurred in several regions of the
world such as in San Francisco and California in the
U.S.A., Russia, China, Indonesia, Haiti, and Brazil.
In Japan, an earthquake of 8.9 Richter magnitude
happened in 2011 and it caused Tsunami and also
radioactive leakage from the nuclear power plants in
Fukushima a where the effects from the leakage
present up till now. Also in 2011, an earthquake of
7.2 Richter magnitude occurred in Turkey and an
earthquake of 5.6 Richter magnitude in the north of
Sumatra Island in Indonesia.
Moreover, at the beginning of 2009 in April, a
volcano in Iceland erupted. The ashes spread into the
atmosphere and covered the north area of the
European Continent. Air transport was then closed
for almost 10 days.
In Thailand, there have regularly been many
small earthquakes. The northern part of Thailand has
also experienced shaking during the earthquakes in
Myanmar.
2. Droughts and bush fires: While storms have
caused flooding in many regions of the world,
droughts and bush fires occur in many parts,
especially in Africa where suffering from long
droughts was the same as in China, India and
Indonesia. During the last few years, there have been
droughts in southern Europe. The amount of rain has
decreased in the area, especially in Spain, Portugal
and France. Additionally, there have been droughts
and bush fires more often in Australia and USA.
Droughts are caused by hotter climate and no
rain in its season for a long period. These factors,
have caused lack of water, bush fires and cyclones in
tropical areas.
In Thailand, before the big flood in 2011, there
were droughts and lack of water for many years. The
levels of water in some important dams such as
Bhumibol Dam, Sirikit Dam, Lam Takhlong Dam,
and Pa SakJolasid were all below 25% of their
capacity(Thairath Online, 2006)3. Storms, floods and
big floods always occur together with the droughts.
India, Bangladesh and China continually have
floods. In 1991, there was a flood in the area of the
Yangtze River in China and the flood caused the
deaths of more than 1,700 people. During the last
two years, there have been floods from hurricanes in
the southern states of USA such as Louisiana. In
2011, there was a big flood in Brisbane, Australia,
before the flood in Thailand in September and
November. After that, there were floods in Vietnam,
Italy and Columbia.
In the last 20 years, there were many big floods
in Thailand after the flood in Nakhon Si Thammarat.
For example, there was a flood in 1990 in the areas
of Bangkok, PathumThani, Chachoengsao,
NakhonNayok, and Prachinburi. In 1995, there were
floods in the lower part of the central region in
Lopburi, Ang Thong, PhraNakhon Si Ayutthaya and
PathumThani. In 2006, there were floods in
Uttaradit, especially in Laplae and Nampat Districts.
Also, in Nan, Phrae, Sukhothai, Phichit and
Phitsanulok, there were floods more often than in the
past. Eventually, in 2011, there was the biggest flood
in Thailand covering a wider area including the
industrial estates in the central region and Bangkok.
The flood caused widely trouble, damage and
sufferings among the people.
The earthquakes, droughts and floods have
occurred in various parts of the world. They have
happened more frequently and caused more damage
in passing years. In October 2011, there was the
biggest flood of the century. In the same month, an
earthquake of 7.2 Richter magnitude occurred in
Turkey and an earthquake of 5.6 Richter magnitude
in the north of Sumatra Island of Indonesia. There
was a snow storm in the wrong season in the east of
the USA. These critical situations are all from the
cause of global warming and climate changes which
threaten the world population at the moment.

III. UNSUSTAINABLE DEVELOPMENT

Development in the past focused mostly on
economic growth rather than the happiness of people
in society. It was unbalanced development which did
not address the sufferings of people in rural
communities who are the majority group of the
country (Office of the National Economic and Social
Development Board, 2006). Natural resources and
the environment have been destroyed at the growth
of the economy and industry. Also, the forests have
been destroyed, chemical residues are in agricultural
products, and soil degradation occurs. These issues
happen when the capital of natural resources and the
environment, which is the base of living of the
people, has been destroyed. Their impacts on life
quality, economy and society are as follows.
1. Impact on life quality: The environmental
problems in rural areas currently come from the
chemical residues in agriculture. This is because the

127

farmers use chemical substances and fertilizers at an
increasing rate (Kaewsong et al., 2001; Panyakul,
2004). The chemical contamination and residues will
destroy the microorganisms in soil and surface water
sources. They also spread into the atmosphere and
cause a continual impact as chemical residues in
plants and food. Humans and animals then receive
these chemical residues into their bodies. The toxic
substances will be transferred from the environment
and houses into the food chain and affect health.
Each yearmillions of farmers are suffering from the
use of insecticides. The Ministry of Public Health
estimated that the chemical contamination in food
has caused cancers in at least 50,000 Thai people
each year (Health Systems Research Institute, 2005).
2. Impact on the economy: It has been found
that, since 1961, the development of the agricultural
sector in Thailand has focused on agriculture for
export. The production plans and learning of
agriculture are therefore about new agriculture for
productivity. They are, for example, the use of new
improved seeds, chemical fertilizers, chemicals, and
other. The present economical and social systems
have been changed. The land for agriculture has been
changed to residential land and industrial zones. The
production on land has gradually decreased while
the needs for consumption have increased.
Agriculture has changed from growing vegetables
for living to growing for selling which is promoted
by the Government. The products have to be
increased by using chemical fertilizers and
insecticides (Kaewsong et al., 2001). Apart from the
factors of production such as cost of petrol and labor,
farmers lack managerial skills and knowledge of
current affairs. This is why most of the farmers are in
debt with chemical residues in their rice products, the
environment, soil, and water sources; and soil
degradation. As shown in many studies, that mention
dynamics of farmers, the farming society is not a
society for production and consumption of small and
isolate communities. On the other hand, the
production of farmers covers widely product
exchange and services. The farmers trading systems
and networks cover wider areas from the isolate a
producers to the marketing system (Santasombat,
2003). Farmers are gradually poorer with more debt.
We can say that the inappropriate management of
natural resources and the environment can cause
impact on the economy both at national and
household levels.
3. Impact on the society and culture: When
nature is destroyed, the labor in rural areas and the
agricultural society has moved to the industrial sector
or urban society. The following issues cause
problems of safety for life and property and crimes
which are now more violent. According to the
record, criminal offences increased from 1.71
offences per 1,000 people in 2001 to 2.11 offences in
2005. (Office of the National Economic and Social
Development Board,2006).The serious or frightening
offences and other offences to life, body, gender and
property have increasingly threatened the safety of
life and property of Thai people. One of the main
causes comes from the problem of broken families.
The warmth of present Thai families is generally at
the low level. Also, the problem tends to increased in
the future. The index of a family warm has
continually decreased during 2001 2005, namely
from 56.16% in 2001 to 55.09% in 2003 and to
51.11% in 2005. This is because the good
relationship within the family is declining. The
members of families cannot do their roles
appropriately. This can affect and reduce the
happiness of families and then lead to various social
problems especially divorce. The rate of divorce is
fairly high and increased from 4.4 couples per 1,000
households in 2001 to 4.6 couples in 2004 and to 5.0
couples in 2005. The problem of increased divorce
together with the economic has crisis, has caused the
problem of child and elderly abandonment which are
more violent (Office of the National Economic and
Social Development Board, 2006).
From those impacts, we can say that the
important causes or factors begin from the
unbalanced development process. There has no an
establishment of criteria and indicators to assure the
risks that cause impacts been on the development of
life quality, economy and society against in the
future, especially concerning the utilization of
natural resources and the environment of people in
rural areas who are the majority group of the country
and the base of production resources.

IV. PRINCIPLES OF SUSTAINABLE
DEVELOPMENT

The principles of a sustainable development
attempt to seek for ways to bring the world away
from crisis. They have operated through international
forums for development supported by UNESCO and
UNEP. Later on, we have found that we have to live
in harmony with environment by reducing the
amount of consumption and the destruction of
natural resources and ecological systems. We have to
turn to eating food and using materials and utensils
that are environmentally friendly. Nature and forest
rehabilitation need to be promoted in order to reduce
the amount of carbon dioxide and increase oxygen in
the atmosphere instead. However, the attempts for
sustainable development need to have action from
the whole world and cannot wait for any more
support from politicians and business persons.
Education for sustainable development started
from the industrial revolution and technological
development 200 years ago. It continued till the
period of social reform (Progressivism) in western

128

countries especially in the USA in 100 years ago.
The notions of the period were adopted into the new
era of education emphasizing search for knowledge
of technology and developing people into a new era
economic system in all parts of the world. Education
has therefore focused on the excellence which leads
to social, family and personal problems. The society
lacks love and kindness; and, at the same time,
crimes and drug abuse occur in the society. This can
be called the collapse of society in which the
family is isolated. People place importance on
working for earning and living separately as is called
lack of warmth. People seek advantages for
themselves and have no responsibility toward the
society, as they are called, selfish persons
(Veeravatnanond, 2012).
The education mentioned above will make
people crazy. They do not understand their own
lives, do not know how to live together in
community and world societies, do not know what is
true and false, and do not know the values and merits
of manhood. Samples of such education are
academic competitions emphasizing scores from
achievement tests as the content. They do not assess
knowledge and ability in social, environmental, and
ethical aspects. The samples promote the value of
unlimited consumption of resources are creating
brands, designing things for consumption, and even
talking about old local wisdoms and bringing this all
back to use without considering appropriateness to
the current situation. These issues can lead to
credulity and more accumulated failures.

V. UNDERSTANDING ABOUT LIFE

Living things including humans, animals and
plants have relations which cannot be separated.
When we think back to the world in the past at its
beginning about 4,500 million years ago, the world
was without living things and then started with air,
water and minerals on its surface. Later on, the
development of living things occurred in the world.
This means that living things were developed from
nonliving things (but the origins of living things in
the world might be different). This also means the
combination of minerals in an amount and condition
suitable for living things. It took very long time to
develop until become living things as plants, animals
and humans as seen at present. However, there
knowledge about the origin of living things is still
uncertain and controversial. The explanations for the
origin of living things are quite difficult to prove by
scientific methods. As stated in a principle of
Buddhism, we should not search for the answer
because it will waste time. It can be concluded that
living things have minerals in the form of organic
substances as parts of their bodies. Those minerals
are, for example, oxygen, nitrogen, calcium, and
phosphorus.
When they originally began, humans and
animals needed food consisting of protein,
carbohydrate, fat, vitamins, and minerals; and water,
with hydrogen and oxygen as its components.
Breathing means taking in oxygen, nitrogen, carbon
dioxide, and other minerals. At the same time,
factors for living such as food, water and air are then
needed. Apart from the need of various minerals for
our bodies, the energy gained from the minerals
taken in is also needed. The body of a living thing is
similar to a chemical factory that receives minerals
and energy from the environment and processes them
for living. Living things contain carbon, hydrogen,
oxygen and calcium as their main components. All
kinds of living things are parts of the natural or
ecological system. The bodies of humans, animals
and plants are used to the ways for passing minerals
and energy to the surrounding environment which
includes both living and nonliving things. Substances
or minerals in the environment are in a system called
cycle. Examples are the water cycle, carbon cycle,
and nitrogen cycle.
The world is currently facing a rapidly
increasing number of population. In 2011, it was
reported that the world population was 7,000 million
people. The number will be 10,500 million people in
2050. However, an increasing number of humans and
living things might not be possible anymore because
the resources as the main factors of living things
have already decreased. As seen in 2011, a food
crisis occurred because food prices increased and the
world could produce less food.
As mentioned above, we can see the close
relationship between living things and the
environment. If the natural resources, which are the
important factor for living things, are plentiful, the
density of living things will increase. If there are
water sources, there will be plenty of animals and
plants around. Similarly with humans since the past,
they usually choose to build their houses and
communities close to water and food sources. They
will move their houses when the resources are
decreased. Unfortunately, at present, humans cannot
move across the borders between counties the same
as with other kinds of living things. For example,
people in China and India are very crowded while
the natural resources, which reflect the life quality
and richness of the country, are limited. However,
there are some exceptions. One case is that
knowledge can help humans to survive in a limited
environment as seen with Japanese people as a good
sample.
Sustainable development should follow
principles as follows.
1. Different thoughts but the same goal: At
present, different ideas at work have been widely

129

accepted under different environmental, social,
cultural, economic, political and educational
circumstances. However, everyone has to understand
and accept the idea of living together in the same
world. All lives have to rely only on factors for
living from this world and also the nature of the
world. Each person will be involved in society,
culture, economy and politics which influence the
ways of living. Education can make people different.
For the one world goal, it is necessary that the
economic, social, cultural and political policies must
emphasize the goal of one world through education
for sustainable development.
2. Development and rehabilitation and to stop
destroying the environment: Environmentalists or
environmentalism have warned us for at least 40
years about dangers from destroying the
environment, destroying the forests, and toxic
substances in the environment. We all should realize
the disasters from global warming (even though
many issues are still waiting for those who are
responsible). We cannot wait any more and urgently
need to put things in action such as growing trees or
forests in all areas of the world. The toxic substances
must be separated and destroyed. They must not be
allowed to affect the soil, water and air. Economic,
social, cultural and technological development must
not any more affect the quality of the environment.
3. Living with a sufficiency life style: Global
warming has affected all lives in the world. Everyone
is facing the temperature of hot weather. Snow is
melting and becoming streams. Climate change has
occurred frequently and storms destroy lives and
property. Bush fires happen more often than before.
Air conditioners are needed in most houses.
Natural resources existing in the world are
closing into a shortage. The natural environment has
already become unbalanced.
New epidemic diseases continually appear and
spread over the world. There are, for example, bird
flu and A 2009 H1N1. Epidemic diseases which
disappeared for along time, such as tuberculosis and
bubonic plague, have returned.
All people must be more responsible for their
own lives not only by protect themselves from
natural disasters, but also to protect themselves from
more damage. This can be done by changing their
way of living from using products luxuriously to
selecting things to buy, use and eat. They must
reduce those unnecessary things in the groups of, for
example, clothes, houses, home products, private
things, travel, and food and dining. They have to
choose products from natural and environmental
friendly raw materials. This is the life style based on
the principles of sufficiency economy.
Moreover, the methods of economic and social
development must be adjusted and not cause
problems to the environment. All sectors must be
more seriously and widely responsible for the world
environment.

VI. CRITERIA AND INDICATORS
FOR SUSTAINABLE DEVELOPMENT

Regarding research on the development of risk
assurance criteria regarding natural resources and the
environment for sustainable development of life
quality, economy and society of the community, the
indicators used to assure the risk of disaster both at
the national and international levels, were obt
1. The risk assurance criteria regarding the
utilization base of natural resources and the
environment comprises 3 main factors. In the area of
natural resource conservation and rehabilitation,
there are 5 sub-factors and 23 indicators. In the area
of danger prevention, there are 4 sub-factors and 17
indicators. In the area of community resource
utilization management, there are 4 sub-factors and
17 indicators. There are total 13 sub-factors and 57
indicators. (See Table 1).
2. The criteria for the development of life
quality, economy and society comprise 3 main
factors. There are 6 sub-factors and 29 indicators in
the area of life quality, 4 sub-factors and 18
indicators in the area of economy, and 4 sub-factors
and 19 indicators in the area of society. There are in
total 14 sub-factors and 66 indicators. (See Table 2)

TABLE 1: RISK ASSURANCE CRITERIA FOR THE UTILIZATION BASE OF NATURAL RESOURCES
AND THE ENVIRONMENT COMPRISES THE FACTORS OF NATURAL RESOURCE CONSERVATION
AND REHABILITATION, DANGER PREVENTION, AND COMMUNITY RESOURCE UTILIZATION
MANAGEMENT

Factor 1 Natural Resource
Conservation and Rehabilitation
Factor 2 Danger Prevention

Factor 3 Management of
Community Resource Utilization
Sub-factor 1.1 Plants in the
community
1. The community has conservation
of the local plant resource.

Sub-factor 2.1 Dangerous Waste
1. The households separate
dangerous waste from general
garbage.

Sub-factor 3.1 Forest, Wild
animals and Aquatic animals
1.The community has plans for
appropriate utilization of local forest,
wild animals and aquatic animals.


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TABLE 1: RISK ASSURANCE CRITERIA FOR THE UTILIZATION BASE OF NATURAL RESOURCES
AND THE ENVIRONMENT COMPRISES THE FACTORS OF NATURAL RESOURCE CONSERVATION
AND REHABILITATION, DANGER PREVENTION, AND COMMUNITY RESOURCE UTILIZATION
MANAGEMENT (CONT.)

Sub-factor 1.1 Plants in the
community
2. The community has a database
the on local plants.
3. The community makes
appropriate use of the local plants.
4. The community has surveys to
provide maintenance and increase the
number of local plants that will
become extinct or nearly extinct.
5. The community grows local
plants in the public areas.
6. The community promotes people to
grow the local plants in their households.
Sub-factor 2.1 Dangerous Waste
2. The community has measures to
correctly manage dangerous waste.
3. The households reduce the
consumption of substances that might
be dangerous to peoples health and
the environment.
4. The community promotes the use
of natural products in order to reduce
global warming.
5. The households know how to
prevent dangers from toxic substances
and now to cure when suffering from
them.
Sub-factor 3.1 Forest, Wild
animals and Aquatic animals
2. The community is involved in
the conservation and rehabilitation of
forest, wild animals and aquatic
animals.
3. The community promotes the
people to gain knowledge of the laws
about forestry.
4. The community promotes
voluntary networks for the protection
of forest, wild animals and aquatic
animals.
Sub-factor 1.2 Animals
1. The community promotes people
to raise local animals and make
appropriate use of them.
conservation of the local animals.
3. The community has a database of
local animals.
4. The community has surveys to
provide maintenance and increase the
number of local animals that will
become extinct or nearly extinct.
Sub-factor 1.3 Forests
1. The community grows trees in its
public areas.
2. The community establishes
criteria for the utilization of
community forest.
3. The community has space for the
conservation of wild animals and
plants.
4. The community has a database of
wild animals and plants.
5. The community provides
involvement for people to watcher
dangers to the forest.
Sub-factor 1.4 Soil
1. The households use natural
methods to improve the soil.
2. The households use soil
appropriately for long period to its
benefit.
study and analysis of soil condition for
regular improvement of the soil.
4. The community has plans for the
appropriate joint utilization of soil.
Sub-factor 1.5 Water
1. The community has measurements
to maintain water sources.
2. The community has fair criteria
for the use of water.
3. The community uses water
suitable for its condition.
4. The community keeps water for
both consumption and agriculture.
Sub-factor 2.2 Garbage
1. The households have ways to
reduce the amount of garbage
appropriately and correctly.
2. The households get involved
with the community in dealing with
the garbage.
3. The households make use of the
garbage.
4. The community provides enough
sanitary places for garbage.
5. The community has measures for
correct garbage disposal according to
sanitation principles.
Sub-factor 2.3 Smoke and Dust
prevent smoke and dust.
2. The community has plans for
watching smoke and dust.
3. The households are involved in
reducing the amount of smoke and
dust.
Sub-factor 2.4 Natural Disasters
prevent natural disasters.
2. The community has plans for
warning of natural disaster.
3. The households have ways to act
to reduce losses from natural
disasters.
4. The community has rescue units
for natural disasters.

Sub-factor 3.2 Soil
1. The households reduce or stop
the use of chemical fertilizers and
substances.
methods of organic agriculture.
plantation appropriate to the soil
condition.
appropriate and fair use of public
lands.
5. The households respect private
and public lands.
Sub-factor 3.3 Water
1. The community has plans to
seek for water resources sufficient for
consumption by the people.
2. The community has ways to
improve and maintain the quality of
water resources for consumption and
agriculture.
3. The community has fair ways
for irrigation.
4. The households make us best
use of the water.
Sub-factor 3.4 Energy
use of natural energy.
reducing the consumption of energy
to reduce global warming.
3. The households make best use
of the energy.
production and searches of
alternative energy.


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TABLE 2: CRITERIA FOR THE DEVELOPMENT OF LIFE QUALITY, ECONOMY AND SOCIETY
COMPRISES 3 MAIN FACTORS OF LIFE QUALITY, ECONOMY AND SOCIETY

Factor 1 Quality of Life Factor 2 Economy Factor 3 Society
Sub-factor 1.1 Food
1. The households are able to seek for enough food
for consumption in their daily lives.
2. People in the households consume enough
valuable and useful food for their health.
3. The households are able to seek for enough food
for consumption.
4. The households prepare food appropriate for daily
consumption.
5. The households have an opportunity to have
meals together at least once week.
Sub-factor 1.2 Clothes
1. People in the households have enough clothes
appropriate to their living.
2. The households know how to look after and make
best use of their clothes.
3. The households select and use clothes made from
natural materials which are not harmful to the
environment.
Sub-factor 1.3 Daily Utensils
1. The households use enough daily utensils suitable
for living.
2. The households look after and make the best use
of daily utensils.
3. The households use products and daily utensils
which are not harmful to the environment and health.
4. The households select and use products for getting
rid of animals and insects which are not harmful to
health and the environment.
Sub-factor 1.4 Health Care
1. People in the households are able to look after
their own health correctly and appropriately.
2. People in the households behave themselves
correctly and appropriately according sanitation.
3. People in the households know how to select
services to prevent disease and for correct and
appropriate according treatments to their status and
needs on a sufficiency base of health.
4. People in the households know how to choose
correct and appropriate ways to behave for their
happiness.
Sub-factor 1.5 Residence
1. The households have secure and safe places
to live.
2. The households build their houses appropriately to
the geographic conditions.
3. The households build their houses appropriately to
the climatic conditions.
4. The households build their houses of a size
appropriate to the number of members.
5. The households look after their houses with
clean sanitation.
6. The households build their houses for energy
saving.
7. The households use used or recycled
materials to build or repair their houses.
8. The households arrange space inside and
outside their houses beautifully.
Sub-factor 1.6 Environmental Arrangement
1. The households arrange the shady and natural
environment for their houses.
2. The households keep clean and do the waste
deposals.
3. The households tidy things and utensils for safety.
4. The households have appropriate waste disposals.
5. The households follow the measures of the
community for environmental protection and
maintenance.

Sub-factor 2.1 Raw Materials for
Production
1. The households seek for raw
materials from the local community
or nearby for producing for
consumption.
2. The households make best use
of natural raw materials for
production.
using raw materials for production
which are not toxic and have no
impact on health and the
environment.
4. The households add value to
their products.
Sub-factor 2.2 Production
1. The households have no trouble
in seeking raw materials for
consumption.
2. The households are able to
reduce costs of production.
3. The households safely create
and develop quality products for
consumption and the environment.
4. The households have production
systems for energy saving.
Sub-factor 2.3 Selling-Transport
1. The households earn incomes
from selling products which is
sufficient for life year round.
2. The community has places for
selling and exchanging its products.
3. The community has ways to
reduce the cost of transport.
4. The community involved in
maintenance of transport routes.
Sub-factor 2.4 Capital
1. The community is able to
reduce its reliance on external capital
sources.
2. The community establishes or
develops funds for production and
saving.
3. The households use the capital
for production correctly according to
the objectives.
4. The households have plans for
systemic use of capital.
use of local labor.
6. The community develops
capacity and skills upon occupations.

Sub-factor 3.1 Cooperation and
Kindness
1. The households together are
involved in jointly activities of the
community.
2. The households visit neighbors
in the community in order to
provide advice.
3. The households kindly offer or
exchange raw materials and
products.
Sub-factor 3.2 Safety and Peace
1. People in the households do not
cause trouble to neighbors and the
community.
2. People in the households help
protect private and public property,
and prevent disaster in the
community.
3. People in the households accept
conflict reconcilement by the
community leaders.
4. People in the households have
guidelines for practice which
facilitate benefits and happiness of
families and the society.
5. People in the households accept
and follow the rules and regulations
of the community.
Sub-factor 3.3 Reduction of
Luxuriousness
1. The households reduce expense
in arranging traditional activities.
2. The households have their own
income-expense accounts.
3. The households manage
incomes for their savings.
4. People in the households
reduce or stop all involvement with
vice and using narcotics.
5. People in the households select
and consume the products of the
community.
Sub-factor 3.4 Morals and Good
Values
1. The community promotes and
appreciates its own good people.
2. The households follow or
practice traditional activities
appropriatal to their statuses.
3. People in the households
believe and rely on the value
concerning making merit..
4. The households create
happiness and security of the
families according to
their own traditions.
5. People in the households have
good values about saving and
patience.
6. Your community promotes the
conservation of culture, traditions
and local wisdom appropriately
according to the condition of the
community.


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VII. CONCLUSION

The world has currently been facing problems of
epidemics, especially A 2009 H1N1 for which it has
been developing vaccine. Even though there have
been attempts and efforts on the matter, the problems
cannot be solved permanently because the issue of
global warming is still the main cause of these
problems. All suffering has not yet been healed
correctly by adjusting the way of living, using less
natural resources as living factors, and being friendly
with the environment.
Adjusting way of live must include the
conservation and quality improvement of natural
resources and the environment as the basis.
Knowledge about the environment should be
provided to the people in order to promote awareness
and values toward the environment. People can be
friendly with the environment through the education
and knowledge about the truth of things and merit.
Teachers, students, environmental educationalists and
developers must have knowledge and understanding
about learning management and transfer, and the
truths and values of the environment. To understand
the nature of human learning is a process of
intelligent development which helps develop free and
systemic ideas as well as good living models for
others.
The sustainable improvement of life quality will
start from personal development which teaches
people to look after their physical health and mental
health. People will have warm families and then be
able to live with others in society and the community
not only because of development of the economy.
Even though people have careers, incomes and good
economic status, they might not have happy lives if
they cannot find happiness and peace inside
themselves.
Knowing how to live happily is the goal of
sustainable development. This can be done by
knowing how to look after oneself, the environment
and the society. The development includes the
improvement of consciousness and intelligence, and
of ways of life that are friendly with the environment.
It will follow the principles of sufficiency living and
morals through educational management to access the
truths of things and oneself. This process of learning
management has already appeared in the principles of
Buddhism. They are, for example, three studies of
morality, concentration and wisdom; and other
principles which have already been practiced in Thai
society.

REFERENCES

Development Evaluation and Communication
Office.(2006). Framework for the development of
indicators for happy living together in Thai society.
Bangkok: Office of the National Health System
Reform.
Editorial Department. Various Nations Suggested
Thailand to Move Capital City, as It Has 4 Times
Risk of Floodings.[Thairath Online]. Retrieve on
http://www.thairath.co.th. (Date : November 8,
2011).

Health Systems Research Institute. (2005). 2005
Annual report of health systems research institute.
Nonthaburi: Health Systems Research Institute.

Kaewsong, Bunchorn et al. (2001). Research report
on the database survey and development of village
community business organizations in the central part
of Northeast Region.Khonkaen: Khonkaen
University.

Office of the National Economic and Social
Development Board.(2006). 2006 National economic
and social development plan. Bangkok: Office of the
National Economic and Social Development Board.

Panyakul, Vitoon. (2004). Agriculture sustainability:
agriculture of the future. Bangkok: GreenNet.

Santasombat, Yot. (2003). Dynamics and flexibility of
farmer societies: economy of communities in North
region and paradigm shift of the third world
communities. Bangkok: Thai Village Community
Economy Project.

Veeravatnanond, Vinai et al. (2012). Development of
risk assurance criteria to the utilization of natural
resources and environment for sustainable
development of life quality, economy and society in
rural Thai communities. Journal of Asian Social
Science, 8(2): 186-158; 2 February, 2012.

Veeravatnanond, Vinai. (2012). Environmental
education for the age of global warming. Phisanulok:
Phitsanulok.com


133

A Decent Work Approach for
Advancing Inclusive Innovation in Informal
Sector Employment under a Global Production
System: A Study of Thailand

Chokchai Suttawet
Department of Social Sciences, Faculty of Social Sciences and Humanities,
Mahidol University, Bangkok, Thailand; csuttawet@gmail.com

Abstract -- The Global Production System (GPS),
which is embedded in its value chains management, is
influencing common employment practices for
benefiting firms of countries with liberal economies in
both the developed and developing world. On the side
of workers benefit, the way of improving workers
quality of working life under the GPS is contingent on a
common decent work approach, initiated by the
International Labour Organization for years. In
Thailand, the huge informal employment sector is in
parallel to the formal employment sector for economic
success as a whole. But under the countrys economic
development, the informal workers suffer much more
than formal ones. A decent work approach in the
informal sector is important to progress, as an inclusive
innovation scheme, for improving workers quality of
life, under the guarantee of the law. But there has been
a limited progress by the State legal administration in
producing subsequent regulations according to the Act.
Finally, the author proposes a number of policy options
for directing the implementation of a decent work
approach, to be discussed among stakeholders of both
informal and formal employment sectors,
representatives and responsible government officers.

Keywords -- Global Production System (GPS), workers
quality of working life, decent work approach, value
chains management

I. INTRODUCTION

The global production system (GPS) is evolving
from an in-house-dominated mass production system
into a flexible and linked production system for both
formal and informal sector employment. This change
is reducing job security, especially with regard to the
more vulnerable forms of employment.

The proliferation of GPSs is a critical
phenomenonone that presents the development
community with both opportunities and challenges
for achieving the goal of decent work for all (The
World Commission on the Social Dimension of
Globalization Report, 2004). GPSs serve as a
significant source of employment for developing
economies, at the same time they affect their labour
markets in a variety of other ways. Regulation tends
to be weak in these new production systems, and
associated competition in the global market,
arguably, is too often leading to a race to the
bottom in terms of labour and other standards.

The ILO, the worlds center of inclusive
innovation in employment is aiming to give sound
operational policy advice, including a range of policy
options, available to national policy-makers and
socio-economic development planners. In so doing,
the ILO encourages all concerned parties to approach
a decent work paradigm and by collaboration among
institutes to better focus on articulating
trade/labour/consumer-friendly standards in line with
the core ILO Labour Standards.

At the same time, participation in these systems
presents an important way of attracting investment,
increasing technological capability, building
industrial capacity, and fostering economic growth,
not only in the formal sector but also in the informal
one.

II. TRANSFORMATIONS WITHIN THE
GPS AND DECENT WORK
The GPS appears to challenge commitments to
decent work. In its expansion of international-to-
local and local-to-international connections, the GPS
is transforming economic work in three ways
(Barrientos 2006: 3):
growth of export business under associated
economic liberalization and the expansion of
transportation and communication;
deregulation of labour markets and impact of
transformations in production on the nature of
employment; and
challenges to the States ability to regulate and
hold multi-national firms accountable.

By its very nature, through the expansion of
global value chains and production of formal and
informal networks, the GPS is transforming

134

employment towards flexibility, insecurity, and
maximization of informal workers. But key players
or stakeholders are bringing pressure to bear on firms
to balance their economic upgrading with social
upgrading to benefit workers of both sectors.
(Barrientos 2006: 4)
Global production brings new forms of business
and employment, and precarious employment figures
prominently among these. An equilibrium of work
quality and quantityi.e. decent workrequires
effective improvement, including broader coverage,
of the labour and employment laws. (Frade and
Darmon 2005).
At international level, the ILO has been working
for decades to promote decent work.
1
One element of
this has been promotion of the use of decent-work
indicators within an overall socio-economic
development action framework. The ILO outlines 23
indicators of decent work, falling into four areas
(ILO 2006: 69-70):

workers rightsindicators include childrens
share of the workforce (5-14 years), female share of
the workforce, and complaints and cases brought to
labour courts or the ILO;
employment/workindicators include types of
work (permanent or casual, factory-based, farm-
based, home-based), wages/income, and hours of
work;
social protectionindicators include social
security coverage (pension funds, insurance, social
assistance benefits, etc.); occupational injury rates
(fatal/non-fatal); excessive hours of work (> 49
hours/week); and minimum wage rates/ income.
social dialogueindicators include trade
union/cooperative membership; number of
enterprises belonging to employer organizations; and
strikes and lockouts, or rates of days not worked.
Within the four strategic objectives: the area of
employment, rights at work, social protection and
social dialogue; decent work is integrative, and has a
deep ethical content. Decent work is productive and
secure employment; it respects labour rights,
provides adequate income, offers social protection,
and includes social dialogue and the rights to
collective bargaining and union participation.
2

III. VALUE-CHAIN WITHIN GPS OF FORMAL
AND INFORMAL EMPLOYMENT
The value-chain analysis of the GPS and its
relationship to decent work helps understand value

1
www.oit.org/public/english/decent.htm.
2
See definition of decent work in www.cinterfor.org.uy/
public/english/region/ampro/cinterfor/publ/sala/dec_work/
ii.htm.
creation in the GPS chain from beginning to end.
More formal firms are utilizing informal firms or
employment for reducing cost of production, such as
employing informal workers at their home to
produce partial products of the firms. Lead actors,
especially big multinational firms, shape the market
in terms of value creation.

Value-chain analysis (Schmitz

2005) can
provide insights into the behaviour of the production
partners, into who does what in leading the chain,
and the subordination of informal employment under
formal employment.

Finally, from both employment of formal and
informal production and service, value-chain
analyses can inter alia help explain the success or
failure of labour codes of ethics and labour standards
of both related sectors.

Informal sector employment is pertinent in many
countries and affects economic growth and
sustainability. Internationally, a huge number of
workers are in informal employment. Informal
employment comprises about 65% of non-
agricultural employment in developing Asia, 51% in
Latin America, 48% in North Africa and 72% in
Sub-Saharan Africa.

The problems of informal employment do for
example, cover a very diverse range of situations,
including the extent of exclusion from labour rights
and laws, the activity sectors, the type of economic
units concerned and their links with the formal
economy. Several types of informal employment are
such as employers, own-account workers, employees,
casual workers and unpaid family workers. Most
developing regions have around 60 70 % of self-
employment (ILO, 2002).

Informal workers are facing a lot of problems.
They are subject to unfair employment terms, a lack
of stable income, and a lack of labour protection and
social security. Informal workers are mostly
excluded from labour protection benefits. They get
unfair wages or lower than minimum wages and
unstable income. Most of them have a lack of access
to social security, a lack of organization,
representation and bargaining power, and are
suffering from health and unsafe working
environments.
(http://www.wikigender.org/index.php/Informal_wor
kers_in_Thailand)

IV. LABOUR STARDARDS AND DECENT
WORK APPROACH

The world global employment culture has been
schematized for nearly one hundred years by the

135

institutional effort of the International Labour
Organization. A great number of the ILOs
conventions and recommendations have been
convened yearly to promote best practices of
employment and quality of workers life. The
progress in adoption of the ILOs conventions by an
increasing number of the members countries proved
its positive impact on labour standards.

Industrial peace rather than riot has been
maintained in the countries seriously implementing
the ratified conventions. By the decent works
approach, that covers four areas of employment
practice, the informal workers should benefit
comparably with the formal workers.

Under the GPS, it is inevitably seen that both
formal and informal sectors of employment are the
contribute to the country economic growth and
sustainability. The productivity of the firm within its
value chains does not solely come from the formal
type of employment.
Also, the cost saving of the formal employment
firm would increase by the use of informal workers
such as sub-contract workers and causal or
impermanent workers that are paid lower than the
permanent workers. But the informal workers are
less legally protected than the formal workers in an
employment structure. Without the innovative
inclusions for raising the quality of working life of
informal workers through decent work, the formal
firm and its workers would hardly survive under the
world business competition.

According to the authors recent research, the
economic and social up-grading of the firms in
Thailand, especially in the seafood industries in
2008, has given us a lesson to learn. The economic
up-grading that helps the firm run well in
international business competition comes first, then
comes the social up-grading that would return safety
work and give back remuneration and other benefits
to workers of the firm (Suttawet 2008). This finding
points out that decent work needs to be promoted if
we are interested in innovative inclusion for the
vulnerable workers of the countrys industries.

The problems of the adoption of the
international labour standards in Thailand and also
other developing countries are mainly owing to
government policy and officials attitudes towards
the international standards to head national law
reform. In Thailand, the ratification of the ILOs
convention is going at a slow rate and in a stumbling
style. For instance, the ratification of the ILO
conventions numbers 87 and 98 is now reaching 60
years from the starting demand of the National
Labour Union Center after the Second World War.

V. THAILANDS INFORMAL SECTOR
EMPLOYMENT AND INCLUSIVE
INNOVATION FOR INFORMAL SECTOR
WORKERS WITHIN THE GPS: THE
SITUATION AND OUTREACH
Informal employment in Thailand is recorded as
about 24.6 million workers in self-employment from
about 39.4 million workers or 62% of labour forces
(http://www.hiso.or.th/hiso/tonkit/tonkits_51.php). They are
such as home workers, subcontract workers, and
various forms of self-employed persons. A huge
number of informal employment workers has arisen
from flexibility of formal employment towards
benefit the informal practice of employment.

Under the value chain in production within the
GPS, informal workers suffer more than formal
workers in employments. The Thai labour protection
law has not yet enough entitled these kinds of
suffering workers. In two cases, evidence in recently,
in 2011, the former government enacted a new Act
The Home Workers Act. This law protects workers
employment on the lines of the decent work
approach, in terms of wages, health and safety,
limited welfare and so on.

However, the subsequent regulations, under
control of the Labour Ministry, to actually enforce
firms and concerned workers are slow in being
produced and until now the law has not yet been
enforced. Furthermore, the Peoples Pension Fund
with a focus especially on self-employed and
informal workers, was also enacted by parliament in
2011, and this second new law also has not yet been
actually enforced by the responsible agencies of the
government, but by the Ministry of Finance.
3

Therefore, legal enforcement is at least, one among
key factors for realizing the promotion of decent
work for informal sector workers.

What are the rights to be promoted for informal
workers within the decent work approach? They
should be: security of employment and income,
productive and better jobs, hours of work, basic
workers rights, opportunities to be employed, job
guidance, skill training and development, creative
work training, workers collective bargaining and
participation with firms, health and safety and even
entrepreneurship for their future living.

Furthermore, as is reported by the UN website
from an e-Discussion on Jobs, Decent Work and
Inclusive Growth which was held from 8 February
to 16 March, organized by the UN Department of
Economic and Social Affairs (DESA), UN

3
This is observed currently by the author of this article as
a committee member on the Improvement of Social
Welfare Laws, under the National Legal Reform
Committee.

136

Development Programme (UNDP) and International
Labour Organization (ILO), a number of
recommendations have arisen from the international
e-discussion generated by 148 contributions from
more than 90 countries. Several key messages
emerged, including the following
(http://www.un.org/en/ecosoc/newfunct/amredis2012
.shtml):

To place employment and decent work at the
centre of growth and development strategies.

To promote full and productive employment for
all, with a specific focus on women and young
people.

To create an enabling environment in which
micro, small and medium enterprises (MSMEs)
can thrive.

To focus on the quality of jobs and livelihoods
to ensure inclusive growth.

To highlight the importance of jobs, inclusive
growth and decent work on the international
development agenda.

As observed, conditionally, the decent work
approach as an inclusive innovation atmosphere for
employment in benefiting informal workers in
Thailand, is so much dependent on the strength of
workers capacity for organizing and collective
action. The progressive success of workers rights
via legal practice is also dependent so much on such
capabilities of workers, and the cooperation of both
formal and informal workers organizations in
monitoring law enforcement.

VI. POLOCY IMPLEMENTATION OPTIONS
FOR APPROACHING DECENT WORK AS AN
INCLUSIVE INNOVATION ATMOSPHERE FOR
THE INFORMAL EMPLOYMENT SECTOR

1. Ensuring rights of informal sector workers
to organize unions or union-friendly associations.
2. Collaboration of both formal sector
workers organizations and informal sector workers
organizations in the same national center(s).
3. Open the opportunity for informal sector
workers to have representatives and a voice in
national tripartite bodies.
4. Supporting the labour court in including
legal cases for informal workers employment the
same as for the formal employment workers.
5. Guaranteeing that skilled workers of
informal sectors have opportunities for permanent
jobs, to minimized in casual work, to be able and
legally empower for factory-based, farm-based and
home- based employment.
6. Regulating of wages/income (and minimum
wage rates/ income), hours of work and excessive
hours of work (> 49 hours/week) for informal
workers through not only national labour protection
laws but also on a charter basis in the wider region,
such as within ASEAN country members.
7. Outlining a social dialogue forum on a
regular basis between representatives of employer
organizations, workers organizations, state officers,
cooperatives, NGO activists, academicians and
media reporters for promoting decent work in
informal sector.
8. Improving skill of informal workers and
their attributes for employability within the value
chains of GPS.
9. Setting up opportunities and means with
special incentives for informal workers as vulnerable
beneficiaries, at least on the same mechanism or
similar standards for formal employment workers
such as on pension funds, insurance, social
assistance benefits, etc., occupational injury rates
trade union/cooperative membership, number of
enterprises belonging to employer organizations, and
strikes and lockouts, or rates of days not worked.
10. Encouraging social audit (which should be
legalized) by organizations of informal workers
unions, association or cooperative-like organization
to monitor legal practice by government officials.
11. Organizing national assemblies yearly
for sharing information for inclusive innovation on
informal sector employment.
12. Restructuring national and industrial data
bases on informal sector employment for integrated
use with the formal sector employment.
13. Evaluating yearly the performance of the
National Committee on Informal Sector
Employment, as a policy making body, to seek for
impacts and improvement of duties of the committee
and its concern with the rights of informal workers
within the decent work approach to security of
employment and income, productive and better jobs,
hours of work, basic workers rights, opportunities to
be employed, job guidance, skill training and
development, creative work training, workers
collective bargaining and participation with firms,
health and safety and even entrepreneurship for their
future living.
14. Improving concrete indicators for informal
sector employment to reach the aims of decent work
which should be done with the involvement of
academic institutions.

137

15. Organizing Public-Private-People partnership
mechanisms both at national and local levels for
cooperation in improving informal sector
employment.
16. Encouraging research projects to be conducted
in order to strengthen constructive practice of decent
work by a formal and informal sectors linkage.
17. Establishing a Secretariat Office on labour
rights and employment monitoring mechanisms,
marching on a course to the start of the ASEAN
Community in 2015, to strengthen cooperative
works between the ILO and ASEAN Community for
every country member.

VII. CONCLUSIONS
Value-chain management and decent work,
within the GPS, has given an insight into
understanding a firms production chain affecting
opportunities for workers quality of life. Within the
development of the country economy the informal
workers suffer much more than formal ones.
Inclusive innovation in informal employment is
worthy to be promoted and inherits in the decent
work approach to labour employment standards that
interrelate formal and informal employment for
sustainable economy as a whole.

A list of topics for enriching inclusive
innovation of informal employment has been given,
inevitably with a hope of legal protection that should
be confirmed and effectively enforced, by which
workers capability in organizing, collective action
and monitoring law enforcement, is involved, as a
lesson learned and suggested by Thailand. Also, the
recent recommendations in early 2012, from an
international perspective on decent work, have given
a focus on such as employment and decent work as
the centre of growth and development strategies and
on promoting full and productive employment for
all.

Finally, a number of policy options for
promoting a decent work approach in practice have
been proposed for discussion among stakeholders
representatives of both the informal and formal
employment sectors and responsible government
officers.

REFERENCES
Barrientos, S. (2006). Global production systems
and decent work. Institute of Development Studies:
1-13 (Geneva, Policy Integration Department,
International Labour Office).

Frade, C. & Darmon, I. (2005). New modes of
business organization and precarious employment:
Towards the recommodification of labour? Journal
of European Social Policy, 15 (2): 107-121.

ILO. (2006). Labour and social trend in Asia and the
Pacific: Progress towards decent work, in http://
www.ilo.org/public/english/region/asro/bangkok.

ILO (2002). Women and men in the informal
economy: A statistical picture, ILO, Geneva.

Schmitz, H. (2005). Value chain analysis for policy
makers and practitioners. In Labour and Social
Trends in Asia and the Pacific 2006. Progress
towards decent work. International Labour Office:
Geneva.

Suttawet, C. (2008). Promoting decent work in
global production systems in Asia and the Pacific: A
study of seafood in Thailand. LO/JILPT Networking
of National Institutes for Labour Studies.

World Commission on the Social Dimension of
Globalization. (2004). A fair globalization: Creating
opportunities for all. Report (ILO), in
http://www.ilo.org/fairglobalization/report/lang--en/
index.htm.

http://www.un.org/en/ecosoc/newfunct/amredis2012.
shtml.

http://www.wikigender.org/index.php/Informal_wor
kers_in_Thailand.

138

Inclusive Innovation: The Case for Those in
Rural Area for Sustainable Development in
Vietnam
Prof. Dr. Ha Van Su
Economic Faculty, Vietnam University of Commerce
Ha Noi, Viet Nam; hvsdhtm@yahoo.com

Trieu Do Kien
Foreign Economic Relations Dept. Ministry of Planning and Investment
Ha Noi, Viet Nam; uchirado@yahoo.com

Abstract The agricultural sector accounts for the
majority of the poor in Vietnam, accounting for
approximately 25% (that is 5% in urban areas and
over 9% throughout the country). For a developing
country with over 70% (63 million people) living in
rural areas, the issue of improving the living conditions
for the poor living in rural areas becomes very
important and is receiving the attention of government
and community. Improving living conditions for the
poor in the agriculture sector is also one of the solutions
for sustainable development in Vietnam at present. The
paper elaborates the approach and implementation of
inclusive innovation in practice with the case for those
living in rural areas aiming at sustainable development.
The study is based mainly on the case of Viet Nam and
some international experience and lessons.

Keywords inclusive Innovation, poor, rural
agricultural sector, sustainable development.

I. INTRODUCTION
Since the last decades of the twentieth century,
most nations have coped with growing challenges in
resources, environmental degradation and social
inequality. These problems have become more
serious when adverse impacts of the market economy
and globalization immensely affect numerous aspects
of the development process in each country. Hence, a
new point of view on development has been
introduced, namely sustainable development, which
is defined as development that meets the needs of
the present without compromising the ability of the
future generations to meet their own. (WCED).
Accordingly, the term sustainable development is
commonly used and highlighted with the implication
of assembling and embedment of three fundamental
issues: economic growth, social equality and
environment protection. Consequently, sustainable
development is a common trend being aimed at by
the human race and geared toward by Vietnam.
For the purpose of sustainable development,
Vietnam has gained a lot of remarkable
achievements in all three economic, social and
environmental dimensions over the past years. In the
economic sector, average GDP was 7.85% during the
period of 2000-2011. The increase in economic scale
and production of industries was visible. GDP per
capita in 2011 was US$1,200, three times as much as
that in 2000. Vietnam has moved from a low-income
to a medium-income country.
FIGURE 1:

GDP GROWTH

GDP GROWTH PER CAPITA

Source: Ministry of Planning and Investment

Nevertheless, these achievements have not
matched with the potential of Vietnam. Apart from
that, Vietnam is coping with a lot of global
challenges (such as energy security, water security,
climate change, sea level rise), the impact of the

139

market economy and economic growth based on
export of natural resources and cheap labor have
resulted in negative consequences for sustainable
developments requirements. These are unequal
access to and benefit from the Governments
policies, and unequal opportunities due to economic
innovation and international economic integration
having widened the gap between the rich and the
poor in the population strata (particularly between
urban and rural areas). Economic growth is not
accompanied with improvement of social values and
ecological protection The most vulnerable objects
to be mentioned are the inhabitants in the rural
agriculture sector. Vietnam currently has over 70%
of its population in rural areas, number of jobs in
agriculture account for nearly 60% and agriculture
contributes up to 20% to GDP. The agricultural
sector also comprises the majority of the poor in
Vietnam, accounting for approximately 25% (that is
5% in urban areas and over 9% throughout the
country).

FIGURE 2: VIETNAMS POVERTY RATES
OVER THE YEARS (FORMER POVERTY
STANDARD)

Source: Ministry of Planning and Investment

Thanks to the Governments special efforts in
the past, Vietnam has obtained certain achievements
in poverty alleviation. The proportion of poverty in
Vietnam has significantly decreased from 28.9% in
2002 to 9.45% in 2010. On average the country
reduced poor households annually 2%. Poor
households average income has doubled during the
same period, the poors life has improved, the
outlook for mountainous rural area has innovated.
The people living conditions have remarkably
improved.
However, the proportion of poor people in rural
areas is still high. The risk of poverty recurrence
exists for a part of the population that has just been
out of poverty, in the context of the global economic
crisis, sticky domestic economic situation, climate
change and sea level rise. Vietnam is considered as
one of very few countries in the world hardest hit by
climate change (Vietnam Rio+20 Report, 2012),
especially in the matter of sea level rise causing a
vast area farming land to vanish, and increasing of
incidence of natural disasters. Therefore, through
inclusive innovation that focuses priorities on the
inhabitants in the rural agriculture sector is a solution
that may bring about effectiveness and highly active
circulation for sustainable development objectives in
Vietnam for the time being.

II. INCLUSIVE INNOVATION FOR THE PEOPLE
IN THE RURAL AGRICULTURE SECTOR FOR
SUSTAINABLE DEVELOPMENT IN VIETNAM
1. Initiatives for All Approaches and
methodologies in Vietnam
With approximate 25% of the poor in
Vietnamese rural areas, the access to basic services
such as clean water, health care, electricity, and
education is difficult. Apart from that, they also have
little access to information, opportunities, and
benefits of the countrys economic development.
Because they are poor, local enterprises and foreign
investors pay no attention to this segment of the
market. Though the Government and donors are
interested in poverty alleviation in Vietnam, a lot of
challenges still exist, particularly in the context of
the current economic crisis. The poor feel like they
are out of development.
Inclusive innovation with the concept of better
exploitation of new ideas with lower cost for more
and more people what we call more for less for
more, to offer services that meet the needs of the
poor at the bottom of the pyramid with incredibly
low costs is hard for Vietnam to tackle, especially
when the number of inventions in Vietnam is lower
than in the region. Up to now, Vietnam still
maintains awareness in accordance with the old
approach, namely top down implosion, which is not
always effective in poverty alleviation, welfare
enhancement, health care, or education for the poor,
particularly the poorest, the poor in remote areas or
in other words, those at the bottom of the pyramid.
Therefore, inclusive innovation is also a change
in the traditional concept of redistribution with
focus on creation of value to bring about a better life
for the people as well as the poorest, so that those
who are involved in supply assembly as well as
consumers shall all benefit. Like the Vietnamese
says, it is not to make equal shares of an available
cake but try to make the cake larger through
increasing the product value at each stage of the
production chain.
2. Some achievements and challenges in the
implementation of inclusive innovation for the people
in the rural agriculture sector for sustainable
development in Vietnam

2.1 Main achievements:
According to DFID, no country makes and great
achievements in poverty alleviation without raising
productivity in the agricultural sector. In this context,
in order to work effectively to reduce poverty and

140

contribute to economic growth, inclusive innovation
for the agricultural sector in Vietnam has also been
focused in order to increase labor productivity in
agriculture. Specifically: In agriculture, Vietnam has
obtained many great achievements, notably food
production, fisheries, and industrial plants. Vietnam
has moved from a food deficit country to become a
country that not only ensures food for domestic
consumption but also is the 2nd largest rice exporter
in the world (export 5-7 million tons of rice each
year). In activities related to inclusive innovation,
Vietnam has successfully built many models. Here
are a few examples:
- Science and community knowledge combine to
reduce rodenticide use: the program in collaboration
with CSIRO, ACIAR, CRC invasive pests. The
result was that people and communities have reduced
infestation by rodents, diseases transmitted by
rodents, and reduce the use of rodenticides from 60
to 90%.
- Enhance the profitability and sustainability of
aquaculture, including shrimp raising combined with
rice, aquaculture and aquatic feeding. This activity is
in coordination with ACIAR and some universities in
Vietnam. The income from rice/shrimp farming has
reached US$17,000USD per year.
- Bio-fertilizers: have recently been developed
by Vietnamese scientists. This type of fertilizer is
priced 45USD/ha and helps to increase productivity
of sugar canes about 1.3 times with 40% of glucose
increase, and that of coffee about 1.5 times,
especially making coffee beans ripen evenly,
reducing harvesting costs.
- Biogas Program for the Animal Husbandry
Sector in Vietnam is supported by SNV, the use of
biotechnology using animal waste to provide clean
and cheap energy for farmers, helping to reduce the
use of fossil fuels, reducing the greenhouse effect.
This project was awarded the Global Energy prize in
2006 in Brussels, Belgium.
Besides, there are many other achievements
such as in mushrooms, tea cultivating, handicrafts
and beekeeping.

2.2 Challenges in the implementation of inclusive
innovation for the people in the rural agriculture
sector for sustainable development in Vietnam:
- The world is in a financial crisis, food and
energy prices fluctuated but with a raising trend.
Thus agriculture sustainable development and
poverty alleviation in rural areas has become more
complicated because of the above-mentioned
negative effects, in particular the global financial
crisis. On the issue of food price, usually food prices
increase will increase the income of farmers.
According to recent research by Ivanic and Martin
(2011), it is pointed out that when the price of all
kinds of food increases by 10 percentage points it
will reduce the overall poverty rate to 0.5% in
Vietnam. The impact of this poverty alleviation is
quite large for households headed by farmers,
accounting for 78% of poor households. A surprising
result of this study is that although a small increase
in food prices can bring about net benefits to food
sellers and the poor in general, a dramatic price
increase can adversely influence poverty reduction
due to its negative impact on non-agricultural
households. Besides, there is a need to consider the
fact that poor households are mainly self-sufficient
and do not have many products sold in the market so
the impact of rising food prices will not increase the
income of poor households.
- Climate change: Vietnam is one of the very
few countries in the world most severely affected by
climate change. Climate change increases the
intensity, extraordinariness and severity of natural
disasters on a global scale. According to the UN
report, the status of natural disasters around the
world is at an alarming high level, over the past three
decades, the number of natural disasters has
increased three times. The number of victims
doubled after each cycle of 10 years.

FIGURE 3: DAMAGE CAUSED BY NATURAL
DISASTERS 2000-2009

Economic losses

Death tolls

Source: Bureau of the Steering Committee on Controlling
Floods and Storms, 2010

- Exhaustion of natural resources, especially soil
degradation, erosion, wash-off and landslides,
salinization, acidification and acidity due to overuse
Billion VND


141

of chemical fertilizers, pollution by crop protection
products and wastes from industrial activities in the
soil environment. Agricultural land has shrunk due to
population pressure, urbanization, industrialization,
the switched uses, rising land prices and the risk of
sea level rise due to climate change. In Vietnam, due
to rising sea levels a lot of cultivated area has been
destroyed. Changes the in production environment
have made the historic experience, solutions, skills,
farming, and livestock husbandry no longer valid and
urgent needs for new methods and seedlings in
agricultural production have been identified.
Besides, Vietnamese farmers are in the habit of
cultivation that primarily uses chemical fertilizers.
This type of fertilizer has an immediate effect, but in
the long run, the soil will become barren and
gradually lose fertility. In contrast, organic
fertilizers, in addition to bringing immediate benefits
to plants, also contribute to improving soil porosity
and fertility. Moreover, the cost of organic fertilizers
is also more competitive than that of inorganic
fertilizers, contributing to reduce the production
costs for farmers.
- Environmental pollution: environmental
degradation as a result of war (mines and bombs /
Agent Orange) and pollution as a result of economic
development is a serious challenge.
- Wastefulness is a major challenge for Vietnam:
Manufacturing in Vietnam is mostly by old
technologies, large consumption of materials and
energy, using intensive labor that reduces production
efficiency, and couse low competitiveness. In
consumption, the lifestyle of enjoyment and wasteful
expenditures is still common in parts of the
population, including the poor.
- Government opinion on agriculture
development. Currently there are different views
about long-term policy. Some suppose that large-
scale agricultural development is necessary, and the
other viewpoint is for increasing labor productivity
and profitability at the household level. The
emergence of these two trends has also resulted in a
shift of resources from household level investment
and caused more difficulties in supporting activities
for the poorest.
- Another difficult problem in Vietnam is high
population density (according to the General
Statistics Office in 2011 it was 265 people per square
kilometer), ranked 13th in the world. Thus the area
of farm land per household is low, especially for
poor households. In addition, the birth rate in recent
years has tended to increase and poor families often
have many children.
In addition to the challenges mentioned above,
for the poorest populations in rural areas, the
implementation of inclusive innovation also has to
cope with a number of challenges as follows:
- Small-scale production, heterogeneous product
quality, low eligibility requirement: As the economy
grows, people tend to purchase goods that are
clearly-labeled and origined. This is not a good news
for the poor in the agricultural sector because their
products are limited, do not meet requirements for
quality and hygiene, hence the sale of products
becomes more difficult.
- Separation from the community, low
educational level, due to limited opportunities to
participate in community activities. During the
participation in community activities they often lack
self-confidence and show shyness. Besides, due to
the difficulty of geographical access, little access to
new equipment is also a barrier making them
frustrated. These barriers lead to high costs of
initiatives/products transfer.
- The number of initiatives, models, offering
"ultra low cost" products with acceptable quality are
frequently limited, so selection and replication are
difficult. Besides, for a variety of products,
"efficiency" models are periodically effective, for
example the current failure of the bonsai and flower
model development despite its success about 3 years
ago. Or in other words, there are no products /
initiatives of a "one size fits all" type so that each
model / product can adapt to a certain product, a
specific area or a population group.
- These groups are usually not large, are
scattered and there are specific cultural and regional
characteristics that lead to difficulty in application of
lessons.
3. Some policy implications from the exploitation of
inclusive innovation for the people in the rural
agricultural sector for sustainable development in
Vietnam:
- The State and donors need to give specific
support for innovation research. The role of research
in the direction of innovation and economic growth
has long been recognized by the private sector in
developed countries, where investments in research
and development of the private sector exceed those
of the State. In Vietnam, private investments in
research are very little. It is mostly by the States, but
the level of investment is also very limited. As a
result, knowledge and technology in agriculture in
Vietnam is still at a very low level. In addition, the
State should also create favorable conditions for the
linkage of the "four" (entrepreneurs, farmers,
scientists, and government) in bringing new
initiatives into the actual service of the poor.
The State should also support the poor in
application of new initiatives/products because they
often have limited access to information about
technology, markets and finance. So the poor should
be supported or facilitated in receiving support from
other sources related to agricultural services,
seedlings, fertilizer and credit.

142

- Research launching innovative initiatives for
people in order to increase labor productivity in the
small farming units should be given priority, along
with better use of natural resources which are
increasingly exhausted. The research should focus on
the use of simple and inexpensive technologies such
as rain water storage, bio gas, support for indigenous
knowledge in crops and livestock. Using new
scientific methods of biology has contributed to
increased income for farmers.
- There is support for the poor in the initial
application of new initiatives. Since most of the poor
in rural areas depend on agriculture, their lives are
difficult and face many risks, and the poorer they are
the larger exposure to risks will be. The poor are
vulnerable to a direct impact caused by property
destruction and productivity reduction, which
indirectly forces them to invest in activities that are
less risky as well as of low productivity. Therefore
they should be supported in the application of new
methods, and products.
- Research on land should also be a priority.
Land demand not only affects the poor in rural areas.
There is a tendency to purchase land to cater to
industrial development, urbanization and the
formation of larger fields in order to increase
efficiency and output. Besides, the non-sustainable
use of land affects soil quality such as by exhaustion
and erosion. Such land use may be beneficial in the
short term, but in the long run will destroy land.
There is more and more evidence of reduced soil
fertility, lack of production and water and erosion.
- Initiatives related to the post-harvest stage also
need attention such as preservation, storage and
processing. Vietnam is a country with a tropical
climate, and humidity which is very favorable for
bacteria and mold and affects the quality of
agricultural products after harvests.
- Initiatives related to the coordination of poor
farmers in the form of cooperatives and on how to
organize and coordinate production and consumption
of products, to organize production more efficiently
as well as acquire a larger and more stable volume of
products should also receive attention, especially for
areas of relatively poor uniformity.

III. CONCLUSION

The general trend now is to focus on how
economic growth can be achieved in a fair manner to
meet the demands of society and sustainability.
However, according to the DFID, the poorest
people do not necessarily benefit from growth, and
therefore there is a need to focus on ensuring wide
participation in agricultural development as an
engine of economic growth and job creation. Or in
other words, agriculture is the focus of development
in developing countries.
Agriculture is an important sector of the
Vietnamese economy, accounting for 20% of GDP
and more than 50% of the population is dependent on
agriculture. Innovative solutions for everyone in the
agricultural sector immensely contribute to poverty
alleviation in Vietnam, where the poor account for
25 percent of the population. This is also the way
towards sustainable development in Vietnam.

REFERENCES
Implementation of Sustainable Development in Viet
Nam. (2012). National Report at the United Nations
Conference on Sustainable Development. SR
Vietnam.
Department for International Development. (2008).
Research Strategy 2008 2013. Working paper
series: Sustainable Agriculture.
Asian Development Bank (2005). M4P, 30 cases of
contract farming An analytical overview. ADB
Vietnam Resident Mission.
World Bank. (2012). Taking stock: An update on
Viet Nam recent economic development.
Ivanic and Martin. (2011). Estimating the Short
Run Poverty Impacts of the 2010 2011 Sure in
Food Prices. Policy Research Working Paper, World
Bank.


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Part Two:
Papers under Innovative Management Theme

144

Policy and its Implications for ICT
Innovations: The Case of e-Government in
Brunei Darussalam

Hazri Kifle
Faculty of Business, Economics and Policy Studies, Universiti Brunei Darussalam
Bandar Seri Begawan, Brunei Darussalam; hazri.kifle@ubd.edu.bn

Abstract-- Innovation has always been a supplement to
the role and activities of the government. It is not the
main drive for the government in enhancing its services
between internal organisations and to the citizens and
businesses. However, the deployment of electronic (e)
government to meet the complex demand of citizens
has triggered increased attention by academic scholars
and practitioners to the field of innovation. This paper
looks at how policy has shaped the innovation
trajectory with reference to a case study of e-
Government in Brunei. The policy formulation process
is the crucial starting point that determines the success
or failure of any innovation journey. A policy analysis
(at macro, meso and micro levels) looks at how policy is
decided, what is the rationale, who participates in the
decision-making processes, and what is the content of
the e-Government policy. This paper shows that when
e-Government policy is formulated poorly, influenced
largely by a single group of actors whose agenda is not
aligned with the national agenda, this can lead to
confusion of objectives, lack of control and leadership,
dispersion of responsibility and ultimately results in
inertia, silo and slow implementation of e-Government.
This paper demonstrates that the policy makers must
be actively involved in open debate with various
stakeholders in order to bring political and societal
objectives into e-Government.

Keywords policy process and analysis, e-Government,
public sector innovation

1. INTRODUCTION

The public sector is now committed and
anxiously engaged in change. The advancement of
ICT has resulted in increased expectation from
society and business. ICT has also brought with it a
change in social and political behaviour. As a result,
a government needs to be more efficient, transparent
and responsive to the demands of its stakeholders.
Pressures have increased for the government to be
more directly involved with various social and
economic issues of the state. Innovation in ICT i.e. e-
Government is now more important than ever and is
the new wave of reformation in the public sector
today.
The implementation of e-Government is not
straight forward for many governments; it is a new
and unpredictable journey. e-Government is not
simply a matter of adopting the latest technology, as
the main challenge is how to make certain that this
technology will best serve the actual requirements of
the citizens and businesses.
Policy is one important, yet often overlooked
issue in e-Government. The importance of having
good policy formulation processes and policy
analysis in giving positive impacts to the
implementation of e-Government has not been highly
recognised. Policy making and implementation are the
core tasks of the government. Perhaps, due to the
common misconception that e-Government is all
about bringing in new technology, the policy makers
tend to subconsciously divorce the role of policy
from e-Government. Not surprisingly, many e-
Government projects simply adopt Information
System (IS) models from the private sector without
any careful consideration of the actual needs of the
local environment.
The role of policy in Brunei e-Government has
been limited contrary to the fact that IT policy as
commonly available in many countries can be
adopted by Brunei subject to some adjustments
relevant to its own context. However, the evaluation
of e-Government projects in Brunei due to the lack
of IT policy is not the main scope of this paper, as a
majority of the projects are still at the
implementation stage. A strategic policy direction
that brings in transformational governance changes
in e-Government is more important. Automation and
adding new technologies are not the main aims of e-
Government. The technology, although crucial in
making e-Government possible at all, is the least of
the governments worries (Silcock, 2001, p.88). The
question is how ICT can be utilised in adding new
value to the governance process in order to achieve
an e-smart government.
In e-Government, revision and even termination
of outdated non-IT policies are required, for
example, to overcome the rigid IT job recruitment
procedures. This is a daunting task as it involves
various ministries and policy makers. e-Government
should be seen as a platform to shift the traditional
bureaucratic public sector to be more responsive and
conscious in terms of policy innovation. The lack of

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innovation in policy - to look beyond the policy
problems of the past, and the failure to realise its
strong influence has been a major barrier towards
effective e-Government. Poor policy on e-
Government, and hence poor strategic direction, has
resulted in many failures of e-Government
implementation.
The objective of this paper is to highlight the
importance of policy formulation processes in e-
Government. The experience of implementing e-
Government in Brunei Darussalam is used by this
paper in its investigation on the impact of poor
policy formulation processes on the ICT innovation
journey in the public sector. Section 2 gives the
background in the area of policy making processes.
Section 3 gives an overview of Bruneis e-
Government where the problems and issues relating
to the policy making process are discussed. Section 4
is the methodology section and Section 5 analyses
the findings of this section. Section 6 outlines the
lessons learnt from the Brunei case study. Section 7
provides future research directions on the issue of the
policy making process followed by the conclusion in
Section 8.

2. BACKGROUND

The digital era comes at the time when the role
of the government has expanded tremendously.
According to Flynn (2002, p.268), major changes in
technology must be encountered by certain
government actions and that includes reformation in
order to ensure that opportunities are served. As a
result, a government is under increasing pressure to
innovate more to provide new ways of delivering
services.
Understandably, the ambition of the policy
makers then is to capitalise on the full potential
offered by ICT through the implementation of e-
Government. In this paper, e-Government is defined
as the utilisation of Information and Communication
Technology (ICT) in serving the priorities of a
government in meeting specifically the social,
economic and political endeavours of the state. The
public sector is trying to emulate the success of the
ICT revolution in the private sector. e-Government is
now a global phenomenon and is taking the attention
of policy makers, politicians, andprivate sectors
especially the IT related, and even ordinary citizens.
A realisation of the full potential of e-Government is
a challenging and complex process. A number of
studies have shown that e-Government projects
around the world are far from reaching their full
potential. According to Willcocks (1994, p.14)
research studies into IT productivity at national,
organisational and project levels, according to some
estimates about 20 percent of United Kingdom (UK)
IT expenditure is wasted and between 30-40 per cent
of projects realised no net benefits. In one survey by
Heeks (2003), only 15 percent of e-Government
projects in developing countries were successful with
35 percent being total failures and 50 percent partial
failures. Thus, despite the many claims of the high
potential of e-Government, the reality does not
reflect the predicted situation.
From the above, e-Government implementation
may be perceived as more technology driven with
little evidence of value addition to the government in
terms of its service delivery to the citizens and
businesses. e-Government should be more concerned
with how policies are to be developed to effectively
reflect political, societal and economic needs. It will
be interesting to demonstrate the importance of
policy in public sector ICT innovation. The policy
process is considered as the starting point that can
determine the success or failure of any projects in the
public sector.
The following section provides an overview on
the concept of policy.

2.1 The policy process
Policy is an important concept in the science of
public administration. To understand the success or
failure of an e-Government innovation process i.e.
how it is facilitated and restrained, it is crucial to
look at how the policy is decided and implemented.
It is imperative to define what public policy is and
why there is a need to focus on it and its analysis.
According to Nutley & Webb (2000, p.14) the phrase
public policy refers to those public issues defined as
problems and the courses of action (or inaction) that
arise to address these problems. Public policy is then
defined as: a set of interrelated decisions taken by
political actor or group of actors concerning the
selection of goals and the methods of attaining them
within a specified situation where these decisions
should, in principle, be within the power of policy
maker to achieve (Roberts, 1971, pp.152).
A popular model that represents the way a
policy is made in the political system was offered by
Harold Laswell, which has been adopted and further
developed by others. Lasswell suggested that the
policy process could be broken down into a series of
consecutive stages and functions. Policy generation
begins with intelligence about a problem,
promotion of the issue, prescription of what
should be done, innovation of a policy,
application of the policy in practice, termination
when the problem has been solved, and appraisal of
the impact (Lasswell, 1950) A schematic
representation of this model is given in Figure 1.


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FIGURE 1: A SCHEMATIC REPRESENTATION OF THE RATIONAL MODEL OF POLICY PROCESS

Source: Jenkins, 1978, p.17

The model proposed by Lasswell, better known
as the rational model, assumes that there is an entry
point for each process a beginning and end point,
and moves through a sequence of linear paths. This
model also known as the policy cycle or stagist
approach continues to be the basis for mapping the
policy process with a variety of stages put forward
later on. [See other models in Parsons (1995),
Jenkins (1978), Hogwood and Gunn (1984)]. The
policy cycle or stages in the model is not believed to
be a real-world description but still considered
useful in depicting the main elements of how policy
systems work. The danger, however, is that it implies
a top-down view of policy making in which there is
a high degree of rationality (Hudson & Lowe, 2004,
p.5). Hudson and Lowe further remarked that this
model fails to take into account the impact of front
line workers or street-level bureaucrats; does not
explain how policy moves from one stage to the
next; and does not easily account for the complex
sets of policy networks that are at the heart of real-
world politics.
Jenkins (1978, p.18) observed that although the
above rational model is useful in drawing attention
to the ordering of policy activities.Few who offer
this model would consider it as anything but an ideal
representation of reality and fewer still would claim
that political behaviour ever takes place in such an
ordered fashion. It is claimed that the process of
policy making is very chaotic and complex. Policy
making is not usually related to any clearly defined
event or a set of explicit decisions.
Policy analysis is a sub-field of political science that
tries to understand and build up knowledge of the
whole process of public policy beginning from the
big picture of the global economy through the
complex issues of which policies are chosen for
inclusion on the political agenda (and which are
excluded), who designs them and how they are
finally delivered (Hudson & Lowe, 2004,
p.3).Basically, policy analysis should distinguish
between (Parsons, 1995, p.xvi):

a. Analysis for the policy process: the use of
research and other analytical techniques to inform
the various stages of the policy process;
b. Analysis of the policy process: how policy
problems are defined, agendas set, policy
formulated, decisions made and policy is
subsequently implemented and evaluated.
The first type of analysis is for prescriptive
purposes and the latter more analytical and
descriptive. This paper focuses only on the second
type analysis of the policy process. The policy
mapping concept proposed by Hudson & Lowe
(2004, pp.6-11) which according to them, helps steer
a pathway that brings clarity to often very complex
situations, is adopted. The mapping process has three
layers namely: macro, meso and micro levels:
Macro-level analysis: this level deals with the
broad parameters that shape the context in which the
policy is made.
Meso-level analysis: this is the middle layer in
between the micro and macro levels. It deals with
how polices come to be made, who puts them on the
policy agenda, and the structure of the institutional
arrangements in which policy is defined and
eventually implemented (Hudson & Lowe, 2004,
p.9).
Micro-level analysis: this level deals with the
opposite of the macro-level analysis i.e. the
individual. This analysis looks at the impact on the
role of politicians, civil servants and the street-level
bureaucrats in designing the policy and its final
outcome.
This paper will analyse the scenario of e-
Government in Brunei Darussalam using the above
three level analysis. The eventual outcome is to show
that when there is a poor policy formulation process
adopted in e-Government, especially when the whole
process lacks the recognition of the importance of
engaging the various stakeholders mainly the
citizens, e-Government will be less successful than it
was intended to be.
The following section will first describe the e-
Government initiatives in Brunei Darussalam.


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3. AN OVERVIEW OF E-GOVERNMENT IN
BRUNEI DARUSSALAM

Brunei Darussalam is a small country situated
on the north-eastern coast of Borneo Island in South
East Asia with a total area of 5,765 sq. km. and a 161
km coastline. It is bounded on the north by the South
China Sea and on all other sides by the Malaysian
state of Sarawak. In the year 2000, His Majesty
Sultan Hassanal Bolkiah expressed his wish to see
the establishment of e-Brunei with the emphasis on
the implementation of e-Government and e-Business
in developing Bruneis economy beyond its heavy
reliance on oil and gas.
Although the year 2005 should have seen a full
endorsement and implementation of e-Government,
many e-Government projects were still at the early
stage of development such as making a web
presence. The majority of the tendered and
implemented projects are for building internal
infrastructure (Government to Government or G2G)
rather than online service applications for the public.
Four major projects were planned to be implemented
at the beginning i.e. Treasury Accounting and
Financial Information System (TAFIS), Human
Resource Management, Multipurpose Smart Card
and e-Health. Only TAFIS was fully implemented in
all the ministries by 2005.
By 2005, the Brunei e-Government only
managed to establish ministerial websites, a few
online services, workshops and training, and
implementation of a few Ministries e-Government
flagship projects. The problem statement is: Why
have the e-Government projects been implemented at
a different priority? The research questions are:
How do rationales of public sector innovation
influence the implementation of e-Government?
How and what group of actors were influential
in the decision-making process?

To understand thee-Government process i.e.
how it is facilitated and restrained, it is important to
look at how the policy is decided and implemented.
The ways in which polices are formulated and
implemented can produce a major impact upon
policy outcomes. Policy success or failure
depends very much upon the early stages of agenda
setting, planning, managing, as well as the delivery
of the policy itself.

The methodology deployed by this paper is
briefly explained in the following section.

4. METHODOLOGY

The guiding principle for the approach to be
adopted was related to the objective of investigating
the policy making process in Brunei e-Government.
The methodological approach of this paperis
qualitative with multiple sources of evidence. The
strength is that it provides the understanding of how
the processes of development of e-Government take
place (How and Why questions). A holistic case
study method is used by this paper to explore the
actual scenario of e-Government in Brunei. In
general, a case study is carried out when there is a
need to understand complex social phenomena.
According to Yin (2003, p.13), a case study is: an
empirical inquiry that investigates a contemporary
phenomenon within its real-life context, especially
when the boundaries between phenomenon and
context are not clearly evident.
Therefore, a case study approach enables this
paper to collect primary or raw data from various
sources. There has been limited study and
publication on Brunei e-Government. A case study
also offers flexibility in the research tools (such as
semi-structured interviews and opinion surveys) that
is needed access to the broad actors and type of
information needed.
Fieldwork consisting of semi-structured interviews
was carried out for a period of four months. The
semi-structured interviews asked why and how an
event has occurred. Not only could the experiences
in implementing e-Government be collected here, it
is also the detailed acquirement of crucial and rare
inside information such as the decisions and choices
that are made within the organisation and the
government.
The main interviewees for the case study were
the Chief Information Officers (CIO), project
managers, Directors of IT, and operational staff in
each of the twelve ministries in Brunei. To obtain a
holistic picture of e-Government, interviews with
senior government officials and the private sector
were also conducted. This would unpack the
complexity in interactions between ministries and
other players. The data analysis is far from
straightforward due to the multiple sources of
evidence used and the depth of data collected.
Hence, the case study facilitated the understanding of
political processes of decision-making and policy
formation that surround the progress of e-
Government in Brunei. All findings were then
triangulated and analysed. Replication of findings
was also used to further increase the validity of the
data. Overall, 34 organisations and 47 different
individuals were interviewed during the fieldwork.
The findings of this paper are now presented in the
next section that follows the three levels of policy
analysis macro, meso and micro.

5. ROAD MAP OF THE POLICY ANALYSIS

5.1 Macro-level analysis
Macro-level analysis will show that the e-
Government started mainly due to global trends.
Many countries around the world have embarked on
e-Government in order to meet the pressure to
modernise the government and also in meeting the

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demand from the increasingly ICT-literate society
and enterprises. Brunei is no exception, and this
scenario can be analysed using the theory of new
institutionalism.
New institutionalism recognises that institutions
operate in a broader environment (that consists of
other institutions) and are influenced by what is
called institutional isomorphism (or simply known as
peer pressure). The main goal of organisations is to
survive by establishing legitimacy within the world
of institutions. This has resulted in an
institutionalisation process by which certain
relationships and actions are taken for granted. As
such, it is not a surprise and rather predictable that
there was a decision to embark on e-Government in
Brunei. Since other governments were doing it, and
together with hearing the success stories in
neighbouring countries such as Singapore and
Malaysia, Brunei could not afford to be left behind.
To stop the analysis of policy making at this macro-
level provokes the criticism that by doing only this
level of analysis, there is a danger that the approach
is rather universalistic rather than deterministic. It
is common knowledge that almost every country is
moving in the same direction of utilising ICT in its
public sector. The importance and potential of IT
cannot be denied and many societies are
experiencing the impact of ICT. High speed
communications and the emergence of the Internet
have changed the outlook of global politics, society
and economy. Each nation has to respond to these
opportunities which are at the same time challenging.
On the whole, the outcome of this analysis is rather
predictable and obvious, and does not take into
account the real and complex picture of the policy
formulation process in Brunei. It does not explain the
story of e-Government in Brunei and perhaps only
gives a possible explanation for the initiation of the
policy. Furthermore, when isomorphism suggests
that institutions will always imitate each other, this is
clearly not the case as it does not explain why other
global trends are not taken up by countries.
With regard to the above statement, meso and
micro level analysis are then considered to be more
prolific in taking into account the bigger picture as to
why Brunei embarked on e-Government.

5.2 Meso-level analysis
This level analyses the when, how and why the
idea of e-Government started, by whom and what is
wrong with the policy. Gordon et al. (1997, p.5)
stated that there lies a continuum of activities
namely: analysis of policy determination and
analysis of policy content. In the analysis of policy
determination, the emphasis is upon the inputs and
transformational processes in the construction of
public policy. It is investigating the forces that drive
policy formulation such as internal objectives,
environmental forces or perhaps internal perceptions
of the external environment. Analysis of the policy
content will look at the mission and objectives of the
policy; is it being practiced and does the content on
paper reflect and meet the intended targets?
The analysis is divided according to the
following stages:
1. What are the rationales of e-Government
implementation in Brunei?
2. An analysis of the policy content of the e-
Government Strategic Framework.
3. How and what groups of actors were
influential in the decision-making process?

5.2.1 Rationales of e-Government
There are many accounts of how e-Government
was first initiated in Brunei. These are now described
below.
a. Opinion survey: A survey was conducted on
the opinions of the CIOs or project managers in
twelve ministries in the Brunei Government on what
are the political or strategic motives that drive
Bruneis implementation of e-Government. The
result is shown in Table 1.

TABLE 1: OPINIONS ON THE STRATEGIC AND POLITICAL MOTIVES THAT DRIVE THE IMPLEMENTATION
OF E-GOVERNMENT IN BRUNEI

Rationale of e-Government in Brunei Disagree Do not
know
Agree Missing
Value
Total
1. Purely driven by His Majestys Titah
(royal speech)
25.0%
(3)
8.3%
(1)
50.0%
(6)
16.7%
(2)
100%
(12)
2. Part of Brunei Public Sector
reformation or modernisation initiatives
0% 0% 91.7%
(11)
8.3%
(1)
100%
(12)
3. Due to global e-Government
phenomenon and Brunei should not be
left behind

0%
8.3%
(1)
91.7%
(11)
0% 100%
(12)
4. A strategy to overcome the lack of ICT
utilisation in the public sector
8.3%
(1)
16.7%
(2)
66.7%
(8)
8.3%
(1)
100%
(12)

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Rationale of e-Government in Brunei Disagree Do not
know
Agree Missing
Value
Total
5. To promote the diversification of the
economy especially in
the ICT sector (Small-Medium Enterprise
development)
16.7%
(2)
25.0%
(3)
50.0%
(6)
8.3%
(1)
100%
(12)
6. To meet the expectation of the
information society
8.3%
(1)
8.3%
(1)
83.3%
(10)
0% 100%
(12)
7. To follow the private sector e-business
model
66.7%
(8)
16.7%
(2)
8.3%
(1)
8.3%
(1)
100%
(12)
8. Recommendations from any particular
study or research that
proposed the implementation of e-
Government
16.7%
(2)
33.3%
(4)
41.7%
(5)
8.3%
(1)
100%
(12)

From the above, the rationales of why e-
Government was implemented can be ranked
according to the number of responses as follows:
1. Part of Bruneis public sector reformation or
modernisation initiatives.
2. Due to global e-Government phenomenon and
Brunei should not be left behind.
3. To meet the expectation of the Information
Society.
4. A strategy to overcome the lack of ICT
utilisation in the public sector.
5. To promote the diversification of the economy
especially in the ICT sector (Small-Medium
Enterprise development).
6. Recommendations from any particular study or
research that proposed the implementation of e-
Government.
7. Purely driven by His Majestys Titah (royal
speech).
8. To follow the private sector e-business model.
The above findings which show the belief that e-
Government was implemented due to the
international pressure for implementing e-
Government, echoes the discussion in the previous
meso-level analysis. The majority of the respondents
agreed with this opinion. The above results also
indicate the middle level policy makers opinion of
why there is e-Government. It is now the task of this
paper to investigate further the actual rationales for
e-Government. The following discussion only
touches upon the rationales relevant to the context of
Brunei (rationales such as the emergence of the
information society and reformation of the public
sector are commonly understood and do not tell the
real story behind the embarkation one-Government
in Brunei).
b. High level rationale - to diversify the
economy: when His Majesty Sultan Hassanal
Bolkiah expressed his wish to see the establishment
of e-Brunei in 2000, he emphasised the
implementation of e-Government and e-business in
developing Bruneis economy beyond its heavy
reliance on oil and gas. Apart from the Asian
Financial Crisis in 1997, The Brunei Darussalam
Economic Council (BDEC) report urged the
government to diversify the economy away from its
traditional dependence on oil and gas with ICT as
one of the main elements in diversifying the
economy (Malik, 2002).In other words, ICT is
expected to open up new opportunities, contribute to
growth, employment and innovation and to advance
the nation into a state of global competitiveness. This
paper, unfortunately, saw little evidence here. The oil
and gas sector still contributed for more than 50% of
the GDP (Brunei Economic Development Board,
2006).
e-Government was seen as a source of profit for
the ICT industry yet the return to the economy and
the society has been very minimal. There were no
clear policies or guidelines on how e-Government
could diversify the economy. e-Government in
Brunei was more focused on acquiring technology
and maintaining system development projects. It has
not gone to the higher level of research and
development and providing innovative service
delivery mechanisms to the public. Thus activities
which might build up the ICT industry are not yet
present.
c. To improve the poor IT diffusion in the public
sector: A study conducted by the Information
Technology and State Store Department (ITSSD) in
1997 has indicated the poor IT diffusion in the Civil
Service. The study was later promoted to become the
National IT Strategic Plan called IT 2000 and
Beyond. The aim was to promote effective
application of IT in the public and private sectors.
The findings were presented to the Permanent
Secretaries meeting in June 2000 and as a response,
the IT-led issues were then considered at a very
advanced level. Finally, the e-Government Working
Committee (EWC) recommended that the
government should spearhead and expedite the e-
Government program as a top priority. Various
committees were then formed to further appraise and
study the steps to implement e-Government until the
e-Government Strategic Framework for Action
2001-2005 was finally formulated.
From the above, ITSSD played a very significant

150

role in triggering the idea of implementing e-
Government to improve IT diffusion in the Brunei
Public Sector. The idea of e-Government was born as
a result of the research conducted by ITSSD. ITSSD
has also been a major part of the EWC as well as
various other committees that formulated the goals,
mission and vision, and strategies of e-Government.
This paper also pointed out that the objective of
improving the low IT diffusion in the public sector
was the main rationale for the embarkation upon e-
Government in Brunei. Other rationales such as
international pressure, emergence of the information
society, diversification of the economy, reformation of
the public sector are present but not as significant as
this particular rationale.
Now, this paper will further analyse the policy
content of the e-Government strategic framework to
strengthen the above conclusion and importantly, to
show how the main rationale for innovation (to have
more diffusion of IT) and the role of specific actors
shaped the direction and situation of e-Government
today.

5.2.2 Content Analysis of the e-Government policy
The content analysis of the Brunei e-Government
Strategic Framework2000-2005 identifies the gaps in
the policy that explain the current scenario of e-
Government.

Objective, Mission and Vision Statements
The objective of e-Government according to the
Strategic Framework wasEG21 Governance and
Services Onlin while the vision statement was to be
an e-smart Government in line with the 21
st
Century
Civil Service Vision. The mission statement was to
establish electronic governance and services to best
serve the Nation. ABND$1billion (about
US$760million) budget was allocated to achieve this
mission and vision that aim to apply information
technology so as to create a world-class information
infrastructure for the daily operations of the Brunei
Government. It was also hoped that e-Government
would bring multi-million dollar projects that would
address both vertical and horizontal needs of the
government, in which the year 2005 has been forecast
as a target for full implementation of e-Government.
Although the words electronic governance and
services online were included, there were no details
about what electronic governance was all about and
no specific lists of online services to be offered to the
citizens. The addition of the sentence in line with the
21
st
Century Civil Service Vision is considered quite
generic and not many respondents during the
fieldwork study were familiar with the details of the
civil service vision. More specific objectives of e-
Government would have made it easier to translate
them into practice. One can infer that the national
agenda was to provide online services and electronic
governance, but stopping here with no further
elaboration.

Strategic Goals of e-Government
How has the statement of objective, mission and
vision been translated into strategic goals to achieve
them? The strategic goals are:

Strategic
Goal
Details
1 To establish an institutional framework
2 To establish e-Government architecture
3 To establish monitoring and regulatory
mechanisms
4 To establish e-Government
infrastructure
5 To deploy common e-Government
applications and services
6 To deploy specific e-Government
application and services
7 To establish knowledge-based economy
and society initiatives

One issue to point out is that nearly half of the
actions under all the strategic goals were led by the
Brunei Information Technology (BIT) Council. The
remainder of the actions were under the
responsibilities of the Prime Ministers Office
(PMO),Ministry of Finance, and a few other agencies
such as the Internal Security Department and Attorney
Generals Chamber. The role of the ministries falls
under only one action under strategic goal #6 (i.e.
deployment of agency- specific intranet/extranet
application and services).
The majority of the actions constitute setting-up
committees, establishing frameworks and regulations,
setting up of data centres and various other
infrastructure systems. The flagship projects identified
such as TAFIS, e-payment, and e-procurement fall
under the purview of the ITSSD of the Ministry of
Finance. SIMPA the Civil Service Information
System under the PMO was the other flagship project
identified in the framework. The rest of the flagship
projects were to be identified by each ministry.
There is an obvious inclination for the content of
the policy to focus mainly on overcoming the low IT
diffusion in the public sector (in line with the
recommendations by the study conducted by ITSSD).
The content of the framework, however, did not have
any details on what and how to achieve online
services and e-governance aligned with the stated
mission and vision.
This inclination to use e-Government simply as a
way to bring in technology and hence IT to the public
sector is more apparent in paragraph 2.2. of the
framework which stated that failing to better the IT
performance in the Civil Service would render the
technologies obsolete before the full benefits can be
obtained. It is now questionable as to whether e-
Government in Brunei was more technology-led
rather than problem-based. Did Brunei embark on this
innovation journey simply because the technology
was there and what to do with it was another question

151

to be dealt with later?
The strategic report, however, identified critical
gaps such as the need to have more IT manpower,
skills, knowledge and competency for the success of
e-Government. If these have been identified as the
constraints, five years to achieve all the goals was
very challenging especially when the infrastructure
and human resources were not yet in place. The e-
Government strategic framework has great ambitions
but was not followed through with detailed planning
and implementation targets.
The Brunei e-Government should be initiated
with more in-depth consideration on what should
have been the actual objectives for e-Government
and the best way of implementing it. A scanning of
the e-readiness, upgrading of the infrastructure in the
whole public sector and incremental identification of
priority projects for the government (not for the
individual ministries) that have clear and instant
benefits for citizens and business would have
enabled a successful implementation of e-
Government.
The analysis so far has identified the significant
role of ITSSD in shaping the design and direction of
e-Government. This paper will now analyse the role
of policy makers in e-Government (stage 3 of the
meso-level analysis).

5.2.3 Role of Policy Makers
This paper has observed that the administrators
from ITSSD and each ministry in designing the IS/IT
plan have dominated the development of e-
Government. The ministerial level of e-Government
development has been carried out by technical
groups such as the IT Department. The policy
makers were not actively involved in the decision on
the selection and use of technology. This creates
difficulty in reaching a strategic decision as the IT
officers do not have authority. In addition, this leads
to a delay in policy formulation and implementation.
Policy makers seem to perceive that e-Government is
a highly technical matter and the decisions in e-
Government should be left completely to the
technical people.
Policy-making is perceived as more important
than coordinating the entire act to put the policy into
effect. It is up to the administrators to determine
whether it is appropriate to utilise a specific
technology. Technological issues are irrelevant to
the politician role[i]t is almost taboo for
politicians to involve themselves in the instruments
and technologies the administrators choose to use
(Jaeger, 2005, p.110).
The perception in the literature is that policy
makers and administrators roles are separate, and
act as a barrier in the smooth and meaningful
development of e-Government. This assumption
should be challenged and the administration should
not be seen entirely as a subordinate activity to
policy-making. Technology development and hence
e-Government should be created in an environment
that involves a number of different actors such as
policy makers, researchers, IT people, and the users
or consumers of technology.
The key point is that technological innovation
must have intrinsic political dimensions. The
concrete decisions of what the technology can be
used for i.e. the design and utilisation of technology
should be construed as a political decision-making
process and not a technical one. The role of policy
makers needs to be changed. Entrusting the
administrators, especially the IT groups, in leading
the e-Government would result in a deficit in values
of the e-Government politically (such as democratic
participation of the citizens), socially (such as better
online services) and economically (such as cost
savings).
When the policy makers are actively involved,
they can offer political leadership that is capable of
creating a sense of importance and common
understanding of the general goals and the direction
that e-Government is to develop in. The policy
makers must be actively involved in open debate
with various stakeholders in order to bring political
and societal objectives into e-Government. As is
evident from the case study, policy makers tend to be
involved only at the frame-setting level and many of
them have little knowledge about what e-
Government is and how it should be utilised.
Even if some policy makers are IT-savvy and
have some knowledge about e-Government, their
views do not dominate the development. The
administrators (particularly the IT group) are clearly
wearing the leaders jersey when it comes to the
construction of the e-Government (Jaeger, 2005,
p.123). This is strongly evident in the case of Brunei,
where the IT community have had influence in
translating the e-Government into practice.
Now, the micro-level analysis will be discussed
before this paper concludes the overall analysis.

5.3 Micro-level Analysis
When the policy has been delivered to the
street-level bureaucrats or to the administrators, it
is assumed that they will just simply implement it as
told by the policy makers. Nevertheless this is not
the case, and the policy failed to be delivered as
intended. According to Pressman and Wildavsky
(1973, pp.125-146) many policies fail to meet their
goals because of factors such as lack of coordination
between government agencies, lack of a clear
direction, underestimation of ability to implement
and weak control over resources.
In Brunei, the national mission and vision in the
e-Government strategic framework have not been
used by each ministry in developing its e-
Government. Instead, they are given the luxury to
formulate their own. This makes the framework
irrelevant to the ministries. There are no guidelines
on which programs to implement and details on how
and what to align with the national agenda.

152

Additionally, there has been a problem of policy
sharing and transparency in the e-Government
process.
The e-Government development in Brunei was
more of a bottom-up approach. The micro-level
group were building the e-Government projects
based on unclear objectives and directions. A
stronger central control of the policy formulation and
implementation is a must. A top-down approach
would ensure a better understanding and political
commitment that would create a stronger urgency,
understanding, coordination and better chance of
approval of the project implementation. It was
difficult for the CIOs to sell their ideas to the top-
level management who had little knowledge of the
projects and thus they were demotivated due to the
frequent rejection and changes in project scope. This
paper believes that the top-down approach is a better
approach to innovation process in the public sector
rather than bottom-up. Certainly, a hybrid model that
combines both approaches would be most ideal.
Finally, there is also a gap between the
administrators in all ministries in collaborating and
sharing the issues in implementation. There is
limited coordination amongst them in clarifying the
ambiguous objectives of e-Government and they
prefer to clarify it in their own styles. Following the
theory of new institutionalism, one main goal of
organisations is to survive by establishing authority
within the world of institutions. Therefore, each
agency prefers to act according to their old style,
previous laws and policies, making it difficult to
bring about new changes especially when they are
coming from other agencies. The ministries are very
silo-like, bureaucratic and act in a very vertical
manner.

6. LESSONS FROM THE BRUNEI CASE STUDY

The previous section so far has analysed the
policy making process in e-Government according to
the Hudson & Lowe (2004) framework which breaks
the analysis into meso, macro and micro levels. This
section will now reflect on the rational models of
policy making presented at the beginning of the
paper to see what they can tell about the Brunei e-
Government story.
Initially, a problem identified by ITSSD was
that there was poor IT diffusion in the public sector.
The analysis then further identified the actions to be
taken in the form of implementing e-Government.
The goals, missions and objectives are then
predetermined with estimation of the consequences
of certain actions (such as costs of training and costs
saving to the government). Courses of actions are
listed with the identification of the lead agencies as
well. What is missing in the policy making process is
full details on how the actions to be taken can
actually be compared to the identified national goals.
There is a mismatch between the actions to be taken
and the national agenda. These important strategic
actions identification of flagship projects of high
priority to the government and citizens are left to be
the responsibility of each ministry. There was no
incremental adjustment to the policy to take note of
small changes in order to improve the existing
framework. There was no evidence of concrete
research input being fed in at the many different
points of implementation involving many different
parties and actors.
The following points can be deduced from the
above paragraph about the policy making process in
Brunei (see Figure 2) with reference to the models
proposed by Nutley & Webb (2000), Lasswell
(1950) and Jenkins (1978):
Problem identification was conducted at the
initial stage of the process of e-Government
where predetermined goals, mission and
vision were formulated. The problem
identification was however, inclined to the
interest of the IT group rather than the
national interest.
Important possible strategies or options,
including alternative strategies and policies,
were not identified. There was a lack of
research carried out and information
available to support the decision-making
process.
The consequences of each strategy in the
Brunei e-Government strategic framework
were not compared to the formulated
national goals, mission and vision.
e-Government was eventually implemented
despite the poor approach in each of the
above stages.
Evaluation practice of e-Government was
very minimal.
There was no evidence of constant feedback
carried out at each stage especially during
the problem identification, options
assessment, decision-making and
implementation stages.


153

FIGURE 2: POLICY-MAKING PROCESS OF E-GOVERNMENT IN BRUNEI

Therefore the important lessons that can be
drawn from the Brunei case study are:

a. The policy making process in e-Government is a
role to be taken by the policy makers and not
just the technical groups. The perception that e-
Government is all about IT and should be
handled by IT people is not true. The
involvement of policy makers will ensure that
the technology will contribute to politics,
economy and society.
b. A hybrid model of both the top-down and
bottom-up approaches is preferable in creating a
smooth process of innovation and policy
implementation.
c. Leadership with strong commitment, long term
vision and strong IT knowledge is crucial.
d. A breakdown in communication and policy
sharing between the top level and street level
bureaucrats resulted in a different rate and
outcome of policy implementation.
e. The policy content of e-Government did not
outline realistic measures and expectations.
More detailed research on how to drive e-
Government must be conducted at the
beginning. Debate and consultation with various
actors must be performed before embarking on
any innovation.
f. Policy or actions formulated on paper do not
guarantee that the policy will be practised or
implemented. Sufficient analysis of context or
the environment, processes, measures and
impacts must be done at various points of the
implementation and not only at the beginning.
g. Other issues such as a long budget approval
process, lack of IT resources and poor
infrastructure are also some of the impediments

to the successful innovation or implementation of e-
Government.

Despite the above, this paper would like to
highlight a few recent positive developments in
Bruneis e-Government. A new e-Government
Strategic Plan 2009-2014 was launched which took
into account the experiences during the early journey
of e-Government. The strategic plan has put the term
citizen-centric as the main guiding principle and
driver of change in Bruneis e-Government. It has
also been acknowledged that the success of the e-
Government initiative is largely dependent on
positive interaction amongst stakeholders, namely
Government, industry and people (The e-
Government Strategic Plan, 2009). The policy and
strategic priorities of Bruneis e-Government are
now more structured with detailed milestone
outlined. The first nationale-Government survey for
Brunei was conducted at the end of 2009 as one of
the initiatives in this new strategic plan.

7. FUTURE RESEARCH DIRECTIONS

Reflecting back on the Brunei experience, this
paper recommends any study on the policy process
to be compared with the literature on the process of
innovation in both public and private sectors. This
paper has analysed the key features of e-Government
implementation according to the policy process
literature. It might be useful to put alongside this key
features of the innovation process, since there are
many similarities [see Mulgan & Albury (2003),
Walker (2003), Ling (2002) and Tidd et al. (2001)].
They all emphasised the need to scan the
environment internally and externally from a variety
of sources before embarking on any innovation.

Lack of constant
feedback for each stage
Problem
identification
No
identification of
alternative
policies/options
No
policies/options
assessment
No evaluation of the selected
strategies against the
predetermined
goals/mission/vision
Implementation
Poor evaluation
practices

154

Quite similarly, this is what this paper consider
should be done first in the policy making process of
e-Government. The decision to embark on e-
Government is in fact a decision to start an
innovation in the public sector.
The innovation literature has emphasised the
need to identify the areas for innovation that certain
organisations will commit their resources to doing.
As Tidd et al. (2001, p.19) correctly put it, an
organisation must be selective and utilise its
resources to avoid the danger of doing everything.
The task of selecting the best and most competitive
choice is very challenging. The literature then also
stresses the need to conduct research and
development and continuous evaluation in order to
learn and manage the process better. There will also
be setbacks or surprises that can result in the
innovations or projects being suspended or aborted
(Walker, 2003, p.94). Besides, Mulgan and Albury
(2003) also correctly point out that the innovation
process draws on different skills, resources,
organisational methods, leaderships and cultures.
This paper shows that e-Government in Brunei
has limited political intrinsic dimension and limited
policy making capability also resulted in the absence
of leadership and the lack of standardisation of
technology policy. This situation would not have
happened if a proper problem identification method
or policy making process was adopted.

8. CONCLUSION

Overall, the case study in Brunei has shown that
ICT innovation is complex as shown by the macro,
meso and micro levels of policy analyses. As shown
in Brunei, the failure to follow the linear process in
this rational model has resulted in the failure of e-
Government policy and its implementation. There
was limited research and information or feedback
gathering in the Brunei e-Government process which
is an important ingredient in both the rational and
incremental model of the policy making process.
Research and strategic discussions must be
conducted by policy makers with assistance from
researchers, think-tank groups, the private sector, the
IT community, and the users of technology in the
beginning of e-Government. This is missing in
Brunei, where the tasks were largely given to the IT
community. Hence, e-Government so far is all about
introducing new technology to the public sector.
In addition, there is no step-by-step approach
outlined but rather an all out implementation
throughout the public sector. Project identification
and prioritisation for the purpose of the national
agenda are not carried out in detail. For example,
projects prioritisation such as online services to
reduce the alarming issue of the lengthy process of
applying for business permits and foreign maid
applications; and solving the broadband connectivity
issue for the population would better justify e-
Government and make the implementation much
easier. A big bang approach with unclear objectives
for all ministries who then need to identify their own
projects caused inertia at the beginning and
unnecessary projects being implemented.
The above situation resulted in confusion in
understanding what the government really wanted in
e-Government. Due to this, conflicts of interest occur
when the street-level bureaucrats finally implement
the ambiguous policy. The lack of key performance
indicators and evaluation strategy add further
complexity to the innovation process.
The heart of success of e-Government lies with
the policy making capacity of the government. A
solid policy formulation process and strong
enforcement of policy implementation can guarantee
the full realisation of the potential benefits of e-
Government. It is now fundamental for the public
sector to overcome its traditional trademark
characteristics of ambiguous objectives, poor
consultation with the citizens, lack of transparency
and accountability, poor knowledge management,
the various layers of the bureaucratic decision-
making process, and dispersion of responsibility in
this digital era.

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156

A Proposed Innovative Leadership Model of
Cambodian High School Directors

Mok Sarom
Graduate School, Buriram Rajabhat University,
Muang District, Buriram Province, Thainland, moksarom@yahoo.com

Sunthorn Kohtbantau
Muang District, Buriram Province, Thainland, sunthorn@yahoo.com

Nawamin Prachanant
Muang District, Buriram Province, Thainland, nawaminpt@yahoo.com

Abstract -- This quantitative research study is designed
to contribute to theoretical and practical frameworks of
leadership practices by exploring school directors
leadership behavior and teachers perceptions of
Cambodian high school directors leadership behavior.
The selected sample includes 191 school directors and
386 teachers from Cambodian public high schools
derived by stratified random sampling, and simple
random sampling. The Leadership Practices Inventory
(LPI), Self and Observer were adapted as the research
instruments. The validity of the instruments was
verified and the forms were back-translated to
minimize ambiguity and errors. The Khmer versions of
the questionnaires were field tested. Using factor
analysis of LPI, it was modified as a Cambodian
Leadership Practices Inventory (CLPI). Two forms of
CLPI, Self and Observer, were collected to confirm the
model. Collected data were analyzed using descriptive
and inferential computer program procedures. The
findings revealed that the school directors practiced
four leadership behaviors: demonstrating to support
the heart, translating a shared vision into action,
sustaining willing participation, and engaging the heart
in a shared process. The teachers perceived the
directors leadership behavior in three dimensions:
demonstrating to strengthen deliverables, engaging the
heart in implementing an organizational strategy, and
translating a shared vision into moral obligation. The
statistics maintained that the canonical analysis of the
four school directors leadership practice and the three
teachers observations of their leadership practice were
statistically significant (p < .001). The goodness-of-fit
indices of the structural equation model of school
directors leadership behavior and teachers
perceptions of school directors leadership behavior
showed their consistency with the empirical data.
Recommendations are made for policymakers and
educators who engage in high school leadership in
Cambodia. This research study provides first-account
insights on leadership practices for effective educational
planning in Cambodia. This study can potentially
benefit for Ministry of Education, Youth and Sport and
international education partners.

Keywords-- perceptions, school directors, teachers,
leadership behavior
I. INTRODUCTION

Cambodia is a land of beauty with a troubled past,
but a growing hope for a better future. Cambodia has
a long history, but one marked with civil conflict,
foreign invasion, and genocide. Cambodia,
unfortunately, is remembered for Pol Pot and the
Khmer Rouge government that came into power in
1975. During the four years of Pol Pots communist
leadership, approximately 1.7 million people lost their
lives due to execution, torture, and starvation. The
government also targeted history and schools.
Libraries were destroyed and schools were closed.
The 20,000 Cambodian teachers perished or fled from
the country. Since the end of 2006 all high schools in
Cambodia would have become accredited by external
quality assurance organizations according to the
Cambodian Education Strategic Plan (ESP) 2009-
2013 (Ministry of Education, Youth and Sport
(MoEYS). 2010: 4). The purpose of the ESP is to
increase the Cambodian educational standards and
create effective schools throughout Cambodia. To
achieve the goals of the ESP, the leadership of each
school plays a very important role. As a result,
directors and teachers need to prepare, equip, and
change in order to comply with the ESP. Cambodian
educational reform has enormously affected public
high schools (Stafford, 2000: 22; Thavin, 2001: 37;
WTO, 2003: 15; Katayama, 2007: 11; Richardson,
2007: 55; Escamilla, 2010: 49; Soveacha, 2010: 35;
Banal, 2011: 21). Teachers and school directors who
are the key persons in the reform must have the same
goals, share a vision, and support one another.
Leadership must be shared between teachers and
school directors in order to move forward and meet
the goals of the reform.
The Cambodian government wants to educate
more people so they will have deeper and wider
knowledge and higher technical skills. Globalization
has forced the world to rapidly become smaller and
also has forced people in the world, including

157

Cambodia, to study and learn much more. These
forces have caused the Cambodian government to
promulgate the ESP 2009-2013. As a result,
Cambodian education has dramatically changed,
especially at the primary level, which is the
foundation of other educational levels.
Building leadership capacity in todays schools
is becoming an increasingly challenging task.
Hence, the need for meaningful and useful
information about effective school leadership is
essential. Schools will be successful in their
missions when the school directors, as leaders of
schools, become more effective and skilled in
carrying out their daily work. Because of
globalization, internationalization, and
technological advance, the missions of schools are
more complex, so school directors need to seek,
define, and refine effective leadership skills (Pit &
Ford, 2004: 11; Chet, 2006: 25; Richardson, 2007:
59; Agosta, 2009: 19; Escamilla, 2010: 33;
Soveacha, 2010: 48; Banal, 2011: 59).
School directors are political appointees in the
hierarchical and politicized system. They must not
only manage the schools, but do so in a way that
closely follows the complex requirements of the
Ministry of Education, Youth, and Sport. School
directors had no preparation to become school
directors (UNICEF, 2007: 12-13). Most newer
school directors first become deputy directors
(assistant principals). If they had a competent
school director to work with, they had the
opportunity to learn good practices. If not, they
simply did what was modeled and operated on their
own intuition. Almost all schools had one or two
deputy directors, depending on the size of the
schools (UNESCO, 2006: 44-46; Soveacha, 2010:
34-35). Besides, the school directors role had come
under more and more scrutiny as expectations had
grown for standard-based educational
accountability.
Cambodias National Education For All (EFA)
Plan 2003-2015 (UNICEF, 2007: 15-16) argues that
the responsibility for school accountability resides
with the school directors. Contemporary school
leaders are expected to perform better than ever
before, being held accountable for teaching and
learning while constantly striving for improvement
and serving as positive change agents. There is,
however, little research that discusses the
importance of how the school directors perceive
their practices and how they relate to the teachers
perceptions of their leadership behavior as well as
effecting academic success.
In the study of leadership behavior, many
theories or models have been written by scholars in
the field. Leadership is very important for both
school directors and teachers in order to move
forward and meet the goals of reform, but no one
has actually applied them to Cambodia. The
researcher do believes that the school directors are
instrumental in keeping the school moving toward the
goal of providing an excellent educating, and need to
know themselves by being cognizant of the leadership
behavior they actually perform and by inviting their
teachers to provide information about the leadership
behavior they perceive. In essence, the present study
then will help the school directors become aware of
the extent to which they are exhibiting the kinds of
behavior that are described in the research instrument.
Through this analysis, the school directors should also
be able to develop an adequate growth plan and
leadership training programs that will assist the entire
school staff in developing needed leadership skills.
The main purpose of this study is to explore the
school directors leadership behavior and teachers
perceptions of Cambodian high school directors
leadership behavior.

II. METHODOLOGY

Population and Samples
The population was 378 public high school
directors and employs 17,008 public high school
teachers throughout Cambodia who are administering
and teaching at grades seven, eight, nine, ten, eleven,
and twelve and who were qualified for the study. The
samples were 191 high school directors, and 386
teachers overall who participated in this study selected
by using the Table of Krejcie & Morgan, and stratified
random sampling, and simple random sampling by
drawing lots.

Research Instruments
Two survey instruments were used in this
research study: the Leadership Practices Inventory
(LPI), and Cambodia Leadership Practices Inventory
(CLPI). Clearly, it was a survey study and used an
instrument developed by Kouzes and Posner (2003) in
western culture. A modified version of Brislin, Lonner
and Thorndikes (1986) translation method was used
to translate the LPI into the Khmer version. An expert
panel review for content validation of the modified
LPI is critical for assuring the content holds a similar
meaning as the original and appropriately fits Khmer
culture. Permission to use the surveys was granted by
the authors. Because the LPI is a copyrighted
publication, the authors of the instrument were
contacted via an electronic mail letter to obtain
permission for its use in this study.
Practically, data were obtained from these school
directors and teachers using LPI. There were two
versions of LPI: LPI-Self and LPI-Observer. The
participating school directors used the LPI-Self to rate
themselves, while teachers used the LPI-Observer to
rate school directors leadership practices. The two
versions of LPI were used to measure leadership
behavior in five categories: 1) modeling the way, 2)
inspiring a shared vision, 3) challenging the process,
4) enabling others to act, and 5) encouraging the heart.

158

Relatively, the CLPI factor analyzed version
was then modified by the researcher in accordance
with the results from the factor analyses. With
regard to factor analysis, the school directors
admitted to using four and the teachers perceived
three out of the five current practices of the
leadership challenges. By utilizing the CLPI, the
school directors were surveyed to measure their
level of use of each of the four leadership practices,
and teachers who observed these leadership
practices were surveyed to measure the level to
which they perceived each of the three leadership
practices being performed by school directors.

Data Collection
In terms of the needed sample size, 191 LPI-
Self questionnaires, and 386 LPI-Observer
questionnaires were distributed in person and by
post. The recipients were asked to send back the
completed survey, using the pre-addressed
envelopes. The follow-up procedure was conducted
by telephone one week afterward in order to
improve the response rates. For purposes of this
study, CLPI, Self and Observer, were then colleted
by the same procedures as for LPI. Data were
collected in a confidential manner. Participation
was voluntary, and questionnaires were answered
anonymously.

Data Analysis Procedure
In terms of exploratory factor analysis (EFA),
the five factors developed from the original LPI
were forced to enter the analysis using factor
analysis with varimax rotation to examine construct
validity of the 30 items. The results of factor
analysis revealed that school directors exhibited
four out of the five current practices of the
leadership challenge; whereas, teachers perceived
that their school directors performed only three out
of the five. In terms of interpretation, the mean
scores necessary for leadership behavior from both
school directors and teachers were interpreted with
the determined five levels of interpretation criteria
using the criteria designed by Srisa-ard in Research
for Teacher (2003) for analyzing data collection.
The researcher gained permission from the author
to use the interpreted criteria.
Data analyses of the CLPI 30 Likert-type items
was presented in descriptive tables with brief
adjoining summaries. Data analyses of the
demographic-type items about school directors, and
teachers was presented in an independent samples t-
test, and in ANOVA tables with adjoining
summaries. Data analyses of the relationship
between variable-type items were presented in
Canonical Correlation tables with adjoining
summaries; whereas, the confirmatory factor
analysis (CFA) to find out the proposed model for
Cambodian high schools was presented in AMOS
figures with adjoining summaries.
III. RESULTS

Results of Factor Analysis
Interpretation of School Directors Four New Factors
Returned questionnaires from both school
directors and teachers were factor analyzed to
determine their validity. Interestingly, school director
component factor analyses were followed through
with Varimax rotation. According to results of the
EFA, original construction with 30 items and 5
subdimensions were changed. The findings of the
factor analysis revealed that four factors were loaded
in the school directors scale. The four new factors
loaded in the school directors scale were: 1)
demonstrating to support the heart, 2) translating a
shared vision into action, 3) sustaining
willing participation, and 4) engaging the heart in a
shared process. The Kaiser-Meyer-Olkin measure of
sampling adequacy was .88, and Bartletts test of
sphericity had a value of .000. The Cronbach
reliability for DSH = .97, TSA=.96, SWP = .95, and
EHS = .94. Each factor reflects a set of leadership
practices that have incentive value for improving
school directors leadership behavior. The details of
factor loaded are described as follows:

TABLE 1: CONSTRUCT SCHOOL DIRECTORS
FACTORS OF THE CAMBODIAN LEADERSHIP
PRACTICES INVENTORY (CLPI)

Interpretation of Teachers Three New Factors
Teacher components factor analyses were
followed through with Varimax rotation. According to
results of the EFA, original construction with 30 items
and 5 subdimensions were changed. The factor
analysis conducted for this study revealed three
dimensions of teachers preference towards school
directors leadership behavior. The three new factors
loaded in the teachers scale were categorized as: 1)
demonstrating to strengthen deliverables, 2) engaging
the heart in implementing an organizational strategy,
and 3) translating a shared vision into moral

159

obligation. The Kaiser-Meyer-Olkin measure of
sampling adequacy was .93, and Bartletts test of
sphericity had a value of .000. Thus, the initial steps
in preparation for teachers factor analysis justified
factors analysis applied on the data set. The
Cronbach reliability for DSD = .89, EIO
= .96, and TSM = .94. Each factor reflects a set of
leadership practices that have incentive value for
improving school directors leadership behavior.
The details of factor loading were described as
follows:

TABLE 2: CONSTRUCT TEACHERS FACTORS OF
CAMBODIAN LEADERSHIP PRACTICES
INVENTORY (CLPI)

Results of Analyses for Research Questions
1. What leadership behaviors are exhibited by
high school directors in Cambodia as perceived by
the school directors?
The first research question was directed toward
identifying the leadership characteristics and
behaviors of the school directors based on the
Leadership Practices Inventory (LPI) reported to be
used by Cambodian school directors who
participated in this study. The 191 surveyed school
directors reported using each leadership behavior
item on the CLPI with varying degrees of frequency
as a whole at high level. Also, the school directors
reported that they practiced TSA the most, SWP the
second most, followed by EHS, and DSH the least.
The top three leadership behaviors reported by
participating Cambodian school directors were
presented in this study. Insights gained from the
findings contribute to our better understanding of how
the school directors selected leadership behaviors to
foster their daily practice.

TABLE 3: TOP THREE LEADERSHIP BEHAVIORS
REPORTED TO BE USED BY SCHOOL DIRECTORS

2. What leadership behaviors are exhibited by high
school directors in Cambodia as perceived by the
teachers?
The 386 surveyed teachers reported preference
for the school directors leadership behavior. Each
leadership behavior item on the CLPI with varying
degrees of frequency as a whole were at a high level.
With regard to the means and standard deviations of
the three dimensions of the CLPI Scale, the findings
revealed that in teachers preferences for the school
directors leadership behavior in Cambodia all three
factors were at high levels. More specifically, EIO
was reported as the most frequent preference, DSD
was the next most preferred, and TSM the least often
preferred.
The top three leadership behaviors reported as
used by Cambodian school directors based on
participating teachers preferences were presented in
this study. Insights gained from the findings
contribute to our better understanding of the teachers
preferences for the school directors leadership
behavior.


160

TABLE 4: TOP THREE LEADERSHIP BEHAVIORS
REPORTED TO BE USED BY SCHOOL DIRECTORS
BASED ON TEACHERS PREFERENCES

3. Do the school directors leadership behavior as
perceived by school directors in Cambodia differ,
based on gender, age, education level, and
experience?
By utilizing the CLPI, the understanding of the
similarities and differences of school directors
perceptions of their leadership behaviors based on
the demographic factors were explored. When
taking into account the gender of school directors,
there was found that high school directors in
Cambodia in term of leadership have been
predominantly male. When taking into account the
age of school directors, there were no significant
differences in leadership practices of DSH, SWP,
and EHS. However, TSA had statistically
significant difference at .01 level. When taking into
account the educational level of school directors,
there was no significant difference in leadership
practice in term of DSH. It should be noted,
however, that EHS showed a statistically significant
difference at the .05 level. With regard to extra
effort, TSA, and SWP showed a statistically
significant difference at the .01 level. When taking
into account working experience of school
directors, DSH, TSA, and EHS of their leadership
practice did not differ significantly; whereas, SWP
showed a statistically significant difference at the
.01 level. Additionally, for each pair comparison in
reported leadership practices admitted by school
directors based upon working experience of SWP,
the results indicated that the school directors who
had working experience from 5 to 10 years reported
their leadership behavior as to SWP differed
statistically from those who had gained more than
10 years experience at the .01 level.

4. Do the school directors leadership behavior as
perceived by teachers in Cambodia differ, based on
gender, age, education level, and experience?
By utilizing the CLPI, the understanding of the
similarities and differences of school directors
perceptions as perceived by teachers based on the
demographic factors of (a) gender, (b) age, (c)
educational level, and (d) working experience were
explored. When taking into account the gender of
teachers, there was not a significant difference in
leadership preference of the three leadership
dimensions. When taking into account the age of the
teachers, there was no significant difference in DSD,
and EIO; whereas, there was a statistically significant
difference at the .05 level in TSM. For each pair
comparison investigation, the teachers who were aged
from 30-45 reported their observations on leadership
practices of school directors based upon educational
level in TSM differed from who were aged more than
45 years at the .05 level. When taking into account the
educational level of teachers, EIO, and TSM showed
statistically significant differences at the .05 level;
whereas, DSD was significantly different at the .01
level. For each pair comparison investigation, the
teachers who had earned below bachelors degree
reported their observations on leadership practices of
school directors based upon educational level in EIO
differed from those gained higher than bachelors
degree at the .05 level. And, the teachers who earned
below bachelors degree and bachelors degree
reported their observations on leadership practices of
school directors based upon educational level that
TSM differed from who gained higher than bachelors
degree at the .05 level. When taking into account the
years of teaching experience of teachers, there were
no significant differences in leadership practices of
school directors by teachers preference based upon
years of teaching experience among the three
leadership dimensions.

5. To what extent is the relationship between the
school directors perceptions of their leadership
behavior and teachers preferences for the school
directors leadership behaviors in Cambodia?
To answer this question, the Cambodian
Leadership Practices Inventory (CLPI) 30-item
questionnaire was employed as the main instrument.
The CLPI was created by researcher according to the
latest 2003 third edition Leadership Practices
Inventory (LPI) developed by Kouzes and Posner
(2003). The CLPI is a 30-item questionnaire used to
rate school directors on four behavior practices which
were DSH, TSA, SWP, and EHS. The three leadership
practices of teachers preferences were DSD, EIO, and
TSM. Canonical correlation analysis was used as the
main technique to analysis the collected data.


161

TABLE 5: R
C
AND OTHER VALUES CONCERNING
THE RELATIONSHIP BETWEEN SCHOOL
DIRECTORS ADMITTED AND TEACHERS
PERCEPTIONS ON SCHOOL DIRECTORS
LEADERSHIP PRACTICES

According to Table 5, the statistic that
pertained to the canonical analysis of the four
school directors leadership practices and the three
teachers observations of their leadership practice
was statistically significant (p < .001). The
canonical correlation suggested that there is the
strongest relationship between the leadership
practice admitted by school directors and the
observations of teachers on the leadership practice
of school directors.

6. What leadership behavior model should the
public high school directors have for supporting
their leadership behavior in the Cambodian school
system?
In the current research, for building up the
proposed model, confirmatory factor analysis
(CFA) was used to summarize the factors among
the existing relationships of individual variables in
this study. The Analysis of Moment Structure
(AMOS) maximum likelihood program was used to
test the theoretical model. The hypothesized causal
relationships between four dimensions of school
directors leadership and three dimensions of
teachers perceptions of their school directors have
been confirmed.
However, the goodness-of-fit statistics include
the comparative fit index (CFI) (Bentler. 1990),
adjusted goodness-of-fit index (AGFI), and root
mean square error of approximation (RMSEA).
The fit indicators of the CFI and AGFI should be
larger than .90 and the RMSEA less than .05 for a
well-fitting model, and the fit is reasonable if the
RMSEA is between .05 and .08. According to
Browne and Cudeck (1993), the model is a good fit
if the RMSEA is between .01 and .05. This study is
based on Byrne (1998) and Bollen (1989) goodness-
of-fit statistics. For the purpose of this study, this
research question utilized structural equation
modeling to test the hypotheses as well as the ratio of
Chi-square, root mean square error of approximation
(RMSEA), root mean square residual (RMSR),
normal fit index (NFI), comparative fit index (CFI),
goodness-of-fit index (GFI), and adjusted goodness-
of-fit index (AGFI) to evaluate overall model fitness.

TABLE 6: FIT INDICES FOR THE MODELS OF FOUR
SCHOOL DIRECTORS LEADERSHIP BEHAVIORS

Given that all the values were above .90, these
internal consistencies are acceptable for data analyses.
Therefore, the model modification stopped. The path
diagram of the final measurement model of the CLPI-
Self is presented in Figure 1.

FIGURE 1: CONFIRMATORY FACTOR MODEL FOR
THE FOUR DIMENSIONS OF SCHOOL DIRECTORS
LEADERSHIP BEHAVIORS

With reference to the statistical method utilized,
confirmatory factor analysis was conducted for the
CLPI-Observer. The whole model of the teachers
perceptions on the school directors leadership
behavior was tested with 30 items contributing to the

162

three dimensions of DSD, EIO, and TSM. The
results of the final three-factor model testing are
presented in Table 7.

TABLE 7: FIT INDICES FOR THE MODELS OF
THREE TEACHERS OBSERVATIONS OF SCHOOL
DIRECTORS LEADERSHIP BEHAVIORS

Given that all the values were above .80, these
internal consistencies are acceptable for data
analyses. Therefore, the model modification
stopped. The path diagram of the final
measurement model of the CLPI-Observer is
presented in Figure 2.

FIGURE 2: CONFIRMATORY FACTOR MODEL FOR
THE THREE DIMENSIONS OF TEACHERS
PERCEPTIONS OF SCHOOL DIRECTORS
LEADERSHIP BEHAVIORS

IV. CONCLUSIONS AND IMPLICATIONS

Perceived Use of Participants Factors
Interpretation
The results of factors analysis revealed that
school directors exhibited four out of the five
current practices of the leadership challenge;
whereas, teachers perceived that their school
directors performed only three out of the five. It is
also interesting to point out that, after the
exploratory factor analysis, it was found that the
construct data for the sampled school directors and
teachers did not completely match the five factor
construct pattern presented by Kouzes and Posner
(2003). The explanation for this may lei in two areas.
First, the value systems embedded and cultivated in
Cambodia are created by the countrys historical
background, and the education system itself plays a
pivotal role in maintaining the hierarchical societal
system. Cambodias societal norms and power
concentrated national culture will constrain school
directors from demonstrating fully collaborative styles
of leadership which assume that leadership can be
shared between school directors and other teachers
(OLeary & Nee, 2001; Morefield, 2003a). Also,
considering the social norms of Cambodia, other
teachers may not expect their school directors to
behave in a democratic way. They will accept school
directors didactic ways as school leaders. Second,
there is the matter of the structure that works to lead
school directors to show their leadership in less
collaborative ways. This is because the limited
financial resources, centrally driven curricula and
didactic ways of teaching and learning leave little
room for the school directors to collaborate with other
teachers and fully enjoy their autonomy. Thus, the
researcher individually claimed that rather than five
LPI leadership practices as proposed by Kouzez and
Posner, the results of this study of school directors
leadership practices better fit a Cambodian context.
The findings in this study support the viewpoint that
there are a set of leadership behaviors, in this case
represented by the western culture as suggested in the
literature, which are both universal and culturally-
specific (Bass & Avolio, 1993; Bass, 1997; Peterson
& Hunt, 1997). Simply put, Kouzes and Posner
(2003) found that statistically significant difference
across LPI scores were possibly due to cross-cultural
comparison. In this sense, Posner (2010) proposed that
many cross-cultural studies suggest that culture can
influence leadership concepts, styles, and practices.

Perceived Use by High School Directors of Their
Leadership Behavior
Utilizing the CLPI, the school directors reported
using each leadership behavior item on the CLPI with
varying degrees of frequency. The means of
individual commitments for practice were at a high
level. Regarding the four-factor dimensions of the
CLPI used, this study found that, ranked from highest
to lowest by mean score of the school directors
leadership behavior throughout Cambodia the
strongest leadership practice with these participants
was translating a shared vision into action, followed
by sustaining willing participation, engaging the heart
in a shared vision, and demonstrating to support the
heart, respectively not a surprising outcome due to the
self-reporting aspect of the survey. This finding can be
interpreted to mean that Cambodian school directors
see the importance of these leadership practices. The

163

findings of this study concurred with those of
Oumthanom (2001), Rouse (2005), Shannon
(2008), and Martin (2011), all of which found that
the information regarding the school directors
leadership practices towards the Leadership
Practices Inventory (LPI), developed by Kouzes
and Posner as a whole were at high and highest
levels. This indicated that Cambodian school
directors that exhibit more leadership practice may
be mainly focused on creating a vision within their
school and thus are able to inspire their followers to
be more productive, encouraging success for the
overall good of the school.

Perceived Use of High School Directors
Leadership Behavior as Perceived by Teachers
Utilizing the CLPI, the school directors
leadership behavior as perceived by teachers
preferences in Cambodia indicated as a whole were
at high level. There are two explanations for these
findings. First, it can be interpreted to mean that the
teachers see the importance of the school directors
leadership practices. Second, the teachers did
perceive that their school directors look for ways to
improve their team, such as networking and taking
the initiative to try new approaches. Overall, it
appears that teachers reported feeling that their
school directors have experience and special
knowledge or expertise and that their school
directors identify with them because of mutual
feelings of respect. These teachers are likely to
view their school directors as treating everyone
fairly, having a pleasing personality, and having
considerable professional knowledge. This can be
explained in light of Oumthanoms findings (2001).
Oumthanom noted that the teachers perceived three
out of the five current practices of leadership at a
high level. Also, Kouzes and Posner (2002a)
described leadership practice as the leaders ability
to create teamwork and trust. Through
empowerment, the leader is able to inspire team
members to strive for the organizations goals and
dreams.

Reported Leadership Practices Admitted by School
Directors
When taking into account the gender of school
directors, it was found that high school directors in
Cambodia in term of leadership have been
predominantly male. According to Khmer culture,
males are leaders, and females are followers. It is
hard to accept females as leaders in Khmer culture.
The findings were not surprising because, more
clearly explained, sex-role stereotyping assigns
different roles to men and women within families;
women are expected to take care of the home and
children; whereas men are expected to work outside
the home. As pointed out by Gorman, Dorina and
Kheng (1999), Ayres (2000) and Morefield (2004),
this brings about two major pressures. First, women
who wish to become leaders have to face a double
workday as their taking on work outside the home
does not change the deeply rooted expectation of their
taking care of the home and children. Second, for
husbands, their expected role of working outside the
home means that there is a huge social cost if they
agree to renegotiate roles with their wives, and so
many do not agree to do so, or do not support their
wives in becoming leaders or taking important
positions in politics. As Bolman and Deal (1992), and
Tang (2008) reported, with a recommendation for
further study, woman do get credit for performance
but get less credit than men for other, non-
performance criteria. To survive in the crises, earning
a better access to university education leaves females
still in need. According to Channay, Undersecretary
of State of the Ministry of Womens Affairs: Girls
who start an adult life with an education handicap step
into a life that is characterized by a weak status and
horizon (Cambodia Daily, 2012: 19).

Reported Leadership Practices Admitted by School
Directors as Perceived by Teachers
When taking into account the gender of teachers,
the findings revealed that there was not a significant
difference in leadership preference of three leadership
dimensions. Why was there no significant difference
in leadership behaviors based on this variable? A
primary reason for this lack of variable is that
Cambodian society is struggling to regain a sense of
national identity through a return to perceived
traditional values and ideals in these post-conflict
years. Perceptions of gender identity, especially
female gender identity, are closely linked to notions of
culture and tradition, and resistance to changes in
gender relations is often strong. This finding was
concurrent with Brailsford (2001), Dean (2009), and
Morris (2011) indicate that teachers gender was not
a significant factor in the influence of teacher
perceptions on school directors leadership behavior.
The findings in this study also correspond with those
from Posner (2010) which determined that they did
not report any statistically significant differences in
the average frequency to which they engaged in the
five leadership practices on the basis of gender.

Reported Relationship between School Directors
Leadership Behavior and Teachers Preferences
From the perspective of the relationship between
the four school directors leadership practices and the
three teachers observations of their leadership
practice, the results of this study maintained that the
canonical analysis of all four school directors
leadership practices and all three teachers
observations of their leadership practice was
statistically significant (p < .001). Hence, both school
directors and teachers perceived leadership practice as
a means to achieve educational reform in Cambodia.
Besides, it appears that both Cambodian school

164

directors and teachers who responded to the survey
are more likely to feel empowered when they like
their school directors and feel that the school
directors have knowledge and expertise in
supportive leadership behavior. For instance,
according to Sinden, Hoy and Sweetland (2004),
when school directors perform supportive behavior,
teachers generally perform respectful behavior
along with trust towards the school directors. The
findings supported a previous study (Morefield,
2003a) which found that teachers see, as leaders of
schools, school directors are able to identify and
remove themselves from imposed constraints and
organizational conventions that block innovation
and creativity. Other research supports these
findings. According to Snowden and Gorton
(1998), irrespective of type of leadership a school
exercises, teachers will be affected by leadership
behavior. The researchers regarded a school
director as someone who can attempt to bring about
change, but position power alone does not
determine leadership. Pounder, Ogawa and Adams
(1995) found a strong relationship between the
leadership behavior of the school director and
organizational commitment, or loyalty and devotion
to the success of the organization.

Proposed Leadership Model
The goodness-of-fit indices of the structural
equation model of the four school directors
leadership behavior dimensions of the current
research showed its consistency with the empirical
data. This result can possibly be explained as that
Cambodian school directors need to not only be
effective in discharging the tasks and
responsibilities of leadership, but they also need to
change their ways of thinking and attitudes to work
collaboratively with others. Duignan (2006)
suggests that effective leaders need to redistribute
both their responsibilities and their mindsets to
incorporate others and this is shared by the
participants in this study. Although traditional
culture acts as a hindrance for providing leadership
in schools, many participants saw it as the
responsibility of school leaders to break through
this reluctance. In the new work style for
Cambodian schools, they need to change their
mindsets, as described by Duigan (2006), into
colleagues instead of bosses and encourage the
staff to employ and implement leadership with a
sense of mutual responsibility. Also, this finding
seems to suggest that Cambodian school leaders
think together strategically with goodness and
moral courage, which has significance for the
Cambodian way of living along Buddhist
principles. This finding is consistent with the
research by Hsiao and Chang (2011) which
indicated that to be excellent, school directors must
also have excellent leadership and management.
They also suggested that school directors and
teachers in charge of the administration in schools
devote themselves to seeking more effective
management. As Dess and Picken (2000) have
emphasized, the 21
st
century environment will require
organizations to continuously innovate by harnessing
the collective knowledge, skills, and creative efforts of
their employees. Leadership behaviors can be an
effective part of the response.
When taking into account the goodness-of-fit
indices of the structural equation model of the three
leadership behavior dimensions of the teachers
perceptions of school directors leadership behavior,
the current research revealed its consistency with the
empirical data. This finding could be attributed to two
main reasons. First, Cambodian teachers are believed
to be promoted by the support of the school directors
because in Cambodian society, power and authority
come from bureaucracy and hierarchy. Second, power
distance is relatively involved. This feature appears in
the high power distance, which is rooted in
Cambodians behavior, and is called listening to the
senior. It is consistent with a study by Timperley
(2005), which shows that distributive leadership has
influence from cultural boundaries.
To summarize, the research findings suggest that
it is beneficial to organizational innovation to
encourage organizational learning through means
other than just increasing the teachers belief in their
innovational contributions and their school directors
leadership behavior. An organization may encourage
organizational innovation by facilitating an increased
understanding and appreciation of the instrumentality
of organizational learning for collective functionality
and effectiveness. More specifically, incorporating
case illustrations and research evidence in orientation
and training may help teachers recognize the
important of organizational learning and directly
motivate them to innovate. The findings also suggest
that organizations may also innovate by recruiting
school directors who have potential for constructive
leadership behavior as a means to facilitate perceived
organizational and individual instrumentalities and
organizational innovation.

V. RECOMMENDATIONS
FOR FURTHER RESEARCH

1. Further research will need to be conducted to
determine if the results of this study can be replicated
with a large number of participants to confirm the
results and to verify the weak points of this study.
2. Setting up an improved research design. This
study was a learning experience. Additional research
of school directors leadership behaviors should also
be conducted in private schools to find out whether
the results would be the same or not. Studies are
needed on the actual work of school directors; for
example, survey studies that report perceptions of
teachers must be supplemented with fieldwork studies

165

that make systematic observations of daily work
patterns of school directors.
3. It is recommended that future research be
conducted on the leadership practices of school
directors by surveying a wider range of
stakeholders such as superintendents, parents, and
school support staff.
4. Research would benefit from a longitudinal,
mixed-methodology approach where qualitative
data would provide a more detailed understanding
of how school directors perceived leadership
behavior over an extended period of time. Utilize
interviews to check inaccuracies in data collection
due to the survey instrument. The strength of
interviews is that subjects can ask questions for
clarification and the interviewers can provide
explanations.

ACKNOWLEDGEMENTS

The researcher is honored that the researcher was
guided and assisted, when needed, by his
supervisors, Assoc. Prof. Dr. Sunthorn Kohtbantau,
Assist. Prof. Nawamin Prachanant, and Assoc. Prof.
Dr. Jarous Sawangtap for their remarkable insight,
their unwavering patience with the numerous
unforeseen delays, and their professional assistance
with his scholarship.

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168

Developing an Innovative Population
Management System

Samboeun Hean
Faculty of Science and Technology, University of South-East Asia
Wat Bo Village, Salakomroek Commune, Siem Reap Municipality, Kingdom of Cambodia
samboeun.hean@gmail.com

Narida La
Faculty of Information Technology, University of Technology and Management
No. 55, Croix Rouge Khmere (St. 180), 12211 Phnom Penh, Kingdom of Cambodia
narida_la@yahoo.com

AbstractA Population Management System (PMS) is a
large and complex system which stores the very large
records of populations such as brief biographies,
addresses and contact information, qualifications, skills
and specializations, health records, etc. This research
focuses on the establishment of a better designed
system from which different sorts of stakeholders in the
society (such as ordinary people, business people,
scholars, professionals, economists, politicians, policy
makers, etc.) can obtain benefit. Moreover, this paper
researches on an effective Database Management
System (DBMS) to store this data and propose a system
model of PMS. Finally, the results of research indicates
that choosing the right DBMS (SQL Server) is a most
important element which plays a role as a data center,
and a well-designed system will provide fast system
service to users.

KeywordsPMS, Modeling, DBMS.

I. INTRODUCTION

One of the most important human achievements
is a development of technology. Day-by-day,
technology has played a more important role in every
country around the world. It is being used in all
fields of work ranging from nature-related
exploration to technology-related development. Its
popularity increases as a result of its reliability,
flexibility, accessibility, and efficiency. Therefore,
our research focuses on how to take benefit from this
technology in the area of population management.
More specifically, it is research on a computerized
system which is used for population management.
Our aim is for Cambodia to have a better designed
population management system which will become
one of the necessary elements in the National
Strategic Development Plan of the Royal
Government of Cambodia (RGC). Although
technology is generally the most efficient
information and communication tool in this era, the
achievement level of a particularly designed system
is based on its flawlessness and perfection. More
precisely, the management system will not be able to
acquire full effectiveness if it is not well designed.
For instance, a population management system will
benefit business persons if it clearly provides
sufficient information from which market
accessibility and labor force availability can be
assessed. Similarly, the management system will also
benefit the policy maker when it is able to provide
effective information about the contemporary
standard of living, qualifications of a particular
group of persons, proportion of the particular group,
etc. because they can, based on the information
provided by the system, make a practicable and well-
balanced policy and they will be able to better plan
ahead. The main objective is to make the system
benefit as many groups of people as possible on the
one hand and make it as efficient (in time and cost),
reliable, flexible, simple, and as accessible as
possible on the other hand. Although there existence
of a population management system which has been
developed by particular government institutions,
such as the Ministry of Planning, to fit their
individual needs, the research is aimed to create a
better designed system a one-stop-for-all
population management system which can benefit
more diverse groups of people. In short, the research
is to develop a population management system
model which combines different sources of
information (a sizable source of information) which
many groups of stakeholders can easily use for their
particular needs.

Based on the current need for information, a
better designed population management system with
greater flexibility, reliability, accessibility, and
efficiency can successfully be developed. In fact, the
system expected to be obtained from the research
will be one that is so flexible; that is to say, it can be
amended or changed in order to meet the real needs
of each group of users. The upgrading of reliability is
referred to as a technical flawless application of the
system as such than for data errors. In other words, it
will help solve the current technical problems which
have downgraded the systems value. As far as the
improvement of accessibility is concerned, the
research studies how to make the system

169

simpler for all users. In short, the system must not be
too complicated for the user to use. The
simplification will make the system more accessible
for all users who are not highly trained or educated
in ICT. The last point is that we will apply our
knowledge of ICT is to improve its efficiency. This
means that the developed system will cost less for
the host organization, while the users will use less
time to get what they want.
When putting these points together, we hope that
the research will be one that will lead to a
development of what we have termed a better
designed management system that will become a
contributory asset in the development plan of the
RGC.
II. OVERVIEW ON DBMS FOR THE SYSTEM

A. Microsoft SQL Server
The Microsoft SQL Server is the most popular
DBMS for managing data. It includes native support
for managing XML data. XML columns can be
associated with XSD schemas and XML data being
stored is verified against the schema. XML is
converted to an internal binary data type before
being stored in the database. Following this version
of the SQL Server, we added some extensions to the
T-SQL language to allow embedding XQuery
queries in the T-SQL and the Common Language
Runtime (CLR) integration to write the SQL code as
Managed Code by the CLR. Also, it aims to make
data management self-tuning, self-organizing, and
self-maintaining with the development of the SQL
Server Always On technologies, to provide near-zero
downtime. The SQL Server includes support for
structured and semi-structured data, including digital
media formats for pictures, audio, video and other
multimedia data. Moreover, it provides native
support OLE DB instead of ODBC for native
connectivity. Its new features and enhancements
include Always On SQL Server Failover Cluster
Instances and Availability Groups which provide a
set of options to improve database availability,
Contained Databases which simplify the moving of
databases between instances, new and modified
Dynamic Management Views and Functions,
programmability enhancements including new
Spatial features, Metadata discovery, Sequence
objects and the THROW statement, performance
enhancements such as ColumnStore Indexes as well
as improvements to OnLine and Partition level
operations and security enhancements including
Provisioning During Setup, new permissions,
improved role management and default schema
assignment for groups.
Microsoft SQL Server also allows user-defined
composite types (UDTs) to be defined and used. It
also makes server statistics available as virtual tables
and views (called Dynamic Management Views or
DMVs). In addition to tables, a database can also
contain other objects including views, stored
procedures, indexes and constraints, along with a
transaction log. The SQL Server database can
contain a maximum of 2
31
objects, and can span
multiple OS-level files with a maximum file size of
2
60
bytes. (Paul, Mike, & Uttam, 2008).
B. Oracle Database
A database server is the key to solving the
problems of information management. It manages a
large amount of data in a multiuser environment so
that many users can concurrently access the same
data. Oracle Database is the first database designed
for enterprise grid computing, the most flexible and
cost effective way to manage information and
applications. Enterprise grid computing creates large
pools of industry-standard, modular storage and
servers. With this architecture, each new system can
be rapidly provisioned from the pool of components.
There is no need for peak workloads, because
capacity can be easily added or reallocated from the
resource pools as needed.
Oracle uses Grid computing, which is a new IT
architecture that produces more resilient and lower
cost enterprise information systems. With grid
computing, groups of independent, modular
hardware and software components can be connected
and rejoined on demand to meet the changing needs
of businesses.
Large Objects (LOBs) are a set of data types that
are designed to hold large amounts of data. A LOB
can hold up to a maximum size ranging from 8
terabytes to 128 terabytes depending on how the
database is configured. Storing data in LOBs enables
you to access and manipulate the data efficiently in
your application. An Oracle provides many features
for data storage as shown in the table below.
(Kuhn, et al., 2011).

TABLE I - ORACLE DATABASE FEATURES

No

Features Brief Description
1 Grid Computing
The grid style of computing treats collections of similar IT resources
holistically as a single pool.
2
Infrastructure Grid

It provides some options such as Server Virtualization, Storage Virtualization,
and Grid Management.
3 Applications Grid Standard Web Services Support.
4
Information Grid

Oracle is robust in managing datasuch as Data Provisioning, Centralized Data
Management, Metadata Management, and Metadata Inference.


170

TABLE I - ORACLE DATABASE FEATURES (CONT.)

No

Features Brief Description
5 Client/Server Architecture Multiprocessing uses more than one processor for a set of related jobs.
6
Physical Database
Structures
The physical database structures of an Oracle database, including datafiles,
redo log files, and control files.
7
Logical Database
Structures
The logical storage structures, including data blocks, extents, and segments,
enable Oracle to have fine-grained control of disk space use.
8
Schemas and Common
Schema Objects
A schema is a collection of database objects. A schema is owned by a database
user and has the same name as that user. Schema objects include structures like
tables, views, and indexes.

C. MySQL Database
MySQL is used for web applications and acts as
the database component of the LAMP, BAMP, and
WAMP platforms (Linux/BSD/Mac/Windows-
Apache-MySQL-PHP/Perl/Python) and for open
source bug tracking tools like Bugzilla. PHP and
MySQL are essential components for running
popular content management systems such as
Drulpal, e107, Joomla, WordPress, etc.
(Di, G. M., 2005).

D. PostgreSQLDatabase
PostgreSQL is a powerful, open source object-
relational database system. It runs on all major
operating systems, including Linux, UNIX
(AIX, BSD, HP-UX, SGI IRIX, Mac OS X,
Solaris, Tru64), and Windows. It is fully ACID
compliant, has full support for foreign keys,
joins, views, triggers, and stored procedures. It
includes most SQL 2008 data types, including
INTEGER, NUMERIC, BOOLEAN, CHAR,
VARCHAR, DATE, INTERVAL, and
TIMESTAMP. It also supports storage of binary
large objects, including pictures, sounds, or
video. It has native programming interfaces for
C/C++, Java, .Net, Perl, Python, Ruby, Tcl, and
ODBC.

TABLE II - CHARACTERISTICS OF POSTGRESQL

Name Value
Maximum Database Size Unlimited
Maximum Table Size 32TB
Maximum Row Size 1.6TB
Maximum Field Size 1GB
Maximum Rows per Table Unlimited
Maximum Columns per Table 250-1600
Maximum Indexes per Table Unlimited
PostgreSQL also provides some features as
follows:
Generalized Search Tree (GiST)-advanced
system which bring together a wide array of
different sorting and searching algorithms
including B-tree, B+-tree, R-tree, partial sum
trees, ranked B+-trees and many others.
Open Source Full Text Search engine
(OpenFTS) - online indexing of data and
relevance ranking for database searching.
PostGIS is a project which adds support for
geographic objects in PostgreSQL, allowing it
to be used as a spatial database for geographic
information systems (GIS), much like ESRI's
SDE or Oracle's Spatial extension.
(About PostgresSQL, 2012)

TABLE III-DBMA COMPARISON

Category Problem Importance Assessment

C
e
n
t
r
a
l

d
a
t
a
b
a
s
e

L
a
b
-
p
a
r
t
i
c
i
p
a
n
t

M
y
S
Q
L

O
r
a
c
l
e

P
o
s
t
g
r
e
s
S
Q
L

Elementary features Basic data types C C B C A
SQL B B C B B
Declarative constraints B B C A A
Programming abstractions A C D A C
Generation of ids C C C A A
National chars B C B A B


171

TABLE III-DBMA COMPARISON (CONT.)

Category Problem Importance Assessment
C
e
n
t
r
a
l

d
a
t
a
b
a
s
e

L
a
b
-
p
a
r
t
i
c
i
p
a
n
t

M
y
S
Q
L

O
r
a
c
l
e

P
o
s
t
g
r
e
s
S
Q
L

Transactions Transactions A C D A A
Locks A C D A A
Multiuser access A D C A C
Programming in DB Stored procedures and triggers B C D A A
Administration Access control B D A A B
Backup A C C A C
Data migration C C A B A
Portability and
scalability
Portability B C B A B
Scalability A C B A C
Performance and
VLDB
Query optimization A C B A B
Structures supporting
optimization
B D D A B
Support for OLAP B D D A D
Allocation of the disk space A C C A C
Size limits A B B A C
VLDB implementations A C D A B
Distributed
databases
Access to multiple databases C D C A C
Heterogeneous systems support B D D B D
Special data types Large objects B B B A C
Post-relational extensions C C D A B
Support for special data types C C D A C
Application
development and
interfaces
Embedded SQL C C D A B
Standard interfaces B C B A B
Additional interfaces A A A A A
Web technology A A B A B
XML B C D A D
CASE B C D A D
Reliability Recovery A B C A C
Commercial issues Prices C A A D A
Technical support A B C B D
Position on the market A C D A D

Refer to the table of the comparison of MySQL,
Oracle, and ProgresSQL in both environments are:
Central Database and Lab-participant
showedthat Oracle was better in many features such
as Multiuser Access, Backup and Restore data,
Portability and Scalability, Query Optimization, etc.
But passed on one more comparison with SQL
Server and Oracle, where we found the SQL Server
performed much better than Oracle for the reason
being that Oracle solution can cost five times more
than an equivalent SQL Server solution that satisfies
the same requirements. So in this project, we would
choose the SQL Server for Data Center Storage.

III. SYSTEM MODELING

The system model consists of three levels of
group sets each of which comprises the order user
group for easy access control. For our first research,

we propose to use three databases in order to provide
very high security at first and second levels. Each of
the levels is defined as follows:
Level1 is a top government level which
consists of very secure data; this level consists
of user groups which have an exact
permission. (This level we will research for
the government area only when required.)
Level2 is at the Ministries level which also
consists of very secure data; this level also
consists of user groups which are from
different Ministries. (In this level we could
research for government when needed and
required.)
Level3 is collective group of sets such as
investors, marketing researchers, economists,
politicians, scholars, students, etc. For these
user groups, we will set permission to access
the collected content set in order to provide
useful and exact information for their research
purposes.

172

FIGURE 1: PMS MODELING

This PMS Model provides accessing permission
as follows:
Level1 All members in this level have
permission to access read but written
permission should be set for specific persons.
Level2 The members could be from
different Ministries so all the members in this
level could access the data for read
permission and written permission should be
set for specific persons.
Level3 This level consists of many
categories of users; we should define right
accessing data by the priority of group users.

IV. CONCLUSION

The research brought about a system modeling
of PMS which studied how to choose a potential
DBMS to store very large data of users. Our research
shows that the SQL Server is the most powerful to
choose for Database Center Storage. Moreover, we
found the designed database model of the PMS
which comprises three levels of group sets that can
be used for future research on Policy Access
Control for PMS.

ACKNOWLEDGEMENT

We would like to thank our consultant Dr. Vises
LA who assisted with useful ideas as well as
supporting us to do research which will benefit
society and globalization area.
We also thank Mr. Sovanna SIEN, President of
the University of South-East Asia for motivating us
to join the International Conference on Inclusive
Innovation and Innovative Management (ICIIIM
2012).
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International Conference of Inclusive Innovation and Innovative Management (ICIIIM 2012)

174

Human Resource Leadership for Effective
Schools in West Malaysia

Golnaz Saeidi

Payam Noor University of Iran, Tehran, Iran,
goli_374@yahoo.com

Sanaz Haghsefat

Kuala lumpur, Malaysia, s.haghsefat@hotmail.com

Abstract--Leadership is setting a new direction or vision
for a group that they follow, i.e. a leader is the
spearhead for that new direction. Management controls
or directs people/resources in a group according to
principles or values that have already been established.
The difference between leadership and management
can be illustrated by considering what happens when
you have one without the other. Providing Leadership,
Management, and Executive development seminars and
training programs with a proven track record of
producing results. We try to show an obvious relation
between leadership management and human resources
in schools.

Keywords-- leadership, human resource, knowledge
management.

I. INTRODUCTION AND LITERATURE REVIEW

Leadership is a significant process by which a
human or person influences others to complete
directs or objective the organization in a program
that makes it more coherent and cohesive. Otherwise,
that is a process through the common goal. Leaders
execute this process by utilizing their leadership
skills and knowledge. At any process, there are traits
that can affect its action.
In other respects, leadership or management is
organizing a group of persons or people to attain a
common aim or target (Andersen, 2006; Ct,
2010).
Leadership categorized into many different
types. (Northouse, 2007, p5) categorized it into two
types that illustrate at figure 1.

Resides in
People
Leader
Followers
Leadership

Height Intelligence
Extroversion
Fluency Other
Traits
Can be
Observed
Interaction
Trait Theory of
leadership
Process Theory
of Leadership
Leader
Followers
Leadership

175

As to figure 1, The knowledge and skills
processed by leader can influence by his/hers traits
or attributes such as values, character, beliefs, and
ethics when leadership learned. While other
attributes or traits give the certain characteristics for
leader that cause to be him/her unique, skills and
knowledge contribute in direct way to the leadership
process (Lord, and Shondrick, 2011).

The traditional styles of leadership illustrated in
figure 2.

As to figure 2, knowledge, skills, and attributes
make leader that is relate factors of leadership. These
factors are:
a) Situation
b) Communication
c) Follower
d) Leader

Situation and leadership:
All situations are distinctively different. The
situation usually has a more significant effect on a
leaders action than her/his traits. They have a few
persistencies across situations. For this reason, the
theory process of leadership is more accurate than
trait theory of leadership (Yammarino, and Bass,
1991).

Communication and leadership:
Studying the process of communication is
significant because we coordinate, evaluate, coach,
counsel, and supervise during this process. It causes
the chain of comprehending and understanding that
unite the members of an association or organization
from top to bottom, and bottom to top. Sometimes, it
is side-to-side (Hambley, ONeill et al., 2007;
Kramer and Crespy, 2011).

Followers and leadership:
Several people need different and separate styles
of leadership. The base of starting point is earning a
good and normal understanding of the human nature,
such as emotions, needs, and motivation. We must
come to recognize our followers are, known, and do
characteristics or attributes (Walumbwa, Wang et al.
2010; Zhu, Avolio et al. 2011).

Leader or Manager:
We must have an honest and frank
understanding of what we can do, and what we
know. Hence, we must determine who is follower
and who is leader or someone else. If they lack
confidence or do not rely on their leader, then they
will be lack the motivation. The pivotal case to be
successful, we must convince our followers, not
ourselves, that we are titled to being followed. (Lord,
and Hall ,2005; Lloyd-Walker, and Walker ,2011).

Trait leadership:
The investigations of leader traits are always by
no means exhaustive (Zaccaro, 2007). In recent
years, several studies have made comprehensive
reviews about leader traits, which have been
historically studied (DeRue, Nahrgang et al.
2011;Hoffman et al., 2011; Judge et al., 2009;
Zaccaro 2007).
This type of leadership specified as integrated
models of personal characteristics, which reflect a
effectiveness across a diversity of group,
organization situations and domain of individual
differences (Strang, K. D. ,2007). Leader influence
refers to amount of effectiveness a leader or manager
has on unique or group followers, satisfaction,
performance, and generally effectiveness (DeRue,
Nahrgang et al. 2011).

Summary of main studies reviewed about leadership
and influences of that at culture and safety illustrated
at table 1.

Authors
and year of
publication
Research question Object of investigation Methods Findings / Approaches
Bennington
and Habir
(2003)
Exploration of leaders
activitiesto promote
proactive coordination
Behaviors.
How to develop human
resource management
Observations principal outputs are
distinguished

Klein et al.
(2006)
Examination of
leadership of extreme
action teams
Trauma team member
interviews (N = 33),
observation of trauma
patient treatment (N
approx. 175)
Semi-structured
interviews
observations, review
of resident
training manual
Semi-structured interviews
observations, review of
resident
training manual
Trait Approach
Behavioral Approach
Situational / Contingency
Leadership Traditional styles

176

Authors and
year of
publication
Research question Object of
investigation
Methods Findings / Approaches
Clarke et al.
(2005)
Relationship between
characteristics of high
reliability
organizations and
patient safety
Surgeons (N = not
specified)
Literature review Subordinates are less likely
to speak up if they were
criticized before
Cole and
Crichton
(2006)
Exploration of trauma
team culture in relation
to the influence that
human factors have on
team performance
Trauma call
observations (N = 6)
Ethnographic
observations, semi-
structured
interviews
-Team leader experience and
seniority is beneficial for
leadership role
-Inappropriate leadership has
negative effects on team
performance
-Team leader training is
needed to learn leadership
skills
-Leaders can improve
individual performance by
encouraging team members
through positive behaviour
and feedback
Abdullah, J. B.
and J. M.
Kassim (2011).
Experience in
improving a crisis
response design and
training
Critical Organization Observation -Teaching team skills is rare
in team leadership
-Training will improve
secondary school
organization
Way, S. A. and
D. E. Johnson
(2005)
Strategic human
resource
Impact of strategic
human resource
Literature Review Decision-making of
Theorizing about impact of
strategic human resource
Hynes et al.
(2006)
Provide approach to
difficult leadership
situation. Identification
of core problems of
and proposition of
solutions
Interdisciplinary
cardiac arrest teams
(N = not specified)
Presentation of
clinical scenarios
including leadership
failures to
interdisciplinary
critical care leaders
-Stress is likely caused by an
individual being ill-equipped
for the role
-Lack of training on
important
leadership/management
skills can result in
inappropriate behaviour of a
team leader -Lack of
effective delegation and
communication lead to the
inappropriate behaviour
Stockwell et al.
(2005)
Relationship between
leadership in teams,
team efficiency and
output
Physician team
leaders in intensive
care unit (ICU)
(N = 827)
Survey At the end of the ICU
physician team leaders shift,
the number of daily goals
accomplished was recorded
Yun et al.
(2005)
Contingency model:
Influence of leadership
on team effectiveness
during trauma
resuscitation differs
according to the
situation
Staff members of
trauma resuscitation
teams (N = 91)
Written scenario
method,
questionnaires
-Empowering leadership
more effective when team
experience high
-Effective leaders should be
able to adjust their behaviour
to better influence team
outcomes
Zala-Mez et
al. (2004)
Effects of
standardization and
task load on
coordination processes
Anaesthesia team
members (N = 13)
Interviews -More direct leadership if
workload is high
-Meta cognition rarely takes
place


177

Culture and leadership:
Culture is a complex and long- term
phenomenon. Culture symbolizes the shared self
image and expectations of the organization. The
common folklore and vision that define the
organization are a reflection of culture (Pfeiffer, Y.
and T. Manser ,2010). , (Schein, E. H. and I.
Books24x7,1992).
Culture influences or affects the characteristics
of the conditions by ite effect on the action and
discuss processes of the leader. But, everything we
do as a leader will influence the condition of the
organization (Wu, T.-C., C.-H. Lin, et al. ,2010) ,
(Phipps, D. L. and D. M. Ashcroft ,2012).
Figure 3 show how we can be a Great leader.

.

First, find a routine that we believe needs
enhancing the most. Next, share our vision in words,
which can understand by our followers. Give them
the methods and tools to solve the problem. We must
define the model of way. Share the glory and honor
with followers heart, when keeping the pains within
our own.

Transformational Leadership:
Element that influence the transformational
leadership are shown with figure 4:

This type of leadership will model base on the theory of transformational leadership.
Challenge
the process
Enable others to act
Model the
way
Encourage
the heart
Inspire a
shared vision
Individual Consideration
Inspirational Motivation
Idealized Influence
Intellectual Stimulation
Transformational
Leadership

178

West Malaysia Leadership:
Adequate management knowledge and skills
among school administrators in Malaysia,
contributed largely, an effective school management.
Thus, study conduct with the aim to examine
management models practiced by national secondary
schools principals in Peninsular Malaysia. As a
result, a management model in Malaysian context
will be advocated for the gallantry of national
secondary schools in Peninsular Malaysia. The
management practices among school principals was
examined based on four models of effective
management by Griffith, that is Rational Goal
Model, Human Relations Model, Open System
Model and Internal Control Process Model.
Malaysia, once known primarily for its
commodity exports of tin and rubber, has grown
rapidly into an important trading partner of both the
United States and Europe. A large Islamic nation
with a diverse population of Malays, Chinese, and
Indians, it preserves many traditional values while
adopting an increasingly international outlook. In
this article, we use findings of the GLOBE study to
identify important values of Malays, relating them to
preferred organizational leadership styles.
Malaysians place particular emphasis on collective
well-being and display a strong humane orientation
within a society that respects hierarchical
differences. The culture inhibits assertive,
confrontational behavior, giving priority to
maintaining harmony. Effective leaders are expected
to show compassion while using more of an
autocratic than participative style. Expatriate
managers need to avoid actions that are incompatible
with these values and expectations.

Problem statement:
The purpose of this research is to strengthen
the influence human resource leadership effective
schools at west Malaysia. The proposal question is
what is the impact of leadership on students
performance and behaviors? .According to the
earlier research, the influence and effectiveness at
students management is base on some significant
questions:
How can we develop relationship of
leadership between school and student?
How can we improve a crisis response to
school leadership modeling?
How is it possible to design the schools
decision making at contact with west Malaysia
problems?
What is influence of leadership or
management on the students team?
What is influence of leadership on the
individual student leadership at west Malaysia?

II. METHODOLOGY

This research proposal will try to answer
about attributes, characteristics, and influences of
such individuals, and their subjectivity with utilizing
an alternative methodology and research based on Q-
methodology.
We will utilize this research method for
analyzing the factors that influence or affect on
culture and safety leadership among school
management.
The other method is evidence based method
practice (EBP) and Evidence based behavioral
practice (EBBP) that will use during this survey to
define the specified treatments and identify the
students decision-making process.
For modeling the frameworks about problem
statement, the evidence based design and
development decision will utilize.

III. CONCLUSION
To know where we are going with leadership
research, we must know where we are, and where we
have beenwe must look backward and forward at
the same time. Leadership is as shared manner or
behavior between members of students. In a contrary
manner, the leadership is not dependent upon an
individuals decision on the term or course of action.
To sum up, leadership can be as a shared and flexible
process between members of distinct team but
authority and managing remains a significant
necessity for leadership because of the older
individual can take over leadership behavior always
at any time requirement to assure the students
safety.

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182

Is the Restoration of Japans Fisheries
Possible ?
Can ITQ and Liberation of Fishery Right Help?
Masayuki Komatsu, Ph.D
National Graduate Institute for Policy studies of Japan
Tokyo Japan, komatsu@grips.ac.jp or komatsumasayuki@gmail.com

Abstract Japans fisheries has declined continuously
over last 20 years and the Great East Japan
Earthquake and Tsunami hit the Tohoku (North-East
of Japan) coasts that added additional decrease of the
production. However the efforts to restore the Japans
Fisheries is gradually made in two of the Prefectural
Governors leadership; one in Niigata for introduction
and implementation of ITQ (individual Transferable
quota) for northern shrimps (Pandalus eous ) for the
first time in Japans domestic fisheries. Another one is
the effort of Miyagi Prefectural Governor for liberation
of Japans unique fishery right from the fisheries
cooperative to private companies. This will be done for
the first time ever in 60 years since the enactment of
Fisheries Law of Japan after World War The
Tsunami devastation may be considered as an
advantage to modernize Japans Fisheries with the
reforms of regulation and system for innovation.

KeywordsDecline of Japans fisheries, ITQ, Fisheries
Cooperative, Fishery Right, and reform for innovation.
I. INTRODUCTION
Japan ranked at the top in the fishery production
in the world from 1972 to 1988, but receded to the
fourth in the position in 2010, overtaken by China,
Indonesia, and India . In March 11
th
2012,the Great
East Japan Earthquake and Tsunami devastated 600
kilo meters of Tohoku coast lines so as to wash out
fishing vessels and fishery facilities

Even before the Earthquake and Tsunami
Japans fisheries declined in production,
profitability and numbers of fishermen. It added
additional catastrophes to the Japans fisheries. Japan
should have taken the effort to reform its fisheries for
restoration long before, however, Japan did not make
any substantial effort to reform the fisheries allowing
the decline. Therefore the Earthquake and Tsunami
should be considered as a basis for the reform for
not only for restoration of fisheries but for the
renewal and innovation for the competitive world
industry.
II. DECLINING FISHERIES OF JAPAN
As the number one fishing nation in the world
Japan enjoyed full scales operation all over the
oceans of the globe. The production of Japan had
reached 12.8 million tons in catches and aquaculture
consisting of 4 million tons from the long-distant
fishery in the 200 mile zone of the national coasts
and in the high seas, 7 million tons of off-shore
fisheries operating in the 200 Exclusive Economic
Zone (EEZ) of Japan, the coastal fisheries being
conducted in the territorial waters and aquaculture in
a designated area at the coastal waters. The
production declined to 4.73 million tons in 2011 and
all fishery sectors have declined despite the policy by
the Government to increase the production in Japans
EEZ (Figure 1). This is estimated to have further
decrease in 2012 because of the lack of recovery
from the devastation of Earthquake and Tsunami .

FIGURE 1

Source: FAO (Food and Agriculture Organization of
the United Nations) and MAFF, Japan

One of the causes for the decline in Japans
fishery production is that the Japanese fisheries
system remains one that encourages free competition
for catches. Under this system Japanese fishermen
overfished leading to the depletion of the resources.
In addition Japanese fisheries legislation allowed the
continuation of status quo.
183

The consumption of seafood in the world has
been increasing but in Japan consumption has
become less while fish are eaten as an attraction as
health food in the United States, Europe and China.
At present, coastal fisheries are mostly run by
individual fishermen, catches of which are declining
and the costs of which are increasing. In 2009
statistics, the average per capita annual income was
2.51 million yen. This low income by Japanese
standards is the reason for aging of the Japanese
fishermen compared with those of Norway that has
more of the younger generation because they have a
higher income of 8 million yen equivalent (Figure 2).

FIGURE 2

With far less than is needed to meet the
expenses of fisheries and households, many
fishermen depend on pension, and land-based
activities. The number of fishermen is decreasing
yearly at a pace of 10,000 persons annually (Figure
3). More than half of them are at the age of 60 years
and over.

FIGURE 3

III. ACTUAL STATE OF FISHERIES COOPERATIVES
Fisheries Cooperatives were established to
democratize fisheries. They were established in 1948
pursuant to the Law on Fisheries Cooperatives
instituted after World War They are legally
divided into (1) coastal fisheries cooperatives
composed of fishermen residing in the same coastal
districts and inland districts, and (2) off-shore
fisheries composed of the same type of off-shore
fisheries. Around the middle of Edo Periods (18
th

century) residents of fishing villages depended partly
on agriculture and partly on fishing. But as the
monetary economy spreads, wealth people and
landlords possess fishing nets and boats to become
the fishermens bosses having control over the
fishery rights in the community. The bosses had their
fishermen (tenant farmers) under control. After
World War the agrarian reform (liberation of
farmers) was enacted under the instruction of
General Headquarters (GHQ) which was then
indirectly governing Japan. Just as the farmers were
granted farmland, Fisheries cooperatives were
established to democratize tenant fishermen.
Fisheries cooperatives were entitled to the
management of fishery rights and the allocation of
rights for enactment to members.
These days in Miyagi prefecture the fishery
cooperatives collect fees exercising fishery rights
from the member fishermen of 400,000 yen to 1.4
million yen for the aquaculture of oysters at sales of
about 10 million yen. There are some cases
collecting fees of 80 million yen for tuna aquaculture
in western Japan, but the reason and criteria for that
amount and purpose of collection were not accounted
to the public. The role of fisheries cooperatives is to
manage fishery resources and promote the sale of the
products. However, the production of coastal
fisheries and aquaculture has declined significantly.
It is doubtful that the fisheries cooperatives fulfil the
aims and objectives of the organization.
Among aquaculture operations for fish, seaweed
and shellfish under the specified fisheries rights
which is managed by the fisheries cooperatives and
executed by the members.
Accordingly in recent years, Japans
aquaculture has faced the fierce international
competition; however, its management is still under
the family type of less organized and modern
business that cannot earn sufficient earnings from the
proceedings of the sale. In Norway and Chile there is
a larger scale of aquaculture (10-100 times larger
than that in Japan), and the low-price products
produced in those countries were imported in
Japan .In order to survive amid such competition,
efforts should be made to make capital investment ,
renovate technology and intensify production
. The legal priority to permit the operation of
aquaculture is given to small scale fishermen through
the fisheries cooperatives. This priority has given no
room for ordinary corporations to enter into the
business of aquaculture even when the number of
existing aquaculture operators are decreasing and
aging. There are subsidies put into the assistance to
halt the decrease in number of fishermen but they are
184

not effective and the business itself does not produce
the profitability. The legal system to allocate fishery
rights through fisheries cooperatives demonstrated
advancing aging and obsoleteness not corresponding
to resolution of the present circumstances.
IV. DETERIORATION OF MARINES RESOURCES
The present situation of fishery stocks in the
waters near Japan demonstrate that about 40% of the
fish stocks subject to the stock assessment are at a
low level. 50% is at a medium level, whereas only
10 % is at a high level.
Overfishing largely account for decline in
fishery production volumes. One clear example is
alfonsino (kichiji or kinki in Japanese). About 15,000
tons of this species used to be caught four decades
ago, but at present the catch has scaled down to one
tenth to about 1,500 tons, with average body size
shrinking from 18cm to 8cm. The alfonsino stock
depletion can be caused by bottom trawling. The
bottom trawling is a fishing method which drags
bag-like nets on the flat sea bottom at depth of 80-
200 meters.
In the north eastern Pacific coast in 1999, it had
been estimated that trawling vessels has passed this
area about 10,000 times during 10 months, excluding
the two months of the no-fishing period (July and
August). Supposing that the nets are dragged
uniformly, it would mean that the entire sea bottom
was dragged everywhere by the net 7 times per year.
It takes alfonsino more than 5 years to grow to the
adulthood. The frequent dragging of the net deprives
them of growth . Furthermore bottom trawling makes
the sea beds flat, shrimp species inhabiting near the
rocks would disappear. Shrimp, which serves as feed
for alfonsino, contains abundant fat, and alfonsino
which feeds on them produces good tastes. However,
there are few shrimp at present, so alfonsino is
feeding on lower nutrition organisms as brittle stars
or Poly chaeta. Therefore, in addition to the direct
damage by the trawl net, alfonsino is exposed to
indirect damage with lower quality feed.
V. LEBERATION OF THE FISHERY RIGHTS IN THE
DISATER-STRICKEN AREA
On May 10, 2012, two months after the attack of
the giant earthquake and tsunami, the Governor of
Miyagi Prefecture proposed the creation of Special
Zone for Restoration of Fisheries in Miyagi
Prefecture at the Governments conference on the
restoration scheme for the Great East Japan
Earthquake and Tsunami area.
This is a scheme to encourage private-sector
investment.
In aquaculture along the coast of Tohoku for
such species as oyster, and scallop, it is assumed that
corporations which fishermen establish using private
sector capital and having fishermen as major
shareholders will participate.
The prefectural Governor grants the license for
aquaculture. Under the Fisheries Law the following
priority is provided: (1) fisheries cooperatives, (2)
corporations, to which 70% or over of local
fishermen belong, and (3) corporation in which
seven or more local fishermen are shareholders or
employees and (4) private corporation or individuals.
In Miyagi Prefecture, the prefectures Fisheries
Cooperative is granted the fishery rights on an
exclusive basis (Figure 4).

FIGURE 4

The Special Zone is intended to amend this
priority and enable private corporations to obtain the
fishery rights along with the prefectural fisheries
cooperatives It aims to promote participation of
private corporations and capital with a view to revive
coastal fisheries to encourage fishermen to be more
independent from fisheries cooperatives.. For many
years, a continuous supply of subsidies to assist
fisheries cooperatives and fishermen did not help
facilitate this independence, but rather it promoted
more dependence the side of fisheries cooperatives
and fishermen on subsidies and requests for
additional subsidies.
The Governor and the Miyagi prefectural
fisheries cooperatives started to argue each other and
so up to now and the Governor decided to establish
at least one corporation with private-sector
investment and fishermen to receive fishery rights
directly from the Prefectural Government for next
renewal period for the licensing of fisheries rights.
The background idea of this Special Zone came
from the proposals of the Takagi Committee on the
Fisheries Reform led by Mr. Yuki Takagi; former
Secretary to the Minister of Agriculture, Forestry and
Fisheries of which I was a member .This committee
had proposed the liberation of fishery rights among
others for the purpose of the modernization and
revitalization of Japans fisheries and sustainability
of supply of seafood and its culture to Japanese
consumers on July 2007. It is said that the Governor
of Miyagi took efforts to fully study the proposal.
The Committee also recommended the introduction
of IQ/ITQ for Japans fisheries.
As for the issue of fisheries successors, it was
found that in Iwate Prefecture even before the area
185

was hit hard by the earthquake and tsunami; only
1,000 out of 5,000 fishermen had successors. In
Miyagi prefecture only 32% of fishermen had
successors and after the disaster, one out of three
were said to quit the fisheries, meaning that the issue
of the lack of successors will be further spurred on
(Figure 5).

FIGURE 5

Under the current Fisheries Law, an individuals
direct engagement in fisheries is limited to fisheries
such as angling which is not based upon the fishery
rights such as the community fishery rights and
specified space fishery rights, granted by the
prefectural government. For this reason, in order to
engage in aquaculture or catch such species as
abalone, there is a need to become a member of a
fisheries cooperative having the fishery rights over
these resources. Now that fishery production and
number of fishermen who are members of fisheries
cooperatives have declined, a new power in fisheries
is deemed necessary. Basically, however, priority is
given to fishermen at present and it is not easy to
make a new entry such as obtaining a new
demarcated space for aquaculture. Specified space
fishery rights are needed to engage in the aquaculture
of yellowtail, salmon, seaweed and shellfish.
The legal characteristic of the sea is that the sea
is so-called public property in its natural state from
ancient times. And that it is subject to direct public
control by the national government and should not be
allowed to be governed exclusively by particular
individuals (Supreme Court of Japan ruling,
December 16, 1986)
VI. FROM SUBSIDY AND COMPENSTION DEPENDENCE
TO MORE INDEPENDENCE
There are about 2,700 fisheries
cooperatives throughout Japan, about 70% of
which are suffering deficits in their principal
fisheries business. However, in the end, the
balance sheets of the cooperatives come to
have surplus on the average. It is found that
the root of the negative structure is because
large figures are incorporated into the
account book under the "other income"
category. The balance sheets of fisheries
cooperatives are turned into the black by
incorporating the subsidies related to the
nuclear power plants, construction of airports,
cement plants, and reclaiming projects. In
other words, the management of fisheries
cooperatives is heavily influenced by compensation
and subsidy.
Fees to exercise the specified space fishery
rights range from 400,000 to 1.2 million yen to
fisheries cooperatives. Furthermore, fisheries
cooperatives will have allocation of money by the
Norin-chuou Kinko Bank (an International credit
organization to invest money collected and deposited
by farmers and fishermen). These moneys combined,
one can understand why fisheries cooperatives do not
accept the participation of new fishermen and
corporations, and resist becoming open
organizations.
In this case, it is better that fishery rights be
granted to fishermen directly from the prefectural
governments, not through fisheries cooperatives.
The fact that the exercise of the fishing rights
was left to the discretion of the fisheries cooperative
caused sales of catches and purchase of materials to
be handled through the cooperatives. This resulted in
high cost and lack on duty of sales on the side of
fishermen. This high cost and low sales turn-over
naturally created drop-outs from fisheries when
profitability deteriorated, and produced many
fishermen with no successors to their business. The
cooperative staffers feel safe themselves because
they think their salaries have nothing to do with the
results of sales.
The time has come to revise the Fisheries Law
and the Fisheries Cooperative Law.
Taking the occasion of the Great East Japan
Earthquake and Tsunami, Miyagi Prefecture
government is advancing reforms of fishery rights
and meets strong resistance from fisheries
cooperatives. The reason is that permission for
aquaculture rights granted only to the fisheries
cooperative on an exclusive basis, led to the decrease
of the number of fishermen and deterioration of
fishery business management.
And, if the current system is retained for the
future as it is now, the present situation will remain
unchanged so that any modernizing effort cannot at
rationalization, technical and sales innovation.be
effectively possible. The fishery rights do not
constitute adequate basis for people in the
prefectures and the country who support a more open
and transparent system. The reform is needed to
convince the general public of Japan.
The natural disasters exposed such issues
pertaining to fishery rights and fisheries
cooperatives. In this respect, the natural disaster
provides a good opportunity for Japan itself at last to
186

go into a country with reform of the legal system ,
for the first time of more than 60 years after World
War II, at which laws Japan enacted that of never
have change until now.
VII. A METHOD OF FISHING WHILE CONSERVING
RESOURCES
The world marine environment is deteriorating
for various reasons; overfishing, global warming,
pollution, and reclaiming and development of coastal
areas. Furthermore, international buying competition
is advancing, backed by the global boom for seafood
in recent years. According to the State of Fisheries
2012 of the United Nations Food and Agriculture
Organization (FAO), 87 % of usable marine fishery
resources in the world are either overfished or caught
to the upper limit that can maintain the balance of the
resources. This figure has been increasing at a rapid
pace. Given this situation, advanced fishing nations
have been promoting resource management by
devising fishing methods to prevent overexploitation
and promote resource recovery. Japan is
implementing regulation of catch efforts (fisheries
license systems and control of the fishing period and
areas input control) and technical regulation
(regulation on the mesh size and length of fishing
nets and vessel sizes technical control) and the
regulation of overall catch volume. (.Regulation to
determine catch volumes output control) are
implemented.
But as individual quotas are not determined,
thorough-going enforcement is not possible and
effectiveness is low.
Whether fishing is regulated under input control
or technical control, fishermen always strive to catch
as much as possible. Therefore, it has been proved
scientifically and historically that methods the other
than output control are meaningless.
Japan has introduced the TAC (Total Allowable
Catch) system, which is an output control, but this
system is applied only to seven species out of several
hundreds of useful fish species. But only two species
are subject to penalty when being overfished.
Furthermore, TAC is established in compliance with
ABC (Allowable Biological Catch) which scientists
made based on scientific findings, also with the
administration considering social and economic
factors. By this consideration of the latter, priority
can often be given to fishermens immediate request
to catch more rather than the scientific evidence and
long term benefit, leading to setting of TAC at higher
level that can promote overfishing .
VIII. IQ (INDIVIDUAL QUOTA) AND ITQ (INDIVIDUAL
TRANFERABLE QUOTA) IN JAPAN
In Japans case, fishermen simultaneously
started in a first-come-first-served race after TAC is
established by the national government or prefectural
governments. This is called the Olympic method or
Race for Fish as it allows catches in free
competition and halts the fisheries when the overall
catch volumes reach TAC. However, what would be
the result of such a method? The size of fishing
vessels tends to become larger because fishermen
strive to catch more fish than others within a limited
space of time before reaching the goal of established
overall volumes. As fishermen engage in fisheries to
catch more only for themselves, they naturally tend
to overfish.
Under this method, fishermen may have to make
an investment for their vessels that are left idle as the
game comes to an end. This method not only
deteriorates resources but also negatively affects
fishery enterprises. Furthermore, if larger quantities
of fish are distributed in the market at the same time,
fish prices will turn lower resulting in smaller profit
for fishermen.
Japan is the only fishing country among major
fishing nations that is adopting the Olympic method
within its EEZ. The other nations are using TAC
together with IQ and ITQ systems (Table 1).

TABLE 1

The IQ system is the one that allocates the
overall catch established under TAC to each
fisherman. The merit of this method is to diminish
the rivalry against other fishermen in an attempt to
catch more than others.
Furthermore this method is good in preventing
overfishing of the resources, checking the increase in
the catch and enabling sales of fish at the higher
prices because fishermen can engage in the fishing
when an eye set on the market end during the fishing
season.
The reduced energy for catch competition results
in the cost reduction on the part of fishermen. They
can chose the best timing of fishing at their own
judgment without making haste They can go out for
fishing when they want. Fishermen can generate
profit because they can operate by choosing the fish
they sell at higher prices. It enables fishermen to set
187

up their annual operational programs and develop
entrepreneurial strategy.
There is a case in which the IQ system was
introduced in Japan, although it was not a move on
the national and regional government level. The
individual quota system has been practiced for
northern shrimp or amaebi shrimp (Pandalus eous) in
Niigata Prefecture in 2011 (Figure 6)

FIGURE 6

This project was triggered by a remark of
Niigata Governor Hirohiko Izumida in a newspaper
in September 2008 that the recovery of fishery
resources is crucial not only for Niigata Prefecture
but also for the whole Japan. On reading the article I
lost no time in going to Niigata to meet Mr. Izumida
and proposed reconstruction of fisheries in Japan by
the introduction of the IQ/ITQ system.
Under the leadership of the Governor, the
Committee to discuss Introduction of New Stock
Management in Niigata Prefecture was established. I
was appointed Chairman of the Committee, and
discussion on the introduction of the IQ system
started.
The reason to have chosen northern shrimp as
the target species was that scientific data are
relatively abundant, the species migration is limited
within the prefecture and the prices are high.
Furthermore the northern shrimp fishery in Niigata
Prefecture is in a relatively small scale with the
number of participating enterprises standing below
40, and some areas are facing the issue of aging of
fishermen and lack of successors.
Northern shrimp is commonly called amaebi
in Japan and the three prefectures Ishikawa, Fukui
and Niigata account for 35% of catch volumes in the
Honshu main island. In the areas of Niigata, northern
shrimp mainly inhabit a depth of 300-600 meters.
The catch proportion is 30% caught by small scale
bottom trawlers in Joetsu District, 40% by shrimp
cage fishery near Sado Island, and 30% by offshore
bottom trawlers in the northern part of Niigata
Prefecture and into northern seabed of Sado.
The stock status is at an intermediate level.
Catch volumes which exceed 1200 tons in the peak
period had decreased to around 400 tons in 2011.
Stock status is deteriorating in Niigata area with the
proportion of small-size shrimp accounting for 40%.
The Committee to discuss the IQ system was
established in 2008. It included not only
representatives of fishermen and academic experts
but also representatives from distributors in the
market places such as wholesale sellers, retailers and
consumers. This was an epoch-making approach
related to fisheries policies in Japan. A wider
perspective is necessary to continue the project while
ensuring conservation of the stock.
The Committee started as a study meeting for
two years form 2008, and discussion of IQ
introduction started in 2010. At present the design
for the IQ system has been developed, including the
establishment of an IQ experiment to enlarge mesh
size of the nets in order to have small-size shrimp
escape, measures to assist business of fishermen, and
exchange of views in locations where the fishery has
actually taken place.
In the case of Niigata Prefecture in setting IQ,
the ratio versus TAC was calculated based on past
performance, and IQ was allocated to individual
fishermen.
IQ was allocated individually to cage fishermen
in Sado Island, and the group IQ was given to the
two off-shore trawling vessels based on Niigata City.
With respect to small scale bottom trawlers in Joetsu
District, IQ was given to each of five areas such as
Nadachi, Nou, and Itoigawa, establishing the upper
limit of catch for the entire Joetsu District. At the
same time, enforcement and submission of catch was
obliged area. Catch was limited, centering on
juvenile shrimp, and the decline in income caused by
such limitation was to be compensated.
For the period from 2011, the model project of
implementation of IQ has started in one of the areas
in Sado Island, and it was successfully concluded.
Although the catch had declined further due to an
unknown reason so far at 73.5% level as opposed to
average years, however, sales were at 76.8% level
which was a bit higher than the production. It was
apparent that the costs of operation were reduced,
and the season that was regularly closed was to
become open due to the new introduction of IQ for
July and August for the tourism season when the
prices were higher.
Starting from the August of 2012, the Governor
re-established the new Committee to review and
improve the recommendations that were submitted to
the Governor at the end of 2010 for IQ
implementation.
The Committee will discuss matters relating to
the expansion of IQ application to other areas and
fisheries and possibility to transform into ITQ for the
188

immediate future. The Committee is accompanied by
a sub-committee on market and business
management to look into the market mechanism,
price formation and elements affecting business
management in relation to stock management and
fishery regulatory policy.
IX. INNOVATION URGENTLY NEEDED FOR PROCESSING
TECHNOLOGY LAGGING BEHIND
The attributes of the decline of seafood
processing and industries in Japan are not only a
setback to Japans fisheries but also increase
operation overseas, where labor cost is cheap and
investment in modern plant and equipment is
relatively easy.
Further, as domestic catch volume declines, an
increasing number of processing plants in Japan
more and more depend upon the import of raw
materials.
The raw materials for dried horse mackerel and
salted mackerel are imported form Europe, including
Norway. The raw materials for fish-paste products
such as kamaboko and chikuwa are imported from
the United States, Thailand and India, in the form of
frozen surimi. On the other hand, there are cases
where small-size fish are now discarded because of
the time and labor required for processing.
Japan faces challenges in the area of freezing
and preservation technology and processing
technology when we consider the future of seafood
processing distribution and marketing in Japan. At
present the mainstay is simple freezing primarily
with the objective of providing raw materials (Table
2).

TABLE 2

But this technology alone will limit Japans
exports to those of primary materials to foreign
countries such as China. When compared with New
Zealand and European nations, Japan is evidently
lagging behind in these areas of technology. Japan
faces the need to introduce high-grade technology
and facilities.
At present, Japanese companies construct higher
grade HACCP plants and plants that can manage to
save energy and ensure high quality products by
means of IT as in China, Vietnam and Thailand.
But the occasion of the devastation by the
Earthquake and Tsunami shall be considered to be a
chance to innovate technology, product quality and
hygiene along with the restoration of the fish stock to
provide a stable supply of material for the
sustainable operation of both fishing vessels and
processing facilities with the reforms of fishery
legislation and regulations such as the Fisheries Law
and Fisheries Cooperative Law.
X. CONCLUSION
The innovation of the fisheries may not be
possible without the reform of fisheries legislation
and system reform. Countries like Japan maintained
for many years the out -dated legislation and
regulations to allow the Olympic system or the Race
for Fish, leading to overfishing and depletion of
stock. These vicious cycles will bring about the
retreat and lagging of the fisheries industries which
the Japanese government has tried to sustain with the
continuous provision of subsidies. The communities
and fisheries cooperatives were also protected by the
Law to keep the closed character of the fishery rights.
This led to aging and setback of the fisheries and
communities. These are preventive factors against
the innovation and modernization of the industries.
Given these circumstances, some of the Governors
stood up for reform to the systems and laws despite
the reluctance of the National Government providing
mostly subsidies policy.
The natural catastrophe caused the heavy
damage to the Tohoku region since all the facilities
and functions were lost. However It could be
considered to be an opportunity to bring about the
reform and renewal of the laws and system that
comes with the innovation of technology to advance
and modernize the current system.
Japans lessons will serve as a model case for
those countries which may experience the similar
problems of the lack of legislation or out datedness
of it and the depletion of fish stocks sooner or later in
the ASEAN nations.
By maintaining the stock for sustainable
resources the fisheries industries can be innovated
for modern industries. In so doing, the reform of the
system and laws will be critical elements to be
introduced in a timely fashion for future
sustainability and benefit for industry, community
and consumers.
ACKNOWLEDGEMENT
Acknowledgement is given to the Niigata Prefecture
and the Governor Mr.Hirohiko Izumida for providing
the opportunity to bring IQ and ITQ for designing
and implementation. I express the appreciation to
Mr.Yuki Takagi for serving as Chair for the
189

Committee for the reform of fisheries laws and
regulations of Japan. I thank assistance being
provided by Dr. Toyoko Ochi for compilation of the
relevant data.

REFERENCES

De Vos B. (2011). Trust and new modes of fisheries
governance. Wageningen: Wageningen University.
FAO. (2012). State of Fisheries 2012 Table. Rome:
Nihon Nation Food and Agriculture Organization.
Fisheries Agency, Ministry of Agriculture and
Fisheries. (2012). The White Paper on Fisheries in
2012. Tokyo: The Government of Japan
Komatsu, M. (2010). The day of disappear of fishes
on the Japanese Table. Tokyo: Nihon Keizaishinbun
Publishing Co. Ltd.
Komatsu, M. (2012). Who owns the Sea?. Tokyo:
The Japan Times.
Niigata Prefectural Government. (2011). The report
of the committee to discuss the new resource
management. Niigata City: Niigata Prefectural
Government.

190

Innovative Transformation in a Knowledge
Intensive Industry: A Case Study of an
Organizational Learning Based Enterprise
Yang Liu
1
, Sanetake Nagayoshi
1
and J unichi Iijima
1

1
Tokyo Insutitute of Technology, Graduate School of Decision Science and Technology, Department of
Industrial Engineering and Management, 2-12-1, Ookayama, Meguro-ku, Tokyo, Japan
{liu.y.af, nagayoshi.s.aa, iijima.j.aa}@m.titech.ac.jp
Abstract--This paper aims to discover the relationships
among organization structure, organization learning
process, and enterprise transformation. A case study is
conducted on Japanese company A, which is in a
transformation process from passive to active as
well as from production centered to service
centered. The research has contributed to academic
on the following aspects: (1) The authors find that the
readiness is an important factor for successful
enterprise transformation. This factor could be affected
by the organization learning process, organizational
culture and fundamental organizational structure. (2)
The authors have also provided a promising way of
analyzing enterprise transformation or innovation
related problems on a high (ontological) level from an
engineering perspective, which can greatly reduce the
complexity of problems with an obvious increase of
effectiveness and efficiency.
Keywords-- Organization Learning, SECI, Enterprise
Transformation, Enterprise Ontology, DEMO, Case
Study.
I. INTRODUCTION
Enterprises increasingly need to consider and
pursue fundamental change, such as upgrading
current business, making innovations such as
expending, M&A, globalization etc., to maintain or
gain competitive advantage. To distinguish from
traditional routine changes, fundamental change is
defined as enterprise transformation (Rouse, 2005).
It is enabled by work process change to approach
value deficiency, which requires allocating of
attention and resource to make the enterprise
anticipate and adapt to change with resources to
yield further enterprise state (Rouse, 2005).
Enterprise transformation is a more innovative and
strategy related change that it influences multiple
aspects of an organization, for illustration: routine,
organization structure, human capital, marketing
strategy and so on. It is more difficult to model and
manage compared with low level changes (Op`t
Land, M. , etc., 2009, 2012).
Enterprise transformation, compared with
organization learning, is always a process of
detecting and correcting errors (Fiol and Lyles,
1985) to improve the organizations value creation
capabilities.
However, existing academic literature lacks
further discussion about how enterprise
transformation and organization learning affect each
other. Authors have argued that exception handling
or organization learning process is the trigger that
encourages enterprise transformation. Other
knowledge management processes such as SECI
(Nomura, Toyama & Konno, 2000) together with
culture change, structure change will increase the
readiness for transformation. Thus they will ensure
successful transformation.
The remainder of the paper is organized as
follows: First, relative research methods are
introduced in section 2. After that, two
transformation case studies of a J apanese system
integration company are introduced in section 3.
Next, the cases are analyzed with our assumption in
section 4. Some additional findings are discussed in
section 5. Finally, the limitations of this study and
implications for future research are described in
section 6.
II. RESEARCH METHOD
A. Engineering Viewpoint
Given the complexity of change, several
researchers have argued that enterprise
transformation should be considered from a modular
and systems perspective instead of from a workflow
perspective. When business is conceptualized and
modularized, similar businesses can be managed
using the same dominant logic (Bettis & Prahalad,
1995), thus the complex of change can be simplified
and become analyzable. Opt Land & Dietz (2012)
suggest that DEMO (Dietz, 2006), an enterprise
ontology, can be used for modeling enterprise
191

transformation with a highly reduced return on
modeling effect (ROME).
DEMO is an enterprise ontology used to
describe the essential structure of an enterprise
without getting into implementation details. It
includes four aspect models: the Construction Model,
Process Model, Action Model and State Model
(Dietz, 2006).

The interaction model (IAM) included in the
construction modelof DEMO, as shown in Figure. 1,
aims to describe the construction of an enterprise by
defining:
Transaction: A sequence of acts between two
actor roles. Including: communication loop acts
(request, promise, state and accept) and
production acts.
Actor Role: The actor role defines
responsibility, authority and capability. As
shown in Figure 1, A01 is an actor role which
initiates the transaction T02, and A02 is the
actor role that executes the transaction (T02).
Transaction and Result Table: As shown in
Table 1., each transaction has a result, that
expresses how the transaction changes the state
of the given world.

FIGURE 1: ATD

TABLE 1: TRT
Transaction Result
T02 Prepare R02 Pizza P is prepared

By using DEMO IAM model, the main structure
of organization as well as how the main business is
completed, who is involved, what responsibility they
take and what are the results, can be totally clarified
without getting into implementation details.
Several works have been contributed based on
DEMO. (Aveiro 2010) discussed how to
automatically detect and address dysfunctions for
exception handling using DEMO from an
engineering viewpoint. Furthermore, (Nagayoshi,
Liu & Iijima, 2012) developed patterns for exception
handling, not only considering routine change but
also structure change and action rule change. From
the value creation viewpoint, Pombinho (2012, 2011)
connected the construction of an enterprise with the
concept of value to analyze whether we do the right
thing by analyzing the value stream.
DEMO is used as an enterprise transformation
description method in this research.

B. Qualitative Research
From the engineering viewpoint, qualitative
research was conducted. The case study was on the
strength of four interviews with several managers of
Company A, including:
The first interview: Director of Company A;
The second interview: CEO and technical
director of Company A;
The third interview: sales manager and
technology manager from the second solution
division;
The fourth interview: sales manager and
technology manager from the first solution
division.
Each interview lasted for about 2-3 hours.
Results of the interviews are organized and analyzed
in the following sections.
III. CASE STUDIES
Company A is a J apanese IT company which
was founded in 1969 as a software provider. After a
long period of growth, several well known
application packages were designed and developed
in the early 1980s. One of them, the accounting
system for local government, was awarded as an
outstanding information system. Now it is a
primary business of the first solution division.
Afterwards, Company A expanded its business
into system integration area from late 1980s. In such
business, it is the primary company that undertakes
to help customers analyze their requirements, as well
as provide solution plans. As a sub-constructor,
Company A dispatches work to users firms to
finish assigned tasks according to upper level
primary constructors solutions. This is the primary
business of the second solution division.
However, with the evolution of new technology
(cloud computing, etc.) and the keen competition in
the IT area, Company A had to find out other
business opportunities to be more competitive. The
transformation inside the company includes the
following two business logic changes for different
solution divisions:

From the passive type of business to the active
type of business in the second solution division;
From a software package provider to an
application service provider (software as a
service type of business) in first solution
division.
Two transformation cases are described in the
following sections. The description for each case is
based on DEMO IAM. Each case was conducted
from three changing aspects: (1) Construction
change; (2) Knowledge structure change and (3)
Mindset/culture change.
192

C. From Passive to Active
It was the transformation that occurred in the
second solution division in company A. As a system
integrator before transformation, company A mainly
played the role of a sub-constructor. In regular cases,
it is the primary constructors who do have the know
how to provide solutions for fulfilling a customers
requirements. Sub-constructor just needs to dispatch
skilled workers, who have different unit prices
according to different skill levels, to the customer`s
side for software development according to primary
constructors requirements. In this type of business, a
sub-constructor does not need to have too much
knowledge about a customers business. Also, it is
not necessary for them to manage the schedule and
risk of the whole project. The primary constructor
takes the responsibility for all these instead. The
revenue is calculated by multiplication of unite price
and work time.
A construction model of this type of business is
shown in Figure 2.

FIGURE 2 ATD OF THE SECOND GROUP BEFORE
TRANSFORMATION

Company A has proceeded with this type of
business for about 10 years. One of the biggest
customers as a sub-constructor is Company B, one
of the biggest J apanese IT infrastructure and systems
integrators. They accumulated plenty of experience
not only in software development but also know
how in different business sectors especially in the
billing system. All these advantages drive their
transformation from being a sub-constructor to
becoming a primary constructor.
As a primary constructor, Company A provides
another type of contract choice: (Request for
Proposal). In the new model, it was Company A who
was responsible for delivering a final solution with
controlled time, quality and fixed cost. The whole
solution includes: requirement analysis, IT system
design, software development, testing, etc.
The construction model of Company A for
running this new type of business is shown in Figure 3.
The first successful case of this new type of
business is Project C in the year 2009.
Company C is a traditional distributor in
J apan. In 2009, Company C planned to employ a
new service product, but they needed solutions for an
effective billing system to support this new business.
Company A was chosen as the solution provider.
This project lasted from October, 2010 to October,
2011, for one year.
By interviewing the project manager and the
primary sales person in the second solution division,
the transformation was concluded from three aspects
including what changed and how it changed.

Construction Change: from Route sales to
Pre-sales
What changed:
As shown in Figure 2, in the route sales model,
Company A did not need to propose their solutions.
The sales person who played in the actor role A01
as contract dealer passively sold the own human
resources, the available skilled workers who could be
dispatched to the customer`s side. On basis of a good
understanding of primary constructors requirements,
sales person provided information on their staff and
made contract with the customer by counting people
by hour. We can clearly see that the transactions
T00, T03 and transaction T06, T09 were not
businesses of Company A before change.

FIGURE 3 ATD OF THE SECOND GROUP AFTER
TRANSFORMATION & ATD OF THE FIRST GROUP
BEFORE TRANSFORMATION

193

However, in the new business logic, the old T00,
T03, T06, T09 become part of the business of
Company A after change. It is not the salesman
themselves but a proposal group who was involved
in the sales process. As shown in Figure 3, three new
transactions (T08, T09, and T10) are added as sub-
transactions of transaction T01, which means that to
finish the new type of sales (pre-sales) Company A
needs to analyze customers' requirements, propose to
customers, and make cost estimation. Only when all
these transactions are finished, Company A can
finish the sales process to make a contract.
The corresponding actor roles (A08, A09 and
A10), related with each transaction, define new
requirements of capability, responsibility and
authority of an actor who plays the actor role.
Thus the proposal group includes:
A pre-sales person who can play A08 as a
requirement analyzer, with the capability to
understand customers requirements very well;
A pre-sales person is also required to fulfill
A10 as cost estimator with the responsibility
of estimatig cost and negotiating the price with
the customer based on the solution.
Consulting staff who can play A09 as proposal
designer, with the capability of understanding
technical details as well as designing and
proposing solutions to customers.

How it changed:
For doing the new type of business, additional
communication skills, proposal skills, and know-
how are required. Especially a pre-sales person who
can play actor role A08 and A10 is required.
However, Company A did not have enough
capability when they focused on dispatch of business.
Being a subsidiary company of a big IT company, it
was not difficult for Company A to invite several
experienced sales person with pre-sale skills from the
big company to join. With the lead of such
experience in pre-sales, the sales person inside the
company obtained more knowledge about pre-sales.
The proposal group was built in Company A,
including pre-sales, a manager, and consultants to
play the actor roles of A01, A08, A09 and A10
together. The proposal group integrates closely
with customers to actively understand their business
and their requirements, and then proposes a suitable
solution. Cost, risk, and schedule need to be carefully
estimated and managed. When the proposal is
accepted by the customer, the analysis and design
process will be in progress until final deliver is
confirmed by the customer.
Project management method change:
What changed:
In the dispatched business model, the primary
constructor or the customer managed the project to
control cost, quality and schedule.
However, in the new business model, all the
responsibilities are taken into account by Company
A, thus it needs to do cost control, project schedule
and quality control.
In Figure 3, for transactions T01, T04, T05, T06,
T07, though they have similar construction compared
with the traditional ones, the action rule for the actor
role has changed. For project management, the
content of T05, work plan changed with the
expanded plan requirement, such as cost control, and
quality control.
As a primary constructor, they also dispatch
work to sub-constructors according to their work
plan. The additional transaction T02, sub-
construction can be initiated by the project manager
in Company A.

How it changed:
It was a big challenge for managers in the second
solution division. Their solutions were practical
experience and on-job training.

Knowledge structure change:
What changed:
Route sales persons did not need to have
compact knowledge about customers business and
technical details of the solution. Also, technology
staff did not need proposal skills. It was not
necessary for both to have estimation knowledge
about cost and risk control.
However, it is necessary for the sales group to
have such knowledge to proceed with the proposal
type of business as a prime contractor.

How it changed:
As we mentioned before, by inviting
experienced pre-sales persons to join Company A,
the company obtained such capability as doing
proposal sales. Additionally, training courses related
with cost estimation, project management and
proposal skills were introduced to enhance
employees knowledge of structure evolution.
Also, the most important training was on-the-
job-training which made their staff be involved in
the project to grow their skills quickly and
effectively. After the first Project B had been
finished, Company A requested the project members
to conduct lectures sharing knowledge and
experience with all the staff inside the company.
194

Mindset/culture transformation:
What changed:
The request for proposal type of business
forces Company A to actively integrate their
resources for proposing and fulfilling customers
requirements rather than passively selling their
existing resources. Correspondingly, a culture
transformation from the passive mode (waiting for,
and according to) to the active mode (looking
for and plan to) is required.
However, it was difficult to progress with the
new type of business without a positive working
mindset and competitive spirit. Normally employees
did not want to change their current work style
especially with high risk before this first successful
project.

How it changed:
Company A successfully encouraged the
mindset transformation through these three ways:
Top-down encouragement:
Because of the shrink age in dispatched business,
the boards of directors decided to transform from the
dispatched type of business to the proposal type of
business. After serious research, the CEO gave
several lectures for the necessity and benefits of
introducing the new type of business. It could be
traced back to the year 2009. This encouraged the
employee mindset to change, for it made the entire
company realize that this was a change they had to
proceed.
Environmental motivation:
As we introduced, Company A has 40 years of
IT experience. Middle age (40s) staffs were not so
positive in learning new things and undertaking the
challenge. This was a barrier for the transformation.
At the beginning stage, Company A chose those
employees who are eager to challenge to be involved
in the new type of project. They also planned plenty
of on-the-job training to assist these employees to
grow. The change in these employees and success of
the project improved confidence for doing this type
of projects, hence it revivified motivation.
Also, their knowledge sharing mechanisms
assisted the mindset transformation. Meanwhile, a
spirit system was introduced to encourage culture
change from passive mode to active mode.
The interviewers confirmed that most of the
company employees became more positive to such
proposal type of business after this project.
Standardization of new business logic
By successfully completing the first proposal
type of project, Company A standardized the
proposal process and built a Primary Center to
open up new business opportunities. It was a
development center composed of pre-sales persons
and consultants to provide entire solutions. This
center not only develops their own business based on
their know-how, but also integrates with the other
companys products to propose to customer the best
solution.
By the time of interview, approximately 10% of
revenue was obtained by this proposal type of
business in the second solution division.

D. From Product to Service
This is a transformation in the first solution
division of Company A which focused on package
business before transformation.
Local government support is a traditional
business in the first solution division of Company A.
As a package vendor, their position is defined as
serving small and medium cities and towns in J apan,
which distinguished Company A from other e-
government production vendors.
It will not be competitive for Company A unless
it can transform from being a package vendor to a
service provider.
Company A made the first step by successfully
providing application service to regional
government D. Primary challenges, transformations
and solutions were concluded as follows:

Construction Change:
The original construction model of the first group
in Company A is the same as shown in Figure 3.
In order to provide a service instead of selling
products, the first thing to be added is risk control. In
the new type of business logic, sales persons need to
estimate cost and risks for providing the service
before proposing. As a service provider, Company A
has to consider the risks of service and getting them
under control. A new transaction T11 is added, as
shown in Figure 4.
For transaction T05, it is not the order completer
but the product manager who initiates T05, in order
to make the work plan before they get the order.
As a service provider, T04 and T07 remains the same
but the action rule change. For T04, Company A
supplies a service to a customer instead of producing
to order. Accordingly, the rule of T07 payment
changes as well.

195

FIGURE 4 ATD OF THE FIRST GROUP AFTER
TRANSFORMATION

Knowledge structure change:
The knowledge for cost estimation mentioned
above, risk control and service quality control, such
as service reaction time, recovery time, error rate,
etc., were all new but necessary additional
knowledge for making the transformation from
product to service.

How it changed:
The first solution division obtained the
required capability through the learning process.
They asked other experienced consultants to gain
such knowledge. Also, they learned by practice.
Mindset/Culture change:
What changed:
The transformation from products to service
required corresponding mindset transformation from
products to service (Prahalad & Bettis, 1986, Vargo
etc., 2008, Vargo & Lusch, 2008).

How it changed:
The mindset change was traced by the evolution
of virtual machining computer technology and
environmental motivation.
FIGURE 5 FIVE STAGES IN ENTERPRISE TRANSFORMATION

196

IV. ASSUMPTIONS AND ANALYSIS
In Company As case, we concluded that the
enterprise transformation includes five stages, as
shown in Figure 5. Five Stages in enterprise
transformation.
S0 (TDL): Traditional Dominant Logic Stage
S0 is the beginning stage. In this stage, the
enterprise ran traditional business with the traditional
dominant logic.
S1 (P): Preparing Stage
In this stage, though the organization retains the
traditional dominant logic, it is preparing for change
because of value deficiencies, environmental
forces, existing defects, exceptions or other factors.
Individuals achieve corresponding knowledge as
well as skills, trust and passion, tension, etc. These
factors are inside individuals in the organization, so
we call it tacit knowledge. In S1, tacit knowledge is
accumulated by having experience of the new type of
business.

S2 (TF1): Transforming Stage 1.
Transforming Stage1 is the stage whose new
business logic is added to the current business
structure, though it participates only to a very small
percentage without becoming dominant logic.
In this stage, the organization has had experience
of how to handle the new type of business. There are
some documents, routines and methodologies
accumulated as organizational knowledge.

S3 (TF2): Transforming Stage 2.
In transforming Stage 2, the new business is
growing. It takes more and more at a percentage in
the whole business structure so that the organization
begins to change its dominant logic to include the
new type of business.
In this stage, the organization has more
experiences on the new type of business. New
knowledge has been accumulated and combined with
existing knowledge. The related documents, routines
and methodologies are standardized as the guide for
new business logic.

S4 (NDL): New Dominant Logic Stage
Run in new dominant logic. The changed
dominant logic targets at the best performance.
Traditional business and new business is balanced.
Thus, the transformation finished.
A. Transitions in the transformation process
As Figure 6 shows, the transformation from
Stage 0 to Stage 4 is an organization at learning and
knowledge creation process. It can be concluded and
mapped with the SECI model (Nonaka & Takeuchi,
1995) to specify how organization learning supports
transformation.
Transformation includes four transitions:
Socialization, Externalization, Combination, and
Internalization.

Transition S: From S0 to S1 (Socialization)
This is a transition from the traditional dominant
logic stage to the stage of preparation for change.
Tacit knowledge, such as knowledge, skills,
confidences, trusts and so on, is accumulated.
Individuals obtain such tacit knowledge by learning
process. It could be training or experiences.
In Company As case, the staffs accumulate tacit
knowledge of the billing system through a lot of
working experiences with Company B. This is the
tacit knowledge Company A had before considering
the transformation.
Meanwhile, when Company A began to consider
the transformation, it hired experienced pre-sales
persons who had tacit knowledge of the new type
business. Thus tacit knowledge is obtained.

FIGURE 6 SECI FOR ENTERPRISE
TRANSFORMATION

Transition E: From S1 to S2 (Externalization)
This is a process of transition from preparing for
change to the stage of running a new type of business.
In this stage, tacit knowledge in persons is
externalized as explicit knowledge.
The externalization is realized by
conceptualizing tacit knowledge through multi-
methods. Symbols, figures, and other methods are
utilized to express tacit knowledge inside individuals.
This explicit knowledge for enterprise transformation
could be new process documents, routines, problem
solving methodologies.
As a knowledge representation methodology,
engineering methodology assists externalizing tacit
knowledge of enterprise structure. By DEMO
construction model, traditional business structure and
the new business structure can easily be compared.
As shown in Figure 2 and Figure 3, the T02, T08,
T09 and T10 in Figure 2 are newly defined
transactions with corresponding actor roles. Actor
197

roles in DEMO define authority, responsibility,
and capability, thus the accession of new actor
roles means the requirement of such operant
resources with corresponding capabilities and
knowledge.
Handling exceptions can also trigger such
externalization process. In Company As case, the
externalization of tacit knowledge is through its
exception handling process. Company C and Local
government D were both the exception cases that
were different from Company As traditional
business. The exception handling processes in
Company A were not single loop learning (Argyris
& Schon, 1978), which focuses on routine change,
but double loop learning (Argyris & Schon, 1978)
with development of more complex rules and
associations regarding the new business.
This learning process demands correspondingly
upgraded organizational knowledge structure. For
Company As knowledge structure in an as-is
model, Company A did not have such capability to
support the to-be business. One of Company As
solutions was to hire experienced pre-sales persons
that had related tacit knowledge. In the learning
process, this tacit knowledge was externalized as
procedures, project documents, and templates and so
on.
For staffs who are involved in such a project, the
experience of acting as a primary constructor is a
socialization process that increases their tacit
knowledge as well.

Transition C: From S2 to S3 (Combination)
This is a process of expanding the new type of
business.
In this process, new achieved explicit
knowledge is combined with existing or other new
achieved explicit knowledge to improve the current
system.
In Company As case, after the success of
delivering their first active type of business, they
did a series of systemizing works. Primary center
was created to continue this type of business, with
new developed solutions for other industries besides
billing system. Project Cs business and
externalized knowledge is taken as a new standard;
the same as software as a service type of business.

Transition I: From S3 to S4 (Internalization)
As figure 6 shows, it is a process of internalizing
explicit knowledge into individuals. By defining
routines and rules, and sharing experiences, the new
explicit knowledge is accepted by other individuals
in the organization and internalized as part of their
tacit knowledge.
In Company As case, because of the successful
experience of two exception handling projects,
together with the standardization of new business,
more and more employees accepted the change,
furthermore they had intention to learn and wanted to
be involved in similar projects. Explicit knowledge
of doing such project is internalized.
The SECI model is not a sequential type of
learning but a spiral type of improvement. The
increasing intension, confidence and benefit change
the staffs mindset and Company As culture with a
more active atmosphere for expanding the new
business. With more experience and the
externalization, combination and internalization loop,
Company A will be able to complete its
transformation.
By the time of interview, Company A was in the
beginning of Transforming Stage2. The revenue of
new business occupied only 10% of the whole. With
the growth of the new type of business, Company A
planned to transform the dominant business logic of
its second division into with the active type of
business in the near future, the same with the first
solution division. The SECI model and learning
process were continuing in Company A.

V. DISCUSSION
As a knowledge intensive company, Company
As transformation was strongly related to its
organizational learning and knowledge creation
process. When they become aware that the
requirement of change is a double loop learning
process, they decided not just change at the routine
level but at the rule, dominant business and structure
level.
By coping with the organizational learning
process, externalized relative knowledge, as an
output of E (Externalization) process or C
(Combination) process, is accumulated in the
organizational memory (Levitt & March, 1988). The
content of organizational memory can be internalized
as tacit knowledge, thus it affects the organization
culture and mind set.
In our case, the transformation has not had a
significant effect on KPIs (Key Performance
Indicator) or other performance indicators up to now.
However, by analyzing SECI process, we can see an
improved and dynamic change in readiness, as
shown in Figure 6. This indicator describes how
ready a company is prepared for change, from
knowledge, resources and procedures perspective.
When the readiness for transformation is reached
through this continuous accumulation process, the
enterprise can easily be transformed into the new
business.
The readiness for transformation increases in the
process of learning, knowledge is socialized,
externalized, combined and internalized. It is also
affected by organizational structure change and
culture change.
198

This research benefits from the engineering
viewpoint in these two aspects:
By analyzing the DEMO IAM model, structure
characteristics under business change could be
simplified and analyzed.
The actor roles defined in DEMO represent
capability, responsibility, and authority.When
the structure of responsibilities and required
capabilities can be predefined, innovation
methods or transformation can be easily
analyzed and produced.

VI. CONCLUSION
Company As transformation process is
analyzed from the organization learning and
knowledge creation perspective in this paper. Our
research contributed to academic learning from the
following aspects:
Five stages of enterprise transformationare are
defined and used to explain how the learning
and knowledge creation process (SECI)
supports enterprise transformation.
Discovery of how organization learning can
trigger and hence support enterprise
transformation.
For a knowledge intensive company, an
effective knowledge creation process will enhance
the readiness for organizational transformation, thus
assist enterprise transformation:
Handling exceptions will accelerate the
knowledge creation process as a trigger.
Coping with exception is discovered to be a
trigger of transformation from socialization to
externalization.
Coping with exception is discovered to be a
trigger from externalization to combination.
This research is a qualitative study without
quantitative proof. More formal discussion is
necessary on the indicator readiness. The results
are related to knowledge intensive companies, but
should not be limited to this sector. These problems
will be analyzed in our further research.
ACKNOWLEGEMENT
The authors thank the CEO, the director, the
senior manager, the sales managers and the
technology managers in Company A, who kindly
dedicated time to our research work. We could not
archive our work without their generous cooperation.

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199

I-Sight Mouse
An Innovative Aid for Disabled People with Limited Use of Hands Using
Image Processing Technique

Hasrul Reeza
United Nations University / The National University of Malaysia: Department of Public Health
Kuala Lumpur, Malaysia; hasrulreeza@gmail.com
W. M. Syahrir
University Malaysia Pahang: Faculty of Computer Science and Software Engineering
Pahang, Malaysia; wmsyahrir@ump.edu.my
S. M. Aljunid
United Nations University: International Institute for Global Health
Kuala Lumpur, Malaysia; saljunid@gmail.com
Zafar Ahmed
The National University of Malaysia: Department of Public Health
Kuala Lumpur, Malaysia; zafar.he@gmail.com
S. M. Hamzah
Casemix Solutions Sdn. Bhd.
Kuala Lumpur, Malaysia; s.hamzah@casemix.com.my

Abstract In the past few years technology has
immensely increased, but at the same time has become
less expensive. With the availability of necessary
resources, people have become interested in real-time
applications that involve image processing. The i-Sight
Mouse was developed to help detect and track facial
movement to able to control of mouse application by
using machine vision (webcam). There are existing
systems that do similar functions but have much room
for improvement that is why the i-Sight Mouse was
developed. It is used for people with disabilities, who
have limited use of hands or fingers and have the need
to interact with a computer. These people can use a
computer just by using the movement of head and
facial muscles by aid of the i-Sight Mouse. There are
two modules in this system. These include: face
recognition and face tracking. The face recognition
module is a prerequisite module necessary before
executing the face-tracking module. By implementing
image-processing techniques the system is able to do
the face recognition process and then the face tracking
process can be enabled. The face recognition module
is used to capture a video frame, and enhanced facial
image so as to establish it as a human face. Face
tracking is based on predicting the place of the facial
feature in the captured frame based on its location in
previous ones (face recognition module); template
matching and some heuristics are applied to locate the
features new coordinates. By tracking the eyes the
system is able to simulate the movements of a
conventional mouse; users can operate it by blinking
the right and left eye just as a normal operator will
use right and left clicks of a conventional mouse. The
nose tip is tracked and its movement and coordinates
are used as the movement and coordinates of the
mouse pointer. The system was developed using
Extreme Programming as the software development
model, which is intended to improve software quality
and responsiveness to changing customer requirements.

Keywords face recognition, face tracking,
image processing, real time processing
I. INTRODUCTION

The current evolution of computer technologies
has enhanced various applications in the human-
computer interface. Face and gesture recognition is a
part of this field, which can be applied in various
applications such as in robotic, security system,
drivers, monitors, and video coding systems. One of
the promising fields in artificial intelligence is HCI
(Human Computer Interaction), which aims to use
human features (e.g. face, hands) to interact with the
computer (Hjelmas & Low, 2009).

There are people, often children or teenagers,
who were born with physical disabilities (typically
with cerebral palsy or other neurological
disorders). These folk may never have learned to
read and are not familiar with using a
computer. They might not have any communication
system at all. They might not understand cause and
effect, that actions on their part can cause events in
the world. These people have a right to get the
opportunity to have a normal life like having jobs,
communicate with each other and also have
entertainment, and be treated like normal persons.
The other kind of disabled people are adults who
learned to read and use a computer but then lost their
physical ability to use the computer because of an
accident or stroke or degenerative disease.

One way to achieve that is to capture the desired
feature with a webcam and monitor its action in order
to translate it into some event that can communicate
with the computer. By developing the i-Sight Mouse
it will help people who have hands disabilities that
prevent them from using the mouse. This application
uses facial features (nose tip and eyes) to interact
with the computer.

200

The nose tip was selected as the pointing device.
The reason behind that decision is the location and
shape of the nose; as it is located in the middle of the
face it is more comfortable to use it as the feature that
moves the mouse pointer and defines its coordinates,
not to mention that it is located on the axis that the
face rotates about, so it basically does not change its
distinctive convex shape which makes it easier to
track as the face moves. Eyes were used to simulate
mouse clicks, so the user can fire these events as he
blinks.

There is a system that has been developed to
capture head movement for the control of cursor
movement to help people with disabilities use the
computer. Prof. Margrit Betke and Prof. James Gips
developed the Camera Mouse. Camera Mouse works
as a mouse replacement system for Windows
computers so it should work with just about any
application program. For example people use
Camera Mouse with entertainment programs,
education programs, communication programs, web
browsers, and so on. Camera Mouse works best with
application programs that require only a mouse and a
left click and that do not have tiny targets. It is easier
to use Camera Mouse with application programs that
do not require extreme accuracy. Right now, this
Camera Mouse system is supported in Windows
Vista or Windows XP systems and it needs a
standard USB webcam (Gips Betke & Flemming,
2000). The system involves two computers: the
vision computer, which does the visual tracking, and
the users computer, which runs a special driver and
any application software the user wishes to use.
Figure 1 shows the scheme of the interaction.

FIGURE 1: THE CAMERA MOUSE SYSTEM
(Gips Betke & Flemming, 2002)

A. The Vision Computer

Initially the operator uses the camera remote
control to adjust the pan-tilt-zoom of the camera so
that the persons face is centered in the image. The
operator uses the mouse to click on a feature in the
image to be tracked, perhaps the tip of the users
nose. The vision computer draws a green 15 by 15
pixels square centered on the point clicked and
outputs the coordinates of the center of the square.
These will be used for the mouse coordinates by the
users computer. Thirty times per second the vision
computer receives a new image from the camera and
decides which 15 by 15 square sub image is closest
to the previous selected square. The vision computer
program examines 400 15 by 15-trial square sub
images around the location of the previously
selected square. The program calculates the
normalized correlation coefficient r(s, t) for the
selected sub image s from the previous frame with
each trial sub image t in the current frame (Gips
Betke & Flemming, 2002).

Where A is the number of pixels in the sub image,
namely 225, and

The trial sub image with the highest normalized
correlation coefficient in the current frame is
selected. The coordinates of the center of this sub
image are sent to the user computer. The process is
repeated for each frame. If the program completely
loses the desired feature the operator can intervene
and click on the feature in the image and that will
become the center of the new selected sub image.

B. The Users Computer

The users computer is a Windows 98 machine
running a special driver program in the background.
The driver program takes the coordinates sent from
the vision computer, fits them to the current screen
resolution, and then substitutes them for the mouse
coordinates in the system. The driver program is
based on software developed for the EagleEyes
system; an electrode based system that allows for
control of the mouse by changing the angle of the
eyes in the head (Gips Betke & Flemming, 2002).

Many programs require mouse clicks to select
items on the screen. The driver program can be set to
generate mouse clicks based on dwell time. With
this feature, if the user keeps the mouse pointer
within, typically, a 30-pixel radius for, typically, 0.5
second a mouse click is generated by the driver and
received by the application program as shown in
Figure 2.

FIGURE 2: TEMPLATE AND SEARCH WINDOW
POSITIONS


201

The experience with the Camera Mouse system
is very encouraging. Figure 3 shows how people
interact with the Camera Mouse. It shows that the
Camera Mouse can successfully provide computer
access for people with severe disabilities. It is a user-
friendly communication device that is especially
suitable for children. The system tracks many body
features and does not have any user-borne
accessories, so it is easily adaptable to serve the
special needs of people with various disabilities.

FIGURE 3: THE CAMERA MOUSE USER INTERFACE
(Gips, 2009).

II. RESEARCH SCOPE

The main users for the i-Sight Mouse application
are people who do not have reliable control of hands
but can move their heads. The system environment
uses windows operating system that fits with the
JAVA Runtime Environment (JRE) and JAVA
Media Framework (JMF). To control the mouse
pointer, various points were tracked ranging from the
middle distance between the eyes, to the nose tip. In
order to do that Face Detection Algorithm is used. A
Six Segmented Rectangular (SSR) filter used to
reduce the area focused looking for the face and the
eyes. In order to facilitate the use of SSR filters an
intermediate image representation called integral
image will be used. With this representation
calculating the sectors of the SSR filter becomes fast
and easy. The restriction on using the i-Sight Mouse
is that the face position must be in the center of the
screen and the distance is about 35 cm from the
screen. The light source must be controlled to be
frontal to the face.
III. IMAGE PROCESSING TECHNIQUES

FIGURE 4: CONCEPTUAL MODEL

A, General Process

The i- Sight Mouse was built based on the basis
of this concept, which starts with recognition and
then tracking of the recognized picture. So in this
major process there are some of image processing
technique implied.

B. Face Detection

Face detection has always been a vast research
field in the computer vision world, considering that it
is the backbone of any application that deals with the
human face (e.g. surveillance systems, access
control). Researchers have not spared any effort or
imagination in inventing and evolving methods to
localize, extract, and verify faces in images.Early
methods are dated back to the 1970s, when simple
heuristics were applied to images taken with certain
restrictions (e.g. plain background, frontal view).
These methods however have improved over time
and become more robust to lighting conditions, face
orientation, and scale. Despite the large number of
face detection methods, they can be organized in two
main categories: Feature-based methods, and image-
based methods (Hjelmas & Low, 2009).

C. Six Segmented Rectangular Filter (SSR Filter)

In order to achieve high speed and reliable face
detection, the system need to combine both feature-
based and image-based approaches to detect the
point between the eyes (Between-the-Eyes) by using
a Six-Segmented Rectangular filter (SSR filter). The
SSR filter, which is a rectangle divided into six
segments, operates by using the concept of the
bright-dark relations around the Between-the-Eyes
area. Between the Eyes is selected face
representation because it is common to most people
and easy to find for a wide range of face orientations.
Between the Eyes has dark parts (eyes and
eyebrows) on both sides, and has a comparably
bright part on the upper side (forehead), and lower
side (nose and cheekbones). This characteristic is


202

stable for any facial expression. The proposed SSR
filter is used to detect the Between-the-Eyes area
based on two characteristics of face geometry.

FIGURE 5: SIX SEGMENTED RECTANGULAR
FILTERS

D. Integral Image

An intermediate representation of image called
integral image is used to calculate sums of pixel
values in each segment of SSR filter (Sawettanusorn
et al., 2005). Firstly, the SSR filter is scanned on the
image and the average gray level of each segment is
calculated from the integral image. Then, the bright-
dark relations between each segment are tested to see
whether its center can be a candidate point for
Between-the-Eyes.

E. Support Vector Machine (SVM)

Support vector machines (SVMs) are a set of
related supervised learning methods used for
classification and regression. A support vector
machine constructs a hyper plane or set of hyper
planes in a high-dimensional space, which can be
used for classification, regression or other tasks. A
good separation is achieved by the hyper plane that
has the largest distance to the nearest training data
points of any class (so-called functional margin). In
general the larger the margin is the lower the
generalization error of the classifier. It will be used
for face verification when Between-the-Eyes is
verified (Support Vector Machine, 2009).

FIGURE 6: HYPER PLANES WITH THE MAXIMAL
MARGIN

F. Skin Color Model

It is believed that people from different races
have the same skin color but they differ in lighting
intensity of that color (Prem et al., 2002). In order to
find a suitable skin color model, according to the
previously mentioned idea, there is a need to use the
pure r and g values, which are the R and G values of
the RGB color model in the absence of brightness
(Kawato & Ohya, 2000), and they are calculated
with the following equations:

r = R / (R + G + B)
g = G / (R+ G + B)

The r and g values are moved to the (a, b) color
space with the following equations:

a = r + g / 2
b = 3 / 2 g

The range of a is from 0 to 1, while the range
of b is from 0 to 3 / 2.

When the a and b values for each of the
samples have been calculated is increased the
counter of each value (a has 101 counters, b has
88 counters). The values that are most frequent are
considered as skin pixel values, so after plotting the
a and b results we deduce the following
thresholds for a, and b to consider a pixel as a
skin pixel:

0.49 < a < 0.59
0.24 < b < 0.29

G. Sum of Square Difference (SSD)

The value used in the tracking process is the
sum of the squared differences (SSD). A window
that has the features template size is scanned over
the Range of Interest (ROI) and the SSD between the
template and the current window is calculated. After
scanning the entire ROI the window that has the
smallest SSD is chosen as the templates match, and
its location is considered as the features new
location. In order to achieve faster results; while
calculating the SSD, if its value is still smaller than
the smallest SSD so far, it skip to the next window in
the ROI, because the current SSD will not be the
smallest one (Kawato & Ohya, 2000).

H. Motion detection

To detect motion in a certain region we subtract
the pixels in that region from the same pixels of the
previous frame, and at a given location (x, y); if the
absolute value of the subtraction is larger than a

203

certain threshold, we consider there was motion at
that pixel.

I. Blink Detection

We are applying blink detection in the eyes
ROI before finding the eyes new location. The blink
detection process is run only if the eye is not moving
(we consider the eye as not moving if it did not
change its location in the past two frames), because
when a person uses the mouse and wants to click, he
moves the pointer to the desired location, stops, and
then clicks; so basically it is the same for using the
face: the user moves the pointer with the tip of the
nose, stops, then blinks. To detect a blink motion in
the eyes ROI is applied; if the number of pixels
motion in the ROI is larger than a certain threshold
we consider that a blink was detected, because if the
eye is still, and a motion in the eyes ROI is detected,
that means that the eyelid is moving which means a
blink (Kawato & Ohya, 2000).

IV. METHODOLOGY

A. Process for Face Recognition Modules

FIGURE 7: FACE RECOGNITION PROCESS

As shown in Figure 7, before the system finds a
candidates face the video frame needs to be
processed by image processing techniques. First the
input video frame needs to be extracted pixels by
using java class PixelGrabber. The PixelGrabber
grabs the pixels from the image and puts them in the
desired array. Then the image need to be in gray
scale which is to extract the red, green, and blue
bands of the image and convert them to the hsb color
model.

After getting the gray scale image, the image
will convert to a binary image array. Before going
through the SSR filter the image will be calculated as
integral image for calculating the cumulative sum.
Then the value of the integral image cumulative sum
array will be used in SSR filter to recalculate the
possible area of the candidate possible face position.

Using the value of the SSR filter and integral
image the system will find the candidates face and
eyes. Then extraction of the Between The Eye (BTE)
Template will occur and the face needs to be verifies
with the Support Vector Machine (SVM) which has
been train with 6759 BTE templates. Positive
classification results mean true faces, while negative
ones mean false faces.

Since one person will use the program at a time
(only one person uses the mouse at a time), we need
to pick one of the positive results as the final
detected face. Then the system will detect the nose
using the SSR filter. The result of the face
recognition process will come out with eye and nose
location with a rectangle drawn around it.

B. Process for Face Tracking Modules

After the face has been recognized, the system
will track the face in the video stream. Figure 8
shows the nose tip is tracked to use its movement
and coordinates as the movement and coordinates of
the mouse pointer. The eyes are tracked to detect
their blinks, where the blink becomes the mouse
click.

FIGURE 8: FACE TRACKING PROCESS

Video
Frame
Track the
Nose
Detect
Eye
Blinks
Track the BTE Track
the
Eyes
Refine
BTE
location
Refine
Nose
location
Repeat
Process
Video
Frame
Find
Candidate
Face
Extract
BTE
Template
Find Candidate
Eyes
Verify
using
SVM
Find
Nose
Video Frame Overlay with Eyes &
Nose Location

204

The tracking process is based on predicting the
place of the feature in the current frame based on its
location in previous ones; template matching and
some heuristics are applied to locate the features
new coordinates. To do the face tracking process the
setting of Range of Interest (ROI) needs to be
configured first. The location of the tracked feature
in the past two frames (at moments t-1 and t-2) is
used to predict its location in the current frame (at
moment t). To do so, the shift values that the
features template has made between frames t-2 and
t-1 are calculated, and the features ROI in the
current frame shifted from the features last place (in
frame t-1) with that shift value.

The ROI location is set in such a way that it stays
entirely in the boundaries of the video frame. To
detect motion in a certain region, the pixels in that
region are subtracted from the same pixels of the
previous frame, and at a given location (x, y). If the
absolute value of the subtraction is larger than a
certain threshold, a motion at that pixel is considered
to have occurred. Implementation of image
processing is like face recognition, in which each
frame will go through the pixel extraction, grayscale,
conversion to binary form and calculated.

V. RESULTS AND DISCUSSIONS

For usability measurement a field test has been
conducted. The i-Sight Mouse was tested with 20
people, which were 10 male, and 10 female from
diverse races and skin color selected by normal
selection.

A. Normal flow of the system

FIGURE 9: FACE POSITION AND DISTANCE ARE IN
THE RIGHT PLACE

FIGURE 10: AFTER CLICKING START BUTTON

Figures 9 and 10 show the normal flow for the
system where the face is in the center and the
distance is about 35 cm and the light source is placed
frontal to the face. When the user clicks the start
button the face recognition and face tracking is
trigged resulting the block of eyes, BTE and the nose
tiped.

B. Exception handling of the system

FIGURE 11: FACE POSITION AND DISTANCE ARE
NOT IN THE RIGHT PLACE

FIGURE 12: MESSAGE BOX APPEARS WITH
RECOMMENDATIONS

Figures 11 and 12 above show exception
handling by the system, where face position and
distance not in the right place. When the user clicks
the start button the message box will appear and give
some recommendations to make the i-Sight Mouse
run well.

C. Results Analysis

The testing phase was completed with 20
people, which came from several categories. Table 1
shows the results analyzed from the testing process.

TABLE 1

Gender Able to
use
Success rate
Male Wearing spectacles 1/ 3 80.00%
Not Wearing
spectacles
7/7
Female Wearing spectacles 1/2 80.00%
Not Wearing
spectacles
7/8
Total 16/ 20 80.00%

205

From the results shows in Table 1, 16 people
were able to use the i-Sight Mouse application out of
its total 20. That indicates 80.00% successful rate of
effectiveness of the application. There are results that
show that some of people who wearing spectacles
were not able to use the application. This is caused
by the reflection of the spectacles that affects the
process for this testing purpose. There was also one
person who did not wear spectacles but could not use
the application. This was because of multiple light
sources affecting the result. All the people are being
instructed to move their heads and eyes only with
limitations on the speed of their motion.

D. Advantages

The advantages of this prototype are:

i. The prototype was able to used mouse applications
using webcam without using the physical mouse.
ii. People with disabilities but who can move their
heads and eyes are able to use this application to help
them interact with computer programs.

E. Disadvantages

The disadvantages of this prototype are:

i. The prototype can only process one face for each
process.
ii. The result is affected by where the source light
comes from.

F. Constraints

There are three main constraints that effect the
delivering of the system. Mainly:

i. The lighting effects:The lighting effects may cause
reflection on the face during the image acquisition
process and these might cause the taking the image
to be interrupted.

ii. The system can only detect a single image of the
face: Currently, the prototypes can only process one
face at a time for each process.

iii. The resolution of the PC camera: The resolution
of the PC camera has a direct effect on obtaining
accurate values. The higher the resolution the PC
camera has, the higher accuracy results can be
produced.

G. Assumptions

There are three assumptions that were taken in
consideration during the i-Sight Mouse development:

i. The face of the user is centered on the screen.
ii. The face musts about 35 cm distance from the
screen.
iii The light source is frontal to the face.

VI. CONCLUSION

The main purpose for development of this
system is to develop an aid system that uses camera
application to recognize and track facial parts and
movement to control the mouse function. This
system will help people with disabilities to control
the mouse pointer on a computer just by moving
their head and blinking their eyes.

The testing process, which has been tested were
done, shows that 80.00% of the 20 people is able to
use this application. Ten males contributed in this
finding and ten females where some of them, were
wearing spectacles. Thus, the finding proved that
successful rate of the i-Sight Mouse in effective use
is 80.00%.

There are several recommendations for further
research in order to use the i-Sight Mouse as
innovation software in helping people with
disabilities.

The first idea is improving the tracking
robustness against lighting conditions, perhaps by
using more sophisticated and expensive capturing
devices such as infrared cameras that can operate in
absence of light and give more accurate tracking
results.

The second idea is adding the double left click
(detecting a double left eye blink) and the drag mode
(enabling/disabling with a right double eye blink)
functionalities. The application also needs
configuration so that the user can configure it such as
to time for blinking detection suited to the user.

The third idea is adding voice commands to
launch the program, start the detection process, and
to enable/disable control of the mouse with the face
and also for the user to be able to choose which face
will take command of the mouse application for
which the application must be able to detect multiple
faces.

Nowadays, many techniques are available in the
image-processing field. Further research could take
alternative techniques and approaches in order to
enhance this prototype to produce better results.

As a conclusion, it could be stated that this study
has successfully met its objectives in that it has
succeeded in developing software for people, which
wish to use computer applications that need mouse
operation but cannot because of their limited use of

206

their hands. Now the technology has been proved
can help people in facing routine problems so
hopefully the i-Sight Mouse can be one of the
innovation technologies that can impact the future
generations of community members and give new
perspectives and advantages in adopting new
technology for health.

VII. REFERENCES

Hjelmas E. & Low B.K. (2009). Face detection: A
survey. Retrieved on July 25, 2009, from
http://www.idealibrary.com

James G. (2009). Camera Mouse User Manual
Retrieved on June 4, 2009, from
http://www.cameramouse.org

James G., Betke M., & Fleming P. (2000). The
Camera Mouse: Preliminary Investigation of
Automated Visual Tracking for computer Access.
RESNA Conference in Orlando.

James G., Betke M., & Fleming P. (2002). The
Camera Mouse: Visual Tracking of Body Features to
Provide Computer Access for People With Severe
Disabilities. IEEE Transactions on Neural Systems
and Rehabilitation Engineering, vol. 10, no. 1.

Kawato S., & Ohya J. (2000). Automatic Skin-color
Distribution Extraction for Face Detection and
Tracking. ICSP2000: The 5th International
Conference on Signal Processing, vol. II, pp.1415-
1418, 2125 August 2000, Beijing, China.

Prem K., Prasad G., P. Subbanna B., & Sumam D.
(2002) Human Face Detection and Tracking using
Skin Color Modeling and Connected Component
Operators.

Sawettanusorn O., Senda Y., Kawato S, Tetsutani N.,
& Yamauchi H. (2005). Real-Time Face Detection
Using Six-Segmented Rectangular Filter (SSR
Filter). ATR Media Information Science
Laboratories, Kyoto, Japan.

Support Vector Machine (SVM) (2009). Wikipedia
the free Encyclopedia. Retrieved on August 12,
2009, from http://www.wikipedia.com.


207

The Influence of Innovativeness Organizational on
the Performance of Organizations: An Analysis
among Selected Malaysian Private Universities

Noorlaila Hj Yunus, PhD
Faculty of Business Management, Universiti Teknologi MARA, Puncak Alam, Selangor, Malaysia
Nlaila814@salam.uitm.edu.my; Lailanoor13@yahoo.com

Ismayaza Noh
Universiti Teknologi MARA, Puncak Alam, Selangor, Malaysia
Ismay147@salam.uitm.edu.my

Che Norlia Hassan
Faculty of Business Management, Universiti Teknologi MARA, Puncak Alam, Selangor, Malaysia
Norlia361@puncakalam.uitm.edu.my

Abstract Many researches had examined innovation
activities and its associations with organizational
characteristics or investigated different angle of innovative
capability, such as product innovation. However, less study
has been paid to validate overall organizational
performance, especially in the context of higher education
and its organizational innovativeness . This paper argues
that innovativeness may have some influence on university
performance. The sampling frame used in this study is
extracted from the directory of academic and management
staffs of three selected private universities in Malaysia. The
primary motivation of this paper is to focus on the impact of
creativity, openness to new ideas, and intention to innovate
on the private university performance. I n this paper several
propositions are highlighted and developed. The
researchers integrate few models on the innovation to
develop a suitable framework and model for organizational
innovativeness research; develop relevant organizational
innovativeness construct. I n particular, the influenced of
innovativeness management as key important variable
which have been neglected in Malaysian institution of
higher learning previous studies are examined.

Keywords organizational/management innovativeness,
internationalization, organizational performance, institutions of
higher learning, Malaysia

I. INTRODUCTION
Private university shares similar business
organizational goal in terms of profit-oriented entity.
Therefore, private university performance derived from
many variables which are objectively needed to be
achieved to reflect organizations ability to stay longer
in business, and sustains its profit and stability. The
variables that shaped the success of the private
university performance are in a form of four based
dimensions. The dimensions measures illustrate the use
of the Overall Performance of the University, Quality
of teaching and Services and Students Growth. Hence,
for the performance impact in this study, it is focusing
on the different focus which appears to be the
organizational innovativeness such as from the
operational, customer satisfaction, market share;
supplier related and environmental related (Yasin &
Gomes, 2010).
With the competitive globalization pressures
nowadays and with the new technology advanced, it
increases the need for the university constantly to
improve and adapt the innovation to their institutions.
Organizational innovativeness is considered as key in
achieving sustainable competitive advantages and by
extension, for the success of businesses in the market
(Valencia, Valle & Jimenez, 2011). Organizations and
institutions with greater innovativeness will be more
successful in responding to changing environments and
developing new capacities to achieve better
performance. In Malaysia, the education business is
growing rapidly, with the total of twenty five (25)
private universities competing among themselves in
order to show their capabilities to the market (Ministry
of Higher Education Malaysia, 2011). Aula and Tienari
(2011) contended that creating an innovative world
class university is the explicit objective of the ministry
officials and representatives of the business community
who actively promoted the merger. The universities are
further forced to compete globally in seeking the
attention of financiers, academics, students, and
employers. The demand for external accountability
materializes in a number of ways; the ideas and
practices of corporate management are adopted and
adapted (Engwall, 2008). Aula and Tienari (2011)
argued in order to find synergies and secure efficient
operations; and to provide opportunities to better meet
the demands for innovativeness and academic

208

entrepreneurialism, the impact of these activities on the
performance of private universities in the country
remain debatable.
The link of entrepreneur activities to
organizational innovativeness may benefit the private
university in terms of its performance outcomes.
Private university having its entity as profit oriented
business had to compete for their survival. In order to
survive, private university must strategize for
continuous improvement and innovativeness to
strengthen the company advantage. According to Hult,
Hurley and Knight (2003), the innovativeness appears
to be an important determinant of business
performance. This implies that innovative activities are
generally important to the success of the business.
According to An Ho (2011), organizational
innovativeness is examined in many disciplines, such
as management and strategy, entrepreneurship,
political science and marketing. In additions, according
to Rogers (2003) innovation refers to a new idea,
product, method or service adopted in organizations.
The innovation activities also can be characterized by
unpredictability, multidiscipline, and variability in the
process, and firms can take advantage of multiple
viewpoints through the development of interaction
networks among members (Wen Huang & Hui Li,
2009). A number of authors have emphasized that
entrepreneurship appears to be the primary act
underpinning innovation and further claimed that
entrepreneurship as the primary catalyst of
organizational innovativeness (Mc fdzean, OLoughlin
& Saw, 2005). In addition, scholars advocated that
innovation as a process that provides added value and a
degree of novelty to the organization, its suppliers and
customers through the development of new procedures,
solutions, products and services as well as new method
of commercialization (Mc Fadzean, OLoughlin and
Shaw., 2005; Hult, Hurley, Robert and Knight., 2003).
Organizational innovativeness provides important
means for changing an organization, whether as a
response to changes that occurs in its internal and
external environment. According to Hult et al., (2003)
when the environment evolve, organization must adopt
innovations over time and the most important
innovations are those that allow the firms to achieve
some sort of competitive advantage and contributing to
its performance. Hamon (2003) stated that the
organizational performance is an indicator which
measures how well enterprise achieves their objectives.
Meanwhile Robbins and Coulter (2002) contended that
an organization can assess organization performance
according to the efficiency and effectiveness of goal
achievement.

The objectives of the study are thus:
1. To identify to what extent organizational
innovativeness exists among Malaysian selected
private universities.
2. To identify to what extent the organizational
innovativeness impact the performance of the selected
private universities in Malaysia.
3. To examine the moderating effects of size of
the university in the relationship between the
creativity, openness to new ideas, and intention to
innovate. towards the university performance.

A. Enterpreneurship Activities and Innovation
The link of entrepreneur activities to
organizational innovativeness may benefit the private
university in terms of its performance outcomes.
Private university having its entity as profit oriented
business had to compete for their survival. In order to
survive, private university must strategize for
continuous improvement and innovativeness to
strengthen the company advantage. According to Hult,
Hurley and Knight (2003), the innovativeness appears
to be an important determinant of business
performance. This implies that innovative activities are
generally important to the success of the business.
According to An Ho (2011) organizational
innovativeness is examined in many disciplines, such
as management and strategy, entrepreneurship,
political science and marketing. In additions, according
to Rogers (2003) innovation refers to a new idea,
product, method or service adopted in organizations.
The innovation activities also can be characterized by
unpredictability, multidiscipline, and variability in the
process, and firms can take advantage of multiple
viewpoints through the development of interaction
networks among members (Wen Huang & Hui Li,
2009). Innovation represents the core renewal process
in any organization. A number of authors have
emphasized that entrepreneurship appears to be the
primary act underpinning innovation and further
claimed that entrepreneurship as the primary catalyst of
organizational innovativeness (Mcfdzean, OLoughlin
& Saw, 2005)[21]. In addition, scholars advocated that
innovation as a process that provides added value and a
degree of novelty to the organization, its suppliers and
customers through the development of new procedures,
solutions, products and services as well as new method
of commercialization (Mcfdzean et al., 2005; Hult et
al., 2003).
Organizational innovativeness provides important
means for changing an organization, whether as a
response to changes that occurs in its internal and
external environment. According to Hult et al., (2003).
when the environment evolve, organization must adopt
innovations over time and the most important

209

innovations are those that allow the firms to achieve
some sort of competitive advantage and contributing to
its performance. Hamon (2003) stated that the
measures how well enterprise achieves their objectives.
Meanwhile Robbins and Coulter (2002) contended that
an organization can assess organization performance
achievement.

B. Organizational effectiveness
The early definitions of organizational
innovativeness define innovativeness as a form of
social process which leads organizations to go through
series of major changes (Caroll, 1995). Recent
literature points out a general consensus in the
literature that innovativeness is the precursor to the
innovation and represents a firms ability to innovate
(Hult et al., 2004). The organizational innovativeness
can be viewed as multi-dimensional by including the
five dimensions: creativity, risk-tasking, openness to
change, future orientation, and pro-activeness (An Ho,
2011). Similarly contended by Dundon (2005) it
differentiates innovation from creativity and suggests
that innovation comprises the four elements, namely,
creativity, strategy, application and profitability.
As stated by Lynch et al., (2010) the
organizational innovativeness also can be defined as a
five key dimension have emerged from foregoing
discussion, namely, creativity, openness to new ideas,
intention to innovate, willingness to risk taking and
technological capacity to innovate. The five (5) keys
dimension of organizational innovativeness:

i. Creativity
According to Amabile (1983; 1988) as cited by
Rodriguez (2002), creativity are defined as a product
or response ... that is (a) both a novel and appropriate,
useful, correct or valuable response to the task at hand,
and (b) the task is heuristic rather than algorithmic in
nature. It must somehow influence the way business
gets done by improving a product, for instance, or by
opening up a new way to approach a process.

Proposition 1a: Organizational Innovativeness
(Creativity) will be positively influence Performance
(Overall Performance)

Proposition 1b: Organizational Innovativeness
(Quality of Teaching and Services)

Proposition 1c: Organizational Innovativeness
(Students Growth))

ii. Openness to New ideas
The personality trait openness or open-
mindedness is used to refer to an innovative
organization which is more receptive and tolerant to
new ideas and open to new experiences more on to
take risk and adopt an innovation to the organization
(Lynch et al, 2010).

Proposition 1d: Organizational Innovativeness
(Openness to new idea) will be positively influence
Performance (Overall Performance)

Proposition 1e: Organizational Innovativeness
Performance (Quality of Teaching and Services)

Proposition 1f: Organizational Innovativeness
Performance (Students Growth)
Students Growth)

iii. Intention to Innovate
According to Lynch et al (2010) the intention to
innovate are defined as the organizations commitment
or devotion to the innovation process and intention to
be innovative.

Proposition 1g: Organizational Innovativeness
(Intention to innovate)) will be positively influence
Performance (Overall Performance)

Proposition 1h: Organizational Innovativeness
(Intention to innovate) will be positively influence
Performance (Quality of Teaching and Services)

Proposition 1i: Organizational Innovativeness
(Intention to innovate) will be positively influence
Performance (Students Growth)

C. Innovation Activity
A thorough review of the literature supports varied
definition of innovation (An Ho, 2011; Lynch et al,
2010; Hult et al 2004; l 1995).The examination of the
innovation literature confirms that there is enormous
diversity in views and approaches to what actually
constitutes innovative activity, and also highlights
some of the confusion that exists within discipline
itself (McFadzean et al 2005)[21]. A number of
process models have been developed in the literature
suggesting that innovation consist a variety different
phases: idea generation, research design and
development, prototype production, manufacturing,
marketing and sales (McFadzean et al 2005; and
Knoxx 2002.
More recently a number of integrative models
have been proposed all of which identify a number of
different types of innovation, for example Rowley,
Baragheh and Sambrook,( 2011)discuss several types
of innovation: product (including radical and

210

incremental), service, and process (including
administrative, service and production), it also discuss
position, process, product and paradigm innovation
(Rowley et al 2011; Francis and Bessant, 2005).
On linking innovation and knowledge creation,
Filippetti, (2011) emphasize that different strategies of
knowledge creation and learning processes are relevant
source of firms heterogeneity and had strong
association with their innovation behaviors. This
further implies that the innovations are not merely
derived from the product or services but also based on
the behavior of the organization.
The importance of organizational innovativeness
is also received and viewed attention among scholars
based on the survey by (Filipetti, 2011; Tether & Tajar,
2008) they used the Innobarometer survey to
investigate the importance of organizational
innovation. Their major finding revealed that with
well-established patterns of innovation based on
product innovation and process innovation, a third
relevant organizational-cooperation mode of
innovation emerges. This mode of innovation results
particularly relevant amongst service sector firms.
On the other aspects of organizational
innovativeness, the approach by Li, Zhou and Si,
(2010) appears to be beneficial to explore. According
to Li, Zhou and Si, (2010)[there appear to be two types
of organizational innovativeness approach namely the
exploratory and exploitative innovation.
i. Exploratory Innovation
The term of the exploratory innovation is more on
the offering and creating new products and services
ii. Exploitative Innovation and
Exploitative innovation is concern on improving
quality of the innovation based on the existing activity
performed.

D. Private Universities and Organizational
Performance

The private university performance is defined as
the perceptions of the private university in
benchmarking their standing with competitors as well
as their internal views on performance of the university
itself, Raja Suzana (2008). As a literature goes, the
measures how well an organization achieves their
objective and can assesses organizational performance
achievement (An Ho, 2011). According to Scholl
(2002), despite an organization's effort, many still do
not perform well and studies on the survival of
organizations found that the average age of an
organization is about 18 years. He further contended
that the short life span of organization is the result of
complex, but essential dynamic processes within the
organizations such as performance that has been
ignored and unattended by management.

E. Statement of problem
In this era of globalizations and as marketplace
become more dynamics, the organizations need to
innovate themselves in response to changing the
customer demands and the lifestyle (Rowley, Baregheh
and Sambrook, 2011). Based on Hult, Hurley, Robert
and Knight (2003), the innovation factors with the
specific drivers basically contribute to the
organizational innovativeness and collectively
influence to the business performance itself.
Hence, in this study, with a particular focus on
selected private universities in Malaysia, it aims to
examine the three dimensions such as creativity,
openness to new ideas and intention to innovate
(Lynch et al., 2010) to the organizational
innovativeness on the performance.

III. METHODOLOGY

The study is planned as a cross sectional survey of
private universities at Taylors University, Sunway
University and Management Science University as its
population. It is correlational in that it seeks to
determine the relationship between organizational
innovativeness and performance of Taylors
University, Sunway University and Management
Science University. Quantitative research is used to
employ theories pertaining to natural phenomena. In
representing these universities, a selection of faculty
members who had experienced and involved in
innovation activities will be done. The purposive
sampling technique will be used. According to Sekaran
(2004) the sampling technique is confined to specific
types of people who can provide the desired
information, either because they are the only ones who
have it, or conform to some criteria set by the
researchers.

IV. CONCLUSIONS

The purpose of this paper is to investigate the
influence of organizational innovativeness towards
private universities performance. The numerous
reforms in the education system introduced by the
government in the countrys bid to become a regional
focus for academic excellence warrants the need for
universities to engage in innovation. Past studies have
proven that there is a relationship between these two
variables. Therefore, some initiatives on
organizational innovativeness dimensions such as
creativity and so forth should be considered by
universities to enhance their performance. The data
suggests the presence of the concept and a holistic

211

knowledge and insight of emphasizing innovation
discipline in higher education. HEI can even now
transform them into a highly pro-active innovation
discipline where they can largely have their own
control over those activities and transform their
knowledge into commercial values. In pursuit of this
activity, HEI should by now start thinking of
developing policies and planning on how to implement
innovative behavior on its learning programs in their
institutions. Although there is a number of evidence
from the literature, they had been studied in isolation.
Hence, this finding appears to be contributing to a new
paradigm on the emergence of higher education as an
innovative entity. Therefore, it is high hope that the
key finding of this study that activities of the
organizational innovativeness will given a high impact
on the university performance. In the context of HEIs,
the innovation activities appear to be a source of
competitive advantage and serves as a path to higher
levels of success. Consequently, an innovation activity
is an important path that the university can take to
make it possible for the academic members and
graduates to engage in innovative behavior.
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International Conference and on Inclusive Innovation Innovative Management (ICIIIM 2012)

213

Leadership and Business Performance of
Technology Based SMEs in Malaysia
Azlin Shafinaz Mohamad Arshad
Malaysian Academy of SME & Entrepreneurship Development (MASMED)
Universiti Teknologi MARA, Malaysia; azlin@salam.uitm.edu.my

Amran Rasli
Faculty of Management and Human Resource Department
Universiti Teknologi Malaysia, Malaysia; m-amran@utm.my

Abstract--Many studies and research has been carried
out on various areas of Small and Medium Enterprises
(SMEs). Among the topics of growing interest are
leadership styles. Earlier studies have discovered that
business performance has a direct influence towards
leadership styles and entrepreneurial orientation.
Leadership style is seen to influence business
performance as leaders are responsible for the business
operations of the organization. Different leadership
styles used by the top management will affect business
performance differently. In addition, previous studies
have shown there is a relationship between leadership
styles and business performance. However, studies on
technology based SMEs are found to be very limited
and unexplored. Thus, a study is needed to research
technology based SMEs especially in Malaysia, as the
government has spent a huge sum of money to create
new ventures involved in technology. This study is
expected to provide both practical and theoretical
contributions.

Keywords Leadership Styles, Business Performance,
SMEs, Technology Based SMEs

I. INTRODUCTION
Small and medium sized enterprises (SMEs)
have been said to be the main players in economic
growth in many countries around the world. They
also are said to be the prime mover and also the
backbone of industrial development in Malaysia
(Salleh & Ndubisi, 2006; Ramayah & Koay, 2002).
Small and Medium Enterprises (SMEs) are
considered as the most effective factors that
contribute to the economic development of any
country (Wiklund & Shepherd, 2003). Many small
and medium-sized enterprises (SMEs) depend on
their ability to be innovative for achieving and
sustaining competitive advantage (Parida,
Westerberg & Frishammar, 2012). SMEs in
Malaysia accounted for 99.2% of the total business
establishments, contributed about 32% of gross
domestic product (GDP) and 59% of total
employment (SME Report 2010/2011). This has
proven that the SMEs sector plays an important role
in ensuring the countrys economy is stable. It is not
surprising that the government has allocated funds
for the improvement and development of SMEs
particularly those involved in Technology related
activities.
One of the key factor to improve firm
performance is the leader itself (Yildirim & Serhat,
2011). Leaders are usually associated with followers.
A leader must influence followers in the right way
(Daft, 1997) as they are one of the key factors that
will improve firm performance and are considered as
dynamic sources of managerial success and hence
sustained competitive advantage (Yildirim & Serhat,
2011). As cited by Arham (2012), Abdul Razak
(2010) has proposed that effective leadership
behaviours and entrepreneurial attitudes are among
the key factors for the success of SMEs.

II. PROBLEM STATEMENT
With todays intense competition, studying the
leadership behaviors of the owners/managers/leaders
is important to identify suitable styles to be adopted
(Glantz, 2002). Growing economies are now looking
at high-technology sectors such as bio-technology,
nano-technology, ICT and many more as a main
source of future economic development (Cooper,
2006). It has been highlighted that technology based
SMEs have an impact on economic growth, job
opportunities and many innovations (Massa & Testa,
2008). However, to a certain level, there is limited
research into studies of technology oriented firms.
Only a small number of studies have taken
technology based firms as their focus area (Majid,
Ismail & Cooper, 2011; Ajagbe, M. A. et al, 2012).
In the globalization economy, SMEs are
required to adjust their current business practices in
order to cope with the new business environment that
has become globally competitive. However, the

214

majority of the studies are looking at Western
contexts in traditional SMEs. Thus, the applicability
to the Malaysian context is still open to question and
needs to be researched and little has been done in
exploring leadership styles in technology based
SMEs since they differ significantly from the
traditional SMEs.
Since studies on leadership styles are considered
limited and have gained interest among scholars,
there is a need to do this study especially in the
context of technology based SMEs.

III. LITERATURE REVIEW
A. Leadership Styles
Leadership styles refer to the behavior that
distinguishes a leader (DuBrin, 2001). Effective
leaders are able to influence followers to act
accordingly to achieve organizational goals. A firms
effectiveness and performance would be different
when leaders apply different types of leadership
styles in the organization (Nahavandi, 2002). There
are numerous styles a leader can adopt. In a study
done by Rosing, Prese & Bausch (2011), within a
technology company, three leadership styles have
been identified. The three styles are transformational,
transactional and ambidextrous (Rosing, Prese &
Bausch, 2011). For the purpose of this study, the
three styles of leadership for technology firm will be
adopted.

a) Transactional Style
The transformational leadership style is about
inspiration and charisma. It involves leaders coming
up with a strategic and clear vision and
communicating it effectively to their subordinates
(Bass, 1985). The main components of
transformational style are idealized attributes,
idealized behavior, inspirational motivation,
individualized consideration and intellectual
stimulation. However, in 1998, Bass combined
idealized influence and inspirational motivation into
one dimension; idealized influence (charisma) (Bass,
1998).
In idealized influence, leaders will act as role
models and influence employees to put the good of
the organization above self-interest. The leader
encourages followers with a clear sense of purpose
(Tracey and Hinkin, 1998). Inspirational motivation
is where leaders are able to inspire and also motivate
followers to behave in appropriate ways. According
to Bass and Avolio (1994), leaders must identify
objectives and goals and endlessly motivate
followers to pursue new ideas. An individual
considering leader will ensure that the followers will
get individual attention, treat them separately, advise
and coach each of them (Bass, 1990).
Transformational leaders are preferred as they are
aware of the needs of employees (Tracey & Hinkins,
1998). Intellectual stimulation leaders allow
employees to be creative and innovative in their
work activities (Avolio & Bass, 2004). Employees
are allowed to use their imaginative ways in solving
problems and are encouraged to try new ways of
doing things though it differs from the leaders views
(Avolio & Bass, 1995).

b) Transactional Style
Transactional style is seen as a relationship
between leader and follower for applied effort which
is normally associated with rewards (Bass, 1985;
Pawar & Eastman, 1997). Robbins (2003) defined
transactional leadership as directing and stimulating
followers in accordance with stated goals by
explaining their role and work requirement. This
leadership style helps firms to achieve their
objectives more efficiently by linking job
performance with rewards and ensuring employees
have adequate resources to get the job done. Bass
(1995) and Bass and Avolio (1997, 2004) classified
transactional style into two main components;
contingent reward and management by exception in
two forms, active and passive.
Contingent reward is an exchanging of rewards
when agreed objectives are met. Employees are
being rewarded for work accomplished (Bass &
Avolio, 1994) and this is seen as a way to motivate
and encourage employees to perform better. Active
management by exception is when a leader
supervises employees to avoid mistakes being made.
Bass and Avolio (1994) describe this leader as
choosing to be involved with subordinates to ensure
all is in accordance and corrective actions taken
when needed. For passive management by exception,
the leader would only interfere when things go
wrong (Bass & Avolio 2004). Leaders allow
employees to make mistakes and corrective actions
are taken when mistakes are being made.

c) Ambidextrous Style
Ambidextrous leadership refers to a combination
of both transformational and transactional leadership
styles (Schreuders & Legesse, 2012). It is where
leaders have mastery in switching between the two
styles depending on the needs of the company
(Schreuders & Legesse, 2012). This style is
necessary during different phases of the innovation
process (Rosings et al., 2011). In their recent article,
the innovation process refers to the conceptualization
of an idea that involves creativity as well as the
development and implementing of the idea (Rosings
et al.,2011). A leader who uses this style is able to
foster both explorative and exploitative innovation
by encouraging increasing or reducing variance and

215

flexibly switching between these behaviors (Rosing
et al., 2011). Where leaders are capable of
simultaneously exploiting existing competencies and
exploring new opprtunities they are said to be
ambidextrous leaders (Schreuders & Legesse, 2012).
In exploration, it is important for leaders to
assess the firms vision regularly, encourage
innovation and make adjustments and changes in the
organization (Dover & Dierk, 2010). As for
exploitation, a different approach is required. The
organization firm must focus on carrying out
activities as efficiently as possibble (Schreuders &
Legesse, 2012). Thus, it is important for a
technology firm to be aware in balancing between
exploration and exploitation to ensure the firms
success (Rosing et al., 2011).

B. Business Performance
To measure business performance, a researcher
can use subjective indicators and objective indicators.
These measures are widely used in many researches
and both can be divided into financial and non-
financial indicators. In this study, the researcher
adopted self-reported subjective measures where the
performance of the firm is measured by the
perceptions of the owners/managers. Previous
studies have often used self-reports to gather
business performance data, and these results have
proved reliable (Knight, 2000). Furthermore, public
information is unreliable because most SMEs are
privately held and have no legal obligation to
disclose information (Yang, 2008). In addition,
respondents may be reluctant to provide actual
financial data (Tse et al., 2004).
C. Conceptual Framework

Business performance will be used as the
dependent variable in the study as it is the subject
matter in this study that will lead to specific
outcomes. Basically it intends to examine
performance of Malaysian technology based SMEs
base on subjective measures which are growth and
financial performance. These variables were based
on the indicators used by Brush and Hisrich (1991)
and used in entrepreneurship research (Brush &
Vanderwerf, 1992).
Leadership styles will be the independent
variable where the styles that will be under study are
based on the article by Rosing et al., (2012). The
dimensions are transformational style, transactional
style and ambidextrous style. As has been discussed
earlier, many studies have been looking at the
transactional and transformational styles of
leadership. The ambidextrous style has been under
study by many. Thus, the study is appropriate as
technology based SMEs are the context of the study.

IV. CONCLUSION
This integrated framework would give new
insights into SMEs especially technology based
SMEs in Malaysia, by developing a framework to
explain and explore leadership style and business
performance. The findings should be able to assist
technology based SMEs to have better performance
in the future as being in technology business is very
difficult and challenging compared to traditional
business. Besides, in order to remain competitive,
technology based SMEs have to find ways to survive
in the era of globalization.

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218

Transformational Leadership Style and
Business Performance: The Mediating Role of
Entrepreneural Innovation

Samsudin Wahab
Faculty of Business Management, Puncak Alam, Selangor; samsudinphd@yahoo.com

Roslan Abdul Aziz
Jabatan Muamalat, Kolej Islam Darul Ridwan, Kuala Kangsar, Perak; roslan_a@yahoo.com

Rosli Mahmud
Universiti Utara Malaysia, Sintok Kedah.

Abstract It is highlighted that being innovative means
the ability to create new methods by combining
resources and this is an important element in
entrepreneurship. The purpose of this study is to
investigate the relationship between leadership styles,
innovation and business performance of SMEs in
Malaysia. Out of 391 questionnaires answered only 371
questionnaires were usable for this research.
Innovative was supposed to be fully mediating the
relationship between leadership styles and business
performance. This finding supported that innovative
position; a firm can increase its performance and
having the first-hand advantage of benefiting from the
growing market opportunities.

Keywords Business Performance, Innovation,
Leadership Style, Entrepreneurs
I. INTRODUCTION
SMEs have played a critical role in the
economic development of Malaysia. Since 1970s, the
Malaysian Government has been very focused in
developing the Small and Medium Enterprises
(SME). This has led to the birth of The New
Economic Policy (NEP) which was announced in
1971 to bring about improvement in the nations
welfare and reduced the socioeconomic disparity.
Studies have revealed that the performance of
organizations co-relate directly to the leadership
styles of the leaders in the organizations. Traditional
views have generally indicated that leaders can
impact the performance of the organizations they
lead (Thomas, 1988). According to Nave (2006) the
success or failure of the business depends on the
leadership styles employed by the leaders. The
leader is primarily responsible for every aspect of the
business operations whether daily or long term.
Weber, Camerer, Rottensteich, and Knez (2001)
argue that leadership is essential to the operation of
the organizations, and success depends on the
effectiveness of the leader. Van Wart (2006) states
that all organizations need leadership to guide
organizational operations. Organizations require
efficient leaders who are capable of steering people
in the right direction to achieve its mission, vision,
and to remain faithful to the philosophy and values
of the organization.
According to Burns (1978), in comparison to
transactional leaders, transformational leaders create
an organization vision to inspire and motivate its
followers. Followers apply that vision and desires of
the organization before their personal desires. The
leaders endeavor to promote the behavior and
aspirations of the team members, elevating both the
followers and the leader to a higher level of
performance and awareness. According to Bass,
(1985) the inspired teams needs now move away
from concerns like safety and security to higher
needs such as achievement and self-actualization as
described Maslows Hierarchy of Needs. Howell
and Avolio (1993) held that these leaders are change
agents as they inculcate the organizations vision
onto members of the organization. Yukl (1989) held
that when compared to transactional leaders whose
influence is limited by the terms of the contract with
their followers, transformational leaders may have
long-terms and extended positive effects on the
organization and its performance
Krishnan (2001) held that transformational
leaders are leaders who can obtain the cooperation of
the members in the organization to cooperate with
each other towards one common goal through their
behaviour and actions. According to Tichy and
Devanna (1986), the leader through behavior and
action can motivate the subordinates as a team, to
pursue organizational goals and objectives. Conger
& Kanungto (1988) held that it encourages flawless
operation and higher achievement throughout the
organization. Higher achievement means operational
excellence and organizational success. According to
Bass (1990), Transformational leaders have the
ability to support followers, subordinates, or
employees to see past their own self-interests for the

219

group's goals. In order to achieve the organization's
goals while attending to the personal growth of each
individual within the group, the leaders will
stimulate, inspire, and engage the emotional
involvement of their followers (Bass, 1985).
Barbuto (2005) suggested the theory that
Transformational leadership measures success of its
leaders by gauging the level of influence that leaders
have on their followers. Podsakoff, Mackenzie,
Morrman and Fetter (1990) agree that followers
exhibit greater trust, contentment, and citizenship to
the organization, leader, and self.
Transformational leadership is a theory that is
founded on the leader's ability to influence his or her
followers according to Avolio and Bass (2004). Five
factors serve as the foundation of Transformational
leadership; (1) Idealized Attributes, (2) Idealized
Behaviors, (3) Inspirational Motivation, (4)
Intellectual Stimulation, and (5) Individualized
Consideration. Table 2.4 provides brief descriptions
of each of the Transformational leadership factors
(Alimo-Metcalfe & Alban-Metcalfe, 2001).
The entrepreneurial innovation construct in
entrepreneurship has received considerable attention
from researchers (Lyon, Lumpkin & Dess, 2000;
Aragon-Corea, 1998; Barringer & Bluedon, 1999;
Zahra & Covin, 1995; Dess & Lumpkin, 1996).
Studies on entrepreneurial innovation have been
mostly focusing on the links between entrepreneurial
innovation and performances (Lyon, Lumpkin, &
Dess, 2000). Although there have been many studies
on the direct relationship between leadership styles
and business performance and the direct relationship
between entrepreneurial innovation and business
performance, not many studies have tried to focus on
the mediating effect of entrepreneurial innovation on
leadership styles and business performance
relationships. Several research designs have
concentrated on entrepreneurial orientation as a
mediating variable (Wiklund & Shepherd, 2003 &
Wolf & Pett, 2007). Lumpkin and Dess (1996) have
called for additional research on the role of
entrepreneurial orientation as a mediating variable.

TABLE 1: TRANSFORMATIONAL LEADERSHIP
FACTORS

Factor Description
Idealized Influence
Attributes
Leaders demonstrate
ethics, principles, and
values in their conducts.
Idealized Influence
Behaviors
Leaders behave in
manners that command
respect, admiration, and
trust.
Inspirational Motivation Leaders inspire and
motivate followers.

Factor Description

Individual Consideration Leaders encourage debate,
questioning, and problem
solving with creative and
innovative solutions.
Intellectual Stimulation Leaders take an interest in
assisting followers to
develop to their fullest
potential.
Source: Alimo-Metcalfe and Alban-Metcalfe (2001)

This study was focusing on the mediating effects
of entrepreneurial innovation on the relationship
between leadership styles and entrepreneurial
performance of the SMEs in Malaysia. SMEs were
chosen because they constitute 99.2 percent or
518,996 of business establishments in Malaysia but
their contribution to the economy of Malaysia is only
about 19 percent of the total export value and 32
percent of gross domestic product.
II. METHODOLOGY

The population of this study is based on the
SME Business Directory which is obtainable at
https://secure.smeinfo.com.my. The list of SMEs
business sectors and the number of companies in
Malaysia is shown in Table2. The services SMEs
with a total population of 5138 companies are the
focus of this study. Owner/managers of the SMEs
were given the questionnaire surveys for them to
response.

TABLE 2: LIST OF SMEs BUSINESS SECTORS

Business Sector Number of
Companies
Manufacturing (including Agro
Based)
5911
Manufacturing Related Services 1376
Mining and Quarrying 36
Services (including ICT) 5138
Construction 1567
Primary Agriculture 309
Others 1782
All Business Sectors 16,119
Source: https://secure.smeinfo.com.my

The survey methods using postal and phone call
interview were employed to collect data. Through
postal services, 1000 questionnaires were sent to
owner/managers of the SMEs throughout Malaysia.
The respondents were chosen through a systematic
random sampling technique. Under this technique,
every 5
th
firm was selected from the list in the
sampling frame. A total of 1000 firms were selected
from the list of 5138 SMEs. Out of 391
questionnaires answered only 371 questionnaires
were usable for this research. The collected data

220

were analyzed using the SPSS version 16.
Descriptive statistics, correlation and regression
analysis were used to analyze the data.
.
III. ANALYSIS AND FINDING

The reliability of the survey instruments was
tested using the Cronbachs alpha coefficients. The
results of the pilot tests revealed that the coefficients
were greater than 0.7, which implies a satisfactory
reliability (Nunnally, 1978). Table 3 shows the
results of the reliability tests.

TABLE 3: CRONBACHS ALPHA COEFFICIENT OF
THE PILOT TEST

Dimensions Number of Items CronbachsAlpha

Transformational Leadership 20 0.900

Entrepreneurial Innovation 9 0.760

Business Performance 7 0.923

To find any influence of the mediator innovation
on the relationship between owner/managers
leadership styles (transformational, transactional and
passive-avoidant and performance of SMEs, the
researcher used multiple regressions to test the
influence of the mediating variable. The researcher
tested the influence of entrepreneurial orientation on
the relationship between leadership styles and
business performance.
Table 4 shows the summary of the multiple
regressions results for leadership styles, innovation
and business performance.
Based on the SPSS output in table 4, the
regression equation can be patterned as below:

Y
P
=
0
+
10
X
LS
+
11
X
EO +

Y
P
= 1.385 + 0.314X
LS
+ 0.332X
EO
+

or
Business performance = 1.385 +
0.314 leadership styles + 0.332
entrepreneurial orientation +

The equation above means :

The 1.385 constant value shows if independent
variable is constant, the mean of performance is
1.385.

The 0.314 regression coefficient of leadership
styles states that for every increment of 1 unit of
leadership styles, there will be an increase of
business performance by 0.314.

The 0.332 regression coefficient of
entrepreneurial orientation states that for every
increment of 1 unit of entrepreneurial orientation,
there will be an increase of business performance by
0.332.

The value is calculated using the formula =
(1-R Square ^2). In this case the value is equal to
0.953. This value shows that the amount of
performance variable variance which is not
explained by leadership styles and entrepreneurial
orientation is 0.953.

TABLE 4: SUMMARY OF REGRESSION RESULTS BETWEEN OWNER/ MANAGERS LEADERSHIP STYLES,
ENTREPRENEURIAL ORIENTATION AND BUSINESS PERFORMANCE OF SMEs

Variable Adjusted F t Unstandardized Standardized P(Sig)
R-square count count Coefficient (B) Coefficient
()

(Constant) 1.385

Leadership Styles 0.217 52.139 4.197 0.314 0.209 0.000
Entrepreneurial 0.217 52.139 6.992 0.332 0.348 0.000
Orientation


221

Figure 1 shows the standardized coefficient ()
before mediation for the tested variables (leadership
styles, inovation and business performance).

FIGURE 1: RELATIONSHIP OF TESTED VARIABLES
(LS, EI AND BP) BEFORE MEDIATION

= 0.342

= 0.383

= 0.428

FIGURE 2: RELATIONSHIP OF TESTED VARIABLES
(LS, EI AND BP) AFTER MEDIATION

N

= 0.209

0.383

= 0.348
From the figure, it can be concluded that there
are significant relationships among the tested
variables before mediation. According to Baron and
Kenny(1986), if leadership styles is no longer
significant when innovation is controlled, the finding
supports full mediation. In this study, the researcher
found that leadership styles is still significant after
mediating with innovation, therefore the finding
supports partial mediation (see fig. 2). The researcher
concluded that the variable innovation only mediated
partially the relationship between leadership styles
and business performance.

IV. CONCLUSION

The independent variables of transformational
leadership, transactional leadership and leadership
styles can also influence entrepreneurial orientation.
Entrepreneurial orientation was also found to have
positive influence on business performance. Using
the method suggested by Baron and Kenny (1986),
the researcher performed multiple regressions to test
whether entrepreneurial innovation mediates the
relationship between leadership styles and business
performance. The results showed that entrepreneurial
innovation only partially mediates the relationship
between leadership styles and business performance.
A significant positive relationship between
transformational/transactional leaderships and
entrepreneurial orientation is also found in this study.
This means that as transformational /transactional
leadership level increases, entrepreneurial innovation
also increases simultaneously. It can be concluded
that the implementation of entrepreneurial innovation
by SMEs increases its the sales growth, employment
growth, market value growth, gross profit, rate of
return of asset, rate of return of investment and
overall performance.
This research contributes to a more
encompassing perspective on SMEs in Malaysia for
better understanding on the mediating effects of
entrepreneurial innovation on the relationship
between leadership styles and business performance.
Beside that its determining the relationship between
leadership styles and business performance;
determining the relationship between entrepreneurial
innovation and business performance, and
determining the mediating effect of entrepreneurial
innovation on the relationship between leadership
styles and business performance of SMEs.

V. RECOMMENDATION

Entrepreneurial innovation (EI) has received
substantial conceptual and empirical attention,
representing one of the few areas in entrepreneurship
research where a cumulative body of knowledge is
developing. The earlier findings, however, do
provide a starting point for research into how SMEs
practice its leadership styles knowledge. Future
research should investigate on the kind of trainings
and what type of programs required in developing
the entrepreneurs to higher level of competencies.
Future research should also focus on identifying
those environmental conditions in which
entrepreneurial activities may or may not lead to
improve business performance of SMEs. It is
interesting to investigate on the possible influence of
firm resources, industry life cycle stage, senior
management characteristics and SMEs competencies.
Leadership is important for SMEs to survive,
and a future research study could examine a leaders
personal construct. A study on leadership
development could provide owner/managers with
knowledge as to what type of development is
necessary to enhance leadership skills and attributes
to maintain business performances.
Although this research confirmed the role of
leadership styles as an important aspect of
organizational strategy, additional research is needed
to refine the understanding of this critical dimension.
Future research should consider a longitudinal design
in studying the practice of leadership styles,
TLS
T LS
BP
EI
EI
EI
TLS
BP
BP

222

overcoming the inherent limitation of using cross
sectional data and leading to more specific and
accurate assessments.

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International Conference on Inclusive Innovation and Innovation Management (ICIIIM 2012)

223

Smart Guardian: An Innovative Way to
Security in a Mobile Society

Thiri The` Wut Yee
University of Computer Studies, Yangon
thirithewutyee@gmail.com
Ni Lar Thein
nilarthein@gmail.com

AbstractTechnologies are shaped and re-shaped and
innovations have to respond to the needs of technology
and society. The current technology trend is reaching to a
convergence point of mobile computing and social
networking i.e. more people surf the web using mobile
devices than using PCs. Although such technology has
consistent positive impacts on modern society, it has also
caused various social concerns about privacy, security,
pornography, Internet crime etc. The proposed system
which is called SmartGuardian (SG) is intended for a
smartphone owner to specify access i.e. revoke, allow or
partially allow access to the devices resources and
services at run time based on contextual information and
the users role for the device. In such a way, the system
encourages users to consider the trade-off between
functionality and the disclosure of personal information
whilst they use smartphones for multiple purposes i.e.
access without compromising privacy and security.

Keywords access control, context-aware system,
privacy, role-based access control, social security

I. INTRODUCTION

Over the past few years, a number of mobile
applications have emerged. Some intend to increase the
productivity of work while others are geared towards
supporting social networks. The technology trend is
reaching to a convergence point of mobile computing
and social networking i.e. more people surf the web
using mobile devices than using PCs. Besides, there
are many social networking sites which may require
building a data connection network, accessing the
media store, or exposing contact list information. Such
technology causes various social concerns about
privacy, security, pornography, Internet crime etc and
requires protecting privacy and sensitive data when
sharing data with others. Alternatively, the more SNS
sites are accessed, the more Internet crime will be
enabled. Therefore, there is an inevitable need to
control access for any usage scenario. However, we
cannot control what we are going to access, thus we
have to control how we are going to access. As a
consequence, all desktop access control and security
features should be leverage to promote existing
security infrastructure to suit with the current mobile
technology. This is the intended idea of the proposed
system. SmartGuardian is a system using the
advantages of the nature of the mobile device and role-
based access control mechanism based on the devices
current context. The proposed system suggests the
need of new privacy modes (like the silent, airplane
mode) in smartphones. These privacy modes can
empower users to flexibly control in a fine grained
access control manner. What is more, the access
granted can be dynamically monitored at runtime to
support a users requirements in various scenarios
(e.g., in different contexts).

II. MOTIVATION

Mobile phones are progressively gaining
popularity, creating new application areas as their
capabilities increase in terms of computational power,
sensors and communication. In developed countries,
mobile phones outnumber potential subscribers. For
example, in Germany over 80 million handsets are
spread over a total of approximately 82 million
residents. Figures in other countries are similar, and the
share of mobile phones is increasing. In Myanmar,
there were over 0.5 million mobile subscribers in 2009
and the figure had increased to above 1.3 million in
July, 2010. Moreover, on January 18 2011, CDMA
800MHz mobile phones were allowed Internet access.
After that, GSM Internet mobile phone lines came in
June 21. Consequently, there are Android phones sold
in the market and the sales are increasing more and
more. As a result, there are nearly 0.27 million
Android phone holders in Myanmar. With such a surge
development, Myanmar people, especially younger
generation, increasingly access social networking and
other sites using mobile devices on a daily basis.
Android is one of the newer operating systems
targeting smartphones. While being based on a Linux

224

kernel, Android has unique properties and specific
limitations due to its mobile nature. This makes it
harder to detect and react against malicious access if
using conventional techniques for Android-based
applications. Although Android puts the control in the
users hands, users arent necessarily protected from
malicious applications. For example, if users download
an advertisement-based application that sends text
messages to and receives messages from friends, they
must give the application access to personal
information (to read contact data), all messages (to
read received messages), network communication (to
download advertisements from the Internet), and
services that cost money (sending messages can incur
charges). A legitimate application will use these
services only for the intended purposes, but malicious
software could use them to communicate personal
information to a website. Users do not control what the
application does with the services. Because the
Android market is open, people can easily create and
market Trojan horse applications. Google removes
applications from the Android market that are
identified as malware, but a user must determine that
an application is malware, and the application could do
harm before it is removed.
In the open source scenario, Android encounters
not only security but also privacy issues. Third party
developers can submit their applications to the Android
market from which users can download them and
install. Whereas this provides greater accessibility to a
variety of applications, it gives rise to serious
problems. As mentioned earlier, the more SNS sites are
accessed, the more Internet crime will be possible.
Therefore, there is an inevitable need to control access.
However, we cannot control what we are going to
access thus we have to control how we are going to
access. This is the intended idea of proposed system;
SmartGuardian. SmartGuardian mostly aims for
younger generation Internet users who use an Android
mobile device as a terminal. To do so, the behavior of
users using the devices applications and services must
be controlled. However, the existing security and
privacy control mechanisms of mobile phones mostly
hold a coarse-grained and incomplete security model.
Most of the current systems work on device level
security which is a per application basis. To enhance
this in a fine-grained manner, it is practical to use
context-related information to specify what resources
and services an application should be authorized access
to.
The remainder of this paper is organized as
follows. Section 3 discusses the existing work in
related fields. Section 4 presents the proposed system
concept which we are currently working on. Section 5
has a discussion of the scope of the proposed system,
and Section 6 presents some concluding remarks.
III. RELATED WORK

To improve on the above security issues, many
researches have proposed a number of solutions. These
range from the architectural and computational
category to user interface. The proposed system is
mostly related to the first category.
Apart from the proposed system which is fully
user-oriented, almost all researches have focused on
validation of permission assignments at the application
installation stage i.e. application-oriented. In Apex
(Mohammad and Sohail, 2010), a resource usage
model is presented which can reveal not only install
time but also run time permission constraints.
ConUCON (Guangdong et al., 2010) proposes a
continuous usage control model which enhances data
protection and resource usage control on a mobile
platform. With DiffUser (Xudong et al., 2009), a
differentiated user access control model is proposed
and a prototype is also implemented. However, the
above models consider access control mostly from the
application point of view. In our system, resource and
access restrictions are handled in terms of explicit user
point of view. Moreover, our system stores user
defined policies based on user roles while the former
stores policies based on accessed applications which
lead to more IO consumption. Furthermore, they can
be applied only for static policy enforcement because
they do not use contextual information on the current
user environment.
In Ongtang et al. (2009); Fuchs, Chaudhuri and
Foster (2009), other application policies semantic are
monitored against IPC and a dependency check. They
are data/program flow analysis tools and they can also
be used as offline certification models. For example,
ScanDroid (Fuchs, Chaudhuri and Foster, 2009)
extracts security specifications from the applications
manifest and checks whether data flows through those
applications are consistent with those specifications.
However, such security analysis is controlled by
application provider policies and not by user policies.
Thus, these systems are only suitable for the developer.
Moreover, they can pose only install time policies.

IV. PROPOSED SYSTEM CONCEPT

The proposed system allows the phone owner
(system administrator) to specify what applications and
services the phone user (end-user) should be prohibited
to access or allowed conditionally. This mechanism
extends the existing Android application framework
combining contextual and user role information.


225

A. Context Related Role-Based Access Control
Mechanism
Context aware access control mechanism is a
mobile computing paradigm in which applications can
discover and take advantage of contextual information
and is exploited in decision making on access control.
The rich examples of contextual information which can
be exploited are such as user location, time zone,
nearby people and devices and user activity etc.
Context-aware system offers new opportunities for
developers and end users by gathering context data and
adapting system behavior according to the security
policies.
Current smartphone operating systems support
only a single user mode which is suitable for the phone
owner to work with. However, challenges arise for
smartphone users when smartphones are used in
malicious social environment. Hence, access to private
or confidential information must be managed and
protected according to various usage scenarios. In such
cases, role-based access control (RBAC) becomes the
most suitable access control mechanism.
RBAC is a common paradigm to ensure that users
have sufficient rights to perform various system
operations. Traditional RBAC is a multi-user, multi-
role mechanism in which the subject can possess
multiple roles simultaneously. Users who have similar
privileges are grouped together and any user can be a
member of multiple groups at a time. In the
smartphone system, the role per user is limited to one
and the phone owner has the highest priority role.
Therefore, the context-related access control
mechanism comes forward in this scenario. Based on
the users character, behavior, and current situation,
access control becomes finer without user intervention.
That is by cooperating roles and user responsibilities
with current user context; system wide security policies
are successfully constructed.

B. SmartGuardian
Taking advantage of role-based access control
(RBAC) and contextual information, SmartGuardian
monitors and controls the device usage whenever the
user uses mobile devices to access resources, services,
installed applications as well as social networks and
other sites. Then it makes the decision such as to allow
or deny in accordance with predefined policies.
Realization of the proposed model is shown as follows.

FIGURE: 1 REALIZATION OF THE PROPOSED SYSTEM

C. Running Example
This section presents how SmartGuardian works in
practical scenarios. From the privacy control aspect,
there are situations in which the user might want to
restrict the usage of phone resources and services
according to the user role such as administrator, friend
or children etc. SmartGuardian monitors device access
and determines whether it is allowable or not by
conferring with a policy database. If access goes to an
allowable application or service, SmartGuardian passes
it. When an attempt of violation is encountered, it
immediately inspects current contextual information
via the context inference engine. If environmental
context is matched with policies, access is allowed
under conditional exception or totally denied. Consider
the following scenario as an example. There is an
executive meeting where the user works on every
Monday between 11:00 PM to 12:00 noon and camera
and video recording are not allowed at the meeting.
The specified policy can be achieved using
SmartGuardian. When the user approaches the meeting
room within the specified time period, the context
inference engine alerts to the access control engine. At
the same time, SmartGuardian automatically switches
to privacy guardian mode. Similarly, web site access
and other resources access can be easily controlled by
specific rules.

226

Another aspect is the security principle. Suppose
that the phone owner lost his phone or lent it to others
or the phone was stolen. As SmartGuardian strongly
enforces policies through the predefined user context,
it can capture peculiar usage pattern, malicious
temporal and spatial information; and finally comes
into security guardian mode. In this mode,
SmartGuardian automatically locks the phone and
sends SMS to the base station as well as the predefined
phone number to alert the situation.
Finally, let us consider the access control aspect
from the parental control point of view. Suppose that
parents want to control childrens phone usage.
According to statistics, more and more children are
coming to access mobile phones for entertainment and
social communication rather than making phone calls.
Thus parents do not want their children to spend too
much time playing online games or accessing Internet.
They need means to control their childrens mobile
phone access and determine which sites or applications
can run and how long they can run etc. For example,
there is a policy which daddy sets such as within class
hours, child cannot access all resources except the
parental phone calls, educational applications etc. In
the mean time, SG monitors the childrens mobile
phone usage and determines whether it is allowable or
not by conferring with the policy database. If access
goes to an allowable application or service, SG passes
it. When an attempt of violation is encountered, SG
immediately inspects current contextual information
via the context inference engine. If environmental
context is matched with policies, access is allowed
under conditional exception or totally denied. In such a
case, there are two situations. When the user
approaches a predefined or peculiar contextual
environment, SG automatically changes to parental
control mode. For instance, the mobile phone comes
into the parental control mode automatically if the
temporal context comes within school hours.
Otherwise, it comes into the parental guardian mode in
response to an access violation. Predefined policies are
treated on a priority basis, and the priority must be
defined by system administrator. It is mostly different
from existing mechanisms of mobile phone in general
like the silent or airplane modes.

V. SYSTEM SCOPE

The proposed system is intended for distribution
not only to locally in Myanmar but also worldwide.
The system scope is illustrated in the figure below.

FIGURE 2: SCOPE OF SMARTGUARDIAN

In the localization phase as shown in the Figure 2,
SmartGuardian is distributed with no fees charged to
the academic and business sectors of the country. For
academic sector, SmartGuardian is distributed via the
government and ministries. Accordingly, for business
sector, governmental organizations can obtain
SmartGuardian from their respective offices. In
addition, private companies can get SmartGuardian
from the Myanmar Computer Federation head office.
Initially, Smart Guardian is distributed free to
local people. However, they are encouraged to give
feedback on the application and the responses are dealt
with instantaneously. Taking advantage of such
feedback, SmartGuardian will become free of bugs in
time.
The global scope also includes free and charged
market periods. What is more, the plan also targets the
development of a general yet finer access control
framework (context-related role-based access control
framework) which can combine with any mobile phone
platform.

VI. CONCLUSION

Nowadays, smartphones are becoming more and
more human-based. Therefore in order to solve the
security issues of these devices, we have to consider
mostly the user-oriented approach. In this paper, we
propose a new access control mechanism which can
not only simplify from the users perspective but also
can boost the existing Android access control
mechanism to become a finer-grained mechanism.
Moreover, the proposed prototype shows that the user
can control device usage in all access scenarios via a
simple user interface by taking advantage of contextual
and role-based information. Nevertheless, the proposed
plan does not include any server-based architecture.
For instance, SmartGuardian doesnt include

227

client/server communication for access control
decisions. In addition, there is no need to send context
information to the server side for a context inference
process. In the current Android market, there is no
application which controls access by means of a
contextual and role-based model. The proposed system
is intended for all users who access resources and
services provided by mobile phones; regardless of their
ages, jobs, environments or intentions.

REFERENCES

Adam P.F., Chaudhuri, A., Foster, J. S. (2010).
SCanDroid: Automated Security Certification of
Android Application. Proceedings of the 31
st
IEEE
Symposium of Security and Privacy.

Guangdong, B., Liang, G., Tao, F., Yao, G., Xiangqun,
C. (2010). Context-Aware Usage Control for Android.
Lecture Notes of the Institute for Computer Sciences,
Social Informatics and Telecommunications
Engineering, Volume 50, Part 6, 326-343.

Mohammad, N., Sohail, K. (2010). Apex: Extending
Android Permission Model and Enforcement with
User-defined Runtime Constraints. ACM Conference
on Computer and Communications Security - CCS, pp.
328-332.

Ongtang, M., McLaughlin, S., Enck, W., McDaniel, P.
(2009). Semantically Rich Application-Centric
Security in Android. Annual Computer Security
Applications Conference ACSAC. pp. 340-349.

Wissen, B., Palmer, N. J., Kemp, R., Kielmann, T.,
Bal, H. (2010). ContextDroid: An Expression-Based
Context Framework for Android, In Proceedings of
PhoneSense 2010.

Xudong, N., Zhimin, Y., Xiaole, B., Champion, C. A.,
Dong, X. (2009). DiffUser: Differentiated User Access
Control on Smartphones. IEEE International
Conference on Mobile Adhoc and Sensor Systems -
MASS, pp. 1012-1017.

228

An Innovative Context and Preference Aware
Location Based Services System
for Tourism in Myanmar

Tin Maung
Ph.D Candidate, University of Computer Studies, Yangon
Yangon, Myanmar; tinmaung84@gmail.com

Ni Lar Thein
Rector, University of Computer Studies, Yangon
Yangon, Myanmar; nilarthein@gmail.com

Abstract Tourism has become a popular global
leisure activity for recreational, leisure or business
purposes. Tourism is important for a country because
it brings in large amounts of income in payment for
goods and services available. It also creates
opportunities for employment in the service sector of
the economy associated with tourism. In the case of
travel and tourism, tourists generally need information
outside their usual environment for traveling to and
staying in other places. Without using an interactive
and user friendly information system, tourists may
require much effort to find their destination in the
Google map or tourist guide book. Therefore, it is
necessary to provide location awareness services and to
meet individual tourist preferences. Myanmar is still in
efficient in IT infrastructure to support necessary
information for tourists. For example, in Myanmar,
GPS and satellite services utilized with mobile devices
are proliferating among the local community. Thus, in
order to provide responsible tourism, we need adequate
infrastructure and a tourism development program
which leads to social and economic development and a
sustainable environment. The purpose of this paper is
to contribute to the construction of a Context and
Preference Aware Location Based Services (CPALBS)
system to provide rich information to tourists based on
context such as location, time and preferences.
Keywords Location based services; Myanmar
Tourism; Context Aware Location Based Services;
Tourism in Golden Land; Innovation Tourism in
Myanmar

I. INTRODUCTION AND BACKGROUND
Recent political reform in Myanmar has stirred
an immediate demand from foreign visitors to visit
the country. Higher numbers of foreigners are
expected to be drawn to the Golden Land:
Myanmar after several leading publicationsThe
New York Times, Conde Nast Traveler, CNN and
Lonely Planet have recommended Myanmar as a top
travel hotspot in 2012 and coming years.
Accordingly, Myanmar targets a million tourists in
2012. Myanmars Ministry of Hotels and Tourism
reported the country received 816,369 international
tourists (including day return visitors) during 2011,
up 3.14% from 2010. The country aims to reach the
1 million milestone this year. In addition, Myanmar
claims it earns US$ 319 from each visit, up 25.6%,
while average spending per day, per person, stood at
US$ 120, up 17.6% from US$ 102 in 2010.
In such a case, tourists generally need
information about locations that they do not know
very well. So it is to create location awareness and
provide answers to their individual interests. In
tourism, tourists both inbound and outbound may
pay for this, as the information about the visiting
place is important from the point of view of gaining
knowledge and making the tour a hassle free and
pleasurable one. (LBS) Location-based services
allow travelers to book last minute flights or trains
and provide information if any one of them is
delayed and even then visitors can search for their
preferred tourist destinations, hotels, shops etc.
It is possible to get web services and other
information services for hotels and tourism. But
location-based services are very popular and most
useful for the tourist. The visitors can get almost all
information from their portable devices. They can
access the information that they want from their
229

mobile devices. Without LBS, they will browse the
information on the Internet or other sources. This is
time-consuming and money wasting for the tourist.
The rest of this paper is organized as follows:
Section 2 introduces what are location based services
and how they are useful in tourism. Section 3
discusses the system architecture of the Context and
Preference Aware Location Based Service
(CPALBS) system for tourists. Location based
adaptation for range query is presented in section 4.
Tourist scenarios and experimental results are
presented in section 5. Section 6 discusses related
work. Finally, section 7 gives the conclusion.

II. LOCATION BASED SERVICES (LBS)

LBS are services that determine where a mobile
device and its user are geographically located and
also act as an information gateway for the user by
providing various kinds of services. LBS answers
some common questions like - Where is the user?
What is the nearby attraction? Where is the nearest
service? etc. and the answers to these questions are
useful for a tourist or traveler who is in a strange area
without having much knowledge about the place and
language. This shows that LBS can be a useful
material aid for travelers in the growing tourism
industry, with some innovative tourism related
applications.
The help of LBS it can be useful in tourism by
offering various services to the user. In spite of the
conventional services like vehicle navigation,
emergency services and law enforcement, it can also
provide other valuable information to the tourist. The
services provide by the LBS system are as follows:
Traffic Information The LBS device can
inform visitors about current traffic updates. For
example, if there is a traffic queue ahead or any
traffic diversion on their route, it can alert them by
sending messages.
Roadside Service In case of vehicle
breakdown, the visitors can seek the help of an LBS
provider who can inform them about the nearest
garage, petrol station or cash point on their way.
Destination Information While visiting a
place it is important for tourists to know all the most
popular sightseeing locations of that place. Therefore
they can collect information about the nearest tourist
attractions.
Recreation Spots It can answer the visitors
questions related to leisure activities like the nearest
hotel, restaurant, club, spa, theater, music events etc.
They just have to send a message to the operator
through their LBS device and the operator can
inform them back for services after checking the
database and comparing it with their current location.
Weather Updates It can notify visitors about
the weather conditions of their visiting place so that
they can have a chance to arrange their travel
schedule accordingly.
Hence, LBS allows travelers to determine their
own location and provides different value added
services. For example, it can inform them about
route direction, traffic jams, interesting sights,
nearest metro station, airport, hotel, hospital and
shopping malls etc. This information only takes
location information and a database containing all
kinds of facts based on tourism as primary inputs to
offer services. So in tourism mobile phones or any
other PDAs can act as tourist guides thereby offering
value-added services to the tourists based on their
context and preferences. Figure 1 illustrates a high
level overview of location based services where
users issue various location-based requests through
their personal devices. Mobile devices are connected
to the Internet to submit their requests along with
their locations that are retrieved through location-
detection devices (See below).

FIGURE 1: HIGH LEVEL OVERVIEW OF LOCATION
BASED SERVICES

III. DESCRIPTION OF SYSTEM ARCHITECTURE
This section introduces the detailed architecture of
the location based service system. The architecture
consists of four layers namely:
Transmission/Reception Layer, Service Layer, Data
Processing Layer and Database Service Layer.
Figure 2 shows the outline of the system architecture
of Context and Preference Aware Location Based
Services (CPALBS).

230

FIGURE 2: SYSTEM ARCHITECTURE OF CONTEXT
AND PREFERENCE AWARE LBS

A. Transmission/ Reception Layer
The function of the Transmission/Reception
Layer is to make the diversities of different wireless
communication networks (e.g., 3G, IPv4, and IPv6)
transparent to users. Interfaces of different wireless
communication network are encapsulated into a
standard self-adaptive interface to client.
B. Service Layer
This layer provides location-based services to
users. The location-based service starts when the
Service Layer receives the initial request from the
Transmission/Reception Layer and begins the initial
request with a user preference query to the Database
Service Layer. The Data Processing Layer processes
the address information in the Database Service
Layer according to the user preference query.
C. Database Service Layer
As shown in Figure 2, the Database Service
Layer contains various types of original information
such as restaurant, shop, cinema, hotel, gas station
and hospital information.
D. Data Processing Layer
There are two modules in this layer: the
Location-aware Module and Data Selection Module.
The Location-aware Module tries to relate the
information in the database to locations within a
specified location range. The function of the Data
Selection Module is to select parts of the information
relevant to the users preferences to support future
services.
(1) Location-aware Module
The Location-aware Module analyzes the
information in the database based on a symmetry
approach to the location range query and extracts the
address information within a calculated location
range. The extracted address information within the
users requested range becomes the input to the Data
Selection Module to filter optimal services based on
user preferences.
(2) Data Selection Module
There is massive data in the calculated location
range, but just part of this that accords with user
preferences is used in location based services due to
the time and resource limit. Accordingly, we must
select the information which users are interested in
or really need. Taking restaurants for an instance,
there are lots of restaurants around a user, if we
return information on all the restaurants to him, it
makes the service boring and take a long time
because of the transmission of a huge amount of
data. Moreover, the information on a large number of
restaurants may just puzzle him but not guide him to
choose one. Therefore, data selection is important
and the core function of the Data Selection Module.
For the specified location range, this module
selects part of the information related to this range
according to user preferences and extracts all the
matched address information within this location
range. Finally, the Data Selection Module ranks the
extracted address information according to similarity
values and returned top-k optimal answers.
IV. LOCATION BASED ADAPTATION FOR
RANGE QUERY
As tourists travel in a city, they come across
different landmarks and have different needs
depending on the time of day. Tourists want to learn
about the landmarks they are facing, or may want to
find a nearby restaurant that serves their favourite
food if it is dinner time. Location is a prime
determinant of what information shoud be sent to the
users wireless device. For example, if it is lunch
time and a tourist expressed interest in receiving a
231

list of restaurants in close proximity, the delivered
list should not contain those restaurants which are
not included in the users desired location range. The
application server issues a request to the restaurant
web service and the web service returns a list of
restaurants filtered based on the users desired
location range. In this case, the system uses the
proximity detection algorithm using the symmertry
approach for the users desired location range.
The algorithm uses a two step approach whereby
first the relevant tourists neighboring area is
determined, and then a list is generated based on a
peferred maximum distance of travel to a restaurant.
This approach relies on detecting the users location.
The users GPS instrumented client device sends
location updates to the system. From each location
update the system can determine where the user is
currently located.
FIGURE 3: SELECTION OF RELEVANT AREA
WITHIN SPECIFIED LOCATION RANGE

Once the surrounding area is determined, an
information request is issued to the database server
to retrieve the areas requested services. By
extracting only the services within a certain range the
system is allowing for the possibility that the
database server could make use of spatial data
structures in order to find the relevant data set. When
this data set is returned to the application, a filtering
step takes place to select only those services that are
within a pre-determined distance from the mobile
user. This algorithm proves to be more efficient
compared to an exhaustive computation of distance
over all available services. Figure 3 shows requested
range and the relevant information area within
predefined location range.
V. TOURIST SCENARIOS AND EXPERIMENTAL
RESULTS
In order to validate the system, some scenarios
have been designed and tested with users. In these
scenarios several tourism entities have been
simulated: a restaurant, a bus company and a tourism
office. Notifications of different types have been
configured using several context conditions in
order to create the customization process.
A. Proposed Scenarios
Points of Interest Information Notifications. These
notifications are configured by the tourism office.
Several virtual fences have been created and linked
to notifications with information about the points
of interest that are inside those areas. If a visitor
enters one of these areas, the notification is pushed to
the visitor's mobile device. The main context
parameter that has been used is the visitor's location.
Transportation Information Notifications. These
notifications are provided by the bus company.
Several areas have been created around bus stations.
In this way, if a visitor is waiting for the bus, the
system pushes a notification with an estimate of
the remaining time for the bus to arrive. The
context parameters that have been used are the
visitors location and the moving mode. The system
infers that visitors are waiting for the bus if they are
inside a bus station area and they are not moving.
Restaurant Suggestion Notification. This is a
suggestion notification configured by a luxury
restaurant. This use case is used to suggest
restaurants to visitors with a defined business role
having a walk around a restaurant area at lunch
time. A luxury restaurant can participate in this
so that the notification provides information
about the menu. In order to send this
notification, several context parameters have been
used: location, moving mode (walking), time
(from 11 a.m. to 14 p.m.), and date (from Monday
to Friday).
Restaurant Offer Notification. This is an offer
notification provided by a fast food restaurant
with an outdoor terrace. The notification is
232

configured in order to offer a discount to visitors
that are having a walk around the restaurant
area at lunch time. This discount is offered
because there are not many people having lunch
at the terrace. In this way, if the weather is nice,
the notification informs visitors that they can have
lunch on the terrace with a 10% discount. This
use case utilizes the following context parameters:
location, simulated restaurant back-end, moving
mode (walking), time (from 13 p.m. to 14 p.m.).
B. Experimental Results
The above mentioned scenarios where implemented
in a real area of Yangon, Myanmar as shown in
Figure 4. The users have to take a tour through the
different areas of the described scenarios.

FIGURE 4: CLIENT TERMINAL DISPLAYS

(a) (b)

(c) (d)
Note: (a) The terminal lists hotels by user preference
and then by distance within the user specified service
area. (b) The user selects a hotel on the list to get
detailed information. (c) Map of the user selected
hotel (d) Detailed information website of the user
selected hotel.
VI. RELATED WORK
There are several research projects in the
tourism domain that use context parameters in
order to customize information according to the
visitor's situation (Schwinger, Grn, Prll,
Retschitzegger & Schauerhuber, 2005).The LOl@
(Umlauft, Pospischil, Niklfeld & Michlmayr, 2003)
and MobiDENK (Krosche, Baldzer, & Boll, 2004)
approaches make use of location context in order to
customize requested information. COMPASS
(Setten, Pokraev, & Koolwaij, 2004) provides
tourists with context-aware recommendations
using external map services. Both pull and push
based information retrieval is supported. The
system uses location, user profile and time in
order to customize requested information.
CRUMPET (Poslad et al., 2001) is a tourism guide
that provides information about points of interest.
The system can also provide proactive tips when
a visitor approaches a concrete point of interest.
In this case, location and user desired criteria are
considered. Guilliver's Genie (OGrady & OHare,
2004) is also a map service that uses location,
device and user profile in order to provide
information about nearby points of interest. The
233

m-To-Guide (Kamar, 2003) approach uses
location, network and user preferences as context
parameters and supports pull and push based
information retrieval. CAIPS (Beer, Rasinger,
Hpken, & Fuchs, 2007) considers location, user
profile, weather, time and date in order to push
messages via SMS or e-mail. Also, some of the
more relevant architectures to support context-
aware services have been reviewed. One of the first
implemented approaches is the Context Toolkit
(Dey, 2000). This framework presents an
innovative architecture composed of different
functional modules in order to acquire, aggregate
and interpret context information. It uses key/value
pairs in order to model context data. Other
approaches like CASS (Fahy & Clarke, 2002)
propose a layered middleware architecture that
uses a relational data model to represent context
data. JCAF (Bardram, 2005) is a framework and a
runtime environment to develop and deploy
contextual computing applications. It uses an object
oriented model to represent context data. These
three approaches use interpreters to convert
acquired raw data into higher level context data,
but these transformations cannot be very complex
because there is no inference mechanism.
SOCAM (Gu, Pung, & Zhang, 2005) is also a
framework based on three different layers, namely
a sensing layer, a middleware layer and an
application layer. Mobile frameworks have also
been developed in order to create applications
that are executed in mobile devices (Hofer,
Schwinger, Pichler, Leonhartsberger, & Altmann,
2002). These are designed to acquire mobile device
information as context data (e.g., location, battery
level, noise).
VII. CONCLUSION
This paper has presented context and preference
aware location based services for tourism in
Myanmar. The service sends push based notification
with tourism information to visitors mobile devices,
according to their context inside a determined area.
And then, the visitors can search the desired
available services from their mobile devices such as
restaurants, hotels, pagodas and other. This system
behaves as a guide for the visitors to provide rich
information in Myanmar. Tourists will not require
much effort to find their destination in the Google
Map or tourist guide book. This work explores the
usage of a great number of context parameters in
order to customize information in a mobile scenario.
The usage of more context values has an impact on
the customization process, where more context
conditions can be used in order to provide a more
accurate personalization. This system improves
usability, given that it minimizes the user interaction
with the mobile device and helps to get better user
satisfaction.
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Setten, M. V., Pokraev, S. & Koolwaaij, J.
(2004). Context-Aware Recommendations in the
Mobile Tourist Application COMPASS. Adaptive
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235-244.

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Michlmayr, E. (2003). Lol@, a Mobile Tourist
Guide for Umts. Information Technology &
Tourism 5(3): 151-164.


235

A New Clustering Algorithm for Innovative
Management System
Hnin Wint Khaing
University of Computer Studies, Mandalay (UCSM)
Mandalay, Myanmar; snow.hwk@gmail.com
Mie Mie Khin
Mandalay, Myanmar

Abstract Clustering is the process of finding
groups of objects such that the objects in a group will
be similar (or related) to one another and different
from (or unrelated to) the objects in other groups. The
quality of a clustering result depends on both finding
initial centroids and removing outliers. In this paper,
we propose a clustering algorithm based on k-Means
which can improve cluster quality. There are two main
parts in the proposed algorithm; (i) finding the best
initial centroids and (ii) detecting and removing
outliers. In finding initial centroids, the quick sort
algorithm is used to sort the distance of data points and
divide the sorted data points into k equal sets and
choose middle points as initial points. In the second
part, the small cluster with maximum similarity value
is chosen to define and remove outliers. In the
evaluation, SOM (Self Organizing Map) and k-means
clustering algorithms are used to compare the cluster
quality with the proposed algorithm. According to the
results, the proposed algorithm can provide better
accuracy with less computational time than SOM and
k-Means.

Keywords Clustering, K-means, SOM, initial
centroid, outliers
I. INTRODUCTION
Cluster analysis is one of the major data analysis
methods widely used for many practical applications
in emerging areas. Clustering is the process of
finding groups of objects such that the objects in a
group will be similar (or related) to one another and
different from (or unrelated to) the objects in other
groups. The quality of a clustering result depends on
both finding initial centroids and removing outliers.
The k-means algorithm (Jiawei Han , 2006) is
effective in producing clusters for many practical
applications. However efficiency of the original k-
means algorithm heavily relies on the random choice
of initial centroids (Abdul Nazeer & Sebastain, 2009).
and it considers outliers as clusters. Initial centroids
also have an influence on the number of iterations
required while running the original k-means
algorithm. Various methods have been proposed
in the literature to enhance the accuracy and
efficiency of the k-means clustering algorithm based
on initial centroids (Koheri and Ali Barakbah, 2007).
Outlier detection and removal is a task that finds
objects that are considerably dissimilar, exceptional
or inconsistent with respect to the remaining data
(Murugavel).
The basic idea of a SOM is to map the data
patterns onto an n-dimensional grid of neurons or
units. That grid forms what is known as the output
space, as opposed to the input space where the data
patterns are. This mapping tries to preserve
topological relations, i.e., patterns that are close in
the input space will be mapped to units that are close
in the output space, and vice-versa (Fernando, Victor
and Marco, 2005)
There have been a number of tests comparing
SOMwith k-means. Conclusions seem to be
ambivalent as different authors point to different
conclusions, and no definitive results have emerged.
Some suggest that SOM performs equally with or
worst than statistical approaches, while other authors
conclude the opposite.
To make enhancement in the earlier proposed
methods, we propose a new clustering algorithm to
automatically detect initial centroids by using a quick
sort and outliers by choosing a smaller cluster with
maximum similarity value. So this will reduce time
and computational complexity because it requires
only the number of clusters as inputs and removes
unneeded data as outliers. This paper presents the
implementation by the comparison with SOM and
the traditional k-means algorithm based on a real
dataset and a synthetic dataset.
This paper is organized as follows. Section 2
describes related work. Section 3 presents an
overview of SOM and k-means algorithm and the
existing clustering algorithms. Section 4 introduces
the proposed algorithm. Section 5 describes the
architecture of the proposed system. Section 6
experimentally demonstrates the performance of the

236

proposed algorithm. The final Section 7 describes the
conclusion and future work.
II. RELATED WORK
Osama (Abu Abbas, 2008) applied several indices
to evaluate the performance of clustering algorithms,
including hierarchical clustering, k-means, PAM and
SOM.
Several attempts were made by researchers to
improve the effectiveness and efficiency of the k-
means algorithm (Fahim, Salem, Torkey and Ramadan,
2006; Huang, 1998). The original k-means algorithm
consists of two phases: one for determining the
initial centroids and the other for assigning data
points to the nearest clusters and then recalculating
the cluster means. The second phase is carried out
repetitively until the clusters get stabilized, i.e., data
points stop crossing over cluster boundaries.
Jiawei Han (2006) proposed an efficient method
for assigning data-points to clusters. The original k-
means algorithm is computationally very expensive
because each iteration computes the distances
between data points and all the centroids.
Fahim (2006) approach makes use of two
distance functions for this purpose,one similar to the
k-means algorithm and another based on a heuristic
to reduce the number of distance calculations. But
this method presumes that the initial centroids are
determined randomly, as in the case of the original k-
means algorithm. Hence there is no guarantee for the
accuracy of the final clusters.
Abdul Nazeer & Sebastain (2009) proposed an
enhanced algorithm to improve the accuracy and
efficiency of the k- means clustering algorithm. This
algorithm produces good clusters in less amount of
computational time.
Koheri Arai & Ridho Barakbah (2007) proposed an
algorithm for centroids initialization for k-means. In
this algorithm both k-means and hierarchical
algorithms are used. Then, the result is transformed
by combining with a hierarchical algorithm in order
to find the better initial cluster centers for the k-
means clustering algorithm.
Many data mining algorithms in the literature
find outliers of clustering algorithms. Techniques
that define outliers as data points outside clusters are
presented by (Qiu, 2003). A two-phase method to
detect outliers was proposed by (Jiang Tseng and Su,
2001). The first phase used a modified k-means
clustering algorithm, in the second phase, a
minimum spanning tree (MST) was constructed.
From this tree, the sub tree with minimum number of
nodes was treated as outliers and was removed.
III. CLUSTERING ALGORITHMS
One of the most well-known algorithms in the
field of data mining is clustering. Clustering
concerns how to group a set of objects based on their
similarity of attributes and/or their proximity in the
vector space. The problem of clustering is to
partition a data set into groups (clusters) in such a
way that the data elements within a cluster are more
similar to each other than data elements in different
clusters .Clustering is the subject of active research
in several fields.
A wide variety of clustering algorithms have
been proposed for different applications. There are
many clustering mechanisms: Hierarchical
clustering, Partitional clustering, Density-based
clustering, Grid-based clustering and Model-based
clustering. Among them, two different clustering
algorithms; SOM (grid-based) and K-Means
(partitional) are chosen to compare with the
proposed algorithm. The general reasons for
choosing these two algorithms are: popularity,
flexibility, applicability and handling high
dimensionality.
A. K-Means Clustering Algorithm
The k-mean clustering algorithm is probably the
most commonly used partitional clustering
algorithm.
It generates k points as initial centroids
arbitrarily, where k is a user specified parameter.
Each point is then assigned to the cluster with the
closest centroid. Then the centroid of each cluster is
updated by taking the mean of the data points of each
cluster. Some data points may move from one cluster
to another cluster. Again we calculate new centroids
and assign the data points to suitable clusters. We
repeat the assignment and update the centroids, until
convergence criteria are met i.e., no point changes
clusters, or equivalently, until the centroids remain
the same. In this algorithm mostly
The Euclidean distance is used to find distances
between data points and centroids (Fernando, 2005).
The Euclidean distance between two multi-
dimensional data points X = (x1, x2, x3... x
m
) and Y =
(y1, y2, y3... y
m
) (Jiawei Han, 2006) is described as
follows:
FIGURE 1: AN ORIGINAL K-MEANS CLUSTERING
ALGORITHM
Input: D = {d
1
, d
2
, d
3
, ..., d
i
, ..., d
n
} // Set of n data
points.
k // Number of desired clusters
Output: A set of k clusters.
(1) Arbitrarily choose k data points from D as initial
centroids;
(2) Repeat
(3) Assign each point d
i
to the cluster which has the
closest centroid
(4) Calculate the new mean for each cluster
(5) Until convergence criteria is met.

The time complexity of the k-means algorithm is
O(nkl), where n is the number of objects, k is the
number of clusters, and l is the number of iterations.
B. Self Organizing Map (SOM)

237

The Self Organizing Map is an artificial neural
network that performs clustering by means of
unsupervised competitive learning (Fahim, Salem &
Ramadan, 2006). In the SOM the neurons are usually
arranged in a two dimensional lattice (feature map).
Each neuron receives inputs from the input layer and
from the other neurons in the map. Each node is
associated with a weight vector with the same
dimension as the input space.
The purpose of SOM is to find a good mapping
from the high dimensional input space to the 2-D
representation of the nodes. One way to use SOM for
clustering is to regard the objects in the input space
represented by the same node as grouped into a
cluster. During the training, each object in the input
is presented to the map and the best matching node is
identified. Formally, when input and weight vectors
are normalized, for input sample x (t) the winner
index c (best match) is identified by the condition:

For all i, || ) ( | || | t m t x t m t x
i c

(1)

Where t is the time step in the sequential
training, mi is the weight vector of the i
th
node.
After that, weight vectors of nodes around the best-
matching node c = c (x) are updated as:

t m t x h t m t m
i i x c i i

,
1
(2)
Where is the learning rate and
i x c
h
,
is the
neighborhood function, a decreasing function of
the distance between the i
th
and c
th
nodes on the map
grid. To make them converge quickly, the learning
rate and neighborhood radius are often decreasing
functions of t. after the learning process finishes, and
each object is assigned to its closest node. There are
variants to the above classical scheme of SOM.
Figure 2 shows the SOM algorithm.

FIGURE 2: AN ORIGINAL SOM CLUSTERING
ALGORITHM

Input: D = {d
1
, d
2
, d
3
, ..., d
i
, ..., d
n
} // Set of n data
points.
Output: A set of clusters.
(1) Choose the dimension and size of the map. (2)
For every new member
(3) Compute the distance between the new vector
and every clusters codebook vector.
(4) Recompute all codebook vectors with the new
vector, using both a distance radius on the map and
learning rate that decrease in time.

The advantages of SOM clustering (Abbas, 2008) are
as follows;
(i) Different kinds of distance measures and joining
criteria can be utilized to form the big clusters.
(ii) It has been successfully used for many
application areas.
(iii) The SOM generates a sub-optimal partition if
the initial weights are not chosen properly.
IV. PROPOSED CLUSTERING ALGORITHM
In the k-means and SOM clustering algorithms,
the initial centroids are selected randomly and do not
identify outliers.So these method are very sensitive
to the initial starting points and do not promise to
produce the unique clustering results. In the
proposed algorithm, there are two parts, one for
finding the best initial centroids for an efficient way
for assigning data points to appropriate clusters. The
other is for detecting and removing the outlier.
The process flow is as shown in Figure 3 and the
detailed steps in the following sub section.
In this approach, points are not chosen as new
initial cluster centres (centroid) until there is no
change in K-means clustering. So, this reduces
computational and time complexity because it is not
necessary to run more than one- iteration and it uses
a quick sort algorithm.
A. Finding Initial Cluster Center
In the proposed algorithm, there are the
following steps to systematically get the initial
centroid. Firstly, we calculate the distance from the
origin to each data point in the data set using the
Euclidean distance. Then, the original data points are
sorted in accordance with the calculated distances by
using quick sort algorithm.
After sorting the data points, to get the initial
centroid, we partition the sorted data points into the
given k equal sets. After taking the number of
partitions, in each set, take the middle points as the
initial centroids to calculate the similarity value of
each remaining data point. After this we are ready to
detect and remove data points as outliers.
B. Detecting and Removing Outliers
In the second part, a proposed algorithm based
on clustering approaches for outlier detection is
presented. We first compute the similarity value of
initial cluster center get from the first part (finding
initial cluster centers) and each remaining points is
calculated and compared. Choose the smallest
similarity value, closest to initial centroid and set it
to cluster c
i
. Choose the maximum similarity value in
the same data point and all centroids and these points
are disjoint from all of these remaining point. These
data points are defined as outliers and discarded it.
The architecture of the proposed clustering
algorithm with auto detection of the initial centroid
and outliers are as shown in figure 3 below.


238

FIGURE 3: THE SYSTEM FLOW OF PROPOSED
CLUSTERING

cluster results
Data sets
Data
preprocessing
Finding Initial
Centroid
Calculating distances of
the each data point from
the origin (by Euclidean
distance)
Sorting these distances by
ascending (by quick sort)
Dividing the sorted data
points into given k equal
sets
Taking the middle points of
each partition to choose as
initial centroid
Calculating the similarity
value between initial
centroid and each
remaining data point
Choose smallest
value, closest to
initial centroid and
set it to cluster ci
Choose maximum value
in the same data point
and disjoint from all
remaining points as
outlier
Remove outliers
Detecting and
removing outliers
Preprocessing

Figure 4 shows the proposed clustering algorithm
with detailed steps for detecting initial centroids and
removing outliers automatically.

FIGURE 4: A PROPOSED CLUSTERING ALGORITHM

Input: D = {d1, d2, d3, , dn}//Set of n data points
k//number of desired cluster
Output: A set of k clusters
(1) Normalized missing value and removed
redundant and unnecessary data as data
preprocessing
(2) Calculate the distance for each data point
from the origin based on the Euclidean distance.
(3) Sort the data points accordance with the
distances by using Quick Sort algorithm.
(4) Partition the sorted data points into k equal sets.
(5) Take the middle point as the initial centroid in
each set.
(6) Compute the similarity value of initial cluster
center and each remaining point is calculated and
compared.
(7) Choose smallest similarity value, closest to initial
centroid and set it to cluster c
i
.
(8) Choose the maximum similarity value in the
same data point and all centroids where these points
are disjoint from all of remaining points.
(9) These data points are defined as outliers and
discarded it.
.

V. EVALUATION
In our evaluation, we have evaluated the
proposed clustering algorithm on different data sets
as to purity and error of clusters.
A. Description of Datasets
In our experiment, we have evaluated the
proposed clustering algorithm on synthetic xml
document and Iris, Bupa, Wine and Echocardiogram
datasets from UCI as shown in Table1. The same
data set is given as input to the standard k-means
algorithm, SOM and the enhanced algorithm. All of
these algorithms need number of clusters as an input.
The value of k, the number of clusters, for example,
is taken as 3 and 7 outliers in the Iris dataset in the
proposed algorithm. In addition, for the original k-
means algorithm the set of initial centroids is also
required. The enhanced method finds initial centroids
systematically. The enhanced method requires only
the data values and number of clusters as inputs. (See
Table 1 below).


239

TABLE 1: DESCRIPTION OF DATASETS

Data sets No. of
records
No. of
attributes
Class
xml document 200 10 3
Iris 150 4 3
Bupa 345 7 2
Wine 178 13 3
Echocardiogram 132 13 2
B. Purity Measure
A cluster is called a pure cluster if all the objects
belong to the same class. To measure the efficiency
of the proposed method, we have used the clustering
accuracy measure. The clustering accuracy r is
defined as,

k
i
i
a
n
r
1
1
(3)
where a
i
refers to the data objects that occur in both
cluster C
i
and its corresponding labeled class, and n
is the number of objects in the data set.
The clustering error e is defined as e = 1 r. If
a partition has a clustering accuracy of 100 percent,
it means that it has only pure clusters. Large
clustering accuracy implies better clustering (He Xu
Deng, 2002)
The performance comparison of algorithms
based on purity and error results is shown in Table 2.

TABLE 2: PURITYAND ERROR MEASURE OF
ALGORITHMS

VI. CONCLUSION AND FUTURE WORK
The k-means and SOM are widely used for
clustering large sets of data. But in these methods the
quality of the final clusters relies heavily on the
initial centroids, which are selected randomly, and
outliers. Moreover, these two algorithms are
computationally very expensive also. The proposed
algorithms achieve better clustering and time without
loss of clustering quality. And it is found to be more
accurate and efficient compared to the original k-
means and SOM algorithms by finding better initial
centroids and detecting and removing outliers. In
future work, we have planned to design and develop
an efficient system with the aid of the proposed
clustering algorithm as clustering based prediction of
future data in medical management system. For
example, in the heart attack prediction system,
firstly, the heart disease database is clustered using
our proposed clustering algorithm, which will extract
the most relevant data to heart disease without
outliers. And then these relevant data are classified to
predict the heart attack level of patient by using
classification techniques. The expected outcomes
will show that the designed prediction system is
capable of predicting the heart attack effectively.
Because our proposed method removed unneeded
data as outliers and choose initial centroid
systematically, so the proposed algorithm can provide
better accuracy with less computational time than others.

REFERENCES
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M. A. (2006). An Efficient enhanced k-means
clustering algorithm. Journal of Zhejiang University,
10 (7): 1626-1633.
Fernando, Victor Lobo and Marco Painho, C. (2005).
Self-organizing maps as substitutes for K-means
clustering, V.S. Sunderam et al. (Eds.): ICCS 2005,
LNCS 3516, pp. 476 483.
Huang Z, C. (1998). Extensions to the k-means
algorithm for clustering large data sets with
categorical values. Data Mining and Knowledge
Discovery, (2): PP 283304.
Jiang, M., Tseng, S. and Su, C. (2001). Two-phase
clustering Process for outlier detection. Pattern
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Jiawei Han M. K, C. (2006). Data Mining Concepts
and Techniques. Morgan Kaufmann Publishers, An
Imprint of Elsevier.
Abdul Nazeer K.A and Sebastain M.P, C. (2009).
Improving the accuracy and efficiency of the k-
means clustering algorithm, International Conference

D
a
t
a
s
e
t

N
u
m
b
e
r

o
f

c
l
u
s
t
e
r
s

A
l
g
o
r
i
t
h
m

N
u
m
b
e
r

o
f

O
u
t
l
i
e
r
s

P
u
r
i
t
y

o
f

c
l
u
s
t
e
r

(
%
)

E
r
r
o
r

o
f

c
l
u
s
t
e
r

Synthetic xml
K=3
k-means - 0.91 0.09
SOM - 0.88 0.12
Proposed 8 0.97 0.03

Iris

K=3
k-means - 0.82 0.18
SOM - 0.83 0.17

Bupa

K=2
k-means - 0.76 0.24
SOM - 0.78 0.22
Proposed - 0.81 0.19

Wine

K=3
k-means - 0.73 0.27
SOM 0.74 0.26
Echocardiogr
am

K=2
k-means - 0.75 0.25
SOM - 0.75 0.25

240

on Data Mining and Knowledge Engineering
(ICDMKE) Proceedings of the World Congress on
Engineering (WCE-2009), London UK.

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Computer Science and Technology, Computer
Science and Technology, 17 (5), Editorial
Universitaria de Buenos Aires.


241

Demonstrating Profile of Urinary Tract
Infection in Pregnant Women
with Innovative Approach

Htun Min Latt
No. (1) Defence Services General Hospital (1000-bedded), Nay Pyi Taw, Myanmar
htunminlatt0401@gmail.com

Tin Maung Hlaing
Defence Services Medical Research Centre, Nay Pyi Taw, Myanmar
hlaingtm@gmail.com

Abstract--One hundred and fifty pregnant women
attending antenatal care unit of No. (1) Defence
Services Obstetrics and Gynaecological and Children
Hospital (300-bedded) in Yangon were studied to
demonstrate bacteriological profile of urinary tract
infections during May 2010 to June 2011 with four
objectives; to perform routine examination of urine
from pregnant women who attend antenatal care with
or without urinary tract infection in second trimesters,
to isolate the pathogenic bacteria by cultural method,
to determine antibiotic sensitivity pattern of bacteria
isolates and to identify different types of bacteria
causing urinary tract infection at Microbiology
Department, Military Institute of Nursing and
Paramedical Sciences. The uniqueness of this study
with bacteriological culture and sensitivity test
differentiates from the previous study where routine
examination of urine alone was done. Isolation and
identification of bacteria was made with standard
bacteriological examination procedures and antibiotic
sensitivity test was done by modified disc diffusion
technique of Kirby-Bauer method. The highest
incidence age group was found between (26-34) years.
Eighty one out of 150 urine samples showed pus cell
more than 5/HPF in routine examination of urine and
were cultured from which 11 isolates were identified.
The most common isolated bacteria were Klebsiella
species (5 isolates, 6.2%), followed by Escherichia coli
(3 isolates, 3.7%), Proteus species (1 isolate, 1.2%),
Pseudomonas species (1 isolate, 1.2%) and
Staphylococcus aureus (1 isolate, 1.2%). Drug
sensitivity test showed that all isolates of bacteria were
100% sensitive to Amikacin, Amoxicillin,
Ciprofloxacin, Cefotaxin, Gentamycin, Ceftriazone and
Levofloxacin. This study contributes current
information of the bacterial aetiology of urinary tract
infections of pregnant women with innovative
approach, urine culture and sensitivity which are not
routinely done in AN care screening procedure in
Myanmar. The finding of common pathogens and their
sensitivity pattern out of new approach are helpful in
the management of such cases in population.
Keywords Pregnant women, urine routine
examination, culture and sensitivity test, Kirby-Bauer
method

I. INTRODUCTION
Urinary tract infection (UTI) is one of the most
common bacterial infections in the human population
especially in women, which involves the urethra,
bladder, and kidney due to short urethra, absence of
prostatic secretion, pregnancy and easy
contamination of the urinary tract with faecal flora
(Haider et al, 2010). The overall lifetime risk of
developing a UTI is high (more than 50% of all adult
women), and appropriate diagnosis and treatment are
essential to quality care (Leight,1990). It is therefore
essential to screen for urinary tract infection in
pregnancy so that timely treatment could be offered.
Urinary tract infections account for
approximately 10 percent of outpatient visits by
women and 15 percent of women are increased risk
of UTIs. Pregnant women have increased incidence
of 8 percent of UTI because 90 percent of pregnant
women have been developed urethral dilatation,
which will remain until delivery (Moyhadas &
Irajan, 2009).
It is more common in pregnant than in non-
pregnant women. Studies from different parts of
India have indicated that urinary tract infection
(UTI) during pregnancy leads to low birth weight
babies, increased prenatal mortality and premature
births along with acute and chronic sequelae in
mothers (Lavanya & Jogalakshmi, 2002).
In the study of Yin Yin Zaw, Tun Yee and Thein
Thein Aye (2000), the incidence of asympatomatic
bacteria in pregnancy was (1.3%) in antenatal care
clinic at Defence Services Maternal and Children
Hospital (300-bedded). Therefore, asymptomatic
bacteria are also considerable problems in the
Myanmar military setting.
Urinary tract infection(s) accounts for
significant morbidity in developing countries
including Myanmar. Without treatment, this
condition leads to symptomatic cystitis in about 30%
of pregnant women and half of them will eventually
develop acute pyelonephritis (Weaver & Jenkins,
2002). Therefore, UTI in pregnant women is

242

associated with significant effects on both mother
and baby. Accordingly, all pregnant women should
be screened for UTI. Urine culture and sensitivity
remain the gold standard in diagnosing UTI.
Screening for and treatment of asymptomatic
bacteriuria in pregnancy become a standard as a
routine screening procedures in antenatal care,
however, there is no previously published local
studies and paucity of data in this area.
According to explosion of evidence based
knowledge, laboratory diagnosis has gained
tremendous importance in todays practice. The
antibiotics sensitivity pattern of the pathogenic
bacteria has changed from time to time due to
emergence of drug resistant strains. An ideal way to
achieve an effective therapy is to isolate pathogen
with their sensitivity pattern. This study aims to
detect the profile of urinary tract infections in
pregnant women with innovative approach and
thereby giving ultimate management to affected
pregnant women in developing country.

II. AIM AND OBJECTIVES
Aim
To study profile of urinary tract infections in
pregnant women with innovative approach.

Objectives
1. To determine the occurrence of pyuria and
bacteriuria of pregnant woman who attending
antenatal care unit with or without urinary tract
infection in second trimester
2. To isolate and identify the pathogenic
bacteria causing UTI
3. To determine the antibiotic sensitivity pattern
of the bacteria isolates

III. RESEARCH METHODOLOGY
A cross-sectional laboratory based descriptive
study, total (150) urine samples from pregnant
women in second trimester with or without urinary
tract infection attending antenatal care unit of No. (1)
DSOGCH (300-bedded), Yangon were collected by
simple random sampling method during May 2010 to
June 2011.This (150) urine specimens were
processed in Department of Microbiology, Military
Institute of Nursing and Paramedical Sciences
(MINP).
Methods
Collection of specimen
Before specimen collection, relevant history was
taken according to proforma. Each specimen was
labeled with code number, age, and clinical diagnosis
history of antimicrobial therapy and sent
immediately to the Department of Clinical
Laboratory, No. (1) DSOGCH for urine routine
examination. Then it was sent to Microbiology,
MINP. Clean-catch midstream urine specimens were
taken with a sterile wide-mouth screw capped
container after giving explanation to get without
contaminated urine from pregnant woman who
commit to participate in this study. Specimen was
processed within 2 hours of collection, or was kept
refrigerated at 4 C until delivery to the Laboratory
and processed no longer than 18 hours after
collection (National Health Laboratory, 2003).

Microscopic examination of wet film cover slip
preparation
After macroscopic examination, the specimen
was placed on the clean glass slide making evenly
spread smears, heat fixed and dried. Then smears
was stained by Gram stain and examined under oil
immersion lens of ordinary light microscope. Gram
stain reaction, morphology and arrangement of
bacteria and pus cells noted according to the
proforma.

Preparation of culture media
In this study, three culture media was prepared,
blood agar and Mac Conkey agar for routine culture
method in urinary tract infection and muller Hinton
for antibiotic susceptibility test. These necessary
media were prepared correctly according to the
instruction of manufacturer.

Isolation of the potential bacteria pathogens by
standard culture method
The urine sample was inoculated onto the blood
agar and Mac Conkey agar plate with (0.01)
calibrated wire loop and incubated at 37 C with 5-
10% CO
2
overnight. The next day, small colonies
with lactose fermentation and non-lactose
fermentation was looked for. Bacterial growth in
accordance with the following working definition
was subjected into for the gram stain microscopic
examination and biochemical identification
accordingly (Cheesbrough,2000).

Working definition
Bacteriuria is traditionally defined as the
presence of >10
5
colony-forming units per milliliter
(CFU/ml) of urine from mid-stream clean catch urine
specimens (Speller,1990).

Biochemical identification
Biochemical tests appropriate for the respective
organisms were performed according to Cowan &
Steels manual for bacterial identification. These tests
are Catalase test, Coagulase test (slide test), Oxidase
test, Sugar fermentation test, Indole production test,
Methyl red test, Citrate utilization test and Motility
test.

Antibiotic susceptibility of isolated pathogens
Antibiotic susceptibility test was done on
isolated pathogens using appropriate antibiotic discs
by Kirby-Bauer method.

243

IV. RESULTS
A total of 150 mid-stream urine samples from
150 pregnant women who attended the antenatal care
unit at No. (1) DSOGCH were studied during period
May 2010 to June 2011.
Occurrence of UTI in study population
A total of 150 urine specimen was examined
microscopically in which 69 sample (46%) were pus
cell <5/HPF. Eighty one sample (54%) with pus cell
>5/HPF (Table 1) were selected into culture and (11,
13.6%) were found to be culture positive (Table 2).

Age distribution in study population
In this study, majority were in 26-34 year age
group (101 pregnant women) followed by 15-25 year
age group (31) and 35-44 year age group (18) (Table
3).

Distribution of significant growth of bacterial
isolates
Five different genera of aerobic bacteria among
11 isolates were identified as growth > 10
5
org/ml
from the 81 cases of pus cell more than 5/HPF in
urine routine examination.
Among 11 isolates, the most prevalent bacteria
isolate was Klebsiells species. (5 isolates, 6.2%),
followed by Escherichia coli (3 isolates, 3.7%), and
one isolates each of Proteus species, Pseudomonas
species and Staphylococcus aureus (1.2%) (Table 4)

TABLE 1: PRESENCE OF PUS CELL BY URINE
ROUTINE EXAMINATION
No. Pus cell in Urine RE Number ( % )
1
Pus cell <5/HPF in urine
RE
69 (46%)
2
Pus cell >5/HPF in urine
RE
81 (54%)
Total - 150 (100%)

TABLE 2: CULTURE POSITIVITY RATE AMONG
STUDY POPULATION (N=150)
Sample
examined

No. (%)

Positive
culture
No. (%)
Negative
culture
No. (%)
culture
done
81 (54) 11 (13.6) 70 (86.41)
culture not
done
69 (46) - -
Total 150 (100) 11 (13.6) 70 (86.41)

TABLE 3: DISTRIBUTION OF PREGNANT WOMEN
ACCORDING TO AGE
Age
group
No.
No. of
pus cell
>5/HPF
No. of
culture
positive No.
(%)
No. of
culture
negative
No. (%)
15-25 31 9 1 (1.23) 8 (9.87)
26-34 101 60 8 (9.87) 52 (64.2)
35-44 18 12 2 (2.46) 10 (12.34)
Total 150 81 11 (13.56) 70 (86.41)

TABLE 4: DISTRIBUTION OF BACTERIA ISOLATED
FROM PUS CELL >5/HPF URINE (N=81)

No.
Types of isolated Bacteria Number (% )

1
Klebsiella species 5(6.2)

2
Escherichia coli 3(3.7)

3
Proteus species 1(1.2)

4
Pseudomonas species 1(1.2)

5
Staphylococcus aureus 1(1.2)
11(13.6)

V. DISCUSSION
The purpose of this present study was to
determine the occurrence of pyuria and bacteriuria of
pregnant woman, isolate and identify the pathogenic
bacteria and the antibiotic sensitivity pattern of
causing UTI. The routine culture method is a gold
standard for urine culture. A gold standard is
necessary for calculating sensitivity, specificity,
likelihood ratios and predictive values. One of the
responsibilities of the laboratory is to inform
clinicians of the importance of performing diagnostic
testing to establish an accurate diagnosis. Urine
culture can perform identification of all possible
pathogenic organisms to UTI. In culture method,
predictors included the quality of the specimen
obtained from pregnant women as this relates to
inoculums size and the operators ability to
appropriately perform the culture of the Urine
sample, quality of culture media temperature,
incubation condition and interpretation of the result.
Occurrence of UTI in study population
During the study period, 150 clean catch mid-
stream urine samples of pregnant women attended
antenatal care unit of No. (1) DSOGCH, Yangon
were examined.
Of these, 81 specimens were found to have pus
cell more than 5/HPF in urine routine examination

244

and 69 specimens showed pus cell less than 5/HPF in
urine routine examination. Five different genera or
aerobic bacteria among 11 isolates were identified
from the 81 cases of pus cell more than 5/HPF in
urine routine examination.
Therefore, 11 out of 150 study populations had
significant growth of five different genera. Since,
none of these pregnant women gave signs and
symptoms suggestive of UTI, they might have
asymptomatic bacteriuria. According to study by Yin
Yin Zaw et al (2000), only 1.3 % (11 out of 826)
were found to be bacteriuria without any symptom
for, clean catch first voided urine specimen. It can be
explained that the difference in defining UTI {Urine
RE followed by culture and sensitivity which was
used as the innovative approach in this study and
urine RE only by Yin Yin Zaw et al(2000)}. Where
the facilities and quality of medical technologists
involved in conduct of research varied over time
period.

UTI in Relation to Age Group
The maximum occurrence of UTI cases were
detected in (26-34) year age group. It could be
explained by the prevalence of asymptomatic UTIs
among healthy women increase with advancing age.

Distribution of Significant Growth of Bacteria
Isolates
Five different genera of aerobic bacteria among
11 isolates were identified from the 81 cases of pus
cell more than 5/HPF in urine routine examination.
Among 11 isolates, the most prevalent
organisms were Klebsiells species.(5 isolates, 6.2%),
followed by Escherichia coli (3 isolates, 3.7%),
Proteus species(1 isolates, 1.2%), Pseudomonas
species (1 isolates, 1.2%) Staphylococcus aureus(1
isolates 1.2%). According to literatures, Ecoli is the
most common bacteria associated with UTIs. It was
consistent with the study done by Yin Yin Zaw et at
(2000) in same study area. In their study, 10 out of
11 isolates (90.9%) were Escherichia coli.
Similarly, in Moghadas and Irajian (2009) study
among 297 pregnant women, 10 (3.3%) were
positive for asymptomatic urinary tract infection.
The dominant bacteria isolate was Escherichia coli
(70%). Klebsiella species causes asymptomatic
bacteriuria in frequently (Nicolle, 2003; Loh and
Sivalingan, 2007).
However, in this study, Klebsiella species
predominates over other species rate. It should be
noted the pattern of urinary pathogen could change
over time to time so timely detection of
asymptomatic bacteriuria in pregnant women
becomes a challenge to clinical practice.

Antibiotic Sensitivity Pattern of Bacteria isolates
Out of 11 isolates, Klebsiells species. ( 5
isolates, 6.2%), Escherichia coli (3 isolates,
3.7%),one isolate each of Proteus specie,
Pseudomonas species and Staphylococcus aureus
(1.2%) were 100% sensitive to Amikacin,
Amoxycillinm, Ciprofloxacin, Cefotaxine, Gentamycin,
Ceftriaxone and Levofloxacin.
Moghadas and Irajian (2009), stated that the
isolation rate of asymptomatic urinary tract infection
in pregnant women in attending semman public
health centers, Iran. 80% of isolates were sensitive to
ciprofloxin and cefotaxime, 70% of isolates were
sensitive to gentamycin and chloramphenicol, 50%
of isolates were sensitive to nalidixic acid and
kanamycin, 30% of isolates were sensitive to
tetracycline and 10% of isolates were sensitive to
ampicillin and amoxicillin-clavulanic acid.
Mya Mya Lwin (2001) found that the isolation
rate of community acquired common infection in
muslin free hospital, Yangon. Escherichia coli which
was 96% sensitive to ceftriaxone, 92% sensitive to
ciprofloxacin, 88% sensitive to gentamycin and 56%
sensitive to norfloxacin. It was less sensitive to
cotrimoxazole (28%) and only 8% sensitive to
amoxicillin.
Mya Mya Aye (1999) reported that
Staphylococcus aureus which was sensitive to
amikacin (87.5%) and ciprofloxacin (75%).
However, 37.5% were methicillin resistant
Staphylococcus aureus. Gram-negative bacteria
comprising 5 isolates of Pseudomonas species one
isolate each of Escherichia coli and Citrobacter
species respectively showed 85.7% sensitivity to
ciprofloxacin, 71.4% sensitivity to cefotaxime and
57.1% sensitivity to norfloxacin and gentamycin
respectively. All were sensitive to amikacin.
This could be explained by the fact that high
frequency of antibiotic resistant was found generally
in nosocomial environment due to emergence of
virulent microorganisms that have survived and
evoluted during antibiotic exposure (pressure). An
ideal way to achieve an effective therapy is to isolate
pathogen with their sensitivity pattern. In this study
population, the organisms might be community
origin.

VI. CONCLUSION

This study was a cross-sectional laboratory
based descriptive study conducted in the
Microbiology Department, MINP and No. (1)
DSOGCH for one year duration. A total of 150
pregnant women with or without signs and
symptoms of urinary tract infection in second
trimester underwent bacteriological evaluation.
Antibiotic sensitivity testing was performed by
modified Kirby-Bauer disc diffusion method.
Significant bacteria growth (>10
5
organisms per
ml of urine) was found to affect more commonly the
middle age group especially (26-34) years age group.
Bacteria isolates of Klebsiella species and
Escheriachia coli and followed by Proteus species,
Pseudomonas species and Staphylococcus aureus are

245

totally sensitive to Amikacin, Amoxycillin,
Ciprofloxacin, Cefotaxine, Gentamycin, Ceftriaxone
and Levofloxacin.
Appropriate management of lower UTI during
pregnancy will prevent most upper UTI and their
sequelae. Since non culture methods like routine
examination of urine are not reliable for the
identification of bacteriuria in asymptomatic
population leaving infection unnoticed with
possibility of flaring up of infection, culture and
sensitivity should be carried out for detecting
bacteriuria in pregnancy.
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246

Innovative Study on Determining Risk of
Noncommunicable Diseases among Migrant
Workers for Better Healthcare

Tin Maung Hlaing
Defence Services Medical Research Centre
Nay Pyi Taw, Myanmar; hlaingtm@gmail.com
Ye Thwe Hlaing
Defence Services Medical Research Centre
Nay Pyi Taw, Myanmar; yethwehlaing@gmail.com

Abstract-- Infectious diseases constitute major health
problems in developing countries but people in those
countries are not without risk of having
noncommunicable diseases and the migrant
populations in those countries are not spared for
noncommunicable diseases. There are many risk
factors that cause noncommunicable diseases (NCDs)
and most of them are preventable behavioural risk
factors. Little information is known about risk
behaviours influencing NCDs among Myanmar
migrant workers because most studies focused on
communicable diseases. This cross-sectional study
aimed to determine the prevalence of the major risk
factors of NCDs in the migrant worker population. A
total of 400 respondents (313 males and 87 females)
were selected with a systematic sampling method. The
respondents were interviewed with a pretested semi-
structured questionnaire and prevalence and measures
of central tendency of NCD risk factors were
calculated. In this study, the prevalence of current
smokers was 53.8%, the prevalence of current daily
smokers was 47.6%, the percentage of heavy episodic
drinkers among males was 57.1% and that among
females was 10.3%. The majority of respondents
(99.5%) ate less than 5 servings of fruit and/or
vegetables on average per day. The percentage with a
low level of physical activity was 24.5%, that of
overweight was 8.8% and the percentage of raised
blood pressure was 9.5%. The prevalence of raised
random blood glucose was 0.8%. The prevalence of a
high level of combined risk factors was 14.5%, that for
the younger age group was lower than that of the older
age group. The prevalence of the above risk factors was
quite higher among the migrant population than
among the general population. Therefore it is
important to establish more emphasis on NCDs in the
migrant workers in order to offer better healthcare.

Keywords - Noncommunicable diseases, tobacco
smoking, alcohol binge drinking, physical inactivity,
overweight, raised blood pressure, blood glucose

1. INTRODUCTION
1.1Background
Noncommunicable diseases (NCDs) are the
leading causes of death globally, killing more people
each year than all other causes combined. In 2008, of
the 57 million deaths that occurred globally, 36
million (63%) were due to NCDs, comprising mainly
cardiovascular diseases, cancers, diabetes and
chronic lung diseases (World Health Organization,
2011).
According to the World Health Organization
(WHO) data, nearly 80% of NCD deaths occur in
low- and middle-income countries. Low- and lower-
middle-income countries have the highest proportion
of deaths under 60 years from NCDs. In high-income
countries, premature deaths under 60 years were
13% and 25% for upper-middle-income countries. In
lower-middle-income countries, the proportion of
premature NCD deaths under 60 years rose to 28%,
more than double the proportion in high-income
countries. In low-income countries the proportion of
premature NCD deaths under 60 years was 41%,
three times the proportion in high-income countries
(World Health Organization, 2011).
There are many risk factors that influence
NCDs, mainly cardiovascular disease, cancer,
chronic obstructive pulmonary disease and diabetes
mellitus. The most important behavioural risk factors
are tobacco use, unhealthy diet, insufficient physical
activity (WHO Regional Office for South-East Asia,
2002) and the harmful use of alcohol (World Health
Organization, 2010). Up to 80% of heart disease,
stroke and type 2 diabetes and over a third of cancer
could be prevented by eliminating the above risk
factors (World Health Organization, 2008).
Moreover, the influence of these behavioural risk
factors and other underlying metabolic/ physiological
causes such as raised blood pressure, raised blood

247

glucose and overweight and obesity is the major
factors in the rising trends of NCDs globally (World
Health Organization, 2010).

1.2 Risk Factors
1.2.1 Tobacco
There are nearly 6 million people die due to
direct tobacco use and second-hand smoke (SHS)
each year (Mendis, Puska, & Norrving, 2011). The
use of tobacco is associated with ill-health, disability
and death not only from noncommunicable diseases,
but also from communicable diseases. In case of
noncommunicable diseases, tobacco use is
responsible for 10% of all deaths from
cardiovascular diseases, 22% of all cancer deaths,
and 36% of all deaths from diseases of the
respiratory system (World Health Organization,
2012a).
1.2.2 Low Fruit and Vegetable Consumption
Globally, 1.7 million (2.8%) of deaths are
attributable to low fruit and vegetable consumption
(World Health Organization, 2012c). WHO
estimated that insufficient intake of fruit and
vegetables cause around 14% of gastrointestinal can-
cer deaths, about 11% of ischaemic heart disease
deaths and about 9% of stroke deaths globally. Rates
of deaths and disability-adjusted life years (DALYs)
attributed to low fruit and vegetable intake are
highest in middle-income European countries and in
South-East Asia (Department of Health Statistics and
Informatics, 2009). Recent study showed that the
whole grain-enriched hypocaloric diet reduced body
weight and waist circumference (Katcher, Legro,
Kunselman, Gillies, Demes, & Bagshaw, 2008).
1.2.3 Alcohol
Harmful use of alcohol is related to premature
death and avoidable disease and is a major avoidable
risk factor for NCDs. Hazardous and harmful
drinking was responsible for 2.5 million (3.8%)
deaths worldwide in 2004, among these deaths, more
than 50% were due to CVDs, liver cirrhosis and
cancer (Mendis, Puska, & Norrving, 2011).
1.2.4 Physical Inactivity
Physical inactivity is one of the preventable risk
factors for NCDs. Physical inactivity is estimated to
cause around 2125% of the breast and colon cancer
burden, 27% of diabetes and about 30% of the
ischaemic heart disease burden (Department of
Health Statistics and Informatics, 2009). Dutheil, et
al., (2010) showed that the association of diet and
physical activity reduced significantly the body
weight (p = < 0.0001), BMI (p = < 0.0001) and waist
circumference (p = < 0.05).
1.2.5 Overweight and Obesity (High Body Mass
Index)
Overweight and obesity are the fifth leading risk
for global deaths and account for 2.8 million adult
deaths each year (World Health Organization,
2012b). Mean BMI, overweight and obesity are
increasing worldwide due to changes in the types of
diet and increasing physical inactivity. Rates of
overweight and obesity are projected to increase in
almost all countries, with 1.5 billion people
overweight in 2015 (Department of Health Statistics
and Informatics, 2009). Overweight and obesity
cause adverse metabolic effects on blood pressure,
cholesterol, triglycerides and insulin resistance
(Mendis et al, 2011).
1.2.6 High Blood Pressure
Globally, 51% of stroke (cerebrovascular
disease) and 45% of ischaemic heart disease deaths
are attributable to high systolic blood pressure. At
any given age, the risk of dying from high blood
pressure in low- and middle-income countries is
more than double that in high-income countries
(Department of Health Statistics and Informatics,
2009).
1.2.7 High Blood Glucose
Changes in diet and reduction in physical
activity increase resistance to insulin, which, in turn,
raises blood glucose. Genetics plays an important
role in whether individuals with similar diets and
physical activity levels become resistant to insulin.
Globally, 6% of deaths are caused by high blood
glucose, with 83% of those deaths occurring in low-
and middle-income countries. Raised blood glucose
causes all diabetes deaths, 22% of ischaemic heart
disease and 16% of stroke deaths (Department of
Health Statistics and Informatics, 2009).

1.3 Reviews of Other Studies
1.3.1Prevalence of Tobacco Smokers
A study done among migrant Myanmar youth
workers in Samut Sakhon Province, Thailand
showed that the prevalence of current smokers was
21.5% (Howteerakul, Suwannapong, & Than, 2005).
The prevalence of current smokers in American
Samoa was 29.9% (World Health Organization,
2007) and in Nauru was 48.2% (WHO Regional
Office for Western Pacific Region, 2007). WHO
Regional Office for Western Pacific Region, (2010a)
showed that the prevalence of current tobacco
smokers was 27.6% in Mongolia. The prevalence of
smokers was 39.8% in the Solomon Islands (WHO
Regional Office for Western Pacific Region, 2010b).
1.3.2 Prevalence of Alcohol Consumption Status
Howteerakul, Suwannapong and Than, (2005)
showed that the prevalence of alcohol drinkers
among migrant workers was 25.4%. In 2007, the
prevalence of binge drinkers in American Samoa
among males was 49.6% and that among females
was 15.1% (World Health Organization, 2007), the
prevalence in Nauru among males was 29.8% and
that among females was 25.6% (WHO Regional
Office for Western Pacific Region, 2007). In 2010,
the prevalence of binge drinkers in Mongolia among

248

males was 39.7% and that among females was 15.1%
(WHO Regional Office for Western Pacific Region,
2010a) and in the Solomon Islands among males was
25.1% and that among females was 20.3% (WHO
Regional Office for Western Pacific Region, 2010b).
1.3.3 Prevalence of Low Consumption of Fruits and
Vegetables
The prevalence of those eating less than five
servings per day in American Samoa was 86.7%
(World Health Organization, 2007) and in Nauru was
96.9% (WHO Regional Office for Western Pacific
Region, 2007). WHO Regional Office for Western
Pacific Region, (2010a) showed that the prevalence
was 92.3% in Mongolia. The prevalence in the
Solomon Islands was 93.6% (WHO Regional Office
for Western Pacific Region, 2010b).
1.3.4 Prevalence of Physical Inactivity
Howteerakul, Suwannapong and Than, (2005)
showed that the prevalence of low physical activity
among migrant workers was 36.7%. In 2007,
prevalence of low physical activity in American
2007). In 2010, the prevalence of low physical
activity in Mongolia was 7.5% (WHO Regional
Office for Western Pacific Region, 2010a) and in the
Solomon Islands was 41.9% (WHO Regional Office
for Western Pacific Region, 2010b).
1.3.5 Prevalence of Overweight
The prevalence of overweight in American
2007). WHO Regional Office for Western Pacific
Region, (2010a) showed that the prevalence was
39.8% in Mongolia. The prevalence in the Solomon
Islands was 67.4% (WHO Regional Office for
Western Pacific Region, 2010b).
1.3.6 Prevalence of Raised Blood Pressure
The prevalence of those with raised blood
pressure in American Samoa among males was
40.9% and among females was 27.9% (World Health
Organization, 2007). The prevalence in Mongolia
was 92.3% (WHO Regional Office for Western
Pacific Region, 2010a) and in the Solomon Islands
was 10.7% (WHO Regional Office for Western
Pacific Region, 2010b).

1.4 Rationale
Myanmar is now facing a double burden of
disease (communicable and non-communicable
diseases). Deaths due to NCDs contribute 51% of all
deaths and 44% of overall morbidities. In 2003-2004,
a STEPwise approach survey on the prevalence of
diabetes mellitus and prevalence of risk factors stated
the prevalence of diabetes was 12.6% in females and
11.5% in males, the prevalence of hypertension was
28.8% in females and 31.8% in males and the
prevalence of obesity was 11.05% in females and
5.38% in males (Ministry of Health, 2011).
In 2009, a noncommunicable disease risk factor
survey was done in Myanmar. It was nationally
representative and it stated that the prevalence of
current smokers was 22.0% and that among males
was nearly 45% and among females was 7.8%.
Among current smokers, nearly 76% smoked daily
(smoking all types), with a gender difference of
75.1% of men and 78.5% of women. Among current
drinkers, 15.7% reported drinking daily. Nearly 13%
of the current male drinkers reported drinking more
than 5 standard drinks on a drinking day and 0.1% of
women reported drinking 4 or more, suggestive of
binge drinking. The mean number of combined
fruit and vegetable servings was 2.6 serves per
average day. About 90% of the respondents
consumed less than five servings of fruit and/or
vegetables per day. In case of physical activity,
12.7% had a low level of physical activity. The
overall prevalence of overweight (BMI 25.0-29.9)
was 18.7%, and of obesity (BMI 30) was 6.8%. The
prevalence of raised blood pressure (Systolic Blood
Pressure (SBP) 140 mmHg and/or Diastolic Blood
Pressure (DBP) 90 mmHg) and being currently on
medication for raised blood pressure was 30%
(WHO Regional Office for South-East Asia, 2011).
The migrant workers play an important role in
productivity of the country and the occurrence of
NCDs among them will cause reduction in
productivity of the country. In general, the migrant
workers move from place to place far from their
native town and their own community relatively
leading to lack of psychological and social care.
With regards to the health status of the migrant
workers and internally displaced population, most of
the healthcare services like accessibility of adequate
food, water, housing and occurrence of
communicable diseases are deemed necessary rather
than noncommunicable diseases. Thus, there is no
local study about risk of NCDs among those
population conducted in Myanmar. The innovative
findings of this study will be useful for planning and
developing strategies for better healthcare against
NCDs.
2. OBJECTIVE
2.1 General Objective
To determine the prevalence of the major risk
factors of NCDs in the migrant worker population.

2.2 Specific Objectives
(1) To describe the prevalence of behavioural
risk factors influencing NCDs, including tobacco
use, alcohol consumption, dietary behaviour and
physical activity.
(2) To measure the prevalence of major
physical risk factors influencing NCDs such as
obesity and raised blood pressure.

249

(3) To find the level of blood glucose which is
one of the important biochemical markers
influencing NCDs.

3. METHODOLOGY
This study was a cross sectional descriptive
design to determine risk of NCDs among migrant
worker population. For calculating the survey sample
size, we assumed a 95% confidence interval (z =
1.96) and d = 0.05 (5% margin of error) and p = 0.3
(prevalence of combined risk factors from NCD risk
factor survey, Myanmar 2009) and used the
following formula:
n = z p (1- p)/d
n = (1.96) (0.3) (0.7) / (0.05)
n = 322
Therefore the minimum required sample size
was 322 respondents. Ethical clearance was
approved by the Institutional Ethical Committee of
the Defence Services Medical Research Centre
(DSMRC). The survey questionnaire was pretested
in migrant workers of other areas and 400
respondents were selected from a construction site of
DSMRC through a systematic sampling method.
After receiving informed consent, face to face
interviews, physical and blood glucose
measurements were carried out from 25
th
April, 2012
to 23
rd
May, 2012. Data were entered in a computer
daily. After cleaning the whole raw data, data
analysis was conducted using SPSS version 20. The
prevalence and measures of central tendency of NCD
risk factors were calculated.

4. RESULTS
Table 1 shows behavioural risk factors such
as tobacco use, alcohol consumption, fruit and
vegetable consumption and physical activity. The
overall percentage of current smokers was 53.8%:
63.6% among males and 18.4% among females. The
percentage of current daily smokers was 47.6% in
males, 4.6% in females and 38.2% in all respondents.
Among these daily smokers, average age for starting
smoking was 18.5 years and it was not too different
among males (18.6 years) and females (18.0 years).
More than half of daily smokers (57.5%) smoked
manufactured cigarettes, 56.4% among males and
100% among females. The mean number of
manufactured cigarettes smoked per day was 5.23 in
both sexes, 5.4 in males and 1.0 in females.
The next risk factor described in Table 1 is
alcohol consumption. Among the respondents,
33.2% were lifetime abstainers, 22.3% among males
and 64.4% among females. Only 3.3% were
abstainers over the past 12 months, 3.6% males and
1.2% females. Prevalence of current alcohol drinkers
(drank in the past 30 days) was 61.0% in males,
33.3% in females and 55.0% in both sexes. Among
male respondents, 57.1% had five or more drinks and
among females, 10.3% (binge drinking).
Table 1 also shows fruit and vegetable
consumption status among the respondents. The
mean number of days when fruit was consumed in a
typical week was 2.43 among the respondents, 2.9
among males and 0.08 among females. The mean
number of servings of fruit consumed on average per
day was 1.0 in all respondents and 1.2 and 0.5 among
males and females respectively. The mean number of
days when vegetables were consumed was 4.4, 2.1
and 2.43 among males, females and both sexes
respectively. The mean number of servings of
vegetables consumed on average per day was 1.3 in
all respondents and 1.5 and 0.5 among males and
females respectively. The majority of the
respondents (99.5%) ate less than 5 servings of fruit
and vegetables on average per day, 99.4% among
males and all the female respondents.
Physical activity of the respondents is shown
in Table 1. About one fourth of the respondents
(24.5%) were found at a low level of activity and it
was not much different among males and females,
24.3% and 25.3% respectively. Nearly one third of
the respondents (67.7%) were engaged in a high
level of activity, 67.4% among male respondents and
69.0% among female respondents. The median time
spent in physical activity among males was 165
minutes and that among females was 90 minutes.
The percentage of the respondents not engaging in
vigorous activity was 37.5% and that in males was
39.0% and in females was 32.2%.
Table 2 shows physical measurements and
blood glucose measurement. The mean BMI was
20.9 in males and 22.3 in females. The prevalence of
overweight (BMI 25 Kg/m) was 8.8% in total
respondents and 6.1% among male respondents and
18.4% among female respondents. The percentage of
obesity was not much different among males and
females, 2.3% and 2.2% respectively. Average waist
circumference in males was 70.7 centimetres (cm)
and that in females was 73.0 cm. Average systolic
blood pressure (SBP) among males was 112.2
mmHg and that among females was 107.7 mmHg.
The mean diastolic blood pressure (DBP) among
males was 75.4 mmHg and that among females was
71.5 mmHg. The prevalence of raised blood pressure
(SBP 140 and/or DBP 90 mmHg or being
currently on medication for raised BP) among males
was 10.7% and that among females was 4.6%. The
prevalence of raised BP pressure (SBP 140 and/or
DBP 90 mmHg) while not being currently on
medication among males was 9.3% and that among
females was 4.6%. Average random blood glucose
among males was 109.6 mg/dl and that among
females was 112.2 mg/dl. The prevalence of raised

250

random blood glucose among males was 0.6% and
that among females was 1.1%.
Table 2 also shows a summary of combined risk
factors. The percentage showing none of the five risk
factors shown in the table was very low and found
only in males (0.3%). The percentage with three or
more of the five risk factors in the younger age group
(18-44 years old) was 16.1% among males and 2.7%
among females. That in the older age group (45-67
years old) was 27.3% among males and 8.3% among
females. In all age groups, the percentage with three
or more of the five risk factors was 14.5% among the
respondents, 17.3% among males and 3.4% among
females.
5. DISCUSSION
5.1 Tobacco Smoking
Percentage of current smokers was 53.8% in this
study, which was two times higher than in the
corresponding rate in the noncommunicable disease
risk factor survey in Myanmar, 2009 (22.0%). The
percentage of current daily smokers was 47.6% in
males, 4.6% in females and 38.2% in all respondents,
which was 2.6 to 15 times higher than in the
Myanmar, 2009 survey; 18.3% in males, 0.3% in
females and 7.6% in all respondents. Among these
daily smokers, the average age for starting smoking
was 18.5 years, which was 2.3 years younger than in
the above corresponding study (20.8 years). More
than half of daily smokers (57.5%) smoked
manufactured cigarettes, which was more than two
times higher than in the above corresponding study
(21.5%).

5.2 Alcohol Consumption
The prevalence of current alcohol drinkers
(drank in the past 30 days) was 61.0% in males,
33.3% in females and 55.0% in both sexes, which
was higher than in the corresponding study in the
Myanmar, 2009 survey (12.9%). Among male
respondents, 57.1% had five or more drinks and
among females, 10.3% (binge drinking), which was a
huge increase the previous corresponding study (12.8
in males an 0.1 in females).

5.3 Fruits and Vegetables Consumption
The mean number of days fruit was consumed in
a typical week was 2.43 among the respondents,
which was lower than in the corresponding study in
the Myanmar, 2009 survey (4.3). There was no
significant difference in the mean number of servings
of fruit consumed on average per day (1.0 vs. 1.1).
The mean number of days vegetables were consumed
was 2.43 among the respondents, which was lower
than in the corresponding study (5.7). There was no
significant difference in the mean number of servings
of vegetables consumed on average per day (1.3 vs.
1.5). The majority of the respondents (99.5%) ate
less than 5 servings of fruit and vegetables on
average per day, which was higher than in the
corresponding study of noncommunicable disease
risk factors in the Myanmar, 2009 survey (about
90%).

5.4 Physical Activity
About one fourth of the respondents (24.5%)
were found at a low level of activity, which was
higher than in the corresponding study in the
Myanmar, 2009 survey (12.7%). Nearly one third of
the respondents (67.7%) were engaged in a high
level of activity, which was higher than in the
corresponding study (57.1). The median time spent
in physical activity was 165 minutes among males
and 90 minutes among females, which was slightly
higher among males (156) and lower among females
(120). The percentage of the respondents not
engaging in vigorous activity was 37.5%, which was
lower than in the corresponding study (71.3%).

5.5 Physical Measurement
The prevalence of overweight was 8.8%, which
was significantly lower than in the corresponding
study (25.4%). The percentage of obesity was not
much different among males and females, 2.3% and
2.2% respectively, which were lower than in the
corresponding study (4.3% in males and 8.4% in
females). Average waist circumference in males was
70.7 centimetres (cm) and that in females was 73.0
cm, which were slightly lower than in the
corresponding study (76.3 in males and 75.6 in
females). The prevalence of raised blood pressure
(SBP 140 and/or DBP 90 mmHg or being
currently on medication for raised BP) among males
was 10.7% and that among females was 4.6%, which
were significantly lower than in the corresponding
study (31.0% in males and 29.3% in females). The
prevalence of raised BP pressure (SBP 140 and/or
DBP 90 mmHg) while not being currently on
medication among males was 9.3% and that among
females was 4.6%, which were significantly lower
than in the corresponding study (28.4% in males and
23.7% in females). Average random blood glucose
among males was 109.6 mg/dl and that among
females was 112.2 mg/dl. The prevalence of raised
random blood glucose among males was 0.6% and
that among females was 1.1%, which were within
normal blood glucose levels and only 3 out of 400
respondents had raised random blood glucose levels.
5.6 Combined Risk Factors
The percentage of those with none of the five
risk factors shown in the table was very low and it
was found only in males (0.3%). The percentage
with three or more of the five risk factors in the
younger age group (18-44 years old) was 16.1%

251

among males and 2.7% among females. That in the
older age group (45-67 years old) was 27.3% among
males and 8.3% among females. The percentage with
three or more of the five risk factors in older age
group was higher than in the younger age group. In
all age groups, the percentage with three or more of
the five risk factors was 14.5% among the
respondents, 17.3% among males and 3.4% among
females. Males were higher than females in terms of
three or more of the five risk factors.

VI. CONCLUSIONS AND RECOMMENDATIONS
The current data indicate that smoking
prevalence among migrant workers is higher than
that among the general population. Therefore,
smoking related chronic diseases may be high among
the migrant population and there should be delivered
messages about the health risks associated with
smoking and of the health benefits of ceasing
smoking among the population. The alcohol related
data indicate that drinking alcohol is quite high in the
migrant population and heavy drinkers are seen
mostly among males. There is a need for an
increased awareness of the health impacts of excess
alcohol consumption among the migrant population
and to discourage the binge drinking habit.
Fruit and vegetable consumption is low and
nearly all the respondents consumed less than 5
servings of fruit and vegetables on average per day.
There should be increased awareness about the
importance of a healthy diet and encouragement of
healthy eating habits across all age groups by
promoting the availability and consumption of
greater levels of fruit and vegetable.
Nearly one fourth of the respondents were
physically inactive. Although the population with
overweight was low among respondents, they should
be informed of the health benefits of reducing and
preventing overweight and programmes that support
and promote weight reduction are still needed for
those who are overweight. Messages about the health
impacts of hypertension, diabetes and cardiovascular
disease and the benefits of preventing or controlling
them should be delivered to the migrant population.
According to the innovative findings of this
study, it is important to promote health education
programmes against NCDs, to ensure sustainable
funding mechanism to support NCDs strategy
implementation and monitoring, to strengthen the
capacity of health workers and health system for
effective prevention and control of NCDs, to develop
a system of community-based care and management
of individuals with diagnosed NCDs in order to
receive better healthcare leading to the development
of the country.

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APPENDICES
APPENDIX 1
TABLE 1: BEHAVIORAL RISK FACTORS
Results for adults aged 18-67 years (incl. 95%
CI) (adjust if necessary)
Both Sexes Males Females
Tobacco Use
Percentage who currently smoke tobacco
53.8
(48.1-57.8)
63.6
(57.6-68.3)
18.4
(9.9-26.1)
Percentage who currently smoke tobacco daily
38.2
(33.2-42.7)
47.6
(41.5-52.5)
4.6
(0.0-8.1)
For those who smoke tobacco daily
Average age started smoking (years)
18.5
(17.9-19.3)
18.6
(17.9-19.3)
18.0
(18.0-18.0)
Percentage of daily smokers smoking
manufactured cigarettes
57.5
(49.1-64.8)
56.4
(48.0-63.9)
100
Mean number of manufactured cigarettes smoked
per day (by smokers of manufactured cigarettes)
5.23
(4.0-6.4)
5.4
(4.2-6.6)
1.0
1.0
Alcohol Consumption
Percentage who are lifetime abstainers
33.2
(28.3-37.6)
22.3
(17.6-26.9)
64.4
(54.3-74.4)
Percentage who are abstainers over the past 12
months
3.3
(1.3-4.6)
3.6
(1.5-5.6)
1.2
(-1.1-3.5)
Percentage who currently drink (drank alcohol in
the past 30 days)
55.0
(50.1-59.8)
61.0
(55.5-66.4)
33.3
(23.3-43.20
Percentage who engage in heavy episodic
drinking (men who had 5 or more / women who
had 4 or more drinks on any day in the past 30
days)

57.1
(50.1-64.7)
10.3
(0.0-21.0)
Fruit and Vegetable Consumption (in a typical week)
Mean number of days fruit consumed
2.43
(2.2-2.7)
2.9
(2.6-3.2)
0.08
(0.5-1.1)
Mean number of servings of fruit consumed on
average per day
1.0
(0.9-1.1)
1.2
(1.1-1.3)
0.5
(0.3-0.7)
Mean number of days vegetables consumed
3.87
(3.6-4.1)
4.4
(4.1-4.6)
2.1
(1.5-2.8)
Mean number of servings of vegetables
consumed on average per day
1.3
(1.2-1.4)
1.5
(1.4-1.6)
0.5
(0.3-0.6)
Percentage who ate less than 5 servings of fruit
and/or vegetables on average per day
99.5
(98.0-100)
99.4
(98.5-100)
100
(100)


253

TABLE 1: BEHAVIORAL RISK FACTORS (CONT.)
Physical Activity
Percentage with low levels of activity (defined as
< 600 MET-minutes per week)
24.5
(20.3-28.7)
24.3
(19.5-29.1)
25.3
(16.2-34.4)
Percentage with high levels of activity (defined as
>3000 MET-minutes per week)
67.7
(63.1-72.3)
67.4
(62.2-72.2)
69.0
(59.3-78.7)
Median time spent in physical activity on average
per day (minutes) (presented with inter-quartile
range)
150
(30-435)
165
(30-435)
90
(15-240)
Percentage not engaging in vigorous activity
37.5
(32.7-42.2)
39.0
(33.6-44.4)
32.2
(22.3-42.0)

TABLE 2: PHYSICAL AND BLOOD GLUCOSE MEASUREMENTS AND SUMMARY OF COMBINED RISK
FACTORS

Physical Measurements
Mean body mass index - BMI (kg/m)
21.2
(20.9-21.6)
20.9
(20.6-21.4)
22.3
(21.7-22.9)
Percentage who are overweight (kg/m)
8.8
(6.0-11.6)
6.1
(3.4-8.7)
18.4
(10.2-26.5)
Percentage who are obese (kg/m)
2.3
(0.8-3.7)
2.3
(0.0-4.6)
2.2
(0.5-3.8)
Average waist circumference (cm)

70.7
(69.9-71.6)
73.0
(71.3-74.7)
Mean systolic blood pressure - SBP (mmHg),
including those currently on medication for raised
BP
111.3
(109.8-112.5)
112.2
(110.8-
113.6)
107.7
(104.7-
110.8)
Mean diastolic blood pressure - DBP (mmHg) ,
including those currently on medication for raised
BP
74.5
(73.7-75.4)
75.4
(74.4-76.4)
71.5
(69.8-73.2)
Percentage with raised BP (SBP 140 and/or
DBP 90 mmHg or currently on medication for
raised BP)
9.5
(6.5-12.2)
10.9
(7.2-14.1)
4.6
(0.2-9.0)
Percentage with raised BP (SBP 140 and/or
DBP 90 mmHg) who are not currently on
medication for raised BP
8.25
(5.5-10.9)
9.3
(6.1-12.5)
4.6
(0.2-9.0)
Biochemical Measurement

Mean random blood glucose, including those
currently on medication for raised blood glucose
(mg/dl)
110.2
(108.2-112.2)
109.6
(107.6-
111.6)
112.2
(106.5-
117.9)
Percentage with raised random blood glucose as
defined below or currently on medication for
raised blood glucose
plasma venous value (200 mg/dl)
capillary whole blood value (200 mg/dl)
0.8
(-0.1-1.7)
0.6
(-0.2-1.4)
1.1
(-1.1-3.3)

254

TABLE 2: PHYSICAL AND BLOOD GLUCOSE MEASUREMENTS AND SUMMARY OF COMBINED RISK
FACTORS (CONT.)

APPENDIX 2

SURVEY TEAM
Principal Investigator:
Tin Maung Hlaing (Commandant,
DSMRC)
Field Investigators
Naing Thar Myint
Aung Khin Sint
Linkar Win
Moe Htet Oo
Tun Tun Naing
Ye Thwe Hlaing
Yan Naung Win
Nyein Chan
Nay Myo Aung
Win Lwin Oo
Kyaw Thu Hein
Nyein Chan Aung
Than Htike Win
Htin Lin Naing Soe

Summary of combined risk factors
1. current daily smokers
2. less than 5 servings of fruit and
vegetables per day
3. low level of activity
4. overweight (BMI 25 Kg/m)
5. raised blood pressure (SBP 140 and/or
DBP 90 mmHg or currently on
medication for raised BP)
Percentage with none of the above risk factors
0.2

0.3

0.0

Percentage with three or more of the above risk
factors, aged 18 to 44 years
13.5
(9.9-17.0)
16.1
(11.8-20.4)
2.7
(-0.9-6.4)
22.2
(10.0-34.3)
27.3
(12.1-42.5)
8.3
(-7.3-23.9)
14.5
(11.0-17.9)
17.3
(13.1-21.5)
3.4
(-0.4-7.2)

255

An Innovative Bio-Assessment Tool for
Application in River Water Quality
Management

Subodh Sharma
Aquatic Ecology Centre (AEC), Kathmandu University, P. O. Box: 6250, Kathmandu, Nepal.
subodh.sharma@ku.edu.np

Abstract The Nepalese Biotic Score (NEPBIOS) is an
innovative tool developed in Nepal for the assessment
of water quality in the middle mountain and lowland
rivers of the Himalayas. This tool is based on the
response of benthic macro invertebrates as biological
indicators to environmental change. The original list of
benthic macro invertebrates with 92 (82 family level
indicators, 8 generic level, and 2 species level)
indicators is now extended to 116 indicators (87 family
level, 15 generic level, and 14 species level) for its
application in bio-monitoring of the rivers in Central
Himalaya, and renamed as NEPBIOS-EXTENDED I.
The Nepalese Biotic Score based Average Score Per
Taxon (NEPBIOS/ASPT) values are reorganized for
river water quality classification based on experiences
gained from several case studies. Local community in
Nepal have found that monitoring river quality using
benthic macro invertebrate fauna is easy and
understood by the public and that they provide good
scientific information. Promotion of this method
through research on viable bio-indicators should be
the priority in future.
Keywords Biotic Score, Biotic Index, Bio-monitoring,
Macro invertebrates, NEPBIOS
I. INTRODUCTION
There is a widespread public concern about the
degradation of water quality in Nepal. Rivers and
streams are major sources of drinking water for most
of the people in the middle hills. A detailed review
of research carried out in this field can be obtained
from Sharma (1996) and Pradhan (1998) covering
different eco-regions in Nepal. Several efforts are
underway to formulate methods for monitoring river
water quality in the Hindu-Kush Himalayas
(Ofenbck et al., 2010; Stubauer et al., 2010).
However, it is the development of the Nepalese
Biotic Score (NEPBIOS) that led to other indices
formulation in the region considering macro
invertebrates as indicators. This is a biological
method of assessing river water quality, which takes
into account the presence, and absence of families of
macro-invertebrates or higher taxa. This method
involves the determination of average score per
taxon (ASPT) of the indicator species present in a
sample of macro-invertebrates, more detail of which
can be obtained from Sharma (1996). There exist
hundreds of biological methods for water quality
assessment worldwide. Efficiency of ten such
methods was tested in assessing the water quality of
Nepalese rivers (Sharma & Moog, 1996) and it was
finally recommended that the newly adapted
NEPBIOS/ASPT method should be applied to assess
the water quality of rivers in Central Himalaya
particularly Nepal. Pradhan (1998) in her attempt to
apply NEPBIOS in the Bagmati river system has
also formulated NEPBIOS-BRS (also called
NEPBIOS-BBS) and contributed to expansion of the
list of NEPBIOS. Scholz (2001) applied NEPBIOS
for biological water quality assessment of the Seti
river and its tributaries in Pokhara Valley, Nepal. In
order to provide the most suitable assessment system
for Nepal the applicability of both the original
NEPBIOS and the NEPBIOS-BRS were tested
(Sharma and Moog, 2002). To increase the
comparability of NEPBIOS within different eco-
regions of Nepal, Sharma & Moog (2002) have
suggested a departure from a class-defined system to
a reference based evaluation scheme (Table 1).
Application of a reference based evaluation system
in eco-regional frameworks offers valuable tools for
inventorying and assessing environmental resources,
for setting resource management goals, and for
developing biological criteria and water quality
standards (Hughes, 1989; Griffith et al., 1994).
There exists an adequate database of water
chemistry in most of the countries in the Himalayas.
Essentially all monitoring programs in the region are
focused on physico-chemical analysis of water
samples. The knowledge of chemical monitoring is
immense. On the other hand, there is virtually no
information on bio-monitoring, except for India and
Pakistan (Habermann & Reisenberger, 2000) to a
very limited extent. In India, the Central Pollution
Control Board, Delhi is actively involved in not only
the physical and chemical characterization of rivers
but also biological monitoring of 126 rivers on
regular basis. Habermann and Reisenberger (2000),
the first researchers in Pakistan, have tested the
efficiency of, in addition to NEPBIOS, five other
indices developed in Europe, for monitoring the
water quality of rivers in Pakistan. Habermann and
Reisenberger (2000) stated clearly that the reason
for limiting their study to the family level was the

256

lack of adequate literature describing the aquatic
fauna of Pakistan. The trend of generating chemical
data is prevalent in South Asia and a good technical
work force is also available for carrying out
chemical analyses in the Himalayan countries. But
the question of data handling and interpretation
remains unanswered. In this paper the list of
NEPBIOS is extended and conversion of ASPT to
equivalent water quality is proposed in a different
way. This is based on our experience in the middle
mountains of Nepal and is recommended to other
Central Himalayan countries in middle mountainous
zones.
II. MATERIALS AND METHODS
Data from 216 sites published in Sharma
(1996), and Pradhan (1998) were the bases for this
analysis. Description of sampling site features was
recorded in a site protocol according to Sharma
(1996). Determination of benthic macro-
invertebrates was done to the highest possible
taxonomic precision level. Pre-classification of
water quality was by experts' judgment, taking into
consideration the parameters such as turbidity,
colour, odour, foaming, algal composition and
cover, suspended solids, wastes, anaerobic
oxidation, microbiological and biological
characteristics, details of which can be obtained
from Moog et al. (1999). The water quality was
classified into four main and three transitional
classes (Table 2), the definitions of which are given
in Sharma & Moog (1996).
The sampling of macro-invertebrates for the
application of NEPBIOS is based on the experience
that the sampling should be continued so far as the
collector is assured that no more new fauna is likely
to occur at the site under investigation. Sampling is
conducted qualitatively from downstream to
upstream by using all possible net sizes including
hand picking. Different types of habitat should be
sampled in rough proportion to their frequency
within the reach. Available information on scores in
use in different countries, macro-invertebrates'
response to water quality and the range of
pollutional class represented by each taxon in the
rivers of Nepal were the basis for scoring them
(Moog and Sharma, 2001). The organisms identified
were listed according to the water quality at which
they appeared. Prior knowledge on the quality of
water was necessary for understanding macro-
invertebrates' response, which was achieved through
'Professional Judgement'. Two steps were followed
in 'Professional Judgement'. The first step was based
on reference made to the scores that had previously
been assigned by different authors worldwide such
as BMWP (Hellawell, 1978), BMWP/ASPT
(Armitage et al., 1983), Family Based Index
(Hilsenhoff, 1988), Trent Biotic Index (Woodiwiss,
1964), Extended Trent Biotic Index (Woodiwiss,
1978), Lincoln Quality Index (Extence and
Ferguson, 1989), Indices Biotiques (Tuffery and
Verneaux, 1968), Indices Biotiques (Tuffery and
Davaine, 1970), IBGN (AFNOR, 1992) and Belgian
Biotic Index (De Pauw and Vanhooren, 1983). The
second step was based on the distribution pattern of
each taxon (family level) in response to pollution
level. The comparison of family (taxon) distribution
with the distribution of observed water quality
classes was carried out to observe if any families
with the same ecological distribution are differently
scored. A guide score 10 was the maximum assigned
with 1.43 as the score interval for seven different
water quality classes.
The oligosaprobic level (Class I) characterizes
river reaches with clean, clear (with the exception of
glacier-fed brooks), nutrient-poor water that is
almost always, nearly saturated with oxygen. Only
small amounts of suspended organic matter or
bacteria are detectable. Even fine sediments are
always of a brownish or light colour throughout and
are extremely rich in minerals. No reduction
phenomena exist. The substrate is predominantly
colonized by algae, mosses, Turbellaria and insect
larvae (in middle and upper reaches several
plecopteran species occur). The fauna is usually
species rich, but low in abundance. Chironomids are
found in low abundance; mainly the periphyton-
dwelling chironomids (Diamesinae, Orthocladiinae).
Worms are generally represented by planarians and
sensitive oligochaetes. The moss flora is represented
by several species, sometimes in high frequency.
Periphyton (predominantly diatoms and
cyanobacteria) is visible almost exclusively due to its
colouring (Aufwuchs). Green algae are scarce, and
do not stand out.
This transitional water quality class I-II
(oligosaprobic to beta-mesosaprobic) describes river
reaches with little inorganic and organic nutrient
content, and with the exception of glacier-fed brooks,
clear water. The oxygen content is high. The
concentration of suspended organic matter is very
low. Fine substrates are of a brownish or light colour
throughout; the undersides of stones have no visible
black reduction spots. Primarily, these reaches are in
salmonid rivers, which are densely and diversely
colonized by algae, mosses, Turbellaria, Plecoptera,
Ephemeroptera and Trichoptera larvae as well as
Coleoptera (Elmidae, Hydraenidae) and dipteran
larvae. Worms are generally represented by
planarians, and sensitive oligochaets; net-spinning
trichopterans appear only sporadically. The
chironomids (predominantly, Orthocladiinae and
Diamesinae) are slightly more numerous than in
water quality class I.
This water quality class II (beta-mesosaprobic)
is found in river reaches with moderate organic
pollution, increased nutrient content and still a good

257

oxygen supply (despite possible oxygen
supersaturation or depletion). The water in middle
and higher reaches is usually clear and at most
contains a low amount of suspended organic
particles. In lowland rivers the suspended solids can
increase due to natural processes. The sediment is
light or dark, but not black, and is often slippery due
to algal growth; the undersides of stones are not
coloured with black reduction-spots. Processes of
biodegradation take place in aerobic areas. Reduction
phenomena occur only occasionally, here and there,
in lentic sites of potamal waters (e.g. backwaters).
Species diversity and abundances are very high for
nearly all animal groups in addition to algae (all
groups) and other aquatic plants. The percentage of
individuals and the taxon diversity of Chironomidae
further increases (predominantly Orthocladiinae, in
quietly flowing reaches Tanytarsini and
Chironomini). The net-spinning trichopterans are
usually numerous only where suitable current
velocities are available; whereby Polycentropodidae
can appear in large quantities in potamal regions.
Macrophytes can cover areas but usually green algae
(Chlorophyceae) do not yet appear in large
quantities. These rivers yield high numbers of fish of
various species.
The transitional water quality class eg., II to III
(beta-mesosaprobic to apha-mesosaprobic)
contains river reaches whose load of eutrophicating
nutrients as well as organic, oxygen-consuming
substances is clearly visible. Because of the heavier
load of organic matter, the water is in certain
circumstances slightly turbid. In localized lentic
areas, under large stones, sludge may occur. Fine-
grained substrates are brown or light coloured at the
surface, and in deeper areas sometimes dark
(chemically reduced). Black spots can appear
beneath stones. In certain circumstances, and with
sensitive species or life-history stages, fish kills are
possible due to strong fluctuations in the oxygen
budget. The diversity of macro-organisms is
sometimes reduced and certain species show an
abnormal tendency toward mass development.
Macrozoobenthic colonization occurs by sponges,
bryozoans, crustaceans, molluscs, leeches and insect
larvae (with Plecoptera only certain species of the
genera Leuctra, Nemurella and Nemoura). Leeches
clearly increase. Among the oligochaets on occasion
Naididae occur in large quantities. For the first time,
Tubificidae occur in remarkable numbers. Net-
spinning trichopterans (predominantly Hydropsyche)
often appear in large quantities as well as
chironomids, especially tube-building forms in the
fine sediments. In addition to the tolerant
Orthocladiinae and Diamesinae, in the psammal the
Prodiamesinae stand out; in the pelal the
Chironomini (mainly Polypedilum), and Tanytarsini
(mainly Micropsectra). Filamentous algae (e.g.
Cladophora) and macrophytes frequently form
stands covering large areas, or, develop as mass
colonies. Green algae are more abundant than in
water quality class II. Sewage bacteria may often be
seen as tufts with the unaided eye, but are not yet
outstanding. The most diverse group is the ciliates
but colonies of ciliates that can be seen with the
unaided eye, on hard substrates and living benthic
organisms, are rare. Usually, these river reaches still
produce high yields of fish.
Water quality class III (alpha-mesosaprobic) is
found in river reaches that contain heavy organic,
oxygen-consuming loads and usually large oxygen
deficits. The water is partially coloured or turbid as a
result of suspended matter from sewage discharge. In
lentic areas, sludge is deposited. Stone, gravel, and
sandy substrates usually display blackened spots of
ferrous sulphide. In lentic areas, nearly all the
undersides of stones can be strikingly black
coloured. Fine-grained substrates are often slimy, in
deeper areas black and sludge-like. The fish
population often is reduced due to disrupted
reproduction; periodically occurring fish kills can be
expected. Only a few benthic invertebrates which are
tolerant to oxygen deficiency, such as sponges,
leeches and aquatic isopods can occur in large
quantities. Among the worms, Tubificidae dominate,
and to some degree Naididae, Enchytraeidae and the
genus Lumbriculus. Besides euryoecious
Orthocladiinae, the groups of Chironomidae that
most often appear are Tanytarsini and Chironomini.
Net-spinning trichopterans are strikingly more scarce
than in the preceding water quality class and it is
often difficult for the critical pupal stage to survive.
The typical ciliate-community is composed of
Trithigmostemometum cucullulae. Colonies of sessile
ciliates (Charchesium, Vorticella), can be clearly
seen with the unaided eye as well as filamentous
sewage bacteria and fungi (e.g. Sphaerotilus,
Fusarium and Leptomitus) which grow on hard
substrates and living benthic organisms. Filamentous
green algae found in the preceding water quality
class are mostly substituted by Stigeoclonium;
sewage-tolerant, blue-green algae; and diatoms
which sometimes cover large areas in lentic
locations. Sewage-tolerant macrophytes are still able
to grow in masses.
The river reaches with water quality class III
to IV (alpha-mesosaprobic to polysaprobic), to a
large degree, provide limited conditions for life due
to the very heavy loading of organic, oxygen-
consuming substances. Occasionally anoxic
conditions prevail; the water is often coloured and
extremely turbid due to suspended matter from
sewage discharges and drifting tufts of sewage
bacteria; the river bottom is mostly covered with
sludge. Fine substrates in deeper areas are nearly
black throughout, sludgy, and occasionally release a
clearly detectable odour of hydrogen sulphide. In

258

lentic areas nearly all undersides of stones are
blackened. The most extensive sludge deposits in
lentic areas are densely colonized by larval
chironomids of the genus Chironomus, tolerant
Tanypodinae, tubificid worms, and Enchytraeidae
(e.g. Lumbricillus). In hard substrates leeches can be
found; the accompanying fauna is composed of
euryoecious species. Compared to water quality class
III the algal cover is reduced in both qualitative and
quantitative terms. In lotic sites, blooms of
filamentous, sewage-bacteria occur (typical "sewage
fungus-development"), and sulphur bacteria can form
striking macroscopic layers. The microbenthos
mainly consists of ciliates, flagellates and bacteria,
which often show mass development. The existence
of self-sustaining and balanced fish populations is no
longer possible.
Water quality class IV (Polysaprobic) is found
in river reaches with extreme loading by organic,
oxygen-consuming sewage. The water is often
coloured and extremely turbid due to the suspended
matter of sewage discharge and sewage bacteria. The
river bottom is usually characterized by heavy
deposits of sludge. In lotic sites nearly all the
undersides of stones are covered with large black
patches of ferrous (II) sulphide; in lentic areas both
sides of stones are totally black. Fine substrates are
totally black. Processes of putrifaction predominate,
and there is often the odor of hydrogen sulphide.
Oxygen concentrations can be very low, or
occasionally, anoxic conditions occur. Colonizers are
predominantly bacteria, flagellates and
bacteriophagous ciliates which often develop in
masses. The typical ciliate-community is
Colpidietum colpodae. The filamentous sewage
bacteria are less abundant than in the preceding
water quality class. Sulphur bacteria reach their peak
abundance and form clearly-visible lawns. Compared
to water quality class III the algal cover is reduced in
both qualitative and quantitative terms. Besides a
few chironomids (Chironomus riparius-agg. and
Chironomus plumosus-agg.) and individual
tubificids, the macrofauna is only further represented
by air-breathing forms (e.g. mosquito larvae, moth
flies, soldier flies and syrphids).

III. RESULTS AND DISCUSSION
Bagmati River System--When the NEPBIOS/ASPT
method with scores listed as NEPBIOS-Original
(Sharma, 1996) was applied to describe the water
quality of the Bagmati river system, a coefficient of
determination (R
2
) 0.78 was obtained. NEPBIOS-
BRS (Pradhan, 1998) when applied in assessing the
water quality of the same sites in the Bagmati river
system (BRS), increased the R
2
value from 0.78 to
0.83. This precision is due to modifications
in the scores that include nine additional families
added to the list, and adjustment is made to the
values of tolerant species belonging to the family
Baetidae, Chironomidae and Salifidae with
identification to a higher taxonomic level.
Altogether 71 families were listed and 54 families
were given family level scores and 12 families, the
generic and species levels, these new scores were
named NEPBIOS-BRS, for which the scores were
initially proposed. In NEPBIOS-Original, altogether
103 families were listed and 82 families were
scored. The scores given were family level based
except for the genera and species belonging to
families Baetidae, Heptageniidae, Leptophlebiidae,
Hydraenidae and Perlidae. While comparing the
scores as between NEPBIOS-BRS and NEPBIOS-
Original, out of 45 scored families of NEPBIOS, 17
families got the same score while the rest of the
families got different scores. Twelve families of
NEPBIOS-BRS got one score less than NEPBIOS-
Original. The NEPBIOS-BRS has received one
score higher than that of NEPBIOS-Original to 8
families. Habermann & Reisenberger (2000) have
also compared the scores allotted by NEPBIOS-
Original and its extension to NEPBIOS-BRS.
Seti River System NEPBIOS-Original scores
and NEPBIOS-BRS scores were used to assess the
water quality of the Seti River and its major
tributaries in Pokhara valley, Nepal.
NEPBIOS/ASPT based on its NEPBIOS-Original
score list revealed R
2
= 0.96 (Figure 1). Whereas,
NEPBIOS-BRS overestimated water quality Class
III thereby the R
2
value is slightly reduced but still
maintains a value of 0.92 (Figure 2).
Formulation of ASPT transformation scale
for middle mountains In order to assign an
appropriate range of ASPT for water quality
classification of the midland mountain streams in the
Central Himalayan region, it was necessary to
observe the relationships between water quality
classes and Average Score Per Taxon in the midland
mountain region. Figure 4 demonstrates a
relationship that existed between the two
parameters. Based on this finding the
NEPBIOS/ASPT transformation scales were
formulated for the middle mountains of Nepal
(Table 3).
IV. CONCLUSIONS
NEPBIOS is a biological method that promises
a quick, less expensive, and an easy way of
assessing river water quality. The method is simple
to apply taking into account the presence and
absence of benthic macroinvertebrates. In the
region, where less taxonomic knowledge on benthos
is available and identification is possible only up to
family level, a family based NEPBIOS could also be
used. The NEPBIOS-Extended has 87 family level

259

bioindicators, and it is very likely that the user of
this method will come across many taxa, which are
not scored in the present list. Under such a situation,
users could refer to Moog and Sharma (2001) for
methods adopted in scoring the taxa. The results
obtained with the application of NEPBIOS, when
produced in coloured water quality maps, are best
understood by non-biologists for application to the
river management system.
V. ACKNOWLEDGEMENTS
Dr. Daniel Hering, University Duisburg Essen,
Germany receives special thanks for reading through
the entire manuscript and critically commenting on
it. Furthermore the inspiration received from
Benthos Group at the Department of Natural
Resources & Applied Life Sciences (BOKU),
Austria has led to final publication of this paper.

TABLE 1
NEPBIOS/ASPT TRANSFORMATION SCALE
PROPOSED FOR RIVER WATER QUALITY
ASSESSMENT OF THE MIDLAND AND
LOWLAND
Source: Sharma and Moog 2002

TABLE 2
SEVEN WATER QUALITY CLASSIFICATION
SCHEME PROPOSED FOR RIVERS IN THE
MIDDLE MOUNTAINS OF NEPAL

Classes Descriptions
I No to very slightly polluted
I-II Little pollution
II Moderate pollution
II-III Critical pollution
III Heavy pollution
III-IV Very heavy pollution
IV Extreme pollution

Source: Sharma 1996

FIGURE 1: APPLICATION OF NEPBIOS-ORIGINAL TO
SETI RIVER SYSTEM.

FIGURE 2: APPLICATION OF NEPBIOS-BRS TO
SETI RIVER SYSTEM.

NEPBIOS/A
SPT Original
Scale
NEPBIOS/
ASPT for
Midland
NEPBIOS/
ASPT for
Lowland
Class
8.00-10.00 7.50-10.00 6.50-10.00 I
7.00-7.99 6.51-7.49 6.00-6.49 I-II
5.50-6.99 5.51-6.50 5.00-5.99 II
4.00-5.49 4.51-5.50 4.00-4.99 II-III
2.50-3.99 3.51-4.50 2.50-3.99 III
1.01-2.49 2.01-3.50 1.01-2.49 III-IV
1 1.00-2.00 1 IV

260

FIGURE 3: APPLICATION OF NEPBIOS-BRS TO
RIVERS IN THE MIDLAND MOUNTAINS.
y = -1,7618x + 9,335
R
2
= 0.719
1
2
3
4
5
6
7
8
9
10
1 1.5 2 2.5 3 3.5 4
Saprobic water quality classes
N
E
P
B
I
O
S
-
B
R
S
/
A
S
P
T

FIGURE 4: APPLICATION OF NEPBIOS-ORIGINAL TO
RIVERS IN THE MIDLAND MOUNTAINS.
y = -1.9281x + 9.753
R
2
= 0.8121
0
1
2
3
4
5
6
7
8
9
10
1 1.5 2 2.5 3 3.5 4
Saprobic water quality classes
N
E
P
B
I
O
S
/
A
S
P
T

TABLE 3
NEPBIOS/ASPT TRANSFORMATION SCALE
PROPOSED FOR MIDDLE MOUNTAINS IN
CENTRAL HIMALAYA

NEPBIOS/ASPT Water Quality Classes
7.50-10.00 I
6.51-7.49 I-II
5.51-6.50 II
4.51-5.50 II-III
3.51-4.50 III
2.01-3.50 III-IV
1.00-2.00 IV

APPENDIX: 1

THE NEPBIOS EXTENDED SCORE LIST OF
BENTHIC MACROINVERTEBRATES

Taxa with Score 10:
Capniidae, Ephemerellidae (Drunella sp.),
Enchytraeidae (Marionina spp.), Epiophlebiidae,
Helicopsychidae, Helodidae (Scirtidae),
Heptageniidae (Epeorus rhithralis), Heptageniidae
(Rhithrogena nepalensis), Hirudinidae (Myxobdella
nepalica, Dinobdella ferox), Hydrobiidae,
Leuctridae, Nipharyidae, Peltoperlidae, Perlidae
(Acroneuria spp.), Perlidae (Calicneuria spp.),
Pomatiopsidae, Siphlonuridae, Sphaeriidae
(Pisidium casertanum, Pisidium ellisi),
Taeniopterygidae, Uenoidae.

Taxa with Score 9:
Athericidae, Chloroperlidae, Enchytraeidae
(Fridaericia perrieri), Goeridae, Leptophlebiidae
(Habrophlebiodes sp.), Limnocentropodidae,
Naididae (Nais alpina), Neoephemeridae,
Perlodidae, Polycentropodidae, Potamidae
(Himalayapotamon spp.), Sphaeriidae (Pisidium
annandalei, Pisidium prasongi), Tubificidae
(Aulodrilus limnobius)

Taxa with Score 8:
Arcidae, Baetidae (Centroptilumsp.),
Brachycentridae, Chironomidae (Diamesinae),
Elmidae, Euphaeidae, Gammaridae (Gammarus
lacustris), Glossiphonidae (Helobdella stagnalis,
Paraclepsis praedatrix), Glossoscolecidae
(Glyphidrilus spp.), Glossosomatidae,
Heptageniidae (Epeorus bispinosus), Heptageniidae
(Iron psi), Heptageniidae (Rhithrogena spp.),
Hydrobiosidae, Lepidostomatidae, Limnephilidae,
Lumbricidae, Lumbriculidae, Lymnaeidae (Galba
simulans, Galba truncatula), Nemouridae,
Neritidae, Perlidae, Philopotamidae, Psephenidae,
Rhyacophilidae, Sphaeriidae (Pisidium
atkinsonianum), Stenopsychidae, Stenothyridae .

Taxa with Score 7:
Aphelocheiridae, Baetidae (Cloedodes sp.), Baetidae
(Baetiella spp.), Baetidae (Baetis spp.), Baetidae
(Baetiella ausobskyi), Baetidae (Baetis sp.1),
Corydalidae, Ephemerellidae, Ephemerellidae
(Cincticostella sp.), Ephemeridae, Erpobdellidae
(Erpobdella spp. )Gammaridae, Gyrinidae,
Heptageniidae, Heptageniidae (Cinygmina sp.),
Heptageniidae (Notacanthurus cristatus),
Hydraenidae, Leptophlebiidae, Limoniidae,
Pleuroceridae, Psychomyiidae, Salifidae (Barbronia
sp.), Simuliidae, Tipulidae.

Taxa with Score 6:
Aeshnidae, Assiminaeidae, Baetidae (Baetis sp.5),
Baetidae (Baetis sp.4), Caenidae, Ceratopogonidae,

261

Corbiculidae (Corbicula bensoni, Corbicula
assamensis), Cymothoidae, Ecnomidae, Ellobiidae,
Ephemerellidae (Torleya nepalica), Grapsidae
(Varuna literata), Heptageniidae (Electrogena sp.),
Hydrometridae, Hydropsychidae, Hydroptilidae,
Hymenosomatidae, Naididae (Ilyodrilus templetoni,
Aulophorus furcatus), Nephthydae, Nereidae,
Novaculidae, Onchidiidae, Scirtidae, Tubificidae
(Limnodrilus udekemianus), Talitridae, Viviparidae.

Taxa with Score 5:
Amblemidae, Atyidae, Baetidae (Baetis sp.2),
Baetidae (Baetis sp.3), Bithyniidae, Chlorocyphidae,
Coenagrionidae, Corduliidae, Dryopidae,
Hirudinidae (Asiaticobdella spp., Poecilobdella
granulosa), Hydrophilidae, Leptophlebiidae
(Euthraulus spp.), Naididae (Dero limosa, Dero
digitata), Odontoceridae, Paratelphusidae
(Sartoriana spinigera), Protoneuridae, Sphaeriidae
(Pisidium nerillianum), Unionidae.

Taxa with Score 4:
Calopterygidae, Chironomidae (Microtendipes sp.),
Chironomidae (Polypedilum sp.), Corbiculidae
(Corbicula striatella), Dytiscidae, Gerridae,
Glossiphoniidae, Lymnaeidae, Micronectidae,
Naucoridae, Nepidae, Palaemonidae, Planorbidae,
Ranatridae, Salifidae (Barbronia weberi),
Sphaeriidae (Pisidium clarkeanum), Thiaridae,
Tubificidae (Aulodrilus pluriseta, Limnodrilus
claparecleanus).

Taxa with Score 3:
Atyidae (Caridina spp.), Corixidae, Libellulidae,
Lumbricidae, Megascolecidae, Noteridae,
Notonectidae, Salifidae .

Taxa with Score 2:
Culicidae, Physidae, Tubificidae (Brachiura
sowerbyi, Limnodrilus hoffmeisterai).

Taxa with Score 1:
Chironomidae [Chironomus group riparius
(=thummi) and group plumosus].

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Tuffery, G. & Verneux, J. (1988). Methode de
determinationation de la qualit biologique des eaux
courantes. Exploitation codifie des inventaires de la
faune du fond. Ministere del Agriculture (France),
Centre National dEtudes Techniques et de
Recherches Technologiques pour l Agriculture, les
Forets et l Equipment Rural, Section Peche et
Pisciculture, 23p.

Tuffery, G. & Davaine, P. M. (1970). Niveau
faunistique le plus lev et indice de deversite.
Diagnose cologique en Cours DEau Salamoidae.
CECPI 6e Session. Cracovie, Pologne EIFAC 70/sc.
191.6.3.70, 29 pp. From Woodiwiss F. S. (1976)
op.cit.

Woodiwiss, F. S. (1964). The biological system of
stream classification used by the Trent River Board.
Chemy. indust., 11, 443-447.

Woodiwiss, F. S. (1978). Comparative study of
biological-ecological water quality assessment
methods. Summary Report. Commission of the
European Communities. Severn Trent Water
Authority. UK, 45 pp.

263

Innovation Management of Higher Education
Institutions in the Philippines: LPU
Experience

Flora V. Javier
Consultant, Special Projects and Planning, Lyceum of the Philippines University
Capitol Site, Batangas City, Batangas, Philippines
flora.v.javier@gmail.com

Esmenia R. Javier
Executive Vice President / Vice President for Academics and Research
Lyceum of the Philippines University
erj48@yahoo.com

Abstract-- The stiff competitions among Higher
Education Institutions (HEIs) in the Philippines has
led their university managers to innovate their
products and services to meet new needs of their
customers and changing market conditions. This paper
presents best practices of the Lyceum of the Philippines
University (LPU) in the context of the quality assurance
mechanisms such as local and international
accreditation, international certification such as the
International Centre of Excellence in Tourism and
Hospitality Education (THE-ICE), Investors in People,
the Quality Management System (QMS: ISO
9001:2008) and recognition granted by state regulatory
bodies such as Autonomous and University Status,
Center of Excellence and Center of Development in its
pursuit of excellence in its academic program offerings,
learning outcomes, and support services. Descriptive
documentary analysis was employed to present the best
practices of the Lyceum of the Philippines University.
Qualitative and quantitative analysis was done in order
to draw out the perceived reforms in the higher
education system. The output could serve as a basis for
Higher Education Institutions in the Philippines in
managing innovations for greater effectiveness and
efficiency.

Keywords-- Innovative management, quality
management system, international certification, local
and international accreditation

I. THE PROBLEM AND THE REVIEW OF
LITERATURE

Philippines private educational institutions
compete with each other to get a fair share of the
market customers (students) and be a highly
competitive environment. Private educational
institutions, like any business organization, face
strong challenges and stiff competition leading to
product innovation in as far as service demands of
the changing market conditions are concerned.
The Lyceum of the Philippines University, like
many other universities in Asia, faces rapid and
incessant challenges brought about by technological
advances and global demands. As an educational
institution it has to deliver the products and services
necessary to achieve the outcomes it intends to
produce. Because organizations face a varied
environment, produce different products, render
different services, and their organizational members
consist of different kinds of people with different
culture and values, the effectiveness of the
organization is so determined.
In its pursuit of innovation and excellence in
delivering quality education, the Lyceum has
embraced two quality assurance tools, namely the
accreditation of the majority of its academic
offerings under the Philippine Association of
Colleges and Universities- Commission on Higher
Education (PACU-COA), where presently the school
has twelve accredited programs in different levels,
and the implementation of the Quality Management
System (QMS), ISO 90001:2000 standard.
As a call for stiff competition, the Lyceums
leaders and managers believe that this is one sure
way not only to survive, but to lead in the present
highly competitive environment; thus, it was deemed
necessary to undertake this study.


264

Literature Review
Quality maybe defined in various ways. It is
defined as the totality of features and characteristics
of a product or source that bears on its ability to
satisfy given needs. (American National Standards
Institute, ANSI). It may also mean superiority or
excellence of a product or service. Quality should be
embedded in the organization as a way of life,
integrated in every decision process and result for
organizational effectiveness (Evans, 2008) One of
the main functions of the school managers/ leaders is
to continuously assess the school system to
determine strategies in innovating their services
leading to program effectiveness and improvement
(Weber, 2002).
It is the responsibility of management to provide
the leadership for continual improvement and
innovation in processes and systems, products and
services. Achieving the highest levels of
performance requires a well-defined and well-
executed approach to continuous improvement and
learning which may refers to both incremental and
breakthrough improvement. Improvement and
learning need to be embedded in the way an
organization operates. It may be of several types:
enhancing value to the customer through new and
improved product and services, improving
productivity and operational performance through
better work processes and reductions in errors,
defects, and waste; improving flexibility,
responsiveness, and cycle time performance; and
improving organizational management processes
through learning (Evans and Dean, 2003).
The Malcolm Baldridge National Quality Award
(MBNQA) aims among others to stimulate
companies to improve quality and productivity for
the pride of recognition while obtaining a
competitive edge through increased profits and to
recognize the achievement of those companies that
improve the quality of their goods and services and
provide an example to others (Evans, 2008).
The Education Criteria for Performance
Excellence (ECPE,2009), the most recent document
issued by the MBNQA is designed to establish a
framework for integrating total quality principles and
practices in educational organizations. The criteria
consist of a hierarchical set of categories, items, and
areas to address, referred to as categories, which are
as follows: leadership, strategic planning, customer
and market focus, information and analysis, human
resource focus, process management, and business
results. The systems operations are composed of the
seven Baldridge categories that define the operations
of the organization and the results it wants to
achieve. Leadership, Strategic Planning, and
Customer Focus represent the leadership triad. These
three categories are placed together to emphasize
the importance of leadership focus on students,
stakeholders, and strategy. The next three categories,
namely Workforce Focus, Process Management and
Results represent the results triad. The organizations
workforce and key processes accomplish the work of
the organization that yields the organizations overall
performance results. Measurement, Analysis and
Knowledge Management are critical to the effective
management of the organization and to a factbased
knowledge-driven system for improving
performance and competitiveness. It serves as the
foundation for the performance management system
(PQA Criteria, 2009).

Objectives of the Research
This study presents the best practices in the
Lyceum of the Philippines University in its pursuit of
academic excellence.

II. RESULTS AND DISCUSSIONS

1. Best Program Offerings and Core Competencies
Lyceum of the Philippines University Batangas
Inc. referred to in this presentation as LPU is a
private tertiary educational institution located
within Region IV-A (CALABARZON) of the
Philippines. It was established in 1966 by the late
Senator Sotero H. Laurel with three prominent
women of Batangas to provide the young people of
Batangas an education with high standards. LPU has
been known for its high standards in hospitality and
tourism management, maritime education and allied
medical courses. LPU offers a variety of educational
programs, 39 degree and 13 non degree programs or
a total of 52, to meet students needs at the
undergraduate and graduate levels. (Figure 1).
These courses are delivered through formal and
direct classroom instruction in heterogeneously
grouped classes by programs using the enhanced
CHED curricula and standards, and where
appropriate, standards set by professional
organizations and regulatory bodies.
Internship/apprenticeship program is delivered
through the partnerships with local and foreign
establishments. LPU offers a wide variety of
curricular and extra curricular activities in various
fields.


265

FIGURE 1: LPU PROGRAM OFFERINGS

College Undergraduate Graduate
LIMA Mar Engg, Mar Trans,
SRC
MAMET,
MASM
CAMP MLS, PT, BS Pharma,
RT
MMLS
CBA BSA, BSBCM, BSBA,
BSOA, AOA
MBA, DBA,
MPA, DPA
CCOS BSCS, BSIT, ACT
Criminology BSCrim
Dentistry DDM
CEAS BEED, BSED, ABMC,
ABPL, AB PSY, BS
PSY
MAITE,
MAPSY,
MAELS
COE BSCOE, BSIE, BSME,
BSECE

CITHM BSHRM, BSITTM,
BSIHM, AITTM,
DHRM, CCA
MAIHM
Nursing BSN MAN
ETEEAP BSBM, BSHRM, BSN

LPU is committed to a culture of quality and
excellence marked by a familial spirit and a
harmonious work environment. It is embedded in its
vision, mission and core values. The university has
identified its core competencies as follows:
Hospitality Management and Tourism, Marine
Transportation, Dentistry, Medical Technology, and
Nursing which have contributed to the attainment of
the schools vision and mission, as attested by the
graduates of the above-mentioned programs. A
sample of the major technological equipment that
supports these competencies are shown in Figure 2.

2. Best Organizational Situation Quality
Management System
The Quality Management System of LPU is
certified to ISO 9001:2008. LPU is also the first
school to be recognized by the International
Standards For Human Resource Training and
Development, the Investors In People (IIP). Twenty-
five programs of LPU are accredited at various levels
by the PACUCOA. LPU has the following
requirements: Labor Code of the Philippines or RA
7641, Philippine Teacher Professionalization Act of
1994(Code of Ethics for Professional Teachers), RA
7796 TESDA Act of 1994,RA 7722 or Higher
Education Act of 1994, SSS, Phil Health (RA 7875),
Employment Compensation Act and Income Tax
Law (Republic Act No. 8424).
LPU is compliant with Philippine Clean Air Act
of 1999 and Mobility of Disabled Persons Act.
Additionally LPU complies with the requirements
mandated by CHED and TESDA for all programs.
Likewise it complies with all the regulations and
policies of the DOLE, and the DOH, securing health
and safety permits from appropriate government
agencies.

FIGURE 2:
MAJOR TECHNOLOGICAL EQUIPMENT

Core
Compete
ncies
Equipment &
Facilities
Description
HRM &
Tourism
Equipped with state-of-
art hot and cold kitchen
laboratories, Mini Hotel,
Le Caf, Bar Laboratory
and Tourism Travel
Bureau. It also utilizes
software such as
Microsoft Opera and
Amadeus to familiarize
the students in the
operation of the current
trend in on-line booking
and hotel reservation.
These are used to
reinforce classroom
Instruction through
hands-on experience
that provides skills,
knowledge and values
to future HRM and
Tourism practitioners

Maritime
Education

Equipped with world-
class facilities and
equipment used to
deliver education and
training for maritime
students such as:
Training Building -
Maritime Training
Center, Simulated
Bridge - MV Empress
of Asia, Fire House,
Swimming/Training
Pool, Machine Shop,
Gymnasium and
Dormitory
Equipment and
facilities are used to
simulate actual work
environment during
Fire Fighting,
Swimming and
teaching Basic Safety
Courses. They provide
support to learning of
skills, knowledge and
values that hone the
maritime students to
become competent
seafarers and maritime
officers


266

FIGURE 3:
LPUS COMPETITIVE POSTURE

Core
Competencies
Championship /
Awards
International Linkage /
Partners
Accreditation Status Board
Performance
Hospitality
Management and
Tourism Program
8 International
Awards, 30
National
Championships

With international
linkages in different
hotels, restaurants and
beach resorts. 46
students are deployed in
United States under
Work and Travel
Program with First Place
Inc.
With tie-up with: 20 5
Star Hotels (Deluxe
Class), 13 4 Star Hotels
(First Class), 19 3 Star
Hotels (Standard Class),
28 - Other Hotels, 8
Airline Companies, 4
Beach Resorts
Presently applying for
International
Certification in
Education
Level 3 - HRM
Center of Excellence
(COE)
Tourism - Center of
Development (COD)
Not applicable
Marine
Transportation
Champion- Cadet
Prince Justice Dela
Cruz , 16th
National Seafarer's
Day Oratorical
Contest
Outstanding
Maritime Cadet of
the Philippines -
Cadet Florence
28 linkages with different
shipping and manning
agencies and maritime
institutions

Marine
Transportation
Level 3

With 51 Board
Topnotchers
(from 1984 up-to
present)
61.12% -
Institutional
Passing
Percentage for
the last 5 years
(2007-2011)
Peter Virtucio - 16th National Seafarer's Day
1st BSMT female graduate to reach a
Management Level Officer Chief Mate Rima
Fe H. Lumangtad

Dentistry 100% passing rate
in 5 Consecutive
Releases of Dental
Licensure Exam

First place in the
May and June 2009
Dental Licensure
exam
International College of
Dental Education -
Fellow (Dean, Dr. Ed
Panopio), Colgate
Palmolive Philippines,
Batangas Regional
Hospital, First Gas Power
Corporation, Lingap
Pangarap Ng Mga Paslit,
Inc., Kepco Power Corp.
Consultancy Visit With 3 board
topnotchers
(from 1990 up-to
present)
86.11% -
Institutional
Passing
Percentage for
the last 5 years
(2007-2011)
Medical
Technology
Pioneer and only
provider of medical
technology in
Batangas Province
Regional Finalist for
The Search for 10
Outstanding student
medical centers, hospitals
and other health
organizations /
institutions students
selected as national
scholars of the PAMETH
Med Tech - Level
III First
Reaccredited

With 4 board
topnotchers
(from 1987 to
present 61.06%-
Institutional
Passing
Percentage for

267

for the Philippines
September 15-17,
20118th Place - Jay
GarrethVillanueva
10th Organization
of Student Services
and Educators Inc.
National Seminar,
Safeguard MedTechs ng
KinabukasanScholarship
PASMETH Quiz Show;
2011 5
th
Placer
PAMET-PASMETH
Quiz Show; 2010- 4
th

Placer - PAMET-
PASMETH Quiz Show,
3
rd
Placer PART National
the last 5 years
(2007-2011)

Core
Competencies
Championship /
Awards
International Linkage /
Partners
Accreditation Status Board
Performance
September 22,
2011; 2011 - 3
MedTech
RadTech Quiz Show ,
2010 2 National
Medtech Scholar, 2009
1 National Medtech
Scholar

Nursing QuizBee Champion
- Association of
Nursing Service
Administrators of
the Philippines
3
rd
Place - Batangas
Quiz Show, 4th
Place - De LaSalle
Lipa Battle of the
Minds
medical centers, hospitals
and other health
organizations/institutions
Level III First
Reaccredited
With 6 board
topnotchers
(from 1990 to
present

53.46%-
Institutional
Passing
Percentage for
the last 5 years
(2007-2011)
Champion - 1st ANSAP Batangas Chapter Quiz
Show, Oral and Poster Presentor - 1st National
University Singapore-National University,
Platinum & Golden Award - 1
st
International
Conference of Nursing, 1st Place Dev't
Communication - Regional Higher Education
Press Conference, 4th Place Dev't
Communication - Luzon Wide Higher Educ.
Press Con

Autonomous University Status
LPU is one of the 42 autonomous universities
out of the 2,247 tertiary schools in the country.
Being an Autonomous University serves as the
driving force for key changes that affect innovation
and collaboration such as that LPU can now offer
more innovative programs without permits from the
CHED, and we can now deliver programs outside the
university campus, such as extension classes through
productive tie-ups with other schools locally and
internationally. These key changes include the
following: forging an international tie-up with Dusit
Thani College and Dusit Thani Hotels for the
enhancement of the students skills in the HRM and
tourism courses ,and the establishment of the
Internship Office which has developed closer
collaboration with industry partners for the
placement of our Practicum students in identified
programs. Other innovations include creation of
Center for Language Learning (CELL),
departmentalization of final examinations in selected
subjects, online evaluation of employees
performance, establishment of the Maritime Training
Center which offers the Basic Safety Courses, and
the construction of a state-of-the-art dormitory at
LIMA campus.

Center of Excellence and Center of Development

LPUs College of International Hospitality
Management (CITHM) is considered as one of the
most awarded HRM schools in the country as of
today. Its HRM program is the first and only Center
of Excellence and its Tourism program is first and
only Center of Development in the country. These
key changes include the following: forging an

268

international tie-up with Dusit Thani College and
Dusit Thani Hotels for the enhancement of the
students skills in the HRM and Tourism courses

International Linkages
Towards the vision at being a recognized
university in the Asia Pacific region by 2022, LPU
has instituted the following: creation of the
Placement Alumni and External Relations (PAER),
forged MOAs with international establishments, and
presented research papers in international fora. LPU
also provides graduate education in the Middle East
and has forged a linkage with Thai Nguyen
University in Vietnam. Locally, LPU has linked with
St. Anne College of Lucena for an MBA/MPA
program and with BATELEC I in Calaca for the
MBA program for its employees. Likewise, LPU
hosted the international conference of IFSSO in
November 2011. LPU is also proud that its cultural
group the Lahing Batangan Dance Group has
garnered numerous national and international awards
and has represented the Philippines in international
dance festivals. Today, LPU is serving 9,491
students enrolled in various programs. The ideal of
academic excellence is concretized by the
competence of its faculty and the quality of its
educational services.

Plan Do-Check-Act (PDCA)

LPU uses a systematic performance
improvement system, Plan Do-Check-Act (PDCA)
whose key element is that the process enables the
employees to monitor the quality plans and quality
objectives they have formulated to determine gaps in
the implementation of the plans and attainment of
objectives. The gaps identified are acted upon. Thus,
the process enables employees to accept that
continuous improvement is part and parcel of all the
LPU processes. In 2008, LPU applied for recognition
to Investors in People which operates on the
principles of Plan-Do-Review. The Investors in
People is an International Quality Standard focused
on people aimed at improving business performance.
LPU was introduced to the Philippine Quality Award
through a seminar organized by DTI with key
university officials attending in May 2008. Attempts
were made to see how LPU leaders are making
progress using the Baldridge Model.
Recommendations of the study were acted upon and
in 2011, LPU management decided to start the
journey towards excellence. Workshops were
conducted, sessions were held with officers and
employees until such time that LPU submits its
application for external review and feedback.
Presently, LPU is a recipient of the Philippine
Quality Award.

3. Based on the best practices identified, the
researchers summarized the output in an Integrated
Framework for Organizational Excellence based on
the Malcolm Baldridge Model.

CUSTOMERS NEEDS AND
REQUIREMENTS
ENVIRONMENT
Faculty & Staff
Instruction & Research
Laboratories
Library
Physical and Technological
Facilities
RELATIONSHIP
Customers
Workforce
Partners & Suppliers
Stakeholders
CHALLENGES
High Student Achievement
Competent Human Resource
Internationalization and Linkages
Strong Research Culture &
Sustainable ComExt program
Higher Level of Quality
Assurance Level and
Certification
ORGANIZATIONAL
EXCELLENCE
Product and Process
Outcomes

Customer Focused
Outcomes

Workforce Focused
Outcomes

Leadership and
Governance Outcomes

Financial and Market
Outcomes
Leadership Strategic
Planning

Customer
Focus

Mngt of Info
Knowledge and
Infotech

Workforce
Focus

Operations
Focus

Quality Assurance Tools
Voluntary Accreditation Center of Development Outcomes-Based Education (OBE)
CHED Regulatory Requirements Quality Management System (ISO) / 5S Autonomous and University
Center of Excellence Investors in People (IiP) Status


269

III. CONCLUSION

The best practices of the Lyceum of the
Philippines University are based on quality assurance
tools which include voluntary accreditation with
PACUCOA, certification of the Quality Management
System to ISO 9001:2008 by Det Norske Veritas,
recognition by IIP. , Autonomous and University
Status granted by the Commission on Higher
Education, and the status of being a Center of
Excellence in HRM and Center of Development in
Tourism also from CHED.

IV. RECOMMENDATION

Benchmarking of Universities in the Philippines
and other Asian countries may be done at the
Lyceum of the Philippines University for their Best
Program Offerings, Core Competencies, Competitive
Posture and Best Organizational Situation

REFERENCES

Education Criteria for Performance Excellence
(ECPE), 2009.

Evans, J.R. & Dean, J.W. (2003). Jr. Total quality
management, organization and strategy 3
rd
ed.
Singapore: Southwestern Thomson.

Evans, James R. (2008). Quality and performance
excellence management, organization and strategy
5
th
ed. USA: Thomson South Western.

Evans, J. & Dean, J. (2003). Total quality
management; organization and strategy. Thomson,
Australia.

Guterman, J. (2001). Dont let your customer
service suffer when your workforce shrinks. Harvard
Management Review 2002.

PQA. (2010). Philippines Quality Award for
Performance Excellence for Business Criteria for
Performance Excellence and Application Guidelines.
Department of Trade and Industry

Weber, J. (2002). Leading the instructional
program: School leadership handbook for
excellence. 2
nd
edition, edited by Stuart C. Smith and
Philips Piele, 191-224. Eugene Oregon, ERIC
Clearinghouse in Educational Management.


270

Talisai (Terminalia catappa L.) Leaf Extract:
Potential Innovative Cure for Cancer

Carina R. Magbojos
College of Allied Medical Professions
Lyceum of the Philippines University, Batangas City, Philippines
carinamagbojos@yahoo.com

Oliver Shane R. Dumaoal, Karmelle Louise C. Lontoc, Christine D Fallaria,
Isaiah Joyce L. Flores, Dyan P. Gaddi, Ma. Errin A. Magpantay, Rodrigo M. Villacrucis Jr.
oliver_dumaoal@yahoo.com

Abstract-- Cancer is a disease with different forms
affecting people of all ages worldwide. New blood
vessels are important for the proliferation and growth
of cancer cells. These new vessels develop from pre-
existing ones, a phenomenon called angiogenesis.
Terminalia catappa L. (Talisai) is said to contain the
flavonoid kaempferol, which is capable of inhibiting
angiogenesis. Various tests on angiogenesis have been
done on the chorioallantoic membrane (CAM) of eggs
because of its simplicity, low cost, and less disturbance
of the cells. The leaf extract was obtained using ethanol
and was proven to contain flavonoids, tannins and
triterpenoids by phytochemical screening. Four
concentrations (50ppm, 100ppm, 200ppm and 300ppm)
of the crude Talisai leaf extract were administered to
ten-day old fertilized eggs. Upon harvesting the CAM
from the incubated eggs, the amount of small blood
vessels was recorded by counting the number of branch
points per blood vessels. Results showed that there
were 60 small blood vessels counted at 50ppm, and 46,
37, and 12 at 100ppm, 200ppm and 300ppm,
respectively which show a significant difference.
Reduction of the small blood vessels increases as the
concentration of Talisai leaf extract increases. Using a
one way analysis test, a significant difference on
angiogenesis using different concentrations was found
as between 50ppm, 200ppm, and 300ppm. The study
recommends the use of lower concentrations to show
when the angiogenic inhibiting activity of Talisai starts
and identify the active component responsible for its
angiogenic inhibiting activity.

Keywords-- angiogenesis, cancer, chorioallantoic
membrane, Terminalia catappa, flavonoids

I. INTRODUCTION

Through the years, cancer has always been one
of the leading causes of death worldwide. These
statistics are based on Global Cancer Statistics 2008,
the standard set of worldwide estimates of cancer
incidence and mortality produced by the
International Agency for Research on Cancer
(IARC) for 2008. Breast cancer is the most
frequently diagnosed cancer and the leading cause of
cancer death in females worldwide, accounting for
23% (1.38 million) of the total new cancer cases and
14% (458,400) of the total cancer deaths. About half
the breast cancer cases and 60% of the deaths are
estimated to occur in economically developing
countries. Colorectal cancer is the third most
commonly diagnosed cancer in males and the second
in females, with over 1.2 million new cancer cases
and 608,700 deaths estimated to have occurred. Lung
cancer is the most commonly diagnosed cancer as
well as the leading cause of cancer death in males
globally. Among females, it was the fourth most
commonly diagnosed cancer and the second leading
cause of cancer death. Lung cancer accounts for 13%
(1.6 million) of the total cases and 18% (1.4 million)
of the deaths (Bray et al., 2011).
For several thousand years, plants have been
used in traditional medicine as for treating the
spiritual origins of disease as well as the physical
symptoms. The vast knowledge of these medicinal
plants provides leads toward therapeutic concepts,
accelerating drug discovery (Cheikhyoussef,
Mapaure & Shapi, 2011).
Terminalia catappa is a Combretaceous plant
whose leaves are widely used as a folk medicine in
Southeast Asia (Annapoorani & Saroja, 2011). Also
known as Tropical almond, Indian almond or Talisai,
it is a large, spreading tree now distributed
throughout the tropics in coastal environments.
Tropical almond has a vast natural distribution in
near-coastal areas of the Indian Ocean, through
tropical Asia, and into the Pacific Ocean (Evans et
al., 2006). Medical studies have reported that the
extract of Talisai leaves and fruits have anticancer
effects and that the leaf extracts can inhibit Lewis
lung carcinoma cells that contribute to lung cancer
(Annapoorani & Saroja, 2011). Combretaceous
plants like Talisai are rich in polyphenolic
compounds. Consumption of fruits, vegetables and

271

plants rich in polyphenols is associated with a
reduced risk of certain cancers, cardiovascular
diseases, atherosclerosis, diabetes, and Alzheimers
disease (Annegowda et al., 2010).
Angiogenesis is the formation of new blood
vessels from existing ones (Bonifacio et al., 2010;
Gupta et al., 2011). It takes place during embryonic
development, inflammation and angiogenesis-
dependent diseases like cancer (Bonifacio et al.,
2010). Tumor angiogenesis is the proliferation of a
network of blood vessels that penetrates into
cancerous growths, supplying nutrients and oxygen,
and removing waste products (Mentlein & Schindler,
2006). Formation of new blood vessels
accommodates the growth and spread of the cancer
cells to the other parts of the body, thus resulting in
the pathogenesis of the cancer itself. It paves a new
way for the cancer cells to reach distant parts of the
body. It is an important phenomenon in
physiological situations such as embryonic
development and wound healing as well as
pathologic conditions like diabetic retinopathy,
rheumatoid arthritis, tumor progression and
atherosclerosis (Badimon, Krupinski & Slevin,
2009). Averting angiogenesis may interrupt the
malignancy progression of neoplastic cells (Brown et
al., 2008), treat malignant neuroblastoma (Banik et
al., 2011) and prevent the emergence of different
disorders it can cause, like excessive vessel growth
e.g. diabetic nephropathy, psoriasis, and arthritis
(Veeramani & Veni, 2010). Nowadays,
antiangiogenic therapy is considered as the fourth
cancer treatment besides surgery, chemotherapy and
radiotherapy (Boosani & Sudhakar, 2011).
Chorioallantoic membrane is the major
respiratory organ of the chick embryo that is formed
by the fusion of three layers: chorionic ectoderm,
allantoic endoderm and mesoderm (Heng et al.,
2008). In this research, the CAM model was used to
mimic the in vivo angiogenesis of the human body.
The various advantages of this model include low
cost, reliability, and easy control over the model
(Kreutzer, Moussy & Valdez, 2002; Heng et al.,
2008; Ribatti, 2010). The traditional shell chicken
chorioallantoic membrane (CAM) model has been
used extensively in cancer research to study tumor
growth and angiogenesis (Abe et al, n.d.; Ribatti,
2008; Berns et al., 2010). Less complicated tissue,
blood sampling and direct and continuous
visualization of the implant site can also be done. Its
environment is more stable, flat, and has a large
working area and wider field of view, excellent for
imaging and longitudinal studies (Berns et al., 2010).
Different chick embryo model systems allow for
comprehensive analysis of specific stages and
aspects of cancer cell dissemination such as tumor
cell colonization in the spontaneous metastasis
model, tumor cell colonization in the experimental
metastasis model or tumor-induced angiogenesis in
the collagen onplant model (Deryugina & Quigley,
2008).
Talisai leaves were evaluated to determine their
ability to inhibit the formation of new blood vessels.
Studies have shown that leaf extracts of Terminalia
catappa have potential to prevent metastasis (Agbaji
et al., 2011). The phytochemicals of this plant
include tannins, flavonoids, and triterpenoids
(Annapoorani & Saroja, 2011). The leaves of Talisai
contain the flavonoid kaempferol (Joshi, Kamat &
Kamat, 2008; Chikezie, 2011). Kaempferol (3,5,7-
trihydroxy-2-(4- hydroxyphenyl) - 4H-1-
benzopyran-4-one), one of the flavonoids present in
it is also found in many edible plants and in plants or
botanical products commonly used in traditional
medicine. Some epidemiological studies have found
a positive association between the consumption of
foods containing kaempferol and a reduced risk of
developing several disorders such as cancer and
cardiovascular diseases (Guerrero et al., 2011).
Kaempferol reduces vascular endothelial growth
factor (VEGF) gene expression at mRNA and protein
levels (Chen et al., 2009). Two plants of the same
genus, namely Terminalia arjuna and Terminalia
chebularet, also possess a certain but different
flavonoid, luteolin. It has been learned that this
flavonoid has an ability to inhibit angiogenesis in the
murine xenograft model (Lzaro, 2009). In this
regard, this study aimed to assess and evaluate the
angiogenic activity of Talisai leaf extract on CAM of
chick embryo given that this and some species of the
same genus have phytochemicals that can inhibit
angiogenesis.
It is hypothesized that the phytochemicals
present in Talisai will exhibit an angiogenic effect.

II. MATERIALS AND METHOD

Collection of plant sample
The leaves of Talisai tree were collected from
the Lyceum of the Philippines University Batangas
with a required weight of approximately five
hundred (500) grams. The petiole and midrib were
removed. Taxonomic identification of the plant was
done by botanists of the Herbarium in the University
of the Philippines, Los Baos.

Collection and incubation of eggs
One hundred twenty-two (122) fertilized white
leghorn chicken eggs (Gallus domesticus) purchased
in Indang, Cavite were incubated for ten (10) days
before administration of Talisai leaf extract.

Preparation of Talisai leaf extract
Approximately 500 grams of fresh Talisai leaves
were collected and washed with distilled water to
eliminate dirt and unnecessary microorganisms, and
air dried. The dried and washed leaves were cut into

272

small pieces using an osterizer and were then
immersed in 85% ethanol. They were kept in a cool,
dark place for 48 hours with occasional agitation.
The mixture was filtered and the filtrates were
exposed under a laminar flow until almost dry
(Guevarra, 2005).

Phytochemical Screening
Test for flavonoids: On one ml of the extract, a
few drops of sodium hydroxide was added.
Production of an intense yellow color in the plant
extract, which become colorless upon addition of a
few drops of dilute acid, indicates the presence of
flavonoids.
Test for tannins: A few drops of 1% lead acetate
were added to five ml of talisai leaf extract.
Formation of a yellow precipitate indicates the
presence of tannins.
Test for triterpenoids: Ten mg of the extract was
dissolved in 1 ml of chloroform; 1 ml of acetic
anhydride was added following the addition of 2 ml
of conc. H
2
SO
4
. Formation of a reddish violet color
indicates the presence of triterpenoids.

Preparation of the different concentration of the leaf
crude extract
The concentrations T1 (50 ppm), T2 (100ppm),
T3 (200 ppm) and T4 (300 ppm) were prepared from
the obtained crude leaf extract of Talisai were
calculated using a formula derived from the
conversion factor (1 ppm = 1mg/L) (Mohanty &
Sujana, 2010), converting milligrams of extract to
grams and liters to 100 milliliters of distilled water.

Administration of Talisai Leaf Extract (Billiones,
Fazar & Kashim, 2008)
The 10-day-old fertilized eggs were punctured at
the blunt end having the air sac exposed for injection
with a sterile syringe, making sure the CAM were
not damaged. 0.3 mL of different concentrations of
Talisai leaf extract was administered into the CAM,
which would make the vascular network of CAM
conspicuous against the white background of the
egg, with a 1cc syringe fitted with a 26-gauge needle.
To avoid error, one syringe was used for each
concentration. The inoculated site was covered with
wax paper and sealed with a melted candle to prevent
rotting and contamination. Upon administration of
extract, the developing chick embryos were
incubated at 37 C for two (2) days.

Data gathering and statistical analysis
After the incubation of the eggs, the inoculated
CAM was observed, counted and compared. Under a
light microscope, the number of small blood vessels
was recorded by counting the number of branch
points per blood vessel. Branch points or points of
intersection with pre-existing capillaries were also
counted (Hipolito & Reyes, 2006).
The statistical tool that was used to determine
the difference in angiogenesis between different
concentrations is one-way analysis of variance. The
Tukey method was also applied to correlate
individual treatment means. All statistical analyses
were done at 5% probability level (Paraguya &
Remedio, 2008).


Preparation of Talisai Leaf Extract
From 500 grams of the fresh crushed Talisai
leaves, 15 grams of extract (Figure 1) were obtained
upon evaporation under the laminar flow hood, a
percentage yield of 3%.

FIGURE 1: TALISAI LEAF EXTRACT

The phytochemical screening of the crude
extract of Talisai leaves used in this study revealed
that the crude leaf extract contained tannins,
triterpenoids and flavonoids as shown in Figure 2.

FIGURE 2: PHYTOCHEMICAL SCREENING
(A)FLAVONOIDS (B)TANNINS (C)TRITERPENOIDS

Table 1 shows that the number of small blood
vessels observed at different Talisai leaf extract
concentrations under the microscope. At 50 ppm
concentration of the Talisai leaf extract 60 small
blood vessels were counted. At 100 ppm, 200 ppm
and 300 ppm, there were 46, 37 and 12 small blood
vessels, respectively, counted. This shows that
reduction in small blood vessels increases as the

273

concentration of Talisai leaf extract increases as
depicted in Figure 3.

TABLE 1: NUMBER OF SMALL BLOOD VESSELS
OBSERVED AT DIFFERENT TALISAI LEAF
CONCENTRATIONS

Concentration of the
Talisai leaf extract
Average blood
vessels formed
Negative 71
50 ppm 60
100 ppm 46
200 ppm 37
300 ppm 12

FIGURE 3: CAM AT DIFFERENT CONCENTRATIONS
OF THE TALISAI LEAF EXTRACT

Negative control

50 ppm 100 ppm

200 ppm 300 ppm

Table 2 demonstrates the difference in
concentrations of Talisai leaf extract as compared to
the negative control. At a concentration of 50 ppm,
there is a significant reduction in number of blood
vessels formed as compared to the negative control.
There is also a significant difference between the
concentrations 100 ppm, 200 ppm and 300 ppm as
compared to the negative control. This is in
conformity with the study of Haddad & Vedar
(2009) but using a different plant material. They
revealed that at 1%, 2% and 3% of Syzigium
samarangense (Macopa) crude bark extract, there
was asignificant decrease in the number of small
blood vessels compared to the negative control.

TABLE 2: DIFFERENCE ON THE CONCENTRATION
OF TALISAI LEAF EXTRACT AS COMPARED TO
THE NEGATIVE CONTROL

Conc
Negative Control = 71
t
p-
value
Interpretation
50 ppm -7.534 .000 Significant
100 ppm
-
18.045
.000 Significant
200 ppm
-
20.599
.000 Significant
300 ppm
-
55.538
.000 Significant

Table 3 presents the differences in the inhibitory
activity of each of the four (4) concentrations on the
growth of the blood vessels. At 50 ppm, there is no
significant difference as compared to 100 ppm but
there is a significant difference at 200 ppm and 300
ppm. At 100 ppm, there is no significant difference
on all concentrations. At 200 ppm, there is a
significant difference as compared to 50 ppm while
there is no difference between 100 ppm and 300
ppm. At 300 ppm, there is no significance between
100 ppm and 200 ppm while there is a significant
difference as compared to 50 ppm. Using one way
analysis of the test results, it was found out that there
is a significant difference in the angiogenesis using
different concentrations between 50 ppm, 200 ppm
and 300 ppm since the p-value obtained is less than
the 0.05 level of significance. Since there is a narrow
range between 50 ppm and 100 ppm, there is only a
close discrepancy of the reduction of the blood
vessels that is statistically insignificant. The same p-
value is seen as between 100 ppm, 200 ppm and 300
ppm.


274

TABLE 3: MULTIPLE COMPARISON OF THE
DIFFERENCE OF ANGIOGENESIS BETWEEN
DIFFERENT CONCENTRATIONS

Conc Conc
p-
value
Interpretation
50 ppm
100 ppm .196 Not Significant
200 ppm .010 Significant
100
ppm
200
ppm
300
ppm

IV.CONCLUSIONS AND RECOMMENDATIONS

Conclusion
The results of the study show that Talisai leaf
extract has angiogenic inhibitory activity on
chorioallantoic membrane of chick embryo at
concentrations 50 ppm, 100 ppm, 200 ppm, and 300
ppm with a significant difference in angiogenesis
between 50ppm, 200ppm, and 300ppm Reduction of
the small blood vessels increases as the concentration
of Talisai leaf extract increases..

Recommendation
The study recommends the use of lower
concentrations to show when the angiogenic activity
of Talisai starts and identify the active component
responsible for its angiogenic activity. Furthermore,
it is recommended to test the angiogenic activity of
different plant extracts.

ACKNOWLEDGEMENT

The researchers are truly grateful to the
following: Lyceum of the Philippines University,
College of Allied Medical Professions (LPU-CAMP)
for the use of the equipment and amenities critical
for the completion of this research; Dr. William
Gruezo of UPLB for the authentication of the plant;
and Ms. Annalie Patea, for her expertise in the
statistical treatment of the data.

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276

eMedCalc: A Mobile Application for
Innovative Drug Calculation

Rosaly B. Alday
College of Computer Studies, Lyceum of the Philippines University
Capitol Site, Batangas City, Philippines; roselie_alday@yahoo.com

Cecilia C. Pring
College of Nursing, Lyceum of the Philippines University
Capitol Site, Batangas City, Philippines; ccl_pring@yahoo.com

Olive E. Sandoval
College of Computer Studies, Lyceum of the Philippines University
Capitol Site, Batangas City, Philippines; poknatpangit@yahoo.com

Abstract- Drug administration is one of the most critical
functions of nurses and that there is no room for
mistakes as patients lives would be in danger. Doctors
will give medication orders and it is the responsibility
of the nurses to prepare, administer and record such
medication considering the medication rights of the
patient. It is imperative that accurate dosage of the
medicine should be administered to the right patient at
the right time. Drugs and solutions are one subject that
nurses are prepared to deliver safe drug
administration. However, notwithstanding, prior
knowledge and constant practice in the clinical area,
nurses still have difficulties in drug calculation. Despite
efforts of the hospital management to eliminate cases of
medication error, there are still cases reported. The
researchers, with the aim of providing help to eliminate
medication error in hospitals for the benefit of both the
medical personnel and most especially the patients,
developed a mobile application that can be downloaded
to android cellphones which can easily and accurately
calculate drug dosage. Thus, this research is an
innovation both in the field of mobile applications and
the medical field with the advent of the use of
technology in health informatics.

Keywords-- mobile application, health informatics,
medical innovation, application development

I. INTRODUCTION

The practice of nursing under a professional
license is a privilege, not a right. In accepting the
privilege, the nurse must understand that this
responsibility includes accountability for ones
actions and judgements during the execution of
professional duties. (Clayton, 2007)
According to Adams, (2008), the primary role of
the nurse in drug administration is to ensure that
prescribed medications are delivered in a safe
manner. Drug administration is an important
component of providing comprehensive nursing care
that incorporates all aspects of the nursing process.
The nurse must be accurate in calculating,
preparing and administering a medication. Failure to
observe the prescribed nursing responsibilities in
drug administration could lead to an avoidable
complication which is unacceptable and can be
considered negligence of nursing responsibility.
Medication errors can result in serious complications
known as adverse drug events. The National
Academy of Sciences Institute of Medicine (IOM)
estimates the number of lives lost due to preventable
medication errors accounts for more than 7,000
deaths in hospital annually. (Clayton, 2007) Accurate
measurement of the volume of medication prescribed
is essential. The importance of accuracy in every
step of drug administration cannot be
overemphasized. Mistakes in dosage calculation can
cause insufficient drug response or excessive and
potentially harmful drug effects. Consequently, it is
essential for the nurses responsible for administering
medication to understand the proper procedure of
dosage calculation (Hitner, 2006).
Basic mathematical skills are essential for drug
calculations, yet many international studies have
shown that both student nurses and registered nurses
struggle with basic calculations. For example, Hutton
(2009) found that 80% of 231 first year student
nurses scored less than 75% on a 50 item numeracy
test. Learner (2006) reported that the Nursing and
Midwifery Council was extremely concerned
following reports in a newspaper that a third of
newly registered nurses (13 out of 40) failed a basic
numeracy test (with a 60% pass level) set as part of a
new selection process.
Clearly, both clinical effectiveness and patient
safety are at risk if inaccurate drug doses are
administered because of poor numerical skills and/or
poor drug calculation skills (National Patient Safety
Agency, 2009). To prevent deskilling and ensure
patient safety, it is important that registered nurses

277

regularly practise and refresh all types of drug
calculations with self-testing. This learning should be
further reinforced through regular nursing practice
and assessment in clinical practice.
To answer the emerging needs of nurses in
dosage and solutions a mobile application was
developed by the researchers that can accurately
calculate drug dosages. The application features
calculations for intravenous fluids and all other
drugs, oral and intramuscular drugs which are
commonly prescribed by medical doctors sand
administered by professional nurses. The application
provides results in all possible units of conversion.
This mobile application can be used on touch screen
phones with the Android operating system.

Objectives

1. To develop a mobile application for dosage
and solutions that can help solve problems
encountered in drug calculation.

2. To include metric conversion, tablet and
capsule calculation, liquid doses and
injectable dosages calculation, intravenous
fluids and pediatric dosage calculation,
body weight and body mass index in a
mobile application.

II. REVIEW OF RELATED LITERATURE

A. Drug Calculations
According to Kerri Wright (2008, 2010), drug
calculations are an essential skill for nurses. The
clinical skill of performing a drug calculation has
come under recent scrutiny, resulting in the
development of essential skills clusters in which pre-
registration nurses must be competent before
qualifying (Nursing and Midwifery Council 2007).
The focus on drug calculation skills places renewed
emphasis on how these skills are taught in higher
education institutions and how they are learned by
students theoretically and in clinical practice. The
role of mathematics is integral to nursing practice,
and careful and accurate calculations are important to
help prevent medication errors.
Before administering any medication, the nurse
must have a current license to practice and must
understand the individual patients diagnosis and
symptoms that correlate with the rationale for drug
use. The nurse should know why a medication is
ordered, the expected action, usual dosage, proper
dilution, route and rate of administration, minor side
effects to expect, adverse effects to report, and
contraindications for the use of a particular drug.
(Clayton, 2007).
Meriel Hutton (2009), stated that medication
error is an aspect of clinical governance highlighted
recently by the National Patient Safety Agency
(NPSA) for remedial action (NPSA 2006). Actions
include rapid response reports on incidences of
medication error and the development of e-learning
materials on the safe use of injectable medication.
While recognizing that medication errors are multi-
factorial, lack of competence in numerical
calculation is often cited as a key area of concern
(Fry & Dacey 2007).
According to Christopher K. Finch and Timothy
H. Self (2001), each year, an estimated 98,000
Americans die because of medical errors. Up to 4%
of inpatients experience some type of medication
error. Common ones involve sound-alike drug names
(Nevirapine, Nelfinavir). Dose calculation errors can
occur if the basis should be ideal body weight (as for
digoxin) rather than actual body weight. Prescribing
the wrong dosage form can lead to significant
discrepancies in therapeutic effect. Writing the
wrong frequency (tid instead of q8h) can skew
trough and peak blood levels. Failure to adjust doses
for renal dysfunction is especially common.
A study was conducted by David M. Gillham
and Stephen Chu (2008) to a group of 158 pre-
registered second year nursing students who were
given a written test in drug calculation. The results
indicated that a large number of students had limited
understanding of basic arithmetic. Many students
made errors large in magnitude, which implies
potentially dangerous drug doses. The most frequent
errors were in the categories of division, formula use,
multiplying fractions and approximation.

Problems encountered in Drug Calculations
In recent years, public attention has focused on a
problem that has long plagued the medical
community: medication errors. Studies have tallied
the cost of these errors in needless deaths, morbidity,
and health care expenses. The US Institute of
Medicine estimates that each year up to 98,000
Americans die because of medical errors. Thus,
medical errors cause more deaths than motor-vehicle
accidents, AIDS, breast cancer, or work place
accidents. These errors encompass all medical
activities; however, medication-related errors are the
largest category.
A medication error has been defined as "a
failure in the drug treatment process (prescribing,
interpreting, dispensing, and administering) that
leads to, or has the potential to lead to, harm to the
patient." It is estimated that up to 4% of all inpatients
will experience some type of medication error. In a
study of medication errors, 39% were prescribing
errors. According to one estimate, up to 2.6% of
hospitalized patients experience a prescribing error.
Research has found that people will do more
complicated calculations, and so associate numbers
with their meaning, rather than use easier methods
that distance the calculation from the clinical
situation (Schliemann & Nunes 1990, Nunes et. al.
1993). If nurses are clear about what they are

278

calculating, and experienced regarding the range of
the expected answer, then it would be easier to use
the drug calculation formula method, 'what you
want, over what you have, multiplied by what it's
in. Some of the methods used successfully by
nurses in clinical practice (Hoyles et al 2001) are
presented to demonstrate that drug calculations can
be solved using basic numeracy combined with
clinical knowledge.
According to Galligan (2001), universities often
provide support to nursing students to improve their
numeracy skills and more specifically to assist
students undertake medical calculations confidently
and correctly. In order to provide the correct support,
lecturers need to know where students errors are
occurring, understand why errors occur, and provide
appropriate support to reduce future error.

C. Possible Solutions for Drug Calculation Errors
Possible solutions according to Christopher K.
Finch and Timothy H. Self (2001) are advance
solutions like programs that are available for
electronic personal data assistant devices, such as
contraindications, and interactions; however, these
databases are not totally comprehensive. In addition,
FDA-approved product literature is available as the
Pocket PDR, an electronic pocket-sized device.
Strategies being developed to prevent these and
other errors such as decimal point misplacement,
abbreviation use, overlooked drug interactions, and
incomplete patient history include physician order
entry, consulting a clinical pharmacist, improving
medication education, and handheld electronic
personal data assistants (Boyle, 2011).

Rights in Drug Calculations
Just like any other medical procedures, rules and
proper steps should be considered and strictly
followed in administering medicines.
According to eWriteGigs Research Network,
there are ten guides in drug administration to
remember as follows: 1) Right Medication Check
three or more times if the name of the medication to
be administered is the same with the name of the
medication in the doctors order; 2) Right Dosage
Calculate if the dosage ordered is appropriate to the
client. If you think there is a discrepancy in the
dosage, raise the issue with the prescribing
physician. Do not just read and follow; 3) Right
Patient Before giving the medication, check label
in the patients bed. If the label declares the name of
the patient, ask his/her name. Proceed if the patient
declares the right name; 4) Right Manner and Route -
Check if the route ordered is appropriate to the
client. For example, if the order requires an oral
route for a vomiting patient, cancel administration
and raise the issue with the prescribing physician; 5)
Right Time To be able to give medications at the
right time, prepare your drugs before the ordered
time; 6) Right Documentation - Immediately after
administration, record the name, dosage, route and
other facts on the patients chart 7) Right Assessment
Some medications require assessments before
administration. Be sure to conduct these assessments
prior to administration. For example, administering
an antihypertensive drug to a patient with blood
pressure of 90/70 is unlikely; 8) Right Education
Let the patient know why they are given the
medication and what to expect. Teach them how to
enhance the effect of the drug. For example, tell a
patient to take in citrus fruit to improve absorption of
iron drugs; 9) Right Evaluation - Note if the desired
outcome manifests in the patient; 10) Right to Refuse
to Medication Sometimes patients are apprehensive
about their medication and its effects. This could be
because of erroneous perceptions about the effects of
drugs on their health. Nurses should keep in mind
that patients have the right to refuse their medication.
However, they have the duty to know the reason why
they refuse their medication and to deal with it.

III. METHODS

The researchers utilized a descriptive type of
research. Descriptive research as used in the study
observed, described and document aspects of
situation as it naturally occurred.
Participants in the study include nursing
practitioners in Batangas province who are directly
administering medication to the clients in the
hospital setting.
In the development of the mobile application,
the researchers used Java as the programming
language. Conversion of measurements, such as
centimeter, inches, feet, liter, milliliter, ounce, drops,
teaspoon, tablespoon, kilogram, gram, milligram,
pounds can be converted to their equivalent.

IV. RESULTS

Based on the interview and observation among
nursing practitioners, there is a need for a device that
would facilitate drug conversions and accurate
calculations. With this objective, a mobile
application was developed using the Java
programming language. The application is all about
computing the correct dosage for drugs, metric
conversion for volume, length and weight and body
mass index. It consists of options such as Start,
About and Exit Buttons which have their own
functions, the Start button consists of different
options regarding calculation of drugs. The About
button has information about the authors, also the
different definitions of terms which can help users
can be seen so as to further understand the medical
terms in using the application.The user will choose
among the options that are appropriate, then input

279

the numbers and the mobile application will
automatically calculate the result.

V. CONCLUSION AND RECOMMENDATION

Conclusion
The researchers, therefore, conclude that in the
field of medicine, one of the problems that nurses
encounter is calculating the dosage of different
medications.
This application will be of great help to nurses
in drug administration

Recommendation
It is highly recommended that the developed
mobile application is used in the clinical setting by
the nurses on duty in the hospitals.

REFERENCES

Adam, M. P.. (2008). Pharmacology for nurses: A
pathophysiological approach. Second edition.
Pearson Education, Southeast Asia.

Boyle, M. J., et al. (2011). Numeracy skills of
nursing students. Nurse Education Today 31.8: 815+.
Academic OneFile. Web. 9 Jan. 2012.

Clayton, B., (2007). Basic pharmacology for nurse,
Elsevier, Singapore

Finch, C. K., & Self, T. H. (2001). 10 Common
prescribing errors:. Consultant: 766. Academic
OneFile. Web. 9 Jan. 2012.

Fry M, & Dacey, C. (2007). Factors contributing to
incidents in medication administration. British.
Journal of Nursing, 16 (11): 676-681

Gilham, D.M. & Chu, S. (2008). Does handheld
device makes an effective assistant,
www.eprints.bournemouth. ac.uk/5733/.

Hoyles, C., Newman, K. and Ross, R. (2001).
Changing patterns of transition from school to
university mathematics, International Journal of
Mathematical Education in Science and Technology,
32(6), 829-845.

Hutton, M. (2009). Numeracy and drug calculations
in practice: PHC270. Primary Health Care. 19,
5,.40-45.: 40+. Academic OneFile.Web. 9 Jan. 2012.

McMullan, M. (2010). Get ahead for maths: Miriam
McMullan compares drug calculation skills in
students and qualified nurses, with surprising results"
Nursing Standard 25.6: 61. Academic OneFile.Web.
9 Jan. 2012.

Nunes, T., Schliemann, A. & Carraher, D. (1993).
Street Mathematics and School Mathematics.
Cambridge, Cambridge University Press.

Schliemann, A. D. & Nunes, T. (1990). A situated
schema of proportionality. British Journal of
Developmental Psychology, 8, 259-268.

Wright, K. (2008). Drug calculations part 1: A
critique of the formula used by nurses. Nursing
Standard 22.36 40+. Academic OneFile.Web. 9 Jan.
2012.

Wright, K. (2008). Drug calculations part 1: A
critique of the formula used by nurses. Nursing
Standard 22.36: 40+. Academic OneFile.Web. 9 Jan.
2012.

Wright, K. (2008). Drug calculations part 2:
alternative strategies to the formula. Nursing
Standard 22.37: 42+. Academic OneFile.Web. 9 Jan.
2012.

Wright, K. (2010). Do calculation errors by nurses
cause medication errors in clinical practice? A
literature review. Nurse Education Today 30.1
(2010): 85+. Academic OneFile.Web. 9 Jan. 2012.
Galligan, L., (2001). Analyzing students drug
calculation errors, 24
th
Annual Merga Conference
Proceedings, p. 257.

280

APPENDICES

SCREEN LAYOUTS

FIGURE 1: PHONE MENU

Using the android phone, a specially designed
icon to activate the mobile application was included
in the main menu of the phone. This icon can be
tapped to activate the mobile application in just the
way that other applications can be activated.

FIGURE 3: MAIN MENU LAYOUT

The Main Menu Layout consists of the
capabilities that the mobile application can do in
doing drug calculations. It serves to list the functions
can be done by activating the function.

FIGURE 2: APPLICATION MENU

This serves as the main menu of the mobile
application which gives the user choices on where to
activate the application.

FIGURE 4: BODY MASS INDEX LAYOUT

Body Mass Index is an example of one of the
main functions that can be calculated by the mobile
application. Values are input and the conversion can
be activated by tapping calculate button.


281

FIGURE 5: CAPSULE CALCULATION

Another important function of the application is
the capsule calculation function which converts
dosages from milligrams.

FIGURE 6: INJECTABLE DOSAGES

Injectable medicines are the most common form
of medicine to administer for immediate effect to the
patient. Therefore, the use of this function simplifies
the task of the nurses on duty.


282

ePatient: An Innovative Medical Record
System for Hospitals

Cecilia C. Pring
Dean, College of Nursing
Capitol Site, Batangas city, Batangas, Philippines; cclpring@yahoo.com

Rosaly B. Alday
Dean, College of Computer Studies
Capitol Site, Batangas City, Batangas, Philippines; roselie_alday@yahoo.com

Abstract - The medical record is a living document that
tells the story of the patient and facilitates each
encounter they have with health professionals involved
in their care. It may include a range of data including
demographics, medical history, medication, laboratory
test results and personal status information. Nurses
spend a significant portion of their time obtaining
information necessary for patient care and
documenting all aspects of care rendered to the patient.
While private hospitals in the country are pursuing
electronic recording, government hospitals are being
left behind because of the cost inherent in the
installation of electronic health recording. It is in this
context that the researchers developed a web
application to make all the patients records
computerized for the benefit of the government owned
hospitals. The medical records of the patients can be
easily accessed online. The e-chart includes an out-
patient department form, admission form, patient
profile, medication form, intravenous fluid form,
laboratory form, temperature record, vital signs,
intake and output form, doctors order, nurses notes
and discharge form. Thus, this research is considered
to be a move towards innovating the method of file
handling especially of the medical records of patients.

Keywords: web-based medical records, health
informatics, web-based hospital records

I. INTRODUCTION

Documentation allows the health care providers
including nurses and doctors to communicate about
the care provided to the patient. The nurse
documentation forms part of the medical record
which is a powerful tool that allows the treating
physician to track the patients medical history and
identify problems or patterns that may help
determine the course of health care. The medical
record is a living document that tells the story of the
patient and facilitates each encounter they have with
health professionals involved in their care. It may
include a range of data including demographics,
medical history, medication, laboratory test results
and personal status information. Nurses spend a
significant portion of their time obtaining
information necessary for patient care and
documenting all aspects of care rendered to the
patient. Paper documentation often requires repeated
transfer of data from the point of initial
documentation to forms such as flow sheets, and
ultimately, to the patients chart.
Paper based systems have been introduced to
support nursing process documentation. Frequently
however, problems such as low quality and high
writing efforts are reported. Paper based
documentation is challenging to use because of
questionable penmanship, which increases the risk
of errors. For instance, a doctor in a rush scribbles
orders on the patients chart, these may be
carelessness about legibility of the writing, or poor
reasoning about the amount of medication. The
moment when the nurse interprets the order, or tries
to decipher the handwriting is a critical time
(Eisenberg 2010).
Paper based records have been in existence for
centuries and their gradual replacement by computer
based records has been underway for over twenty
years in western healthcare systems.( Gearing and
Olney, 2006).
However, while many Medical Centers in the
country have taken advantage of the benefits of
computer based records, government hospitals
remains paper based in all these documentary
requirements despite many disadvantages.
Restrictions of a government hospitals adopting
computer based documentation fall securely on the
budget allotted for health care as well as lack in
manpower and necessary equipment.
Harley (2004) noted that because of lack of
modern equipment at some hospitals the medical
records of the patients are difficult to find. The
patients need to bring or remember their number to
be presented to the hospital if they want to see their
records. All the medical record of a patient is placed
in a file cabinet that has a number. Because all the

283

record is manually written on the form, the nurse
finds it difficult to monitor the condition of the
patient. The nurses also find it difficult to understand
the hand writing of the doctors because it is difficult
for them for understand what is written on the
doctors order.
It is in this context that the researchers
developed a web application to have all the patients
records computerized. In that way the medical
records of the patients can be easily accessed. The e-
chart includes an out-patient department form,
admission form, patient profile, medication form,
intravenous fluid form, laboratory form, temperature
record, vital signs, intake and output form, doctors
order, nurses notes and discharge form.

I.1. Objectives of the Study

The major objectives of the study are to help the
health care providers especially the nurses make
documentation simple, error- free, and time saving.
Specifically,
1.) To develop a web application that can help
the nurses save time in doing their
documentation.
2.) To make the patients records computerized,
easily access the information using ternary
search algorithm.
3.) To minimize or lessen the problems
encountered by the nurses in using the paper-
based system.

II. REVIEW OF LITERATURE

According to Eisenberg (2010), the previous
handwritten charting system did not support the
extended patient assessment/ education component
and was less organized. Paper- based systems are
challenging to use because of questionable
penmanship, which in the users opinion, increases
the risk of error. An additional concern is the tedious
task of record review with paper base systems.
Combing through pages of handwritten notes takes
much longer.
Gearing and Olney (2006), mention that paper-
based records have been in existence for centuries
and their gradual replacement by computer-based
records has been slowly underway for over twenty
years in western health care systems. Computerized
information systems have not achieved the same
degree of penetration in health care as that seen in
other sectors such as finance, transport and the
manufacturing and retail industries.
In an increasingly litigious society, according to
Kunka, the importance of proper patient charting for
hospital staff cannot be underestimated. However, a
difficulty arises when the hospitals standards for
patient charting comes in conflict with the legal
standards imposed by litigators who attack the
charting practices used in a particular case, and
judges who must decide whether a health care
practitioner has fallen below the standard of care
expected for that practitioner.
Each hospital develops its own standards of
charting practice, usually by taking into account the
requirements set by the associations which govern
health care professionals in the community. A major
tension which develops is the apparent need to
document everything in order to protect against
lawsuits, and the fact that such documentation can be
used by a skilled lawyer to attack virtually any health
care professional. Equally problematic are hospital
policies which have adopted charting protocols, such
as the form of charting known as charting by
exception (CBE) or variance charting. These
policies are potentially the biggest area of risk for
hospitals and their staff, as they provide ample and
futile grounds for attack by experienced counsel.
A paper-based document management system
has several shortcomings, or else electronic
document management might not have seen the light
of day. As paper is by nature physical, it takes up a
lot of storage space. With its limited resources, a
small business may not be able to afford to rent or
purchase storage space onsite or offsite. If you store
most of your documents in paper form, you need to
keep purchasing several packs of blank paper every
month for varying needs: photocopying, printing, fax
paper, writing pads, invoice books, account books
etc. Add to it the cost of other stationery items and
you begin to wonder if there is a better alternative to
the paper-based system of managing documents.
There is limited mobility in a paper-based document;
it cannot match up to email or sending it as an
attachment to an instant message. Also, editing in
paper based documentation is messy. Editing a typed
or handwritten document will leave marks on the
paper. Also, the only way to preserve the pre-edited
copy is to make a photocopy before editing it. This
process has to be repeated every time you edit or
revise the document. All it does is add more copies
to your paper archive and leave the original
document in bad shape. In this kind of
documentation, collaboration is difficult. If the
firms departmental heads in different corners of the
office want to collaborate on a paper document, an
assistant will first have to make copies of the
document and distribute them. Then each head will
have to make copies of the document and distribute
them. Then each head will have to make notes. To be
able to see each others notes, they will need to
gather anyway for a meeting before they finalize the
action plan. Compare this with an electronic
document management system where you can simply
share the document (grant access to it) with your
departmental heads; each of them can add their notes
and save the document. The document can then be
seen by all with everyones notes on it.

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Web based applications are the ultimate way to
take advantage of today's technology to enhance the
organizations productivity and efficiency. Web
based applications give an opportunity to access the
business information from anywhere in the world at
any time.
Medical records contain important clues about
the history of medicine. These documents, which
ostensibly describe the course of a patient's illness,
are "unique constructions that allow us to observe the
social and technical structure of contemporary
healing." Electronic medical records (EMRs) offer
many advantages. However, there are also risks
involved with adopting a full commercial EMR.
These include high cost, the disruption of clinic
routines, and poor or no vendor support. This
program serves as an electronic front sheet for the
patients chart that records International
Classification of Diseases--9th Revision codes and
chronic medications and allergies, and provides
reminders for prevention, procedures. The mini EMR
has been inexpensive, adaptable, easy to maintain,
and very well accepted, and it has caused little
interruption of our clinical activities. We believe the
program can serve as a bridge to a future commercial
EMR once that market has matured.
Electronic medical record systems can improve
the quality of patient care in developing countries,
according to a study published in the March issue of
the Journal of the American Medical Informatics
Association. Researchers found a 50% increase in
the number of CD4 tests requested when computer-
generated reminders were used in one HIV/AIDS
clinic in Kenya, according to Haupt (2011).
Twenty years ago the influential Institute of
Medicine began prodding the medical community to
embrace electronic medical records. EMRs would
make healthcare better, safer, and more efficient,
argued the IOM, and if every person's complete
medical history was stored on computers linked up
across the country, clinicians anywhere could view a
patient's every blood test, hospital stay, and X-ray;
smart software would guide diagnoses. In hospitals,
prescribed drugs and doses would be computer-
vetted against each patient to forestall life-
threatening medication errors. The medical
community's general reaction: great idea, but
difficult and expensive. As the years passed,
hospitals did gradually adopt "computerized
physician order entry" for prescriptions, but
otherwise marriages between computers and
healthcare largely took place in billing departments
and other back offices.
Although studies have shown that most patients
are capable of completing online histories, about 10
percent might not be willing to said Mayo's
Bachman. Some patients just don't like using
computers, and even some computer-literate patients
may feel uneasy about putting their personal medical
histories online. Bachman points out that a
computerized history-taking program can't pick up
on nonverbal behavior, and using it means a change
in workflow. Patients may also make inadvertent
errors and supply information that isn't needed.
But comparing computerized histories with in-
person interviews misses the point. "This is like
asking what is better for farming--farmers or
tractors," says Bachman. "The computer is a tool. It
helps greatly in providing information that is
forgotten by clinicians and is excellent at obtaining
data on socially sensitive issues such as sexual
practices, abuse, and chemical dependency. It
eliminates the need for Yes and No questions and
prepares both the clinician and the patient for the
interview.

III. METHODS

Procedure
This study used the ternary search tree
algorithm, a special tree data structure where the
child nodes of a standard tree are ordered as a binary
search tree. Ternary search trees are effective and for
many applications involving mapping strings to other
values as well as completing near-neighbor lookups
and other string-related queries. In addition, ternary
search trees are a more space efficient (at the cost of
speed) equivalent of typical trees. Further, ternary
search trees can be used any time and a hash table
will be used to store strings.
The researchers focused on a database that
stores all information in the simple database using
ternary search tree, the nurses can easily find,
retrieve, and print information on the patient so that
the doctors can simply access and find the
information on their patient.
A flow chart is a type of diagram that represents
a software or process, showing the steps as boxes of
various kinds, and their order connecting these with
arrows. Although it is relatively old design tool; they
remain popular among computer programmers
working on systems analysis and design.
Flowcharts are used for designing and
documenting complex processes. They help visualize
what is going on and thereby help the viewer to
understand the process. They can be used to gather
information and data about a process as an aid to
decision making or performance evaluation.

Ternary Search Tree Algorithm
A ternary search algorithm is a technique in
computer science for finding the minimum or
maximum of a function that is either strictly
increasing and then strictly decreasing or vice versa.
A ternary search determines either that the minimum
or maximum cannot be in the first third of the
domain or that it cannot be in the last third of the
domain, then repeats on the remaining two-thirds. A
ternary search is an example of a divide and conquer
algorithm. And a ternary search tree algorithm is a

285

three way tree where every node's left subtree
has keys less than the node's key, every middle
subtree has keys equal to the node's key, and every
right subtree has keys greater than the node's key. If
the key is a multikey (string, array, list, etc.), the
middle subtree organizes by the next subkey
(character, array or list item, etc.).

IV. RESULTS

The result of the study was supported using Java
Eclipse in creating the web application and MySQL
Workbench in database to develop an algorithm by
which the nurse can easily search the name of the
patient record or information using the web base
application as the search menu using the ternary
search tree algorithm. The researchers used the
ternary algorithm for easily searching for the names
of the patient and their records. The Eclipse IDE
for Java Developers provides superior Java editing
with validation, incremental compilation, cross-
referencing, code assist; an XML Editor; and much
more. MySQL Workbench is a unified visual tool
for database architects, developers, and DBAs.
MySQL Workbench provides data modeling, SQL
development, and comprehensive administration
tools for server configuration, user administration,
and much more.

V. FINDINGS

The researchers found that the web based
application is easier than the paper based system
because it is easy to update, easy to add records,
easy to access the record of the patient, and less
documentation for the nurses. The use of the
Ternary Algorithm Search Tree is more compatible
with the web application that we made. It is easy to
search the patients record using this algorithm.

VI. CONCLUSION

The use of the Ternary algorithm for ePatient:
An Innovative Medical Record for Hospitals is
highly recommended because it promotes the
paper-based hospitals to become electronic and
advanced.
The Ternary algorithm for the study considered
is an efficient and advanced web based application
which will be deployed in the hospitals.

VII. RECOMMENDATIONS
This research can still undergo some
improvements, like any other web application we
can further improve the accuracy of the application
in order to be more efficient and more accurate for
the users. The web application EMR is a user
friendly application so that the user can easily
understand and use it. In order to achieve this, the
researchers should have a proper and
wide knowledge of the application to make the
program successful. Finally, the company who will
get the Ternary algorithm for ePatient: An
electronic medical record web application could
make use of the database as a strategic weapon

286

and new marketing techniques that will give these
gains from savings and increased time.

APPENDICES
Screen Shots

FIGURE 1: LOGIN SCREEN
The Login screen will be used by the user to
officially access the system and provides security for
the proper maintenance of the database.

FIGURE 2: INPUT SCREEN
This screen will provide the environment for the
user to input the necessary data as needed for each
patient in the hospital.

FIGURE 3: MAIN MENU
The screen layout contains the major profiles
that the users can choose in the process of using the
system.
FIGURE 4: THE PERSONAL INFORMATION
SCREEN

This screen is mainly for the Administrator and
users of the system to provide access to the users and
security to the system.

FIGURE 5: PATIENTS PROFILE

Data about the particular patient can be input to
the system using the previous screen.

FIGURE 6: PATIENTS PROFILE

287

More details about the patient can be input using this
window.

FIGURE 7: ADMISSION RECORD
The Admission Record of the patient contains
all the important information that the hospital can
use in all the needed transactions while the patient is
admitted to the hospital.

REFERENCES

Computerized record keeping system of medical
services for indigent patients at Batangas Regional
Hospital. BRH Records page 10.

Bachman, J. (2003). The patient computer interview:
A neglected tool that can aid the clinician. Mayo
Clinic Proc. January 2003, Vol 78. himss.org

Berkowicz D.A., Barnett G.O. and Chueh, H.C.
(2010),Component architecture for web based EMR
applications. Netsity Web Based Application,
http://www.netsity.com/ webbasedapplication.htm

Eisenberg, S.(2010), Electronic medical records: life
in the paperless world

Gearing, P., Olney, C M. (2006), Enhancing patient
safety through electronic medical record
documentation of vital signs (page 2,3) Retrieved on
March 25,2012. The Journal of Healthcare
Information Management, Volume 20, Issue 4

Going electronic (2011)," Bulletin of the World
Health Organization May 2011: 321. Academic
OneFile.Web. 9 Aug. 2012.

Haupt, A (2011), The era of electronic medical
records http://health.usnews.com/health-news/most-
connected-hospitals/articles/2011/07/18/most-
connected-hospitals

Hartley, P.A. (2004) Enhancing Patient safety
through Electronic Medical Record Documentation
of Vital signs page 2,3.

Kunka, L. H. (2011) Pitfalls of medical records
http://www.thomsonrogers.com/sites/default/files/lhk
-pitfalls-of-medical-record-chr=arting.pdf

Versel, N (2004). Patient histories: How computers
help: Computerized history-taking gives you more
details--with less work for you and your
staff. Medical Economics 7 May 2004:
TCP15+. Academic OneFile.Web. 9 Aug. 2012.

"Web-based EMR (2006). Health Management
Technology Nov. 2006: 40. Academic OneFile.Web.
23 July 2012

288

A Proposed Innovative Model for Upholding
Human Rights among Street Children:
A Collaborative Intervention

Francis Kayode Ashipaoloye
Faculty, College of Education, Arts and Sciences
Capitol Site, Batangas City. Philippines 4200
ashiop@yahoo.com

Abstract-- The proliferation of street children and their
rights as human beings are becoming the concern of
Third World countries like the Philippines. In line with
Article 1 of the Universal Declaration of Human
Rights, All human beings are born free and equal in
dignity and rights Despite the various provisions of
the articles and sections of CRC, UNICEF revealed
that many street children across the globe are exposed
to dangers that hinder their growth and development.
In Batangas City there is a proliferation of street
children in which records show the majority of them
are Badjaos known as the Sea Gypsies of the Sulu
and Celebes seas. Utilizing descriptive, documentary
evidence coupled with qualitative treatment of data,
this paper is an attempt to present the demographics of
street children proliferation, reasons why there are
street children, their social, economic, peace and order
conditions and how to address the issue of threats to
their human life.

Keywords-- Street children, Model for Upholding
Human Rights, City Social Welfare Development
Office (CSWDO), sea gypsies

LITERATURE

The survival of the fittest has hitherto been the
governing ideology in human society from time
immemorial. Street children due to their condition
are vulnerable to myriads of abuses. This is even
more evident in contemporary society where children
are increasingly being perceived as expendable. The
instinct for self protection alone is not enough to
safeguard the welfare of street children who are so to
speak the poorest of the poor in the society. Thus, the
United Nations Universal Declaration of Human
Rights was enacted to accord adults and especially
children the right and equality that would ensure the
equal protection and freedom of all people. In spite
of all these lofty laws, the dignity of street children
has consistently been disregarded and violated
(Gwanmesia, 2011).
Thus, human security is not just the state having
the capacity to protect its citizenry from both internal
and external aggressors; but being able to adequately
address issues that threaten the welfare, human
dignity, threats to livelihood, human rights, poverty
and development, and other social issues. The
objective of human security according to Alkire
(2003) is to protect the fundamental core of all
human lives from critical pervasive threats, in a way
consistent with long-term human fulfillment.
In defining street children, UNICEF identified
them based on types, namely: street-living children,
those who ran away from their families and live
alone on the street; street-working children, those
who spend most of their time on the streets, fending
for themselves, but returning to their families on a
regular basis; while children from the street families
are those who live on the streets with their families
(Mexico Child Link, 2009). For the Human Rights
Watch, street children are those for whom the street
has become their real home more than their families.
(Prevalence, Abuse & Exploitation of Street Children
In the early years of the 21
st
Century-2000 to 2010).
The UN estimated the population of street
children across the globe at 150 million (Thapaliya,
2005). UNICEF and World Health Organization
(WHO) postulated that the steadily growing number
of street children worldwide could be between 100
and 150 million (Ferrara & Ferrara, 2005). Thus, it is
difficult if not impossible to give the exact number of
street children because of their lifestyle.
The United Nations (UN) estimates the
population of children on the streets worldwide to be
at 100 million, with the number increasing daily.
According to the UN, 20 million of these children
are from Africa; 40 million are from Latin America;
25-30 million in Asia; and 25 million in other parts
289

of the world. The UN further revealed that at least 1
million children in Africa alone are sexually
exploited for commercial purposes in brothels, bars
and on the streets. Many of these street children are
engaged in difficult and dangerous jobs and are also
victims of car accidents.
Lamberte (2010) postulated that one of the
factors that determine the visibility of children on the
street can be attributed to their being away from
school. Less participation in schooling is notable
among street children in the National Capital Region
(NCR) and in the Visayas. Research has shown that
there were about 246,011 (3 percent) of the total
population of street children aged 0-17 in 22 major
cities in the Philippines. About 80 percent are boys
and 95 percent still have parents. They comprise 5%
of the countrys poor urban children, estimated to be
4,832,000. Furthermore, Lamberte (2010) further
posited that 20% of the 246,011 are very visible on
the streets. The cohort of street children comprises
1.61% of young urban population. The highest was
Metro Manila 11, 346 children. The disaggregation
follows: Manila City 3,266, Quezon City 2,867,
Kalookan City 1,530, Pasay City 1,420 and the rest
of Metro Manila estimated at 2,263. Research further
revealed that it is difficult to get a headcount of street
children since they are usually mobile or transient.
Understanding the above injunctions, the City
Social Welfare Development Office (CSWDO) City
government of Batangas---as part of its good
governance practices---appears to be responsive to
some needs of its constituents; the poor,
disadvantaged and especially street children. To
further ensure the human rights of street children, a
model (Public, Private and Non-Governmental
Organizations) is thus proposed to further uphold the
human rights of street children.

II. OBJECTIVES OF STUDY

Utilizing descriptive, documentary evidences
coupled with qualitative treatment of data, this paper
is an attempt to present the demographics of street
children proliferation, reasons why there are street
children, their social, economic, peace and order
conditions and how to address the issue of threats to
their human life.

III. METHODS

Interviews were conducted, with observation
and field work. As to innovations to improve life of
the street children and uplift their human rights focus
group discussions were conducted.

IV. RESULTS AND DISCUSSION

1. Demographics of the Proliferation of Street
Children
There were three sets of street children
interviewed. The first set of street children are
predominantly from Batangas City 7-16 years old.
They are so dirty, untidy and prone to diseases due to
their exposure to trash cans and some have travelled
with their parents from Bicol to Batangas City
seeking for greener pastures, with no plans of going
back. They roam the streets (nangangalakal) from
morning until evening gathering plastic bottles from
trash cans which they sell to plastic traders in
Batangas City. It was discovered that those who are
still very young, between 7-12 years old, roam the
streets with peer groups; and tend to be independent
when they are about 13-16 years old. Most of them
eat left-over food from garbage and sleep on the
street when tired. They even admitted having been
involved in crimes or vices like drinking alcohol,
smoking cigarettes, rugby or drug abuse; moreover,
these children are prone to drugs, theft and other
crime-related activities as a way out of their social
status.
The second set of street children are from
Mindanao, south of the Philippines. They are
popularly called the Badjao Sea Gypsies. The
name Badjao is a Malay-Bornean word which
connotes man of the seas. By nature, the Badjaos
settle by the sea or areas where there are mini-ports.
They left Mindanao mainly as a result of social
unrest and poverty without any plans of returning.
They came as a small group of families, with other
families following suit which also led to their
proliferation. First they settled in Sta. Clara,
Simlong, Tabangao and finally in Wawa. They have
been in Wawa for a long time because, aside from
proximity to the sea, they are also closer to the city
proper and feel much at home. According to their
leader, they have grown from 8 families to about 700
families since 1979 with an average of 4-6 children,
predominantly boys.
Their main source of livelihood is begging. The
women and their children and sometimes the
children alone resort to begging around the city,
market places, churches and so on. They also sell
fish and cooked food within their neighborhood to
further augment their source of livelihood. These
children form groups or gangs, cause accidents, are
prone to theft, and run around in public places, are
exposed to sexual exploitation and susceptible to
drugs, cigarettes, alcohol abuse, and threats to lives
and property. These children are usually dirty and
untidy, a nuisance to the society, aggressive in
begging, cannot speak and write in the native
language of the Batanguenos, Tagalog. Most are
290

Moslems and a very few Christians, some others are
Roman Catholics, Born Again and Iglesia ni Kristo.
The third set of street children are street families
from Bongabong, a Philippine municipality about
212 km south of the Philippine capital Manila. It is
located in the Province of Oriental Mindoro and they
are popularly known as the Mangyans. They were
found smoking tobacco with their four children 3-8
years old, looking very dirty and unkept, begging for
alms in front of the Lyceum of the Philippines
University Batangas. Some of them live around the
New Market (Bagong Palengke) in Batangas City
with other families together with their children. They
are usually more in December for Christmas and in
January for the Batangas City Fiesta (Feast for the
Sto. Nino).
Comparatively, based on the five years report of
the City Social Welfare and Development Office of
Batangas City who are in charge of street children,
records show there were 166 families (2004) living
temporarily in Barangay Malitam and Wawa. In
2005 and 2006, there were 194, in 2007 there were
269 with 1,496 individuals. There was an increase in
2008, with 269 with 1,496 individuals and a
decreasing number was noted in 2009 and 2010, with
1,170 comprising 234 families.
The study revealed the reasons for street
children proliferating such as poor family
background, parents unable to afford to provide them
with basic needs; they are abandoned, orphaned or
disowned by their parents, because of decreased
household income and parental lack of literacy skills
and schooling. Furthermore, single parents are
unable to combine work and child care and one or
both parents being in prison is likewise considered as
a basis for why there is an increasing number of
street children. The findings of the research
substantiate the findings of UNICEF that the
problem of street children is exacerbated due to
families inability to support children because of
parental illness and decreased household income
(Human Rights Reports 2005).

2. Effects of Proliferation of Street Children
From the results of this study, there is a
proliferation of street children in Batangas City and
somehow there are effects on their socio-economic,
peace and order and human rights.
As to socio-economic status it was disclosed that
street children sleep on the streets, they are dirty and
untidy and eat left-over food from garbage and
sometimes steal food items from the stalls. This
result confirmed the study of Sisters Love Reaches
Out to Street Children of Vietnam (2004) which
opined that street children sleep on the streets and
become scavengers, beggars, shoe-shiners, market
laborers, carriers, prostitutes and some end up being
sold or abandoned.
The proliferation of street children has an effect
on threats to peace security. The research revealed
that children became susceptible to drugs, cigarettes,
alcohol abuse, playing on the streets and running
around in public places, a cause of accidents, threats
to lives and property, and prone to theft. This is also
equally true at the findings of Tanou (2002) that
street children in Burkina Faso resort to picking
pockets, stealing parts of cars or motorbikes and so
on. Furthermore, they also use flick-knives to
threaten pedestrians. Some stay in front of bars
almost every night to smoke shisha or traffic in
drugs.
Also, the unstable lifestyles, lack of medical
care, and inadequate living conditions increase street
childrens susceptibility to chronic illness. They lack
security, protection, and hope, and continue to face a
deep-rooted negative stigma about homelessness;
and the mental, social and emotional growth of street
children are affected by their nomadic lifestyles.
Many street children disclosed that adults and
older youth turned to selling drugs, stealing and
prostitution, drug abuse, use of psychoactive
substances, including medicines, alcohol, cigarettes,
heroin, cannabis and readily available industrial
products such as shoe glue (rugby).
The above findings confirm the postulate of the
United Nations Office of Drug Control and Crime
Prevention (UN-ODCCP) (2002) that street children
spend all or most of their time on the street, lack
supervision, protection or guidance which makes
them vulnerable to a wide range of health and
psychological hazards. Here according to the ancient
Greek philosophers Aristotle and Plato, a large and
powerful educative agency owes to the individual
increased opportunities of self-development and
greater capacity for the enjoyment of life.

3. Awareness of the Respondents on the Program for
Street Children for good governance
Batangas City (Southern Luzon which is 110
kilometer down south of Manila) which is considered
one of the fastest urbanizing cities in the Philippines
due to its rapid industrialization, has contributed to
the social progress of the people. But the same
development has brought about street children which
have proliferated all around the city. Article 20 of the
UN CRC posited that a child who is temporarily or
permanently denied his or her family environment
shall be entitled to special protection and assistance
by the state.
The rapid industrialization in the city has
contributed to the economic and social progress of its
people. This same progress, however, comes with
social problems. One of the current concerns of
Batangas City is the proliferation of street children
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around the city proper. They eventually become
child laborers, street beggars, and children of the
street, neglected children and with other social
problems.
This vulnerability of children is being addressed
by UN through its Convention on the Rights of
Children (CRC). To protect the rights of a child,
Article 19 of CRC states that a child must be
protected from all forms of physical or mental
violence, injury or abuse, neglect or negligent
treatment, maltreatment or exploitation, including
sexual abuse. Furthermore, Article 20 of the CRC
provides that a child who is temporarily or
permanently denied his or her family environment,
shall be entitled to special protection and assistance
by the state (Article 20) (Oyeniyi, 2010).
The implementation of human rights relies on a
conducive and enabling environment such as
appropriate legal frameworks and institutions as well
as political, managerial and administrative processes
responsible for responding to the rights and needs of
the population especially street children.
Based on documents from the Republic of the
Philippines City Social Welfare and Development
Office (CSWDO) of Batangas City, there is a need to
provide temporary shelter for street children who,
thereafter, are provided with basic education and
socialization. The corresponding strategies to meet
such objectives include: (1) lessening the time these
street children spend on the streets (2) providing
meaningful group experiences and activities (3)
providing guidance and counseling to strengthen
family relations (4) providing skills training and
workshops to families of the beneficiaries (5)
providing a literacy education program and (6)
providing food supplements among other programs.
Furthermore, the Social Workers and the Day Care
Workers facilitate the daily sessions at the Drop-In-
Center. A typical day for street children is spent
following a program of activities such as soup, baths,
and clothes among others. The CSWDO, in
collaboration with other agencies such as the Local
Government Unit and City Council for the Welfare
of Children, gives other services such as support
services, rescue operations, referral for shelter
assistance and provision of a written policy.
However, there are limitations on skills
training/income generating projects for street
children, availability of family drug abuse prevention
program seminars, provisions for street childrens
personal hygiene, materials and balanced meals and
early notification of annual meetings for street
children through their local officials. Blame is
sometimes heaped on Non-Governmental
Organizations (NGOs) for encouraging children to
live on the streets through the services they render
without a due collaboration with the City
Government. The research revealed that many
Batanganeons are only moderately aware of the
CSWDO programs for street children.

4. Proposed Model to Further Uphold the Human
Rights of Street Children
According to Aristotle, man is naturally social; it
is good for him to live in a society or polis (i.e., a
city-state). He emphasized that social life in a
community is a necessary condition for mans
flourishing as complete as human being. Thus, the
state above all is a large and powerful educative
agency which owes the individual increased
opportunities of self-development and greater
capacities for the enjoyment of life (Younkins,
2003). With this underpinning philosophy; the study
presents a proposed innovative model for upholding
human rights among street children: a collaborative
intervention.

292

Proposed program for street children to become
functional global citizens.
In order to realize the above model, the
proposed program below shows the collaboration of
public, private and non-governmental organizations
towards upholding the human rights of street
children to become functional global citizen.

Key
Results
Area
(KSA)
Objective Activities Persons
Involved

Human
security.

To ensure
rights of
street
children to
human
dignity.

Free and
accessible legal
assistance for
street children.
Relocation of
abused and
exploited
children.
Rehabilitation
of abused men
and women.
rehabilitation
and Reform
Houses

Provincial and
City Legal
Offices
Integrated Bar
of the
Philippines
(Batangs
Chapter)
Private Retreat
and Formation
Houses
Bilibid Prisons
Bureau of Jail
Management
Human
rights.

To
alleviate
poverty
among
street
children.
Free education
among street
children to
elementary/
secondary
school.
Special
education
program.
Scholarships
may be given
to deserving
students among
the Badjaos.
Livelihood and
community
extension
program/Semina
r for Badjao
leaders.
Parents
Teachers
Association
Public school
heads/
principals
OCVAS
City
Government
Planning
University
community
extension
Officer
DSWD
Family
and
parental
guidance
.
To
inculcate
the
importance
of family
as the basic
social
institution
Film showing
family re-
orientation.
Seminar on
parenting
Family day for
street children.
Awards for
deserving
families of
street children.

V. CONCLUSION

Indeed, there is a proliferation of street children
in Batangas City, predominantly the Badjaos who are
not properly identified by their personal
demographics. They have similar characteristics to
street children in other Third World Countries. Street
children deserve to live a normal human life as is the
states responsibility towards its citizens. The City
Social Welfare Development Office (CSWDO) of
Batangas City, has to some extent provided various
programs to uphold the human rights of street
children. A public, private and non-governmental
organizations model is proposed to further uphold
the human rights of street children.

VI. RECOMMENDATIONS

The proposed program to improve the life of the
street children be tabled for discussion by NGOs
local government offices and private individuals.
The Lyceum University may concretize
programs for street children uplifting their human
rights and dignity.

REFERENCES

Alkire, S. (2003). A conceptual framework for
human security. Working Paper 2. Oxford: Centre
for Research on Inequality, Human Security and
Ethnicity (CRISE).

Ferrara F. & Ferrara V. (2005). The childrens
prison: Street children and Indias juvenile justice
system. http://www.careshareindia.org/OHome/
OHEnglish.pdf

Gwanmesia I. (2011). Human rights and child
trafficking. OPPapers.com. http://www.oppapers.
com/essays/Human-Rights-And-Child-Trafficking/
720225)

Human Rights Reports 2005 County Reports on
Human Rights Practices. U.S. Dept of State Bureau
of Democracy, Human Rights, and Labor, March 8,
2006. www.state.gov/g/drl/rls/hrrpt/2005/61569.htm
(accessed 4 February 2011)

Lamberte, E. The Filipino children global study on
child poverty and disparities: Philippines, Policy
Brief No. 5, 2010. http://www.unicef.org/philippines/
brief05 fnl.pdf

293

ODCCP Rapid situation assessment of street children
in Cairo and Alexandria United Nations: ODCCP
Studies on Drugs and Crimes. 2002. http://www.
unodc.org/pdf/ youthnet/egypts_street_children_
report.pdf.

Oyeniyi A. J. (2010) Ife Psychologia.http://www.
faqs.org/periodicals/201003/1973238871.html#ixzzlt
4ACA.
.
Sisters Love Reaches Out To Street Children Of
Vietnam. (2004). From the issue of 4 April, 2004.
www.catholicleader.comau/prinfriendly.php?num=1
798 http://gvet.com/childprostitution/Vietnam.htm.

Tanou S. (2002). Anb-Bia Supplement, Issue/Edition
Nr 435-01/06/2002 Burkina Faso ospiti.peacelink
.it/anb-bia/nr435/e02.html (accessed 11 April 20110
http://gvnet.com/streetchildren/BurkinaFaso.htm.

Thapaliya B. (2005). The pathetic reality of street
children in Nepal. Retrieved Wednesday,
November 02, 2011. http://www.globalpolitician.
com/21288-nepal.

Younkins W. E. (2003). Capitalism and commerce.
Aristotle, human flourishing, and the limited state.
Montreal November 22, 2003 / No 133
http://www.quebecoislibre.org/031122-11htm.


294

A Redesigned Innovative Faculty
Performance Evaluation System: Inputs from
Feedback

Dr. Flora V. Javier
Consultant, Special Projects and Planning
flora.v.javier@gmail.com

Dr. Norma L. Meez
Graduate School Administrative Officer
lybat_external@yahoo.com

Abstract-- Effective human resource management
forms the foundation of a high performance work
system in which technology, organizational structure,
people and process work together to maintain
organizational effectiveness and obtain competitive
advantage. This research looks into the
performance management system of LPU,
specifically on the faculty performance evaluation
system and how it has utilized feedback from the
various sectors of the community to come up with
a redesigned instrument that supports the
teaching employees to work as effectively and
efficiently as possible to meet the goals of the
organization. This research is anchored on the
principle that performance should be managed,
measured and rewarded and in the long run should
enable the organization to understand how the
employees contribute to the organizations strategic
goals, hence contributing to the organizations
competitive advantage. Using descriptive and content
analysis, the study determines acceptability of the
policies and criteria of performance evaluation
instruments being administered to about 400 teaching
personnel of LPU. Feedback was used as an innovative
tool to redesign the performance management of the
LPUs teaching force system.

Keywords-- performance management system, teaching
performance, teaching performance evaluation,
feedback, faculty performance evaluation system

I. INTRODUCTION

The performance management system of an
organization helps the organization to understand
how the employees are contributing to the
organizations strategic priorities and goals.
Effective human resource management forms the
foundation of a high performance work system in
which technology, organizational structure, people
and process work together to maintain organizational
effectiveness and obtain competitive advantage
(Noe, et al 2007).
As a system, performance management impacts
and affects everyone in the organization. It helps the
organization achieve business results and maintain
its desired culture, and enables employees to
understand how they are contributing to the
organizations strategic priorities and goals, what is
expected of them, and how they are doing as it
focuses on the employees growth and development.
In Lyceum of the Philippines University, the
performance management system aims to align
individual and organizational goals, to provide
feedback on the work progress and
accomplishments, and to provide information as a
basis of planning, training and development and
movement of personnel. As an organization, the
university believes that faculty members are
institutional agents who can empower their students
to develop their highest potential; thus expectations
from their performance demands innovative
management tools.

II. OBJECTIVES OF THE RESEARCH

This research looks into the performance
management system of LPU specifically on the
faculty performance evaluation system and how it
has utilized feedback from the various sectors of the
community to come up with a redesigned instrument
that supports the teaching employees to work as

295

effectively and efficiently as possible to meet the
goals of the organization

III. LITERATURE REVIEW

Performance management is the process through
which managers ensure that employees activities
and outputs are congruent with the organizations
goals and is therefore central to gaining competitive
advantage. The performance management system has
three parts: defining performance, measuring
performance, and feeding back performance
information. First, a performance management
system specifies which aspects of performance are
relevant to the organization, primarily through job
analysis. Second, it measures those aspects of
performance through performance appraisal, which
is only one method for managing employee
performance. Third, it provides feedback to
employees through performance feedback sessions
so they can adjust their performance to the
organizations goals. Performance feedback is also
fulfilled through tying rewards to performance via
the compensation system such as through merit
increases or bonuses. (Decenzo & Robbins, 2005).
Despite a wealth of research materials on the subject,
there is no concensus on one ideal performance
management system (PMS). However, any
performance management system should reflect the
unique requirements of an organization. The three
perspectives of performance management are as
follows: 1) performance management as a system for
managing organizational performance, 2)
performance management as a system for managing
employee performance, 3) performance management
as a system for integrating the management of
organizational and employee performance.
When performance management is used as a
system for managing organizational performance, the
focus is on the determination of the organizations
strategy, and the implementation of that strategy
through the organizations structure, technology,
business systems and procedures. The employees are
not the primary focus, although the employees will
be affected by changes in technology, structure, and
operating systems (Williams, 1998, Racho, 2007).
A study very similar to the present investigation
was the research conducted by Casas (2006) where
she investigated the acceptability of the Agency
Performance Evaluation System to the Batangas
provincial government employees. She rationalized
the conduct of the study through developing a
properly designed performance appraisal system
which will continue to be significant to management.
Like many performance rating instruments, it has
eliminated factors that may lead to subjective
appraisal such as the effects of recent behavior bias,
the prevalence of halo-error and event the leniency
of the rater-supervisor.
In quality assurance on basic education,
Ravhudzulo (2012) assesses best practice
implementation in basic education by using the
Continuous Self-Renewal (CSR) model. He declared
that the importance of the study to scholars is for
them to realize that the CSR Model is responsible for
improving the quality of teaching and learning in the
basic education and general education and training
(GET) phase. This CSR Model considers whole-
school evaluation as the cornerstone of the quality
assurance system in schools. This approach provides
the opportunity for acknowledging the achievements of
a school and for identifying areas that need attention
efforts.
As innovation includes effective identification
of improvements based on existing practices, there
are researches which propose models of innovation,
which can provide important competitive advantages
for the opportunities for change. Ayen (2010)
disclosed that teachers are expected to have sound
knowledge of their subject areas to be able to select
appropriate and adequate facts for planning of lesson
notes, effective delivery of lessons, proper
monitoring and evaluation of students' performance,
providing regular feed-back on students'
performance, improvisation of instructional
materials, adequate keeping of records and
appropriate discipline of students. They must also
have access to information which is up-to-date,
reliable and relevant to the educational needs of
students.

IV. METHODS

The study employed a descriptive design,
specifically a survey method and documentary or
content analysis.
To determine feedback, the researchers used
criteria in the performance evaluation instruments.
The respondents were taken from the population of
428 regular and full time teachers employed during
the SY 2007-2009. . and feedback from 400 teaching
personnel. Interview was done among 20 deans and
25 representative students from each course.
Average and percentage were used to describe how
the teachers performed for three years.
to establish a pattern or trend in the teachers
performance. T-test and Anova were used to
determine the significant differences between the
students and the department heads/ deansevaluation
ratings and among the deans evaluation ratings.
V. RESULTS AND DISCUSSION

Table 1 below presents the criteria on the
performance evaluation system in Lyceum of the
Philippines University. As shown from the table the

296

performance evaluation system was determined
through the following: 1) policies governing
information the performance evaluation system, 2)
criteria used in the deans evaluation of faculty
member, 3) Deans observation of faculty
instructional performance, 4) Student evaluation of
faculty members performance and 5) Faculty
members self evaluation.

1. Feedback from the Performance Evaluation
System
The feedback on the performance evaluation
system was determined through the responses on
acceptability of the following: 1) policies governing
information in the performance evaluation system, 2)
criteria used in the deans evaluation of Faculty
member, 3) Deans Observation of faculty
instructional performance, 4) Student evaluation of
faculty members performance and 5) Faculty
members self evaluation

TABLE 1:
FEEDBACK OF LPU ON THE FACULTY
PERFORMANCE EVALUATION SYSTEM

Areas of Concern WM V I Rank

1. Performance evaluation
system in terms of policies
3.88 SA 5

2. Department heads
evaluation of faculty members
4.23 SA 4

3. Department heads
observation of faculty
performance
4.44 SA 3
4. Students evaluation of
faculty performance
4.48 SA 2
5. Faculty members self
evaluation
4.51 HA 1

Grand Mean 4.31 SA

Results show that the Lyceum Faculty Performance
Evaluation system is substantially acceptable (grand
mean = 4.31).

The item with high acceptability feedback is on
the criterion faculty members self evaluation. The
data reveal the high acceptability of the criteria used
in faculty members self-evaluation (composite mean
= 4.51). Specifically, the teacher considered that
ability to inculcate discipline is a component of
classroom management expertise which is
demonstrated by the teachers ability to provide a
physical learning environment where students are
actively engaged in classroom activities and do not
intentionally cause disruption or delay in learning,
where students behave according to class norms and
teachers expectations and demonstrate respect and
consideration for others.
Observing official time in starting and ending
class and setting examples of ethical and mood
behavior are also considered highly acceptable with
WM of 4.58 and rank of 2.5. It is good to note that
mastery of the subject matter, attending to graduate
studies, compliance with school rules and regulations
and accurate evaluation of student performance and
dressing neatly and appropriately were all found to
be highly acceptable. The remaining criteria were
rated as substantially acceptable.
The data indicate that the performance
evaluation system in terms of the student evaluation
of faculty members performance (4.48), department
heads observation of faculty members (4.44),) the
Department heads evaluation of faculty members
(4.23) and adherence to policies governing
information on the performance evaluation system
(3.88) were substantially acceptable. This could
indicate that the teachers want to be assessed by
different groups to ensure objectivity of the
evaluation.
Respondents claimed instruction as integral to
the evaluation, thus observation during classes by the
department should have higher percentage. This was
also indicated in the teachers comments which state
The student evaluation must be reduced to 30%
while the deans observation must be increased to
25%.
The acceptability of the policies governing the
performance evaluation system obtained the lowest
mean of 3.88 pointing to the need to review the
present policies governing the performance
evaluation system of Lyceum of the Philippines
University, specifically the weight given to each
component, the timeliness of the feedback to the
teachers, and the utilization of the evaluation ratings
for teachers promotion, loading or de-loading,
regularization and other administrative purposes.
Also, the respondents comments gathered from
the survey questionnaire indicate some weaknesses
that need to be addressed. These are as follows:
The facultys performance observation and
evaluation should be once a year, and should be
mostly applied only to beginners and to faculty with
fair evaluation. The above three consecutive median
performance evaluations prior to re-classification
should be reviewed. It was also noted that the results
of performance evaluation should be treated with
utmost confidentiality and student assistants should
not be allowed to give the results to the teachers.
It was also noted that performance evaluation
should pass through a committee who should
undertake a thorough review of all the Items in the
evaluation instruments. A final comment from one
respondent revealed that in general, this
questionnaire is limited to the existing criteria of the

297

instrument only, but does not address other aspects
of the evaluation system.

2. Redesigned Faculty Performance Evaluation
System
Based from respondents feedback, the
researchers proposed a 360-degree redesigned
faculty performance evaluation system which
provides a more rounded view of people, with less
bias than if an assessment is conducted by one
individual. Research has shown that 360-degree
feedback can enhance both communications and
performance. Such 360-degree surveys are used for
employee development, succession planning,
training needs assessment, and for making appraisal,
salary and promotion decisions. To illustrate, some
areas of performance management that the 360-
degree feedback addresses are behavioral skills such
as communication, teamwork and leadership.
Additionally, as CHED has mandated higher
education institutions on the three major constructs
of Instruction, Research and Community Extension,
this redesign is anchored on this and illustrated as
follows:
The redesigned deans evaluation of
Instructional Performance, Self - Evaluation of
Faculty Members and Peer Evaluation focus on the
3Cs the faculty that is competence, commitment and
caring. The scale for this is as follows: 5
Outstanding / Excellent, 4 More than acceptable /
Very Good, 3 Acceptable / Good, 2 Less than
acceptable / Fair, 1 Minimally Exhibited /Poor.

A. Redesigned Deans evaluation of I nstructional
Performance for

A. Competence/Excellence
1. Subject Matter Expertise. Demonstrates
thorough knowledge of his subject matter; is able to
relate subject matter with other fields and life
situations
2. Instructional Materials Development. Uses
appropriate concrete instructional aids and materials,
introduces new approaches, and employs teaching
strategies and procedures that enable students to
assimilate optimally new knowledge and skills
3. Communication Skills. Expresses ideas clearly,
fluently and spontaneously; adheres to the standard
rules of grammar and uses the medium of instruction
required by a subject.
4. Evaluation of Students Performance. Conducts
accurate and objective evaluation of student
performance; is fair and honest in giving grades and
observes the standard grading system of the school.
5. Relational Skills. Shows genuine interest in
his/her students; shows respect and consideration of
students opinions and suggestions; provides a non-
threatening atmosphere in the classroom.
B. Commitment to organization and profession
1. Exceptional Sense of Duty. Willingly accepts
and performs leadership roles in various extra-
curricular and socio-cultural activities of the school;
with an exceptional sense of duty and dependability
2. Recognition of School Authority and
Compliance with School Policies. Recognizes the
authority and responsibilities of his superior/s and
provides him/them with the necessary support
service and assistance; complies and consistently
implements existing school policies such as wearing
school uniform, IDs, use of prescribed textbooks,
text manuals, use of test booklets during
examination, etc.
3. Professional Growth and Development.
Continuously strives to develop himself as evidenced
by post-graduate studies currently undertaken and
attendance to field-related training, seminars and
conferences; participates in research text manual
writing and other studies undertaken by his
department, submits book reviews, lectures and
articles for publication.
4. Passion for Execution and Transcending
Personal Needs. Displays passion for execution and
sense of urgency in all tasks; can transcend personal
needs when organizational concerns need to be
attended to; willing to put far greater effort beyond
the required standards to help the university become
successful and effective .

C. Caring
1. Fostering Spirit of Community and Sense of
Family. Fosters the spirit of community and sense of
family in the work place, goes out of his way to
maintain harmonious and friendly relations with
superior, peers and subordinates;
encourages/supports efforts for establishing high
morale among co-workers
2. Professionalism. Is well-groomed; conducts
himself professionally at all times in a manner that
befits his profession (dress, language and behavior);
sets an example of moral and ethical behavior to
students; gets along well with students, peers and
superiors without compromising school policies and
standards of propriety; demonstrates professionalism
in dealing with colleagues and accepting criticism;
shows proper decorum during meetings, by listening
to presentations intently; keeps information and
discussions at work confidential
3. Honesty and Integrity in Work. Manifests
honesty and integrity in dealing with co-workers and
the organization; there is consistency between words
and action; protects and preserves school property
through judicious use of the schools resources.
4. Attitude towards Work. Shows marked interest
and pride in his job and is willing to give and receive
feedback on performance standards, job
responsibilities, special assignments.

298

5. Attitude towards the Organization. Establishes
a positive image for his/her department and the
organization as a whole and functions effectively as
a member of the organization whether assigned to
leadership roles or subordinate roles.

A. Redesigned Self - Evaluation of Faculty
Members
Competence
1. Instructional Materials Development.
I use appropriate concrete instructional aids
and materials, introduce new approaches, and
employ teaching strategies and procedures that
will enable students to assimilate optimally
knowledge and skills
2. Evaluation of Student Performance
I conduct accurate and objective evaluation
of student performance; am fair and honest in
giving grades and observe the standard grading
system of the school
3. Records and Report Management
I submit on time error-free, concise, and
neat reports and documents (grading sheets,
syllabi, test papers, student records, faculty load
and room status reports, seminar reports, etc.
4. Communication Skills
I express ideas clearly, fluently and
spontaneously; adhere to the standard rules of
grammar and use the medium of instruction
required by the subject.

B. Commitment to organization and profession
5. Teachers Personality And Human Relations
I willingly accept and perform leadership
roles in various extra-curricular and socio-
cultural activities of the school; with an
exceptional sense of duty and dependability.
6. Recognition of School Authority and
Implementation of School Policies
I recognize the authority and responsibilities
of my superior/s and provide him/them with the
necessary support service and assistance;
comply with and consistently implement
existing school policies such as wearing school
uniform, IDs, use of prescribed textbooks, text
manuals, use of test booklets during
examination, etc.
7. Professional Growth and Development
I continuously strive to develop myself as
evidenced by post-graduate studies currently
undertaken and attendance to field-related
training, seminars and conferences; participate
in research text manual writing and other studies
undertaken by my department, submit book
reviews, lectures and articles for publication.

C. Caring
8. Attitude Towards the Job.
I show marked interest and pride in my job
and am willing to give and receive feedback on
performance standards, job responsibilities, and
special assignments.
9. Attitude Towards the Organization
I establish a positive image for my
department and the organization as a whole and
function effectively as a member of the
organization whether assigned to leadership
roles or subordinate roles
10. Teacher Personality and Human Relation
Is well-groomed; dresses appropriately
when in civilian clothes; conducts himself in a
manner that befits his profession; sets an
example of moral and ethical behavior to
students; gets along well with students; peers
and superiors without compromising school
policies and standards of propriety.

C. Redesigned Peer Evaluation of Faculty
Member
Competence
1. Communication Skills. Expresses ideas clearly,
fluently and spontaneously; adheres to the standard
rules of grammar and uses the medium of
instruction required by the subject.
2. Knowledge. Generally competent with thorough
knowledge of his/her field
Commitment to organization and profession.
3. Recognition of school authority and
implementation of school policies. Recognizes the
authority and responsibilities of his superior/s and
provides him/ them with the necessary support
service and assistance; complies and consistently
implements existing school policies such as
wearing school uniform, IDs, use of prescribed
textbooks, text manuals, use of test booklets
during examination, etc.
4. Professional growth and development.
Continuously strives to develop himself as
evidenced by post-graduate studies currently
undertaken and attendance to field-related
trainings, seminars and conferences; participates in
the research/es text manual writing and other
studies undertaken by his department, submits
book reviews, lectures and articles for publication.
5. Teacher personality and human relation. Is well-
groomed; dresses appropriately when in civilian
clothes; conducts himself in a manner that befits
his profession; sets oneself as an example of moral
and ethical behavior to students; gets along well
with students; peers and superiors without
compromising school policies and standards of
propriety.


299

6. Cooperation in school activities Willingly accepts
and performs leadership roles in various extra-
curricular and socio-cultural activities of the
school; with an exceptional sense of duty and
dependability.
Caring
7. Attitude towards the job. Shows marked interest
and pride in his job and is willing to give and
receive feedback on performance standards, job
responsibilities, special assignments.
8. Attitude towards the organization. Establishes
positive image for his/her department and the
organization as a whole and functions effectively
as a member of the organization whether assigned
to leadership roles or subordinate roles.

D. Mandatory Requirements
1. Attendance and Punctuality in meetings and
university, college / department functions
(1) Faculty Meetings
(2) Pistakasan / Dedication Ceremony /Other
Activities
(3) Inter-College Academic Competition / MSAW
& Articulation of the VGMO
(4) School Foundation Activities (Family Night)
Awards Convocation, Loyalty Parade) /
Commencement Exercises
(5) College Days Celebration / Other College
Activities
2. Adherence to JEP, 5S and cost savings program.
Uses the English language as the medium of
instruction (where appropriate), in work transactions
and in daily conversations; religiously implements
5S in his/her work station/faculty room; fully
supports the schools energy program and cost
saving program.
3. Loyalty to Management and Pride in LPU. Shows
loyalty to the school by fully supporting its programs
and projects, takes pride in LPU and practices its
core values (LPUNJPL); does not speak ill of the
organization or do things that are not supportive of
management, school goals and objectives.
4. Classroom Management. Demonstrates effective
classroom management skills ensuring that
classrooms and other places of learning are
conducive to learning, students attendance is
regularly checked and monitored and students
course requirements are checked and returned to the
students.
5. Records and Report Management. Submits on
time error-free, concise, and neat reports and
documents (grading sheets, syllabi, test papers,
student record, faculty load and room status report,
seminar reports, completion grade, etc.
To meet the demands of the tri-fold functions of
education, the researchers also redesigned Research
Performance Evaluation and community extension,
with focus on rubrics for nature of research and
nature of Community Extension College Based
Projects for Adopted Community which were
provided with equivalent points.

RUBRICS FOR RESEARCH

Nature of Research Equivalent
points
Institutional research refereed, published in an
international journal and presented
internationally
5 points
Institutional research refereed, published in an
international journal but not presented
internationally
5 points
Institutional research refereed and presented
internationally but not published
5 points
Institutional research not refereed and not
presented internationally but published
5 points
Institutional research refereed and presented at
the national level
5 points
Institutional research refereed presented and
published at the regional level (Regional/
Calabarzon Journal)
4 points
Institutional research refereed and published in
legitimate Lyceum journal
4 points
Research-based and scholarly article published
in international paper/basic college research
presented in international paper
3 points
in a national paper/ basic college research
presented in a recognized school colloquia/for
a
3 points
in any legitimate Lyceum paper or journal
2 points
Action research/ basic college research
published in a national paper
3 points
Action research/ basic college research
published in Lyceum journal
2 points
Action Research/ basic college research not
published and only submitted to the Dean
1 point

C. Redesigned Community Extension Performance
Evaluation
RUBRICS FOR COMX

Nature of Community Extension
College Based Projects for Adopted Community
Equivalent
points
1. Conceptualized, implemented, monitored,
evaluated and submitted documents of
accomplished projects as certified by the
Dean and COMX Officer
2. Conceptualized, implemented and submitted
documents of accomplished project
3. Conceptualized and implemented COMX
projects
4. Implemented COMX projects
5. Conceptualized COMX projects

5
4

3

2
1

300

RUBRICS FOR COMX (CONT.)

Nature of Community Extension
College Based Projects for Adopted Community
Equivalent
points
College Based Outreach Projects
1. Conceptualized, implemented, participated
and submitted documents of outreach
projects
2. Implemented, participated in and submitted
documents
3. Participated in outreach projects
4. Conceptualized outreach projects
5. Suggested outreach projects

5

4
3
2
1
COMX Initiated Projects
1. Actively participates in community extension
activities all the time (5 times)
activities most of the time (4 times)
activities often times (3 times)
activities sometimes (2 times)
activities (1 time)

5

4

3

2

1

VI. CONCLUSIONS AND RECOMMENDATIONS

Conclusions
1. Feedback from the respondents show substantial
acceptability, thus performance evaluation criteria
can be enhanced by incorporating the suggestions
given by the respondents on each component.
2. The items in the performance evaluation system
need to address other aspects as 360 degrees
evaluation system.
3. A redesigned performance evaluation is hoped to
serve as an innovation for teaching employees to
work as effectively and efficiently as possible to
meet the goals of the organization.

Recommendations
1. The criteria for the components of the
performance evaluation system should be thoroughly
reviewed and similar items should be clustered. For a
more accurate and objective rating by the raters
especially the Deans, the use of the given rubrics is
recommended.
2. The policies governing the performance evaluation
system should be re-examined to determine what
area needs improvement.
3 The redesigned Faculty Performance Evaluation
System may be tabled for discussion, then be tried
for at least 2 courses to determine its weaknesses.
4. A similar study may be conducted possibly after
three years utilizing cluster ratings as suggested
above to determine the effectiveness of the
performance evaluation system.

REFERENCES

Ayeni, A. J. (2010). Teachers' instructional task
performance and principals' supervisory roles as
correlates of quality assurance in
secondary schools in Ondo State. Obafemi Awolowo
University, Ile-Ife,
Nigeria: Unpublished doctoral dissertation.

Casas, P. M. P. (2006) Acceptability of the agency
performance evaluation system to the batangas
provincial government employees. Unpublished
Thesis, Lyceum of Batangas, Batangas City.

De Cenzo, D. A. & Rabbins, S. P. Fundamentals of
human resource management. 8
th
edition. New
Jersey: John Wiley & Sons, Inc.

Noe, R. et.al. (2007) Fundamentals of human
resource management. 2
nd
Edition. Mc. Graw Hill.

Racho, N.C., Diamante & Tan. (2007). Human
resource management local and global perspectives.
Quezon City: C & E Publishing.

Ravhudzulo,N.A. (2012). Assessing best practice
implementation of quality assurance in basic
education by establishing standards and measuring
program effectiveness. Journal Of Emerging Trends
In Educational Research And Policy Studies,
Retrieved from ://httpgo.galegroup. com/ps/i.do?id

Williams, R. S. (1998). Performance management:
Perspective on employee performance. 1998.
Boston: Instructional Thomson Business Press.

301

Innovative Management of Cross-Sectional
Stock Returns in the Philippines

Ramon George Atento
Director, Capital Markets
Lyceum of the Philippines
Laguna, Philippines
george.atento@gmail.com

Abstract-- Stock market investing is an unpopular
activity in the Philippines, with a mere 1% of the
population investing in the PSE. Related by many to
gambling and mainly an activity for the rich,
investment has put the Philippines not only below
world standards, but even one of the lowest in the
Asian region. The descriptive correlation method
was used in this research, along with documentary
analysis of the financial statements of the member
companies of the Philippines Stock Exchange Index
(PSEi). The subjects are the 30-member companies of
the PSEi. Data consisted of the Price-Earnings, Price-
Book, Price-Free Cash Flow, Price-Earnings-Growth
and Price-Sales ratios, and the corresponding yearly
price appreciation of the said stocks from 2007-2011.
Relationships between the ratios and subsequent price
appreciation were analyzed using Pearson-r correlation
on a year-on-subsequent-year basis. Multiple
correlation was performed to determine which ratios
predict the subsequent price-increases of the stocks.
Price increases were also compared between the high
and low groups of the fundamental ratios. Finally, a
guideline for future investors was given in order to
filter the many stocks available for investment, and
how to assemble ones portfolio given the indicators for
each stock.

Keywords-- stock exchange, innovative management in
stock market, Philippine Stock Exchange, Cross-
Sectional Stock Returns, fundamental analysis,
portfolio management

LITERATURE

Investing in the Philippines is not a popular
activity. The majority of the Filipinos regard
investing as an activity reserved for the rich. (Fox,
1999) Long gone are the days when the country
ranked second in Asia, dominating Korea, Singapore
and Taiwan. Now, as reflected in the same study,
these countries have five times more GDP per capita
than the sick man of Asia. Investment has
inevitably lagged, as confirmed by Boutchkova and
Megginson (2000), where, in a study on global
capital markets, the Philippines fared poorly against
world standards, with investment at 44.7% of the
GDP (versus World standards of 81.6%). Volume is
also low at 12.7% of GDP (versus World standards
of 79.3%). As Menaje (2009) puts it, in the
Philippines, investment remains to be a topic heard
only in board rooms and business courses.
The Philippines Stock Exchange (PSE) is one of
the oldest bourses in Asia, with its Manila Exchange
starting operations in 1927. Makati Stock Exchange
followed soon in 1963. The two eventually merged
into the present PSE set up in Ayala. Presently, the
PSE has 268 listed companies, with 134 active
trading participants. Its daily turnover is about P6-8
Billion.
With the PSEs current market capitalization of
P9.049 Billion (November 14, 2012), it is still one of
smallest in the world. Thailand, a similarly-sized
country, for example, has an equivalent market
capitalization of almost P10 Trillion with P30-50
Billion worth of transactions daily, and about 500
listed companies. It is noteworthy that the Stock
Exchange of Thailand (SET) was founded only in
1975.
Research relating to the stock market and
investment in the Philippines is also at a minimum,
in contrast to the voluminous output of the same
nature in the United States and Japan. Studies that
relate stock returns to macro and micro-economic
variables such as earnings surprises, book to market
value, cash flow yield, unemployment and GDP have
been plenty not only in the US, but also in Japan and
recently, China.
The stock market has been viewed by most
people including Filipinos as related to gambling.
Periods of speculation in the past drove the crowd to
frenzy and victimized millions, including among
others, the great Isaac Newton himself (Cunningham,
2001) who lost millions in current dollar equivalent
in the South Sea Company. In the US, even though
there have been a host of studies relating stock
returns to fundamental or technical indicators, many
still regard the stock market as a gambling activity.
With the dearth of literature here in the Philippines,
and devoid of any investment guide or mathematical
model to help investors in choosing sound
investment patterns, most Filipinos regard the stock
market an elitist activity for the old boys club
(Philippine Law Journal, 84).
As a result, according to the PSE report, only
1% of Filipinos invest in the Stock Market, in
contrast to a much larger investor base in Thailand
302

(20%), and Australia (32%). Since these numbers
are based on investor accounts, one could deduce
that the actual individual number of investors is even
lower, since a multitude of accounts per individual is
possible. With this, we can surmise that the capital
market in the Philippines is still at this point in its
infancy stage.
As a result, the majority of investible funds end
up in the bank, earning 0.5-1.0% a year.
Contrariwise, the broader All Shares Index has gone
up at an average of 14% annually since 2000.
According to the 2009 Family Income and
Expenditures Survey, the average Filipino family is
able to save 14.85% of its annual income, amounting
to P565.139 Billion. However, only 1% of this is
invested (P5.6 Billion), to earn greater yield. A great
majority is left in the bank, only to be spent later on.
The 13% opportunity cost representing the spread
between yields from bank deposits and stock
earnings is a staggering P73 Billion every year.
Compound this for ten years, and this amount
balloons to P1.4 Trillion Pesos, which can help
create jobs and distribute wealth.
Adding to this is the deep ignorance even of
some of the wealthy families in the rural areas of the
nation, choosing pyramid scams that promise great
yield for a very short period of time, as in the recent
case with Aman Futures.
This predicament is not ideal, especially for a
developing country as the Philippines. The capital
market is a barometer of the economic health of
nations (Fox, 1999; Fosback, 1994). National
development cannot march onwards without
investment from the private sector. With mediocre
volume in the market, the money that should be used
by companies for expansion is placed in banks in
exchange for minimal interest. Due to this, banks
become awash with cash. With growing
expectations on interest rates among investors,
mostly savers, banks must charge higher on loans.
Government spending, which uses investment from
sale of treasury bills and bonds demands a higher
interest than the one being paid by banks.
On the part of individual investors, interest
earned on savings and time deposits is clearly not
enough. Inflation rate erodes these deposit earnings
and in the long term, their money depreciates in
value. As a tradeoff, investors view this as the price
they have to pay for security of capital. Some more
savvy investors choose risk free investment that pays
higher interest, like government-issued treasury bills
and treasury bonds. Historically though, stock
returns still outperform these securities in the long
term (Vick, 2000; Fosback, 1994).

II. OBJECTIVES OF THE RESEARCH

This study presents the fundamental ratios of
listed stocks in the PSE, and relates them to the
subsequent price appreciation (or depreciation) of the
following year. Specifically, it compares the
differences of stock movement (whether up or down)
between stocks belonging to a high or low Price-
Earnings (PE), Price-Book (PB), Price-Sales (PS),
Price-Earnings-Growth (PEG) and Price-Free Cash
Flow (PFCF). Choosing the past four (4) completed
years, this study focused on the ratios for the end-of-
year 2007, 2008, 2009, 2010 and 2011. Further, it
also found comparison data for stock prices at the
end of fiscal years 2008 (to correspond to 2007
ratios), 2009 (for 2008 ratios, etc.). 2010, and 2011.
Although we have ratio data for end of year 2011,
the corresponding price appreciation for 2012 could
not be presented at the time of writing this paper due
to obvious constraints.

III. REVIEW OF LITERATURE

There are two main analysis employed in stock
picking. The first one uses basic information about
listed companies, particularly data found in their
balance sheets. The idea is simple. The stock prices
should reflect the intrinsic value of the company
(Vick, 2000). When the price is below the intrinsic
value, investors who use fundamental analysis
classify the stock as a buy. On the other hand, if
the price of the stock is way above the intrinsic value
of the company, the investor who uses the said tool
might avoid the stock, dismissing it as overpriced. If
the stock is already held, it might be sold since the
price and value always revert to the least possible
distance from each other.
The second one is technical analysis, which
focuses on chart patterns and timing. Its idea is that,
although the stock prices reflect the intrinsic value of
a company, no one actually knows when the market
discounted the difference between the price and
value of the company. When the stock is held
underpriced by a fundamental analyst, a technical
analyst might not necessarily agree. S/he might
think that the market is expecting a deterioration of
income in the coming quarters, and the price is a
reflection of this expectation. On the other hand, if
the stock is overpriced, it is possible that the
expectation is for income to surge in the coming
years as shown by ONeil (2009). The latter is true
for companies with research breakthroughs like the
cases of Xerox, IBM, Microsoft, and some
biotechnology stocks in recent years. The main idea
of technical analysis is that stock prices move in
trends and history tends to repeat itself. The Dow
Theory presupposed stock trends in the beginning of
the twentieth century, which was used by Hamilton
(1922) as a forecast tool. He also coined the term
Dow Theory summarizing it as based on the
editorial writings of Charles Dow. This was
disproved, however by a later study of Alfred
Cowles (1934).
Most professional investors believe that
employment of both fundamental and technical
303

indicators is that which gives better stock returns.
This current study will focus on fundamental, rather
than technical variables.
The literature review for this study is conducted
to identify variables that have been used in prior
research regarding stock returns.
Fundamental variables are those that are
reflected in the balance sheet of companies. They
can mirror solvency, profitability, growth, or
liquidity. Investors often compare these measures to
price, and equate the ratio to value investing. One
of the most successful investors is Warren Buffett
who employed value investment (Vick. 1999). He is
a consistent top 5 wealthiest man in the world, who
accumulated his wealth solely from Wall Street.
Aligned usually to Buffett is fundamental analysis
and the interplay of price and value (Vick, 1999), a
technique he openly attributes to his mentors,
Benjamin Graham and David Dodd who wrote in
1934 a landmark book called Security Analysis.
Fundamental variables have been a favorite
resort of investment managers to choose stocks for
their portfolio. Vick (1999) analyzed historical
returns of such fund managers who employed
fundamental variables throughout their investing
career. Included are famous investors like Warren
Buffett, Michael Price, Mario Gabelli, and Peter
Lynch.
Frankel and Lee (1998) discussed the
relationship of accounting valuation and market
expectations in their study. Their study concentrated
on the so-called I/B/E/S consensus forecast, which
represents forecasts of institutional brokers. Their
method employed estimating companies
fundamental value from the I/B/E/S consensus
forecast and a discounted residual income model
from expected future dividends. The latter uses the
Edwards-Bell-Ohlson (EBO) valuation technique as
coined by Bernard in 1994 (in Frankel and Lee,
1998). Their results showed that the firms
fundamental values are highly correlated with
contemporaneous stock prices. Also, their resulting
P/V (Price over Fundamental Value) was shown to
be a good predictor to cross-sectional returns in the
long term.
Chan et al (2008) presented a good review of
previous literature on fundamental indicators as
predictors of stock returns. For example, they cited
studies by Thomas and Zhang (2002) that found out
about the negative relationship between huge
inventory increases and stock returns. They also
mentioned about studies linking fixed assets and
stock returns. There have been studies also that
related capital expenditures and stock returns, as in
the case of Titman, Wei and Xie (2004). For their
part, they searched for the relationship between
balance sheet growth that is, total assets, and
related it to expected stock returns. They provided a
thorough explanation of how an investor might look
at asset growth in terms of future growth, and how
the same can give appreciation to the intrinsic value
of a company. In their study, they found out that
companies that experienced high asset growth tend to
suffer erosion in stock prices a year after (-5.88%)
and the next year (-4.85%). The authors provided
possible explanations for this, but they pointed out
that the real rationale for this remains unclear.
Book value has always been a Graham favorite
for security analysis (Graham, 1934). Grahams
original idea was that he did not want to purchase
stocks that are at a premium over their accounting
book value. The idea was that if a stock is trading at
a price below its own book value, there is no other
way but to revert to the mean to its own book
value, sometimes, even at a premium over it. His
filter includes price to book value that is below 0.67
or 2/3 of the latter. Penman, Richardson and Tuna
(2006) investigated the book-to-price effect in stock
returns, explaining in their research how book-to-
price (B/P) absorbs leverage. In their study, they
showed how B/P decomposes into an enterprise B/P
ratio and a leverage component. The former
represents operations risk, while the latter represents
financing risk. What they found is that the enterprise
B/P ratio correlates positively with subsequent stock
returns. On the other hand, depending on the
enterprise B/P ratio, the leverage component
correlates negatively with future stock returns.
Another fundamental variable that is important
for investors is dividend yield. In place of stock
price growth, investors might opt for cash dividends,
whereby, the company releases year-end earnings
that it does not need to investors. Usually, the
understanding is that dividends are unwanted cash
that companies have no need for. Basu (in Blume,
1979) stated that individual investors have a strong
preference for dividends, even if retained earnings in
turn were reduced. Further, if dividend yields were
to be increased substantially, 41.8% of respondents
would plan to increase their holdings. Blume (1979)
employed a cross-sectional regression analysis for
the period covering 1936-1976 in Wall Street. He
found out that there is a significant relationship
between the quarterly realized rates of return and
both the beta coefficients and the anticipated
quarterly dividend rates. He noted that those stocks
with anticipated yields in excess of the mean market-
wide yield outperformed non-dividend paying stocks
at each level of beta. This provides a rational
explanation of why investors prefer dividend-paying
companies than those that do not.
Earnings per share (EPS) or net income is a
bottom line that is the central figure of fundamental
analysis. Most fund managers view this as a critical
metric before they chose a stock to buy. Coupled
with the prevailing market price, this metric is one of
the first fundamental variables investigated by
investors in order to decide those stocks that are
better buys than the rest. Studies working around
earnings ratio (Palanca, 1993), earnings surprises
304

(Skinner and Sloan, 2000) and earnings per share
have been abundant. For example, Jorgensen, Li
and Sadka (2009) discussed in their study the
relationship between earnings per share, dispersion,
and aggregate stock returns. According to their
results, cross-sectional earnings dispersion is
positively related to contemporaneous stock returns
while being negatively related to lagged stock
returns. They explained that possible explanation for
this is that an increase in uncertainty causes an
increase in expectations, which causes prices to fall.
This is in line with risk expectancy where the
requirement of returns is directly related to risk.
Earnings dispersion or variability causes
expectations to rise, and since prices are a
manifestation of investors expectation of future
earnings, this in turn causes prices to fall.
Here in the Philippines, there have been a
number of local studies which concentrated on
fundamental variables. Like their American
counterparts, they concentrated on the usual
fundamental ratios associated with value investing.
Ip (2003) focused on the beverage industry in the
Philippines, analyzing the relationship between the
key fundamental ratios of price/sales, price/book and
price/earnings. Her study chose the period from
1995-2002.
As the stock market in the Philippines is divided
into sectors, sectoral returns are also important
indicators of investment climate in the country.
Choosing fundamental indicators, Chu (1995)
investigated the influence of book value per share,
current ratio, debt to equity, dividend yield, earnings
per share, price/earnings ratio, return on assets, and
return on investment on the stock prices of the
commercial-industrial sector, the property sector, the
oil sector and the mining sector of the Philippine
Stock Exchange.
Other Asian studies emerged in the analysis of
the effects of fundamental variables to stock returns.
For example, in analyzing results in the Jakarta Stock
Exchange (JSE), Toly (2008) made use of
accounting ratios that are dubbed as internal
factors of the economic health of companies. For his
part, he focused on the most highly-capitalized
stocks or the so-called blue chips classified as the
LQ45 in the JSE. Using GRETL software, he
analyzed various accounting ratios, and found book
value per share, dividend payout ratio, EPS and ROA
as the metrics that can be used to determine
movement of stock prices of the LQ45 in the JSE for
the years covering 2002-2006.
In the same way, Chan et al (1990) concentrated
on fundamental variables in analyzing stock returns
in the Japanese market, which is the second largest
market in the world. Their data extended from 1971
to 1988, including even companies that were
eventually delisted in the Tokyo Stock Exchange.
Fundamental variables employed by them included
earnings yield, cash flow (earnings plus depreciation)
yield, market capitalization (size), and book to
market ratio. In their study, they found out that there
is a significant relationship between fundamental
variables and expected returns in the Tokyo Stock
Exchange. Of the four fundamental variables
considered, the book-to-market ratio and the cash
flow yield have the most significant impact on
expected returns. It is to be recalled that book-to-
market ratio is the indicator that Benjamin Graham
solidly employs in the valuation of stocks. Chan et
al (1990) also noted that differences in accounting
standards somehow distorted past studies in the
relationship of fundamental variables and stock
returns. With stricter accounting policies now in the
light of the many improvements in accounting
standards, this should not be a problem in our study.

IV. METHODS

Subjects of the Research
From the current population of 266 listed
companies in the Philippines Stock Exchange (PSE),
this study used the thirty (30) companies included in
the PSE Composite Index (PSEi), considered to be
the bellwether of investor sentiment not only in the
capital markets of the Philippines, but also its
economy as well. The stocks included in the list are
chosen by the board of directors of the Philippines
Stock Exchange, following a set of stringent
guidelines. The current PSE Composite Index
(PSEi) consists of the following stocks, with their
corresponding ticker codes: Aboitiz Equity Ventures
(AEV), Alliance Global Group, Inc. (AGI), Ayala
Corporation (AC),Ayala Land (ALI), Aboitiz Power
Corporation (AP), Bank of the Philippine Islands
(BPI), Banco de Oro Unibank, Inc. (BDO), Belle
Corporation (BEL), Cebu Air (CEB), DMCI
Holdings Inc (DMC), Energy Development
Corporation (EDC), First Gen Corporation (FGEN),
Globe Telecom Inc (GLO), International Container
Terminal Services Inc (ICT), JG Summit Holdings
(JGS), Jollibee Foods Corporation (JFC), Manila
Electric Company (MER), Manila Water Company
(MWC), Megaworld Corporation (MEG), Metro
Pacific Investments Corporation (MPI), Metropolitan
Bank and Trust Company (MBT), Philex Mining
Corporation (PX), Philippine Long Distance
Telephone Company (TEL), Robinsons Land
Corporation (RLC), San Miguel Corporation "A"
(SMC), Semirara Mining Corporation (SCC), SM
Development Corporation (SMDC), SM Investments
Corporation (SM), SM Prime Holdings (SMPH),
Universal Robina Corporation (URC),

Data Gathering Procedure
This study made use of the audited financial
statements (balance sheet and income statement) of
the abovementioned companies. These are publicly-
available data from the PSE website, the companies
websites, and the Security and Exchange
305

Commission. They are also available in
commercially-available websites, such as
businessweek.com (Bloomberg), technistock.com,
and citiseconline.com. Fundamental ratios were
calculated using Microsoft Excel, based on the
primary data from the companies financial
statements.

V. RESULTS

Price-Earnings (PE)

TABLE 1:
PE VALUES THROUGH THE YEARS 2007-2011

TABLE 2: PRICE APPRECIATION (IN%) OF PSEi
STOCKS FROM 2008 2011 GROUPED ACCORDING
TO HIGH, LOW OR NEGATIVE PEs.

2008 2009 2010 2011
High PE (46.13) 69.33 51.00 0.15
Low PE (46.50) 115.33 164.47 3.62
Negative (39.00) 140.67
PSEi (46.07) 94.87 107.73 1.89
p-value 0.946 0.249 0.001 0.61

Price-earnings (PE) is one of the most famous
indicators value investors look for in analyzing
stocks. It is very straightforward, dealing only with
net income and price. It is understandable to focus
on net income, because after all, net income is that
which adds to shareholders equity and hence, to the
net value of the company. Although PE has only
been a significant factor in 2010 when comparing
companies with high and low PEs (p = 0.001), still,
we see a general trend that those companies with
high PEs tend to underperform the market over time.
Further, companies with lower PEs tend to do better
than the market and those with high PEs. The
cumulative returns for companies with high PEs
grew by 37.95% from 2008-2011. In the same
period, the PSEi grew by 122.44%, while companies
with low PEs grew at an average of 215.70%.
Peculiar to PE are the companies with losses, and
eventually turned around. This study has only three
(3) companies that incurred losses prior to fiscal year
2008 and 2009. These companies even
outperformed the low PE companies during the said
years. However, since these companies eventually
turned around the following year, there is not enough
data points for better comparison.

Price-Sales (PS)

TABLE 3:
PS VALUES THROUGH THE YEARS 2007-2011

TABLE 4: PRICE APPRECIATION OF PSEi STOCKS
FROM 2008-2011 GROUPED ACCORDING TO HIGH
OR LOW PS

2008 2009 2010 2011
High PS (50.60) 74.27 71.60 0.66
Low PS (41.53) 115.47 143.87 3.11
PSEi (46.07) 94.87 107.73 1.89
p-value 0.245 0.196 0.051 0.718

Price-Sales (PS) is another famous indicator value
investors look for in analyzing and picking stocks.
Sales take out the negative values that
EPS has. Since income comes from sales, advocates
of this ratio look at sales power to drive income. The
idea is that a company with strong sales will
eventually take care of its margins and turn in good
income potential. Corollarily, a company may post
good net income by selling its assets, or collecting
receivables; however, without strong sales, this will
eventually turn down its profit or even post losses.

As in the case of PE, comparison of means between
companies with high and low PS did not turn out to
be significant, except for 2010, where the low PS
companies improved at a higher pace than its high
PS counterparts (143.87 > 71.60, p = 0.051). We
again see a general trend favouring companies with
low PS over time. From 2008-2011, companies that
belong to the lower PS group turn in higher returns
(216.80% > 48.7%) than their high PS counterparts.

Price-Book (PB)

TABLE 5: PB VALUES OF COMPANIES IN THE
PSEi THROUGH THE YEARS 2007-2011

306

OR LOW PB

2008 2009 2010 2011
High PB (49.53) 76.13 57.87 6.10
Low PB (42.60) 113.60 157.60 (2.33)
PSEi (46.07) 94.87 107.73 1.89
p-value 0.377 0.241 0.005 0.209

Price-Book is an indicator favoured by value
managers from the time of Benjamin Graham. In his
momentous work, Security Analysis, Graham wrote
that he was looking for companies selling at 2/3 the
book value, meaning, companies with PB of 0.66 or
lower. This is understandable in an asset-intensive
age such as Grahams. However, even in this
quality-driven age, where information, service and
brand carry a hidden value that cannot be
understood through asset alone, we verify that a
lower PB is to be favoured over a high PB. From
the table above, we note that low PB stocks have
consistently performed better than the higher PB
stocks, except in 2011 though the difference during
that year was minimal. Through the years 2008-
2011, companies with lower PB improved their
prices by 208.47% compared to the 48.90% for
companies with higher PB.

Price-Free Cash Flow

TABLE 7: PRICE-FREE CASH FLOW FOR PSEi
COMPOSITE INDEX THROUGH THE YEARS 2007-2011

OR LOW PRICE-FREE CASH FLOW

2008 2009 2010 2011
High PFCF (45.60) 99.00 85.43 8.74
Low PFCF (44.00) 60.71 200.25 (17.62)
(Banks) (47.67) 61.00 46.67 (3.67)
Negative (47.17) 142.00 121.67 7.29
PSEi (46.07) 94.87 107.73 1.89
p-value 0.997 0.35 0.158 0.012

Price to Free Cash Flow is an indicator derived
from the liquidity reserves of the listed company.
The main concept of this metric is that a company
with more reserve cash will naturally be able to stay
afloat during a weak economic cycle, or be
aggressive in strong ones. Earnings may be padded
through accounting gimmicks and other techniques,
while cash is harder to manipulate. Further,
aligning this indicator to market capitalization gives
value investors the assurance that they are not paying
top dollar for a company with very low chance of
growth. Unique to this indicator is the presence of
banks (3 in the Philippine index), where the Free
Cash Flow concept does not apply.
As in the case of previous fundamental
indicators, PFCF differentiation was only significant
in one year (2011 this time, p = 0.012). However,
we note that this indicator was not consistent in
predicting better returns. In the full four (4) years
though, we verify that still, the companies with lower
Price-Free Cash Flow Ratios turned in better profits
(122.61% > 118.28%) than their counterparts. The
banks only turned in 19.03% in the same period,
while companies with negative price to cash flow
went up even more (204.06%).

Price-Earnings-Growth

TABLE 9: PEG VALUES OF COMPANIES IN THE
PSEi THROUGH THEYEARS 2007-2011

OR LOW PEG

2008 2009 2010 2011
High PEG (42.40) 90.85 70.87 (1.37)
Low PEG (45.71) 20.00 206.57 3.66
Negative (53.25) 102.81 90.37 11.10
PSEi (46.07) 94.87 107.73 1.89
p-value 0.516 0.648 0.008 0.52

In order to balance the limitation of earnings and
the fact that better companies are usually given high
valuation, Peter Lynch devised a mathematical
formula to factor growth into the picture. The
concept is that one can pay higher PEs for a stock, as
long as that stock is growing faster than its PE
multiple. Simplistically, it is just PE/ income
growth. Companies trading lower PEG are thus
deemed more valuable and less pricey, than a
company with higher PEG, which can happen in two
ways having higher PE multiple commensurate to
an average growth, or having lower growth against
an average PE multiple.
As predicted, companies with lower PEG have
consistently outshone companies with higher PEG,
especially in 2010 (206.57% > 70.87% p = 0.008).
Throughout the four (4) years from 2008-2011, those
with lower PEG managed to earn 107.03%, better
than those with higher PEG (85.26%).

Regression Analysis

Year 2008
2008 was a dismal year for the market, with the
PSE index going down by 46%. Noted is the
significant correlation of the price moves for that
year with the PEG of 2007, with r = 0.372 and p =
307

0.04. Using step wise regression, SPSS did not
choose any predictors from the pool, although r-
squared for PEG is at 13.84%

Year 2009
For 2009, stepwise regression chose the Price-
Free Cash Flow Ratio of 2008 as the main predictor.
The model summary is as follows:

The regression equation is significant (p = 0.016),
with the following coefficients:

Years 2010-2011
For the years 2010 and 2011, no predictors were
found, since none of the variables correlated with
price appreciation significantly. In 2010, PSEi
member companies went up at an average of 107%
(median of 63%), while in 2011, they went up at an
average of 1.89% (median of 1.00%)

VI. CONCLUSION

Although this study was not able to find
significant predictors for price appreciation from the
previous years fundamental indicators, nevertheless
the value approach for investment is once again
proven better for all of the indicators, especially
when the time frame is increased to many years,
instead of a short period of time.
Further, the classical indicators of Price-
Earnings, Price-Book and Price-Sales, held dear by
value investors of old should still be considered in
choosing stocks to buy. However, instead of relying
only on those variables, several other indicators may
also be chosen. Hence, stocks may be chosen using
prioritization models based on the indicators herein
presented.
Finally, following the idea put forward by
Lynch, a portfolio of stocks may be assembled using
the guide from the indicators, to wit:
A company with low PE, but not necessarily still
growing. These may be the stalwarts or the
cash cows. They no longer grow so much,
hence the market attaches only a small P/E
multiples.
A company with low PB, provided it belongs to
an industry which is asset-intensive. Comparator
data may be provided, using the PB values of
other companies within the industry.
A company that is still growing, especially those
dealing with innovative products and services
will be able to trade at a higher PE, because
premium is attached to it by traders and
investors. They may be chosen in the portfolio,
provided the PEG is below market. Some value
investors go as far as recommending a PEG for
example of 1.5 or 2.0 for better up-side.
Price-Free Cash Flow is an indicator to consider
especially to validate the profitability and
solvency of the company. When used against
PE or PEG, this becomes a powerful tool in
choosing better stocks that appreciates above
market benchmark data.

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309

Data Envelopment Analysis Method Applied
to Service Employees of the Department
Store: The Problem of Multi-Criteria
Assignment
Chiao-Pin Bao
Professor, Department of industrial Engineering and Management, I-Shou University
Kaohsiung, Taiwan; cpbaao@isu.edu.tw

Shu-Chuan Chen
Department of industrial Engineering and Management, I-Shou University
Kaohsiung, Taiwan; melinda2085@yahoo.com.tw

AbstractTraditionaly, there is only one criterion or
empirical rule considered by administrative
supervisors when they have to assign employees.
However, in the modern surroundings of the pluralistic
society, the customers orientation and consumer
awareness are gaining much more attention. Regarding
employee assignment, the factors taken into
consideration are no less than the one criterion. The
research objective of the thesis is to manage the
problems of Multi-Criteria Assignment. In the
research, the Data Envelopment Analysis Method and
0-1 Integer Programming are applied to the Problem of
Multi-criteria Assignment. The analysis is targeted at
the problem of assignment service employees at the
counter of the department store. The result of the
analysis indicates that the service employees who
provide the worse service quality are not the best
option for assignment even though they make a greater
sales amount. It also shows that the service employees
who provide better service and perform better in
teamwork are the more proper option. The application
of the research model can be used to opt for the most
proper employees according to the evaluated
performance at different business locations. The model
can also be applied to the evaluation of new employees
at the different working locations during their
probation period. The appropriate combination of
team members will lead to more profit.

KeywordsAssignment Problem, Data Envelopment
Analysis Method, 0-1 Integer Programming, Empirical
Rule

I. INTRODUCTION

The business model of the department store is
different from that of shops on the street, in that it is
far more competitive and concentrates more on the
quality of services and the image of the brand owner.
From the perspective of the department store
marketing, and offering services for people is the
aim. Only through better service attitudes and
through higher quality of the department store will
the customers swarm in (Lin & Lai, 2005). The
assignment of the service employees associated with
different business locations, like shopping centers or
chain stores, and in a certain period of time,
therefore, is one of the most important policies
adopted by the counter owners. Among the policies,
the sales amount, teamwork, quality of services,
attendance rate of a certain employee differ due to
different locations and places. The variables of
performance have effects on the promotion or the
employment of this service employee.
Nowadays, the assignment of the service
employees of a department store, is traditionally
made by the supervisor of the division by his or her
personal experience. However, the assignment of
service employees is the frontline of the companys
business management. If the assignment cannot suit
the employees to the counters, it may result in a
terrible situation where employees with poor stability
are assigned to business locations they arent
accustomed to. It may also be that the assigned
employees have problems communicating with the
supervisor of the division, colleagues, and even their
customers, which in turn lowers the sales amount and
the cost of running the business rises for the reason.
Consequently, the problem of how to plan a good
assignment of service employees has become a major
point for the company operators, and it is an
important issue that needs constant discussion and
amendment.
The Assignment Problem (AP) is a term
referring to the problem of planning to assign
someone to fulfill some job or task. On account of
the differences between the jobs properties and
employees abilities, the inappropriate assignment

310

will affect the efficiency and the cost of the job.
Hillier, Hillier and Lieberman (2000) noted that any
kind of Assignment Problem can be described by the
following patterns: A set of tasks and a set of
assignees will be matched as to which assignee
should be assigned to which task. He also mentioned
the following variables of the assignment problem to
meet the pre-conditioned hypothesis: The number of
the assignees is the same as that of the tasks. One
assignee is assigned to one task. Each task should be
done by only one assignee. The combination of the
assignee and the task has only one relevant cost. The
objective is set up and then the decision is made to
cut down the total cost to the least. (Huang &
Huang, 2010
Generally, the Assignment Problem discussed
in the operations research is aimed to understand one
kind of cost, how to distribute with the lowest
business cost and how to assign people to fulfill the
task. Yet, the so-called cost involves more than one
kind. For example, the problems of business cost,
working hours, the quality of the work, negotiation,
and communication are necessarily taken into
consideration. Since there are more than two kinds of
assignment criteria, the problem needs multi-criteria
assignment to meet the best possible assignment.
At present, how to lower the cost of production
is the key for companies to survive in this highly
competitive environment. Assigning certain
employees to perform different tasks in pursuit of the
minimum cost is called an Assignment Problem. The
exceptional case of linear programming can be
solved effectively by the Hungarian Method.
Because the cost coefficients are hard to calculate
precisely and show a fuzzy phenomenology in a real
situation, the traditional analysis method is hard to
use (Chiu, Chang & Hsu, 2007).
The Multi-criteria Assignment Problem is
commonly applied to the programming of human
resources. However, when the problem is
complicated enough, linear programming turns out to
be a second-time assignment problem or multi-
objective programming problem. Burkard (1985) and
Brogan (1989) applied Linear Assignment Problem
(LAP), to the objective programming of satellite
orbit. Burkard and Cela (1999) applied LAP to
mathematical programming. The background
theories of the analytical methods are extremely
complex, there are a lot of conditions to the
hypotheses, and the arithmetic involved is not simple
at all.
Theoretically, the most well-known application
of the Linear Assignment Problem (LAP) in
academia is to gain the best programming on the
basis of a certain number of the employees assigned
to the certain number of tasks at the minimum cost.
However, when companies are programming the
assignment of employees, only one criterion can be
considered one time according to the traditional
theory. However, in the modern surroundings of the
pluralistic society, the customers orientation and
consumer awareness are gaining the upper hand.
There are more than one criterion to think about
when it comes to the factors of employee assignment
considered. How to incorporate Assignment Problem
with multi-criteria is the main point of this research.
In addition to the Linear Assignment Problem,
there are discussions about the multi-criteria
assignment problem. Hwang and Yoon (1981)
compiled many methods, such as the Eigen Vector
method, Weighted Least Square Method, LINMAP
(Linear Programming Techniques for
Multidimensional Analysis of Preferences), TOPSIS
(Tecnique for Order Preferences by Similarity to
Ideal Solution Method), and Entropy Method, to set
up criteria. Chu (1979) adopted the pair comparison
of Analytic Hierarchy Process to calculate the
weights of each factor with Eigenvectors. Srinivasan
and shocker (1979) calculated weights with
LINMAP. Hwang and Yoon (1981) argued that the
spirit of TOPSIS is to define a Positive-ideal
Solution and a Negative-ideal Solution. The best
option is based on the one that get nearest to the
Positive-ideal Solution and farthest from Negative-
ideal Solution. Keeney and Raiffa (1976) coined the
Multi Attribute Utility Theory, (MAUT). The theory
is to build a utility function with mathematic
programming. For every possible result, assignment
is based on the most suitable utility, and then the
expected utility of each programming is calculated.
Satty (1997) coined the programming method,
Analytic Hierarchy Process, (AHP). The method
divides the factors which have influence on the
system into several groups, and then into several sub-
groups, constitute the Hierarchy Structure.
There in total five Section in this research:
Section One is the introduction to manifest the
meaning of this research. Section Two is to discuss
references and to introduce the traditional research
on employee assignment. Section Three introduces
the methods of programming of this research,
including interviews with experts, The Data
Envelopment Analysis Method, and Multi-criteria
Assignment. Section Four is the traditional empirical
rules and multi-criteria of the assignment of service
employees. Section Five is the conclusion.

II. RESEARCH METHOD

In order to promote sales performance and to
improve the recent assignment model of service
employees based on empirical rules, this research
targets the service employees of fourth department
stores ( A, B, C, D). First, I intervied the
administrative supervisors of the department store

311

counters, collected information, distributed a questionnaire to determined empirical rules, and then
developed the Multi-criteria Assignment of this
research with the Data Envelopment Analysis
Method.

2.1. Interviewing with experts and discussing
references
In this research, I invited five managers who
have many years of experience in running the
business in the department stores of Kaohsiung, I
asked them questions which later become my
references according to the interviews. I refer to the
factors considered that these experts take seriously
when recruiting service employees. I also consulted
the theories of domestic and foreign scholars, among
which Joseph et al. (2002) noted that sales skills are
one task that service employees should master. Ford,
Walker, Churchill & Hartley (1987) pointed out
three major qualifications for sales skills:
1. Social skills, which help to cope with and
resolve conflicts,
2. Sales skills,
3. Professional skills, which are knowing well
about the properties and relevant knowledge on the
products.
Four criteria for the assignment of service
employees of department store are defined as follows:

1. Sales amounts: The sales amount in the
department store is the most direct factor to evaluate
the ability of the employees.
2. Teamwork: Each service employee should be
equipped with sufficient sales skills. But when
conflicts with other colleagues are stirred up, it may
result in the lack of morale and a very high turnover
of staff, which in turn affects the sales performance.
3. Quality of service: Good quality of service
and elevating the image of the company, keep old
customers coming back, and attract more potential
customers.
4. Attendance rate: Those service employees
who are absent from work and have days off will
cause problems with dispatching workers or with
details about the services for the customers. These
problems will impair the customers rights and lessen
the image of the company.
As a result, this research and the four important
criteria pointed out by the experts will take the
service employees performances in the
abovementioned four criteria as the output of the
employees of the counter.

2.2. Data Envelopment Analysis, DEA
Charnes; Cooper and Rhodes developed the
measurement for productive efficiency (Farrel, 1957)
into the multi-input and multi-output measure model
for productive efficiency. The analysis method of
using Linear Programming to find the product
frontier is called Data Envelopment Analysis (DEA).
DEA includes the Input-oriented Approach and Out-
put Approach. The production function of
microeconomics is replaced by Envelopment. The
input and output of the Decision Making Unit,
(DMU) is confined to Linear Programming. DMU
found within the frontier is regarded as efficient
combination of input and output. DMU out of the
frontier is considered inefficiency. At the same time,
certain efficiency becomes the criterion which is the
Performance Indication ranging from 0 to 1Liu
2004.
2.3. The Evaluation of Common Weight
Charnes, Cooper, and Rhodes (1978, 1979, and
1981) proposed CCR. The model focuses on
Constant Return to Scale, (CRS), which means the
more investment, the more output. CCR model
discusses about: There are n similar DMUs, each of
which has m inputs and s outputs. In order to
measure the proficiency of DMUk and meanwhile
think of the standpoint of the evaluated person,The
CCR model focuses on the maximum of the
evaluated persons output contrast to the input.
When evaluating efficiency with the CCR
model, the inefficient unit is detected, whether the
reason is too much input or too little output that
causes inefficiency cant be figured out. To solve the
problem, Tompson et al (1986) proposed the
Assurance Region (AR)Model, to find closer real
efficiency. The important ranges of input and output
variables are confined by the criteria weights. The
percentage of upper limit and lower limit is increased
and included in DEA.

L
2 . 1

1
/
2

u
2 . 1
( 1 )

L
3 . 1

1
/
3

u
4 . 3

.........

L
j i .
and

u
j i
are weights of output variables
i

j
percentage of upper limit and lower limit

When the assignment problems face multi
criteria, the criteria are weighted and combine into
one single indicator. The measurement of important
weights of each criteria can be of much help for
scholars and experts.
To assure important opinions on each criterion
are made by the evaluating person, this research
adopted the analysis of common weight proposed by
Bao (2007). The number n of criteria of Assignment
Problem is taken as Decision Making the unit in the
Data Envelopment Analysis Method. The output
variables are based on the experts and scholars ideas
about the level of importance of each criterion. In

312

this research, the variables are decided just according
to the experts opinions on each criterion. The
variables x=1 are hypothesized, which weight of
input variables is v = 1. The common weight mode is
shown in the following (2):

min.
n
i
i
s
1

s.t.uryrk v +sj =0

v=1 2

u
r
U
u
u
U
1
1

r=1,,s j=1,,n

j = ur yrj (3)

Of the limiting conditions of (2),
1
U and
u
U
are the output variables yj and yr compared to the
upper limit and lower limit. The formula (2) is used
to obtain the weights ur, r=1,,s, and so on. The
number n of efficiency criteria j, j=1,, n leads to
the following results:

To unify the importance of each criteria, see as
follows:

j =
i
j
j=1,,n (4)

This is the weight of importance of each
criterion.

2.4. The assignment of service employees

1. Traditional Empirical Rules
This research induces the empirical rules of
service employees of the A, B, C, and D department
stores in southern area by thoroughly interviewing:
1. Service employees with greater performance
are assigned to better-located business locations
based on their sales amounts.
2. The service employees with longer years of
experience are assigned to aid the business locations
with poor sales amount.
3. Based on the principle of fairness, the
companies shift the assignment of service employees.
4. Situations where colleagues dont cooperate
or communicate well with one another occur, the
company will make another assignment according to
the experience and requests of service employees.
5. The assignment of employees varies with
different situations. The above empirical rules used
in assignment are recorded and analyzed after
thoroughly interviewing the supervisors of the
department stores.
According to the traditional empirical rules, the
assignment model of service employees of the
department stores is shown as follows Diagrams 1:

DIAGRAM 1: THE TRADITIONAL ASSIGNMENT OF
THE DEPARTMENT STORE

The abovementioned traditional assignment
methods have no proper theories to support. The
supervisors assign at will, which tends to make
service employees with good sales amounts but with
poor teamwork work together because the ones with
different personal qualities and in different working
environments are assigned according to empirical
rules. This leads to tension among the team members,
and excellent employees and the ones with potential
cant perform to their best and even decide to leave.
Empirical rules are likely to bring about personnel
problems and unfair issues.

2. Multi-criteria Assignment
This research collected the questionnaires filled
out by thirty experts in the department store field to
find the essential factors of service employees
qualifications. The common weighs adopted in this
research use sales amounts, teamwork, quality of
services, and attendances as Decision Making Units.
The experts were asked to score the importance of
each factor.

Company
Counter A
1AAAa
AaaAaaaaA1
Counter B
AaaAaaaaA1
Counter C
AaaAaaaaA
1
Counter D
AaaAaaaa
A1
Service
Employees
of the
Counter

Empirical
rules
Years of
working
Sales
amount


313

DIAGRAM 2: MULTI-CRITERIA ASSIGNMENT OF DEPARTMENT STORE

Put the weights evaluated by the experts and
Assurance Region,(AR), into formula (1) to find the
common weights of each criterion. Then put them
into formula (3) to find weights of assignment
factors of the service employees of the thirty experts.
The result of formula (3): Sales amount of 1
=0.7588, 2 of teamwork=0.8253, 3 of service
quality=1.00, 4 of attendance=0.7001. Then put
them into formula (4) to find the common weights of
unification sales amount (
1
) = 0.231,teamwork
(
2
)=0.251,service-quality (
3
)=0.0304, attendance
(
3
)=0.213. The result indicates that experts pay the
most attention to service quality among the overall
factors.

TABLE 1: COMMON WEIGHT AND UNIFIED
COMMON WEIGHT OF EXPERTS ASSIGHMENT
FACTORS OF SERVICE EMPLOYEES

Assignment
Factors
of Service
Employees
Sales
amount
Team
work
Service
quality
Attendance
unified
Common
Weight
()
0.231 0.251 0.304 0.213

The relevant researches can be categorized into:
(1) assignment problem of the minimum cost and (2)
minimum working hours problem of completing
task. Geetha et al. once tried to solve the problem of
the minimum of time and cost by using the multi-
criteria method. Later, many scholars proposed
different research methods, but most of them
discussed only tow criteria or solve the problem with
Linear Programming. The process of problem
solving is usually full of difficulties, and it is very
possible to show multiple pairs of solutions. In order
to solve the problems, this research adopts the Data
Envelopment Analysis Method to cope with a multi-
criteria assignment problem. (Bao, 2011).

Traditional assignment problem is suited for 0-1
integer programming if over two criteria are added.
See Graph 1. In addition to Cij, criteria include
Teamwork Tij, Service Quality Sij, and Attendance
Aij.

Min. C = CijXij
St. CijXij = 1 (4)
CijXij =1
Xij = 01

To simulate the operation of assignment, the
basic hypothesis is as below:
In the hypothesis of this research, there are four
business locations and sixteen new-coming service
employees. The best assignment is decided by the
Envelopment Analysis Method. Among the sixteen
employees, eight are chosen after the first evaluation,
and four out of eight are chosen as reserved
employees. In the information of the diagrammed,
four items of outputs stand for the employees
performances. The greater the number better Then I
use DEA as operator. The output variables are set in
the hypothesis. The assignment of employees work
refers to the sixty-four DMUs. The CW-AR mode is
built in Table 2.

Objective

Best
assignment
of service
employees
Assignment
Of reserved
employees
business
place1
business
place2

business
place3

business
place4

Sales amount
Teamwork
Service quality
Attendance


314

TABLE 2: ASSIGNMENT OF WORK OF EMPLOYEES

Business Location 1 2 3 4 1 2 3 4
1 Sales Amount
Teamwork
Service Quality
Attendance
5
3
4
4
3
4
4
4
2
5
4
5
6
2
3
3
9

8
5
4
5
6
5
4
5
4
3
3
5
3
5
4
4
2 Sales Amount
Teamwork
Service Quality
Attendance
3
4
5
4
2
3
3
5
1
2
4
3
3
2
4
4
10

5
3
3
4
5
4
4
4
5
5
4
4
6
4
3
4
3 Sales Amount
Teamwork
Service Quality
Attendance
4
4
4
4
1
3
3
3
2
2
3
4
3
4
4
5
11

4
5
5
5
3
4
3
4
3
5
4
4
2
4
4
4
4 Sales Amount
Teamwork
Service Quality
Attendance
5
3
5
5
3
3
4
4
3
4
4
4
4
3
5
5
12

2
4
4
4
3
4
3
4
4
5
4
4
6
4
3
4
5 Sales Amount
Teamwork
Service Quality
Attendance
4
5
4
4
3
4
4
4
7
4
5
4
4
2
3
4
13

7
4
4
4
5
4
3
4
6
5
5
5
5
4
4
4
6 Sales Amount
Teamwork
Service Quality
Attendance
4
4
5
4
6
3
4
5
3
3
4
4
5
3
3
5
14

5
4
3
5
3
4
3
4
3
3
3
5
3
3
4
4
7 Sales Amount
Teamwork
Service Quality
Attendance
6
4
4
5
2
3
3
4
3
4
3
5
4
3
4
4
15

5
4
3
5
4
3
3
5
4
3
5
4
5
5
5
4
8 Sales Amount
Teamwork
Service Quality
Attendance
7
4
5
5
5
3
4
4
3
4
4
4
5
4
5
3
16

6
3
4
3
5
5
5
3
4
5
5
4
8
4
4
4

The sixteen employees in Table 2. have four
scores item. Multiply respectively the scores for
Sales Amount, Teamwork, Service Quality, and
Attendance by Unified Common Weights, and find
one single score. Then find the best solution
according to 0-1 integer programming of formula
(4).

The supervisors can choose eight from the
sixteen employees. X53 = 1,X62 = 1,X71 = 1, X144
= 1, X133 = 1, X162 = 1, X91 = 1, and X154 = 1 are
the best solutions. They then are assigned to different
business locations as Table 3.

TABLE 3: THE BEST ASSIGNMENT OF EMPLOYEES

Business
Locations
1 2 3 4
Employee No 7 No 6 No 5 No 14
Employee No 9 No 16 No 13 No 15

After the most proper employees are choosen,
solutions are found for the rest of the eight by using
the same operator: X84 = 1, X102 = 1, X111 = 1,
and X123 = 1. Four of the eight are choosen as
reserved employees and assigned to four different
business locations to fill a vancant position. See
Table 4:


315

TABLE 4: THE ASSIGNMENT OF RESERVED
EMPLOYEES

Business
Location
1 2 l3 4
Employee No11 No10 No12 No8

III. SUMMARY

The multi-criteria assignment problem is a
common problem at companies are faced with in
running business, which is also one of the important
subjects in operations research. Traditionally, this
kind of problem requires the aid of non-linear
programming or other difficult math solutions. With
the help of Data Envelopment Analysis Methods
especial .It is easy to solve multi-criteria assignment
problem. With the aid of DEA, this research also
aims of the companies with more employees and
measures the performance of the employees. We
seek to assign employees to the proper business
locations so as to achieve the best performance and
bring in most profit for the companies.

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316

Team Creative Driving Force and Innova-
tion Imperceptibly Acquired Lead the Sus-
taining Innovation of Team Knowledge-A
Case Study on The Product Developing Team
of Apple Inc.

Jing-Lin Huang
Ph.D. Candidate, Department of Business Administration, National Yunlin University of Science & Technology
Yulin, Taiwan, g9422806@yuntech.edu.tw

Shang-Ping Lin
Professor, Department of Business Administration, National Yunlin University of Science & Technology
Yulin, Taiwan, linsp@yuntech.edu.tw

Justine S. Chang
Assistant Professor, Department of Accounting, Chaoyang University of Technology
Taichung, Taiwan, jschang@cyut.edu.tw

AbstractAt present, there are two types of organiza-
tional knowledge innovation theory. Whether from
the perspective of Nonaka's organizational knowledge
innovation cycle (SECI) or the one that generally af-
fects variables of organizational knowledge innovation,
according to Polanyis hierarchy system and marginal
control principle in knowledge theory, none of the afo-
resaid two types can explain the organization innova-
tion completely. In order to explain the meaning of
teams sustaining innovation more thoroughly, we in-
tegrated perspectives of knowledge innovation litera-
tures from philosophical theory, educational psycholo-
gy theory and management theory, with addition of
examining the globally paradigmatic case-the product
developing team of Apple Inc., the study summarizes
an integrative team sustaining innovative structure.
The structure includes team creative driving force and
innovation imperceptibly acquired process, which
are the roots that guide organizational knowledge sus-
taining innovation. The team creative driving force
apparently drives the process of innovation imper-
ceptibly acquired, while innovation imperceptibly
acquired leads the process of the concrete formation
of knowledge to generate a continuous interactive
cycle of tacit and explicit knowledge, which, with the
accumulative effect of time, would achieve the result of
organizational knowledge sustaining innovation.

Keywordsorganizational innovation, creativity driv-
ing force, tacit knowledge, innovation

I. INTRODUCTION

Polanyi concluded knowledge creation. He
asserted that belief is the only source of knowledge.
It is a commitment structure in which no intelligence
can operate outside. Polanyi described personal
knowledge, of which personalized, imperceptible
and commitment are the three foundations of his
knowing theory, (Hsu, 2004) and tacit knowledge is
the root and core of knowledge innovation. (Chen,
2004) Thus, the exploration of the root of teams
sustaining innovation can only be achieved by
in-depth exploration of teams complete tacit know-
ledge. The exploration of organizational know-
ledge innovation is mainly classified to two catego-
ries, one is organizational knowledge innovation
cycle and another one is about the variables that af-
fect knowledge innovation. In knowledge innova-
tion cycle: Nonaka (1995) cited Polanyis knowledge
creation concept to propose organizational know-
ledge innovation cycle theory (SECI); tacit know-
ledge and explicit knowledge interact to generate
knowledge innovation, which are widely recognized
by theoretical and practical field. (Haack, 1997; Al-
lred, 2001; Jubert, 2004) However, SECI know-
ledge cycle theory is also criticized by some scholars.
(Jorna, 1998, Bereiter, 2002, Poell and Ven der Krogt,
2003, and Gourlay, 2006) Current knowledge in-
novation cycle structure (SECI) cannot completely
explain nature of organizational knowledge innova-
tion. It also cannot explain core concept of Po-

317

lanyis tacit knowing and illustrate why origin of
creativity is formed and how innovation cycle is ac-
tuated, etc.
The second type about variables that affect or-
ganizational knowledge innovation comes from crea-
tivity guided organizational innovation that is mix-
ture of three components, professional knowledge,
creative techniques and tasks motives. (Amabile,
1996) Organizational belief would affect result of
organization on innovative action. (Sastry, 2011)
Finding potential talents and searching further for
suitable jobs can there be endless passion to over-
come difficulties. (Hanson and Hanson, 2002) The
similarity of personal characteristics among team
members has adjusting effect on relationship of
sharing common mental modes and knowledge
sharing.(Shen, Huang, and Cheng, 2007) Innova-
tion and organizational culture is indivisible. (Ste-
phenson, 2011, Sastry, 2011) The inner motive of
value of sensing task itself is favorable to creativity.
The exterior motive of positive and negative evalua-
tion outside on sensing task is unfavorable to crea-
tivity. (Amabile and Kramer, 2011) Leaders inspire
peoples heart, paradigmatic leadership would
strengthen positive relationship between social rec-
ognition and creative efforts. (Hirst, van Dick and
van Knippenberg, 2009) The aforesaid influencing
variables include professional characteristics, mem-
bers characteristics and organizational characteris-
tics that each has effect on organizational innovation,
but there is a lack of integrative exploration on each
characteristic variable.
The study would use that tacit knowledge is the
root of knowledge innovation as antecedent and in-
tegrate the aforesaid two types of research perspec-
tive that focus on tacit knowledge. (SECI and inno-
vation effects variable) The various variables that
affect organizational innovation from previous re-
search were integrated to team creative driving
force: including upper level value of products (pro-
fessions), members characteristics, passions and
emotional affiliation, teams firm belief and leader-
ship strength. The three types of characteristics
agreeably combine to provide power source of team
innovation and affects direction of teams innovation.
In addition, process of innovation imperceptibly
acquired is obtained by referring to Nonakas tacit
knowledge cycle process through case examination:
including thorough practice and experiment expe-
rience, mutual experience integration and passing
on, and in-depth interactive conversing and medi-
tating, an accumulation and integration of organiza-
tional tacit knowledge. The process of innovation
imperceptibly acquired drives continuous cycle
forming habit of knowledge materialization, wait-
ing to achieve knowledge innovation when time is
right. In sum, the study would apply and examine
through personalized perspective of knowledge in-
novation, which was induced from philosophical
perspective, educational psychology and managerial
theory, on innovation paradigm case, the product
development team of Apple, Inc., to further explore
integrative factors that affect teams sustaining inno-
vation.


1. Tacit knowledge
We can recognize people we know from a group
of people, but we cannot say how we did it. Gestalt
psychology states that it is a result of automatic ba-
lancing from the individual part of facial feature
printed on retina or brain. Polanyi further trans-
formed Gestalt psychology development to a know-
ledge theory, proposing that Gestalt is the active and
initiative formation of experience when people pur-
sue knowledge. The so-called imperceptible pow-
er dominates every knowledge found and know-
ledge held as truth after its finding. (Van, 2002)
Knowledge can be separated to two types, the fo-
reknowledge and known, which affected each other
to obtain further known, called Hermeneutic Spiral.
Liu (2000) integrated perspectives of educator John
Deweys tacit learning and psychologist Lozanovs
suggest tology, etc. to point out that: tacit learning
in one way is closely related to essence of creativity
such as instinct, insight, climax experience, etc., it
also reveals the characteristics that large storage of
knowledge would produce cumulative effect. Thus,
in the exploration of integrating philosophy, man-
agement and educational psychology in knowledge
imperceptibility, we can know that tacit knowledge
plays important role in affecting individual and or-
ganization on knowledge creation and is a main
driver in guiding knowledge creation.
The effect of tacit knowledge and deep tacit
knowledge on knowledge creation can be illustrated
by multiple level knowing from mechanism.
Polanyis tacit knowing includes a supporting from
and focal to, but knowing from mechanism is
not automatically communicated. Gelwick (1977)
pointed out:
The supporting awareness and focal awareness
of the functional level in knowing from mechan-
ism each has different role function. The key be-
tween the two is that they must continuously interact
to produce cognition on existing objects. How to
let supporting awareness and focal awareness conti-
nuously and deeply interact, the key lies in that the
focal awareness granted to meaning level has mea-
ningful whole, so that knower can be more attend-
ing to the meaning of unique whole on himself or
herself, thus can be more attending and deepening in
details for it to be clue. The whole meaning

318

promotes that knowers must rely on autonomous
clue and detailed integration to produce more mea-
ningful overall awareness. Thus, with continuous
interaction, knowledge creation (emergence) thus is
generated. The core meaning of multiple level
knowing from mechanism concept is illustrated in
Figure1.

2. Organizational creative driving force
(1) Products (professions) value level characteristics
Polanyi argued the perspective that comprises
humans understanding of actual existing objects is
dual element control perspective, hierarchy sys-
tem perspective, and margin control perspective.
The so-called dual element control perspective: A
knowing of existing object is controlled by some
large principles, which rely on small laws that do-
minate individual parts, but these laws are definitely
insufficient in explaining higher organizational prin-
ciples. The hierarchy system perspective and the
margin control perspective. Every understood ex-
isting object with fixed structure is based on this
principle. (Van, 2002)
In organizational theory, Simon proposed con-
structive perspective of Means-End Chains(MEC).
Everyones selection of execution method and beha-
vior must be evaluated and directed to extensive
scale of organizational value the ultimate objective.
(Scott, 2003). High-level consequence (and value)
can explain objectives of action, but cannot represent
consumers actual action aim, which represents what
we want (what); value represents why. (Gutman,
1997).
(2) Organizational characteristics
Nonaka emphasized that: Ba plays an impor-
tant rolehow to let dynamics of Ba elaborate,
reform on organizational culture and personal con-
scious is an essentially important factor. For leader-
ship strength of Ba, it must have aggressive, dy-
namic, and delicate emotion at the same time. (Chen,
2004) Barnard pointed out: The key factor to orga-
nizational success is to establish a collective objec-
tive that all participants can truly join together.
McGregor stated that we must treat the release of
employees potential as the highest guiding principle
and are obligated to find better methods.
(3) Members characteristics
Maslow emphasized that: What is the right way
of teaching people becoming engineers? We should
let them become someone rich in creativity and more
importantly is personality training or personal train-
ing process, not products themselves. (Lee and Wu)
Business should select talents with core motives and
characteristics ability, then in turn teach them know-
ledge and skills needed in work. (Wei, 2002)
Difference in characteristics would generate huge
power to mentality. (Hong, 2005) Only by input
heart and soul in suitable job can there be continuous
passion to overcome difficulties and there would be
sense of work achievement and value. (Hanson and
Hanson, 2002) Employees with work passion, their
professional ability and interest can elaborate and
also have higher work satisfaction and lower ten-
dency in leaving the job. (Hurley, 2007) The simi-
larity in personal characteristics among team mem-
bers has interactive effect, which has adjusting effect
on relationship between sharing mental modes and
knowledge sharing. (Shen, Huang, and Cheng, 2007)
The major factor that affects innovative behavior of
research and development personnel is personal cha-
racteristics, while the effect of supervisors leader-
ship styles is relatively smaller. (Chen, 2005) The
meaning of affiliated recognition is: Employees
recognition on organizational value, willing to work
hard and involve in organization and strongly hope
to become a member of organization. (Allen and
Meyer, 1990) In the long run if employees grow
emotional recognition within organization, there not
only would be lower turnover ratio, it would also
generate positive effect on work quality and work
information sharing. (Randall, Fedor, and Longe-
necker, 1990).
Therefore, in term of members characteristics,
we can clearly induce that organizational members
characteristics, passion, and emotional recognition
are important factor sources that affect organizational
creative driving force.

3. Process of organizational knowledge imper-
ceptibly acquired
(1) Organizational knowledge innovation cycle
Nonaka pointed out: After combining tacit
knowledge and explicit knowledge, there can be four
types of knowledge transformation produced, socia-
lization, externalization, combination, and internali-
zation. The five training factors of Peter Senges
learning organization has similar process and mean-
ing as socialization, externalization and internaliza-
tion of Nonakas knowledge cycle. (Ramrez, 2010)
Thus, internalization, socialization, externalization
are the formation and transforming process of tacit
knowledge and also are key process that guide inno-
vation production.
(2) Learning organization and community of prac-
tice
Peter Senge pointed out: After entering five
training items of learning organization there mainly
are three levels. The first one focuses on every
element for exercise. The second is principle
understanding level and essence experiencing level.
(Kuo, 1994) Knowledge cannot get away from
owners to be separately thought of, because it is a
process of accumulation and understanding. Thus,
knowledge is not only a general exchange of friend-

319

ship, but must rely on strong and powerful trust
(Brown and Duguid, 2000). CoP is formed by a
group of informal member to execute specific mis-
sion. (Wenger and Snyder, 2000) Thus, tacit know-
ledge and internal dynamic factors are important
roots that compose organizational knowledge inno-
vation cycle.

III. RESEARCH METHOD

1. Interpretation and selection of research subjects
Yin (1994) believed that the reasons for sin-
gle-case study include: (1) Such case is a key case to
test a matured theory, (2) Such case represents an
extreme or unique case. Because it is very rare, it is
worthy to be recorded and analyzed.
The developing team of Apple Inc. has been
highly appraised by the industry. The founder Jobs
and Apple, Inc. are even named innovation paradigm
in the globe. This is a unique and rare innovation
team in global technology industry and is worthy to
be analyzed and explored in depth. Thus, the
product development team of Apple, Inc. is the re-
search object of this study.
After collecting and studying relative informa-
tion of Apple and Jobs biography, we induce and
explore relative product innovation process and ma-
nagerial characteristics, which mainly can be divided
to three stages: Growth and disagreement period
(1976~1985), stagnated and declined period
(1986~1997), and breakthrough and peak period
(1998~2011), as illustrated in Table 1 as follows.

TABLE 1: THREE STATES OF INNOVATION IN APPLE

Growth and
disagreement
period
(1976-1985)
Stagnated
and declined
period
(1986-1997)
Breakthrough
and peak period
(1998-2011)
Innovative
products
Apple
II/Macintosh
Continued
Apple II and
Macintosh series
iMac/iPod/iStore/
iPhone/iPad,
Innovative
cycle
Growing but
disagreeing
Gradually stag-
nated
and declined
Continue to
breakthrough and
reach the top
Products
characteristic
Products diver-
sified, characte-
ristics different
Products diver-
sified
and open, cha-
racteristics
different
Concentrate on
core products,
technology and
human nature
integrate
Organizational
characteristic
Idea disagree-
able, leadership
diversified
Pursued profit,
marketing led
Firm products
belief, strong prod-
ucts leadership
Members
characteristic
Members
passion on
products
diversities
Members
passion on
products is low
and weak.
Members have
high passion on
products and
involve highly.
2. Source of data
The volume of published books, journal studies
and news media report information about Jobs and
Apples innovation history is enormous and informa-
tion about Apples products development team is
rather abundant. Thus, data collected in this study
are majorly secondary data based on published books,
and journal studies, magazines, newspapers and in-
ternet information are used as supplement.

3. Study area
The study would explore two types of tacit
knowledge that affect teams knowledge creation and
their relationship: including element of team crea-
tive driving force and process of innovation im-
perceptibly acquired.
.
IV. FINDINGS

1. Creative driving force and innovation imper-
ceptibly acquired of Apples development team
(1) Formation of teams creative driving force
Polanyi (1958) pointed out: The creation of
high-level knowledge is an active experience forma-
tion, recognition for pursuit of knowledge, and in-
ternal risk taking, and needs individuals original
spirit and unmovable passion with ability to develop
work without being influenced by profit. It is the
original creativity of scientific finding. Amabile
(1996) stated that teams creativity guides team in-
novation and creativity comes from the mix of three
components, profession, task motives and creative
skills. Thus, teams innovation must rely on sup-
port of creative driving force. The formation of
creative driving force in Apples product develop-
ment team can be mainly explained by the following
cases:
Hertzfeld, the major designing engineer of Macintoshs ap-
plication software, said: Is anyone qualified to be the father of
Macintosh? ..Jobs is the major driving force behind Macintosh
has been widely recognized by every circle. I personally think he
really well-deserved. (Hertzfeld, 2004)
Macintosh computer is Apples most important
innovative product during innovation growth and
disagreement period (1976~1985). It is named the
paradigm product in computer history for its simpli-
fied operation and graphic user face. Jobs was
leader of Macintoshs developing team. Although
he never actually participated in product design and
development, as a team leader he has established a
strong creative driving force for the team. His vi-
sion, passion, willpower and persuasive power had
generated profound effect on developing process of
Apples innovative products.
As I watched him battle that disease. I realized how much
his personality was ingrained in the products he created. ..
Thats what has driven me..(Isaacson, 2011) Jobs also

320

said:Innovation is completely irrelevant to R&D funding. .Key
of innovation is not money, but in what kind of talented people you
have, in how you lead, what kind of results you demand. (Gallo,
2011)
The above cases show that members personality
and passion and teams operating method are inse-
parable with products. Our passion and driving
force comes from our will in making great and per-
fect products. Key of innovation is not in budget
but driving force; in what kind of talent people you
have, in how you lead, and what kind of result you
demand.
As stated by Hertzfeld, although this teams cre-
ative driving force is not directly connected to prod-
ucts actual developing process, it plays a critical
role in the products final innovative success. Cre-
ative driving force would provide the team process
of persisting perfect driving force and get deeply to
influence products developing direction. Such crea-
tive driving force and product development teams
member characteristic, organizational managerial
characteristic and characteristic of produce devel-
oped interactively compatibly form a closely inse-
parable relationship, such that, as three characteris-
tics of product, member and organization interac-
tively compatibly formed gets closer, teams creative
driving force would be bigger.
(2) Innovation imperceptibly acquired
From the aforesaid literature review, we have
understood that imperceptible knowledge is the im-
portant factor that causes knowledge innovation.
From the case of Apples product development we
can also see many phenomena of innovation imper-
ceptibly acquired. For example, in Jobss speech in
graduation commencement of Stanford University,
he pointed out:
But ten years later when we were designing the first Ma-
cintosh computer, it all came back to me, ..--because believing
that the dots will connect down the road will give you the confi-
dence to follow your heart, even when it leads you off the
well-worn path, and that will make all the difference. (Won, 2011)
The user face of Macintosh was not complete at first de-
sign In fact we all can learn a lot from it. (Hertzfeld, 2004)
From team leader Jobs in-depth experience and
demonstration, we know that creativity can hardly be
generated through rational, logic and scientific man-
agement. It is gradually imperceptible acquired
over time. Jobs pointed out that innovation imper-
ceptible acquired is hard to be planned ahead, but it
is dominated by subjective and intangible peoples
idea, life and chances, etc. Therefore, team sustain-
ing innovation is deeply influenced by team creative
driving force and process of innovation impercepti-
ble acquired.

2. Composing factors of team creative driving
force
(1) Upper level value of products
To achieve upper level goal must rely on coop-
eration of goal and method in next level. Every
levels are closely linked to each other. Simon
pointed out: The achievement of organizational goals
needs that everyones executing methods and beha-
vioral choices must be evaluated and directed toward
the wide scale of organizational value-the ultimate
goal. (Scot, 2003)
Gutman (1997) proposed: Only by understand-
ing consumers demand on upper level value of
product (why) can effectively turn on remote action
goals (what).
After many years, a reporter asked Jobs, if the CEO that
stayed in Apple back then was Jobs and not Scully, what differ-
ence would there be? ..Most importantly is that companys
value perspective changed, from manufacturing the best computer
in the world, to making the most money. (Wang and Chou, 2011).
Jobs said: Microsoft were very good at the business side of
things..If you want to allow your products to be open to other
hardware or software, you have to give up some of your vision
(Issacson., 2011).
We learn from the above description that in
comparing to other business in prizing market profit
as ultimate value of developing products, what Ap-
ples team pursues is product and users experience
and personal computer revolution. It means that
product development team, in addition to understand
product function and what clients need (what), they
must also understand why products need this func-
tion and why clients have such needs. (why) Apple
team naturally wants to integrate hardware, software
and content to become an integrated close type
products to prevent imperfection generated by inde-
pendent software and hardware compatible openness.
(such as IBM and Microsoft) Therefore, products
upper level value identification is a fundamental
factor that composes team creative driving force.
(2) Organizational characteristic - Organizational
belief and leading power
Organizational belief mainly comes from lead-
ers willpower. Collins proposed that the Fifth
Level leaders possess two contradictory characteris-
tics-humble personality and professional sustaining
willpower. Bertrand and Schoar (2003) stated that
because high level managers in different companies
have different belief, companies in behaviors pres-
entation and performance would yield different re-
sults.
Jobs pressed pause as iPhone neared completion. .but
Jobs ordered the change. Other companies may have shipped,
said Fadell, but we pressed the reset button and started
over(Issacson, 2011)
Because identifying with products upper level
value has become companys common mission and
culture, Apples developing team from top to bottom
all treat the making of products that can benefit

321

peoples expectation in the entire world as career and
would involve in work tirelessly for products flaw-
less perfection. Different from her competitors,
Apple is never compromising when it comes to pur-
sue perfect product design and manufacturing. In a
team that put product as center of everything, pas-
sionately pursuing perfection in product design and
manufacturing has become an immovable belief of
the team.
Jobs said: I dont think I run roughshod over people, but if
something sucks, I tell people to their face. Its my job to be hon-
est. I figured that it was always my job to make sure that the
team was excellent, and if I didnt do it, nobody was going to do
it(Isaacson, 2011) Jobs has already realized that as long as
business managers or leaders can directly and aggressively in-
volve themselves in product development, employees will be ener-
getic..The reason is they saw how much leader threw himself
into. (Elliot, 2011) Jobss intensity was also evident in his ability
to focus.He got Apple back on track by cutting all except a few
core products.(Isaacson, 2011).
To summarize the above, continuous innovative
organizational leadership strength is that leaders lead
excellent teams, implement completely honest inter-
active communication in the team, lead by personal
demonstration, maintain professional focus and per-
sistence, not to survive for maintaining status quo,
but to continuously evolve, move forward, and re-
fine.
(3) Members characteristic-members distinguish-
ing characteristic, passion and emotional affiliation
Hanson and Hanson (2002) stated: Find poten-
tial talent and look for suitable work to make self
doing better and happy. Distinguishing characteris-
tic may result in passion and influence affiliation.
Only with passion and affiliation can team creative
driving force be formed. Apples team pays much
attention to team members distinguishing characte-
ristic, passion, and emotional affiliation, illustrated
as follows:
Former personnel supervisor Sharon Aby (1983-1996) said
in her interview: The talent we want is one full of entrepreneur-
ship Our motto is:Let my eyes open up. (Gallo, 2011)
In March, 1982 (during period of developing Macintosh)
Burrell, Jobs, and I interviewed a candidate for software manag-
erFinally the candidate expressed that he is not right for the job
(Hertzfeld, 2011)
After the launch of Macintosh, although sales was not good
at the beginning, every members in the team clearly knew the
potential of this product. ..Apple is a rarely seen company. It is not
afraid of changing the world around it (Elliot,2011)
The standard of Apples developing team in tal-
ent search firstly emphasizes in adventurous spirit,
expecting oneself to perform excellently, and must
has great enthusiasm in creating new things. Apple
is extremely picky in choosing talents. Most im-
portantly is that personal characteristics must possess
out of ordinary and rebellious property. In early
1980s after Apple II sale was less than expected and
with the pressure of working under Jobs, team
members were still full of affective commitment
toward Apple. Turnover ratio was extremely low.
The main reason is that teams firm belief and lea-
dership strength, and teams pursuance on products
upper level value, etc., all enhanced employees
emotional affiliation on the team, thus further assur-
ing organizational creative driving force. Therefore,
members characteristic, passion, and emotional af-
filiation to the team are one of important factors that
compose organizational creative driving force.

3. Process of innovation imperceptibly acquired
(1) Thorough practice and experimenting expe-
rience
There are mainly three levels before entering
learning type organization. The first is to perform
exercise on every element. Skill of exercise is
the most concrete part of every training and is also
the main focus that an individual or group start on
training. Jobss demand on Apples team is also
thorough practice and trying experience. (Senge,
1990, translated by Kuo, 1994) Example is as fol-
lows:
The retreat in September 1982 was at the Pajaro
Dunes near Monterey. Someday they would all look back
on their journey together and, forgetting or laughing off
the painful moments, would regard it as a magical high
point in their lives.(Isaacson, 2011)
Macintosh products are the beginning of great
products that Jobs created. In order to finish it,
Jobss uncompromising attitude thoroughly de-
manded that team must perform every process to its
perfection. He believed that: The process of thorough
practice and experience itself is the best method to
accumulate experience, through which future note-
book computer dream can possibly be realized. In
another words, the present day Apple series of prod-
ucts that change the world originated from the atti-
tude of Macintosh teams thorough practice and ex-
perience, the result of subsequent continuously ac-
cumulating experience and transformation.
Most of my interviews with Jony Ive ..Since we iterate
every day and never have dumb-ass presentations, we dont run
into major disagreements .(Isaacson, 2011)
Apples emphasis on products trial and expe-
rience can be seen by the design of designers office
and their work pattern. Apples team extremely
values trial experience. Leaders can more than
likely actually experience products and companys
future development and strategies.
From the above two examples, we show that the
original source of Apple teams innovative imper-
ceptibly acquired comes from actual practice and
trial experience to obtain tacit knowledge, not rely on
operating decision meeting, design examination

322

meeting or proposal meeting. From the leadership
style of Apples developing team and habit of em-
phasizing in product trial experience, such apparent
driving force source is closely related to creative
driving force in identification of product upper level
value, members characteristics and organizational
leadership strength.
(2) Mutual belief in experience integration and
passing on
From analysis of creative driving force stated
aforesaid, we learn that to achieve upper level value
of product, Apples team naturally would want to
integrate hardware, software and content to become
an integrated closed-type product to achieve perfec-
tion. Community of practice is one of major ways
in knowledge creation. However, because what
Apples team concern is to achieve perfect manufac-
turing ideal in products, they demand teams must be
able to accomplish mutual trust, experience integra-
tion and passing on objectives, as described in the
following:
During interview, Ive, the designing general of Apple,
pointed out: Simplicity is actually the result of design. ..Ive said:
When the challenge in front of your eyes is so complicated, you
have to rely on integrative method to develop a new product.
(Kahney, 2008)
Elliot, Former senior vice-president of Apple, said:The one
that can grasp Jobs s ideal essence best is Apple CEO, Tim
Cook. Every team in our company does not accept results that
do not achieve excellence. We can confess our mistakes and
have courage to make timely changes.(Elliot and Simon, 2011)
Apples developing process involve many pro-
fessional teams, continuously produce new ideas and
refine. All team must put effort in product devel-
opment at the same time, so there are review meet-
ings one after another and these meetings do not end.
Thus, managers of Apple well know the importance
of full integration and passing on of cross-unit expe-
rience on innovative products development. They
thoroughly practice mutual experience integration
and passing on among teams to let process of prod-
uct development fully elaborate simultaneous engi-
neering, cross-pollinator and deep integration
among teams. In comparing to speedy professional
division of labor and outsourcing among industries,
Apple applies more complicated mutual experience
integration and passing on developing model with
strong ambition. Such driving force source appar-
ently is closely related to aforesaid creative driving
force in product upper value identification, members
emotional affiliation and organizational belief.
(3) In-depth interactive conversing and meditating
The externalization in Nonakas (1991)
knowledge cycle is: Express knowledge hidden in-
side ones body and transform tacit knowledge to
explicit knowledge. Lai (2006) pointed out: Inspi-
ration striking is not by accident. It is a training
that accumulated for a long period of time. Inspira-
tion means a sudden clearing up after time matures.
After thorough practice and trial experience and
mutual experience integration and passing on ab-
undant tacit knowledge has been accumulated and
integrated. Through in-depth interactive dialog
and meditating, tacit knowledge of teams can
usually be brainstormed to become more concrete
creative concepts.
Almost every day when Jobs was healthy and in the office he
would wander by the studio in the afternoonUsually it was just
he and Ive alone.Much of the design process is a dialogue, a
back-and-forth as we walk around the tables and play with the
models. (Isaacson, 2011)
In 2000 Jobs decided it was time to replace the iMac. Ive
came up with a model that was somewhat conventional.and he
realized that a sunflower shape would convey that the flat screen
was so fluid and responsive that it could reach for the sun.
(Isaacson, 2011)
It is rather frequent that Apples developing
team and individuals solve developing problem
through modifying interaction and conversation.
In Apples developing team, in order to construct
creative products, interactive conversation or debate
to go deeply into the problems of products has been a
necessary habit in product developing process.
Through in-depth talk often can inspire unexpected
creativity. Therefore, the production of Apples in-
ternal product creativity did not come from rigid
planning design verification or proposal meeting, but
through habit of unofficial and in-depth problem
improving conversation and meditation that trans-
form accumulated abundant tacit knowledge from
conversation and review to explicit creative concept.
From the product developing method of Apples
team in pursue for developing breakthrough and
problem solving in products, members actively and
strongly search for in-depth conversation, repeated
review and build up conversing situation, such ap-
parent driving force source is closely related to afo-
resaid creative driving force in product upper value
identification, members emotional affiliation and
organizational belief.

4. Time effect of organizational innovation
Back then, Apples input effort in Macintosh can be said to
be enormous, Macintoshs revolutionary ability cannot be said not
strong, but after all it lose to more open and cheaper IBM PC
camps..This is a view with foundation even has brave smell, but
not realistic, because in computer industry everything changes too
fast.(Hertzfeld, 2004)
We learn from the above that over thirty years of
prosperous development in information technology
industry, two large sharply divided strategic schools
have been formed; independent open school and
integrative close school. The former belongs to
IBM and Microsoft type and the later belongs to Ap-

323

ple. The two schools possess completely different
perspective on product innovation. Independent
open school emphasizes in market competition, price
and technology differentiation, with development
belonging to competitive strategy oriented. Inte-
grative close school emphasizes in making best
products for the public, pursuing products perfection
and humanization, with development belonging to
product value oriented. Both schools are funda-
mentally different in their ideals of product value and
are also apparently different in product development
and manufacturing result. Independent open school
goes into depth to understand market and demand
changes, with efficiency, cost and differentiating
innovative profit in the short run obviously better
than integrative close school. In perspective of
literatures product level, product level of integrative
close school is higher than its independent open
school. Thus product of independent open school
lacks integration and humane property, after accu-
mulation of time it is naturally not easy to break-
through demand on product upper level value. On
the contrary, integrative close school possesses pers-
pective of product upper level value, at the beginning
due to the limit of environmental competition, re-
source and little experience, it is hard to produce
higher innovative profit. However, when time ac-
cumulates and matures, the innovative synergy gen-
erated in integrative close school would be much
higher than the independent open school. In com-
paring innovative results and stock price within the
industry over recent years, time effect of Apples
innovation has been far higher than the one of IBM
and Microsoft.

V. CONCLUSIONS

1. Formation and composing elements of team
creative driving force
To view from the developing history and result
of information technology, in brief description of
Apples case, during its three stages of developing
innovation there is huge difference in innovative
results of two stages, stagnated and declined pe-
riod (1986~1997) and breakthrough and peak pe-
riod (1998~2011). In analyzing time effect of or-
ganizational innovation, for the three large compa-
nies in of information technology industry, after
thirty years of development, there is huge gap in re-
sult of product innovation and operating value. The
main reason is the continuous innovation reform
brought about by Apples founder Jobs after his re-
turn Apple in 1996. Jobs did not actually partici-
pate in product development. All the series of Ap-
ples innovative products after the year 2000 came
from Apples products developing team. We can
say that: The team creative driving force brought
back by Jobs apparently inspired innovative ability
(or innovative cycle) of Apples product developing
team. From induced theories of literatures and cas-
es examination we learn the content that compose
team creative driving force, mainly formed by
combination of product value dimension, team cha-
racteristic dimension and members characteristic
dimension, etc.
To further analyze cases, product value dimen-
sion is majorly composed of teams identification
with upper level value of product, teams characteris-
tic dimension is majorly composed of teams solid
belief and leadership strength, and members charac-
teristic dimension is majorly composed of members
distinguishing characteristic, passion and emotional
affiliation. The three elements interactively match
to form an intangible teams inner dynamics that
cannot be clearly stated, which the study called
team creative driving force, as illustrated in Figure
3 below. Although the innovative results of teams
knowledge come from knowledge innovation cycle,
team creative driving force can provide the dy-
namics and direction needed by knowledge innova-
tion cycle, as shown in Figure 4.

2. Generating process and power source of innova-
tion imperceptibly acquired
The organizational knowledge innovation cycl-
ing process (SECI) of Nonaka (1995) treats sociali-
zation as the starting point of innovation cycle. The
study based on theoretical inducement to propose
that tacit knowledge is the origin of knowledge in-
novation cycle, thus set the side that focus mainly on
tacit knowledge of internalizationsocialization
externalization as process of innovation impercepti-
bly acquired. Such process would drive the other
side, the process of knowledge materialization,
that focuses mainly on explicit knowledge, to pro-
duce knowledge cycle. Process of innovation im-
perceptibly acquired is the accumulating and inte-
grating process of tacit knowledge. Therefore, the
establishment of tacit knowledge contained in inter-
nalization is seen as starting point of knowledge in-
novation cycle. After case analysis we induce:
Process that generates innovation imperceptibly
acquired include thorough practice and trial expe-
rience, mutual experience integration and passing
on, and deep interactive conversing and meditat-
ing, etc. Three types of characteristics interac-
tively combine to form a sequence of organizations
active innovation acquired skills. Those progres-
sive, active and instinct skills belong to teams tacit
knowledge. Regardless of computer, carryable mu-
sic, or smart phones, etc., the initial invention of
these products did not come from Apple, but in sub-
sequent application innovation Apple caught up from

324

behind and further changed the application range of
products.
Thus, Apples sustaining innovation does not
come from an individuals jumping style invention,
but formed by accumulated daily and changed im-
perceptibly, which can be clearly seen in the process
of innovation imperceptibly acquired. Apples
developing team emphasizes more on thorough
practice and trial experience. Different from pro-
fessional division of labor outsourcing and emphasis
on low cost high profit developing pattern in infor-
mation industry, product development of Apple team
especially emphasizes in mutual experience inte-
grating and passing on among teams. Thus inter-
face problem among each team (profession) can ob-
tain complete and delicate solution. With the ac-
cumulation, integration, and pass on of aforesaid
individuals and teams abundant tacit knowledge,
plus active application of deep interactive convers-
ing and mediating within the team, the abundant
and integrated experience hidden inside the team can
inspire concrete innovative concept through interac-
tive brainstorming and discussion.
The way that three type process of innovation
imperceptibly acquired can form a sequence of or-
ganizational active innovation skill, its forming
energy mainly come from team creative driving force;
identifying with products upper level value, teams
belief and leadership strength and members distin-
guishing characteristic/passion/emotional affiliation
all equally generate different degree of influence on
three type process of innovation imperceptibly ac-
quired. After effective actuation innovation im-
perceptibly acquired can further push forward
knowledge materialization to produce mutual
cycling habit of tacit and explicit knowledge to
achieve knowledge sustaining innovation, as shown
in Figure 4.

3. Structure and application of team knowledge sus-
taining innovation
(1) Structure of knowledge sustaining innovative
structure
Through inducement of knowledge creation li-
teratures, Apple case analysis and Nonakas organi-
zational knowledge innovation cycle application, the
study started from that tacit knowledge is the origin
of knowledge creation and summed up the effect of
team creative driving force and innovation im-
perceptibly acquired processes on team knowledge
sustaining innovation. From literature level theory
(or MEC theory) we explored and learned: Higher
level team knowledge innovation is reali level of
existence, which principle is team creative driving
force. Reali level of low level existence is
knowledge innovative cycle, which principle is
SECI theory. Thus, high level team knowledge
innovation phenomena cannot be explained by low
level SECI theory and must to through high level
principle team innovative driving force for form
and combine SECI theory of knowledge cycle in
order to fully explain team knowledge innovation.
Therefore, applying concept summed up in this study
and Nonakas knowledge innovative cycle structure
can redefine mutual relationship between knowledge
innovative cycle structure and tacit knowledge level,
as shown in Figure 4.
In Figure 4, team creative driving force ap-
parently drives innovation imperceptibly acquired
process, which pushes knowledge materialization
process to produce continuous mutual cycle habit in
order to achieve result of knowledge innovation.
Therefore, team creative driving force and inno-
vation imperceptibly acquired process are the origin
of guiding team knowledge sustaining innovation.
Each belongs to tacit knowledge and deep tacit
knowledge. Their characteristics are imperceptible,
hard to describe with language logic, or they mainly
base on instinct, subjective, and active conscious.
Their other characteristic is that their forming
process is rather slow and uncertain. Valuable in-
novation acquired inside organization is not easy to
obtain. Creativity mainly originated in team crea-
tive driving force, which, in addition to guide
spouting of creativity, but also provide knowledge
cycle dynamics to let continuous interaction of tacit
knowledge and explicit knowledge to form habit and
when time matures, innovation would then imper-
ceptibly appear suddenly.
Thus, solely from innovative cycle principle
(SECI) or creative driving force is hard to explain
team knowledge innovation. It must let team crea-
tive driving force combining innovative cycle prin-
ciple so it can fully explain team knowledge sustain-
ing innovation, especially the team creative driving
force that based on tacit knowledge and process of
innovation imperceptibly acquired are origin that
influence team knowledge innovation.
(2) Application of team knowledge sustaining inno-
vation
Innovation imperceptibly acquired is a slow
and uncertain predicting process. From the perspec-
tive of overall development history to look at the
innovation imperceptibly acquired process of Apple,
from innovation growth and disagreement period
(1976~1985), innovation stagnated and declined
period (1986~1997), to innovation breakthrough
and peak period (1998~2011), during which the
company went through many uncertain situation and
long period of experience accumulation and integra-
tion so the company can achieve globally recognized
innovation success today. Starting from 1980, in
comparing innovation benefit process of Apples
integration close pattern with independent open pat-

325

tern of IBM and Microsoft, we learn that: In the first
20 years, innovation benefit of independent open
pattern actually far exceeded integrated close pattern.
However, after a period of imperceptible effect, in
past 10 years we can clearly see that after time effect
the innovation results of integrated close pattern has
passed far ahead of independent open pattern. Thus,
the process of generating innovation imperceptible
acquired mainly comes from creative driving
force and effect of time accumulation, which is
knowledge imperceptibility.
Therefore, managers want to achieve technology
sustaining innovation advantage, the key lies in that
team (organization) must own abundant creative tacit
knowledge. Fundamentally it must first establish a
strong tem creative driving force: Team leaders
should clearly understand and identify the upper lev-
el value of product (profession) they face, select
members with suitable characteristic, passion and
emotional affiliation, and establish organizational
belief with product core value oriented and leader-
ship organizational culture. Leaders much closely
integrate members characteristics and team leading
characteristic under upper level value of product
(profession). Secondly is active and effective lea-
dership and management of innovation imperceptible
acquired process: Team leaders must strengthen
on-site individual practice and trial experience train-
ing to accumulate individual tacit knowledge. On
managing leadership team leader should strengthen
cross team (unit) mutual trust, experience integration
and apprenticeship passing on mechanism to accu-
mulate tacit knowledge of entire team. When fac-
ing problems and innovative challenges leaders can
inspire team conversing interactively to solve prob-
lems and build appropriate situation and atmosphere
to enhance interactive conversing habit inside the
team. This way, innovation imperceptible acquired
can be achieved and knowledge materialization can
be driven to generate continuous cycling effect of
knowledge.

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FIGURE 1: TACIT KNOWLEDGE FROM MECHANISM (PREPARED IN THIS STUDY)

(Supporting awareness) (Focal awareness)
Note: The dotted line represents implicity. Solid line represents explicity.

FIGURE 2: TEAM KNOWLEDGE INNOVATION FLOW FIGURE 3: CREATIVE DRIVIN FORCE
Team creative driving force
Team knowledge innovation
cycle

From mechan-
ism(function):
far/focal/whole
From mechanism( function):
near/supporting/individual
From mechanism
(phenome-
na/meaning/existence):
knower
rely on
attending to
integration
Knowledge creation (emergence)

organizational
characteristic
member cha-
racteristic
Process of knowledge materialization
Combination and management
of explicit knowledge
Product (profes-
sional upper level
characteristic
Process of innovation
imperceptibly acquired
accumulation and inte-
gration
of tacit knowledge
Interactively compatible three
types of characteristics
Creative
driving
force
Creative
dynamic
Members:
characteristic/
passion / emotional
affiliation
Organization:
firm belief/
leadership-
strength
Product(profession)
upper level value

328

FIGURE 4: ORGANIZATIONAL SUSTAINING INNOVATION STRUCTURE

Note: Dotted line represents tacit property. Solid line represents explicit property.

Accumulation and integration
of tacit knowledge
(
a
p
p
a
r
e
n
t

k
n
o
w
l
e
d
g
e
)

Innovative imperceptibly
acquired

concrete formation
of knowledge
management and integration
of explicit knowledge
In-depth interactive conversing
and meditating
Knowledge application and integra-
tion.

Mutual experience integration and
passing on

Team creative driving force

Thorough practice and
trial experience

Time effect on team innovation
Apple: 1997-2012 Continuous innovation reaching top of industry
interaction

(explicit knowledge )
(
t
a
c
i
t

k
n
o
w
l
e
d
g
e

)

(tacit knowledge )

Product upper
level value
habit
Product upper level value, members charac-
teristics, passion and emotional affiliation,
organizational firm belief and leadership
strength, interactive match of three cha-
racteristics
(Deep tacit knowledge)
Members charac-
teristics
Organizational
characteristics

329

National innovative Climate and Strategy of
Innovative Development in the Context of
Economic and Cultural Globalization: The
Case of Thailand

Denis Ushakov
International College, Suan Sunandha Rajabhat University
Bangkok, Thailand, fintaliano@yandex.ru

Abstract Intellectualization of manufacturing and
formation of national innovative system is now the
major factors in national competitiveness and
positioning in the international division of labor.
Innovations today are especially important for the
successful catch-up of countries. Among them we can
include Thailand, which has both its own set of social
and cultural benefits for the implementation of
innovative strategies and a number of characteristics
reducing the prospects of innovative progress. This
study includes an analysis of social, cultural and
economic features of investment climate improvement
in Thailand; recommendations concerning the
principles of innovation progress strategy in the
Kingdom; discusses the problems of integration of the
Thai national innovation system in global high-tech
production and in the global market for innovative
products and technologies. The findings and
recommendations contained in the study are also based
on the results of a Thai younger generation survey,
which considers the current state and prospects for
innovative development of the country.

Keywords innovative modernization, strategy of
innovative progress, national innovative system,
innovation and investment process

I. INTRODUCTION
In modern conditions, innovative progress is
the most important source for economic progress,
which provides up to 75% of the GDP growth in
some countries (for example, Western Europe, USA,
Japan), reduces the national economic dependence
on the fluctuations of world prices for resources,
opens a new direction and reserves for further
development (Auzan, Arkhangelsky, & Lungin,
2011, pp. 15-29).
In Asian countries in the first wave of
industrialization (such as Malaysia, Thailand,
Indonesia) the problem of choosing the strategic
goals for further development is maximally relevant
(Lundvall, 1992, pp. 76-92). This is either a
preservation of cost advantages for traditional
manufacturing, of the most comfortable business
environment (strategy of extensive growth), or a
sharp increase of domestic consumption and the
national economic system is transition to a
qualitatively new level of development (strategy of
intensive growth).
The implementation of the first strategy
requires maintenance of a low level of living
standards of local people and a budget deficit.
Furthermore, the country that implements this
strategy, surely will face increasing international
competition (especially with the economically less
developed countries of Asia and Africa), stimulated
by the international integration dynamic (for
example, the start of the AEC in 2015 will present
some negative impacts on the Thai economy,
associated with the growth of labor migration from
the economically underdeveloped Laos, Myanmar
and Cambodia, with the abilities for manufacturing
transferred from Thailand to neighboring countries,
with increasing competition with imported goods and
services). In such circumstances, the state will have
to preserve the development of population living
conditions and will be increasingly falling into
dependence on cheap goods export (Rose, 1999, pp.
210-217). These clearly do not meet the benchmarks
of national development.
In case of intensive growth strategy
implementation the local residents incomes (wages,
social budget expenditures) should increase and the
domestic consumption will grow firstly
quantitatively, further qualitatively. Certainly, it will
affect the business local environment (especially for
multinational and foreign companies), will stimulate
capital outflow, transfer of manufacturing facilities
to neighbouring countries, will reduce the dynamics
of economic growth and will replace some domestic
products by cheaper imports.
Innovative development is an important factor
of successful resolution of this dilemma. The
effective development of innovative enterprises, the
growth of an innovative environment and high-tech
industries together with increasing local population
living standards and domestic consumption, will not
only prevent the negative impacts of the strategy of
intensive growth, but also will promote its more
successful implementation by filling the gap between
the local economic conditions and domestic
consumption with new high-tech industries
(including export-oriented ones), foreign investment
and skilled labour attraction and so on.


330


Problems of forming national innovative
systems and improvement of the national innovative
climate have been an object of research since the
1970s. A large social, economic cultural influence
and the relevant importance of innovative
modernization, its dependence on the functioning of
all spheres of human activity have defined the
innovative climate as a research area for economists,
sociologists, cybernetic, philosophers, politicians and
cultural scientists.
An analysis of principles for innovative
development of economical systems and of
infrastructural and institution transformations
required for innovative climate improvement was
made by Bauman (1992), Cliong and Caldcron
(2000), Drucker (1995), Giddens (2007), Nelson
(1995), Rose (1999), Inozemtsev (1999), Ivanov
(2009) and Delyagin (2006).
Studies on certain countries experience in
developing a national innovative climate and
creating a national innovative model were realized
by Hutton (2007), Lundvall (1992), Piening (1997),
Smart (2009), Solvell, Lindqvist and Ketels (2003),
Azuan, Arkhangelsky and Lungin (2011).
The features of Thai society for its own
further innovative modernization and the problems
of innovative climate improvement in Thailand were
considered by Chulavatnatol (2005), Parniangthong
(2005), Sookpreedee (2005), Virasa (2005),
Youngsuksathaporn (2005) and Lorlowhakarn
(2005).
Despite the numerous studies, the problem of
innovative climate improvement, based on the values
and features of Thai society, of the necessity of
modernization and integration of economy of the
Kingdom, requires both fundamental theoretical and
practical research.
The hypothesis of the study is based on the
need for innovative modernization of Thailands
economic system through improvement of the
national innovative climate in order to ensure the
long-term and sustainable well-being of citizens,
national security, dynamic economic development
and strengthening of Thailands position in ASEAN
and in the world.
At the same time an effective innovative
development of the Kingdoms national economy is
possible only by taking into account the international
experience and internal socio-economic reality; the
effective realizing of institutional and infrastructural
transformations and stimulating and consolidating
the efforts of government, business and society.
Thus, a present stage of economic
globalization, on the eve of ASEAN transition to a
fundamentally new form of international integration
in 2015, Thailand has no other alternative but its own
innovative development. That determines the
relevance of the study.
The purpose of this study is to analyse the
benefits and capabilities of Thai society to
implement the national strategy of improvement, the
innovative climate and innovation progress.
Objectives of the study are as follows:
- Highlight the features of national strategy
for innovative progress and the conditions for its
effective implementation;
- Identify the benefits and challenges of
national innovative climate improvement in modern
conditions;
- Analyse the principles of Thai economic
system innovative modernization;
- Identify priorities for government
stimulation of innovatization of Thai society and
economy;
- Survey the younger generation of Thais on
their assessment of the needs and the tools for the
Kingdoms innovative modernization.

III. MAIN FOCUS OF THE STUDY

According to the findings of previous
research, Thailand is a country with an imbalance
between the level of the local societys innovative
potential and the level of local demand for
innovations
1
. This means that the actively stimulated
development of Thailand innovation infrastructure
and high-tech production are ahead of the real
willingness of Thai society to generate new
knowledge. This imbalance leads to the growth of
high-tech imports, budget expenditures (for
implementation of innovative infrastructure projects)
and reduces the effectiveness of the countrys
innovative development.
Meanwhile, Thai society has certain
economic, social, cultural and religious advantages
to implementing the strategy of national innovative
development. These advantages can be used as
stimulators of innovative potential of the whole
society or of some social groups.
These advantages of Thais are: an innate
tolerance, a willingness to accept a variety of
information, respect, and a propensity for team work
and in-group collaboration. The Thai education
system (at every level) is inextricably linked with the
education of individuality and its involvement in
traditional and usual social processes (sometimes this
involvement can be stimulated from the outside).

1
In this study we estimated the innovative
capacity/potential (aggregated index, depending on the
level of development of the national education system, its
integration to the global information space, the local
populations creativity, etc.) and the demand for
innovations in the national economy (aggregated index,
depending on the share of high-tech industries in the
national economy, the domestic high-tech industries
competitiveness, the level of national high-tech
enterprises export orientation and so on) (Ushakov, 2010).

331

The behaviour of pupils, students, their ethics,
appearance and mannerisms are the same essential
elements of assessment as the learning outcomes or
knowledge, skills and abilities.
On the one hand, these characteristics of
society are keeping Thais out of a heightened
individualism, are decreasing interpersonal
competition, initiative and tendency to invent new
solutions of relevant problems (like in most of
Western civilization). They are inhibiting
innovations because of Thais fear of standing out
from the circle of respected colleagues and friends.
On the other hand, Thais are less organized than their
northern neighbors, appreciate their own freedom
and always have a personal opinion and perception
of reality (even if it is contrary to accepted formal or
informal norms).
Modern Thai society is highly structured and
is a matrix system of social interactions, in which the
horizontal stratification (formal or informal groups)
lies on the vertical interactions (the authority of the
head, the elder, inter-generational and intra-family
connections). Meanwhile Thai society obviously
contains some important unifying frameworks and
basic, which largely enable the unique ethnic identity
of the Thai nation. These are, for example, a
powerful educational basis in the socialization
process, the unquestioned authority of the religious
cult and the Royal family. As an important factor of
the modern Thai nation is unification and
development we can consider the phenomenon of
opposition. For example, Thai and Indian Buddhism,
Thai and "neighbors" way of life, idealization of the
past (Thailand never was a colony) and national
language (usage of own alphabet).
Due to these social conditions of innovative
development, the effective improvement of
Thailands innovative climate is impossible by either
the European (based on personal efficiency,
competition and rivalry), or authoritarian (strict
government control and impact of the most powerful
national leader) scenarios.
Market (liberal) innovative modernization in
Thailand will result in total industrial espionage,
streams of black PR and information wars.
Authoritarian modernization will face the Thais
feelings of pride, freedom, and non-tolerance for
violence, and finally will turn to the creation of
pseudo-innovative projects which are corrupt and
actively explore the budget money.
It is logical to define the concept of
improving the innovative climate in Thailand, which
is mostly adapted to the specifics of Thai society, is
able to accumulate advantages and decrease
disadvantages and problems of Thai innovation
potential. For determination of priorities and
conditions for Thailands innovative climate
improvement we conducted a survey of 440
representatives of the Thai young and creative
generation (students of the International College at
Suan Sunandha Rajabhat University in Bangkok).
Students personal data is in Table 1.
To impact the national innovative climate
through a personal perception of the modernization
processes will be not effective in Thailand due to the
non-acceptance of interpersonal competition.
Taking into account the complexity of Thai society
structure State innovative policy can be oriented to
stimulating an innovative race between social groups
(for example, between different institutions,
organizations, public authorities and enterprises). But
at the same time leadership in this race has to be
extremely influential and prestigious in the whole
society. This is easily achieved through the effect of
common central institutions - family, inter-
generational relations, religion, the Royal family,
uniqueness of own country and nation (the
phenomenon of opposition).
TABLE I
PERSONAL DATA ABOUT SURVEYED STUDENTS

Groups Younger than 18 y.o. Older than
18 y.o.
Totally
Male From Bangkok 12 62 140
Out of Bangkok 18 48
30 110
Female From Bangkok 20 130 300
Out of Bangkok 16 134
36 264
Totally 440

For enhancing the innovative climate the
country needs to develop a personal cult of
innovators, an innovative leadership with
involvement of mass media, of the most popular
Thais both living in the country and abroad. Of
course, the main innovative leader of the Thais is His
Majesty the King, whose personal example can and
has to encourage and inspire millions of people. The
representatives of science, business, education and
government, who have achieved significant
innovative results, must become the heroes of the
nation, the most prestigious and respected persons,
whose experiences and achievements are the main
property of Thais.
The prestige of science can be raised through
the activities of religious institutions. Buddhism is
one of the most ancient and peaceful religions and
can be a philosophical basis for the development of
social innovative thinking. This thinking can be
expressed in the need to evolve to meet the changing
world, to have the abilities for improving it and
making it more harmonious.
As can be seen in Figure 1 all four categories
of surveyed students mentioned the important role of
a strong national leader (together with a quality of
education, law and national discipline and natural
resources) in innovative progress of the country.
One of the important Thai society features,
limiting the national innovative potential, is the so-
called "complex of a small country." Thais
propensity to own opposition and own uniqueness

332

confirmation is often limited by the neighboring
countries - Myanmar, Laos, Cambodia, Indonesia
and Vietnam. Any comparison with neighbors is
originally possible only in favour of Thailand, which
limits the desire to develop own potential more,
including innovations. At the same time, a
comparison of Thailand and China, or Thailand and
Japan would be initially deemed by most Thais as
incorrect.
The list of countries that the surveyed
students can identify as the global leaders
traditionally includes the United States, Japan, China,
European Union countries and Russia (Fig. 2). But it
is interesting to note that surveyed students do not
dream of living in some global leading state (USA,
China).
0
50
100
Discipline, living by
the laws
Natural resources
New technologies
Entrepreneurship
A strong national
leader
Science
Education
Computers and
Internet usage
M, Bangkok M, out of Bangkok
F, Bangkok F, out of Bangkok

As Figures 4, 5, 6 show, most surveyed
students said that Thailand is less developed than
advanced innovative countries. At the same time the
level of Thailands computerization was estimated as
relatively high; but the level of education and quality
of scientific research in the country are still low.
Meanwhile, a globally competitive innovative
climate requires a globally competitive innovative
potential, which allows Thais to adequately and
objectively compare themselves with the leading
nations of the world. Thai authorities should pursue
an information policy more focused outside of
ASEAN and the Asian continent; inform the public
about existing achievements of the country or some
individuals (even if they are very modest results).
For example, most surveyed students do not know
Apichatpong Weerasethakul (currently the only Thai
film director awarded at the Cannes Cinema Festival
in 2010). The names of Thai scientists who have
received international recognition and awards are
known among young people much less than the
names of actresses, models and children of rich Thai
families.

0
10
20
30
40
50
60
High
standarts of
livi ng
Modern army
and mi litary
power
Developed
technologi es
and science
Highly
developed
culture and
arts
Human ri ghts
supremacy
Wel l
developed
system of
education
Natural
resources
Huge
territory
what does a country need to be respected and powerful inthe
world?
what does Thailand have now for being respected and
powerful in Asia and in the world?

Thus, the socio-cultural conditions for
Thailands innovative climate improvement logically
extend in two directions: the development of inter-
group innovative competition and the development
of the external innovative competitiveness of the
nation, which have to be based on the prestige of
science and research.
FIG. 1 CONDITIONS AND FACTORS OF EFFECTIVE INNOVATIVE
PROGRESS OF THAILAND (RESULTS OF STUDENTS SURVEY, %)
FIG. 2 THAILAND AND ADVANCED COUNTRIES OF THE WORLD
(RESULTS OF STUDENTS SURVEY, %)
FIG. 3 SURVEYED STUDENTS WILLINGNESS TO LIVE IN A
POWERFUL AND TECHNOLOGICALLY ADVANCED COUNTRY (%)
FIG. 4 SURVEYED STUDENTS OPINIONS ABOUT THE PERIOD
DURING WHICH THAILAND CAN ACHIEVE THE SAME LEVEL
WITH TECHNOLOGICALLY DEVELOPED COUNTRIES (%)
FIG. 5 FUTURE AND MODERN POTENTIAL OF THAILAND
(RESULTS OF STUDENTS SURVEY, %)

333

The development of a favourable innovative
climate in Thailand is based on three pillars of the
national model of innovative progress.
The first is development of technological
cooperation with innovative and technologically
advanced countries.
An important advantage of Thailand in this
area is the highly favorable conditions for life and
work, formed by the natural features (climate, nature)
and by the impact of human factors (infrastructure,
high level of service including housing, health care,
education, cultural characteristics of Thai society,
and so on). Due to these reasons Thailand can and
should become a place of permanent (temporary)
residence of the global creative class (which, as is
well-known, is inseparable from its own innovative
capacity and is the most important productive factor
within the modern economy). Now many scientists
and researchers (mainly in the fields of design, media
technology and creativity) choose Bangkok, Chiang
Mai and Thai resorts for permanent living.

We can suggest some tools for improvement
of the conditions for research activities. For example,
- formation of national grants system on the
principle of "Thailand Open" where scientists from
anywhere can participate, but have to conduct
research only in Thai universities or laboratories;
- attraction of academics by simplified
procedures for obtaining Thai resident status; by the
centralization of academic employment in national
universities;
- promotion of foreign scientists for research
(not only teaching) in Thailand;
- transformation of Thailand to a comfortable
place for conduct of international research, for
example, through the development of specific
research zones, liberalization of the tax regime and
customs regime for import of scientific equipment
and materials.
As a result of these tools a realization of the
inflow of scholars both from catching up countries
(where financial and infrastructural problems restrict
local scientists in their conduct of research) and
even innovative advanced countries (whose scientists
can be attracted to Thailand by local living
conditions, conditions for conduct of research and
scientists position in society) can be expected.
Arriving professionals can give a definite boost to
Thai national science development and formation of
national scientific and research centers.
The Government through the National
Agency of Innovations should promote international
cooperation with research centers and innovative
corporations, primarily in the areas in which
Thailand has some natural advantages. In this case,
the results of R&D obtained in Thailand could be
much more successful (or will be achieved much
faster) than at the home of origin of innovations. As
examples of such areas we can consider agriculture
(biotechnology, agricultural chemistry, agronomy,
irrigation, food processing, agricultural machinery,
"green" technologies, bio-fuels), health care
(alternative medicine, cosmetics, plastic surgery and
anti-aging medicine, neurosurgery), the chemistry of
polymers, alternative energy, communications,
logistics and transport, design and the media.
The second pillar of Thailands national
strategy of innovative development is an
infrastructure which includes the material objects
and, above all, the low state economic regulation and
public-private partnership. As infrastructure
measures to modernize the Thai society we can also
define:
- The growth of domestic consumption of
innovative (high-tech) products. Thailand should be
a country with a high capacity of national demand
for innovative products. On the one hand, it will
stimulate an important component of the national
innovative process - the demand for innovations,
boosting the penetration of innovations in traditional
sectors of the national economy. On the other hand,
it will be an additional factor to attract foreign high-
tech corporations into Thailand. In order to promote
the domestic consumption of innovative products the
Government should remove the tax and customs
burden from the vendor (seller) of high-tech products
(for example, value added tax, sales tax), develop a
system of credits and loans (in the case of purchases
of innovative products, especially industrial
equipment, vehicles, communication systems and so
on) and a system of obsolete tech product (such as
computers, office equipment, vehicles, machines,
and so on) recycling;
- The attraction of venture capital into
innovative industries, the promotion of domestic and
international investment in national innovative
sectors (through tax incentives, public promotional
support, Governmental insurance of investments,
Government co-participation in investment projects).
As an effective mechanism to effectively
implement an innovative investment cycle we can
propose the establishment (under Governmental
patronage) of a national model that consolidates the
efforts of the population (creative representatives,
FIG. 6 COMPARISON OF THAILAND WITH ADVANCED
COUNTRIES OF THE WORLD (RESULTS OF STUDENT SURVEY, %)

334

scientists, inventors), business (representing
innovative and high-tech industries) and the state
(specialized agencies) (Fig. 7).
As a basis for national model of innovative
modernization an on-line Governmental project
Innoforum - can be implemented. Within this
Internet portal the creative class (scientists,
educational institutions, research centers, etc.) present
their own innovative ideas which are capable of
further commercialization.
A fundamental principle of this national online
project function is the presumption of an ideas
authorship. After posting a new idea on-line (in the
frame of the Inno-forum) it is automatically
patented. Authorship is recognized by the authorities
automatically after a certain time for discussion about
the idea on-line.

FIG.7 - NATIONAL MODEL OF INNOVATIVE MODERNIZATION
THROUGH THE IMPLEMENTATION OF AN ON-LINE PROJECT
"INNO-FORUM"
Of course, the state must provide the
appropriate regulatory framework, which firstly
guarantees the protection of intellectual property, and,
secondly, creates the conditions to block plagiarism
and any form of idea thief. It should be noted that the
on-line work of the Inno-forum will allow for any
member of the creative part of Thai society to
participate in the discussion of new projects or to
publish their own suspicions about the authorship of
an idea and to alert the Government (through
moderators, portal administration) over copyright
acceptance.
Thus, idea will pass through so-called "people's
control", and will be not only checked for purity of
authorship, but also will be modernized as the result of
collective discussion, additional experiment, study and
evaluation. Consequently, a national on-line project, in
fact, will be a platform for crowd-sourcing, for
development of mass collaboration and cooperation.
For the creative part of society is involvement
in this on-line project it is required to implement
certain motivational measures. The participants
motivation has to be based on traditional material
values, which are distributed according to the
indicators of individual participant involvement.
These indicators are:
- The number of proposed ideas (for example,
each participant gets a certain number of points,
increases own status for every posted idea, and is able
to get remuneration yearly, quarterly or monthly);
- The number of views, comments and
suggestions expressed by participants;
- The number of ideas expressed by the
participants which were perceived by business and
commercialized;
- The comments and reviews of other
participants in the on-line project (for example, the
results of voting, rating, the status of the participant,
and so on).
The participants, who are in match with
requirements and conditions of the "Inno-Forum" shall
receive not only the automatic patenting of their own
inventions, but also the material benefits of their
active involvement in research and the innovative life
of the country. Budget spending by the Government
has to be openly and transparently distributed among
the active participants in the project.
Thus, the proposed project is a kind of national
forum for conferences in every field of practical and
fundamental research; a national repository of new
knowledge and inventions, and will realize the
traditional regulating functions (patenting and
intellectual property protection).
At the same time this project is not only for
collection of ideas and new knowledge, but also is for
full exchange, whose functioning is intended to attract
venture capital into innovation development and
commercialization. Therefore business and financial
institutions are very important members of this model
due to their interest in modernizing their
manufacturing processes, products and corporative
relationships.

Taking into account features of Thai society the
strategic guidelines for the countrys innovative
modernization must include the following levels:
- Organizational innovations, based on the
uniqueness of the Thai culture and social system and
including innovations in areas of corporate governance,
education, integration into the world technology and
innovations market, motivation of specialists, creating
FIG. 8 PRIORITIES OF THAI SOCIETY MODERNIZATION
(RESULTS OF STUDENT SURVEY, %)

Commercia-
lization
People
creative
class
Tax
preferences Special funds
employment
Direct
investment
Govern-
ment
National on-line
project
Inno-forum

Presumption of
authorship
Business

335

an innovative culture at the corporate, institutional,
regional and national levels;
- Through organizational innovations (taking
into account the current situation in Thailands
innovative industries) it is logical and achievable to
develop the innovative areas related to design (creation
of new consumer properties of existing national and
foreign-made innovative and high-tech products,
product line differentiation and implementation of
corporate strategies of innovation);
- Through the development of design and
creative activities, it is possible to form national high-
tech enterprises designed initially to satisfy the growing
domestic demand;
- As a result of national enterprise development
is achievable to produce and globally offer Thailands
own high-tech goods and services.
Anyway, a successful strategy of innovative
modernization of Thailand should be based on
fundamental principles, such as support of domestic
competition, transparency of economic and the social
regulation, and, most importantly, humanity of the Thai
socio-economic model, ensuring the supremacy of life,
health, environmental quality and living conditions for
Thais or foreigners in the Kingdom. This requires the
state to continue the implementation of social initiatives,
the salvation of internal problems and improving the
quality and availability of public services, the
environment, and so on.

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Ivanov, D. (2009). Virtual economy. Moscow, Delo.

Lorlowhakarn, S. (2005). Thailands National
Innovation Agency. Thailand competitive innovation
strategies. NIA, Bangkok.

Lundvall, . (1992). National systems of innovation:
towards a theory of innovation and interactive
learning. London: Printer Publishers.

Nelson, J. (1995). Post-industrial capitalism:
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Thousand Oaks (Ca.): Sage Publications.

Parniangthong, S. (2005). Competitive strategy.
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Piening, C. (1997). Global Europe. The European
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Routledge.

Solvell, O., Lindqvist, G., Ketels, Ch. (2003). The
Cluster initiative greenbook. The Competitiveness
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Sookpreedee, N. (2005). Educational Innovation.
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Ushakov, D. (2010). Innovative potential as a factor
of modern states global competitiveness and
positioning. The national economy competitiveness in
today's globalizing world (International scientific-
practical conference. South-Russian Institute (branch)
of Russia Presidential Academy of National Economy
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Virasa, T. (2005). Technological Innovation. Thailand
competitive innovation strategies. NIA, Bangkok.

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Government. Thailand competitive innovation
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336

An Innovative Approach to Crime Reduction
Through Architectural Design: A Case Study
of Bangkok Metropolis, Prathumwan District

Amorn Wanichwiwatana
D.Phil. (Oxon), Faculty of Political Science, Chulalongkorn University, Bangkok, Thailand
a.wanichwiwatana@gmail.com

Abstract-- Crime prevention focused on city planning
and architectural design can control and deter
perpetrators. The so-called crime prevention through
environmental design (CPTED) uses the physical
environment to deter crime. This survey provides
examples as well as specific guidance for designing the
physical and social environment to deter crime. Results
that emerged from an earlier survey indicated that the
quality of life in the city could be enhanced by strictly
enforcing urban planning laws. Expansion of slums and
intrusion on public space must be stopped; and new
forms of community policing, technology and effective
public communication must be provided. The study
also found that citizen involvement has become a
central element for the success of CPTED strategies.
The survey will mainly discuss a study of crime
reduction through crime-preventive architecture and
CPTED in residential, business areas. A concluding
section recommends some feasible ideas to combine
various forms of crime prevention and architectural
design dimensions.This survey presents crime
prevention through environmental design (CPTED) in
Prathumwan district, Bangkok Metropolis with a
special focus on the role of local practices and culture
in dealing with major street crimes. The main question
that is to be answered is: Can there be an effective or
best practices for all? Addressing insecurity and the
feeling of insecurity is a high priority and a serious
concern to people from all walks of life. The survey will
present the outcomes of the attempt and initiatives by
the local communities to curb the so-called street
crimes using CPTED. It is hoped that there will be
some improvement in terms of crime prevention.

Keywords crime prevention, urbanization, urban
planning, environmental design

I. INTRODUCTION
A. Urbanization
Urbanization is often viewed as a negative trend.
Urbanization as defined by the United Nations is
the physical growth of urban areas as a result of
global change, it is also seen as a movement of
people from rural to urban areas with population
growth equating to urban migration. The United
Nations projected that half of the world's population
would live in urban areas at the end of 2008. As
more and more people leave villages and farms to
live in cities, urban growth results. The rapid growth
of a city like Bangkok can be attributed largely to
rural-urban migration (http://www.thisdaylive.com/
articles/how-urbanisation-affect-qualityof-life/82851).

Statistics show the rapid urbanization of the
worlds population over the twentieth century. The
global proportion of urban population rose
dramatically from 13% (220 million) in 1900, to
29% (732 million) in 1950, to 49% (3.2 billion) in
2005. The same report projected that the figure is
likely to rise to 60% (4.9 billion) by 2030.
Bangkok, the Thai capital, contains some 7
million people living within a sprawling
metropolitan area and clearly constitutes an
Extended Metropolitan Region (EMR). (Smith,
2001, p 441). Moreover, urban development of the
capital has outgrown the administrative boundaries
of the Bangkok Metropolitan Administration (BMA
or local government) and encompasses the
neighbouring five provinces (Office of the National
Economic and Social Development Board, 1992 p
ix). Prathumwan is located in the heart of Bangkok
city. The MBA website describes the area in more
depth (www.bma.go.th/bmaeng/pathumwan.) The
area is best known for its shopping centers.

B. Geographical Area, Prathumwan District:
(Information details as well as pictures are courtesy
of Prathumwan District Authority)


337

Prathum Palace (lotus pond palace). Both were built
to the order of King Mongut (Rama IV) and named
so because of an abundance of lotus in Khlong Saen
Saeb during his reign.

The district is sub-divided into four sub-districts
(Kwaeng): (1) Rong Mueang, (2) Wang Mai (3)
Pathum Wan and (4) Lumpini.

C. Shopping Centers

MBK Centre Paragon Central World

Pathumwan is best known for its shopping
centers. Siam Center is the oldest one in the area.
Opened in 1973, it is now flanked by Siam
Discovery Center and Siam Paragon.

One of the most popular for both local people
and tourists is MBK Center (also known as Mah
Boon Krong). It is packed with shops offering
fashion items, mobile phones and souvenirs. A
covered, air-conditioned pedestrian bridge over
Phaya Thai Road connects it to a congested sister
shopping center, the Bonanza Mall, which mostly
sells inexpensive clothing and fashion accessories.

Siam Square is a shopping area consisting of a
block of buildings and small roads full of shops,
attracting mostly teenagers. There are three cinemas
in Siam Square, built in the 1970s and run by the
Apex chain: the Scala and Siam theaters offer a
single, big screen; the Lido is a small multi-plex with
three screens. Besides shops, many exam preparation
schools are found in Siam Square. So the area is full
of students during evenings and weekends.
The Ratchaprasong intersection is in Pathum
Wan district, which is flanked by Central World
(formerly World Trade Center and then Central
World Plaza), Narayana Phan, Gaysorn and Central
Chit Lom shopping malls.
D. Famous Places
Jim Thompson house

Chulalongkorn Ratchaprasong
University

A large portion of Pathumwan is occupied by
organizations. Near MBK, Chulalongkorn University
is the oldest university in Thailand. The main
auditorium together with the Faculty of Arts
buildings Maha Chulalongkorn and Maha
Vajiravudh are famous for architecture. The Museum
of Imaging Technology within the Faculty of
Science houses a large collection of cameras from
old to new. Next to the university are Chulalongkorn
Hospital and the Thai Red Cross. Inside the Red
Cross there is a snake farm called Queen Saovabha
Memorial Institute (or Sathan Saovabha in Thai)
showing venom extraction and producing serum to
treat snakebites.

One of the major tourist attractions is the Jim
Thomson House. It is a complex of magnificent Thai
wooden houses formerly home to James H.W.
Thomson, an American who lived in Thailand,
developed the Thai silk industry, and brought it to
fame to the western world. Now it is turned into a
museum filled with lots of antique decorations.

The Erawan Shrine at the Ratchaprasong
intersection is a sacred place where people come to
pray and make wishes to Brahma. Wishes could
include getting admitted to university, babies, jobs,
and so on. Flowers, wooden elephants, or traditional
Thai dances are returned when a wish is granted.
Also located in Pathumwan are the Royal Bangkok
Sport Club, a horse racing track operating every
other Saturday, the National Stadium, the Lumphini
Boxing Stadium where traditional Thai boxing
matches are held, and Lumphini Park, the first park
in Bangkok.
Every year around Christmas and New Year,
shopping centers, hotels and sidewalks in the
Ratchaprasong shopping district are heavily
decorated with lights celebrating the event. It was
started by Peninsular Plaza and The Regent Hotel,
and later expanded to Sogo (now out of business),
Amarin Plaza, Central World, Central Chit Lom,
Gaysorn and more. Bangkok Metropolitan
Administration also provides lights along the BTS
Skytrain pillars. During the period, it is the brightest
lit area of Bangkok. The countdown is held on the
ground in front of Central World.


338

E. Transportation (Public Transit)

Rail
Hua Lamphong is the central train station of
Bangkok and the State Railway of Thailand.
Trains depart from the station to destinations
throughout Thailand.

Mass transit
Bangkok Metro subway stations in the district
are Hua Lamphong, Sam Yan, Si Lom, and
Lumphini along the southern border of Pathumwan.
Bangkok Skytrains main interchange station,
Siam, is here providing connection between the Si
Lom Line and Sukhumvit Line. Other BTS stations
in Pathumwan are the National Stadium and
Ratchadamri on the Si Lom Line and Chit Lom and
Phloen Chit on the Sukhumvit Line.

F. Crime Prevention

Our approach in understanding and explaining
the causes of crime uses a combination of three
major elements as follows:

Firstly, in order to suppress, prevent and
possibly punish criminals and their crimes. The
classical school of criminology is based upon
utilitarian notions of free will and the greatest good
for the greatest number. At its core, classical
criminology refers to a belief that a crime is
committed after an individual weighs the pros and
cons. The decision to commit a crime is a rational
decision, and is best countered through a deterrence-
based system (Seet, Akers, and Sellers, 2004).

Secondly, Crime Prevention Through
Environmental Design (CPTED) as an alternative
way to fight crimes. This refers to a set of practices
designs to make potential criminal targets less
attractive. The belief that crime is a rational act is
used to make a potential target less attractive to a
criminal, and thus not a rational target. (p 7) A
variety of environmental design could have an
adverse affect on chances for criminal activity.
Jeffery (1994) the founder of the term CPTED said
that a coherent theoretical model of CPTED never
existed. Jeffrey demanded that a new urbanism must
be used to plan urban growth in a more logical way,
and to guide urban policy for the future, including
crime as a major urban problem, something now
neglected by urban planners. It is believed that
citizens as well as the authorities become more
aware of Crime Prevention Through Environmental
Design and possible reduction of criminal
opportunity when loopholes and many other
weaknesses are covered. Therefore the CPTED is
implemented with some creative solution where
possible.

G. Proposed measurements

McKay (2000), CPTED expert proposed that
CPTED emphasizes a new way of dealing with street
crimes through the development of three overlapping
CPTED strategies. These strategies are:

Natural Surveillance is a design strategy that is
directed primarily at keeping intruders under
observation. It uses design maneuvers to increase the
visibility of an estate or a building. The appropriate
arrangement and design of windows, lighting, and
landscaping increases the ability to observe
intruders. When natural surveillance is adjusted to its
highest utility, it maximizes the potential to deter
crime by making the offenders behavior more easily
noticeable to the community, police patrol, or
passerby.

Natural Access Control is a design strategy
that is directed at decreasing crime opportunity.
Natural access control utilizes things such as
windows, doors, bushes, fences, and gates to deny
access to a crime target and to deceive offenders that
there is a risk in entering the area. Control-locks,
bars, and alarms can supplement natural access
control measures if necessary.

Territorial Reinforcement is a design strategy
that realizes that physical design can create or extend
a sphere of influence so that users develop a sense of
proprietorship or territoriality. Territorial
reinforcement employs such design elements as
sidewalks, landscaping, and porches to set apart
public and residential areas and allows the resident to
exhibit signs of ownership that send unwelcome
messages to would-be offenders.
More importantly, care and maintenance allows
for the continued use of a space for its intended
purpose. Deterioration indicates less concern and
control by the residents as well as the authorities
alike. Proper maintenance will protect the public
health, safety and welfare in all existing structures,
residential and nonresidential, and on all existing
premises.

H. Results interpretation (Findings)

Routine Activities Theory. This theory or the
so-called casual model states that for crime to be
committed, three elements must be present: an
available target, a motivated offender, and a lack of
guardians. (Jeffrey, 1999)

These three important elements including some
socio-cultural aspects will be used to analyze all
hurdles and offer appropriate guidelines in terms of
CPTED solution to suit the demand for changes in
the locality and the authorities.


339

II. RESEARCH METHODOLOGY

The investigative techniques and the methods of
data collection include direct observation in the field,
interviews, newspaper archives and official
documents as well as a geographical survey within
the district studied. Also we inevitably touch on
some socio-cultural factors contributing to the local
techniques or designs that proved to be an effective
deterrence to crime.

The data collection process for the main
fieldwork occurred over the course of nearly 2
months between November 2011 and December
2011. A total of 29 people, both residents in the area
and relevant groups (policemen, business owners
etc.), were interviewed to provide a substantial
account of their attitudes towards and experiences of
crime reduction through CPTED. In addition, direct
observation was undertaken by myself as well as 15
participating students.
The primary concern of these interviews was to
gauge the extent to which this diverse range of
citizens believed that there had been a change in
crime level and their attitudes towards CPTED, as
well as their perceptions and their willingness to
cooperate with the authorities.

This project would not have succeeded without
the help of many people. Thanks to all of those who
participated in the survey and interviewing groups.
In particular, I would like to thank all my students in
processing surveys, taking lots of pictures which
consume a huge amount of studying time. I hold a
unique interest in strengthening the cooperation of
the communities and the authorities sharing ideas as
well as useful information to improve their physical
environment for crime prevention. Improvement is
not only possible but must become the expected
outcome of policies, practices, and alternatives for
future crime prevention.

What we learned through this survey is that of
the 29 people randomly interviewed, the majority (27
people or about 93 percent) trusted that their quality
of life will be remarkabl improved by strictly
enforcing the urban planning laws, stopping
expansion of slums and halting intrusion on public
space along with new forms of community policing,
technology, and effective public communication.
These methods would also be very helpful and
effective means to deter crimes in the area.

TABLE 1: NUMBER OF CASES CATEGORIZED BY THE TYPE OF MINOR CRIME WITHIN THE PRECINCT OF
PRATHUMWAN POLICE STATION FOCUSING ON CATEGORY 2 AGGRAVATED ASSAULT AND RAPE AS
WELL AS CATEGORY 3 PROPERTY CRIMES

Categories of crime
2008 2009 2010
reported arrested reported arrested reported arrested
1..Serious violent crimes 17 12 18 15 17 9
2.Aggravated assault and rape 92 33 81 56 71 49
3. Property crimes 441 160 243 126 323 151
4. Crimes that caught public attention 271 18 206 54 152 32
5. Crimes against the state 556 556 435 435 450 450

Source: The courtesy of Prathumwan Police Station

After the CPTED was implemented and adopted
by the local authorities in Prathumwan district, we
found that aggravated assault and rape went down
from 92 in 2008 to 71 cases in 2010 with a good
arrest rate, even though the arrest rate for property
crimes seems to be unsatisfactory (number of cases
dropped from 441 in 2008 to 323 in 2010, the arrest
rate was nearly half of those arrested in 2009) the
year before). A Commissioned Officer disclosed that
there is a rapid population growth and people lived
in highrise condominiums and residential
apartments which had recently emerged in a big
scale ever. The city also offered a more convenient
public transits (sky train and underground train) in
which allowed criminals travel freely in the same
way as ordinary passengers. This was about
urbanization and crime rate increased! We didnt
have enough police force to deal with the running
criminals, somehow, we still trusted that the so-
called Help Yourself Help Others program like the
CPTED was still a useful tool in fighting some kinds
of street crimes.

It is with all these in mind that I have sought to
adapt a broad criminological causal model (classical
school) to the task of understanding how CPTED
works in the community. The model to explain the
causes of crimes I chose is the routine activity
approach first put forward by Cohen and Felson
(1979) subsequently elaborated by Felson (2002).
This posits that for deviance to occur, there needs to
be a supply of motivated actors, opportunities, and a
lack of capable guardians, meaning persons or
institutional arrangements capable of and willing to
prevent or control the behavior in question. This , of
course might be a bored bones model. It does not
specify what provides motivation, nor what the
nature of the opportunities must be for the risk to be
taken, nor what might be encompassed by the vague
notion of capable guardians. Nevertheless, CPTED
does have some heuristic value in helping us to

340

understand and design the environment to curb urban
crimes.

The motivating force is the dissonance between
individual values and the failure of government or
the authorities to provide, through the public pursue,
sufficient resources to the police for them to carry
out their work effectively as well as other negligence
such as the expansion of slums, public space
intrusion on as well as the lack of effective urban
planning for the long term. The majority of Thais
tend to be self-centred individuals which leads to a
norm of indifference to others (Thu-Ra Mai-Chai) as
quoted by Mulder (2000): it is a culture of cynicism
and indifference regarding the public and world
around them which drives them to a stronger
identification with family, friends, and other
particularistic associations that emphasize
individual worth. The Neighbourhood Crime Watch
scheme is also another thing to supplement the
effectiveness of CPTED. It seems to be a Herculean
task to bring about the promised cooperation
between the authorities and the public so that the
CPTED approach will become more successful. As
one respondent said during the interview its the
government program, none of our business to get
involved, therere lots of things to do for my own
family , a kind of neutralization technique for
rationalizing things people are not willing to
cooperate with.

The opportunity issue is quite obvious
particularly that Prathumwan district is located in the
very heart of the city. There are several high-end
shopping centers, financial institutions, government
facilities and many others within this 5 square
kilometers. This could give an opportunity galore for
criminals and opportunity sometimes creates crime.
If there is an opportunity where there is a temptation
or attraction of something to be obtained so easily, it
will be taken up by the onlookers or criminals. If this
opportunity is removed, it removes the chances of
temptation and crime can be stopped. For example if
a car is parked in an area where presence of CCTV is
observed, this could reduce the temptation and might
distract a car thief and prevent such a crime.
Gottfreson and Hirschi (1990) proposed that
people like us have a propensity to crime but not
everyone engages in criminal acts due to the fact that
we experience various opportunities and balance the
risks and benefits (classical criminological concept).
Both see that all criminal acts involve little foresight,
planning, or efforts; they are mostly simple, trivial
and easy.
Therefore the more of opportunities, the less
chance for the criminal to act. As a Commissioned
Officer at Prathumwan Police Station also divulged
It is the policy and guidance for all residential
areas are well lit at night time along with a good
neighbourhood scheme in place, an adequate police
activity and CCTV in operation, the statistics shows
that there are reduction in car thief and burglary in
the area. However, he added that CPTED
measures do not deal with crimes that occur in some
specific areas. For example, they do not help to
prevent crimes in which the victim personally knows
or provides access to the offender, namely, domestic
violence, acquaintance rape, and other measures are
needed to deal with these situations on case by case
basis. It is evident from our survey that a reduction
in opportunity leads to a decline in the crime rate.

What do we need for fighting crime?

It is worth defining culture at this point. Culture
is a complex and broad concept, which can be
defined in many ways. Tylor (1871) stated that
culture in its wide ethnographic sense is that
complex whole which includes knowledge, belief, art,
morals, law, custom, and any other capabilities and
habits acquired by man as a member of society
(Harris 1988) It involves what people think, what
they do, and the material products (designs) they
produce. Culture touches members of a society in
which it shapes their values, assumptions,
perceptions, and behaviour.

The question is: How does a culture impact
architectural design and people thought and action
especially for crime reduction in each community?
There is a need for a survey on peoples culture and
its impact on environmental adjustment or design for
fighting crime.

Triandis (1988) identifies aspects of cultural
variation as individualism-collectivism. He states
that Asian countries represent a collectivist culture,
while the United States and European industrial
countries are characterized by individualism. This is
in contrast to Mulders notion as discussed earlier.
He also describes further that collectivist cultures
emphasize interdependence, group identity, self-
restraint, and hierarchical control.
Individualism, in contrast to collectivism, highly
values individuality and freedom. These basic
cultural characteristics strongly shape the social
systems, lifestyles, and values of each society which
is passed on to their idea of fighting or prevention of
crime.

The following are examples of CPTED in which
various Prathumwan communities have carried out
effectively to the present.

1. Back to basic: Security guard on spot


341

Harry Gold puts that it is the so-called street
crimes such as murder, armed robbery, assault, and
rape that the public is most likely to identify as the
crime problem. So the presence of security guards or
the police is intended to alleviate fears of crime in
the city as well as to serve as a crime deterrent.
(Gold, 1982, p. 292).
2 . Dummies!!!

(Information and Picture: Courtesy of Bangkok Post)
Dummy cameras

According to the present Bangkok Governor
(MR Sukhumbhand Paribatra), there are now 10,000
CCTV cameras operating in Bangkok to make the
capital safer. The Bangkok Metropolitan
Administration (BMA) had installed the 10,000
surveillance cameras near junctions and in areas
where there was a high crime risk, and near schools,
hospitals, community areas and important places
around the capital (Bangkok Post 30-06-11) These
also included 1,325 dummy closed-circuit security
cameras which had been installed throughout the
capital city (Bangkok Post 22-12-11).
Dummy Police Officers

(Information and Picture: Courtesy of The Nation)

The Metropolitan Police had installed
"intelligent" dummy police officers, nicknamed "Jah
Choey" or Sergeant Idly Silent, where accidents take
place frequently, like intersections, bridges or roads
with solid white lines, or where motorists break
traffic laws often. This is in order to keep an eye on
traffic law violators the dummy officers would
capture images of traffic violators and help real
traffic policemen with their job.

The dummies are equipped with security and
speed cameras to detect motorists who violate the
law as well as help cut down on traffic violations
and make Bangkok drivers more cautious. The
cameras embedded in the dummies will transmit
images to traffic police officers' smart phones or
tablet computers within a 2 to 5 kilometre radius as
well as to the Traffic Police Command Centre.
(The Nation 30 9 11)

3. Ghost out there! Death symbol!

A Thai local erected a God of Death statue in order
to warn passersby to behave well as well as
intimidate the potential offenders.

Many Thais apparently fear a variety of ghosts
and evil spirits that might affect their lives to the
same extent as the karma concept (law of action,
ones personal lot in life as mentioned by Neils
Mulder (2000, p. 84) Every household will pay
respect to the spirit that they believe provides
protection and guards their family members:
Phraphum is the lord of the place (Chao-thi), that is,
the local ruler whose presence should be recognized
and respected (Mulder, 2000, p. 25). Accordingly,
many Thai households will erect a spirit house (San-
Prapum), big or small depending on their resources
and concerns, at a corner of their house in order to
worship the spirit.

Spirit.Houses (San Phrapumi in Thai colloquial usage )

342

Mulder also suggested that San Phraphum that
stand prominently at the road side, however, likely
indicate danger spots. some believe accidents
occurred because the dead took other lives to
replace their duties, or the victims showed.
Another foreigner further criticized the important
of this fearsome structure Thai belief in spirit houses
can be positively defined as a sign of concern for
safety on the highway the ad asserts. Thus, shrine
power overrides human control over destiny. Some
drivers turning past Erawan Shrine in Bangkok
(Prathumwan district) lift both hands off the wheel to
wai. The modernity of a shrine lies not just in the
architecture, but also in changes in usage, who gets
worshipped, and the demographic of the devotees.
(Cornwell-Smith 2011, 184).

4. Local Improvements

Two way mirrors at Chulalongkorn University
are often used as a surveillance tool helping to save
students belongings as well as universitys property
from theft and create a perception of risk to
offenders.

A shop owner within Prathumwan district
installed several wall-sized mirrors for shop security
as a deterrent to theft and to monitor her corridors
and reception areas.

Most late-night convenience stores in the city
cooperate with the police to implement visibility
standards, burglary alert training and cash control.
Chulalongkorn University installed benches
where students can sit and observe activities on
streets, sidewalks, open spaces, etc
Using technological appliances: Chulalongkorn
University also deploys access control measures
using electrical/mechanical devices such as CCTV
and various physical means to deny offenders
activities. CCTV was installed in various places
within University areas; the picture below shows a
dummy CCTV near a football field, and another
CCTV with a yellow warning sign installed at a main
building.

Flyovers allow easy access to the public with some
adjustments for crime prevention.

The newly refurbished clear-roof flyover connecting
MBK centre and Siam Discovery center delivers
wider pavements, better lighting and better visibility
for the public.


343

Parking lot in a department store: security is the first
priority

A famous department store within the area
provides a better-looking garage with quality lighting
which will not only improve the environment, but
will attract more customers. The idea of creating a
comfortable environment will attract more customers
and makes them feel safe and secure.

Powerful spotlights were also installed outside the
department store to provide a better visibility at
night.

Safe and sound elevators

Another well-known department store provides its
customers with glass elevators for creating a safe and
aesthetically pleasing environment

Freebies!
Examples of unfriendly (undesirable) architectural
design

Room with a view?

Defensible space or maximum security prison?

III. CONCLUSION AND RECOMMENDATIONS
The implementation of CPTED should be
revised regularly in order to check factors that affect
the success or failure in crime reduction. Designers
need to construct meaningful frameworks for making
appropriate decisions regarding the effectiveness of
the changed environment. It is important that we
need to provide the communities as well as the
public with a more friendly environment which will
not disrupt or disturb the way people live.
Cooperation is a key to success, we need to create
new environments that people feel comfortable
sharing and living in. This is where CPTED provides
concerned parties with the ability to incorporate both
cultural factors and environmental design strategies.

Local authorities must play a vital role in
coordinating security measures and partnerships
involving numerous actors and concerned parties.
Everyone should take part in sharing information,
good practice, experiences and innovative
approaches to creating safe a sound environment.

344

It could be seen that to achieve all these important
goals we need a blend of both the new creative ideas
and communities acceptance. This does not mean
that we simply recreate the environment in a unique
setting and then offer it to the communities as a
multipurpose solution. However, if we utilize a
fruitful solution and uphold the above said strategies
that have produced successful results in the past and
apply them in the new neighbourhood, we will begin
the process of blending the CPTED concept with
social diversity.

It will be through the blending process that we
will be able to provide once and for all a solution
regardless of the location and culture, with a
dynamic changing environment. This process will
empower the communities with the ability to
discover best practices to fit their individual living
styles. Some dimensions that could make the
strategies successful are:

Satisfies both people in the community and
other concerned parties.
Creates a more environmentally friendly life.
Enhances community capacity to adjust to the
new environment.
Stresses blending cultural factors and the
changing environment.
Provides clear guidelines and direct messages
to members of the public.
Coordinates and facilitates access to new
technology.
Enhances communication and interaction
styles.
Decreases difficulties and barriers in
communication.
Minimizes the opportunities for criminal
activity within the area as well as neighbouring
communities.
Allows for more effective and highly
satisfactory cooperation between the authorities and
communities.
Enhances self-learning, self-motivation and
independence.
Reduces time and unnecessary costs.
Provide a balance between new and traditional
changing environments.

A good deal of research will be required to
develop guidelines for effective environmental
designs that accommodate different cultures. This
may encourage researchers to explore further into the
awareness of cross-cultural differences in applying
CPTED as best practice.

REFERENCES

Cohen, L. & Felson, M. (1979). Social change and
crime rate trend: A routine activity approach.
American Sociological Review, 588-608.
Cornwell-Smith, P. (2011). Very Thai: Everyday
Popular Culture. River Books.
Felson, M. (2002). Crime and everyday life.
3
rd
edn. PineForge Press California.

Gold, H. (1982). The sociology of urban life
Prentice-Hall.

Gottfreson, M. & Hirschi, T. (1990). A general
theory of crime. Stanford University Press.

Harris, M. (1988). Culture people nature: An
introduction to general anthropology. 5
th
ed.
New York: Harper and Row Publishers.

Jeffery, C.R. (1971). Crime prevention through
environmental design. Beverly Hill, CA: SAGE.

Jeffery, C.R. (1999). CPTED: Past, present, and
future The 4
th
Annual International CPTED
Association Conference, Sept 20-22.

McKay, T. (2000). What is CPTED? (Handout).

Mulder, N. (2000). Inside Thai society: Religion,
everyday life, change. Silkworm Books.

Development Board. (1992 ). Final report on
national urban development policy framework,
Volume 2, p. ix.

Seet, E, Akers, R. & Sellers, C. (2004).
Criminological theories: Introduction, evaluation ,
and applications 4
th
ed. Roxbury Publishing
Company.

Smith, D. W. (2001). Cities in Pacific Asia. In Ronan
Paddison (ed) Handbook of urban studies. London:
SAGE.

Triandis, H. C. (1988). Individualism and
collectivism: Cross cultural perspectives on self-
ingroup relationships. Journal of Personality and
Psychology, 54 (2) 323-338. The American
Psychological Association.

Websites:
www.bma.go.th/bmaeng/pathumwan accessed on
December 2011)

http://www.thisdaylive.com/articles/how-
urbanisation-affect-quality-of-life/82851/ accessed
on January 2012)

Newspapers:

Bangkok Post, 22-12-11

The Nation, 30-09-11


345

Innovative Human Resource Practice:
A Functional Framework and Causal Model
for Psychological Climate, Occupational Self-
Efficacy, Employee Engagement, and
Organizational Performance
Kijpokin Kasemsap
Faculty of Management Sciences, Suan Sunandha Rajabhat University
Bangkok, Thailand; e-mail address: kijpokinkasemsap@yahoo.com

Abstract Research objectives were to determine a
functional framework and to construct a causal model
of psychological climate, occupational self-efficacy,
employee engagement, and organizational performance
of passenger car manufacturing plant employees in
Thailand. The study reported the responses of 611
operational employees from 14 passenger car
manufacturing plants operating in different parts of
Thailand. Data were analyzed with descriptive statistics
using SPSS (version 11.5) and assessed with
confirmatory factor analysis to confirm the
heterogeneity of all constructs and path analysis to test
the cause and effect relationships among main
constructs of the study using LISREL (version 8) on a
structured questionnaire containing standard scales of
psychological climate, occupational self-efficacy,
employee engagement , and organizational
performance to determine the relationships of
employee engagement, and organizational
performance. Research findings indicated that
dimensions of psychological climate, occupational self-
efficacy, and employee engagement have mediated
positive effect on organizational performance.
Furthermore, employee engagement fully mediates the
relationships between psychological climate and
organizational performance and between occupational
self-efficacy and organizational performance.

Keywords-employee engagement; occupational self-
efficacy; organizational performance; psychological
climate
I. INTRODUCTION
Organizations are focusing on employee
engagement as a promising strategy to increase
retention and improve productivity (Lockwood,
2007). When employees are effectively engaged in
their job duties and tasks, they help the organization
to achieve higher order effectiveness and
performance (Golparvar & Javadian, in press).
Employee engagement is inclusive of long-term
emotional involvement and is an antecedent to more
temporary generalities of employee sentiment, such
as job satisfactionand commitment (Wagner &
Harter, 2006). Engaged employees come to work
every day feeling a connection to their organization,
have a high level of enthusiasm for their work
(Buckingham & Coffman, 1999), and consistently
produce at high levels (Meere, 2005). Having a
higher proportion of engaged employees in an
organization has been shown to have a positive
relationship with a companys profit margin (Fleming
& Asplund, 2007; Ketter, 2008; Wagner & Harter,
2006). Organizations recognize the need for
employees who are proactive, work well with others,
and work toward the success of their organizations
(Bakker & Schaufeli, 2008).
Organizations need engaged employees (Bakker
& Schaufeli, 2008) and they are looking for ways to
develop such a workforce. Engagement is defined as
a positive work-related state of mind that is
characterized by vigor, dedication, and absorption
(Bakker & Demerouti, 2009; Schaufeli & Salanova,
2007). Bakker and Leiter (2010) proposed that the
crossover of engagement among members of a work
team could enhance performance. Thus, focusing on
the drivers of employee engagement can provide the
practitioners with a tool to cultivate engaged
employees for a better team and organizational
performance (Bakker & Leiter, 2010). Schaufeli,
Salanova, Gonzalez-Roma, and Bakker (2002)
defined work engagement as a positive, fulfilling,
work related state of mind that is characterized by
vigor, dedication, and absorption. Rather than a
momentary and specific state, engagement refers to a
more persistent and pervasive affective cognitive
state that is not focused on any particular object,
event, individual, or behavior. According to Schaufeli
et al. (2002), employee engagement has three
dimensions, namely vigor, dedication, and
absorption.
Vigor is characterized by high levels of energy
and mental resilience while working, the willingness
to invest effort in ones work, and persistence even in
the face of difficulties. Dedication refers to being

346

strongly involved in one's work and experiencing a
sense of significance, enthusiasm, inspiration, pride,
and challenge. Absorption is characterized by being
fully concentrated and happily engrossed in ones
work, whereby time passes quickly and one has
difficulties with detaching oneself from work
(Schaufeli et al., 2002). Psychological climate is
defined as the perception and interpretation of an
organizational environment in relation to an
employees perception of well-being (Brown &
Leigh, 1996). Psychological climate has been shown
to significantly affect the development of work-
related attitudes (Harter, Schmidt, & Hayes, 2002;
Kahn, 1990) and research has suggested workplace
climate is an important dynamic in the development
of employee engagement (Brown & Leigh, 1996;
Kahn, 1990). Psychological climate has implications
for organizational competitiveness and productivity
(Brown & Leigh, 1996; Kahn, 1990; Pfeffer, 1998).
Psychological climate of an organization has been
shown to significantly impact job involvement,
turnover, and productivity (Brown & Leigh, 1996;
Lawler, 1990; Pfeffer, 1998).
The psychological climate concept is defined as
being a multidimensional construct representing
shared individual perceptions (Koy & DeCotiis,
1991) that are relatively homogenous, persistent and
stable over time (Moran & Volkwein, 1992;
Schneider, 1983; Schneider & Reichers, 1983).
Psychological climate guides behaviors with the aim
of meeting organizational objectives (James & Jones,
1974; James & McIntyre, 1996; Jones & James,
1979; Schneider & Reichers, 1983), and is a set of
perceptions that describe experiences as opposed to
being an affective reaction, as is the case with job
satisfaction (Koys & DeCotiis, 1991). The discussion
and debate surrounding the distinction between
psychological climate and organizational climate has
considerable longevity but does not appear to have
reached consensus (Parker et al., 2003). The key
issues surrounding the distinction between
psychological climate and organizational climate
concern either a focus on conceptual distinctions or
through employing different data treatment
techniques. The conceptual distinctions are based on
the argument that there is a conceptual difference
between psychological climate and organizational
climate (Glick, 1985; Koys & DeCotiis, 1991). Such
conceptual distinctions have not been sufficiently
supported within the literature to be applied here.
Psychological climate emphasizes a value laden
perspective of the organization that emcompasses
issues or characteristics. The perceptions relate to the
extent that the characteristics contribute to the
individuals sense of well being and psychological
safety. Therefore, the psychological climate variable
will impact the extent to which the individual engages
or disengages with their workplace (James & James,
1989; Kahn, 1990). Psychological climate should not
include any aspect of organizational task or structure.
Koys and DeCotiis (1991) identified three defining
criteria of psychological climate as being: (a) that the
concept is perceptual, (b) that it must describe, as
opposed to evaluate issues, and (c) that it cannot
encompass any aspect of organizational task or
structure. Therefore, the purpose of the climate
construct is not to measure organizational
characteristics such as technology, size, and span of
control or hierarchy. Rather, climate is aimed at
measuring how these factors and other organizational
characteristics are interpreted and assigned meaning
by the individual (James, 1982). According to James,
Hater, Gent, and Bruni (1978), psychological climate
emphasizes the importance of the psychological
meaning and significance of situations to the
individual. The way in which the individual
understands their environment is a cognitive
construction subject to filtering, abstraction,
generalization, and interpretation. Therefore, climate
is important to the development of higher-order
beliefs about situations. The representations
generated by the individual are generally more
meaningful than the objective situation in the
prediction of many important dependent variables
(James et al., 1978; James & Sells, 1981).
Psychological climate domains and dimensions
reflect the definitions of climate that focus on
psychological meaningfulness and the importance of
situations to the individual as recommended by a
range of authors in the field (Glisson & James, 2002;
James & James, 1989; Jones & James, 1979; Joyce &
Slocum, 1984; Koys & DeCotiis, 1991). In the
process of conducting a meta-analytic review of the
psychological climate literature, Parker et al. (2003)
commented that there are a staggering number of
dimensions employed with psychological climate
research. The authors commented that the range of
psychological climate dimensions covered most
aspects of the individuals work environment,
including characteristics of their job, leadership style,
psychological environment, and relationships with
co-workers and supervisors. Parker et al. (2003) did,
however, comment on the usefulness of the measure
developed by Jones and James (1979) because of its
use of situational characteristics and because it has
remained with the notion of tapping into the
individuals cognitive representation of their work
environment.
Psychological climate has been operationalized
as including flexible and supportive management,
role clarity, freedom of self-expression, a sense of
contribution toward organizational goals, adequate
recognition, and challenging work (Brown & Leigh,
1996). Harter, Schmidt, and Hayes (2002) found
these variables significantly relate to the perception of
an employees experience of work and affect the
development of employee engagement. Psychological
climate promotes an awareness of safety and
availability with work (Brown & Leigh, 1996; Kahn
1992; Wagner & Harter, 2006) and encourages
meaningfulness in individual work roles (Kahn,
1990). The variables that affect an employees
experience of work, such as role clarity, job
challenge, and having a supportive supervisor have

347

been consistently linked with employee engagement
(Buckingham & Coffman, 1999; Czarnowsky, 2008;
Fleming & Asplund, 2007; Harter et al., 2002;
Wagner & Harter, 2006). Psychological climate was
developed using the framework of Kahns (1990)
original theory of engagement (Brown & Leigh,
1996). Psychological climate has important linkages
to employee involvement and overall work
performance (Brown & Leigh, 1996).
Psychological climate provides constraints,
opportunities for behavior, and attitudes in
organizational settings (Johns, 2001). Psychological
climate provides a framework for a particular
organizations culture and research (Brown & Leigh,
1996; ONeil & Arendt, 2008). Work environments
that are perceived as psychologically safe impact
performance (Brown & Leigh, 1996). They free
employees to focus on available resources and
desired work outcomes (Brown & Leigh, 1996;
ONeil & Arendt, 2008). Psychological climate has
been operationalized as including the following:
autonomy in work (Brown & Leigh, 1996; James &
Jones, 1974; ONeil & Arendt, 2008), supportive
management (Brown & Leigh, 1996), rewards and
recognition (Brown & Leigh, 1996; James & Jones,
1974; ONeil & Arendt, 2008) and self-expression
(Brown & Leigh, 1996). The facets of psychological
climate as operationalized by Brown and Leigh
(1996) directly parallel the conditions of engagement
as defined by Kahn (1992). Employees who
experience positive psychological climate (Brown &
Leigh, 1996) are more likely to involve themselves in
extra in-role discretionary effort, mediated by
engagement in work. Several studies have supported
the use of psychological climate as an antecedent to
employee engagement.
Psychological climate has a relation with how
employees involve themselves in their work,
ultimately affecting productivity (Brown & Leigh,
1996). Employees make decisions about how hard
they will work, how satisfied they are, and how
committed they will be to the organization (ONeil &
Arendt, 2008) as a result of their personal experience
of work. Furthermore, workplace climate is
influenced by an employees manager (Arawarka &
Greenberg, 2007; Brown & Leigh, 1996) focusing on
the importance of the managerial role (i.e., managers
influence over levels of autonomy, pressure,
structure, self-expression, and trust) in producing
positive workplace climates as well as highlighting
the importance of psychological climate. The context
of an employees work unit, mediated by the
influence of a manager, has the most situational
influence on the perception of psychological climate
(ONeil & Arendt, 2008); this finding parallels
previous researches (Czarnowsky, 2008; Fleming &
Asplund, 2007; Wagner & Harter, 2006).
Psychological climate is a critically important
antecedent variable in the development of workplace
attitudes and behavior and is derived from Kahns
(1990) original conceptualization of employee
engagement (i.e., meaningfulness, safety, and
availability).
The concept of self-efficacy is central to
Banduras social cognitive theory (Bandura, 1986)
and is defined as peoples judgment of their
capabilities to organize and execute courses of action
required to attain designated types of performance
(Bandura, 1986). Four fundamental sources for
generating efficacy beliefs are enactive mastery
experiences, vicarious experiences, verbal persuasion,
and affective states (Bandura, 1997). According to
Bandura (1997), self-efficacy beliefs are acquired
from four sources: the first source, self-efficacy
beliefs may be enhanced through mastery experiences
wherein through repeated achievements, the
individual gains confidence in his or her ability
(Bandura, 1997). A second source is vicarious
learning or the information obtained through
observing others when performing their duties and
interpreting these observations (Bandura, 1997).
Third, there is symbolic experience through social
persuasion by others (Bandura, 1997). The fourth
source in this connection is emotional arousal
wherein the individual experiences anger or stress or
anxiety which may affect the development of that
individuals self-efficacy (Bandura, 1997).
Wood and Bandura (1989) emphasized that
people are both products and producers of their
environment. Personal efficacy is the part of an
individual that interacts in a complex manner with the
environment as well as with other motivational and
self-regulatory mechanisms and with personal
capabilities and performance accomplishments
(Bandura, 1986). Efficacy beliefs not only help us to
understand positive behavior but also its antecedents
and consequences. The present study uses
occupational self-efficacy, a domain specific measure
of self-efficacy due to its greater predictive power
over general and task specific measures (Abele &
Spurk, 2009). Occupational self -efficacy refers to the
belief in ones ability and competence to perform in
an occupation (Pethe, Chaudhary, & Dhar, 1999).
Self-efficacy has been reported by several researchers
to relate positively to work engagement and
employee well being (Xanthopoulou, Bakker,
Demerouti, & Schaufeli, 2009). Furthermore, job and
personal resources can be independent predictors of
work engagement (Xanthopoulou, Bakker,
Demerouti, & Schaufeli, 2007).
II. MATERIAL AND METHODS
Data for this study were collected from 611
operational employees out of 27,046 operational
employees working in the 14 passenger car
manufacturing plants in Thailand by using Yamanes
formula (Yamane, 1970) for a 96% confidence level
with a 4% margin of error by the proportional random
sampling method. Data were analyzed with
descriptive statistics using SPSS (version 11.5) and
assessed with confirmatory factor analysis (CFA) to
confirm the heterogeneity of all constructs and path
analysis (Joreskog & Sorborn, 1993) to detect the

348

cause-effect relationships among various dimensions
of main constructs of the study using LISREL
(version 8) on a structured questionnaire containing
standard scales of psychological climate,
occupational self-efficacy, employee engagement,
and organizational performance, besides some
demographic details like age, education, and tenure
with the organization. Psychological climate was
measured using the Psychological Climate Measure
(PCM) (Brown & Leigh, 1996). The original
Psychological Climate Measure is a 21-item scale
consisting of six subscales where participants
responded along a seven-point Likert scale ranging
from 1 (strongly agree) to 7 (strongly disagree). The
subscales are as follows: supportive management,
role clarity, contribution, recognition, self-expression,
and challenge. Occupational self-efficacy was
measured using a 19-item questionnaire with a seven-
point Likert scale ranging from 1 (strongly disagree)
to 7 (strongly agree) developed by Pethe, Chaudhary,
and Dhar (1999).
The six dimensions of the occupational self-
efficacy scale are confidence (dependence on ones
own abilities), command (sense of control over the
situation), adaptability (the ability to adjust), personal
effectiveness (inclination toward continuous
development), positive attitude (ability to evaluate
optimistically), and individuality (independence in
making decisions and setting standards of
performance). Employee engagement was measured
using the nine-item Utrecht Work Engagement Scale
(UWES 9) developed by Schaufeli, Bakker, and Van
Rhenen (2006) comprising three dimensions, namely
vigor (three items;, i.e., At my work, I feel bursting
with energy), dedication (three items;, i.e., I am
enthusiastic about my job) and absorption (three
items;, i.e., I am immersed in my work) using a
seven-point Likert scale ranging from 0 (never) to 6
(always/everyday). Organizational performance was
assessed with a questionnaire using a seven-point
Likert scale ranging from 1 (strongly disagree) to 7
(strongly agree) developed by Delaney and Huselid
(1996) with 25 items measuring seven elements of
product or service quality, product or service
innovation, employee attraction, employee retention,
customer satisfaction, management and employee
relations, and employee relations.
A functional framework and causal model were
constructed. Research findings indicate that
dimensions of psychological climate, occupational
self-efficacy, and employee engagement have
mediated positive effect on organizational
performance. Furthermore, employee engagement
fully mediates the relationships between
psychological climate and organizational
performance and between occupational self-efficacy
and organizational performance.

FIGURE 1: FUNCTIONAL FRAMEWORK

PC = Psychological Climate, OSE = Occupational Self-
Efficacy, EE = Employee Engagement, OP =
Organizational Performance.
Regarding the functional framework, there are
lots of researchers studying the relationships of
performance in a wide variety of fields. The
functional framework was positively compatible with
the following research findings. Psychological
climate, occupational self-efficacy, and employee
engagement are closely linked to organizational
performance. Employees working in positive
psychological climates are more likely to be engaged.
This finding is compatible with the results from
previous research (Bakker & Derks, 2010; Brown &
Leigh, 1996; Luthans, Norman, Avolio, & Avey,
2008). Zigarmi et al. (2009) suggested an employees
cognitive and emotive appraisal of his or her
workplace climate results in behavior that is either
engaging or disengaging. The interpretation of the
environment is determined by an employees
understanding of the situation, level of empowerment,
capabilities, and beliefs (Zigarmi et al., 2009); this
concept parallels the conditions for employee
engagement as outlined by Kahn (1990). For
example, the ability of a workplace climate to provide
resources for the completion of work is critical for the
overall development of employee engagement.
Employees who work in positive psychological
climates are more likely to be productive and fulfill
desired organizational objectives (Brown & Leigh,
1996; ONeil & Arendt, 2008). In addition, each of
the sub-elements of psychological climate (i.e.,
supportive management, challenge, contribution, and
recognition) had a significant positive relation to the
development of employee engagement. This finding
is consistent with other scholarly research on
supportive management practices (Arakawa &
Greenberg, 2007; Kroth & Keeler, 2009), levels of
appropriate challenge in work roles (Brown & Leigh,
1996), perceived contribution to work (ONeil &
Arendt, 2008), and recognition (Brown & Leigh,
1996; ONeil & Arendt, 2008). According to social
cognitive theory, self-efficacy beliefs influence
motivational behavior manifested in terms of high
effort, persistence, dedication, and being absorbed in
work. Importantly, Xanthopoulou et al. (2007)
asserted personal resources influence work
PC
OSE
E
EE OP

349

engagement above the impact of job resources as they
influence the motivational process that leads to
engagement.
The results of the study are in congruence with
the findings of some of the previous studies
(Xanthopoulou et al., 2009). Self-efficacy beliefs not
only predict, but also follow engagement as is evident
in some of the longitudinal studies showing
reciprocal relationships between efficacy beliefs and
work engagement (Xanthopoulou et al., 2007). Four
fundamental sources for generating efficacy beliefs
are enactive mastery experiences, vicarious
experiences, verbal persuasion, and affective states
(Bandura, 1997). Managers should try to provide
their employees with those experiences which would
enhance their self-efficacy level and ultimately will
lead to the successful achievement of the
organizational goals. Positive feedback creates an
upward efficacy performance relationship (Lindsley,
Brass, & Thomas, 1995). Providing employees with
feedback on their performance will help improve
their self-efficacy. Training programs addressing the
above four sources of efficacy belief should be
organized for newcomers.
IV. CONCLUSION
The purposes of this study were to determine a
functional framework and to contruct a causal model
of psychological climate, occupational self-efficacy,
performance for passenger car manufacturing plant
employees in Thailand. The findings showed that the
and employee engagement have the strength to
mediate positive effect on organizational
performance. In relation to the functional framework,
this result was the extent to which psychological
climate, occupational self-efficacy, and employee
engagement have mediated positive effect on
organizational performance. Furthermore, employee
engagement fully mediates the relationships between
psychological climate and organizational
performance and between occupational self-efficacy
and organizational performance. Organizations
looking to increase performance should focus on
developing employee engagement as an
organizational strategic leverage point. This study
provides support for utilizing each of the variables
examined in this study in the development of specific
and objective work-oriented interventions around
employee engagement.
Human resource practitioners can take an
important role in designing and implementing
interventions in ways that increase employee
engagement and impact organizational outcome
variables. For example, in this study, psychological
climate and occupational self-efficacy were
identified as leverage points for practitioners looking
to enhance employee engagement and performance.
Further, Human Resource Development (HRD)
practitioners should encourage the development of
employee engagement by training leaders, managers,
and supervisors on the conditions that have a relation
with employee engagement. As highlighted by this
study and supported by other research (Arakawa &
Greenberg, 2007; Harter et al., 2002; Kroth &
Keeler, 2009; Lloyd, 2008), an employees manager
strongly influences levels of employee engagement
and performance. Interventions for leaders,
managers, and supervisors can take the form of
formal development and coaching programs that
focus on talent management practices (Lockwood,
2007). Research suggests that interventions designed
to influence employee engagement should provide
opportunities for self-awareness, self-reflection, and
real-time feedback (Hamel, 2007; Maccoby, 2007).
Finally, it is imperative that organizations
looking to increase performance focus on how work
gets accomplished, not just how much. To recruit,
maintain, and motivate employees in an increasingly
competitive environment (Beck, 2003), human
resource practices must be innovative and
compelling, benefiting both the organization and the
employee (Joo, 2010). It is essential that human
resource programs balance the good of the
organization with the good of the employee;
sustainability of organizational performance
alongside any intervention or program must be
considered. Using results from this study to better
understand employee engagement at both an
organizational and individual level, performance
variables (Macey & Schneider, 2008) can serve as a
structure for implementing compelling, focused, and
effective Human Resource Development
interventions. For example, innovative practices can
include taking an entire work group to serve in a
community-wide service project for the day,
encouraging managers to have weekly meetings with
new team members during the first four weeks of a
new job, or encouraging an entire human resource
department to redesign their recruitment and
selection processes to maximize and maintain the
talents of their team.
As evidenced by the findings of this study,
employee engagement has powerful implications for
organizations; consequently those who lead these
organizations must work to create the conditions for
employee engagement to develop. As the field of
Human Resource Development evolves, employee
engagement provides Human Resource Development
professionals a way to help ever-specialized
employees in ever-specialized jobs (Beck, 2003)
successfully operate within the inner workings of a
complex, and ever-changing organization.
Developing high levels of employee engagement in
any organization is a work in progress. However,
thinking differently about work and how each
employee experiences work, is the first step in an
innovative direction.

350

ACKNOWLEDGMENT
The author would like to express thanks for all
the invaluable support obtained from the university
lecturers at the Business Administration doctoral
program in the Faculty of Management Sciences,
Suan Sunandha Rajabhat University.

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352

Innovative Knowledge Management:
A Synthesized Framework and Causal Model
for Organizational Learning, Organizational
Innovation, Knowledge Management
Capability, and Organizational Performance
Kijpokin Kasemsap
Faculty of Management Sciences, Suan Sunandha Rajabhat University
Bangkok, Thailand; e-mail address: kijpokinkasemsap@yahoo.com

Abstract Research objectives were to determine a
synthesized framework and to develop a causal model
of organizational learning, organizational innovation,
knowledge management capability, and organizational
performance of pharmaceutical company employees in
Thailand. The study reported the responses of 583
operational employees from 39 pharmaceutical
companies operating in different parts of Thailand.
Data were analyzed with descriptive statistics using
SPSS (version 11.5) and assessed with confirmatory
factor analysis to confirm the heterogeneity of all
constructs and path analysis to test the cause and effect
relationships among main constructs of the study using
LISREL (version 8) on a structured questionnaire
containing standard scales of organizational learning,
organizational innovation, knowledge management
capability, and organizational performance to
determine the relationships of organizational learning,
organizational innovation, knowledge management
capability, and organizational performance. Research
findings indicated that dimensions of organizational
learning, organizational innovation, and knowledge
management capability have mediated positive effect
on organizational performance. Organizational
innovation is related to knowledge management
capability and fully mediates the relationship between
organizational learning and organizational
performance. Furthermore, knowledge management
capability fully mediates the relationship between
performance.

Keywords- knowledge management capability;
organizational innovation; organizational learning;
organizational performance
I. INTRODUCTION
The technological revolution is accelerating a
global transformation of the competitive
environment. Consequently, organizational
management is no longer perceived as an appropriate
strategy in current markets. Organizational
performance is commonly used as a dependent
variable for business research and is considered to be
one of the most important constructs in the field of
management (Pagell & Gobeli, 2009; Richard,
Devinney, Yip, & Johnson, 2009). Measuring and
analyzing organizational performance has an
important role in turning goals into reality, which in
todays competitive environment is paramount to the
success and survival of an organization (Popova &
Sharpanskykh, 2010). As a result, businesses must
sustain their competitive competence through
uninterrupted enhancement and innovation. In fact,
businesses need competitive strategies and
innovation in order to survive and react to the
challenges and opportunities in the modern
competitive environment. Resistance to innovation is
likely to result in a businesss downfall (Leavy,
1998). Gates (1999) suggested that every person in
the job market should be considered a knowledge
worker in such a speed-emphasized era.
Human resources are considered the most
important asset that any company must treasure. It is
especially essential to implement a successful
knowledge management environment in order to
offer the resources at the right place at the right time
to knowledge workers holding multi-national and
multi-cultural views. However, successful
knowledge management is dependent on well-
functioning human resource management and the
employees perceived behavior in knowledge
creation, knowledge sharing, and knowledge
application (Lord & Farrington, 2006). The benefits
of knowledge management result from a
combination of appropriate organizational culture
and structure. To deal with this issue, past research
has explored the critical success factors for
implementing KM (Wei, Choy, & Yeow, 2006).
Davenport and Prusak (1998) proposed that the goal
of knowledge transfer is to enhance organizational
action power through shared vision and utilization of
past experience, which is also perceived as a process
of organizational learning. Knowledge is posited in

353

an organization as a strategic asset which can help
the firm maintain its competitive ability in a
turbulent environment (Jantunen, 2005).
Knowledge-based assets and organizational
learning (OL) capabilities are critical for a firms
innovation activities (Jantunen, 2005). KM is aimed
at getting people to innovate, collaborate, and make
correct decisions efficiently. KM is aimed at getting
people to act by focusing on high-quality knowledge
(Plessis, 2005). Knowledge is considered the most
important resource in organizations (Choe, 2004).
The characteristics and problems of knowledge do
not differ because of different geographic locations
(Singh, Narain, & Kant, 2008). The success of
organizations consequently is built upon
organizations and individuals speeding learning.
Thus, learning in the organization is the key for
organizations to sustain competitive advantages.
Duncan and Weiss (1979) defined organizational
learning as the development of knowledge relevant
to the relationships among action, consequences, and
work environment. Learning is the power of growth,
and the individual is also the resource of business
growth. Thus, it is possible to acquire more
information within informational society and there
will be more advantages.
The capability of controlling information means
a learning achievement (Hong, 2001). The role of the
firm is to simplify or complicate these employees
learning activities, where these firms contain
organizational learning systems within them (Daft
& Weick, 1984). Organizational learning is
knowledge between the organizational action and its
environment (Daft & Weick, 1984). Researchers
studying on organizational learning specify that it is
an ability that increases the firms performance with
time (Fang, Chang, & Chen, 2010; Ulrich et al.,
1994). Huber (1991) defined organizational learning
as the extended, potential behavioral range of
processing information. Chou (2003) indicated that
organizational learning means a procedure through
which knowledge is obtained and created to improve
behavior modes. Van der Heijden (2004) stated that
organizational learning is a type of experience
conclusion and process to explore and create new
knowledge, together with the systematic infusion of
the knowledge of organization input. In
organizations, innovation activities are influenced by
the learning environment.
There are two types of organizational
innovations, namely exploitative innovation and
exploratory innovation (March, 1991). March (1991)
defined exploitative innovation as developing the
current knowledge, ability, and processes. The basis
of exploitative innovation consists of improving
current technology and ideas. Some basic
modifications of previously used methods cover
exploitative innovation (Cheryl, 1997; Jansen,
Bosch, Frans, & Volberda, 2006). Exploitative
innovation has positive effects on organizations
financial performance (Jansen et al., 2006).
Additionally, if the organization has a good feedback
system, it will avoid making exploratory innovation,
and this reduces time and cost. This means, the
regular feedback makes exploitative innovation
preferable to exploratory innovation (Jelinek &
Schoonhoven, 1990; Kelly & Amburgey, 1991). Less
cost and time makes exploitative innovation a good
strategy. Exploitative innovation avoids replying to
new opportunities and radical changes in the
environment (Henrich, 2007). Each exploitative
innovation forces organizations to make other new
innovations.
Exploitative innovation may be a success trap
after a while. Some exploitative innovations may be
outmoded after an exploratory innovation (Levinthal
& March, 1993). Therefore, exploitative innovation
may not be useful when an exploratory innovation
suddenly comes into prominence (Levinthal &
March, 1993). March (1991) defined exploratory
innovation as exploring knowledge, talents, and
processes. Exploratory innovation is accepted as
risky and costly as well as negative and unguessable.
Therefore, it is not easy to predict successful results
for exploratory innovation (Benner & Tushman,
2003; Henrich, 2007; March, 1991; Rosenkopf &
Nerkar, 2001). An innovation which comes as result
of exploration easily spreads in the competitive
environment. Since other organizations shortly adopt
the innovation, the advantages of exploratory
innovation may be removed. Therefore, competition
conditions have a reducing effect on exploratory
innovation. The competition in the environment also
hinders exploratory innovation (Henrich, 2007;
Levinthal & March, 1993).
Generally, organizations try to speed up their
performance by arranging their current processes and
products or services. This means, they prefer
exploitative innovation rather than exploratory
innovation. On the occasions where the organizations
have fewer conditions in comparison to their rivals,
they make radical changes. It seems more logical to
apply exploratory innovation in these circumstances.
In this manner the organizations will certainly have a
competition advantage (Henrich, 2007; Levinthal &
March, 1993; March, 1991). A number of studies
have presented a positive correlation between
organizational knowledge and organizational
innovation (Shipton et al., 2005). Levels of
organizational learning have a significant impact on
knowledge integration, knowledge management
capability, and firm innovation ability (Ju, Li, & Lee,
2006). Recent studies indicate the positive
relationship between organizational learning and
knowledge management capability (Lemon &
Sahota, 2004). Harvey, Novicevic, and Garrison
(2004) proposed that one of the organizational
capabilities is the ability to learn to adapt to the fast-
changing competitive global environment.

354

Herkema (2003) defined innovation as a
knowledge process targeting creation of new
knowledge tools in order to create sustainable
business solutions. Innovation can be considered as
implementation of exploration and processes shaping
outcomes, products, and new processes (Gloet &
Terziovski, 2004). The goal of learning is to enhance
employees application of knowledge and ability in
this information age. Learning may lead to an
organizational ability to generate a major
competitive advantage (Gloet & Terziovski, 2004).
Wherever organization learning culture is strong, it
will develop a degree of sustainable competitive
advantage (Gloet & Terziovski, 2004). Knowledge
management is turned to guide and will affect
strategies adopted by managers (Harry, 2006).
Theriou and Chatzoglou (2008) suggested KM and
OL play their own unique roles in creating
organizational capabilities, which lead to superior
performance. Lee, Lee, and Lin (2007) defined
learning capacity and knowledge capability factors
as sources of an organizations competitive
advantage.
Milliman, Taylor, and Czaplewski (2002)
proposed that in order to improve the performance of
cross-cultural enterprises, four principles of
organizational learning can be applied i.e., setting
goals, adjusting flexibility with HR requirements,
providing clear guidelines, and creating cross-
cultural interactions or teams. Zellmer-Bruhn and
Gibson (2006) stated team learning positively
influences both task performance and quality of
interpersonal relations. While Hanvanich,
Sivakumar, Tomas, and Hult (2006) demonstrated
how learning orientation and organizational memory
are related to important organizational outcomes.
Rhodes, Lok, Hung, & Fang (2008) discovered that
OL has the greatest positive relationship with process
innovation in knowledge transfer to enhance
organizational performance (OP). The KM processes
of an organization are focused toward obtaining,
sharing, storing, and using knowledge (Gold,
Malhotra, & Segars, 2001), suggesting that
knowledge process capabilities required for storing,
transforming and transporting knowledge throughout
the organization are needed for leveraging the
infrastructure capability.
Four broad dimensions of knowledge
management capability are identified, namely
acquiring knowledge, converting it into useful form,
applying or using it, and protecting it (Gold,
Malhotra, & Segars, 2001). Knowledge acquisition
refers to the degree to which the firm develops or
creates knowledge resources across functional
boundaries enabled by the processes and activities of
interaction, feedback, innovation, brainstorming, and
benchmarking (Gold, Malhotra, & Segars, 2001).
Knowledge acquisition reflects in part a subset of a
firms absorptive capacity more specifically, it can
be viewed as a potential capacity that reflects a
firms ability to use its knowledge to create
advantage, but does not guarantee that knowledge
will be used effectively (Cohen & Levinthal, 1990).
Song (2008) showed that knowledge creation
practices are significantly related to organizational
improvement. Further, when acquired knowledge is
used appropriately, a significant and positive link is
observed between knowledge acquisition and
organizational performance (Lyles & Salk, 1996;
Seleim & Khalil, 2007).
Knowledge conversion is made possible through
the processes and activities of synthesis, refinement,
integration, combination, coordination, distribution,
and restructuring of knowledge (Gold, Malhotra, &
Segars, 2001). Knowledge application refers to the
degree to which the firm applies the knowledge
resources that are shared across functional
boundaries (Gold, Malhotra, & Segars, 2001). It
allows the firm to reap returns on its knowledge
resources. The capability to utilize a related
knowledge base in decision making and problem
solving allows the firm to respond more effectively
to environmental changes. Knowledge is used in a
context in which users can learn and also produce
new knowledge. In the learning process there must
be analysis and critical assessment of ideas plans and
knowledge. Many organizations encourage
organizational learning in which individuals and
teams can apply the knowledge gained to initiatives
such as new product development with the ultimate
aim of improved performance in areas such as
speed to market and innovation (Sarin &
McDermott, 2003). For knowledge to impact
organizational performance, it has to be used to
support the firms processes.
Hence, it is through knowledge utilization that
acquired knowledge can be transformed from being a
potential capability into a realized and dynamic
capability that impacts organizational performance
(Cohen & Levinthal, 1990; Seleim & Khalil, 2007;
Zahra & George, 2002). Knowledge protection is
necessary for effective functioning and control
within organizations (Gold et al Gold, Malhotra, &
Segars, 2001, knowledge protection is often
challenging in part because the copyright laws that
are intended to protect knowledge are limited in their
treatment of the knowledge environment (Everard,
2001). The knowledge protection process should not
be abandoned or marginalized (Gold, Malhotra, &
Segars, 2001). Protecting knowledge from illegal and
inappropriate use is essential for a firm to establish
and maintain a competitive advantage (Liebeskind,
1996). Moreover, since knowledge is crucial for
competitive advantage, storing and protecting
knowledge is expected to create value for the
organization (Lee & Sukoco, 2007). Yang, Wang,
and Niu (2007) provided a more thorough
assessment of the link between OL and OP.
Their findings showed applying OL influences
corporate performance. Hanvanich, Sivakumar,

355

Tomas, and Hult (2006) stated that how learning
orientation and organizational memory are related to
important organizational outcomes, not only when
firms have different levels of environmental
turbulence but also when firms have the same level
of environmental turbulence. Innovation is an idea,
practice, or object that is perceived as new to an
individual or another unit of adoption (Fruhling &
Siau, 2007). In fact, past research has demonstrated
that knowledge management is one of the key factors
influencing an organizations innovative ability
(Bonifacio & Molani, 2003). Kim and Mauborgne
(1997) suggested organizational innovation
facilitates the formation of organizational values and
differentiates an organization from its competitors.
Gracia-Morales, Llorens-Montes, & Verdu-Jover
(2006) defined the relationship between various
types of innovation and organizational outcomes.
Knowledge management capability (KMC) has been
recognized as a key factor for gaining and sustaining
a competitive advantage (Rezgui, 2007).
According to Jantunen (2005), knowledge-based
assets and organizational learning capabilities are
critical for organizational innovation ability. In
addition, Bogner and Bansal (2007) suggested there
are three components in KM systems that influence
firm performance: the firms ability to produce new
knowledge, its ability to build on that knowledge,
and its effectiveness in capturing a high propotion of
subsequent spin-offs. Afiouni (2007) stated that
combining human resource management initiatives
with those of KM will help improve OP. Lee and Lee
(2007) defined statistically significant relationships
among knowledge management capability,
processes, and performance. Organizational
innovativeness through the efforts of followers has
an important impact on organizational performance
(Lee, 2007; Olavarrieta & Friedmann, 2008). The
inclination toward innovation along with the shared
vision established by the transformational leader
enable the organization to achieve elevated goals
(Howell & Frost, 1989).
Knowledge process capability has a significant
and positive impact on organizational effectiveness
(Gold, Malhotra, & Segars, 2001; Zaim, Tatoglu, &
Zaim, 2007). Lee and Sukoco (2007) found that
knowledge management capabilities affect
innovation and organizational effectiveness. Gosh
and Scott (2007) also argued that knowledge
infrastructural capabilities such as technology,
organizational culture and organizational structure,
need to correspond with knowledge process
capabilities in order to achieve considerable
improvements in effectiveness. In assessing the
relationship between knowledge management
practices and performance outcomes, Zack, Mckeen,
and Singh (2009) found that knowledge management
practices are related to measures of organizational
performance. Gracia-Morales et al. (2006) proposed
that there are the positive relationships between OL
and OI and between KMC and OP. Furthermore,
Real, Leal, and Roldan (2006) indicated that
appropriate information technology is one of the
critical factors to support learning activities in
organizations.
Appropriate investment and adoption of
advanced technology not only support OL, but also
help knowledge capturing, storage, and distribution
(Tidd & Trewhella, 2002). The technology-mediated
learning and management of knowledge form a
driving force on OL, OI, and KMC, which also
influences the effectiveness of organizational
operating systems (Real et al., 2006). It is evident
that OL is often considered as one of the key
performance indicators for international enterprises
(Azadeh, Ghaderi, Miran, Ebrahimipour, & Suzuki,
2007). According to Azadeh et al. (2007), top
management may improve existing management
systems through OL practice, which ultimately
increases OP.
II. MATERIAL AND METHODS
Data for this study were collected from 583
operational employees out of 8,607 operational
employees working in the 39 pharmaceutical
companies in Thailand by using Yamanes formula
(Yamane, 1970) for a 96% confidence level with a
4% margin of error by the proportional random
sampling method. All the constructs were
operationalized using seven-point Likert scales
ranging from 1 (strongly disagree) to 7 (strongly
agree). Data were analyzed with descriptive statistics
using SPSS (version 11.5) and assessed with
confirmatory factor analysis (CFA) to confirm the
heterogeneity of all constructs and path analysis
(Joreskog & Sorborn, 1993) to detect the cause-effect
relationships among various dimensions of main
constructs of the study using LISREL (version 8) on a
structured questionnaire containing standard scales of
organizational learning, organizational innovation,
knowledge management capability, and
organizational performance, besides some
demographic details like age, education, and tenure
with the organization.
In creating the organizational learning profile,
Huber (1991) revised the major factors for evaluating
organizational learning. Based on other recent studies
(Pace, Regan, Miller, & Dunn, 1998), four factors
have been analyzed to measure organizational
learning with 15 items of four elements of
information-sharing patterns, inquiry climate,
learning practices, and achievement mindset.
Organizational innovation was assessed using the
questionnaire developed by Subramanian and
Nillakanta (1996) with 8 items of two elements of
technological innovation and administrative
innovation. The 11-item measure of knowledge
management capability as knowledge learning and
acquiring, sharing, and creating and improving has
been developed by Liu, Chen, & Tsai (2004).
Organizational performance was assessed using the
questionnaire developed by Delaney and Huselid

356

(1996) with 25 items measuring seven elements of
product or service quality, product or service
innovation, employee attraction, employee retention,
customer satisfaction, management and employee
relations, and employee relations.
A synthesized framework and causal model were
developed. Research findings indicated that
dimensions of organizational learning, organizational
innovation, and knowledge management capability
have mediated positive effect on organizational
performance. Organizational innovation is related to
knowledge management capability and fully mediates
the relationship between organizational learning and
organizational performance. Furthermore, knowledge
management capability fully mediates the
relationship between organizational learning and
organizational performance.

FIGURE 1: SYNTHESIZED FRAMEWORK

OL = Organizational Learning, OI = Organizational
Innovation, KMC = Knowledge Management Capability,
OP = Organizational Performance
Regarding the synthesized framework, there are
lots of researchers studying the relationships of
organizational learning, organizational innovation,
knowledge management capability, and
organizational performance in a wide variety of
fields. The synthesized framework was positively
compatible with the following research findings.
Organizational learning, organizational innovation,
and knowledge management capability are closely
linked to organizational performance. Organizational
learning strategies result in better organizational
innovation and knowledge management capability,
which ultimately contribute to achieving
organizational performance. Organizational learning
improves organizational innovation and accumulates
knowledge management capability. Organizational
innovation results in development of knowledge
management capability, which contributes to the
establishment of organizational development.
Technological companies should utilize
organizational knowledge in order to enhance
organizational performance.
IV. CONCLUSION
The purposes of this study were to determine a
synthesized framework and to develop a causal
model of organizational learning, organizational
innovation, knowledge management capability, and
organizational performance for pharmaceutical
company employees in Thailand. The findings
showed that the organizational learning,
organizational innovation, and knowledge
management capability have the strength to mediate
positive effect on organizational performance. In
relation to the synthesized framework, this result was
the extent to which organizational innovation is
related to knowledge management capability and
fully mediates the relationship between
performance. Furthermore, knowledge management
capability fully mediates the relationship between
performance. In order to enhance a firms OL, OI,
and KMC, top management in organizations should
focus on formulating effective OL, OI, and KMC
policies, and should facilitate their implementation.
Knowledge acquisition and knowledge
utilization affect the organizational performance in a
positive manner. The improvements, in a high
competitive environment, force the organizations to
follow technology. Knowledge acquisition and
utilization provide for analyzing the technologies
that are currently being used by the organizations
and follow them. In this manner, the organizations
may easily evaluate how the new technology affects
them and see the advantages and disadvantages of it.
This has crucial importance for the organizations.
The members of these organizations should be
responsible for following the new improvements,
providing the knowledge acquisition and utilization.
Each process of the organization should be
understood by the members. Additionally, the
members should know that the processes are related
with each other. It is not enough that the members
should know which the processes are related to each
other. The members must be sure that these
processes are necessary and add value to the
organization. Unnecessary processes will be costly to
the organization. Besides, the organizations must
accept that organizational learning is obligatory in
the competitive environment.
Therefore, organizations should direct their
members on learning activities. The investment on
learning activities should not be seen as a cost point
in the organization. To realize this, the organizations
should use this knowledge management capability in
their activities. Subsequently, organizational
innovations and new developments will easily come
after these organizational learning activities. The
organization members should follow the
technological changes in their industry and
disseminate these to their colleagues. In addition, the
OL
KMC
OI
OP

357

members had better apply this information on their
job activities. If the members do not share this
knowledge and information, they will not be able to
create synergy and this knowledge and information
will not add value to the organization. An
organization should provide an appropriate
environment and encourage its members.
Organizational innovation significantly affects
organizational performance. Therefore, all these new
developments will require organizational innovation
which organizations should apply in their
organizational processes.
ACKNOWLEDGMENT
The author would like to express thanks for all
the invaluable support obtained from the university
lecturers at the Business Administration doctoral
program in the Faculty of Management Sciences,
Suan Sunandha Rajabhat University.
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360

Innovative Approaches to Financial Risk
Management:
Performance of the Price Expectation Model in the SET50 Futures Market
Abhisit Vejjayanvivat
College of Management, Mahidol University
Bangkok, Thailand; abhisit.vejjayanvivat@gmail.com

Abstract This study tests the pricing performance of
the price expectation model, compared to the cost-of-
carry model and the general equilibrium model in the
SET50 stock index futures market in Thailand. Several
regression methods and statistical measures are applied
to evaluate theoretical models. The findings indicate
that the parameter estimation approach selected for the
price expectation model strongly affects its pricing
accuracy. The best empirical pricing models for the
SET50 index futures in our sample are the price
expectation model with historical parameter
estimation, while the implied method for estimating the
parameters of the same model has poor results. In
addition, our results show one more new finding,
namely that incorporating the variation in time-to-
maturity into the regression equation reduces the
pricing errors of the general equilibrium model for
stock index futures.

Keywords cost-of-carry model/ general equilibrium
model/ price expectation model/ time-to-maturity
I. INTRODUCTION
Innovation does not only concern new products,
but can also be extended to cover innovative ideas,
approaches, instruments, and tools to accomplish
goals. For participants in the financial market, a key
challenge is to develop innovative models to improve
risk management and identify profitable investment
opportunities. In terms of pricing index futures,
different models have been developed to achieve this
goal over the years. There is the need for investors to
better understand the wide variety of models
available and to assess their suitability for a given
market. This study attempts to test and provide a
pricing tool that is useful for the Thai SET50 stock
index futures market, comparing several alternative
approaches, including the innovative model recently
developed by Hsu and Wang (2004).
The pricing of stock index futures has received
much attention in the literature. Until now, there are
three main pricing models with different perspectives:
the cost-of-carry model by Cornell and French
(1983a, 1983b), the general equilibrium model by
Hemler and Longstaff (1991), and the price
expectation model by Hsu and Wang (2004). The
most widely studied futures pricing model is the
cost-of-carry model. However, several empirical
studies have found a significant discrepancy between
observed futures prices and theoretical prices derived
from the cost-of-carry model. Motivated by these
considerations, Hemler and Longstaff (1991)
followed the framework of Cox, Ingersoll, and Ross
(CIR) (1981, 1985a, 1985b) to develop a closed-form
general equilibrium model of stock index futures
prices in a continuous-time production economy
characterized by stochastic interest rates and market
volatility.
In addition, there is a newly developed
innovative futures pricing model which may help
investors to better achieve their objectives.
Considering market imperfections and the limitations
on arbitrage, Hsu and Wang (2004) have constructed
a theoretical model to explain why the price
expectation of the underlying asset should enter into
the pricing formula of stock index futures in
imperfect markets. Then, they incorporated the factor
of price expectation to reflect all combined effects of
market imperfections, and used the argument of
incomplete arbitrage to develop a pricing model of
stock index futures in imperfect markets. Moreover,
this study proposed three approaches for estimating
the unobservable model parameter, as well as the
concept and the valuation of the degree of market
imperfection.
In term of futures markets, the Thailand Futures
Exchange (TFEX) is an emerging market with only
one index futures contract trading in the market,
SET50 index futures. Several studies have examined
the SET50 index futures market in the aspects of
trading volume, returns, and volatility but only a few
have examined the pricing of futures contracts. Some
examine the relationship between the trading volume
and return in the SET50 index futures market, [e.g.
Thammasiri (2009)], and the lead-lag relationship
between SET50 index cash and futures, [e.g.
Thongthip (2010)]. The most recent study regarding
SET50 index futures is Tharavanij (2012). In this
study, a Vector Error Correction Model (VECM)
was utilized to test the cost-of-carry model in pricing
a futures contract. Its finding showed that the cost-
of-carry model explains SET50 index futures price
361

extremely well. It also found that the spot and futures
prices were co-integrated. A negative value of an
intercept in a co-integrating vector, resulting from
this research, was explained by a negative correlation
between the cost-of-carry and the spot price change,
which makes a futures price cheaper than a forward
price. Given the performance of the cost-of-carry
model, his paper concludes that there is no necessity
to apply more advanced models like the general
equilibrium model and the price expectation model
in pricing SET50 index futures. His article further
tests the Granger causality link between spot and
futures prices and it finds that only spot prices lead
futures prices. This leads to a conclusion that
investors hedge through SET50 index futures rather
than use it for speculation.
Nevertheless, most researchers in this field
constantly state that pricing models under perfect
market assumption cannot accurately explain the
price behavior of stock index futures under the
imperfect market conditions. Brailsford and Cusack
(1997) examine the issue of futures pricing in the
context of individual share futures (ISFs) traded on
the Sydney Futures Exchange (SFE) in Australia.
This study compares the pricing performance of
three models: the cost-of-carry model, the
continuous-time model of Ramaswamy and
Sundaresan (1985), and the general equilibrium
model. The empirical result suggests that the three
models provide similar results, and none is
dominantly preferred. However, the general
equilibrium model generally outperforms the others
in terms of mean error and mean absolute percentage
error (MAPE). Wang and Hsu (2005) studies on the
same issue examined how well the cost-of-carry
model works in different markets. Empirical results
indicate that the cost-of-carry model is more suitably
applied to developed markets, such as the S&P 500.
Using the Nikkei 225, the Hang Seng, and the
KOSPI 200 (South Korean composite stock index
200) index futures, Wang (2007) examined the
power of the cost-of-carry model and the general
equilibrium model in predicting stock index futures
prices. The empirical implication of the general
equilibrium model indicates that this model appears
especially suitable when stock markets have high
price volatility, the Asian crisis period in this case.
More empirical evidence related to futures
pricing shows similar results. In Wang (2011), the
study examines whether the relationship between
index futures prices and underlying stock indices can
be described using the cost-of-carry model in the
FTSE Xinhua China A50 (China A-share index in
the Singapore Exchange) and the H-share (in Hong
Kong Exchanges and Clearing Limited) index
futures markets. As expected, empirical results
demonstrate that the cost-of-carry model cannot
accurately predict prices of the two index futures
because the two underlying Chinese stock markets
display high price volatility. The price expectation
model was first studied empirically in Wang and Hsu
(2006a). Their paper examined how well the three
main pricing models (the cost-of-carry model, the
general equilibrium model, and the price expectation
model) can explain the price behavior of stock index
futures in a developed market (the S&P 500 index
futures market) and an emerging market (the Taiwan
Futures Exchange-TAIFEX). This study showed that
the price expectation model not only had a compact
mathematical form, but also performed substantially
better than other pricing models.
The empirical results of Wang and Hsu (2006b)
helped to support Hsu and Wang (2004) and Wang
and Hsu (2006a). This study applied a theoretical
valuation model derived by Hsu and Wang (2004) to
measure the degree of market imperfection for
mature (S&P 500 index futures market) and
immature markets (TAIFEX and Singapore
Exchange Derivatives Trading Limited (SGX-DT)).
According to theoretical hypotheses and empirical
results, this study found that a higher degree of
market imperfection was related to more mispricing
of the model based on the perfect market assumption.
Combined with Wang and Hsu (2006a), these results
imply that the price expectation model provides more
accurate pricing performance than that of the cost-of-
carry model in immature markets with a high degree
of market imperfection (the TAIFEX market).
Unfortunately, there is relatively less research
dedicated to investigating the power of the price
expectation model in emerging markets. This study
is designed to provide evidence of the pricing
performance and the implementation of the price
expectation model in the SET50 index futures market.
To add a further contribution, this study will also
study approaches used to estimate an unobservable
parameter of the price expectation model.
II. METHODOLOGY
The pricing of stock index futures is a key issue
for both academic researchers and market
participants. Different models are implemented in
this thesis. They are the cost-of-carry model, the
general equilibrium model, and the price expectation
model.
A. The Cost-of-Carry Model
Cornell and French (1983a, 1983b) use an
arbitrage argument to develop a pricing model. This
model states that the futures price will differ from the
stock price because of the carrying cost, the different
between the benefit and the cost of holding an
underlying asset. Conceptually, the cost and the
benefit of holding the underlying asset are the risk-
free interest rate and the dividend yield respectively.
The inequality between the benefit and cost causes
the futures price to be higher or lower than the spot
price.

362

) )( (
) , (
t T q r
t
t
e S t S F

= (1)
where S
t
the current stock index price
r
t
the risk-free interest rate
q dividend yield
T-t time-to-maturity

B. The General Equilibrium Model
Hemler and Longstaff (1991) followed the
framework of CIR and developed a closed-form
general equilibrium model of stock index futures
prices with stochastic interest rates and market
volatility. Their work showed that market volatility
plays an important role in determining the stock
index futures price as well. The natural logarithm of
the general equilibrium model gives the following
regression equation:

t t t t
V r L c | o + + + = (2)
where L
t
the dividend-adjusted
futures/ spot price ratio
r
t
the risk-free interest rate
V
t
the stock index return
volatility
The dividend-adjusted futures/ spot price ratio is
calculated from:

(
=

t
t T q
t
t
S
e F
L
) (
ln (3)
where F
t
the futures price
S
t
the current stock index
q dividend yield
Rearranging Equation 3, the equation below is
derived.

) (
) , (
t T q V r
t
t t
e S t S F
+ +
=
| o
(4)
Additionally, if = 0, = T-t, and = 0,
Equation 4 reduces to
) )( (
) , (
t T q r
t
t
e S t S F

= .
Thus, the cost-of-carry model can be regarded as a
special case of the general equilibrium model.

C. The Price Expectation Model
Hsu and Wang (2004) incorporated the factor of
price expectation, which reflects the total effect of
market imperfections, and used an incomplete
arbitrage mechanism to construct an index futures
pricing model in imperfect markets. The derivation
of the price expectation model is under the
assumption of a continuous constant dividend yield
during the life of a futures contract and a constant
degree of market imperfection.

) (
) , (
t T
t
e S t S F

=
o
(5)
where S
t
the current stock index
the price expectation

parameter
T-t time-to-maturity
To further understand the foundation of this
model, the price expectation parameter can be
illustrated as follows:

o
o
o
o

o
p
p
p
q q

=
1
) ( ) (
(6)
where
p
the instantaneous expected
return of the hedged
portfolio consisting of one
unit of stock index and x
units of index futures
contracts

p
the instantaneous standard
deviation of the hedged
portfolio
the constant expected
growth rate in the stock
index price
the constant volatility of the
stock index price
q the continuous constant
dividend yield
When the market is perfect and the arbitrage
mechanism works completely, the portfolio becomes
perfectly hedged and therefore
p
= 0. Then, the
value of
=
p
- q, which is the difference between
the risk-free interest rate and the dividend yield.
Thus, the model ends up with
) )( (
) , (
t T q r
t
t
e S t S F

= , which is exactly the same
as the cost-of-carry model. On the other hand, when
the market is imperfect, as it really is, the arbitrage
mechanism cannot work perfectly, then the hedged
portfolio cannot be continuously riskless. It indicates
0 >
o
o
p
and hence the price expectation model is
no longer equal to the cost-of-carry model. In
addition, Hsu and Wang (2004) define
o
o
p
as the
degree of market imperfection to measure the
imperfectness of the market.
To easily apply the model, a simplification of
the parameter
was further suggested by Hsu and

Wang (2004) as follows:

f
f
q
o
o

o
= ) ( (7)
where
f
the instantaneous expected
return on futures

f
the instantaneous standard
deviation of return on
futures
Implementing the price expectation model needs
estimating one unobservable parameter (
). Hsu and
Wang (2004) propose three alternative estimation
approaches: the implied method, the adaptive
363

expectations model, and directly estimating each
parameter that determines
using historical data.

The implied method suggests that the price
expectation parameter can be derived from Equation
5, using one lagged historical observed-traded
futures and spot prices.

|
|
.
|
\
|
1
1
,
ln
) 1 (
1
t
t
t
S
F
t T
o
(8)
The adaptive expectation model implies that the
price expectation parameter can be explained with
the series of its own historical values.
t n t n t t t t
a a a a a c
o o o o o
+ + + + + + =
, 3 , 3 2 , 2 1 , 1 0 ,

(9)
The direct estimation approach is to directly
estimate the parameters in Equation 7 with historical
data, using a simplification of the parameter

suggested by Hsu and Wang (2004):

t f
t
t f t t
q
,
, ,
) (
o
o

o
= (10)
This approach requires estimates of
t
,
f,t
,
t
and
f,t
.

D. Samples
This research conducted empirical tests on a
SET50 index futures contract, which is a futures
contract on the SET50 index calculated from the
prices of the fifty largest stocks based on market
capitalization listed on the Stock Exchange of
Thailand (SET). This paper will study only the
nearest contracts since it is difficult to receive the
complete data for longer maturity contracts. For a
certain date, the trading volume can be as low as a
one-digit number or none for the longer maturity
contracts. There are four series of contracts (four
maturities): H, M, U, and Z, which expire in March,
June, September, and December of the contract year,
respectively. Each contract lasts for 4 quarters. One
contract expires in every quarter. Hence, the time-to-
maturity of the nearest contract in the sample data
always range from 94 days to 1 day.
Weekly frequency is used in this research, as in
this way the data will have less autocorrelation. The
close prices of the SET50 Index and SET50 Index
Futures, and dividend yield are collected from daily
data available on the SETs database called
SETSMART. To avoid weekend effects, the data
were observed on every middle day of the week.
The data were collected from April 4, 2007 to
April 18, 2012, with a total of 260 observations. This
is because from April 4, 2007 onwards, the daily
trading volumes of the nearest contracts have never
gone below 1,000 contracts. The sample data are
divided equally into the in-sample data (04/04/07 -
07/10/09) and the out-of-sample data (14/10/09
18/04/12).

E. Risk-Free Interest Rate Proxy
T-Bill yields on the chosen days available on the
Thai Bond Market Association website are used as
the proxy of the risk-free interest rate. In order to
match with the various time-to-maturities of the
futures contracts, the interpolation of the risk-free
interest rate is necessary and this requires a proxy of
the 1-day risk-free interest rate. BIBOR overnight
and 1-month rates together with the T-Bill 1-month
rate are used to calculate the 1-day risk-free interest
rate. To begin with, the difference between BIBOR
and T-Bill 1-month rates are taken and averaged to
estimate the risk premium for BIBOR. Then, the risk
premium is subtracted from BIBOR overnight rates
to derive the proxy of the 1-day risk-free interest rate.
The interpolated risk-free interest rates are calculated
from the proxy of the 1-day risk-free interest rate,
and T-Bill 1-month (28 days), 3-month (91 days),
and 6-month (182 days), depending on the time-to-
maturity of the futures contracts.
III. EMPIRICAL STUDIES
In this section, the implementation of theoretical
models is investigated.
A. The Cost-of-Carry Model
All variables can be directly observed so the
theoretical values can be obtained by substituting the
known risk-free interest rate, dividend yield, the spot
index price, and the time-to-maturity into the cost-of-
carry model.

B. The General Equilibrium Model
The only variable that cannot be directly
observed is the stock index return volatility, which
can be estimated with the GARCH (1,1) model.
The null hypothesis of a unit root in dependent
variable (L
t
) is rejected at the 1% level, which in
other words means that L
t
does not follow a random
walk. The result implies that there is no co-
integration relation between the dependent variable
and independent variables. Hence the regression
model can be estimated with the OLS model.

TABLE I
THE OLS MODEL OF THE GENERAL EQUILIBRIUM MODEL
t t t
V r L | o + + =

Coefficient Value -0.0086*** 0.3706*** -0.6503***
Std. Error 0.0026 0.0961 0.2250
t-ratio -3.2541 3.8548 -2.8900
p-value 0.0015 0.0002 0.0045
R
2
0.1384
Adjusted R
2
0.1248
P-value (F) 0.0001
Note: For two-tailed test, *, **, and *** significant at the
10%, 5%, and 1% level, respectively.

364

Substituting the out-of-sample data and the
coefficient estimates into the regression model can
generate the estimated dividend-adjusted futures/
spot price ratio. Finally, the theoretical values of
stock index futures can be inferred.

C. The Price Expectation Model
Implementing the price expectation model
requires estimating the price expectation parameter.
By substituting the observed-traded futures and spot
prices at time t-1, the implied-method
at time t is
estimated.
Regarding the adaptive expectation model,
autoregressive modelling [AR(p)] and the Akaike
Information Criterion (AIC) or Schwarz Criterion is
used to determine a lag length. Ten lags are used
initially and the result shows that one lag is suitable.
Then the parameter coefficients are estimated with
the OLS model.

TABLE II
THE OLS MODEL OF THE ADAPTIVE EXPECTATION MODEL
1 , 1 0 ,
+ =
t t
a a
o o

a0

a1
Coefficient Value -0.0540** 0.2269***
Std. Error 0.0238 0.0864
t-ratio -2.2694 2.6248
p-value 0.0249 0.0097
R
2
0.0515
Adjusted R
2
0.0440
P-value (F) 0.0097
Note: For two-tailed test, *, **, and *** significant at the
10%, 5%, and 1% level, respectively.

The direct estimation method directly estimates
each parameter in Equation 10 using historical data.
Regarding the variables
t
and
f,t
, they are
estimated using a GARCH (1,1) model. The
variables
t
and
f,t
are estimated using the average of
past historical returns up to time t.

=
|
|
.
|
\
|
=

t
j j
t
S
S
j
0 2
1
ln
(11)

=
|
|
.
|
\
|
=

t
j j
t f
F
F
j
0 2
,
1
ln
(12)
The theoretical values from three different
estimating approaches are generated by substituting
observed values of spot prices S
t
and the different
estimators of the price expectation parameter
from
each method.
IV. EVALUATING MODEL PRICING PERFORMANCE
A. Model Pricing Performance Statistics
To examine the accuracy of the models in
forecasting the index futures prices, the pricing
performance measures are defined as follows.
Mean Absolute Error (MAE)
MAE =
=

n
t
t t
F AF
n
1
1
(13)
Mean Percentage Error (MPE)
MPE =
=
|
|
.
|
\
|
n
t t
t t
AF
F AF
n
1
1
(14)
Mean Absolute Percentage Error (MAPE)
MAPE =
n
t t
t t
AF
F AF
n
1
1
(15)
Root Mean Square Error (RMSE)
RMSE =
( )
=

n
t
t t
F AF
n
1
2 1
(16)
where AF
t
the actual futures price at
time t
F
t
the theoretical futures price
at time t
n the number of out-of-sample
forecasts
With the observed and estimated futures prices
in hand, the values of MAE, MPE, MAPE, and
RMSE can be calculated and compared.

B. Empirical Results
The observed data of stock index futures prices
from 14/10/2009 to 18/04/2012, with the total of 130
observations, were collected to compare with the
theoretically forecasted values, deriving from
empirical studies. This study examines the
performance of the cost-of-carry model, the general
equilibrium model and the price expectation model.
The result is shown in Table III.
TABLE III
EVALUATING MODEL PRICING PERFORMANCE
Models MAE MPE MAPE RMSE
Cost-of-Carry
) )( (
) , (
t T q r
t
t
e S t S F

=
2.8957 -0.0022 0.0045 3.9322
General Equilibrium
) (
) , (
t T q V r
t
t t
e S t S F
+ +
=
| o

3.3148 0.0022 0.0052 4.2134
Price Expectation
) (
) , (
t T
t
e S t S F

=
o

Implied Method 8.3977 0.0010 0.0125 33.3720
Adaptive Expectation 4.6356 0.0042 0.0068 10.2749
Direct Estimation 2.8014 0.0004 0.0043 3.6615
365

Among all models, the preferred model is the
price expectation model with the direct estimation
approach followed by the cost-of-carry model and
the general equilibrium model. The table also shows
that the different approaches in estimating the
unobservable parameter have a substantially effect
on the pricing performance of the price expectation
model.
More closely examining the models, this finding
suggests the following. The cost-of-carry model
illustrates that the index futures price is a function of
the underlying index price and the carrying cost
which is the difference between the risk-free interest
rate and the dividend yield, adjusted with the time-
to-maturity. However, in terms of MPE, the cost-of-
carry model overprices the actual index futures
prices (with the negative MPE value of -0.0022),
which is consistent with a number of previous
studies. Evidently, the observed futures prices are
often below the spot prices. This can be explained as
that this standard pricing formula overestimates the
carrying cost. In other words, some of the benefit or
cost of holding the underlying asset is not taken into
account.
The general equilibrium model implies that the
logarithm of the futures/spot price ratio can be
represented as a linear regression on a constant, the
risk-free interest rate and the volatility of the
underlying index return. In contrast, the cost-of-carry
model implies that the logarithm of the futures/spot
price ratio depends solely on the risk-free interest
rate. This alternative model suggests that the effect
of the volatility is missing from the cost-of-carry
model. Furthermore, the regression equation on the
risk-free interest rate and the market volatility should
be added into the pricing model.
Referring to the regression result in Table I, the
values of the coefficients (, , and ) are negative,
positive, and negative, respectively. The supporting
explanation of this finding is that, for the positive
beta, the risk-free interest rate is considered as the
opportunity cost of holding the underlying asset. So
the futures price should be higher than the spot price
as there is no cash outflow for the contract holder on
the purchasing date. The market volatility affects the
actual price of the spot index. The negative lambda
suggests that higher volatility causes bigger changes
in the spot price, which ultimately affects futures
contract holders profit and loss. Hence, the index
futures price is lower than the spot price.
For the negative alpha, the rationale behind this
finding can be referred to the mark-to-market feature
of the futures contract. In its broadest sense, mark-to-
market is the process whereby the price or value of a
futures contract is revalued daily using current prices
to determine profit/loss. A trader who makes a profit
today will see the money deposited in his/her
account before the next morning. If the trader loses
money, the loss will be deducted from the account
before trading begins that next morning. Futures
traders need to make an initial margin deposit with
their broker to assure that the account has enough
money to cover any losses incurred while trading. If
a futures account drops to a certain level, the trader
must add margin money to maintain the level of the
margin amount at the original amount, maintenance
margin. Until this maintenance margin is satisfied,
the trader is not allowed to continue trading. Traders
can take profits above the initial margin level but
must always maintain the minimum margin required
by the brokerage firm. Mark-to-market is an
important feature of futures, as it is a daily
accounting of profits and losses. There are
unavoidable cash transactions accruing to the futures
contract holders, responding to the market.
Consequently, the futures price should be lower than
the spot price to compensate for this flaw.
Surprisingly, this study shows that incorporating
the market volatility into the pricing model does not
improve the performance of the original general
equilibrium model in pricing SET50 index futures,
compared to the cost-of-carry model. However, the
performance of the original general equilibrium
model can be affected by the varying time-to-
maturity of the observations in this study. This will
be further investigated in the next section.
Considering the price expectation model, the
price expectation parameter represents the total
effect of the market imperfection. Instead of the
carrying cost, this model implies that the price
expectation can wholly explain the relationship
between the futures price and the spot price. The
factors of the price expectation parameter are the
expected growth rates of the stock index spot and
futures prices, adjusted with the standard deviation
of the spot and futures prices. The empirical result
states that, as expected, the different approaches in
estimating the price expectation parameter greatly
affect the accuracy of the model.
Regarding the implied method, the historically
observed traded futures and spot prices cannot
predict the price expectation parameter very well.
Using the actual value of the price expectation
parameter as an estimator of the future value is
noticeably an ineffective method to forecast the price
expectation parameter. The pricing performance of
the price expectation model with the implied method
shows the largest discrepancy among all three
estimation approaches. Furthermore, it provides no
improvement, compared to the cost-of-carry model.
Another approach is the adaptive expectation
model. This approach suggests that the price
expectation parameter is a function of the series of its
own historical values. This study applies the AR(1)
process to estimate the price expectation parameter.
The price expectation model with adaptive
expectations performs the second worst, compared to
the other estimation approaches, and worse than the
former two main models as well. This study shows
opposite results to those of Wang and Hsu (2006a),
366

which state that the price expectation model with
adaptive expectation provides the best pricing
performance for the TAIFEX futures. This result
suggests that the relationship between the historical
and current values of the price expectation parameter
is not well fitted to predict the futures index price.
The prior two approaches estimate the value of
the price expectation parameter, regardless of the
theoretical variables that directly determine its value.
The direct estimation approach estimates each factor
of the price expectation parameter. It is noteworthy
that this approach provides the most accurate results
among all three estimation approaches. In fact, it also
outperforms the other two pricing models. The
mispricing dramatically decreases from those of
other approaches. This implies that the effect of
market imperfection can be best estimated by the
standard deviations and the expected returns of spot
and futures prices. Comparing to the cost-of-carry
model, the pricing performance of the price
expectation model with direct estimation indicates
that incorporating the effect of the market
imperfection into the pricing model indeed helps to
increase the accuracy of SET50 index futures pricing.
The empirical result shows that the concept of
the price expectation can be applied to forecast the
futures index price. It illustrates that the index
futures price is mainly determined by market
participants. The proof is that the price expectation
model with direct estimation performs the best in
pricing SET50 index futures. However, the methods
used to estimate the price expectation parameter
greatly affect the pricing performance of the model.

C. Modifications of the General Equilibrium Model
Even though the general equilibrium model
takes the market volatility into account, its
performance is the worst. Assuming that the pricing
equation coefficients have different values depending
on the time-to-maturity of the contracts, the original
pricing model is modified in order to investigate this
argument.
Since the observations in this study have a
varying time-to-maturity, so the regression pricing
equation of the general equilibrium model is
modified to include the effect of the variation in
time-to-maturity.

Modified 1:
t t t
V t T r t T t T L ) ( ) ( ) ( + + = | o
(17)
Modified 2:
t t t
V t T r t T L ) ( ) ( + + = | o (18)
Modified 3:
t t t
V t T r L ) ( + + = | o (19)
Modified 4:
t t t
V r t T L | o + + = ) ( (20)
Modified 5:
t t t
V r t T t T L | o + + = ) ( ) ( (21)

TABLE IV
THE PRICING PERFORMANCE OF THE MODIFIED MODELS
Models MAE MPE MAPE RMSE
Original 3.3148 0.0022 0.0052 4.2134
Modified-1 2.9716 0.0008 0.0046 3.9553
Modified-2 3.2791 0.0016 0.0051 4.0357
Modified-3 3.3236 0.0013 0.0052 4.2227
Modified-4 3.2127 0.0015 0.0050 3.9823
Modified-5 2.9822 0.0012 0.0047 3.9748

Apart from the Modified-3 model, the
modification shows an improvement in pricing
performance. Particularly, the Modified-1 model
performs considerably better than the original model.
Incorporating the time-to-maturity into the pricing
equations significantly benefits the index futures
pricing. The Modified-1 equation is rearranged in
order to compare to the cost-of-carry model.

) )( (
) , (
t T q V r
t
t t
e S t S F
+ +
=
| o
(22)
This equation implies that the difference
between the spot and futures prices is not only a
function of the risk-free interest rate and the dividend
yield. The futures price is determined with the
difference between the regression equation on the
risk-free interest rate and the market volatility, and
the dividend yield, adjusted with the time-to-maturity.

TABLE V
THE REGRESSION RESULT OF THE MODIFIED-1 MODEL
t t t
V t T r t T t T L ) ( ) ( ) ( + + = | o

Coefficient Value -0.0499*** 2.6168*** -5.5891***
Std. Error 0.0178 0.6471 1.6185
t-ratio -2.8016 4.0439 -3.4532
p-value 0.0059 0.0001 0.0008
R
2
0.1607
Adjusted R
2
0.1475
P-value (F) 0.0001
Note: For two-tailed test, *, **, and *** significant at the 10%,
5%, and 1% level, respectively.

Referring to Table V, the dividend-adjusted
futures/ spot price ratio is also a function of the time-
to-maturity. Since the values of the regression
coefficients are consistent with those of the original
model, this result illustrates that the effect of the
variables also depends on the time-to-maturity. The
original general equilibrium model fails to take into
account of the varying time-to-maturity of observed
futures contracts. Considering Equation 22 and the
coefficient values, the Modified-1 model includes
benefits and costs mentioned in the previous section,
which are (as illustrated) also a function of the time-
to-maturity.
The effect of the mark-to-market feature of the
futures contract increases with the time-to-maturity.
In other words, there is higher cost accruing to the
367

contract holders who must execute additional cash
transactions, in order to respond to the market.
Similarly, the rationale is quite straightforward for
the risk-free interest rate. As the risk-free interest
rate represents the foregone benefit of holding the
spot index and this cost increases with time, the
longer the time-to-maturity, the higher the
uncertainty of the maturity index spot price. The
effect of the variance increases with the time-to-
maturity as the probability of both large positive and
negative spot price changes increases. As a result,
the time-to-maturity decreases the value of the
futures contract.
The modification illustrates that the coefficient
values in the general equilibrium model are also a
function of the time-to-maturity. In addition,
incorporating the time-to-maturity into the regression
model can increase the accuracy of the model.
However, within the scope of this study, the effect of
the time-to-maturity on the pricing model will not be
further investigated.
V. CONCLUSION
Increasing competition forces fund managers,
institutions and individual financial investors to
constantly develop new ideas and innovative models
to improve risk management and the value of their
portfolio. The results from this study show that
innovative models can allow investors to predict
stock index futures prices more accurately. This
study also develops new ways to implement and
estimate the price expectation model. The calibrated
model may allow investors to better hedge against
adverse movements in the Thai stock market,
possibly harming their wealth, through the use of
stock index futures contracts.
The price expectation model, motivated by the
incomplete arbitrage mechanism in less than perfect
markets, has been developed by Hsu and Wang
(2004) and empirically tested once by Wang and Hsu
(2006a). Using SET50 index futures contracts, this
study examines how well the price expectation
model, the innovative model, explains the behavior
of index futures prices, using three different
estimation methods for the unknown parameters of
the model. This study also compares the price
expectation model with the cost-of-carry model and
the general equilibrium model.
The cost-of-carry model overestimates the
carrying cost of SET50 index futures. Hence, the
theoretical prices of SET50 index futures are always
overpriced. Unexpectedly, incorporating the market
volatility as in the general equilibrium model does
not improve pricing performance. With respect to the
price expectation model, approaches applied to
forecast the price expectation parameter substantially
affect the model accuracy and performance. The
price expectation model with direct estimation of the
parameters provides the best pricing performance for
SET50 index futures, compared to the cost-of-carry
and the general equilibrium models. This
demonstrates that the index futures price changes in
response to the market conditions and participants.
Despite the fact that the model incorporates the total
effect of market imperfections, the price expectation
model with other estimation approaches cannot
predict futures prices any better than the cost-of-
carry model. In fact, the implied method in
estimating the price expectation parameter shows the
worst performance. These results imply that the
performance of the price expectation model
remarkably depends on the approaches used to
estimate the unknown price expectation parameter.
Moreover, the original general equilibrium
model does not outperform the cost-of-carry model
in estimating prices of SET50 index futures. This
finding leads to the examination of the effect of the
varying time-to-maturity on the accuracy of
prediction. The observations in this study have
varying time-to-maturity so the general equilibrium
model is modified to include this variation in time-
to-maturity in the regression equation for estimating
the parameters. The empirical results reveal that the
varying time-to-maturity has a noticeable impact on
the pricing performance of the general equilibrium
model. The explanation to support this new finding is
that the effect of each factor, the mark-to-market
feature, the risk-free interest rate and the market
volatility changes with the time-to-maturity.
Ultimately, the dominant pricing model for
SET50 index futures is the price expectation model
with direct estimation of the parameters, followed by
the cost-of-carry model, and the general equilibrium
model. This result is interesting as it states that the
price expectation parameter can be used in order to
completely explain stock index futures price
behavior.
This study suggests several directions for future
research. One is to empirically compare the pricing
performance of the price expectation model with
different price expectation parameter estimation
approaches in different markets. The second
direction is to apply other methodologies in
estimating the spot and futures return volatility in
order to compare with the GARCH (1,1) model in
this study. Finally, the last direction is to observe
more samples of SET50 index futures prices and test
for the consistency of the empirical results,
especially testing on observations with constant
time-to-maturity and varying time-to-maturity, to
further investigate the effect of the variation in time-
to-maturity of the futures contracts.
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Wang, J. (2007). Testing the general equilibrium
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Wang, J. (2011). Price behavior of stock index
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Markets Finance & Trade, 47, 61-77.
Wang, J. & Hsu, H. (2005). A fitness test of the cost
of carry model for stock index futures, The Journal
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the pricing of stock index futures: Evidence from
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369

Innovative Management of
Collaborative Value Creation

Pawarin Tuntariyanond
Technopreneurship and Innovation Management Program, Chulalongkorn University,
Bangkok, Thailand; pawarin.tun@gmail.com
Pongpun Anuntavoranich
Bangkok, Thailand; p.idchula@gmail.com
Tartat Mokkhamakkul
Faculty of Commerce and Accountancy, Chulalongkorn University,
Bangkok, Thailand; tartat@acc.chula.ac.th
Sageemas Na Wichian
College of Industrial Technology, King Mongkut's University of Technology North Bangkok
Bangkok, Thailand; sgm@kmutnb.ac.th
Abstract Collaboration is vital for promoting value
creation and innovation in the supply chain relationships.
This study reviews and synthesis the relevant literature on
value creation and supply chain collaboration and
presents a summary of findings. In an attempt to gain
more insight, this study examines how partners in a supply
chain facilitate value creation and innovation in exchange
relationship. The purpose is to clarify the key components
which allow the creation of value in a buyer-seller
relationship. The Supply chain collaboration, value
creation strategy and process, and trust are the main
elements of collaborative value creation. The main
contribution of the literature is to propose a collaborative
value creation model that combines the important
concepts of relational value creation and supply chain
collaboration. This study contributes to the innovative
management literature by extending existing theory on
value creation and innovation in the context of
collaborative value creation.

Keywords Value Creation, Supply Chain Collaboration,
Buyer-Seller Relationships, Innovation

I. INTRODUCTION
The 21
st
century is an era of the world facing an
uncertain and ambiguous economy and knowledge-
base. Several organizations go against with this change
by creating value and innovation in the concept, system,
and problem solving of the organization. Value creation
is about the increase of value which is evaluated by
customers from the benefits gained from consuming the
innovation. Therefore, value creation is not increasing
the size of pieces into which the pie is cut and divided
but about increasing the pies size as mutually received
in one piece (Johannessen and Olsen, 2010). Value
creation in the future is based on technology or creating
the value of the innovation by developing a network of
those involved who have various terms of ability and
have visions of creating a new value system which is a
business network in order to create collaboration and
lead to the commercial application of an innovative
proposal (Moller, 2006). Collaborative value creation is
a process originating from the exchange of ability in a
business partnership which affects the increase in
capability of the partnership in the network
(Hammervoll, 2012). Hence, collaboration is regarded
as the crucial factor affecting the value and innovative
creation through the business partnership combined to
make the supply chain.
This paper is about the study of principles and
process to create values in order to identify the key
elements affecting collaborative value creation. For this
paper, the proposal ranged over the conceptual
framework of collaborative value creation obtained
from the literature review in terms of value creation and
collaboration in a supply chain. Next, it was about the
proposal of a conceptual model for research. And last, it
was about the proposal of conclusions for and
recommendations for future research on collaborative
value creation.

II. CONCEPTUAL FRAMEWORK

A. Collaborative Value Creation
Value creation is regarded as a process originating
from the collaboration of capability exchange among a
business partnership. Moreover, it is considered as
activities of suppliers and customers who mutually
create the potential increase basis by applying the
suppliers and customers resources to facilitate each
other. This would generate an increasing capability of
each side (Dominguez-Pry et al., 2011; Hammervoll,
2012; Ritala & Hurmelinna-Laukkanen, 2009). Inter-
organizational collaboration affects value creation
through inter-business connection in various forms
(Ritala & Hurmelinna-Laukkanen, 2009;
Hammervoll, 2012).
370

TABLE I
Definitions of Value Creation

Author Definition of Value Creation
Dominguez-Pry et al. (2011)
Value creation is the process through which the supplier and the customer make use of each
others resources with the aim of creating value.
Hammervoll (2009)
Value-creation initiatives are actions undertaken by firms in exchange relationships that directly
enhance value creation.
Hammervoll (2012)
Value creation is defined as the process whereby the capabilities of exchange partners are
combined such that the competitive advantage of at least one of the partners is improved.
Moller (2006)
Co-creation of value can range from the value created within the suppliercustomer dyad to the
value sought through the network relationships of the supplier and the customer.
Mller & Rajala, 2007
Strategic nets are value creating systems where focal actors create value by configuring their
portfolio of direct business relationships in a specific and integrated manner.
Ngugi et al. (2008)
Relational capabilities have been found to play a key role in increasing sales volume or profits,
gaining access to new markets, developing innovations and in co-creating value in relationships.
Ritala and Hurmelinna
Laukkanen (2009)
Value creation is a collective activity in which the parties jointly build a basis for enhancing its
potential.

TABLE II
Literature Review of Key Elements of Value Creation and Supply Chain Collaboration

Key Elements
of
Value
Creation and
Supply Chain
Collaboration

B
a
r
r
a
t

(
2
0
0
4
)

B
i
e
h
l

(
2
0
0
5
)

C
a
p
a
l
d
o

P
e
t
r
u
z
z
e
l
l
i

(
2
0
1
1
)

C
o
r
s
a
r
o

e
t

a
l
.

(
2
0
1
1
)

C
o
u
l
i
b
a
l
y

a
n
d

S
o
u
v
e
e

(
2
0
1
0
)

D
i
e
z

e
t

a
l
.

(
2
0
1
1
)

D
i
v
i
t
a

e
t

a
l
.

(
2
0
0
6
)

D
o
m
i
n
g
u
e
z

P
e
r
y

e
t

a
l
.

(
2
0
1
1
)

E
n
z

a
n
d

L
a
m
b
e
r
t

(
2
0
1
1
)

F
a
w
s
e
t
t

e
t

a
l
.

(
2
0
0
8
)

F
u
g
a
t
e

e
t

a
l
.

(
2
0
0
6
)

G
o
a

a
n
d

L
y
e
r

(
2
0
0
9
)

H
a
k
s
e
v
e
r

e
t

a
l
.

(
2
0
0
4
)

H
a
l
e
s

e
t

a
l
.

(
2
0
1
1
)

H
a
m
m
e
r
v
o
l
l

(
2
0
0
9
)

H
a
m
m
e
r
v
o
l
l

(
2
0
1
1
)

H
a
m
m
e
r
v
o
l
l

(
2
0
1
2
)

H
a
m
m
e
r
v
o
l
l

a
n
d

T
o
f
t
e
n

(
2
0
1
0
)

H
s
i
e
h

e
t

a
l
.

(
2
0
1
1
)

J
o
h
a
n
n
e
s
s
e
n

a
n
d

O
l
s
e
n

(
2
0
1
0
)

L
a
d
o

e
t

a
l
.

(
2
0
1
1
)

L
a
e
e
g
u
d
d
i
n

e
t

a
l
.

(
2
0
1
0
)

M
a
i
n

e
t

a
l
.

(
2
0
1
1
)

M
o
l
l
e
r

(
2
0
0
6
)

M
o
l
l
e
r

a
n
d

R
a
j
a
l
a

(
2
0
0
6
)

N
g
u
g
i

e
t

a
l
.

(
2
0
1
0
)

P
a
u
l
r
a
j

a
n
d

C
h
e
n

(
2
0
0
7
)

R
i
t
a
l
a

a
n
d

H
u
r
m
e
l
i
n
n
a
-
L
a
u
k
k
a
n
e
n

(
2
0
0
9
)

R
o
d
r
i
g
u
e
z
-
D
i
a
z

a
n
d

E
s
p
i
n
o
-
R
o
d
r
i
g
u
e
z

(

2
0
0
6
)

S
a
h
a
y

(
2
0
0
3
)

S
i
m
a
t
u
p
a
n
g

(
2
0
0
2
)

S
m
a
l
s

a
n
d

S
m
i
t
h

(
2
0
1
1
)

S
w
i
n
k

(
2
0
0
6
)

V
a
n
h
o
m
e

e
t

a
l
.

(
2
0
0
6
)

V
e
r
d
u

e
t

a
l
.

(
2
0
1
1
)

W
o
n
g

a
n
d

A
c
c
o
r

(
2
0
1
0
)

T
o
t
a
l

Collaborative network

X X X X

X X X

X

X

X

10
Value outcome

X X X X X

X

X

X

8
Internal and external
logistic integration

X X X

X

X
X

6
Value creation logic

X X

X X X

X

6
Relational
management

X X X X

X

X

6
Collaborative learning

X X X

X
X

5
Trust

X X
X

X

4
Value appropriations

X X X

X

4
Relational capital

X X X

3
Collaboration drivers
and resistors

X

X

X
3
Creating commitment
and supply chain
understanding
X

X

2
Cross functional team

X

X
2
Inter-firm
communication

X

X

2
Limited number of
suppliers and long-
term relationship
orientation

X

X

2
Collaborative culture
X

X

2
Level of customer-
supplier involvement
in various activities

X

X

2
Collaborative
technique

X

X
2
Development of
relational capabilities

X

1
Price and non-price
coordination
mechanisms

X

1
Flow coordination
mechanisms

X

1
The impact horizon on
supply chain
operational
performance

X

1
Mental model of
decision-makers

X
1
Life cycle from the
time of engagement to
disengagement

X

1
Total 2 1 1 3 1 1 2 2 2 1 2 1 2 2 3 3 1 5 2 1 1 1 2 2 2 2 4 2 4 4 2 4 2 1 1 4
371

According to the concepts, theories and research
related to value creation and collaboration on a
supply chain, it was found that there were scholars
who mentioned had collaborative value creation
under several aspects such as supply chain
collaboration, value creation strategy and process,
trust, value appropriation and value outcome etc. as
shown in Table II.

B. Supply Chain Collaboration
Supply chain collaboration originates from at
least 2 companies which have mutual plans and
operations in order to achieve success. The supply
chain management is the collaborative strategy to
lead the value to the end customers (Simatupang and
Sridharan, 2002). The collaboration in the supply
chain context has to be able to identify the reasons
for needs in collaboration, collaborative position, and
collaborative persons in the supply chain.
Collaboration that occurs is considered as mutual
activities and what key elements of collaboration are
present. The successful collaborative elements in the
supply chain consist of cross functional activities,
process alignment, joint decision making and a
supply chain metric which is the capability for
exchange between buyers and suppliers in order to
be able to realize various problems and develop the
whole capability. (Barratt, 2004)
Collaborative learning is considered as the key
element of relational capability affecting the value
creation originating from the learning interaction
between suppliers and buyers. (Hammervoll, 2009,
2011, 2012; Hammervoll and Tofen, 2010;
Hammervoll, 2012; Ritala and Laukkanen, 2009).
Advanced relational capability needs to develop the
degree and number of integrated processes and
stronger internal capability in order to increase
relational security, transfer knowledge, exchange
values, and have better consistency in team work
(Rodri Gues Diaz and Espino Rodrigue, 2006).
Internal and external logistic integration and a
strategic buyer-supplier relationship results in
logistic integration in an effective supply chain
relationship. Logistic integration is considered as
value creation in a transaction-based arrangement by
having information technology to link between
external logistic integration and relational strategy
between buyers and suppliers. The internal logistic
integration gives positive results through the agility
of suppliers and buyers which consists of flexibility,
time, delivery, and response. These four aspects are
regarded as crucial factors affecting logistic
management (Hammerwall, 2009; Hammervoll and
Tofen, 2010; Paulraj and Chen, 2007).
The collaborative enhancement in the supply
chain is to create commitment and supply chain
collaboration and understanding and remove forces
resist supply chain collaboration by creating the
willingness of information exchange, knowledge
giving, and collaborative team building in the supply
chain, development of an effectiveness evaluation
system for collaboration in the supply chain and
consistent collaborative capability improvement
(Fawcett et al., 2008). Inter-firm communication in
which information is exchanged between buyers and
suppliers, mutual conferences and close follow-up
(Lado et al., 2011; Paulraj & Chen, 2007) by
applying information technology for integration
between buyers and sellers (Ngugi, 2010; Paulraj &
Chen, 2007; Roy et al., 2004) Cross functional teams
enhance the relational development of the buyers and
suppliers in mutual value creation. Both companies
support the team through mutual collaboration and
planning (Enz and Lambert, 2011; Lado et al., 2011).
Relational management by a dynamic approach,
such as modification of internal factors, a flexible
collaboration level, modification in governance
mechanisms, mutual goals determination of the long-
short term, and mutual development of business
plans by both sides, and personnel knowledge
development of both sides, etc (Coulibaly and
Sauvee, 2010; Hammerwall, 2012; Ngugi, 2010).
Collaboration with a limited number of suppliers
and a long-term relationship orientation helps create
close operation with suppliers. A long-term
relationship helps suppliers become part of good
supply chain management and make long term
results through co-capability of the supply chain
(Lado et al., 2011; Paulraj & Chen, 2007).
Fugate et al. (2006) said that the collaborative
mechanism of supply chain management consists of
price and non-price coordination mechanisms, such
as a two-part tariff, buy-back and return policy, a
quality flexibility contract, allocation rules, exclusive
dealings, and exclusive territories, etc. The flow
coordination mechanisms could apply the various
systems as a mechanism in product management and
information flow in the supply chain, such as a
vendor management inventory (VMI), quick
response (QR), collaborative planning forecasting
and replenishment (CPFR), efficient consumer
response (ECR), and postponement and performance.
For the supply chain orientation and learning
orientation, this includes, such feeding as reliability,
commitment, collaborative standards, organizational
compatibility, and support from executives, and
organization wide activities for knowledge base
development. Information communication and
information exchange in terms of marketing
development and new-technology development
precedes the collaborative mechanism.
Collaboration in the supply chain and value
creation is at the level of customer-supplier
involvement in various collaborative activities on
various parts in the supply chain and has a complex
of various processes according to each industrial
structure. The degree of involvement of buyer and
supplier could be considered by the significance of
that process through the supply chain as a whole and
the complex of the process affecting other processes
372

in the supply chain as well as the buyer-supplier
involvement zone (Sahay, 2003). Simatupang and
Sridharan (2002) suggested that the degree of
collaboration in the supply chain depended on the
impact horizon at supply chain operational
performance which was divided into; the short-term
impact, the middle-impact and the long-term impact.
Wong and Acur (2010) suggested that the mental
model of decision-maker, thinking characteristics,
decision behavior, coordination behavior, ordering
behavior, and flow behavior affected inter-
organizational decision coordination.
Hales et al. (2011) concluded that the various
collaborative techniques in the supply chain start
from the steps of preparation, such as suppliers
analysis for selecting the collaborative suppliers,
consideration of the most crucial and appreciative
relationship, evaluation of the operational model and
consideration of the persons who will perform duties
as coordinators with suppliers, consideration of
appropriate communication channels and
consideration of internal obstructions resisting the
relationship in value creation. The next step is about
the implementation of collaborative relationship,
such as a supplier-centric approach in which the
buyer engages the supplier as one-to-one, creating
mutual strategic value by developing targets and
strategies for value creation for each other, such as
building innovative growth, development of value
creation for the customers, risk management, value
chain optimization, and development of structural
capabilities.

C. Trust
Trust is the crucial element of collaborative
culture in a supply chain which is required both
internally and external to the organization.
Moreover, trust has to be built through collaboration
and trust in the sustainable security of organization.
Trust is regarded as a thing which links to creating
the initial partnership or relationship and a crucial
factor for innovative creation to occur in the supply
chain relationship (Barratt, 2004; Hale et al., 2011;
Roy et al., 2004). Collaboration in the supply chain
originates from the collaborative culture caused by
trust, mutuality of both advantages and risks,
openness and honesty (Barratt, 2004).
Hammerwall (2011) identified the various
models of trust in a supply chain relationship as
follows: affective trust was considered as the loyal
feeling of partnership which was a psychological
aspect caused by motivation, intention, and expected
practice of partners in the supply chain and
calculative trust which was decision making on trust
based on economic considerations depending on the
number of transaction-investments of companies in
supply chain and predicted credibility.
Laeequddin et al., (2010) suggested measuring
trust in the supply chain partners relationship in
terms of uncertainty and risk by interpreting the
results in 2 aspects which include the uncertainty
considered them the partnership characteristics, i.e.,
competition, trust, dependence, reliability, and the
internal system of organization. The risks are
considered by economy of dynamic capabilities and
technology as evaluated by comparing the trust and
risk as follows: Risk = No trust, No Risk = Trust,
and Risk Worthy = Trust Worthy.

D. Value Creation Strategy and Process
Moller (2006) said that the strategy in
collaborative value creation in the context of
suppliers and buyers could be divided according to
the value creation logic as follows: (1) core value
production exchange oriented relationships, this was
considered as the value creation which is very
familiar among those involved. The strategy to create
this kind of value is about matching in a pair because
the collaborators who cooperate with each other
could realize clear advantages. The buyers can apply
the benefits and the suppliers are concordant with the
quality of products and services as required, (2)
value added relational value production. This
strategy originates from the suppliers who extend or
improve the proposals to maintain positions and
increase competitive capability, or it originates from
customers who have the authority to motivate the
suppliers to improve the proposals, or it originates
from the customers and suppliers cooperating with
each other for better value creation, (3) future
oriented relational value production. This is the
emerging value system which has both old and new
actors, which might include those involved as
horizontal actors, such as business competitors, and
various research institutes. Moreover, there are
radical changes in the old value system in order to
create new value activities which involve uncertainty
about activities and actors. This kind of strategy
originates from either suppliers or buyers who are
the major drivers in developing the products or
processes which are absolutely changed, or it might
be both sides cooperate with each other in order to
achieve this goal.
The strategy and process of value creation could
occur by strategic nets which consist of factors
supporting value creation, i.e., resources in the
network, ability dynamics, and network
relationships. A business network which can create
success superior to a marketing transaction or
business in one organization, and business network
and a value creation system consisting of 3 basic
roles which include those involved, resources, and
activities. A value creation system from a business
network was considered as a set of activities
conducted by those involved based on the
combination of resources and controlled by those
involved. This was about applying previous
capability to be reused and developing new abilities
to be strong (Hsieh et al., 2011; Moller and Rajala,
373

2007; Ritala and Hurmelinna-Laukhanen, 2009;
Vanhome et al., 2006).
Moller and Rajala (2007) identified the types of
business net classification as value creation systems
under various models as follows (1) Current business
nets; this is a rather secure network with several
levels of structure. Moreover, there is a level of value
and knowledge activities which aim to mix
collaboration in value creation systematically and
combine the customers proposals in the network, (2)
Business renewal nets; this is value creation and
innovative creation in terms of incremental
innovation. It is considered as the restarting of
existing proposals and business processes which
have the requirements of customers or problem
solving as the driving force, (3) Emerging new
business nets; this is regarded as an emerging value
system with radical changes aimed at creating a new
marketing area by constructing new technology and
new concepts of business which is absolutely
changed, and there is radical, discontinuity and
system-wide changes. Therefore there is uncertainty
for the future.
Collaborative networks consist of various stages
which include network design by considering both
internal and external capability and capability which
has not yet been found in a collaborative network.
Partnership selection for applying the technology
which is by arranging the technological information
in readiness in the collaborative network, integration
between various value chains in the industry, is
considered as bringing or developing additional
assets, operation ranging, position evaluation in the
value chain (upstream, middle stream, and
downstream). The determination of boundaries and
goals in value creation includes the determination of
target customers, the determination of target markets
and usage by evaluating the number of target
markets, the consideration of boundaries of markets
sought by the company whether they are product or
technological markets, whether selling or licensing
technology between firms, the determination of
resource potential and the range of motivation among
the partnerships in the collaborative network,
determination of product goals, determination
boundaries of processes, determination of technology
required, and the determination of structures and
elements of information technology (Dominguez
Prey et al., 2011; Maine et al., 2011).

E. Value Appropriation and Value Outcome
Value appropriation is considered as the value
occurring in the business partnership group which
has an exchange relationship by clearly dividing the
value gained by the various companies. Moreover,
there is the determination of the proportion for
dividing the value gained between suppliers and
buyers (Ellegaard et al., 2009). For fairness in value
outcome, it comprises of the distribution rules which
include equity, equality, and needs (Divita, 2006).
The business network consists of the group of value
recipients and value arising in the business network
of value recipients which includes the single actor
level of a major company, the dyadic level in a
network of major companies, and the network level
of various companies in the network (Corsaro, 2011).
The distance of relationship can be calculated from
the eco-social significance of the partnership (Davita,
2006).
The relational value is in the form of money and
subjective value, therefore it is difficult to measure
the quantity of value. The exclusive relational value
can be seen when there is a linking with other parts
of relational value which not only occurs on the side
of buyers but also the side of suppliers. Both sides of
the business relationship are seeking and observing
the resources of value in different ways (Smals &
Smits, 2011).
The value outcome can be divided according to
the value aspects into two comprising the financial
value and non-financial value. The direct value of
finance received by the suppliers includes order
quantity, income, and profit from products and
service distribution. Moreover, the financial direct
value which the customers receive from suppliers
through the relationship includes the compensation
in the form of money received from mutual product
development and sales of both sides (Haksever et al.,
2004; Smals & Smits, 2011). The economic value is
the transactional cost analysis which is the judge of
economic value of members in the business
partnership from the calculation of expectation from
return of the finance (Davita, 2006), The financial
value which has the relational role, such as the
effectiveness of expenses from reducing a difficult in
management which occurs regularly. The reduction
of relational expense includes communication,
negotiation, and agreement, the relationship of
logistic function or delivery time reduction (Corsaro,
2011).
The indirect value which is not financial value
gained by the suppliers is the external value of the
relationship, for example, the customers can provide
new customers to the suppliers which helps the
suppliers have more innovative capability or have
more capability on one of these sides. The buyers
create these things by the proposal of value to the
suppliers which is not money, such as a knowledge
base, and capability. The indirect value which is not
financial received by the suppliers through the
relationship includes technical knowledge and
product design, application of buyers from various
parts, sustainable reputation of the company, and
reputation in high-tech usage (Smals & Smits, 2011).
The management value includes leadership, conduct
of strategy, communication and transparency. The
relational value includes the brand value, popularity,
partnership and network (Kalafut, 2004). The value
374

which takes the developmental role include receipt
of new technology for problem solving, product
and process innovation, reduced time to enter the
market of distribution channels as required
(Corsaro, 2011). The social value is regarded as
satisfaction of members received by other members
in the business partnership evaluated by comparing
the various goals required to achieve in the
relationship (Divita, 2006).

III. CONCEPTUAL MODEL
According to the study of the principles and
process of collaborative value creation by review of
literature related to innovation, value creation, and
collaboration in supply chains these can be
analyzed as the conceptual framework of research
as shown in Fig. 1. The left side of the model
represents the key elements affecting collaborative
value creation which includes supply chain
collaboration, value creation strategy and process,
and trust. The right side of the model, includes
value appropriation and value outcome. Value
appropriation can be divided into fairness and
levels of value recipients. The value outcome can
be divided into financial value and non-financial
value.

Fig. 1. Conceptual Model

TABLE III
Key Elements and Sub Elements in Generating Collaborative Value Creation

Key elements Sub elements Authors
Supply Chain
Collaboration
Collaborative learning
Internal and external logistic integration
Inter-firm communication
Cross functional teams
Dynamic approach
Limited number of suppliers and long-term relationship
orientation
Coordination mechanisms
Level of customer-supplier involvement in various
activities
Mental model of decision-makers
Collaborative technique
Barratt (2004); Coulibaly and Sauvee (2010);
Enz and Lambert (2011); Fawcett et al.
(2008); Fugate et al. (2006); Hales et al.
(2011); Hammervoll (2009), (2011), (2012);
Hammervoll and Tofen (2010); Hammervoll
(2012); Lado et al. (2011); Ngugi (2010);
Paulraj and Chen (2007); Ritala and
Hurmelinna-Laukkanen (2009); Rodriquez
Diaz and Espino-Rodriguez (2006); Roy et al.
(2004); Sahay (2003); Simatupang and
Sridharan (2002); Wong and Accur (2010)
Trust Affective trust
Calculative trust
Uncertainty
Risks
Barratt (2004); Hale et al. (2011);
Hammerwall (2011); Laeequddin et al.,
(2010); Roy et al. (2004)

Value Creation
Strategy and
Process
Value Creation Logic
Collaborative Networks
Dominguez Pry et al. (2011); Hsieh et al.,
(2011); Maine et al., 2011; Moller (2006);
Moller and Rajala, (2007); Ritala and
Hurmelinna-Laukhanen, (2009); Vanhome et
al., (2006)
Value
Appropriation
and Value
Outcome
Fairness
The level of value recipients
Financial value
Non financial value
Corsaro (2011); Divita (2006); Ellegaard et al.
(2009); Haksever et al. (2004); Kalafut
(2004); Smals and Smits (2011)

Supply Chain
Collaboration
Trust
Value Creation
Strategy and Process
Collaborative
Value Creation
Value
Appropriation
Value
Outcome
Fairness
The Level of
Value Recipients
Financial Value
Non-Financial
Value
375

IV. CONCLUSIONS AND RECOMENDATION

A. Conclusion
The study of collaborative value creation is
about the making of contributions to the innovative
management literature on value creation and supply
chain collaboration by extending existing theory on
value creation and innovation in the context of
collaborative value creation. The first part includes
an empirical investigation from the reviews and
synthesis of the relevant literature on value creation
and supply chain collaboration in order to clarify the
key components which allow the creation of value in
a buyer-seller relationship. The study revealed that
supply chain collaboration, value creation strategy
and process, and trust are the main elements of
collaborative value creation. Moreover, this study,
which examined how partners in a supply chain
facilitate value creation and innovation in an
exchange relationship, found that relational value
creation had a strategy and process which consists of
the value creation logic and collaborative networks.
The value outcome received from the collaboration
has to be considered in terms of fairness received by
each side in the supply chain relationship and
considers the level of value recipients. The value
received by relational value creation can be divided
into 2 aspects including the financial value (revenue,
profit, volume of sales and cost efficiency), and non
financial value (knowledge, competencies, reputation
and quality of product).

B. Recommendation
This study was empirical research. According to
the literature review, there are still limitations to the
collaborative value creation model which can be
used appropriately to the structure of each industry.
There is the degree of involvement in collaborative
value creation by buyers and suppliers which differs
according to the collaborative process in various
parts of the supply chain which is a complex of
different processes according to the type of industrial
structure (Sahay, 2003). Moreover, collaborative
creation between buyers and suppliers has to be able
to clearly identify the reasons for requirements in
collaborative position, collaborators in the supply
chain, collaborative activities, and important
elements of that collaboration (Barratt, 2004). The
strategy selection and process applied in the
relational value creation also depends on the degree
of goals in value creation and exclusive aspects of
the industry (Moller, 2006).
The recommendations of this study in order to be
a potential research orientation are as follows: the
research should be in-dept research on one of the
industries to synthesize the model of collaborative
value creation appropriate to that selected industry
and in order to be able to effectively identify the
elements and processes variously applied to
collaborative value creation between buyers and
supplier in the supply chain according to the
exclusive aspects of the industry.
The researchers should develop collaborative
value creation model by having a test of acceptance
of the usage of the collaborative value creation
model in order to evaluate the application of the
model to the industry and to measure the value
received by the buyers and suppliers from applying
the model to collaborative value creation.

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378

Innovative Depression Prevention in Thai
Adolescent Mothers During Pregnancy
Somsri Nawarat
Banlad Hospital
Petchburi Province, Thailand, Email: somsri2501@hotmail.com

Abstract The three purposes of this study are 1) to
develop the structural equation model of variables that
affect depression in pregnant Thai adolescents 2) to
verify how empirical data accords with the structural
equation model of the variables that affect depression
in pregnant Thai adolescents and 3) to study the direct,
indirect, and total influences of the depression
variables. This study used both quantitative and
qualitative mixed methodology. The samples were 418
of pregnant Thai adolescents from eight hospitals in
Phetchaburi province and twenty five of these
adolescents reported significant problems. They
answered questionnaires and were interviewed
concerning these five variables: somatic and medical
support, self-esteem, social support, stress, and
depression. The data were analyzed using SPSS for
Windows and the LISREL. The findings were 1) the
Teen Moms Care Model consisted of 1D4S
(Depression, Somatic and medical support, Social
support, Self-esteem, and Stress) 2) The structural
equation model affecting depression during the
pregnancy of the respondents corresponds with the
empirical data. 3) The somatic and medical support
had a positive direct effect towards depressions with
the coefficient of 0.16 and a negative indirect effect of
0.14. Self-esteem had no direct effect but had an
indirect and negative total effect with the coefficient of
0.31 and -0.47. Social support had no direct effect but
had an indirect effect and negative total effect with the
coefficient of -0.30 and -0.27 respectively. Stress had
a positive direct effect and positive total effect towards
depression with the coefficient of 0.84 and 0.84 at a
significant level of 0.05.

Keywords Development, Structural Equation Model,
Depression, Adolescent Pregnancy

I. INTRODUCTION
According to Thai Maternal and Child Health
Network under the royal patronage of HRH Princess
Srirasmi, the Princess Consort to the Crown Prince
and the academic conference on Teenage Pregnancy
and Premature Birth: Challenging Problems in Thai
Society together with the adolescent pregnancy
which is the main problem in Thai society, in
October 2010, the Ministry of Social Development
and Human Security in cooperation with the public
and private sectors prepared a drafted strategic plan
to be the national agenda in order to prevent and
solve the problem of child and youth pregnancy.
According to the pregnancy rate criteria of the
adolescent younger than 20 years old of the World
Health Organization (WHO, 2004), the pregnancy
rate in adolescent younger than 20 years old should
be less than 10 percent when compared to the
pregnancy rate of women of all ages. (WHO, 2004)
The statistical records in the special reports of
Saiyairak Hospital during the last 10 years stated that
the birth rate of mothers younger than 20 years old
has alarmingly increased. In the year 2000, there
were 11.79 percent of mothers younger than 20 years
old but 10 years later in 2010 it increased to 13.5
percent (Registrar Office, Department of Local
Administration, 2011) (See Figure 1 and Figure 2)

FIGURE 1: THE BIRTH RATE OF ADOLESCENT
MOTHERS YOUNGER THAN 20 YEARS OLD
DURING THE LAST 10 YEARS

MOTHERS YOUNGER THAN 20 YEARS OLD IN 18
AREAS


379

According to 18 public health areas in Thailand, the
public health area 5 has the birth rate of adolescent
mothers younger than 20 years old of 28.24 percent
(Special report, Saiyairak Hospital 2010). Regarding
the depth analysis on the public health area 5 which
consists of 4 provinces, it has been found that
Phetchaburi has the most adolescent mothers
younger than 20 years old, at 38.55 percent which is
the highest of all provinces in the public health area 5
and also of Thailand (See Figure 3).

MOTHERS YOUNGER THAN 20 YEARS OLD IN THE
PUBLIC HEALTH AREA 5

Because of the abundance and importance of the
mentioned problems, the researcher choose
Phetchaburi province to be the subject for this study.
The research objectives are (1) to develop the structural
equation model of variables that affect depression in
pregnant Thai adolescents; (2) to verify how
empirical data corresponds with the structural
equation model of the variables that affect depression
in pregnant Thai adolescents; and (3) to study the
direct, indirect, and total influences of the depression
variables.
In addition to the research objectives, the researcher
develops the following research questions: (1) What are
the characteristics of the variables affecting depression
in Thai adolescent mothers and whether or not they
correspond with the empirical data? and (2) What are
the variables affecting depression in Thai adolescent
mothers during their pregnancy? With regards to the
research questions, the research hypotheses are that
the variables affecting depression in pregnant Thai
adolescents created by the researcher correspond
with the empirical data and that the variables have
direct, indirect and total effects on depression in
pregnant Thai adolescents.

Suvachai Intaraprasert and Surasak Taneepanichkul
(1996) found that the adolescents during pregnancy have
many problems especially mental problem due to their
immaturities and sensitive emotions. Adolescent
pregnancy also strongly affects the economy and society.
They are not ready to be mothers, leading to divorce. In
addition, the children will be fatherless, undesired,
abandoned, and ill-treated, undesired. It is possible that
when they grow up, they will be aggressive, delinquent,
and have problems in living with others in society. The
government must spend a lot of money on medical
treatment and delivery. Most of the babies delivered by
adolescent mothers younger than 20 years old have
the weight at birth lower than standard. They must be
under the medical treatment in the hospitals for 1-3
months in average so these expenses are higher than
those of the moderate pregnancy age (between 20-35
years old) which is only 5,000 baht (Abhisit
Vejjajiva, 2010).
Tharathip Kolatat (2008) discusses the
adolescent mothers expenses on newborn treatments
and complications in general hospitals in Thailand
are around 1,992,025,000 baht annually. If the
adolescent mothers are healthy during pregnancy,
these expenses will be lower and the government can
save more budgets for other economic purposes.
The adolescent pregnancy is a risk to physical and
mental health of both the teenagers themselves and their
family members. The main problem is that the adolescent
mothers are not ready for pregnancy. They cannot face
the various consequent problems throughout the
pregnancy period. They are frustrated, cannot accept the
pregnancy, experience high stress, feel guilty, angry, and
feel that they are useless, worried, and depressed. The
depression affects physical, mind, emotion, society,
family and national economic systems (Warren Jocelyn
T., 2008). In addition to the aforementioned problems,
the researcher is interested in the study on structural
equation of the variables affecting depression in Thai
adolescent mothers during pregnancy. Because the
Thai adolescent mothers are the countrys human
resources, they should be treated with care for their good
health in the future.


In this study, the researcher reviewed the
literatures related to the 5 variables: somatic and
medical support, depression, stress, self-esteem and
social support as well as Penders Health Behavior
Promotional Theory, Holistic Health Care concept,
Policy on Saiyairak Hospital and maternal and child
hygiene then synthesized concepts and developed the
scopes of study as illustrated in Figure 4.


380

FIGURE 4: CONCEPTUAL FRAMEWORK OF THE STUDY

Source: Adapted from Nirattharadorn (2005), Srisaeng
(2003), Boland-Prom, (2004), Dormire (1992), Spears
(2007), Ruppel (2001), Smith, (2007), Cristry , (2011)

This study used a Mixed Method Research. The
unit of analysis is pregnant Thai adolescents. The
samples were chosen by probability sampling and
random sampling method. The sample size is referred to
Fan (2001)s concept -- when using SEM analysis
method, the appropriate sample size to be analyzed by
LISREL should not less than 400 persons. There are 420
questionnaires used in this study and 418 of them were
answered. The samples were chosen from 8 hospitals in
Phetchaburi province during January 2011 and
December 2011. 25 key informants were invited to
participate in the in-depth interviews for qualitative
research. The qualitative data were checked by
triangulation and analyzed by interpretation. The
study reported the in-depth behaviors found together
with the observed behaviors of pregnant adolescents.
The quantitative research tool is a questionnaire
consisting of 6 parts: the first part is general
information, part 2 to part 6 are rating scales. The
qualitative research tool is an in-depth interview
consisting of questions related to all 5 variables.

IV. RESULTS

The research findings are reported as follows.
First, this research study suggested the model called
Teen Moms Care Model which consisted of
1D4S (Depression, Somatic and medical support,
Social support, Self-esteem and Stress). Second, the
structural equation model of the variables affecting
the depression in pregnant Thai adolescents as per
the hypotheses or conceptual framework of the study
corresponded with the empirical data. The researcher
adjusted the model six times. The results of testing
statistical data of the adjusted structural equation
model and the standard criteria suggested by
Joreskog & Sorbom (1996) reported that all of the
statistical data of the model passed the standard
criterias: Relative
2
(
2
/ df) = 1.61, Goodness of Fit
Index (GFI) = 0.96, Adjusted Goodness of Fit Index
(AGFI) = 0.94, Root Mean Squared Residuals
(RMR) = 0.023, Standardized Root Mean Squared
Residual (SRMR) = 0.042, Root Mean Squared Error
of Approximation (RMSEA) = 0.038, p-value for
test of close fit = 0.94, Normed Fit Index
(NFI)=0.98, Incremental Fit Index (IFI) = 0.99,
Comparative Fit Index (CFI) = 0.99, Critical N (CN)
= 295.80. However, the findings suggested that
Likelihood Ratio Chi-Square Statistic (
2
) is still
statistically significant because it is sensitive to
multivariate normality. If the sample size is small,
the tested statistical data distribution is always not
close to
2
standard distribution. In contrast, if the
sample size is too big, the df model is always
rejected. Therefore, the Likelihood Ratio Chi-Square
Statistic (
2
) remains problematic. The estimation of
model in this research used Relative
2
(
2
/df)
instead.
The findings from the study the direct effect,
indirect effect and total effect of the variables
affecting depression in 418 Thai adolescent mothers
during pregnancy showed that somatic and medical
support had a positive direct effect and a negative
indirect effect towards depression with the
coefficient of 0.16 and -0.14 respectively but had no
overall effect. Self-esteem had no direct effect but
had an indirect and negative overall effect with the
coefficient of 0.31 and -0.47. Social support had no
direct effect but had an indirect effect and negative
overall effect with the coefficient of -0.30 and -0.27.
Stress had a positive direct effect and positive overall
effect towards depression at the effected coefficient
of 0.84 but had no indirect effect at the statistical
significance of 0.05 as per Figure 5 and Table 1.

TABLE 1: THE ANALYSIS OF PARAMETER,
DIRECT, INDIRECT, TOTAL EFFECTED
COEFIFICIENTS

* means the statistical significance at 0.05

381

FIGURE 5 THE STRUCTURAL EQUATION MODEL OF
THE VARIABLES AFFECTING THE DEPRESSION
(ADJUSTED MODEL)

According to the figure, the structural equation
model of the variables affecting the depression in
pregnant Thai adolescents in Phetchaburi province
depicts the model called Teen Moms Care Model
which consists of 1D4S (Depression, Somatic and
Medical Support, Social Support, Self-Esteem and
Stress). Meanwhile, the in-depth analysis of qualitative
research with the variable of somatic and medical support
report that the pregnant adolescents have food
consumption misbehavior and malnutrition. They eat
what they like, for example, they do not like drinking
milk but soft drinks. They prefer pickled fruits and
vegetables to the fresh ones. This results in the risk of
under-weighted and pallid children. The negligence of
taking care of their health and the suggestions of doctors
on taking iron and iodine supplements, rejecting food
necessary for increasing blood concentration, and
rejecting sea food to supplement iodine lead to lacks of
iodine and disease protection. Furthermore, the problem
of Rh negative blood group also found in 2 subjects
while 99% of Thai people have Rh positive, and two
adolescent mothers who carried twins must have
caesarean section. The heights of 3 adolescent mothers
do not reach 150 cm. which represents prematurity. The
youngest adolescent mothers found aged only 12 years
old. For the self-esteem variable, during the in-depth
interview, the researcher found that the pregnant
adolescents felt that they were wrong and misbehave
because they were pregnant while they were students.
More than half of the samples said that they were
studying in secondary school and high school. Their self-
esteem level was lower because they had to quit school,
they felt that they were useless, ashamed to friends,
teachers, local people, had negative self-perception,
unsatisfied with their pregnancy, made their parents
upset, ashamed and lack of social acceptance. They had
to change their roles from students to mothers when they
did not want to be, and they had negative self-perception.
Eight adolescent mothers were not accepted by their
husbands. Eleven adolescent mothers did not know
before that they became the second or third wives. Some
of them took the abortion pills. When they found that
they did not have menstruation, they were sure that they
were pregnant then they had very high stress. They did
not receive good care from their husbands even giving
money for taking care of the children, asking them how
they had been, or boosting their spirits. Most of them
were supported by the society and most of the helps
came from their mothers and grandmothers in terms of
accommodation, comforting, caring, and taking them to
the hospitals for checking as per the doctors
appointments.
For the stress variable, the findings report that when
the adolescents know that they are pregnant, they have
very high stress. They cannot sleep well, worried,
unhappy, and afraid of misconduct. They are scared to
tell anyone and want to die especially when they know
that they become the second or third wives. They lack
concentration, some of them escaped from their families,
schools, and have headaches. Some of them conceal the
pregnancy for 5 months and their husbands do not accept
the responsibility to become a father of the baby. They
feel very unhappy and hide from their parents, schools,
friends which lead to depression. When they know that
they are pregnant, they do not want to talk to anyone, feel
bored, upset, and unhappy, feel lonely, cry every night,
cannot sleep well, and have nightmares. They would like
to be by themselves, do not want to meet anyone and
escape from their families. They are afraid of being
gossiped and scared of the delivery process. They want to
die and think about committing suicide. The depression
caused by accumulated stress cannot be solved, they are
unhappy both physically and mentally, they are too
ashamed to meet anyone, and they cannot earn their
living. Their husbands are also students and they still
have to ask their parents for money. Therefore, the
pregnant adolescent mothers have many problems on
somatic and medical support, self-esteem, and social
support which lead to stress and depression.
In general, the finding of the structural equation
model of the variables affecting the depression in
pregnant Thai adolescents in Phetchaburi province
suggested the model called Teen Moms Care
Model which consisted of 1D4S such as somatic
and medical support variable with the factors
consisting of health behavior, risk, disease, drug and
vaccine. The findings in this study correspond with
those previous studies. In terms of risk, the pregnant
adolescents younger than 17 years old have anemia,
malnutrition, late and incomplete Ante Natal Care,
urinary tract infection, the size of the babies are not
appropriate for the pelvic bones, and miscarriages
caused by self-abortion (Ukrit Uchupap , 2010;
Bunpode Suwannachat and Prapatsorn
Ualalitchoowong, 2007). The pregnant adolescents aged
13-17 years old face with the height and weight lower
than standard, abortion, poor living condition, smoking,

382

drinking alcohol, drug addiction, urinary tract infection,
thyrotoxicosis, malnutrition, anemia, twins
pregnancy, no Ante Natal Care. Their ages are lower
than WHO pregnancy criteria. They never have birth
control, so they are unintentionally pregnant and not
ready. The adolescent pregnancies are constantly
increased and the ages of adolescent mothers are
lower and lower compared to the past. The rate of
caesarean section increases with the complications.
Most of the adolescent mothers are unemployed,
have the abortion background, never have marriage
ceremony. They are mistreated and are the victims of
physical and sexual violence, abusive by their
husbands, and they have low income. (White, 2004;
Wasan Watewatanachai, 2007; Suradet Boonyawet,
Chiraphorn Mongkhonprasoet and Rattana
Ngamboonyarak, 2007; Lapvongwatana, 2000)
Regarding self-esteem, the findings of this study
correspond with previous studies that the pregnant
adolescents never have marriage ceremony and have
premature sexual intercourse. The adolescent
pregnancy reduces self-esteem of those young
mothers and ends their teenage lives. They have to
quit school and they are unemployed which lead to
drug addiction and low self-esteem (Nirattharadorn,
2005; Srisaeng, 2003; Spears, 2007). The self-
esteem is low, lack of self-image and good birth
control, poverty, illiteracy, no inspiration/ Besides,
they cannot adapt themselves to the new role of a
mother. Facing with social problems, bad
communication, pregnant adolescents possess low
self-esteem (Neamsakul, 2008; Byrn, 2011).
In terms of social support, the results this study
support those of the previous studies that the
adolescent mothers move from their homes, face
with negative interaction and sarcastic words from
people around them. People often look at them
strangely and gossip them. They change their roles
from students to mothers. They feel ashamed since
they have changed their roles from being daughters
to adolescent mothers, from being the girls who work
in the factory to unemployed pregnant girls. They
face problems of negative attitude towards life style,
economy, low social support, lack of helps from
husbands and families, abuse, and unemployment.
The first-time mothers do not have any knowledge
about how to take care of the babies and themselves.
They are sexually harassed, abandoned by husbands
and their husbands do not accept the responsibility to
be a father. Their low social esteem further leads to
negative behaviors like drinking alcohols, drug
addiction, and attempt to commit suicide. They
become homeless, are forced to leave home, quit
school, do not have food and money, perform illegal
conduct, and commit crime (Kohorn, 2011;
Neamsakul, 2008; Ruppel, 2001; Rebekah, 2008).
The findings also show that the pregnant adolescents
have to live with their husbands on their own. They
become malnutrition, do not have money and social
support, depressed, abused, suffer from sexual
harassment, abandoned by their husbands, have
negative attitude towards pregnancy, have bad health
behavior, low education, and low self-esteem. Peer
group has strong influence on pregnancy, poverty,
lack of food security, negative events in their lives,
physical violence, sexual harassment, earning
problem, emotional suffer, low quality of living, and
bad attitude towards becoming mothers. They do not
get any supports from husbands, families, peer
group, lack of medical information and no mental
help which affects how to improve the quality of life
of the pregnant adolescents. These factors are in
correlation with social support of adolescent mothers
both during pregnancy and after giving birth. The
adolescent mothers do not pay attention to nutrition,
consumption, inappropriate eating habit on meals,
quality, and quantity of food. They do not get any
support of necessary items and facilities. They also
have relationship problems with their families. These
are important to the practice of taking care of the
pregnant adolescent health. (Kimberly, 2009; Vo,
2008 ; Clutter, 2009; Chrzan, 2008 ; Hagelskamp,
2011).
For the stress variable, this study correspond
with the studies of many researchers that the stress
variable of the pregnant adolescents caused by the
change of their roles to become mothers but they
cannot accept this reality. They are ashamed, have to
quit school, receive negative feedback from society,
afraid of delivery. The blame from their parents and
the pregnancy while they are students result in no
money and unemployment, they also feel unhappy
and have high stress. They are 15-19 years old girls,
they fail to control their emotions and express
negative emotions. The blame from their parents
results in high stress and bad mental health that leads
to depression (Boland-Prom, Kimberly Wynn, 2004).
In the meantime, the findings also show that
adolescent mothers are not doing well with stress,
coping with stress, and adapting themselves during
pregnancy. Becoming a mother unintentionally
causes suffering from pregnancy, blemishes, and
failure to adapt. Some of them use negative strategy
by escaping from the society, over consuming food,
using drugs, smoking, getting low social support,
experiencing high level of loneliness, having low
economic status in the society, and feeling unhappy.
These result in stress of the adolescents throughout
pregnancy period (Borcherding, 2005; Golden, 2006;
Smith, 2007).
In terms of depression, this study corresponds
with the previous studies in that life style factor of
the pregnant adolescent is in correlation with
depression. They have stress, smoke and drink
alcohol, use drugs, conflict with their family
members, suffer from bad events in their lives. They
also have problems with marital status because they
are unintentionally pregnant while they are still
young and have low education level, abused by
family, face with negative interaction from their

383

partners and family members, negative behavior
from society, and change in roles. The findings
suggest that family can help pregnant adolescents in
3 aspects: their future, drug problems, and ability to
cope with the undesired pregnancy. These result in
reduction of depression, stress, risk of committing
suicide, economic and social problems, occupation
and income of adolescent mothers (Hanson, 2001;
Lapvongwatana, 2000; Creelman, 2002; Jean, 2005;
Gosdin, 2010; Gavin,.2004 ; Meighan, 2006).
Moreover, the findings also show that the pregnant
adolescents are worried and have emotional
instability which are in correlation with socio
economic status, physical health, the number of
people whom they live with, work, risky behavior,
their behavior during pregnancy, alcohol drinking,
income, poverty, social status, financial status, GPA,
education level, life style, fear of giving birth,
blemishes, cigarette smoking, marijuana smoking,
malnutrition, unplanned and undesired pregnancy,
abortion, negative interactions from their partners
and family members, low self-esteem, and attempt to
commit suicide. Social and cultural factors are in
correlation with the depression in adolescent
mothers. (Feltes, 2007; Sountorp. 2007; Warren,
2008; Gosdin, 2010; Wanna Kongsuriyanavin,
Benjawan Khunrattanapon and Kittirat Techatraisak,
2010; Byrn, 2011; Meighan, 2006; Shelton, 2011;
Angela, & Ekwonye 2011).

V. RECOMMENDATIONS

According to the results reported above, the
researcher has the recommendations as follows.
First, regarding administration, the top and middle
management levels as well as the directors of
hospitals in every level should have the concrete
innovative policies on maternal and child health,
strategy, plans, projects related to pregnant
adolescents and have policies implementation in
order to take care of the adolescent mothers during
their pregnancy to have good, quality, efficient, and
effective services. These lead to reduce problems,
risks, stress and depression of the adolescent mothers
during their pregnancy. Second, the government
agencies especially hospitals or agencies which
provide services for pregnant women especially for
pregnant adolescent mothers should apply the
findings of this study to continue projects or
activities for helping and curing the adolescent
mothers who have problems and risks in somatic and
medical support, self-esteem, social support, stress,
and depression. The helps provided according to
these mentioned variables will result in the good
health of the adolescent mothers and babies,
reducing the risks and diseases and safety during
pregnancy and giving birth, as well as after giving
birth. Last, with respect to academics, this study is
beneficial for those in medical social sciences in
reducing the risk factors affecting the health of the
adolescent mothers and their babies.
Further research should explore on the
adolescent mothers or the pregnant adolescents in
other variables such as loneliness together with the
research on the depression and stress of the
adolescent mothers or the pregnant women in the
juvenile observation and protection centers and
prisons in different provinces.

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386

Innovative Thai Buffalo Conservation
Strategies for Sustainable Local Development
Sakorn Songserm
Mahasarakam Rajabhat University
Mahasarakam Province, Thailand; jackal_2008@hotmail.com

Abstract The purpose of this research is to find
appropriate strategies to deal with Thai buffalo
conservation in order to strengthen local development
and sustainability under the basis on Ituppajjayata
Buddhist principles which involve the process of
creating and developing the use of buffalos leading to
local development through learning, collaboration and
social networking processes and bringing together the
power of human capital, social capital, cultural capital,
physical capital, financial capital, natural resources
and environment. The study employs qualitative
research methodology and applies scientific research to
local academic research including the examination of
development work and local ways of living to examine
the multiple local factors. The research results indicate
that innovative Thai buffalo conservation strategies
consist of three strategies and four activities or CAC's
+ 4A as follows: 1) created strategy, 2) application
strategies, and 3) conscious-building strategies. The
strategy drives relate to self-dependent local
development in the economic, social and environmental
and natural resource dimensions fundamental to
developing a balanced and sustainable growth.

Keywords process, innovative, local development,
sustainable, strategies

I. INTRODUCTION

Evidence of prehistoric paintings of ancient
humans displaying historic pictures of cattle, buffalo,
fish, and wildlife show that buffalos have been very
important in life and have been associated with man
since prehistory. Buffalos are wild animals by
instinct. Later, humans trained the buffalos and used
their labor. Thai people have used buffalos since the
Sukhothai period up to the present time. Living in
the plain, peoples main occupation is farming,
especially traditional farming. In addition, buffalos
have also played an important role in transportation
and logistics and became vehicles in war to protect
the country. Needless to say, buffalos are a national
treasure or heritages of Thailand (Kubkaew, 2010: 7).
Buffalos as economic animals harmonize with local
and socio-cultural dimensions, leading to knowledge
generation, local wisdom, and beautiful culture.
Buffalos have also been the farmers close friends
and become parts of the social bond evidenced by a
traditional buffalo welcome ceremony, buffalo
racing, and buffalo fighting. In terms of the
economic dimension, buffalos are regarded as the
villagers bank, providing them the opportunity to
save money for their childrens education and
become their assets. The buffalo waste can also be
used as fertilizer for the soil, increase the restoration
of ecological diversity, and can also be used as
renewable biomass.

At present, the role of buffalos in the countrys
social and agricultural sectors has declined
continuously since the government issued the
economic and social policy under the National
Economic and Social Development Plan No. 3-4
(1972-1981) and focused on economic stability
together with the emphasis on regional rural
development under the National Economic and
Social Development Plan No. 5-7 (1981-1996) in
order to accelerate the distribution of income and
socio-economic status of farmers and laborers. In
addition, the implementation of the plan has led to
the widely distribution of the economy to both
regional and local communities. The economic
development is also related more to the global
community, reflecting the transformation of the
countrys development from a traditional to an
economic perspective. This results in agricultural
changes, reduced farmland, and widespread use of
machinery instead of buffalo labor. The findings
show that the popularity of buffalo meat
consumption has also decreased (Sajjapan et al.,
2004: 3). The Information Center, Department of
Livestock Development summarizes statistics for
year 2011 that the number of buffalos has reduced
each year, in 1989 the total number were 4,611,691;
in 1999 the number had decreased to 1,799,606; and
in 2011 the number of buffalos was 1,234,179. The
North East has the highest number of buffalos,
approximately 73.05 percent of the total buffalos
nationwide with the highest number in Ubon
Ratchathani province, followed by the North, 16.39
percent, the Central 7.88 percent, and the South, 2.66
percent respectively.
Considering to the importance of the above
issues, the researcher has to develop innovative

387

strategies for Thai buffalo conservation to strengthen
local development and sustainability on the basis of
Ituppajjayata Buddhist principles (Buddhataspiku,
1973) which correspond with the innovative creation
and utilization of buffalos for local development
through mutual learning by the Kasikhamkasonnurak
network which managed and integrated human
capital, social capital, cultural capital, physical
capital, financial capital, natural resources and social
and environmental benefits and sustainability. The
researcher employs qualitative research and applies
community-based research sources consisting of
academic works, development works, and
community ways of living (Kaewthep, 2010: 18)
through multiple local study processes, designs, and
strategy management. Specifically, the purpose of
the study is to examine innovative Thai buffalo
conservation strategies for local development and
sustainability.


The department of Livestock Development,
Ministry of Agriculture and Cooperatives as a
government agency responsible for promoting the
country's livestock has encouraged and promoted
awareness of buffalos and the raising of buffalos. It
also promotes and supports the concept of
conservation by formulating policies at the central
and regional levels for implementing various
projects, namely the farmer cattle bank project
according to His Majesty the King, the revival of the
plowing buffalo bank project, and the I love
buffalo project. Besides, on the occasion of her Her
Majesty the Queens birthday celebration on 11
August 2008 it has indicated that the Thai buffalos
have been abandoned with the unawareness of their
value and use. HRH Princess Maha Chakri
Sirindhorn has founded the Kasakornkaseewit
School known as a school for training farmers or
how to use buffalos to substitute for labor in
agriculture. Such initiatives are gracious for Thai
buffalos and Thai people. The intention is to direct
Thai people to recognize and appreciate Thai
buffalos as well as emphasize a vision of preserving
the Thai buffalos and Thai buffalo wisdom to be
sustained in Thailand. (Kasonkasiwit School, 2012).

Conservation of biodiversity and genetics is
recognized internationally. According to the United
Nations meeting on the topic of Environment and
Development in Brazil in 1992, there were
unanimous agreements on guidelines on environment
and development to ensure sustainable use. This is an
attempt to protect the future generations from
environmental disasters (Sanghuayprai, 2009: 58-63).
Chantarakana. (2012) also indicated in his buffalo
conservation article that human existence is
associated with nature, surrounded by animals, plants,
etc. which are useful to people. The buffalos are
animals useful for human beings. If the buffalos are
not conserved, we will only see them in pictures.
Buffalo conservation could be done in two ways.
First is that they can be raised by residents and by the
non-residents. Or they can be raised in public or
private organizations, but most importantly, they
should be conserved for the villagers. The Thai
Buffalo Conservation Village (2012) has raised
buffalos in a conservation way, gathered all farming
equipments and appliances in the past, and displayed
the lovely and intelligent buffalo show. The Thai
Buffalo Conservation and Development Center
(2012) also has a concept of raising buffalos together
with chickens, which bring about natural ecological
improvement and benefits to the farmers. The
concept of conservation is in accordance with the
National Economic and Social Development Plan No.
11 emphasizing the development under the
integrated six terms of capital: human capital, social
capital, physical capital, financial capital,
environmental capital, and cultural capital.
Furthermore, the plan focuses on the restoration and
promotion of the community cultural values,
especially the agricultural way of living and culture.
The plan also supports research and development on
plant and animal species as well as agricultural
technology that is environmentally friendly,
promotes the creation of value-added agricultural
products and energy on the basis of local knowledge
and knowledge creation, and gives priority to the
balance between conservation and exploitation. This
reflects well-balanced and sustainable development
which further leads to the development of human
capability.

III. METHODOLOGY

The researcher studied the local phenomena in a
multi-dimensional perspective, searched for
appropriate strategies, and had dialogue with the
relevant target groups and related academia in order
to manage appropriate strategies through mutual
learning activities and bring together human, social,
cultural, physical, and financial capital, and natural
resources and the environment. The target area was
Roi Et province. The data from year 2012 show that
Roi Et province has responded to the royal project on
the cattle farming initiative and has successfully
operated it by possessing the highest number of
buffalos among all provinces, accounting for 4.34
percent of the total number of cattle in the country.
Such a project has encouraged the public to value
buffalos and increased the demand for buffalos.
Specifically, the researcher examines the
Kasikhamkasaranurak network, a social network
which conducts activities in Thai buffalo
conservation, comprising the Ban Nong Teong
community in Muang district, Roi-Et, Ban Pa Sang

388

in Jaturapakpiman district community, Nong Yung
School in Muang district, Roi-Et, Tessapalad Paraeri
in Muang district, Roi-Et, and Prasert Songkram
Camp in Muang district, Roi-Et.

A. Data Collection
The target population consists of those who are
knowledgeable in buffalo conservation and academia
in specific fields since this research study focuses on
the search for innovative conservation strategies and
knowledge management through mutual learning.
The research study was conducted from January
2012 to October 2012. The sources of research data
are as follows: (1) Documentary sources from related
theoretical research studies, text books, research
papers, and journal articles, (2) Primary sources from
consultation with specialists in the field and
suggestions from experts to determine the content,
directions, tools, and analysis, and (3) Fieldwork
from participative observation, in-depth interviews,
and casual conversations.

The research tools in this study are as follows:
(1) Discussions, unstructured interviews with
individuals and groups and making recordings.
(2) Conversations which further lead to
conclusions from related persons in order to validate
data. In so doing, everyone has an equal right to
propose ideas or disagreement and sort out reasons
for such disagreement.
(3) Participatory observation by participating in
activities in order to observe necessary behavior
together with conversations, note-taking, and video-
recording for referencing and coding added data.
(4) A social mapping survey in order to
record stories with a simple and easy map of relevant
dimensions at different times such as in the social,
economic, and physical areas and relationship
between the buffalo and society.
(5) In-depth interviews in order to gain insight
into interesting information and obtain a new body of
knowledge.
(6) Recordings in the following four aspects: 1)
Memorization: The conversation flows naturally
while the researcher memorizes important
information and takes notes later, 2) Note-taking:
The researcher takes short notes of important
information and explains the details later, 3) Field-
work: the researcher takes notes and observes
behavior through participatory observation and
conversations, and 4) Recordings: the researcher
video-records as well as decodes images.
(7) Data triangulation to increase research
validity and reliability.

B. Data Analysis
The researcher analyzes the emotions, attitudes,
values, and beliefs which reflect values and
meanings of the particular events and phenomena of
the target groups in order to interpret the findings
from a substantial number of events that are visible
and makes assumptions until arriving at confirmation
(Chantavanit, 2012: 15) or at what is known as
analytic induction.

C. The innovation
Thai buffalo conservation strategies present a
broad concept that encompasses the problem-solving
process that occurs within the organization or the
interactive process between organizations. The
relationship may be characterized by formal or
informal network cooperation or a diversified
learning process such as learning by using, learning
by doing, and learning by sharing. Knowledge
exchange is characterized by tacit knowledge and
codified knowledge which corresponds with the
National Innovation Agency which proposes that
innovation results from the process of interaction and
cooperation between individuals and institutions
involved. Such interaction leads to learning and
spreads knowledge as well as shares ideas and
experiences in order to solve problems and apply
knowledge in a developing economy, society, and
environment. The social cooperation network derives
from the aggregation of those groups with similar
concepts and goals to formulate activities, exchange
knowledge, and create bargaining power to achieve
common goals.

IV. RESULTS

The findings indicate that Ban Nong Teong
community, Nong Hong Wang sub-district, Muang
district, Roi Et give importance to the use of Thai
buffalos for local development according to the
traditional Thai lifestyle. Since the price of
agricultural products has increased and the number
of local-bound buffalos has decreased dramatically,
the integration of people with the same interests in
community development strengthens the concept of
self-reliance in using buffalos to reduce costs. This
community has developed an area of 12 rai as a
center for conscious building and utilization of
buffalos, a prototype of buffalo conservation and
restoration of local-bound culture among farmers,
buffalos, and rice. Such an initiative led to a
cooperative network under the name
Kasikhamkasonnurak in 2011. The Thai buffalo
conscious-building operation center acts as a driving
mechanism to expand cooperative learning networks
and other organizations in several areas, namely Ban
Nong Teong community in Muang district, Roi-Et,
Ban Pa Sang in Jaturapakpiman district community,
Nong Yung School in Muang district, Roi-Et,
Tessapalad Paraeri in Muang district, Roi-Et, and
Prasert Songkram Camp in Muang district, Roi-Et.

The Kasikhamkasonnuraks knowledge
exchange in seminars on February 7
th
, 2012 and

389

September 22
nd
, 2012 on The Search for Thai
Buffalo Conservation Strategies led to the following
conclusions: (1) buffalos are animals supporting
local economy and adding value to society and
natural resources and the environment. However, the
number of these buffalos as well as consciousness on
buffalo utilization have decreased dramatically, (2)
Thai buffalo conservation conveys the utilization of
the existing buffalos for local development, (3) Thai
buffalo conservation strategies appropriate for local
development comprise 3 strategies: 3.1) created
strategy, 3.2) application strategies, 3.3) conscious-
building strategies, and 3.4) strategy supporting
activities comprising the following four activities:
4.1) increasing the number of buffalos, 4.2)
developing utilization and a deep bond among
farmers, buffalos, and rice, 4.3) developing the
interdependence and complementary relationship
among the people, the buffalos, and the forest, and
4.4) regaining consciousness of the buffalo bond in
order to build local cultural relationships among
people, buffalos, and rice. This relationship model is
called strategy CACs+4A (See Figure 1).

FIGURE I: STRATEGY CACS + 4A

The CACs+4A strategy relationship is a
relationship between creating or increasing the
number of buffalos for utilization in local
development and consciousness of love that results
in a creation of a dynamic drive. The dynamic
strategy is a learning process that involves activities
of groups of people, tacit knowledge, and explicit
knowledge in collaboration with economic, social,
and natural resources, and environmental dimensions.
The research results on this dynamic strategy are as
follows:
(1) The created strategy works in two ways: 1)
The Kasikhamkasonnurak Network in cooperation
with public and private agencies. The business
alliance of the Mall Group focuses on the value of
Thai buffalos for local development. They have
developed a merit-making project by buying the
buffalos that would have been sent to a
slaughterhouse and giving them to the
agriculturalists of the Kasikhamkasonnurak Network.
Furthermore, with the support of the royal project for
its cattle bank by the Department of Livestock
Development and the Roi-Et Livestock Development
Office. The Kasikhamkasonnurak Network has
conducted an activity of returning the buffalos to the
fields by distributing them to the network as utilized
and live assets; 2) Increasing the number of buffalos
by natural breeding and artificial insemination.
(2) Application strategies, the findings from
gathering information by conversations, in-depth
interviews, and participative observation of learning
activities are as follows: 1) a deep bond among
farmers, buffalos, soil, and rice is created by utilizing
the low-cost and effective buffalo waste fertilizer. It
brings about recovery of the ecological system and
diversity of living creatures on the lands which are
food sources of both plants and animals. The fresh
buffalo waste can be used in household biogas
production which is an alternative energy. It can
prevent and reduce use of chemical substances for
getting rid of weeds in the paddy fields and promote
the utilization of empty land to raise cattle; 2)
network participation is created by the process of
raising fertilizer funds to sell as materials for organic
fertilizer production. It creates the supplementary
incomes which is directly beneficial for the economy;
3) the buffalos can be used as low-cost labor for
small-area farming and planting instead of using
high-cost agricultural machinery; 4) develops the
interdependence and complementary relationship
among the people, the buffalos, and the forest. The
community forests are food source with biodiversity
which have a complementary relationship with the
community, and the space can be used for cattle
farming (community cattle farming) during the rice
production season when cattle cannot be raised in the
paddy fields. The buffalo waste helps fertilize the
forests and the buffalos provide a barrier that
protects the forests from deforestation. In other
words, buffalos have a part in conservation of
community forest resources. The network has
organized the forest and buffalo activities for
sustainable dependence and support.
(3) Conscious-building strategies, according to
the information gathered of from conversations, in-
depth interviews and participative observation of the
Thai buffalo-love-consciousness activities, the
findings are as follows: 1) a deep bond among
farmers, buffalos, and rice is an aspect of local
culture which promotes love consciousness, bonding
and conservation in the mind of the owners. This
Conscience
Local Culture
Farmers, Buffalos, Rice
Buffalos
return from slaughter
houses to paddy fields
Complementary Benefits
Farmers, Buffalos, Rice

Forests and Buffalos
together exist
Complementary Benefits
Farmers, Buffalos, Forests

390

results in local and Thai wisdom and beautiful Thai
customs such as the auspicious rituals on rice and
buffalos 2) learning courses between the network
and educational institutes for cultivating
consciousness, love, and bonding in youths from
taking care of buffalos after school or on weekends.
Youths can spend their spare time with families
which can reduce their undesirable behaviour.

V. CONCLUSIONS AND DISCUSSIONS

The number of buffalos has increased by 1.26
percent in the area of the dynamic learning process
which corresponds with His Majesty the Kings
concerns about abandoned buffalos and the
continuously decreasing number of buffalos in
Thailand. He directs Thai people to conserve
buffalos among Thai locals and according to the food
security and energy strategies of the National
Economic and Social Development Plan No. 11
emphasizing the integrating of six terms of capital:
human, social, physical, financial environmental, and
cultural capital. The plan focuses on the restoration
and promotion of community cultural values,
especially agricultural way of living and culture. The
plan also supports research and development of plant
and animal species as well as agricultural technology
that is environmentally friendly. It promotes the
creation of value-added agricultural products and
energy on the basis of local knowledge, and
knowledge creation, and gives priority to the balance
between conservation and exploitation. This reflects
balanced and sustainable development which aims to
improve the quality of the people.
According to the application strategies, the
results show that buffalos provide economic value at
the household level both directly and indirectly.
They can strengthen the families and communities in
sustainable local development, which relies on the
participatory process of the social network and
interaction for knowledge management as per the
network theory. This theory derives from networks
which have similar concepts, goals, working
methods, and activities. Participants with common
interests are doing activities together and exchange
their knowledge among each other to accomplish
their goals. This results in transfer of learning and
dissemination of knowledge, thought, and shared
experience for problem-solving and their
applications in terms of economy, society, natural
resources and environment, with complementarity
and sustainability and corresponds with the
philosophical principle of sustainable economy.
Mutual learning results in consciousness of love,
bonding, and conservation. This kind of internal
behavior represents feelings, thoughts, attitudes,
values, beliefs, ideology, events, and phenomena
which reflect group behavior. Everyone participates
and gains equal benefits starting from planning,
determining the procedures, evaluating, and solving
the problems. Problem-solving for local development
employs community-based research (CBR). The
results show that innovative Thai buffalo
conservation strategies require conservation and
maintaining the fertility of the forests which are the
food sources of humans and buffalos. Farmers and
buffalos have complementary and interdependent
relationships. Moreover, local cultures teach and
build consciousness among groups of people
especially a deep bond among farmers, buffalos, and
rice since ancient times. This creates value
consciousness in maintaining and restoring the local
culture, even though not completely, it becomes a
tradition to descend and continuously transferred by
the network.
REFERENCES

Chantawanit, S. (2012). Methodology of Qualitative
Research. 12
st
Ed. Bangkok: Churalongkon
University, 2012 : 15.

Chantarakana, C. (2012). Thai agriculture: animal
genetic diversity and utilization, Search on 20 July
2012. From http://www.gotoknow.org/ blogs/posts.

Intapanyo, P. (2002). Ituppajjayata buddhist
principles 100
th
year buddhataspiku commemoration.
6
th
Ed. Bangkok : Sukkhapabjai Publishing.

Kaewthep, K. (2010). Characteristics and
methodology of community-based research. 1
st
Ed.
Chiang Mai: Vanida Publishing Limited Partnership.

Kasonkasiwit School. (2012). Search on 25
December 2011, form http://www.chaipat.or.th/
chaipat.

Kubkaew, K. (2010). Local wisdom on Thai buffalos
selection. 1
st
Ed. The Agricultural Co- operative
Federation of Thailand, Limited Publishing.

Development Board. The National Economic and
Social Development Plan No. 11B.E. 2555-2559.
2011 : 60-61 ; March, 2012.

Roi Et Province Livestock Office. (2011).
Operational plan manual as of fiscal year 2012.
2011: 121

Sajjapan, B. (2004). Local buffalos breeding
development and conservation for sustainable utilization.
1
th
Ed. Bangkok: Research Abstract Group Research
and Buffalos Develop Livestock Department : p3.

Sanghuaypai, N. (2009). Buffalo production for
conservation and sustainable development. 1
st
Ed.

391

Department of Livestock Development Bangkok:
Buffalo Research and Development Sections, Bureau
of Animal Husbandry and Genetic Improvement,
Livestock Development. Ministry of Agriculture and
Cooperatives.

The Information Center of Livestock Department
(2012). Animal statistics, Search on 25 March 2012.
Form http://www.dld.go.th/datacenter.

Thai Buffalo Conservation Village. (2012). Thai
buffalo conservation village (buffalo villlage),
Search on 20 July 2012. From http://
www.suphan.biz/Villagebuffalo.htm.

The Buffalo Conservation and Development Center.
(2012). Thai buffalos nearly distinct conservation is
required, search on 20 July 2012. http://www.
thaibuffaloconservation.com/history.html.

The National Innovation Agency, (2010). Minister
of Science and Technology. Innovative management for
executives ( revised edition). 3
rd
Edition. Bangkok:
Innovation Culture Promotion Department, National
Innovation Agency (Public Organization).


392

Factors Affecting Academic Achievement of
Nursing Students: A Proposed Innovative
Learning Environment

Kerdsiri Hongthai
Nursing Faculty ,Vongchavalitkul University
NakhonRatchasima, Thailand , kerdsiri_h@yahoo.com

Kanitha Jodnok
Nursing Faculty ,Vongchavalitkul University
NakhonRatchasima, Thailand ,kachodnock@hotmail.com

Abstract - The purpose of this study was to explore
factors relating to and affecting academic achievement
of nursing students in the Nursing Faculty at
Vongchavalitkul University. The factors included grade
point average at high school, attitude toward nursing
study, academic behavior, friend relationships,
preparation for examination, teaching behavior and
university services. The sample was 224 student nurses
who were studying in year 2010. There were 203
questionnaires included in this study. The response rate
was 90.62 percent. Data were collected using the
questionnaires with Likert type scales with 5 categories.
Data were analyzed by SPSS for Windows using
descriptive statistics: mean and standard deviation,
Pearson Correlation Coefficient, and Stepwise Multiple
Regression Analysis. The results are as follows: 1.
Factors significantly (p 0.01) correlated with
academic achievement of nursing students were
attitude toward nursing study, friend relationships,
preparation for examination (r = .989), academic
behavior (r = .956) and grade point average at high
school (r = .339). 2. Factors significantly (p 0.01)
predicting academic achievement of nursing students
are friend relationships ( = .872), grade point average
at high school ( = .250), attitude toward nursing study
( = .164), preparation for examination ( = .114),
academic behavior ( = .065). Friend relationships,
grade point average at high school, attitude toward
nursing study, preparation for examination, and
academic behavior accounted for 82.80 percent of
variance in academic achievement of nursing students,
F (7.307).

Key words: Factors, Affecting, Academic Achievement

I. INTRODUCTION

Development of human power depends on the
quality of education management with emphasis on
higher education. If the people are qualified this will
promote social and national progress. The aim of
National Education since 1999 is to develop the Thai
people with physical, mental, intellectual, moral,
ethical and cultural knowledge and ability to co-exist
happily with others (Ministry of Education, 1999).
Successful education management at higher
education level is achieved by the recognition by the
students that the teachers will be developed and
encouraged to cover the students mental and
psychosocial behavior (Broussean & Freeman, 1984)
and education must be managed to give students the
opportunity to enhance their knowledge and skills
throughout the duration of stay in the profession.
This is consistent with the actual and future needs.
Sustainable development requires the development
of learner-centered education focusing on practical
learning experience as the foundation (UNESCO,
1996). Therefore, the researcher is aware of the
importance and necessity of the factors that influence
the academic achievement of the students, the basic
information that is helpful for improving the
management of teaching and preparing students to be
ready for examination as professional nurses and
possess abilities suitable for the profession is
standards. The purposes of the research are as
follows:
1. Investigate the academic achievements of
(1-4) year nursing students, studying in year 2010.
2. Compare academic achievements of
students for each year.
3. Examine factors associated with academic
achievement of the students for each year.
4. Examine the relationship between the grade
point average at high school, attitudes towards
nursing study, academic behavior, friend
relationships, teaching behavior, and university
services and preparation for the examination of
nursing students with academic achievement at
Vongchavalitkul University.

393

5. Analyse factors that influence the academic
achievements of nursing students at Vongchavalitkul
University.


Nursing education is a study focusing on
student-centered activities by allowing the students
to learn from practice or true experience. The
teaching process in nursing is preparing nurses to be
skilled both academically and in having the ability to
practice nursing as a profession. Teaching is divided
into two important parts, comprising the theory and
practice that are related (Unipant, 1997). There are
several components associated with quality parts
starting from the input factor including courses of
study, student nursing, materials and convenient
tools for production processes consisting of
management methods, teaching activities and other
supporting activities. Last, productivity includes the
quality of graduated nursing students that appears
only when the quality of education is high at all the
components of the production process. This study
indicates that the quality index can be determined by
success in learning or academic achievement of
students (Bloom, 1984) as a result of factors of input
and the production process to achieve success in
learning by the students and responsible education,
thus giving more attention to these two factors.
Since academic achievement is an indicator of
productivity, the development of knowledge and
understanding of the learning process by each
institution is important to achievements which are
indicators of the quality of institution responsibilities
(Jesson, 1995). Who is responsible for education
management from senior management to officers
such as teachers must want to know about the
academic advance of the institution over the years to
indicate performance on the job and to be a data base
of education planning for the future (Lambert &
Lines, 2000). The human learning process is not
directly caused by the actions of the school but also
caused by the nature of the learning process,
depending on the abilities of students of many
different backgrounds of the people; for example, the
record of achievement and economic status of
families. It is found that background affects the
variability of the students achievement (Saunders,
1997).
Vongchavalitkul University is the first private
university in the Northeast of Thailand. It was set up
to meet the educational needs of the people in the
Northeast; especially the Nursing Faculty was
established because demand for nurses had increased
and the goal of the course is the development of
nursing students as knowledgeable professionals to
possess global competency and have life skills as
desirable features of the course. Academic
achievements of students as part of the course
demonstrate the effectiveness of the desirable
features of the Graduate Nursing Program (Nursing
Faculty, Vongchavalitkul University, 2006).

III. METHODOLOGY

The study of factors influencing the
academic achievements of students of the Faculty of
Nursing, Vongchavalitkul University is descriptive
in nature. The population for this research is the
nursing students with the 1
st
4
th
year of study in
2010 at Vongchavalitkul University. The total
population for this research comprises 224 persons.
The tools were check lists and queries with a
5 level Likert rating scale, in 7 parts below:
Part 1: General information on the students
profiles, grade point averages at high school and
GPAs of students from Year 1 to the second
semester of study in 2010.
Part 2: Queries on attitudes towards nursing
study with a scale ranging over 5 levels comprising
12 questions.
Part 3: Queries on academic behavior with a
scale ranging over 5 levels comprising 22 questions.
Part 4: Queries on friend relationships with a
Part 5: Queries on teaching behavior with a
Part 6: Queries on university services with a
Part 7: Queries on preparation of the students
for the examination with a scale ranging over 5
levels comprising 11 questions.

Tools and Quality Testing
The researcher applied the questionnaire to
Usanee Thepwarachai and three professionals
grouped the items to improve the content validity
and found the Index of Congruence as a sum of 0.81
and then tested the reliability of the questionnaires
with 30 nursing students in Suranaree University of
Technology, Nakhon Ratchasima. The Cronbach's
alpha coefficient was 0.859.

Data analysis.
1. Analyze variance in the general and basic
information by descriptive statistics including
percentages, mean and standard deviation.
2. Analyze relationships between the factors
for the 8 parts and academic achievement by Pearson
correlation analysis.
3. Analyze factors that influence the academic
achievement of nursing students through multiple
regression analysis.

394

IV. RESULTS

Part 1 General information on a sample group
of 203 persons, mostly female: 192 persons
comprising 94.58 percent. Age over 20 years: 114
persons comprising 56.15 percent. The score at the
end of Grade 6 ranges between 2.00 to 3.00 applying
to 108 persons, representing 53.20 percent and the
grade point average for the Bachelor of Nursing,
ranges from 3.00 to 3.50 applying to 105 persons,
representing 51.72 percent.

TABLE 1: COMPARISON OF THE ACADEMIC ACHIEVEMENT OF THE STUDENTS IN EACH YEAR

Part 2 The comparison of the academic
achievement of students for each year.
Part 3 Factors associated with academic
achievement of students in each year at
Vongchavalitkul University were as follows:
Year 1 The average score on teaching
behavior was the highest, then attitudes towards
nursing study, friend relationships, preparation for
the examination, university services, academic
behavior and grade point average at high school
respectively.
behavior was the highest, then university services,
attitudes towards nursing study, friend relationships,
academic behavior, preparation for the examination
of students and grade point average at high school
respectively.
behavior was the highest, then university services,
attitudes towards nursing study, friend relationships,
academic behavior, preparation for the examination
and grade point average at high school respectively.
behavior was the highest, then attitudes towards
nursing study, university services, friend
relationships, academic behavior, preparation for the
examination and grade point average at high school
respectively.
Part 4 The relationship between the various
factors and the academic achievement of nursing
students of Vongchavalitkul University. Academic
achievement of the sample group are related to
attitudes towards nursing study, friend relationships
and preparation for the examination (r = .989)
academic behavior (r = .956) and grade point
average at high school (r = .339) at a statistical
significance of 0.01 (See Table 2).
Part 5 Factors influencing academic
achievement of nursing students.
There were significant predictors of academic
achievement of nursing students at Vongchavalitkul
University, including friend relationships ( = .872),
grade point average at high school ( = .250),
attitudes towards nursing study ( = .164),
preparation for the examination ( =.114),
and academic behavior ( = .065) (R2 = .828, F =
7.307).These factors could explain the variation in
academic achievement up to 82.80 percent (See
Table 3).

Year SD
1 2.70 0.73
2 2.51 0.61
3 2.59 0.71
4 2.50 0.60

395

TABLE 2: THE RELATIONSHIP BETWEEN VARIOUS FACTORS AND ACADEMIC ACHIEVEMENT OF
NURSING STUDENTS

Factors
G
r
a
d
e

p
o
i
n
t

a
v
e
r
a
g
e

a
t

h
i
g
h

s
c
h
o
o
l

A
t
t
i
t
u
d
e
s

t
o
w
a
r
d
s

n
u
r
s
i
n
g

s
t
u
d
y

A
c
a
d
e
m
i
c

b
e
h
a
v
i
o
r

F
r
i
e
n
d

r
e
l
a
t
i
o
n
s
h
i
p
s

T
e
a
c
h
i
n
g

b
e
h
a
v
i
o
r

U
n
i
v
e
r
s
i
t
y

s
e
r
v
i
c
e
s

P
r
e
p
a
r
a
t
i
o
n

f
o
r

t
h
e

e
x
a
m
i
n
a
t
i
o
n

A
c
a
d
e
m
i
c

a
c
h
i
e
v
e
m
e
n
t

1. Grade point average at high school 1
2. Attitudes towards nursing study .339** 1
3. Academic behavior .332** .989** 1
4. Friend relationships .320** .989** .385 1
5. Teaching behavior -.083 .008 .967** -.024 1
6. University services -.097 -.042 .039 -.034 .019 1
7. Preparation for the examination .339** .989** .967** .977** -.012 -.055 1
8. Academic achievement .339** .989** .956** .989** -.024 -.047 .989** 1

*p < .05, ** p < .01

TABLE 3: FACTORS INFLUENCING ACADEMIC ACHIEVEMENT OF NURSING STUDENTS

R = .910; R
2
= .828; F = 7.307; SE = .294; A = .418, p < .01

V. DISCUSSION

1. Comparison of the academic achievement of the
students in each year

Research indicates that academic achievement
of students each year was highest in their 1
st
year,
then followed by the 3
rd
, 2
nd
and 4
th
year of study,
respectively. That is due to teaching of theory to give
knowledge on the subject. Students learn the
fundamental courses in their 1st year and they are
prepared for learning more specific courses in the
subsequent years, which provide students with the
ability and readiness to practice with their patients
(Othkanont, 1985) such as adult nursing and teaching
practical knowledge focused on implementing
knowledge gained from experience in the class and
applied in real situations. The curriculum organizes
students into small groups, so there is intensive care
from nursing instructors. The practice is divided into
2 phases: Phase 1 is the practice of nursing
fundamentals in the 2
nd
year of study and Phase 2 is
factor B SE t

1. Friend relationships
2. Grade point average at high school
3. Attitudes towards nursing study
4. Preparation for the examination
5. Academic behavior

.961
.262
.154
.095
.076

.872
.250
.164
.114
.065

.092
.082
.50
.033
.036

2.329

396

the practice of nursing courses especially for students
from the 2
nd
to 4
th
years of study. In the 2
nd
year, they
must learn both the theory and practice on the wards
as their first professional nursing experience, in
which they have to adapt themselves to the new
atmosphere. This affects the academic achievement
of nursing students which decreases from the 1
st
year.
In the third section of the 3
rd
year which continues
from the 2
nd
year, the learning comprises both theory
and increased practice, on the patients wards to
understand the processes. As a result, there is
increased academic achievement. That makes the
second section. In the 4
th
year, since the curriculum
structure contains more specific context and training
in nursing that can be used in real situations, the
students seem to have a minimum academic
achievement.

2. Factors related to and influencing academic
achievement of nursing students at Vongchavalitkul
University.

1. Friend relationships are related to academic
achievement with a statistical significance at the .01
level, and can predict academic achievement up to
82.80 percent. According to the study of Boyd (Boyd
ref. in Khamwirat, 1999), in research for testing the
academic achievement and academic progress of
students over a 10 years period found that the change
in academic achievement of students in the period of
10 years was predicable from the relationship
between friends or concluding relationships between
friends which was related to academic achievement
of students, which was consistent with Barr (2008)
Barr found that for students who have an extrovert
personality it was possible to predict attitudes and
positive behavior in nursing education. Students who
were extrovert and would like to meet people have
the opportunity to exchange and share their
knowledge with others. The nursing students in
Vongchavalitkul University have an environment on
a daily basis to stay in college, both in class and
outside the classroom. Groups of friends are
important to student life. In this study, we found that
they are in groups. Learning activities have various
styles. With most of the activities and practice in a
group, students are very close together and the friend
relationship is important in the academic nursing
system.
2. Grade point average at high school
correlates with academic achievement at a statistical
significance of .01, and can predict academic
achievement up to 82.80 percent. Grade point
average at high school is related to academic
achievement. The results showed that the grade point
average at high school was positively correlated with
academic achievement of students. Students who
have good grade point averages at high school also
obtain high grade points in graduate nursing. Such
findings are consistent with studies of Chancharoen
(2006). Chancharoen showed that according to the
opinion of nursing students, the GPA on high school
graduation is related to academic achievement.
Laboonkham (2002) also found that the factors that
influence the academic achievement of students in
the College of Science of the National University of
Laos showed that the average score at the end of
high school was one of the factors that positively
influenced the academic achievement of students. In
addition, Phanpakdee (1999) reported that factors
related to the academic achievement of medical
students in the Faculty of Medicine,
Srinakharinwirot University were their grade points
in Grade 6, which positively correlated with and
predicted results of the study including workshop.
This is consistent with Wharrad (2003) who found
that for the long-term in Nursing, the background
knowledge of English in High School of 181
students (General Certificate of Secondary
Education) can predict success in the learning nurse.
3. Attitudes towards nursing study correlate
with academic achievement with a statistical
significance at the .01 level, and can predict
academic achievement up to 82.80 percent,
according to Meesook is (2006) study, which
reported analysis of factors related with academic
achievement in science of Diploma Students in
Ayutthaya College. Collecting data from 3
rd
Year
students in academic year 2006, with a sample of
260 persons obtained academic achievements in
science at the average level (2.97) and attitudes
towards science, attitudes towards the science
teacher, achievement motivation to learn, economics
of family, and friend relationships among college
peers at an average level that was consistent with the
study of Phinyo (2000) who showed some factors
related to academic achievement of mathematics
students in a university. The findings indicated that
factors associated with academic achievement of
mathematics students in Naresuan University include
attitude toward mathematics, the teaching profession,
and grade point average of all subjects in high
school.
4. Preparation for the examination correlate
with the academic achievement at a statistical
significance at the .01 level and can predict academic
achievement up to 82.80 percent, according to the
study of Phommaharach (2003) which reported that
behavior such as preparation for the exams
influenced the academic achievement of students in
the Faculty of Science, Chiangmai University:
Among 60.2 percent of students who prepared for
the exam, 80.3 percent of the students with a GPA
in the range higher than 3.25 have prepared for
examination, while only 55.5 percent of the
students with a GPA 2.00 - 2.49 have prepared for

397

examination. Therefore, students should pay
attention to this behavior. If the students have good
preparation for the exam, they will have good
academic achievement. The preparation for the
examination is a process of understanding the lesson.
In order for the students to apply existing knowledge
to meet the objectives of the coming tests, the review
or training exercises often help them have the skills
to do the test. Unless in higher education especially
in health education that is limited in examination or
tests, the students must be prepared in other ways,
such as scheduling and planning for preparation as
well as reading.
5. Academic behavior correlated with
academic achievement at a statistical significance at
the .01 level and can predict academic achievement
up to 82.80 percent. The results found that academic
behavior has a positive relationship to the academic
achievement of students. Students with good
academic behavior have a high average score when
they graduate in nursing (Bloom, 1984). Bloom
showed that having arranged 5 stages of learning
including the perception stage, that is the students
informed values that must be built into them, the
response stage such as that students informed
knowledge and an interest in those values, then they
had the opportunity to respond in some manner.
Next, in the esteem stage, the students obtained
experience with the values and appreciated the
values that made them have positive attitudes
towards values. Furthermore, in the organization
stage, the students appreciated the value they added
to their value systems, leading to the creation of
character stage, in which the students practice their
values consistently, and as habits. Thus, students
with good practice in learning as a habit will get high
academic achievement, which is consistent with
the study of Pholpol and Chomroong (2003)
who indicated that students with an Industrial
Management major at King Mongkut's University of
Technology, North Bangkok, always paid attention
to the instructors, followed up on the lessons when
they were absent, discussed their studies with peers,
did homework by themselves, and often questioned
teachers have higher academic achievement.

VI. CONCLUSIONS

Research indicates that friend relationships,
grade point average at high school, attitudes towards
nursing study, preparation for the examination and
academic behavior correlate positively with
academic achievement of nursing students at the
Vongchavalitkul University. This suggests that the
university management levels should innovatively
manage the atmosphere for the nursing students so
that they achieve higher academic performance. In so
doing, institutions should focus on innovative
activities to improve student learning, activities that
promote knowledge sharing, such as mutual learning
through Peer Tutoring Technique or Group Process
that focuses on academic activities, etc.

VII. RECOMMENDATIONS FOR FUTURE
RESEARCH

1. There should be further study to analyze
the academic achievement of students (Grade point
average for all programs) on the exam to register for
the Certificate of the nursing profession to improve
the quality and standards of education of the
students.
2. There should be studies to compare
factors affecting the academic achievement of
nursing students as between public and private
institutions to plan for the innovative learning
environment.
3. There should be qualitative studies of
factors affecting academic achievement of academic
behavior such as an in-depth study of academic
behavior, preparation for the examination by
students, and friend relationships to develop a case
study of good practice.
4. There should be further studies by
analyzing the institutional context with the academic
achievement of student learning to guide policy and
nursing education in universities.

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Brousseau, B., & Freeman. D. (1984).Comparing
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Chancharoen, K.(2006). Evaluation of teaching by
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Business Management of Rajamangala Institute at
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Education Today, 23(4): 246-253
.

.

399

The Thai Royal Forestry Department:
The Need for Reform

Auschala Chalayonnavin
Doctoral Candidate of Public Administration in Public Policy and Public Management,
Faculty of Social Science and Humanities, Mahidol University, Bangkok, Thailand: auschala_c@hotmail.com

Somboon Sirisunhirun
Associate Professor in Public Administration (Public Policy and Public Management),
Faculty of Social Science and Humanities, Mahidol University, Thailand: somboon.sir@mahidol.ac.th

Abstract -- The forests of Thailand have been depleted at
an alarming rate over the past few decades due to illegal
encroachment and deforestation. This situation has not
been helped by incoherent and uncoordinated
government policies regarding natural resources and
agricultural expansion. As a result, the Royal Forestry
Department, as the direct agency responsible for the
forestry area maintenance and governmental policy
implementation, cannot address the problems effectively.
This paper attempts to examine problems regarding the
Royal Forestry Departments policy implementation with
a mission to improve the state agencies so they can
sustain Thai national resources in a more effective and
efficient way. The research uses mixed method analysis.
The priority qualitative data is gathered by in-depth
interview with 5 senior executives who are directly
involved with illegal deforest suppression and repression.
The minor qualitative data is gathered from literature
review. Then, a triangulation technique is used for data
verification combining multiple observers including
experts, literature reviews and officers using Delphi
analysis. The proposed solutions I outline are as follows:
1. The Royal Forestry Department should re-adjust its
structure to be consistent with other organizations
responsible for similar problems. 2. The Royal Forestry
Department officers must be trained and educated
regarding their roles, responsibilities and authorities
under the nation's laws. 3. Any whistle-blowers within the
Department, and also law enforcement personnel, must
be fully protected from political intervention and receive
fair justice.
Keyword-- State agencies reforms, Resources conservation

I. INTRODUCTION

Thai forests are a majestic and diverse natural
heritage for the nation. They contribute both directly
and indirectly to ecological and economic services.
Forests support energy flow and chemical cycling,
they reduce soil erosion, absorb and release water,
purify water and air, influence local and regional
climate, store atmospheric carbon, and provide
numerous wildlife habitats. Forests also provide fuel
wood, lumber, pulp to make paper, mining, livestock
grazing, recreation, and jobs.
More than half of the world's estimated 10 million
species of plants, animals and insects depend on the
existence of tropical forests for their survival and well-
being. The benefit of a healthy rainforest ecosystem
to these species is obviously huge. Many species have
specialized niches, and they would not be able to
survive if their ecosystem is destroyed or degraded.
However, rainforests are being cleared to harvest
timber or to convert land for cattle operations. Nearly
half of the worlds species of plants, animals and
microorganisms will be destroyed or severely
threatened over the next quarter century due to
rainforest deforestation. (Sahney and Benton, 2008)
Currently, 121 prescription drugs currently sold
worldwide come from plant-derived sources. And
while 25% of Western pharmaceuticals are derived
from rainforest ingredients, less than 1% of these
tropical trees and plants have been tested by scientists.
Although these are just a few reasons for their
preservation, the rainforests are obviously more
valuable alive than cut and burned due to human
activity. (Viyada Dokphrom, 2002).
The main forest product is wood which is
originally used as a precursor for many products.
Wood plays a major role in modern economy as most
industries utilize wood for their goods procession.
Therefore, forests can be both givers and protectors of
humankind, which makes it difficult to assess or reflect
how important forests may ultimately be as to the
national GDP. With these implications laid out,
Thailand could lose forest resources rapidly and
irreversibly, if they continue to be exploited at the
present rate for more than 20 years. (Viyada
Dokphrom, 2002).
From current surveys, we can see that the problem
of illegal logging and deforestation became worse over
the last 10 years in Thailand. From the earliest aerial
photograph survey in 1961, the national forest area was
273,629.00 square kilometers or 53.3 % of total
400

national area. The record shows that more than
102,043.35 square kilometers or 19.89 %, or 37.3 % of
total forest area had disappeared by deforestation
within 5 decades. The missing forest area is equal to 88
Khao Yai national parks. Therefore, this suggests that
Thailand has lost forest over two areas of Khao Yai a
year since 1961. (Sueb Nakasatien Foundation, 2011).
The logging ban was the most drastic form of
forest protection ever attempted in Thailand, although
logging in plantations and mangrove forests was not
affected. The ban officially terminated the relationship
between the Royal Forest Department and logging
concessionaires, and caused uncertainty about the
Royal Forestry Departments future role in forest
management. (IUCN, 1996) The goal of the ban was,
in the first instance, to protect the remaining natural
forests and secondly, to enforce rules and punishment
of encroachers in the protected forests. There was
general consensus that logging had contributed to or
actually had caused severe nation-wide deforestation,
although it was recognized that appropriate logging
practices do not cause deforestation directly. (FAO,
1998) However, logging roads indirectly provide
access for illegal loggers and the rural poor as they
search for new land. Some individuals and
environmental groups viewed the ban as an opportunity
to shift towards integrated participatory development
with proper conservation measures. (FAO, 2012).
In 2011, the Deputy General Director of the Royal
Forestry Department, Dr. Vitoon Chalayonnawin,
commented that perpetrators motive to trespass is the
huge rewards from valuable wood. As the price of
wood becomes higher their economic momentum for
foresters to supply wood in different ways; both legal
and illegal. The original sources of illegal behavior can
be grouped in the following ways; 1. A rapid growth of
sawmills, paper mills and tourism 2. An unclear cut
forestry demarcation 3. A political influence over local
officers and governmental operation 4. An unclear cut
of the state officers authority 5. An overlapping
authority between state agencies on forestry prevention
and suppression 6. An overlapping of laws
enforcement over the problem area. All these factors
significantly; 1. Obstruct state officers operation, 2.
Deter the law enforcement and 3. Disturb government
policy implementation regarding to forestry
conservation. Consequently, officers cannot effectively
achieve their mission on natural forest conservation.
These trigger them to gradually demoralize themselves
and decrease their effort to conserve national forest.
(Vitoon Chalayonnawin, 2009).
In 1992, the Royal Forestry Department research
stated that there are 5 major units directly enforce
policy implementation in response to Thais
conservation areas namely; 1. Wild-Fire Control
section 2. Prevention and Suppression Planning section
3. Forestry Promotion section 4. Planning and
Budgeting section and 5. Legal section. The units have
their main operation to receive governments master
plan and transfer it to their strategic plan. Then, the
plan will be carried on, and be followed-up and
evaluated by their operation in a cooperative way with
the governmental policy cyclical sequence. These
operational units can thoroughly reflect the entire loop
of governmental policy cycle. Therefore, the study can
be completely done from these units as coding analysis
that simplifies policy cycle into blockage implying
policy implementation problem. (Document on Land
Usage Problem, department of Forestry, 2012).
From various reasons mentioning above,
government agencies reforms regarding to the
environmental conservation, a case of the Royal
Forestry Department must be studied, in order to
analyze and synthesize the real causes of problem.
Then the solution to the problem should be modeled in
order to generalize the ways to readjust and re-improve
state agencies relating to their law enforcement and
policy implementation. This study also seeks the way
to prevent state officers from being abused by influent
groups of people and political stakeholders which
results in 1. To preserve state officers moral in order
for them to work correctly and honestly 2. To maintain
state agencies justice and 3. To conserve national forest
for the next generation.

Research Objectives
1. To analyze the status and determine problems
relating to policy implementation of officers in
apprehending illegal loggers in national parks and wild
life conservation parks
2. To propose a model for restructuring
environment conservation agencies: a case study of
the Royal Forestry Department

Scope of the Study
1. Scope on content; the study will be focused on
the problem of policy implementation in national parks
and wild life conservation parks regarding to 5 major
units that directly enforce policy implementation in
response to Thais conservation areas namely; 1.
Wild-Fire Control section 2. Prevention and
Suppression Planning section 3. Forestry Promotion
section 4. Planning and Budgeting section and 5.
Legal section.
2. Scope on Time frame ; the time frame of study
is from November 27
th
, 2011 to August 8
th
, 2012
3. Scope on population; data will be collected from
5 senior executives and experts who are directly
involved with illegal deforest suppression and
repression in national parks and wild life conservation
parks namely; 1. Wild-Fire control section 2.
Prevention and Suppression Planning section 3.
401

Forestry Promotion section 4. Planning and Budgeting
section and 5.Legal section.

II. LITURATURE REVIEW

Thailand has a total land area of 513,115 km2 and
a population of 61.1 million people (1998) with an
annual growth rate of 1.1 percent (World Bank, 2000).
The economy consists of a diverse mix of agriculture,
manufacturing and service industries. Rapid
urbanization has taken place since the 1980s. The
population density is about 120 persons/km2 and 23
percent of the population lives in urban areas. (RFD,
1998).
The Government estimates that Thailands forest
cover declined from 53.3 percent of the total land area
in 1961 to 25 percent in 1999. (FAO, 1999) estimates
place forest cover at only 22.8 percent in 1995. Annual
deforestation rates have exceeded 3 percent for much
of the time since 1961 (FAO, 1998) and reached 3.9
percent between 1976 and 1982 (Jantakad & Gilmour
1999). Reforestation did little to stem the trend. A total
of only 850,000 to 900,000 ha were planted between
1906 and 1996 (RFD 1998; Green World Foundation
1999).
The Royal Forestry Department was established in
1896 for national forest maintenance, law enforcement
on illegal logging and deforestation behavior.
According to the National Development plan, the
forest area should be maintained at 50 % of the total
national area. However, by 1967, the forestry figure
was reduced to 40 % due to rapid national economic
growth and expansion of permanent trespassing by
local communities. In 1989, the declamations of the
logging ban prohibited all logging business
concessions in Thailand. However, the logging ban
also posts diverse effects to national wood supply
regarding insufficient wood stock to cope with
domestic consumption, as a result that instead of
creating key to the solution of forestry degradation.
The policy encouraged illegal logging. (PER, 1992).
Since the establishment of the Royal Forestry
Department in 1896 until the imposition of the logging
ban, Thailand enacted four main forest policies,
according to a few forestry acts and national plans. The
Forest Protection Act of 1913 set out principles for the
long-term exploitation of forests benefiting the State.
The 1961 First National Economic and Social
Development Plan (NESDP) aimed to protect 50
percent of Thailands areas as forests. The second
NESDP (1967) reduced the area to be protected to 40
percent. Finally, the first formal National Forest Policy
was announced in 1985, - emphasizing economic or
production forests and conservation or protected
forests. It divided the 40 percent of land under forests
into 25 percent for economic forests and 15 percent
for conservation forests. The seventh NESDP (1992-
1996), following the imposition of the logging ban,
reversed the allocations to 25 percent of conservation
forests and 15 percent of economic forests to
emphasize conservation objective. (FAO, 1998).
Despite these serious efforts to maintain the
national forest area, the forest area still diminished
continuously due to various pressures. Therefore, the
considerable areas of conservation forests exist only on
paper. Although, the Royal Thai Government try to
provide excessive budgets to forestry plantation in
remote areas, the department still has insufficient
resources and man-powers to maintain those new forest
areas existing by government mission. The illegal
logging is still apparent as their practice was more
advanced than the government officer.
For many reasons addressed above, can point out
that the past attempts by the Royal Forest Department
to rehabilitate degraded forests met with little success
due to overwhelming constraints posed by illegal
encroachers residing in the forests. (Jantakad and
Gilmour 1999) These illegal encroachers were
bolstered by incoherent and uncoordinated government
policies regarding natural resources and agricultural
expansion. An estimated 1.3 million households are
living on the surveyed (official) forestlands (TFSMP2
1993).
Conservation measures have consequently played
a major role in Thailands forestry policy, especially
after 1989. The core legally designated conservation
areas are national parks, wildlife sanctuaries, forest
parks, non-hunting areas, watershed Class 1, and
mangrove conserved forests (declared by Cabinet
Resolution), which total 17.4 million ha. In 2002, a
department of National Parks, Wildlife and Plant
Conservation was separated from the department of
Forestry after the grand bureaucratic reform launched
by Prime minister Thaksin Shinawatra. Both
departments had some overlapping of authority and
responsible areas. Therefore, problems in the
conservation of national forest and natural resources
are inevitable to emerge due to the serious confusion of
laws and regulation overlapping between both power
separations. For example, Forestry department power
is under the Ministry of Agriculture while the
department of National Parks, Wildlife and Plant
Conservation power is under the ministry of National
resources and Environment. The Department of
National Park takes care of the water sources and
wildlife in the forest while the forest areas are under
the responsibility of the Royal Forestry Department.
These confusions had serious impacts on the
operational process of national forest conservation.
(Woradej Juntarasorn, 2001) Moreover, the agencies
administration complexity within the Royal Forestry
Department itself also created confusion about the
402

power and authority between both federal and local
units of operation. This mirage problem can delay
street level operators effort to solve problems within
the field. This unity obsceneness command has played
a vital role in creating problem affecting the
departments performances for many years. (Alongkot
Worakee, 2003).

III. METHODOLOGY

Conceptual Framework
A study on state agencies reform as a mean for
natural resources and environmental conservation; a
case study of the Royal Forestry Department will be
carried on under the institutional framework. The
paradigms of institutional structure will be used as
analyses reference in order to understand problems of
officers policy implementation which can led to the
forest exploitation. The technique usage can enable
researchers to visualize the problem systematically and
in an inter-connective way.
Therefore, the study will perceive the problem of
policy implementation lading to deforestation as a
system that consists of educational, political,
economic, and legal institutes. Each of unit analysis
has to be synchronized into a form of healthy body. So,
the model for problems solving can reflect the
perception of problem structurally and inter-
connectively.

Data Collection
A study on state agencies reform as a means for
natural resources and environmental conservation; a
case study of the Royal Forestry Department is a
qualitative research using mixed method technique.
The priority data is collected from in-depth interview
with 5 senior executives and experts who are directly
involved with illegal deforest suppression and
repression namely; 1. Wild-Fire Control section 2.
Forestry Prevention and Suppression section 3.
Forestry Promotion section 4. Planning and Budgeting
section and 5. Legal sections using open ended
questions designed to encourage longitudinal answers
from subjects own knowledge and feelings. The minor
data is collected from documentary review relating to
previous research particularly on forest laws
enforcement and regulation enforcement.
Data Analysis
The collection of documentary review data and the
5 senior executives in-depth interview data are
analyzed using Delphi technique with experts to
describes the problem structure regarding to the Royal
Forestry Departments policies implementation. The
unit of analysis will be displayed in systematic pattern
as internal and external factors that affect the
department. Internal factors are identified by inner
weaknesses that the department exhibits concerning a
deleterious effect on the forestry resources. Oppositely,
external factors are outside influences that impact the
ability of the department to achieve sustainable
resources conservation such as legal and political
environment. Finally, model of operational problem
and the problem solving in relating to law enforcement
and policy implantation will be presented by
information obtained from the experts opinion.

IV. RESULTS OF THE STUDY

Problems in policy implementation
The conclusion of the study developed from the 5
senior executives interview, and hopefully the ensuing
discussion, to show that creating more law or tougher
enforcement will not ameliorate forest destruction. As
they suggests, this will only lead to further forest
encroachment, confusion among implementing
agencies as well as alienation of local communities and
general public. The study fallouts is that there a
number of internal and external factors encourage
forest destruction as followed;

Internal Factors
1. The major problems for wildfire control are
insufficient budget and insufficient knowledge and
man-power for the operational tasks. The wildfire
control section itself also has insufficient budget to
promote and educate fire control among citizens.
Moreover, most villagers do not recognize the
significance detriments of their long-term agriculture
upon the forest vulnerability to fire, so that they keep
on with their practices of trespassing and mobile
plantations. Consequently, there are more frequent and
larger forest fires in places where people live and
cultivate, and these fires are imposing rapidly growing
costs on federal and local governments. This can create
further deficit to the departmental resources.
Another part of the problem is that the Forest
Service has become a less effective management
agency. Today it is an agency in an advanced state of
paralysis by analysis. The preparation of paper
documents (e.g., environmental impact statements,
formal land use plans, etc.) consumes large parts of its
budget, leaving few budgetary and personnel resources
for solving problems on the ground. In addition, the
Forest Service has shifted from a philosophy of
multiple-use management to one of ecosystem
management, which emphasizes the achievement of a
2. As the state tries to control illegal encroachment
through strict law enforcement, this will often only
lead to further confusion among implementation
officers. Therefore, the major problem of the
prevention and suppression planning section are related
to the investigation process for the accused officers
403

working on national inclusive commission. Currently,
the investigation process within the department
involves a commission chaired by the general director,
permanent secretary or minister without representatives
from accused officers to defend themselves. This
leaves them open to being unfairly treated by political
interference.
3. The problems of the forestry promotion section
are; a. Insufficient man-power (so that the agency has
to borrow most human resource from other units), b.
The agency has no permanent location and c. there are
insufficient resources and vehicles for their operational
tasks. The most evidence in the department shows that
agency has only 10 cars serving more than 30 units so
that they have to borrow excessive resources from
other prevention units.
4. The vital problems facing officers are the
prolonged criminal investigation processes. Moreover,
injunctions and actions against trespassers arrestment
are time consuming. For example, in the case of the
building in restricted area, to tear the building down,
the court process take almost a year awaiting the
building to be completed, therefore it is impracticable
to take an active measure in preventing crime within
the conserving forest. Moreover, some officers are
recriminated from the accused caused by the corrupt
officers. As well, there is also loop-hole in the Civil
Law that cannot prosecute the bribe-taking officers.
Some officers are intimidated by the local politicians
or influence business logger.
5. The various hierarchies that structure state
agencies in Thailand such as federal office, regional
office and local office create a structural environment
that makes departmental operations very difficult,
especially as most operations have many overlapping
authority from between many units. At the same time,
political intervention is a significant part of Thai
governmental operations, and one that can deter decent
conservation policy which not meets the median voter
demand. The process of power overlapping creates the
administration problem as the process of decision
making is evolved into a more complicated structure.
There are also more new face actors in the political and
administration environment. This creates reluctant
condition for operational officers called fragmented
centralization.
6. The Royal Forestry Departments main problem
arises from the lack of coordination and cooperation
among operational units. Each unit wants to defend
their specific mission without bringing any
contribution to other operational units. Some
operational units had to plan their mission and execute
the project solely without any contribution from other
units responsible for related problems.
7. There is a lack of the departments ability to
transform national policy into guidelines, operational
plans or a project road map. There are no clear cut
project objectives and project mission statements
signaled from the government in order for officers to
set up their daily working basis and operational
standards.
8. The Royal Forestry Department had multiple
project monitoring problems regarding its policy
implementation. In the past, policy evaluation was
assessed by visiting committees from the central office
or the operating unit would submit a report brief to the
government. The process of evaluation took merely a
step on outcome in digit but there are no details
indicated about impact or consequence on policy
implementation assessment.

External factors
1. The problems in policy implementation include
the lack of co-operation and brain-storming with
external units concerning the Royal Forestry
Departments policy implementation. The state
agencies tend to defend their policy or projects and try
to expand their mission territory in every possible way
in order to reduce and postpone their job responsibility.
This is the nature of Thais bureaucracy which tends to
select policy that supports populist policy which would
not impair natural resource exploitation. Therefore, the
policies favorable to politicians will be particularly
taken care of, and on the opposite side; the policies
without favorable voting potential will not get any
attention.
2. The lack of co-operation from multiple
stakeholders to get useful policy into the government
attention. As an example of possible public
cooperation, we might consider the 1988 initiatives
whereby there were community movements
underlining the rights and ability of villagers to
manage forestry resources in a sustainable way after
the catastrophic flood in the southern of Thailand. And
finally, the government had to comply with the demand
of local people, by initiating the drafting of a
Community Forestry Bill proposing new rules and
regulations regarding the use of state-owned forests by
local communities. (Marie, 2012) However, there are
still problems of a genuine dialogue establishment
among various stakeholders in order to allow the
vertical interaction to take place in Thailand.
3. Political interests may also affect the policy
implementation. If prominent organization or people
such as local politician, interest group, and senior
officers especially medias do not support decent policy
using politics sanction, the stakeholders could also
delay or oppose such policy that would benefit
environmental resources. Since Thailands political
environment changed constantly from 1942 -2012, in
which many governments took turn in taking power
over a short period of time so that, the implementation
404

of valuable policy was discontinued. The Royal
Forestry Department officer had to bear the burden in
controlling and supervising public policies without
assistance from the opposite side of government.
4. Property right in Thailand is extremely
ambiguous and often interpreted differently by various
branches of Thais government. The inability of many
Thai citizens to secure property has resulted in them
going out into the forests to find space to farm. Often
wildfires are deliberately set off by local farmers, as
well as by speculators who hire people to set forests on
fire in order to claim land title deeds for the areas that
have become degraded forest.
5. The state sees forest areas as a way to promote
national development through the extraction of timber
and ignores the other important functions that forests
play and most importantly ignores the needs of local
communities who are dependent on these resources and
most often have been managing them for generations.
Policies and laws regarding use and management often
reflect this political agenda and rarely reflect what is
happening on-the-ground, or at the local level. In turn,
the more the state tries to suppress illegal
encroachment through enforcement of strict laws, or
enactment of new laws, the more it alienates
communities and the more crime increases (as seen
from the statistics of the forest crime arrestment).
(Pearmsak Makarabhirom, 2012).
6. In Thailand, there are more than 20 laws on
forest and resource management. As a result, there are
conflicts of policy and law management among some
authorized governmental agencies. As for forestland,
there are 16 relevant agencies, and 6 agencies for
mangrove forest, and more than 24 agencies for water
resources provision and distribution. Overlapping of
agency's responsibility is an obstacle for collaboration.
(Pearmsak Makarabhirom, 2012).

Unit Problems
The research fallout is that foremost units that
impact the personnel system (Officers) in the Royal
Forestry Department are politics and educational
institutes. Both institutes affect the policy
implementation as they provide fundamental obstacles
for the departments collaboration of policy
implementation. Moreover, the ambiguous agencies
division and bureaucratic hierarchy significantly
encourage overlapping authorities among operational
units within the Royal Forestry Department. As a
result, there are various kinds of political interventions
into the departments operation. When this kind of
culture is used as a framework for the departments
administration structure, it creates further complicated
structures of power allocation among each operational
unit so that agreements of operational strategy are
often not possible. This phase can be called fragmented
centralization. As more new actors are brought into the
political administration, the more there is a condition
for fragmented centralization, this kind of environment
makes the departments policy mission inconsistent
with its policy implementation.
Therefore, in order to solve the problem, the state
agencies must be reformed not only in their structure,
but their new culture, too, their bureaucratic systems
must be reinvented in order to improve policy and law
enforcement. The department power and structures
must be clearly defined and reallocated, since this
factor can lead to the implementation success or
failure. So far, the previous adjustment of the
department had stressed merely on some topics rather
than forming a new paradigm.
A new paradigm of the Royal Forestry Department
is not a tougher enforcement of older laws but to
recognize the local communities and general public
necessity to the policy implementation. As the
problems of the departments financial deficit cannot
be easily remedied, other institutes such as Officer and
Moral must step up to guide the boarder goals of rural
development and follows a social process oriented
approach which involves all the stakeholders on forest
resource management. (Pearmsak Makarabhirom,
2012).

V. CONCLUSION AND RECOMMENDATIONS

Conclusions
In conclusion, the Royal Forestry Department
performs their set tasks inefficiently because their
policy implementations are closely linked with
political and economic institutes. Both institutes can
lead to its success or failure of the policy
implementation. However, in order to forecast whether
certain policy may affect the implementation process
or not, cannot be explained into one particular way.
The problem of political and economic institutes
cannot be easily fixed due to the present economic
depression in Thailand. Therefore, the problem solving
must be refocused on the culture restructuring which
must be intentionally research in case by case basis due
to the short term cyclical changing of political
environment in Thailand. Since, the Royal Forestry
Department is no longer sole player in the public
administration in conserving forestry resources; the
study can merely reflects some parts of policy
implementation dilemmas.
In order to cope with Economic and Political
institutes, Educational, Officer and Moral institutes
must step up to heal the stress on personal system
(Officers system). As the conflicts over forestry
resources in Thailand originated from the competition
over the limited resources. The fact that the state
centralizes resource management and concentrates on
405

timber management policies has led to the major
resource conflicts between local people and the
government in Thailand. Not one forest policy or law
enacted by successive Thai governments recognizes
that local people live in or near and use forest
resources on daily basis. Thus, any activity that local
people undertake (whether good or bad) is considered
illegal. This has led to serious rural disenchantment
and an increase of conflicts between the government
and the rural majority. Without rural majority
recognition, the policy implementation in Thailand
would stick with chaos of both institutes. The study
concludes that the problem solving process can be
reflected as followed:
The government often uses politics to solve
problems of forest management by using the decision
of the cabinet. Consequently, the solutions to problems
take place very slow. In many cases, there is some
conflict between related laws so the permanent
solutions cannot be made. Even though the State issues
laws to enforce, every law has some defects. Violators
of the law, especially those who have some economic
power, often use the deficiency of the law for their own
benefit. It is difficult to arrest them since they
efficiently develop many tricks to circumvent the law.
Therefore, when problems arise, law, education,
moral and officer institutes should take part on
problem retreat in order to release the pressure out of
the departments personal system (officer system).
Even though each institute may have their own specific
objective, the government must readjust their cultural
framework in order to create more welcoming
environment for officer to cope with the change of
political and economic depression. According to ensure
welcoming environment, legitimacy is considered a
basic condition in mandating wall to protect officer
from influential elites. In terms of legitimacy, the third
party must be assigned assistance with an attorney to
determine the criminal division with an intention of
generating justice to all parties involved especially to
those officers who were prosecuted whilst attending to
on duties. Moreover, the Royal Forest Department
itself must change its policy and institution framework
as cyclical adjustment relevant to the change of Thai
socio-economic situation giving particular attention to
public integrity and morality formation. This cyclical
adjustment can improve the potential of communities
to involve with government policy formulation and
implementation.
The educational institutions can step up to serve
the system with by adding more human capital and
talent into the department implementation stream. New
human capital must easily interface and assimilate to
variety operational objectives in order to handle the
new problem arena as well as to survive with various
functional changes.
In the past, there was evidence to show that the
more regulation there was, the more crime occurred
(yet forest resources were less well protected).
Therefore, a clear cut model to improve and adjust the
process of policy implementation should be set up right
after the Royal Thai Government is clear cut about the
policys and law management conflicts among
authorized governmental agencies. In this case, Law
institutes can male proposals to reduce legal
complexity to enforce forest management. It appears
that the more policy there is, the more confusion there
is, which in turn leads to less enforcement. To change
this ambiguous environment, general public must
involves in the policy formulation in order for them to
take their action on community benefit for further
enchantment with government policy creation.
Form Thais experience, it is demonstrated that a
clear forest policy needs to be formulated. However,
this cannot just be done unilaterally by the Royal
Forestry Department. The forest department needs to
work on a multisystem and multi-sectorial approach to
develop policies for managing the wide array of
services and functions that forests provide. The
Political institutes can step up on this stream in order to
change the Thais political environment into
community respect. This should be in-line with other
development strategies -that are taking place on the
ground as followed;

Recommendations
Requiring for the effective implementation; there
are a number of actions that are still needed to
effectively achieve forest protection and conservation
objectives, such as:
Macro level
1. Re-assess and modify the Royal Forestry
Departments role and the professional attitudes of
forest officers. The Royal Forestry Department needs
to develop a vision for the future, and restructure
accordingly and rethink its responsibilities. (FAO,
2012).
2. Strengthen institutional capacity to facilitate
collaborative decision-making, and increase
transparency and accountability in forest management.
(FAO, 2012).
3. Establish security of land tenure, and provide
access to resources for local people. (FAO, 2012).
4. Pass the Community Forestry Bill to clarify
peoples rights in using and managing forests. (FAO,
2012).
5. Develop capabilities within local institutions
and acknowledge local villagers traditional rules and
regulations. This should facilitate the preparation of
natural resource management planning and
implementation through the Tambon Administrative
406

Organization (TAO), under the TAO Act in 1994.
(FAO, 2012).
6. Foster cooperation and coordination (among the
involved agencies) in policy formulation, policy
planning, natural resource management, policy
monitoring, policy evaluation, and clarify the
responsibilities of stakeholders.
7. Develop forest policy via public consensus.
Many institutions, agencies and groups of people will
have to be consulted. However, this will lead to a more
participatory plan and so will be more publicly
supported. Again, we are not suggesting more laws or
regulations but a clear policy framework which will
enable laws that reflect on-the-ground realities. In
Thailand, participation of local communities in natural
resource management is enshrined in the new
constitution which was enacted in 1997. However, no
clear policy has been enacted at all allow this to
happen. What is not needed is another law but clear
policy framework/guidelines and lines for support
which develop a more holistic approach to forest use
and management. (Pearmsak Makarabhirom, 2012).
Micro level
1. The wildfire control section should organize
training and education to public and local
administration within wild-fire vulnerable areas. Public
network should be developed for wild-fire control
cooperation. The Royal Forestry Department must
integrate operational plans into its operations mission
and process. General public should be informed about
proper land preparation for agriculture without putting
fire upon the ground. The government must hold
public hearings on these issues and ask for input and
advice from a wide-range of stakeholders.
2. The Royal Forestry Department should set up a
committee comprised of round table stakeholders in
order to investigate the accused officers before
administrative court. This will create more justice and
legitimation to government officer in the
department. The general director, independent
organizations and lawyer should be included into the
investigation process. The power checks and balanced
should be brought to the court for transparency.
3. Some ambiguous laws should be amended.
Forestry officers should be educated about relevant
laws for their daily operations. The investigation
committee should be power-checked and balanced.
Laws should be strictly enforced against local
politicians and local leaders, in order to promote
conservational awareness.

Core value reforms
Poor public sector performance and fiscal crises
caused by the department budget deficits have forced
the department to pay particular attention to the way
their functions affect particular groups of
stakeholders. Addressing these problems has required
substantial reforms on their core value and measures
as followed:
1. Core value measures
1) The Crime prevention and suppression
section must make reforms to outline and practice a
clear set of principles and rules designed to establish
policy credibility and economic stability.
2) Prevention and suppression operations
must be strict, honorable and transparent.
3) Cyclically adjust the department
administration using public consensus in order to
provide justice, fair treatment and unquestionable
treatment for all stakeholders.
4) Cautious and prudent activities by
community sharing help ensure government rules are
met and significantly reduce ineffectiveness by
unexpected events.
2. Preventive measures
1) Comprehensive cooperation with other
agencies such as Royal Thai Army in forestry
conservation is necessary.
2) All logging accounting must be strictly
controlled in order to protect forests from illegal
logging transportation.
3. Structure and system improvement
measures
1) The key principles must be reflected in
reforms to the planning and control regime is the
agencies revision both in central and regional level in
order to create proper power checked and balanced.
2) The department must introduce new
features to public administration, including service
delivery agreements, the implementation of the first
stage of a resource budgeting system, a new
departmental investment program, investigation
strategies and a wide range of cross cutting reviews.
3) The department should construct
financial reform programs in order prioritize resource-
allocation and raise public service productivity.
4) Integrate works with Ministry of
Defense and Ministry of Interior to control influential
people, or state officers or criminal conspirators who
have worked against the well-being of the forest and
wildlife.
5) Controlling saw mills and wood
processing plants to operate legally. The transportation
of woods and forest products must abide the
appropriate laws.
6) Initiate pilot projects to promote forest
conservation and wildfire control among local people.
Assigning local administration to take care of own
forest.
7) Training forest conservation volunteers
in 56 provinces and Youth Forester in 30 provinces.
407

8) Encourage local, private organization,
private sectors and communities to take part in forest
conservation, especially those living within the
conserved forest areas.
4. Suppression measures
1) Establishing regular patrol efforts to
check forest borders, gather information about
landscapes, socio-psychological situation, vulnerable
points, and nature of crimes in responsible area. This
information can be used in solving problems in
practical time.
2) Use public relations to promote forest
and wild life conservation. Generate local effort in
order to create understanding and awareness in forest
resources as a mutual benefit.
3) Set up proper guideline and regulation
ensuring sound environmental friendly that will not
impact forestry resources within and across generation.
4) The department must meet the key in
forest conservation project and avoiding an
unsustainable and damaging rise in the burden of
public.
5) Developing new technology and
equipment to inspect the evidence and situation quickly
and accurately, such as satellite and aerial pictures.
Helicopters can be used in patrol as well as in
cooperation with Army and Air Force to cope with the
department mission.
5. Supportive measures
1) Enhance the forestry officers role to
promote the cooperation among public in conserving
forest using meeting, seminar and training.
2) Using social sanction and media to help
monitor misbehavior over the forestry resources.
Employing international trade measurements and WTO
to stop the over usage of forestry products.
3) Set up a forest conservative liaison office
in order to coordinate among parties network for
forestry conservation.

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409

Innovation Paradox or Escape from Feararchy
Exploratory Research on Why Innovation Cannot Happen in the Modern
Organization

Sergey Ivanov
Department of Management, School of Business and Public Administration,
University of the District of Columbia, Washington, DC, USA; sivanov@udc.edu; www.SergeyIvanov.org

Abstract In this paper, I discuss the current state of
the modern organization, and suggest that it is not
conducive to innovation. I argue that the modern
organization is in a state of paralysis, in which
innovation is not possible. I term this state feararchy. I
suggest several steps to start healing and repairing the
modern organization to transform it into a productive
and trust-based system, unleashing innovation from
every employee to contribute to the whole.

Keywords Innovation, Feararchy, General Theory of
Managerial Hierarchy, Requisite Organization Theory,
Organizational Structure, Corporate DNA

Amongst the officers there seemed to be an inverse
relationship between rank and efficiency. The more
senior they were, the less competent they appeared.

Norman Dixon

I. INTRODUCTION
Innovation is impossible in the modern
corporation, government agency, or university. In
fact, most modern organizations, instead of focusing
on new ideas and creativity, require complicity and
incompetence. For those who doubt this fact, try
introducing a new idea into your organization,
especially if your manager might not like it. At best,
your idea would be ignored. A traditional approach
to deal with such disturbance is generally non-
renewal of the employees contract, or simply firing
from the organization.
By-and-large, most people in the organization
are so afraid to say what they really think that the
modern organization has become a hierarchy of fear,
which I call, feararchy, in which fear rules supreme.
Such an arrangement destroys the human spirit
(Harvey, 1988).
I define feararchy as an organization in which
the amount of fear is over 40%, as estimated through
a formal organizational survey (Ivanov, 2012). The
reason for this demarcation is that during formal
organizational studies, most employees fear their
answers may be revealed to their managers, and
often pretty-up the responses. I noticed this effect
when I was conducting organizational studies, and
asked the same question in the organization, and later
in the MBA and other graduate businesscourses I
was teaching, with adults from comparable
organizations, ranks, age, and other factors. The
values of the responses doubled. For example, on the
question of underemployment, fear, or any other
question, normally, organizational surveys report
about 40% of all working adults feeling
underemployed and bored. When I ask the same
question outside the formal organization, working
adults in a graduate classroom report 80%
underemployment (or fear). There is a possible bias
that adults who continue graduate studies may be
more underemployed and underutilized than adults
who do not pursue advanced university work. I tend
to think that the classroom environment breaks the
relationship between the response and the
employers identification, and therefore, people
answer more honestly. Thus, I estimate that when a
formal organizational survey projects 40% fear, the
real fear in the organization is much higher, up to
double the percentage reported through formal
surveys.
Sharansky (1998), discussing the totalitarian
regime of the former Soviet Union, uses the terms
doubletalk and doublethink to describe the
atmosphere in the country. His evaluation is that
these phenomena have rotted the former USSR
society to a complete stagnation. The modern
American organization is, regretfully, similar
(Ivanov, 2011). In order to survive to receive the
next paycheck, we comply and agree with any silliest
idea the management puts forth, fully aware that it is
non-workable and wasteful. The bravest of the
employees who get enough courage to come up with
a new good idea and bring it forward, often suffer
reprisal from the organization.
Dixon (1976) explores the conditions why
military officers comply with stupid orders from
their top commanders, which lead to disaster. His
conclusions are of an authoritarian personality of top
leaders, which he blames for organizational
ineffectiveness and blunder. Milgrams studies (1974)
confirm that in the hierarchal organization, people
obey authority, their manager, irrespective of
whether the task makes sense or is immoral.
Having conducted organizational studies for
over a decade, I believe that Dixons authoritarian
personality of top leaders is a function of a mismatch

410

between the complexity of the working role and the
capability of the individual filling that particular role.
These mismatches cause great pain to the vast
majority of the working adults, and their families, as
the majority of them are employed by hierarchical
systems, which have now become destructive and
unhealthy feararchies.

II. THEORY OF WORK, METHODS, AND
ORGANIZATIONAL STUDIES
Many theorists have attempted to describe and
measure work and its complexity in organizations.
Seemingly a difficult problem, there is an emerging
body of work since the late 1950s that offers a way
to measure the complexity of work in the roles
within the hierarchical organization. Jaques (1964,
1996, 2002), Brown (1971), Kraines (2001), Clement
(2008), Lee (2007), and Ivanov (2006, 2008, 2011,
2012) describe and identify the levels of work
complexity in the hierarchical organization, and
present various studies confirming this methodology.
The basic principle is the assumption that the
complexity of work in the organization increases
from the very basic at the lowest levels of the
organization to the top roles, such as CEO, CFO,
political appointee, General Officer, and others.
Work in organizations occurs through defined levels
of work, growing in complexity at the lowest level at
the bottom of the hierarchy to the top strategic role
of the CEO. This body of work has accumulated into
what is now called, the General Theory of
Managerial Hierarchy (Jaques, 2002). I call this
structure the Organizational (Corporate) DNA
(2012).
The Organizational DNA consists of the
following eight levels of work (Ivanov, 2012):

TABLE I: GENERAL DNA OF THE HIERARCHICAL ORGANIZATION

Level Organization Type / Role Timespan Annual Revenue, Comments
9 N/A Over 100 years /
5 or more generations
Organizations of this type have
not been found.

8 Large Multinational 50 100 years /
3 4 generations
Over $100B/year
S
t
r
a
t
e
g
i
c

7 Multinational 20 50 years /
1 2 generations
$10 to $100B/year
6 N/A
(long-term)
10 20 years /
1 generation
Stratum 6 corporation can only
exist in the context of a stratum
7 or 8 organization.
5 Unit of a Multinational, or a
Stand-Alone Company
5 10 years /
within 1 generation
$100M to $1B/year
4 Small Business Unit or a
Stand-Alone Company
2 5 years $10 to $100M/year
O
p
e
r
a
t
i
o
n
a
l

3 Small Business 1 2 years $1 to $10M/year

2 Mom-and-Pop Shop 3 months 1 year Up to $1M

1 Basic Organizational Role 1 day 3 months Smallest organizational role

The main principle of the theory is that work in
any hierarchical organization is conducted through
well-defined and distinct levels of work, 1 through 8.
These levels of work (complexity of work in the role)
are easily discoverable through the timespan
instrument. Timespan measures the complexity of
work in the role by identifying the longest tasks in
the role, assigned by the manager to the subordinate.
This instrument is objective because it identifies
actual tasks, which both the manager and subordinate
confirm during the survey.
To collect data and conduct research in all
organizational studies, I developed a deterministic
survey, which I use to study every role in the entire
organization, horizontally and vertically. The survey
collects the data on complexity of roles in the
organization (longest tasks), as well as other
information, such as trust to the organization, fear,
under-capacity work, and other information. I collect
data under the principles of the theory in order to
correlate the same information in different
organizations, various geographical locations, studies,
and so on, and to be comparable with studies of other
scholars.
The lowest level of work is level/stratum 1. In
this level, the person is tasked to complete a set of

411

assignments, with the longest targeted completion
date just under three months. An example of such
work could be of an intern, who could be learning
new skills in the organization, or a junior analyst,
whose longest task is to prepare a monthly report.
This level of work also implies the lowest decision-
making in the role.
The complexity of work increases in higher
strata. Executives in top organizational roles handle
large strategic issues that impact organizations five,
ten, twenty, and more years into the future. Examples
of such work are creating new businesses for a new
generation of services or products. I (2011, 2012)
define roles in levels 5 and above as strategic, and
roles in levels 1 through 4 operational. The reason
for this division is that people working in levels 1
through 4 handle activities impacting the
organization today, such as taking care of the current
projects, programs, customers. Executives in levels 5
and above (depending on the size of the organization)
focus on the future of the enterprise years ahead.
This includes developing future markets, new and
innovative products or services, fundamentally
different business models for the future, new
customers, and overall thrusts into the companys
destiny.
While conducting organizational studies, and
determining the levels of roles of the employees,
additionally, in the past ten-twelve years, I collected
data on peoples fear of their organizations, and
underemployment. I individually and privately asked
each participant how much fear there was in the
organization, and whether they were employed just
right, overemployed, or underemployed.
Unexpectedly, and consistently, I discovered
staggering numbers for both fear and
underemployment. People felt underemployed when
their roles were in the level below where they
thought they could work, for example, the
employees role was in level 1 while s/he felt capable
to work in level 2. Correlating these findings with
peoples comments during the surveys, especially
about unproductive work and lack of innovation, I
am putting forth a thesis that fear and
underemployment undermine innovation.

III. BOREDOM, UNDERUTILIZATION, FEAR
The modern organization in the state of fear is
where innovation ceases. It is also hard to be
innovative when the person is bored. When the
person is bored and in fear, s/he will not be creative.
The majority of the population today is bored on
the job. The following data I obtained conducting
organizational studies over the past decade in Europe
and the United States. Almost 50% of employees
worldwide, in the studies ranging between 2001 and
2005, admitted to being underemployed at work:
FIGURE1: UNDEREMPLOYMENT FINDINGS, 2001-2005

In my studies between 2007 and 2012, mostly in
the United States, these findings have not changed
significantly. Close to 50% of all employees, at all
levels of the hierarchy, report working below their
capability:

FIGURE2: UNDEREMPLOYMENT FINDINGS, 2007-2012

Additionally, the surveys reveal that on average,
over 20% of the required work employees report as
meaningless, non-value-adding, and wasteful to their
organization. Such work includes useless meetings,
duplicative reporting, answering unnecessary data
calls, administrative training, and the like. Daily or
weekly progress reporting from all employees is an
example of a meaningless and wasteful activity. For
example, for an organization employing 100,000
people, daily progress reporting amounts to at a
minimum a 100,000-page-document filled with
meaningless information, on a daily basis.
All meaningless activities are often symptoms of
fear, incompetency, and expected behavior. Why
would a competent manager, assigning well-thought-
out tasks to his or her direct subordinates need a
daily or weekly progress report? A competent boss
would need problem or opportunity/special
circumstance reporting when these events occur, but
not a daily laundry list of fake accomplishments; it is
not an accomplishment to report a wasteful meeting.
In the later studies, I collected data on fear and
trust in organizations. I discovered a direct
relationship between these two items: when people
do not trust, they fear (fear and trust were separate
questions on the survey):

412

FIGURE3: FEAR AND TRUST RELATIONSHIP IN THE
HIERARCHICAL ORGANIZATION, 2007-2012

In many organizations, the fear factor reaches
100%. Examples of such organizations are
corporations about to or undergoing layoffs,
universities, and government departments. With no
trust to the organization, innovation cannot occur.
An example of innovation is a new idea,
developed at any level of the organization, and
presented to the manager. The boss must be secure
and intelligent enough to comprehend the innovative
thought. In the workplace, this means a level of
capability greater than theirsubordinate. For example,
if the subordinate is working in level 1, the manager
must at least be capable of working in level 2.
It takes guts to present a new idea because by
definition, new means contradicting and unbalancing
the existing paradigm. For this to occur, the
organization must set the right conditions for a
creative and trust-inducing environment to welcome
and absorb innovation and the disturbance new ideas
bring. Thus, the person offering a new and valid idea
normally takes a risk because this idea often
challenges the existing status-quo, may outshine the
managers, and may even contradict what the
managers, directors, and executives think. In the
feararchy, the person offering a new idea is likely to
be let go by the organization, setting an example for
other employees not to follow.
Only in the enterprise in which people trust each
other and the organization, innovation can occur,
because the system would not retaliate against a
bright employee with a different viewpoint. By
definition, such an organization requires competency
at all levels of the organization, because only a
competent boss will seek out new ideas by the nature
of the role and his or her competency. An
incompetent boss, or the manager whose capability is
below the requirements of the role, is insecure and
will not seek out new ideas. He or she cannot
because he is not capable at understanding the role.
Instead, this person will seek to preserve the
appearance of competence by shutting down all and
any potential threats, which are new ideas, competent
subordinates, colleagues, and thus feararchy is born.
An insecure boss is a danger to any organization.
Bagehot (1882) advises that all ministers to a king
must have secure appointments through the
mechanism oftenure of office, for the king to receive
honest advice and counsel. Most modern
organizations today offer only insecure positions to
people, who work at the pleasure or whim of the
manager or organization. This setting hardly enacts
honest and good counsel, or fosters trust or
innovation. Quite opposite, this system cultivates
massive anaclitic depression and marasmus in
organizations and populations (Harvey, 2012).
Depressed people unlikely will be energized and
excited about the future, creatively thinking of new
ways to improve product lines and services. Rather,
they will perform less and comply more, destroying
and corrupting their souls in the process. My findings
that almost 50% of the working population are
underemployed and fear their organizations are
symptoms of this disease.

IV. IS ESCAPE FROM FEARARCHY POSSIBLE?
Only a disciplined and long-term focused
approach can support innovation. Innovation, most
of the time, does not happen by luck, without a
focused endeavour aimed and supported into the long
future. Fads come and go, wasting organizational
resources. Fads are those short-term and ill-advised
efforts with great promise, usually originating in
work level 1 or 2, which are inadequate in
complexity for any multinational enterprise (Ivanov,
2011, 2012). These fads originate from insecurity
and inability to think at higher levels of work, such
as levels 5, 6, and 7, integrating the lower-lever work
into coherent and useful organizational efforts.
I find that the argument that the United States
does not have a qualified workforce cannot be
supported by the organizational data I have collected
over the past decade. The argument that there are
many job openings available at supposedly high
levels of work does not withstand the data. My data,
over the past ten-twelve years, shows that most
people are employed in levels 1 and 2, which are the
lowest adult work levels. These levels cause
boredom in most people who are more capable than
the complexity of work required in these roles.
Traversing large organizations, I have not found
many level 5 and above job openings available. In
fact, most openings in the United States, irrespective
of the college degrees and qualifications required to
apply, are only looking to fill the smallest possible
roles, at level 1 or 2, making most adults
overqualified by their in-born capability. This is the
result of one-year contracts, short-term wins, daily
and weekly reporting, lack of coherent long-term

413

strategies, and other ills, in other words, possible
incompetence and insecurity at the top to think
through and engage in long-term strategic endeavors.
Dixon, describing poor leaders, recommends
scanning for authoritarian personalities and
psychopaths (1987). I do not think this is practical,
but I do believe it is possible to escape feararchy
through courage (Ivanov, 2012).
Organizations can do the following to reduce
fear:

1) Cut Bull
Courageously list all nonsense and absurd work
in organizations, and stop it. These irrational
activities would vary from one organization to
another. Some examples of organizational absurdity
are unnecessary progress reports, e-mails with
everyone in CC, useless meetings, duplicative
reporting, and so on. Eliminating foolish work would
free up organizational resources by at least 20%, in
some instances, 40-50%.

2) Free Time
Allow long-term sustainable/backburner projects
in the organization. In the context of a large
multinational organization, someone needs to work
on five-, ten-, twenty-, and longer year-projects into
the future.

3) Increase Truth
Instead of reporting pleasantries (current
progress reports), replace these with honest problem
and opportunity reporting, on an as-needed basis.
Sometimes a word (brief conversation with the boss)
is sufficient.

4) Increase Levels of Work
Increase the level of work for most employees.
This requires understanding of the current levels of
work in the enterprise. Conduct a study to discover
where your organization really is. If your Directors
and Vice Presidents (or Government SES) are
working in level 2, they are likely not doing good or
adding value to the organization, but rather harming
it. Increase their level of work by assigning
meaningful, realistic, and integrated long-term goals
so that people could work truthfully and intelligently
with each other to achieve these goals.

5) Give People Dignity
Stop treating your workforce as children; they
are not. Even children, more often than not, prefer to
be treated as adults. By assigning meaningful tasks
and treating people as good contributing members
with a future, the vast majority will respond in kind,
unleashing tremendous influx of new ideas and
synergy into the organization. Isnt this what you, the
CEO, want?
6) Recalibrate Accountability
This is a more difficult aspect, requiring change
in behaviour. If the manager assigns tasks, decides
resources, timeline, quantity and quality, do not hold
the employee accountable for the results (Jaques,
2002). All the employee can do is to try his or her
best, often in spite of the organizational system.
Teachers buying their own supplies because the
school would not provide is not the best example of
good leadership. Hold the boss accountable. Only
then, the manager would have to put some thought
and planning into the tasks he or she assigns.

7) Unleash Innovation at Every Work Level
Every person can and wants to innovate. At the
lowest level of work, the employee could come up
with a new way of scheduling meetings, or
responding better to customer requests. At the next
level, the manager of the assembly line could
introduce innovation to improve quality over the
course of six months, actively engaging and
soliciting ideas from subordinates. At the top of the
organization, executives could identify new markets,
services, and products for the organization five, ten,
and more years into the future, supported by the
innovation for improvement from within the
organization. It is the very lack of clarity into the
distant future that gives rise to short-term lack of
planning and jerking of the organization.

V. CONCLUSION
Many modern organizations today are paralyzed.
For innovation to occur, there is a need for courage
to unparalyze this entire structure from the top. It
is scary to think big thoughts, make decisions, and
commit resources for the long-term future, especially
in an unstable and challenging business environment.
It is even more frightening to have a productive and
competent workforce.
For large organizations to succeed, this is
exactly what they need to do, think big, and unleash
the energy and innovation from every level of the
organization, creating a contributing and spirited
community, not afraid to forward ideas to the top.
It is a lot of fun to work for a competent boss,
have no bull in the process (silly and wasteful
activities), feel good about genuinely contributing to
the organization, and have a future. This type of an
environment heals and transforms feararchy into a
productive and competent organization, unafraid to
commit as it thinks big.

ACKNOWLEDGEMENT
The author thanks Professor and Chair of the
Management Department, Dr. Hany Makhlouf, Dean
Richard Bebee, faculty colleagues, staff, and

414

especially students of the School of Business and
Public Administration, University of the District of
Columbia, for their support, encouragement, lively
discussions, and inspiration.
The author is also grateful to Robert Rathbun,
J.D., a brilliant HR professional with over 35-years
of multinational corporate experience, for reviewing
this manuscript and authors ideas.

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415

Assessment and Measurement of Innovative
Performance at the Regional Level in Vietnam
Nguyen Hien Than
Faculty of Environment and Resources, Nong Lam University
Ho Chi Minh city, Vietnam, Email: nguyenhienthan@yahoo.com

Abstract In order to measure the innovation level in a
region, the paper establishes the innovation index for
the region based on multi-criteria analysis and an
entropy weight method. The regional innovation index
is measured from 42 indicators, clustered into 11
objects and relies on 2 dimensions as innovation input
indicators
1
and innovation output indicators
2
. Author
illustrates the method with a case study in Binh Duong
province. The result showed that Binh Duongs
innovation index has increased continually from a score
of 0.47 to 0.63 in the period 2007 2011.

Keywords: innovation, innovation indicator, innovation
index, composite index.

I. INTRODUCTION
Innovation has become a policy priority in many
countries supported by national strategies and large
budgets (Meghnaddesai & Sakikofukuda-parr, 2002).
Consequently, innovation is a central driver of
economic growth, development, and better jobs. It
has also always been an important element in the
relative success of societies (Kestenbaum, 2009).
Moreover, the innovative process is the key factor to
developing the current industrial status. This
innovation must always be evidently linked to
sustainability (Lzaro & Dorronsoro, 2008).
Nowadays, in order to evaluate the effectiveness
of a governments interventions, various innovative
measurement have been developed over the years to
measure innovative performance at the national level
such as innovation indicators, the innovation
capacity index, the sum innovation index, and
especial the global innovation index. First a time,
composite innovation index was established as the

1
Innovation input indicators represent elements required
for developing innovative activities.
2
Innovation output indicators are used to control activities
related to innovative results obtained (Lzaro &
Dorronsoro, 2008).
strategic goal for the European Union in 2000; called
the European innovation scoreboard (Hollanders,
2010). Now, the global innovation index has become
well-known all over the world. According to
NESTA, innovation index provides a basis for better
policy making for innovation by developing and
deploying significantly improved measures of
innovation (Kestenbaum, 2009).
However, the global innovation index (GII) only
focuses on economic aspects and a little on social
aspects. Environmental innovation has not been
mentioned in GII. Furthermore, it only focuses on
measure innovative performance at the national
level. It is very hard application to measure at sub-
national level such as cities, provinces, federations,
etc. The main problem we face is the lack of
statistical data for complex indicators in this system.
Thus, the main purpose of this paper is to establish a
better understanding of the innovative performance
for regions; considering the possible use of three
aspects - economic, environmental, and societal. In
this case, the author uses Binh Duong province (Viet
Nam) for an illustrative case study.
Binh Duong is a industrial province in Viet
Nam. Binh Duong has had quickly economic growth
with an average annual growth rate of 14% in gross
domestic product (GDP) from 1997 to 2011. In 2011,
the per capita annual income of Binh Duong was
around 48.8 million VND (2,402 USD), which is two
times more than the nations average value.
II. MATHEMATICAL MODEL FOR
COMPUTING THE INNOVATION INDEX
2.1. Selection of indicators
The proper innovation indicators are selected
covering different aspects of development including
economy, society and environment. The criteria for
selection of the innovation indicators includes
usefulness, data availability, continuity, reliability,
relevance (DiSano, 2001) and readily measurable
data (UNESCO, 2005).

416

Indicators of
positive innovation
Selection
Grouping
Weighting
Normalizing
Calculating
Combining
Judging
Innovation indicators
Innovation Input Innovation output
Weight of indicator
Normalize indicators of innovation

Innovation Input
Sub-index
Innovation output
Sub-index

Overall innovation index
Indicators of
negative innovation

FIGURE 1: INNOVATIVE EVALUATION MODEL

FIGURE 2: SCHEME FOR CALCULATION OF THE
REGIONAL INNOVATION INDEX
2.2. Determining maximum and minimum scores
The maximum score is the highest relative score
found for the whole time period. Similarly, the
minimum score is the lowest relative score found for
the whole time period (Research, 2009).
In this study, the maximum score and the
minimum scores are determined based on literature
review, realistic research and the results of the global
innovation index of INSEAD. Min value and max
value are considered to limit the standard (benchmark)
that the government needs to improve toward a high
innovation performance.
2.3. Transforming data
The main difficulty of aggregating indicators into
the innovation index is the fact that indicators may be
expressed in different units (Damjan Krajnc &
Glavic, 2004).
The positive indicator: r
+
ij
= [x
ij

min(x
j
)]/[max(x
j
) - min(x
j
)] (1)
The negative indicator: r
-
ij
= [max(x
j
) -
x
ij
]/[max(x
j
) - min(x
j
)] (2).
2.4 Weighting the indicators The weight
determination is one of the important parts in the
composite index, because it has a deep effect on the
assessment results. The main steps of using the
entropy coefficient method to determine the weights
are as follows (Yang & Wu, 2011):
Step 1: Standardization of the original data matrix
Supposing there are m evaluation indicators and n
evaluation objects, the original data matrix is as
follows:
Y = ,
According to the attribution of every indicator,
we have different the construction function of
normalization as the following Eq (1) and Eq (2).
However, min and max values are the minimum
and maximum indicator sample values. It differs in
value as discussed above (sub-heading 2.3).
To standardize the matrix, the result is:
R = , R

= (r
ij
)
m x n
(i =1,2,,m;
j = 1,2,,n). Where, r
ij
is the standard value of the i-
th evaluation indicator the j-th on evaluation object; r
ij
[0,1].
Step 2: Define entropy: during the assessment
where there are m evaluation indicators and n
evaluation years, the definition of the entropy of the i-
th indicator is:
H
i
= - lnf
ij
(3)
Where, f
ij
= r
ij
/

, 0 H
i
1. Obviously,
when f
ij
= 0, so f
ij
lnf
ij
= 0 (Liu & Cui, 2008).

Step 3: Define entropy weight

Then, the entropy weight can be defined as:
w
i
= (1- H
i
)/(m - ), 0 w
i
1, =
1. (4)
2.5. Calculating the sub-indices, sub-index and
overall index
Sub-indices can be calculated as shown in Eq:
i
S,jit
= + , = 1,
0 (5)

417

Where, i
S,jit
is

the innovation sub-indices for a
group of indicators j in time (year) t. is the weight
of indicator i for the group of a object j. Sub-index
can be calculated as shown in Eq.
III. RESULTS
The results are reported as follows. (Please also see
the tables below).
I
S,jt
= , = 1, 0. (6)
Where, I
S,jt
the innovation sub-index for a group
of objects j in time (year) t. is the weight of
objects j for the group of innovation input or output
indicators and reflects the importance of this object
in the innovation assessment of the region.
The overall innovation index is the simple
average of the input and output sub-index.
I
RII
= (I
input
+ I
output
)/2. (7)

3.1. Innovation indicators for the regional
innovation index
Innovation indicators were abtained based on
literature review, such as Global innovation index
2011 (Dutta, 2011), Innovation and Human
development in Viet Nam (Humanities, 2001),
Indicators for monitoring integration of environment
and sustainable development in enterprise policy
(Hertin & Berkhout, 2011). The innovation
indicators selected following the criteria mentioned
above by multiple analysis. The result of selection is
shown in Table 1:

TABLE 1: INNOVATION INDICATORS OF BINH DUONG PROVINCE FROM YEARS 2007 TO 2011

Subjects Indicator Unit
Ma
x
Min 2007 2008 2009 2010 2011
Sourc
e
Business
environment
Entry costs index

10 1 7.95 8.5 8.38 8.34 8.12 a
Land access and tenure
security index
10 1 7.02 7.74 7.48 7.16 6.84 a
Transparency index

10 1 7.44 7.72 7.55 6.57 6.61 a
Legal institutions index

10 1 7.02 6.24 5.94 5.63 6.39 a
Time costs of regulatory
compliance
10 1 7.34 6.25 8.08 6.99 6.85 a
Total tax rate/ profit % 40 0 5.69 5.63 4.82 4.55 4.7 b
Education
&Training
Public education expenditure %GDP 8.36 0.8 1.47 1.46 1.22 1.68 1.40 c
Pupil teacher ratio % 48 7.5 22.07 21.68 20.27 20.56 20.8 c
Gross enrolment ratio % 98 0.5 71.8 71.8 73 74 75.6 b
Adult literacy rate % 99 0.5 94.1 94.1 96.7 96.9 97.3 b
Research &
development
Gross expenditure on R&D % 4.83 0.03 0.15 0.13 0.12 0.13 0.11 c
Researchers headcount per
million population
100
0
10 407 419 454 647 638 c
Gender
equality
Equally distributed income
index
% 1 0.2 0.56 0.58 0.58 0.60 0.62 c
Ratio of women in
government at provincial
people's council
% 40 0 22.2 25.76 25.76 25.76 25.7 c
Health
Child malnutrition % 34.5 1 16.1 15.4 14.1 12.9 11.1 c
Number of doctors per
10,000 population
10 1 4 4 4 5 5 c
Infant mortality rate under 5
years
40 0 13.3 7.99 7.98 5.49 6.83 c
Public health expenditure %GDP 5 0.05 0.40 0.29 0.25 0.22 0.35 c
Infrastructure
Infrastructure index

100 1 65.30 66.25 72.62 75.72 85.7 a
Electricity output
kWh/
cap
200 1.32 16.07 6.42 1.32 2.35 4.26 c
Electricity consumption
kWh/
cap
500
0
554 2673 3355 3752 3085 3263 c
Share of renewable energy
use
% 93.3 0 62.20 62.23 62.50 62.80 63.2 c
Market Access
Percentage of total business
costs spent on labor training
% 5 0 0.175 0.58 1 1
1.17
5
a
Services provided by
provincial agencies: general
education
% 90 20 40.1 46.23 58.63 58.99 75 a
Percentage of secondary % 28 2.74 4.2 4.7 4.9 7 5 a

418

graduates/total workforce
Firm has used technology
related services
% 75 15 46.5 47.5 48.28 50
58.0
1
a
Imports of goods & services %GDP 230 11.3
114.1
5
123.6
8
144.4
6
192.7
226.
2
c
Exports of goods & services %GDP 220 9.01 110.8 125 160.9 201.8 215 c
Foreign direct investment net
inflows
%GDP 73 0 56.80 54.50 39.53 7.79 5.50 c
Environment
Ratio of firms registered
environmental management
systems
% 50 5 13.6 15.3 16 16.5 20 d
Population access to safe
water
% 100 23.3 90.6 93.6 94.6 98.1 99.7 c
Population access to
sanitation
% 100 42.6 60.3 60.3 60.3 60.3 94.9 c
Environmental protection
expenditure
%GDP 1.50 0.1 0.22 0.20 0.17 0.21 0.22 d
Economic
effects
Total factor productivity

0.00 10.3 15.03 17.60 14.67 33.11 34.1 c
Annual growth rate of GDP
at constant prices
% 15.8 0.00 14.89 10.32 15.06 14.00 14.6 c
Implemented FDI %GDP 79.6 0 31.41 31.47 30.77 22.08 18 c
Social effects
Gender development index

1 0.2 0.75 0.75 0.76 0.77 0.78
c Human development index

1. 0.2 0.75 0.76 0.76 0.78 0.79
Gini coefficient

0.45 0 0.31 0.33 0.34 0.34 0.39
Environmental
effects
Water quality index

100 1 40.38 43.07 69.30 69.26
73.4
8
d
Air quality index

500 1 158.5 153.3 132.1 80.6 67.7 d
Eco-efficiency

1.8 0 0.84 0.7 0.88 0.98 1.17 IER

Source: a - The Vietnam provincial competitiveness
index (USAID & VNCI, 2012), b - General Statistical
Office (http://www.gso.gov.vn), c - Binh Duong
Statistical Office (Binh Duong Statistical Office,
2011), d - Binh Duong Department of Natural
resources and Environment.
3.2. The weight of each indicator and sub-index by the
entropy coefficient method

To determine the weights of the selected
indicators, indicators of positive (+) and negative
performance (-) in the perspective of innovation were
determined at the judging stage. Then, the process of
determining the weights by the entropy coefficient
method was conducted. The evaluating weights for
indicator system and objects are as follows:

TABLE 2: THE WEIGHTS OF THE INDICATORS AND THE OBJECTS IN EVALUATION MODEL
Issues
Objects Indicator Judging Weight
Innovation
output

Business
environment
Entry costs index + 0.13
0.13
Land access and tenure security
index
+ 0.17
Transparency index + 0.21
Legal institutions index + 0.16
Time costs of regulatory compliance + 0.14
Total tax rate - 0.20
Education and
Training
Public education expenditure + 0.17
0.15
Pupil teacher ratio - 0.19
Gross enrolment ratio + 0.35
Adult literacy rate + 0.29
Research &
development
Gross expenditure on R&D + 0.37
0.15 Researchers headcount per million
population
+ 0.63
Gender equality
Equally distributed income index + 0.61
0.11 Ratio of women in government at
provincial people's council
+ 0.39

419

Health
Child malnutrition - 0.21
0.12
Number of doctors per 10,000
population
+ 0.47
Infant mortality rate under 5 years - 0.12

Public health expenditure + 0.20
Infrastructure
Infrastructure index + 0.26
0.08
Electricity output + 0.30
Electricity consumption + 0.15
Share of renewable energy use + 0.29
Market Access
Percentage of total business costs spent on labor
training
+ 0.09
0.08
Services provided by provincial agencies: general
education
+ 0.12
Percentage of secondary graduates/total workforce + 0.16
Firm has used technology related services + 0.20
Imports of goods & services + 0.16
Exports of goods & services + 0.13
Foreign direct investment net inflows + 0.15
Environment
Ratio of firms registered environmental
management systems
+ 0.14
0.18 Population access to safe water + 0.12
Population access to sanitation + 0.64
Environmental protection expenditure + 0.10
Innovation
Input

Economic effects
Total factor productivity + 0.56
0.36 Annual growth rate of GDP at constant prices + 0.19
Implemented FDI + 0.25
Social effects
Gender development index + 0.40
0.26 Human development index + 0.36
Gini coefficient - 0.24
Environmental
effects
Water quality index + 0.33
0.39 Air quality index - 0.41
Eco-efficiency + 0.26

3.3. Analysis of the results
According to the evaluation model of the
composite index, the comprehensive index of regional
innovation is achieved. Reference geography, the

author designs a 5 grade evaluation criteria of the
innovation level including: very low [0 0.25], low
(0.25 0.45], moderate (0.45 0.55], high (0.55
0.75] and extremely high (0.75 1]. The results of RII
are shown in Table 3:
TABLE 3: THE INNOVATION LEVEL RESULTS OF BINH DUONG PROVINCE FOR 2007 - 2011
Objects 2007 2008 2009 2010 2011
Business environment 0.10 0.10 0.10 0.09 0.09
Education and Training 0.10 0.10 0.10 0.10 0.10
Research &
development
0.04 0.04 0.04 0.06 0.06
Gender equality 0.06 0.06 0.06 0.06 0.06
Health 0.04 0.05 0.05 0.05 0.06
Infrastructure 0.04 0.04 0.04 0.04 0.04
Market access 0.03 0.04 0.04 0.04 0.04
Environment 0.06 0.06 0.06 0.06 0.13
Economic effects 0.13 0.10 0.13 0.26 0.27
Social effects 0.15 0.15 0.15 0.16 0.15
Environmental effects 0.21 0.20 0.25 0.28 0.30
Input sub-index 0.47 0.48 0.49 0.52 0.60
Output sub-index 0.49 0.45 0.54 0.69 0.72
Regional innovation
Index
0.48 0.47 0.51 0.61 0.66

420

FIGURE 2: BINH DUONGS INNOVATION INDEX
FROM 2007 TO 2011
As can be seen from the Fig 3, Binh Duongs
innovation index is registering a good state of
development from 2007 to 2011, and its composite
index of 0.47 in 2007 continually rises 0.63 in 2011,
an increase of 0.16, rising as much as 33%, with an
average annual growth of 8%. According to the
discrimination criteria to the innovation degree, Binh
Duong has high innovation performance in 2011.

FIGURE 3: INNOVATION INPUT SUB-INDICES IN
2007 AND 2011

FIGURE 4: INNOVATION OUTPUT SUB-INDICES IN
2007 & 2011
As can be seen from Fig 4 - 5, Binh Duongs
innovation input sub-indices have fluctuated lightly
between the period 2007 and 2011. In 2007 - 2011,
environmental index has strongly changed from 0.06
to 0.13, an increase of 0.07, and rising as much as
123 %. Then, the research and development index is
at the second rank with 0.04 in 2007 and steadily
reaches 0.06 in 2011, an increase of 0.02, rising as
much as 55%. Some objects have changed little such
as education - training and infrastructure. Besides,
the business environment index is decreasing 5%. On
the other hand, we show that Binh Duongs
innovation output sub-indices have fluctuated
strongly. Especially, economic effects has quickly
change, an increase from 0.13 to 0.27, and rising as
much as 107%.
The results of assessment show that Binh
Duongs innovation performance is in a good state of
development. Binh Duong has strongly improved in
many fields, especially economic growth. Besides,
Binh Duongs innovation index also shows that Binh
Duong still has some weaknesses which need
improvement in the future such as income equality,
health, research and education.

IV. DISCUSSION AND CONCLUSIONS
Regional innovation performance can be
measured using the regional innovation index (RII)
which provides a good overview of trends in
innovation over a period of time. It also highlight the
individual regions strengths and weaknesses. The
RII helps to highlight opportunities for improvement
and to respond to emerging issues and pressures in
the innovation process both nation at and sub-nation
at.
An important feature of the regional innovation
index is the possibility of comparing and ranking
many regions in the nation that the case study in this
paper does not have opportunity to introduce.
Measuring innovation, identifying its main drivers,
and fostering adequate policies is a multi-year
journey.
The regional innovation index provides an
integrated metric based on carefully selected and
weighted variables. In this way, determining weights
by the entropy method is useful to evaluate a
complex phenomenon on fields. The entropy weight
method, an optimal method for comprehensive
assessment and worth promoting, has simple
formulas and is easy to use. The calculation
processes use almost all the relative information and
entropy weight is assigned to each index, which
makes the assessment results reasonable and reliable.
The possible disadvantage of the model could be
a selection of indicators. In this case study, the
indicators were selected considering the availability

421

of reliable data. In Viet Nam, some indicators are
necessary to the innovative evaluation model, but
they are not available data in statistical yearbooks or
other sources. In order to overcome this
disadvantage, the author used indicators to be easily
selects in agencies and public sources (such annual
reports, statistical yearbooks, websites, etc) but they
are still guaranteed to be exact and reasonable.
Nomenclature
I
RII
regional innovation index
x
ij
value of every indicator
min(x
j
) indicator of positive performance with
minimum value of Binh Duong province
mix(x
j
) indicator of positive performance with
maximum value of Binh Duong province
r
+
ij
indicator of positive performance
r
-
ij
indicator of negative performance
i
S,jit
innovative objects index
I
S,jt
innovative sub-index
w weight of indicators or objects
i innovation indicators
j innovation objects
t time in years

REFERENCES
Binh Duong Statistical Office. (2011). Statistical
yearbook of Binh Duong 2011. Thu Dau Mot: Binh
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Damjan Krajnc, & Glavic, P. (2004). How to
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DiSano, J. (2001). Indicators of sustainable
development: Guidelines and methodologies.
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mg2001.pdf.

Dutta, S. (2011). The global innovation index 2011:
Accelerating growth and development. France.
Hertin, J., & Berkhout, F. (2011). Indicators for
monitoring integration of environment and
sustainable development in enterprise policy. UK:
University of Sussex.

Hollanders, H. (2010). Measuring innovation: The
European innovation scoreboard: Maastricht
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Humanities, N. C. F. S. S. A. (2001). Doi Moi and
human development in Viet Nam. Ha Noi.

Kestenbaum, J. (2009). The innovation index:
Measuring the UKs investment in innovation and its
effects. UK.

Lzaro, J. E., & Dorronsoro, I. C. (2008). Indirect
measurement of eco-innovation based on company
environmental performance data. Fundacin LEIA
C.D.T.

Liu, W., & Cui, J. (2008). Entropy coefficient
method to evaluate the level of sustainable
development of China's sports. International Journal
of Sports Science and Engineering, 02, pp. 72-78.

Meghnaddesai, & Sakikofukuda-parr. (2002).
Measuring the technology achievement of nations
and the capacity to participate in the network age.
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nts/apcity/unpan014340.pdf.

Research, M. E. a. s. (2009). European innovation
scoreboard 2008 comparative analysis of innovation
performance. Italian.

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progress and outcomes of integrated coastal and
ocean management. Retrieved 19/9, 2011, from
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13e.pdf.

USAID, & VNCI. (2012). The Vietnam provincial
competitiveness index 2011. Viet Nam: Vietnam
Chamber of Commerce and Industry.

Yang, L., & Wu, S. (2011). Using variable fuzzy set
theory and information entropy for air pollution risk
assessment in Beijing, China. 2011 2nd International
Conference on Environmental Science and
Development, 4, pp. 33 - 41.


422

Supporting Work Innovative Behavior in
Vietnam Equitized Firms

Ta Thi Hong Hanh
HCMC Open University
Ho Chi Minh City, Vietnam- hanh.tth@ou.edu.vn

Truong Thi Lan Anh
HCMC University of Technology
Ho Chi Minh City, Vietnam- ttlanh@sim.hcmut.edu.vn

Sununta Siengthai
School of Management, Asian Institute of Technology
Bangkok City, Thailand- s.siengthai@ait.ac.th

Abstract- The research examines the effect of individual
perception of work settings on which factors
supporting work innovative behavior (WIB) in two
equitized firms in Vietnam. These two firms represent
two key trends of organizational transformation -
reengineering oriented and TQM oriented. Six
hypotheses about factors supporting innovative
behavior were tested: (1) customer focused strategy, (2)
continuous training, (3) communication, (4) teamwork
(5) high technology and (6) talent employment. Using
factor analysis and structural equation model, the
research finds out that in the reengineering oriented
firm, teamwork, communication, and high technology
significantly support WIB while in the TQM oriented
firm, those significantly supporting factors to WIB are
customer focused strategy, continuous training, and
high technology.

Keyword--work innovative behavior, supporting factors,
reengineering, total quality management, and
equitization.

I. INTRODUCTION

Vietnam today needs to fasten the equitization
for restructuring the national economy and deeply
integrating into global economy. The equitization
process began in 1992 and were planed to finish in
2010 (see table 1) but such objective could not be
reached. Vietnam still has 1265 state owned
enterprises. Thereby, in period 2010-2015 : state
government has been going to equitize 573
enterprise while 284 firms in public sectors and 408
business companies continue to be state owned.

TABLE I: THE NUMBER OF EQUITIZED
ENTERPRISES
Year Number of
Firms
Accumulated
number
1996-
2004
1
2005-
2006
2
2007-
2010
3

2237
1188
about 1500
2237
3425
4925
Source:
1
(Loc, Dang, & Ngan, 2007),
2
(Minh, 2006)
3
(MOFA, 2006)

As seen, equitization is the best way to
restructure firm and improve business competences
because of competition pressure without government
supports (Loc, et al., 2007; Sjoholm, 2006; Webster
& Amin, 1998) . In the aspect of organizational
development, the effective business reformation and
managerial advancement can be considered as the
process innovation outcomes (Daft, 2001; Little,
2008), which largely depends on innovative behavior
at work (Amabile, Conti, Coon, Lazenby, & Herron,
1996). Additionally, Vietnamese firms have
recognized the importance of innovation because this
declares the different value chain as the successful
key (Porter, 2010), thus they are concerned how to
build organizational climate that stimulates creativity
and which factors are the most important that lead to
support individual innovation. Certainly, the
literature shows empirical studies (Ong, Wan, &
Chng, 2003; Orfila-Sintes & Mattsson, 2009) that
confirm the impact of organizational components on
innovative behavior, however, comparing the above
organizational factors in different transformation
trends such as reengineering, total quality
management on innovation behavior might not be
explored. This research investigates the intra-
organizational factors on innovation behavior in two

423

firms. Those firms are high ranked in industry
innovation and focus on different organizational
transformations. Then comparing the importance of
work setting factors to an individual contribution
toward innovation among two firms, the research
may suggest the successful cases to improve firm
innovation capacity.
II. THEORETICAL DEVELOPMENT AND
HYPOTHESES
A. Concept of work innovative behavior
The terms of invention, creativity,
innovativeness and innovation have inter-relations.
Invention creates new knowledge while innovation
may not involve new knowledge but does it adapt or
apply invention to respond to business changes
instead (Amar & Juneja, 2008). Innovation as a
process that consists of idea generation (creativity),
experiment and execution (Koe, 2007) or innovation
includes two stages (1) the first stage is
innovativeness which is the initiation based on
problem perception, data collection, attitude learning
and resource requirement in purpose of adoption
decision and (2) the second stage relates to
implementation which includes all activities and
facts making innovation ideas come true
(Damanpour, 1991). Thereby, innovation can be
defined as the first successful application of a
product or process (Cumming, 1998). Moreover,
the innovation is carried out through the individual
activities (Scott & Bruce, 1994; Peneder, 2010)
which is called innovative behavior. Innovative
behavior is divided into creative behavior and
adaptive behavior (Oldham & Cummings, 1996;
Krause, 2004; Peneder, 2010). In other words,
individuals in organization contribute toward
innovation in two approaches: (1) they generate new
ideas or imply old things in new way; these
activities are considered as creative behavior; or (2)
they apply/ support new things in the work, namely
adaptive behavior (Peneder, 2010). This research
focuses on how to support work innovative behavior
(WIB). So adaptive behavior is chosen to define
WIB in this paper.
B. Antecedents of Work Innovation Behaviors
Woodman et al (1993) state that creative
behavior depends on individual, group and
organizational characteristics in which the work
settings crucially affect on innovation related
behavior (Amabile, et al., 1996; Krause, 2004; Sun,
Zhao, & Chen, 2011). Thereby, our focus also is
organizational factors that can contribute to identify
the importance of each those on innovative behavior
as well as comparing among two different types of
cultural transformation to draw conclusion of
organizational practices in change.
Yuan and Woodman (2010) suggested perceived
organizational support for innovation as an
antecedent to individual innovative behavior at work.
To elaborate this idea, our conceptual model
involves several key organizational supporting
factors, such as: customer focused strategy,
teamwork, technology, flow of information, training
and development, and talent employment.

Customer-focused Strategy
The firms which follow understandings of
customer needs contributed on successful product
innovation (Abratt & Lombard, 1993; Salavou,
Baltas, & Lioukas, 2004). Additionally, the
customers pressure for cost reduction or the global
competition forced firms to change as source of
innovation (Motwani, Klas, & Chanaron, 1997). We
therefore hypothesize as follows:

H1: Customer focused strategy is positively related
to WIB.

Technology
To discover the effect of technology on
innovative behavior, the researchers approach this
from other angles. In Kobates research, the rapid
technology change in marketplace forced
multinational firms to invest more in process
innovation to keep competitive advantage (Kotabe,
1990). For Bagherinejads study, the category of
technology (high, medium and low technology firms)
influenced the innovation, it means that high
technology firms were more innovative
(Bagherinejad, 2006).

H2: Higher technology level is positively related to
WIB.

Teamwork
There are two pure types of organization:
mechanistic and organic structure (Robbins S.P,
Millet Bruce, & T, 2004). Innovative employees
need the flexibility of an organic structure (Aiken M.
& J., 1971; Woodman, et al., 1993; Ahmed, 1998;
Siengthai & Bechter, 2001; Robbins S.P, et al., 2004;
Bagherinejad, 2006). Organic structure is
characterized by low formalization, decentralization,
free low of information and cross functional teams
(Robbins, Millett, & Waters-Marsh, 2004) The key
for sustainability of such structure in a dynamic
business environment is teamwork. Previous studies
proved the effect of teamwork as a crucial identity of
dynamic structure on innovation behavior (Sun, et al.,
2011; Lin & Liu, 2012). Therefore, we hypothesize:

H3: Teamwork will be positively related to WIB.

Free flow of information
Information access is a great important factor in
management, especially in innovation management
(Woodman, et al., 1993; Ong, et al., 2003). Open
communication or availability of information creates

424

a supportive resource for innovation (Damanpour,
1991; Krause, 2004; Chen, 2011; Lin & Liu, 2012).

H4: Free flow of information will be positively
related to WIB.

Continuous training and development
Training can be considered as knowledge
sharing and continuous training is noted as widening
and upgrading employees skills and knowledge
through which, firm can improve innovation capacity
(Siengthai & Bechter, 2001; Krause, 2004; Sun, et al.,
2011).

H5: Continuous training and development will be
positively related to WIB.

Talent employment
Talent is defined as high performer or high
potential talent (Lewis & Heckman, 2006) which
may involve the expert or professional in work. His
role in innovation process is crucial in aspect of
R&D, knowledge sharing. It is possible to be not
found any study relating talent employment and
innovation or individual innovation, so we
hypothesize:

H6: Talent employment will be positively related to
WIB.

A. Preliminary research
Investigating 106 firms which transformed from
state owned to equitized ones in Ho Chi Minh City,
Vietnam, the authors mainly focused on culture
change in these firms and concluded some of them
have oriented in reengineering or total quality
management. Descriptive statistics show that 60.4%
of equitized firms have been oriented to
reengineering while 37.7% has been in TQM.
In second stage, ten equitized firms were chosen
which had highly perceived level of innovation
compared to average industrial innovation level. We
interviewed managers in these companies to deeply
identify the trend of organizational transformation,
such as reengineering or TQM. Finally, we had two
equitized firms including one reengineering oriented
firm in seafood industry and one TQM firm in
packaging industry. Those two companies permitted
us to survey employees about their perception of
work settings and their work innovative behavior.
B. Quantitative research
Sampling
The questionnaire was sent to human resource
managers or organization and administration
managers in each equitized firm, and then these
persons sprout out this to employees. We also agreed
to provide our sample respondents an executive
summary of findings after the data analysis.
Research measurement
Work Innovative Behavior
WIB was measured by (1) implementing
innovation outcomes in work, (2) communicating
about innovation application by himself, (3) trying to
innovating in work and (4) supporting new ideas for
innovation. The respondents were asked to rate on
seven point Likert scale (1 = significantly lower and
7 = significantly higher).
Organizational factors
As seen in literature review, the perceived
determinants of innovation behaviors in this study
are related to working environment such as (1)
strategy, (2) technology, (3) teamwork, (4) free flow
of information and (5) talent employment. The
measurement scales for these determinants are seven
point Likert type (1= strongly disagree and 7=
strongly agree).
Customer oriented strategy
Customer oriented strategy was measured by
four seven- Liker scale items, which include (1)
listening to customers opinions, (2) improving
quality of products or services based on customers
information, (3) setting objectives based on
customers needs, and (4) valuing customers inputs
in developing new products or services. Higher
scores in these scales show higher influence the
customer oriented strategy is perceived towards work
settings.
Technology level
Technology level in firms was measured by five
seven-Likert scale items. Those involve (1) applying
high level of technology, (2) employing labor with
high education, (3) employing labors with high
technical skills, (4) employing labor with high
experience and (5) employing labor with different
backgrounds. The higher scores on this scale indicate
the higher influence the technology level is perceived
towards work settings.
Teamwork
Teamwork was measured by five seven-scale
items. Those involve (1) working in team for
creative ideas, (2) valuing cooperation, (3)
exchanging ideas, (4) allowing sufficient time to
think of creative solutions to problems and (5)
supporting creative thinking. The higher scores on
this scale indicate the higher influence the teamwork
is perceived towards work settings.


425

Free flow of information
Free flow of information was measured by four
seven-scale items which include (1) easily accessing
to to varied sources of information, (2) being good at
managing databases of information, (3) being
effective in disseminating information and (4) being
good at collecting information from external sources.
Higher scores on those scales prove the higher
influence the free flow of information is perceived
Continuous training and development
Four items on this factor which include (1)
promoting internally when filling vacant positions,
(2) continuous training program to upgrading
existing employees skill or knowledge, (3)
continuously revising training program and (4)
formalizing training program with clear structure.
Higher scores in these scales show higher influence
the continous training and development is perceived
Talent employment
Talent employment was measured by three
seven-Likert scales manely (1) employing people
with high technical skills, (2) employing people with
creative thinking and (3) employing people with
change support. Higher score in those scales indicate
higher influence the talent employment is perceived

IV. RESULTS
A. Profile of Respondents
498 acceptable questionaires were used for data
analysis, Table 2 presents the sample profile. In
TQM oriented firm, the percentage of female is
lower than reengineering oriented firm (36%
compared to 56.3%) but the family status, age
interval or senority among two firms are quite
identical.
B. Research analysis
Firstly, we ran exploratory factor analysis (EFA)
to identify factors relating to work settings. In TQM
oriented firm, the items were reduced into 4 factors
which have loadings greater than 0.5 and eigenvalue
greater than 1. Most of the items relate to customer
focus strategy, continuous training and development,
high level of technology, or talent employment (see
Appendix 1, Table 1A), such factors explain 77.73%
of the total variance of the items, the KMO tests
were 0.788 indicating the high significant
relationships among variables in the correlation
matrix, the Barletts test finds that correlations are
significant at the 0.000. In reengineering oriented
firm, valid factors include teamwork, free flow of
information, customer focus strategy and high level
of technology (see Appendix 1, Table 1B). These
factors explain 74.73% of total variance of the items
since each of their corresponding eigenvalues is
greater than one, the KMO tests were 0.797 and the
Barlett test of Sphericity at 0.000. The means,
standards deviations, inter-correlations, and
Cronbachs alpha coefficients for these factors
satisfied the thresholds of reliability and validity
standards (Hair et al., 2006) (Appendix 2).

TABLE II
THE SAMPLE PROFILE OF TWO EQUITIZED
ENTERPRISES

TQM oriented
firm (packaging
industry)
Reengineering
oriented firm (seafood
industry)
N % N %
Gender
Male 133 62.1 160 43.0

Female
77 36.0 122 56.3
Family status
Single 80 37.4 117 41.2

Married
118 55.1 162 57.0
Age
18-21 6 2.8 8 2.8
22-34 105 49.1 112 39.4
35-44 57 26.6 96 33.8
45-54 31 14.5 55 19.4
>54 8 3.7 10 3.5
Senority
<1
year
19 8.9 20 7.0
1-2 40 18.7 61 21.5
2-5 56 26.2 58 20.4
5-10 29 13.6 51 18.0
>10 65 30.4 91 32.4
Total 214 100 284 100

For testing the effect of work settings on WIB in
two models of transformation, AMOS 16.0 was used
to examine the goodness of fit for two models and to
estimate the paths. The results in Table 3 indicate
that although the hypothesized models are mediocre
fit (HOE, 2008), but they are still worth for
discussion. Specifically, in model of TQM oriented
firm, the
2
to degree of freedom ratio is below 3
which means there is no considerable difference
between the actual and predicted matrices (Hair,
Black, Babin, Anderson, & Tatham, 2006), the CFI

426

is 0.9 representing an acceptable fit and RMSEA is
below 0.1 indicating mediocre fit. In model of
reengineering oriented firm, the
2
to degree of
freedom ratio is below 4, CFI is 0.9 and RMSEA is
below 0.1, these results are also near the minimum
requirement for the benchmark fit indices.
H1 hypothesized that customer focused strategy
is positively associated with WIB. The parameter
estimate is statistically significant and positive
(= .08, p<.05) in TQM oriented firm. This study
examines how the employees perception of work
settings affects their innovative behavior.
Specifically testing H1, we can conclude that
employees in TQM oriented firm are likely to have
more innovative behaviors if the firm applies
customer focused strategy.
H2 predicted that high technology level is
positively related to WIB. The parameter estimate is
statistically significant and positive in both
Reengineering oriented firm and TQM firm (= .11,
p<.05 and = .25, p<.001 respectively). Employees
in both firms perceived that working with high level
of technology, they can behave innovatively.
H3 posited that teamwork is positively
associated with innovative behavior, and the
parameter estimate is statistically significant and
positive in Reengineering firm (= .10, p<.1). This
result is also supported by other authors that work
group support or team support may engage in
innovative behavior (Sun, et al., 2011; Lin & Liu,
2012)
H4 predicted that free flow of information is
positively related to WIB. The parameter estimate is
statistically significant and positive in Reengineering
firm (= .17, p<.05). This result is consistent with
the statements of certain authors that employees who
feel free access to information will be encouraged
toward innovative behavior (Chen, 2011; Lin & Liu,
2012).
H5 hypothesized that continuous training and
development is positively associated with innovative
behavior, and the parameter estimate is statistically
significant and positive in TQM firm (= .16, p<.1).
Although this factor is slightly effect on innovative
behavior, it also concludes that employees are likely
to respond with continuous training and development
to innovate.
Finally, H6 posited that talent employment is
positively related to innovative behavior, and
parameter estimate is non-significant in TQM firm.
This hypothesis is rejected.

TABLE III
STRUCTURAL EQUATION MODEL
Reengineeri
ng oriented
firm
TQM
oriented
firm
S.E. S. E.
H1: Customer-
focused strategy
innovative behavior
.15 .15
**

H2: High technology
level innovative
behavior
.11
**
.52
***

H3: Teamwork
innovative behavior
.10
*

H4: Free flow of
information
innovative behavior
.17
**

H5: Continuous
training and
development
innovative behavior
.19
*

H6: Talent
employment
innovative behavior
-.07

2
(103)=
385.35,
2
/df= 3.74,
CFI = .90,
RMSEA= .09
8
2
(122)=
300.26,
2
/df= 2.46
CFI = .90,
RMSEA= .
098

*
p<.1;
**
p<.05;
***
p<.01

V. DISCUSSION AND CONCLUSION

Comparing the two models of transformation in
two representative firms, we find out interesting
differences in terms of supporting factors to WIB. In
the Reengineering oriented firm, Technology,
Teamwork, and Free flow of information are the
three significant factors to support employee WIB.
Among them, only Technology is the only common
important factor of the two firms. In TQM oriented
firm, beside Technology, Customer-focused strategy
and Continuous training and development are the
next two significant factors to support its employee
WIB.
This paper suggests that no matter which type of
transformation the equitized firm wants to apply,
high technology level will provide more
opportunities and working conditions to support its
employee WIB. While reengineering focuses on
establishing new process, TQM provides a
philosophy of customer orientation and a working
environment that highly supports employee
performance. This may explain why the respondents
chose customer-oriented strategy and training and
development as supporting factors to employee WIB.
It also explains why high technology level gains
higher coefficient in the TQM firm than that is in the

427

reengineering firm. People in TQM firm consider
technology as a working environment rather than just
hi-tech machines, means and methods.
Talent management remains questionable in this
research. A wider survey to many transformation
firms may provide better conclusion about this factor.
The limitation of research is the indices of
model fit. As seen, the mediocre fit shows the
rejected null hypotheses with a low probability of
being failure in reaching the conclusion.
Additionally, some low standardized path
coefficients limit the values to the understanding of
relationship between organizational factors and
innovative behavior.
The results of research contribute to change the
top management perception about the work setting in
order to increase the innovative behavior based on
the trend of organizational transformation. Moreover,
from the successful cases of innovation outcomes,
Vietnamese enterprises can decide the reasonable
adjustments of organizational factors for better
innovative behavior which may lead the more
innovation outcomes. Further study can be applied
for other trends of organizational transformation or
expand to other types of companies.

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429

APPENDIX 1

TABLE 1A
THE ROTATED FACTOR SOLUTION FOR WORK SETTINGS IN TQM ORIENTED FIRM

Component
Factor 1 Factor 2 Factor 3 Factor 4
Listening to customers .951
Customer information for product/service innovation .943
Objectives based on customer needs .937
New products or services from market research .930
Technology with high skills .844
Technology with high experiences .793
Technology with high education .743 .304
Creative thinking criteria for employment .869
Talent employment .858
Have high skill and deep knowledge .383 .685
Internal promotion .804
Formal training program and clear structure .740
Continuous training .317 .712
Note: Principal component analysis with varimax with Kaiser normalization
Kaiser- Meyer- Olkin (MBO): .788; Bartlett test of Sphericity at p< .000; Total variance: 77.73 percent

TABLE 1B
THE ROTATED FACTOR SOLUTION FOR WORK SETTINGS IN REENGINEERING ORIENTED FIRM

Component
Factor 1 Factor 2 Factor 3 Factor 4
Allowing sufficient time to think .899
Valuing cooperation .855
Exchanging ideas .824
Working in team for creative thinking .789
Encouraging creative thinking .784
Listening to customers .842
Objectives based on customer needs .658 ,323
Being effective in disseminating information .829
Being good at managing databases of informatio .758
Easily accessing to to varied sources of information .752
Technology with high education .929
Technology with high skills .915
Note: Principal component analysis with varimax with Kaiser normalization
Kaiser- Meyer- Olkin (MBO): .797, Bartlett test of Sphericity at p< .000; Total variance: 74.77 percent


430

APPENDIX 2

TABLE 2A
CORRELATIONS AND CRONBACHS ALPHA IN TQM ORIENTED FIRM (N=214)

Mean S.D (1) (2) (3) (4) (5)
(1) Innovative behavior 5.41 .84 (.80)
(2) Customer- focused strategy 5.59 1.42 .21
**
(.96)
(3) Technology 4.95 1.09 .32
**
.27
**
(.80)
(4) Continuous training and development 5.34 .98 .30
**
.33
**
.42
**
(.73)
(5) Talent employment 5.20 1.11 .14
*
.15
*
.38
*
.35
**
(.77)
Notes:
**
p<.01;
*
p<.05; Cronbachs Alphas are in parentheses

TABLE 2B
CORRELATIONS AND CRONBACHS ALPHA IN REENGINEERING ORIENTED FIRM (N=248)

Mean S.D (1) (2) (3) (4) (5)
(1) Innovative behavior 5.41 .84 (.84)
(2) Teamwork 5.59 1.42 .31
**
(.91)
(3) Customer- focused strategy 4.95 1.09 .30
**
.50
**
(.85)
(4) Free flow of information 5.34 .98 .23
**
.25
**
.30
**
(.71)
(5) Technology 5.20 1.11 .14
*
.20
**
.33
**
.03

(.87)
Notes:
**
p<.01;
*
p<.05; Cronbachs Alphas are in parentheses


431

Inserting Innovation Tools into the
Curriculum of Universities in Response to the
Requirements of the Innovation Process of the
Provinces in Vietnam

Dr. Che Dinh Ly
Institute for Environment and Resources, National University Ho Chi Minh City (VNU-HCM)
Ho Chi Minh City, Vietnam. Email: cdly@vnuhcm.edu.vn
Abstract-- Starting from the role of universities in
the innovation process in provinces of Vietnam, this
paper discussed gaps in teaching programmes in
terms of the contribution of graduates to inclusive
innovation and innovation management. In recent
years, higher education in Vietnam has developed
strongly and is facing several constraints as to
qualification of lecturers, inflexible curriculum, and
quality assurance problems. To improve abilities of
graduates to contribute to the innovation process in
the provinces, several tools and techniques or
methods have been proposed for insertion into the
curriculum: strategy tools for leadership skills,
problem solving, decision making and project
management and, communication skills and
creativity techniques.

Keyword-- innovation education, education for innovation
management, innovation tools, Vietnam education.

1. UNDERSTANDING INCLUSIVE INNOVATION
AND INNOVATIVE MANAGEMENT
1.1. Inclusive innovation
Inclusive innovation is a term that is being used
for explicitly developing innovations that address the
mundane needs of billions of people at the bottom of
the income pyramid. The needs of these people have
not been the focus of the innovation system because
their low incomes were not considered sufficiently
attractive markets for the innovative efforts of firms
(Dahlman, 2011).
In inclusive innovation, we need to build
capacities to engage with innovation, participation and
change for people. It is necessary to educate them for
knowledge and make them support innovation.
In inclusive innovation, there are products and
processes of generating, accessing and utilizing
knowledge involved in production, distribution and
consumption.
1.2. Innovation management
To understand innovation management, we must
first develop a working definition of innovation. Not
everyone agrees as to the meaning of the term
innovation. According to (Tilley M. L. et al, 2008),
Schumpeter in 1934 identified five types of innovation:
1) Utilizing new and cheaper sources of supply,
2) Developing a cheaper substitute,
3) Creating a new good that more adequately
satisfies existing and previously satisfied
needs,
4) The search for new markets,
5) The introduction of a completely new product.
Note that, in each case, Schumpeter suggests that
innovation involves some form of implementation of a
creative idea and does not end with idea creation.
Innovation management suggests that the process
of developing creative ideas that result in successful
products or services is a decision strategy that firms
can adopt. The firm then plans, staffs, directs, controls,
and organizes to implement the decision.

2. ROLE OF UNIVERSITIES IN THE
INNOVATION PROCESS OF PROVINCES
Innovation education initiatives with real-world
interaction with industry and the creation of an
innovative climate for provinces is very important to
the innovation process in Vietnam.
Innovation education provides tools and resources
for potential innovators in an environment that
enhances idea generation by encouraging students with
different technical skills to actively engage with each
other, and to appreciate each others perspectives
(Killen & Ford, 2005).

432

The necessity for innovation education is
mentioned in many works (Commission, 2011;
Goddard, 2012; Killen & Ford, 2005; Shavinina,
2012), and it also needs to be added in the curriculum
in the universities of Vietnam.

FIGURE 1: FOUR AREAS WHERE A UNIVERSITY
COULD CONTRIBUTE TO INNOVATION IN A
PROVINCE

Active contributions of universities to the
provincial situation can be broken down into four
areas:
Business innovation which is closely linked to the
research function of the university,
Human capital development linked to the teaching
function,
Community development linked to the public
service role of universities,
The fourth area is the contribution of the
university to the institutional capacity of the
region through engagement of its management and
members in local civil society.

Where these four domains are integrated, the
university can be seen to be occupying a proactive
and not just a passive role in the regional
development process.
According to Commission, (2011), universities
can play a key role in defining a provincial innovation
strategy by contributing to a rigorous assessment of the
regions knowledge assets, capabilities and
competencies, including those embedded in the
universitys own departments, as well as local
businesses.
Universities need to recognize the opportunities
for technological diversification strategies of major
locally embedded industries to which the university
research base can contribute.
In the area of human capital and skills, universities
can act as a powerful magnet for attracting talented
students and staff into the province from other parts of
the country. In addition, through their teaching at
undergraduate and postgraduate level, universities have
the potential to add to the stock of human capital by
means of graduate recruitment into provincial
businesses, possibly following work placement as part
of the students degree (Commission, 2011).
Graduates from universities can provide the
connectivity through which knowledge exchange
between their teachers and businesses takes place.
However all too often teaching programs respond
solely to student demand and a national labor market
for graduates, particularly when there is no clearly
articulated business demand linked to regional
innovation drivers. The consequence is often graduate
emigration to more dynamic regions.

3. HIGHER EDUCATION OF VIETNAM IN
THE PROCESS OF CHANGE AND ITS
CONSTRAINTS AND GAPS

FIGURE 2: VIETNAM AND MAIN PROVINCES

Vietnam has an area of 331,688 Km
2
, 88% of
Vietnamese people. Vietnam is a member of AFTA,
APEC, and WTO.
GDP of the nation is 65 billion USD (2007), GDP
per capita 800 USD (2007), GDP(PPP) per capita is
3.100 USD (2006).

433

GDP by activity: Agriculture (15.97 %), forestry
(1.2%), industry and construction (40.97 %), service
(38.1 %) (2006). Unemployment is about 6.1% (2003)
and labor force: 44.58 mil (2006).
Labor by activity: Agriculture (56.8%), industry
(37%), service (6.2%) (2005). Main industries:
Petroleum, clothes, shoes, cement, steel, chemicals,
construction materials, coal, foodstuff processing.
Vietnams higher education system now has 322
universities and colleges (47 private HEIs, account for
15%), 1.5 million students (4 year bachelor degree).
On average it has 170 students/10,000 citizens. At
the current moment, HE has 52,000 faculty members
(teaching staff), ratio of students to faculty (29
student/faculty), about 7,000 Ph.D. holders as faculty
members (about 13.5% of total teaching staff), 463
professors, 2,467 associate professors. There is little
research at universities (3% of university revenue) and
HE has weak linkage with industry. Equipment for
teaching and research, is obsolete, curriculum and
teaching methods are outdated.
At the current moment, innovation education has
not been an official subject in the curriculum of almost
all universities in Vietnam.
Vietnam HE has many constraints and it does not
response to the requirement for an innovation process
for economic development.
To improve the situation at the current time,
Vietnam leaders have planned to make a big reform in
the HE of Vietnam. Five directions for solution have
been introduced:
1. Introducing performance standards for teachers
and instructors a performance based system in
education management,
2. Improving autonomy, efficiency and
accountability of HE institutions,
3. Improving the efficiency of financial management
of HE,
4. Further decentralization,
5. Developing a 2-tier higher education system,

4. GAPS IN TEACHING PROGRAMMES OF
UNIVERSITIES IN VIETNAM AND SOLUTIONS
In Figure 3 the survey of the World Bank (World
Bank, 2012) is not clear as to skill gaps of
professionals in Vietnam but it can say that the
curriculum and also the teaching methods, of several
universities (private and state) is so backward.
Education (HE) in Vietnam stands for a big reform. In
terms of contribution to provincial innovation, the
teaching programs must be innovated to a more holistic
approach. There are many skills, tools, techniques and
methods which need to be applied to the curriculum or
supplementary training in universities.

FIGURE 3: COMPARATIVE SKILL GAPS AMONG
PROFESSIONALS IN ASIAN COUNTRIES.

Note: The darker the shade, the stronger the gap
(within each country only). Dotted cells indicate gaps
that have became less serious, and hashed cells indicate
gaps that have became more serious, in relation to the
current demand for that skill.
= not available. Source: World Bank (2012)

There are thirteen practical mechanisms that
(Commission, 2011) guide European countries in
connecting universities to regional growth. It propose
the main skills:

TABLE 1: THE MECHANISMS AND SKILLS NEEDED

PRACTICAL
MECHANISMS
(Commission, 2011)
Main skills needed to
supplement training
Consultancy services
Communication skill
tools;
Student volunteer and
community work
Communication skill tools
Graduate enterprise
programs
Decision making tools,
Project management tools
Staff spin outs
Project management tools,
Time management tools
Workforce development Team management tools
Staff mobility Team management tools
Widening student
participation
Communication skill tools


434

PRACTICAL
MECHANISMS
(Commission, 2011)
Main skills needed to
supplement training
Exploitation of IP
Creativity technique
tools
Research and
technology centers
Project management;
time management
Network and cluster
development
Strategy tools
International linkages
Strategy tools, decision
making
Talent attraction and
retention
Communication skills
tools
Cultural development
and place making
Decision making tools,
Strategy tools.

5. TOOLS METHODS AND TECHNIQUES
NEEDING TO BE INSERTED IN THE FORMAL
CURRICULUM IN RESPONSE TO INNOVATION
EDUCATION
According to my own experience, innovation
education has hardly been included directly as a
independent subject in the university curriculum. There
is an overloading problem in education programmes but
it could be inserted into the current subjects as tools and
techniques to strenghthen the students capacities to
contribute to the innovation process of local provincial
society.
5.1 Strategy tools: SWOT, TSWOT, QSWOT, QSPM
Strengths-Weaknesses Opportunities-Threats
Analysis and other similar methods are useful tools to
generate new strategic directions at any time for a local
situation. By SWOT, students have the ability to find
the orientation to contribute to the innovation process for
the locality (L, 2009).
5.2 Leadership skills tools
One of the tools in this category is Crisis Action
Planning. This tool allows fast exchange of pertinent
information, analysis of situations affecting possible
business, development of feasible adaptive crisis action
and a decision-making process to select the best
adaptive crisis action.
5.3 Team management tools
There are several tools such as: influence,
interpersonal facilitation, relational creativity, team
leadership. These tools aid gifts and talents and abilities
to lead and justify the innovation process.
5.4 Problem solving: Causal Effect Analysis
Causal Effect Analysis is a valuable tool to help the
students identify the possible cause of a bad event in the
innovation process.

5.5 Decision making tools
Many decision making tools are needed for students
as Multictiteria Analysis, Analytical Hierarchy Process,
Scenarios Analysis. These tools are very necessary for
all kinds of students. In the tradictional education
system, the curriculum attaches special importance to
knowledge but lack tools and methods.
In the process of mass development of higher
education in Vietnam, the quality of graduates is not so
uniform. The young lecturers are teaching mainly
knowledge so the graduates lack many skills that are
needed for contribution to the innovation process.
5.6 Project management tools
Inclusive innovation needs to understand the
situation of the localities (districts and provinces) to
develop projects and project management. The tools
needing to be added into the formal curriculum could be
Logical Framework Analysis (develop and manage the
innovation project), and planning cycle methods to
manage the project.
5.7 Communication skills
One of the serious lacks for engineers when leaving
the university is that of communication tools. To
effectively contribute to the innovation process, the
graduates must be equipped with communication tools
such as win-win negotiation tools, conflict resolution,
running effective meetings, and questioning techniques.
5.8 Creativity Techniques
The process of innovation requires organization and
the team is normally multidisciplinary. Interdisciplinary
skills are necessary to manage such activity, hence the
need for the engineer to have a knowledge and
understanding of other professions involved in the
creative and innovation process (McKeag, 2010).

FIGURE 4: INTERDISCIPLINARY SKILLS ARE
NECESSARILY INVOLVED IN THE CREATIVE AND
INNOVATION PROCESS
(Modified from Killen & Ford, (2005).

435

The Mapping Australian Science and Innovation
final report released in Proceedings of the 2005
ASEE/AaeE 4th Global Colloquium on Engineering
Education, Australasian Association for Engineering
Education identified three interrelated abilities
underpinning science and innovation. The three ability
areas are:
Idea generation encompassing abilities in
creativity and problem solving.
Capitalizing on ideas including entrepreneurship
and leadership abilities.
Managing innovation the ability to manage
individuals and teams within an innovative culture.
(Fig. 4).
Based on the discussion above, it could be said
that creative techniques are a very important
component of the university curriculum to make
graduates be involved in the provincial creative and
innovation process in Vietnam.
6. CONCLUSION
Innovation education has not yet been introduced
at universities in Vietnam. However, innovation topics
should not be a faculty subject. They could be inserted
in many subjects and it is very necessary for students
graduating from universities to contribute to inclusive
innovation and innovation management of the
localities. In recent years, higher education in Vietnam
has developed strongly and is facing several constraints
as to qualification of lecturers, inflexible curriculum,
and quality assurance problems. To improve abilities
of graduates from universities and to make them able
to contribute to the inclusive innovation and innovation
management process of the provinces, several tools
and techniques or methods have been proposed for
insertion into the subjects of the curriculum: tools for
strategy, leadership skills, problem solving, decision
making, project management and communication skills
and creativity techniques.

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http://siteresources.worldbank.org/EASTASIAPACIFI
CEXT/Resources/226300-1279680449418/7267211-
1318449387306/EAP_higher_education_fullreport.pdf.


436

The Influence of Communism on Ethical
Decision Making

Ngo Thai Phuong
Flinders Business School, Flinders University,
Hanoi, Vietnam, ngot0002@flinders.edu.au
Bahaudin G. Mujtaba
Nova Southeastern University, 3301 College Avenue, Fort Lauderdale,
FL. 33314-7796. USA., mujtaba@huizenga.nova.edu
Greg Fisher
Flinders Business School, Flinders University, Adelaide,
Australia, greg.fisher@flinders.edu.au

Abstract - Previous studies have shown that
communism follows different patterns in different
countries of the world. China and Vietnam, where
officials have jettisoned many of the original basic
tenets of communism, have been the world's two fastest
growing economies over the past two decades. This
paper focuses on the Communist Vietnam where in
comparison to China, minimal research has been
conducted. This paper explores how communist party
values support ethical decision making. The
hypotheses are predicted in a propositional format as a
first step in the development of a theory of the influence
of communism on ethical decision making because the
link between communism and business ethics is rarely
explored. Relevant literature along with suggestions
and implications for research are presented.

Keywords--Vietnam, communism, ethical decision
making, business ethics.

I. INTRODUCTION

Ethical decision-making and socially responsible
behaviours are becoming more important today than
ever before. As such, this paper explores how
communist party values support Vietnamese ethical
decision making. The hypotheses are proposed here
as a first step in the development of a theory of the
influence of communism on ethical decision making
because the link between communism and business
ethics is rarely explored.
The gradual shift of economic power from the
West to Asia and to China more recently presents a
new and distinctive challenge to Western domination
over global development discourse (Gillespie, 2010).
China and Vietnam where have jettisoned many of
the original basic tenets of communism (Holmes,
2009) have been the world's two fastest growing
economies over the past two decades (Malesky,
2011). Moreover, by late 2008, the amazon.com
ranking of book sales revealed that the book of
communist theory, Marxs Capital had become a best
seller. There is renewed interest in communism in
both theory and practice (Holmes, 2009).
Communist China was not only showing the rest
of the world how a country could have impressively
and continuously high economic growth rate but also
was using some of the results of this growth to invest
in western countries, including USA (Holmes, 2009).
China is the largest socialist country and worlds
second largest economy behind the United States
(Sun, 2003). The Chinese model might be
increasingly attractive even in the worst global
economic crisis since October 1929. China rapidly
growing influences the rest of the world. China has a
hybrid system and its own name for itself in Chinese
as Zhongguo - the Middle Country (Holmes,
2009). Also, Chinese culture differs from that of the
Western countries. Chinese culture has mainly been
conceptualized as Confucianism, collectivism, and
communist ideology (Lin & Canchu, 2008). The
Chinese Communist Party (CCP)s ideology,
namely, MarxismLeninism, Maoism, Deng
Xiaoping Theory, and the theory of Three
Represents, is a major source of influence in Chinese
organizations, shaping management practices in
China. Communist ideals constitute a moral
character, including: (a) commitment to abiding by
the law and avoid corrupt practices, (b) positive
attitude toward the Chinese Communist Party and
willingness to follow Party dictates even when they
conflict with ones own personal views (c) positive
attitude toward party political workshops held during
working hours. Chinas case indicates that
communism, an institution or ideology, has
moderated the Confucian influence on Chinese
leadership.
The focus of this article is Communist Vietnam
where in comparison to China, minimal research has
been conducted. Vietnam is generally grouped
among other post-socialist or post communist
countries (Chen, 2008; Reid Henry, 2007; Smith,
2006; Wu, 2003; Ydice, 2003).
As the sole representative of the Vietnamese
government, the Communist Party of Vietnam (VCP)
is in a position to create and control its state-authored
Vietnamese culture (Gillen, 2011). The VCP uses its

437

power and Vietnamese culture as an expedient
resource to assist in resistance to outside influence
and preserving Vietnamese ideologies and principles
and institutions governing routine social life.
Communism has served the VCP with an ideology
that placates dominant Party and state interests while
retaining a concentration of power within the state
(London, 2009). Unlike other political parties, the
VCP is today arguable as strong as ever, has and
continues to enjoy broad legitimacy across large
segments of society.
There are lots of studies investigating the impact
of national culture on ethical decision making.
Culture has both a direct and indirect impact on
ethical decision making (Thomson, 2007). National
culture influences an individuals intention to behave
ethically (e.g. R. I. Beekun, 2005; R. Beekun,
Hamdy, Westerman, & HassabElnaby, 2008;
Westerman, 2007...). It is an important determinant
of ethical decision making. Different cultural
backgrounds may affect individuals' ethical decision
making (Hofstede, 1984).
In the case of Vietnam, we may propose that
communist values are a significant variable
influencing Vietnamese ethical decision making.
The influence of communism does not appear to
have been explored and thus the purpose of this
paper is to propose a framework which links
communism with business ethics in order to get a
better understanding of how communism influences
the ethical decision making. The first section of the
paper reviews prior research on definition of
communism and Asian communism. In the second
section, the Vietnamese Communist Party is
reviewed in the role of creating and preserving
unique Vietnamese culture. The third section
develops hypotheses about the link between
Vietnamese Communist Party value and business
ethics. They have been developed on a judgmental
basis.

II. COMMUNISM DEFINED

Is an individuals perception of business ethics
a function of communism? To answer this question,
it becomes readily apparent that we must first define
communism. It is important to discuss this upfront
before reviewing the literature although it is not easy
to define communism in simple terms.
There is little agreement as to what communism
is. Websters New College Dictionary defines
communism is a social system marked by the
common ownership of the means of production and
common sharing of labour and products. David
Graeber (2010) defines communism as any human
relationship that operates on the principle of from
each according to their abilities, to each according to
their needs. Based on concept of belief, Chen
(2008) points out that communism requires a more
general commitment to a communist or socialist
ideology that favors social equality,
cosmopolitanism, and scientific-technological
progress. It refers to a specific commitment to
Marxist-Leninist ideology as articulated in Soviet or
East European regimes.
Communism originated from Carl Marx and was
later further developed by Vladamir Lenin after the
Russian Revolution. One function of Communist
Party is to socialize the population in various ways
(Holmes, 2009). This includes control of the
education system, control of the mass media and
direct communication with the citizenry during
election campaigns. In communist countries such as
China, Communist Party has played major roles in
the shaping of the country (Yang, 2010). The
Chinese governments policy indicates clearly the
desire to cultivate a Marxist ideology and communist
ethics in its youth. A ruling partys ideology and
accompanying rhetoric can have a major impact on
citizens perceptions. Chinese people are able to
accept communism as a guiding force in their lives.
In communist countries, individuals who have been
indoctrinated in communist ideology are less likely
to behave unethically.
Based on the above discussion, we propose that
individuals who have experienced communism and
have been heavily indoctrinated in its moral
philosophy may behave more ethically.

III. COMMUNISM IN ASIA

Communism in Asia is not a new phenomenon.
Its earliest beginnings extend back into the late
nineteenth century, when a handful of young Asian
intellectuals first came into contact with Marxism.
The initial Communist Parties were established much
later, but even this development took place nearly a
half century ago. Asian communist countries
demonstrated a different pattern of transition that
characterized by gradual, experimental, phased and
partial reforms as compare to former communist
countries in Russia and Eastern Europe that were
illustrative of neoclassical big bang or radical
approach (Nolan, 2011).
There are highly significant difference between
European and Asian Communism (Voorhis, 2010).
During 1989, Communism collapsed in Germany
and the rest of Eastern Europe. However, in Asia
(China, Vietnam, Lao, ...) communism proves the
succeed results. Communism in Asia is still in power
at this moment which has the characterized Asia as
opposed to Europe.

IV. BUSINESS ETHICS, THE COMMUNIST
PARTY AND VIETNAMESE CULTURE

Vietnamese Culture and Ethics
With a population of about 90.5 million,
Vietnam is the 13th most populous country in the
world (Anh, 2008). Vietnam represents a collectivist

438

and oriental culture (Nguyen & Mujtaba, 2011;
Nguyen, Mujtaba, & Boehmer, 2012; Rowley, 2009).
The individual is seen at a lower level than the
collective group (the family, school or company).
Strict guidelines are designed to protect the
reputation of the group. Vietnam has been dominated
by ruling elites, initially colonial forces, followed by
the monarchy, which was succeeded by the Socialist
and current Communist Party leaders. Wright (2001)
concludes that banks in Vietnam operate mainly on
the strength of relationships.
Vietnam has no state religion (Vinh, 1990).
However, there are three major religions which have
a profound impact on Vietnamese behaviours,
namely Confucianism, Taoisme and Animism
(Rambo, 2005). In 2003, Vietnamese religious
communities had about 20 million people of
different religions (Trinh, 2007). Most Vietnamese
Buddhists belong to the Mahayana branch. The
Theravada branch exists in Vietnamese ethnic
communities living in the Mekong Delta (Vinh,
1990).

Business Ethics in Vietnam
Business ethics is a relatively new issue in
Vietnam, began emerging after market-economy
reforms, when Vietnam started to join in the
internationalization and globalization process (Anh,
2008).
Previously, in the centralized planned economy
(De Melo, Denizer, & Gelb, 1996; Tran-Nam &
Pham, 2003), all activities were conducted by the
Government under the Communist Partys
leadership. Most assets were state owned. Most
employees were working for the State. They
followed the higher authoritys direction. Managers
had little power to play their leadership role. They
were only instruments of State policy (Truong
Quang, 1998). The discipline and salary system were
simple and unified. It is easily to recognize the
subordinatesuperior relationship in organizations
and the strict bureaucratic and hierarchical
management system in society (Quang, 2002). The
paternalistic approach in management continues to
play an important role in various governmental,
public and private corporate organizations. One of
the distinctive features in the Vietnamese society is
indirect speech, resulting from the importance of
saving face (Quang, 2002 , p.3). People try to avoid
ambiguous situations by setting up formal rules, and
rejecting deviant behaviors.
Along with the economic reform and open-door
policy and joining the World Trade Organization, the
Vietnamese cultural-socio-economical environment
has undergone some significant changes. It
respectively leads to a transformation in ideology
and a sense of value. The move towards a market-
oriented economy from a command economy and
Confucian cultural philosophy has resulted in the
mixture between collectivism and individualism
(Ralston, 1999). For instance, Vietnamese employees
lean towards individualism through a stronger
emphasis on personal performance-based rewards
rather than being rewarded for loyalty and group
performance (T. Quang, 1998; Tuan, 2000). The
context of Vietnam is linked to modernization,
advance technology and the influx of western
management. This has led to an adaptation to
western values and behaviours which are often
considered as having more freedom and more
publicity than in Asian culture. Under pressure of
globalization, the Vietnamese mass media mentions
business ethics quite frequently, but the
understanding of the issue is still very vague, no
official definition of business ethics.

Vietnamese Communist Party
Vietnam is a long lasting social communist
country. In Vietnam, one single Communist Party
was established more than 80 years ago. Vietnam has
a formal structure of a tripartite state with legislative,
executive and juridical branches but with significant
involvement of the VCP as a real decision making
power. Vietnamese Communist Party memberships
account for 3% of the population (Carlyle A. Thayer,
2008). They are in key positions in all government
agencies: The National Assembly, Ministries,
Supreme Court. The Partys Central Committee with
a current representation of 160 members who are
high-ranking leaders in the government system is a
forum for strategic decision making in Vietnam.
The Vietnamese Communist Party has a
monopoly of power, a tremendous control over
society and a strong impact on the public
administration system (E. Chan, 2010; Fforde, 2003).
The political system is ruled only by this one single
party the rule of the Vietnamese Communist Party
(Nhi, 2005; Tsuboi, 2005). Polito-bureaus and the
Central Committee, which centre on the General
Secretary of the party, have all of the ultimate power
of decision because a single party commands the
hierarchy of authority in all legislative, judicial, and
governmental aspects (Tsuboi, 2007, p. 9).
Communism has strict laws and enforcement
according to the Partys charter. The party
organizations play leadership roles in all state
activities to implement party policies (C. A. Thayer,
2009; Carlyle A. Thayer, 2008).
Citizens belong to mass organizations
appropriate to their status such as the quasi-
governmental Vietnam Fatherland Front, the
Vietnam General Confederation of Trade Unions or
Ho Chi Minh Communist Youth League. Party
members leading such organizations educate and
mobilize the masses through regular study sessions
to implement party policies (Ibp, 2007).
During the period of the centrally planned
economy, the VCP directly controlled all state
governance activities. After that, the transition into a
market based economy decreased the role of Party

439

and gave more power to the Government and the
legislative institution (McCarty, 2001a). However,
those bodies are far from autonomous since almost
all of the state leaders are Communist Party
members. The Partys Central Commission for
Organization and Personnel appoints the
Governments senior personnel management and the
National Assembly instead of the Prime Minister and
National Assembly. The high level of involvement of
the Party in top personnel the state helps Party
member government officials to comply completely
with the Partys principles.
The Partys ideology and mindset play a crucial
role in shaping public opinion and social issue
(Nguyen-Hoang, 2010; Carlyle A. Thayer, 2008).
The Communist Party of Vietnam has adopted
Marxism-Leninism and Ho Chi Minh Ideology. The
spirit of communism is for the people, from the
people and of the people (Khieu, 2007). Communist
Party members are recognized as high-ranking
members who play exemplary roles in their daily
work, and when faced with major issues (VCP,
2011). They often place the Partys interest above
personal interest; the Partys interests are supreme.
For Communist Party members, communist
ideologies play an important role and are strong
determinants of an individuals values.
Communism seems to have become a very
powerful force in the life of Vietnamese. It has
become apparent that communism has become a very
significant variable in attempting to understand the
psychology of Vietnamese. This suggests that
communism influences the understanding and
explanation of the behavior of Vietnamese. Hence,
being a member of the Communist Party would have
a positive impact on ethical perceptions and ethical
behavior.

Vietnamese culture
This section first describes how the VCP has
established Vietnamese culture and then explores
why it differs from other national culture.
Vietnamese religions also are been analysed as a
distinctive different from other nation culture.
George (2003) indicates that the notion of culture as
a resource entails its management.
Firstly, the VCP introduced market socialism in
the late 1980s. It is clear that the Party desires an
additional layer of cultural and economic supervision
during the period of rapid changing economy.
Gainsborough (2003) reported that the (market)
reforms have increased the economic decision-
making responsibilities of local governments (p. 2),
leading to a stronger local governance decision
making. While the VCP creates national economic,
political, and cultural dictums, it is up to local
governments to make sure that national cultural
ideology is woven in to the fabric of local policy and
their constituents lives on an everyday, mundane
basis (Gillen, 2011).
Secondly, Government continues to give
Vietnams state-owned organizations preferential
treatment for accessing real estate, exempting tax or
restricting private competition (Gainsborough,
2003). Unlike other neoliberal state governments, the
VCP still control the national marketplace in order to
protect its economic interests, developing and
profitable industries by tagging them with a label of
cultural importance. The VCPs cultural narratives
have been constructed over time (Beresford, 1989;
Duiker, 1995; Marr, 1997; Pelley, 2002; Tai, 1996).
In the i mi (renovation) era, the VCP still
frames national culture on the basis of
Vietnameseness (as opposed to foreignness) by
creating a state-wide tension between foreign
cultural interlocutors and the enduring strength of a
state-authored Vietnamese culture (Gillen, 2011).
The presentation of the VCPs Vietnamese
culture is important and associated with market
reform policies. The VCP has created an economy in
which the cultural discourses of equitability, caution,
and community play a role in drawing attention away
from the states predatory economic actions, actions
which create solvency for state-owned enterprises
and challenge private, non-state businesses (Gillen,
2011).
Vietnamese culture is almost unique and
different to other Asian socialist countries including
China. It is because the VCP is still keep control
power during reform process. The nature of the
Party in Vietnam may differ from the conventional
stereotype of iron control (McCarty, 2001b). The
VCP maintained its rule through a system of checks
and balances operating around the principle of
consensus (Van Donge, 1999, p.16).
One other main different point between the
Vietnamese culture and others is in terms of
managing religions. In most communist countries,
religions and religious activities were strongly
discouraged, closely monitored or even formally
banned in Albania in 1967 (Bouquet, 2010; Holmes,
2009). However, in Vietnam, religious institutions
are recognized and co-opted for nation-building and
state-affirming purposes. Communist Party policies
respect the peoples right to freedom of beliefs and
religions, clearly state rights and duties of religious
individuals and religious organizations (Bouquet,
2010). Furthermore, Vietnamese religions and beliefs
can be seen as a strong indication of the ideological
orientation of the VCP. Nowadays, political leaders
usually praised Vietnamese religious organizations
for its achievements and contribution to the
development of the whole economy.
Like Maoism in China, Ho Chi Minh ideology
symbolized the nature of Vietnams modern cultural
identity. Ho Chi Minh, a creative Marxist ideologist
and great humanist, is an exemplary modern
communist of wisdom and intellect. Profoundly and
completely believing in socialism and communism,
Ho chi minh ideology reaches epochal heights. With

440

his understanding of the Vietnamese peoples lives
and destiny, he devoted his life to the salvation and
development of his nation and people. Ho Chi Minh
ideology is a result of the creative application and
development of Marxism-Leninism in the conditions
of Vietnam. Ho Chi Minhs ideology is in close
association with socialism which was developed
from a practical viewpoint on development and
renovation (Rua, 2010). That is reason at its
7
th
National Congress (6-1991) the Vietnamese
Community Party affirmed to take Marxism-
Leninism and Ho Chi Minh thought as the
ideological foundation and lodestar for its action
(Tuong, 2011).

V. HYPOTHESIS DEVELOPMENT

Business ethics is "an application of general
ethical principles to actual practical problems in the
area of business (Christie, 2003, p. 266). Trevino et
al (2006) described behavioural ethics as concerned
with the explanation of individual behaviour that is
subjected to, or judged according to, generally
accepted moral norms of behavior and that occurs in
the context of larger social prescriptions. Ethical
decision making is a process by which individuals
use their moral base to determine whether certain
issues are right or wrong. Differences in ethical
decision making means that underlying value
structures differ (C. L. M. Chan, 2011).
As stated above, ethical decision making is
influenced by national culture. National culture
influences an individuals intention to behave
ethically (e.g. R. I. Beekun, 2005; R. Beekun et al.,
2008; Westerman, 2007). Vietnamese culture is
created and influenced by the Vietnamese
Communist Party. Therefore, we propose that
communist values affect ethical decision making.
Individuals with a high commitment to communism
tend to recognize the ethical issues or problems more
so than their counterparts.
Based on the above discussion, our predictions
are proposed as follows:
Proposition 1: Communist party members tend
to behave more ethically than others.
Proposition 2: Individuals with a high
commitment to communism tend to recognize the
ethical issues or problems more so than their
counterparts.

VI. THEORETICAL AND MANAGERIAL
IMPLICATIONS

In this study, the authors review communism in
relation to ethical decision making. The authors
believe that different levels of an individuals
commitment to communism significantly influence
ethical decision making in communist countries.
This article attempted to fill the gap in ethics
literature by examining the link between communism
and ethical decision making.
The findings of the study can be incorporated in
ethics training. With the increasing roles of
communist countries in the global economy,
individuals may increase their perceptions to ethical
behavior and enable them to anticipate the actions in
future by learning communist ethics.
Following this analysis, empirical research now
needs to be carried out to assess to what the extent
communism affects ethical decision making. While
much work lies ahead, this paper is offered as a
contribution towards a theory of communist
influence on business ethics

VII. SUMMARY

Previous studies on communism and ethical
decision making are patchy. Researchers try to make
progress in contributing to the knowledge base of
communist ethics in particular. This article
contributes towards the developing of business ethic
in Asia which we believe will acquire a growing
importance in near future.

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443

Exploring SMEs Perception and Trust toward
HRIS for a Sustainable HRM Performance:
Case Study of SMEs in Vietnam
Nguyen Ngoc Duc
School of Management, Asian Institute of Technology (SOM-AIT)
Bangkok, Thailand; Email: Nguyen.Ngoc.Duc@ait.ac.th

Abstract Small and Medium Enterprises (SMEs)
currently play an important and pivotal role in all
countries, especially in developing nations. They are
also key factors in terms of reducing unemployment.
Therefore, how to manage human resources in the most
optimal way (e.g. saving human energy along with high
performance and bringing out expected outcomes) is
one of the serious concerns of such enterprises. Human
Resource Information Systems (HRIS), an innovative
HRM solution, have become known as a support system
for sustainably driving HRM development. Hence,
enhancing trust of SMEs toward HRIS is necessary for
a sustainable HRM performance. Accordingly, this
study aims to explore SMEs perception and trust
toward HRIS in Vietnam. This is one of the first
qualitative pilot research studies on such an issue in
Vietnam. In this research, DeltaQual
TM
research
technique, a Nielsen proprietary qualitative product,
was applied to conduct and analyze 10 In-Depth
Interviews (IDIs), which were carried out with high-
profile respondents (e.g. top managers) of SMEs in
Vietnam.

Keywords Human Resource Management, Human
Resource Information System, HRM, HRIS,
Sustainable HRM, Innovative HRM, Trust, Perception,
SMEs, Vietnam

I. INTRODUCTION
Today, Small and Medium Enterprises (SMEs)
play an important and pivotal role in all countries in
terms of national economic development. The
Organization for Economic Co-operation and
Development (OECD) has addressed the importance
of SMEs in their statement as follows:
In all countries including the largest
ones, SMEs play a very important role. In
particular, it has been recognized for some
15 years that their dynamism, related in
part to the technological and economic
changes which have occurred over this
period, has made an important
contribution to the creation of new jobs,
the economic revival of certain regions
and also to technological progress.
(OECD, 1993, pp. 7)

The proportion of SMEs in OECD make up 95%
of all enterprises and 60-70% of employment
(OECD, 2011; Levinsohn & Brundin, 2011).
Vietnam is a developing country with rapid
economic growth in the last 10 years in terms of
GDP at current prices (Vietnam Report, 2012).
Additionally, the impact of increased Foreign Direct
Investment (FDI) on economic growth in Vietnam
has helped to reduce the technology gap between the
foreign and local firms (Anwar & Nguyen, 2010).
The private sector in Vietnam has been rapidly
growing since the mid 1990s with a high majority
ratio of SMEs (Nguyen et al., 2006; Nguyen, 2005).
With the development of Information and
Communication Technology (ICT) in the 21
st

century, computerizing management operations has
become more popular and more necessary in the
modern business (Hashim & Mokhtar, 2012; Kohli
& Grover, 2008; Kulatilaka & Venkatraman, 2001);
therefore, the potential benefits will increase in
organizations using IT applications, especially
SMEs, which are involved in the internationalized
trend of grasping the opportunity for profitable
growth (Lin & Chaney, 2007; Fink, 1998) and the
demand for applying modern management
technology to business operations is really
indispensable. Vietnamese enterprises are also
following this trend. Accordingly, Human Resource
Information Systems (HRIS), an innovative HRM
solution, has become known as a support system for
sustainable HRM development (Alwis, 2010;
Buodreau & Ramstad, 2005; Duc et al., 2012;
Kumar, 2012; Page, 1996; 2002; Poorangi et al.,
2011; Tansley et al., 2001). HRIS has been
researched and applied widely in the USA and
Europe (Lengnick-Hall & Mortiz, 2003; Strohmeier
& Kabst, 2009; Yusoff & Ramayah, 2011).
According to a survey of HR consultants, the number
of organizations adopting and implementing HRIS in
their businesses is rapidly increasing (Cedar
Crestone, 2005). However, how to encourage SMEs
in Vietnam to apply HRIS to their operations and
how to manage human resources in the most optimal
way (e.g. saving human energy along with high
performance and bringing out expected outcomes)
by using HRIS are serious concerns of such
enterprises. Hence, enhancing trust of SMEs toward
HRIS is necessary for a sustainable HRM
performance. From this point of view, this study
aims to explore SMEs perception and trust toward
HRIS in Vietnam.

444

II. HUMAN RESOURCE INFORMATION
SYSTEM

Based on the research objective, we chose and
applied the following relevant HRIS definition. In
this paper HRIS is defined as:
A software or online solution for the
data entry, data tracking, and data
information needs of the Human
Resources, payroll, management, and
accounting functions within a
business (Healthfield, 2012).

According to Heathfield (2012), a good HRIS
will cover the following functions:
Management of all employee information
Reporting and analysis of employee
information
Company-related documents such
as employee handbooks, emergency
evacuation procedures, and safety
guidelines
Benefits administration
including enrollment, status changes, and
personal information updating
Complete integration with payroll and other
company financial software and accounting
systems
Applicant tracking and resume management


3.1. Research Methodology: the In-depth Interview
The In-depth interview is a qualitative research
technique which is applied for intensive individual,
face-to-face interviews to explore respondents
perspectives on particular ideas and new issues in
depth (Boyce & Neale, 2006; McCormack, 2004;
Neuman, 1997). This method is normally conducted
in the most comfortable atmosphere and setting for
respondents (Ritchie & Lewis, 2003). Hence, this
method is suitable for high-profile respondents (e.g.
top managers).
The following is the reason why we prefer In-
depth interviews to Focus Group Discussions (FGD),
In-Home Visits (IHV), or Ethnography in this study.
In short, IHV and Ethnography are used to
explore respondents routine habits (Creswell, 2007;
Madison, 2005; Spindler & Spindler, 1987); whilst,
FGD is carried out in a group of 4 to 6 respondents
in each session (Merton, R. et al., 1956; Merriam,
2009). Therefore, these three methods did not fit
with the research objective and high-profile SME
respondents. The tight working schedules of SME
top managers could not allow for appointments of
four or six respondents at the same time to happen.
In addition, discussion in a group may have
prevented the respondents from revealing the private
and sensitive information of the company.
Therefore, based on the timeframe and monetary
investment constraints, the ten (10) IDIs were
conducted from April 5
th
to May 22
nd
, 2012 in Ho
Chi Minh City, Vietnam.
3.2. Research Technique: DeltaQual
TM
The following is a summary of the DeltaQual
TM

research technique, which is retrieved from the
Internal Qualitative HRIS-Trust Project Report
(Duc & Nielsen Qualitative Experts, 2012).

Introduction to DeltaQual
TM
DeltaQual
TM
is a Nielsen proprietary qualitative
product. It is Nielsens response to large gaps in
current research between consumer feelings,
preferences, brand impressions, and shop-floor
behaviour. It also sorts out the complex consumer
and marketing dynamics from a plethora of
marketing activities, brands, choices, influences, and
joint or co-shopping issues to address anything more
than a simple singular purchasing decision.
3.3. Recruitment criteria
Small and Medium Enterprises (SMEs) (defined
by the government of Vietnam, 56/2009/N-CP
issued on 30/6/2009) are the main targets of this
research. However, because of the research schedule
and budget, this study could not cover more than 10
interviews.
SME Respondents participating in the study
came from 10 different SMEs and five common
industries (Manufacturing, Transportation, Commu-
nication, Financial services, and Construction & Real
Estate).

IV. FINDINGS

SMEs Evaluation of HRIS Concept

The concept of HRIS introduced to all
respondents of this study represented the basic
package that any supplier would offer.
All SME respondents had information about the
HRIS being open to customization to properly suit
their own needs and conditions. With this,
respondents were free to address whether they think
the HRIS concept introduced covered all their
expected needs or whether there were specific
features valuable to them and their business.
Generally, all SME respondents found the HRIS
concept covered basic needs as required of HRM
activities. However, the concept did not stand out
qualitatively in comparison with other HRIS
products available on the market. In other words, the
concept did not succeed in creating a strong
impression among SME respondents. Therefore,
among both users and non-users, the general
customer preference was medium.
Table I shows a quick summary of concept
evaluation, qualitatively, between HRIS current users
and non-users. In short, non-users were more
interested in the concept than their counterparts

445

were. The general interest however could be greater
in order to insure a secure purchase intention.

TABLE I
QUICK SUMMARY OF CONCEPT EVALUATION

Attributes
Customer preferences
HRI S users Non-users
General
evaluation
Medium Medium high
Relevancy Medium Medium
Appeal Medium low Medium high
Uniqueness Low Medium
Credibility High Medium
Purchase
intention
Medium low Medium high

Yet the concept introduced to SME respondents
in this study was brief. It was true that all SME
respondents worried whether they understood the
promised usability and features properly or at least as
closely as possible to what the supplier meant.
Customer evaluation for that reason may become
different when revealing the concept details.
Generally, SME respondents stated only a product
prototype would enable them to provide the most
accurate evaluation, which might be different from
evaluation of the introduced concept.
Both users and non-users find relevancy
medium. The promised features were able to cover
all required needs and expectation of HRM tasks.
However, all common enterprises have these needs
and expectations.
The small enterprises, qualitatively, tended to
perceive the concept with fewer relevancies than
their counterparts do. This partly derives from the
fact that SMEs with a smaller size of operation are
more likely to have simpler needs regarding
employee management. As a result, some usability
and features are unnecessary and the concepts
relevancy is low and vice versa. The detailed features
often considered as unnecessary include training
history and planning, and employee appraisal. The
following is an example quoted by a small enterprise
respondent.
The product is meant for many
different companies therefore I dont
know whether it will be suitable for me.
For example my company maybe
smaller than others, or we have a
different plan to manage employees
(Small enterprise respondent, non-user)

Both current HRIS users and non-users
associated the concept with medium appeal although
the latter were slightly more interested in the concept
than their counterparts were. Without much actual
usage experience, the non-users are easier to attract.
It also requires more than promised usability for
current HRIS users to perceive the product as
outstanding.
The medium customer preference regarding
appeal derives most likely from the fact that
promised usability covered only basic HRM needs.
As mentioned by one SME respondent:
I dont see any difference in this
concept. It is similar to other HRIS I
know. Therefore it has an average
appeal. (Medium enterprise, non-user)

Qualitatively, SMEs did expect more than these
basic aspects for added value. Some expected the
product to be more suitable and focused on the
companys actual situation and more specific needs.
Moreover, some suggested the relevant added value
for each field of operation increases the appeal for
the concept.
Small enterprises qualitatively found the concept
as less appealing than their counterparts. This derives
from the simpler needs and expectations of small
enterprises. As a result, some features are
unnecessary and thus wasted because smaller
enterprises do not have the need and desire to
implement those features.

Qualitatively, according to both users and non-
users, HRIS is often associated with significant
importance and greater effectiveness in business
management.
In other words, customers trust HRIS products
for their effectiveness and impact on business
management performance. However, the product
believers trust varies greatly according to the
business situation and the relevant SME perception
and attitudes in business management.
Examples include smaller enterprises who
consider themselves below the needs for HRIS. They
believe smaller enterprises with limited numbers of
employees, simple employee management needs and
no expansion for the near future do not value HRIS
and its strengths in HRM activities. The trust in this
case is limited.
Another example is with business owners or
directors who have ambitious but detailed plans for
business development and expansion. Together with
business development, the needs for employee
management become more urgent and require a
better and more effective solution for HRM practice.
HRIS, together with its strengths, is a helpful tool for
business management in this case. The trust therefore
is relatively high.
The most common indicators for trust are
divided into four sets: Individual, Corporate, HRIS
itself, and its suppliers:
Individuals Traits closely link to Individual
Profile. In short, the most important
attributes for this set of traits consist of the
following:
o Knowledge
o Work experience
o Working style
o Involvement in the company
management
Corporate Traits connect to Corporate
Profile. This set also closely links to the

446

Employee and Business group of factors
impacting the decision making process. The
main features include:
o Size of operation
o Employee number
o Field of operation / industry
o Management direction
o Employee management needs
o Business plan for near future
HRIS itself represents how customers
perceive the strengths and weaknesses of
a specific product. This consideration is
based on a combination of triggers and
barriers against product purchase and
implementation.
o Usability and features provided
o Minimal errors and system
corruptions
o Ability to customize and update
o Monetary and other investments
required
o Other strengths and weaknesses
The HRIS suppliers are also factor into
customer perceptions and consider the
followed combination of strengths and
weaknesses.
o Brand credibility and image
o After-sales services

V. CONCLUSION

Generally, SME respondents have a certain trust
regarding HRIS although this trust is in different
elements. Internally, the business situation and the
SMEs perceptions and attitudes to business
management strongly impact trust. Externally, HRIS
itself and its suppliers account for the other factors
that impact trust. Internally, the business situation,
perceptions, and attitudes to business management
are indicated through traits of the organization: size,
field of operation, management direction,
management style, plans for employee management
and needs in the future. For individual traits:
knowledge, work experience, business style, and
involvement in company management are the
elements that contribute to trust in HRIS for SME
individuals. Individual means the person contributing
to the decision-making processes as either HR or IT
managers or business owners or directors.
In general, SMEs should be identified and
classified according to their profiles. Most SMEs can
only be identified in the consideration of HRIS itself
and its suppliers. The main purpose is to build and
maximize general trust. Some directions for
building and maximizing trust with HRIS among
SMEs include (but are not limited to) the following:

Offer appropriate delivery of usability,
features, and added value to help the
product become more attractive and
outstanding compared to competitors in the
market.
Provide a product prototype to interested
SMEs for an opportunity to evaluate actual
performance with usability and features.
Focus on system strengths through
communication, while ensuring that
solutions to potential barriers will prevail.
Delivering appropriate messages by
approaching potential customers through
relevant and effective channels.

Additionally, offering product prototypes could
enable SMEs to have more chance to interact with
actual product performance; thus, contributing to
general evaluation of the product itself.

ACKNOWLEDGEMENT

We would like to thank Nielsen Qualitative
Experts for their commitment and support during the
data collection phase of this research.

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448

Vietnam Higher Education Reform:
Challenges and Solutions

Vu Ngoc Tu
International School - Vietnam National University, Hanoi
Hanoi, Vietnam, email: tuvn@isvnu.vn

Abstract-- The comprehensive reform that has been
vigorously carried out over the last decades in all
sectors has achieved important results. In spite of
many difficulties and challenges, Vietnams GDP
growth rates have been very strong compared to its
South-East Asian neighbours (Nuffic Neso
Vietnam). That has been attributed to higher
education reform as higher education has been
considered a very important part of the renewal of
the State. In other words, Vietnams higher
education reform that has been carried out since
1990s has recorded remarkable achievements.
Firstly, the university scope and network has better
met the peoples learning requirements. Secondly,
higher education quality has been enhanced.
Thirdly, equity of accessing higher education has
been improved. Fourthly, university governance has
changed for the better. Fifthly, teaching and
administrative staff have considerably increased in
terms of quality and quantity. Sixthly, non-public
higher education has developed. Seventhly,
investment in higher education has increased and
lastly, higher education institutions physical
facilities have improved (Education Development
Strategy 2011-2012, June, 2012). However,
Vietnams integration into WTO has brought about
changes in the economic structures and in many
ways, Vietnam higher education must integrate
into the regional and world higher education
communities. That requires Vietnam to speed up its
higher education reform. The main aims of the
higher education reform are: (i). to produce human
resources, raise peoples intellectual level, foster
talent, conduct R&D in order to generate
knowledge, create new products to meet the
requirements of socio-economic development,
national defence, security and international
integration and (ii). to upgrade some universities to
international standards and improve the
competitive strength of the countrys human
resources and economy (Higher Education Law,
2012). The higher education reform has to be
mapped out in accordance with the Higher
Education Law 2012 and the Education
Development Strategy 2011-2012 by the Vietnamese
Government. Education and training, science and
technology are national first priorities and
education and training are regarded as necessary
foundation and active factors for the successful
implementation of the socio-economic objectives,
national construction and defense. Hence,
investment in this field is also considered as one of
the targets of investment policy of the Vietnamese
Government (Higher Education Law, 2012).
Favorable conditions have been created to make
education and training serve socio-economic
development even more effectively; the whole
society and all people have been, to some extent,
mobilized to serve and make contributions to the
development and consolidation of the higher
education. Although a lot has been done, there are
still many difficulties and obstacles ahead. It is
certain that these difficulties and obstacles will
have to be surpassed if Vietnam wants its higher
education reform to be successful. This paper
considers (i). the current situation of Vietnams
higher education and its achievements over the last
years of reform, (ii). guidelines and objectives to
speed up higher education reform and (iii).
challenges and solutions. It is hoped that this paper
will contribute to the success of Vietnams current
higher education reform.

Keywords: higher education, reform, guidelines,
objectives, challenges, solutions

1. INTRODUCTION

Humankind is entering a new era an era of
knowledge-based economy when knowledge has
become a giant power, the dominant resource that
brings about wealth and prosperity. That also means
that traditional resources like: natural resources, huge
markets are no longer playing an extremely
important role in the national socio-economic
development as before. In such circumstances, the
competition between developed and developing
countries is detrimental to the latter because of their

449

low quality higher education. Vietnam a developing
country is no exception. Realizing that, Vietnam has
carried out its higher education reform since 1990s.
Although this reform has recorded a lot of encouraging
results, it is still far from fully meeting the
requirements for highly qualified human resources for
Vietnams industrialization and modernization chiefly
after Vietnam entered WTO and its international
integration process has occurred at a very high speed.
In that connection, Vietnam has to continue to
accelerate its higher education reform. However, the
questions are: (i) what are backgrounds and guidelines
for higher education reform? (ii) What are the
objectives? (iii) what are the challenges? and (iii) how
is it carried out in the best manner? Then how can
Vietnam find the right answers to those questions?
It is obvious that Vietnams higher education
reform in the years to come has to be mapped out in
accordance with the Higher Education Law 2012 and
the Education Development Strategy 2011-2012 which
consider education and training, science and
technology as national first priorities and education and
training as necessary foundation and active factors for
the successful implementation of the socio-economic
objectives, national construction and defense. This
paper, therefore, looks at (i). the current situation of
Vietnams higher education, (ii). achievements of
higher education reform over the last decades, (iii).
guidelines and objectives for speeding up HE reform
and (iv). challenges and solutions for higher education
reform.

2. CURRENT SITUATIONS OF VIETNAMS
HIGHER EDUCATION

2.1. Thanks to the higher education reform over
the last years, Vietnams higher education system has
steadily developed. The number of higher education
institutions has increased and the training quality has
gradually improved. From the system consisting of
only narrowly specialized universities with only
Bachelor and PhD degrees following the former Soviet
model, now many of them have changed to multi-
disciplinary/comprehensive universities offering
Associate, Bachelor, Master and PhD programs.

It might be right to say that Vietnams higher
education system consists of the following 6 types:
- Specialized universities each of which focuses on
a certain single area of study, such as economics,
banking, law, technology, agriculture, forestry,
fishery;
- Multi-disciplinary (comprehensive) universities
including three newly established regional
universities in some of Vietnams largest cities;
- National universities, one in Hanoi established in
1993 and one in Ho Chi Minh City established in
1995;
- Open universities: two open universities
established in 1994, one in Hanoi and one in Ho
Chi Minh City;
- Foreign universities and;
- Vietnam foreign universities.

At present, there are 426 higher education
institutions out of which about 100 are non-public in
comparison with 376 in 2009; the number of higher
education students is 2.5 million compared with
133,000 in 1987.
Vietnams higher education is organized according
to the following types: public and non-public (people-
founded and private). Public institutions are established
by the government and receive funding for the
infrastructure, facilities and operational expenditures.
People-founded institutions are funded by the
communities for their infrastructure, facilities and
operational expenditures. Private institutions are
funded by social, professional, economic organizations
or individuals for infrastructure, facilities and
operational expenditures. The government supports
public institutions to ensure that they always play the
key role in the national education system. In addition,
there are institutions with foreign invested capital: (i).
100% foreign invested institutions and (ii). joint
venture institutions (Higher Education Law, 2012).
National universities are for the first time clearly stated
in one separate article in the Higher Education Law
2012 as comprehensive, high quality training and R&D
centers which are given priorities for development by
the State.
Vietnams higher education comprises of
Associate, Bachelor, Master and PhD levels.
- Associate level is from 2 to 3 years depending on
disciplines and is for students with upper
secondary education certificates, 1.5 to 2 years for
students with secondary vocational certificates of
the same disciplines.
- Bachelor programs are from 4 to 6 years
depending on disciplines and for students with
upper secondary education certificates.
- Master is 2 years for students with Bachelor
degrees.
- PhD is from 2 to 4 years for students with
Bachelor degrees and Master degrees respectively.

Most of Vietnams college-level institutions are
managed by provincial peoples committees. Colleges
normally offer three-year programs and award
Associate diplomas to those who graduate. About two-
thirds of Vietnams colleges specialize in training

450

teachers for lower levels of the education system.
Colleges are small and the students in these colleges
make up a small pan of the total enrolled in public
higher education.
In terms of higher education management, it is
worth noting that universities and colleges are not only
managed by Ministry of Education and Training
(MOET) but also by various ministries and provincial
peoples committees: by Ministry of Education and
Training (56/426), by other ministries such as Ministry
of Public Security (6 universities/academies), Ministry
of Defense (22) and by provincial peoples
committees. At present, 40/63 provinces and cities
have universities accounting for 65%, 60/63 provinces
have colleges making up 95% (MOET, August 2012).
Besides, there is also another type of higher
education that should be mentioned: continuing
education.

2.2. Continuing education

Continuing education is composed of:

- 3-4 years for secondary education;
- 3-5 years for higher education.

Continuing education takes various forms:
complementary education, distance education, open
education, self-study in order to create favorable
conditions for citizens of all levels to receive education
in accordance with their own situations. Its main aim is
to raise peoples intellectual level, develop human
resources to meet the requirements of socio-economic,
scientific, technological and cultural development
programs of various localities, branches, ministries and
social organizations.
The network of continuing education consists of:
in-service training departments of different universities
and colleges, secondary vocational schools, in-service
training schools, foreign language distance training
centers, continuing education centers in different
provinces and cities, distance education centers at
district level, full-time and part-time complementary
education schools, and a lot of language and
informatics centers in many provinces and cities in
Vietnam.

3. VIETNAMS HIGHER EDUCATION REFORM
(2010-2020)

The contents of Vietnams higher education
reform which touch upon all the training and research
disciplines focus on: reorganizing the system of
universities and colleges: their structures and training
scope; renewal of the learning and teaching, writing a
new system of course books, making teaching and
research closely linked; training and retraining faculty
members; modernizing the equipment and facilities to
serve the training process and research work in order to
integrate the higher education of our country into the
regional and world higher education community and to
meet the needs of the new society.

3.1. ACHIEVEMENTS OF VIETNAMS HE REFORM
OVER THE LAST DECADES

Vietnams higher education reform over the last
decades has achieved encouraging results. According
to the Ministry of Education and Training (MOET),
higher education innovation over the last years has
specified a system of appropriate, basic knowledge
levels for each type of training programs, diversified
the objectives, training modes, types of higher
education institutions and ownerships. It has
restructured the training process which is conducted
according to modules and credit system is being
applied although this has been done for a long time in
developed countries. More importantly, it has
narrowed the gap between Vietnam higher education
and regional higher education and confirmed its further
development.

The establishment of the two national universities
and two foreign Vietnam universities is also
considered as an encouraging result of higher
education reform. The two national universities are
high quality, multi-disciplinary training and R&D
centers which are highly autonomous and given
priority for development. In addition, over the last
years, Vietnam has set up two Vietnam - foreign
universities: (i). Vietnam-German University in Ho Chi
Minh City with Germany as a strategic partner; (ii).
Hanoi University of Science and Technology whose
strategic partner is France. Moreover, the Vietnamese
Government is going to establish Vietnam Russia
University of Science and Technology in partnership
with Russia and Vietnam UK university in Da Nang,
and a university in Can Tho Province in partnership
with USA. These universities are modeled after
existing modern universities in the world and meeting
international standards ranging from curricula,
teaching methods, assessment methods and training
management. The idea behind this is to build a higher
education that is multi-tiered and that includes higher
education institutions operating under different
ownership model (public, private and mixed). These
universities are said to be Vietnams first research-
oriented universities which are more autonomous than
other Vietnamese universities and they will be the first
universities to hire administrators and 50-80% foreign

451

lecturers. However, as higher education is one of the
three key areas (renovation in mechanism and policy
and renovation in administration and building up
strong and transparent State machinery) to create a
breakthrough to change the socio-economic situation
and vigorously develop human resources, Vietnams
higher education must continue to be carried out.

3.2. GUIDELINES FOR SPEEDING UP HIGHER
EDUCATION REFORM IN VIETNAM

For the higher education to develop in such a way
that it fully meets the requirements of Vietnams socio-
economic development and successfully integrate into
the regional and worlds higher education
communities, the reform should be carried out
according to the following guidelines:
(i) Realizing the mission of producing highly
qualified human resources for all economic sectors and
raising the peoples intellectual level;
(ii) Closely connecting with and directly
contributing to the socio-economic development,
speeding scientific and technological advancements
and meeting peoples learning requirements;
(iii) Higher education reform is the process of
modernizing higher education system, changing
thinking patterns, raising the status of each institution
and the whole system;
(iv) Higher education reform should inherit the
training achievements of the country and the world;
(v) It should bring into full play the national
identity and perceive the essence of the humankind,
and quickly approaching the higher education
development trends of developed countries;
(vi) Higher education must be practical and assure
its high efficiency and ample attention should be paid
to the development of non-public institutions;
(vii) Creating favorable conditions in policy for
every organization, individual and the whole society to
participate in the development of higher education in
an equal way;
(viii) Reforming the university governance in the
direction of raising autonomy and social responsibility,
improving the competitive strength of each university
and the whole system, clearly specifying functions and
State management of higher education;
(ix) Higher education reform should be fully
carried out from objectives, process, content to
methodology;
(x) Closely combining general education with
vocational training;
(xi) Setting up new higher education institutions
and expanding training scope as at present, the existing
higher education institutions only satisfy about 34% of
the learning requirements of high school leavers; and at
the same time solving the relationship between
improving quality and realizing social equity and
assuring training efficiency;
(xii) Speeding up higher educational socialization
and;
(xiii) Bringing into full play the role of institutions
in the process of higher education reform in which
teaching and administrative staff play the key role and
encouraging the whole society especially scientists,
social activists, employers, students and families to
support and actively participate in higher education.

In pursuing those guidelines, the following
objectives of higher education reform should be
achieved.

3.3. OBJETIVES OF HIGHER EDUCATION
REFORM IN PERIOD 2011-2020:

The objectives of HE reform in period 2011
2020 are as follows:

(i) To ensure the rational structure of training
levels, professions between regions and at the same
time in line with the master plan of each province and
city;
(ii) To finish classifying training programs into
two directions: research and professional-applied;
apply flexible training processes, combine traditional
model with multi-stage model and change to credit
training system, renovate the training contents,
teaching and learning methods, combine learning with
practice, learning with research and improve
professional skills;
(iii) To improve the training quality and at the
same time, expand the training scope so as to achieve
the ratio 450 students/10,0000 people in 2020 out of
which 70-80% students following professional-applied
programs and 40% students in non-public HE
institutions; build up some universities of international
standards and increase the number of foreign students
in Vietnam;
(iv) To build up highly qualified teaching and
administrative staff with good moral, good knowledge,
advanced and modern teaching and administrative
management style. By 2020, at least 60% lecturers
have master degrees compared with only 48.8% in
2012 and 35% have PhD degrees in comparison with
11.8% in 2012; student/teacher ratio is 20. As for
natural sciences, engineering and technology, this ratio
should not exceed 15; and for economics, social
sciences and humanities, it is not over 25;
(v) To improve the scope and efficiency of
scientific and technological activities in higher
education institutions. Big universities should be the

452

strong R&D centers of the whole country. The revenue
from scientific research, technological transfer,
production and service accounts for 15% of their total
revenue in 2020;
(vi) To enter into agreements on degree
recognition and on credit transfer with countries in the
region and the world;
(vii) To completely set up an accreditation system
and mechanism for quality assurance. All higher
education institutions should carry out periodical
accreditation and make public the accreditation results;
(viii) To make use of modern management
methods and technologies, especially ICT in all higher
education institutions, set up a national data center for
training and research and a system of digital libraries
and;
(ix) To make a policy on higher education
development assuring the autonomy and social
responsibility of HE institutions in terms of training,
R&D, business, production and service, organization
and personnel, finance, mobilization of investment
resources; ensure the State management and the role of
supervision of the society for HE institutions
operation.

It is ideal if the above-mentioned objectives can be
achieved simultaneously. The fact is that some leading
HE institutions may have already realized some of
them and others may have given priorities to
materialize some of those objectives depending on
their real conditions but ultimately, they will all have
to be attained.

3.4. CHALLENGES FACING VIETNAMS HIGHER
EDUCATION REFORM

Hayden (2005), MOETs World Bank consultant
groups challenges facing Vietnams higher education
into four categories: finance, management
(governance), quality and equity of access. However, it
is obvious that there are other challenges that are no
less important to be considered and that should also be
addressed.
(i) The biggest challenge is to ensure that the
system of education and training responds to the
emerging demands of a growing economy, that is, to
satisfy the requirements for human resources of the
countrys industrialization and modernization and
peoples learning requirements. Moreover, the training
scope has not yet met the requirements of
industrialization and modernization; there is imbalance
between supply and demand;
(ii) The second challenge is the inappropriate
structure of the higher education system, the network
of higher education institutions and research
academies is separated thus reducing the investment
efficiency and the quality of training and research.
Moreover, research is not paid due attention to,
teaching is not yet closely linked with research and
service for social life;
(iii) The third challenge relates to finance. The
financial resources are limited, mainly relying on the
State budget. In addition, the centrally determined
structure of funding proves to be inefficient and
counter-productive. Most of the higher education
institutions in Vietnam are inactive in finding other
financial resources. Hayden (2005) states that the level
of funding for Vietnams higher education is small:
only 0.41% of GDP in 2002 out of a total of 4.22% for
all levels of education. In terms of expenditure on
higher education, Vietnam compares poorly to the rest
of the region and the rest of the world (average is
1.22%);
(iv) The fourth one concerns the training quality,
content and methods. It might be correct to say that the
training quality and efficiency is still low. That is
confirmed by Vallely (2008) who states that Vietnam
does not have even a single university of recognized
quality. Learning is not closely combined with
practice, and therefore, human resources produced are
not highly qualified. Training programs are inflexible
focusing on theory rather than practice and slow in
integration; learning and teaching methods are
outdated, training process is closed and inflexible. In
general, higher education institutions have limited
research capacity, faculty qualifications are generally
low and vary significantly across types of institutions
and regions. Although Vietnams higher education
system has recently introduced internal quality
measures, it still lacks external quality measures. The
technological and administrative infrastructure seems
to be inadequate, curricula do not meet the
requirements of society, teaching methods are
backward, the level of articulation and global
integration is low. The progress of renovating is slow
because of the slow-changing mindset of teachers and
their heavy teaching load (World Bank, 2007). That
explains why about 50% of Vietnamese university
cannot find jobs in their area of specialization;
(v) The fifth challenge is that the teaching and
administrative staff have not yet been able to meet the
requirements of higher education reform both in terms
of quality and quantity. At present, there are only
77,000 higher education teachers/lecturers out of
which only 9,126 have PhD degrees and 36,347 have
Master degrees; and 300,000 management personnel
for the whole education system from general education
to higher education (MOET, August 2012). There is a
serious lack of research experts, higher education

453

policy makers. Moreover, many lecturers do not pay
due attention to research;
(vi) The sixth challenge is management.
Management is characterized by a very high level of
centralization. The Ministry of Education and Training
(MOET) has significant power over higher education
and determines matters as varied as detailed as
curriculum, student enrolment, academic assessment,
awarding of degrees, budget decisions, infrastructure
and facility maintenance. There is a severe lack of
close links between HE institutions and scientific
research, businesses, industries and employers. The
existing mechanism and policies have not yet created
self-accountability, responsibilities of higher education
institutions for personnel, revenue-expenditure balance
and quality of training products;
(vii) The seventh challenge is that competition is
not created for higher education development, HE
institutions development plan is not clear, just short-
term rather than long-.term and higher education
institutions are not rationally distributed in the whole
country thus reducing the investment efficiency;
(viii) The eighth is that higher education reform
has not been able to keep pace with economic reform
and requirements for integration; higher education
management cannot keep pace with HE socialization;
(ix) The ninth one is the equity of access. Vietnam
higher education has always affirmed the equity of
access very much in line with admission to higher
education should be based on the merit, capacity,
efforts, perseverance and devotion and can take place
in a lifelong scheme, at any time, with due recognition
of previous acquired skills (UNESCO, 1998).
However, the fact is that at present, certain groups
(women, ethnic minorities, the less privileged, those
from particular regional areas) are not represented in
higher education proportionately to their numbers in
the population. The reason for this is that poverty in
Vietnam has a geographical aspect, the poorer regions
tend to have fewer higher education institutions, and
people just cannot pay for their higher education and
consequently results in lower level of enrolment.
(x) The last one relates to curricula as the bulk of
Vietnamese curricula do not meet the needs of about
60% young laborers who graduate from training
establishments need to be retrained for at least 6-12
months after being recruited (Nuffic Neso/Vietnam).

Although there are still many challenges as
mentioned above, they have to be surpassed if Vietnam
wants its higher education reform to achieve its
objectives. What would be the solutions?

3.5 SOLUTIONS FOR HIGHER EDUCATION
REFORM

In order to realize the above-mentioned objectives
and ultimately, higher educations most important
mission entrusted by the Government: to produce
highly qualified human resources to meet the
requirements of socio-economic development, national
defence and security, the following solutions for higher
education reform should be addressed in the most
serious way.
(i) Making a master plan of the network of higher
education institutions in such a way that with their
structure of professions and training levels, they are
rationally distributed in the whole country and in each
province in conformity with the population density and
strategies of socio-economic development, national
defence and security. At present, out of 426 HE
institutions, 156 accounting for 38% are located in
Hanoi and Ho Chi minh City (MOET, August 2012)
and that has to be adjusted;
(ii) In the immediate future, adjusting the structure
of levels and existing system of higher education
institutions so as to make higher education suitable for
the countrys socio-economic development and the
worlds development trend;
(iii) Setting up a flexible and articulated training
process, renewing the objectives, contents, teaching
and learning methods in higher education;
(iv) Building up a contingent of highly qualified,
devoted and capable teaching and administrative staff
with advanced and modern teaching and management
method;
(v) Intensifying/speeding up R&D activities in
order to improve the training quality and directly solve
problems arising from the process of socio-economic
development and increasing revenues for each higher
education institution;
(vi) Reforming the financial mechanism for higher
education with an aim to diversify financial resources
and enhance the investment efficiency;
(vii) Renovating higher education management
according to the orientation of raising autonomy in
such a way that Vietnamese HE institutions are no
longer subject to a highly centralized system of control,
raising social responsibilities and speeding up each
institutions competitive capacity;
(viii). Improving the competitive strength of the
whole HE system in the integration process;
(ix) Expanding international cooperation as
international cooperation is considered as an integral
part of the institutional missions of higher education
institutions and international cooperation and
exchange are the major avenues for advancing higher
education throughout the world (UNESCO, 1998).
International academic cooperation has gradually
helped to narrow the gap between Vietnam and other

454

countries in the fields of science and technology and to
improve understanding between individuals and
between Vietnam and other countries. Broader
international exchange would bring about an overall
improvement in the training and research quality and
change the brain drain to brain gain in Vietnam.
In that connection, each of Vietnams higher education
institutions must set up an appropriate structure and/or
mechanism for international cooperation.

4. CONCLUSION

Vietnams higher education reform has been paid
special attention to by the Vietnamese Government
since it was started more than 20 years ago and it has
recorded a lot of encouraging achievements. However,
this reform has to be sped up as without urgent and
fundamental reform to higher education system,
Vietnam will fail to achieve its enormous potential
and there is close relationship between development
and higher education (Vallely, 2008). This paper has
dealt with guidelines, objectives of speeding up higher
education reform which will have to be realized.
Although there are still many challenges that have been
pointed out, it is believed that, with the guidelines and
solutions already mentioned, they will be overcome so
that higher educations management, efficiency,
quality and responsiveness and quantitative capacity
can be surely improved. With all these being done,
Vietnams higher education will ultimately realize its
important missions very much in line with those set by
UNESCO: (i). to educate highly qualified graduates
and responsible citizens able to meet the needs of all
sectors of human activities, (ii). to provide
opportunities for higher education learning and for
learning throughout life, (iii). to advance, create and
disseminate knowledge through research, (iv). to help
understand, interpret, preserve, enhance, promote and
disseminate national, regional, international and
historic cultures in the context of cultural diversity, (v).
to help protect and enhance societal values, and (vi). to
contribute to the development of education at all levels,
including through the training of teachers. In that
connection, this paper is hoped to make a worthy
contribution to the success of Vietnams current higher
education reform.

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Education Development Strategy. (2012). 2011-2020,
13 June, 2012.

Hayden, M. (2005). The Legislative and Regulatory
Environment of Higher Education in Vietnam.
Washington, DC: The World Bank.
Hayden, M & Lam Quang Thiep. (2007). A 2020
Vision for Vietnam, International Higher Education,
No. 44, pp. 11-13.

Higher Education Law. (2012). 16 June, 2012.

Lam Quang Thiep. (2005). An Overview of Higher
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Technical paper 2.1., Volume 2: Reforms for Higher
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MOET. Vietnam Higher Education Renovation
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MOET. Higher Education Consolidation and Reform
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MOET. Statistical Data, 2010-2011, 2012.

Thomas Vallely & Ben Wilkinson. Vietnam Higher
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Nguyen Van Do. (1996). Higher Education A Pivotal
Lever for Socio-Economic Development in Developing
Countries in the 21st Century. International
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Nuffic Neso Vietnam. (2010). Trends in Vietnamese
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Que Anh Dang. (2009). Recent Higher Education
Reforms in Vietnam: The Role of World Bank.
October, 2009.

UNESCO. (1998). World Declaration on Higher
Education for the Twenty-First Century: Vision and
Action, 9 October, 1998.

Vu Ngoc Tu. (1997). Vietnams Higher Education
Reform: Missions and Challenges. The EU-ASEAN
Round Table on Cooperation in the area of Education
and Training, 26-28 May 1997, Helsinki, Finland.

Vu Ngoc Tu. (2004). The Role Played by Research in
Higher Education Institutions. Research Management:
Cross National Perspectives & Mutual Learning
Experience. Second Asia Research Center Directors
Workshop, 7-12 July, 2004, Elsen Tasarkhai,
Mongolia.

World Bank. (2007). Vietnam. Higher Education and
Skills for Growth, Human Development Department,
East Asia and Pacific Region, 4 May, 2007.


455

Part Three:
Abstracts under Inclusive Innovation and
Innovative Management Themes


456

Innovative Management for Prevention of
Mother to Child Transmission (PMTCT)
through a Linked Response (LR) Approach

Svay Somana
M&E Officer of PMTCT program
somana39a@yahoo.com; Tuon Sovanna, PMTCT program manager, sovannatuon@yahoo.com

Abstract - Problem statement: LR means the linkages between reproductive health and HIV which are
crucial to comprehensive management of patients. Cambodia faced the highest rate of HIV prevalence
among the Asian countries. The HSS showed that HIV prevalence was 1.7% among population aged 15-
49 in 1999, and decreased to 0.8 in 2010 with similar HIV prevalence among anti-natal care (ANC) 0.9%
in 2006 which decreased to 0.4% in 2010 (1). Regarding the implementation of PMTCT, at least 25% of
pregnant women (PW) do not attend the public ANC services, 25% of women accessing ANC servicers in
the 1
st
quarter of 2007 were not tested for HIV, and only 50% of identified HIV positives delivered at
PMTCT maternity wards (2). Methods: PMTCT has been, 1.) scaled up to reach the majority of PW and
their infants by enhancing the communities understanding of PMTCT, maximizing opportunities for HIV
testing for PW and their infants, 2.) strengthened through referrals between HIV/AIDS, STI, ARV, ANC,
family planning, safe abortion, maternal and newborn health, and 3.) effectively collected, managed, and
data used for program planning, quality improvement and patient tracking. Results: Based on PMTCT
implementation, the ANC sites increased from 77 in 2007 to 954 in 2011,the same as the number of PW
attending ANC at PMTCT sites tested for HIV and the results received were increased in number from
66, 186 (72.7%) in 2007 (3) to 247, 164(71%) (4) in 2011, the number of PW in Cambodia tested for HIV
and results received were increased from 66, 186 (14.9%) in 2007 to 247, 164 (67%) in 2011, and the
number of HIV positive PW who received ARV/ART were also increased from 505 (11.2%) in 2007 to 829
(56%) in 2011. Conclusion: Based on the results mentioned above, it means that even though the PMTCT
sites were scaled up,30 % of PW attending the ANC at PMTCT sites tested for HIV and results received
is still missing, the same as that about 33% of PW in Cambodia were not tested for HIV. In addition,
about 44% of PW with HIV positive did not come to get ARV/ART.

Keywords innovative management, prevention of mother to child transmission of HIV (PMTCT),
Linked Response (LR), Anti Natal Care (ANC), and HIV Cambodia.


457

Inclusive Innovation and Development: Case
Studies from Indian Experience

V. V. Krishna
Professor in Science Policy and Chair, Centre for Studies in Science Policy
School of Social Sciences, Jawaharlal Nehru University, New Delhi 110067
Krishna@mail.jnu.ac.in; vkrishna16@hotmail.com

Abstract--Inclusive innovation is a term which, in the Indian context, has come into innovation policy
literature in the last decade. Epistemological roots of this concept can however be traced back to the rural
development experiments of Shantiniketan, West Bengal by the great Indian scholar and poet
Rabindranath Tagore and to the Swadeshi Movement and model of economic development advocated by
M.K. Gandhi and his followers from the early 20
th
Century. This was also the period when India
confronted the impact of modern science and technology through colonialism and the struggle waged by
the Indian political and intellectual elite and masses. The post colonial and independent India led by
Indias first Prime Minister, Jawaharlal Nehru and his team from the 1940s led to various models and
perspectives of development. Underlying these perspectives was the meaning of inclusive innovation and
development directed at alleviating the poverty, misery and drudgery of Indian people. Going beyond
and cutting across historical periods, the paper traces three models or perspectives of inclusive innovation
and development namely, the Nehruvian, Gandhian and the contemporary notions of inclusive innovation
and development. Whilst the Nehruvian and Gandhian perspectives shared the same final goal of
removing poverty and infusing welfare and prosperity for Indian people, they differed in their
methodology. Whilst the former advocated the deployment of modern science and technology as main
instruments of growth and development characterized as a top down perspective, the latter advocated a
more mundane bottom up approach. As we approached the 1990s and beyond, India as other countries
confronted the challenges of globalization, environmental sustainability and currently the problems of
climate change. Given these challenges, the contemporary policy effort at inclusive innovation and
development is reframed and recast whilst the historical experiences remain at its foundation. The last
part of the paper is concerned with the contemporary perspective of inclusive innovation and
development.This part of the paper is divided into three sections. The first section deals with Indian
experience in terms of how this concept comes into sharp focus in public policies and identifies flagship
programmes and policies. The second section throws light on the institutional arrangements underlying
inclusive innovation covering various actors such as government institutions, civil society organizations
and business enterprises. The third section identifies various case studies in inclusive innovation and
development, which are deemed to be relatively successful cases. To what extent can these cases be
replicated? What kind of lessons do they throw up? How can we bring out the convergence between
formal and informal institutional structures? What are the current policy and institutional challenges?
These are some of the issues which will be dealt with in the concluding part of the paper.
Keywordsinclusive innovation, inclusive development, globalization, sustainability, India.


458

The Surveillance of Tobacco Use and Second
Hand Smoking among High School Students
in Lao PDR/ 2011 Global Youth Tobacco
Survey (GYTS, CDC/WHO): Innovative
Policy for the Effectiveness of Tobacco
Control Programs in Schools

Angkham Ounavong

Department of Basic Health Sciences, Faculty of Medical Sciences, University of Health Sciences, Vientiane,
Lao PDR
Samira Asma
Global Tobacco Control. Office on Smoking and Health. CDC ,Atlanta, USA
JamesRarick
Tobacco Free Initiative. WHO Regional Office for Western Pacific, Manila,Philippines
Bounlay Phommasack
Department of Hygiene and Prevention, MOH, Lao PDR
Bounlonh Ketsouvannasane
Tobacco Free Initiative, WHO, Lao PDR
Katthanaphone Phanhduangsy

Abstract The objective of this study is to describe the prevalence of cigarette smoking and other tobacco
use as well as information on five determinants of tobacco use: 1) access/availability, 2) price and
environmental tobacco smoke exposure, 3) providing cessation, 4) media and advertising and 5) school
curriculum taught in Lao PDR. Lao PDR GYTS was a school-based survey of students in high school of
grades 2-4 conducted in 2011. A two stage cluster sample design was used to produce a representative
sample of students among 15 targeted provinces of Lao PDR. A total 4,061 (13-15 years old) students
participated in the survey. The survey revealed that current smoking among students in Lao PDR was
still high and not significantly different compared to GYTS 2007 (8% vs 7.4 %) there was a statistically
significant difference between boys and girls (14.3% and 1.1% with 95% CI), Current use of other
tobacco products was 6.6% but there was no statistically significant difference in use as to gender (7.7%
and 5.3% with 95% CI), The main findings were as follows: 1) Offer of help to quit tobacco use. Results
from 2011 GYTS show that students who currently smoke are interested in quitting. Of students who
currently smoke: 75.3% want to stop smoking, 78.0% tried to stop smoking in the past year and 72.7%
have received help to stop smoking, 2) Warning about the dangers of tobacco. During the past year, 51.2%
of students had been taught in class about the dangers of smoking and 50.2% had been taught in class
about the effects of tobacco use. The GYTS data also show that during the past year, 37.3% of students
had discussed in class reasons why people their age smoke. 3) Enforcement of bans on tobacco advertising,
promotion, and sponsorship. The data show that 78.3% of students saw anti-smoking media messages in
the past 30 days. But, in the past 30 days, 47.1% saw pro-cigarette advertisement on billboards/ points of
sale and 47.5% saw them in newspapers or magazines/leaflets. Further, 12.3% of students have an object
with a cigarette brand logo and 8.9% were offered free cigarettes by a tobacco company representative.
4) Protection of people from tobacco smoke. The GYTS data show that 50.1 % of students are around
others who smoke outside their home and 36.5% live in homes where others smoke in their presence. In
conclusion, this survey showed a comprehensive picture of the situation related to tobacco issues among
school students in Lao PDR that will be representative of use nationwide and gives us the opportunity and
the main ideas on how to develop innovative policy for the effectiveness of tobacco control programs in
schools. Immediate action is required to help students quit smoking and to prevent those who are not
smokers from initiating smoking in future and to reduce secondary smoke exposure among this group.
Keywords tobacco use, second hand smoking, high-school students, innovative policy, Global Youth
Tobacco Survey. Lao PDR

459

Inclusive Education, the Way to Innovations
in Education: A Case Study of Myanmar

Professor Win Myat Aye
Rector, University of Medicine Magway, Magway City, Myanmar
wmaye10@gmail.com

Abstract--Part One: Background, Myanmar started the formulation of an Education for All National
Action Plan (EFA-NAP) in March 2002, and implemented it in 2003. There was a significant increase of
the primary enrolment rate to a net primary intake rate of 97.58% in 2005-06 compared to 91.0% in
1999-2000. But there is still a large number of children who are not yet attending school, in excluded
groups mainly physically and intellectually challenged children, children belonging to ethnic, linguistic
and religious minorities, children living in slums, children affected by HIV, child victims of trafficking ,
drug addiction and children in correction centers. Regarding inclusive Education Development, Myanmar
has traditionally provided access to education to mentally and physically disabled children. As of now
there are 12 institutions specially opened for blind and deaf children. One hundred and ninety-six
children are in formal schools. The National Workshop on Inclusive Education was organized and held in
2005 and programs were formulated to accommodate all children regardless of their physical,
intellectual, social, emotional, linguistic or other conditions. Other successful activities are raising
awareness among the parents, teachers, community and the students and data collection, curriculum
development and training of teachers, production of special educational materials and research on
teaching methodology, and development of centers for Inclusive Education. After this National
Workshop, a series of workshops were organized at regional and local levels by the Ministry of Education
and nongovernment organizations. The Ministry of Education has been planning to open a center for
Inclusive Education to enable children to meet, learn and enjoy the special facilities provided for them.
The Ministry of Education in cooperation with the Ministries of Health and Social Welfare and NGOs is
now focusing on providing opportunities for these children. A total number of 125 townships have been
involving in data collection on Inclusive Education of this phase. We find that a large number of inclusive
related children are already enjoying their study in formal schools. They include over-aged children.
According to the All SchoolAge Children in School Project, a special program for over-aged children
has been introduced since 2003-04. The over aged children and those who dropped out before completing
primary level now have the opportunity to complete primary education within a short time frame. The
primary school curriculum was revised with 3 academic years for 7 to 8 year old children, and 2 academic
years for 9 year old and above children to complete the primary cycle. In 2004-05, 31640 seven year old
and above children attended Grade-1 under the special education program. There are some children who
cannot come to school during hours due to their domestic engagements. Non-formal Primary Education
(NFPE) is an alternative program for them to complete primary education within 2 years. Mobile schools
with mobile teachers are also opened. Part I I Myanmar in transition. Myanmar is emerging from 5
decades of isolation both economically and politically. With its rich natural resources and strategic
location between the two economic global powerhouses, China and India, the country shows good
potential for growth. Myanmar could become one of the next rising stars in Asia if it can successfully
leverage its rich endowments such as its natural resources, labor force, and geographic advantage for
economic development and growth. Myanmar is making brave new moves, as did many of the regions
high growth and transition economies decades earlier. It is opening up to trade, encouraging foreign
investment, and deepening its financial sector. There is a series of political and economic reforms
including political dialogue with Aung San Su Kyi, free and fair by-elections, release of prisoners,
developing civil society in Myanmar, free discussion at the parliamentary meetings, invitation of the
exiles back to our country, policy consultation with multi stakeholders for national development,
promoting freedom of journalism and its associations, peace talks with ethnic armed groups,
implementing national level projects on rural development and poverty reduction conducting
macroeconomic reforms leading to inclusive growth for the entire population to realize people centered
development. Part Three: Planning for future, Our economic policies are aiming at inclusive growth for
the entire population and quick wins policy for short term strategy. Myanmar reported impressive GDP

460

growth rates, averaging 10.2% during 19922010 and 12.2% during 20002010. Quality data for the
education system will be developed that improves the capabilities of individuals and capacity of
institutions. The new government is implementing poverty reduction to achieve Millenium Development
Goal One by eight tasks including development of rural socio-economy particularly improving education
and health status in rural areas. The main innovations are a recent doubling of the education budget,
Comprehensive Education Sector Review (CESR) by conducting official launch of Comprehensive
Education Sector Review with High-ranking officials from the Government of the Republic of the Union
of Myanmar who came together with development partners to formally launch the Comprehensive
Education Sector Review (CESR) on 23
rd
October, 2012 in Nay Pyi Taw which will lead to innovations in
Education.
Keywords-- inclusive education, way to innovations, Myanmar.


461

An Innovative Model of Electrical Energy
Saving in Households and Communities
in the Central Region of Thailand

Wasan Srisaard
College of Innovative Management, Valaya Alongkorn Rajabhat University under Royal Patronage
1 Moo 20 Km 48 Pahonyotin Road, Tambon Klong-Nueng, Klongluang District, Pathumtani Province, 13180
e-mail: sriwasan@hotmail.com

Abstract This research study is aimed at studying the conditions of electrical energy consumption and
management and developing an innovative model of electrical energy saving in the households and
communities in the central region of Thailand. Electrical energy plays an important role in the economic
system. Nowadays, electrical energy consumption increases dramatically. An increase in world energy
consumption leads to the awareness of energy conservation. It is necessary to solve the energy problems
of today and in the future. The study employed both qualitative and quantitative methods. 500 subjects
were selected from a sampling group and 50 key informants participated in the in-depth interview
sessions in Phra Nakhon Si Ayutthaya, Lop Buri, Nakhon Nayok, Saraburi and Ang Thong. The data
were collected by questionnaires, in-depth interviews, group conversations, and workshops. Specifically,
57.6 percent of the sample groups were male, 76.4 percent of them aged between 25 and 44 years old. 37.0
percent graduated with a Bachelor degree or higher, 50.0 percent, which is the highest number, were
employees. 50.6 percent had the income between 8,001 and 15,000 baht per month. 45.0 percent spent less
than 1,001-2,000 baht per month on electrical energy. According to the research findings, an overall
picture of knowledge, attitude, and practice toward electrical energy saving in the households of the
sample group showed high knowledge level ( = 14.21, S.D. =1.897), high attitude ( = 3.02, S.D. =.344)
and high practice ( = 2.33, S.D. =.249). In terms of administration and management of electrical energy
in the households and communities, the findings show that households and communities still lack
participation, electrical energy consumption planning, and use of alternative energy. Electrical energy
consumption in the households increases because of the increased number of electrical appliances and the
necessity to use these appliances every day. These findings suggest that an innovative model of electrical
energy saving in households and communities in the central region of Thailand requires participation
from 3 sectors: the public, local and community, and household sectors. Participation from these 3 sectors
involves processes including disseminating knowledge to people together with continuous and consistent
communication and public relations. Most importantly, electrical energy saving must begin from the
household sector.

Keywords- Innovative model, saving, electrical energy, households and communities, central region


462

Innovation comes from the producer - not from the
customer.
W. Edwards Deming


463

Part Four:
Appendices


464

4.1 Resume of Speakers, Session Chairs and Reviewers

United Nations Development Programme
Mr. Rathin Roy
At present, Mr. Roy is Manager and Head of the UNDP Asia-Pacific Regional Centre (APRC),
providing APRC management and support services for development and coordination to the
various Country Offices in the Asia-Pacific region, in the capacity of advisor and regional
programme implementation. He was previously Director of the International Policy Centre for
Inclusive Growth in Brasilia, Brazil. He has also served in New Delhi as the Economic Advisor
to the Thirteenth Finance Commission. Mr. Roy served as the Public Resource Management
Advisor (2002-2008) and as the Acting Cluster Leader for Inclusive Development, (September
2007-May 2008) in the Poverty Practice, Bureau for Development Policy (BDP)-UNDP. During
his tenure at UNDP Headquarters, he developed a global profile for the organization on fiscal
policy issues, including supporting work on fiscal space for the G-20 and G-24 multilateral
groupings. Prior to joining UNDP, Mr. Roy was tenured in the Economics Faculty at the School
of Oriental and African Studies, University of London (1995-2002), and was an Economist with
the Institute for Development Policy and Management at the University of Manchester, UK
(1993-95).
Mr. Somchai Yensabai
As Programme Manager, Governance Unit, UNDP Thailand, Mr. Somchai designs and oversees
the implementation of the governance portfolio, covering three key subject areas, i.e.
decentralization, access to justice and conflict prevention. In partnership with his Thai
government counterparts, he currently works on several projects to address social cohesion
issues, including the project entitled Southern Thailand Empowerment and Participation which
aims to assist the three southernmost provinces and the project for Integrated Community
Development for Livelihood and Social Cohesion in Mae Hong Son province.
Ms. Elise Bjstad
Ms. Elise Bjstad is currently working for UNDP Thailand, based in Bangkok. As part of the
Governance Unit, she is working with projects focusing on legal empowerment of the poor,
decentralization and capacity building for local governance. She is more specifically providing
support in drafting technical papers, advising on project administration, coordinating knowledge
sharing, monitoring and evaluation. In Thailand, the UNDP is working closely with various
ministries to improve the lives of underserviced and vulnerable people in a country with a
growing economy. Ms. Elise Bjstad can be reached on elisebjastad@gmail.com
China
Rui J i
Asia-Pacific Finance and Development Center, Shanghai, China; jerry@afdc.org.cn, Dr. Rui Ji is
the Senior Economist of the Asia-Pacific Finance and Development Center (AFDC). He also
served as a faculty member at the Shanghai National Accounting Institute. His main research
areas are development economics and the financial market. Dr. Rui Ji has a Ph.D. from
Shanghai University of Finance and Economics, in Investment Economics. He has also
participated in the World Bank's leadership training course on development policy and received
the certificate. In addition to teaching and research, he has served as coordinator in many training
projects sponsored by the World Bank, the Asian Development Bank, and other international
institutions. He also provides decision-making advice for the governments and private sectors.
I ndia
Professor Dr. V.V. Krishna
Professor Krishna is in Science Policy and Chairperson, Centre for Studies in Science Policy,
School of Social Sciences, Jawaharlal Nehru University, New Delhi. Professonal Recognition,
Membership and Special Invitations: He has been Editor: Science, Technology and Society: An
International Journal (Sage Publications, Thousand Oaks, London and New Delhi) for the last
10 years.; Member: Task Force on Industrial Clusters and Regional Innovation (2003-2005);
UNIDO, New Delhi; Council Member of the Society for Social Studies of Science (4S), 2000-
2002, USA.; Member, International Council for Science Policy Studies, ICSU, UNESCO, Paris;

465

Professor Dr. V.V. Krishna (Cont.)
Invited contribution to the International Encyclopedia of the Social and Behavioral Sciences,
UK: Pergamon and Elsevier Science Publications, 2000; Member: Board of Studies, Academic
Council and Court, Jawaharlal Nehru University 2002-2004.; Referee for research proposals of
the program on Societal Dimensions of Engineering, Science and Technology, National Science
Foundation (NSF), USA.; Visiting Professor, Maison des Sciences de lHomme, Paris and IRD,
Paris, in 1993-1994 (for 10 months); and one month each in 1995, 1996, 1997, 1998, 1999,
2000-2002; 2004.; Visiting Professor, AEGIS, University of Western Sydney, Australia 2004-
2005 (10 months); Books Published: Science and Technology in a Developing World
(Sociology of Sciences Year Book, 1995), The Netherlands: Kluwer Academic Publishers, 1997
(with Terry Shinn and J. Spaapen).; Scientific Communities in the Developing World, New
Delhi: Sage Publications, 1997, (with Jacques Gaillard and Roland Waast). Brain Drain: A
Sociological Study of Scientific Communities, New Delhi: Gyan Publishers, 1995 (with S.
Mahanti, V.K. Jairath, E. Haribabu and A. Basu); S. S. Bhatnagar on Science, Technology and
Development, 193854, New Delhi: Wiley, Eastern Ltd, 1994.
I ndia
Raghav Narsalay
Mr. Narsalay is the India lead at the Accenture Institute for High Performance. Under his
leadership, the India team has published several interesting research reports providing strategic
insights to companies on doing business in rural markets and in using business model innovation
as a profitable growth tool. Prior to working with Accenture, Mr. Narsalay worked with
organizations including the Centre for Monitoring the Indian Economy, Department of
Economics and Statistics at the Tata Services, Consumer Unity and Trust Society and Economic
Law Practice as a policy analyst and economist. During his tenure at these institutions, he has
published several interesting papers spanning macroeconomic policy, and international trade and
competition policy. His papers have been published by bodies including the UNCTAD and he
has had an opportunity to present his views at conferences organized by several UN bodies. He
has also written more than 30 articles in English and Marathi in leading national and regional
dailies. Adjudged by the Financial Express in 2006 as one of the youngest influential policy
makers in the country, Mr. Narsalay continues to work with a range of business and social
stakeholders to promote business and social welfare policies. He is a part of the Insurance
Regulatory Advisory Board and is a part of the Skills and Employment Subcommittee of the
Planning Commission for the 12th Five Year Plan. Mr. Narsalay has pursued his education in
statistics, economics and law. He holds Bachelor's and Master's degrees in statistics and
economics, respectively, from the University of Mumbai. He completed his European Masters
degree in Law and Economics from Erasmus University. He was awarded the prestigious
Erasmus Mundus Scholarship by the European Commission to pursue this particular coursework.
Mr. Narsalay has avid interest in music. He plays the tabla and supports young and promising
musicians promoting Indian classical music under the banner of Manorath, a foundation that he
has dedicated to his father, the late Manohar Eknath Narsalay. He is also passionate about
painting. Mr. Narsalay is married to Dr. Madhavi Narsalay, a distinguished Sanskrit scholar and
is blessed with a daughter, Maitreyi.
I ndonesia
Mr. Adik Bandoro
Mr. Bandoro is at present a lecturer in political communication at Surya Institute. Mr. Bandoro
graduated from Gadjah Mada University in political science and majored in international
relations. He received his post graduate degree from IPWI School of Economics. In the past Mr.
Bandoro has held several government positions, among others as Director for Technical
Cooperation at the State Secretariat of the Government of Indonesia (1998) and Director for
International Cooperation at National Agency for Disaster Management (2004). His government
assignments include as Head of the Secretariat of the Non-Aligned Movement (NAM) Summit
(1991); Head of the Secretariat for the APEC Summit (1994) and Head of the Secretariat for the
ASEAN Informal Summit (1996). He was awarded a decoration, Lencana Wira Karya by the
President of the Republic of Indonesia for his dedication as a public servant to the Nation and
State (1993). As Head of the Indonesia TCDC Unit, Mr Bandoro was assigned as Team Leader
for several government technical assistance projects to other developing countries (1990)


466

Mr. Adik Bandoro (Cont.)
and resource person on South-South cooperation in several international conferences. His broad
knowledge on South-South Cooperation has led him to be a consultant and researcher on South-
South Cooperation for the JICA (2010) and the World Bank Institute (2011). He was the drafter
for Indonesias South-South Cooperation Grand Design and Blue Print (2010). He initiated the
idea of setting up a Centre for South-South Cooperation in a university in Indonesia which later
was taken up by Brawijaya University, in Malang, Indonesia by establishing the Center for
South-South Cooperation Studies. Mr. Bandoro retired from government service in 2010 and is
now pursuing teaching at the University and Surya Institute. He is also currently a member of
advisory board of the Center for South-South Cooperation Studies at Brawijaya University.
J apan
Professor Dr. T. Keisei Tanahashi
Dr. Tanahashi is professor emeritus of Tokyo Keizai University and the principal partner of
International Creative Consultants, Ltd. He studied engineering at Kyoto University and then at
Stanford University, holding M.Sc. (Industrial Engineering) and Ph.D (Engineering-Economic
Systems). After his Ph.D. he first joined the Mathematical Research Center, University of
Wisconsin, as assistant professor and then the World Health Organization in Geneva as System
Scientist/Operations Researcher. At WHO, he was primarily engaged in methodological
research in health system development and management, and consultancy in this field in several
countries in Asia and the Middle-East, including the appointment as WHO-advisor to the
Malaysian Ministry of Health for its effort to strengthen health service R & D. He left WHO in
1981 and started work as management consultant, concurrently serving as a counsellor to the
Engineering Consulting Firms Association in Japan. He typically assisted engineering
consulting firms with his expertise in systems analysis, and in the management of their
international or ODA projects. His area of engagement ranged from industrial development to
urban planning and information system development, and he has worked for government
agencies and international agencies, including UNESCO and UN/ESCAP. He began his
academic career in 1987, and focused his research interest in international development
cooperation and management. He had been invited as visiting professor/fellow by leading Asian
research institutions, such as KAIST (Korean Advanced Institute of Science and Technology) in
Korea, ISEAS (Institute of Southeast Asian Studies) in Singapore. He was awarded the
Fulbright Senior Scholarship and other scholarships, which enabled him to work at the Institute
of Asian Studies, Chulalongkorn University, Center for South-East Asian Studies, University of
Hawaii, the School of Business Administration, Georgetown University, and the East-West
Center in Hawaii. His current research interest is divided into three areas; namely, health system
management, evaluation methodology for societal development, and strategic issues of
globalization.
Malaysia
Dato Dr. Sharifah Zarah Syed Ahmad
Dr. Sharifah Zarah received her Ph.D. in Strategic Social Planning from the School of Politics
and International Relations, University of Leeds, United Kingdom in 1997, after completing a
Masters Degree in Personnel Management, specialising in Arbitration and Negotiation, from the
Graduate School of Public and International Relations, University of Pittsburgh, USA.
Appointed as a Malaysian Diplomatic and Administrative Officer in 1981, she has been working
in various Ministries, including in the Ministry of Defense, Ministry of Education, National
Unity and Social Development, and Ministry of Foreign Affairs (as a Minister Counselor at the
Permanent Mission of Malaysia to the United Nations in New York), and the Ministry of
Women, Family and Community Development. In April 2009, Dato Dr. Sharifah Zarah was
promoted to Deputy Secretary General (Policy and Innovation), in the Ministry of Science,
Technology and Innovation (MOSTI). She attended a course on Innovation for Economic
Development at Harvard Kennedy School of Government, USA and gained new and relevant
knowledge critical to her career development and for carrying out her responsibilities in tandem
with the new demands posed by policy measures to ensure that Malaysia achieves high income
status in an inclusive and sustainable manner. In MOSTI, Dr. Sharifah Zarah has been able to


467

Dato Dr. Sharifah Zarah Syed Ahmad (Cont.)
build competence in matters and issues relating to the management of science, technology and
innovation, and has been able to blend her experience, expertise and perspectives in social
development areas with science, technology and innovation. She brought the human dimension
and new insight into MOSTIs roles and responsibilities by strategically positioning MOSTI as a
Ministry that is not only focused on formal R&D, but a Ministry that also explores and exploits
informal education, indigenous knowledge, creativity and innovativeness of the people on the
ground, particularly the excluded groups and those at the bottom of the pyramid. She is
instrumental in diffusing the inclusive innovation concept, and in the planning of its
implementation. Inclusive innovation has now become an important part of the national agenda.
With the announcement of the Year of Innovation in 2010, the Year of Science in 2011 and the
Year of Science and Innovation Movement 2012, Dato Dr. Sharifah Zarah has taken on the task
of taking charge of all promotion and publicity programmes involved in MOSTIs efforts to
inculcate a culture of science, innovation and creativity in Malaysia. She and her team have
successfully planned and implemented STI promotion programmes and activities all over
Malaysia and are now moving towards strengthening and mainstreaming STI, including
inclusive innovation, into society at all levels and in all sectors. She is actively involved in the
formulation of the National Science, Technology and Innovation Policy, and was involved in the
preparation of the World Innovation Forum, Kuala Lumpur (WIF-KL2012) with the theme
Inclusive Innovation for Transformation held in Kuala Lumpur from 3 to 7 November 2012.
As a recognition of her contributions to the country, Dr. Sharifah Zarah Syed Ahmad was
conferred a Federal Title by His Majesty the King of Malaysia (Darjah Kebesaran Kesatria
Mangku Negara on 14 February 2007 and a State Title by the Sultan of Kelantan (Darjah
Kebesaran Dato Paduka Setia Mahkota Kelantan Yang Amat Terbilang) on 29
th
March 2008.
Nepal
Prof. Dr. Subodh Sharma
Dr. Sharma received a Ph.D. from the University of Agriculture, Forestry and Renewable
Natural Resources (BOKU), Vienna, Austria in 1996 after completing a Post Graduate Training
course on Limnology from the Austrian Academy of Sciences and a Masters in Zoology with
specialization in Ecology from Tribhuvan University, Nepal. He was awarded a Senior Fulbright
Research Scholarship for undertaking research at Towson University, Maryland, USA in
Paleoecology, considering chironomids as indicators of climate change in high altitude
Himalayan lakes. He has been a Professor of Environmental Science in Kathmandu University
since August 2007. He has supervised five doctoral students (PhD.) and six are undertaking
research for the Ph.D. on different aspects with focus on river integrity assessment and
formulation of assessment tools to assess environmental impacts. A research project with the title
Development of an Assessment System to Evaluate the Ecological Status of Rivers in the Hindu
Kush - Himalayan Region (ASSESS_HKH) carried out from 2005-2008 supported financially
by the European Commission is a work undertaken by Dr. Sharma as Regional Project
Coordinator covering Bhutan, Bangladesh, Nepal, India and Pakistan and best illustrates his
capability to handle the task assigned. He has published forty-four research articles in
international and regional journals such as Hydrobiologia, Mountain Research and Development,
Water Resources Journal, Freshwater Biology , Environmental Management etc., and fifty-nine
publications in local journals and proceedings of international conferences related to taxonomy
of macro-invertebrates and their application in river water quality assessment, rainwater
harvesting and quality development of biotic indices and scores, and climate change in the high
altitudes of the Himalayas. Dr. Sharma has received several prestigious awards such as the
Young Scientist Award by TWAS (Third World Academy of Science and Technology), and the
Education Excellence Contribution Award by Rt. H. First President of the Republic of Nepal Dr.
Ram Baran Yadav etc.
The Philippines
Mr. Octavio B. Peralta
Mr. Peralta is presently the Secretary General of the Association of Development Financing
Institutions in Asia and the Pacific (ADFIAP), the focal point of 131 development banks and
other financial institutions engaged in the financing of sustainable development in 45 countries
and territories in the Asia-Pacific region, and concurrently the Secretary General of the 328


468

Mr. Octavio B. Peralta (Cont.)
member, 154-country, World Federation of Development Financing Institutions (WFDFI)
composed of similar regional associations in Africa, Asia-Pacific, Latin America and the Middle
East. ADFIAP is a non-governmental organization in consultative status with the United
Nations Economic and Social Council. Mr. Peralta has extensive international exposure, having
worked on various capacity-building programs and training events with multilateral development
organizations and acted as a resource person on sustainable development banking and finance in
many meetings and conferences. He is an EDI-World Bank Fellow, having completed its
Trainers Course for Development Bankers in Washington, D.C. and in 1990, an alumnus of
Japans Association of Overseas Technical Scholarships, having attended its Program for Top
Management in Tokyo in 1998, and a Professional Director and ICD Fellow, having completed
the Professional Directors Program of the Institute of Corporate Directors in the Philippines in
March, 2006. He is presently a member of the United Nations Environment Programme Finance
Initiatives Asia-Pacific Task Force.
Portugal
Professor Dr. Fernando Cardoso de Sousa
Of the Research Centre for Spatial and Organizational Dynamics (CIEO), University of the
Algrave, Portugal. Professor de Sousa holds a Ph.D. and is a Professor in Organizational
Behaviour; and Director of the B. Sc. program in Real Estate Mediation and the M.A. program in
Human Resource Management, at the INUAF, Loule, Portugal. He is Founder and Director of
the Marketing Research Office (GAIM) and the Portuguese Creativity and Innovation
Association (Apgico). He has been guest speaker in universities and companies in Portugal,
Brazil, Spain, South Africa, UK and EUA, and author of books and articles on subjects such as
creativity, innovation, leadership, human resources, psychology and military sociology. He is a
consultant to companies in human resources and organizational innovation and has recently been
awarded the "Excellence in Innovation Award", at the 3rd International India Innovation
Summit, in Mumbai.
South Africa
H. E. Robina P. Marks
Ms. Marks is the South African Ambassador to Thailand, Cambodia, Myanmar and Laos and a
Permanent Observer at the United Nations Economic and Social Commission for Asia and the
Pacific (ESCAP). She was educated at the University of the Western Cape (B.A. Honors in
Sociology, Teachers Diploma), the University of Manchesters Institute for Development Policy
and Management (Advanced Diploma in Institutional Development) and the University of
Sussex Institute for Development Studies (M.A. in Gender Studies). A former political detainee
under the then Internal Security Act 29 during the Anti-Apartheid struggle, Ms. Marks was a
gender activist and a regional organizer of the United Democratic Front a fore-runner of the
African National Congress, and an anti-apartheid forum that campaigned for the release of
political prisoners. Subsequent to the advent of democracy in 1994, Ms Marks served on Boards
of various civil society organizations committed to deepening democracy and entrenching non-
racism and non-sexism. Ms. Marks also worked as a consultant to the Minister of Justice in the
Head Office on the Status of Women in the Presidency, and as equity adviser to the Department
of Environmental Affairs and the Development Bank of Southern Africa. Internationally, she has
worked on numerous assignments across Africa and with the European Unions mission in South
Africa, UNIFEM and the Ford Foundation. Ms. Marks has held various positions in non-
governmental organizations as a researcher, consultant, and lecturer. She was a visiting lecturer
at the African Gender Institute (UCT), and a research fellow at Simmons College, Boston, MA
with a specific research interest on the politics and practice of identity in South Africa. Prior to
this, she was appointed as Chief Director at the Department of International Relations. She was
also responsible for representing South Africa at the United Nations Commission on the Status
of Women, at the African Union Womens Directorate, and the Southern African Development
Community Gender Secretariat. She was also responsible for overseeing the development of
South Africas National Action Plan on UN Resolution 1325. She was recently appointed as
Ambassador to Thailand.

469

South Africa
Professor Dr. Mammo Muchie
Dr. Muchie D.Phil. is NRF/DST Research Professor and SARCHI chair holder, IERI, TUT, in
Pretoria, South Africa on Innovation Studies, and Professor and Coordinator at the Research
Centre on Innovation and International Political Economy and at the Comparative Research
Centre on Integration and a Member of the Scientific Board of GLOBELICS, Aalborg
University, Denmark. He graduated from Columbia University (USA), Mendeleev Institute of
Measurement Science (Russia), M.Phil. in Economic Development and D. Phil. in Science and
Technology Policy from the University of Sussex (UK). His research interest is in the area of
international political economy, world order, disorder and reordering, development studies,
international organizations, and the building of an African system of political economy in
production and consumption, comparative regional research on technology and development and
environment and development. Regarding his editorial background, he was an editorial member
of the Board on the Economics of Innovation; the African Journal of Political and Social
Research; African Renaissance, and Holler Africa, Social Epistemology (a journal on
knowledge, culture and policy); the Science of Science (a journal of the Ukrainian Academy
of Science); EASST Review, the EASST Scholarly Community; Issues in Health and
Environment, School of Environment, Health and Biological Sciences at Middlesex University;
the Interdisciplinary Journal of International Studies, and Editor of the Working Paper Series for
the Research Center on Development and International Relations; Editor of the Working Paper
Series of the Research Centre on Development, Innovation and International Political Economy
(www.diiper.ihis.aau.dk); Science, Technology and Society (an international journal devoted to
the developing world); Science, Technology and Policy Working Papers (1991-1995),
Middlesex University (founder and developer of the initiative, linked to seminars and
conferences); Diverse City (a journal of the Centre of Culture in London); Dtente (1984-
1992) (an international journal founded by colleagues and myself devoted to changing the
economics and politics of the former USSR); Russia and the World (1993-1995) (a journal
established after the collapse of the USSR); Transformations (a journal for social transformation
based in Poland); Ethiopian Register (associate co-editor, with a monthly column); Ethiopia
Profile (chief co-editor); Challenge (chief editor); and Combat (chief editor). He has been an
author of about 237 scholarly articles in various international journals. His experience in
consultancy has been for: the UNESCO Forum on Knowledge, Research and Higher Education,
Paris (2006-2008); Editorial Consultant, Science, Technology and Society, Open
University/Oxford University, Encyclopedia (1998); Editorial Consultant, Science, Technology
and Society Encyclopedia, RKP (1996); Frederich Ebert Foundation, funding for organizing a
conference on Underdevelopment the Challenge of the 21st Century (1992); UNIDO, resource
person for the Material Technology Workshop (1991); BBC (British Broadcasting Corporation),
TV multi-cultural music "Under African Skies, translator and consultant (1989); Free
University, the Staartbaan Project: A short course on Management in the Context of
International Business, short course teaching 29 (1989/1991); the Dutch TNO, research on
information technology and economic development (1988), the Dutch Tropical Institute: project
to write a paper researching/reviewing development theory: Limburg University, (MERIT)
Maastricht, Economic Research on Innovation and Technology, and support to work related to
the theoretical part of Ph.D. work carried out on Technology and the Division of Labor,
(published subsequently as a double issue) (1988).

470

Thailand
Associate Professor Dr. Sakarindr Bhumiratana
Dr. Sakarindr is President of King Mongkuts University of Technology Thonburi (KMUTT),
Bangkok, Thailand. Before holding this position, he was President, over the period 2004-2010,
of the National Science and Technology Development Agency (NSTDA), at which institute he
has held various positions from 1991, initially as Director of the National Center for Genetic
Engineering and Biotechnology (BIOTEC) and later Director of the Rural Development
Technology Service Unit. His association with KMUTT commenced in 1997 as Director of the
Chemical Engineering Practice School and later as Senior Vice President of Administrative
Affairs. His academic work from 1979 includes posts as Assistant Professor, Department of
Chemical Engineering, KMITT (the former name of KMUTT). He was Deputy Director of the
National Center for Genetic Engineering and Biotechnology from 1986 to 1991. Over the period
1976 to 1979 he was Lecturer and Assistant Professor, Department of Chemical Technology,
Chulalongkorn University. Dr. Sakarindrs graduate and post-graduate work were undertaken at
the University of California in Davis and his post-doctoral work was completed at the University
of Wisconsin in Medison in 1976. He has published extensively in the fields of food technology,
agro-industry, biotechnology and transport phenomena. His teaching topics are transport/
rheology. Food/ biochemical engineering and systems biology/ bioinformatics. His research and
development work has been primarily in the fields of biogas generation, transport properties of
food materials, culture and utilization of Spirulina platensis, and systems biology for bioprocess
development. Dr. Sakarindr has also been active in research management, especially over his
period as Director of the National Center for Genetic Engineering and Biotechnology (1992-
2000); and in rural development, as in agro-processing projects for small farmers. He is a
member of several academic and scientific associations such as Chairman, Board of the National
Center for Genetic Engineering and Biotechnology, Thailand (2012present); Member of
Thailand Management Association Board of Council (2011 present); Member of Board of
Directors, Small and Medium Enterprise Development Bank of Thailand (20082011); Member
of Thailand Institute of Scientific and Technology Research Board (2011present); Chairman of
ASEAN Sub-Committee on Food Science and Technology (19951999); Member of the
Advisory Board of the UNESCO Centre for Membrane Science and Technology at the
University of New South Wales, Australia (1994 present) etc. and has been the recipient of
numerous prestigious academic awards such as ASEAN Science and Technology Meritorious
Service Award (2005); Graduated Magna Cum Laude, recognizing top 2% of UC Davis
graduating class (1971); Regents Scholarship in recognition of high academic achievement and
demonstration of outstanding promise, University of California (1969); Phi Kappa Phi Citation
for the highest cumulative academic average in the sophomore class, University of California,
Davis (1969). He has worked as a consultant for chemical and especially food processing,
companies; and services as a committee member for various academic and public sector agencies
and institutes.
Thailand
Professor Dr. Boonthan Dokthaisong
Professor Dr. Boonthan is Chair of the Doctoral Programme in Public Administration (DPA) at
the College of Innovative Management (CIM), VRU. Before running the DPA Programme at
CIM, he was Professor of Public Administration, at the National Institute of Development
Administration (NIDA). He was also Member of Parliament (PM) and Member of the Senate. He
has also been a Deputy Senate Speaker. In addition, he has been a board committee member for
many organizations. Regarding inclusive innovation, he is the originator of the model: Inclusive
innovation for competency building by the Learning Process (ICBL), while he was recently an
advisor to the Minister of Education, he proposed the ICBL Model to the Ministry. Later on
his proposed model has been accepted as an inclusive education policy by the Ministry. At
present, the model has been formulated as a policy and the policy has been transformed into an
action plan. The objective of this policy is to enable disadvantaged persons of age 18 years and
three years working experience to gain high school diplomas to prepare them for the Asian
market and to be members of AEC. The present Cabinet has approved this policy for

471

Professor Dr. Boonthan Dokthaisong (Cont.)
implementation by the Department of Non-formal and Informal Education. The Knowledge-
Skill-Good Management (KSM) Model is to be used as a learning method to emphasize
Inclusive Innovation in Competency Building (IBCL). Learning is the core of economic
development and growth. Encouraging and giving opportunities for unfortunate citizens is an
inclusive innovation policy to liberate the masses from illiteracy and poverty. The on-going
project on the implementation of the IBCL model-based inclusive education policy will be
monitored and assessed in order to observe the results as well as to continuously improve the
model for effectiveness of the goals targeted.
Thailand
Professor Dr. Brian Sheehan
Professor Dr. Brian Sheehan is an Australian citizen who has been a resident of Bangkok,
Thailand, for the last 18 years. His initial academic education was in Economics and later in
Management at the University of Melbourne. He initially had working experience in an
Australian state instrumentality, and later in management consulting and in the private sector,
before becoming an academic. He became Head of the Department of Applied Economics and
later the Dean of Business at the Phillip Institute of Technology and later again, Associate Dean
of the Faculty of Business at RMIT University in Melbourne, Australia. Since his time in
Thailand, he has worked as a full-time academic for several years initially as Co-Director of the
Doctoral degree in Public Administration at the National Institute of Development
Administration (NIDA) (International Program) and later becoming the Dean of the
International College at Rangsit University. He retired from full time academia some years ago
but he has taught at many Thai universities as a part-time lecturer over the past 10 years or more.
He has taught economics and management courses and supervised research students at a number
of Thai universities (and Australian universities in Thailand and Malaysia) for a number of years.
He also has taught in the USA (MBA) and he currently also teaches management in China
(Shanghai) (MBA) and in India (Calcutta) (MBA). He also continues to supervise Doctoral
thesis students at Burapha University and at Thaksin University. He has published and edited
quite widely. He has been President of the Asian Forum on Business Education (AFBE) since
2004. (See: www.afbe.biz) He is Editor of the AFBE Journal and is on the Editorial Panel of a
number of other Journals.
Thailand
Dr. Sa-ard Banchirdrit
Education Background: Bachelor Degree - Political Science (B.A), from Ramkhamheang
University, Bangkok, Thailand Master Degree - Master of Public and Private Management
(MPPM), from the National Institute of Development Administration (NIDA), Bangkok,
Thailand -Master of Business Administration (MBA), from the Asian Institute of Technology,
Thailand Doctorate Degree - Doctor of Business Administration (DBA), from the University of
South Australia (Unisa), Adelaide, Australia, Research Topic: Turnover of High Performing
Employees in Electronics Industries in Thailand. Work Experience: 30 years of experience in
Human Resource Management in multinational corporations in Thailand and the Asian region.
He retired from business sector in December 2006; his last position was " HR Director" of SIG
Combibloc responsible for the Asian region, Taiwan, Korea, Vietnam, Indonesia, and Thailand.
Since January 2007 till now, he has entered the academic field, joining with Valaya Alongkorn
Rajabhat University, under Royal Patronage. His first assignment was the program commitee
member for MPA and DPA. He has been assigned to be Director of the MBA and DBA program
in November, 2008. Now Dr. Sa-ard is Dean, College of Innovative Management, Valaya
Alongkorn Rajabhat University under Royal Patronage. Area of Expertise: Dr. Sa-ard has
expertise in international HRM and innovation of HR practices.
Thailand
Dr. Watana Patanapongse
Dr. Watana is founder and President of the Governance Innovation for Sustainability Institute
(GIS) and conducts research projects with international agencies: the United Nations
Development Programme (UNDP), Task Team for South-South Cooperation (TT-SSC),
Organization of Economic Cooperation and Development (OECD), etc. He is specialized in

472

Dr. Watana Patanapongse (Cont.)
Assessment of Development Results, Monitoring and Evaluation Research, strategic planning,
action planning, and e-Government based on Logical Framework Analysis (LFA) and the
Results-Based Management (RBM) approach. GIS research scholars have served local public
agencies and state enterprises: the Ministry of Education, Ministry of Foreign Affairs, Ministry
of Justice, Ministry of the Interior, Ministry of Natural Resources and Environment, Ministry of
Agriculture, Ministry of Energy, Office of the Prime Minister, etc. He was one of the committee
members for Development of Womens Rights in Social and Political Participation (for six
years), and he was one of the committee members for the Integrated Provincial Administration
Board which was presided over by the Prime Minister (for two years). This Committee helped
the Prime Minister direct all public agencies especially in the provinces to work collaboratively
and move forward in a united direction in order to achieve a national vision and strategies for
national development goals. Regarding his experience as a research scholar, conference
administrator as well as editor and reviewer, he was selected to be an exchange scientist between
Thailand (National Research Council of Thailand) and Japan (Japan Society for the Promotion of
Science JSPS). He was an administrator for an international seminar co-organized by EDI of
the World Bank, UN Habitat, ADAB, and NIDA. Additionally, he was Project Director for
Training Courses in the area of development administration especially in RBM-based strategic
planning and LFA-based project planning for neighboring countries in the ASEAN Community
and some selected developing countries from Asia and Africa, sponsored by TICA for about ten
years. He was Editor-in-Chief for the Journal of Development Administration (at NIDA) for six
years. Additionally, he has been a peer reviewer for the UNDP Evaluation Office, OECD,
Thailand Research Fund, as well as some national and international journals.
Thailand
Dr. Pimprapai I ntaravitak
Dr. Pimprapai is Vice President of the Governance Innovation for Sustainability Institute (GIS).
Previous project work was with the United Nations Development Programme (UNDP), Task
Team for South-South Cooperation (TT-SSC), Organization of Economic Cooperation and
Development (OECD), etc. Specialized in monitoring and evaluation research, strategic
planning, action planning, and e-Government based on Logical Framework Analysis (LFA) and
the Results-Based Management (RBM) approach. She has previously worked on a project
operating team for an international seminar co-organized by NIDA and TICA and was a
reviewer for the UNDP Evaluation Office and NIDA journal.
USA
Associate Professor Dr. Sergey I vanov
Dr.Sergey Ivanov is an Associate Professor of Management at the School of Business and Public
Administration, University of the District of Columbia. His professional practice and scholarly
interests are in the field of scientific organizational research in government, corporate,
multinational, and military organizations. He received a Ph.D. from the George Washington
University School of Business, working under the leadership of Dr. Elliott Jaques on dynamic
theories in organizational science. Dr. Ivanov developed a new systemic methodology for rapid
analysis of large organizations, including multinational corporations and departments of the U.S.
federal government. This method enables analysis of the work of classified organizations,
without learning and revealing the proprietary nature of these organizations work, yet
uncovering optimization opportunities. Professor Ivanov has taught management and
organizational courses at the University of the District of Columbia, as well as the George
Washington University, for over a decade. Dr. Ivanov enjoys invitations to speak on the topics of
management and organizations. He also serves on the Board of the Cambridge Institute For
Applied Research (CIfAR). More information about Dr. Sergey Ivanov is available at
www.SergeyIvanov.org, where he freely answers questions and shares ideas.


473

4.2 List of Authors
Contributor Country
Greg Fisher
Flinders Business School, Flinders University Adelaide, Australia, Email:
greg.fisher@flinders.edu.au
Australia
Samdrup Rigyal, Ph.D.
Director: Office of the Vice Chancellor, Royal University of Bhutan Thimphu, Bhutan
samdrup.ovc@rub.edu.bt
Bhutan

Dechen Choden, Ms.
College of Natural Resources, Royal University of Bhutan
Lobesa, Punakha. Bhutan.deda_cst2000@yahoo.com/dechen.choden.cnr@gmail.com
Bhutan
Leandro Pongeluppe
Research Scholar, Institute of Education and Research (INSPER)
So Paulo, Brazil, Email: leandro.pongeluppe@gmail.com
Brazil
Hazri Kifle, Ph.D.
Senior Lecturer, Faculty of Business, Economics and Policy Studies, Universiti Brunei
Darussalam, Bandar Seri Begawan, Brunei Darussalam; hazri.kifle@ubd.edu.bn
Brunei
Darussalam
Luch, Sreyleak
Phnom Penh, Cambodia; l.sreyleak@gmail.com
Cambodia
Men, Pauravy
Phnom Penh, Cambodia; menpauravy@gmail.com
Cambodia
Mok Sarom, Ph.D. Candidate
Graduate School, Buriram Rajabhat University, Muang District, Buriram Province,
Thainland, moksarom@yahoo.com
Cambodia
Narida LA
Faculty of Information Technology, University of Technology and Management, No.
55, Croix Rouge Khmere (St. 180), 12211 Phnom Penh, Kingdom of Cambodia,
narida_la@yahoo.com
Cambodia
Pum Sophy
Research Department, Angkor Mikroheranhvatho Kampuchea, Phnom Penh,
Cambodia; pum.sophy@amkcambodia.com
Cambodia
Svay Somana, Ph.D.
M&E Officer of PMTCT program of National Maternal and Child Health Center
(NMCHC) , somana39a@yahoo.com
Cambodia
Samboeun Hean, Professor
Faculty of Science and Technology, University of South-East Asia, Wat Bo Village,
Salakomroek Commune, Siem Reap Municipality, Kingdom of Cambodia
samboeun.hean@gmail.com
Cambodia
Tuon Sovanna, Ph.D.
PMTCT progran of National Maternal and Child Health Centre (NMCHC).
sovannatuon@yahoo.com
Cambodia
Thun Vathana, Ph.D.
Research Department, Angkor Mikroheranhvatho Kampuchea, Phnom Penh,
Cambodia; thunvathana@yahoo.com
Cambodia
Runzhong Peng, Ph.D.
Shanghai, China; pengrunzhong@afdc.org.cn
China
Rui J i, Ph.D.
Asia-Pacific Finance and Development Center, Shanghai, China; jerry@afdc.org.cn
China
Zhang J iachen, Ph.D. Student
Center for Innovation and Entrepreneurship; Tianjin University of Finance and
Economics, Tianjin, China; edify1592@gmail.com
China
Raghav Narsalay
India Lead, Accenture Institute for High Performance,
Mumbai, India, Email: raghav.narsalay@accenture.com
India
V. V. Krishna, Professor Dr.
Professor in Science Policy and Chair, Centre for Studies in Science Policy, School of Social
Sciences, Jawaharlal Nehru University, New Delhi 110067
Krishna@mail.jnu.ac.in; vkrishna16@hotmail.com
India

474

4.2 List of Authors
Contributor Country
Adik Bandoro
MultiPolar, Jakarta, Indonesia; adikbandoro@gmail.com; abandoro@southsouth.org
Indonesia
Golnaz Saeidi, Assistant Professor, Ph.D.
Payam Noor University of Iran, email adress:goli_374@yahoo.com
Iran
J unichi Iijima, Professor, Ph.D.
Graduate School of Decision Science and Technology, Department of Industrial
Engineering and Management, Tokyo Institute of Technology, 2-12-1, Ookayama,
Meguro-ku, Tokyo, Japan, Email: iijima.j.aa@m.titech.ac.jp
Japan
Masayuki Komatsu, Professor, Ph.D.
National Graduate Institute for Policy studies of Japan
Tokyo Japan, komatsu@grips.ac.jp or komatsumasayuki@gmail.com
Japan
T. Keisei Tanahashi, Professor, Ph.D.
International Creative Consultants, Ltd. Kobe, Japan; tanahasi@kba.att.ne.jp
Japan
Yang Liu, Ph.D. Student
Meguro-ku, Tokyo, Japan, Email: liu.y.af@m. titech. ac. jp
Japan
Sanetake Nagayoshi, Professor, Ph.D.
Meguro-ku, Tokyo, Japan, Email: nagayoshi.s.aa@m.titech.ac.jp
Japan
Angkham Ounavong, Ph.D.

Department of Basic Health Sciences, Faculty of Medical Sciences, University of
Health Sciences, Vientiane, Lao PDR
Lao PDR
Bounlay Phommasack

Lao PDR
Bounlonh Ketsouvannasane
Tobacco Free Initiative, WHO, Lao PDR
Lao PDR
Katthanaphone Phanhduangsy
Lao PDR
Vixay Bouyavong
Medical Student, Year V, Faculty of Medical Sciences, University of Health Sciences,
Vientiane Capital, Lao PDR
Lao PDR
Gasstsar-Rakotandrandria Constant
Trilingual writer and Madagasan Traditional Public Speaker - President, NGO
ECODEV Madagascar, Antananarivo, Madagascar; entelekia.madagascar@gmail.com
Madagascar
Pr. Rakotomaria Andrianirina Etienne
University of Antananarivo, Ecole Suprieure Polytechnique, Antananarivo,
Madagascar; andrianirina.rakotomaria@yahoo.fr
Madagascar
Amran Rasli, Professor, Ph.D.
Faculty of Management and Human Resource Department, Universiti Teknologi
Malaysia, Malaysia; m-amran@utm.my
Malaysia
Azlin Shafinaz Mohamad Arshad
Malaysian Academy of SME & Entrepreneurship Development (MASMED),
Universiti Teknologi MARA, Malaysia; azlin@salam.uitm.edu.my
Malaysia
Che Norlia Hassan
Faculty of Business Management, Universiti Teknologi MARA, Puncak Alam,
Selangor, Malaysia, Norlia361@puncakalam.uitm.edu.my
Malaysia
I smayaza Noh
Universiti Teknologi MARA, Puncak Alam, Selangor, Malaysia,
I smay147@salam.uitm.edu.my
Malaysia
Sanaz Haghsefat, Mrs.
Email adress:shaghsefat@gmail.com
Malaysia
Noorlaila Hj Yunus, PhD
Faculty of Business Management, Universiti Teknologi MARA, Puncak Alam,
Selangor, Malaysia Nlaila814@salam.uitm.edu.my; Lailanoor13@yahoo.com
Malaysia

475

4.2 List of Authors
Contributor Country
Roslan Aziz
J abatan Muamalat, Kolej I slam Darul Ridwan, Kuala Kangsar, Perak;
roslan_a@yahoo.com
Malaysia
S. M. Hamzah
Casemix Solutions Sdn. Bhd., Kuala Lumpur, Malaysia;
s.hamzah@casemix.com.my
Malaysia
Samsudin Wahab, Ph.D.
Faculty of Business Management
Puncak Alam, Selangor; samsudinphd@yahoo.com
Malaysia
W. M. Syahrir
University Malaysia Pahang: Faculty of Computer Science and Software
Engineering, Pahang, Malaysia; wmsyahrir@ump.edu.my
Malaysia
Saadiah Mohamad, Professor, Ph.D.
Malaysia
M. F ahshah F .M. Hasl an
Malaysia
Nurhuda A.F athi l
Malaysia
Umi Afiqah M. Azam
Malaysia
Fatin N. Husni
Malaysia
Hasrul Reeza
United Nations University / The National University of Malaysia: Department of
Public Health, Kuala Lumpur, Malaysia; hasrulreeza@gmail.com
Malaysia/
International
Organization
S. M. Aljunid
United Nations University: International Institute for Global Health, Kuala Lumpur,
Malaysia; saljunid@gmail.com
Malaysia/
International
Organization
Zafar Ahmed
The National University of Malaysia: Department of Public Health, Kuala Lumpur,
Malaysia; zafar.he@gmail.com
Malaysia/
International
Organization
Hnin Wint Khaing
Mandalay, Myanmar; snow.hwk@gmail.com
Myanmar
Htun Min Latt
No. (1) Defence Services General Hospital (1000-bedded), Nay Pyi Taw, Myanmar,
htunminlatt0401@gmail.com
Myanmar
Kyu Kyu Than
Research Scientist, Department of Medical Research, Lower Myanmar, Yangon,
Myanmar; kyukyuthan.@gmail.com
Myanmar
Mie Mie Khin
University of Computer Studies, Mandalay (UCSM), Mandalay, Myanmar
Myanmar
MyaThida, Professor
Professor & Head, Department of Obstetrics & Gynaecology, University of Medicine
(2), Yangon, Myanmar; profmyathida@gmail.com
Myanmar
Nandar Pwint Oo, Ms., Ph.D Candidate
University of Computer Studies, Yangon, Yangon, Myanmar;
nandarpwintoo@gmail.com
Myanmar


476

4.2 List of Authors
Contributor Country
Nang Mya Thuzar Maung
Specialist Assistant Surgeon, Department of Obstetrics & Gynaecology, University of
Medicine (2), Yangon, Myanmar; nangmyathuzar@gmail.com
Myanmar
Ni Lar Thein, Professor, Ph.D.
Rector, University of Computer Studies, Yangon, Yangon, Myanmar;
nilarthein@gmail.com
Myanmar
Thiri The` Wut Yee, Ms.
University of Computer Studies, Yangon, thirithewutyee@gmail.com
Myanmar
Tin Maung, Mr., Ph.D. Candidate
Yangon, Myanmar; tinmaung84@gmail.com
Myanmar
Ye Thwe Hlaing, Ph.D.
Defence Services Medical Research Centre, Nay Pyi Taw, Myanmar;
yethwehlaing@gmail.com
Myanmar
Subodh Sharma, Professor, Ph.D.
Aquatic Ecology Centre (AEC), Kathmandu University, P. O. Box: 6250, Kathmandu,
Nepal, subodh.sharma@ku.edu.np.
Nepal
Carina R. Magbojos, Ph.D.
College of Applied Medical Professions , Lyceum of the Philippines University,
Batangas City, Philippines, carinamagbojos@yahoo.com
The
Philippines
Cecilia C. Pring, Ph.D.
College of Nursing, Lyceum of the Philippines University, Capitol Site, Batangas
City, Philippines, ccl_pring@yahoo.com
The
Philippines
Christine D Fallaria, Isaiah Joyce L. Flores
The
Philippines
Dyan P. Gaddi
The
Philippines
I saiah J oyce L. Flores
The
Philippines
Esmenia R. J avier, Ph.D.
Executive Vice President / Vice President for Academics and Research, Lyceum of the
Philippines University, Capitol Site, Batangas City, Batangas, Philippines
erj48@yahoo.com
The
Philippines
Flora V. J avier, Ph.D.
Consultant, Special Projects and Planning, Lyceum of the Philippines University,
Capitol Site, Batangas City, Batangas, Philippines, flora.v.javier@gmail.com
The
Philippines
Francis Kayode Ashipaoloye, Professor
Faculty, College of Education, Arts and Sciences, Lyceum of the Philippines
University, Capitol Site, Batangas City, Philippines 4200, ashiop@yahoo.com
The
Philippines
George Atento
Director, Capital Market, Lyceum of the Philippines
Laguna, Philippines, george.atento@gmail.com
The
Philippines
J ames Rarick

Tobacco Free Initiative. WHO Regional Office for Western Pacific, Manila,
Philippines
The
Philippines
Karmelle Louise C. Lontoc
The
Philippines
Ma. Errin A. Magpantay
Lyceum of the Philippines University, Batangas City, Philippines,
The
Philippines
Norma L. Meez, Ph.D.
Graduate School Administrative Officer
Lyceum of the Philippines University Capitol Site, Batangas City, Batangas,
Philippines, lybat_external@yahoo.com
The
Philippines
Olive E. Sandoval
College of Computer Studies, Lyceum of the Philiipnes University, Capitol Site,
Batangas City, Philippines; poknatpangit@yahoo.com@yahoo.com
The
Philippines
Oliver Shane R. Dumaoal
The
Philippines


477

4.2 List of Authors
Contributor Country
Rodrigo M. Villacrucis J r.
The
Philippines
Rosaly B. Alday, Ph.D.
College of Computer Studies, Lyceum of the Philippines University, Capitol Site,
Batangas City, Philippines; roselie_alday@yahoo.com
The
Philippines
Fernando Sousa, Professor, Ph.D.
Research Centre for Spatial and Organizational Dynamics (CIEO), University of the
Algarve Faro, Portugal; cardoso_sousa@hotmail.com
Portugal
I leana Monteiro, Professor, Ph.D.
Research Centre for Spatial and Organizational Dynamics (CIEO), University of the
Algarve Faro, Portugal; ileanamonteiro@hotmail.com
Portugal
Chiao-Pin Bao, Professor
Kaohsiung, Taiwan; cpbaao@isu.edu.tw
Taiwan,
China
J ing-Lin Huang, Ph.D. Candidate
Department of Business Administration, National Yunlin University of Science &
Technology, Yulin, Taiwan, g9422806@yuntech.edu.tw
Taiwan,
China
J ustine S. Chang, Assistant Professor
Department of Accounting, Chaoyang University of Technology
Taichung, Taiwan, jschang@cyut.edu.tw
Taiwan,
China
Shang-Ping Lin, Professor
Department of Business Administration, National Yunlin University of Science &
Technology, Yulin, Taiwan, linsp@yuntech.edu.tw
Taiwan,
China
Shu-Chuan Chen, Ph.D.
Kaohsiung, Taiwan ; melinda2085@yahoo.com.tw
Taiwan,
China
Abhisit Vejjayanvivat
College of Management,Mahidol University
Bangkok, Thailand; abhisit.vejjayanvivat@gmail.com
Thailand

Amorn Wanichwiwatana, D.Phil. (Oxon)
Faculty of Political Science, Chulalongkorn University, Bangkok, Thailand,
a.wanichwiwatana@gmail.com
Thailand

Auschala Chalayonnavin
Doctoral Candidate of Public Administration in Public Policy and Public Management,
Faculty of Social Science and Humanities, Mahidol University, Bangkok, Thailand:
auschala_c@hotmail.com
Thailand

Brian Sheehan, Professor, Ph.D.
President, Asian Forum on Business Education, Bangkok, Thailand,
Email: brian.sheehan9@gmail.com
Thailand
(Australia)

Chaicharn Wongsamun,
Associate Professor: Department of Agricultural Extension, Khon Kaen University,
Khon Kaen, Thailand: chaichrn@kku.ac.th
Thailand

Chokchai Suttawet, Ph.D.
Department of Social Sciences, Faculty of Social Sciences and Humanities, Mahidol
University csuttawet@gmail.com
Thailand

Denis Ushakov, Ph.D.
International College, Suan Sunandha Rajabhat University
Email: fintaliano@yandex.ru
Thailand
(Russia)
Kampanat Vijitsrikamol
Department of Agricultural and Resource Economics, Faculty of Economics, Kasetsart
University, Bangkok 10900, Thailand. fecoknv@ku.ac.th
Thailand

KanithaJ odnok, Lecturer
Nursing Faculty ,Vongchavalitkul University, NakhonRatchasima, Thailand,
kachodnock@hotmail.com
Thailand

Kerdsiri Hongthai, Lecturer
Nursing Faculty ,Vongchavalitkul University, NakhonRatchasima, Thailand ,
kerdsiri_h@yahoo.com
Thailand
Kijpokin Kasemsap, Ph.D.
Faculty of Management Sciences, Suan Sunandha Rajabhat University Bangkok,
Thailand; e-mail address: kijpokinkasemsap@yahoo.com
Thailand


478

4.2 List of Authors

Contributor Country
Nawamin Prachanant, Assist. Professor, Ph.D.
Co-advisor, Graduate School, Buriram Rajabhat University, Muang District, Buriram
Province, Thainland, nawaminpt@yahoo.com
Thailand

Pawarin Tuntariyanond
Bangkok, Thailand; pawarin.tun@gmail.com
Thailand
Penporn J anekarnkij
Department of Agricultural and Resource Economics, Faculty of Economics, Kasetsart
University, Bangkok 10900, Thailand. fecoppj@ku.ac.th
Thailand

Pongpun Anuntavoranich
Bangkok, Thailand; p.idchula@gmail.com
Thailand
Sageemas Na Wichian
College of Industrial Technology, King Mongkut's University of Technology North
Bangkok, Bangkok, Thailand; sgm@kmutnb.ac.th
Thailand
Sakorn Songserm
Mahasarakam Rajabhat University, Mahasarakam Province, Thailand;
jackal_2008@hotmail.com
Thailand
Som Na-saan, Ph.D.
Public Health Technical Officer (Senior Professional), Kalasin Public Health Office
Thailand

Somboon Sirisunhirun
Associate Professor in Public Administration (Public Policy and Public Management),
Faculty of Social Science and Humanities, Mahidol University, Thailand:
somboon.sir@mahidol.ac.th
Thailand

Somsri Nawarat. Ph.D.
Banlad Hospital, Petchburi Province, Thailand, Email: somsri2501@hotmail.com
Thailand
Sununta Siengthai, Associate Professor, Ph.D.
Associate Professor Dr., School of Management, Asian Institute of Technology,
Bangkok City, Thailand- s.siengthai@ait.ac.th
Thailand
Sunthorn Kohtbantau, Associate Professor, Ph.D.
Major Advisor, Graduate School, Buriram Rajabhat University, Muang District,
Buriram Province, Thainland, sunthorn@yahoo.com
Thailand

Tartat Mokkhamakkul
Faculty of Commerce and Accountancy, Chulalongkorn University,
Bangkok, Thailand; tartat@acc.chula.ac.th
Thailand
Thongchai Nilkham, Ph.D.
Lecturer in Environmental Education Program, Environmental Education Program
Board at Valaya Alongkorn Rajabhat University under Royal Patronage
Email: printer_pote@hotmail.com ; M: 086-237-4557
Thailand

Vinai Veeravatnanond, Associate Professor, Ph.D.
Scholar in Social Science (Environmental Education), President of the
Environmental Education, Association of Thailand, Chairman of Environmental
Education Program at Valaya Alongkorn, Rajabhat University under Royal
Patronage
Email: vinai.vee@gmail.com M: 089-712-5814
Thailand
Wasan Srisaard
College of I nnovative Management, Valaya Alongkorn Rajabhat University under
Royal Patronage, 1 Moo 20 Km 48 Pahonyotin Road, Tambon Klong-Nueng,
Klongluang District, Pathumtani Province, 13180
e-mail: sriwasan@hotmail.com
Thailand
Bahaudin G. Mujtaba,
Nova Southeastern University 3301 College Avenue Fort Lauderdale, FL. 33314-
7796. USA. Phone: (954) 262-5045; Email: mujtaba@huizenga.nova.edu
USA
Samira Asma
Global Tobacco Control. Office on Smoking and Health. CDC ,Atlanta, USA
USA

479

4.2 List of Authors
Contributor Country
Sergey I vanov, Associate Professpor, Ph.D.
Department of Management, School of Business and Public Administration,
University of the District of Columbia, Washington, DC, USA; sivanov@udc.edu
Contact I nformation: Sergey Ivanov, Ph.D.
Phone: +1 202 556 1660 (also: voice mail, text messaging, Viber, and WhatsApp)
Skype: sergeygw, E-mail: sivanov@udc.edu, Web: www.SergeyI vanov.org
USA
Che Dinh Ly, Ph.D.
Institute for Environment and Resources, National University Ho Chi Minh City
(VNU-HCM)
Vietnam
Ha Van Su, Professor, Ph.D.
Economic Faculty, Vietnam University of Commerce, Ha Noi, Viet Nam;
hvsdhtm@yahoo.com
Vietnam
Ngo Thai Phuong
Flinders Business School, Flinders University Hanoi, Vietnam, Email:
ngot0002@flinders.edu.au
Vietnam
Nguyen Ngoc Duc
School of Management, Asian Institute of Technology (SOM-AIT)
Bangkok, Thailand; Email: Nguyen.Ngoc.Duc@ait.ac.th
Vietnam
Nguyen Hien Than
Faculty of Environment and Resources, Nong Lam University, Ho Chi Minh city,
Vietnam, Email: nguyenhienthan@yahoo.com
Vietnam
Ta Thi Hong Hanh
HCMC Open University, Ho Chi Minh City, Vietnam- hanh.tth@ou.edu.vn
Vietnam
Truong Thi Lan Anh
HCMC University of Technology, Ho Chi Minh City, Vietnam-
ttlanh@sim.hcmut.edu.vn
Vietnam
Trieu Do Kien, Ph.D.
Foreign Economic Relations Dept. Ministry of Planning and Investment, Ha Noi, Viet
Nam; uchirado@yahoo.com
Vietnam
Vu Ngoc Tu, Associate Professor, Ph.D.
International School - Vietnam National University, Hanoi, Vietnam, email:
tuvn@isvnu.vn
Vietnam


480

4.3 Host Committees

Honorable Chairs
Associate Professor Dr.
Sombat Kotchasit
President of Valaya Alongkorn Rajabhat University under Royal
Patronage (VRU)
Associate Professor
Somsiri Arunothai
Vice President of VRU
Assistant Professor Lt.
Wipawee Kietsiri
Acting SubLt. Adulya
Wiwattanapatapee
Dr. Supot Saikaew Vice President of VRU
Dr. Suthep Boonsorn Vice President of VRU
Dr. Orawan Passornsiri Assistant to President of VRU
Professor Dr. Boonton
Dockthaisong
Chair of Doctor of Public Administration Program Committee, CIM,
VRU
Professor Dr. Imron
Maluleem
Committee Member, Doctor of Public Administration Program
Committee, CIM, VRU
Professor Dr. Chamnong
Adivadhanasit
Committee Member, Doctor of Public Administration Program
Committee, CIM, VRU
Dr. Sa-ard Banchirdrit Dean, College of Innovative Management (CIM), VRU
Assistant Professor Dr.
Chowana Bhawakanun
Associate Deans of College of Innovative Management, CIM, VRU
Dr. Ruangdech Rengpian Associate Deans of College of Innovative Management, CIM, VRU
Dr. Watana Patanapongse Program Director, ASEAN Economic Community Inclusive Innovation
Plus Center (AECI Center) and Committee Member, Doctor of Public
Administration Program Committee, CIM, VRU

Consortium Committees
Conference Chairs
Dr. Watana
Patanapongse
Program Director, ASEAN Economic Community Inclusive Innovation
Plus Center (AECI Center) and President and Founder of Governance
Innovation for Sustainablity Institute (GIS)
Professor Wang
Weidong
Dean of Humanities, Chair of Chinese Yunnan University
Professor Yin Hong Vice President, Yunnan University of Finance and Economic
Professor Dr. Lu
Jiansheng
Dean, Faculty of Foreign Language and Cultures, Kunming University of
Science and Technology
Dr. Li Xiang Nong Vice President, Huazhong Normal University
Professor Yao Yao Xu Vice President, Jiangxi Normal University
Dr. Li Kouqing Director-General, Asia-Pacific Finance and Development Center

481

Dr. Peng Runzhong Senior Economist, Asia-Pacific Finance and Development Center (AFDC)
Professor Dr. Liyan
Zhang
Professor, Commercial Business Department, Tianjin University of
Finance and Economics (TUFE)
Professor Dr. Brian
Sheehan
President, Asian Forum on Business Education
Professor Dr. Keisei
Tanahashi
School of Management Science, Tokyo Keizei University
Dr. Oum Ravy Vice Rector, Royal University of Phnom Penh
Assistant Professor
Dr.Ora-Orn Poocharoen
Assistant Dean, Student Affairs, Lee Kuan Yew School of Public Policy,
National University of Singapore
Dr. Kirpal Singh Director, Wee Kim Wee Centre, Singapore Management University
Dr. Ahmad Bashawir
Haji Abdul Ghani
Dean, College of Law, Government, and International Studies, University
Utara Malaysia
Dr. Flora V. Javier Vice President for Administration and Planning, Lyceum of the
Philippines University
Mr. Enrique Maruri Task Team South-South Cooperation Technical Secretary
Dr. Pichet
Durongkaveroj
Secretary General, National Science Technology and Innovation Policy
Office (STI) Thailand
Dr. Supachai
Lorlowhakarn
Director, National Innovation Agency, Thailand
Dr. Wittaya Jiaraphan President, The Association of Researchers Under the Patronage of the
National Research Council of Thailand
Dr. Pimprapai
Intaravitak
Program Deputy Director, ASEAN Economic Community Inclusive
Innovation Plus Center (AECI Center), Governance Innovation for
Sustainability Institute, Thailand

Conference Executive Team for Host Committee and Consortium Committee
Conference Executive Director
Dr. Watana Patanapongse Program Director, ASEAN Economic Community Inclusive Innovation
Plus Center (AECI Center), Governance Innovation for Sustainability
Institute, Thailand
Deputy Directors
Dr. Pimprapai Intaravitak Program Deputy Director, ASEAN Economic Community Inclusive
Innovation Plus Center (AECI Center), Governance Innovation for
Sustainability Institute, Thailand
Ms. Phorntippha
Prathumratana Kerr
Program Deputy Director, ASEAN Economic Community Inclusive
Innovation Plus Center (AECI Center), Valaya Alongkorn Rajabhat
University under Royal Patronage, Thailand
Mr. Wang Tiansong Program Deputy Director, ASEAN Economic Community Inclusive
Innovation Plus Center (AECI Center), Valaya Alongkorn Rajabhat
University under Royal Patronage, Thailand

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the price expectation

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