TEPEK PROJECT Turkey's Participation in European Knowledge Economy

TEPEK PROJECTTurkey's Participation in European Knowledge Economy ROMTEX Renewal Prof. Dr. Constantin Bratianu Assist. Prof. Simona Vasilache Assist. Prof. Anca Mandruleanu

Structure of the study case Part A • Introduction • Acknowledgements • Early life stage of the company • ROMTEX life stage in socialism • ROMTEX Renewal • Intellectual capital in ROMTEX

Structure of the study case Part B • Methodology • Results and discussions • Conclusions • References

Part A. Introduction We obtained the information through: • studying the company history • analyzing the textile Romanian market before and after the political regime change from December 1989 • conducting interviews with top management and several working meetings with Mrs. Liliana Iacob, the General Manager of ROMTEX, from 1990 on

Part A. Acknowledgments The authors would like to express their acknowledgments to the partners involved in TEPEK project for the continuous knowledge share and, particularly, to our colleagues from Inholland University, for offering us the case studies model and Bilkent University for the questionnaire that we used in our research. Special thanks to professor Daan Andriessen, Director of the Research Center in Intellectual Capital, Inholland University, for sharing his experience and valuable knowledge with us.

Part A. Early life stage of the company • Founded in 1928, in Bucharest • Field of activity of the newly founded company was spinning and weaving mill, for thick fibers: flax, hemp and jute • Problems addressed: internal market competition, import restrictions

Part A. ROMTEX life stage in socialism Events • 1948 – nationalization • 1951 – 1970 • production facility was modernized • circular weavers • range of products diversified • Investments of 4 millions lei • After 1950 – decorative textile

Part A. ROMTEX life stage in socialism Events • 1970 – collaboration between ROMTEX and the Textile Research Institute of the Romanian Academy • 1980 – the decline Employees • at the beginning, 1000 employees • in 1975, 1475 employees • in 1980, 1000 employees

Part A. ROMTEX Renewal • Before 1989 - Romania - a socialist country • After 1989 – changes in the political and economical system from Romania

Part A. ROMTEX Renewal Decision time for ROMTEX • to go on as a state owned company • to go on the privatization process by the MEBO method • to go on for foreign investors

Part A. ROMTEX Renewal Evolution of the textile production

Part A. ROMTEX Renewal Evolution of production by types of products

Part A. ROMTEX Renewal Evolution of work productivity

Part A. ROMTEX Renewal Decision time for ROMTEX • to go on with the old type of products only and to downsize the company • to go on lohn, as the general trend on the Romanian market • to diversify the products spectrum and to expand on the international market

Part A. Intellectual Capital in ROMTEX • 2000 – collaboration with Bianchi & Bianchi • problems faced: • Adjustment of machinery • Establish the type of production • development of R&D department • 2008 – supplier of home decors

Part B. Methodology We applied a 36-items questionnaire, adapted to the profile of the analyzed company, to 20 employees, chosen by judgment sampling, based on their number of years in the organization (min. 5 yrs), and their involvement in innovation-related activities. The variables in the questionnaire were analyzed in SPSS, using Factorial Analysis with Varimax rotation and Kaiser normalization, in order to outline the independent components of human capital, organizational capital, and relational capital.

Part B. Methodology The descriptive statistics for human capital variables (see Handout 1) shows that the average values of the variables are, generally, between 3 and 4, indicating a fair to good level of human capital development in the organization, as perceived by its employees.

Part B. Methodology The descriptive statistics for organizational capital variables (see Handout 1) shows that, except for adequate management information systems, which still have to be developed, and for incomes from licenses, the rest of the indicators range between fair and good, for organizational capital as well, according to the perception of the questioned employees in ROMTEX.

Part B. Methodology The descriptive statistics for relational capital variables (see Handout 1) shows that the perception of relational capital variables is comparable with the perception regarding the previous two forms of capital.

Part B. Results The factorial analysis (see Handout 2) identified seven components of human capital, as follows: • self development • initiative • performance & satisfaction • compliance • fitness • team work • training

Part B. Results It can be seen that there is a fair balance between factors related to personal skills, to personal performance, and factors relating to fitness in the team, and also to the efforts the team (i.e., organization) makes in order to upgrade the individual to the required organizational level performance.

Part B. Results Five components of organizational capital (see Handout 2) were identified, as follows: • brand awareness • tailored processes • R&D • equipments • management information systems

Part B. Results • Some of the presumable components of organizational capital, as licenses, or subsidies, are not highly correlated with these factors, signaling that there still is room for development in these respects. As outlined by the analysis, the organizational capital of the considered organization is a combination of efficient marketing processes and efficient technological processes, in an attempt to control the market inside-out

Part B. Results Five components of the relational capital (see Handout 2) were extracted, namely: • exploration of external knowledge • collaboration with public institutions • participation in foreign business networks • relational marketing • cooptition

Part B. Results • Thus, the company extends its relational web towards exploration of web-wide knowledge sources and participates, as well, in foreign markets, by associating itself in foreign business networks. Its relations are, thus, diverse and productive.

Part B. Conclusions Our case study synthesized the development of a Romanian manufacturer of textiles, from a traditional state-owned enterprise, to a modern knowledge-based organization, capable of taking creative decisions and of exploring new, innovative paths of actions.

Part B. Conclusions Through a triangulation of the research methods – observation, interview with the manager and questionnaire, we characterized the evolution of the company, over 80 years of activity, and we outlined prospects for future development.

Part B. Conclusions The case study illustrates a Romanian success story, in a field of activity which has generally lost its privileges after the fall of the communist regime, and testifies the way in which intelligent exploitation of human capital, together with reconsideration and rebuilding of structural capital, and use of relationships, even fortuitous, in order to gain sustainable performance.

Part B. Conclusions The several turning points that we have outlined illustrate the moments when the evolution of the company required all the attention and the commitment of its management and employees, in order to take the best available decision.

Part B. Conclusions The progress of the company, dependent on these decisions, which were taken at crucial moments, proves that there was in place a wise management and a proper usage of human capital, relational and structural capital in order to make sense and profit of an ill-organized market.

Part B.References used • Andriessen, D. (2004) Making sense of Intellectual Capital. Design a method for valuation ofintangibles. Amsterdam: Elsevier. • Andriessen, D. (2008) Case study: Jentjens Machinetechniek BV. Part 1&2. TEPEK Project. • Brătianu, C., Andriessen, D. (2008) Knowledge as energy: a metaphorical analysis, in: Proceedings of the 9th European Conference on Knowledge Management, Southampton Solent University, UK, 4-5 September 2008, pp.75-82. Reading: Academic Publishing. • Brătianu, C. (2008) A dynamic structure of the organizational intellectual capital, in: Naaranja, M.(ed.) Knowledge management in organizations (KMO2008), pp.233-243, Vaasa: Vaasa YLIOPISTO. • Mândruleanu A., Ivanovici M. (2008) Knowledge Management in Organizations, Economy and Transformation Management, Jean Monnet European Centre of Excellence – The School of High Comparative European Studies (SISEC), Universite d’Avignon et des Pays de Vaucluse, France

Part B.References used • Mândruleanu A., Ivanovici M. (2008) Knowledge Management Implications, Management & Marketing, Bucureşti, vol. 3, nr. 2 (10), pp. 105-115 • Stam, C. (2008) TEPEK Case method. TEPEK Project, 2008-2009. • Vasilache, S. (2008) Organizational knowledge dynamics, Management & Marketing, 3 (2), pp. 91-104

TEPEK PROJECT Turkey's Participation in European Knowledge Economy