Po štn ina pl ača na pr i p ošt i 4 10 2 K ran j ORGANIZACIJA Journal of Management, Informatics and Human Resources Revija za management, informatiko in kadre ISSN 1318-5454 Vo lum e 5 0 Nu mb er 4 No ve mb er 20 17 Volume 50, Number 4, November 2017 ORGANIZACIJA Organizacija is an interdisciplinary peer reviewed journal that seeks both theoretically and practically oriented research papers from the area of organizational science, business information systems and human resources management. Topics will be drawn from, but are not limited to, the following areas: • organizational theory, development and restructuring of organizations; • new and innovative organizational structures and approaches; • managerial aspects of quality management; • organizational behavior; • human resources management; • development, restructuring and management of information systems; • interorganizational systems, electronic commerce; • decision making, decision support. In particular, we seek papers which cover state- of-art developments in organizational theory and practice, and present new insights that improve our understanding in the subject area of the journal Organizacija je interdisciplinarna znanstvena revija, ki objavlja prispevke s področja organizacije, informatike in kadrovskega managementa. Primeri tematskih sklopov, ki jih pokriva revija, so: • teoretične osnove organizacijskega razvoja ter spreminjanja organizacijskih struktur in procesov • novi organizacijski pristopi ter njihova uporaba • organizacijski ukrepi za doseganje večje produktivnosti, ekonomičnosti in rentabilnosti poslovanja in proizvodnje • management kakovosti • kadrovanje in izobraževanje kadrov pri prestrukturiranju podjetij • stimulativnost nagrajevanja v spremenjenih lastninskih razmerah • prestrukturiranje organizacijskih in informacijskih sistemov • načrtovanje, razvoj in uporaba informacijske tehnologije in informacijskih sistemov • medorganizacijski sistemi, elektronsko poslovanje • odločanje, podpora odločanju, direktorski informacijski sistemi Vsebina ni omejena na navedene tematske sklope. Še posebej želimo objavljati prispevke, ki obravnavajo nove in aktualne teme in dosežke razvoja na predmetnem področju revije, ter njihovo uvajanje in uporabo v organizacijski praksi. 297 Contents 4/2017 Organizacija, Volume 50, Number 4 November 2017 RESEARCH PAPERS REVIEWERS IN 2017 Anita KOLNHOFER-DERECSKEI Metod ŠULIGOJ, Helena MARUŠKO Ľubica LESÁKOVÁ, Petra GUNDOVÁ, Pavol KRÁĽ, Andrea ONDRUŠOVÁ Laura JUŽNIK ROTAR, Mitja KOZAR Milica ŽURAJ, Petra ŠPARL, Anja ŽNIDARŠIČ Christina BRESTER, Ivan RYZHIKOV, Eugene SEMENKIN The Indifferent, the Good Samaritan, the Brave and the Agent in Allais Paradox situation – or How Endowment Effect Influences Our Decision in Case of Allais Paradox? Hotels and Halal-oriented Products: What Do Hotel Managers in Slovenia Think? Innovation Leaders, Modest Innovators and Non-innovative SMEs in Slovakia: Key Factors and Barriers of Innovation Activity The Use of the Kano Model to Enhance Customer Satisfaction Analysis of Individual Aspects Influencing Non-purchasing in an Online Environment and Consumer Willingness to Purchase Custom-Made Apparel Multi-objective Optimization Algorithms with the Island Metaheuristic for Effective Project Management Problem Solving Editorial office: University of Maribor, Faculty of Organizational Science, Založba Moderna Organizacija, Kidriceva 55a, 4000 Kranj, Slovenia, Telephone: +386-4-2374295 , E-mail: organizacija@fov.uni-mb.si, URL: http://organizacija.fov.uni-mb.si. Organizacija is co-sponsored by the Slovenian Research Agency. Published quarterly. Full text of articles are available at http://www.degruyter.com/view/j/orga and http://organizacija.fov.uni-mb.si. 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Dekleva DePaul University, School of Accountancy and MIS, Chichago, USA Matjaž Maletič University of Maribor, Faculty of Organizational Sciencies, Slovenia EDITORIAL BOARD / UREDNIŠKI ODBOR REVIJE Hossein Arsham, University of Baltimore, USA Franc Čuš, University of Maribor, Slovenia Vlado Dimovski, University of Ljubljana, Slovenia Daniel C. Ganster, Colorado State University, USA Jože Gričar, University of Maribor, Slovenia Werner Jammernegg, Viena University of Economics and Business Administration, Austria Marius Alexander Janson, University of Missouri-St. Louis, USA Stefan Klein, University of Münster, Germany Aleksandar Marković, University of Belgrade, Serbia Hermann Maurer, Technical University Graz, Austria Matjaž Mulej, University of Maribor, Slovenia Valentinas Navickas, Kaunas University of Technology, Lithuania Ota Novotny, University of Economics, Prague, Czech Republic Milan Pagon, Independent University, Bangladesh (IUB), Dhaka, Bangladesh Björn Paape, RWTH-Technical University Aachen, Germany Dušan Petrač, NASA, Jet Propulsion Laboratory, California Institute of Technology, USA Hans Puxbaum, Vienna University of Technology, Austria Vladislav Rajkovič, University of Maribor, Slovenia Gábor Rekettye, University of Pécs, Hungary Henk G. Sol, Faculy of Economics and Business, University of Groningen, Netherlands Eugene Semenkin, Siberian State Aerospace University, Krasnoyarsk, Russian Federation Velimir Srića, University of Zagreb, Croatia Paula Swatman, University of Tasmania, Australia Brian Timney, The University of Western Ontario, Canada Maurice Yolles, Liverpool John Moores University, UK Douglas R. Vogel, Harbin Institute of Technology-HIT, School of Management, China Gerhard Wilhelm Weber, Middle East Technical University, Turkey Stanisław Wrycza, University of Gdańsk, Poland Yvonne Ziegler, Frankfurt University of Applied Sciences, Germany Hans-Dieter Zimmermann, FSH St. Gallen University of Applied Sciences, Switzerland 299 Organizacija, Volume 50 Number 4, November 2017Research Papers DOI: 10.1515/orga-2017-0022 The Indifferent, the Good Samaritan, the Brave and the Agent in Allais Paradox situation – or How Endowment Effect Influences Our Decision in Case of Allais Paradox? Anita KOLNHOFER-DERECSKEI Obuda University, Faculty of Business and Management, Budapest, Hungary derecskei.anita@kgk.uni-obuda.hu Background and purpose: Mainstream economic models do not take ownership into consideration. Only after the findings of behavioural economists was endowment effect widely observed. Endowment effect means that goods that one owns are valued higher than other goods not held in endowment. At the same time the principal-agent liter- ature is concerned with how the principal (such as employer) can motivate his agent (say the employee), to act in the principal’s interests and also for their holdings. The main problem is that acting in somebody’s else’s interests can influence our values as well. Moreover, the principal as owner suffers from endowment effect. Both situations can be treated as a risky decision. Risk confuses our rationality in a predictable way. Design/Methodology/Approach: Due to this it was observed how foreign students from various cultural back- grounds decided (n=186 answers) in a risky financial situation by focusing on Allais’ classic gambles. I also presented their preferences over certain and uncertain outcomes regarding the owner of the final win; i.e. how they choose for themselves or on behalf of one of their best friends. One famous experiment - which tested the descriptive validity of the axioms’ expected utility theory - was Allais. Allais handled probabilities and outcomes in high hypothetical payoff financial gamble situations; he found that when offering two similar options, the common consequences will not be removed by the actors. I was interested in what happens when the actors take risks on behalf of others. It was used between-subjects technique on an extended multicultural sample. Regarding the two different topics, three hypothe- ses were tested (1); based on Allais paradox (2); observed ownerships (3); the comparison of two phenomena. Results: The results show that the subjects responded differently when they needed to decide about their own prop- erties rather when their friends’ properties were concerned. When a sure safe outcome was offered to the subjects, they took more risk on behalf of their friends rather than own. Moreover, the subjects do not take into consideration that the same attributes must be ignored, so Allais paradox was verified. Conclusion: The goal of this paper is then twofold. First, it was established a conceptual link between Allais-type be- haviour and ownership problem. Second, Allais axiom was used to characterize different roles. Knowing predictable patterns of seemingly irrational heuristics in human behaviour can improve economic theory. At the same time, this knowledge helps us to avoid irrational decisions. Keywords: Allais paradox; Endowment effect; Principal-Agent Problem; Risk 1 Received: July 11, 2017; revised: September 30, 2017; accepted: October 20, 2017 “The real substance on which the economist works remains economic and social.” (Allais, 1988) Organizacija, Volume 50 Number 4, November 2017Research Papers 300 1 Introduction Nowadays, it is well-known that an average employee spends more than 25 percent of their working life deciding on others’ interests. Despite the fact they take risks on be- half of others, i.e., are responsible for others’ utilities max- imizations, they try to do their best. They allocate scarce resources to satisfy others’ wants and needs. At the same time, not only economic resources are scarce, in addition, human psychological resources - like attention - are limited as well. Due to this, the profit-maxi- mizations of the aforementioned employees are not accom- plished; this is, in a part, because of the lack of complete information. In decision-making, the Nobel Prize winner Herbert Simon (1971) believed that agents face uncertain- ty about the future and costs in acquiring information in the present. These factors limit the extent to which agents can make a fully rational decision, thus they possess only “bounded rationality” and must make decisions by “satis- ficing,” or choosing that which might not be optimal but which will make them or the owners happy enough. So they will use special heuristics (rules of thumbs based on previous experiences) which hurt the rationality of ‘homo oeconomicus model act’. These two issues provide the im- portance and relevance of this experiment. 1.1 Theoretical background 1.2.2 Expected utility theory Choosing rationally is equal to choosing the option with the higher expected utility (EU), defined as EU = ∑ u (xi) pi where pi and xi mean the probability and the amount of payoffs, u is the function of the payment, respectively, associated with each possible outcome (i=1, . . . , n) of that option. Later, von Neumann & Morgenstern (1947) explained expected-utility theory on axiomatic grounds; it quickly became the most influential theory of individ- ual choice behaviour. (Hertwig et al. 2004). Assumptions of the expected utility theory were laid in the 1940s by Neumann and Morgenstern. They offered several simple axioms, characterizing preferences of rational actor, they suggested that the utility of a risky gamble should be the probability weighted average of the utilities of its possible outcomes (Camerer, 1998). One of these axioms are the so called independence implies. The independence axiom shows how choice is influenced by only the differences among many alterna- tives, but the same attributes must be ignored. It means that, when comparing gambles, all common outcomes that have the same probabilities will be handled by the subjects as irrelevant. One famous experiment which tested the de- scriptive validity of the axioms of expected utility theory were the Allais’ experiments. He found that under certain conditions subjects would violate this aforementioned in- dependence axiom. (Oliver, 2003). The Allais paradoxes were enough to cast some problem on Neumann and Mor- genstern’s theory. As Hertwig et al. (2004) summarized “Perhaps the most prominent violation is the Allais paradox (…) in which decision makers choosing between risky prospects do not conform to the independence axiom, according to which outcomes common to all prospects (and with known probabilities) should have no influence on the decision.” (p. 535) The empirical testing, experimental methods became the focus of decision making. Because various studies began to propose ways to generalized Allais paradox to explain data. During this period, most scholars were test- ed by psychologists and covered on the interdisciplinary area between psychology and economics. Important work includes weighted utility theory, rank-dependent theory and finally the famous prospected theory (Kahneman & Tversky, 1974). Most papers included an obligatory dis- cussion of how their theories could explain the Allais par- adox. There were a couple of datasets without clear con- clusion, but the experimental methods served as models for researches. Camerer (1998) summarized some periods after Allais’ finding. Only few of them are mentioned here, because those serve like limitations of the original Allais’ problem and either this research. Some researchers have focused on fitting theories to personal characteristics (see later Palmer et al. 2013), and risk taking can be one of these characteristics. Estimation of uncertainty and probabilities are subjective (personal). In addition, they are revealed by choices. One’s decisions are influenced by their earliest experiences; so-called subjective expected utility theories provided new experiments like Ellsberg “two color prob- lem”. Most experiments require people to weigh current problems against future outcomes, but those problems are relatively new and not likely or known by the subjects. Due to this, it seems that knowing how preferences are formed over time is also needed. Finally, it is important to understand the environment, and cultural background. Aforementioned findings brought new theories but impor- tance of Allais paradox does not disappear. 1.1.2 Allais paradox Allais used a standard gamble situation with money (fi- nancial) outcomes. The common consequence effect tested empirically how the subjects’ choices violated independ- ence. Allais argued that when the individuals are faced with the situations detailed in Table 1, they changed their preferences. Because, when we ignore common outcomes or consequences (i.e. outcomes with 0.89 probabilities), the outcome of Gamble A (in Case X) is equal to outcome of Gamble C (in Case Y); at the same time, Gamble B is equal to Gamble D. Despite of this most of the subjects chose Gamble A in Case X and Gamble D in Case Y. This 301 Organizacija, Volume 50 Number 4, November 2017Research Papers Allais Paradox was tested between subjects (they were di- vided into two groups related to the cases, and only one case was offered) and within subjects (i.e. both cases were offered for each subject) methods, as well. Here, I used the between subjects technique. The suggested amount of outcomes serves as a ref- erence points for the actors. Huck & Müller (2012) im- plemented three different treatments; one with the origi- nal version (high hypothetical payoffs); another with low hypothetical payoffs; and the last one with low but real payoffs. According to the authors, violations were sys- tematic and significant, but much lower when outcomes (stakes) are low; also, these were much lower in a labora- tory environment than on real fields. I agree with the au- thors who suggested that it would be more useful to study relative real outcomes rather than hypothetical absolute levels. Maybe changing the topic of the outcomes might solve this problem. However, Oliver (2003) tested it using health outcomes. He also verified Allais’ paradox in his empirical testing (he used health outcomes with the classic probabilities). He found that this effect was stronger when the participants also gave extended possibilities to provide explanations. I agree with Khalil (2015), who provided a relatively new reason for Allais problem and connected Allais paradox with shoplifting. He wrote, “Regretting a rational decision means changing your belief about that decision so that what appeared optimal at the time now ap- pears suboptimal. Concerning the Allais paradox (the cer- tainty effect), it is the outcome of people’s fear of regret. Fear of regret leads people to become over-cautious, using biased under-confident beliefs that lead them to compul- sive behavior such as seeking zero-risk options.” (Khalil, 2015, p. 551). As a result, Huck & Müller (2012) found significant differences between demographical characteristics of ac- tors; consequently, the undergraduate persons with lower incomes were less consistent. Da Silva et al. (2013) asked 120 students biological and demographical background before testing Allais paradox. I think their small number and widely heterogenous sample does not cover the needed statistical pre-requirements. However, the authors found “that women, in particular if not menstruating, are more “rational” in that they are less susceptible to the Allais paradox. Those born to not-too-young mothers are more rational, too. Those who father kids are also more rational. Those with high prenatal testosterone exposure are more rational. Those with many negative life events are also more rational. Anxious, excited, alerted, happy, active, and fresh people are also more rational. Left-handers and athe- ists are possibly more rational, too.” (Da Silva et al., 2013, p. 568). In my case, the limited size and non-representative sample did not allow testing deeper gender differences or family background, moreover, I did not focused in female respondents’ menstrual cycle or answerers’ mother’s age, parenthood or digit ratio as Da Silva et al. (2013) did. Van de Kuilen and Wakker (2006) tested empirically how Allais paradox works if subjects are given the oppor- tunity to learn by both thought and experience. They ar- gued that in both cases the number of expected utility vio- lations decreased significantly because learning can reduce probability transformations. With reputation and feedback, subjects learned and avoided violations of expected utili- ties. In this experiment, no learning possibilities or feed- back were given to the respondents. It used one of the typi- cal lab online methods but did not control the influences of the environment. Only the number of decisions / choices were calculated quantitatively and there were no measure- ment of how aware people are of the decisions they make and how the environment influences these decisions. It can be realized that if the common consequences (i.e. highlighted column in Figure 1) are removed Case X is equal to Case Y. However, if we consider all probabili- ties, it can also be realized that Case X is not risky because it contains a safe option with a sure outcome (Gamble A). Table 1: Allais’ paradox, where independences are highlighted (Own source) Probabilities Case X winnings probability 0,1 0,89 0,01 W in in gGamble A 100 1 100 100 100 Gamble B 100 0,89 500 100 0500 0,1 0 0,01 Case Y winnings probability 0,1 0,89 0,01 W in in gGamble C 100 0,11 100 0 100 0 0,89 500 0 0 Gamble D 500 0,1 0 0,9 Organizacija, Volume 50 Number 4, November 2017Research Papers 302 Table 1, which is based on the classic, original Allais ex- periment, was experimentally verified in this paper (de- tailed in chapter 2). Wu & Gonzalez (1998) categorized the different types of Allais paradoxes; they described three common conse- quence effect conditions: horizontal, vertical, and diagonal shifts within the probability triangle. The first two con- ditions are shifts in probability mass from the lowest to middle outcomes and middle to highest outcomes, and the third proposed weighting functions. That means individ- uals violate the independence axiom for small as well as large outcomes, for real as well as hypothetical payoffs, and for small as well as large probabilities, as a result the original expected utility theory is not able to explain choic- es under risk. They suggested that cumulative prospect theory (CPT) of Kahneman and Tversky can describe all three conditions. Later, Birnbaum (2007) gave an extended and deeply detailed mathematical interpretation of various Allais paradoxes. He suggested a new descriptive model, the transfer of attention exchange model (TAX) and com- pared it with aforementioned subjectively weighted utility theory (SWU) (Camerer, 1998) and lower gains decompo- sition utility model (LGDU). He used informational asym- metrical problems (e.g. sellers and buyers in negotiation or bargaining) and represented endowment effects in Allais situations. This paper will not compare various models of Allais paradoxes. However, Birnbaum’s finding (2007) is a pos- sible improvements for this paper. In spite of mathemati- cal terms helping us to underpin common consequences, (probabilities and outcomes are turned into equation), to tell the truth, I absolutely agree with Allais: “The use of even most sophisticated forms of mathematics can never be considered as a guarantee of quality.” (Allais, 1988). As a result, in this paper, the original descriptive model was tested empirically with two different owners’ positions. It used the classic model of preferences using high payoffs with certain and uncertain outcomes offered to owners or on behalf of another. I applied a static instead of a dynamic model, because according to Andreoni & Sprenger (2010), risk preferences are not time preferences. In the classic experiments, no property problems were taken into account, but I was interested in any connections between predictable, seemingly irrational heuristics. The following chapter discusses and details the problem of properties. 1.1.3 Ownership Although actors usually take risks, where the target of the purchases or capital belongs to other actors, i.e. the previ- ous actors, they make decisions about someone else’s in- terests. The relationship of agency is one of the common- est modes of business interactions. However, mainstream economic models do not handle endowment effect or the problem of interests. Only after the findings of Thaler (1980), was endow- ment effect widely observed. Endowment effect means that goods one owns are valued higher than other goods not held in endowment. This effect is mostly interpreted (like in the previous chapter) as the result of loss aversion (Kahneman & Tversky 1979). It seems Kahneman and Tversky work is universal model for both problems. Ac- tors value losses (negatively framed outcome of a risky situation) higher than gains (outcome above the reference point) during the evaluation of choice options. Moreover, if somebody owns a product, the prospect of losing or selling is equal to losses. Dupont & Lee (2002) tested this wedge, they verified Thaler’s findings and they highlight- ed that the majority of the people questioned in surveys failed to give a price that would compensate them for tak- ing on more risk. Interestingly, the ownership itself can refer not only to objects. Zoltay Paprika & Nagy (2012) found that, e.g., the ownership structure of companies played an important role when they examined how creativity was assessed on the job market. Since it was divided into the following cat- egories - Hungarian, foreign and mixed ownership - based on a similar approach, it could be worth examining the en- dowment effect in international dimensions as well. Originally, the endowment effect is robust and well-documented in results of experimental economics. This effect introduces a huge gap between the prices at which one is willing to sell or buy a good owned by them. This discrepancy between the maximum willingness to pay for a good and the minimum compensation demanded to part from the good causes a principal agent hierarchical situation. Moreover, the question is given: What about those who do not own any items but behave as an owner might? The first author who studied this field was Arrow (Arrow, 1984). Based on his theory, Ross (1973) gave a widely mathematical explanation about agency problem. The principal-agent literature is concerned with how the principal (owner) can motivate his/her agent (non-owner) to act in the principal’s interests: therefore the principal cannot observe the actions themselves. The agents must choose an action from a number of alternative possibili- ties (in my research only two possibilities were offered). As Arrow (1984) suggested, the outcome (possibility) is affected - but not completely determined - by the agent’s behaviour. Both principal and agent are assumed to be making decisions optionally in view of their own needs. In sum, the agents will play either fair or not fair. Although in this paper principal – agent theory was referred, here can be found a simple hypothetical decision change. My approach, however, differs from that of Arrow (1984) in several ways. The original situation is more complicated. Bakacsi (2015) summarized the characteristics of princi- pal – agent problem which are the following: (1) both the 303 Organizacija, Volume 50 Number 4, November 2017Research Papers agent and the principal manage and control a stock that is important and represents a special surplus for them; (2) the principal owns and control resources and the agent adds value; (3) they have different aims both are selfish and ra- tional that leads to so called opportunistic behaviour; (4) participants made a previous contract based on the bar- gaining power of the agent but; (5) the agent plays fair or not fair (i.e. he/she is opportunistic). The principal is able to control this problem in three different ways with use of (a) controlling system, (b) motivation and (c) fixed behav- iour norms. According to him, this situation is a simple be- haviour-economical, decision theory paradigm, where the actors are peers. Reb & Connolly (2007) underlined that the subjective ownership by independently manipulating factual ownership (i.e., what participants were told about ownership) and physical possession of an object influence each other. Their results showed that the endowment effect might be primarily driven by subjective feelings of own- ership rather than by factual ownership. In other words, it the development of a subjective sense of endowment and possession lead actors better, rather than a legal entitle- ment. Due to this, friendship can serve as a perfect exam- ple for subjective sense of endowment. Moreover, Chang et al. (2016) found interactions between altruist and egoist depending on individual heterogeneity. They found that actors (the givers) became more altruistic and willing to help if they know the other subject (the receivers). Falk et al. (2008) underlined that fair-minded per- sons are likely to have important economic effects based on their fairness. Because of these issues, it is advanta- geous to group any agents’ behaviour. Hámori (2003) differentiated various types of altruism, here reciprocal altruism was assumed because friendship, businessman’ agreement, partnership are typical examples of recipro- cal altruism. Small & Loewenstein (2003) investigated laboratory studies, they maintain that many decisions are driven by arguments or reasons, rather than value-based calculations of options, and friendship is a pretty important reason. They found that determined victims received more money; that means when the victims were determined the subjects donated more money. Regarding the theories, this paper’s groups (roles) are the following: • Indifferentists or Same safe choices: are those who do not take risk for themselves nor on behalf of a friend. They select the same safe choices two times, i.e. in both cases. • Good friends: are those who play risky for them- selves but avoid risk in place of a good friend (protect their gains). • The braves or Risk-Takers: are those who take risk in both situations (they are not influenced by the identi- ty of the owner.) • Agents against principal: avoid risk when they have to decide about their money but they take risk on be- half of their friends. Table 2 helps us to clarify each groups. This problem was tested earlier (see Kolnhofer-Derecskei, (2017) - this paper dealt only with the endowment prob- lems, Allais paradox was skipped). Linking Table 1 and Table 2, I was able to measure the connection between en- dowment effects and Allais paradox. Conceptual model of this research is presented in Fig- ure 1. The two topics provide two separated hypotheses (H1; H2); a third hypothesis (H3), can be connected and compared to the previous two. Table 2: Survey variations (Own source) Owner Self Good friend Situation Certain Uncertain Certain Uncertain Same safe choices INDIFFERENTIST X X Good friends FRIEND X X Risk taker BRAVE X X Principal agent AGENT X X Organizacija, Volume 50 Number 4, November 2017Research Papers 304 2 Methods 2.3 Research questions and hypotheses Separating the two aforementioned behavioural econom- ics’ heuristics allowed the following hypotheses to be test- ed: H1. Allais paradox will be interpreted in both cases. There will not be any differences according to who controls the hypothetical outcomes (i.e. the subjects need to decide for themselves or on behalf of their good friend). H2. The subjects will respond differently when they need to decide about their own interests rather when their friends’ interests are concerned. The actors can be identified by the aforementioned types, see Table 2. Linking together both above detailed topics, finally the fol- lowing hypothesis was observed: H3. When a sure, safe outcome with 1.0 probability is of- fered to the subjects they take more risk on behalf of their friends and protect their own chances; i.e., they will not be a risk taker on their own behalf (here Allais variant A) by comparison with the other Gamble (here Allais variant B). Due to the sample selection mainly robust (non-sensitive) non parametric test (with significance level 0.05) and sym- metric measures were used with SPSS 22. 2.4 Methods The original version was implemented with high hypo- thetical payoffs. It was used between subjects form; that means the respondents were divided into two groups based on their birthdates. Charness et al. (2012, p. 1) defined this technique as the following “In a “between-subject” de- signed experiment, each individual is exposed to only one treatment. With these types of designs, as long as group as- signment is random, causal estimates are obtained by com- paring the behavior of those in one experimental condition with the behavior of those in another.” They suggested that this design is more likely and preferred in field of social sciences than within-subject design. In this research, the sample was divided into two different groups. this design provides half the amount of information given the sample size but as Charness et al. (2012, p. 8) suggested, “Between analyses are statistically simple to perform as long as ran- dom assignment is achieved across groups”. In contrast, Birnbaum (2008) advised a different assessment method. According to him, a large number of replications with a large number of properties tested within the same person can only help to analyse personal differences. On the other hand, Allais followed the between sub- jects methodology with no replications nor feedback. In this case, one group with even birthdates got the first Al- lais’s gamble (variant A) which also contains a safe sure outcome. The other one (odd birthdates) received the other Allais’s gamble version (variant B). Both offers can be seen in Figure 2 and detailed in the aforementioned Table 1. The Figure 1: Conceptual model based on theoretical background (Own source) 305 Organizacija, Volume 50 Number 4, November 2017Research Papers experiment was a between-subjects survey (two groups) and the classic version with high hypothetical payoffs was used. It took place online (so called lab experiment situa- tion). No feedback or reputation possibilities were given to the subjects. This experiment was only a part of a wider research. A pilot version was tested and evaluated earlier (see Kol- nhofer-Derecskei (2017)) and the original text can be found in the Appendix. The survey (i.e. Google Form) was shared electronically among the partner universities of Obuda University Keleti Faculty of Business and Man- agement; original, whole texts of the questionnaire can be reached on the Internet1. Figure 2: Allais’ gambles (Own source) 1 1 Link to survey is: https://goo.gl/forms/AY2OIMFstUZ6KnRe2 Figure 3: Sample statistics regarding ethnicity (capita) (Own source) Organizacija, Volume 50 Number 4, November 2017Research Papers 306 2.5 Sample After clearing and clarifying data, the evaluated number of answers is 186. As mentioned earlier, my chosen pop- ulation (target group) was university students studying at any partner university (see Figure 1). It is a fact that current university students will be future employees, and higher education institutions are facing serious challenges all over Europe. As well as the high rate of unemployment, lack of professionals, the decrease in the number of young- er generations, the expected quality and content of knowl- edge has also changed. Therefore, we need to know their behaviour (Kádár-Reicher 2016). However, the sample was multicultural (different eth- nicities) but the subsamples’ sizes do not allow concentra- tion on national comparisons. The subjects were divided into two groups according to the date of birth (even number variant A contains 89 persons, odd number variant B has 97 persons). The min- imum age of respondents was 19 years old, the maximum 57 years, and an average of 24.51 years of age. There were 80 males and 106 females. Overwhelmingly, respondents were studying business (n=124) or engineering (n=52); 10 persons were from other faculties. Study levels are the fol- lowing: 121 persons attend bachelor full-study programs; 60 persons master studies and there were five doctoral stu- dents. 2.6 Hypotheses testing In this chapter, any hypotheses are being tested step by step. H1. Allais paradox will be interpreted in both cases. There will not be any differences according to those who mod- elled the hypothetical outcomes (i.e. the subjects need to decide for themselves or on behalf of their good friend). Comparing both gamble variations, there were no signif- icant differences between them regarding the ownership. As a result, almost the same distribution can be seen in Table 3. Most of the subjects chose the first safe option in the first gamble and in the frame of the second variant they preferred the second one. That mirrors Allais’ origi- nal findings. In both cases there was significant symmet- rical measurement, but weak connections were found e.g. Cramer 0.223 (p=0.02). H2. The subjects respond differently when they need to decide about their own properties rather when their friends’ properties are concerned. The actors can be divided related to the aforementioned types, see Table 2. All the aforementioned roles (types of subjects) can be identified with the following frequencies (see Table 4). Around 70 percent of the subjects chose the same options for themselves and on behalf of their friends, half of them voted for the risky (certain) and another half for the uncer- tain (not risky) outcomes. Relating tp Huck & Müller (2012), I was interested in gender differences as well. Although there were no signifi- cant differences (using non-parametric Mann-Whitney test sig. level 0.05 Asym. sig p= 0.199), the crosstabs analysis could be interesting because men (males) took risk more often (see Table 5). But Da Silva and colleagues findings cannot be verified. H3. When a sure safe outcome is offered to the subjects they take more risk on behalf of their friends and protect their own win (i.e. they will not be risk taker on behalf of themselves, here Allais variant A) compared with the other gamble (here Allais variant B). This hypothesis can be accepted as well, because in the A Table 3: Frequencies of Allais (capita) (Own sources) Number of respondents Allais A Winnings Probability Self Good friend Gamble A 100 1 61 61 Gamble B 100 0.89 28 52500 0.1 0 0.01 Allais B Winnings Probability Self Good friend Gamble C 100 0.11 45 43 0 0.89 Gamble D 500 0.1 52 54 0 0.9 307 Organizacija, Volume 50 Number 4, November 2017Research Papers case (with sure outcome) most subjects (18+43=61 per- son) voted for the certain outcome rather than in B (un- certain) gamble (n=12+31=43). Other connections (e.g. relationships with level of studies or main subjects) were not confirmed. 3 Discussion The goal of this paper is then twofold. First, it was es- tablished a conceptual link between Allais-type behaviour and ownership problem. Second, Allais axiom was used to characterize different roles. Since the original Allais ex- periment, several variations were tested, some of them are detailed above, and others are only mentioned. Nonetheless, in this paper the subjects faced with the original Allais situation. This research investigated how the subjects behave in the same situation but on behalf of their friends, so the Allais paradox (widely heuristics) and ownership problem (widely endowment economy) were connected. Earlier also Birnbaum’s paper (2007) proposed en- dowment effect and Khalil (2015) dealt with principal and agent framework, as well. I agree with Khalil’s explana- tion “The principal and the agent have identical prefer- ences. They differ only with respect to their beliefs. The principal’s beliefs are optimal in the sense of being the best given the information. The agent’s beliefs are subopti- mal; they are based on over-estimation of the likelihood of success. Consequently, the agent recommends to the indi- vidual impulsive (suboptimal) actions, while the principal recommends to the individual optimal decisions.” (p. 558). Because my results underlined it, summary of the re- sults can be found in Table 7. Finally yet importantly, we must ask what the reasons are for the Allais paradox also happening when the sub- jects take risk on behalf of somebody else. According to Oliver (2003), I summarized some possible explanations for Allais effect. The first explanation is the classic Kahneman & Tver- sky’s loss aversion effect (prospect theory). These Nobel Table 4: Crosstabs according roles (capita) (Own source) Table 5: Crosstabs according gender and roles (capita) (Own source) Table 6: Crosstabs according roles and Gamble Variant (capita) (Own source) Roles Frequency Percent (distribution) Agent 23 12.4 Indifferent 74 39.8 Good friend 30 16.1 Risk taker 59 37.7 Total 186 100 Roles Gender Total Male Female Agent 7 16 23 Indifferent 32 42 74 Good friend 12 18 30 Risk taker 29 30 59 Total 80 106 186 Roles Allais variant Total A B Agent 9 14 23 Indifferent 43 31 74 Good friend 18 12 30 Risk taker 19 40 59 Total 89 97 186 Organizacija, Volume 50 Number 4, November 2017Research Papers 308 Prize-winning authors presented a critique of expected utility theory as a descriptive model of decision making under risk and developed an alternative model. According to their work, people tend to avoid risk when a positive frame is presented, but they seek risks if a negative frame is utilized. This effect may be strong in the choice between the two situations. The subjects have the possibility to avoid the possibility of winning nothing. The amount of money offered is quite high and serves as a reference point. The second reason can be that when certainty is antic- ipated, disappointment may confuse the original expect- ed utilities. This cognitive process applies to probabilities rather than the outcomes. My findings indicate that cer- tain and uncertain consumption are evaluated differently; I found significant differences between risky (uncertain) and non-risky (certain) Allais variations. The perceived level of risk also influences our decision; making a decision un- der risk, where the possibility of losing our ownership is higher than the risk taken on behalf of our friend, makes us risk averse and confuses our preferences. In this experiment, significant differences can found between deciding for ourselves and deciding in place of a friend. My findings assume that people decide systemati- cally in different ways about their own property rather than about others’. They are more risk averse when the outcome is theirs but will take risk on behalf of others. At the same time, this verifies the Agent- Principal Theory and the En- dowment effect. In the results, I need to underline that in the second situation the safe wins were more attractive for the sub- jects than the feeling of risk. Due to this, in variant B they focused more on the amount of safe winnings (i.e. USD) than the probability of win options (i.e. percentage). In the case of variant A, it was reversed. 4 Limitations of the study I agree with Huck & Müller (2012) that “it appears that lab results will draw a too optimistic picture. The population at large, it turns out, is less consistent with EUT than student samples are.” (p. 276). Van de Kuilen & Wakker (2006) summarized the limitations of Allais paradox, as they said, “our study gives the first pure demonstration that irration- alities such as in the Allais paradox are less pronounced than often thought” (p. 155). As it was underlined earlier, it is typical that the subjects had never faced these situations before, so their decisions could be based on simple misun- derstandings or misinterpretations rather than on irration- alities. Thinking in probabilities is also unfamiliar for the subjects. Most of the experiments (like the present paper) use poor descriptions instead of any visually or numerical- ly understandable overview. Hertwig et al. (2004) called this form ‘decision from description’. They proposed, “de- cisions from experience and decisions from description can lead to dramatically different choice behavior.” (Her- twig et al. 2004, p. 534). Their results suggest that direct experience of outcomes leads to underweighting, i.e., in decisions based on experience, rare events had less impact than in decisions from descriptive. At the same time, the- oretical and hypothetical choices do not motivate subjects to reveal their true preferences. Fan (2002) tested three small-payoff variants on the Allais paradox questions. For each variant, the probabilities were the same as in the orig- inal Allais questions; only the payoffs differed. There were both hypothetical and real payoffs and also negative pay- offs. She found that whether payoffs were hypothetical or real, Allais paradox behaviour largely disappeared. As she summarized the behaviour was closer to simple expected value maximization when payoffs were real than when they were hypothetical. Other side of the coin is that altruistic behaviour can be motivated. Fehr & Fischbacher (2003) highlighted the in- teraction between altruists and selfish subjects with human cooperation. Because a minor group of altruists can force a majority of selfish subjects to cooperate or, conversely, a few egoists can influence a large number of altruists to defect. They tested the effect of punishment and reward in case of altruism. Calabuig et al. (2016) investigated effect of punishment in an experiment with endowment heter- ogeneity. Using within-subjects designs they found that endowment effect disappear with punishment. Therefore, punishment has an opposite psychological effect on intrin- sic motivation. Friendship and subjective positive feelings between owners and decision makers improve rationality through shared responsibility (e.g. unwritten businessper- sons’ agreement). According to Camerer (1998), some studies concen- trated on fitting theories to individuals. As it was men- tioned earlier risk taking preferences might be take in Table 7: Hypotheses testing (Own resources) Hypotheses Results H1. Allais paradox was be interpreted in both cases. Accepted H2. The subjects responded differently when they needed to decide about their own properties rather when their friends’ properties were concerned. Accepted H3. When a sure safe outcome was offered to the subjects, they took more risk on behalf of their friends rather than own. Accepted 309 Organizacija, Volume 50 Number 4, November 2017Research Papers account, Palmer et al. (2013) detailed how individual dif- ferences can be measured but they mentioned cross cul- tural differences, as well. Baillon et al. (2016) compared the rationality of group decisions with individual decisions under risk. Participants were required to choose between two options that based on Allais problem. They found that communication helped to find more moral rational deci- sions, and the groups violated less axioms and were more rational than individuals did. It seems that group decision drives to more rational choices because solves the feeling of uncertainty. It should be underlined that some research- ers confuse risk and uncertainty (like Robison at al. (2010) used the terms: decision under uncertainty, in contract Kahneman & Tversky (1979 used decision under risk) but they are not equal to each other. In this paper these two phenomena will not be differed (please find it detailed in Figure 4: Sample statistics regarding ethnicity (capita) (Own resources) Figure 5: Sample statistics regarding ethnicity (capita) Based on Hofstede Centre’s results) Organizacija, Volume 50 Number 4, November 2017Research Papers 310 Kolnhofer-Derecskei & Nagy 2017). Here I just agree with Andreoni & Sprenger (2010) that Allais problem might be connected with uncertain and certain effect. Managing un- certainty among different cultures is measured by Hofstede (2017). In his definition, uncertainty is the following: “The Uncertainty Avoidance dimension expresses the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity.” (Hofstede, 2017). UA Index- es of participants are indicated in Figure 4. These results based on findings of Hofstede’s Centre2. In this paper, ethnicity was related to the different roles. That means there were significant differences in both cases (i.e. Group A and Group B) regarding nations. (Kruskal-Wallis with sig. level 0.05 p<0.005). However, these results can be caused by the non representative sam- ple selection methods. Descriptive histograms in Figure 4 show some differences among participants’ cultural back- grounds. Comparing Figures 4 and 5, it can be realized that in case of Albania (where the number of the participants was also acceptable) should be some relationship. UA Index is not so high which can explain the salient number of risk-takers. 5 Conclusion Yet, what is the evidence of this paper? The importance of learning and knowledge helps us to avoid irrationalities due to basic misunderstanding and lack of motivation. As Birnbaum (2008) suggested a long experiment is possible that people might learn stochastics evidences. That is the reason why it is useful to observe this old-fashioned effect. If we find predictable patterns of ir- rationality in human behaviour, then we can improve eco- nomic theory. I agree with Maletič et al. (2017) that the increasing turbulent business environment means that or- ganizations are constantly faced with either uncertain and/ or competitive environments. Hence it is recommended to adopt and use such kind of managerial practices (e.g. Mal- etič et al. (2017) suggested PAM) and KPIs which help and control uncertain and risky decisions. Closing this chapter, I would quote Herbert Simon (1978 p. 361), who said the following in his Nobel lecture “I have perhaps said enough also with respect to the lim- itations of these new constructs to indicate why I do not believe that they solve the problems that motivated their development.” I hope that this paper helps to understand how psychological issues can improve decision makers in a business area. Anknowledgement This research was supported by the ÚNKP-16-4/III. and ÚNKP-17-4/1 New National Excellence Program of the Ministry of Human Capacities. The author is thankful for the help of Prof. Wlodzimierz Sroka. References Allais, M. (1988, December 9). An Outline of My Main Contributions to Economic Science. Lecture notes distributed in Nobel Lectures. France, Paris. http:// www.nobelprize.org/nobel_prizes/economic-scienc- es/laureates/1988/allais-lecture.html, http://dx.doi. org/10.1007/BF00134634 Andreoni, J., & Sprenger, C. (2010). Certain and Uncer- tain Utility. 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Journal of Economic Behavior & Organ- ization 1(1), 39-60, http://dx.doi.org/10.1016/0167- 2681(80)90051-7 Tversky, A., & Kahneman, D. (1974). Judgement under Uncertainty: Heuristics and Biases. Science, New Se- ries, Vol. 185, No. 4157. (Sep. 27, 1974), pp. 1124- 1131, http://links.jstor.org/sici?sici=0036-8075%2819 740927%293%3A185%3A4157%3C1124%3AJUU- HAB%3E2.0.CO%3B2-M Van de Kuilen, G. & Wakker, P. P. (2006). Learning in the Allais paradox. Journal of Risk and Uncertainty. 33(3), 155–164, http://dx.doi.org/10.1007/s11166-006-0390- 3 Wu, G. & Gonzales, R. (1998). Common Consequence Conditions in Decision Making under Risk. Journal of Organizacija, Volume 50 Number 4, November 2017Research Papers 312 Risk and Uncertainty, 16, 115–139. Zoltay Paprika, Z., & Nagy, V. (2012). Assessment of Cre- ativity on the Job Market. Procedia Economics and Finance, 3, 166-181, http://dx.doi.org/10.1016/S2212- 5671(12)00136-0 Anita Kolnhofer-Derecskei is working as Assistant Professor at Óbuda University in Budapest, Hungary. She teaches various courses on business economics and management, statistics and research methodol- ogy on bachelor, master and PhD level. Her research interest includes economic psychology and behavioural economics. Her research work and PhD dissertation focused on the organizational creativity in 2015. As a member of some scientific committees and journals’ guest editor, she participated in more national research projects and two times won the Hungarian New Nation- al Excellence Program’s internship. Indiferentni, dobri Samaritan, hrabri in agent v položaju Allais-ovega paradoksa: kako učinek lastništva vpliva na našo odločitev v primeru Allais-ovega paradoksa? Ozadje in namen: Glavni ekonomski modeli ne upoštevajo lastništva, čeprav učinek lastništva kažejo ugotovitve vedenjskih ekonomistov. Ta učinek pomeni, da je blago, ki ga nekdo ima v lasti, vrednoteno višje od drugega blaga, ki ni v njegovi ali njeni posesti. Obenem se literatura glavnega agenta ukvarja s tem, kako lahko glavni agent (kot je n.pr. delodajalec) motivira svojega agenta (recimo delavca), da deluje tudi v interesu glavnega agenta. Poglavitni problem je, da lahko delovanje v interesu nekega drugega vpliva tudi na naše vrednote. Poleg tega učinek lastništva vpliva tudi na glavnega agenta. Obe situaciji je mogoče obravnavati kot tvegano odločitev. Tveganje namreč zmede našo racionalnost na predvidljiv način. Oblikovanje / metodologija / pristop: V članku raziskujem, kako so se študentje (n = 186 odgovorov) iz različnih kulturnih okolij odločali v tveganem finančnem položaju, s posebnim ozirom na klasične Allais-ove igre. Predstavila sem tudi njihove preference glede gotovih in negotovih izidov upoštevajoč lastnika končnih izidov; to je, kako se odločijo, ko se odločajo za sebe ali za enega od svojih najboljših prijateljev. Eden od znanih eksperimentov, ki so te- stirali veljavnost pričakovane uporabne teorije aksiomov, je bil Allais-ov eksperiment. Allais je obravnaval verjetnosti in izide v izrazito hipotetičnih situacijah v finančnih igrah. Zanima me, kaj se zgodi, ko udeleženci tvegajo v imenu drugih. Uporabljena je bila tehnika med subjekti na razširjenem večkulturnem vzorcu. V zvezi z dvema različnima temama smo testirali tri hipoteze (1) prva temelji na Allais-ovem paradoksu, (2) druga na percipiranem lastništvu in (3) na primerjavi obeh pojavov. Rezultati: Rezultati kažejo, da so se subjekti drugače odzvali, ko so se morali odločiti o svoji lastnini, kot takrat, ko so odločali o lastnini drugih. Ko je bil subjektom ponujen tudi varen izid, so sprejemali večje tveganje v imenu svojih prijateljev, kot v svojem imenu. Subjekti niso upoštevali, da bi morali prezreti lastništvo. Tako je bil potrjen Allais-ov paradoks. Zaključek: V članku je bila vzpostavljena je bila konceptualna povezava med vedenjem vrste Allais in problemom lastništva. Drugič, Allais-ov aksiom je bil uporabljen za označevanje različnih vlog. Poznavanje predvidljivih vzorcev navidezno iracionalne hevristike v človeškem vedenju lahko izboljša ekonomsko teorijo. Hkrati to znanje nam poma- ga preprečiti neracionalne odločitve. Ključne besede: Allais-ov paradoks; učinek lastništva; problem glavnega agenta; tveganje 313 Organizacija, Volume 50 Number 4, November 2017Research Papers Appendix Allais variant A (if the birthday number of the respondents is even) Suppose you have just won 100 million USD in a gamble. What would you do? It’s up to you whether you • keep a sure gain of 100 million USD and quit the game OR • you go on, continue the gamble, where there’s a 10% chance of 500 million; 89% chance of 100 million; 1% chance of nothing. Suppose one of your best friends is in the same situation but you have to decide instead of him/her. Which would you choose for him/her? • He/She has to quit and keep a sure gain of 100 million USD • He/She has to continue the gamble with the before mentioned assumptions / conditions. Allais variant B (if the birthday number of the respondents is odd) Two gambles are offered to you but you can take part only in one of them. Which do you prefer? • With a 11% chance you win 100 million USD and with a 89% chance you win nothing OR • There’s a 10% chance that you win 500 million USD and an 90% chance that you win nothing. Suppose one of your best friends is in the same situation but you have to decide instead of him/her. Which would you choose for him/her? • With a 11% chance he/she wins 100 million USD and with a 89% chance he/she wins nothing OR • There’s a 10% chance that he/she wins 500 million USD, and 90% chance that he/she wins nothing. Organizacija, Volume 50 Number 4, November 2017Research Papers 314 DOI: 10.1515/orga-2017-0023 Hotels and Halal-oriented Products: What Do Hotel Managers in Slovenia Think? Metod ŠULIGOJ1, Helena MARUŠKO2 1 University of Primorska, Faculty of Tourism Studies – Turistica, Obala 11a, 6320 Portorož/Portorose, Slovenia metod.suligoj@fts.upr.si (corresponding author) 2 Independent consultant, Vurnikov trg 4, 4320 Radovljica, Slovenia Background and Purpose: Tourists from the Islamic world are significant stakeholders in the tourism market. The purpose of this paper is to identify the key aspects of halal tourism in connection with the hotel industry. Furthermore, we want to determine whether hotel managers are familiar with halal certification and on what basis they would opt for it. Design/Methodology/Approach: The research focuses on halal goods, services, and facilities, in general, and spe- cifically in Slovenian hotels; concepts, contemporary trends, and the situation in Slovenia are presented. In response to the literature review, we applied the analysis of the factor loadings to define the important factors that influence the decision-making process; by applying PCA, we reduced the dependent variable to a single factor (although predic- tions were slightly different). Findings: The most important elements in the adoption of the certificate are the simplicity and efficiency of the pro- cedure itself and the fact that the process does not require major financial investments. The element that significantly influences the managers’ decision-making process is the possibility of adjusting to the standard of the certificate. Conclusion: The paper’s main contribution is to deepen the perspective of the development of tourism in an area that remains a relatively undeveloped and unknown niche within the Slovenian tourism/hospitality industry but very promising in the global context. Keywords: hotel managers; halal certificate; Islam; thematic offer; Slovenia; Croatia 1 Received: March 10, 2017; revised: September 14, 2017; accepted: October 3, 2017 1 Introduction Muslim tourists are significant stakeholders in the tour- ism market, although the Western world until recently has viewed them, for example, only as pilgrims to Mecca. Un- doubtedly, in recent years there have been major shifts in the travel habits of the Muslim population. Muslim tourists are one of the fastest growing segments in the world, sec- ond only to Chinese tourists (Aladjem, 2012). They can be defined as guests who are just entering the global tour- ism market, with increased purchasing power and a strong desire to pursue their social status (Onislam.net, 2010), seeking a holiday in places where they can follow their religious principles and have access to services which are in accordance with their lifestyle (Aladjem, 2012). According to recent research of Dinar Standard (2012) in 2011, Muslim tourists spend about 102 billion Euros on their travels. Moreover, they are characterised by a domi- nant share of young people, since nearly half of the world’s Muslim population is younger than 24 years. By 2030, the global proportion of young Muslims will grow twice as fast as the share of young people in non-Muslim countries (Baker, 2011); considering the entire world Muslim popula- tion, which has 1.8 billion people, and is rapidly increasing and is expected to represent 30% of the world population by 2025 (Dinar Standard, 2012). Young people are edu- cated, and eager to gain new knowledge and discover new places (Baker, 2011); more than 52.7% of Muslim tourists 315 Organizacija, Volume 50 Number 4, November 2017Research Papers travel for leisure and entertainment, with 50% of them pre- ferring halal services, 30% would seek services that are fully consistent with sharia law (Dinar Standard, 2012). The data show that it is not a narrow market niche, but a significant trend that will have a strong impact on the glob- al tourism sector in the coming years (Razalli, Yusoff & Roslan, 2013). The specific needs of Muslim guests raised the demand for adjusted products and services, which are known as ‘halal’. This is defined as a sub-category of re- ligious tourism and includes airlines, travel agencies, tour operators and hotels (Henderson, 2010). The concept of halal appeared more frequently in connection with food, which is prepared in accordance with Islamic principles,1 but today it indicates a wide range of different products and services, e.g. financial operations, cosmetic products, vaccines, and last but not least tourism services (Piangpis, Oraphan & Hamzah, 2014). Consequently, in recent years, many countries in the world have shown an incrementally increasing interest in the concept of halal tourism (Battour, Ismail & Battor, 2011). Therefore, the primary purpose of this study is to present the fundamental aspects of halal tourism in connection to the hotel industry. Since 1991,2 Slovenian tourism has developed and grown with above-average dynamics. It has contributed almost a 13% share of the GDP in recent years and em- ploys approximately 13% of all employees in the country. It is very internationally oriented: the main sales markets are Italy, Austria, Germany, and Croatia. Around 60% of tourists use hotel accommodation, followed by campsites (Slovenian tourist board, 2017; Slovenian tourist board, n.d.). However, in Slovenian tourism, the topic of halal products and services is completely unexplored and was not included in the 2012-2016 Slovenian Tourism De- velopment Strategy (The Government of the Republic of Slovenia, 2012) or The 2017–2021 Strategy for the Sus- tainable Growth of Slovenian Tourism (The Government of the Republic of Slovenia, 2017). For example, in Feb- ruary 2016, only five halal-certified hotels were operating. The fieldwork of this study was conducted in the fall of 2015 in order to determine the attitude of managers of hotels with at least three stars toward services for Mus- lim guests. Our search in COBISS (Co-operative Online Bibliographic System and Services), HRČAK (Portal of Scientific Journals of Croatia) and in large international bibliographic indexes such as Emerald, Elsevier, and the Taylor & Francis Group indicates that no research of this kind has been published. 2 Islam as the basis for the tourist engagement Islam is a religion that strongly encourages travel. Among Muslims, it is believed that they are closer to God when they travel and that their prayers during the journey are more effective (Timothy & Olsen, 2006; Kovjanic, 2014). In Islam, historically speaking, there were many differ- ent types of travel with significant religious roles, which changed and adapted over time (Henderson, 2003). It is especially important to emphasise that the act of travelling in Islam is ‘purposeful’, with a strong emphasis on the reli- gious impulses: to strengthen the relationship between the broader Muslim community or umma (Ummah, Ummet) and the continuation of the long history of Muslim travels (Henderson, 2003; Kovjanic, 2014); the Muslim religion is a way of life (Boisard, 2002) or life itself (Nasr, 2007). In compliance with sharia law, Muslims place a high value on the tourist experience and rely heavily on the ethical dimension and tradition, which is not always typical for the tourists from the Western world (Sureerat et al., 2015). When Muslims decide on tourist destinations, they particularly pay attention to halal food (67% of them), the overall value (53% of them), and the experience being suit- able for Muslims (49% of them) (Baker, 2011); when they travel to distant places, they travel in groups, which is also encouraged by the Islamic tradition. Thus, the majority of Muslims around the world decide to travel in the company of family members and friends (Timothy & Olsen, 2006, p. 199; Aladjem, 2012). Hence, their holiday calendar is designed differently than in other cultures/religions, where most people go on vacation during certain seasons or times of the year (Aladjem, 2012): Muslims are guided by the lunar calendar and follow the phases of the moon, and thus go on vacations in different periods of time and to different locations/destinations. Ramada month (Ramazan) with the feast of Eid al-Fitr (Bajram) and the feast of Eid al-Adha (Kurban Bairam) are the central events in the traditional holiday calendar when many Muslims choose to travel. 3 Halal (tourism) and hotels Halal tourism is defined as a sub-category of religious tour- ism that includes airlines, travel agencies, tour operators, hotels (Henderson, 2010), food and beverage providers, logistics, finance, tourism packages, SPA centres (Zulkifli et al., 2011) and any other guest activities regarding the consumption of products and services adjusted to Islamic principles (Duman, 2011). Irrespective of the product clas- sification, the main attributes of halal tourism are based on factors that satisfy the basic religious needs of Mus- lim guests: access to halal food, prayer facilities (Battour, 1 1 More can be found in Food and Agriculture Organization of the United Nations (FAO) (n.d.). 2 The year of the proclamation of the independence of Slovenia. Organizacija, Volume 50 Number 4, November 2017Research Papers 316 Ismail & Battor, 2001; Hashim, Murphy & Muhammad, 2007), discrete dress code (Henderson, 2010), ban on the sale of alcoholic beverages, and the prohibition of gaming services (Din, 1989). The hotel industry has established the concept of (a) the halal hotel that is fully operational in accordance with Islamic principles3 and (b) the halal-friendly hotel, which, in addition to its existing range of services, also offers ser- vices tailored to Islamic principles. The halal hotel is not restricted to supplying only halal food and drinks, since all hotel services/activities are carried out in accordance with Islamic principles (Sureerat et al., 2015). Henderson (2010) was the first to indicate the basic characteristics and attributes of halal hotels. Halal hotels attract mostly con- scious guests who respect and appreciate the environment, culture, heritage, well-being, and the green character of the place (Al Bawaba, 2007), which could be more profitable than offering standard hotel services (Morgan, Pritchard & Piggott, 2002). In any case, the halal certificate is a suc- cessful marketing tool for promoting halal trademarks or services (Rajagopal et al., 2011), giving the halal-certi- fied hotel an added competitive advantage for attracting foreign and domestic guests (Zaliani, Omar & Kopong, 2011), whether they are religious or not.4 The process for obtaining the halal certification has a favourable effect on the six dimensions of the performance of the hotel: the qualifications of the hotel staff, employee motivation, in- creased the range of skills of employees, better efficiency, environmental awareness, and economic wisdom (Razalli, Abdullah & Yusoff, 2012). Obtaining the halal certifica- tion, in fact, depends on the adjustment of certain hotel processes, greater emphasis on quality control, and the training of hotel staff. The global halal tourism market in 2013 reached a val- ue of around 140 billion USD, which represents approxi- mately 13% of the total world tourism industry and is 60% more than three years before (Crnjak, 2014); according to Rezidor Hotel Group it is estimated to increase by 20% in the next decade (Saad, 2013). In addition to its rapid growth halal tourism also brings guests who spend much more money, on average about 1,700 USD per day than Europeans, who spend on average 500 USD (Saad, 2013); Kovjanic, 2014, 36). The trend, of course, has been quick- ly detected by many tourism service providers who aligned to the needs of the new segment with the acquisition of halal certificates. In this context, two completely different examples are highlighted in the following sub-chapters. 3.1 Halal concept in the Croatian hotel industry Croatia has already declared itself to be a halal-friendly destination and started an extensive campaign to promote their halal offerings, which resulted in high media cover- age, e.g. Crnjak (2014), Šoštarić (2014), Latinović (2016). Croatia is also the first country in the European Union to have standardised the certification procedures and is also actively engaged on the international level in order to reach an agreement between countries on a uniform procedure of certification. In December 2014, Croatia had 12 certified accommodation facilities (Crnjak, 2014); the updated list is available on the website of the Centre for Halal Quality Certification of the Islamic Community in Croatia (http:// halal.hr/pruzatelji-usluga/).5 Experiences of some hotels in Zagreb, which already have the halal certificate, show that the halal certification is a good opportunity for the devel- opment of not just leisure tourism, but also of congress tourism. For example, the certified hotels in Zagreb have hosted the Olympic basketball team and handball team from Qatar, a football club from Saudi Arabia, a youth football team from Kuwait and several business delega- tions from the Middle East (Crnjak, 2014). One factor that has undoubtedly helped is also the direct air connection of Qatar Airways and the opening of the Qatari embassy in Zagreb, as well as business associations and investments in general (Šoštarić, 2014). According to PR data from the Hotel Esplanade, it is clear that since the introduction of halal standards, the hotel profit increased by 6% in 2013, while the number of overnight stays increased by 4% (Grgić, 2014).6 Croats hope that by strengthening the ha- lal supply they will manage to prolong the tourist season and to enhance the development of medical tourism, which is becoming increasingly interesting to the Arab markets (Pavičić, 2014; see also Ištaković, 2012). 3.2 Halal concept in the Slovenian hotel industry In Slovenia, the concept of halal is still relatively unde- veloped. In contrast to other EU countries, which have various halal butcher shops, restaurants, perfumeries, and personal hygiene products, the offer of halal products and services is predominantly poor in Slovenia. Apart from a 1 3 Caprice Hotel from Turkey, Al-Jawhara Hotel in Dubai, Hotel Sofyan Hotel and Hotel Tuara Natama in Indonesia, and DePal- ma Hotel in Malaysia were the first hotels to be transformed into halal hotels (Razalli et al., 2013). 4 Sixty per cent of the guests at Jawhara Hotels, an Arabic halal hotel chain, are non-Muslim, who appreciate its staff friend- liness and family atmosphere (Alserhan, 2011); the biggest advantage of halal hotels is the spiritual experience (Rosenberg & Choufany, 2009). 5 Under the auspices of the Ministry of Tourism and three other ministries, the centre organised the World Halal Day Croatia 2016 in November of that year (Croatian Chamber of Economy, 2016). 6 However, figures have to be understood in the context of public relations (PR), which is the usual technique of corporations. Apart from that, we have to take into consideration that so many other factors impact the hotels’ performance (including profit). 317 Organizacija, Volume 50 Number 4, November 2017Research Papers few manufacturers of food products that have been halal certified, and some trading companies, there are no oth- er providers of these products and services (Kalčić, 2007, p.9; Pašić, 2009, p.49; Batagelj et al., 2014). In the hotel industry, the halal offer is also modest (see ‘1 Introduc- tion’), and this area is not a theme of academic research. Accordingly, within the hotel industry it is necessary to start practically at the beginning, which means that it is necessary to first determine the knowledge of the hotel management about this topic and consequently identify the opportunities for progress that would be consistent with the identified trends at the global level; the main question is: to what extent are hotel managers familiar with the halal certification and on what basis would they decide on its implementation? Relying on existing studies is problem- atic, because they are rare (Samori & Sabtu, 2012), char- acterised by political, economic and cultural differences: conducted on halal hotels in Muslim countries, e.g. Samori & Sabtu (2012), Afifi (2014); focused on halal tourism in general, e.g. Al-Borzooei & Asgari (2013), Hamameh & Steiner (2004), Razzaq, Halla & Prayag (2016), Battour, Ismail & Battor (2010), Kovjanic, (2014), Battour & Is- mail (2016); focused on the global halal tourism market and its potentials (Crnjak, 2014; Saad, 2013; Kovjanic, 2014, p.36); focused on six dimensions of performance of the hotel (Razalli, Abdullah & Yusoff, 2012) or focused on the (processing) industries, which are not directly related to tourism, e.g. Demirci, Soon & Wallace (2016), Farouk, Pufpaff & Amir (2016). Furthermore, we could not find any research that would highlight the views of managers regarding the halal offer in hotels (see “1 Introduction”). Consequently, based on the meta-analysis, this paper pro- poses the following claims: • C1: Slovenian hotel managers are not familiar with the halal certificate. • C2: Decision-making related to certification is at least two-dimensional. 4 Methodology In the study, Slovenian hotels categorised with three stars or more, which are recorded in the register of the Sloveni- an accommodation providers (www.slovenia.info/register- NO) were considered. Hotels with gaming activities were discarded, because these kinds of services are incompat- ible with Islamic principles. After this selection process, the population was obtained, summarised in Table 1. By applying the method of random sampling, 100 hotels were selected, and a questionnaire was sent by e-mail to the ho- tel managers (respondents). In total, 34 completed surveys were obtained, which represents 11% of the population. The size (in relation to the category) of this sample was problematic for further analysis; consequently, some ad- justments (weighting) to correct for under-representation of certain characteristics were implemented.7 We relied on the assumption that for the research it is particularly important to obtain information from the part of the researched population with representative members of a target group (Altinay & Paraskevas, 2008). Therefore, we accept the fact that we operate with a small and then weighted sample, which can additionally be defined by the following characteristics: the shortest operating period of a hotel is 2 years, while the longest operating period is 101 years. On average, ho- tels had been operating for 21.87 years; the hotel with the lowest number of employees has 4 employees, while the largest has 200 employees. The av- erage number of employees per hotel in the sample is 26; 74.2% of hotels are independent organisations with one hotel. The development of the questionnaire was a more complex process, since it was done on the basis of the ob- jectives of the research for reasons mentioned at the end of the previous chapter (‘3 Halal (tourism) and hotels’). A preliminary web questionnaire pertaining to managers’ perceptions was initially developed from the relevant re- search, i.e. Rosenberg & Choufany (2009), Henderson (2010), Razzalli, Abdullah & Yusoff (2012), which were focused on different perspectives of halal context. The questionnaire has been based on the Technological Accept- ance Model (TAM), developed by Davis (1989), which represents an extension of the theory of rational action Table 1: Structure of the population and the sample according to the hotels’ category Hotel category No. of hotels Population Sample 3* 175 14 4* 122 19 5* 9 1 1 7 This intervention impacted all further calculations. Organizacija, Volume 50 Number 4, November 2017Research Papers 318 (Theory of Reasoned Action (TRA)) (Fishbein & Ajzen (1975); Ajzen & Fishbein (1980)). The final version of the questionnaire, which was the result of interviews with three experienced researchers, included 11 questions with dichotomous or ordinal variables, with the level of agree- ment on a scale of 1 to 5, where 1 marked the lowest level of agreement, 5 the highest. The following ordinal varia- bles (claims/questions) were included in the questionnaire: • Q1 How well do you know the halal certificate for hotels, which includes hotel standards adapted to the needs of Muslim guests? • Q2 The decision on obtaining the halal certification depends on the amount of information about its posi- tive impact on the hotel performance; • Q3 The possibility for adapting the existing hotel ser- vices and facilities to standards required by the halal certificate; • Q4 The decision to obtain the halal certificate de- pends on the simplicity and effectiveness of the pro- cedure for obtaining the halal certificate; • Q5 The decision to obtain the halal certificate de- pends on the amount of financial investment required for obtaining the halal certificate; • Q6 The decision to obtain the halal certificate depends on the increase in the number of Muslim guests; • Q7 The decision to obtain the halal certificate de- pends on the decisions of other Slovenian hotels about certification. The survey was conducted in the winter of 2015. The ac- quired data were then statistically analysed using the SPSS 20.0 statistical software package, with which the calcula- tions were made using the descriptive analysis, principal component analysis (PCA) and analysis of the factor load- ings. A 0.05 significance level was chosen before the data analyses. 5 Results At the beginning of the empirical analysis, some basic calculations were carried out, which served to verify the data obtained, which is particularly important because of the way the research instrument was developed. First, the relatively low average values (x̄) characterise the variables from Q1 to Q7 (see Table 2). However, the high Cronbach α (0.890) indicates a high reliability of the construct. Second, the Spearman correlation test was employed to verify the correlation between all included variables that influence the decisions of hoteliers for a halal certificate and the category of the hotel. The decision related to pos- sibilities to adjust the services and facilities to the require- ments of the halal certification (Q3), the decision to obtain the halal certification if the latter would not require signif- icant financial investments (Q5) and the decision to obtain the halal certification if this would increase the number of Muslim guests (Q6) show values 0.387 ≤ ρ ≥ 0.653,8 which indicates a significant correlation between these variables and the hotel category; four-star hotels reach the highest average ratings. Lower positive correlation is evident with the decision that depends on the amount of information about its positive impact on the hotel perfor- mance (Q2) ̶ ρ = 0.168. The same calculation was made for the connection between the same ordinal variables and the dichotomous variable hotel is part of a hotel group, for which all the coefficients were in the interval - 0.331 ≤ ρ ≥ - 0.168. This suggests that the decision on the halal offer is not linked to the internal structure (organisation) of the hotel organisation. Third, results in Table 2 reflect the fact that Slovenian hoteliers (managers) have not (yet) developed a positive opinion on the halal certificate. This is also supported by the high coefficient of variation, which is indicated by the spread of answers. In addition, with the descriptive anal- ysis of the two additional variables, we have found that more than half of the respondents are familiar with the concept of halal tourism (52.6%), but the proportion of Table 2: Descriptive statistics (Source: authors) * weighted sample Variable n1* Minimum Maximum x̄ Σ γ1 β2 Q1 306 1 5 1.58 0.936 1.852 4.147 Q2 306 1 5 2.50 0.844 0.961 0.438 Q3 306 1 5 2.55 0.913 0.858 1.222 Q4 306 1 5 2.71 1.002 0.869 0.088 Q5 306 2 5 2.83 0.925 0.819 -0.342 Q6 306 2 5 3.10 1.021 0.514 -0.885 Q7 306 1 5 2.48 0.843 0.820 0.525 1 8 Correlation is significant at the 0.01 level (2-tailed). 319 Organizacija, Volume 50 Number 4, November 2017Research Papers those who have not even thought about obtaining the halal certification for their hotel is dominant (73.1%).9 Conse- quently, C1 was confirmed. It is necessary to point out that the highest x̄ present variables for which the decision to obtain the halal certificate depends on the increase in the number of Muslim guests (Q6) and decisions to obtain the halal certificate would not require major financial invest- ments (Q5). Our intention was also to define the managers’ deci- sion to obtain the halal certification as a new construct. Therefore, we used a multivariate PCA method. In this way, we gained new information on the structure of the variables and created new factor(s). Initially, variables Q1 and Q3 were excluded from the analysis (does not relate completely to the managers’ decision-making). We wanted to make sure that the correlation between variables is large enough to allow us to replace the basic variables with the principal components. The high value of the KMO coeffi- cient (0.801) and the significant Bartlett’s test of sphericity (χ2 = 952.436, df. = 10; p <0.000) allowed us to continue with the multivariate analysis. To determine the main fac- tors affecting the decision on obtaining the halal certifica- tion, we employed the analysis of the factor loadings. The results show how the highest factor determines the most important factor affecting the decision to accept the ha- lal certificate, which is the simplicity and efficiency of the procedure itself (Q4) (see Table 3). In the second place is the fact that the process does not require a major financial investment (Q5), and least influential is the information on the positive impact on hotel performance (Q2). Next, we used PCA method to reduce the dependent variables to a smaller number of factors. One factor with eigenvalues greater than 1.00 that explained 66.20% of the total vari- ance was identified (see Figure 1). This suggests that the scale items are uni-dimensional. The identified factor can logically be called decision making. Consequently, C2 was rejected. Table 3: Analysis of the factor loadings of the main components (Source: authors) Component 1 x̄ Σ Q4 0.934 2.71 1.002 Q5 0.892 2.83 0.925 Q6 0.817 3.10 1.021 Q7 0.731 2.48 0.843 Q2 0.664 2.50 0.844 Figure 1: The component’s eigenvalues (Source: authors) 1 9 Both variables are dichotomous. Organizacija, Volume 50 Number 4, November 2017Research Papers 320 6 Discussion and conclusion The main contribution of this study is to deepen the per- spective of the development of tourism in an area that re- mains a relatively undeveloped and unknown niche within Slovenian tourism, yet very promising in the global con- text. Based on this assumption, Slovenia could increase the visits of Muslim tourists by incorporating halal content in its tourism services and facilities, since it already offers many features that appeal to the Muslim guest, e.g. cul- ture, history and art, wellness. According to the (research) claims, we established that Slovenian hotel managers are not familiar with the halal certification and, therefore, are not taking it into consideration; their decision-making process for adopting the halal certificate would be deter- mined by the simplicity and efficiency of the procedure itself and on the fact that the procedure does not require a major financial investment. The certification procedure remains quite unclear and inconsistent. This is problemat- ic: Islamic communities are tied to each country, and the interpretation of certain religious aspects may also differ between them; a unified mechanism for certification on the international, European or global, level has not been yet established (Rosenberg & Choufany, 2009; see also Crn- jak, 2014; Obućina, 2014). Institutionalised practices for the certification of halal hotels as well as institutions that would define uniform criteria about the conditions for ob- taining a halal certificate does not yet exist on the market (Henderson, 2010). Hence, findings on the efficiency of the procedure itself and on financial investment are basically consistent with the allegations of Razzalli, Abdullah and Yusoff (2012) on the dimensions of the hotel performance, which includes the effectiveness and economic prudence. Due to the significant cultural/religious differences, halal adjustments may affect certain hotel services, hotels interi- ors, and other features (according to the characteristics of halal hotels indicated by Henderson, 2010); they are justi- fied only when they have a significant (positive) impact on sales. Therefore, their implementations require additional caution in the decision-making process of hotel managers in Slovenia, where the Islamic religion is not dominant; managers’ practical orientation and pragmatism are re- flected in the decision-making process that would be influ- enced by the possibilities to adapt the existing hotel facil- ities and services to the standards determined by the halal certificate. The process of the adaptation of existing facili- ties and services should be supported by external partners, which could lead to the development of higher quality and more innovative products. Exactly this approach has been detected as a weak point of the Slovenian tourism (see Uran Maravić, Križaj & Lesjak (2015)). The hotel industry recognises that an increased demand for certifications requires a consensus on uniform guide- lines and standardised procedures to protect and ensure a consistent quality of halal products and services (Halim & Salleh, 2012). Therefore, the EU has already begun the process to standardise the procedures for the certification and thus facilitate a transparent functioning of the neces- sary mechanisms (Obućina, 2014). The problematic aspect of the topic has also been shown by the results of our study, in which we found that hoteliers’ decisions for adopting the halal certificate largely depend on the perception of the complexity and costs of the certification process. The in- terest of Slovenian hotel managers for a halal certificate could be increased by developing clear and simple pro- cedures for obtaining the halal certification, which would favourably affect the perception of the degree of difficul- ty and the possibility to adjust to the standards of halal certificates. This would help hoteliers make decisions that would be in line with the global trends (see Dinar Stand- ard (2012), Baker (2011) and Razzali, Yusoff & Roslan (2013)) and competitors in the neighbourhood (see Crnjak (2014), Šoštarić (2014), Latinović (2016)). In order to improve the perception and understanding of the complexity of the process for obtaining the halal certificate, an interdisciplinary team consisting of (a) or- ganisers or experts for standardisation, (b) experts of hos- pitality/hotel industry, (c) experts of halal standards and (d) religion/culture of Islam from Slovenia and/or abroad should define/develop: (a) clear halal standards for the hotel industry (in formal written form) and, on this basis, (b) special educational/training programs, including all the necessary consultations, (c) publicly available material (standards) and other quick information, e.g. via web page. In addition to these recommendations, it is necessary to strengthen the research of halal tourism in Slovenia, since this would help to overcome stereotypes and strengthen the awareness of hotel managers and other relevant stake- holders in tourism about the potentials/opportunities, to connect the specific business concept with the specific sec- tarian organisational culture10 and provide a level of qual- ity that is consistent with the expectations of the guests (see Parasuraman, Zeithaml & Berry (1985) or Kukanja, Gomezelj Omerzel & Kodrič (2016)). In this sense, this research could help develop national halal systems in Slovenia and in the wider region as well as improve the perception of hotel managers and facilitating an easier in- tegration of services adjusted to the needs of Muslims (as well as other guests) in the hotel facilities and services; the perspective of corporate social responsibility (CSR) in the hospitality industry should not be neglected (see Kukanja, Planinc & Šuligoj (2016) or Štrukelj & Šuligoj (2014)). This survey, like any scientific study, has certain re- strictions. The constraints of the quantitative research in- clude low response rates of hotel managers and a general lack of knowledge about halal services among Slovenian hotel managers. To ensure the representativeness of the re- sults, weighting of the sample was required. Nevertheless, 1 10 In general presented by Šuligoj & Mrđa (2016). 321 Organizacija, Volume 50 Number 4, November 2017Research Papers our study can be seen as a relevant (first) study on the spe- cific form of the tourism/hotel industry. Another limitation is also represented by the use of an online questionnaire, which excludes the role of the interviewer and thus the possibility of the immediate elimination of possible confu- sions and mistakes in completing the surveys. An interest- ing example is variable Q3, which was not clearly linked to the decision making and consequently excluded from the calculations related to C2. As a general restriction, we can mention the absence of related research on halal tour- ism, which could be effectively used for the development of the instrument and for argumentation and interpretation of the final findings. Despite these limitations, with the use of selected methodology, the goals of the study have been successfully achieved. 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Developing the framework for Ha- lal friendly tourism in Malaysia. International Busi- ness Management, 5 (6), 295–302, http://dx.doi. org/10.3923/ibm.2011.295.302 Metod Šuligoj, PhD, is an Associated Professor at the Faculty of Tourism Studies – Turistica, University of Pri- morska, Slovenia. His main research interests include quality in hospitality industry, management in hotel in- dustry, human resources in tourism and special inter- ests tourism. He started his professional career in the hotel industry, where he was promoted to Hotel Manag- er and later to Project Manager. In addition to research and teaching activities, he is also an Accommodation Assessor, an EFQM Excellence Assessor in Slovenia and an Experts witness in the fields of quality in tourism and in the hospitality industry. Moreover, he works as a Reviewer for various international scientific journals. Helena Maruško graduated in Cultural studies at the Faculty of Social Sciences (University of Ljubljana) in 2004. She developed her professional career by work- ing for global international companies like Ebay in Dub- lin (Ireland) and Webcertain in York (Great Britain). In 2015 she received her master’s degree in Tourism at the Faculty for Tourism Studies - Turistica, Portorož, University of Primorska. She participated in the devel- opment of the Ljubljana’s cultural development strategy and the development of the Tourism strategy of Velenje. Currently she works for an independent company in the field of tourism and marketing. Organizacija, Volume 50 Number 4, November 2017Research Papers 324 Hoteli in v halal usmerjena ponudba: kaj o tem menijo managerji hotelov v Sloveniji? Ozadje in namen: Turisti iz muslimanskih držav so pomemben deležnik na turističnem trgu. Namen tega prispev- ka je identificiranje ključnih vidikov halal turizma, posebej v hotelirstvu. Posebno nas je zanimalo, ali so managerji seznanjeni s halal certifikatom in ali bi želeli pridobiti certifikat. Design/Metodologija/Pristop: Raziskava je osredotočena na halal izdelke, storitve in opremo v splošnem in po- sebej v slovenskem hotelirstvu; predstavljeni so koncepti, obstoječi trendi in razmere v Sloveniji. Poleg pregleda literature, smo za definiranje pomembnih faktorjev, ki pomembno vplivajo na proces odločanja managerjev, izdelali analizo faktorskih obremenitev; z uporabo metode glavnih komponent smo nabor odvisnih spremenljivk zmanjšali in oblikovali en faktor (čeprav so bila predvidevanja nekoliko drugačna). Rezultati: Najpomembnejši elementi pri certificiranju so enostavnost in učinkovitost postopkov ter dejstvo, da posto- pek ne zahteva večjih finančnih investicij. Najpomembnejši element, ki vpliva na proces managerjevega odločanja, je možnost prilagoditve obstoječe ponudbe standardu, ki je del certifikata. Zaključek: Glavni prispevek je v poglobitvi razvojnega vidika v turizmu na področju, ki je relativno nerazvita in nepo- znana niša v slovenskem turizmu/gostinstvu, toda zelo obetajoča na svetovnem nivoju. Ključne besede: managerji hotelov; halal certifikat; Islam; tematska ponudba; Slovenija; Hrvaška 325 Organizacija, Volume 50 Number 4, November 2017Research Papers DOI: 10.1515/orga-2017-0024 Innovation Leaders, Modest Innovators and Non-innovative SMEs in Slovakia: Key Factors and Barriers of Innovation Activity Ľubica LESÁKOVÁ, Petra GUNDOVÁ, Pavol KRÁĽ, Andrea ONDRUŠOVÁ Matej Bel University in Banská Bystrica, Faculty of Economics, Tajovského 10, Banská Bystrica, Slovakia, lubica.lesakova@umb.sk, petra.gundova@umb.sk, pavol.kral@umb.sk, andrea.ondrusova@umb.sk Background and Purpose: The field of innovation represents for small and medium enterprises (SMEs) a funda- mental challenge. If the number of innovative SMEs is to rise, it is necessary to identify key factors determining their innovation activity and eliminate the innovation barriers. The main purpose of the paper is to present the results of primary research focused on identification (evaluation) of key factors and barriers determining innovation activities in Slovak SMEs. The division of SMEs into three groups of enterprises: innovation leaders, modest innovators and non-innovators enables to identify the differences in managers´ perception of the main factors and barriers determin- ing innovation activities in various types of SMEs and to formulate policy implications for Slovak SMEs. Design/Methodology/Approach: Results of the empirical research were processed using MS Excel and the sta- tistical analysis of the data in R3.2.4. statistical system was done. For statistical tests we assumed significance level (α = 0.1). Results: Evaluating the importance of the key factors a majority of enterprises (64.71%) indicated financial resources as the most important factor for the innovations. There is no statistically significant difference in individual (analysed) factors between innovation leaders, non-innovators and innovation followers (modest innovators). The results gained from Fisher exact test (p-value = 0.11) indicated a small difference in evaluating the significance of individual barriers between innovation leaders, non-innovators and modest innovators. Majority of enterprises also see as the main barriers to develop innovation activities bureaucracy and corruption and inappropriate state support of innovation activities. Conclusion: The main implications (conclusion) coming from the research are basic recommendations for state policy makers as well as SME ś managers to foster innovation activities in enterprises. They refer to the areas of financial resources, high-quality human resources, cooperation and participation of SMEs in different networks and clusters, systematic institutional support to SMEs, well-created vision and clearly formulated aims, and willingness of enterprises to innovate. Recommendations are summarised following the results of factor ś and barrier ś evaluation. Keywords: innovations; small and medium enterprises; factors; barriers; Slovak Republic 1 Received: July 15, 2017; revised: September 22, 2017; accepted: October 21, 2017 1 Introduction Innovations are declared as a priority in all European countries and a number of EU programmes are developed to support innovation activities in small and medium en- terprises. Starting up the EU potential for growth is one of the key challenges of the Europe 2020 Strategy (European Commission, 2010). Innovations have been long time at the centre of a challenging scientific debate. The management guru Peter Drucker observes that “innovation is the specific tool of entrepreneurs, the means by which they exploit changes as an opportunity” (Drucker, 1985). Trushman, & Na- dler (1996) focus on the firm in noting that “innovation Organizacija, Volume 50 Number 4, November 2017Research Papers 326 is the creation of any product, service or process which is new to the business unit”. Another management guru, Michael Porter, shifts the focus of attention by highlight- ing that innovation cannot be treated solely from an in- dividual or firm level since the process of innovation is embedded within the national or regional context (Porter, 1990). The OECD definition describes innovation as a res- toration and widening of product and market portfolio, as new designing, manufacturing and distributing methods, as implementation of changes in work organization and labour force skills, etc. The guidelines on measurement of innovation the OSLO Manual (OECD, 2005) define in- novation as “the implementation of a new or significantly improved product (good or service) or process, a new mar- keting method, or a new organisational method in business practices, workplace organization or external relations”. Although innovation has been studied already for the second century, so far there is no common definition of it. The current approach to innovations maintains that in- novation is a key word for entrepreneurs, it emphasises a global approach to innovations as a philosophy (way of managing enterprises) which influences all parts of trans- formation process in the enterprise (marketing, research and development, planning, manufacturing, managing, etc.) (Adair, 2009). According to Bessant, & Tidd (2009), for small and medium enterprises, innovation can be a way to gain a competitive advantage. Cooke, & Wills (1999) stress that innovations help reinforce the market position or gain a larger market share, increase the effectiveness of operations and improve the reputation. Thus, the ability to compete in innovations plays a very important role as a factor of competitiveness, and strengthening innovation activities is one of the main tasks of all types of businesses. In the last years the role of innovation on SME´s sur- vival has received in theoretical and managerial literature a great deal of attention (Di Cintio, Ghosh, & Grassi, 2017; Cheah, Lang, Snowden, & Watts, 2014; Lee, Lee, & Ga- rett, 2017). Much of the research has expanded its scope and included different types of innovation in the research (Maletič, et al., 2014). The innovation aspect of entrepre- neurship has gained critical importance in almost all sec- tors (Peljko, et al., 2016). A wide range of new themes has appeared. One of them is the identification of key factors and barriers determining innovation activities in SMEs. 2 Factors and barriers determining innovation in SMEs Innovation must be a natural part of any entrepreneur- ship today. Permanent and regular innovation is becom- ing a competitive necessity; to be successful in the future requires interrupting conventions (Jones, & Miller, 2007). This is a time of changes and the only way for an enter- prise to be successful is to accept these changes, adapt to them and utilize them. With the development of innovation processes in all types of enterprises, the growing role of innovations is ev- ident also in small and medium enterprises. Compared to large companies, SMEs have more benefits from the point of view of innovation processes, which can be their in- novative advantage. In particular, SMEs have flexible and entrepreneurial management structures that allow them to adapt to the changing market and at the same time have no bureaucratic and administrative constraints. They use informal and effective internal communication, their man- agers are willing to take risk and they are able to exploit new high-risk markets. In spite of all the above mentioned advantages, small and medium enterprises have also some handicaps – not many of them own research capacities and they face a lot of financial problems. Most of the previous research has paid attention to the managing innovation in large enterprises (Nooteboom, & Stam, 2008). A few studies were conducted to discov- er which factors contribute to innovation efforts in SMEs (Keizer, et al., 2002). Following Keizer, et al. (2002), the factors that have an effect on innovation can be divided into internal and external, where internal variables (indi- cators) refer to the characteristics and policies of SMEs, while external variables refer to the opportunities that SMEs can seize from their environment. From the various studies of success and failure in innovation, it is possible to compile a checklist of factors affecting innovation ac- tivities. For our purposes, it will be helpful to build on the previous research and focus attention on a set of key fac- tors significant for SMEs´ innovation (Lesáková, 2014). In our paper, we deal with a set of key factors that are driving innovation in small and medium enterprises and each of the factors is translated to partial indicators (based on Lesáková, et al., 2016; Nemec, 2014): • human resources (human potential) – number, struc- ture and competencies of staff, share of highly edu- cated people, leadership; • financial resources (financial potential) – own funds and funds (private and public) available from finan- cial and non-financial institutions; • technology (material potential) – state of machinery, structure of production potential, ability to quickly adapt production to the changing needs of the market; • cooperation with external entities (other enterprises, knowledge centres, universities, research institutions, other stakeholders) – forms of cooperation, partici- pation of SMEs in networks and clusters, support for building partnerships, cooperation between SMEs, research institutions and universities; • management of innovation activities in enterprises – created vision, clearly formulated goals and strategy, organizational structure, willingness to innovate, lev- el of managing innovations in SMEs, organizational culture; 327 Organizacija, Volume 50 Number 4, November 2017Research Papers • system of state support for innovation – forms of in- novation support, quality and amount of innovation support. On the other hand, it is necessary to mention the main bar- riers to developing innovation activities; we have compiled a checklist of 11 barriers to innovation in Slovak SMEs: lack of internal financial sources, difficulty to obtain exter- nal financial sources, high cost of innovation, insufficient qualification of labour, lack of willingness to innovate, absence of innovation strategy, lack of cooperation with external entities, inappropriate system of state support for innovation, bureaucracy, corruption, lack of knowledge about the benefits of R&D in the enterprise (Lesáková, et al., 2016; Nemec, 2014). To obtain a complex view of the factors and barriers significant for innovation in SMEs, we divided all enter- prises into three categories according to the introduced type of innovation: 1. Innovation leaders (successful innovative enterpris- es) – enterprises that introduced at least 3 product innovations, 3 process innovations, 5 organization- al and 5 marketing innovations in the years 2010 – 2015. 2. Non-innovators (non-innovative enterprises) – enter- prises that did not introduce any product innovation or process innovation in the examined period. 3. Modest innovators (innovation followers) – enter- prises that belong neither to the group of innovation leaders nor the group of non-innovators. Most of the existing research studies devoted to the eval- uation of innovation activity in SMEs are based on the division of enterprises into two categories: innovative en- terprises and non-innovative enterprises (Hoffman, et al., 1998; Keizer, et. al., 2002; Radas, & Božič, 2009; Szcze- pańska-Woszczyna, 2014). The reason why we decided to divide the entire sample of enterprises into more than two categories was to identify the difference in the significance of key factors and barriers determining innovation activi- ties. It is obvious that there are enterprises which can be included neither in the category of innovative enterprises, nor the category of non-innovative enterprises. We used cluster analysis to process our data and it revealed that the enterprises are falling into three categories – the enterpris- es which are successful in innovation activities (innovation leaders), then the enterprises that could be marked as mod- est innovators (innovation followers) and the enterprises that do not perform any innovation activities (non-inno- vative enterprises). The above-mentioned groups of en- terprises enable to obtain more accurate results about the key factors and barriers determining innovation activities in SMEs. 3 Aim, material and methodology Theorists from different countries largely acknowledge in- novation as a key driver of SME´s performance and growth in contemporary market economies (Di Cintio, Ghosh, & Grassi, 2017). Innovation matters, not only at the level of the individual SME but also increasingly as the wellspring for national economic growth (Bessant, & Tidd, 2009). Most of the research studies confirm that innovations are the drive of SMEs development advancing the possibili- ties of their future competitiveness and increasing SME´s economic efficiency and performance (Kressel, & Lento, 2012; Lee, Lee, & Garett, 2017; Peljko, et al., 2016). For SME´s management is therefore the critical task to iden- tify key factors and barriers determining their innovation activities. This paper aims to present the results of primary re- search focused on evaluation (identification) of the key factors and barriers determining innovation activities in Slovak SMEs. The division of SMEs into three groups of enterprises: innovation leaders, modest innovators and non-innovators enables to identify the differences in man- agers’ perception of the main factors and barriers deter- mining innovation activities in various types of SMEs and formulate policy implications for Slovak SMEs (recom- mendations for SMEs as well as policy makers) and thus improve the situation in this area. Based on the research of different authors (O´Sulli- van, & Dooly, 2009; Bessant, & Tidd, 2009; Keizer, et. al., 2002; Radas, & Božič, 2009; Szczepańska-Woszczyna, 2014) and our own previous research (Lesáková, 2014), we looked for answers to two main questions: • Q1 – What are the main differences, if any, in the perception of various factors determining innovation activities in all three segments of SMEs: innovation leaders, modest innovators and non-innovators? • Q2 – What are the main differences, if any, in the per- ception of barriers to developing innovation activities in all three categories of SMEs: innovation leaders, modest innovators and non-innovators? Data for our research were collected in the period from November 2015 to January 2016. We used questionnaire as a method of primary data collection (see Appendix for details). Questionnaire was divided into three parts. The first part was devoted to the evaluation of key fac- tors determining innovation activities, the second one to the evaluation of main innovation barriers and the last one to identification items. The questionnaire was distributed electronically through Google Docs to randomly cho- sen 998 enterprises of all size types (micro, small, medium size and large enterprises). We sent the questionnaire to top managers of these companies by e-mail. Sixty one of the enterprises responded and sent the completed question- naire. After reviewing each reply, we set aside the answers Organizacija, Volume 50 Number 4, November 2017Research Papers 328 from large companies, as our research was focused only on SMEs. At the end, we collected 51 valid questionnaires from SMEs. After that, we processed the data through MS Excel, and made a statistical analysis of the data in R 3.2.4 statistical system. Based on criteria listed in Labo- vitz (1968) we decided to choose 10% significance level (α=0.1) for statistical tests. The representativeness of the sample regarding the classification SK NACE (p-value = 0.1594) and region (p-value = 0.2824) was tested using Chi-squared goodness of fit test. Based on the test results, we concluded that our sample of enterprises can be seen as a reasonable sample of the entire population of small and medium enterprises. The sample included 58.8% of micro enterprises, 23.5% of small enterprises and 17.7% of medium enter- prises. It consisted mainly of enterprises located in the re- gion of Bratislava (43.1%), which was most likely caused by the highest concentration of enterprises in this region. The second most frequent representation had enterprises from the region of Banská Bystrica (15.7%). In the sample, prevailed enterprises (firms) from the sector of manufac- turing industry (19.6%), wholesale and retail (17.7%) and construction (15.7%). According to the division of SMEs into the three cat- egories (innovation leaders, innovation followers and non-innovative enterprises), 13 enterprises were classified as innovation leaders (25.5%) – in the years 2010 – 2015, they introduced at least 3 product innovations, 3 process innovations, 5 organizational innovations and 5 market- ing innovations; 14 enterprises (27.5%) can be considered non-innovators – they did not introduce any product inno- vation or process innovation, and 24 enterprises (47.1%) were included into the group of innovation followers. 4 Results Data collected by the questionnaire point to a rise of all types of innovations during the analysed period. They con- firmed that most enterprises developed innovation activi- ties in the year 2015. The number of individual types of in- novations introduced in each year of the examined period is presented in Table 1. To determine the proportion of enterprises that intro- duced a certain type of innovation, we used 90% confi- dence intervals (Table 2). From Table 2 it is evident that with 90% confidence, the highest proportion of product in- novations were introduced in the year 2015 (from 45.6% to 71.6%), process innovations in the year 2014 (from 46.7% to 72.3%), organizational innovations in the year 2015 (from 0% to 15.3%) and marketing innovations in the year 2015 (from 44.5% to 70.9%). Based on the research results, we could identify the types of innovations the enterprises introduced. During that period, the best enterprise introduced 20 innovations (5 product innovations, 5 process innovations, 5 organiza- tional innovations and 5 marketing innovations) and the worst enterprise did not report any type of innovation. On average, the enterprises in our sample introduced 12.29 (SD = 5.25) innovations in the analysed period. The first part of the questionnaire was focused on eval- uation of the factors significant for innovation in Slovak SMEs. We created a checklist of six key factors: human resources, financial resources, technology, cooperation with other entities, management of innovation activities in enterprises and system of state support for innovation. We assumed that Slovak SMEs do not evaluate the sig- nificance of these factors in the same way. To verify this premise, we used the Friedman test. This test rejected the null hypothesis that none of the factors is seen by Slovak Table 1: Type of introduced innovations Type of innovation 2015 2014 2013 2012 2011 2010 Product innovations 26 22 24 14 11 11 Process innovations 24 27 18 16 10 12 Organizational innovations 25 20 10 9 9 7 Marketing innovations 22 19 14 4 6 8 Table 2: 90% confidence interval for share of enterprises according to the type of innovation (%) Type of innovation 2015 2014 2013 2012 2011 2010 Product innovations 45.6-71.6 36.8-63.2 41.1-67.5 20.4-45.2 14.7-38 14.7-38 Process innovations 40.1-66.2 46.7-72.3 27.7-53.3 23.7-48.9 12.6-34.8 16.2-39.6 Organizational innovations 0-15.3 0-12.2 0-8.7 0-8.4 0-8.4 0-8 Marketing innovations 44.5-70.9 33.3-60.1 13.2-36.2 11.4-33.7 11.4-33.7 7.9-28.4 329 Organizacija, Volume 50 Number 4, November 2017Research Papers SMEs as more or less important than the others (p-value = 9.066e-14) and supported our assumption that Slovak SMEs perceive the key factors significant for their inno- vation differently. Evaluating the importance of the key factors (Table 3), a majority of enterprises (64.7%) indicated financial resources (average 3.56) as the most important factor for their innovations. Another two factors – human resources and technology – had the same average (3.03), but 20 en- terprises (39.2%) indicated human resources as the most important factor of innovation activity in the enterprise. Technology as the most important factor was indicated by 15 enterprises (29.4%). Critical is the finding that 35 enter- prises (68.6%) consider cooperation with external partners as a factor of low importance. To compare the significance of individual factors de- termining innovation activities in Slovak SMEs, we used a graphical presentation by box plots. Graph 1 shows that Table 3: Factors determining innovation activities in Slovak SMEs Factors The importance of factors The lowest (1) Lower (2) Higher (3) The Highest (4) Average Human resources 5 (9.80%) 8 (15.69%) 18 (35.29%) 20 (39.22%) 3.03 Financial sources 1 (1.96%) 2 (3.92%) 15 (29.41%) 33 (64.71%) 3.56 Technology 3 (5.88%) 7 (13.73%) 26 (50.98%) 15 (29.41%) 3.03 Cooperation with external entities 10 (19.61%) 25 (49.02%) 8 (15.69%) 8 (15.69%) 2.27 Management of innovation activi- ties in enterprises 4 (7.84%) 24 (47.06%) 13 (25.49%) 10 (19.61%) 2.56 System of state support for inno- vation 7 (13.73%) 14 (27.45%) 13 (25.49%) 17 (33.33%) 2.78 Graph 1: Box plots of factors affecting innovation activities in Slovak SMEs Organizacija, Volume 50 Number 4, November 2017Research Papers 330 the median and mean are the highest for financial sources, which suggests that financial sources are the factor with the highest impact on innovation activities in Slovak SMEs. To answer the first research question (Q1) it can be stated, that there is no statistically significant difference in individual (analysed) factors between innovation leaders and non-innovators and between innovation leaders and followers. It means that managers of enterprises have the same view of the importance of the factors regardless of the introduced innovations. We evaluated also the significance of individual factors determining innovation activities in all three categories of enterprises (Table 4). Our research confirmed that in all three categories of enterprises (innovation leaders, non-innovators and mod- est innovators), financial resources are viewed as the most significant factor in innovation activities. Barriers to innovations in Slovak SMEs We defined a checklist of 11 barriers (Table 5) and asked the managers to evaluate the significance of these barriers. The list of 11 barriers was elaborated on the basis of the results from our previous research (Lesáková, et al., 2016; Nemec, 2014). We assumed that Slovak SMEs do not eval- uate the barriers to innovations as equally significant, and to verify this premise, we used the Friedman test. The test rejected null hypothesis that that none of the barriers is seen by Slovak SMEs as more or less important than the others (p-value<2.2e-16) and supports our assumption. Ta- ble 5 below presents a comparison of the average of indi- vidual barriers, standard deviation and median. Among the most significant barriers were bureaucracy (3.34) – 29 enterprises (57%) evaluated this barrier as the most serious – then, corruption and state support of inno- vation activities, which achieved the same average (3.14). 25 enterprises (49%) considered these two barriers very significant. Inappropriate system of state support for in- novation activities was marked as a serious barrier by 23 enterprises (45%). On the other hand, lack of cooperation with external entities was marked as the least significant barrier (mean = 1.96). In the next step, we analysed the differences in evalua- tion of the main barriers to innovation in the three catego- ries of enterprises – innovation leaders, innovation follow- ers and non-innovative enterprises (Table 6). There is no statistically significant difference in in- dicating the main barriers between the three categories of enterprises. The results gained from Fisher exact test (p-value = 0.11) indicated only a small difference in cor- ruption. They confirmed a statistically significant differ- ence between the leading enterprises and modest innova- tors (innovation followers) in evaluating the corruption barrier (p-value = 0.076). Table 4: Evaluating factors determining innovation activities in three categories of SMEs by importance on scale 1 – 4 (4 means the highest importance and 1 the lowest importance) Factors All enterprises Leaders Modest innovators Non-innovative SMEs Mean (SD) Median (IQR) Mean (SD) Median (IQR) Mean (SD) Median (IQR) Mean (SD) Median (IQR) Human resources 3.04 (0.98) 3.0 (1.5) 3.46 (0.66) 4.0 (1.0) 2.79 (1.02) 3.0 (2.0) 3.07 (1.07) 3.0 (1.0) Financial sources 3.57 (0.67) 4.0 (1.0) 3.54 (0.66) 4.0 (1.0) 3.50 (0.78) 4.0 (1.0) 3.71 (0.47) 4.0 (0.8) Technology 3.04 (0.82) 3.0 (1.0) 3.23 (0.73) 3.0 (1.0) 2.75 (0.79) 3.0 (1.0) 3.36 (0.84) 3.5 (1.0) Cooperation with external entities 2.27 (0.96) 2.0 (1.0) 2.62 (1.04) 3.0 (1.0) 2.17 (0.96) 2.0 (0.0) 2.14 (0.86) 2.0 (0.8) Management of in- novation activities in enterprises 2.57 (0.90) 2.0 (1.0) 2.69 (0.95) 3.0 (1.0) 2.50 (0.93) 2.0 (1.0) 2.57 (0.85) 2.5 (1.0) System of state support for inno- vation 2.78 (1.06) 3.0 (2.0) 3.23 (1.01) 4.0 (1.0) 2.42 (1.02) 2.0 (1.0) 3.00 (1.04) 3.0 (1.0) 331 Organizacija, Volume 50 Number 4, November 2017Research Papers Table 5: Barriers to innovations in Slovak SMEs by importance on scale 1 – 4 (4 means the highest importance and 1 the lowest importance) Barriers All enterprises Mean (SD) Median (IQR) Bureaucracy 3.34 (0.92) 4.00 (1.00) Corruption 3.14 (1.03) 3.50 (1.75) Inappropriate system of state support for innovation 3.14 (0.99) 3.00 (1.00) High costs for innovations 2.98 (0.72) 3.00 (0.00) Lack of internal financial sources 2.82 (0.97) 3.00 (1.00) Difficulty in obtaining of external financial sources 2.80 (1.04) 3.00 (2.00) Insufficiently qualified labour force 2.35 (1.05) 2.00 (2.00) Lack of knowledge about benefits of R&D in enterprise 2.00 (0.96) 2.00 (2.00) Lack of willingness to innovate 1.98 (0.98) 2.00 (2.00) Absence of innovation strategy 1.98 (0.97) 2.00 (1.00) Lack of cooperation with external entities 1.96 (0.98) 2.00 (1.00) Table 6: Barriers to innovations in Slovak SMEs according to three categories of enterprises Barriers Leaders Modest innovators Non-innovative SMEs Mean (SD) Median (IQR) Mean (SD) Median (IQR) Mean (SD) Median (IQR) Bureaucracy 3.75 (0.62) 4.00(0.00) 3.13 (0.99) 3.00 (1.25) 3.36 (0.93) 4.00 (1.00) Corruption 3.75 (0.62) 4.00(0.00) 2.88 (1.08) 3.00 (2.00) 3.07 (1.07) 3.00 (1.00) Inappropriate system of state support for innovation 3.58 (0.67) 4.00 (1.00) 2.79 (1.06) 3.00 (2.00) 3.36 (0.93) 4.00 (1.00) High cost for innovations 2.92 (0.79) 3.00(1.25) 2.96 (0.75) 3.00 (0.00) 3.08 (0.64) 3.00 (0.00) Lack of internal financial sources 2.75 (1.14) 3.00(0.75) 2.79 (0.93) 3.00 (1.00) 2.92 (0.95) 3.00 (2.00) Difficulty in obtaining of external financial sources 2.83 (1.11) 3.00 (2.00) 2.70 (1.11) 2.00 (2.00) 2.93 (0.92) 3.00 (1.50) Insufficiently qualified labour force 2.58 (1.16) 3.00(1.50) 2.25 (0.94) 2.00 (1.25) 2.31 (1.18) 2.00 (2.00) Lack of knowledge about benefits of R&D in enterprise 1.62 (0.96) 1.00 (1.00) 2.21 (0.98) 2.00 (2.00) 2.00 (0.85) 2.00 (2.00) Lack of willingness to innovate 2.15 (0.99) 2.00(2.00) 1.92 (1.02) 2.00 (2.00) 1.92 (0.95) 2.00 (1.00) Absence of innovation strategy 2.15 (1.07) 2.00(2.00) 1.92 (0.88) 2.00 (1.25) 1.92 (1.08) 2.00 (1.00) Lack of cooperation with external entities 2.25 (1.22) 2.00 (2.25) 1.96 (0.91) 2.00 (1.00) 1.69 (0.85) 1.00 (1.00) Organizacija, Volume 50 Number 4, November 2017Research Papers 332 Results of statistical analysis enable to answer the sec- ond research question (Q2). Innovation leaders indicated bureaucracy (mean = 3.75) and corruption (mean = 3.75) as the most significant barrier and state support of innova- tion activities as a significant barrier (mean = 3.58). Bu- reaucracy and corruption were marked as significant bar- riers also by modest innovators (mean = 3.13). High cost of innovations was a significant barrier for innovation fol- lowers. Inappropriate state support of innovation activities is another significant barrier, especially for non-innovative SMEs (mean = 3.36). It can be concluded that a majority of enterprises see the main barriers to developing innovation activities in: 1. bureaucracy and corruption, 2. inappropriate state support of innovation activities, 3. high cost of innovation and 4. lack of financial resources. Based on the test results, and the fact that our sample size was sufficiently large to identify large and medium differences between the sample and the population with respect to chosen criteria, as well as large and medium ef- fect sizes, we concluded that our sample of enterprises can be seen as a reasonable sample of the entire population of small and medium enterprises. 5 Discussion and conclusion Research results confirmed that managers of all three cate- gories of enterprises have the same or a very similar opin- ion on the significance of the factors and barriers, regard- less of the type and number of innovations. No statistically significant difference was confirmed here. In the following part, we will briefly conclude the re- sults of the research aimed at identification of key factors and barriers of innovation activities in Slovak SMEs. The main implications are basic recommendations for state policy makers as well as SMEs´ managers to foster inno- vation activities in enterprises. We can summarise them as follows: 1. Innovation leaders, modest innovators and non-in- novative firms see financial resources as the most significant factor for innovation activities (see Table 4). For the future, it will be necessary to mobilise all financial sources in the area of innovation support in order to ensure that innovation activities performed by business entities receive the same level of funding as those in advanced EU countries. In connection with the efforts towards the most effective use of allocated financial resources, the state will have to provide in- direct aid to profit-generating projects implemented by SMEs, i.e. it will have to use financial engineering instruments such as guarantee funds, credit funds, venture capital funds and municipal development funds. There is an enormous interest of competent institutions in coordination with the Ministry of Fi- nance of the Slovak Republic to apply an upgraded model of usage of innovative financial tools in order to support innovation activities in SMEs (Country Report Slovakia, 2016). Slovakia has set a target to increase expenditures on research and development to 1.2% of GDP by 2020. To support the financing of innovations, the situation should be changed not only by one way financial support from state budget, but also by increasing the resources of businesses, which in 2020, should account for 2/3 of the total resources spent on R&D. This implies much greater involvement of SMEs in research. The state should adopt measures that would encourage businesses to be much more engaged in research, development and innovation. We see a solution also in overall im- provement of the business environment, for example, through a reduction of indirect taxes – especially VAT rate, reduction of contributions to social and health insurance companies, and in all the other areas men- tioned above. 2. High-quality human resources were indicated as an important prerequisite for developing innovation ac- tivity (see Table 3). The results showed a small differ- ence between innovation leaders and non-innovators (see Table 4). Quality management and employees able to think creatively and implement innovations in their activity are crucial to the development of in- novation activity of an enterprise. The management must be able to lead and direct the thoughts and ideas in the enterprise, search and use talents, and must be also aware of the fact that the enterprise will be successful due to being distinguished by the human resources (Frappaolo, 2006). The demand for cre- ative workers should motivate Slovak secondary schools and universities to equip their students with such competencies that would accommodate their future employers. Each business subject should be more actively involved in the educational process (Janson, Cecez-Kecmanovic, & Zupančič, 2007). A solution to this problem could be “dual educational system”, which has been recently launched in Slovak secondary vocational schools. Firms could also give more support to lifelong learning of their employees to improve their qualifications and skills needed for the implementation of innovative actions. These ed- ucational activities should be carried out in coopera- tion with cluster organizations, industrial chambers and associations operating in Slovakia, as well as regional authorities and municipalities. Employees are expected to have a pro-active approach and to be willing to learn and implement new knowledge in the innovation activity. On the other hand, they must be adequately rewarded for their innovation ideas, for their increased effort to search for new, innovative solutions (Lesáková, 2009). 333 Organizacija, Volume 50 Number 4, November 2017Research Papers 3. Another factor significant for the development of in- novation activity is cooperation and participation of SMEs in different networks and clusters (on scale 1-4 where 4 means the highest importance and 1 means the lowest importance means was 2.27). It is surprising that for 49.0% of the responded enterpris- es, cooperation with external entities in innovations has a lower importance (see Table 3). Modest inno- vators reported a significantly lower level of cooper- ation (mean = 2.17). The positive examples from EU countries confirm that participation of small and me- dium enterprises in networks and clusters and support of partnerships is a way to involve small and medium enterprises in innovation activities (Cygler, Gajdzik, & Sroka, 2014). Innovation process of a higher level calls for improvement of interaction between small and medium enterprises, research institutions and universities and for creation of effective networks and partnerships (Lesáková, 2009). Creating a part- nership is a way to get involved in innovation activ- ities. Cooperation of SMEs with other organisations in the field of innovation activities brings several synergic effects to the enterprise. The most important of them is sharing of knowledge and a similar ap- proach to the latest know-how, sharing of capacities, a lower demand for financial sources, etc. Support to innovative industrial cluster organisations is also one of the main measures in the Innovation Strategy of the Slovak Republic for the years 2014 – 2020. The purpose is to improve the competitiveness of these organisations through support of their selected activ- ities with a view to promote joint industrial activities in selected areas (Innovation Strategy of the SR for 2014 – 2020). 4. According to the research results, the government should pay much more attention to systematic in- stitutional support to SMEs on the national and regional level (see Table 4). All enterprises (innova- tion leaders, modest innovators and non-innovators) pointed to the low quality of innovation support. In- appropriate state support of innovation activities is a significant barrier (see Table 5), especially for non-in- novative enterprises (see Table 6, mean = 3.36). Of special importance is the development of institutions supporting innovation activities on the national and regional level. Setting up regional innovation cen- tres would foster implementation of the regional and state innovation policy in regions and thus increase the competitiveness and employment at the regional level and reduce regional disparities. Regional in- novation centres could help to start cooperation be- tween SMEs on the one hand, and universities and research centres on the other hand. A critical point is autonomous functioning of sectors of education, research and innovation (R&I) and business, which means a different understanding of R&I. It is nec- essary to create links between R&I in multinational companies and in local businesses, including SMEs, and to increase the interest of businesses and indus- trial clusters to change the structure of industrial R&I entities. Successful implementation of the innovation strategy requires a structural change of the competen- cies of the management of research and innovation in Slovakia and a fundamental change in the culture of innovative environment. 5. SMEs´ managers agreed on the fact that without a well-created vision and clearly formulated aims, innovation activity in SMEs is limited. The results showed that the management of innovation is a part of the business strategy in the category of innova- tion leaders (46% – 94%), but it is not the case of many modest innovators and non-innovators. Clearly formulated objectives are a vision depending on the possibilities of the enterprise and the situation in the market. Clear vision is a strong predictor of success (Wagner, & Hollenbeck, 2012). 6. And the last precondition that appeared in the an- swers of managers is willingness of enterprises to innovate. This is an inevitable factor, even if it is connected with a certain risk. The positive thing is that “lack of willingness to innovate” had the lowest rank in all three categories of enterprises (see Table 6). Many innovative SMEs now are successful and perspective and, on the contrary, many enterprises without innovative activity are getting into financial problems. Willingness to innovate should be accom- panied by such an environment that will support the rise of innovation activities (Lesáková, 2013). In this way, innovations could be introduced faster and at the same time, the number of barriers retarding the rise of innovation activities could be lower. The low number of innovative enterprises in Slovakia is a result of innovation barriers that are an obstacle ham- pering successful development of innovation activities in businesses. Specifically, Slovak enterprises suffer from a lack of financial sources to innovation, which significantly reduces their innovation activity; yet, the major obstacle lies in bureaucracy and corruption. The explanation why bureaucracy and corruption are viewed by Slovak SMEs as the main barriers (see Table 5) comes from their experience during the process of raising money and developing innovation activities. The enter- prises mentioned their negative experience with obtaining finance from the European Union funds or other public financial sources (bureaucratic administration, corruption, ineffective redistribution of finances, as well as ignorance of their drawing). High cost of innovation was also appeared on the list of significant barriers to innovation for Slovak SMEs. Never- Organizacija, Volume 50 Number 4, November 2017Research Papers 334 theless, managers should take into consideration that in- novation is a prerequisite to get a competitive advantage in future. The respondents expressed a critical opinion about the institutional form of support from the state (see Table 5) – about the existence and activities of institutions sup- porting innovation activities as well as the support of the rise and development of innovative SMEs. Critically are also viewed Slovak regional offices in terms of the missing regional innovation structures; there is no scheme for ef- fective management of the state innovation policy and re- gional innovation strategies. The respondents were critical to the long-term absence of regional innovation centres, which should help to start cooperation between SMEs on the one hand, and universities, research centres, technolog- ical parks on the other hand, and to enhance the process of establishing clusters. Some of the barriers can be eliminated at the level of enterprise, but most of them require solutions at the state level. Therefore, the task for the state is to ensure adequate inputs (sources) for innovation activities and create suita- ble conditions, i.e. an environment that can stimulate de- velopment of innovation. Our research is a scan of the current situation of iden- tification key factors and barriers determining innovation activities in Slovak SMEs and offers a lot of space to im- prove. The biggest limitations of this study is a small re- sponse rate of the questionnaire which prevented us from taking our statistical analyses further. Consequently, the presented results should be interpreted primarily from the exploratory point of view. Limitations of our study create opportunities for future research. In the future we plan to focus on higher number of enterprises, including enterpris- es of various size (small, medium-sized and large enter- prises) and also from various countries. It would be very interesting to repeat our primary research in other coun- tries than Slovakia for the purpose of making international comparison of identification (evaluation) of key factors and barriers determining innovation activities in SMEs. Acknowledgement The research was supported by the National Scientific Agency of the Ministry of Education of the Slovak Re- public (research project VEGA 1/0494/15 “The research of factors influencing the successfulness of innovative small and medium enterprises in the Slovak Republic”). Literature Adair, J. (2009). Leadership for Innovation. London: Ko- gan Page Limited. Bessant, J., & Tidd, J. (2009). Innovation and entrepre- neurship. Chichester: John Wiley & Sons Ltd, West Sussex, England. Cooke, Ph., & Wills, D. (1999). Small firms, social capital and the enhancement of business perfor- mance through innovation programmes. Small Business Economics. 13(3), 219-234, https://doi. org/10.1023/A:1008178808631 Country Report Slovakia. (2016). 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Retrieved July 8, 2017 from http://www.oecd.org/dataoecd/35/61/2367580 O´Sullivan, D., & Dooley, L. (2009). Applying Innovation. London: Sage Publications, United Kingdom. Peljko, Ž. et al. (2016). An Empirical Study of the Rela- tionship between Entrepreneurial Curiosity and Inno- vativeness. Organizacija. 49(3). 172-181, https://doi. org/10.1515/orga-2016-0016 Porter, M. (1990). Competitive Advantage of Nations. New York: Free Press. Szczepańska-Woszczyna, K. (2014). Determinants of in- novation activities in small and medium-sized enter- prises in Poland. Journal of Advanced Research in Management. 5(2), 65-73. Radas, S., & Božič, L. (2009). The antecedents of SME in- novativeness in an emerging transition economy. Tech- novation. 29(1), 438-450, https://doi.org/10.1016/j. technovation.2008.12.002 Trushman, M. L., & Nadler, A. D. (1996). Organizing for Innovation. California Management Review. 28 (3), 74–92, https://doi.org/10.2307/41165203 Wagner, J., & Hollenbeck, J. (2012). Organization behav- iour. Securing Competitive Advantage. London: Rout- ledge, Taylor & Francis Group, Ltd. Ľubica Lesáková is Professor at the Department of Corporate Economics and Management of the Faculty of Economics of Matej Bel University in Banská Bystri- ca (Slovak Republic). Her research focuses on small and medium enterprises and innovations. She has pub- lished more than 100 articles in scientific journals and proceedings of international conferences. Petra Gundová is a lecturer at the Department of Cor- porate Economics and Management of the Faculty of Economics of Matej Bel University in Banská Bystrica (Slovak Republic). In her scientific research, she fo- cuses on issues of the financial analysis of companies and innovations. She has published over 20 articles in scientific journals and proceedings of international con- ferences. Pavol Kráľ received his Ph.D. in Mathematical Analysis from the Matej Bel University in Banská Bystrica. He is an Assistant Professor at the Faculty of Economics, Matej Bel University in Banská Bystrica. His research interests include fuzzy set theory and economic appli- cations of mathematics and statistics. He is a (co)au- thor of more than 30 publications in scientific journals and proceedings of international conferences. Andrea Ondrušová is a PhD student of the study pro- gramme Corporate Economics and Management at the Faculty of Economics of Matej Bel University in Banská Bystrica (Slovak Republic). Organizacija, Volume 50 Number 4, November 2017Research Papers 336 Inovacijski vodje, skromni inovatorji in neinovativna mala in srednje velika podjetja na Slovaškem: ključni dejavniki in ovire pri inovacijskih dejavnostih Ozadje in namen: Področje inovacij predstavlja temeljni izziv za mala in srednje velika podjetja (MSP). Da bi lahko povečali število inovativnih MSP, moramo opredeliti ključne dejavnike, ki določajo njihovo inovacijsko dejavnost in odpravijo inovacijske ovire. Glavni namen prispevka je predstaviti rezultate raziskave, osredotočene na identifikacijo in oceno ključnih dejavnikov in ovir inovacijske dejavnosti v MSP. Ta podjetja smo klasificirali v tri skupine: inovacijski voditelji, skromni inovatorji in neinovatorji, kar omogoča prepoznati razlike v mnenjih menedžerjev o glavnih de- javnikih in ovirah, ki vplivajo na inovacijske dejavnosti v različnih vrstah malih in srednje velikih podjetij, in oblikovati smernice posledice za slovaška MSP. Zasnova / metodologija / pristop: Zbrane empirične podatke smo obdelali z MS Excel in s statističnim paketom R3.2.4. Pri statističnih testih smo privzeli raven pomembnost (α = 0,1). Rezultati: Večina podjetij (64,71%) je kot najpomembnejši dejavnik inovativnosti navedla finančna sredstva. Med (analiziranimi) posameznimi dejavniki med inovativnimi voditelji, skromnimi inovatorji in neinovatorji nismo ugotovili statistično značilnih razlik. Rezultati, pridobljeni s Fisherjevim testom (p-vrednost = 0.11), kažejo majhno razliko pri vrednotenju pomena posameznih ovir med vodilnimi inovatorji, neinovatorji in skromnimi inovatorji. Večina podjetij meni, da so nadaljnje glavne ovire pri birokracija in korupcija na področju inovacijskih dejavnosti ter neustrezna državna podpora inovacijskim dejavnostim. Zaključek: Iz raziskave izhajajo osnovna priporočila za snovalce državnih politik, pa tudi za mala in srednja pod- jetja, da spodbujajo inovacijske dejavnosti v podjetjih. Nanašajo se na področje finančnih virov, visokokakovostnih človeških virov, sodelovanje in udeležbo MSP v različnih omrežjih in grozdih, sistematično institucionalna podpora MSP, dobro oblikovano vizija in jasno oblikovane cilje in pripravljenost podjetij na inovacije. Ključne besede: inovacije; mala in srednje velika podjetja; dejavniki; ovire; Slovaška republika 337 Organizacija, Volume 50 Number 4, November 2017Research Papers Appendix Listed below are only the questions relevant to theme of the article. Q1: Which type of innovations did you introduce in each year of the analysed period? Q2: Evaluate the importance of the key factors determining innovation activities. 2015 2014 2013 2012 2011 2010 Product innovations Process innovations Organizational innovations Marketing innovations Q 3: Evaluate the importance of barriers to innovations. Factors The importance of factors The lowest (1) Lower (2) Higher (3) The highest (4) Human resources Financial sources Technology Cooperation with external entities Management of innovation activities in enterprises System of state support for innovation Barriers The importance of barriers The lowest (1) Lower (2) Higher (3) The highest (4) Lack of internal financial sources Difficulty in obtaining of external financial sources High costs for innovations Insufficiently qualified labour force Lack of willingness to innovate Absence of innovation strategy Lack of cooperation with external entities Inappropriate system of state support for innovation Bureaucracy Corruption Lack of knowledge about benefits of R&D in enterprise Organizacija, Volume 50 Number 4, November 2017Research Papers 338 Q 4: Evaluate motives to realize the innovation activities (5 = the most important motive, 1 = the less important motive). Q 28: What is the number of SK NACE of your enterprises? Q 29: Indicate the region where your enterprises is located. • Bratislava region • Trnava region • Trenčín region • Nitra region • Banská Bystrica region • Žilina region • Prešov region • Košice region Q 30: Indicate the number of employees in your enterprises. • 0 - 9 employees (micro enterprises) • 10 - 49 employees (small enterprises) • 50 - 249 employees (medium enterprises) • 250 employees and more (big enterprises) Growing competition at the market The effort to keep the customer at the market The innovation impulse coming from employees The effort to enter on new (foreign) markets Changes in the legislative requirements Possibility to cooperate with another company, resp. institutions The innovation impulse coming from owner of Possibility to gain the financial as well as non-financial support from the state or from the EU 339 Organizacija, Volume 50 Number 4, November 2017Research Papers DOI: 10.1515/orga-2017-0025 The Use of the Kano Model to Enhance Customer Satisfaction Laura JUŽNIK ROTAR1, Mitja KOZAR2 1 Faculty of Business, Management and Informatics, Na Loko 2, 8000 Novo mesto, Slovenia laura.juznik-rotar@guest.arnes.si (Corresponding author) 2 Gorenje, d.d., Partizanska cesta 12, 3320 Velenje. Slovenia mitja.kozar@gorenje.com Background/purpose: The interest of measuring customer satisfaction is reflected in its ability to gain customer loyalty, enhance favourable word of mouth, lead to repeat purchases and improve a company’s market share and profitability. The issue of integrating the Kano model of customer satisfaction with other models and tools to support development or improvement of a product, or to determine market strategies, is relatively unexplored in the Slovenian sector. This research aims to construct the Kano model in order to enhance customer satisfaction in the case of home appliances. Design/Methodology/Approach: Data was collected using an online survey amongst randomly selected individ- uals from the service interventions for an end users database. Principal component factor analysis was first used to identify the underlying factors of home appliance characteristics. In the next phase we calculated the derived and stated importance of customer satisfaction, which was then used to construct the Kano model of customer satisfac- tion. We further analysed which factors are the strongest drivers, or predictors, of repeat purchase using multiple regression analysis. Results: In the study we identified the underlying home appliance factors. The results show that these factors are: sales environment, price, user features, design features and technical features. The results were then used to con- struct the Kano model where the analysis goes beyond the qualitative analysis by implementing two approaches, stated and derived importance approach. According to the Kano model, marketers should concentrate on delight characteristics such as: wider knowledge of the salesperson, professional skills of the salesperson, design of home appliance, brand of home appliance. What is more, factors called ‘user features’ are the strongest predictors of repeat purchase. Conclusion: This paper links the Kano model with measuring customer satisfaction and presents a contribution for marketing research theory. Therefore, the results could be used to support optimization of business decision-making, as well as for further scientific research. Keywords: optimization; business decisions; Kano model; measuring customer satisfaction 1 Received: March 15, 2017; revised: June 19, 2017; accepted: July 11, 2017 1 Introduction Business decisions related to the market demand some ability to track and predict the behaviour of large groups of people. How can one predict only one person’s deci- sions? If we go further, how can one predict the behaviour of many people? The effective approach can be expected through efficiently gathering data and connecting this data with statistical analyses. The procedures and methodolo- gy of marketing research make it feasible to gather usable information, based on which we can make strategic deci- sions. The risk of incorrect decisions can also be lowered. The purpose of market research is to gather informa- tion that can be used to identify opportunities, as well as problems, in marketing and to choose more effective ac- tions in the marketplace. Marketing research uses informa- tion from all sources connected with marketing (compa- ny, competition, marketing mix, social and technological Organizacija, Volume 50 Number 4, November 2017Research Papers 340 environment), whereas market research gathers, edits and analyse data for a certain market or segment (see, for ex- ample Macdonald, Wilson & Konuʂ, 2012). The purpose of market research is to link the customer to the marketer by providing information that can be used in making marketing decisions. Some believe that the link between the customer and market research is more impor- tant today than ever. Competition for the customer is grow- ing every day, customers expect greater value. Companies have to learn insights from customers in order to keep them loyal (Burns & Bush, 2010). One way for companies to get insights from customers is to measure customer sat- isfaction (Šuster Erjavec et al., 2016). Customer opinions are often sought in the form of surveys asking questions about perceptions of quality, experiences with a brand or purchase, with the likelihood to come back and buy again or tell friends about their experience. We are interested in the extent to which customers are satisfied or dissatisfied with home appliance product char- acteristics. One of the models to measure customer satis- faction is the Kano model of customer satisfaction (dis- cussion on the Kano model is provided in subsection 3.1) which classifies product characteristics based on how they are perceived by customers and their effect on customer satisfaction. The theory of attractive quality offers insight into the dynamics of product and service attributes. This theory of attractive quality also deals with the relationship between the objective performance of attribute and cus- tomer satisfaction with attribute. According to the nature of this relationship, attributes are classified into one of five quality dimensions: attractive quality, one-dimensional quality, must-be quality, indifferent quality and reverse quality (see, for example Taifa & Desai, 2017; Fonseca, 2015; Nilsson-Witell & Fundin, 2005). There have been several applications of the Kano model, as well as adap- tations of the Kano model. Dominici et al. (2016) apply the Kano model to find the drivers for achieving customer satisfaction with new product developments in smartcars exploiting the value potential of internet of things technol- ogies. Being aware of reducing pollution emissions, more companies have started to focus on clean energy as well. Yang et al. (2015) use the Kano model to analyse customer needs for the battery electric vehicle in order to promote the adoption of such vehicles in Sanghai. Authors use four approaches to categorize the battery electric vehicle attrib- utes as must-be quality, one-dimensional quality, attractive quality and indifferent quality. Furthermore, Shahin et al. (2017) provide revision of the Kano model and separating indifference attributes in order to develop satisfaction and dissatisfaction indexes and to apply such a newly defined Kano model in the presidential election, whereas Chang & Chen (2014) apply the Kano model with a modified cus- tomer satisfaction coefficient to reach effectiveness for a semiconductor wafer fabrication. Additionally, an adapt- ed approach to the Kano model to identify patient needs from different patient roles can be found in Gustavsson et al. (2016). Authors report that such an approach to view- ing patients as customers and incorporating inputs from various groups and various stakeholders appear to help in the identification of a wide range of patient needs. In their study, Murali, Pugazhendhi & Muralidharan (2016) demonstrated the application of multiple regression anal- ysis in studying the influence of after sales services attrib- utes on customer satisfaction, customer loyalty and cus- tomer retention for three different products from the home appliances sector and based on the results, suitable strate- gies can be developed to improve customer satisfaction, customer loyalty and customer retention. The paper aims to help companies develop better understanding, as well as to highlight the importance of measuring customer satis- faction. The empirical part of the paper provides a means for companies to integrate the Kano model with other models and tools to support development or improvement of a product, or to determine market strategies in order to add value and to improve company performance. The paper is structured as follows: after a brief intro- duction, we present a/the marketing system, we continue with the marketing management process, then present the concept of customer satisfaction and the Kano model. We continue with the empirical application and finally con- clude. 2 Literature review 2.1 Marketing system Marketing research grew out of the needs and demands of the marketing system. The marketing system represents a conceptual model in which marketing mix and situational factors are seen as independent variables (input) and cause behavioural responses and performance measures (Fein- berg et al., 2013; Jobber, 2007) (Figure 1). Independent variables in marketing research can be separated into situational factors (which cannot be con- trolled) and various decisions regarding marketing mix made by the organization. The environment to which the selling organization must adopt is represented by situation- al factors. These factors include availability of resources, actions of competitors, economic climate, market trends and government regulations. Although these cannot be controlled, they can be measured. Alternatively, numer- ous variables are difficult or impossible to measure, such as customer moods whilst shopping – they must be treat- ed as unobservable. There are numerous other decisions and choices made under the control of the organization. Among the most important of these is marketing mix, which typically includes product, price, places and pro- motion. Combinations of different levels of these variables form alternative marketing programs or courses of action. 341 Organizacija, Volume 50 Number 4, November 2017Research Papers To understand market dynamics and customer behaviour it is realistic to view these as inputs or decision variables (Aaker, 2010; Aaker, 2005; Chernatony, 2002). Behavioural response is influenced with both inde- pendent variables (namely marketing mix and situation- al factors), which include: purchases, buying intentions, preferences and attitudes. It would not be reasonable to believe that behavioural responses result only from inde- pendent variables. Actual behaviour is a combination of a variety of effects – some are controllable, some merely measurable and some unobservable. This on the other hand complicates the question of how to develop a marketing program that effectively handles a dynamic set of varia- bles and behavioural responses (see, for example Burns & Bush, 2010; Aaker, 2010). Behavioural responses form the basis of an organization’s monetary and non-mone- tary performance measures. Monetary measures include: sales, market share, profit, ROI, cash flow. Non-monetary measures, for example, are the organization’s image and customer satisfaction, which is further discussed in this paper. In practice, business decisions are rarely driven exclusively by these input-output marketing models and formal statistical models. Rather they are a combination of managerial experience, judgement and intuition (Feinberg et al., 2013). 2.2 Marketing management process The main task of marketing management is to comprehend the marketing system well enough to make decisions that affect that system in accordance with the organization’s goals (Feinberg et al., 2013). The role of the information- al feedback between the marketing system and the deci- sion-making process, which is called marketing manage- ment process, is shown in Figure 2. The decisions made by managers are aimed at influ- encing the performance measure in a predictable manner, based on information concerning the/a/their marketing system (see, for example Johansson et al., 2014; Strandsk- ov, 2006). They are informed by past experiences and marketing research and can thus plan future actions by comparing performance against objectives (Aaker & Joa- chimsthaler, 2009). 2.3 Measuring customer satisfaction We already mentioned that performance measures in marketing system are those which managers try to influ- ence and can be divided into monetary and non-monetary performance measures. One of the non-monetary perfor- mance measures is customer satisfaction, which is further discussed in this paper. Customer satisfaction represents one of the key concepts in modern marketing theory and practice. Each company is trying to satisfy its customers in a way, that customers would repeatedly come back. Each company is striving for long-term customer loyalty (see, for example Gričar & Bojnec, 2013; Ažman & Gomišček, 2012; Ćoćkalo, Đorđević & Sajfert, 2011; Almquist, Sen- ior & Bloch, 2016). In preliminary research involving the measurement of customer satisfaction, it was found that customer satisfaction was not only influenced by per- ceived product quality, but also by the whole shopping experience and expectations (Wen Wu, 2006). From that point, customer satisfaction has been defined in different ways and contexts. According to the literature review, we could define two different conceptualizations of customer Figure 1: Model of the marketing system Organizacija, Volume 50 Number 4, November 2017Research Papers 342 satisfaction. Firstly, satisfaction is an effective construct based on feelings and emotions. Secondly, satisfaction is a dynamic construct that develops over a period of time. These two different conceptualizations are also called transaction-specific and cumulative satisfaction respec- tively (see, for example Anderson et al., 1994; Burns & Bush, 2010). According to (Gronholdt et al., 2000; Ko- bylanski & Pawlowska, 2012; O’Sullivan & McCallig, 2012) satisfaction is the customer’s emotional and ration- al (cognitive) evaluation of experiences with a product or service. The standards that customers are using to evaluate their experiences are the basis for their judgement of ful- filment of promises. These could be personal goals, needs, expectations and experiences with competitive companies. Customer satisfaction has to be seen as one of the main goals of a company’s managers and therefore the source of a competitive advantage. It is actually an investment which brings measurable business benefits. In such a man- ner it is reasonable to manage customer satisfaction and to monitor factors which influence business benefits that satisfaction brings. Influence on the successfulness of a company is namely derived from the following direct ben- efits which come from satisfaction: higher consumption, higher level of loyalty, willingness to pay more, greater expectations, lower costs, good reputation and positive word of mouth. Additionally, satisfaction also influences financial successfulness of a company. There are numer- ous studies that confirmed positive effect of satisfaction on return on investment and profitability of a company (see, for example Anderson et al., 1994; Omachonu et al., 2008; Yeung & Ennew, 2000; Yu, 2007). The strategic meaning of satisfaction besides business benefits is also seen in how satisfaction represents such elements according to which basic business strategy has to be determined. In such a way, a company can follow strategy of specialisation, fo- cusing on narrow, specific market segments ensuring high quality. Such a strategy leads to the above-average satis- faction, greater loyalty and higher price premiums. Sec- ond basic business strategy can be mass, undifferentiated strategy, where »average«, price sensitive customers are targeted. Somewhat lower satisfaction is acceptable with this strategy as companies are competing with lower costs or prices rather than with quality or differentiated supply. What is more, customers within the second strategy have increasingly greater expectations so the threshold of yet acceptable satisfaction is increasingly greater for them. One of the models to measure customer satisfaction is the Kano model of customer satisfaction which classi- fies product attributes based on how they are perceived by customers and their effect on customer satisfaction (Chu, 2002; Di Paula, 1999; Grigoroudis & Spyridaki, 2003; Kano et al., 1984; Lilien et al., 1992; Južnik Rotar & Ko- zar, 2012). These classifications are useful for guiding de- sign decisions – they indicate when good is good enough and when more is better (Kano Model Analysis, 2014; Spool, 2011). Figure 2: Marketing management process 343 Organizacija, Volume 50 Number 4, November 2017Research Papers 3 The Kano model of customer satisfaction 3.4 Short overview of the Kano model of customer satisfaction The Kano model of customer satisfaction, proposed by the Japanese professor Noriaki Kano and his colleagues, divides product attributes into three categories: threshold or must be, performance and excitement or delighter (see Figure 3). A competitive product meets basic attributes, maximizes performances attributes and includes as many excitement attributes as possible (Chen & Chuang, 2008; Kano Model Analysis, 2014; Kano et al., 1984; Spool, 2011). The Kano model is used to determine the customer expectations regarding product – it is used for analyzing customer needs and determining product requirements. The main focus of customer needs abbreviates from the product quality properties. Customers (or potential cus- tomers) are trying to solve an issue or realize an opportu- nity. However, it is crucial to define a segregation of needs, since we know all the needs are not equal – different cus- tomers have different priorities and meanings attached to their needs. 3.5.5 History The Kano model was developed in 1984 by Noriaki Kano and his team. It was formulated to define a model that could categorize and prioritize customer needs and provide the manufacturer with guidelines for product development lifecycle and to provide the customer with on-growing sat- isfaction when returning for the new line of a product from the same manufacturer. 3.1.2 The model The model itself can be shown graphically as a combina- tion of two axis – the x axis and the y axis, where the x axis defines whether the customer needs were met and to what extent (the x axis can be understood as the products performance or function) and the y axis is the level of cus- tomer response to the product: was the customer delighted or disappointed The customer response and the level of meeting expectations is divided into three categories (see, for example Chen & Chuang, 2008): • Basic needs or as we can call them the “must be re- quirements”. The requirements in this category are essential – if they are met it means that there is no special delight for the customer, they are performing quite neutral. But if these requirements are not met, the customers are disappointed and the product is not likely to be sold. • Performance needs. These are needs that the custom- er can define and the manufacturer can discuss. The needs are subject to the “more is better” rule. The needs that are met here are the one that separate one product or service from another. This is the category which provides the separation between competitors. In this category the product or service provides an answer to questions such as: What is the level of ser- vice? What is the price performance? What features does a product have? • Attractive (delight) needs. These are mostly the un- spoken needs that the customer cannot define. These needs are not expected by the customer – so if the product or the service does not provide them, the customers are neutral, since they were not expecting them in the first place. But if the product or service provides them, the customers are excited. These three categories can be used for defining our prod- uct or service requirements and design. When designing a new product, it is expected that all the requirements from the first category are met – there can be no option to omit them. When taking the second category (performance needs) into focus, it is clear that in this category the prod- uct or service and its place between competitors is defined. This is where the right level of features and properties are defined to assure an attractive and competitive product. The third category is where the “wow” effect is defined. Each product or service should have at least one or two such features which delight the customer and therefore provide the final differentiation of the product from the competition. By integrating such features into our product or service, this really means embellishing the product or service when we are defining it. 3.1.3 Use of the Kano model The Kano model can be used in different ways, depending on the matter in focus. However, it is crucial to always pro- vide the three category view of the customer regarding the matter in focus. Once it can be used as a model for meeting the features and properties that the product should have, it can be used as a model for defining and benchmarking the product basic quality against other products on the market. The Kano model is sometimes called the ‘two-dimensional quality model’. The customer sees the Kano model as a simple classi- fication of the products they encounter – they see them as basic, good or excellent products. This is where use of the Kano model becomes complex. When providing a solution to a global market, sometimes the understanding of delight can vary from one location to another, one culture to an- other, one set of values to another. The second important factor is the definition of delight during the time. As time passes, the sets of features that provide delight changes. So when defining the features and properties from a distance, Organizacija, Volume 50 Number 4, November 2017Research Papers 344 it is important to understand the “strategic” in the “opera- tional” usage of the Kano model. The “strategic” point of view suggests something like “our product will have ex- cellent design features”, and the more operative approach says something like “this year our dishwashers shall be made in all the colors of the rainbow.” If the Kano model is utilized as a tool for defining the products and their quality, the understanding of ’delight’ and ’must have’ must be permanently and constantly re- defined (see, for example Butori & De Bruyn, 2013). This definition must be relevant to both the market and time in which the product is meant to meet the market. Through doing this efficiently the Kano model is and can be used as a tool for achieving customer loyalty and a perennial, yet steady, growth of new customers wanting to buy the product. 3.6 Stated and derived importance In order to construct the Kano model, we must define x axis and y axis. We define x axis as stated importance, whereas y axis is defined as derived importance. In cus- tomer satisfaction surveys, the most frequent request is to rate the importance of a particular product or service attrib- ute. This information is used by a company to determine which attributes are valued most by customers and how they are related (Di Paula, 1999; Smith & Wright, 2004). When analysing data from customer satisfaction surveys, a common problem is the comparison of stated and derived importance for a set of satisfaction dimensions (Fontenot et al., 2007; Grigoroudis & Spyridaki, 2003; Moliner et al., 2007; Tarn, 2004; Trif, 2013). The derived importance analysis includes correlating performance ratings for a specific product or service attribute with broader perfor- mance criteria. Such criteria could be the overall custom- er satisfaction ratings of the company, product or service. The more prominent an attribute correlates with overall customer satisfaction, the more important it is for a com- pany to improve performance on that attribute (Di Paula, 1999; Matzler et al., 1996; McElroy, 1989). One of the key advantages of the derived importance approach is that it makes use of statistical modelling – multiple regression in deriving the relative importance of explanatory variables in explaining the dependent variable. In general, this ap- proach is objective by avoiding human bias; the quality of data is higher. Alternatively, the question is to what extent the regression model predicts the dependent variable as a function of the other explanatory variables. Another prob- lem is the existence of multicollinearity. For example, the three variables that measure quality are correlated amongst themselves. The stated importance approach uses both at- tribute importance and performance ratings. According to Chu (2002) the main reason for using stated importance is that it entails the face validity of the results. It is also a sim- ple technique to administer. This approach involves both importance and performance measures. On the contrary, this is seen as a disadvantage as the attributes are generally measured twice (repetition) and therefore takes more time for a respondent to fill in the questionnaire. Additionally, the response rate may be lower (see, for example Park, 1998; Partovi, 2007). Figure 3: Kano model 345 Organizacija, Volume 50 Number 4, November 2017Research Papers 4 Research methodology We adopted a quantitative approach regarding data col- lection and the method used was based on a survey. Re- spondents were randomly selected individuals from the service interventions for an end users database for which the information of their willingness to participate in such activities was available. Respondents were invited to com- plete the survey. They received the link to the web appli- cation. However, in cases where no email address was available, the paper form of the survey was forwarded. The main part of the survey consisted of 23 home appliance characteristics, which measured respondents’ perceived importance and the relative performance of each attribute on a five-point Likert scale. Respondents’ overall level of satisfaction with home appliance was also measured on a five-point Likert scale. We obtained 115 valid surveys. Out of 115 valid surveys there were 48,7 % males and 51,3 % females. Approximately half of the respondents were below the age of 40, whereas more than a half of the re- spondents had a degree from a higher education institution and more. The majority of respondents were employed on a non- fixed terms basis, whereas the mode on income in- terval was 1000-1499 EUR. The most frequent family size was 4 or 5 members in a family, followed by three and two members in a family. 5 Results We first used factor analysis to identify the underlying fac- tors of the 23 home appliance characteristics. The main objectives of using factor analysis are: • To create a smaller set of correlated characteristics into dimensions or factors from the existing char- acteristics that explain the most variance among the characteristics. Characteristics Label Mean Std. dev. Neatness of salesperson in the workplace P1 3,10 1,24 Professional skills of salesperson P2 3,87 1,27 Wider knowledge of salesperson P3 3,74 1,19 Professional approach of salesperson P4 3,84 1,29 Appearance of sales salon P5 3,63 1,18 Appearance of exhibition place where home appliance was presented P6 3,48 1,19 Web presentation of home appliance P7 3,74 1,09 Basic price of home appliance P8 3,93 0,97 Terms of financing and stage payments P9 3,20 1,33 Discounts and sales campaign P10 4,00 1,13 More affordable home appliance in comparison to competitive brands P11 3,20 1,19 Technical features that competing devices do not have P12 3,67 1,02 Dimensions of home appliance P13 3,74 1,16 Energy class of home appliance P14 4,19 0,88 Serially fitted protective equipment P15 4,03 1,01 Brand of home appliance P16 3,83 1,04 Colour palette in which home appliance is available P17 3,30 1,27 Design of home appliance P18 3,83 1,01 Easy to use P19 4,23 0,84 Simple basic maintenance of home appliance P20 4,25 0,94 Guarantee period P21 4,50 0,81 Service network with available spare parts P22 4,53 0,74 Keeping in touch with customer after purchase P23 3,03 1,36 Table 1: Descriptive statistics (Source: author calculations) Organizacija, Volume 50 Number 4, November 2017Research Papers 346 • To apply the derived factors for subsequent analysis: to further calculate the derived importance and stated importance of customer satisfaction which are then used to construct the Kano model of customer sat- isfaction (due to internal business needs we applied adapted version of the ’original’ Kano model where the classification of a feature goes beyond qualitative analysis and is based on stated and the derived impor- tance approach). • To analyse which characteristics are the strongest drivers or predictors of repeat purchase. Principal component factor analysis with varimax rotation was first used to identify the underlying factors of the 23 home appliance characteristics (descriptive statistics is re- ported in Table 1). The Kaiser-Meyer-Olkin (KMO) meas- Characteristics Factor loading Sales environment Price User features Design features Technical features Sales environment Neatness of salesperson in the workplace 0,83 Appearance of exhibition place where home appli- ance was presented 0,81 Appearance of sales salon 0,78 Professional skills of salesperson 0,78 Wider knowledge of salesperson 0,71 Professional approach of salesperson 0,70 Price Discounts and sales campaign 0,79 Basic price of home appliance 0,77 Terms of financing and stage payments 0,71 More affordable home appliance in comparison to competitive brands 0,69 User features Easy to use 0,72 Guarantee period 0,71 Brand of home appliance 0,66 Simple basic maintenance of home appliance 0,52 Design features Colour palette in which home appliance is avail- able 0,83 Design of home appliance 0,77 Technical features Energy class of home appliance 0,60 Serially fitted protective equipment 0,58 Dimensions of home appliance 0,51 Eigenvalue 8,29 2,33 1,92 1,42 1,03 % of variance 36,06 10,12 8,37 6,17 4,48 Cronbach’s Alpha 0,91 0,80 0,77 0,84 0,71 Table 2: Results of factor analysis – identification of underlying home appliance factors (Source: author calculations) 347 Organizacija, Volume 50 Number 4, November 2017Research Papers ure of sampling adequacy was calculated to examine the appropriateness of factor analysis. In our case KMO was 0,86, indicating that factor analysis is appropriate. The de- cision whether to include characteristic into a factor was based on several principles (see, for example Field, 2009), including: characteristic loadings equal to or above 0,50; eigenvalues equal to or above 1,0; and the decision also included the recommendation that factors extracted should account for at least 60 % of the variance. As a result, a five-factor solution which categorized the 23 home appli- ance characteristics and explained 65,2 % of the variance was identified. We also tested the reliability and validity of measurement. We tested reliability using Cronbach’s Al- pha. Cronbach’s Alpha coefficient was higher than 0,70 in all cases and indicated that the tested measurement scale is reliable. We tested validity with convergent validity and used Pearson’s correlation coefficients. The correlation coefficients within each factor are high and statistically significant, indicating the existence of convergent validi- ty. Table 2 shows the results of five factors derived from factor analysis labelled as Sales environment, Price, User features, Design features and Technical features. According to the results of factor analysis we applied the derived factors to further calculate the derived impor- tance and the stated importance of customer satisfaction which were then used to construct the Kano model of cus- tomer satisfaction. We calculated the stated importance (x axis in the Kano model) as the mean importance rating given to home appliance characteristics by respondents. In order to convert the means into importance weights we normalised the means. The derived importance (y axis in the Kano model) was obtained by correlating rating of characteristics with the overall rating. Subsequently we performed the normalisation. Figure 4 presents the Kano model according to the data used. According to the Kano’s model characteristics that have a high stated and low derived importance are least expected characteristics (must be attributes). Characteris- tics like energy class of home appliance and serially fitted protective equipment are the minimum expected for home appliance. Characteristics with low stated and high derived importance are called delight attributes. The marketers should concentrate on these attributes. In this study wider knowledge of salesperson, professional skills of salesper- son, design of home appliance, professional approach of salesperson, brand of home appliance, basic price of home appliance, appearance of exhibition place where home ap- pliance was presented and more affordable home appliance in comparison to competitive brands emerge as the delight attributes. Others are linear attributes. If they are impor- tant, then pay attention. The most important characteristic is the guarantee period, as stated and derived importance is high. If they have low importance, one should not pay much attention to those characteristics in the sense of de- Figure 4: Kano model for the study of home appliance Organizacija, Volume 50 Number 4, November 2017Research Papers 348 sign. Spending too much on such characteristics may not be in a linear relationship with profitable returns. In addition, we wanted to understand respondent opinions and drivers of their evaluation in order to gain perspective of how we can improve their experiences and perhaps company profitability. In such a manner we an- alysed which factors are the strongest drivers or predic- tors of repeat purchase. Factor analysis provides us with the set of quantities that can be used in a regression or other multivariate analysis technique (in comparison with the original intercorrelated variables). Regression works in the best possible way when predictors are uncorrelated (Iacobucci, 2013; Feinberg et al., 2013). We have to be aware that variables that we are given are never uncorre- lated. Alternatively, factors (when they are extracted using orthogonal rotation, like varimax) are always perfectly uncorrelated (Field, 2009). This enables further statistical analysis. According to this, we completed our analysis by using the factors in a logistic regression to help determine which are the strongest drivers or predictors of repeat pur- chase. The repeat purchase was a dummy variable indi- cating 1 if respondent would buy another home appliance product of a brand X if he/she had to buy another home appliance product and indicating 0 otherwise. We used the variable repeat purchase as dependent variable in a logistic regression with the five factors as predictors. The logistic regression results are shown in Table 3. The logistic regression analysis showed that the model as a whole is statistically significant (χ2=14,98, p<0,010). Estimate of the variance that can be predicted from the com- bination of the five factors, Cox&Snell and Nagelkerke R2 is 12,2 percent and 17,1 percent respectively, which means that the five factors explain about one eight (one sixth) of the variation in repeat purchase. Table 3 presents the odds ratios, which suggest that the odds of repeat purchase are increasingly greater as user features (factor 3) scores in- crease. The odds of repeat purchase improve by 2,236 for each unit increase in users’ features score. 6 Discussion and conclusion In this study user features are those which represent the strongest driver of repeat purchase and they are positively correlated with repeat purchase. This may indicate that the decision of the company to adopt the simplicity philoso- phy has proven to be the right orientation for the company combining lifestyles and personalities. The company prod- ucts are designed following experiences and technology. The creation and realisation of the company products is driven by the needs of different types of people. The com- pany plays a challenger on the market several times; such as the decision to adopt the life simplicity philosophy. The company was in the position to follow such market strate- gy as the company faces economies of scale and therefore lower costs per unit. Additionally, the company is small enough to be flexible. The company product range is char- acterized by innovative and design-oriented products with high technical perfection and functionality. The company has become an innovative brand with an emphasis on de- sign, geared to the needs of customers. The company relies on proven and useful solutions to achieve the most efficient use for household appliances. From the principle of “be- wusst robust” (consciously robust), today’s principle of the company is to create attractive design-oriented household appliances to make the daily lives more pleasant and less complicated. The company’s decision, supported by ongo- ing customer satisfaction measurement enables the com- pany to apply continuous improvement and total quality management philosophies, as well as to improve company performance in the context of economic globalisation. From the methodological point of view, limitations in the research can be found in the number of respondents. Having a sample size which is large enough, ensures a representative distribution of the population and finding significant relationships from the data. Another limitation of the research is the omission of a variable which would indicate the country of origin of the respondents. Having such a variable would allow comparisons to be made, to form independent groups and test the differences between the groups and to account for other impacts, such as gener- al economic conditions. However, the latter could be seen Table 3: Logistic regression analysis results (Source: author calculations) Coefficients B Std. error Exp(B) Sig. Constant 0,825 0,218 2,283 0,000 Factor 1 0,018 0,221 1,018 0,936 Factor 2 -0,055 0,225 0,947 0,808 Factor 3 0,805 0,241 2,236 0,001 Factor 4 0,163 0,216 1,177 0,450 Factor 5 0,142 0,213 1,152 0,506 349 Organizacija, Volume 50 Number 4, November 2017Research Papers as a possible direction for future research. The findings of our research have both theoretical and practical implications. It is believed that the findings of this research enable better understanding of the complexi- ty of customer satisfaction and the Kano model itself. Our research adds to the relatively scarce literature in Slovenia in the relation of using the Kano model and integrating this model with other models and tools to support optimization of business decisions. Above all, the research of customer satisfaction influences the improvement of quality man- agement and in general the performance of a company. From a theoretical perspective, our research contrib- utes to identification of the home appliance factors and to construction of the Kano model of customer satisfaction based on the calculation of the stated and derived impor- tance. The Kano model can be used in many different ways; however it always provides the three category view of the customer. On top of that, the findings of our research indicate which factors are the strongest drivers/predictors of repeat purchase. In order to optimize business decisions, it is imperative to focus on people as customers and em- phasize customer needs and priorities. 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His research focus is on risk management, decision making in management, infor- mation technology, performance management, knowl- edge management. Uporaba Kano modela za izboljšanje zadovoljstva potrošnikov Ozadje/namen: Zanimanje za merjenje zadovoljstva potrošnikov se kaže v koristih, ki jih le-to prinaša, in sicer pridobitev lojalnosti potrošnikov, prenašanje potrošnikovih dobrih izkušenj od ust do ust, ponovni nakup, izboljšanje tržnega deleža podjetja in dobičkonosnosti. Področje integriranja Kano modela zadovoljstva potrošnikov z ostalimi modeli in orodji, ki omogočajo razvoj ali izboljšanje proizvoda oziroma določanje trženjskih strategij, je na sloven- skem področju relativno neraziskano. Cilj raziskave je oblikovati Kano model za izboljšanje zadovoljstva potrošnikov gospodinjskih aparatov. Zasnova/metodologija/pristop: Podatki so bili zbrani preko spletne ankete med naključno izbranimi posamezniki iz podatkovne baze končnih uporabnikov. Faktorska analiza glavnih komponent je bila uporabljena za identifikacijo dejavnikov lastnosti gospodinjskih aparatov. Nato smo izračunali izpeljano in navedeno pomembnost, kar je bilo up- orabljeno za oblikovanje Kano modela zadovoljstva potrošnikov. Prav tako smo analizirali, kateri dejavniki v največji meri vplivajo na ponovni nakup z uporabo multiple regresijske analize. Rezultati: Identificirali smo dejavnike gospodinjskih aparatov, pri čemer so to prodajno okolje, cena, uporabniške, oblikovalske in tehnične lastnosti. Na podlagi rezultatov smo nato oblikovali Kano model, kjer analiza presega kvalita- tivni okvir in pomeni implementacijo dveh pristopov, izpeljane in navedene pomembnosti. Tržniki naj se osredotočijo na lastnosti kot so širše znanje prodajalca, strokovne sposobnosti prodajalca, dizajn gospodinjskega aparata, bla- govna znamka. Uporabniške lastnosti v največji meri vplivajo na ponovni nakup. Zaključek: V članku smo povezali Kano model z merjenjem zadovoljstva potrošnikov, kar predstavlja prispevek k teoriji trženjskega raziskovanja. Rezultati raziskave lahko služijo kot podpora optimizaciji poslovnih odločitev kot tudi za nadaljnje znanstveno raziskovanje Ključne besede: optimizacija; poslovne odločitve; Kano model; merjenje zadovoljstva potrošnikov Organizacija, Volume 50 Number 4, November 2017Research Papers 352 DOI: 10.1515/orga-2017-0026 Analysis of Individual Aspects Influencing Non-purchasing in an Online Environment and Consumer Willingness to Purchase Custom-Made Apparel Milica ŽURAJ1, Petra ŠPARL2, Anja ŽNIDARŠIČ2 1 Independent researcher, Ljubljana, Slovenia milica@zuraj.com 2 University of Maribor, Faculty of Organizational Sciences, Kranj, Slovenia anja.znidarsic@fov.uni-mb.si Purpose: The main purpose of the study was to assess the opinion of online consumers about the possibility of mak- ing custom apparel using 3D body scanning technology in an online environment and to investigate the shopping ex- perience of consumers who purchase in the online apparel market. In order to be able to propose solutions to improve the online shopping experience, we also investigated aspects influencing non-purchasing in an online environment. Methods: An online questionnaire on shopping experience, influences on the purchase, and the process of online apparel shopping using advanced technology was prepared and distributed via several online channels to the con- sumers who purchase apparel online. The questionnaire was completed by 76 respondents from different European countries, the United States and Australia. In order to analyze individual aspects influencing non-purchasing in an online environment, an exploratory factor analysis was performed. Results: The factor analysis revealed that the two broad dimensions of reasons why consumers have never bought any ready-to-wear apparel online despite browsing are a misperception of product integrity and time-consuming searching. The results show that the proposed solutions to improve the online apparel experience, such as making custom apparel using advanced technologies, have a positive impact on the decision of the consumers to purchase on the online apparel market. It turned out that a high proportion of potential consumers are willing to share their body dimensions through 3D body scanning technology in order to improve the fit of the apparel. Conclusion: According to the results, we expect that the advanced 3D body scanning technology would provide substantial progress regarding fit, visualization, and manufacturing of custom-made apparel when purchasing in online stores. Keywords: online shopping apparel; custom made apparel; consumers’ shopping experience 1 Received: July 17, 2017; revised: October 12, 2017; accepted: November 11, 2017 1 Introduction The main idea and motive for this research paper de- rives from the fact that the consumer wants to purchase high-quality apparel, which satisfies their fitting prefer- ences, in an easy and cost-effective manner. This is not a problem when it comes to small brick-and-mortar shops where the consumer can touch the fabric, look at the color, try on the apparel, etc. The challenge arises in online ap- parel stores, where the consumer is able to evaluate the apparel qualities only virtually. Online apparel stores pro- vide consumers with various benefits, such as saving time and money, 24-hour availability, better service in general, a fast (and easy) process of shopping and a greater choice of products compared with brick-and-mortar shops (Mon- suwe, Dellaert, & Ruyter, 2004; Loker, Ashdown, Cowie, 353 Organizacija, Volume 50 Number 4, November 2017Research Papers & Schoenfelder, 2004; Orzan, Iconaru, Popescu, Orzan, & Macovei, 2013). However, it is well known that a high proportion of the returned apparel purchased in an online store is due to the inability to find the right size and/or due to the dissatisfaction with the fit of ready-to-wear ap- parel. Also, according to Olaru, Filipescu, Niculescu, and Filipescu (2013) “unsold products do not reflect that they are obsolete or do not have the best quality in terms of accuracy of manufacturing technology, appropriate use of raw and auxiliary materials, but they were not purchased because they do not correspond to the dimensional mor- phological requirements of the users”. The cause of this problem stems from the standardization of the apparel siz- ing system, either due to the obsolescence of the existing standards or variations in body shapes and sizes that the existing standards do not account for, or due to the size disparity between the apparel suppliers. Most manufactur- ers of ready-to-wear apparel set standard sizes depending on their target market (Ashdown & Dunne, 2006; Faust, Carrier, & Baptiste, 2006; Kim & LaBat, 2013). Howev- er, many groups (slim, plus-size, very tall, elderly women, black women and others) do not belong to the target group of the clothing industry and thus they cannot find appar- el that fits their body size and desired style (Ashdown & Dunne, 2006; Romeo & Lee, 2015). Gültepe and Güdükbay (2014) emphasized that trying the apparel on is one of the most time-consuming stages of apparel shopping, and the problem of fitting ready-to-wear clothes is especially present in online shopping. When purchasing apparel online, consumers are unable to touch and feel the apparel (Wu, Hwang, Sharkhuu, Tsogt Ochir, 2017). To facilitate the evaluation of fit of ready-to-wear apparel to the individual body shape, some online retail- ers already enable consumers to use virtual fitting rooms for trying on the apparel on their website through virtual models tailored to the physical dimensions of their body. However, the existing virtual models cannot fully capture the properties of the human body (Pilar, Stjepanovič, & Jevšnik, 2013). According to Kozar et. al. (2014) “virtual body models are limited to a standing posture with stand- ard body shape characteristics”. Also, getting the physical dimensions of the consumer (height, bust, waist, hips and arms) is based on the self-measurement (using a measur- ing tape) which has certain drawbacks (see Ashdown & Dunne, 2006; Park, Nam, Choi, Lee, & Lee, 2009). Despite the efforts of online retailers to provide a better virtual experience using the help of interactive technolo- gy, it is first necessary to solve the problem of the current system of ready-made apparel sizes and to enable a relia- ble acquisition of the physical dimensions of consumers. Ives and Gabriele (2003) emphasized that it is important to improve the consumers’ satisfaction and comfort, where a good alternative to stock sizing is a custom-made clothing service (as cited in Kim et al., 2017). The solution that we propose could be purchasing cus- tom-made apparel online using innovative technologies. Integrated anthropometry information technology (3D body scanner, WEB camera) and CAD/CAM software, which includes 3D virtual apparel simulation software, provide an opportunity for purchasing custom-made ap- parel over the Internet. With the anthropometry informa- tion technology, »3D digitized anthropometric data can easily be collected in a few seconds and accessed imme- diately from anywhere in the world through the Internet« (Niculescu, Mielicka, Salistean, Napieralska, Popescu, & Mocenco, 2016). This would guarantee that apparel would satisfy the requirements of the consumers. The consumers’ preferences regarding apparel fit may be defined as the re- lationship between the body, garment dimensions, and the expectations the wearer has in regard to the fit (Chattara- man, Simmons, & Ulrich, 2013). Therefore, shopping for custom-made apparel via the Internet can solve the issues consumers have when purchasing ready-to-wear apparel. In our study we investigated the experiences of con- sumers when shopping for apparel online and their shop- ping habits. Therefore, the purpose of our study was to determine the shopping experiences of consumers who purchase in the online apparel market and to analyze the willingness of potential consumers to purchase cus- tom-made apparel in the online apparel market. In addi- tion, we investigated if the offered solutions that incorpo- rate advanced technologies on the Internet would improve their online shopping experience of the apparel and wheth- er they would be willing to entrust volunteering their body dimensions to online retailers. 2 Literature Review Online consumers are searching and evaluating informa- tion regarding the effectiveness of apparel through the virtual product experience (Yu, Lee, & Damhorst, 2012). Therefore, online shops on their websites try to provide the consumer with the most realistic experience, similar to shopping in a brick-and-mortar store. This is achieved through the integration of advanced image interactive technology (Yu et al., 2012), which enables the creation and manipulation of the products or the environment to simulate the actual experience with the product and the en- vironment (Yang & Young, 2009), for example: expansion or zoom, 3D rotation and personal 3D models in a virtual fitting room for trying on apparel. Per authors Loker, Ash- down, and Carnrite (2008); Kim and LaBat (2013); Yang and Young (2009); Boonbrahma, Kaewrata, and Boon- brahma (2015) virtual fitting technology in the online store solves problems such as the fit of ready-to-wear apparel, choosing the appropriate size and style, and overconsump- tion of time on the purchase. Most online stores on their websites provide informa- tion about standard sizes and the measurement procedure which helps the consumers to choose the appropriate size Organizacija, Volume 50 Number 4, November 2017Research Papers 354 more easily. Some online stores on their websites also of- fer virtual fitting rooms, where the physical dimensions of the virtual mannequin can be changed and adapted to the physical dimensions of the consumer (neck, chest, waist, hips). Consumers can, before the purchase, virtually try on a garment and choose the size that best fits their body shape. In both cases, the consumers are measured by using a measuring tape and on the basis of the obtained physi- cal dimensions choose an appropriate size which fits them best. However, it has been shown that self-assessments are inaccurate by as much as 6 cm (Yoon and Radwon as cit- ed in Ashdown & Dunne, 2006). Authors Kim and Choi (2002) indicate that previous studies have shown that ap- parel consumers do not generally familiarize themselves with their body measurements (as cited in Park et al., 2009). We conclude that the apparel consumers’ lack of knowledge about their body measurements, as well as the technical difficulties involved while taking those measure- ments, are impediments to the proper selection of clothing sizes when shopping online. In addition, some online stores have virtual fitting rooms that utilize a 3D scanner to capture the physical body dimensions of the consumer. Based on the obtained physical dimensions, it enables the consumers to try on ap- parel in a virtual fitting room before they make a purchase. Studies have shown that the 3D scanner enables a reliable acquisition of the physical dimensions (Loker et al., 2004). However, for the consumers who do not belong to the tar- get market of apparel manufacturers, the use of a 3D body scanner (i.e. the exact body measurements acquisition) does not guarantee that they will find the ready-to-wear apparel that fits their body shape. According to Ashdown and Dunne (2006), the consumer dissatisfaction with the fit of apparel is very high (62% for men and 50% for wom- en). Another study shows that 70% of women aged 55 and over are dissatisfied with the fit of ready-to-wear apparel (Goldsberry et al. as cited in Ashdown & Dunne, 2006). One of the reasons is that most manufacturers of ready-to- wear apparel set standard sizes depending on their target market (Anderson et al., 2001; Ashdown & Dunne, 2006; Faust et al., 2006; Kim & LaBat, 2013). Another reason is that “garment order initiators do not adhere to the stand- ard sizes charts and garment manufacturers are incapable or unwilling to produce garments that meet the order ini- tiators` specifications” (Faust et al., 2006; Xu & Huang, 2003). A survey (Faust et al., 2006) showed a number of factors that contribute to this situation: obsolescence of the existing standards, variations in body shapes and sizes that the existing standards do not account for and marketing ploys aimed at flattering certain consumers. Moreover, the estimate of dimensions used in current 2D patterns rep- resents only a general dimension with a small range of fundamental measurements such as neck base girth, arm- hole girth, bust girth, waist girth, hip girth, body depth, etc. (Fang & Tien, 2013). Such systems do not take into account the detailed dimensions and specific surface con- figurations of individuals (Fang & Tien, 2013; Ashdown & Dunne, 2006; Faust et al., 2006). Measurements of con- sumers even in the same size category vary (Apeagyei & Otieno, 2007). Due to the above mentioned, consumers are forced to try on several different brands and sizes before finding the apparel that fits them best (Anderson et al., 2001), but also to try on a large number of apparel items, which does not guarantee that the consumer will find a garment that fits well (Ashdown & Dunne, 2006). Based on the results of these studies, we can conclude that many consumers do not fall within the target group of the apparel industry and for this reason cannot find the apparel that fits their body dimensions and the desired style. It follows that the technology for the virtual fitting of ready-to-wear ap- parel (which uses parametric body or a 3D body scanner) is intended primarily for the consumers who, in terms of size, (dimensions of the body) belong to the target group of the apparel industry. Different body shapes pose a challenge for the garment industry. However, the development of technology makes the fitting of the apparel to the consumers’ needs possible (Lee, Kunz, Fiore, & Campbell, 2002). With advanced 3D technology, there would certainly be substantial progress regarding fit, visualization, and manufacturing of cus- tom-made apparel when purchasing in online stores. Ash- down and Dunne (2006) emphasized that the success pat- terns of a custom fit ultimately depend on the reliability of the body measurement process. Therefore, 3D body scan- ning systems and CAD/CAM software which includes 3D virtual apparel simulation software may carry commercial potential in the apparel industry of custom-made apparel for retail over the Internet. To summarize, online stores can offer an alternative solution; custom-made apparel, that enables the develop- ment of apparel which fits the consumer perfectly. Also, in this way, the consumers who, according to their body dimensions, do not belong to the standard sizing system, would have the opportunity to buy apparel that corresponds to their requirements regarding fit, comfort and style. The global apparel industry continues a positive growth trend. By 2019, the global apparel market will have grown to 1.51 trillion U.S. dollars (Statista, 2017a). A ro- bust growth is expected in emerging markets and the Unit- ed States’ apparel market (Statista, 2017b). According to Eurostat (Eurostat, 2017a), in 2015, 184,205 enterprises in the EU-28 were engaged in textile and apparel manufactur- ing and their annual turnover was 148,610.3 million EUR. In 2014, they employed 1,431,420 employees. On the oth- er hand, the EU-28 countries have more than 511,000,000 (Eurostat, 2017b) potential consumers (estimated by num- ber of persons with residence in one of these countries), while the number of potential online consumers is even higher, since the world population already exceeds 7.5 bil- lion people. Lectra, one of the world leaders in integrat- 355 Organizacija, Volume 50 Number 4, November 2017Research Papers ed technology solutions, expects that four critical trends will shape the global apparel industry in the next five to ten years: millennials, technology, industry 4.0 and China (McGregor, 2016). Millennials, the people born between 1981 and 1997, bring a lot of challenges for the apparel in- dustry, since they want quality and more sustainable prod- ucts at low prices. The Executive Vice President of Sales at Lectra, Edouard Macquin, forecasts that in the appar- el industry, the following new technologies will become common (McGregor, 2016):“collaborative solutions, 3D rendering, connected devices and the Internet of Things, augmented reality, virtual reality and analytics, making the data speak and providing information.” In Industry 4.0, an era of automatization and data exchange in the cloud, one of the major challenges will be moving from mass pro- duction to mass customization. The manufacturers and the consumers will have a direct connection, without (or at least with fewer) intermediaries (McGregor, 2016). Based on the literature review on problems in shop- ping for apparel online (e.g. Loker, Ashdown, and Carnrite (2008); Kim and LaBat (2013); Yang and Young (2009); Boonbrahma, Kaewrata, and Boonbrahma (2015)) one of our objectives was to investigate the shopping experience of the consumers who purchase in the online apparel mar- ket and to investigate the individual aspects influencing the decision of consumers, who, in spite of browsing and searching do not purchase the apparel. We propose the fol- lowing research questions: • RQ1: Which factors influence online apparel pur- chases? • RQ2: How many dimensions (or factors) are con- tained in the individual aspects influencing non-pur- chasing in an online environment and what is their content? Based on the literature review on drawbacks and consum- ers’ dissatisfaction with ready-to-wear apparel due to the use of standardized sizes and inappropriate fit, the aim of the paper is to investigate the consumers’ willingness to purchase custom-made apparel tailored according to the specifications of an individual consumer, using advanced technologies. In the third research, the question (RQ3) we investigated was whether the respondents would be willing to give their body measurements while purchas- ing custom-made apparel online, since the accurate body measurements are a prerequisite for the production of cus- tomized apparel. • RQ3: What proportion of the potential consumers would be willing to give their body measurements when purchasing custom-made apparel online? 3 Methodology Instrumentation We prepared a questionnaire based on several sources: Loker et al. (2004), Hosun (2012), and Yu et al. (2012). The questionnaire was tested by 10 respondents, minor grammatical errors were found and eliminated. The Eng- lish version of the questionnaire was proofread by a native speaker. In the final version of the questionnaire, we de- cided not to set up hard warnings on all questions, instead, we decided on soft warnings that enable the respondent to complete the survey, even if they do not provide answers to all the questions. We received a proposal to replace the term “apparel”, due to its archaic connotation, with a more modern term “clothing”. However, on the basis of the lit- erature review, we decided to keep the term “apparel”. The questionnaire was prepared in accordance with the aims of the research and was divided into four thematic parts. The first part ‘Shopping experiences’ was designed to discover the importance of online apparel shopping to the consum- ers. All variables were measured on a 5-point Likert type scale of agreement, where 1 means ‘strongly disagree’ and 5 ‘strongly agree’. In the second part, entitled ‘Influences on the pur- chase’, respondents were asked to estimate the factors that affected their decision to purchase the apparel online, us- ing the 5-point scale of influence. They were also asked to estimate the factors that influence their decision not to purchase the apparel in spite of browsing and searching in online stores. In addition, we were also interested to know whether the respondents ever returned the apparel they purchased and for what reason. The last thematic part was devoted to the development of a virtual product and to the process of online apparel shopping using advanced technology. Within this part, the respondents were asked if the following solutions would affect their online purchase of the apparel: virtual fitting of the apparel, custom-manufactured apparel according to the body dimensions using advanced technologies (3D body scanning, CAD/CAM programs, etc.), the aesthetic properties of the apparel shown as realistically as possible, a flexible date of delivery, higher quality of the apparel (materials and/or workmanship), the apparel being safe and harmless to their health and the easy purchase of the apparel. At the end of the survey, socio-demographic questions were included, about gender, age, education, occupational status and place of residence. Data Collection An anonymous online survey using web portal (www.1ka. si) was conducted in July and August 2013. The survey focused on the population that buys apparel online. Organizacija, Volume 50 Number 4, November 2017Research Papers 356 The link to the questionnaire was published: (a) on three different forums of shopping centers worldwide, (b) on five well-known fashion forums, (c) on official Face- book forums of nine online stores of large world-renowned brands. These brands include apparel for men, women and youth and have online stores. Additionally, we asked twelve online stores of world-famous apparel brands and the students of the clothing and textile department at a U.S. university in the West to publish our questionnaire link on their Facebook pages. The decision to distribute the questionnaire via various channels was made based on the previous research where surveys were conducted mainly on students or respondents who receive special benefits to participate in the research. Altogether we received 76 completed questionnaires. We would like to emphasize that in contrast to the majority of other studies on apparel customization, we did not offer any material incentives to the participants included in the research. 4 Results Sample Characteristics Our study included 41% men and 59% women. Their age ranged between 22 and 48 (with the average age of 33). More than half of the respondents (59%) have a university diploma and 76% are employed. The majority of the re- spondents (80%) are from Europe (Slovenia 57%; Serbia 24%; and the rest of the respondents were from Montene- gro, Austria, Bosnia and Herzegovina, Bulgaria, France, Italy, Russia and the United Kingdom). The other respond- ents were from the USA and Australia (Table 1). Descriptive Statistics for Online Shopping Experiences In the first thematic part, the respondents answered sever- al questions on online shopping apparel experiences and views using the 5-point Likert type scale of agreement. It turned out (Table 2) that the respondents mostly be- lieve that online shopping for apparel is ‘Time saving’ for them (M = 3.84). The other three options received lower means, ‘Fun’ (M = 3.25), ‘Pleasure’ (M = 3.10) and ‘Obli- gation’ (M = 2.30). Table 1: Sample characteristics Group % Gender Men 41% Women 59% Age 20 – 30 years 29% 31 – 40 years 61% 41 – 50 years 10% Education Less than High school diploma 5% A levels/High school diploma 15% Bachelors degree/University 46% Master’s Research degree, PhD Degree 20% Country Europe Austria 2% Bosnia and Herzegovina 2% Bulgaria 2% France 2% Italy 2% Montenegro 4% Russia 2% Serbia 24% Slovenia 57% The United Kingdom 2% America North America 18% Australia and Oceania Australia and Oceania 2% 357 Organizacija, Volume 50 Number 4, November 2017Research Papers Further, we wanted to know how often they purchase apparel online. The majority of respondents make online purchases once a month (28%) or once every three months (26%). They are followed by consumers who have never bought apparel online (22%) and those who buy once a year (18%), while the rest of the respondents purchase on- line once a week (Figure1). Since the consumers are purchasing both in traditional and online shops we wanted to know what percentage of all the apparel bought in the last year they bought online. It turned out that the traditional shopping still prevails over online shopping. Namely, the majority of respondents (48%) bought at most 20% of apparel online, followed by consumers who bought 21%-40% of apparel online (22%) and consumers who bought 41%-60% (21%). Only 2% of the respondents bought online more than 80% of the ap- parel in the last year (Figure2). In the second thematic part of the questionnaire and in RQ1, we were interested to know how much the given elements affect online apparel purchasing. The respond- ents answered using the 5-point scale of influence, and the results are presented in Table 3. On average, they decide on online shopping mostly because of ‘Time saving’ (M = 4.19), ‘Avoiding crowds’ (M = 3.92) and ‘Home delivery’ Table 2: Viewpoints on online apparel shopping Online apparel shopping represents… N M SD … pleasure 63 3.10 1.21 … fun 63 3.25 1.05 … obligation 57 2.30 1.05 … time saving 62 3.84 .96 Figure 1: Frequency of purchasing apparel online Figure 2: Percentage of online purchases in the last 12 months Organizacija, Volume 50 Number 4, November 2017Research Papers 358 (M = 3.88). As the least important element, they estimated that ‘Online shopping is fun’ (M = 3.20). One of the problems that online shops are facing is returning the product. More than half (59 %) of the re- spondents who are purchasing online said that they already returned an apparel item they had purchased online. As the most common cause they estimate ‘the size does not match’ (45%), while only 2% of respondents stated that the reason was ‘Damaged on delivery’. Descriptive Statistics for Variables Indicating Reasons for Non-purchasing in Online Stores In addition, we asked the respondents about the individual aspects that have influenced their decision not to purchase the apparel, in spite of browsing and searching in an on- line store. The respondents provided their answers on the 5-point scale of influence (1 meaning ‘no influence’ and 5 meaning ‘big influence’). According to Table 4, the aspect with the highest influence on the decision not to purchase the apparel in spite of browsing and searching for it, is ‘unsure about fit and size’ (M = 3.93). The aspect with the second highest impact is ‘cannot try on the apparel‘(M = 3.84), followed by the aspect ‘the aesthetic properties (style, color and print) are not realistically shown’ (M = 3.60). The aspect with the lowest impact on the decision not to purchase is ‘the risk of getting used apparel in spite of ordering it brand new’ (M= 2.56). Factor Analysis for Individual Aspects Influencing Non-Purchasing Apparel Online As stated above, in spite of browsing and searching, some consumers do not end up making a purchase. In order to analyze individual aspects influencing non-purchasing in an online environment, an exploratory factor analysis was performed. The analysis was based on nine variables measuring individual aspects influencing the decision of consumers not to make an online purchase of the apparel in spite of browsing and searching. The descriptive statistics are presented in Table 4. One could argue that the sample is too small to perform a factor analysis as we do not have at least 100 cases and case-to-variable ratio is far below 10, but based on the em- pirical data, Arrindell and van der Ende (as cited in Field, 2013) concluded that the case-to-variable ratio made little difference to the factors’ solutions. More important than the overall sample, the size and ratio between cases and variables in the stability of the obtained solution are factor loadings. If at least four factor loadings are above .6, then the factors are reliable regardless of the sample size (Gua- dagnoli & Velicer, 1988), and Table 6 shows that we got two factors where the first one has all the factor loadings above .76 and the other has all the factor scores above .71, Table 3: Factors affecting online apparel purchases Variables N M SD Online shopping is fun. 49 3.20 .98 Time saving 48 4.19 .76 Avoiding crowds 48 3.92 1.01 Home delivery 48 3.88 .84 Table 4: The descriptive statistics of nine variables measuring individual aspects that influence the consumers’ decision not to purchase apparel in spite of browsing and searching. Note. N – number of observations, M – mean, SD – standard deviation Variables N M SD No personal contact with apparel (i.e. touch and feel, weight). 43 3.56 .959 Cannot try on apparel (i.e. fit, comfort, appearance). 43 3.84 1.153 Visual and aesthetic risk (i.e. style, color and print, matching with other apparel). 43 3.51 1.009 Aesthetic properties (style, color and print) are not realistically shown. 43 3.60 .979 I am not sure about fit and size. 43 3.93 .961 The risk of getting used apparel in spite of ordering it brand new. 43 2.56 1.053 Delivery date is not flexible. 43 2.74 .928 Cannot assess the quality of apparel (fiber, manufacturing). 43 3.23 .947 Browsing and searching for apparel is very time-consuming. 43 2.88 1.005 359 Organizacija, Volume 50 Number 4, November 2017Research Papers indicating that our solution is reliable. Further, the reliability of the questionnaire was tested with the Cronbach’s Alpha Coefficient, where it turned out that the questionnaire has quite a high reliability, α = .802. In addition, the adequacy of the sample was confirmed with Kaiser-Meyer-Olkin test, KMO = .805 (it is ‘good’ according to Hutcheson and Sofroniou (1999) and Field (2013)). Bartlett’s test of sphericity (36)=166.35, p<.000, indicating that correlations between items are sufficiently large for performing the Principal Component Analysis. The multi-collinearity was ruled out based on the inspec- tion of the correlation matrix, where the largest significant correlation coefficient between ‘aesthetic properties (style, color and print) are not realistically shown’ and ‘visual and aesthetic risk (i.e. style, color and print, matching with other apparel)’ was equal to .692 (p < .000), which is far below .8. In addition, the value of the determinant of the correlation matrix should be greater than .00001 (Field, 2013), and in our case it was equal to .013. Among nine individual aspects that influence the con- sumers’ decision not to purchase the apparel online, in spite of browsing and searching, two factors were revealed based on three common rules of extraction (Field, 2013): (i) Kaiser’s criterion of extracting factors with eigenvalues higher than 1 (λ1 = 3.7, λ2 = 2.20, λ3 = .72), (ii) the ‘scree’ plot (not reported here but can be reconstructed with ei- genvalues from Table 5), which clearly shows the point of inflexion at the third factor suggesting that the solution contains two factors, and (iii) the total percentage of ex- plained variance was greater than 60 % since it was equal to 66 % (Table 5). Therefore, an answer to the first part of RQ2 is that there are two dimensions (or factors) based on individual aspects influencing non-purchasing in an online environment. Table 6 shows factor loadings after the oblimin rota- tion. It should be noted that the factor scores lower than Table 5: Eigenvalues and the percentage of explained variance Note. Extraction Method: Principal Component Analysis Component Initial Eigenvalues Loadings Total % of Variance Cumulative % Total % of Variance Cumulative % 1 3.754 41.708 41.708 3.754 41.708 41.708 2 2.202 24.469 66.177 2.202 24.469 66.177 3 .718 7.975 74.152 4 .617 6.852 81.004 5 .526 5.847 86.851 6 .426 4.733 91.584 7 .299 3.318 94.902 8 .249 2.764 97.667 9 .210 2.333 100.000 Table 6: Rotated ‘pattern’ component matrix Note. Extraction Method: Principal Component Analysis. Rotation Method: Oblimin with Kaiser Normalization. The factor scores smaller than .3 are suppressed, variables are ordered according to the decreasing factor scores. Variables Component 1 2 Cannot try on apparel (i.e. fit, comfort, appearance). .887 Visual and aesthetic risk (i.e. style, color and print, matching with other apparel). .809 No personal contact with apparel (i.e. touch and feel, weight). .805 Aesthetic properties (style, color and print) are not realistically shown. .775 I am not sure about fit and size. .763 Delivery date is not flexible. .830 The risk of getting used apparel in spite of ordering it brand new. .740 Browsing and searching for apparel is very time-consuming. .711 Cannot assess the quality of apparel (fiber, manufacturing). .366 .707 Organizacija, Volume 50 Number 4, November 2017Research Papers 360 .3 are suppressed and that variables are ordered accord- ing to the decreasing factor scores. The content of both dimensions obtained from individual aspects influencing non-purchasing in an online environment (the second part of RQ2) can be obtained from the factor scores in Table 6. For each variable, the factor score written in bold indi- cates to which factor it belongs. The items that cluster on the first factor suggest that it represents a ‘misperception of product integrity’, while the second factor represents ‘browsing and delivery issues with overall quality’. Sev- eral authors (e.g. Field (2013)) suggest that the reliability should be calculated for subscales rather than theoretical scales or the whole questionnaire. Therefore, we calculat- ed Cronbach’s Alpha coefficients for both obtained factors. Cronbach’s Alpha Coefficient for the first factor is equal to 0.872, and for the second factor it is equal to 0.753, indi- cating that both subscales are highly reliable. The factor scores smaller than .3 are suppressed, varia- bles are ordered according to the decreasing factor scores. The correlation coefficient between both obtained factors is equal to .126, indicating that they are weakly connected, so we tried the orthogonal varimax rotation, as well. The solution was practically the same, with slightly different factor loadings. Therefore, we decided to keep and inter- pret the non-orthogonal solution presented above. Analysis of Consumer Attitudes Toward Improved Shopping Experiences and Their Willingness to Pur- chase Custom-Made Apparel Having in mind the limitations of today’s standard sizing system of ready-to-wear apparel and the technological advances in the textile industry, we proposed some solu- tions that can improve shopping experiences and the whole concept of online apparel shopping. Therefore, in the last thematic part we were interested to know which of the pro- posed improved shopping experiences would affect the re- spondent’s decision about their online apparel purchases. It turned out that the vast majority of respondents think that all the proposed solutions would positively affect their decision to purchase. More precisely, ‘easy purchase of the apparel’ was selected by 93% of the respondents, ‘aesthet- ic properties of apparel are shown as realistically as possi- ble’ by 85%, ‘higher quality of apparel’ by 82%, ‘apparel that is safe and does not present a health risk’ by 80%, ‘an option to virtually try on the apparel’ by 73%, ‘an option to custom manufacture the apparel to your measurements with the use of advanced technologies, e.g. body scanning or CAD/CAM’ by 72%, and ‘flexible date of delivery’ by 57%. In this part, we were also interested to know whether the respondents would be willing to give their body meas- urements when purchasing custom-made apparel online. According to RQ3, it turns out that a high proportion of the respondents (93%) is willing to share their body di- mensions. 5 Discussion Our study showed that online shopping for apparel is most attractive due to saving time and its amusement aspect, providing a high level of pleasure. Two of the most im- portant reasons for not purchasing, despite browsing and searching in online stores are that potential consumers are not sure about the right size and they cannot try on the apparel. Similar results were established in several other studies (e.g. Yang & Young (2009), Yu et al. (2012)), as well. Our investigation of the individual aspects influencing non-purchasing in an online environment revealed two factors based on nine measured aspects that influence the decision of consumers not to purchase the apparel online despite browsing and searching. The first factor, ‘misper- ception of product integrity’, refers to the aesthetic and functional characteristics of the apparel which should be superb and satisfy the consumer’s expectations in every aspect, including comfort, fit, color and pattern. Online consumers of ready-to-wear apparel may be discouraged from purchase, especially due to the dissatisfaction with the fit of ready-to-wear apparel, as a result of the lack of direct experience with the product on the Internet. Howev- er, despite the efforts of online retailers to provide a better virtual experience with the help of interactive technology (e.g. expansion or zoom, 3D rotation, personal 3D models in a virtual fitting room), and easier selection of the appro- priate size using the information about standard sizes and measurement procedure provided on their websites, con- sumers in online stores are still not completely sure which size fits them best and whether apparel is comfortable to wear. Fulfilling the consumer’s preferences regarding ap- parel fit, meaning to enable an adequate relationship be- tween the body, garment dimensions and the consumer’s expectations about how they want it to fit, is possible to achieve with a custom-made apparel service via the Inter- net. Our results indicate that the solutions which use ad- vanced technologies for purchasing custom-made apparel online, would positively influence the consumer’s decision to purchase on the online apparel market. Furthermore, the results of our study show that a high proportion of the re- spondents (93%) is willing to share their body dimensions in order to improve the fit of custom-made apparel. The second factor reveals ‘browsing and delivery is- sues with overall quality’ and includes more heterogene- ous aspects of online shopping. Variables ‘Cannot assess the quality of apparel (fiber, manufacturing)’ and ‘The risk of getting used apparel in spite of ordering it brand new’ refers to the overall quality of the purchased appar- el, while the other two variables relate to the time issues of time-consuming Internet browsing and unknown and/ or inaccurately estimated delivery time. The second factor shows a quite unique dimension of browsing, delivery is- sues and concerns about receiving used apparel which was not stressed in previous studies. 361 Organizacija, Volume 50 Number 4, November 2017Research Papers 6 Conclusions Technology development makes it possible for apparel to meet the consumer’s expectations (Lee et al., 2002). With advanced 3D technology (3D body scanning and automat- ed CAD software for custom pattern generation, 3D simu- lation and visualization of apparel with realistic materials properties) there would certainly be significant progress regarding the fit, visualization, and manufacturing of cus- tom-made apparel when purchasing in online stores. The results of our study show that the proposed solu- tions to improve the online apparel purchasing, such as making custom apparel using advanced technologies (scanner body, CAD/CAM software, etc.), the possibility of virtually trying on the apparel, realistic aesthetic prop- erties of apparel, high quality (materials and/or manufac- turing) of apparel, safe apparel and an easy process for purchasing apparel, have a positive impact on the decision of the consumers to purchase on the global online apparel market. Also, the results of our study demonstrated that the consumers are willing to give their body measurements for the manufacturing of custom-made apparel. Therefore, in the future, it is necessary to focus on the development of a system which will allow an easy online purchase of custom-made apparel of high quality at a low- er cost. In order to move in this direction, it is necessary to further develop the technology and integrate it into the system. In addition, a cost efficiency analysis of such a system should be conducted from both the consumers’ and the manufacturers’ perspectives. After the implemen- tation of such a system, the consumers’ satisfaction with custom-made apparel bought online should be investigat- ed based on several factors (e.g. personal characteristics, fashion involvement, body satisfaction, purchase behav- ior, general attitude towards novelties with an emphasis on new technologies) that can potentially impact the inten- tion to use it. In cooperation with online shops providing virtual fitting rooms, a research investigating reasons (e.g. dissatisfaction with the fit) for returning apparel needs to be conducted. The main limitation of the research is a low response rate, but we have to emphasize that we did not offer any financial or other benefits to the respondents participating in the study, in contrast to the majority of other studies on apparel customization. Another drawback of the study is that we did not ask the respondents about their body measurements, usual standardized sizing, and their satis- faction with their looks. In cooperation with online stores, reasons for returned apparel due to inappropriate fit could be investigated in more detail, as well as the consumers’ willingness to purchase custom-made apparel and their satisfaction with the purchase of custom-made apparel, as well as the overall shopping experience. 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Clothing and Tex- tiles Research Journal, 30 (4), 251-266. http://doi. org/10.1177/0887302X12462059 363 Organizacija, Volume 50 Number 4, November 2017Research Papers Analiza posameznih vidikov, ki vplivajo na ne-nakup v spletnem okolju, in potrošnikova pripravljenost za nakup oblačila po meri Namen: Glavni namen raziskave je bil pridobiti mnenja spletnih potrošnikov glede možnosti izdelave oblačil po meri z uporabo 3D tehnologije skeniranja telesa v spletnem okolju ter raziskati nakupovalne izkušnje potrošnikov, ki kupu- jejo oblačila na spletu. Da bi lahko predlagali rešitve za izboljšanje spletnih nakupovalnih izkušenj, smo raziskali tudi vidike, ki vplivajo na ne-nakup v spletnem okolju. Metode: Spletni vprašalnik o nakupovalnih izkušnjah, vplivih na nakup in postopek spletnega nakupovanja oblačil z uporabo napredne tehnologije je bil pripravljen in posredovan prek različnih kanalov potencialnim potrošnikom, ki uporabljajo internet za nakup oblačil na spletu. Vprašalnik je izpolnilo 76 anketirancev iz različnih evropskih držav, Združenih držav Amerike in Avstralije. Za analizo posameznih vidikov, ki vplivajo na ne-nakup v spletnem okolju, smo uporabili faktorsko analizo. Rezultati: Faktorska analiza je razkrila, da obstajata dve širši dimenziji razlogov, zakaj kljub iskanju oblačil na spletu potrošniki še niso opravili spletnega nakupa in sicer: napačna predstavitev integritete izdelka ter časovno zamudno iskanje. Rezultati kažejo, da predlagane rešitve za izboljšanje spletnih izkušenj pri nakupu oblačil, kot je izdelava oblačil po meri z uporabo naprednih tehnologij, pozitivno vplivajo na odločitev potrošnikov, da le-ti kupijo izdelek na spletnem trgu oblačil. Izkazalo se je, da je velik delež potencialnih potrošnikov pripravljen zaupati svoje mere telesa dobljene s 3D skeniranjem, z namenom, da bi se izboljšalo prileganje oblačil. Zaključek: Glede na rezultate pričakujemo, da bodo napredne 3D tehnologije zagotovile velik napredek glede prile- ganja, vizualizacije in izdelave oblačil po meri pri nakupu v spletnih trgovinah. Ključne besede: spletno nakupovanje oblačil, izdelava oblačila po meri, potrošnikove nakupovalne izkušnje Milica Žuraj received her bachelor’s degree in 2012 and masters’ degree in 2015 in orga-nizational scienc- es at the University of Maribor, Faculty of Organization- al Science. Her main research interests are cross-cul- tural training of expatriates, and customer willingness to purchase apparel online using advanced technologies. Petra Šparl († in 2016) was an Associate Professor of Mathematics at the Faculty of Organizational Sciences, University of Maribor, Slovenia. Her main research in- terests were graph theory, data analysis and students’ performance in methodological courses. Anja Žnidaršič is an Assistant Professor of Quantita- tive Methods at the Faculty of Organizational Sciences, University of Maribor, Slovenia. Her main research in- terests are social network analysis, micro-enterprises and information-communication technology, and stu- dents’ performance in methodological courses. Organizacija, Volume 50 Number 4, November 2017Research Papers 364 1 Received: July 17, 2017; revised: October 12, 2017; accepted: November 11, 2017 DOI: 10.1515/orga-2017-0027 Multi-objective Optimization Algorithms with the Island Metaheuristic for Effective Project Management Problem Solving Christina BRESTER, Ivan RYZHIKOV, Eugene SEMENKIN Reshetnev Siberian State University of Science and Technology, Institute of Computer Science and Telecommunications, 31 »Krasnoyarskiy Rabochiy« ave., Krasnoyarsk, 660037, Russian Federation eugenesemenkin@yandex.ru (corresponding author) Background and Purpose: In every organization, project management raises many different decision-making prob- lems, a large proportion of which can be efficiently solved using specific decision-making support systems. Yet such kinds of problems are always a challenge since there is no time-efficient or computationally efficient algorithm to solve them as a result of their complexity. In this study, we consider the problem of optimal financial investment. In our solution, we take into account the following organizational resource and project characteristics: profits, costs and risks. Design/Methodology/Approach: The decision-making problem is reduced to a multi-criteria 0-1 knapsack prob- lem. This implies that we need to find a non-dominated set of alternative solutions, which are a trade-off between maximizing incomes and minimizing risks. At the same time, alternatives must satisfy constraints. This leads to a constrained two-criterion optimization problem in the Boolean space. To cope with the peculiarities and high com- plexity of the problem, evolution-based algorithms with an island meta-heuristic are applied as an alternative to conventional techniques. Results: The problem in hand was reduced to a two-criterion unconstrained extreme problem and solved with differ- ent evolution-based multi-objective optimization heuristics. Next, we applied a proposed meta-heuristic combining the particular algorithms and causing their interaction in a cooperative and collaborative way. The obtained results showed that the island heuristic outperformed the original ones based on the values of a specific metric, thus showing the representativeness of Pareto front approximations. Having more representative approximations, decision-makers have more alternative project portfolios corresponding to different risk and profit estimations. Since these criteria are conflicting, when choosing an alternative with an estimated high profit, decision-makers follow a strategy with an estimated high risk and vice versa. Conclusion: In the present paper, the project portfolio decision-making problem was reduced to a 0-1 knapsack constrained multi-objective optimization problem. The algorithm investigation confirms that the use of the island meta-heuristic significantly improves the performance of genetic algorithms, thereby providing an efficient tool for Financial Responsibility Centres Management. Keywords: 0-1 multi-objective constrained knapsack problem; project management portfolio problem; multi-objective evolution-based optimization algorithms; collaborative and cooperative meta-heuristics 365 Organizacija, Volume 50 Number 4, November 2017Research Papers 1 Introduction When managing an organization, many different kinds of problems can be faced and a large proportion of these can be solved mathematically. These problems are actually de- cision-making problems in the space of alternatives and thus can be reduced to mathematical programming prob- lems in which a solution that provides an extremum value of some criterion is a decision. The aim of decision-mak- ing support systems is to solve these mathematical pro- gramming problems so that managers could base their de- cisions on numerical analysis performed by the program software. This means that a computational system which supports the decision-making process for top managers in the project management problem is important, useful and its application provides a mathematically determined solu- tion. In this paper, we focus on the problem, which takes place in machine-building factory management, where the project investment problem should be solved. According to this, we need to allocate funds among different financial responsibility centres. In this study, we consider the two-objective knapsack problem, which is in some way similar to a real invest- ment portfolio management problem for a factory. Here a factory, considered as a system, contains different subsys- tems with their specific products, functionality and proper- ties. In big companies, there are many innovative projects aimed at modernizing technology, thus increasing income, reducing the amount of work in progress and making the business more client-oriented. Therefore, by solving this problem, it becomes possible to reduce the time spent by top managers on making decisions – their projects should be accepted and realized in the near future. It is impor- tant and should be highlighted that the characteristics of each subsystem and the complexity of project domains prevent people from being experts in all areas and, con- sequently, from making a properly weighted and informed decision. This explains the importance and the value of decision-making support systems with a growing focus on algorithms solving related problems. The problem discussed in this paper differs from the ones in Markowitz’s (Markovitz, 1952) modern portfolio theory based on mean-variance analysis, and also from those discussed in post-modern portfolio theory (Rom and Ferguson, 1993). It has the form of the decision-making multi-objective optimization problem, specifically, the two-criterion 0-1 knapsack optimization problem with constraints. The growing complexity, which is caused by growth in the problem dimensionality, nonlinearities, the specific nature of alternatives’ representations and the mul- timodality of criteria, requires new algorithms which al- low these difficulties to be overcome. Such algorithms are so-called evolution-based and nature-inspired techniques – stochastic optimization algorithms modified by many researchers to deal with complex problems. These mod- ifications change the algorithm operators, the algorithm structure or the meta-heuristics controlling the behaviour of the extremum-seeking algorithm. There are many different approaches proposed for solving those portfolio problems in which various mod- ifications are implemented. One of them is based on ge- netic algorithms (Goldberg, 1989) and an entropy-based modification (Aslan et al., 2015) which finds a solution in mean-variance terms. In the study (Drezewski and Dor- oz, 2017), the multi-agent co-evolutionary approach is applied to a portfolio multi-criteria optimization problem, and the genetic algorithm here is the main optimization technique. A combination of a genetic algorithm and parti- cle swarm optimization (Kennedy and Eberhart, 1995) for solving this kind of problems is considered in (Kuo and Hong, 2013). The results of these investigations show that meta-heuristics greatly improve the performance of the al- gorithm. Multi-objective knapsack optimization problems are still of vital importance. Many different approaches are ap- plied, combined and developed for solving these problems which arise from decision-making problems of different backgrounds in various organizations. In the paper (Vi- anna and Vianna, 2013) a specific optimization algorithm based on a greedy-randomized adaptive search procedure (Feo and Resende, 1995) and a multi-objective iterat- ed local search is proposed. In this work, many different multi-objective optimization methods were presented and one of them was the Chebyshev-based modification of a genetic algorithm (Alves and Almeida, 2007). In the study (Florios et al., 2010) some different approaches based on genetic algorithms were investigated for solving the con- sidered problem. In this study, we compare some cooperative approach- es with homogenous and heterogeneous combinations joined in the island model for solving the project manage- ment decision-making problem for a machine-building factory. The experimental results prove that the proposed meta-heuristics outperform standard multi-criteria optimi- zation algorithms. 2 Project Portfolio and 0-1 Knapsack Multi-Criteria Problem One of the common ways of alternative space representa- tion in the 0-1 knapsack problem, related to project port- folio management, is the Boolean space Bn, where n is a space dimension and is equal to the number of projects. In other words, the way the knapsack is packed (portfolio of projects), is a Boolean vector xϵBn in which coordinates are decisions on each project: it is 0 or false if we decline the project realization and it is 1 or true if we accept the project. In this study, we consider an organization which structurally consists of m financial responsibility centres Organizacija, Volume 50 Number 4, November 2017Research Papers 366 (FRC) and there are different projects for each FRC. The whole number of pro- jects N j mj , ,=1 n N j m j= = ∑ 1 (1) (5) (6) (7) (2) (3) (4) I i j N j Nk k i ( , ) ,= + = = − ∑ 0 0 1 0 determines the dimensionality of the Boolean space. In this decision-making problem, the j-th project of i-th FRC has the following characteristics: ci, j denotes the annual costs of the project realization, Ri, j is an expert’s es- timation of its realization risks and Pi, j is the annual profit of the project if it is accepted. The whole organization also has its own characteristics: C is the total amount of credits, which is normally a sum of Ci, the annual credits of each FRC for project realizations and Ĉ, which is the same for the whole organization. We may also require the specific rate of return on capital r to be satisfied. This problem definition leads to a pseudo-Boolean op- timization problem with two criteria and inequality con- straints. The first criterion is the maximization of the profit of all the accepted projects and the second criterion is the minimization of the sum of the risks. As can be seen, the first criterion is to be maximized, and the second – mini- mized: where is a specific indexing function which returns the index of a Boolean vector for the j-th project of the i-th FRC. At the same time, the project portfolio must satisfy the constraints. We cannot exceed the amount of credits and we cannot go below the current return rate on capital: To reduce the constrained extremum-seeking problem (1)-(4) to an unconstrained one, we use the static penalty functions: B x F x B x r 2 1 1 ( ) ( ) / ( ) .= ≥ and the initial problem can be determined with the formu- las: where positive numbers are the controlling parameters. In this study, we set all the parameters equal to α = 103. The considered problem (6) and (7) is known to be NP-hard so there is no time and computational-efficient optimization technique that would find a global optimum. This becomes further complicated when we need to find the set of solutions which approximates the Pareto set. As was mentioned earlier, we need a specific optimization technique which is efficient in solving this kind of prob- lem, and for this purpose we use modern multi-objective algorithms and improve them with the island meta-heuris- tic (Preuss, 2015). 3 Multi-Objective Genetic Algorithms and the Island Model Meta- Heuristic The common scheme of any multi-objective genetic algo- rithm (MOGA) includes the same steps as any convention- al one-criterion GA (Crainic and Toulouse, 2010): 1 Generate the initial population 2 Evaluate criteria values; 3 Estimate fitness-values; 4 While (stop-criterion!=true), do: { 5 Choose the most appropriate individuals with the mating selection operator based on their fitness- values; 6 Produce new candidate solutions with recombination; 7 Modify the obtained individuals with mutation; 8 Evaluate criteria values for new candidate solutions; 9 Estimate fitness-values; 10 Compose the new population (environmental selection); } αi j i j, , , ,=1 2 367 Organizacija, Volume 50 Number 4, November 2017Research Papers When designing a MOGA, researchers are faced with some issues relating to fitness assignment strategies, di- versity preservation techniques and ways of elitism imple- mentation. Therefore, we will consider the effectiveness of MOGAs which are based on various heuristics. Non-Sort- ing Genetic Algorithm II (NSGA-II) (Deb et al., 2002), Preference-Inspired Co-Evolutionary Algorithm with goal vectors (PICEA-g) (Wang, 2013) and Strength Pareto Evo- lutionary Algorithm 2 (SPEA2) (Zitzler et al., 1997) are used as tools to optimize the introduced criteria. The basic features of each method are displayed in Table 1. MOGA Fitness Assignment Diversity Preservation Elitism NSGA-II Pareto-dominance (niching mecha- nism) and diversity estimation (crowd- ing distance) Crowding distance Combination of the previous population and the offspring PICEA-g Pareto-dominance (with generating goal vectors) Nearest neighbour technique The archive set and combina- tion of the previous popula- tion and the offspring SPEA2 Pareto-dominance (niching mech- anism) and density estimation (the distance to the k-th nearest neighbour in the objective space) Nearest neighbour technique The archive set Table 1: Basic features of the MOGA used Figure 1: The three categories of algorithms used However, it is almost impossible to know in advance which algorithm is the most effective for the current problem. On the one hand, a series of experiments might be conducted to find the best MOGA, which is quite a time-consuming approach. On the other hand, different algorithms might be combined in a cooperation to avoid having to choose the most effective one. In reality, this kind of modification is easily implemented and is based on an island model. The island model (Whitley et al., 1997) of a GA im- plies the parallel work of several algorithms: they might Organizacija, Volume 50 Number 4, November 2017Research Papers 368 be the same or different. The initial number of individu- als M is spread across L subpopulations: Mi=M/L, i=1,…, L. At each T-th generation, algorithms exchange the best solutions (migration). There are two parameters: migration size, the number of candidates for migration, and migration interval, the number of generations between migrations. It is also necessary to define the island model topology, in other words, the scheme of migration. We use fully con- nected topology, meaning that each island shares its best solutions with all the other islands included in the model. This multi-agent model is expected to preserve a higher level of genetic diversity. Firstly, the conventional NSGA-II, PICEA-g, and SPEA2 have been implemented to be used as optimizers (Figure 1 top). Secondly (Figure 1, middle), we have achieved a num- ber of homogeneous cooperative algorithms: in each case, the island model has the same three components: they are NSGA-II, PICEA-g or SPEA2. In addition to diversity preservation, another benefit of this model is the possibility to reduce the computational time due to the parallel work of islands. Finally, a heterogeneous cooperative algorithm has been developed (Figure 1, bottom). Three different MO- GAs (NSGA-II, PICEA-g and SPEA2) have been included in this model as its components simultaneously. The ben- efits of the particular algorithm (NSGA-II, PICEA-g or SPEA2) could be advantageous at different stages of opti- mization (Brester and Semenkin, 2015). In summary, there are three main categories of MO- GAs which are used in this study and they are portrayed in Figure 1. 4 Statistical Investigations The problem in question was solved for a big ma- chine-building plant. There were five FRC (m = 5) and each FRC had its own list of projects and required invest- ments (N1 = 8, N2 = 6, N3 = 5, N4 = 3, N5 = 3). For each of the projects, we had an expert’s estimations of the risks Ri, j and annual profits Pi, j . The whole number of projects n was equal to hence in this knapsack problem we had 25 Boolean varia- bles. Other parameters were set as follows: Ĉ = 40,r = 0.5. Firstly, we used an exhaustive search to design a true Pareto front. It required 225 = 33554432 vector-function evaluations. In Figure 2, the obtained front is presented. It might be noted that the dependence between the F1 - (6) and F2 - (7) criteria is close to linear. Increasing the profit would cause an increasing in the risk, and minimizing the N j j m = = ∑ 25 1 risk leads to a decrease in profit. It is essential to note that for an exhaustive search, an increase in the problem dimensionality leads to the expo- nential growth of vector-function evaluations. Therefore, for high-dimensional problems, it might be time-consum- ing and some alternative methods should be developed. Next, we applied the conventional NSGA-II, PICEA-g and SPEA2 to solve the problem. In all the experiments, we defined the following settings: binary tournament se- lection, uniform recombination and the mutation probabil- ity pm = 1/L, where L is the length of the chromosome. A series of tests with different amounts of resources was conducted: Exp. 1 – 100 individuals and 200 generations (20,000 vector-function evaluations), Exp. 2 – 200 indi- viduals and 300 generations (60,000 vector-function eval- uations), Exp. 3 – 300 individuals and 400 generations (120,000 vector-function evaluations). To estimate the quality of the obtained approximations of the true front, we involved Inverted Generational Distance (IGD) (8), which equates the average distance from the true Pareto front P* to the found solution A (Zhang et al., 2008): where d(v, A) is the minimum Euclidean distance between v and the points in A. All the results were averaged over 25 runs of each al- gorithm. Table 2 contains the averaged IGD values corre- sponding to three experiments (Exp. 1, 2 and 3) and three conventional MOGAs (NSGA-II, PICEA-g and SPEA2). By increasing the amount of resources, we obtain ap- proximations which are getting closer to the true front. In two cases (for PICEA-g and SPEA2), we may see a great improvement of IGD values caused by the growth of vector-function evaluations. For NSGA-II, increasing the amount of resources by a factor of two does not lead to a significant improvement (from 20,000 up to 60,000) or to any improvement (from 60,000 up to 120,000). The algorithm which was the best for the lowest number of vector-function evaluations (Exp. 1) was the worst for the highest number of calculations (Exp. 3). To illustrate the obtained solutions, from each ex- periment we chose one Pareto front approximation cor- responding to the median value of IGD. In Figure 3, we depict these approximations. Then, we applied three homogeneous cooperative MOGAs: NSGA-II – NSGA-II – NSGA-II, PICEA-g – PICEA-g – PICEA-g and SPEA2 – SPEA2 – SPEA2. For each MOGA, all islands had an equal amount of resources (200 generations and 300/3 = 100 individuals in popula- tions), the migration size was equal to 20 (in total, each island received 40 points from two others), and the mi- gration interval was equal to 20 generations. Thus, in this experiment the amount of resources corresponded to the IGD P A d v A P v P( *, ) ( , ) | * | *= ∈∑ (8) 369 Organizacija, Volume 50 Number 4, November 2017Research Papers Figure 2: The true Pareto front for the real problem considered Table 2: Experimental results. IGD values for the conventional MOGAs MOGA IGD values Exp. 1 (20,000 eval.) Exp. 2 (60,000 eval.) Exp. 3 (120,000 eval.) NSGA-II 0.5520 0.4664 0.4838 PICEA-g 0.9649 0.5598 0.3564 SPEA2 0.7352 0.4423 0.2822 Figure 3a: The Pareto front approximations obtained by NSGA2 number of vector-function evaluations in Exp. 2 (60,000). We also estimated the averaged IGD values and presented them in Table 3. It might be noted that the use of the island model led to a considerable improvement in IGD values. Moreover, having the same amount of resources as we had in Exp. 2, we could achieve IGD values which were com- parable with (for PICEA-g and SPEA2) or even better (for NSGA-II) than we gained in Exp. 3. Finally, the heterogeneous MOGA (NSGA-II – PI- CEA-g – SPEA2) was used to solve the problem in ques- tion. Again, we provided the algorithm with 60,000 vec- tor-function evaluations. All the other settings were also the same (as for homogeneous cooperative MOGAs). The averaged IGD value obtained by the heterogeneous coop- erative MOGA is equal to the best averaged IGD value achieved by the homogeneous cooperative MOGA (Table Organizacija, Volume 50 Number 4, November 2017Research Papers 370 Figure 3b: The Pareto front approximations obtained by PICEA-g Figure 3c: The Pareto front approximations obtained by SPEA2 Table 3: Experimental results. IGD values for the cooperative MOGAs IGD values Homogeneous cooperative MOGAs NSGA-II – NSGA-II – NSGA-II 0.2985 PICEA-g – PICEA-g – PICEA-g 0.4153 SPEA2 – SPEA2 – SPEA2 0.3876 Heterogeneous cooperative MOGA NSGA-II – PICEA-g – SPEA2 0.2984 371 Organizacija, Volume 50 Number 4, November 2017Research Papers 3). It is also comparable with the best result in Exp. 3 (with 120,000 vector-function evaluations). In Figure 4, we show one Pareto front approximation found by the heterogeneous cooperative MOGA and cor- responding to the median value of IGD. The results obtained proved the effectiveness of coop- erative MOGAs: firstly, with the same amount of resources we could attain much better IGD values and, secondly, us- ing the heterogeneous cooperative MOGA, we could avoid having to choose the most appropriate MOGA for the cur- rent problem (it is essential because MOGAs demonstrate different performances in Exp. 1, 2 and 3). As one can see, the estimated Pareto front provides decision-makers with possible outcomes, in case they consider multiple criteria, and enables them to choose the combination, which would fit the current state of the mar- ket. The proposed heterogeneous island approach also pro- vides faster convergence toward the solutions. 5 Conclusion In this study, we focused on the decision-making problem related to machine-building factory portfolio management with the goal of optimal investment, which can be defined as the 0-1 multi-objective constrained knapsack optimi- zation problem. This problem is NP-hard, the criteria are mappings from the Boolean space and we need to estimate the Pareto front on a set of permissible alternatives. To reach the goal, an efficient multi-objective optimization technique is required. We applied well-known evolution-based algorithms such as PICEA-g, SPEA2 and NSGA-2 for this problem with different amounts of resources. The algorithms were compared using the specific IGD metric, which is a com- mon measure of Pareto front representativeness. As can be seen, increasing the computational resources usually yielded an increase in the efficiency of the algorithm and, with the exception of NSGA2, the increase is significant. Hence, adding more resources may improve the results, though the effect is unpredictable and non-linear. More- over, in the case of NSGA2 being applied to this prob- lem, the median of the IGD metric was not improved after 60,000 evaluations and this is probably a result of the al- gorithm behaviour. To overcome this obstacle, we used an island model based on the interaction among multi-objective optimiza- tion algorithms: homogeneous, when the algorithms are of the same nature, and heterogeneous, when the algorithms are different. Experimental results show that the developed approach outperforms the original algorithms even with the lower amount of computational resources. The most efficient algorithms are the following: the heterogeneous algorithm with the SPEA2, NSGA-2 and PICEA-g combi- nation and the homogeneous algorithm with three NSGA- 2. This implies that the island model-based multi-objec- tive algorithms are more efficient and more promising in solving the complex NP-hard problems of organizational management. The proposed approach provides us with a set of non-dominated alternatives, which are project portfolios with different profits and risks. This solution is valuable for top managers when they make decisions on future in- vestments based on the current state of the whole organ- ization and estimations of project characteristics. More profitable project portfolios usually have a high level of risks and less profitable project portfolios correspond to a low level of risks. The main benefit of applying the pro- Figure 4. The Pareto front approximation obtained by the heterogeneous MOGA Organizacija, Volume 50 Number 4, November 2017Research Papers 372 posed approach is its flexibility and ability to show the bigger picture. Whatever risk value is confirmed by the de- cision-maker, the Pareto set approximation gives the best portfolio in terms of the profit and vice versa. Our proposal is going to be investigated on higher-di- mensional similar problems with nonlinear profit func- tions, since most of the projects are related and affect each other. This is the first possible direction of our research in the near future. Following this, it would be reasonable to solve similar problems with stochastic uncertainties as is considered in modern portfolio theory where risks and profits are the stochastic variables. Acknowledgment This research is performed with the financial support of the Ministry of Education and Science of the Russian Federa- tion within state assignment № 2.6757.2017/БЧ. 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Evolutionary Meth- ods for Design Optimisation and Control with Appli- cation to Industrial Problems EUROGEN 2001, 3242 (103), pp. 95–100. 373 Organizacija, Volume 50 Number 4, November 2017Research Papers Christina Brester received her Master’s degree in System Analysis and Control from the Reshetnev Sibe- rian State Aerospace University (Krasnoyarsk, Russia) in 2014 and her PhD in Computer Science from the Si- berian Federal University and the Institute of Compu- tational Modeling of Siberian Branch of Russian Acad- emy of Sciences (Krasnoyarsk, Russia) in 2016. Since 2016, she has been an Associate Professor at the High- er Mathematics Department of the Institute of Comput- er Science and Telecommunications of the Reshetnev Siberian State University of Science and Technology (Krasnoyarsk, Russia). Her areas of research include multi-objective optimization, neural networks and data analysis. Ivan Ryzhikov received his Master’s degree in System Analysis and Control from the Reshetnev Siberian State Aerospace University (SibSAU), Krasnoyarsk, Russia in 2011. He received his PhD in Computer Science from SibSAU in 2016. Since 2011, he has been a research fellow at the Reshetnev Siberian State University of Science and Technology in Krasnoyarsk, Russia. His research interests include metaheuristic optimization, inverse modelling, data science and computer science. Eugene Semenkin received his Master in Applied Mathematics degree from Kemerovo State Universi- ty (Kemerovo, USSR) in 1982, his PhD in Computer Science from Leningrad State University (Leningrad, USSR) in 1989 and his DSc in Engineering and Habil- itation from the Siberian State Aerospace University (Krasnoyarsk, Russia) in 1997. Since 1997, he has been a professor of systems analysis at the Institute of Com- puter Science and Telecommunications of the Siberian State Aerospace University. His areas of research in- clude the modelling and optimization of complex sys- tems, computational intelligence and data mining. He has been awarded the Tsiolkovsky Badge of Honour by the Russian Federal Space Agency and the Reshetnev medal by the Russian Federation of Cosmonautics. Algoritmi za optimizacijo več ciljev z metaheuristiko otoka za učinkovito reševanje problema vodenja pro- jektov Ozadje in namen: V vsaki organizaciji vodenje projektov odpira številne in različne probleme odločanja, katerih velik del je mogoče učinkovito rešiti s pomočjo posebnih sistemov za podporo odločanju. Takšni problemi vedno pred- stavljajo izziv, saj za njihovo kompleksnost ni časovno ali računsko učinkovitega algoritma. V članku obravnavamo problem optimalnih finančnih naložb. V naši rešitvi upoštevamo naslednje organizacijske vire in značilnosti projekta: dobiček, stroške in tveganja. Zasnova / metodologija / pristop: Problem odločanja je formuliran kot večkriterialni problem 0-1 nahrbtnika. To pomeni, da moramo poiskati nedominantno množico alternativnih rešitev kot kompromis med maksimiranjem dohod- kov in zmanjševanjem tveganj. Obenem pa morajo alternative zadoščati omejitvam. To vodi k omejenemu problemu dvokriterialne optimizacije v Boolovem prostoru. Da bi obvladali posebnostmi in visoko zapletenost problema, smo kot alternativo običajnim tehnikam uporabili evolucijske algoritme z meta-hevristiko otoka. Rezultati: Problem smo formulirali kot neomejeno dvokriterijsko optimizacijo in ga rešili z različnimi heurističnimi op- timizacijami, ki temeljijo na evoluciji. Nato smo predlagali meta-hevristiko, ki združuje specifične algoritme in dosega njihovo interakcijo na sodelovalni način. Dobljeni rezultati so pokazali, da je hevristika otoka presegla rezultate, dob- ljene na podlagi vrednosti specifične metrike, s čimer se je pokazala reprezentativnost Paretovih prednjih aproksi- macij. Bolj reprezentativni približki omogočajo nosilcem odločanja več alternativnih projektnih portfeljev, ki ustrezajo različnim ocenam tveganja in dobička. Ker so ti kriteriji v nasprotju, pri izbiri alternative z ocenjenim visokim dobičkom nosilci odločanja sledijo strategiji z ocenjenim tveganjem in obratno. Zaključek: V članku smo problem reševanja portfeljev projektov formulirali kot problem večciljne optimizacije 0-1 nahrbtnika z omejitvami. Analiza algoritma potrjuje, da uporaba meta-hevristike otoka bistveno izboljšala učinkovitost genetskih algoritmov in tako predstavlja učinkovito orodje za upravljanje centrov za finančno odgovornost. Ključne besede: 0-1 večkriterialni problem nahrbtnika; portfelj vodenja projektov; večciljni evolucijski algoritmi za optimizacijo; skupna in kooperativna meta-hevristika Organizacija, Volume 50 Number 4, November 2017 374 Reviewers in 20171 A. Mohammed Abubakar, Aksaray University, Manage- ment Information Systems, Aksaray, Turkey Olja Arsenijević, Faculty of Business Study and Law, Bel- grade, Serbia Benjamin Banai, University of Zadar, Department of Psy- chology, Zadar, Croatia Manuel Benazić, Juraj Dobrila University of Pula, Faculty of Economics and Tourism “Dr. Mijo Mirković”, Pula, Croatia Viktorija Bobinaite, Lithuanian Energy Institute, Labora- tory of Energy Systems Research, Kaunas, Lithuania Alenka Brezavšček, University of Maribor, Faculty of Or- ganizational Sciences, Kranj, Slovenia Ljiljana Lj. Bulatović, Singidunum University, Faculty of Media and Communication, Beograd, Serbia Donatello Caruso, University of Foggia, Department of Economics, Foggia, Italy Daria Chernayeva, National Research University, Higher School of Economics, Moscow, Russia Vít Chlebovský, Brno University of Technology, Faculty of Business and Management, Brno, Czech Republic Agnieszka Czajkowska, Kielce University of Technology, Faculty of Civil Engineering and Architecture, Kielce, Poland Sergio Da Silva, Federal University of Santa Catarina, De- partment of Economics, Florianopolis, Brazil Vesna Damnjanović, University of Belgrade, Faculty of Organizational Sciences, Belgrade, Serbia Dunja Demirović, University of Novi Sad, Faculty of Sciences, Novi Sad, Serbia Sarah Doumen, Hasselt University, Hasselt, Belgium Florin Duma, Babeş-Bolyai University, Faculty of Europe- an Studies, Cluj-Napoca, Romania Ines Dužević, University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia Joanna Ejdys, Bialystok University of Technology, Faculty of Management, Kleosin, Poland Zoltán Gál, Kaposvar University, Department of Regional Economics & Statistics, Kaposvár, Hungary Beata Gavurova, Technical University of Košice, Faculty of Economics, Košice, Slovakia Jyotiranjan Gochhayat, KIIT University, Department of Humanities and Social Sciences, Bhubaneswar, India Jolita Greblikaitė, Aleksandras Stulginskis University, Business and Rural Development Management Insti- tute, Kaunas, Lithuania Tadeja Jere Jakulin, University of Primorska, Faculty of Tourism Studies – Turistica, Portorož, Slovenia Eva Jereb, University of Maribor, Faculty of Organization- al Sciences, Kranj, Slovenia Janja Jerebic, University of Maribor, Faculty of Organiza- tional Sciences, Kranj, Slovenia Robertas Jucevicius, Kaunas University of Technology, School of Economics and Business Kaunas, Lithuania Laura Južnik Rotar, Faculty of Business, Management and Informatics, Novo Mesto, Slovenia Marina Klačmer Čalopa, University of Zagreb, Faculty of Organization and Informatics, Varaždin, Croatia Davorin Kofjač, University of Maribor, Faculty of Organ- izational Sciences, Kranj, Slovenia, Jure Kovač, University of Maribor, Faculty of Organiza- tional Sciences, Kranj, Slovenia Safet Kozarević, University of Tuzla, Faculty of Econom- ics, Tuzla, Bosnia and Herzegovina Tatjana Kozjek, University of Ljubljana, Faculty of Ad- ministration, Ljubljana, Slovenia Brigita Krsnik Horvat, University of Maribor, Research Support Services, Maribor, Slovenia Aleksandra Laskowska-Rutkowska, Lazarski University, Logistics and Innovation Center, Warszawa, Poland Gregor Lenart, University of Maribor, Faculty of Organi- zational Science, Kranj, Slovenia Robert Leskovar, University of Maribor, Faculty of Organ- izational Sciences, Kranj, Slovenia, Nikolaj Lipič, Alma Mater Europaea - EC, Maribor, Slo- venia Branko Lobnikar, University of Maribor, Faculty of Crim- inal Justice and Security, Ljubljana, Slovenia Peter Madzik, Catholic University in Ruzomberok, Man- agement Department, Ruzomberok, Slovakia Matjaž Maletič, University of Maribor, Faculty of Organi- zational Sciences, Kranj, Slovenia Damjan Maletič, University of Maribor, Faculty of Organ- izational Sciences, Kranj, Slovenia Marjeta Marolt, University of Maribor, Faculty of Organi- zational Science, Kranj, Slovenia Maja Meško, University of Primorska, Faculty of Manage- ment, Koper, Slovenia Gozdana Miglič, University of Maribor, Faculty of Organ- izational Science, Kranj, Slovenia Milan Milošević, Faculty of Business Study and Law, Bel- grade, Serbia Marian Niedźwiedziński, University of Lodz, Faculty of Economics and Sociology, Lodz, Poland Vesna Novak, University of Maribor, Faculty of Organiza- tional Sciences, Kranj, Slovenia Rok Ovsenik, Institute of Management, Ljubljana, Slove- nia Antonín Pavlíček, University of Economics, Faculty of In- formatics and Statistics, Prague, Czech Republic 1 1 Until November 15, 2017 375 Organizacija, Volume 50 Number 4, November 2017 Uroš Pinterič, Faculty of Organization studies, Novo mes- to, Slovenia Aleksandra Pisnik, University of Maribor, Faculty of Eco- nomics and Business, Maribor, Slovenia Iztok Podbregar, University of Maribor, Faculty of Organ- izational Sciences, Kranj, Slovenia Tanja Rajkovič, Inovema d.o.o, Ljubljana, Slovenia Sanda Renko, University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia Blaž Rodič, Faculty of Information Studies, Novo mesto, Slovenia Maciej Rostański, University of Dąbrowa Górnicza , Dąbrowa Górnicza, Poland Erik Ružić, University of Pula, Faculty of Economics and Tourism “Dr. Mijo Mirković”, Pula, Croatia Zakiah Samori, MARA University of Technology, Acad- emy of Contemporary Islamic Studies (ACIS), Shah Alam, Malaysia Svenka Savić, University of Novi Sad, Faculty of Philoso- phy, Novi Sad, Serbia, Tijana Savić Tot, Faculty of Management, Sremski Kar- lovci, Serbia Mario Silić, University of St.Gallen, Institute of Informa- tion Management, St.Gallen, Switzerland Andrzej Skibiński, Czestochowa University of Technolo- gy, Faculty of Management, Czestohowa, Poland Włodzimierz Sroka, University of Dąbrowa Górnicza, Faculty of Management, Dąbrowa Górnicza, Poland Vlasta Střížová, University of Economics, Faculty of In- formatics and Statistics, Prague, Czech Republic Andrea Sujová, Technical University in Zvolen, Faculty of Wood Sciences and Technology, Zvolen, Slovakia Katarzyna Szczepańska-Woszczyna, University of Dabro- wa Gornicza, Faculty of Management, Dabrowa Gor- nicza, Poland Polona Šprajc, University of Maribor, Faculty of Organi- zational Sciences, Kranj, Slovenia Ivan Todorović, University of Belgrade, Faculty of Organ- izational Sciences, Belgrade, Serbia Polona Tominc, University of Maribor, Faculty of Eco- nomics and Business, Maribor, Slovenia Bahrija Umihanić, University of Tuzla, Faculty of Eco- nomics, Tuzla, Bosnia and Herzegovina Benjamin Urh, University of Maribor, Faculty of Organi- zational Sciences, Kranj, Slovenia Jaromír Veber, University of Economics in Prague, De- partment of Management, Prague, Czech Republic Goran Vukovič, University of Maribor, Faculty of Organi- zational Science, Kranj, Slovenia, Monika Wieczorek-Kosmala, University of Economics in Katowice, Department of Corporate Finance and In- surance, Katowice, Poland Monica Zaharie, Babeş-Bolyai University, Faculty of Eco- nomics and Business Administration, Cluj-Napoca, Romania Eglantina Zyka, University of Tirana, Faculty of Econom- ics, Tirana, Albania Anja Žnidaršič, University of Maribor, Faculty of Organi- zational Sciences, Kranj, Slovenia Organizacija, Volume 50 Number 4, November 2017 376 Manuscripts considered for publication in Or- ganizacija (organizacija@fov.uni-mb.si) are those which: • Contain original work – which is not published elsewhere in any medium by the authors or anyone else and is not under consideration for publication in any other medium. The author(s) is/are also responsible for any violations of the copyright regulations. • Are focused on the core aims and scope of the journal: Organizacija is an interdisciplinary peer reviewed journal that seeks both theoretically and practically oriented research papers from the area of organizational science, business information systems and human resources management. • Are clearly and correctly written – should con- paper, should be written in a clear, easy to understand manner and be readable for a wide audience. • Are written in English – should be clearly and grammatically written, in an easily readable style. Attention to detail of the language will avoid severe misunderstandings which might lead to rejection of the paper. Correct language is the responsibility of the authors. Unless the author is an English native speaker, the paper must be proofread by a language editor, English native speaker All parts of the manuscript should be type-written (font size 12), with margins of 2.5 cm. Pages should be numbered consecutively throughout the manuscript. The text should be subdivided into numbered chapters. Figures and tables, consecu- tively numbered (Figure 1, Figure 2, ...; Table 1, Table 2, …) can be included in electronic form in the text. Colour pictures cannot be published in the printed version of the journal; colours appear only in the internet version. The paper should start with a cover page with names and mailing and electronic addresses of the authors. To assure the anonymity of the refereeing procedure the names of the authors should not appear in the text. When referring to the literature use the APA style (http://www.apastyle.org/). A short description of the APA style is included in the Guidelines for Au- thors (see http://www.degruyter.com/view/j/orga). All the papers will be reviewed by at least two referees. Based on the opinions and suggestions of the reviewers, the editors accept the paper, demand minor or major enhancements, or reject the paper. If major enhancements are required the upgraded paper is reviewed again. Manuscripts can be submitted via journal web site (http://organizacija.fov.uni-mb.si). For further in- organizacija@fov.uni-mb.si or joze.zupancic@fov.uni-mb.si). University of Maribor, Faculty of Organizational Science Kidričeva cesta 55a 4000 Kranj, Slovenia Fax: +386-4-2374-299 Phone: +386-4-2374-226 V reviji Organizacija objavljamo znanstvene članke, rezultate raziskovalnega dela avtorjev. Predloženi prispevki naj bodo napisani v angle- škem jeziku. Imeti morajo strukturo IMRAD, ki je običajna za znanstvena in strokovna besedila (informacija n.pr. na RESEARCH/imrad.html). Objavljamo de- la s predmetnega področja revije, ki še niso bila objavljena in niso bila poslana v objavo v kakšni drugi reviji ali zborniku. Avtorji so odgovorni za vse morebitne kršitve avtorskih pravic. Besedilo naj bo oblikovano za tiskanje na papirju in levo poravnano. Na začetku prispevka, takoj za naslovom, naj bo povzetek (izvleček) dolžine naj- več 250 besed, ključne besede, v končni – sprejeti verziji članka pa na koncu prispevka tudi kratek strokovni življenjepis vsakega od avtorjev (do 10 vrstic) in letnica rojstva (zaradi vnosa podatkov v knjižnični informacijski sistem COBISS, v reviji letnica ne bo objavljena). Na prvi strani besedila naj bodo napisani le naslov prispevka, imena in (poštni in elektronski) naslovi avtorjev članka, po možnosti tudi telefonska številka enega od avtorjev. Da bi zagotovili anonimnost recenziranja, naj se imena avtorjev ne pojavljajo v besedilu prispevka. Na koncu članka, za življenjepisi, naj bo slovenski prevod naslova, povzetka in ključnih besed. Članek naj bo razčlenjen v oštevilčena poglavja. Naslovi članka, poglavij in podpoglavij naj bodo napisani z malimi črkami, da so razvidne kratice. Slike in tabele v elektronski obliki vključite kar v besedilo. Besedilu so lahko priložene slike in/ali tabele na papirju v obliki pripravljeni za preslika- vo. V tem primeru naj bo vsaka slika na posebnem listu, oštevilčene naj bodo z arabskimi številkami, v besedilu naj bo označeno, kam približno je treba uvrstiti sliko: na tem mestu naj bo številka slike/ tabele in njen podnapis. Slike bomo praviloma pomanjšali in jih vstavili v članek. Upoštevajte, da morajo biti oznake in besedila na vseh slikah dovolj velika, da bodo čitljiva tudi pri velikosti slike, kot bo objavljena v reviji. Vse slike naj bodo črno-bele z belim ozadjem; barvnih slik v tiskani verziji revije ne moremo objaviti, barve so vidne le v spletni verziji. Članki morajo biti pred objavo v Organizaciji lektorirani. Končno verzijo mora lektorirati naravni govorec oz. lektor s primerljivim znanjem angleščine. Seznam citirane literature oblikujte v APA stilu; podroben opis le-tega je na http://www.apastyle. org/, povzetek pa je tudi v podrobnem navodilu avtorjem na www.versita.com/o/authors. Ne upora- bljajte opomb za citiranje; eventualne opombe, ki naj bodo kratke, navedite na dnu strani. Označite jih z arabskimi številkami. Predložene prispevke pregledata in ocenita najmanj dva recenzenta. Na osnovi mnenj in predlogov recenzentov uredniški odbor ali urednik sprejmejo prispevek, zahtevajo manjše ali večje popravke in dopolnitve ali ga zavrnejo. Če urednik oziroma re- cenzenti predlagajo večje popravke, se dopolnjeni prispevek praviloma pošlje v ponovno recenzijo. Članke za objavo lahko predložite preko spletnega mesta http://organizacija.fov.uni-mb.si. Za nadalj- nje informacije in pojasnila se lahko obrnete na uredništvo Organizacije (organizacija@fov.uni-mb. si ali joze.zupancic@fov.uni-mb.si). Naslov uredništva: Univerza v Mariboru, Fakulteta za organizacijske vede Kidričeva cesta 55a 4000 Kranj Faks: 04-2374-299 Tel.: 04-2374-226 AUTHOR GUIDELINES / NAVODILA AVTORJEM Prva slovenska revija za organizacijska in kadrovska raziskovanja in prakso. Revijo sofinancira Javna agencija za raziskovalno dejavnost Republike Slovenije. Ponatis in razmnoževanje deloma ali v celoti brez pisnega dovoljenja nista dovoljena. Izdajatelj: Univerza v Mariboru, Fakulteta za organizacijske vede Kranj, Založba MODERNA ORGANIZACIJA, Kidričeva cesta 55a, KRANJ, telefon: 04 23 74 200, telefax: 04 23 74 299, E-pošta: organizacija@fov.uni-mb.si. Uredništvo revije: Kidričeva cesta 55a, 4000 Kranj, naročniški oddelek: 04 23 74 295. Letna naročnina: za pravne osebe za prvi naročeni izvod 51,47 EUR, drugi naročeni izvod 41,38 EUR, vsak nadaljnji 36,33 EUR, za posameznike 25,23 EUR. Cena posamezne številke je 9,08 EUR. Na leto izidejo 4 številke. Tisk: ROLGRAF d.o.o. Naklada 200 izvodov. Organizacija is covered by the following services: Cabell's Directory, CEJSH (The Central European Journal of Social Sciences and Humanities), Celdes, CNPIEC, Die Elektronische Zeitschriftenbibliothek, DOAJ, EBSCO - TOC Premier, EBSCO Discovery Service, ECONIS, Ergonomics Abstracts, ERIH PLUS, Google Scholar, Inspec, International Abstracts in Operations Research, J-Gate, Microsoft Academic Search, Naviga (Softweco), Primo Central (ExLibris), ProQuest - Advanced Polymers Abstracts, ProQuest - Aluminium Industry Abstracts, ProQuest - Ceramic Abstracts/World Ceramics Abstracts, ProQuest - Composites Industry Abstracts, ProQuest - Computer and Information Systems Abstracts, ProQuest - Corrosion Abstracts, ProQuest - Electronics and Communications Abstracts, ProQuest - Engineered Materials Abstracts, ProQuest - Mechanical & Transportation Engineering Abstracts, ProQuest - METADEX (Metals Abstracts), ProQuest - Sociological Abstracts, ProQuest - Solid State and Superconductivity Abstracts, Research Papers in Economics (RePEc), SCOPUS (in the process of registration), Summon (Serials Solutions/ProQuest), TDOne (TDNet), TEMA Technik und Management, WorldCat (OCLC) CONTENTS - 4/2017 299 314 325 339 352 364 374 Anita Metod ŠULIGOJ, Helena MARUŠKO Hotels and Halal-oriented Products: What Do Hotel Managers in Slovenia Think? Ľubica LESÁKOVÁ, Petra GUNDOVÁ, Pavol KRÁĽ, Andrea ONDRUŠOVÁ Innovation Leaders, Modest Innovators and Non-innovative SMEs in Slovakia: Key Factors and Barriers of Innovation Activity Laura JUŽNIK ROTAR, Mitja KOZAR The Use of the Kano Model to Enhance Customer Satisfaction Milica ŽURAJ, Petra ŠPARL, Anja ŽNIDARŠIČ Consumer Willingness to Purchase Custom-Made Apparel Christina BRESTER, Ivan RYZHIKOV, Eugene SEMENKIN Project Management Problem Solving REVIEWERS IN 2017