Po štn ina pl ača na pr i p ošt i 4 10 2 K ran j Journal of Management, Informatics and Human Resources ISSN 1318-5454 Revija za management, informatiko in kadre Volume 53, Issue 3, August 2020 Organizacija (Journal of Management, Informatics and Human Resources) is an interdisciplinary peer-reviewed journal which is open to contributions of high quality, from any perspective relevant to the organizational phenomena. The journal is designed to encourage interest in all matters relating to organizational sciences and is intended to ap- peal to both the academic and professional community. In particular, journal publishes original articles that advance the empirical, theoretical, and methodological understand- ing of the theories and concepts of management and or- ganization. The journal welcomes contributions from other scientific disciplines that encourage new conceptualiza- tions in organizational theory and management practice. We welcome different perspectives of analysis, including the organizations of various sizes and from various branch- es, units that constitute organizations, and the networks in which organizations are embedded. Topics are drawn, but not limited to the following areas: • organizational theory, management, development, and organizational behaviour; • human resources management (such as organization & employee development, leadership, value creation through HRM, workplace phenomena etc.); • managerial and entrepreneurial aspects of education; • business information systems (such as digital business, decision support systems, business analytics etc.); • enterprise engineering (e.g., organizational design, business process management, enterprise transformation paradigms etc.); • papers that analyse and seek to improve organizational performance. Organizacija (Revija za management, informatiko in človeške vire) je interdisciplinarna recenzirana revija, ki objavlja visoko kakovostne prispevke z vseh vidikov, ki so pomembni za organizacijske procese in strukture. Revija je zasnovana tako, da spodbuja zanimanje za različne vidike v zvezi z organizacijskimi vedami in je namenjena tako akademski kot strokovni skupnosti. Revija objavlja izvirne članke, ki spodbujajo empirično, teoretično in metodološko razumevanje teorij in konceptov managementa in organizacije. Pozdravljamo tudi prispevke iz drugih znanstvenih disciplin, ki spodbujajo nove koncepte v organizacijski teoriji in praksi. Objavljamo članke, ki analizirajo organiziranost z različnih vidikov, so usmerjeni na organizacije različnih velikosti in iz različnih sektorjev, na enote, ki sestavljajo organizacije, in na mreže, v katere so organizacije vpete. Teme so pokrivajo predvsem naslednja področja: • organizacijska teorija, upravljanje, razvoj in organizacijsko vedenje; • management človeških virov (kot so organizacija in razvoj zaposlenih, vodenje, ustvarjanje vrednosti s pomočjo človeških virov, organizacijski pojavi na delovnem mestu itd.); • vodstveni in podjetniški vidiki izobraževanja; • poslovni informacijski sistemi (kot so digitalno poslovanje, sistemi za podporo odločanju, poslovna analitika itd.); • podjetniški inženiring (npr. organizacijsko oblikovanje, upravljanje poslovnih procesov, paradigme preoblikovanja podjetij itd.); • članki, ki analizirajo organizacijsko uspešnost in prizadevanja za izboljšanje le-te. Organizacija, Volume 53, Issue 3 August 2020 Contents 3/2020 Editorial office: University of Maribor, Faculty of Organizational Science, Založba Moderna Organizacija, Kidriceva 55a, 4000 Kranj, Slovenia Telephone: +386-4-2374-295 , 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. Papers for publication in Organizacija can be submitted via journal website at http://organizacija.fov.uni-mb.si. Before submission authors should consult. Guidelines available at https://content.sciendo.com/view/journals/orga/orga-overview.xml . You can contact the editorial via e-mail: organizacija@fov.uni- mb.si or joze.zupancic@um.si Articles are currently abstracted/indexed in: Cabell’s Directory, CEJSH (The Central European Journal of Social Sciences and Humanities), Celdes, Clarivate Analytics - Emerging Sources Citation Index (ESCI), 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 Pol mers 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 Co mmunications Abstracts, ProQuest - Engineered Materials Abstracts, ProQuest - Mechanical & Transportation Engineering Abstracts, ProQuest - METADEX (Me tals Abstracts), ProQuest - Sociological Abstracts, ProQuest - Solid State and Superconductivity Abstracts, Research Papers in Economics (RePEc), SCOPUS, Summon (Serials Solutions/ProQuest), TDOne (TDNet), TEMA Technik und Management, WorldCat (OCLC). RESEARCH PAPERS 185 198 212 227 246 260 Irfan HELMY, Wiwiek Rabiatul ADAWIYAH, Harini Abrilia SETYAWATI Robert K. MACGREGOR, Włodzimiercz SROKA, Radka MACGREGOR PELIKÁNOVÁ Dana BERNARDOVÁ, Klára KAŠPAROVÁ, Martin FINK, Kateřina IVANOVÁ, Tetiana ARKHANGELSKA Alenka NAGLIČ, Polona TOMINC, Klavdij LOGOŽAR Farzad SATTARI ARDABILI Jože ZALAR, Goran VUKOVIČ, Rok OVSENIK Fostering Frontline Employees’ Innovative Service Behavior: The Role of Workplace Friendship and Knowledge Sharing Process The CSR Perception of Front- line Employees of Luxury Fashion Businesses Construction and Significance of Corporate Social Responsibility Indices – from Results to the Essence The Impact of Industry 4.0 on Export Market Orientation, Market Diversification, and Export Performance Moderating-mediating Effects of Leader Member Exchange, Self-efficacy and Psychological Empowerment on Work Outcomes among Nurses The Influence by the Elderly on Modernising the Organisation of Tourist Farms 184 Organizacija, Volume 53 Issue 3, August 2020 EDITOR / UREDNIK Jože Zupančič University of Maribor, Faculty of Organizational Sciencies, Slovenia CO-EDITORS / SOUREDNIKI Petr Doucek Prague University of Economics, Faculty of Informatics and Statistics, Czech Republic Matjaž Maletič University of Maribor, Faculty of Organizational Sciencies, Slovenia Włodzimierz Sroka WSB University, Department of Management, Dąbrowa Górnicza, Poland EDITORIAL BOARD / UREDNIŠKI ODBOR REVIJE Hossein Arsham, University of Baltimore, USA Franc Čuš, University of Maribor, Slovenia Sasha M. Dekleva DePaul University, School of Accountancy and MIS, Chichago, USA 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 Matjaž Perc University of Maribor, Slovenia Dušan Petrač, NASA, Jet Propulsion Laboratory, California Institute of Technology, USA Nataša Petrović University of Belgrade, Serbia Tetyana Pimonenko, Sumy State University, Balatsky Academic and Scientific Institute of Finance, Economics and Management, Ukraine 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 Reshetnev Siberian State University of Science and Technology, 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 185 Organizacija, Volume 53 Issue 3, August 2020Research Papers 1 Received: 20th March 2020; revised: 27th May 2020; accepted: 28th June 2020 Fostering Frontline Employees’ Innovative Service Behavior: The Role of Workplace Friendship and Knowledge Sharing Process Irfan HELMY1, Wiwiek Rabiatul ADAWIYAH2, Harini Abrilia SETYAWATI1 1Putra Bangsa Economics College, Department of Management, Kebumen, Indonesia, risetirfan@gmail.com, harini.abrilia.setyawati@gmail.com 2Jenderal Soedirman University, Faculty of Economics and Business, Purwokerto, Indonesia, wiwiekra@gmail.com (corresponding author) Background and purpose: The hospitality industries need to create benevolent work environment and social ac- tivities that stimulate frontline service employees (FLEs) innovative behavior. Drawing on social capital theory, this study aims to examine the influence of workplace friendship on promoting FLEs’ innovative service behavior. This study also examines the mediating role of knowledge sharing process (knowledge collecting and knowledge donat- ing) on the relationship between workplace friendship and FLEs’ innovative service behavior. Design/Methodology/Approach: For data collection, the convenience sampling method is applied to survey 163 frontline employees in 3- and 4-stars tourist hotels located in Yogyakarta, Indonesia. The present study performed structural equation modelling (PLS-SEM) software Smart-PLS v3.0 to test the hypotheses. Results: The result showed that workplace friendship has significant influence on FLEs’ innovative service behavior. Also, this study empirically found that workplace friendship influence FLEs’ innovative service behavior directly and indirectly trough knowledge collecting. Interestingly, knowledge donating has insignificant effect on FLEs innovative service behavior. Conclusion: We conclude that workplace friendship could create a favorable work environment that fostering FLEs innovative service behavior trough knowledge sharing process. Therefore, this research adds to the body of knowl- edge by pointing out the influence of workplace friendship and knowledge sharing process on FLEs innovative ser- vice behavior. This present study also provides the human resource practice regarding how to nurturing workplace friendship that stimulates FLEs innovative work behavior. Keywords: Frontline service employees, Innovative service behavior, Workplace friendship, Knowledge collecting, Knowledge donating DOI: 10.2478/orga-2020-0012 1 Introduction Existing literature focuses on the hospitality industry has primarily emphasized the critical role of frontline employ- ees (FLEs) on service performance. Frontline workers in- teract with the customer personally (Ordanini & Parasur- aman, 2011) and create impressive guest-host interaction, rather than narrowly focusing on routine operational work as a means of building customer experience and loyalty. They have to capture customers’ needs and capable of im- proving products and services innovatively. Innovation is a key competency that helps workers dealing with their unpredictable novel tasks. Medallia Institute surveyed frontline employees of hospitality, retail and financial ser- 186 Organizacija, Volume 53 Issue 3, August 2020Research Papers vices companies in the U.S. The result concluded that 56% of FLE possessing brilliant ideas that could improve their companies’ practices, and 43% alleged that their insights could reduce costs of service delivery (Benjamin, 2016). The Medallia study punctuated FLEs as a wealth of an or- ganization. The workers dazzling knowledge and intuition may be used as the organizational think-tank to face the fast-paced nature of business competition. Despite the conventional wisdom, there is an ongoing debate on the importance of fostering innovative behaviors among frontline employees in service settings. The man- agement literature highlights the need for business firms to doggedly foster innovative behaviors among frontline em- ployees, no matter the cost in order to survive the constant state of radical transformation (Santos-Vijande et al. 2016; Engen, & Magnusson, 2015). Recent studies pinpoint the prominence of nurturing FLEs innovative behavior in ser- vice organizations. Leaders should encourage their FLEs to be more innovative (Ozkok et al. 2019; Al-Hawari, Melhem, & Shamsudin, 2019) to survive the onslaught of business competition. In the meantime, pieces of literature revealed the fac- tors that might inhibit FLEs’ innovative service behavior. Lack of support from the organization and the absence of reward for creative behaviors are among the factors that hinder employees’ innovative service behavior (Yeşil & Hırlak, 2013). Most frontline employees are anxious about risk, and they are reluctant to propose new ideas at work, which slows down the service innovation process (Melton & Hartline, 2010). Addressing this point, managers should create favorable workplace environments aiming at solv- ing the obstacles and, in turn, encourage FLEs’ innovative service behavior. Past studies have massively explored the antecedents of FLEs’ innovative service behavior, such as learning goal orientation (Montani, Odoardi, & Battistelli, 2014), knowledge sharing (Kim & Lee, 2013), managerial sup- port (Wynen et al. 2019), leadership (Yidong, & Xinxin, 2013) and social interaction (Michael, Hou, & Fan, 2011). In this study, we focus on the relationship between work- place friendship and FLEs innovative service behavior. The focus of the study is motivated, particularly by the fact that the research is still reported inconsistent and inconclusive findings. For instance, Okoe et al. (2018) examined the relationship between human resource prac- tice outcomes and service innovation from across service industries in Ghana. Contrary to previous studies, They found that the interaction of workplace friendship and knowledge sharing had no significant effect on service in- novation. Another study, Maria, Jong, & Zacharias (2017), also stated that support form colleagues weakened the re- lationship between job engagement and FLEs innovative service behavior in the banking and finance sector. This re- search gap calls for more studies to reinvestigate the corre- lation between workplace friendship and FLEs innovative service behavior in different context (Okoe et al., 2018). Testing the model in wider context shall increase the gen- eralizability of the theory, therefore adds value to the body of knowledge in the field. This research was conducted in tourist hotels located in Indonesia. Data released by the National Bureau of Statistics of Indonesia (BPS) showed a proliferation of occupancy rates of hotels in Indonesia by 4,54% in 2019, and approximately 28% of hotel guests were a foreign tourist. Thus, the following research is nec- essary to assist professionals in finding the best way to promote FLEs innovative behavior to face the increasing complexity oh hotel guests’ demands and to anticipate the uncertain novel duties of their jobs. Furthermore, in building a relationship between work- place friendship and FLEs’ innovative service behavior, this study posits the role of the knowledge sharing pro- cess as a mediating variable. The new insight may resolve the inconclusive findings on workplace friendship-inno- vation relationship observed in the most relevant litera- tures. This study provides research contributions in several primary ways. First, this study extends prior research on the connection between workplace friendship and FLEs innovative service behavior. Second, by integrating the knowledge sharing process, this study has investigated the underlying process of how workplace friendship leads to FLEs’ innovative service behavior via knowledge collect- ing and knowledge donating. Third, this study extended the generalization of the research model by the context tourist hotel sector in Indonesia. Finally, the findings of this paper can bring attention to the tourist hotel’s management in the case of nurturing the friendly work environment that increasing FLEs innovative service behavior. 2 Literature Review 2.1 Innovative Service Behavior Innovative behavior is a form of individual engagement in the innovation process, including initiative and application of an idea, product, or procedure (Scot & Bruce, 1994). Previous studies agreed that innovation is different from creativity; even some research are often used the terms in- terchangeably (Farr & Ford, 1990; Scot & Bruce, 1994). Creativity is a process of creating an idea, while innovative subsequent provided an idea until an implementation or application process. Accordingly, creativity is a compo- nent of innovation. Based on their seminal work, Scot & Bruce (1994) stated that innovative behavior is viewed as a multi-stage process that is starting from problem recog- nition, generating an idea or solution, and seek a coalition to support the idea. Finally, the last stage is completing the concept by producing the model or product of innovation. De Jong & Hartog (2010) developed four distinctive stages of innovative behavior, namely idea exploration, idea-gen- erating, idea championing, and idea implementation. First 187 Organizacija, Volume 53 Issue 3, August 2020Research Papers stage, idea exploration includes looking for ways to im- prove current products, services, or processes. Idea gen- eration is the stage where individuals use their creativity to create something new and beneficial to the progress of an organization or company. Idea promotion is the stage of finding and gathering partners, sponsors, or supporters of ideas that have been generated. Moreover, the last stage after idea promotion is idea realization, which includes implementing or realizing ideas in the work environment. This study explored the effect of workplace friendship on innovative service behavior. According to Wang & Hou (2015), individual innovative behavior strongly depends on their quality network relationship (e.g., friendship) at the workplace because this kind of relationship provided the necessary information, resources, and support which help an employee to promote and realize their new ideas. 2.2 Workplace Friendship, Knowledge Sharing Process and Innovative Service Behavior Sias & Cahill (1998) have a focus on developing a friend- ship relationship in the workplace. They found that in- creasing frequent and intimate interaction in the workplace shall foster workplace friendship. Berman, West, & Richter (2002) defined workplace friendship as a non-exclusive re- lationship at work that involves mutual trust, commitment, reciprocal liking, and shared interest and values. Morrison (2004) also mentioned that workplace friendship colored by voluntary, reciprocal, and equality relationships. Re- cently, Pillemer & Rothbard (2018) explained four dis- tinctive characteristics of workplace friendship, namely informality, voluntary, socio-emotional, communal norms. The first element, voluntary and informality, means that friendship among co-workers is not formally initiated by the organization, and there is a lack of standard (non-hi- erarchical) in the relationship (Berman, West, & Richter, 2002; Sias et al. 2004). Second, workplace friendship is characterized by the communal norm and social support. The main goal of relationship is to provide support among friends and foster affective and relational wellbeing (Mor- rison & Cooper-Thomas, 2016). Previous researches have acknowledge several benefits of workplace friendships, such as reduced stress, turnover intention, and increased job satisfaction and organizational commitment (Morri- son, 2004). Further, workplace friendship has improved performance (Hsu et al. 2016; Berman, West, & Richter, 2002) and job involvement (Riordan & Griffeth, 1995). However, several studies also pointed out the negative out- comes of friendship at work. For instance, negative gossip, instrumental goal conflict, decreased loyalty, low produc- tivity, and negative politic in the organization (Song & Olshfski, 2008; Pillemer & Rothbard, 2018). But overall, friendship has a beneficial effect on individuals and organ- izations (Zarankin & Kunkel, 2019). In their study Kratzer, Leenders & Engelen (2006) assert that human interaction in the organization was the critical antecedent to innova- tion. It means that employees’ innovativeness depends on collaboration among employees (Gottfridsson, 2014). Besides, workplace friendship, as a social collectiveness, motivates employees to share ideas and method in order to solve problems or to generate new products (Faraj & Wasko, 2001). Thus, we proposed the following hypoth- esis: H1: Workplace friendship has a significant influence on FLEs’ innovative service behavior. H2: Workplace friendship has a significant influence on knowledge collecting. H3: Workplace friendship has a significant influence on knowledge donating. 2.3 Mediating Role of Knowledge Sharing Process Knowledge sharing is defined as a process where individu- als mutually exchange tacit or explicit knowledge to create new knowledge (Van Den Hooff & De Ridder’s, 2004). However, conceptually, terminology of knowledge shar- ing is often interchangeable with the concept of knowledge transfer and knowledge exchange (Zheng, 2017). Several studies have provided clear limitations about the differ- ences between knowledge sharing and knowledge transfer in the knowledge management literature (Tangaraja et al., 2016). Knowledge sharing is a series of actions carried out by an individual (people to people process) within an organization member while knowledge transfer is used primarily to describe the movement of knowledge be- tween larger entities in the organization, such as between departments or divisions or organizations themselves. On the other hand, knowledge exchange is an individual activity within organizations that do knowledge sharing and knowledge-seeking (individuals who seek knowledge from their colleagues) (Paulin & Suneson, 2015). In this current study, social capital theory was em- ployed in linking workplace friendship, knowledge shar- ing process, and innovative service behavior. The concept of social capital explains the organizational resources that arose from the interaction between members, involving knowledge exchange or knowledge management activities (Nahapiet & Ghoshal, 1998, p. 243). Recent knowledge management literature has considered social capital as the main instrument that facilitates knowledge sharing and in- novation in the organization. For instance, Weerakoon et al. (2019) investigated the linkage between links between social capital, opportunity-motivation-abilities, knowl- edge creation, and innovativeness within R&D teams in Iran. They found that strength of the ties among the organ- izational members leads to knowledge creation, and signif- icantly promoted innovativeness. Another study, Akhavan & Hosseini (2015), indicated that social capital was asso- 188 Organizacija, Volume 53 Issue 3, August 2020Research Papers ciated with knowledge sharing behavior that, in turn, was significantly related to innovation capability. Past studies has recognized interpersonal trust as the critical compo- nent of workplace friendship that motivate employee to participate in knowledge sharing activity (Sias et al. 2004; Wu et al. 2009). In this view, this present study analyzed the role of workplace friendship as the form of social cap- ital on delivering knowledge sharing process and innova- tive work behavior in organization. Knowledge management literature showed that the knowledge sharing process involve both efforts of bring- ing and getting knowledge. Ardichvili, Page & Wentling (2003) noted that knowledge sharing consists of “knowl- edge supply” and “knowledge demand” while Oldenkamp (2001) divided knowledge sharing process into “knowl- edge carrier” and “knowledge requester”. Another study by Van Den Hooff and De Ridder’s, (2004: 118) proposed knowledge sharing process as “knowledge donating” and “knowledge collecting” activity. Knowledge donating is an activity of communicating intellectual capital to other colleagues, while knowledge collecting is about strength- ening colleagues so they can persuade them to share their intellectual capital. This study investigates the role of knowledge col- lecting and knowledge donating as mediating variables between workplace friendship and FLEs innovative ser- vice behavior. The nomological validity of the model was based on the previous research model addressing the ante- cedents and consequences of innovative service behavior (Tierney & Farmer, 2002). Akram et al. (2018) mentioned that these two forms of knowledge sharing have their own individual standing and effects in the literature. For in- stance, Kim & Lee (2013) examined the effects of goal orientation on innovative service behavior with knowledge sharing as the mediator in a survey on 418 FLEs hotel in Korea. They found the positive association between learn- ing goal orientation and innovative service behavior via knowledge sharing process. In addition, the study indicat- ed that knowledge collecting is a more reliable predictor of innovative service behavior. Another study, Kamasak, and Bulutlar (2009) emphasized that knowledge donat- ing did not have any impact on innovation. Similarly, Lin (2007) found a significant positive relationship between ICT use and knowledge collecting, but no significant re- lationship with knowledge donating. These different find- ings revealed that knowledge collecting and knowledge processing were two distinct types of knowledge sharing processes that have a different and separated effect in re- search literature. Previous studies revealed that knowledge sharing significantly improve individual innovation, absorptive capacity, and innovativeness (Yesil & Hirlak, 2013; Hau, Kim, Lee & Kim, 2013). The success of knowledge shar- ing process relies on employees who are actively sharing their knowledge. In the service context, the employee who engages in knowledge sharing activity are willingly to share more information (e.g., customer needs, market trend) to their colleagues. Astonishingly, a person who share information are also collect information from coun- terparts simultaneously. Another attributing factor that drives knowledge sharing behavior is individual percep- tions of social interaction within the organization (Intezari, Pauleen, and Taskin, 2017). Positive perceptions lead to better sharing acts compared to the negative one. In ad- dition, the closeness of relationships between individuals, beliefs, friendship relationships, and informal communica- tion patterns are factors that encourage individuals to share knowledge (Janet and Alton, 2013). On the base of above literature and arguments, we proposed hypothesis: H4: Knowledge donating have a positive relationship on the innovative service behavior. H5: Knowledge collecting have a positive relationship on the innovative service behavior. H6: Knowledge donating mediates the relationship between workplace friendship and innovative service be- havior. H7: Knowledge collecting mediates the relationship between workplace friendship and innovative service be- havior. 3 Methodology 3.1 Sample and Procedure The participant of the study were frontline employees of hotels located in Yogyakarta, one of the provinces with the most significant growth of creative industries and tourism in Indonesia. The targeted hotels were located in the vicin- ity of well-known tourist destinations in the area including Parangtritis, Malioboro and Keraton. Respondents were limited to frontline workers of the hotels that deal directly with customers in their jobs. Thus, included participants were those in the front office, in charge of room services, as well as serving food and beverages to the hotel guests. Before data collection, the research team initially contact the HR managers in each hotel for permit. Out of fifteen hotels invited to participate in the survey, three refused to take part due to their confidential policy. Self-adminis- tered questionnaires were distributed to frontline employ- ees via the hotels’ human resource managers. To ensure valid response, the researchers briefs the hotel managers on the content of the questionnaires beforehand. Then, the frontline employees filled in the self-administered ques- tionnaire immediately under the manager’s supervision. The length of the data collection was approximately three months starting from March until June 2019. According to the above explanation, this study investi- gated the empirical model as follows: 189 Organizacija, Volume 53 Issue 3, August 2020Research Papers This study utilized a convenience sampling method. This design was employed because not all tourist hotels provided access to the survey. Moreover, frontline em- ployees are working in different shifts and different days that hinder the possibility of involving every employee in the study. Convenient sampling is among the least chosen method due to its deficiency in support studies that seek to generalize the findings. To resolve the deficiency, Landers & Behrend (2015) proposed that the feature of the sample and the setting of the study should be provided. In view of this, we have provided the demographic data of the re- spondents described as Table 1. 3.2 Measurement and Analyses Approach This present study employed self-reported questionnaire to measure each variable. All of the survey items were translated from English into Indonesian language using a method of forwarding and backward translation (Brislin, 1970). The measurement of innovative service behavior (six items) was a contextualized version of Luoh, Tsaur, & Tang (2014). Workplace friendship was measured using a workplace prevalence instrument (six items) developed by Nielsen, Jex & Adam (2000). Knowledge sharing pro- cess measurement in this research was used two-dimen- sional developed by Van Den Hooff and De Ridder (2004); knowledge donating (three items), and knowledge Collect- ing (four items) (see table 2). All items were rated from 1 (strongly disagree) to 5 (strongly agree). This research used Smart PLS to analyze of the hypotheses and testing of the proposed model. Smart PLS was employed because of it provide support for research with relatively small sam- ples. Moreover, Smart PLS is appropriate to build causal modeling for future testing purposes (Hair et al. 2017). 4 Results 4.1 Demographic Characteristics The questionnaires were distributed and collected from 225 employees, and 163 were completed and adequately filled. Thus, the usable response for this study was 72,4%. The demographic data of the respondents are presented in Table 1. As indicated in Table 1, out of 163 respondents, 97 re- spondents equivalent to 58.90% were males. The major- ity of the respondents (59.1%) were secondary and high school graduates while 15.34% were vocational school holders and 25.15% were possessed bachelor’s degree. Most of the respondents (38.65%) worked as room service employees and 38.13% were at the food and beverage de- partment. According to job tenure, most of the respondents (30.06%) had work experience between 12-15 years. Figure 1: Research Model 190 Organizacija, Volume 53 Issue 3, August 2020Research Papers 4.2 Measurement Model Evaluation All minimum requirements are fit with the measurement model, as illustrated in Table 2. First, this study used a cut- off value of 0.70 significance for the loading factor of all items above 0.70. Higher levels of outside loading factors indicate a higher level of indicator reliability (Hair et al. 2017). Second, all extracted mean values (AVE) exceed the 0.50 threshold, supporting the convergent validity of the construct steps. Composite reliability (CR) precisely explains the convergence and internal consistency of the developed measures. CR estimates the degree to which the respective indicators signal the latent construct. The CR estimates of the latent variables of the present study Table 1: Characteristics of respondents (n=163) Demographic Characteristic Frequency Percentage Gender Male 96 58.90% Female 67 41.10% Total 163 Education Secondary and High School 97 59.51% Vocational school 25 15.34% University 41 25.15% Total 163 Hotel Department Food and Beverage 56 34.36% Room service 63 38.65% Frontdesk 44 26.99% Total 163 Job Tenure (year) Under 3 3 1.84% 3-5 24 14.72% 6-9 32 19.63% 9-12 40 24.54% 12-15 49 30.06% above 15 15 9.20% Total 163 ranged from 0.859 to 0.925 (Table 2), which exceeded the cut-off value of 0.7.Third step, to asses discriminant valid- ity, we examined by comparing of the square root of the AVE to each variable relation (Fornell & Larcker, 1981). The result showed that discriminant validity is established between two constructs association among indicators and greater than that between a construct and any other con- struct (Hair et al. 2012). Cronbach’s alpha coefficients for the multiple-item workplace friendship, knowledge do- nating, knowledge collecting, and innovative service be- havior were 0.807, 0.892, 0.793, and 0.876, respectively, indicating an acceptable level of reliability. 191 Organizacija, Volume 53 Issue 3, August 2020Research Papers Table 2: Convergent, Divergent validity, and Reliability Note: CR, composite reliability; AVE, average variance extracted; CA, cCronbach’s alpha; Values above the diagonal in bold are squared inter-construct correlations for Fornell–Larcker criterion. Instrument CA CR AVE Instrument 1 2 3 4 Workplace friendship (1) 0.807 0.859 0.695 0,834 Knowledge donating (2) 0.892 0.925 0.755 0.603 0,869 Knowledge collecting (3) 0,793 0.864 0.701 0.764 0.486 0,837 Innovative service behavior (4) 0,876 0.890 0.715 0.558 0.108 0.442 0,846 Table 3: Measurement Model Evaluation Result Factor Measurement Item Mean Standard Devi-ation Factor Load- ing Workplace Friendship WF.1 I have formed strong friendships at work. 3.84 0.52 0.715 WF.2 I socialize with coworkers outside of the workplace. 3.80 0.66 0.738 WF.3 I can confide in people at work. 3.85 0.58 0.769 WF.4 I feel I can trust many coworkers a great deal. 3.35 0.87 0.771 WF.5 Being able to see my coworkers is one reason why I look forward to my job. 3.45 1.16 0.724 WF.6 I do not feel that anyone I work with is a true friend. (R) 3.45 1.01 0.735 Knowledge Donating KD.1 When I’ve learned something new, I tell my colleagues about it. 3.47 0.71 0.879 KD.2 I share information I have with my colleagues. 3.55 0.84 0.860 KD.3 I think it is important that my colleagues know what I am doing. 3.32 0.99 0.876 KD.4 I regularly tell my colleagues what I am doing. 3.25 0.98 0.861 Knowledge Collecting KC.1 When I need certain knowledge, I ask my colleagues about it 3.97 0.54 0,821 KC.2 I like to be informed of what my col- leagues know 3.65 0.65 0,727 KC.3 I ask my colleague about their abilities when I need to learn something 3.58 0.60 0,775 KC.4 When a colleague is good at something, I ask them to teach me how to do it 3.44 0.77 0,812 192 Organizacija, Volume 53 Issue 3, August 2020Research Papers Note: WFS, workplace friendship; KD, knowledge donating; KC, knowledge collecting; ISB, innovative service behavior. Figure 2: Measurement model Factor Measurement Item Mean Standard Devi-ation Factor Load- ing Innovative Ser- vice Behavior ISB.1 I come up with innovative and creative notions 3.74 0.65 0,705 ISB.2 I try to propose my own creative ideas and convince others 3.45 0.70 0,826 ISB.3 I seek new service techniques, methods, or techniques 3.48 0.58 0,755 ISB.4 I provide a suitable plan for developing new ideas 3.65 0.75 0.892 ISB.5 I try to secure the funding and resources needed to implement innovations 3.28 0.86 0.813 ISB.6 Overall, I consider my self a creative member 3.49 0.74 0.863 Table 3: Measurement Model Evaluation Result (continues) 193 Organizacija, Volume 53 Issue 3, August 2020Research Papers 5 Discussion and Implications The research findings have confirmed the critical role of friendship relations in shaping service innovation. In this study, workplace friendship found to be the key facilita- tor in promoting FLEs innovative service behavior. These findings imply that a friendly work environment has an essential role in creating innovation opportunities and de- velop new services. Workplace friendship was also found a significant influence on both knowledge collecting and knowledge donating. Social capital theory supports our findings that when frontline employees build up friend- ly relations with others, their willingness to share and collect an idea, information, or method will be stronger. Further, workplace friendship is provide trust and emo- tional support. Interpersonal trust encourage more effec- tive communication, open discussion and understanding work- related problems. Therefore, workplace friendship motivates frontline employees to work collectively in the problem-solving process. When frontline employees see each other as real friends, they will voluntarily share ideas to find a solution to the problems. Our study also empirically indicated that knowledge collecting has a mediating effect on the relationship be- tween workplace friendship and FLEs’ innovative service behavior. Friendship at work provides opportunities for frontline employees to learn and gather valuable infor- mation from coworkers; for example, various customer characteristics and customer complaints on hotel services, which is vital for service encounter innovation. Despite the significant effect of knowledge collecting, this study concluded that knowledge donating was not related to FLEs innovative service behavior. This study is partially in line with previous studies that empirically found knowl- edge collecting as a better contributor in facilitating the employee innovative work behavior (Akram et al. 2018; Hussein et al. 2016; Kamasak & Bulutlar, 2009). However, regarding this inconsistent findings, we should not rule out Variable Original Samples STDEV t-Statistics ρ -Values Hypothesis WFS → ISB 0.218 0.105 2.074 0.039* H1: Supported WFS → KD 0.706 0.043 16.379 0.000** H2: Supported WFS → KC 0.753 0.045 16.741 0.000** H3: Supported KD → ISB 0.154 0.079 1.941 0.053 H4: Unsupported KC → ISB 0.527 0.098 5.387 0.000** H5: Supported Specific Indirect Effect WFS → KD → ISB 0.147 0.081 1.826 0.068 H6: Unsupported WFS → KC → ISB 0.397 0.077 5.164 0.000* H7: Supported Table 4: Structural Equation Model Assessment Note: *ρ < .05; ** ρ <.001; STDEV, standard deviation; WFS, workplace friendship; KD, knowledge donating; KC, knowledge collecting; ISB, innovative service behavior. 4.3 Findings For this study, structural equation modelling using a Par- tial Least Squares (PLS) was used to test the hypotheses. Smart PLS 3 Version 2.0 software was used to perform the analysis. Table 4 summarizes the results of the best-fit model and explains the direct and indirect relationship between exogenous variables and endogenous variables. In hy- potheses H1, H2, and H3, authors examined the effects of workplace friendship on knowledge donating, knowledge collecting, and innovative service behavior. The results found that workplace friendship had significant effect on ISB (t=2.074; ρ=.039), knowledge donating (t=16.379; ρ<.001) and knowledge collecting (t= 16.741; ρ<.001). Therefore, H1, H2, and H3 were supported. Furthermore, knowledge collecting was found to positively influence innovative service behavior (t=5.387; ρ<.001) and provid- ing support for H5. However, the result also revealed that knowledge donating has no significant relationship with innovative service behavior (t=1.941; ρ=.053). Thus, H4 was unsupported. Next, according to specific indirect ef- fect test (Hair et al. 2017), this result showed that knowl- edge collecting partially mediate the relationship between workplace friendship and innovative service behavior (t=1.826; ρ=.068), providing support for H7. On the other hand, the mediating effect of knowledge donating was not significant (t=1.826; ρ =.068). Consequently, H6 was not supported. 194 Organizacija, Volume 53 Issue 3, August 2020Research Papers the possible impact of inadequate sample size that invari- ably introduces errors into the final findings (Schoemann, Boulton & Short, 2017) This study provides several implications for both hos- pitality management and theoretical development. First, hotel managers should consider workplace friendship as a rewarding tool for increasing FLEs› innovative ser- vice behavior. Hence, as a way of improving workplace friendship, the manager ought to provide an opportunity for employees to socialize with others in a more pleasant environment, for example, comfortable face to face meet- ings and informal briefing before starting up their work. Furthermore, hotel managers should consider social activ- ities that improve collective intelligence by strengthen the interpersonal trust and emotional connection among cow- orkers. Second, it implies that FLEs experiencing good quality workplace friendship are more likely to involve in the knowledge collecting and, in turn, trigger higher in- novative service work behavior. Thus, managers should consider the mechanism to accelerate the implementation of knowledge sharing collecting process. For instance, managers ought to develop a flexible and build openness knowledge-sharing climate that enable FLEs to collect in- formations or experinces and also they can learn service delivery from others. This strategy can enlarge employees’ knowledge repository which is critial for idea generating on innovation service process. The third implication, this study theoretically contrib- utes to the social capital literature by enriching the model that predicts innovative service behavior. This research is among the first that attempt to integrate the association among workplace friendship, knowledge sharing process, and innovative service behavior in hospitality service lit- erature. This study also advances previous research by ex- amining two distinctive dimensions of knowledge sharing (knowledge donating and knowledge donating) related to innovative service behavior. However, we have over- looked to capture possible interaction between knowledge donating and knowledge collecting. Therefore, these find- ings open the doors for further research to investigate the nature of knowledge sharing process related to innovative service behavior. 5.1 Conclusion, Limitation and Future Research This study concludes the importance of workplace friend- ship to encourage FLEs’ innovative service behavior. Workplace friendship promotes a friendly work environ- ment that becomes a trigger for collective intelligence in knowledge sharing behavior. Workplace friendship also provides favorable interaction among FLEs that positively nurturing innovative service behavior trough the knowl- edge collecting process. However, this research has sev- eral limitations and suggestions for future research. First, the sample size was relatively small. A larger sample is suggested to provide a more accurate, precise, and com- prehensive result. Second, the limitation of this study is related to the use of a convenience sampling method. We suggested a probability sampling method in order to lev- erage the generalization of findings. Third, it would be in- teresting to replicate this study in a longitudinal method to understand the cause and effect relationship. In addition, a longitudinal study helps scholars discovering factors to sustain workplace friendship, knowledge sharing, and in- novative service behavior relationships. Fourth, this study only focuses on the mediating effect of knowledge donat- ing and knowledge collecting on innovative service behav- ior. However, we suggest the extensive research to investi- gate the possible interaction between knowledge donating and knowledge collecting. Fifth, this study only concen- trated on frontline employees within the hotel service sec- tor. Future research could extend the investigation to dif- ferent industries to obtain a broader generalization of the study. Moreover, this research was conducted in Indonesia, a developing country with specific cultural features, future research should reinvestigate this current model in various settings (e.g., European or western countries) to reveal any differences or similarities from the present study. Literature Al-Hawari, M., Bani-Melhem, S. and Shamsudin, F. (2019). Determinants of frontline employee service in- novative behavior: The moderating role of co-worker socializing and service climate, Management Resear- ch Review, 42(9), 1076-1094. https://doi.org/10.1108/ MRR-07-2018-0266 Akhavan, P., & Mahdi Hosseini, S. (2016). Social capital, knowledge sharing, and innovation capability: an em- pirical study of R&D teams in Iran. Technology Anal- ysis & Strategic Management, 28(1), 96-113. https:// doi.org/10.1080/09537325.2015.1072622 Akram, T., Lei, S., Haider, M. J., & Hussain, S. T. (2018). Exploring the impact of knowledge sharing on the in- novative work behavior of employees: A study in Chi- na. International Business Research, 11(3), 186-194. https://doi.org/10.5539/ibr.v11n3p186 Ardichvili, A., Page, V., & Wentling, T. (2003). Motiva- tion and barriers to participation in virtual knowled- ge-sharing communities of practice. Journal of Knowledge Management, 7(1), 64-77. https://doi. org/10.1108/13673270310463626 Benjamin, B. (2016). Listen to Your Employees, Not Just Your Customers. Available at https://hbr.org/2016/08/ listen-to-your-employees-not-just-your-customers Berman, E. M., West, J. P., & Richter, Jr, M. N. (2002). Wor- kplace relations: Friendship patterns and consequences (according to managers). Public Administration Re- 195 Organizacija, Volume 53 Issue 3, August 2020Research Papers view, 62(2), 217-230. https://doi.org/10.1111/0033- 3352.00172 Boyd, N. G., & Taylor, R. R. (1998). A developmental approach to the examination of friendship in leader-fol- lower relationships. The Leadership Quarterly, 9(1), 1-25. https://doi.org/10.1016/S1048-9843(98)90040-6 Brachos, D., Kostopoulos, K., Soderquist, K. E., & Prastacos, G. (2007). Knowledge effectiveness, so- cial context and innovation. Journal of Knowled- ge Management, 11, (5), 31–44. https://doi. org/10.1108/13673270710819780 Brislin, R. W. (1970). Back-translation for cross-cultural re- search. Journal of cross-cultural psychology, 1(3), 185 - 216. https://doi.org/10.1177/135910457000100301 Cao, F. and Zhang, H. (2020), Workplace friendship, psy- chological safety and innovative behavior in China: A moderated-mediation model, Chinese Management Studies, Vol. ahead-of-print No. ahead-of-print. https:// doi.org/10.1108/CMS-09-2019-0334 Chang, H. T., Chou, Y. J., Liou, J. W., & Tu, Y. T. (2016). The effects of perfectionism on innovative behavior and job burnout: Team workplace friendship as a mo- derator. Personality and Individual Differences, 96, 260-265. https://doi.org/10.1016/j.paid.2016.02.088 De Jong, J., & Den Hartog, D. (2010). Measuring innova- tive work behavior. Creativity and Innovation Mana- gement, 19 (1), 23-36. https://doi.org/10.1111/j.1467- 8691.2010.00547.x Engen, M., & Magnusson, P. (2015). Exploring the role of front-line employees as innovators. The Service In- dustries Journal, 35(6), 303-324. https://doi.org/10.10 80/02642069.2015.1003370 Hair, J., Hollingsworth, C., Randolph, A. and Chong, A. (2017). An updated and expanded assessment of PLS-SEM in information systems research. Industrial Management & Data Systems, 117(3), 442-458. htt- ps://doi.org/10.1108/IMDS-04-2016-0130 Hau, Y. S., Kim, B., Lee, H., & Kim, Y. G. (2013). The effects of individual motivations and social capital on employees’ tacit and explicit knowledge sharing intentions. International Journal of Information Ma- nagement, 33(2), 356-366. https://doi.org/10.1016/j. ijinfomgt.2012.10.009 Helmy, I., Adawiyah, W. R., & Banani, A. (2019). Linking Psychological Empowerment, Knowledge Sharing, and Employees’ Innovative Behavior in SMEs. The Journal of Behavioral Science, 14(2), 66-79. Retrieved from https://so06.tci-thaijo.org/index.php/IJBS/article/ view/172180 Hussein, A., Singh, S., Farouk, S. and Sohal, A. (2016). Knowledge sharing enablers, processes and firm in- novation capability, Journal of Workplace Learning, 28(8), 484-495. https://doi.org/10.1108/JWL-05-2016- 0041 Intezari, A., Taskin, N., & Pauleen, D. J. (2017). Looking beyond knowledge sharing: An integrative approach to knowledge management culture. J. Knowledge Mana- gement, 21(2), 492-515. https://doi.org/10.1108/JKM- 06-2016-0216 Janet, W.C.N. and Alton, C.Y.K. (2013), The peculiari- ties of knowledge management processes in SMEs: the case of Singapore, Journal of Knowledge Mana- gement, 17(6), 958-972. https://doi.org/10.1108/JKM- 04-2013-0163 Kamaşak, R. & Bulutlar, F. (2010), The influence of knowledge sharing on innovation, Europe- an Business Review, 22(3), 306-317. https://doi. org/10.1108/09555341011040994 Kim, T. T., & Lee, G. (2013). Hospitality employee knowledge-sharing behaviors in the relationship between goal orientations and service innovative behavior. International Journal of Hospitality Ma- nagement, 34, 324-337. https://doi.org/10.1016/j. ijhm.2013.04.009 Kratzer, J., Leenders, R. T. A., & Van Engelen, J. M. (2006). Team polarity and creative performance in innovation teams. Creativity and innovation mana- gement, 15(1),96-104. https://doi.org/10.1111/j.1467- 8691.2006.00372.x Liu, H., Shi, J., Liu, Y., & Sheng, Z. (2013). The modera- ting role of attachment anxiety on social network site use intensity and social capital. Psychological Reports, 112 (1), 252-265. https://doi.org/10.2466/21.02.17. PR0.112.1.252-265 Liyanage, C., Elhag, T., Ballal, T. and Li, Q. (2009), Knowledge communication and translation – a knowledge transfer model, Journal of Knowled- ge Management, 13(3), 118-131. https://doi. org/10.1108/13673270910962914 Lu, Jackson & Hafenbrack, Andrew & Eastwick, Paul & Wang, Dan & Maddux, William & Galinsky, Adam. (2017). “Going Out” of the box: Close intercultural friendships and romantic relationships spark creativity, workplace innovation, and entrepreneurship. Journal of Applied Psychology. 102(7), 1091–1108 https://doi. org/10.1037/apl0000212 Luoh, H., Tsaur, S. and Tang, Y. (2014), Empowering employees: job standardization and innovative be- havior, International Journal of Contemporary Hos- pitality Management, 26(7), 1100-1117. https://doi. org/10.1108/IJCHM-03-2013-0153 Melton, H. L., & Hartline, M. D. (2010). Customer and frontline employee influence on new service develop- ment performance. Journal of Service Research, 13(4), 411-425. https://doi.org/10.1177/1094670510369378 Michael, L.A.H., Hou, S.‐T. & Fan, H.‐L. (2011), Crea- tive Self‐Efficacy and Innovative Behavior in a Ser- vice Setting: Optimism as a Moderator. The Jour- nal of Creative Behavior, 45, 258-272. https://doi. org/10.1002/j.2162-6057.2011.tb01430.x Montani, F., Odoardi, C., & Battistelli, A. (2014). Indivi- dual and contextual determinants of innovative work behavior: Proactive goal generation matters. Journal of Occupational and Organizational Psychology, 87(4), 196 Organizacija, Volume 53 Issue 3, August 2020Research Papers 645-670. https://doi.org/10.1111/joop.12066 Morrison, R. L. (2004). Informal relationships in the workplace : associations with job satisfaction, orga- nisational commitment and turnover intentions. New Zealand Journal of Psychology, 33(3), https://doi. org/10179/1666 Morrison, R. L., & Cooper-Thomas, H. D. (2016). Friend- ship among coworkers. The Psychology of Friendship, 123-140. New York: Oxford University Press. Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellec- tual capital, and the organizational advantage. Acade- my of management review, 23(2), 242-266. https://doi. org/10.5465/amr.1998.533225 Nielsen, I. K., Jex, S. M., & Adams, G. A. (2000). Deve- lopment and validation of scores on a two-dimensio- nal workplace friendship scale. Educational and Psy- chological Measurement, 60(4), 628-643. https://doi. org/10.1177/00131640021970655 Oldenkamp, J. H. (2001). Succesvol overdragen van ken- nis (Successful knowledge transfer), Utrecht, Nether- lands: Lemma. Ordanini, A., & Parasuraman, A. (2011). Service innova- tion viewed through a service-dominant logic lens: a conceptual framework and empirical analysis. Jour- nal of Service Research, 14(1), 3-23. https://doi. org/10.1177/1094670510385332 Ozkok, O., Bell, S. J., Singh, J., & Lim, K. (2019). Front- line knowledge networks in open collaboration models for service innovations. AMS Review, 9 (3), 268-288. https://doi.org/10.1007/s13162-018-00133-5 Paulin, D., & Suneson, K. (2015). Knowledge transfer, knowledge sharing and knowledge barriers–three blur- ry terms in KM. Leading Issues in Knowledge Mana- gement, 2 (2), 73-94. Unique Identifier: 2012-18129- 007 Pillemer, J., & Rothbard, N. P. (2018). Friends without benefits: Understanding the dark sides of workplace friendship. Academy of Management Review, 43 (4), 635-660. https://doi.org/10.5465/amr.2016.0309 Riordan, C. M., & Griffeth, R. W. (1995). The opportuni- ty for friendship in the workplace: An underexplored construct. Journal of Business and psychology, 10 (2), 141-154. https://doi.org/10.1007/BF02249575 Santos-Vijande, M. L., López-Sánchez, J. Á., & Rudd, J. (2016). Frontline employees’ collaboration in in- dustrial service innovation: routes of co-creation’s effects on new service performance. Journal of the Academy of Marketing Science, 44(3), 350-375. htt- ps://doi.org/10.1007/s11747-015-0447-4 Schoemann, A. M., Boulton, A. J., & Short, S. D. (2017). Determining power and sample size for simple and complex mediation models. Social Psychological and Personality Science, 8(4), 379-386. https://doi. org/10.1177/1948550617715068 Scott, S. G., & Bruce, R. A. (1994). Determinants of inno- vative behavior: A path model of individual innovation in the workplace. Academy of Management Journal, 37 (3), 580-607. https://doi.org/10.5465/256701 Sias, P. M., & Cahill, D. J. (1998). From coworkers to friends: The development of peer friendships in the workplace. Western Journal of Communication (inclu- des Communication Reports, 62(3), 273-299. https:// doi.org/10.1080/10570319809374611 Sias, P. M., Heath, R. G., Perry, T., Silva, D., & Fix, B. (2004). Narratives of workplace friendship deterioration. Jour- nal of Social and Personal Relationships, 21(3), 321- 340. https://doi.org/10.1177/0265407504042835 Song, S. H., & Olshfski, D. (2008). Friends at work: A comparative study of work attitudes in Seoul city government and New Jersey state government. Ad- ministration & Society, 40(2), 147-169. https://doi. org/10.1177/0095399707312827 Tangaraja, G., Mohd Rasdi, R., Abu Samah, B., & Ismail, M. (2016). Knowledge sharing is knowledge transfer: a misconception in the literature. Journal of Knowledge Management, 20(4), 653-670. https://doi.org/10.1108/ JKM-11-2015-0427 Van den Hooff, B. and de Ridder, J. (2004), «Knowled- ge sharing in context: the influence of organiza- tional commitment, communication climate and CMC use on knowledge sharing“, Journal of Knowledge Management, 8 (6), 117-130. https://doi. org/10.1108/13673270410567675 Wah, C. Y., Menkhoff, T., Loh, B., & Evers, H. D. (2007). Social capital and knowledge sharing in knowled- ge-based organizations: An empirical study. Interna- tional Journal of Knowledge Management (IJKM), 3(1), 29-48. https://doi.org/10.4018/jkm.2007010103 Weerakoon, C., McMurray, A. J., Rametse, N. M., & Are- nius, P. M. (2019). Social capital and innovativeness of social enterprises: opportunity-motivation-ability and knowledge creation as mediators. Knowledge Manage- ment Research & Practice, 1-15. https://doi.org/10.108 0/14778238.2019.1590138 Wang, W. T., & Hou, Y. P. (2015). Motivations of employe- es’ knowledge sharing behaviors: A self-determination perspective. Information and Organization, 25 (1), 1-26. https://doi.org/10.1016/j.infoandorg.2014.11.001 Wu, W. L., Lin, C. H., Hsu, B. F., & Yeh, R. S. (2009). Interpersonal trust and knowledge sharing: Modera- ting effects of individual altruism and a social inte- raction environment. Social Behavior and Personali- ty: an international journal, 37(1), 83-93. https://doi. org/10.2224/sbp.2009.37.1.83 Wynen, J., Boon, J., Kleizen, B., & Verhoest, K. (2019). How multiple organizational changes shape manage- rial support for innovative work behavior: Evidence from the Australian Public Service. Review of Public Personnel Administration, 10(2), 491-515. https://doi. org/10.1177/0734371X18824388 Yeşil, S., & Hırlak, B. (2013). An empirical investiga- tion into the influence of knowledge sharing barriers on knowledge sharing and individual innovation be- havior. International Journal of Knowledge Mana- 197 Organizacija, Volume 53 Issue 3, August 2020Research Papers gement (IJKM), 9(2), 38-61. https://doi.org/10.4018/ jkm.2013040103 Yidong, T., & Xinxin, L. (2013). How ethical leadership influence employees’ innovative work behavior: A perspective of intrinsic motivation. Journal of busine- ss ethics, 116(2), 441-455. http://dx.doi.org/10.1007/ s10551-012-1509-x Zarankin, T. G., & Kunkel, D. (2019). Colleagues and Friends: A Theoretical Framework of Workplace Friendship. Journal of Organizational Psycholo- gy, 19(5). https://doi.org/10.33423/jop.v19i5.2517 Zheng, T. (2017). A literature review on knowledge sha- ring. Open Journal of Social Sciences, 5(3), 51-58. https://doi.org/10.4236/jss.2017.53006 Irfan Helmy is an assistant professor at the Departement of Management, Putra Bangsa Economics College, in Indonesia. He obtained a Doctoral Scholarship Program from The Indonesian Ministry of Research, Technology, and Higher Education (Ristekdikti). Currently, he is completing the dissertation about innovation in Indonesian small and medium enterprises. His research interest mainly focuses on organizational behavior, human resource management, and small- medium enterprises. Wiwiek Rabiatul Adawiyah is a professor at the Department of Management, Faculty of Economics and Business, Universitas Jenderal Soedirman, Indonesia. Her research interest is focused on human resource management, entrepreneurship, quality management, and Islamic banking. She is currently appointed as a reviewer in some nationally accredited journals and some reputable international journals. She also actively written scientific articles, textbooks, and conducts international conferences as a keynote speaker. Harini Abrilia Setyawati is an assistant professor at the Departement of Management, Putra Bangsa Economics College. Currently. She holds a Ph.D. candidate from Jenderal Soedirman University. Her research is focused on the areas of strategic management, marketing and consumer behavior. By collaborating with other researchers, she has published research papers in domestic and international journals. Spodbujanje inovativnega vedenja uslužbencev, ki delajo neposredno s strankami: vloga prijateljstva in izmenjave znanja na delovnem mestu Ozadje in namen: Gostinstvo zahteva takšno delovno okolje in socialne dejavnosti, da spodbujajo inovativ- no vedenje zaposlenih, ki delajo neposredno s strankami (Front Line Employees - FLE). Namen te študije je na osnovi teorije socialnega kapitala preučiti vpliv prijateljstva na delovnem mestu na spodbujanje inovativne- ga vedenja zaposlenih FLE. Študija preučuje tudi posredovalno vlogo procesa izmenjave znanja (zbiranje in dajanje znanja) na povezavi med prijateljstvom na delovnem mestu in inovativnim vedenjem zaposlenih (FLE). Metodologija: Za zbiranje podatkov smo uporabili metodo vzorčenja in anketirali 163 zaposlenih v ho- telih s tremi in štirimi zvezdicami v mestu Yogyakarta v Indoneziji. Za statistično obdelavo zbranih po- datkov smo uporabili programsko opremo za modeliranje strukturnih enačb (PLS-SEM) Smart-PLS v3.0. Rezultati: Prijateljstvo na delovnem mestu pomembno vpliva na inovativno vedenje zaposlenih, ki delajo ne- posredno s strankami (FLE). Poleg tega je raziskava empirično ugotovila, da prijateljstvo na delovnem mes- tu neposredno in posredno, preko zbiranja znanja, vpliva na inovativno vedenje zaposlenih. Zanimivo je, da da- rovanje znanja nepomembno vpliva na inovativno vedenje zaposlenih, ki delajo neposredno s strankami (FLE). Zaključek: Sklepamo, da bi prijateljstvo na delovnem mestu lahko ustvarilo ugodno delovno okolje, ki bi spodbudilo inovativno vedenje zaposlenih prek postopka izmenjave znanja. S tem raziskava prispeva k poznavanju vpliva prija- teljstva na delovnem mestu in izmenjave znanja na inovativno vedenje zaposlenih. Študija predlaga tudi kadrovsko prakso glede negovanja prijateljstva na delovnem mestu, ki spodbuja inovativno delovno vedenje zaposlenih. Ključne besede: Inovativno vedenje storitev FLE, Prijateljstvo na delovnem mestu, Zbiranje znanja, Dajanje znanja. 198 Organizacija, Volume 53 Issue 3, August 2020Research Papers 1 Received: 5th May 2020; revised: 28th June 2020; accepted: 5th July 2020 The CSR Perception of Front- line Employees of Luxury Fashion Businesses Robert K. MACGREGOR1, Włodzimierz SROKA2 & Radka MACGREGOR PELIKÁNOVÁ1 1Metropolitan University Prague, Prague, Czech Republic, robertkmacgregor@yahoo.com & radkamacgregor@yahoo.com 2WSB University, Dąbrowa Górnicza, Poland & North West University, Potchefstroom, South Africa, wsroka@wsb.edu.pl Background and Purpose: The sustainability projected into Corporate Social Responsibility (CSR) is pivotal for luxury fashion businesses and they heavily refer to it. However, do their front-line employees follow this trend? To achieve an effective and efficient CSR, the front-line employees have to share the CSR perception advanced by their businesses. The main objective of the study is to discover, critically assess and compare the CSR perception of the front-line employees of the top luxury fashion industry businesses located in Prague, Czech Republic. Design/Methodology/Approach: An investigative case study of the CSR approach of such employees of all ten top luxury fashion businesses in Prague is performed while using a holistic Meta-Analysis, a manual Delphi method and three rounds of interviews, along with mystery shopping techniques. Results: The heterogenous conglomerate of data reveals: (i) problematic awareness of these employees, (ii) their ignorance of the legal setting, (iii) an imbalance and preferential focus, along with ignorance of certain CSR catego- ries, (iv) direct and indirect contradictions and (v) a preoccupation with the fur issue. Conclusions: This alarming inconsistencies and ambiguity have strong implications for both science and practice, they call for more studies, a deeper understanding of causes and a prompt correction in order to make the CSR perception of these important inside stakeholders be in line with expectations. Keywords: Corporate Social Responsibility (CSR), EU law, Luxury fashion, Sustainability. DOI: 10.2478/orga-2020-0013 1 Introduction The concept of sustainability emerged in the context of the economic globalization, dominated by more productivity, as well as social and ecological damage (Schüz, 2012). It reflects the value judgments about justice in the distribu- tion and use of resources and rests on three pillars: eco- nomic (profit), environmental (planet) and social (people) dimension‘s continuity (MacGregor Pelikánová, 2019a). The leading force behind this newly launched trend were the United Nations (UN) which issued two milestone doc- uments: (i) the Report of the World Commission on Envi- ronment and Development; Report: Our Common Future prepared by the Brundtland Commission, published as the UN Annex to document A/42/427 in 1987 (“Brundt- land Report 1987”) and (ii) the Resolution made during a historic UN Summit in September 2015 and entitled Transforming our world: the 2030 Agenda for Sustainable development (“UN Agenda 2030”), which brought with it the 17 Sustainable Development Goals (“SDGs”) and 169 associated targets. These two documents are the outcome of International Law and are not per se enforceable vis-à- 199 Organizacija, Volume 53 Issue 3, August 2020Research Papers vis businesses (MacGregor Pelikánová, 2019a). The initial focus on sustainability has been progres- sively paralleled by corporate responsibility concerns (MacGregor Pelikánová, 2019a). Indeed, the original dis- tinction between (i) sustainability in the narrow sense, with rather systematic and visionary features and designed for soft law and self-regulation, and (ii) corporate responsibil- ity, with rather normative and moral features and designed for national law regulation, have converged in Corporate Social Responsibility (“CSR“) (Bansal & Song, 2017). For the EU and EU member states, sustainability in the large sense represents a current multi-stakeholder re- lationship of virtually all members of society and even the society itself. Although the resulting CSR is only partially covered by mandatory EU law provisions and national law provisions (MacGregor Pelikánová, 2019b), the CSR that came of this represents a transparent dialogue and inter- action between businesses and other stakeholders which should be materialized, among others, by publicly avail- able financial reporting and non-financial reporting, i.e. CSR reporting (MacGregor Pelikánová, R. & MacGregor, 2017). There are extensive studies about the (lack of) CSR and CSR reporting progress in the automotive (MacGre- gor Pelikánová, 2019a), food (Haski-Leventhal, 2018), agricultural (Vveinhardt et al, 2019) and other industries (Sroka & Szántó, 2018). Sustainability is a central challenge of the fashion industry (Cerchia & Piccolo, 2019). For luxury fashion businesses, the key values and competitive advantage de- terminants are linked to their luxury brands protected as trademarks (MacGregor Pelikánová & MacGregor, 2019) and other Intellectual Property („IP“) assets (MacGregor Pelikánová, 2019c). Such brands represent scarcity, exclu- sivity and overflowing resources pointed to the top goals and priorities, such as CSR. They perfectly match the con- cept of a competitive advantage with a competitive target while engaging in „capturing the core and broadening without diluting” (Moon et al, 2014). So, they desperately need to come across as standing up for CSR and as able to afford CSR, at least based on the expectations of their cus- tomers (Olšanová et al., 2018) and their potential investors (Morgan Stanley, 2017). Consequently, their commitment to CSR needs to be effectively and efficiently conveyed on all levels, including the bottom. However, what is the reality? How do front-line employees of luxury fashion businesses perceive CSR? Does their perception of the CSR match the indicated expectations of luxury fashion customers and investors? This logically leads to the need to perform a deep mi- cro-case study about the CSR perception of these inside stakeholders – front-line employees. Consequently, the main objective is to discover, critically assess and com- pare the CSR perception of the front-line employees of the top luxury fashion industry businesses in Prague. In order to address this pioneering objective, after the Liter- ature and Legislative Review (2.), Data and Methods (3.) needs to be discussed and this should be followed up by an engagement with explicit and implied CSR statements col- lected through the pioneering micro-case study performed in Pařížská regarding top luxury fashion businesses. Thus, Research findings and Discussion address interviews (4.1.), the observations gained via mystery shopping tech- niques (4.2.) and the comparison of the implied informa- tion (4.3.). The presented data and arguments culminate in the Conclusion (5.) which points to an unbalanced CSR perception of these internal stakeholders and a fragmen- tation that ultimately has a negative impact for society. Therefore, the reasons for this heterogeneity need to be understood and overcome. 2 Literature and Legislative Review Both the concept of sustainability and CSR have grown with globalization, and the apparently unrestricted growth in the power of corporations has led to the proposition that global companies, as powerful economic, social and polit- ical actors, must increasingly be brought within the law´s domain (Bunn, 2004). CSR is about the all-encompassing responsibility towards society, i.e. addressing all three sus- tainability pillars (Olšanová et al, 2018). CSR principles are a demonstration of moral obligations of the given busi- ness towards the entire society and this goes way beyond the mere concept of profit maximization. CSR emerged originally rather as an “ethical responsibility” than a “legal liability” and represented virtue ethics, utilitarian ethics, and deontological ethics (Schüz, 2012). Responsibility, as such, has Latin roots, see “respondere”, and means that someone has to answer for the effects caused by him to an authority and this authority evaluates its damages (Schüz, 2012). If this regime is incorporated into the legal system and this authority is a judge, we deal with a special type of responsibility called ‘liability’. States have demonstrated various approaches to sus- tainability and accordingly have “delegated” some CSR tasks and duties to stakeholders, including businesses (MacGregor Pelikánová, 2019a). Therefore, CSR goes through a process of progression from none, to an over facultative one, to a mandatory regime (MacGregor Pe- likánová, 2019a). Currently, CSR consists of many types of social responsibility: economic, legal, ethical, etc. (Sroka & Szántó, 2018), i.e. it is a set of duties to adhere to in a certain manner because it is either morally or legally right or at least expected (MacGregor Pelikánová, 2019a). Herein, the movement from the soft sphere of ethics to the hard sphere of law with regard to what is to be, depends upon the jurisdiction. The EU motto is “united in diversity” and the under- lying idea is “Europe can succeed if it acts collectively, as a Union”, especially regarding CSR, which is a dialogue and interaction between businesses, corporations and their 200 Organizacija, Volume 53 Issue 3, August 2020Research Papers stakeholders (MacGregor Pelikánová, 2017) that enjoys full EU endorsement via policy support (Šebestová et al, 2018). The primary EU law, especially the Treaty on the Functioning of the EU (“TFEU”) underlines the social and environmental dimensions (Polcyn et al, 2019), along with the economic dimension of life (MacGregor Pelikánová & MacGregor, 2018). Secondary sources, such as Regu- lations and Directives, and supplementary sources, must be in-compliance with primary sources, while carrying on strategic priorities (Piekarczyk, 2016). Regarding CSR, they include predominantly general and special Directives (MacGregor & MacGregor Pelikánová, 2019), such as Di- rective 2013/34/EU of 26 June 2013 on annual financial statements and consolidated financial statements, as well as Directive (EU) 2017/1132 of 14 June 2017 relating to certain aspects of company law. EU and EU law priorities, targets and flagship initiatives are intra-related and argu- ably develop technological potentials (Balcerzak, 2016), recognize the R&D and IP impact on competitiveness (Marčeta & Bojnec, 2020), the awareness and commitment with respect to CSR (MacGregor Pelikánová, 2018) and ephemeral philosophical-economical categories of ethics and fairness (Sroka & Lörinczy, 2015). However, the ul- timate choice remains up to European businesses, in how much they would go for CSR and report about it. They do not exhibit a unified trend, i.e. for some, their commitment towards sustainability via CSR is a mere imposed duty and a negative burden, while for other businesses, CSR is a ve- hicle for improvement in all three spheres of sustainability (economic, environmental and social) and an instrument to improve their own financial performance (Rodriguez-Fer- nandez, 2016). Arguably, in the 21st century EU, business ethics is re- garded as a significant factor influencing the success and profits of modern businesses (Sroka & Lörinczy, 2015). The related CSR represents the recognition of shared value policies and principles and aims at “a more sophisticat- ed from of capitalism“ (Porter & Kramer, 2011). Conse- quently, if a business wants to be perceived as reliable and attract not only customers, but as well, employees, busi- ness partners and investors, it should demonstrate a high level of institutionalization of sustainable and ethical prin- ciples and practices (Sroka & Szántó, 2018) and engage in a proper communication of the same externally and internally (Szanto, 2018). These arguments are covered by the stakeholder theory that proposes that the business engagement with CSR implies (at least indirectly) value creation through improvement of the business’s reputation (Gallardo-Vázquez et al, 2019) and branding (Osei-Tutu, 2019) and ultimately an increase in market share (Ting et al, 2019) and enhanced financial performance (Rowley & Berman, 2000). The originally simplistic CSR, thus, be- comes strategic CSR and the evolution phases are: CSR cultural reluctance, CSR cultural grasp and CSR cultural embedment (Olšanová et al, 2018). However, there are also some opponents of the overly positive CSR perception in the EU (Chwistecka-Dudek, 2016). They refer to traditional theories, are more scep- tical, point to limitations due to possible agency conflicts between managers, shareholders, environmental activists, etc., and underline that resource allocation due to CSR, especially for social goals, may add to the costs, and, con- sequently, prevent profit maximization (Friedman, 2007). Pursuant to this, businesses should not automatically jump to the conclusion that more CSR and more CSR report- ing must lead to an ultimate and global success. Several studies documented the negative impact of CSR activities and spending by indicating that CSR practices can gen- erate unnecessary costs, cripple financial results (Barnett, 2007) and thus undermine competitive advantage (Scherer & Palazzo, 2011). Regardless of all these discourses, all modern busi- nesses need to reconcile the profitability, growth and so- cial relationships, i.e. CSR cannot be totally avoided and, according to the prevailing opinion stream, positively im- pacts financial performance (Ting et al, 2019). Each and every business in the EU must make a choice and imple- ment it consistently. The sphere of the luxury fashion industry is well suited to be a prima facia great platform for a CSR engagement by all stakeholders. The term “luxus” has a double meaning: it positively connotes such concepts as beauty, prestige, and power, but also implies excessive and ostentatious displays of wealth (Kapferer, 2012). The fashion luxury industry was traditionally linked to the allure of a limited access, heritage, sophistication, high desirability, excellent quality, high price and the extraordinary (Olšanová et al, 2018). It has also been associated with concepts like exces- sive consumerism, extremely high costs, elitism, opulence or guilty pleasures (Deloitte, 2019). However, recently it seems that two new luxury fashion customer groups have appeared – the HENRYs (High-Earners-Not–Rich-Yet) and youngsters (Millennials and Gen Z) (Deloitte, 2019; Dabija et al, 2019). Customers from these two groups, and perhaps even other customers, check online CSR reports, as well as the CSR direct manifestation in these shops, and they search for demonstrations of “their“ ethical and moral values. Naturally, only motivated and committed internal stakeholders can extend these values and lead to satisfied business partners and customers. In today’s EU, luxury fashion businesses opted for a strong CSR commitment and their owners´ and top-man- agement statements explicitly confirm a developed pro- CSR perception while addressing the mentioned expected values (Olšanová et al, 2018). Obviously, this pro-CSR strategy can be effective and efficient only if all internal stakeholders share it (Bunn, 2004). Properly tailored CSR practices can be cost effective (Osei-Tutu, 2019) only if in- ternal stakeholders know about them, agree upon them and consistently inform others about them in a unified man- ner (Ikram et al, 2019). Since the sustainability drive is strongly culturally influenced, it is pivotal to reconcile the 201 Organizacija, Volume 53 Issue 3, August 2020Research Papers CSR perception by all internal stakeholders (Burksiene et al, 2018) regarding CSR categories. These categories are indirectly implied by the EU law on non-financial (CSR) reporting, especially Directive 2013/34/EU as updated, and have been recently established by academia (MacGre- gor Pelikánová, 2019a): • environment protection (MacGregor Pelikánová, 2019a), • employee matters (Dvouletý, 2017), • social matters and community concerns (Mallin, 2018), • respect for human rights (Osei-Tutu, 2019), • anti-corruption and bribery matters (Sroka & Szántó, 2018) and • R&D activities (Marčeta & Bojnec, 2020). However, there is a lack of studies about the reality and dynamics of these internal CSR perceptions. Namely, there are basically no studies about the CSR perception of front- line employees of luxury fashion businesses. This situation is amazing because these businesses rely much more on face-to-face interaction than do anonymous online sales, and their ambassadors vis-à-vis customers - their front-line employees - play a critical role with respect to the consist- ency and ultimately effectiveness and efficiency of their pro-CSR perception. 3 Data and Methods The data and methods used in this paper are determined by the main objective, which is, via an investigation, to dis- cover, critically assess, and compare the CSR perception of front-line employees of the top luxury fashion industry businesses in the Czech Republic. Specifically, it is about obtaining direct and indirect information about CSR per- ceptions conveyed by the employees facing customers in Pařížská street in Prague. This case study is based upon a research of predominantly primary data and the processing of such by methods that are both critical and comparative (Yin, 2008). It allows for retaining the holistic and mean- ingful characteristics of real-life events (Yin, 2008). The parameters were obvious, i.e. the case study included all businesses located in Prague‘s “Luxury Fashion Street”, AKA “Prague´s 5th Avenue”, which sell luxury clothing brands and specifically, leather handbags. The criterion of leather handbags is used because they are indicators and/ or the “engine that drives luxury brands today” (Han et al, 2010). The primary data about the statements of the em- ployees was directly obtained by interviews and indirectly by mystery shopping techniques. Each interview had two parts – structured (posing four questions) and unstructured (invitation for providing further information about prod- ucts, brand and CSR). Namely, each of these front-line employees was asked to show a woman’s leather bag size A4 and to explain (i) the product´s material and functional advantages, (ii) its brand advantages, (iii) business rela- tion to CSR and (iv) the employee´s knowledge about CSR regulations. They were then induced to provide any other relevant CSR information. Mystery shopping techniques, i.e. mystery consumer methods and techniques (Osterweil, 2012), included observations of CSR positive and nega- tive indices, such as social (un)friendliness (co-operation, competition and arrogancy between employees and vis-à- vis customers), environment (un)friendliness of the shop setting (used materials, light fixtures, etc.) and packaging material (recycling, etc.), concept design and human inter- action. Table 1 lists those businesses examined by the case study, which are all businesses meeting the set require- ments (luxury fashion – leather bags), i.e. no business was omitted and hence the list is exhaustive. The authors have been consistently litigating for the use of the qualitative analysis (Vourvachis & Woodward, 2015) and the holistic Delphi method for CSR studies (MacGregor Pelikánová, 2019a). Consequently, even this case study builds upon a rather qualitative holistic manual Delphi method (Okoli & Pawlowski, 2004) with rankings done by three experts with economics and law backgrounds and CSR knowledge (due to the GDPR and privacy issues, only the initials of these three experts are provided: EDC, LM, ZUP) and in addition all of them have already purchased these types of luxury products and were open to purchase them again, i.e. they were “real”. The ranking was done by each of them independently with the same weight. They did both interviews and mystery shop- ping observations and classified the yielded information about each of the six CSR categories with (+) or (++) or (+++). Information implying ignorance of, or a disregard for CSR got (0), while information implying a general and weak CSR perception got (+), deeper and more specific CSR information netted (++) and genuine and excellent CSR information got (+++). These interviews and mys- tery shopping observations were done in three rounds and, pursuant to the holistic manual Delphi method, generated ranking and notes whereby these three experts compared, discussed and readjusted. Hence, each of these top 10 lux- ury fashion businesses in Pařížská was visited three times in December 2019 (each time by a different expert of these three), i.e. in total - 30 visits. During their visits, the mys- tery shoppers performed the above described interviews with both a structured (4 questions) and a non-structured part to extract direct indices about the CSR perceptions of front-line employees, and mystery shopping observation to extract indirect indices. Involved front-line employees shared slightly different cultural backgrounds (Czech, Slo- vak, Russian), which could originally impact their sustain- ability and CSR perceptions (Burksiene et al., 2018). Since these employees provided the interviewing experts with documents (e.g. marketing leaflets shown and discussed by employees), qualitative content text analysis (Kuckartz, 202 Organizacija, Volume 53 Issue 3, August 2020Research Papers Group Business Origin Revenue in 2018 (bil EUR) LVMH Louis Vuitton 1854, Paris 46.8 LVMH Christian Dior 1945, Paris 46.8 LVMH Fendi 1925, Rome 46.8 LVMH Bulgari 1884, Rome 46.8 Kering Gucci 1921, Florence 4.65 Kering Bottega Veneta 1966, Vicenza 4.65 Prada Prada 1913, Milan 3.14 Dolce Gabanna Dolce Gabanna 1982, Milan 1.29 Tod´s Tod´s 1920, St.Elpid. 0.96 Furla Furla 1927, Bologna 0.58 Table 1: Case Study – Six luxury fashion business groups and their ten top businesses Source: Prepared by the authors and based on their field searches performed in December 2019. 2014) was marginally used as well (Krippendorff, 2013). This framework and employment of both intrinsic and extrinsic evidence and direct and indirect indices facili- tates a holistic processing that reveals possible trends. Its benefits are maximized by the parallel use of Meta-Anal- ysis, which is an analysis of analyses (Schmidt & Hunter, 2014), i.e. a quasi-statistical analysis of a large collection of results from individual studies with the goal of integrat- ing their findings (Glass, 1976). The use of three rounds for the Delphi ranking with adjustments, along with the Meta-Analysis of additional information, along with So- cratic questioning (Areeda, 1996), reduces the inherent subjectivity and boosts the academic robustness of this case study. 4 Research findings and Discussion Often, the setting of the law and appropriate regimes is one thing, while their application is quite another matter entirely. A proper and committed perception of the CSR is a pre-requirement for the EU‘s expected approach to CSR by a critical group of stakeholders shaping the CSR of the entire business – the internal stakeholders of lux- ury fashion businesses. These ambassadors are either de iure representatives of these businesses, CEOs preparing, issuing and signing CSR reports or Codes of Ethics, or de facto representatives of these businesses – front-line em- ployees facing the clientele on “5th Avenue”, i.e. Pařížská street. It might be expected that luxury fashion businesses are (should be) aware about the importance of the mes- sage conveyed by these front-line employees and that they make sure to motivate these front-line employees to di- rectly and indirectly promote the best information about the illustrious commitment for all six CSR categories of the given business. However, perhaps this is mere specu- lation. Therefore, it is quite legitimate, via investigations, to discover, critically assess and compare the approach of the front-line employees of the top luxury fashion industry businesses in Prague, both directly by interviews and indi- rectly by mystery shopping techniques. Hence, in Decem- ber 2019, a repeated (3x) field search of all 10 luxury fash- ion businesses was performed, entailing both interviews and mystery shopping. 4.1 Front-line employees’ direct statements – interviews Each shop was visited 3x in December 2019 and an inter- view consisting of two parts, along with mystery shopping was performed. The information from these three sets of interviews was processed and re-adjusted by the Delphi method, is summarized in Table 2 and 3 and commented in a semi-anonymized manner while using codes instead of names of these luxury businesses. Manifestly, direct statements during the first half of each interview of the front-line employees of these ten top luxury fashion businesses have not differed dramatically, while interesting trends across this special segment of in- dustry could be observed. Basically, all employees covered 203 Organizacija, Volume 53 Issue 3, August 2020Research Papers the environment, employee matters, social and R&D cate- gories, and totally skipped Human rights and Anti-corrup- tion categories. However, the second part of the interviews proved to be very interesting and highly revealing and thusly allowed for the differentiation between the intensi- ty of the CSR commitment regarding the four mentioned categories. A clear “leader” among CSR categories was the envi- ronment category and basically each and every employ- ee addressed it extensively and in a different, original manner. Some employees underlined the tradition and animal welfare policies without going in much detail (A, B). Other employees provided more moderate environ- ment statements oriented not to animal welfare, but they backed them strongly with facts (C, D). Certain employees seemed almost obsessed with animal welfare, energy sav- ing and recycling (E, G). Finally, some employees provid- ed rather weak information without any interest to speak further about it (F, I). Next in line were employee matters and social catego- ries, for which rather general statements were made with a reluctance to go into details. The biggest difference was within the R&D category, regarding which some employ- ees volunteered a lot of information C, D), a little infor- mation (A, B, E, I) or not any information (F). As stated above, no employee mentioned Human rights and anti-cor- ruption categories. Manifestly, the front-line employees either do not know about the CSR legal framework or their perception of it is incorrect. One half of the front-line employees in- terviewed totally failed this part, the other half demonstrat- ed only some basic knowledge. The second half of each interview allowed for a free flow of communication and for letting the employees vol- unteer information about CSR. The information from these three sets of interviews was processed and re-adjusted by applying the Delphi method, is summarized in Table 4 and commented in a semi-anonymized manner while using codes instead of names of these luxury businesses. Manifestly, direct statements during the second half of each interview provided a more colourful picture, and the rather small differences became magnified. Some em- ployees were reluctant to carry on the discussion (B), show patronage preferences, patronization and favouritism of certain clients over others (Vveinhardt & Sroka, 2020), or even became confused and contradicted themselves (A) and ultimately even provided information against CSR. From the six CSR categories, only four were men- tioned and clearly the environment category with animal welfare took the lead. Well-informed employees pushed this issue, while underlining their concurrent opinion (E, G), and poorly informed employees became confused (A). Some employees kept repeating the same information (I), while others admitted that they are not on the same page (F). Amazingly, some employees declined to carry on the discussion and left to speak to someone else (B). Employ- ees from less animal-welfare oriented businesses gladly volunteered deep insightful information showing that the entire environment category is manipulated. Doubtless the Table 2: Employeeś direct statements during the first half of interviews about CSR categories; businesses’ names are replaced by codes Environm. Empl.Mat. Social HumRight An- ti-Corr. R&D A ++ + ++ 0 0 + B ++ + ++ 0 0 ++ C ++ + ++ 0 0 +++ D ++ ++ ++ 0 0 +++ E +++ ++ + 0 0 + F ++ ++ + 0 0 0 G +++ ++ + 0 0 +++ H ++ ++ + 0 0 + I ++ ++ + 0 0 + J + + + 0 0 + Source: Prepared by the authors and based on their own searches and interrogations (interviews). 204 Organizacija, Volume 53 Issue 3, August 2020Research Papers Table 3: Employeeś direct statements during the first half of interviews – awareness about international, regional and national laws on CSR International law (SDG) Regional law (EU reporting) Regional law (EU restrictions) National law (CZ law on CSR A + 0 + 0 B + 0 + 0 C + 0 + 0 D ++ 0 ++ + E ++ 0 ++ + F ++ 0 ++ + G ++ 0 ++ + H 0 0 0 0 I 0 0 0 0 J 0 0 0 0 Source: Prepared by the authors and based on their own searches and interrogations (interviews). Table 4: Employeeś direct statements during the second half of interviews (initiated by employees) Environm. Empl.Mat. Social HumRight An- ti-Corr. R&D A 0 0 + 0 0 + B 0 + + 0 0 ++ C +++ ++ ++ 0 0 +++ D ++ ++ ++ 0 0 +++ E +++ ++ + 0 0 + F + + + 0 0 0 G +++ ++ + 0 0 +++ H ++ ++ + 0 0 + I + + + 0 0 + J + + + 0 0 + Source: Prepared by the authors and based on their own searches and interrogations (interviews). 205 Organizacija, Volume 53 Issue 3, August 2020Research Papers most interesting revelation was the information that arti- ficial fur done by G and E actually represents an environ- mental hazard because, unlike animal fur, it does not easily and naturally decompose. The employees had very little to say about social and R&D categories, but surprisingly mentioned some em- ployment matters and became very clear that there is a big fluctuation among the employees from these businesses. Moreover, often the only way to get a job promotion is to “go next door”, in other words, to take a job with another store in Pařížská. During the second part of the interviews, there often arose the issue of the working place dynamics, and it became obvious that a strict and rigid hierarchical approach prevails, and often junior employees are treated with a total lack of respect (G). Prima facia, it looked like promotion via merit and qualifications is not a core value (B) and employees oscillate between acting strictly, to be- ing almost arrogant (B, I) and even down to a familiar ap- proach more fitting for those working in a supermarket (F). Finally, during the second half of the interviews, the varying cultural and linguistic levels of the employees, as well as a general failure of effective employee training and education, became apparent. In sum, the first half of the interviews showed small differences that became magni- fied by the second half interviews and called for testing via mystery shopping techniques. 4.2 Front-line employees’ indirect statements – mystery shopping Since no indices were revealed regarding social matters, human rights, and anticorruption categories, only the re- maining three CSR categories were examined by the mys- tery shopping observation and are presented in Table 5. Namely, the CSR category of the environment was ob- served while focusing on the mimicry and facial-body language of front-line employees and their manner of touching and dealing with products. The CSR category employment matters was observed while focusing on the mutual interaction between front-line employees and their dress code. The CSR category R&D was observed while focusing on the manner of product demonstrations, along with mimicry and facial-body language. CSR Category Environm. Empl.Mat. R&D Criteria Mimicry + Material touch Interaction + Dress- ing Demonstrating + Mimicry A 0 0 0 B + 0 0 C ++ ++ +++ D ++ ++ +++ E +++ ++ + F + + 0 G +++ ++ +++ I + + + J + + + K + + 0 Table 5: Employeeś indirect statements – mystery shopping revelations Source: Prepared by the authors and based on their own searches and interrogations (interviews). 206 Organizacija, Volume 53 Issue 3, August 2020Research Papers Of all the tables, clearly the last one, Table 5, is the most revealing and confirms that there is a big difference between these businesses, i.e. the CSR approach of their employees. Those initially disappointing are confirmed, and the mystery shopping techniques underline that these front-line employees made weak attempts to pretend to be committed CSR ambassadors (A, B) and demonstrate fa- vouritism inclinations. These findings match recent studies in comparable settings and ultimately support their very correct conclusions (Vveinhardt & Sroka, 2020). Other front-line employees do not have such ambitions and ultimately appear much more convincing (F, H, I, J). The “winners” are either those employees who are quite environmentally aware (E, G) or employees deeply aware of traditions and concepts (C, D). With but small exagger- ation, it can be stated that the split between the most CSR committed employees is done based on the preference: free fur v. fun fur. Naturally, it would be remiss to neglect the presenta- tion of these results coupled with short notes about the setting in which the employees operate, while referring to these ten businesses and their six groups. LVHM comes across as a modern light shopping mall, AKA warehouse, without any privacy and where custom- ers form lines, while with B, the dark shop setting reflects the scandalous and perverse history of the B family and is matched with the arrogance of certain employees. C and D‘s shop settings, as well as employees, are dramatically different, they are nice, bright, and employ an individual approach; they treat customers with charm and friendli- ness, even with a nice touch of decent humour and know much more about the history and concept (C, D) than their colleagues about (A, B). Hence the LVMH group does not appear as overly consistent. In contrast, the Kering group is very consistent and both the setting, as well as the employees stress animal welfare and other environmental issues (energy, recy- cling). It almost looks like the most critical issue at hand is to provide a wonderful life for the animals if their skin is soon to be used and there is an extreme feeling of guilt about their fate. Sadly, little attention is paid to IP and so the nice and committed, and rather humble, employees show “pro-environment” products, but creativity and so- phistication are missing. G is similar to the Kering group and its fur free status is obvious and demonstrated by its exhibit hall. Its employ- ees are committed and have exceptionally deep knowl- edge. They are confident and respectful, even while speak- ing about their competition. Interestingly, they describe the competing B store as a fairy tale world (however, based on the author’s experience, a visit to B can easily turn into a dark nightmare and a truly unhappy fairy tale, inappropri- ate for small children). They are enthusiastic about their substitutes and their pro-environment approach. The rain on this parade is provided by bits of information offered by C´s employees who informed us that G substitutes are extremely environmentally unfriendly in the long term. H, I and J appear much more modest, their shops do not convey a strong luxury impression and their employees follow this rather minimalist, honest approach. 4.3 Comparison and discussion There is a clear gap between those ready to make gran- diose proclamations and possibly lacking integrity and those who are more modest. Further, the obtained results have to be appreciated in the light of available recognized international indexing tools. According to the CSR HUB Sustainability Management Tools CSR/ESG ranking, the leaders are Gucci (96%), Louis Vuitton (92%), Christian Dior (89%), while the CSR underperformers should be Tod´s (28%), Fendi (22%) (CSR Hub, 2019). Manifestly, CSR Hub works more with quantitative than qualitative indicators and so matches up well with the key word’s fre- quency in CSR reports and Codes of Ethics and much less with Delphi indicators and employee statements. Despite all possible objections, the CSRHub basically confirms all the above-mentioned common elements and stresses in- ternal differences between businesses in the same group. Namely, within LVHM, some employees (A,B) have dra- matically different approaches to CSR than other employ- ees (C,D). Further, this confirms the importance of the in- dividual background and culture for the sustainability and CSR perceptions (Burksiene et al, 2018). The performed pioneering case study managed to bring together direct and indirect statements implied by inter- views, as well as field observations yielded via mystery shopping techniques. The holistic Meta-Analysis of this rather heterogenous conglomerate of data reveals five highly significant aspects regarding the CSR perception of these front-line employees: (i) their problematic aware- ness, (ii) their ignorance of the legal setting, (iii) their im- balanced and preferential focus along with ignorance of certain CSR categories, (iv) their direct and indirect con- tradictions and (v) their almost obsessive preoccupation with the fur issue – fun fur (using fur is fun and indispen- sable) v. free fur (using fur is evil and wasteful). Firstly, the awareness of these front-line employees about CSR is dramatically different and it appears that many top luxury fashion businesses totally omit the proper selection and training of their employees and contribute to the massive job fluctuation. It is amazing that these differ- ences are even between employees from the same group (LVMH – A, B v. C, D). Secondly, front-line employees know very little about CSR regulations and are confused about the mandatory and facultative positive law provisions. They do not ap- preciate the differences between jurisdictions and confuse moral and legal obligations. For example, only a few front- 207 Organizacija, Volume 53 Issue 3, August 2020Research Papers line employees understood the mandatory setting for the sale and use of fur products. Generally, they are inclined to believe that environmental aspects are compulsory, while social and other CSR categories are beyond the reach of the law, including reporting. Sadly, the SDGs and inter- national law dimension is completely outside their aware- ness. Thirdly, the prevailing focus is on the environmental and employee matters of CSR categories, with an under- tone of interest for brand history and for IP. This is total- ly in contrast with the conventional understanding of this industry, which is basically built by selected family fame and excellence. Further, the SDGs of the UN are obviously not major concerns of the front-line employees of these businesses. Fourthly, even if the front-line employees should be convincing and consistent ambassadors of these luxury leaders, they often prove to be poorly informed, not com- mitted and not professional enough to avoid contradicting themselves, providing poor customer service and denying the CSR. Fifthly, a top CSR concern of almost of all these em- ployees is the burning issue of what materials are used and how they are obtained. Therefore, after general CSR proc- lamations, there comes a fast spiel whether is it evil to use animal fur or not. Considering the current global issues (drought, warming, disappearing icebergs and tropical for- ests, ozone-hole, COVID, etc.), it is rather surprising that front-line employees totally depart from SDGs and even from the top hallmarks of their employers-businesses. With all due respect to animal welfare, perhaps this should not be a top CSR concern, neither should it definitely take priority over SDGs. This luxury slow fashion should re- turn to core values and distinguish itself from the fast fash- ion (Niinimäki et al, 2020). These five aspects are both surprising and not match- ing with the expected and desired CSR image of top brands, including leading luxury fashion businesses (Ad- amska, 2020). Indeed, the case study points to a myriad of flaws requiring prompt correction, provided that the CSR approach of luxury fashion businesses is to be gen- uine, effective, and efficient. It confirms the prior finding about the critical importance of external, as well as inter- nal communications regarding the CSR, especially in the multi-national settings (Szanto, 2018) as well as cross-sec- torial setting (Van Tulder et al, 2016). Exactly that is typical for the luxury fashion industry. However, it is not only about the cure, it is as well about prevention and so the question ‘how’ should be paralleled with the question ‘why’. Indeed, the proper understanding of the causes of the current deplorable status is indispensable for achieving a correction and for bringing all stakeholders on board in order to make the concept of sustainability and SDGs real and worthy of the efforts of all concerned (van Tulder & Keen, 2018). Science should explore this discrepancy, and practice should promptly take action by engaging in com- munications with their employees. 5 Conclusions The EU wants to engage businesses with the sustainability issue and attempts to boost their CSR directly by harmo- nizing the reporting and indirectly pushing businesses to be transparent regarding their CSR. In addition, the im- portance of sustainability, business ethics and CSR has been growing and this trend continues. Luxury fashion businesses are aware of it and declare their commitment to CSR in a manner definitely exceeding the strict legal min- imum demanded by the EU law. All six CSR categories as implied by the EU law, and related practices appear to be relevant for these businesses. Despite the rather small sample, the performed case study brings forth valuable information about ALL top luxury fashion businesses in the Czech Republic, and, con- sidering their international nature, perhaps even about al- most ALL top luxury fashion businesses in the EU. Hence, the main objective was met by investigative discovery, critically assessing and comparing the approach of the front-line employees of these top luxury fashion industry businesses in Prague. The mentioned set of valuable, truly pioneering and, for the future, research calling aspects, entail especially (i) problematic awareness, (ii) their ignorance of the legal set- ting, (iii) imbalances and preferential focus, along with ig- norance of certain CSR categories, (iv) direct and indirect contradictions and (v) a preoccupation with the fur issue. This has strong implications for both science and practice. Indeed, the case study reveals interesting information, trends, patterns and even discrepancies and fragmentation. The CSR approach of those individuals voicing CSR pol- icies for top luxury fashion businesses has very little in common, or at least similar, to the objectives set globally by the UN, regionally by EU and nationally by EU mem- ber states as vocalized by their statements and materialized by their actions. Lost in translation? Do we have here just individual failures or systemic issues? Science and prac- tice should work together to understand this and to find reasons for it and to identify instruments for improvement. The CSR approaches of front-line employees of lux- ury fashion businesses are trailing much behind expecta- tions, at least the expectations of CSR global, regional, and national policy makers. This is very alarming, especially considering the need of the multi-stakeholder approach. Indeed, this alarming inconsistency and ambiguity calls for more studies, deeper understandings of causes and prompt corrections in order to bring the CSR perception of these important inside stakeholder in line with expectations. There are several managerial contributions of our study. Firstly, it presents the results of a case study anal- 208 Organizacija, Volume 53 Issue 3, August 2020Research Papers ysis related to the manager’s attitudes to marketing and innovations in luxury fashion industry in relation to the CSR concept, thus delivering findings to the current de- bate on the topic. Secondly, such research is rather rare and the CSR concept is analysed mostly in relation to other aspects, such as the impact on a company’s performance and its image, relationships between employee, mobbing or nepotism. Given this fact, this aspect is a significant added value of the study. Thirdly, the results achieved may be used for the formulation of the research hypotheses in further surveys. Of course, our study is not free of limitations, the first of which is the analysis of only one sector existing in one country. The research could and should be expanded while considering different internal and external stakehold- ers (e.g. different type of employees, agents, consumers, etc.), different EU member states and/or different sectors which are able and expected to go actively for CSR (e.g. financial services sector, pharmaceutical sector, etc.) and different time lines (statements in different years). Such longitudinal, comparative and cross-sector studies could yield extremely relevant and pioneering conclusions and recommendations. Another limitation of our current study is the method used. We employed the case study analysis and a quantitative approach might be used in future re- search to explore the in-depth nature of the phenomenon. Indeed, the methodology adjustment is necessary if the above suggested and highly ambitious comparison is to be developed. Despite these limitations, we strongly believe that this study presents the real situation with regard to marketing and innovations in the luxury fashion industry and their connections to the CSR concept. Acknowledgement This paper is the result of Metropolitan University Prague’s research project no. 74-02 “Territorial Studies, Economics, International Relations” (2020) based on a grant from the Institutional Fund for the Long-term Strategic Develop- ment of Research Organisations. The project was funded within the auspices of the pro- gramme of the Minister of Science and Higher Education entitled “Regional Initiative of Excellence” in 2019-2022, project number 018/RID/2018/19; amount of funding: PLN 10,788,423.16. Literature Adamska, M. (2020). Practical Application of Forms and Tools of Marketing Communication in the SME Sec- tor. E&M Economics and Management, 23(2), 193– 209. http://doi.org/10.15240/tul/001/2020-2-013 Areeda, Ph.E. (1996). The Socratic method. Harvard Law Review, 109(5), 911-922 Balcerzak, A.P. (2016). Technological Potential of Euro- pean Economy. Proposition of Measurement with Ap- plication of Multiple Criteria Decision Analysis. Mon- tenegrin Journal of Economics, 12(3), 7-17. http://doi. org/10.14254/18005845.2016/12-3/1 Bansal, P. & Song, H.C. (2017). Similar, but not the Same: Differentiating Corporate Sustainability from Corporate Responsibility. Academy of Management Annals, 11(1), 105-149. http://doi.org/10.5465/an- nals.2015.0095 Bunn, I.D. (2004). Global Advocacy for Corporate Ac- countability: Transatlantic Perspectives from the NGO Community. American University International Law Review, 19(6), 1265-1306. Burksiene, V.; Dvorak, J. & Burbulyte-Tsiskarsishvili, G. (2018). Sustainability and Sustainability Marketing in Competing for the Title of European Capital of Culture. Organizacija, 15(1), 66-78, http://doi.org/10.2478/ Orga-2018-0005 Cerchia, R.E. & Piccolo, K. (2019). The Ethical Consumer and Codes of Ethics in the Fashion Industry. Laws, 8, 23. http://doi.org/10.3390/laws8040023 Chwistecka-Dudek, H. (2016). Corporate Social Respon- sibility: supporters vs. opponents of the concept. Fo- rum Scientiae Oeconomia, 4(4), 171-179. CSRHub (2019). CSRHub available at https://www.cs- rhub.com/ Dabija, D.C.; Bejan, B. & Dinu, V. (2019). How Sustain- ability Oriented is Generation Z in Retail? A Literature Review. Transformations in Business & Economics, 18(2), 150-155. Deloitte (2019). Global Powers of Luxury Goods 2019. Bridging the gap between the old and the new. Re- trieved January 5, 2020, from https://www2.deloitte. com/content/dam/Deloitte/es/Documents/bienes-com- sumo-distribucion-hosteleria/Deloitte-ES-consum- er-industry-global-powers-luxury-goods-2019.pdf Dvouletý, O. (2017). What is the Relationship between Entrepreneurship and Unemployment in Visegrad Countries? Central European Business Review, 6(2), 42-53. http://doi.org/10.18267/j.cebr.179 Friedman, M. (2007). The Social Responsibility of busi- ness is to Increase its Profits. In: Zimmerli W.C., Holzinger M., Richter K. (eds) Corporate Ethics and Corporate Governance. Springer, Berlin, Heidelberg, 173-178. http://doi.org/10.1007 Gallardo-Vázquez, D.; Valdez, L. & Castuera-Diáz, A.M. (2019). Corporate Social Responsibility as an Anteced- ent of innovation, Reputation, and Competitiveness 209 Organizacija, Volume 53 Issue 3, August 2020Research Papers Success: A Multiple Mediation Analysis. Sustainabil- ity, 11(20), 5614. http://doi.org/10.3390/su11205614 Glass, G.V. (1976). Primary, secondary, and meta-analysis of research. Educational Researcher, 5 (10), 3-8. Han, Y.J.; Nunes, J.C. & Dreze, X. (2010). Signalling Status with Luxury Goods: The Role of Brand Promi- nence. Journal of Marketing, 74(4), 15-30. Haski-Leventhal, D. (2018). Strategic Corporate Social Responsibility. Los Angeles: SAGE Publication. Ikram, A.; Li, Z.F. & Minor, D. (2019). CSR-contin- gent executive compensation contracts. Journal of Banking & Finance. https://doi.org/10.1016/j.jbank- fin.2019.105655 Kapferer, J.N. (2012). The luxury strategy: break the rules of marketing to build luxury brands. Kogan Page Pub- lishers, London. Krippendorff, K. (2013). Content Analysis: An Introduc- tion to its Methodology. Los Angeles, CA: Sage. Kuckartz, U. (2014). Qualitative Text Analysis – A Guide to Methods, Practice and Using Software. 1st Edition. Sage Publications Ltd. MacGregor, R.K. & MacGregor Pelikánová, R. (2019). Shareholder Engagement for Corporate Governance in the Light of the Harmonization and Transposition. International Journal of Economics and Business Ad- ministration, VII(4), 22-34. MacGregor Pelikánová, R. (2017). European Myriad of Approaches to Parasitic Commercial Practices. Oeconomia Copernicana, 8(2), 167-180. http://doi. org/10.24136/oc.v8i2.11 MacGregor Pelikánová, R. (2018). The nebulous effec- tiveness, efficiency and fairness of the European e-Jus- tice Portal vis-à-vis Corporate Social Responsibility. Progress in Economic Sciences, 5, 127-141. http://doi. org/10.14595/PES/05/008 MacGregor Pelikánová, R. (2019a). Corporate Social Re- sponsibility Information in Annual Reports in the EU – Czech Case Study. Sustainability, 11, 237. http://doi. org/10.3390/su11010237 MacGregor Pelikánová, R. (2019b). Harmonization of the protection against misleading commercial practices: ongoing divergences in Central European countries. Oeconomia Copernicana, 10(2), 239–252. http://doi. org/10.24136/oc.2019.012 MacGregor Pelikánová, R. (2019c). R&D expenditure and innovation in the EU and selected member states. Journal of Entrepreneurship, Management and Inno- vation 15(1), 13-33. http://doi.org/10.7341/20191511 MacGregor Pelikánová, R. & MacGregor, R. (2017). Eu- ropean e-Justice Portal – Reality of Electronic One- Stop-Shop for Publication of Financial Statements in the EU. In: Jindřichovská, I.; Kubíčková, D. Confer- ence: 5th International Scientific Conference on IFRS - Global Rules and Local Use. Anglo-American Uni- versity. MacGregor Pelikánová, R. & MacGregor, R. (2018). Cor- porate Social Responsibility e-Reporting as a tool for (Un)fair competition in the EU. In Löster, T.; Pavelka, T. (Eds.). Conference Proceedings. The 12th Interna- tional Days of Statistics and Economics. University of Economics, Prague. MacGregor Pelikánová, R. & MacGregor, R. (2019). The Impact of the New EU Trademark Regime on Entre- preneurial Competitiveness. Forum Scientiae Oecono- mia, 7(2), 59-70. http://doi.org/10.23762/FSO_VOL7_ NO2_4 Marčeta, M. & Bojnec, Š. (2020). Drivers of Global Competitiveness in the European Union Countries in 2014 and 2017. Organizacija, 53(1), 37-52. http://doi. org/10.2478/orga-2020-0003 Moon, H.-C. et al. (2014). Extending Porter´s generic strategies: from three to eight. European Journal of International Management, 8(2), 205-225. http://doi. org/10.1504/EJIM.2014.059583 Morgan Stanley (2017). Millennials Drive Growth in Sus- tainable Investing. Morgan Stanley. Retrieved January 5, 2020 from https://www.morganstanley.com/ideas/ sustainable-socially-responsible-investing-millenni- als-drive-growth Niinimäki, K., Peters, G., Dahlbo, H., Perry, P., Rissanen, T., Gwilt, A. (2020). The Environmental Price of Fast Fashion. Nature Reviews Earth & Environment, 1:189- 200. http://doi.org/10.1038/s43017-020-0039-9 Okoli, Ch. & Pawlowski, S.D. (2004). The Delphi method as a research tool: an example, design considerations and applications. Information & Management, 42(1), 15-29. http://doi.org/10.1016/j.im.2003.11.002 Olšanová, K.; Gook, G, & Zlatić, M. (2018). Influence of Luxury Companies´ Corporate Social Responsibility Activities on Consumer Purchase Intention: Devel- opment of Theoretical Framework. Central European Business Review, 7(3), 1-25. Osei-Tutu, J.J. (2019). Socially Responsible Corporate IP. FIU Legal Studies Research Paper Series. Research Paper No. 19-01. Osterweil, W. (June 4, 2012). The Secret Shopper. The New Enquiry. Retrieved January 10, 2020 from https://the- newinquiry.com/the-secret-shopper Piekarczyk, A. (2016). Contemporary organization and a perspective on integration and development. Oeconomia Copernicana, 7(3), 467-483. http://doi. org/10.12775/OeC.2016.027 Polcyn, J.; Stępień, S. & Czyżewski, B. (2019). The Mea- surement of the Quality of the Environment and its Determinants in Poland and in the Regional Perspec- tive. Annales Universitatis Apulensis Series Oeconom- ica, 21(2): 11-21. http://doi.org/10.29302/oeconomi- ca.2019.21.2.1 Rodriguez-Fernandez, M. (2016). Social responsibility and financial performance. The role of good corporate governance. BRQ Business Research Quarterly, 19, 137-151. http://doi.org/10.1016/j.brq.2015.08.001 Rowley, T. & Berman, S. (2000). A brand new brand of cor- porate social performance. Business & Society, 39(4), 397-418. http://doi.org/10.1177/000765030003900404 Schmidt, F.L. & Hunter, J.E. (2014). Methods of Me- 210 Organizacija, Volume 53 Issue 3, August 2020Research Papers ta-Analysis – Correcting Error and Bias in Research Findings. 3rd Edition, London, UK: SAGE. Schüz, M. (2012). Sustainable Corporate Responsibility – The Foundation of Successful Business in the New Millennium. Central European Business Review, 1(2), 7-15. Sroka, W. & Lörinczy, M. (2015). The perception of eth- ics in business: Analysis of research results. Proce- dia Economics and Finance, 34, 156–163. http://doi. org/10.1016/S2212-5671(15)01614-7 Sroka, W. & Szántó, R. (2018). Corporate Social Respon- sibility and Business Ethics in Controversial Sectors: Analysis of Research Results. Journal of Entrepre- neurship, Management and Innovation, 14, 111–126. http://doi.org/10.7341/20181435 Šebestová, J.; Krejčí, P. & Šiška, P. (2018). „Be or Not to Be“: A Dilemma of Business Policy Support on a Re- gional Level. Central European Business Review, 7(1), 3-13. http://doi.org/10.18267/j.cebr.192 Szanto, R. (2018). The Online Communication of Corpo- rate Social Responsibility in Subsidiaries of Multina- tional Companies in Hungary. Organizacija, 51(3): 160-168. http://doi.org/10.2478/orga-2018-0017 Ting, I.W.K.; Azizan, N.A.; Bhaskaran, R. et al. (2019). Corporate Social Performance and Firm Performance: Comparative Study among Developed and Emerging Market Firms. Sustainability, 2019, 12, 26. http://doi. org/10.3390/su12010026 Van Tulder, R., May Seitanidi, M., Crane, A. & Brammer, S. (2016). Enhancing the Impact of Cross-Sector Part- nerships. Four Impact Loops for Channeling Partner- ship Studies. Journal of Business Ethics, 135, 1-17. http://doi.org/10.1007/s10551-015-2756-4 Van Tulder, R. & Keen, N. (2018). Capturing Collaborative Challenges: Designing Complexity-Sensitive Theories of Change for Cross-Sector Partnerships. Journal of Business Ethics, 150, 315-332. http://doi.org/10.1007/ s10551-018-3857-7 Vourvachis, P. & Woodward, T. (2015). Content analysis in social and environmental reporting research: Trends and challenges. Journal of Applied Accounting Re- search, 16(2): 166-195. http://doi.org/10.1108/JAAR- 04-2013-0027 Vveinhardt, J. & Sroka, W. (2020). Nepotism and Favou- ritism in Polish and Lithuanian Organizations: The Context of Organisational Microclimate. Sustainabili- ty, 12(4), 1425. http://doi.org/10.3390/su12041425 Vveinhardt, J.; Stonkute, E. & Sroka, W. (2019). Discourse on Corporate Social Responsibility in the external communication of agricultural enterprises. European Journal of International Management, 13(6), 846-879. http://doi.org/10.1504/EJIM.2019.102816 Yin, R.K. (2008). Study Research. Design Methods. 4th Edition. Thousand Oaks: Sage. Robert Kenyon MacGregor, (MBA - Orcid ID 0000- 0003-2888-3880, WoS Researcher ID E-9858-2019, h-index: 4, Scopus ID: 57213174280), is an academic lecturer at the International Business Department of the Metropolitan University Prague. He attended the Uni- versity of Michigan, the University of California-Santa Barbara and Eastern Michigan University, with an MBA from the latter, was a sports writer with nearly 100 mag- azine articles published and a Realtor and Real Estate law expert. He is a common law expert and writer with a wide experience regarding management, internation- al trade, business ethics, sustainability and USA-EU relationships. His current research interests include corporate social responsibility, financial reporting and industrial property. Włodzimierz Sroka (Orcid ID 0000-0002-8701-0716, Researcher ID I-1805-2013, h-index: 8, Scopus ID: 54793625000), is an associate professor at the Man- agement Department of WSB University, Dąbrowa Górnicza (Poland) and specialises in theoretical and practical issues relating to management and strategic management. He is the author of numerous scientific papers on strategic alliances, network organisations, strategy, the restructuring of companies, CSR and business ethics, marketing and customer’s behaviour, public management as well as innovations and entre- preneurship published in peer-reviewed international journals. He is also a member of the scientific councils of several journals (e.g. Editor in Chief at Forum Scien- tiae Oeconomia and Deputy Editor in Chief of the Euro- pean Journal of International Management) and confer- ences organised by different European universities. He holds PhD, M.Sc. and B.Sc. degrees in management and marketing from the Karol Adamiecki University of Economics in Katowice, as well as a D.Sc. degree (habilitation) from the University of Žilina (Slovakia). Currently he combines his scientific activity with the position of CEO of a medium-size engineering compa- ny. He was previously employed in different managerial positions in both the steel and machine industries. 211 Organizacija, Volume 53 Issue 3, August 2020Research Papers Radka MacGregor Pelikánová, Ph.D., LL.M., MBA (Orcid 0000-0001-9628-7146, Researcher ID: G-2601- 2018, WoS ID V-5469-2019, h-index: 8, Scopus ID: 56021587200), is an academic lecturer and researcher in the International Business Department of the Metro- politan University Prague. She graduated from Charles University Prague, Czech Republic (Ph.D. - Private Law), from the Université Paris XIII – Villetaneuse, France (Licence en Droit – Law), from Wayne State University, USA (LL.M. - Corporate and Financial Law) and National American University, USA (MBA). She is a member of both the Czech and Michigan Bar Asso- ciations and has over twenty years of lawyer, business management and academic experience. She has a prolific publishing history including seven monographs and over one hundred articles, almost half of which are classified in the WoS and Scopus database. Her current research interests include intellectual property, competition and corporate social responsibility. Dojemanje družbene odgovornosti podjetij s strani zaposlenih v prestižnih modnih podjetjih Ozadje in namen: Trajnost, kot komponenta družbene odgovornosti podjetij, je ključna za prestižna modna podjetja; ta podjetja se nanjo tudi pogosto sklicujejo. Vendar, ali njihovi zaposleni, ki delajo s strankami, sledijo temu trendu? Da bi dosegli učinkovito in učinkovito družbeno odgovornost podjetij, se morajo tudi zaposleni, ki imajo neposreden stik s kupci, sprejeti percepcijo družbene odgovornosti podjetij, kjer delajo. Glavni cilj študije je ugotoviti, kritično oceniti in primerjati dojemanje družbene odgovornosti podjetij pri zaposlenih v podjetjih prestižne luksuzne modne industrije, ki se delujejo v Pragi na Češkem. Oblikovanje / metodologija / pristop: Uporabili smo študijo primera družbene odgovornosti podjetij na vzorcu zaposlenih v vseh desetih prestižnih modnih podjetjih, ki so prisotna v Pragi. Uporabili smo celostno metaanalizo, ročno metodo Delphi in tri kroge intervjujev, skupaj z »mystery shopping« tehnikami. Rezultati: Heterogeni konglomerat zbranih podatkov razkriva: (i) problematično ozaveščenost obravnavanih za- poslenih, (ii) njihovo nepoznavanje pravne ureditve, (iii) neravnovesje in prednostno osredotočenost na nekatere kategorije družbene odgovornosti, ob nepoznavanju drugih kategorij, (iv) neposredna in posredna nasprotja in (v) velika osredotočenost na temo »krzno«. Zaključki: Ugotovitve opisanih nedoslednosti in dvoumnosti so pomembne tako na raziskovanje kot za prakso. Predlagamo, da se nadaljnje raziskave usmerijo na eni strani v globlje razumevanje vzrokov, po drugi pa v takojšnje ukrepanje, predvsem osveščanje zaposlenih v zvezi z družbeno odgovornostjo podjetij kjer delajo. Ključne besede: Družbena odgovornost podjetij (CSR), Zakonodaja EU, Prestižna moda, Trajnost. 212 Organizacija, Volume 53 Issue 3, August 2020Research Papers 1 Received: 11th July 2019; revised: 29th March 2020; accepted: 8th July 2020 Construction and Significance of Corporate Social Responsibility Indices – from Results to the Essence Dana BERNARDOVÁ1, Klára KAŠPAROVÁ2, Martin FINK1, Kateřina IVANOVÁ1 & Tetiana ARKHANGELSKA1 1Moravian Business College Olomouc, Department of Social Science and Law, tř. Kosmonautů 1288/1, 779 00 Olo- mouc, Czech Republic, dana.bernardova@mvso.cz, martin.fink@mvso.cz, katerina.ivanova@mvso.cz, tetiana.arkhangelska@mvso.cz 2Masaryk University, Faculty of Economics and Administration - Department of Corporate Economy, Lipová 507/41a, 602 00 Brno, Czech Republic, klara.kasparova@econ.muni.cz Background and Purpose: Regular reporting on Corporate Social Responsibility (hereinafter referred to as CSR) should make it easier for enterprises to identify the sustainability risks and lead to an increased investors and consumers’ confidence. The aim of the paper is to find out how the indices which evaluate the socially responsible behaviour of enterprises are constructed. Design/Methodology/Approach: The scoping review is the method used in this study. The scoping question is: What do we know about the construction of indices evaluating the socially responsible behaviour of organisations from the existing expert resources? Results: The analysis of 20 papers shows that there is no consensus about the method of determining the weights and constructing the index. There are 4 approaches to the aggregated index construction. The first one uses the percentage of filling the specific criteria or the average of values of specific dimensions of the index. The second one uses the multi-criteria decision-making methods (most often the Analytical hierarchical process method). The third one uses unconventional linguistic models and fuzzy logic and finally, the fourth one uses the factor analysis or the method of the main components. Conclusion: The main feature of CSR indices lies in their methodological disunity. It complicates the understanding of the CSR outputs and essentially makes it impossible to create a CSR performance ranking, especially for small and medium-sized enterprises (hereinafter referred to as SMEs). Keywords: Corporate Social Responsibility, Index, SMEs, Scoping review, Clarity of CSR index outputs DOI: 10.2478/orga-2020-0014 1 Introduction Corporate social responsibility of enterprises (herein- after referred to as CSR) is interpreted as a transition of enterprises in the perception of their role from the level “profit only” to the level of three “P” – “profit, people, and planet”. CSR is also interpreted as the Triple bottom line (TBL). The term TBL, formulated by Elkington in 1994, means that companies should focus not only on increas- ing their added value in the economic field, but also in the environmental and social area (Elkington, 2013). CSR is connected to ethics, i.e. the ethical dimension of entre- preneurship. It is also related to economics of enterprises, organisation management, and public interests (Slaper & Hall, 2011; Pokorná, 2012; UN, 2013). The strategy Europe 2020 was adopted in 2010. Its main issue is the promotion of social and territorial co- hesion and sustainable growth (European Commission, 2009). In response, the European Commission issued the Communication on ‘A Renewed EU Strategy 2011–14 for 213 Organizacija, Volume 53 Issue 3, August 2020Research Papers Corporate Social Responsibility’. It deals with a newly defined responsibility of enterprises for their impact on the society (European Commision, 2011). The Council of Europe called for the same in March 2016. At present, the Directive 2014/95/EU (European Parliament, 2014) the European Parliament and of the Council on non-financial reporting by large enterprises obliges them to regularly provide non-financial information on their activities. It ap- plies to trading companies with over 500 employees, with a balance sheet total of more than EUR 20 million and the net profit of more than EUR 40 million. Approximately 30 organisations will be affected by this measure in the Czech Republic according to the assumptions. Regular re- porting should make it easier for enterprises to identify the sustainability risks and lead to an increased investors and consumers’ confidence. Obviously, the socially responsi- ble reporting has an impact on the successful corporate op- erations of large and medium sized organisations conduct (Peršič & Markič, 2013). However, the Directive does not prevent the Member States from requiring the disclosure of non-financial information from enterprises not covered by this Directive, including SMEs. In order to trustworthily report on CSR, there exist the measurement and implementation methodologies. The re- sulting reports and methodologies are becoming important in the development and spreading the CSR ideas (Fink et al., 2020). Methodologies by Leipziger (2003) considers these methodologies the CSR standards and, according to him, they can be divided into “... performance and pro- cess-oriented standards”. Performance oriented standards can be considered normative standards as they “define only minimum standards of what the socially responsible be- haviour is” (Leipziger, 2003, p. 39). The performance-ori- ented standards group can include methodologies meas- uring the socially responsible performance of enterprises generally called the CSR indices. In general, the index is intended to quickly navigate large data files (lists of companies, databases of individual organisations, etc.). A specific index expresses belonging to a group of organisations holding the given index. In this case, indices can be considered face values. Within a sin- gle group (index as a number), we can consider not only nominal but also ordinal data, i.e. we can create an order of organisations grouped under the given index. Cardinal data have the highest informative value, showing how much a particular organisation is better than the following one in the ranking. This is ideal when evaluating the CSR level of organisations, as organisations that hold a particu- lar CSR index should be able to determine their CSR rate compared to other indexed organisations. For example, the DJSI index (Dow Jones Sustainability Index) publishes the cardinal data (Industry Leader Report, 2018) in publicly accessible materials, compared to the FTSE4Good Index Series, where we were not able to trace such data in pub- licly accessible sources. The initial study was conducted by the authors. Be- ing a mega-source of scientific information for social and humanitarian sciences, the EBSCO database was chosen for the search of literary resources. The keywords for the search strategy were determined according to the PCC al- gorithm. The keywords were: Index or Indices and CSR. The search strategy was also specified: not to search for keywords in full texts, but only in the titles or abstracts; to use the available keyword equivalents; to search only in the reviewed texts. The final result was 50 texts, all of which discussed the issue of CSR, but only 12 of them mentioned the keyword index in the abstract. The same keywords were also searched for in the Google Scholar database, which offered over 100,000 links. The Social Re- sponsibility Journal, which includes most of the keywords according to this database, was selected. According to the best correspondence between the keywords and the paper title, four more research papers from this journal were se- lected. On the basis of our initial study, we can conclude that the indices mainly reflect the activities perceived as CSR in combination with the economic parameters and inter- ests of financial institutions (profitability, market potential, stability of the stock market position, etc.) and serve as a guidance for potential investors (Pinilos et al., 2018; Hawn et al., 2018). Their benefit indicating the socially responsi- ble behaviour is small and the impacts of CSR indices on the ethical behaviour and culture of the society are uncon- vincing (see Adel et al., 2019; Collison et al., 2009). Not every organisation can reach the point of having the CSR index, and according to the found-out indications, it is a fairly small group of large organisations. With all respect to the ‘Strategy 2020’, indices must be suitable for all types of organisations at all the regional levels as there are more than 90% of SMEs (United Nations, 2019) in the world. Measuring the organisations’ performance in CSR (if it does have a use value for their recipients – stakehold- ers) must be comprehensible to them and the results of the organisations’ indexation must be comparable (as pointed out by Rita et al., 2018 and Yang Wen-Tao et al., 2016). None of the authors of the initial study mentions the existence of a universal and comprehensible CSR index suitable for all types of organisations and stakeholders covering all the CSR areas and based on the CSR ethical foundations. Adel et al. (2019) (attempting to construct such an index) mention the trend of the need for a new CSR index that outlines the evolving needs and require- ments of CSR in a non-financial ethical dimension. From the point of view of ethical entrepreneurship and thus sustainability, it can be deduced that CSR indices should be constructed to serve not only financial institu- tions, but also all the external stakeholders, organisations of all types and their internal stakeholders (Government of the Czech Republic, 2017). 214 Organizacija, Volume 53 Issue 3, August 2020Research Papers The aim of the paper is to find out how the indices that evaluate the socially responsible behaviour of organi- sations are created. 2 Methodology The method of secondary research (i.e. the analysis of already identified and published results) aimed at a rapid systematic review of the selected topic - scoping review was chosen. Its purpose is to describe the scope of the al- ready published scientific results on the subject (Peters et al., 2015). To conduct the scoping review, the Arksey and O’Malley approach, which consists of five steps: identify- ing search issues, identifying relevant research, selecting research, collecting and comparing data, and summarising Table 1: Descriptive and specific criteria established for the scoping review method Descriptive criteria Specific criteria Publication year 1. The method of determining dimensions and (sub)catego- ries (terms dimension and subcategory are chosen for being the most common in terms of the issue) Authors 2. The method of the index model validation (used for the index construction) 3. The method of determining the weights1 Research area 4. The data collection method (filling the index with data) Journal title 5. The method of index construction Source: authors and reporting on results was chosen (Arksey & O’Malley, 2005). The first step in the procedure proposed by Arksey and O’Malley is formulation of the study (scoping) question (Arksey & O’Malley, 2005). The general study (scoping) question is: »What do we know about the construction of indices evaluating the socially responsible behaviour of organisations from the existing expert resources?” The second step in the scoping review method is to determine the descriptive criteria of the scientific papers, see Table 1. The third step is to determine the specific criteria for the initial study of the content of scientific papers on the basis of the initial research. Table 1 shows the second and third steps of the scoping review. The results are presented according to these criteria. The Scopus database was selected to perform the scop- ing review. The Scopus database contains more papers on the issue of CSR indices than the Web of Science database, its sources are quoted more often (Harzing & Alakangas, 2016). The papers in the Scopus database target at a wider target group than the academic community (Chadegani et al., 2013), which is suitable for the applied scientific issue of the CSR indices. Only papers in English professional journals on Business, Management and Accounting for the last 5 years (i.e. from 2014 to 2018) were searched. The next step was to formulate the keywords for the search. The following procedure was selected to search for syn- onyms for the expression “CSR index”. Two expressions were entered into the search algorithm – “CSR” and “in- dex” (they had to appear together). Subsequently, the en- tire generated list of papers was reviewed, and the syno- nyms were generated based on their titles. The occurrence of the keywords was monitored only in the paper titles, keywords, and abstracts. The papers not addressing indi- ces evaluating the general concept of CSR were excluded from the search, only the papers meeting the specific crite- ria were left. The search order was created using Boolean operators. The search order using Boolean operators was: TITLE-ABS-KEY ( “social responsib* index” OR “tool to measure social responsib*” OR “evaluate social responsib*” OR “evaluation of social responsib*” OR “sustainability index” OR “tool to measure sustainability” OR “evaluate sustainability” OR “evaluate of evaluation of evaluation of sustainability” AND NOT REPORTING AND NOT DISCLOSURE ) AND DOCTYPE ( AR OR RE ) AND ( LIMIT-TO ( SRCTYPE , “j “ ) AND ( LIM- IT-TO ( SUBJAREA , “BUSI “ ) OR LIMIT-TO ( SUBJA- REA , “English “ ) OR LIMIT-TO ( PUBYEAR , 2015 ) A total of 130 papers were obtained through the car- ried out above procedure. Based on the study of the title and abstract, their relevance to the study question was as- sessed. Only those papers that met the following condi- tions were selected: 1. They focused at least partially on the methodolo- gy of the CSR index construction. 1 1 IAEP, School Children´s Acquisition and Maintenance of Quantitative Thinking in Mathematics, PISA, TIMSS. 215 Organizacija, Volume 53 Issue 3, August 2020Research Papers 2. The papers related to the general concept of CSR (or possibly the parallel and very close concept of permanent sustainability) or at least two of the three dimensions of the concept TBL. The papers focusing on a narrow segment – region, sector, product, or raw material were excluded. 3. The full text of the paper was available. As a result of the application of these selective criteria, 20 papers were analysed – see Table 2. 3 Results The results are divided into two parts according to the types of the set criteria (see Table 1). The first part presents the descriptive information on the obtained resources. The second part presents the specific information relating to the content of the obtained resources. Analysis according to the descriptive criteria - descrip- tive information about the obtained sources. The scoping review shows that the interest in con- structing the index measuring the socially responsible be- haviour of an organisation or its sustainability is gradually increasing in the analysed period, especially since 2016 – see Figure 1. However, the interest is still very small in terms of absolute numbers. Various authors deal with the issue, however, neither of them is listed in more than one paper.2 Graph 2 shows that the papers address the issues of Business, Management, and Accounting most frequently. Further, they address Engineering, Environmental Sci- ence, and Energy. Figure 1: Number of papers published in the Scopus database for the period 2014-2018 Source: authors, based on data from the Scopus database (‘Scopus’ 2018) 1 2 Two authors have the same surname (Ribeiro), but their names show that they are two different people. The data in the Scopus database show that they do not even come from the same workplace. The authors from the USA, Brazil, and (a little less) from the Czech Republic are most concerned with the issue. Two collectives of authors from the Czech Republic deal with the issue. The first are Staňková and Zapletal from the Faculty of Economics of the Technical University of Ostrava. What is interesting about their approach is that they use unconventional linguistic models and fuzzy logic to construct the index – see below. The second team consists of Rajnoha, Lesníková, and Krajčík – all the three authors work in different universities in the Czech Republic. 216 Organizacija, Volume 53 Issue 3, August 2020Research Papers Data from the Scopus database show that the papers on the index construction are concentrated in the Journal of Cleaner Production by the Elsevier publishing house, the Cite Score of which was 5.79 last year, SCImago Jour- nal Rank (1,467) and Source Normalized Impact per Pa- per (2,194). The number of such papers in the Journal of Cleaner Production is increasing – in 2014 and 2016 there appeared only 1 paper on the subject, in 2017 there were Source: authors, based on data from the Scopus database (‘Scopus’ 2018) Figure 2: Connection of the examined papers to the research area3 already 2 papers, and in 2018 there were already 7 papers in its different issues. Beyond them, the rest of the papers can be found in other journals. As for the Czech journals, they are E and M: Economics and Management4 and Sci- entific Papers of the University of Pardubice, Series D: Faculty of Economics and Administration.5 Analysis according to the specific criteria - specific in- formation related to the content of the obtained sources. 1 3 The sum of the papers in research areas is higher than 20, as papers can be related to several research areas. 4 Paper by Rajnoha, Lesníková and Krajčík. 5 Paper by Staňková and Zapletal. Author Criterion 1: the method of determining dimensions and (sub) categories Criterion 2: the method of index model validation Criterion 4: the meth- od of data collection for filling the index with data Criterion 5: the method of the index construc- tion Ribeiro et al., 2018 review, dimensions established without further explanation tested in 2 cities secondary data simple index Huang & Badurdeen, 2018 TBL, adopted methodology tested in 1 company data available in the enterprise simple index Table 2: Results of the analysis of the content of papers according to the specific criteria 217 Organizacija, Volume 53 Issue 3, August 2020Research Papers Marimin et al., 2018 without explanation, dimensions established without further explanation tested in 1 company expert survey - inter- views and question- naires simple index Schrippe & Ribeiro, 2018 adopted meth- odology tested in 60 organisa- tions secondary data (avail- able questionnaires) simple indices Jiang et al., 2018 review, TBL, authors’ own research tested in 49 companies for the period of 2 years interviewing company representatives factor analysis Rodrigues et al., 2018 TBL, review, authors’ own research tested in 1 city interviewing company representatives multi-criteria decision-making Liern & Pérez-Gladish, 2018 adopted methodology, dimensions established without further explanation tested in 79 companies secondary data (other indices, financial data) fuzzy logic + multi-criteria decision-making Djekic et al., 2018 review without explanation of the rules tested in 4 organisations company data obtained by an unspecified method fuzzy logic Mansourianfar & Haghshenas, 2018 reviews with- out explanation of the rules, TBL tested in 1 city secondary data multi-criteria decision-making Alderete & Bacic, 2018 adopted methodolo- gy, review, dimensions determined without further explanation tested in 540 munici- palities secondary data factor analysis Kopacz, Kryzia & Kryzia, 2017 TBL, review without expla- nation of the rules tested in heavy industry secondary data multi-criteria decision-making Venturelli et al., 2017 review, authors’ own research tested in 3 companies semi-structured inter-view fuzzy logic Table 2: Results of the analysis of the content of papers according to the specific criteria (continues) 218 Organizacija, Volume 53 Issue 3, August 2020Research Papers Kalutara et al., 2017 review, TBL, authors’ own research not tested xxx factor analysis Azevedo & Barros, 2017 TBL, authors’ own research, adopted methodologies, dimensions established without further explanation tested in 25 companies secondary data (Sus-tainibility report) multi-criteria decision-making Rajnoha, Lesníková, & Krajčík, 2017 adopted methodology, dimensions established without further explanation tested in 1 company secondary data (enter-prise data for 5 years) multi-criteria decision-making Kılkış, 2016 adopted meth-odology tested in 12 cities secondary data (from authorities and agen- cies) simple index Staňková & Zapletal, 2016 TBL, di- mensions established without further explanation tested in 3 companies secondary data - Inter- net presentations, CSR reports, other publica- tions and research multi-criteria decision-making + fuzzy logic Janamrung & Issaraworn- rawanic, 2015 adopted methodology, dimensions established without further explanation tested in 204 companies secondary data (annual reports, data streams) simple index Amini & Bienstock, 2014 adopted meth- odology, TBL, dimensions established without further explanation not tested xxx simple index Ngai et al., 2014 adopted methodology, dimensions established without further explanation not tested focus groups, inter-views multi-criteria decision-making Table 2: Results of the analysis of the content of papers according to the specific criteria (continues) Source: authors, based on data from the Scopus database (‘Scopus’ 2018) 219 Organizacija, Volume 53 Issue 3, August 2020Research Papers Most of the analysed papers (11 out of 20) used the CSR TBL concept to identify the dimensions (i.e. the eco- nomic, environmental, and social dimensions). For estab- lishing the categories (or subcategories, if the categories were further divided), the authors most often used the ex- isting indices/models (which were further supplemented or modified) or reviews – see Table 2, criterion 1: The method of determining dimensions and (sub)categories. The CSR concept itself is not exactly defined and there is no gener- ally accepted standard to follow (see the outputs of the in- itial study). The choice of the indices or models is very di- verse. The authors of the papers do not usually justify their choice, except stating that this is a known index/model, or that the index/model is suitable for the examined area. The methodologies/indices chosen by the authors (see Table 2, criterion 1) are specifically named in table 3. Only the authors of two papers are more specific about the process of constructing the index, dimensions, and index categories. For the index construction, Huang and Badurdeen (2018) used the combination of two indices so that the resulting (sub)categories did not overlap and were clear. Schrippe and Ribeiro made an interesting adjustment of the already constructed index. They divided the existing categories into compulsory and compensatory categories based on the assessment of the index categories by a group of experts. The compulsory categories must be fulfilled by organisations at least to some extent in order for them to be considered socially responsible, this does not apply for the compensatory categories (Schrippe & Ribeiro, 2018). Table 3: Methodologies chosen for the index construction in the analysed papers The authors constructed their index based on the mentioned methodologies, indices: The index was constructed in a different, unclassifiable way: Huang & Badurdeen, 2018: Process Sustainability Index and Product Sustainability Index Mansourianfar & Haghshenas, 2018: predetermined rules Schrippe & Ribeiro, 2018: Corporate Sustainabil- ity Index Azevedo & Barros, 2017: content analysis of sustainability reports Liern & Pérez-Gladish, 2018: model of the Vigeo rating agency Staňková & Zapletal, 2016: beyond the legal framework Djekic et al., 2018: model by Liu a Lai Rajnoha, Lesníková, & Krajčík, 2017: model by Krajnce and Glaviče Kılkış, 2016: SDEWES City Sustainability Index Janamrung & Issarawornrawanic, 2015: from KLD Rating Data a Corporate Social Responsibili- ty Guideline of the Corporate Social Responsibili- ty Institute of the Stock Exchange of Thailand Amini & Bienstock, 2014: according to the Hart’s natural resource-based view of the firm, TBL and the zero waste perspective Ngai et al., 2014: adapted Wood’s 3P model (prin- ciples, processes and products) Source: authors, based on data from the Scopus database (‘Scopus’ 2018) In case when the index (sub)categories resulted pri- marily from the review – see table 2, the review was often supplemented by other methods – most often by individual or group interviewing of experts. The number of the inter- viewed experts ranged from 3 to 7 (Schrippe & Ribeiro, 2018; Rodrigues et al., 2018; Venturelli et al., 2017). Some authors belonging to this group also state that when de- termining the (sub)categories, they followed not only the results of the review, but also certain pragmatic motives – their own experience and inventions. For example, Rod- rigues et al. (2018) adopted a rule according to which only the category that can be further divided can be considered the category. Kopacz, Kryzia and Kryzia (2017) admit that they chose the content of the categories in such a way that the values were easily identifiable and the total number of included (sub)categories was not too large. Only three papers from the group of papers using re- view methods for the identification of (sub)categories also use the factor analyses or their alternatives. The procedure is best described in Kalutara et al. (2017), who identified the individual dimensions and their preliminary categories on the basis of a literature review and enterprise docu- 220 Organizacija, Volume 53 Issue 3, August 2020Research Papers ments. The dimensions were subsequently evaluated by 6 selected experts and adapted in order to be relevant to the examined sectors. This way, 67 preliminary influencing factors were identified (Kalutara et al., 2017). The authors then sent a questionnaire to the selected respondents who met several conditions, which ensured that the respond- ents understood the problem.6 The aim was to find out the perceived validity of the individual identified preliminary factors for each dimension. The validity was evaluated on a five-point Likert scale, with the individual points ex- pressed both linguistically and numerically.7 Before per- forming the factor analysis, both the internal consistency of respondents’ responses (inter-item reliability) using Cronbach’s coefficient α and the validity were calculated. In terms of the validity, the authors verified whether the evaluation of the relevance of factors by 6 experts corre- sponded to the evaluation of a wider sample of addressed respondents. The weighted arithmetic average was used for this purpose. By performing the factor analysis8 on the material of 67 preliminary influencing factors, 18 superior groups that became the index categories were identified (Kalutara et al., 2017)9. As well as Kalutara et al., Jiang et al. wanted the in- dex to accurately measure the social performance of the organisation, and the reliability and validity.10 The authors used Cronbach’s coefficient α to calculate the reliability. Analysing the validity, they distinguish between the con- tent and construct validity. The content validity is calculat- ed using the correlation coefficient between the indicator and the initial performance score. The construct validity is calculated using the main components method (Jiang et al., 2018). As a result, the authors eliminated some of the preliminary factors set by the study since they did not meet the set values and thus gained the final categories.11,12 Alderete and Bacic (2018) also used the factor analy- sis to create the categories and the entire index. First, they used the main components method and subsequently (as well as Kalutara et al. (2017)) the Varimax method for ro- tation. Marimin et al. (2018) used a more general alterna- tive to the factor analysis in their research. They used the multidimensional scaling to construct a three-point scale, on which they measured the individual categories (Mono- lingual dictionary).13 The last group of authors approached the formulation of (sub)categories in a completely different way than de- scribed above. For example, Azevedo and Barros (2017) used the content analysis to examine the sustainability re- ports of 25 companies over a 16-year period. On the ba- sis of the carried out analysis and taking into account the Global Reporting Initiatives Guidelines and established re- quirements (categories must be measurable, data must be available and verifiable), the authors formulated the final category (Azevedo, & Barros, 2017). Staňková and Zaple- tal (2016), in their turn, picked out only the categories that go beyond the legal obligations of the organisation. Con- trarily, Mansourianfar and Haghshenas firstly defined a set of nine rules, on the basis of which they then chose the final form of the subcategories (Mansourianfar & Hagh- shenas, 2018).14 On the basis of the carried-out analysis, it can be con- cluded that most of the indices are conceived as aggregat- ed constructs whose structures contain weights. Indices always allow for the possibility of multiple criteria that are thereafter combined with their structure, in which a value in the form of weights is assigned to each newly created category. It is often very difficult to draw a line between the index contents construction and construction of the weights assigned to each part of the index. On the basis of the carried-out analysis, the authors of this paper created groups of indices that showed the same approaches to their construction – see table 2. Basically, the approaches to the index construction can be divided into four groups. 1. Simple indices The first group does not use weights at all or uses them only at the last stage of the aggregated index construction. This group includes, for example, the index constructed by Ribeiro et al. (2018), which shows the percentage of com- pliance with the requirements placed on an organisation, or the Schrippe and Ribeiro index (2018) showing how the organisation fulfills the so-called compulsory criteria in percentage15 (Schrippe & Ribeiro, 2018). The dimension 1 6 They received 107 responses in total (Kalutara et al., 2017). 7 Strongly disagree (1-1.5), disagree (1.5-2.5), neither agree nor disagree (2.5-3.5), agree (3,5-4,5) strongly agree (4,5-5,0) (Kal- utara et al., 2017). 8 They chose the Varimax rotation method (Kalutara et al., 2017). 9 The data file containing the overview of all the dimensions, categories, and subcategories is at the authors’ disposal. The file was not published for being too extensive. 10 The questionnaire was completed by 49 companies united in 1 association. Its aim was to find out the data in the individual TBL dimensions (Jiang et al., 2018). 11 Cronbach’s coefficient α is higher than 0,7, correlation coefficient (content validity) is higher than 0,5, and the loading between the correlated indicators and the first main component (construct validity) is higher than 0,5 (Jiang et al., 2018). 12-14 The data file containing the overview of all the dimensions, categories, and subcategories is at the authors’ disposal. The file was not published for being too extensive. 221 Organizacija, Volume 53 Issue 3, August 2020Research Papers value can also be calculated as the ratio of the points ob- tained per each dimension category to the maximum num- ber of points in the dimension. The final index value is then determined by the arithmetic average of the dimension val- ues (Janamrung, & Issarawornrawanich, 2015). The index value given by the average of the dimension values is also presented by Huang and Badurdeen (2018), as well as Ma- rimina et al. (2018) and Kılkışe (2016) who use the simple weighting. The idea is to make the index construction as simple as possible and understandable to users, compared to the following indices, which are more sophisticated, more accurate, and therefore, sometimes more difficult to be understood by general public. 2. Indices using the selected multi-criteria deci- sion-making method The second group uses the multi-criteria decision-mak- ing methods, most often the method of analytical hierar- chical process, sometimes extended by the unconventional linguistic models and fuzzy logic. To determine the val- ue of each dimension, Azevedo and Barros used the Delf method. The value of each dimension is determined by the sum of the category values that can have a positive or neg- ative impact on the dimension, i.e. a positive or negative value. To aggregate dimensions into the resulting index, the multi-criteria method of decision-making, namely the weighted sum method, the advantage of which is trans- parency and clarity for the public, was used (Azevedo & Barros, 2017). Mansourianfar and Haghshenas follow the method of analytical hierarchical process, where, within the pair comparison, experts assess which of the two of- fered (sub)categories is more important and by how much. The index value is determined by the sum of the weights and normalised values of each category (Mansourianfar & Haghshenas, 2018). Kopacz, Kryzia, and Kryzia (2017) or Rajnoha, Lesníková, and Krajčík (2017) also used the an- alytical hierarchical process method. Staňková and Zaple- tal as well as Liern a Pérez-Gladish (2018) extended the method by the unconventional linguistic models and fuzzy logic. 3. Indices using the unconventional linguistic mod- els and fuzzy logic The third group uses the unconventional linguistic models and fuzzy logic in the index construction. It uses linguistic terms to introduce the preferences of the deci- sion-maker (Pokorný et al., 2017). Djekic et al. expressed each category on a three-value linguistic scale, which was subsequently converted into numeric values on a scale from 0-100. When aggregating dimensions, each dimen- sion had the same weight (Djekic et al., 2018). Unconven- tional linguistic models and fuzzy logic, specifically the fuzzy expert system, were also used by Venturelli et al. (2017). 4. Indices using the factor analysis The last group uses the factor analysis (or its analogy – the main components method) in the index construction. Both Kalutara et al. and Alderete a Bacic used it not only to identify categories, but also to reveal the weights. They chose the method of the main components to select the fac- tors. Kalutara et al. presented the way of aggregation as well - the index is calculated as the sum of the values of in- dividual dimensions multiplied by the respective weights (Kalutara et al., 2017). Jiang et al. chose the method of the main components instead of the factor analysis. The result- ing index is then given by the product of the sustainable performance score and development coordination degree (Jiang et al., 2018). When constructing the index, the expert panels are of- ten used for deciding on the categories, dimensions, and weights. The expert panels method is aimed at summaris- ing and synthesis of a wide range of data and information and creating a summarising report, which is a set of rec- ommendations for solving the discussed issue or an over- all vision regarding the covered subject. The main task of the expert panel is usually the synthesis of different input data. The method is suitable for solving the highly com- plex issues (e.g. CSR) requiring knowledge from different disciplines. 4 Discussion The scoping review shows that the indices authors use the form of a case study in a particular organisation to test the indices the most often. The number of the investigated organisations did not exceed 12 in the case of the multi- ple case studies. The data are obtained primarily from the secondary sources. Only in 3 cases the authors did obtain the index calculation data from interviewing in the organ- isation. The above-mentioned procedure does not change in the case of larger research samples (from 49 to 204 or- ganisations). The authors most often use the data from the databases, or the information provided on the websites or in reports of the investigated organisations. Schrippe and Ribeiro’s approach, where they collected data for creating an adjusted index directly from the ques- 1 15 The dimension value in their model is given by the lowest value of the compulsory category and the final index value is given by the lowest dimension value. The index is therefore based on the idea that poor performance in one compulsory dimension/ category means that an organisation cannot be considered socially responsible. 222 Organizacija, Volume 53 Issue 3, August 2020Research Papers tionnaires that the companies had to fill out in order to have a chance to reach the Corporate Sustainability Index of the Brazilian Stock Exchange can serve as an inspiration1. Given that this is a relatively exceptional index, which a maximum of 40 out of the 200 companies with the most liquid shares can reach, the vast majority of the selected companies voluntarily published their answers, which in turn served as a data source for the further research of the authors (Schrippe & Ribeiro, 2018). There is no consensus about the method of determining the weights and index construction. Most of the CSR indi- ces are created by using the existing data, which are later variously adjusted according to the expert panels formed according to different criteria. According to Mansourianfar and Haghshenas, the sub- categories must meet the following criteria by being (Man- sourianfar & Haghshenas, 2018): • relevant to sustainability in its three main dimen- sions; • comprehensible to an ordinary citizen; • transparent in its content and structure – i.e. the user should be able to find out how the final value is calculated; • foreseeable; • comparable; • appropriate for scaling, i.e. measurable on an ap- propriate spatial and time scale; • measurable, i.e. repeatedly measured and able to be quantified; • feasible, i.e. reliable, reasonably priced and • independent, i.e. independent of each other. In the carried out scoping review, it was not possible to well-monitor the way the described indices were used. They are explicitly mentioned only in 2 papers. Most of the time, the authors only state that they created their own index based on a review, but they are not specific in what exactly the review contained. If we accept the op- tions described in the introduction to interpret the output data of the indices as nominal, ordinal, and cardinal data, then at first glance it seems possible to create an order of organisations according to the CSR rate by means of the CSR index evaluation. If we consider the resulting indices as ordinal, then we can trace the use, as different forms of rankings within a single index methodology are used. However, taking into account the cardinal data shows that the resulting CSR indices of different methodologies do not determine the real ranking of organisations. This is due to the inconsistency of the construction of the different CSR indices, the diversity of inputs for the evaluation of the CSR indices, and the diversity of profiles of the target evaluated groups of organisations. The CSR index notice value is also affected by the data source processed in the CSR index, the method of evaluating the data in the CSR index, as well as the clarity of the CSR output for the user. It can be assumed that there is still a number of other ways of constructing and evaluating the CSR indices that are traceable in other scientific databases. In the process of summarising the outputs of the car- ried-out research, we face a number of follow-up questions: Is CSR a suitable content for indexing? Can the CSR activ- ities that should be an expression of free will and a specific visibility of the organisation’s relations with the society be expressed by the index? What is more relevant for the CSR index evaluating? Are these data obtained from publicly available sources that respondents publish themselves or the process by which an organisation reaches the value of a particular index? Furthermore, the differences in social, i.e. national, religious, regional, legislative frameworks at national levels that change the concept of CSR according to the environment must be taken into account (Bernardo- vá et al., 2018a). The positive effects of CSR activities on the society are one of the basic characteristics of the CSR concept, and these can only be perceived by the end-users. Maria Gjølberg illustrates this fact in her paper. To address it, she develops 2 indices: one measuring the CSR activities and one measuring the CSR performance in 20 OECD coun- tries. The comparison of results reveals the significant dif- ferences between the 20 countries. (Gjølberg, 2009). The issue of approaching the CSR indices in different countries is also discussed by Halkos and Skouloudis (2018), who highlight the interconnection of the global CSR concept and innovative capacity with regard to the national specif- ics of individual countries. CSR is a social construct that develops in parallel with the social evolution. This is documented in a timeline of scientifically and practically recognised definitions. In 1954, Bowen defined the CSR as: “... the entrepreneur’s obligations to carry out such procedures, to take such deci- sions or to follow such direction of conduct as desirable in terms of the objectives and values of the society.’ The 2001 Definition of the European Commission defines the CSR as follows: “... describe it as a concept whereby compa- nies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis....”(Commission of the European Communities, 2001). The UN states that: „Cor- porate sustainability is imperative for business today – es- sential to long-term corporate success and for ensuring that markets deliver value across society. To be sustain- able, companies must do five things: Foremost, they must operate responsibly in alignment with universal principles and take actions that support the society around them. Then, to push sustainability deep into the corporate DNA, companies must commit at the highest level, report annu- ally on their efforts, and engage locally where they have a presence.“ (UN, 2014, p. 7) Rasche’s et al., (2017) defi- nition says: “CSR policy acts as a self-regulatory mech- anism by which the company monitors and ensures its 223 Organizacija, Volume 53 Issue 3, August 2020Research Papers active compliance with legal spirit, ethical standards and national or international standards.” The concept of CSR is being transformed, however, the ethical nature of entrepre- neurs’ responsibility towards the society remains the same. Responsibility as an individual response to the needs of others is elaborated in the paper by Lévinas. The author emphasises the primacy of ethical (moral) values over any thinking, knowledge and people’s actions (Lévinas, 2009, p. 123). In terms of CSR, this means: understanding the needs of the society and taking into consideration the so- cietal needs in entrepreneurship; the ability to communi- cate with all the stakeholders; the ability to orientate in the structure and functioning of the company; the ability to estimate the consequences of one’s own conduct; and the ability to see one’s own role in passing on the values to the future generations. 5 Conclusion The aim of the paper was to find out how the indices that evaluate the socially responsible behaviour of organisa- tions are created. The reason is to evaluate their usability for SMEs that account for around 99% of active entrepre- neurial entities in the EU (European Parliament, 2020). The indices are a well-established tool of the CSR measurement. Approaches to their construction are of different level of complexity, which subsequently man- ifests itself in the level of their comprehensibility. The CSR methodologies using other than simple mathemati- cal procedures are complicated to interpret. Indices using the linguistic models and fuzzy logic are intended to make the value data more effective by using the knowledge and experience of the “experts”. In the data processing, they do not use the mathematical, but the linguistic models. But even these indices do not always give us the ability to un- derstand the logic of their construction for SMEs. In the case of SMEs, the use of the CSR index accord- ing to the above-mentioned construction methods seems problematic. SMEs cannot employ the CSR experts or employees understanding the complex descriptions of the CSR indices construction (see indices using the factor analysis, indices using the multi-criteria decision-making methods, indices using the unconventional linguistic mod- els and fuzzy logic) (Bernardová et.al., 2018b). SMEs also do not often produce the data which the indices based on the secondary data processing are drawn from. The indices described in the simple index group are mainly applicable to SMEs. Limitations of the research and ethical aspects of the study: The carried-out research has several limitations to be taken into account when interpreting the results. The scop- ing review was conducted within one database and only in the selected period of 2014-2018. Therefore, extending the review for additional databases and time periods could potentially change the results. It should be also noted that the assessment of the relevance of the papers to the study question was carried out by one researcher, which increas- es the level of subjectivity of the selection. Acknowledgements This article is dedicated to the Project No. TL02000336: Corporate Social Responsibility Index under the Éta 2 TAČR Program financed by the Technology Agency of the Czech Republic. Literature Adel, C., Hussain, M., Mohamed, E., & Basuony, M. (2019). Is corporate governance relevant to the quality of corporate social responsibility disclosure in large European companies? International Journal of Accounting & Information Management, 27(2), 301- 332. https://doi.org/10.1108/IJAIM-10-2017-0118 Alderete, M.V., & Bacic, M.J. (2018). Local Productive Arrangements and local development in non-metro- politan municipalities of Sao Paulo, Brazil. Cuadernos de Gestión, 18 (1), 103-124. http://doi.org/10.5295/ cdg.150561ma Arksey, H., & O’Malley, L. (2005). ‘Scoping Studies: To- wards a Methodological Framework’. International Journal of Social Research Methodology. 8(1), 19–32. https://doi.org/10.1080/1364557032000119616 Azevedo, S., & Barros, M. 2017. The Application of the Triple Bottom Line Approach to Sustainability Assess- ment: The Case Study of the UK Automotive Supply Chain. Journal of Industrial Engineering and Manage- ment, 10(2): 286. https://doi.org/10.3926/jiem.1996. Bernardová D., Ivanová, K., & Fink, M. (2018a). CSR: země vzniku, země rozvoje, země aplikace [CSR – Countries of Origin, Countries of Development, Countries of Application]. In Horáková, N., ed. Socio- logické výzvy ve středoevropském kontextu: 8. česko- slovenské sociologické dny v Ostravě 15. 11. 2017 [So- ciological challenges in the Central European context: 8th Czech-Slovak Sociological Days in Ostrava 15. 11. 2017]. Ostrava: Ostravská univerzita. Bernardová D., Ivanová, K., & Kubicová, J. (2018b). Společenská odpovědnost organizacía její význam pro rozvoj region. [Corporate Social Responsibility and its Importance for the Development of the Region]. In Jílková, E. et al. Hospodářská politika a regionální rozvoj [Economic Policy and Regional Development] (pp. 148-176). Olomouc: Moravská vysoká škola Olo- mouc Bowen. H. R. (1953). Social Responsibilities of the Busi- nessman. New York: Harper & Row. 224 Organizacija, Volume 53 Issue 3, August 2020Research Papers Chadegani, Arezoo Aghaei, Hadi Salehi, Melor Md Yunus, Hadi Farhadi, Masood Fooladi, Maryam Farhadi, & Nader Ale Ebrahim (2013.) A Comparison between Two Main Academic Literature Collections: Web of Science and Scopus Databases’. Asian Social Science. 9 (5), 18–26. https://doi.org/10.5539/ass.v9n5p18 Collison, D., Cobb, G., Power, D., & Stevenson, L. (2009). FTSE4Good: exploring its implica- tions for corporate conduct. Accounting, Au- diting & Accountability Journal, 22(1), 35-58. https://doi.org/10.1108/09513570910923006 Commission of the European Communities. (2001). Green Paper. Promoting a European Framework for Corpo- rate Social Responsibility. Retrieved January 22, 2019 from https://ec.europa.eu/commission/presscorner/de- tail/en/DOC_01_9 Eldomiaty, T., Soliman A., Fikri A., & Anis, M. (2016). The financial aspects of the Corporate Responsibility Index in Egypt: A quantitative approach to institutional economics. International Journal of Social Econom- ics, 43(3), 284-307. Elkington, J. (2013). Enter the Triple Bottom Line. In: The Triple Bottom Line, Does It All Add Up?: Assessing the Sustainability of Business and CSR. London: Earths- can European Commission (2015). Awareness-raising ques- tionnaire. Retrieved December 30, 2018, from https:// ec.europa.eu/docsroom/documents/10369/attach- ments/1/translations/en/renditions/pdf European Commission. (2011). Communication from The Commission to The European Parliament, The Coun- cil, The European Economic and Social Committee and The Committee of The Regions: A renewed EU strategy 2011-14 for Corporate Social Responsibili- ty. Retrieved December 18, 2018 from https://eur-lex. europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX- :52011DC0681&from=EN European Commission. (2009). The governance challenge for knowledge policies in the Lisbon Strategy: Between revolution and illusion. Luxembourg: Office for Offi- cial Publications of the European Communities. Re- trieved December 18, 2018, from http://ec.europa.eu/ invest-in-research/pdf/download_en/kin123469enc_ web.pdf) European Parliament (2020). Small and medium-sized enterprises. In Fact Sheets on the European Union. Retrieved January 20, 2020 from https://www.narod- niportal.cz/legislativa/narodni-akcni-plan-pro-byznys- a-lidska-prava-na-obdobi-2017-2022/https://www.eu- roparl.europa.eu/ftu/pdf/en/FTU_2.4.2.pdf European Parliament (2014). Directive 2014/95/EU: Non-financial reporting. Retrieved December 18, 2018 from https://eur-lex.europa.eu/eli/dir/2014/95/oj Fink, M., Ivanová, K., Bernardová, D., Arkhangelska, T., & Kašparová, K. (2020). Social Responsibility ETA Index 2019. International Journal of Curriculum and Instruction, 12 (Special Issue), 50–65. Retrieved Feb- ruary18, 2020, from https://files.eric.ed.gov/fulltext/ EJ1245281.pdf Gjølberg, M. (2009). Measuring the immeasurable?: Con- structing an index of CSR practices and CSR per- formance in 20 countries. Scandinavian Journal of Management. 25(1), 10-22. http://doi.org/10.1016/j. scaman.2008.10.003 Government of the Czech Republic (2017). National Ac- tion Plan for Business and Human Rights 2017-2022. Retrieved January 18, 2020 from https://www.narodni- portal.cz/legislativa/narodni-akcni-plan-pro-byznys-a- lidska-prava-na-obdobi-2017-2022/ Halkos G., & Skouloudis A. (2018). Corporate social re- sponsibility and innovative capacity: Intersection in a macro-level perspective. Journal of Cleaner Pro- duction, 182, 291-300. https://doi.org/10.1016/j.jcle- pro.2018.02.022 Harzing, A.W., & Alakangas, S. (2016). Google Schol- ar, Scopus and the Web of Science: A Longitudinal and Cross-Disciplinary Comparison. Scientometrics. 106(2), 787–804. https://doi.org/10.1007/s11192-015- 1798-9 Hawn, O., Chatterji, A. K., & Mitchell, W. (2018). Do in- vestors actually value sustainability? New evidence from investor reactions to the Dow Jones Sustainabil- ity Index (DJSI). Strategic Management Journal, 39 (4), 949-976. http://doi.org/10.1002/smj.2752 Huang, A., & Badurdeen, F. (2018). Metrics-Based Ap- proach to Evaluate Sustainable Manufacturing Perfor- mance at the Production Line and Plant Levels. Jour- nal of Cleaner Production, 192, 462–76. https://doi. org/10.1016/j.jclepro.2018.04.234 Janamrung, B., & Issarawornrawanich, P. (2015). The Association between Corporate Social Responsibility Index and Performance of Firms in Industrial Products and Resources Industries: Empirical Evidence from Thailand. Social Responsibility Journal, 11(4), 893– 903. https://doi.org/10.1108/SRJ-11-2013-0141 Janik, B., & Bartkowiak, M. (2015). The comparison of socially responsible indices in Central and Eastern Eu- rope. International Journal of Environmental Technol- ogy & Management, 18(2), 153-169. Jiang, Qiuhong, Zhichao Liu, Weiwei Liu, Tao Li, Wei- long Cong, Hongchao Zhang, & Junli Shi. (2018). A Principal Component Analysis Based Three-Dimen- sional Sustainability Assessment Model to Evaluate Corporate Sustainable Performance. Journal of Clean- er Production, 187, 625–37. https://doi.org/10.1016/j. jclepro.2018.03.255 Kalutara, Pushpitha, Guomin Zhang, Sujeeva Setunge, & Ron Wakefield. 2017. Factors That Influence Austra- lian Community Buildings’ Sustainable Management. Engineering, Construction and Architectural Manage- ment, 24 (1), 94–117. https://doi.org/10.1108/ECAM- 10-2015-0158 Kılkış, Ş. (2016). Sustainable Development of Energy, Water and Environment Systems Index for Southeast 225 Organizacija, Volume 53 Issue 3, August 2020Research Papers European Cities, Journal of Cleaner Production, 130, 222–34. https://doi.org/10.1016/j.jclepro.2015.07.121 Kopacz, M., Kryzia, D & Kryzia, K. (2017). Assessment of Sustainable Development of Hard Coal Mining Industry in Poland with Use of Bootstrap Sampling and Copula-Based Monte Carlo Simulation. Jour- nal of Cleaner Production, 159, 359–73, https://doi. org/10.1016/j.jclepro.2017.05.038 Leipziger, D. (2003). The corporate responsibility code book. Sheffield: Greenleaf Publishing. Lévinas, E. (2009). Etika a nekonečno [Ethics and Infini- ty]. Praha: Oikoymenh Liern, V., & Pérez-Gladish, B. (2018). Ranking Corporate Sustainability: A Flexible Multidimensional Approach Based on Linguistic Variables. International Trans- actions in Operational Research, 25(3), 1081–1100. https://doi.org/10.1111/itor.12469 Mansourianfar, M. H., & Haghshenas, H. (2018). Mi- cro-Scale Sustainability Assessment of Infrastructure Projects on Urban Transportation Systems: Case Study of Azadi District, Isfahan, Iran. Cities, 72,149–59. https://doi.org/10.1016/j.cities.2017.08.012 Marimin, Darmawan, M. A., Widhiarti, M. P., & Teni- wut, Y. K. (2018). Green Productivity Improvement and Sustainability Assessment of the Motorcycle Tire Production Process: A Case Study. Journal of Clean- er Production, 191, 273–82. https://doi.org/10.1016/j. jclepro.2018.04.228 Peršič, A., & Markič, M. (2013). The Impact of Social- ly Responsible Reporting on Successful Corporate Operations. Organizacija, 46, 47-54. https://doi. org/10.2478/orga-2013-0007 Peters, M. D. J., Godfrey, C.M, Khalil, H., McInerney, P., Parker D., & Baldini Soares, C. (2015). Guidance for Conducting Systematic Scoping Reviews. Internation- al Journal of Evidence-Based Healthcare. 13 (3), 141– 46. https://doi.org/10.1097/XEB.0000000000000050 Pinillos, A., A., Fernández-Fernández, J. L., & Fernández Mateo, J. (2018). A critical review of the Corporate Governance dimension in the Sustainability Indexes questionnaires. Revista de Comunicación, 17 (2), 9-40. https://doi.org/10.26441/RC17.2-2018-A1 Pokorná, D. (2012). Koncept společenské odpovědosti: obsah, podstata, rozsah [Concept of Social Respon- sibility: Content, Basis, Scope]. Olomouc: Univerzita Palackého Pokorný, M. et al. (2017). Soft-Computing Technologies in economics expert Systems. In Ryan, D. ed., Expert systems: Design, Applications and Technology (pp. 1-58). New York: Nova Science Publishers Rajnoha, R., Lesníková, P., & Krajčík, V. (2017). Influ- ence of Business Performance Measurement Systems and Corporate Sustainability Concept to Overall Busi- ness Performance: “Save the Planet and Keep Your Performance”. E+M Ekonomie a Management, 20 (1), 111–128. https://doi.org/10.15240/tul/001/2017-1-008 Rasche, A., Morsing, M., & Moon, J. (eds.). (2017). Cor- porate Social Responsibility: Strategy, Communica- tion, Governance. Cambridge: Cambridge University Press. Rita, D.I.G., Ferreira, F.A.F., Meidutė-Kavaliauskienė, I., Govindan, J., & Ferreira, J.J.M. (2018). Proposal of a green index for small and medium-sized enterprises: A multiple criteria group decision-making approach. Journal of Cleaner Production, 196, 985-996. https:// doi.org/10.1016/j.jclepro.2018.05.275 RobecoSAM. (2018). Industry Leaders 2018. Retrieved December 20, 2018, from https://www.robecosam. com/csa/csa-resources/industry-leaders.html Rodrigues, A.P. et al. (2018). Developing Criteria for Per- formance Assessment in Municipal Solid Waste Man- agement. Journal of Cleaner Production, 186, 748–57. https://doi.org/10.1016/j.jclepro.2018.03.067 Schrippe, P., & Ribeiro, J. L. D. (2018). Corporate Sus- tainability Assessment Heuristics: A Study of Large Brazilian Companies. Journal of Cleaner Produc- tion, 188, 589–600. https://doi.org/10.1016/j.jcle- pro.2018.02.232 Slaper, T. F., & Hall, T. J. (2011). The Triple Bottom Line: What Is It and How Does It Work? The Indiana Busi- ness Review, 86 (1), 4-8. Retrieved January 14, 2019, from http://www.ibrc.indiana.edu/ibr/2011/spring/ pdfs/spring2011.pdf Staňková, Š., & Zapletal, F. (2016). Assessment of Cor- porate Social Responsibility Using Fuzzy Analytic Hierarchy Process. Scientific Papers of the University of Pardubice, Series D: Faculty of Economics and Ad- ministration, 2016 (23), 142–54. United Nations (2019). Micro-, Small and Medium-sized Enterprises Day 27 June. Retrieved March 24, 2019, from https://www.un.org/en/events/smallbusinessday/ United Nations (2014). United Nations Global Com- pact. UN. Retrieved March 24, 2019, from https:// www.globalcompact .de/wAssets /docs/Nach- haltigkeits-CSR-Management/un_global_compact_ guide_to_corporate_sustainability.pdf United Nations (2013). Economic and Social Council Ex- plores Integration of Three Sustainable Development Pillars - Economic, Social, Environmental - to Achieve ‘Triple Win’ Solutions.Meetings Coverage & Press Releases. Retrieved January 24, 2019, from https:// www.un.org/press/en/2013/ecosoc6574.doc.htm Venturelli, A., Caputo, F., Leopizzi, R., Mastroleo, G., & Mio, C (2017). How Can CSR Identity Be Evaluated? A Pilot Study Using a Fuzzy Expert System. Journal of Cleaner Production, 141, 1000–1010. https://doi. org/10.1016/j.jclepro.2016.09.172 Yang Wen-Tao, Zhu Xiang-Dong, & Nie Zhong-Ying. (2016). Research on evaluation index system of small and medium size enterpises in engineering machinery industry from social responsibility perspective. Jour- nal of the Balkan Tribological Association, 22 (2A-II), 2108-21234. 226 Organizacija, Volume 53 Issue 3, August 2020Research Papers Dana Bernardová, Ph.D. is an expert assistant at the Department of Social Sciences and Law, Moravian Business College Olomouc, Olomouc, Czech Republic. Her research focuses on the CSR, HR management, soft skills. She participates in research projects, teaches, conducts soft skills training, and leads project CSR teaching in direct co-operation with SMEs. Klára Kašparová, Ph.D. is an associate professor at the Department of Corporate Economy, Faculty of Economics and Administration, Masaryk University, Brno, Czech Republic. Her research focuses on the CSR, marketing, marketing communication and marketing research. She participates in the research projects, teaches, and publishes in marketing and CSR. Martin Fink Mgr. is an expert assistant at the Department of Social Sciences and Law, Moravian Business College Olomouc, Olomouc, Czech Republic. He deals with the CSR, the issue of quality of life and QMS (ISO 9001), teaches CSR and communication skills, and participates in project focused on teaching of CSR in collaboration with regional SMEs. Kateřina Ivanová, Ph.D. is an associate professor and a temporarily entrusted Vice-Rector for Science, Research and Development; the Associate Professor at the Department of Social Sciences and Law, Moravian Business College Olomouc, Olomouc, Czech Republic. She focuses on the ethical foundations of social responsibility and methodology of sociological research for business practice, conducts scientific research projects, and teaches business ethics, methodology. Tetiana Arkhangelska, Ph.D. is a Department Manager, senior lecturer at the Department of Social Sciences and Law, Moravian Business College Olomouc, Olomouc, Czech Republic. She focuses on the corporate social responsibility, management of commercial activities abroad, comparative and gender linguistics, teaches and publishes in the field of CSR, Ethics and CSR of small and medium-sized businesses as well as management of commercial activities. Sestava in pomen kazalnikov družbene odgovornosti podjetij - od rezultatov do bistva Ozadje in namen: Redno poročanje o družbeni odgovornosti podjetij naj bi podjetjem olajšalo prepoznavanje traj- nostnih tveganj in vodilo do večjega zaupanja vlagateljev in potrošnikov. Namen prispevka je ugotoviti, kako so sestavljeni indeksi, ki se uporabljajo za ocenjevanje družbeno odgovornega ravnanja podjetij. Zasnova / metodologija / pristop: Pregled obsega je metoda, uporabljena v tej študiji. Vprašanje za določanje obsega je: Kaj vemo o oblikovanju indeksov, ki ocenjujejo družbeno odgovorno vedenje organizacij iz obstoječih strokovnih in znanstvenih virov? Rezultati: Analiza 20 člankov je pokazala, da glede metode določitve uteži in konstrukcije indeksa ni soglasja v lite- raturi. Obstajajo 4 pristopi k oblikovanju indeksa. Prvi uporablja odstotek izpolnjevanja določenih meril ali povprečje vrednosti določenih dimenzij indeksa. V drugem pa so uporabljene večkriterijske metode odločanja (najpogosteje analitična hierarhična metoda). Tretji uporablja nekonvencionalne lingvistične modele in mehko logiko, četrti pa te- melji na faktorski analizi ali metodi glavnih komponent. Zaključek: Glavna značilnost indeksov družbene odgovornosti je njihova metodološka raznolikost. To oteži razu- mevanje rezultatov analiz družbene odgovornosti podjetij in v bistvu onemogoča rangiranje po uspešnosti glede družbene odgovornosti, še zlasti za mala in srednje velika podjetja. Ključne besede: Družbena odgovornost podjetij, Indeks, Pregled obsega, Indeks družbene odgovornosti podjetij 227 Organizacija, Volume 53 Issue 3, August 2020Research Papers 1 Received: 2nd February 2020; revised: 20th June 2020; accepted: 15th July 2020 1 According to i-SCOOP (2020) Industry 4.0, which refers to the fourth industrial revolution (TechTarget, 2020), is the digital transformation of manufacturing/pro- duction and related industries and value creation processes. The Impact of Industry 4.0 on Export Market Orientation, Market Diversification, and Export Performance Alenka NAGLIČ, Polona TOMINC, Klavdij LOGOŽAR University of Maribor, Faculty of Economics and Business, Razlagova 14, SI-2000 Maribor, Slovenia, alenkana- glich@gmail.com, polona.tominc@um.si, klavdij.logozar@um.si Background and Purpose: Existing literature on the Industry 4.0 concept does not provide a clear empirical veri- fication if and how the implementation of Industry 4.0 impacts export market orientation, market diversification, and export performance of firms. The purpose of this paper is to provide a framework on how firms can increase their export performance by knowing the impact of Industry 4.0 on firms’ export activities. Methodology: The analysis is based on an examination of 81 Slovenian export firms, with the majority active in the processing industry in which the export of products and services represents a more than 20% share in the total revenue of the firm. Factor analysis and multiple regression were used to process the collected data. Results: The analysis results reveal that firms that invest in advanced technologies and realize digital transforma- tion are better prepared to compete internationally and achieve better export performance. Conclusion: Our study showed the positive link between implementation of Industry 4.0 and export activities of firms and confirmed that implementation of Industry 4.0 leads to many changes in the mindset and operation of Slovenian firms and actively reflects in their export results. The research findings may serve as an important guide for managers in the optimal planning and management of export marketing and business activities. The study thus provides a foundation for the growing research on the relationship between Industry 4.0 and export business activ- ities of firms. Keywords: Industry 4.0, Export market orientation, Market diversification, Export performance. DOI: 10.2478/orga-2020-0015 1 Introduction Industry 4.01 is bringing many changes that represent numerous advantages or growth possibilities to firms, i.e. the possibility to expand to new, non-traditional markets, streamline products, adapt manufacturing without delays, and efficiently use resources and energy, in addition to causing firms to face new challenges. Ganzarain & Errasti (2016, 1122) deterimne that In- dustry 4.0 is a new phenomenon based on technological concepts of cyber-physical systems and Internet of Things and Services that has the potential to give rise to smart factories and influence every economic sector, especially industry. The phrase or abbreviation I 4.0 appeared in 2011 as a result of an association of representatives of German firms, politics, and academicians striving to boost the com- petitiveness of the German manufacturing industry based on high technology (Kagermann et al., 2011) as well as a 228 Organizacija, Volume 53 Issue 3, August 2020Research Papers focus on smart – (a) smart products, (b) processes, and (c) procedures and factories (BMBF, 2017). According to Kagermann et al. (2013), implementing Industry 4.0 will not only strengthen the competitive posi- tion of firms but also drive solutions to both global (e.g. re- source and energy efficiency) and national challenges (e.g. managing demographic change) (Kagermann et al., 2013). Rodič (2017, 205) claims, that even when firms are not interested in implement¬ing the Industry 4.0 paradigm, the pressure from their competitors or partners will motivate them to do so. As suggested by Jerman et al. (2020, 69 and 75) it is also important to know and understand new competencies of employees such as technical literacy, in- formation and communications technology (ICT) literacy, inovation and creativity, openness to learning, adaptation to change and various soft skills, introduced by the concept of Industry 4.0. Prior researches revealed that Industry 4.0 encourag- es (a) the creation of new business models (Frank et. al., 2019; Müller et al., 2020) (b) transformation of interna- tionalization processes (Strange & Zucchella, 2017; Chi- arvesio & Romanello, 2018) and (c) impacts on firms’ (export) performance (Dalenogare et al., 2018; Büchi et al., 2020). While Grzybowska & Łupicka (2017, 222) determine that the development of new technologies is the main driv- ing force behind the contemporary global economy, Müller et al. (2018c) claim that strategic as well as operational opportunities are positive drivers of Industry 4.0 imple- mentation, whereas challenges regarding competitiveness as well as organizational and production fit hinder its pro- gress. Veile et al. (2019) expose seven dimensions, which need to be considered when implementing Industry 4.0: (1) corporate culture and communication, (2) personnel, (3) firm organization, (4) safety and security, (5) preparing the implementation of Industry 4.0 solutions, (6) integrat- ing Industry 4.0 solutions and (7) financial feasibility. Müller et al. (2018c) determine that the perception of Industry 4.0-related opportunities and challenges, which is the first step toward Industry 4.0 implementation, depends to a large extent on different firms’ characteristics. Accord- ing to Horvȃth & Szabó (2019, 119) multinational firms have higher driving forces and lower barriers to industry 4.0 than small and medium-sized firms. The contemporary dynamics in the field of technolo- gy development and market globalization require firms to innovate and internationalize while also remaining com- petitive in the international marketplace (Bettiol et al. 2020). According to Hannibal & Knight (2018), oppor- tunities presented by Industry 4.0 might provoke firms to rethink their degree or geography of internationalization. While Strange & Zucchella (2017) highlight the possibil- ities of the potential transformation that Industry 4.0 can have on the international dimension of firms, Chiavesio & Romanello (2018) didn’t confirm a direct relationship between Industry 4.0 and internationalization, but among other things encouraged scholars to research the relation- ship between investments in Industry 4.0 and the firm’s strategy to remain competitive in the international context. One of the latest researches (Bettiol et al. 2020) on the relationship between investments in Industry 4.0 and inter- nationalization processes shows that the implementation of Industry 4.0 does not change the international strategy of the firms, but is mainly focused on finding coherence between the opportunities based on those technologies and the present strategy of the firms. Nevertheless, the authors Bettiol et al. (2020) argue that firms that source global- ly and export present the highest level of sensitiveness to global competition in the investments in Industry 4.0 tech- nologies. Despite the growing body of economic research on In- dustry 4.0, little attention has been paid to an examination of opportunities and challenges related to export business and performance of firms. The purpose of our study is to find out whether and how the implementation of Industry 4.0 reflects in firms’ export business. The main objective of this article is to examine if and how the implementation of Industry 4.0 encourages firms’ export activities, such as (a) export market orientation and (b) market diversification – not only to traditional but also emerging markets (China, India, Vietnam, Turkey, Paki- stan), and improves its export performance. Accordingly, this study attempts to answer the following research ques- tions: RQ1: How does the implementation of Industry 4.0 impact the export market orientation of firms? RQ2: How does the implementation of Industry 4.0 impact the strategy of diversification to the dynamic mar- kets of fast developing countries? RQ3: How does the implementation of Industry 4.0 impact the export performance of firms? More and more Slovenian firms are aware that digital- ization of manufacturing is essential for improving com- petitiveness on domestic and foreign markets. In 2017, the industrial sector composed 32.2% of Slovenia’s total GDP, which is an encouraging fact when compared to the industrial sector’s share in the EU’s total GDP of 25.1% in 2017 (CIA, 2020), however these data are accompanied by the questions, ‘Which transformation phase are Slovenian firms currently in?’ or ‘Are they capable of introducing fu- ture technologies?’ (Herakovič, 2016, 12). In the further course of this paper, Chapter 2 describes the theoretical background, whereas Chapter 3 outlines the designing of the conceptual model and hypotheses. In Chapter 4, the empirical approach is described, encom- passing a survey of 81 Slovenian export firms and the sur- vey results. Chapter 5 presents a discussion, while Chapter 6 is closing the paper with a conclusion. 229 Organizacija, Volume 53 Issue 3, August 2020Research Papers 2 Literature review 2.1 Industry 4.0 and export activity According to Bettiol et al. (2020, 2) the new emerging paradigm of the fourth industrial revolution promises to redefine the sources of value through the exploitation of new sets of technologies such as co-robots, additive man- ufacturing, Internet of Things (IoT), big data, and artificial intelligence being directly connected to manufacturing. Industry 4.0 has been one of the emerging topics in re- lation to international business in the last decade (Strange & Zucchella, 2017; Chiarvesio & Romanello, 2018). The implementation of Industry 4.0 is an evolutionary process that requires current basic technologies and expe- riences to be adapted to the specific requirements of man- ufacturing engineering and innovative solutions for new locations and new markets to be explored (Kagermannn et al., 2013, 7). Alcácer et al. (2016, 499) claim that the new tech- no-economic paradigm of the information age has brought about new structures and processes in international busi- ness. In their recent contribution, Bettiol et al. (2020, 1) highlight growing attention on the relationship between implementation of Industry 4.0 and internationalization processes. The authors (Bettiol et al., 2020, 9) argue that different level of internationalization impacts the motiva- tion of implementation of Industry 4.0 technologies. Ac- cording to the authors, emerging technologies can modify the scale and organization of manufacturing processes, potentially pushing firms toward the redefinition of their activities worldwide. As reported by Laplume et al. (2016, 595), the imple- mentation of new technology, such as 3D printing, has the potential to partially reverse the trend towards global spe- cialization of production systems into elements that may be geographically dispersed and closer to the end users. Strange & Zucchella (2017, 174) expose the importance of further growth of digital platforms for the distribution of products (e.g. Amazon, Alibaba), which make it easier for small firms to also enter global markets. According to recommendations (Chiavesio & Ro- manello, 2018) for future investigation on the relationship between Industry 4.0 and their related effects on the inter- national configuration and performance of firms, the pres- ent study is focused on the importance and influence of Industry 4.0 on export activities of firms’ and optimizing their export performance. In fact, no empirical evidences have been developed up now to test if and how Industry 4.0 is impacting firms’ export activities, especially in terms of how their diversification strategies to untraditional, emerging markets are considered. 2.2 Industry 4.0 and export market orientation A firm’s export market orientation is based on the percep- tion of the environment and on better knowledge of the needs, requirements, and wishes of foreign consumers. Export market-oriented firms are more informed about the needs of their target markets and will be positioned more strategically than their less market-oriented competitors to tailor products and services for those markets (Day & Wensley, 1988). The emergence of the information and digital age is rapidly changing the manner of international business activity (Alcácer et al., 2016). Industry 4.0 relies on the adoption of digital technologies to gather data in real time and to analyze it, providing useful information to the man- ufacturing system (Wang et al., 2016). Rezk et al. (2016) predict that emerging technologies will reshape the inter- national configuration options available to firms. As already stated, export market orientation is based on collecting, analyzing, and using information on foreign markets. It is also based on the formation of suitable export strategies in accordance with that information. For instance, smart, connected products allow compa- nies to form new kinds of relationships with customers, requiring new marketing practices and skill sets (Porter & Heppelmann, 2014). In other words, as companies ac- cumulate and analyze product usage data, they gain new insights into how products create value for customers, en- abling better positioning of offerings and more effective communication of product value to customers (Porter & Heppelmann, 2014). According to the findings from the scientific literature on the impact of Industry 4.0 on firms’ export market ori- entation, it can be assumed that emerging technologies are an important part of consolidating export market orienta- tion. 2.3 Industry 4.0 and diversification strategy (on emerging markets) The fast technological and communication progress in re- cent decades has operatively brought distant markets much closer and further encouraged firms to expand internation- ally, even though their operations are getting more com- plex with stronger internationalization due to the diverse cultural, institutional, and competitive environment. According to Porter & Heppelmann (2015), implemen- tation of some Industry 4.0 technologies may have strong impacts on the firms themselves and even across their boundaries. Although the literature highlighted (Strange & Zuc- chella; 2017; Rehnberg & Ponte, 2017) the importance of 230 Organizacija, Volume 53 Issue 3, August 2020Research Papers Industry 4.0 technologies in connection with developing international activities, Chiarvesio & Romanello (2018) didn’t confirm a direct relationship between Industry 4.0 and internationalization or any underlying impact in terms of internationalization. On the other hand, different authors have speculated on how some new technologies may impact cross-border business. For example, 3D printing may alter the way pro- duction is organized across time and space – with impor- tant redistributive effects on geography and size of pro- duction activities (Rehnberg & Ponte, 2018), while the digitalization that includes internet and mobile technolo- gies with high-speed connectivity has helped bring about a change to established (export) business models (Roblek et al., 2016). In their recent contribution, Strange & Zuc- chella (2017) discuss the potential implications of big data for international business. They determine that firms will be able to monitor emerging trends and opportunities in overseas markets without the need to make substantial re- source commitments in local marketing affiliates, and that they will be able to more effectively optimize their supply, production, and distribution activities around the world. The availability of good-quality big data will enable firms to analyze and operationalize them and realize the potential benefits (Strange & Zucchella, 2017), which is particularly important in the case of firms that have the am- bition to expand their business activities to international markets, especially fast growing, distant ones, which offer great business opportunities but represent a different busi- ness environment and weakly known culture and customer preferences. It is evident that the young growing population with potential consumer power is an important driver for inter- national business experts that want to pursue opportunities in the rising Asian and other emerging markets. Despite the fact that the world has changed dramatically as a result of the pandemic, the advanced economy group is forecast to grow at 4.5 percent in 2021, while growth for the emerg- ing market and developing economy group is forecast at 6.6 percent in 2021 (IMF, 2020) – a great starting point to take advantage of the fourth industrial revolution, which offers an option of real-time international connectivity, product coordination, and customization of production without a time lag. 2.4 Industry 4.0 and export performance Export performance is one of the most studied topics of international operations and the central construct in export marketing research (Cavusgil & Zou, 1994; Leonidou, Katsikas & Samiee, 2002). However, little is known about how firms see the potential contribution of Industry 4.0 related technologies for export performance. Prior studies docu¬mented that new technologies, more efficient production techniques, and new products and processes resulting from technological innovation help exporting firms to respond to technological and en- vironmental changes in highly competitive global markets (Kafouros et al., 2008; Zahra & Covin, 1995), whereby the research of Azar & Ciabuschi (2017) indicates that or- ganizational innovation enhances export performance by sustaining technological innovation. To achieve a competitive advantage, a company must be able to differentiate itself and thus command a price premium, operate at a lower cost than its rivals, or both. This allows for superior profitability and growth relative to the industry average (Porter & Heppelmann, 2014). Azar & Ciabuschi (2017, 333) are convinced that adopting inno- vations is vital to ensuring adaptive behavior by exporting firms. Industry 4.0 is considered a new industrial stage in which vertical and horizontal manufacturing process in- tegration and product connectivity can help companies to achieve higher industrial performance (Dalenogare et al., 2018). According to Haseeb et al. (2019) elements of In- dustry 4.0 such as big data, Internet of Things, and smart factory have a positive role in promoting information technology (IT) implementation, which contributes to sus- tainable firm performance. Adopting a higher number of smaller technological innovations enables exporting firms to better adjust to the new foreign environment and en- hance their performance rather than focusing exclusively on radical innovations (Azar & Ciabuschi, 2017, 333). 3 Conceptual Model and Hypotheses Export market oriented firms operate on the basis of ob- taining information that enables better understanding of consumers in foreign markets (Narver & Slater, 1990), therefore we assume that the firms employing the new set of technologies, such as, in particular, Industrial IoT (Por- ter & Heppelman, 2014; Strange & Zucchella; 2017) and Big Data, which enable management of large amounts of data (Manyika et al., 2015; Strange & Zucchella; 2017), will be more successful in developing export strategies. We can assume that the Industry 4.0 digital business en- vironment promotes planning and making strategic export decisions on the basis of data on (potential) foreign market consumers, therefore we propose the first hypothesis: Hypothesis 1: Industry 4.0 implementation positively impacts the export market orientation of firms. We believe that in order to develop an appropriate strategy for the firm’s market diversification to distant, fast developing markets, the ability of international network- ing in real time, adjusting production without delay, and coordinating products are of critical importance. These 231 Organizacija, Volume 53 Issue 3, August 2020Research Papers are the advantages brought about by the fourth industrial revolution (Müller et al., 2018a). The adoption of some Industry 4.0 technologies may cause (1) global value chain reconfiguration (Rehnberg & Ponte, 2017), for example reverse the trends towards global specialization of pro- duction systems into elements that may be geographically dispersed and closer to the end users (Laplume et al., 2016, 595), or (2) optimization of firms’ supply, production, and distribution activities around the world (Strange & Zuc- chella; 2017), which is also reflected in the ambitions in formulating the firm’s international market expansion, especially to distant, fast developing foreign markets that offer numerous business opportunities. This is grounds for our second hypothesis. Hypothesis 2: Industry 4.0 implementation positively impacts the strategy of diversification to the dynamic mar- kets of fast developing countries. Researches argue that adopting innovations for the de- velopment of a foreign market is beneficial to export per- formance (Azar & Ciabuschi, 2017; Büchi et al., 2020). International competitiveness of firms is increasingly de- pendent on their competitive potential, therefore based on the results of previous research (Kafouros et al., 2008; Azar & Ciabuschi, 2017), we believe that export firms will only be sufficiently responsive and competitive with regard to the environmental and technological challenges posed by the increasingly fierce competition in terms of mar- ket globalisation by adopting new technologies, effective production techniques, and new products and processes. From an IB perspective, we may expect that Industry 4.0 technology implementation influences the firms’ ability to compete in national and regional foreign markets as well as cross-border optimisation of business processes and ac- tivities in the broader geographical area. In reference to this, we put forward the following hypothesis: Hypothesis 3: Industry 4.0 positively impacts the ex- port performance of firms. Further on, we are introducing the conceptual frame- work, based on theoretical perspective and developed hy- potheses (see Figure 1). Figure 1: Conceptual model and hypotheses 232 Organizacija, Volume 53 Issue 3, August 2020Research Papers kets of fast developing countries – Hypothesis H2 To measure the construct Strategy of diversification to the dynamic markets of fast developing countries, we creat- ed a new questionnaire based on the long-term marketing potentials of fast developing markets (PwC, 2017; Lins & Servaes, 2002), the uncertainty of the business envi- ronment (Jurše, 2017), demographics (OECD, 2019), the capacities of the firm, and the skill set of the personnel (Sakarya et al., 2007; Jurše, 2017), due to the specific na- ture of the empirical study (non-traditional markets, young population, rising new purchasing power). The respond- ents evaluated individual statements based on the 7-point Likert scale. c) Export performance – Hypothesis H3 The studying of export performance was focused on the factors that significantly influence the export performance of firms, i.e. their sales on foreign markets, export market share, entry into foreign markets, and the average annual sales growth in comparison to the average annual growth of their industry. The questionnaire was designed based on the measurement instrument developed by Cadogan et al. (2002). All four items were measured on the 7-point scale, with the first three items focused on measuring satisfaction (1 – very unsatisfied, 7 – very satisfied), and average an- nual sales growth focused on evaluating the achieved level (1 – very bad, 7 – very good). 4.2 Applied methodology In order to test hypotheses H1, H2, and H3, the multidi- mensional dependent variables (export market orientation, strategy of market diversification to the dynamic markets of fast developing countries, and export performance) and the explanatory variable (Industry 4.0 implementation) were designed by means of factor analysis, whose applica- bility was tested beforehand by means of the Bartlett’s test of sphericity and the Kaiser-Meyer-Olkin (KMO) index (Kaiser, 1974), which has to be above 0.5. The shared var- iance of an individual variable explained with all the fac- tors together was verified by means of communalities. If an individual variable did not reach the prescribed value of 0.4, it was removed from the analysis. In the further course of the factor analysis, we evaluated the dimensionality, va- lidity, and reliability of the constructs. When determining a smaller number of factors, we used the rule of the own value, which has to be more than 1 for individual factors, as well as the rule of the entire explained variance, with the stipulated value of more than 60%. The convergent validi- ty of a construct was verified with the factor loading apply- ing to the relevant factor. Loading values equal to or higher than 0.6 have confirmed the interconnection between vari- ables measuring the same construct. The construct reliabil- ity or the consistency of individual factors was determined with the Cronbach Alfa Coefficient (Cronbach, 1951), with 4 Study methodology and sample 4.1 Questionnaire design In the first phase of the empirical study, we focused on designing relevant and reliable measurement scales by means of which we tried to study individual constructs as precisely as possible. Based on scientific literature, we searched for suitable measurement scales. If none were available, we designed them in accordance with the fun- damental definitions of the constructs and drafted individ- ual question banks. Questionnaire items are shown in the Appendix. 4.1.1 Explanatory variable construct For the Industry 4.0 implementation explanatory variable construct in hypotheses H1, H2, and H3, we designed a new questionnaire comprised of items linked to the digi- talization of operations (Herakovič, 2016; Kagerman et al,. 2013; Dais & Bosch 2014), creation of new export strate- gies and models, a fast information flow, and a facilitated overcoming of temporal as well as geographic obstacles (Kagerman et al., 2013; Ganzarain & Errasti, 2016). The construct was measured on the seven-point Likert scale. The questionnaire design takes into consideration impor- tant fields, such as the digitalization of business processes and the competitiveness of the firm, the creation of new business (export) models, a facilitated flow of information, and new – digital marketing channels. 4.1.2 Dependent variable constructs a) Export orientation of firms – hypothesis H1 The Export orientation of Slovenian firms construct has been operationalized based on the shortened range of Narv- er and Slater statements, focusing on the market orienta- tion dimension descriptions (Narver & Slater, 1990). For the purposes of our study, the scale was additionally adapt- ed in accordance with Cadogan et al. (2009, 86). When designing the scale or subscales, our point of view was just like for the authors of the information on export mar- kets, the availability/dissemination of public information, and the responsiveness of the export firm or its employ- ees. The questionnaire has been significantly shortened and simplified, as we were mostly interested in definitions that were focused on export market orientation, and we avoided posing questions and statements on related topics, because we did not want to deter the representatives of the firms surveyed from participating in a research as a result of too many statements to choose from. The construct was measured on the seven-point Likert scale. b) Strategy of diversification to the dynamic mar 233 Organizacija, Volume 53 Issue 3, August 2020Research Papers the prescribed value of at least 0.60. The dependability of a dependent variable on an ex- planatory variable or the created factors was studied by means of the regression analysis, which was performed separately for each of the hypotheses under the consider- ation of the value of the (multiple) correlation coefficient used to explain the correlation strength and the direction between dependent and independent variables as well as the value of the (multiple) coefficient of determination based on which the relationship between the explained and total variance for a dependent variable was determined. It was verified with the F-test if it is sensible to use the regression model, which demonstrates the suitability of a model as a whole or the existence of a linear relationship. Additionally, the T-test and statistical significance confirm the existence of codependency among variables. We took the 5% significance rate into consideration. 4.3 Characteristic of the sample The survey questionnaire was distributed via e-mail at the beginning of April 2019 to 300 corporate addresses. We received 144 responses to the questionnaire by the end of April 2019. 63 firms were eliminated, because their re- sponses were incomplete. Therefore, the final sample for the data analysis featured 81 firms that met all the condi- tions (n=81). The email was addressed to the employees at one of the following positions in the firm: management board chairman or member, director of the firm, director or man- ager of the export department, director or manager of the marketing department, others (sales manager, chief digital information officer, financial analyst, head of controlling). The survey is based on the examination of 81 Sloveni- an export firms, with the majority active in the processing industry (see Table 1) in which the export of products and services represents a more than 20% share in the total rev- enue of the company on foreign markets. Table 1 shows that the majority, i.e. 37% of the survey respondents, were small firms. The director function was the most common among survey respondents (43.2%). 14.8% of respondents declared themselves the director/manager of the export de- partment, with the same share also attributed to other po- sitions, such as marketing manager, controlling manager, sales manager, and other similar positions. The majority of firms participating in the study (Table 1) were processing firms (34.6%) as well as information and communication firms (17.3%). A striking 56.8% of the firms included in the study have been present on foreign markets for more than 11 years (Table 1). It is evident from the data analysis results in Table 2 that as many as 64.2% of the participating companies real- ize the biggest share of their revenues on foreign markets through the export of products. Table 2 shows that exports account for 21 to 40% of the entire revenue of 42% of or- ganizations participating in our study. The most important market category into which the largest export share (Table 2) of the respondent firms falls is developed markets, with a share of 88.9%. As little as 1.2% of the firms participat- ing in the study stated the independent markets category (e.g. Saudi Arabia – defined as a developing market, Bot- swana – defined as a frontier market). Size of the firm fk f%k Micro enterprises (1-10 employees) 16 19.7 Small firms (11-50 employees) 30 37.0 Mid-sized firms (51-250 employees) 21 25.9 Large firms (251 + employees) 14 17.3 Total 81 100.0 Position fk f%k Chairman/member of the management board 10 12.3 Director of the firm 35 43.2 Director/manager of the export department 12 14.8 Director/manager of the marketing department 10 12.3 Does not wish to respond 2 2.5 Other 12 14.8 Total 81 100.0 Table 1: Profile of surveyed firms and respondents 234 Organizacija, Volume 53 Issue 3, August 2020Research Papers Activity of the firm fk f%k A – Agriculture and hunting, forestry, fisheries 3 3.7 C – Processing 28 34.6 F – Construction 4 4.9 G – Sale, maintenance in repair of motor vehicles 7 8.6 H – Transport and storage 4 4.9 J – Information technology and communication 14 17.3 F – Finance and insurance 2 2.5 L – Real estate 3 3.7 N – Other various business activities 16 19.8 Total 81 100.0 Presence on foreign markets fk f%k Less than 1 year 2 2.5 From 1 to 5 years 17 21.0 From 6 to 10 years 16 19.7 11 years or more 46 56.8 Total 81 100.0 Table 1: Profile of surveyed firms and respondents (continues) Share of export in the total revenue of the firm fk f%k Between 21% and 40% 34 42.0 Between 41% and 60% 18 22.2 Between 61% and 80% 8 9.9 More than 81% 21 25.9 Total 81 100.0 Strategic form of export internationalization representing the biggest export share for the company fk f%k Product export 52 64.2 Contract-based forms 20 24.7 Direct investments 9 11.1 Total 81 100.0 Most important market category according to the Global Market Index representing the biggest export share for the company fk f%k Developed markets 72 88.9 Developing markets 8 9.9 Independent markets 1 1.2 Total 81 100.0 Table 2: Export share in the entire revenue of the firm, strategic form of export internationalization, and the most important market category according to the Global Market Index. 235 Organizacija, Volume 53 Issue 3, August 2020Research Papers 5 Results 5.1 Factor analysis results Based on the factor analysis, we established that the Indus- try 4.0 implementation construct is two-dimensional (Ta- ble 3), i.e. comprised of two subconstructs – digitalization of business processes and new export models, products, and markets. The two factors explain 81.94% of the total variance. Since the communality value was insufficient, we disqualified variable II4_3 in advance (a fast informa- tion and data flow makes it easier to overcome temporal and geographic obstacles) and repeated the factor analysis with the disqualified variable. The construct is convergent- ly valid, since the rotated factor loadings for individual factors exceed 0.6. It is also reliable, which is evidenced from the Cronbach Alfa Coefficient that equals 0.781 for the construct. The factor analysis results for the dependent varia- ble Export orientation of Slovenian firms (Table 4) have shown that the construct is multidimensional. In accord- ance with the fundamental variables, we named the first factor or subconstruct Inter-functional connectivity, the second Consumer focus, and the third Focus on the infor- mation and competition on foreign markets. These three factors explain 96.18% of the variance. The rotated fac- tor matrix showed higher-than-prescribed rotated factor loadings for individual subconstructs also in this studied construct, therefore the entire construct is convergently valid. Suitable Cronbach Alfa Coefficient values confirm the reliability of the scale. The rotated matrix for the Construct Diversification Strategy into the dynamic markets of emerging countries (Table 5) pointed us towards disqualifying two factors or subconstructs – Diversification to fast developing markets and Operational risks, which explain 89.48% of the entire variance. Due to an insufficient communality value, we disqualified fundamental variable DSDMEM_5 (We have suitably trained marketing experts for our entry on foreign markets) in advance and repeated the factor analysis with the disqualified variable. The Cronbach Alfa Coefficient values confirmed the reliability or consistency of both fac- tors (subconstructs) as well as the entire construct. Construct Export performance of firms is unidimen- sional (Table 6). After fundamental variable EP_1 (With our firm’s sale to foreign markets in the last 3 years, we are: 1 – very unsatisfied, 7 – very satisfied) was disquali- fied for not having met the prescribed communality value of 0.4 and the factor analysis was repeated, the factor load- ings are above 0.6, which confirms the convergent validity of the construct. One single factor explains 76.82% of the entire variance. The Cronbach Alfa Coefficient value is 0.842, making the scale reliable. Factor loadings Statement Communalities 1 2 II4.0_1 Digitalization of business processes is crucial for the competitiveness of the firm. 0.735 0.857 0.008 II4.0_2 Industry 4.0 encourages executives to design new ex- port strategies and models. 0.869 0.180 0.915 II4.0_4 The implementation of digitalization is supervised by competent executives. 0.852 0.886 0.258 II4.0_5 The automation of manufacturing/business processes encourages us to create new products and/or expand to new markets. 0.881 0.102 0.933 II4.0_6 New marketing (digital) channels are used to in- crease export sales. 0.761 0.855 0.172 Kaiser-Meyer-Olkin measure: 0.663; Chi-Square: 190.200 Cumulative percentage of explained variance for the first factor: 54.73% Cumulative percentage of explained variance for the second factor: 27.21% Cronbach Alpha – all items (5): 0.781 Cronbach Alpha – factor 1: 0.850 Cronbach Alpha – factor 2: 0.858 Table 3: Results of Factor Analysis for the Construct Implementation of Industry 4.0 236 Organizacija, Volume 53 Issue 3, August 2020Research Papers Factor loadings Statement Communalities 1 2 3 EO_1 We closely monitor the information on trends (e.g. pro- visions, technological development, politics, economy on export markets). 0.979 0.078 -0.032 0.986 EO_2 We continuously plan and monitor the firm’s activities con- nected to meeting consumers’ needs on foreign markets. 0.980 -0.027 0.989 -0.029 EO_3 Executives in all positions in the firm are constantly in contact with current and prospective consumers on foreign markets. 0.971 0.014 0.985 -0.022 EO_4 Consumer satisfaction on foreign markets is often mea- sured and carefully planned in advance. 0.942 -0.019 0.968 -0.068 EO_5 Employees in the marketing department, along with em- ployees from other departments in the firm, study future requirements and needs of consumers on foreign markets. 0.966 0.982 0.018 0.038 EO_6 Information on consumers on foreign markets is available to everyone in the firm. 0.906 0.942 -0.071 0.119 EO_7 Executives frequently discuss advantages and strategies of competitors on foreign markets. 0.987 0.992 -0.009 0.050 EO_8 All departments in the firm take part in the export opera- tions. 0.981 0.989 0.020 0.062 EO_9 We respond quickly to marketing and other competitive ac- tivities of our competitors on foreign markets. 0.978 0.096 -0.066 0.982 EO_10 The export personnel are continuously in contact with the manufacturing department. 0.929 0.963 -0.008 0.050 Kaiser-Meyer-Olkin measure: 0.801; Chi-Square: 1463.067 Cumulative percentage of explained variance for factor 1: 48.43% Cumulative percentage of explained variance for factor 2: 29.28 Cumulative percentage of explained variance for factor 3: 18.47% Cronbach Alpha – all items (10): 0.814 Cronbach Alpha – factor 1: 0.987 Cronbach Alpha – factor 2: 0.981 Cronbach Alpha – factor 3: 0.978 Table 4: Results of Factor Analysis for the Construct Export Orientation of firms 5.2 Hypotheses testing results In the further course of the empirical study, the hypotheses were verified by means of regression analysis. The results of individual models are shown in Table 7. Testing hypothesis H1 The results of the first regression model (Table 7) stud- ying the impact of Industry 4.0 implementation on the ex- port orientation of Slovenian firms show that the subcon- struct digitalization of business processes (standardized regression coefficient = 0.267; p<0.017) has a statistically significant impact on the export orientation of Slovenian firms, while there is no direct connection between new ex- port models, products, and markets as well as the export orientation of Slovenian firms, since the connection is not statistically significant. The R2 coefficient equals 0.076 and is statistically significant (p<0.050), which means that 7.6% of the variance of the export orientation construct can be explained through the variance of both variables together. The Durbin-Watson coefficient close to the pre- scribed value of 2 shows that there is no autocorrelation in the residuals. Firms that have digitalized their operations on all operational levels have shown a stronger export ori- 237 Organizacija, Volume 53 Issue 3, August 2020Research Papers Factor loadings Statement Communalities 1 2 DSDMEM_1 For our industry, fast developing markets represent long-term marketing potentials. 0.875 0.935 -0.004 DSDMEM_2 The uncertainty of the business environment is one of the key factors when deciding on entering the markets of fast develop- ing economies. 0.958 0.094 0.975 DSDMEM_3 The dynamic BRIC markets are crucial for the growth of our firm. 0.845 0.908 0.144 DSDMEM_4 We consider China and India to be among economically the most dynamic and attractive developing markets. 0.921 0.957 0.073 DSDMEM_6 The strategy of diversification to developing markets has been assessed as risky. 0.882 0.034 0.939 DSDMEM_7 We are interested in entering Asian developing markets with a young geographic composition and a growing purchasing pow- er. 0.868 0.930 0.065 DSDMEM_8 We only opt for non-ownership forms when entering fast devel- oping high-risk markets. 0.972 0.088 0.982 DSDMEM_9 The marketing activity diversification strategy on developing markets is designed in accordance with the firm’s capacities. 0.956 0.089 0.974 DSDMEM_10 The firm’s international competitiveness is boosted with out- ward internationalization to non-traditional, fast developing markets. 0.776 0.877 0.085 Kaiser-Meyer-Olkin measure: 0.795; Chi-Square: 1072.610 Cumulative percentage of explained variance for factor 1: 52.23% Cumulative percentage of explained variance for factor 2: 37.25% Cronbach Alpha – all items (9): 0.882 Cronbach Alpha – factor 1: 0.956 Cronbach Alpha – factor 2: 0.979 Table 5: Results of Factor Analysis for the Construct Diversification Strategy into the dynamic markets of emerging countries entation. The new export models, products, and markets construct has a negative and statistically insignificant im- pact on the export orientation. The strength of the linear connection between the dependent and the independent variables is weak, since the R value in our case is only 0.274. Hypothesis H1 that Industry 4.0 implementation positively affects the export market orientation of Slove- nian firms can only be partially confirmed. Testing hypothesis H2 Model 2 (Table 7) was used to establish the effect of Industry 4.0 implementation on the strategy of diversifica- tion to the dynamic markets of fast developing countries. It can be concluded that the subconstruct of the digitali- zation of operations (standardized regression coefficient = 0.267; p<0.016) positively affects the expansion of firms to developing markets. It has been established that the link between new export models, products, and markets and the expansion strategy to fast developing markets is not statistically significant. The adjusted coefficient of deter- mination R2 equals 0.066 and is statistically significant (p<0.026), which means that 6.6% of the variance of the diversification to the dynamic markets of fast developing countries strategy construct can be explained through the variance of both predictor variables. The Durbin-Watson coefficient is 1.787, which excludes potential autocorre- lation problems. Hypothesis H2 stating that Industry 4.0 implementation positively impacts the strategy of diversi- fication to the dynamic markets of fast developing coun- tries can thus only be partially confirmed. 238 Organizacija, Volume 53 Issue 3, August 2020Research Papers Testing hypothesis H3 The results of the third regression model (Table 7) con- firm that the subconstructs of business process digitaliza- tion (standardized regression coefficient = 0.855; p<0.001) and new export models, products, and markets (standard- ized regression coefficient = 0.172; p<0.003) have a sta- tistically significant positive impact on the export perfor- mance of Slovenian firms. The effect of the digitalization of operations subconstruct on export performance is very strong, whereas the subconstruct of new export models, products, and markets only has a weak impact on the export performance of Slovenian firms. The adjusted coefficient of determination R2 equals 0.754 and is statistically signif- icant (p<0.026), which means that 75.4% of the variance of the export performance of Slovenian firms construct can be explained through the variance of both predictor variables. The Durbin-Watson coefficient equals 1.580, so there is no danger of residual autocorrelation. It has been established that firms with digitalized operations as well as systematically designed new export models, products, and selected markets achieve better export performance compared to firms that have not (completely) digitalized their operations or are still insisting on traditional busi- ness models and product ranges as well as selected mar- kets. Slovenian export-oriented firms will have to urgently follow the trends of digital transformation in the future, also when it comes to faster collection of important data and information from remote foreign markets. With time- ly recognition and fast reactions to customer requirements as well as thorough monitoring of the competition on for- eign markets, firms boost their own competitiveness and increase their possibilities for maintaining/improving ex- port performance. Hypothesis H3 stating that Industry 4.0 implementation positively impacts the export performance of Slovenian firms has therefore been confirmed in full. 6 Discussion The aims of this study are to fill the voids in the ex- tant literature by providing empirical confirmation of the impacts of Industry 4.0 implementation on export market orientation, market diversification to emerging markets, and export performance. This paper responds to calls for empirical research on Industry 4.0 technologies’ impact on the international configuration and performance of firms (Chiarvesio & Romanello, 2018). At a general level, the results of this study show that implementation of Industry 4.0 is beneficial to export activities of firms. First, this study found that firms that digitize business processes (standardized regression coef- ficient = 0.267; p<0.017) manage large volumes of data, including extensive information on customers and compet- itors in foreign markets, providing them with a better basis for achieving greater export market orientation, which is consistent with Strange & Zucchella’s (2017, 179) claims that firms, supported by BDA, will be able to monitor emerging trends and opportunities in overseas markets which exert big influence on the implementation of market orientation in the export context. Second, our study seems to lead us to consider that subconstruct Digitalization of business processes (stand- ardized regression coefficient = 0.267; p<0.016) has a strong impact on firms’ international market expansion into emerging markets. Our finding is consistent with ex- pectations and with lessons drawn from the literature (Azar & Ciabuschi, 2017, Büchi et al., 2020), since we find that firms with certain ownership-specific advantages, such as innovative products, technological know-how, and market price leadership in competitive products, which are the re- sult of digital transformation, often give firms a competi- tive edge in foreign markets. We also establish that due to Factor loadings Statement Communalities 1 EP_2 Satisfaction (1 – very unsatisfied, 7 – very satisfied) with the export market share of the firm in the last 3 years. 0.902 0.950 EP_3 Satisfaction (1 – very unsatisfied, 7 – very satisfied) with the firm’s entry onto foreign markets in the last 3 years. 0.698 0.835 EP_4 Achieved (1 – very low, 7 – very high) average annu- al growth of the firm compared to the firm’s industry average growth. 0.704 0.839 Kaiser-Meyer-Olkin measure: 0.588; Chi-Square: 128.089 Cumulative percentage of explained variance for factor 1: 76.82% Cronbach Alpha – all items (3): 0.842 Table 6: Results of Factor Analysis for the Construct Export performance of firms 239 Organizacija, Volume 53 Issue 3, August 2020Research Papers Unstandardized coefficients Standardized coefficients Dependent variable Independent variable B Std. error Beta t Sig. VIF MODEL 1 Export orientation of Slovenian firms Implementation of Industry 4.0 – Factor 1: Digitalization of business processes 1.871 0.764 0.267 2.449 0.017 1 Implementation of Industry 4.0 – Factor 2: New export models, products and markets 0.428 0.764 0,061 0.560 0.577 1 Model 1: R = 0.274; R- square = 0.076; Adjusted R-square = 0.051; p<0.048; Durbin-Watson = 2.104 MODEL 2 Diversification strategy into dy- namic markets of emerging countries Implementation of Industry 4.0 – Factor 1: Digitalization of business processes 2.181 0.884 0.267 2.467 0.016 1 Implementation of Industry 4.0 – Factor 2: New export models, products and markets 1.113 0.884 0.136 1.259 0.212 1 Model 2: R = 0.299; R- square = 0.090; Adjusted R-square = 0.066; p<0.026; Durbin-Watson = 1.787 MODEL 3 Export performance of Slovenian firms Implementation of Industry 4.0 – Factor 1: Digitalization of business processes 0.781 0.051 0.855 15.432 0.001 1 Implementation of Industry 4.0 – Factor 2: New export models, products and markets 0.157 0.051 0.172 3.111 0.003 1 Model 3: R = 0.72; R- square = 0.761; Adjusted R-square = 0.754; p<0.000; Durbin-Watson = 1.580 Table 7: Regression Analysis Results the possibility of international networking in real time pro- vided by digitalisation of business processes, the firms are able to compete more easily also in distant, commercially attractive, fast developing markets. This finding is in line with (a) McKinsey’s (2015) claims that firms need to drive the digital transformation of their business to succeed in the new environment and (b) the assertion that adoption of digital technologies can have significant implications for firms’ international operations (Strange & Zucchella, 2017). Müller and Voigt (2018b, 659) claim that Industri- al Internet of Things (IIoT) confronts industrial manufac- tures with economic, ecological, as well as social benefits and challenges. In order to make sustainability potentials in firms accessible, concerns towards increasing compe- tition, future viability as well as losing customer orienta- tion should be addressed. Firms hereby need to find new or modified business models that address these concerns (Müller and Voigt, 2018b, 666). While prior research argued that firms can benefit from Industry 4.0 in the attempt to innovate their business models through their digital transformation (Roblek et al., 2016; Frank et al., 2019), we didn’t confirm an effect of subconstruct New export models, products, and markets in connection to Industry 4.0 technologies on developing cross-border activities, in other words on expansion into emerging markets, therefore this aspect is worth inves- tigating in more detail in further research. The reason, among other things, might be that Slovenian firms in gen- eral are less digitally mature than other firms worldwide (Erjavec et al., 2018, 109). Third, our research, in line with expectations, reveals that firms that introduce the emerging technologies of Industry 4.0 into their production or business processes achieve, according to the results of our analysis (standard- ized regression coefficient = 0.855; p<0.001) better export performance. As emerges from the extant literature, the different technologies that are included in the umbrella term Industry 4.0 (IoT, Big data and Analytics, Robotics, Additive Manufacturing) can have very diverse impacts on firms’ export performance (Azar & Ciabuschi, 2017; Bettiol et al., 2020). Dalenogare et al. (2018) determine that some of these technologies are positively associated to 240 Organizacija, Volume 53 Issue 3, August 2020Research Papers the expected benefits, while others are still at a very early stage of implementation and thus are without clear expect- ed benefits. From this perspective, Industry 4.0 defines a new path for the competitiveness of the firms, especially in advanced countries, such as in Europe (WEF, 2018), that are nowadays particularly challenged by global com- petition and which might find in these technologies a new source of competitive advantage (Bettiol et al., 2020, 2). 7 Conclusions The present study highlights the importance and influence of Industry 4.0 technologies on the creation of export ac- tivities of firms. Contrary to Chiarvesio & Romanello’s (2018) claims, we confirmed a direct relationship between implemented emerging technologies and cross-border pro- cesses, which is in line with Gerbert et al.’s (2015) findings that Industry 4.0 includes a range of new digital industrial technologies based on Internet of Things, BDA, and 3D printing that will strongly influence firms’ international business activities. According to Bettiol et al. (2020), the necessity to face global competition is one of the most compelling reasons for investing in Industry 4.0 technologies. This study con- firmed this claim, as some of the emerging technologies (IoT, BDA) ensure much information on customers and competitors in foreign markets, which is of key impor- tance for developing relevant export strategies. In this study, based on the analysis of 81 Slovenian export firms with the majority active in the processing industry, we argued that firms can benefit from digital transformation in terms of expansion to foreign, more dis- tant markets, which is in line with Porter & Heppelman’s (2015) work that attributes strong impact on cross-border business operations to some Industry 4.0 technologies. The outcomes of this paper indicate that export busi- ness results are significantly related to effective perfor- mance of activities and actions that firms launch, direct, execute, and manage in their selected markets through their strategies, programmes, and operations (Jurše, 2017, 10) and are based on increased competitiveness through smart equipment, making use of information about high- wage locations, demographic changes, resources, energetic efficiency, and urban production (Heck & Rogers, 2014). In summary, the current study documents the positive link between implementation of Industry 4.0 and (a) ex- port market orientation, (b) exit internationalization into emerging markets, and (c) export performance. 7.1 Implications for managers Industry 4.0 is bringing many changes that represent nu- merous advantages or growth possibilities for firms, i.e. the possibility to expand to new, non-traditional markets, streamline products, adapt manufacturing without delays, and efficiently use resources and energy, in addition to causing firms to face new challenges. The findings of this study reveal that the business suc- cess of firms in international markets is significantly related to the managers’ commitment to exploiting the opportuni- ties and advantages provided to the firms by the emerging technologies, which is consistent with the finding of (a) Jurše (2017, 114) that in their efforts for cross-border mar- ket expansion, managers often come up against a series of restrictions resulting from various gaps in their own competitive potential and are reflected, inter alia, in insuf- ficiently perfected technological competencies of the firm, or (b) with the claim of Chiarvesio & Romanello (2018) that managers wishing to preserve competitiveness of their firms in the international arena invest in technological ad- vances. In the future, managers will ensure company perfor- mance mainly on the basis of good anticipation and for- mulation of customer demands as well as more efficient product distribution, which is inextricably linked to the implementation of digital technologies, such as BDA and IoT (Strange & Zucchella, 2017, 181). This study con- firmed this claim, as its results show that firms with digi- talized operations as well as systematically designed new export models, products, and selected markets achieve bet- ter export performance. The current study investigates whether and how the im- plementation of Industry 4.0 is related to the export activ- ity of firms and whether it influences decisions regarding export market orientation and diversifications to emerging markets. The findings of this study reveal that firms that in- vest in advanced technologies and realize digital transfor- mation are better prepared to compete internationally and achieve better export performance. The research findings may serve as an important guide for managers in the op- timal planning and management of export marketing and business activities. 7.2 Limitations and future avenues of research However, the study features several limitations. Every firm in the survey was represented by only one respond- ent, therefore the firm’s opinion could only be presented unilaterally. Another limitation is the focus on Slovenian firms. This limitation should be kept in mind when gener- alizing the results and transferring them to different (more advanced level of digitization) countries or even cultural contexts (different export business practices). The sample size (n=81), which is largely determined by the size of the country or, more precisely, the number of export firms, willing to correctly participate in the survey, prevented a more thorough comparison between indus- tries. The study sample featured few firms that are active in 241 Organizacija, Volume 53 Issue 3, August 2020Research Papers non-manufacturing industries. The interpretation of find- ings reflects the general state of firms in all size brackets – from micro to large organizations. We suggest that in the future the authors include a higher number of respondents in an individual firm, fo- cus on the industry of an individual company, and also collect data for samples of countries that represent for- eign markets in order to be able to make an international comparison. Moreover, future studies could investigate for instance, what kind of export (direct exporting, indirect exporting) and what kind of products (high-tech products, pharmaceutical products, vehicles) are supported by In- dustry 4.0. Therefore, we claim studies in the international management fields that carry on an in-depth analysis of export products, types of export business, potential ex- port markets and activities in relation to the Industry 4.0 emerging technologies. This approach could clarify which products and types of exports, supported by Industry 4.0, could be implemented in order to increase international competitiveness and export performance. Literature Alcácer, J., Cantwell, J. & Piscitello, L. (2016). In- ternationalization in the information age: A new era for places, firms, and international busine- ss networks? Journal of International Business Studies, 47, 499–512, https://doi.org/10.1057/ jibs.2016.22 Azar, G. & Ciabuschi, F. (2017). Organizational in- novation, technological innovation, and export performance: The effects of innovation radicalness and extensiveness. International Business Review, 26 (2), 324-336, https://doi.org/10.1016/j.ibus- rev.2016.09.002 Bettiol, M., Capestro, M., de Marchi, V., & Di Maria, E. (2020). Industry 4.0 investments in manufacturing firms and internationalization. Marco Fanno Working Papers, 245. BMBF – Bundesministerium für Bildung und Forschung. (2017). Industrie 4.0. Inovationen für die Produk- tion von morgen. https://www.bmbf.de/pub/Indus- trie_4.0.pdf Accessed 13 January 2019. Büchi, M., Cugno, M., Castagnoli, R. (2020). Smart factory performance and Industry 4.0. Technological Forecasting and Social Change, 150, https://doi. org/10.1016/j.techfore.2019.119790 Cadogan, J. W., Diamantopoulos, A., & Siguaw, J. A. (2002). Export Market-Oriented Activities: Their Antecedents and Performance Consequences. Journal of International Business Studies, 33 (3), 615-626, https://doi.org/10.1057/palgrave.jibs.8491036 Cadogan, J. W., Kuivalainen, O., & Sundqvist, S. (2009). Export Market-Oriented Behaviour and Export Per- formance: Quadratic and Moderating Effects Under Differing Degrees of Market Dynamism and Interna- tionalization. Journal of International Marketing, 17 (4), 71-89, https://doi.org/10.1509/jimk.17.4.71 Cavusgil, S. T., & Zou, S. (1994). Marketing stra- tegy-performance relationship: An investigation of the empirical link in export market ventures. Journal of Marketing, 58, 1–21, https://doi.org/10.2307/1252247 Chiarvesio, M., & Romanello, R. (2018). Industry 4.0 Technologies and Internationalization: Insights from Italian Companies, van Tulder, R., Verbeke, A. and Piscitello, L. (Ed.) International Business in the Information and Digital Age. Progress in Inter- national Business Research, 13, 357-378, https://doi. org/10.1108/S1745-886220180000013015 CIA – Central Intelligence Agency. (2020). The World Factbook. Economy – overview. https://www.cia.gov/ library/publications/the-world-factbook/geos/ee.html. Accessed 20 April 2020. Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests. Psychometrika, 16 (3), 297-334, https://doi.org/10.1007/BF02310555 Dais, S., & Bosch, R. (2014). Industrie 4.0 – Anstoß, Vision, Vorgehen. In Bauernhansl, T., ten Hompel, M., & Vogel-Heuser, B. (Eds.), Industrie 4.0 in Produktion. Automatisierung und Logistik, 625–634. Wiesbaden: Springer Vieweg. Dalenogare, L. S., Benitez, G.B., Ayala, N. F., & Frank, A. G. (2018). The expected contribution of Industry 4.0 technologies for industrial performance. Inter- national Journal of Production Economics, 204, 383–394, https://doi.org/10.1016/j.ijpe.2018.08.019 Day, G. S., & Wensley, R. (1988). Assessing Advantage: A Framework for Diagnosing Competitive Superio- rity. Journal of Marketing, 52 (2), 1-20, https://doi. org/10.2307/1251261 Erjavec, J., Manfreda, A., Jaklič, J., & Indihar Štemberger, M. (2018). Stanje in trendi digitalne pre- obrazbe v Sloveniji. [State and trends of digital trans- formation in Slovenia]. Economic and Business Re- view, 20, 109-128, https://doi.org/10.15458/85451.56 Frank, A. G., Mendes, G. H. S., Ayala, N. F., & Ghezzi, A. (2019). Servitization and Industry 4.0 convergen- ce in the digital transformation of product firms: A business model innovation perspective. Technological Forecasting & Social Change, 141, 341-351, https:// doi.org/10.1016/j.techfore.2019.01.014 Ganzarain, J., & Errasti, N. (2016). Three Stage Maturity Model in SME’s towards Industry 4.0. Journal of Industrial Engineering and Management, 9 (5), 1119- 1128, http://dx.doi.org/10.3926/jiem.2073 Gerbert, P., Lorenz, M., Rüßmann, M., Waldner, M., Jus- tus, J., Engel, P., & Harnisch, M. (2015). Industry 4.0: The Future of productivity and growth in manufactu- ring industries. Boston Consulting Group, 1-9. https:// image-src.bcg.com/Images/Industry_40_Future_of_ Productivity_April_2015_tcm9-61694.pdf. Accessed 10 May 2020. Grzybowska, K., & Łupicka, A. (2017). Key compe- tencies for Industry 4.0. Economics & Management 242 Organizacija, Volume 53 Issue 3, August 2020Research Papers Innovations, 1 (1), 250-253, https://doi.org/10.26480/ icemi.01.2017.250.253 Hannibal, M., & Knight, G. (2018). Additive manufactu- ring and the global factory: Disruptive technologies and the location of international business. Internatio- nal Business Review, 27 (6): 1116–1127, https://doi. org/10.1016/j.ibusrev.2018.04.003 Haseeb, M., Hussain, H. I., Slusarczyk, B., & Jermsitti- parsert, K. (2019). Industry 4.0: A Solution towards Technology Challenges of Sustainable Business Performance. Social Sciences, 8(5), 154, https://doi. org/10.3390/socsci8050154 Heck, S., & Rogers, M. (2014). Are you ready for the resource revolution? McKinsey Quarterly, 2, 32-45. Herakovič, N. (2016). Nekateri tehnološki izzivi Industri- je 4.0. [Some technological challenges of Industry 4.0]. Ventil, 22 (1), 10-16. Horváth, D., & Szabó, R. Z. (2019). Driving forces and barriers of Industry 4.0: Do multinational and small and medium-sized companies have equal opportunities? Technological Forecasting & Social Change, 146, 119-132, https://doi.org/10.1016/j. techfore.2019.05.021 IMF – International Monetary Fund. (2020). World Economic Outlook. Chapter 1 – The great lock- down. https://www.imf.org/en/Publications/WEO/ Issues/2020/04/14/weo-april-2020. Accessed 3 May 2020. I-SCOOP. (2020). Industry 4.0: the fourth industrial rev- olution – guide to Industrie 4.0. https://www.i-scoop. eu/industry-4-0/. Accessed 12 July 2020. Jerman, A., Bertoncelj, A., Dominici, G., Pejić Bach, M., & Trnavčević, A. (2020). Conceptual Key Competen- cy Model for Smart Factories in Production Proces- ses. Organizacija, 53 (1), 68-79, https://doi:10.2478/ orga-2020-0005 Jurše, M. (2017). Mednarodne strateške in kapitalske po- vezave [International strategic and capital alliances]. Maribor: University of msribor, Faculty of Economics and Business. Kafouros, M. I., Buckley, P. J., Sharp, J. A., & Wang, C. Q. (2008). The role of internationalization in explain- ing innovation performance. Technovation, 28, 63–74, https://doi.org/10.1016/j.technovation.2007.07.009 Kagermann, H., Lukas, W. D., & Wahlster, W. (2011). In- dustrie 4.0: Mit dem Internet der Dinge auf dem Weg zur 4. industriellen Revolution. VDI Nachrichten, 13. Kagermann, H., Wahlster, W., & Helbig, J. (2013). Se- curing the future of German manufacturing industry. Recommendations for implementing the strategic ini- tiative INDUSTRIE 4.0. Final report of the Industrie 4.0 Working Group. https://www.acatech.de/wp-con- tent/uploads/2018/03/Final_report__Industrie_4.0_ac- cessible.pdf. Accessed 14 January 2019. Kaiser, H. F. (1974). An index of factorial simplicity. Psychometrika, 39 (1), 31-36, https://doi.org/10.1007/ BF02291575 Laplume, A. O., Petersen, B., & Pearce, J. M. (2016). Global value chains from a 3D printing. Journal of International Business Studies, 47, 595-609, https:// doi.org/10.1016/j.techfore.2019.01.014 Leonidou, L. C., Katsikeas, C. S., & Samiee, S. (2002). Marketing strategy determinants of export per- formance: A meta-analysis. Journal of Business Research, 55, 51–67, https://doi.org/10.1016/S0148- 2963(00)00133-8 Lins, V. K., & Servaes, H. (2002). Is Corporate Di- versification Beneficial in Emerging Markets? Financial Management, 31 (2), 5-31, http://dx.doi. org/10.2307/3666220 Manyika, J., Chui, M., Bisson, P., Woetzel, J., Dobbs, R., Bughin, J., et al. (2015). The Internet of Things: Mapping the value beyond the hype. McKinsey Glo- bal Institute, (June) 144. McKinsey & Company. (2015). Industry 4.0: How to navigate digitalization of the manufacturing sector. https://www.mckinsey.com/business-functions/opera- tions/our-insights/industry-four-point-o-how-to-nav- igae-the-digitization-of-the-manufacturing-sector. Accessed 2 May 2020. Müller, J. M., & Voigt, K.-I. (2018b). Sustainable Industrial Value Creation in SMEs: A Comparison between Industry 4.0 and Made in China 2025. International Journal of Precision Engineering and Manufacturing-green Technology, 5, 659-670, https:// doi.org/10.1007/s40684-018-0056-z Müller, J. M., Buliga, O., & Voigt, K.-I. (2018a), Fortune favors the prepared: How SMEs approach business model innovations in Industry 4.0? Technological Forecasting and Social Change, 132, 2-17, https://doi. org/10.1016/j.techfore.2017.12.019 Müller, J. M., Kiel, D., & Voigt, K.-I. (2018c). What Drives the Implementation of Industry 4.0? The Role of Opportunities and Challenges in the Context of Sustainability. Sustainability, 10, 247, https://doi. org/10.3390/su10010247 Müller, J. M., Buliga, O., & Voigt, K-I. (2020). The role of absorptive capacity and innovation strategy in the design of industry 4.0 business Models-A compari- son between SMEs and large enterprises. European Management Journal, https://doi.org/10.1016/j. emj.2020.01.002 Narver, J. C., & Slater, S. F. (1990). The Effect of a Market Orientation on Business Profitability. Journal of Marketing, 54 (4), 20-35, http://dx.doi. org/10.2307/1251757 OECD – Organization for Economic Co-operation and Development. (2019). Young population. https://data. oecd.org/pop/young-population.htm. Accessed 7 May 2019. Porter, M. E., & Heppelmann, J. E. (2014). How Smart, Connected Products Are Transforming Competition. Harvard Business Review, 92 (11), 64-88. Porter, M. E., & Heppelmann, J. E. (2015). How Smart, 243 Organizacija, Volume 53 Issue 3, August 2020Research Papers Connected Products Are Transforming Companies. Harvard Business Review, 93, 1-37. PwC – PricewaterhouseCoopers. (2017). The Long View. How will the global economic order change by 2050? https://www.pwc.com/gx/en/world-2050/assets/ pwc-world-in-2050-summary-report-feb-2017.pdf. Accessed 30 April 2020. Rehnberg, M., & Ponte, S. (2016). 3D printing and global value chains: How a new technology my restructure global production. GPN Working Paper Series. Sin- gapore: Global Production Networks Centre. Rehnberg, M., & Ponte, S. (2017). From Smiling to Smirking? 3D Printing, Upgrading and the Restruc- turing of Global Value Chains. Global Networks, 18 (1), 57–80, https://doi.org/10.1111/glob.12166 Rezk, R., Srai, J. S., Williamson, P. J. (2016).The impact of product attributes and emerging technologies on firms’ international configuration. Journal of Inter- national Business Studies, 47, 610-618, https://doi. org/10.1057/jibs.2016.9 Roblek, V. Meško, M., & Krapež, A. (2016). A Complex View of Industry 4.0. SAGE Open, Aprile-June, 1-11, https://doi.org/10.1177/2158244016653987 Rodič, B. (2017). Industry 4.0 and the New Simulation Modelling Paradigm. Organizacija, 50 (3), 193-207, https://doi:10.1515/orga-2017-0017 Sakarya, S., Eckman, M., & Hyllegard, K. H. (2007). Market selection for international expansion. Interna- tional Marketing Review, 24 (2), 208-238, https://doi. org/10.1108/02651330710741820 Strange, R., & Zucchella, A. (2017). Industry 4.0, global value chains and international business. Mul- tinational Business Review, 25(3), 174-184, https:// doi.org/10.1108/MBR-05-2017-0028 TechTarget. (2020a). Industry 4.0. https://whatis.techtar- get.com/search/query?q=Industry+4.0. Accessed 12 July 2020. Veile, J. W., Kiel, D., Müller, J. M., & Voigt, K. I. (2019). Lessons learned from Industry 4.0 implementation in the German manufacturing industry. Journal of Manufacturing Technology Management, https://doi. org/10.1108/JMTM-08-2018-0270 Wang, S., Wan, J., Zhang, D., Li, D., & Zhang, C. (2016). Towards smart factory for industry 4.0: a self-organi- zed multi-agent system with big data based feedback and coordination. Computer Networks, 101, 158–168, https://doi.org/10.1016/j.comnet.2015.12.017 WEF – World Economic Forum. (2018). Readiness for the Future of Production Report 2018. http://www3. weforum.org/docs/FOP_Readiness_Report_2018.pdf. Accessed 2 May 2020. Zahra, S. A., & Covin, G. C. (1995). Contextual in- fluences on the corporate entrepreneurship-perfor- mance relationship: A longitudinal analysis. Journal of Business Venturing, 10 (1), 43-58, https://doi. org/10.1016/0883-9026(94)00004-E Alenka Naglič is a doctoral student at the Faculty of Economics and Business, University of Maribor. Her research interests are primarily focused on emerging markets and market diversification. She works as Marketing Specialist in the field of digitalization in the media industry. Polona Tominc is a full -time Professor in the Department of Quantitative Economic Analysis at the Faculty of Economics and Business, University of Maribor. Her research is focused on statistical methods in economics and business sciences, especially in the field of entrepreneurship, gender differences and behavioural differences between social groups in different fields of management. She has published over sixty original scientific papers, with several of them in the Scopus or WoS databases and has participated at several scientific conferences. Klavdij Logožar is an associate professor of international economy and business at University of Maribor, Faculty of Economics and Business. His research work is focused on logistics and supply chain management, international business and international strategic alliances. 244 Organizacija, Volume 53 Issue 3, August 2020Research Papers Vpliv industrije 4.0 na izvozno tržno naravnanost, tržno diverzifikacijo in izvozno uspešnost Ozadje in namen: Obstoječa literatura s področja koncepta industrije 4.0 ne vključuje bistvenih empiričnih prever- janj, če in kako implementacija industrije 4.0 vpliva na izvozno tržno naravnanost, tržno diverzifikacijo in izvozno uspešnost podjetij. Namen prispevka je oblikovati okvir, ki podjetjem, na osnovi poznavanja vpliva industrije 4.0 na izvozne aktivnosti podjetij, pomaga pri spodbujanju njihove izvozne uspešnosti. Metodologija: Analiza temelji na raziskavi 81 slovenskih izvoznih podjetij, ki so v večini dejavna v predelovalni in- dustriji, z več kot 20-odstotnim deležem izvoza izdelkov oziroma storitev v celotnih prihodkih podjetja. Za obdelavo zbranih podatkov smo uporabili faktorsko analizo in večkratno regresijo. Rezultati: Dobljeni rezultati analize razkrivajo, da se podjetja, ki vlagajo v napredne tehnologije in uresničujejo digi- talno preobrazbo, lažje soočajo z mednarodno konkurenco ter dosegajo boljše izvozne rezultate. Zaključek: Naša raziskava je pokazala pozitivno povezavo med implementacijo Industrije 4.0 in izvoznimi aktiv- nostmi podjetij ter potrdila, da izvajanje Industrije 4.0 vodi k številnim spremembam v miselnosti in delovanju slo- venskih podjetij ter se dejavno odraža tudi na njihovih izvoznih rezultatih. Ugotovitve raziskave lahko vodstvenim zaposlenim pomagajo pri optimalnem načrtovanju in upravljanju izvoznega trženja in poslovnih dejavnosti. Pričujoča raziskava je dobra osnova za nadaljnje poglobljeno preučevanje odnosa med industrijo 4.0 in izvoznim poslovnim aktivnostim podjetij. Ključne besede: Industrija 4.0, Izvozna tržna naravnanost, Tržna diverzifikacija, Izvozna uspešnost 245 Organizacija, Volume 53 Issue 3, August 2020Research Papers Appendix Implementation of Industry 4.0. II4.0_1: Digitalization of business processes is crucial for the competitiveness of the firm. II4.0_2: Industry 4.0 encourages executives to design new export strategies and models. II4.0_3: The rapid flow of information and data facilitates overcoming time and geographical barriers. II4.0_4: The implementation of digitalization is supervised by competent executives. II4.0_5: The automation of manufacturing/business processes encourages us to create new products and/or expand to new markets. II4.0_6: New marketing (digital) channels are used to increase export sales. Export Market Orientation EO_1: We closely monitor the information on trends (e.g. provisions, technological development, politics, economy on export markets). EO_2: We continuously plan and monitor the firm’s activities connected to meeting consumers’ needs on foreign markets. EO_3: Executives in all positions in the firm are constantly in contact with current and prospective consumers on foreign markets. EO_4: Consumer satisfaction on foreign markets is often measured and carefully planned in advance. EO_5: Employees in the marketing department, along with employees from other departments in the firm, study future requirements and needs of consumers on foreign markets. EO_6: Information on consumers on foreign markets is available to everyone in the firm. EO_7: Executives frequently discuss advantages and strategies of competitors on foreign markets. EO_8: All departments in the firm take part in the export operations. EO_9: We respond quickly to marketing and other competitive activities of our competitors on foreign markets. EO_10: The export personnel are continuously in contact with the manufacturing department. Diversification Strategy into the dynamic markets of emerging countries DSDMEM_1: For our industry, fast developing markets represent long-term marketing potentials. DSDMEM_2: The uncertainty of the business environment is one of the key factors when deciding on entering the markets of fast developing economies. DSDMEM_3: The dynamic BRIC markets are crucial for the growth of our firm. DSDMEM_4: We consider China and India to be among economically the most dynamic and attractive developing markets. DSDMEM_5: We have properly trained marketing professionals to enter the emerging markets. DSDMEM _6: The strategy of diversification to developing markets has been assessed as risky. DSDMEM_7: We are interested in entering Asian developing markets with a young geographic composition and a growing purchasing power. DSDMEM_8: We only opt for non-ownership forms when entering fast developing high-risk markets. DSDMEM_9: The marketing activity diversification strategy on developing markets is designed in accordance with the firm’s capacities. DSDMEM_10: The firm’s international competitiveness is boosted with outward internationalization to non-traditional, fast developing markets. Export Performance EP_1: Satisfaction (1 – very unsatisfied, 7 – very satisfied) with the sales volume of our firm to foreign markets in the last 3 years. EP_2: Satisfaction (1 – very unsatisfied, 7 – very satisfied) with the export market share of the firm in the last 3 years. EP_3: Satisfaction (1 – very unsatisfied, 7 – very satisfied) with the firm’s entry onto foreign markets in the last 3 years. EP_4: Achieved (1 – very low, 7 – very high) average annual growth of the firm compared to the firm’s industry average growth. 246 Organizacija, Volume 53 Issue 3, August 2020Research Papers 1 Received: 5th May 2020; revised: 29th June 2020; accepted: 9th July 2020 Moderating-mediating Effects of Leader Member Exchange, Self-efficacy and Psychological Empowerment on Work Outcomes among Nurses Farzad SATTARI ARDABILI Islamic Azad University, Department of Management, Ardabil Branch, Ardabil, Iran, sattari.farzad@gmail.com; f.sattari@iauardabil.ac.ir Background: The main effects of leader-member relationship and the quality of supervisor-subordinate relation- ship are emphasized as main variables that help improve nurses’ job satisfaction and reduce exhaustion. The aim of this study is to examine the effects of the emotional intelligence, self-efficacy, and psychological empowerment on psychological exhaustion and job satisfaction of nurses using moderation-mediation effects of leader-member exchange (LMX). Methods: A cross-sectional design was carried out in three public-sector hospitals in north west of Iran during 2016. A total of 138 self-administered questionnaires were used for analysis. The main hypotheses of this study were an- alyzed through applying mediation-moderation analysis using PROCESS model. Results: The results revealed that LMX acted as a mediator between emotional intelligence and job satisfaction through converting its negative effect into positive one. The indirect effect of emotional intelligence on emotional exhaustion through leader-member exchange was strongly negative especially at higher levels of leader-member exchange. Conclusions: High quality relationships between nurses and their superiors could improve their job outcomes. The negative relationship between emotional intelligence and emotional exhausting was more significant when lead- er-member exchange was taken into account. High emotional intelligence in nurses has negative effect on job satis- faction but by mediating role of LMX the effect changed to positive. LMX partially mediated the effect of emotional in- telligence on job satisfaction, except when self-efficacy values were quite large. Psychological empowerment did not significantly moderate the relationship between emotional intelligence, leader-member exchange, and job outcome. Implications for nursing managers: It is recommended to analyze the quality of leader-member exchange in the hospitals before using them for measurement of nurses’ satisfaction and their jobs’ outcomes. Managers should also concentrate more on leader-member exchange and try to improve its quality. Future studies are needed to investi- gate the effects of leader-member exchange quality in longer follow-up periods. Key words: Emotional intelligence, Moderating mediating effect, Leader member Exchange (LMX), Psychological empowerment DOI: 10.2478/orga-2020-0016 1 Introduction It is shown that emotional intelligence has various ef- fects on job outcomes such as job satisfaction (Wen, Huang, & Hou, 2019). However, based on the idea be- hind the leader-member exchange (LMX), it seems that the impact of emotional intelligence on the consequenc- es of jobs in different occupational groups can change under the influence of some other variables such as the supervisors-subordinates relationship and their obtaining 247 Organizacija, Volume 53 Issue 3, August 2020Research Papers empowerment. Therefore, increasing the managerial and psychological empowerments can improve the quality of the relationship between the nurses or subordinates and their supervisors and hence improve their job satisfaction (Laschinger, Purdy, & Almost, 2007). The effectiveness of these factors with respect to the culture and perceptions of empowerment in different areas is different in various studies (Al-Maaitah, 2019; Yip, 2004) reveal us its lack of theoretical base. Despite this attention, relatively few pre- vious studies have examined the relationship and mecha- nism of leader-member exchange among these variables Thus, the main aim of the present study is to assess the mediating role of leader member exchange on the relation- ship between emotional intelligence and job outcomes in- cluding job satisfaction and job exhaustion through evalu- ating mediation and moderation effects of self-efficacy and psychological empowerment of nurses. 2 Theory and Hypotheses 2.1 Leader–member exchange mediates emotional intelligence, job satisfaction, and emotional exhaustion In nursing literature review, Evans and Allen (2002) con- firmed the nurses’ ability to manage and understand their own emotions and those of their patients is an asset in pro- viding the best possible care, but the potential value of emo- tional intelligence is an issue that still needs to be searched especially in relationships and work performances. Voiten- ko (2020) explored the relationship between burnout and emotional intelligence (EI). Emotional exhaustion as the first phase of burnout carries great importance, because it may increase the turnover rates among the employees and may lead to reduced quality of care. Also, the high levels of emotional exhaustion have direct effect on the work out- comes such as job satisfaction (White & Grayson, 2019); therefore, it seems reasonable to assume that there exists a negative correlation between emotional intelligence and emotional exhaustion. In addition to emotional intelli- gence and work outcomes, there is another concept which deserves attention such as leader member exchange. Such leadership practices effect on employees’ work behavior, burnout and empowerment (Manojlovich, 2005) and rela- tionship between high quality of leader-member exchange and higher performance (Rezapour & Sattari Ardabili, 2017). Consistently, we argue that some extent emotional intelligence protective against nurses’ work outcomes can be in relation with quality of relationship between leaders, nurses, and mediating role of the nurses’ psychological empowerment; therefore, the first hypothesis is formed. H01: Leader–member exchange mediates the relation- ship between emotional intelligence, job satisfaction, and emotional exhaustion. 2.2 Moderating Effects of Self-Efficacy on Job Outcomes Self-efficacy is an individual’s belief in his or her ca- pacities or abilities to muster the cognitive, motivational, and behavioral resources required to perform in a given situation (Bandura, 1997). It means that self-efficacy refers to the situation-specific nature of competence belief. It’s closely related to the relevant variables affecting on the performance of nurses and healthcare centers such as job satisfaction and emotional exhaustion. A sense of self-ef- ficacy had a significant impact on the level of stress and the ways of dealing with difficult situations among nurses (Chegini, Janati, Asghari-Jafarabadi, & Khosravizadeh, 2019; Liu & Aungsuroch, 2019) and can help to decrease job stress and less exhaustion (Voitenko, 2020). Further- more, low self- efficacy and high self-efficacy were strong- ly correlated to the job stress and job satisfaction, respec- tively (Manojlovich, 2005; Skaalvik & Skaalvik, 2010). Researchers found that people with a high level self-effi- cacy have more confidence in their abilities and therefore like to set up challenging and specific goals which com- mitted to them (Sue-Chan & Ong, 2002) and more likely to be succeed more in challenging tasks (Luthans, Youssef, & Avolio, 2007). The leaders’ enthusiasm may arouse emo- tions in their staff through encouraging them to increase their levels of self-efficacy (Ashkanasy & Dasborough, 2003). This process depends on employees’ emotions and leaders relationships with individual employees. On the other hand, there is a relationship among communication competence, self-efficacy, and job satisfaction (Arfara, Tsivos, Samanta, & Kyriazopoulos, 2017; Park, Jeoung, Lee, & Sok, 2015). Therefore, it is expected that people who possess high levels of self-efficacy have effective communication skills. Self-efficacy not only can build a better relationship between leader-subordinate, but also it can improve through better relationships with superiors or managers. Self-employment not only has a direct relation- ship with the job consequences, but also has a significant effect of on the interaction between leader and subordi- nates and career implications. Therefore, the second hy- pothesis is formulated. H02: Degree of self-efficacy moderates the positive in- teractive effect of emotional intelligence and leader-mem- ber exchange on job satisfaction and emotional exhaustion. 248 Organizacija, Volume 53 Issue 3, August 2020Research Papers 2.3 Indirect Effects of Emotional Intelligence on Psychological Empowerment and Employee Work Outcomes The recent body of theoretical and empirical research de- velops linking psychological empowerment to the positive employees’ work outcomes such as job satisfaction, organ- izational commitment, and job performance (Permarupan, Al Mamun, Samy, Saufi, & Hayat, 2020). As the employ- ees perceive that their work is meaningful and has a sig- nificant impact on their skills or competencies which gives them autonomy to make decisions on how to do their work or determine for themselves, they become more able to ex- press their values and true interests through their work ex- periences (Seibert, Wang, & Courtright, 2011). This may lead to the higher levels of job satisfaction and greater organizational commitment which provide them such job opportunities. Herzberg, Mausner, and Snyderman (2011) proposed that employees who are more intrinsically moti- vated than other employees will derive a greater sense of satisfaction from the value of their work and apt to demon- strate a greater effort for successful execution of job duties. Seibert et al. (2011) stated that meta-analysis found that psychological empowerment was related positively to job satisfaction, organizational commitment, and job perfor- mance. By considering this combination, the second hy- pothesis which predicts that psychological empowerment mediates the interactive effect of LMX (Aggarwal, Chand, Jhamb, & Mittal, 2020) and degree of emotional intelli- gence on job satisfaction, organizational commitment, and job performance, will positively significant and we have referred to it as a first stage of moderation model in which the path from the independent variable like leader-member exchange to the mediator variable such as psychological empowerment is moderated while this path from the me- diator to the dependent variable is not moderated. In terms of the relationship between leader-member exchange and employees’ work outcomes or attitudes, it should lead to a conditional indirect effect where the indirect effect of leader-member exchange on employees’ work outcomes through psychological empowerment is dependent upon the communication degree which they have. Furthermore, communication degree strengthens the positive relation- ship between leader-member exchange and psychologi- cal empowerment. The higher degree of communication can predict a strong positive inverse relationship between leader-member exchange and employees’ work outcomes through psychological empowerment. Therefore, the third hypothesis was formed as follow: H03: Psychological empowerment mediates the inter- active effect of emotional intelligence and leader-member exchange on job satisfaction and emotional exhaustion. Figure 1 reflects the development of theoretical framework of study in which the degree of self-efficacy moderates the relationship that leader-member exchange mediates between emotional intelligence and nurses’ job satisfaction and emotional exhaustion. On the other side, psychological empowerment also mediates the relation- ship between leader-member exchange and job outcomes. Figure 1: The theoretical framework of study 249 Organizacija, Volume 53 Issue 3, August 2020Research Papers 3 Method 3.1 Sample and Procedure The participants of the study were selected from nurses in three public-sector hospitals in North West of Iran via applying convenience sampling method and random sam- pling used in each cluster. Only one hundred thirty-eight questionnaires were replied out of 260 ones (response rate = 53.1%) and 23 of them were excluded due to incom- plete data. All participants were asked to indicate their age, gender (1 = male, 2 = female); and the level of education (ranging from 1 = high school degree to 5 = postgraduate university degree). The average age of nurses was 33.5 years old (SD = 4.6). Seventy-nine percent of the respond- ents were female. 3.2 Measures 3.2.1 Emotional Intelligence Wong and Law Emotional Intelligence Scale (Wong & Law, 2002) as a self-report scale was used to measure the respondents’ emotional intelligence. It consists of four di- mensions which are consistent with Mayer and Salovey’s definition of emotional intelligence. These dimensions are self-emotional appraisal (SEA), others’ emotional apprais- al (OEA), regulation of emotion (ROE), and use of emo- tion (UOE). This questionnaire consists of 16 items with a 5 point Likert- scale. 3.2.2 Leader–Member Exchange To measure the quality of leader-member exchange, Lid- en, Wayne, and Stilwell (1993) adaptation of (Scandura & Graen, 1984) were used. Items were scored on a sev- en-point rating scale ranging from 1 (strongly disagree) to 7 (strongly agree). It rates the quality of nurses’ relation- ships with their supervisors. Employee-rated leader-mem- ber exchange was used because our theorizing specifically has focused more on employees’ perceptions of the quality of supervisor-subordinate relationship or high quality of leader-member exchange. A sample items was “My su- pervisor understands my problems and needs” and “My supervisor would use his or her influence to help me solve problems in my work”. The estimated Coefficient alpha was 0.87. 3.2.3 Psychological Empowerment Psychological empowerment was assessed using Spre- itzer’s (1995) 12-item scale. It used three items for each of the four dimensions of psychological empowerment, namely meaning, competence, autonomy, and impact. The items such as my job activities are personally meaningful to me, and my impact on what happens in my work team is large refer to these dimensions, respectively. Reliability of questionnaire was reported by using Cronbach’s alpha as 0.91. Consistent with those found in previous studies and theories such as Chen and Klimoski (2003) and Zhang and Bartol (2010) which conceptualized and measured psycho- logical empowerment as an overall motivational construct through conducting Confirmatory Factor Analysis (CFA). The results comprised of four sub-dimensions, the fit in- dices for 4 first-order factors and 1 second-order factor demonstrated goodness of fit (χ2= 163.02, p < 0.00, Non- normed Fit Index (NFI) = 0.80, Comparative Fit Index (CFI) = 0.84, The Root Mean Square Error of Approxima- tion (RMSEA) = 0.14). In this study, the four dimensions were averaged into a single psychological empowerment scale. 3.2.4 Self-Efficacy Perceived self-efficacy was measured by means of gener- al self-efficacy scale (Schwarzer & Jerusalem, 1995). The measure taps beliefs in one’s capability to handle difficult tasks in a variety of other domains. It consists of 10 items that are rated on a 4-point scale with the anchors not at all true and exactly true. An example item is “I can handle whatever comes my way.” Higher scores on this measure indicate higher levels of general self-efficacy. Longitudi- nal studies have reflected variable stability coefficients which ranging from 0.47 to 0.75 (Scholz, Doña, Sud, & Schwarzer, 2002). 3.2.5 Emotional Exhaustion Professional burnout is a gradual psychological process which is produced due to occupational stress and it is com- posed of high levels of employees’ emotional exhaustion, high depersonalization, and low personal accomplishment levels (Halbesleben & Buckley, 2004). The most widely used research instrument is Maslach Burnout Inventory – General Survey (MBI-GS) which was used to measure burnout among non-human service workers (Schaufeli & Taris, 2005). The emotional exhaustion subscale of the MBI-GS was used to measure emotional exhaustion. Its 5 items were rated on a 7-point Likert scale ranging from 0 (never) to 6 (every day). 3.2.6 Job Satisfaction Job satisfaction was measured through five-point Likert scale based on the Quality of Employment Survey. This in- 250 Organizacija, Volume 53 Issue 3, August 2020Research Papers strument contains five general measures applicable to any profession including criminal justice jobs (Holt & Blevins, 2011). High scores represented higher levels of job sat- isfaction and low scores represented low job satisfaction. 3.3 Analyses 3.3.1 Analytic Approach For data assessment, AMOS 20 and SPSS 20 statistical programs were used. Before hypothesis testing, PROCESS was used as computational tool for path analysis (Hayes, 2013). Furthermore, the evaluation of measurement model was done through confirmatory factor analysis (CFA) to consider the analytical distinctiveness of each construct through anticipating the item load on their respective con- structs. In order to assess the research model fit, several goodness-of-fit indices as suggested in Structural Equation Modeling (SEM) were applied (Kline, 2015) such as Chi- square statistics divided by degrees of freedom (χ2/df) that recommended to be less than 3, Relative Fit Index (RFI), Normed Fit Index (NFI), Comparative Fit Index (CFI), Tucker-Lewis Coefficient (TLI); RFI, NFI, CFI and TLI greater than 0.90 is also recommended. Root Mean Square Error of Approximation (RMSEA) as another index is bet- ter to be up to 0.05 and acceptable up to 0.08. Harman’s single factor test (Podsakoff, MacKenzie, Lee, & Podsak- off, 2003) was used to identify the common method var- iance of factors because the dependent and independent variables were reported by the same source or individual. Entering the values of dependent and independent variables in one factor analysis with principal factor axis factoring and varimax rotation, six factors emerged with Eigen values greater than 1. The outcomes exposed to the highest variance of 29.07 per cent. The results indicated that Common Method Variance (CMV) did not impact on the findings of the study. In order to avoid errors in data entry, the data was en- tered twice and comparison was made between two sep- arate data entries (Barchard & Christensen, 2007). SPSS was used to do missing data imputation and analysis over some of the study variables using the recommended expec- tation-maximization (EM) algorithm (Schafer & Graham, 2002). On average, there were 1.52 percent missing values in the study variables (SD = 1.75; Range = 0-6.4 percent). Little (1988) proposed a chi-square test which indicated that these values were missing completely at random (χ2/ df = 6.03, p = 0.00). His research showed that the imputa- tion of missing data using the EM algorithm was appropri- ate. Table 1 presents the summary of descriptive statistics for the variables and their correlations. 3.3.2 Discriminant Validity of Constructs At first, confirmatory factor analysis (CFA) was con- ducted on variables such as leader-member exchange, psy- chological empowerment, job satisfaction, job exhaustion, self-efficacy, and emotional intelligence for establishing their Discriminant Validity. This was important because all of these variables were from the same source. For the pur- pose of the study, two models were selected and then com- pared. First, a one-factor model was used where the load M SD 1 2 3 4 5 6 Gender 1.79 0.40 -- Leader Member 3.20 0.69 0.06 -- Emotional Exhausting 2.62 0.88 -0.21* -0.31** -- Job satisfaction 2.32 0.66 -0.05 0.45** -0.54** -- Self-efficacy 2.87 0.55 -0.05 0.37** -0.17 0.17 -- Psychological Empower- ment 3.61 0.80 0.04 0.43** -0.20* 0.17 0.68* -- Emotional Intelligence 2.62 0.88 0.03 0.27 -0.21 0.03 0.63 0.72* * Correlation is significant at the 0.05 level **Correlation is significant at the 0.01 level Table 1: The Summary of Descriptive Statistics & Correlations of all items on one factor for four above mentioned scales was assumed (χ2= 1911.71, p < 0.00, NNFI = 0.46, CFI = 0.56, RMSEA= 0.12). Second, a six-factor model with leader-member exchange, job exhaustion, job satisfaction, self-efficacy, emotional intelligence, and psychological empowerment loaded on separate factors (χ2 = 1884.00, p < 0.00, NNFI = 0.67, CFI = 0.67, RMSEA = 0.09). The first model demonstrated poor fit of the model to the data while the second model showed better fit in- dices to the data in which psychological empowerment 251 Organizacija, Volume 53 Issue 3, August 2020Research Papers Constructs Items F a c t o r Loadings Self-Efficacy NFI = 0.70 IFI = 0.77 TLI = 0.62 CFI = 0.75 RMSEA = 0 .13 Chi- Square = 112.48 Cronbach = 0.84 I can always manage to solve difficult problems if I try hard enough. 0.53 If someone opposes me, I can find the means and ways to get what I want. n.a It is easy for me to stick to my aims and accomplish my goals. 0.58 I am confident that I could deal efficiently with unexpected events. 0.58 Thanks to my resourcefulness, I know how to handle unforeseen situations. 0.64 I can solve most problems if I invest the necessary effort. 0.61 I can remain calm when facing difficulties because I can rely on my coping abilities. 0.58 When I am confronted with a problem, I can usually find several solutions. 0.53 If I am in trouble, I can usually think of a solution. 0.62 I can usually handle whatever comes my way. 0.59 Psychological Em- powerment NFI= 0.80IFI = 0.85 TLI = 0.76 CFI = 0.84 RMSEA = 0.14 Chi- Square = 163.02 Cronbach = 0.91 Competence 0.96 Self determination 0.97 Meaning 0.85 Impact 0.89 Job Satisfaction NFI= 0.96 FI= 0.98 TLI= 0.96 CFI=0.98 RMSEA= 0 .09 Chi-Square=9.61 p=0.08 Cronbach=0.86 All in all, how you how satisfied are you with your job? 0.69 Knowing what you know now, if you had to decide all over again whether to take the job you now have, what would you decide 0.84 In general, how well would you say your job measures up to the sort of job you wanted when you took it? 0.85 If a good friend of yours told you he (or she) was interested in working in a job like yours for your employer, what would you tell him (or her)? 0.75 If you were free to go into any of job you wanted, what would your choice be? n.a Leader-Member Exchange NFI = 0.88 IFI= 0.92 TLI = 0.84 CFI = 0.92 RMSEA = 0.13 Chi -Square= 41.37 Cronbach = 0.87 Do you know where you stand with your leader … n.a How well does your leader understand your job problems and needs n.a How well does your leader recognize your potential 0.74 What are the chances your leader would use his/her power to help you solve prob- lems in your work 0.78 Regardless of the amount of formal authority your employee has, what are the chances that he/she would ‘bail you out’ at his/her expense 0.80 I Have enough confidence in my leader that I would defend and justify his or her decision if he or she were not present to do so. 0.74 How would you characterize your working relationship with your leader 0.71 Table 2: Overall Reliability of the Constructs & Factor Loadings of Indicators and self-efficacy were modeled as second order factors. After the purification processes, all the standardized factor loadings exceeded 0.05 (p < 0.01) suggest the evidence of convergent validity. Discriminant validity was checked by comparing the proportion of average variance extracted (AVE) for each construct to the square of the correlation coefficients. Table 2 demonstrates the overall reliability of the constructs and factor loadings of the indicators. The proportion of variance extracted in each construct exceed- ed the respective squared correlation coefficients as an ev- idence of discriminant validity. Table 3 demonstrates the result of test for discriminant validity. 252 Organizacija, Volume 53 Issue 3, August 2020Research Papers Table 2: Overall Reliability of the Constructs & Factor Loadings of Indicators (continues) Job Exhaustion NFI= 0.93 IFI=0.95 TLI= 0.85 CFI=0.95 RMSEA= 0.13 Chi -Square= 15.14 Cronbach= 0.83 I feel burned out from my work 0.74 I feel emotionally drained from my work. 0.87 I feel fatigued when I get up in the morning and have to face another day on the job. 0.87 Working with people all day is really a strain for me 0.69 I feel frustrated by my job 0.93 Emotional Intelli- gence NFI = 0.83 IFI = 0.91 TLI= 0.87 CFI= 0.90 RMSEA= 0.09 Chi- Square= 196.97 Cronbach= 0.91 Self-emotion appraisal (SEA) 0.81 Others’ emotion appraisal (OEA) 0.84 Use of emotion (UOE) 0.56 Regulation of emotion (ROE) 0.86 Table 3: Discriminant Validity CR AVE MSV ASV Empower- ment Job Satisfac- tion Exhaus- tion Leader_ Member Self_Effi- cacy Emotional Empowerment 0.94 0.59 0.47 0.40 0.77 Job Satisfaction 0.99 0.97 0.85 0.40 0.59 0.98 Exhaustion 0.96 0.86 0.85 0.38 -0.58 -0.92 0.93 Leader-Member 0.95 0.82 0.79 0.41 0.69 0.89 -0.83 0.90 Self -Efficacy 0.81 0.52 0.38 0.16 0.61 0.12 -0.14 0.23 0.72 Emotional 0.90 0.52 0.46 0.17 0.67 0.03 -0.09 0.18 0.59 0.72 4 Results 4.1 Hypotheses Testing Table 4 demonstrates the results for the first and second hypotheses. These hypotheses predicted the conditional indirect effects of emotional intelligence through lead- er-member exchange on emotional exhaustion and job sat- isfaction. The mediating effects were examined by proce- dures discussed in Hayes (2013) and using the PROCESS Macro (Model 4). The relationship between emotional intelligence and job outcomes including exhaustion and job satisfaction were tested at different leader-member ex- change levels in this study. Outputs along with 95 percent bias-corrected bootstrap confidence intervals based on 5000 bootstrap samples are shown in Table 2. The direct effect of emotional intelligence on emotional exhaustion was significantly negative (B = -0.206, t = -2.00, 95% CI [-0.41,-0.00], p = 0.04). The standardized indirect effect of emotional intelligence on emotional exhaustion through leader-member exchange was significant (B = -0.10, SE = 0.05, 95% CI = [-0.23, -0.02], t = -2.07, p = 0.00). After including leader-member exchange as a mediator of the relationship, emotional intelligence still had a significant direct effect on emotional exhaustion (B = -0.20, t = -2.00) and this path reduces the magnitude of this effect. Table 4 shows that the indirect effect of emotional intelligence on job exhaustion through leader-member exchange is consistently negative. It decreased as the values of lead- er-member exchange relationship increased. Approximate 95 percent biased-corrected bootstrap confidence intervals 253 Organizacija, Volume 53 Issue 3, August 2020Research Papers Table 4: LMX Mediating Effects of EI on Job Satisfaction & Emotional Exhaustion Emotional Exhaustion Job Satisfaction B SE t B SE t Constant 3.63 0.72 5.02**** 1.72 0.35 4.80**** Gender (Control Variable) 0.48 0.20 2.31** -0.11 0.10 -1.09 Emotional Intelligence -0.20 0.10 -2.00** -0.05 0.06 -0.75* Leader-Member Exchange -0.05 0.02 -2.59*** 0.04 0.00 5.10**** Emotional Intelligence *Leader-Member Exchange -0.10 0.05 -1.77** 0.08 0.03 2.29** R2 = 0.17*** f(3,10) = 6.82 R2 = 0.16*** f(3,10)=9.15 *P < 0.10, **P < 0.05, ***P < 0.01, ****P < 0.001 for the conditional indirect effect is less than zero for val- ues of leader-member exchange. Hence, leader-member exchange completely mediates emotional intelligence in- fluence on job exhaustion (B = -0.08, 95% CI = [-0.17,- 0.02], SE =0.03). Moreover, there were significant positive relationship between leader-member exchange with both occupational outcomes including job exhaustion and job satisfaction were significant (B = 0.47, SE = 0.07, t = 6.29, p = 0.00) while there was an inverse relationship between leader-member exchange and burnout (B = -0.360, SE = 0.14, t = -2.56, p = 0.05). In second phase of the first hypothesis, the impact of emotional intelligence on job satisfaction was investigat- ed as a first step to demonstrate the existence of an in- direct effect of emotional intelligence on job satisfaction via leader-member exchange as a mediator (B = -0.05, p = 0.45, 95% CI(-0.18, 0.08)). The results revealed that there was not a significant relationship between emotional intel- ligence and job satisfaction. Therefore, leader-member ex- change could not consider as a mediator between emotion- al intelligence and job satisfaction, but it can be entered as a single block into the model. There was a significant in- teraction between job satisfaction and single block and this interaction was shown in the form of EI*LMX that was the result of indirect effect (B = 0.08, SE = 0.03, 95% CI [0.02, 0.17], Z = 2.29). Therefore, leader-member exchange me- diated the relationship between emotional intelligence and burnout. Table 4 presents the leader-member mediating effects of emotional intelligence on job satisfaction and emotional exhaustion. To determine whether if leader-member exchange and psychological empowerment could mediate the relation- ship between emotional intelligence and job outcomes including job satisfaction and exhaustion respectively, Hayes PROCESS\\process macro was conducted to ana- lyze the mediation effect and then add psychological as- pect to the model (Model 6) (Hayes, 2013). The results revealed that psychological empowerment as a dependent variable could significantly be predicted by emotional in- telligence (B = 0.73, SE = 0.08, t = 9.19, 95% CI= [0.57, 0.89], p = 0.00) and leader-member exchange (B = 0.04, SE = 0.08, t = 4.09, 95% CI=[0.02, 0.07], p = 0.00, R2 = 0.60, F(3,103)=78.80). The results indicated that only the mediating role of leader-member exchange can be considered significant in the relationship between emo- tional intelligence (EI- > LMX- > EX) and psychological empowerment, and psychological empowerment did not act significantly as moderator in this relationship (EI- > LMX-> PS- > EX) (B = -0.10, SE = 0.06, 95% CI = [-0.26,-0.01]). Table 5 demonstrated the mediating effects of member-leader exchange and psychological empower- ment on the relationship between emotional intelligence and job outcomes. Table 6 demonstrates the results of third hypothesis in which job outcomes were significantly affected by emo- tional intelligence through mediating role of leader-mem- ber exchange, while in the second hypothesis self-efficacy acted as moderator. According to the Model 14 (Hayes, 2013), the relationship between emotional intelligence and job satisfaction was significant only when leader-member exchange had mediating role (B = -0.27, 95% CI = [-0.47, -0.07], p = 0.00). Table 7 states that emotional intelligence had indi- rect positive effect on job satisfaction through applying the mediating effect of leader-member exchange. As its values decreased, the values of self-efficacy increased. 254 Organizacija, Volume 53 Issue 3, August 2020Research Papers Table 5: The Mediating Effects of Member-Leader Exchange & Psychological Empowerment on the Relationship between Emotional Intelligence & Job Outcomes Emotional Exhaustion Job Satisfaction B SE t B SE t Constant 3.63 0.72 5.12*** 1.72 0.36 4.77*** Gender 0.48 0.20 2.30* -0.11 0.10 -1.06 Emotional Intelligence -0.22 0.15 -1.46 -0.07 0.08 -0.90 Leader-Member Exchange -0.05 0.02 -2.44* 0.04 0.01 3.79*** Psychological Empowerment 0.01 0.16 0.11 0.03 0.09 0.39 Emotional Intelligence *Leader- Member Exchange -0.10 0.05 (-0.24,-0.02) 0.08 0.03 (0.02, 0.17) Emotional Intelligence *Leader-Member Exchange *Psychological Empowerment 0.00 0.01 (-0.02,0.04) 0.00 0.01 (-0.01, 0.02) Emotional Intelligence *Psychology Empowerment 0.01 0.11 (-0.20,0.24) 0.02 0.06 (-0.11, 0.15) R2 =0. 17*** f(4,10)=5.09 R2 = 0.17*** f(4,10)=7.94 *P < 0.10, **P < 0.05, ***P < 0.01, ****P < 0.001 Emotional Exhaustion Job Satisfaction B SE t B SE t Constant 2.78 0.73 3.80*** 3.02 0.36 8.31*** Gender 0.47 0.20 2.30* -0.11 0.10 -1.14 Leader-Member Exchange -0.05 0.01 -3.27** 0.03 0.00 4.18*** Emotional Intelligence -0.28 0.14 -1.91* -0.13 0.07 -1.87* SE 0.16 0.21 0.75 0.18 0.11 1.72 Emotional Intelligence*Leader-member Exchange*Self-Efficacy -0.27 0.29 -0.91 -0.27 0.10 -2.71** R2 = 0.19*** f(5,10) = 5.07 R2 = 0.22*** f(5,101) = 9.95 Table 6: Mediating-Moderating Effect of Leader-Member Exchange & Self-Efficacy Table 7: Conditional Indirect Effects of Emotional Intelligence on Job Satisfaction through Leader-Member Exchange at Values of Self Efficacy as Moderator Mediators Bias Corrected Bootstrap 95% Confi- dence Interval Self-Efficacy Indirect Effect Boot SE Lower Upper Leader-Member Ex- change -0.53 0.11 0.04 0.03 0.21 Leader-Member Ex- change 0.00 0.06 0.03 0.02 0.14 Leader-Member Ex- change 0.53 0.02 0.02 -.011 0.10 Notes: Values for self-efficacy (moderator) are the mean and plus/minus one standard deviation (SD) from the mean. 255 Organizacija, Volume 53 Issue 3, August 2020Research Papers A 95% of bias-corrected bootstrap confidence of inter- val for the conditional indirect effect was entirely above zero for low-to-medium levels of self-efficacy. Hence, leader-member exchange partially mediated the effect of emotional intelligence on job satisfaction, except when self-efficacy values were large. Finally, index of moder- ated mediation described by (Hayes, 2013) was estimated (−0.07) which was significant (95% CI = [-.187, -.016]) as zero fell outside the conditional indirect effects. 5 Discussion This study investigated the roles that leaders play in me- diating emotional intelligence effects on job satisfaction and emotional exhaustion with regard to psychological empowerment and self- efficacy of nurses. Given the demonstrated challenges associated with nurses’ work out- comes (Permarupan et al., 2020), the key role of exchange between leader and member is surprising. The effects of self-efficacy (MacPhee, Skelton‐Green, Bouthillette, & Suryaprakash, 2012), emotional intelligence (Mohebbi, Coombe, & Kirkpatrick, 2017) and psychological empow- erment (Laschinger et al., 2007; MacPhee et al., 2012) on work outcomes are approved except for how these differ- ent factors effect on work outcomes with regard to each other. Consistent with previous researches that has ex- amined the interaction between leader-member exchange and work outcomes (Loi, Chan, & Lam, 2014; Rezapour & Sattari Ardabili, 2017), this study also referred to the importance of leadership in promoting positive work out- comes in hospital. The findings showed that participants’ leader-member exchange mediates the effect of emotional intelligence on job outcomes. Leader-member exchange is considered as an important boundary condition for under- standing the relationship between emotional intelligence and psychological empowerment as well as self-effica- cy and job outcomes. This resulted in a mediated effect in which the indirect effect of emotional intelligence on emotional exhaustion through leader-member exchang- es was more strongly negative especially at higher levels of leader-member exchange. In spite of existing a weak negative relationship between emotional intelligence and job satisfaction, the direct effect of leader-member ex- change on job satisfaction was high enough in a way that through the mediating role of leader-member exchange the relationship of emotional intelligence could become sig- nificantly positive. Previous studies (Gorgens-Ekermans & Brand, 2012; Voitenko, 2020) investigated the impact of emotional intelligence on emotional exhaustion and burnout which can increase through mediating role of leader-member exchange. Actually, the quality of subordi- nate-superordinate relationship can reduce or prevent the employees’ emotional exhaustion. Those employees, who have a higher degree of emotional intelligence, experience less emotional exhaustion. Furthermore, the strength of this relationship can enhance as the superior-subordinate relationship improve. Unlike most of previous studies which showed that high levels of emotional intelligence lead to higher job satisfaction (Benson, Ploeg, & Brown, 2010) , the results of this study revealed that there was an inverse relationship between the level of nurses’ emotional intelligence and decreasing their job satisfaction (through mediating leader-member exchange). In previous studies, the superior-subordinate relationship was not investigat- ed that is why this relationship was not much significant (Kafetsios, 2007). It can be argued that the nurses who had high levels of emotional intelligence had less willingness to stay in their current jobs due to their high communi- cating skills with other private clinics and hospitals and therefore were less satisfied with their jobs (Wu & Nor- man, 2006). In the same conditions, therefore, different results or job outcomes could be expected based on emo- tional intelligence. A qualified relationship with superior could positively change the results. It means that it was not only reduces the level of burnout, but also it also was the main cause of job satisfaction among employees. So, the employees with high levels of emotional intelligence could have a good relationship with their supervisors and therefore their satisfaction level of their job could be im- proved. These results of study indicated that only using the nurses who had higher levels of emotional intelligence could not guarantee the enhancement hospital services’ quality and efficiency and the quality of their relationship with their superiors was an influential factor. Laschinger et al. (2007) investigated that building a good relationship between nurses and their supervisors could cause job sat- isfaction without considering the nurses’ emotional intel- ligence. The effect of this relationship should properly be determined through psychological empowerment of nurs- es. Unlike the study of Lyu, Ji, Zheng, Yu, and Fan (2019), the psychological empowerment of the nurses did not have a direct effect on job satisfaction and burnout and it was in line with the study of Yip (2004) who stated that the perception of empowerment differed in western and east- ern societies because western culture supported espoused values in democratic culture and society. These conflicting research results may be due to the lack of consideration to the leader-member relationship in these studies. Thus, it can be concluded that psychological empowerment did not effect on the job outputs independently. The results also re- vealed that self- efficacy and leader-member exchange did not act as an independent mediator in the relationship of emotional intelligence and burnout. It can be deduced that self-efficacy of physical dimension of an occupation as an influential factor can effect on burnout. Physical and emo- tional dimensions of an occupation and job environment cannot regulate with self-efficacy and work-related vari- ables (Maslach & Jackson, 1981). Emotional intelligence also cannot regulate them alone, but just can influence on 256 Organizacija, Volume 53 Issue 3, August 2020Research Papers the quality of relationship with superiors. Herzberg (1966) stated that emotional intelligence was considered as one of the motivational factors and should be considered dif- ferent from other health factors. The condition is different regarding the job satisfaction because it is related to the human physical processes and working conditions (Cro- panzano & Mitchell, 2005). Therefore, the mediating role of self-efficacy has a significant effect on the relationship between leader-member exchange and job satisfaction. It also acts as a compliment for the physical dimension of job satisfaction which investigates the effect of leader-member exchange and emotional intelligence on job satisfaction. 6 Conclusion The results of this study showed that the research on dif- ferent occupations can bring different results especially for occupations that are stressful and have excessive workload (McVicar, 2003). It is not necessary to seek an overhasty generalization of the results of previous studies in nursing job, but categorizing the different dimensions of theories seems to be necessary. Due to the novelty of this study which investigated the mediating and moderating effects of leader-member exchange, self-efficacy, and psycholog- ical empowerment on relationship between emotional in- telligence and work attitudes, the findings failed to support any potential positive role of psychological empowerment as a mediator between emotional intelligence and lead- er-member exchange as well as job satisfaction and emo- tional exhaustion. In other words, contrary to expectations, neither emotional psychology nor self-efficacy can predict emotional exhaustion. Based on the obtained results, al- though self-efficacy affected on the relationship between emotional intelligence, leader-member exchange, and job satisfaction, it was surprisingly inefficient about the same relationship with the influence of emotional exhaustion. The importance of leadership training can never be un- derestimated. Effective leadership skills, especially com- munication skills for the nurses, seem to be necessary for the board of supervisors to develop supervisors’ leadership skills and qualities, improve employees’ job satisfaction, and decrease employees’ emotional exhaustion. Investi- gating the relationships among nurses’ self-efficacy beliefs and their perceptions may be helpful to improve the nurses’ performance. Future research needs to examine the ways in which emotional intelligence effects may be moderated by more non-personal factors such as social support, job identity, and especially organizational climate which cover the emotions in organizations. Like previous studies, this study also suffers from some limitations. First, the statis- tical population of the study was restricted to nurses’ per- ceptions of the quality of their leader-member exchange relationship, self-efficacy, and emotional empowerment; therefore, the data generally obtained from just a single source. Therefore, the findings of this study cannot neces- sarily be generalized to all occupations. Second, supervi- sors and nurses ratings of leader-member exchange might not appear on the same line (Hill, Kang, & Seo, 2014). Third, though efforts should be made to reduce the effects of biases especially at interpreting the results. To validate the conclusions, it is better to seek out the samples from multiple sources and occupations which need less com- munication skills such as virtual jobs and employees on production lines. Literature Aggarwal, A., Chand, P. K., Jhamb, D., & Mittal, A. (2020). Leader–member exchange, work engage- ment, and psychological withdrawal behavior: the mediating role of psychological empowerment. Fron- tiers in Psychology, 11:423. https://doi.org/10.3389/ fpsyg.2020.00423 Al-Maaitah, N. A. (2019). The Spatial Variation in Wom- en Empowerment in Jordan: A Cross Country Com- parative Overview Management and Business Re- search Quarterly, 11, 20-34. https://doi.org/10.32038/ mbrq.2019.11.03 Arfara, C., Tsivos, G., Samanta, I., & Kyriazopoulos, P. (2017). The Integration of Information Technology to Facilitate HRM Functions: The Case of the Health Care Sector (Biomedicine Group). Management and Business Research Quarterly, 3, 38. https://doi. org/10.32038/mbrq.2017.03.03 Ashkanasy, N. M., & Dasborough, M. T. (2003). Emotional Awareness and Emotional Intelli- gence in Leadership Teaching. Journal of Ed- ucation for Business, 79(1), 18-22. http://doi. org/10.1080/08832320309599082 Bandura, A. (1997). Self-efficacy : the exercise of control. New York: Freeman. Barchard, K. A., & Christensen, M. M. (2007). Di- mensionality and higher-order factor structure of self-reported emotional intelligence. Personality and Individual Differences, 42(6), 971-985. http://dx.doi. org/10.1016/j.paid.2006.09.007 Benson, G., Ploeg, J., & Brown, B. (2010). A cross-sec- tional study of emotional intelligence in baccalaureate nursing students. Nurse Educ Today, 30(1), 49-53. http://doi.org/10.1016/j.nedt.2009.06.006 Chegini, Z., Janati, A., Asghari-Jafarabadi, M., & Khos- ravizadeh, O. (2019). Organizational commitment, job satisfaction, organizational justice and self-efficacy among nurses. Nursing Practice Today. http://dx.doi. org/10.18502/npt.v6i2.913 Chen, G., & Klimoski, R. J. (2003). The Impact of Expec- tations on Newcomer Performance in Teams as Medi- ated by Work Characteristics, Social Exchanges, and Empowerment. The Academy of Management Jour- nal, 46(5), 591-607. https://doi.org/10.2307/30040651 257 Organizacija, Volume 53 Issue 3, August 2020Research Papers Cropanzano, R., & Mitchell, M. S. (2005). Social exchange theory: An interdisciplinary review. Journal of management, 31(6), 874-900. https://doi. org/10.1177%2F0149206305279602 Evans, D., & Allen, H. (2002). Emotional intelligence: its role in training. Nurs Times, 98(27), 41-42. https:// doi:10.1007/978‐0‐387‐88370‐0_8 Gorgens-Ekermans, G., & Brand, T. (2012). Emotional intelligence as a moderator in the stress-burnout rela- tionship: a questionnaire study on nurses. J Clin Nurs, 21(15-16), 2275-2285. http://doi.org/10.1111/j.1365- 2702.2012.04171.x Halbesleben, J. R., & Buckley, M. R. (2004). Burnout in organizational life. Journal of management, 30(6), 859-879. Hayes, A. F. (2013). Introduction to mediation, moder- ation, and conditional process analysis: A regres- sion-based approach: Guilford Press. https://doi. org/10.1111/jedm.12050. Herzberg, F., Mausner, B., & Snyderman, B. B. (2011). The motivation to work (Vol. 1): Transaction publish- ers. ISBN:1412815541, 9781412815543 Hill, N. S., Kang, J. H., & Seo, M.-G. (2014). The interactive effect of leader–member exchange and electronic communication on employee psychological empowerment and work outcomes. The Leadership Quarterly, 25(4), 772-783. https://doi.org/10.1016/j. leaqua.2014.04.006 Holt, T. J., & Blevins, K. R. (2011). Examining job stress and satisfaction among digital fo- rensic examiners. Journal of Contemporary Criminal Justice, 27(2), 230-250. https://doi. org/10.1177%2F1043986211405899 Kafetsios, K. (2007). Work-family conflict and its relationship with job satisfaction and psychologi- cal distress: The role of affect at work and gender. Hellenic Journal of Psychology, 4(1), 15-35. Retrived from: https://pseve.org/wp-content/uploads/2018/05/ Volume04_Issue1_Kafetsios.pdf Kline, R. B. (2015). Principles and practice of structural equation modeling: Guilford publications. ISBN: 9781462523344. Laschinger, H. K. S., Purdy, N., & Almost, J. (2007). The impact of leader-member exchange quality, empowerment, and core self-evaluation on nurse manager‘s job satisfaction. Journal of Nursing Admin- istration, 37(5), 221-229. https://doi.org/10.1097/01. NNA.0000269746.63007.08 Liden, R. C., Wayne, S. J., & Stilwell, D. (1993). A longitudinal study on the early development of lead- er-member exchanges. Journal of Applied Psychology, 78(4), 662. https://psycnet.apa.org/doi/10.1037/0021- 9010.78.4.662 Little, R. J. (1988). A test of missing complete- ly at random for multivariate data with missing values. Journal of the American Statistical As- sociation, 83(404), 1198-1202. http://doi.org/ 10.1080/01621459.1988.10478722 Liu, Y., & Aungsuroch, Y. (2019). Work stress, perceived social support, self‐efficacy and burnout among Chi- nese registered nurses. J Nurs Manag, 27(7), 1445- 1453. https://doi.org/10.1111/jonm.12828 Loi, R., Chan, K. W., & Lam, L. W. (2014). Leader–mem- ber exchange, organizational identification, and job satisfaction: A social identity perspective. Journal of Occupational and Organizational Psychology, 87(1), 42-61. https://doi.org/10.1111/joop.12028 Luthans, F., Youssef, C. M., & Avolio, B. J. (2007). Psy- chological capital: Developing the human competitive edge: Oxford University Press Oxford. http://doi.org/ 10.1093/acprof:oso/9780195187526.001.0001 Lyu, D., Ji, L., Zheng, Q., Yu, B., & Fan, Y. (2019). Abusive supervision and turnover intention: Mediat- ing effects of psychological empowerment of nurses. International Journal of Nursing Sciences, 6(2), 198- 203. https://doi.org/10.1016/j.ijnss.2018.12.005 MacPhee, M., Skelton‐Green, J., Bouthillette, F., & Suryaprakash, N. (2012). An empowerment frame- work for nursing leadership development: supporting evidence. J Adv Nurs, 68(1), 159-169. https://doi. org/10.1111/j.1365-2648.2011.05746.x Manojlovich, M. (2005). Promoting Nurses‘ Self‐effica- cy: A Leadership Strategy to Improve Practice. Jour- nal of Nursing Administration, 35(5), 271-278. https:// doi.org/10.1097/00005110-200505000-00011 Maslach, C., & Jackson, S. E. (1981). The measurement of experienced burnout. Journal of organizational behavior, 2(2), 99-113. McVicar, A. (2003). Workplace stress in nursing: a liter- ature review. J Adv Nurs, 44(6), 633-642. http://doi. org/10.1046/j.0309-2402.2003.02853.x Mohebbi, H., Coombe, C., & Kirkpatrick, R. (2017). Emotional Intelligence: Continuing Controversies and Unresolved Issues Language Teaching Re- search Quarterly, 4, 12-24. http://doi.org/10.32038/ ltrq.2017.04.02 Park, M. S., Jeoung, Y., Lee, H. K., & Sok, S. R. (2015). Relationships among communication competence, self-efficacy, and job satisfaction in Korean nurses working in the emergency medical center setting. J Nurs Res, 23(2), 101-108. http://doi.org/10.1097/ jnr.0000000000000059 Permarupan, P. Y., Al Mamun, A., Samy, N. K., Saufi, R. A., & Hayat, N. (2020). Predicting Nurses Burnout through Quality of Work Life and Psychological Empowerment: A Study Towards Sustainable Health- care Services in Malaysia. Sustainability, 12(1), 388. https://doi.org/10.3390/su12010388 Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. J Appl Psychol, 88(5), 879-903. http://doi.org/10.1037/0021-9010.88.5.879 258 Organizacija, Volume 53 Issue 3, August 2020Research Papers Rezapour, F., & Sattari Ardabili, F. (2017). Leader-mem- ber exchange and its relationship with career adapt- ability and job satisfaction among employees in public sector. International Journal of Organizational Leadership, 6, 425-433. http://dx.doi.org/10.33844/ ijol.2017.60405 Scandura, T. A., & Graen, G. B. (1984). Moderating effects of initial leader–member exchange status on the effects of a leadership intervention. Journal of Applied Psychology, 69(3), 428. https://psycnet.apa. org/doi/10.1037/0021-9010.69.3.428 Schafer, J., & Graham, J. (2002). Missing data: Our view of the state of the art. Psychological Methods, 7(2), 147-177. https://doi.org/10.1037/1082-989X.7.2.147 Schaufeli, W. B., & Taris, T. W. (2005). The concep- tualization and measurement of burnout: Common ground and worlds apart The views expressed in Work & Stress Commentaries are those of the author (s), and do not necessarily represent those of any other person or organization, or of the jour- nal. Work & Stress, 19(3), 256-262. https://doi. org/10.1080/02678370500385913 Scholz, U., Doña, B. G., Sud, S., & Schwarzer, R. (2002). Is general self-efficacy a universal construct? Psycho- metric findings from 25 countries. European Journal of Psychological Assessment, 18(3), 242. https://psyc- net.apa.org/doi/10.1027//1015-5759.18.3.242 Schwarzer, R., & Jerusalem, M. (1995). Generalized self-efficacy scale Weinman, J., Wright, S., Johnston, M. Measures in health psychology: A user‘s portfo- lio. Causal and control beliefs, 35-37. Retrived from http://userpage.fu-berlin.de/health/engscal.htm Seibert, S. E., Wang, G., & Courtright, S. H. (2011). Antecedents and consequences of psychological and team empowerment in organizations: a meta-analytic review. J Appl Psychol, 96(5), 981-1003. http://doi. org/10.1037/a0022676 Skaalvik, E. M., & Skaalvik, S. (2010). Teacher self-effi- cacy and teacher burnout: A study of relations. Teach- ing and Teacher Education, 26(4), 1059-1069. https:// doi.org/10.1016/j.tate.2009.11.001 Spreitzer, G. M. (1995). Psychological empowerment in the workplace: Dimensions, measurement, and validation. Academy of Management Journal, 38(5), 1442-1465. https://doi.org/10.2307/256865 Sue-Chan, C., & Ong, M. (2002). Goal assignment and performance: Assessing the mediating roles of goal commitment and self-efficacy and the moderating role of power distance. Organizational Behavior and Human Decision Processes, 89(2), 1140-1161. https:// doi.org/10.1016/S0749-5978(02)00017-1 Voitenko, E. (2020). Emotional burnout as a result of professional stress in the work of managers. Journal of Behavior Studies in Organizations, 3, 5-12. http:// dx.doi.org/10.32038/JBSO.2020.03.02 Wen, J., Huang, S., & Hou, P. (2019). Emotional intel- ligence, emotional labor, perceived organizational support, and job satisfaction: A moderated mediation model. International Journal of Hospitality Man- agement, 81, 120-130. https://doi.org/10.1016/j. ijhm.2019.01.009 White, D., & Grayson, S. (2019). The importance of emo- tional intelligence in nursing care. J Comp Nurs Res Care, 4, 152. https://doi.org/10.33790/jcnrc1100152. Wong, C.-S., & Law, K. S. (2002). The effects of leader and follower emotional intelligence on performance and attitude: An exploratory study. The Leadership Quarterly, 13(3), 243-274. https://doi.org/10.1016/ S1048-9843(02)00099-1 Wu, L., & Norman, I. (2006). An investigation of job sat- isfaction, organizational commitment and role conflict and ambiguity in a sample of Chinese undergraduate nursing students. Nurse Educ Today, 26(4), 304-314. https://doi.org/10.1016/j.nedt.2005.10.011 Yip, K.-s. (2004). The empowerment model: A critical reflection of empowerment in Chinese culture. Social Work, 49(3), 479-487. Retrieved July 10, 2020, from www.jstor.org/stable/23721085 Zhang, X., & Bartol, K. M. (2010). Linking empowering leadership and employee creativity: The influence of psychological empowerment, intrinsic motivation, and creative process engagement. Academy of Man- agement Journal, 53(1), 107-128. Retrieved July 10, 2020, from www.jstor.org/stable/25684309 Farzad Sattari Ardabili is Assistant Professor in the Department of Management, Islamic Azad Universi- ty, Ardabil Branch, Iran. He has worked as executive manager in a consultant company and as a research head at University. His practical experience in research and in educational organizations had persuaded him to study on organizational behaviour. He focused in conducting research in leadership and organizational behaviour. Currently he is working on wisdom and its relationships with career adaptability, ambidextrous behaviour and self-efficacy. Because of his educational background in operational research, he is particularly interested in mixed method research in different mul- ticultural organizations. He also served as conference organizer in more than 10 international conferences over period of 2015-2019. 259 Organizacija, Volume 53 Issue 3, August 2020Research Papers Vpliv posrednega učinka izmenjave med vodjo in timom, samo-učinkovitosti in psihološko opolnomočenje na delovnih rezultate medicinskih sester Ozadje: Glavni učinki odnosa med vodjo in članom ter kakovost odnosa med podrejenim in nadrejenim so glavne spremenljivke, ki pomagajo izboljšati zadovoljstvo in zmanjšati izčrpanost medicinskih sester. Cilj te je študije preu- čiti učinke čustvene inteligence, samoučinkovitosti in psihološkega opolnomočenja na psihično izčrpanost in zado- voljstvo z medicinskimi sestrami s poudarkom na vplivu izmenjave med vodjo in timom Metode: Podatke smo zbrali v treh javnih bolnišnicah na severozahodu Irana v letu 2016. Zbrali smo 138 za analizo uporabnih anketnih vprašalnikov. Glavne hipoteze te študije smo analizirali z uporabo analize mediacije- moderacije po modelu PROCESS Rezultati: Rezultati so pokazali, da je izmenjava med vodji in timom (Leader Member Exchange - LMX) delovala kot posrednik med čustveno inteligenco in zadovoljstvom z delom in spremenila negativen učinek v pozitivnega. Posre- dni učinek čustvene inteligence na čustveno izčrpanost z izmenjavo voditeljem in člani je bil močno negativen, zlasti pri višjih ravneh izmenjave med člani in vodjo.. Zaključki: Študija je pokazala, da lahko kakovostni odnosi med medicinskimi sestrami in nadrejenimi izboljšajo rezultate dela. Negativni odnos med čustveno inteligenco in čustvenim izčrpavanjem je bil izrazitejši, če smo upo- števali izmenjavo med člani tima in vodjo. Visoka čustvena inteligenca pri medicinskih sestrah negativno vpliva na zadovoljstvo z delovnim mestom, vendar se s posredovanjem vloge izmenjave med člani in vodjo vpliv spremenil v pozitivnega. Izmenjava med vodjo in timom je delno posredovala učinek čustvene inteligence na zadovoljstvo z delovnim mestom, razen kadar so bile vrednosti samo-učinkovitosti precej velike. Psihološko opolnomočenje ni bi- stveno vplivala na povezave med čustveno inteligenco, izmenjavo med vodjo in člani in rezultati dela. Implikacije za vodje zdravstvene nege: Priporočamo, da vodje je preučijo kakovost izmenjave med vodji in člani timov v bolnišnicah, preden jih uporabijo za merjenje zadovoljstva medicinskih sester in rezultatov njihovega dela. Menedžerji naj se tudi bolj osredotočijo na izmenjavo med vodji in člani tima in poskušajo izboljšati kakovost v le-te- ga. Nadaljnje študije so potrebne za raziskovanje učinkov različnih učinkov kakovosti izmenjave med člani in vodji v daljših obdobjih spremljanja. Ključne besede: Čustvena inteligenca, Izmenjava med vodji in člani (LMX), Psihološko opolnomočenje 260 Organizacija, Volume 53 Issue 3, August 2020Research Papers 1 Received: 24th April 2020; revised: 9th July 2020; accepted: 25th July 2020 The Influence by the Elderly on Modernising the Organisation of Tourist Farms Jože ZALAR1, Goran VUKOVIČ2, Rok OVSENIK3 1Višja strokovna šola za gostinstvo, velnes in turizem Bled, Slovenia, joze.zalar@vgs-bled.si 2University of Maribor, Faculty of Organizational Science, Kranj, goran.vokovic@um.si 3Alma Mater Europaea, Evropski center, Maribor, Slovenia, rok.ovsenik@gmail.com Background and purpose: The demographic structure of the countryside shows that the number of people aged 65 or more is increasing; however, they are still active and motivated for work and help the younger generation. The research aims at studying the influence of the elderly on the organisation of tourist farms; particularly the factors which affect the organisation of operation and modernisation thereof, such as the factors of inheritance, intergen- erational organisational relationships and cooperation, the frequency of further training, inclusion of the elderly in tourist farms and the effect of the perceived changes in the organisation of subsidiary tourist activities on farms on the perception of modernisation. Methodology: A critical review of secondary literature sources has been made and the findings were summarised by applying the synthesis method. Further on, a survey was conducted on tourist farms in all Slovenian cohesion regions in order to collect the data which was then analysed by multiple regression method, applying IBM SPSS software. Results: Inheritance factors do not affect the perception of the modernisation of tourist farms in a statistically signif- icant way; the same applies for intergenerational relationships for people, aged 51 or more while the influence was established for people under 51. Furthermore, the inclusion of the elderly does not have any influence neither does the frequency of further training while education and trainings themselves are important. It has been found out that the expansion of the offer, followed by the division of work, is the most significant for the perception of modernisation. Conclusion: Survey results show good relationships among the social actors and possible solutions which can be implemented in order to help the population of the Slovenian countryside concerned. Key words: The elderly, Modernising the organisation, Tourism, Tourist farms, Organisation. DOI: 10.2478/orga-2020-0017 1 Introduction In these times of rapid changes and progress social sys- tems are changing, followed by changing tourist systems (Holloway and Humphreys, 2019). Tourism is undergoing significant changes and facing new challenges, which re- sult in new aspects regarding the operation of tourist sys- tems. On the other hand, the demographic structure of the countryside is getting older, which means that the number of people aged 65 or more is increasing; however, most of them are still active and motivated for work and help the younger generation, in our case on tourist farms (Kerbler, 2007; Program razvoja podeželja, 2015; Reid, Pezzi and Faggian, 2020). People in the countryside are constantly striving for maintaining good conditions for the development of economy on the farms; and it is those conditions that are extremely important for the future generations who will continue to work on the farm (Kerbler 2011, Kneževič 261 Organizacija, Volume 53 Issue 3, August 2020Research Papers Hočevar 2013). Numerous families in the countryside con- sist of several generations, where also the elderly have a significant role and consequently also the influence (Augé, 2011); according to the same author: »Longer life expec- tancy, transition from the usual living with three genera- tions to four generations gradually lead to practical chang- es in the regulation of social life.« The problems in the countryside are connected with the decreasing number of families with several members. On the other hand, there are even as many as four gener- ations on the same farm, we are facing the migration of young people to towns and migration of the elderly back to the countryside. All of the above causes deterioration of intergenerational relationships, disputes concerning in- heritance (Kerbler 2011), lack of quality knowledge and further education and training (Burholt and Dobbs 2012; Glasgow and Brown 2012; Kneževič Hočevar 2013). Consequently, knowing the influence of the elder- ly on the modernisation and development of the organi- sation of tourist farms is of key importance (Dwyer and Bressey 2007; Cigale, Lampič, Potočnik and Repe, 2014; Phillipson et al., 2018), which is emphasised also in the rural development programmes (Rural Development Pro- gramme, 2015; NIC 2018). The whole world, particularly big countries such as the United States of America, Canada and Australia, is aware of the significance and relevance of those problems (Davis, Chrothers, Grant, Young and Smith, 2012; Beaulieu 2014). Tourist system is operating more and more individu- ally as mass tourism does not prevail anymore. The new way of organisation, affected by the individualisation of tourist services, requires the application of new technolo- gies, new ways of management and, above all, a new way of training for tourism. This research aims at studying the influence of the elderly on modernising the organisation of tourist farms in Slovenia; particularly how the factors of inheritance, quality of intergenerational organisational re- lationships, further training, social inclusion of the elderly and the perceived changes in the organisation of subsidiary tourist activities on farms affect the perception of the mod- ernisation of tourist farms. 2 Theoretical background The number of people aged 65 or more who are still active and motivated for work and help the younger generation on tourist farms is increasing (Kerbler, 2007; Program razvoja podeželja, 2015; Reid, Pezzi and Faggian, 2020). Consequently, it is very important to know the influence of the elderly on modernising the organisation of tourist farms and therefore four pillars have been established as the factors which affect the organisation of operation and modernisation thereof. These are as follows: transfer of ownership and inheritance, intergenerational organisation- al relationships and cooperation, further training and social inclusion of the elderly in tourist farms. Transfer of ownership and inheritance – In the past (before land reform in 1848) various rules applied to in- heriting farms, all sharing the same interest of the govern- ment or the landlord that farms would not be fragmented. Therefore rules on the inheritance of farms did not favour the division of property or they even prevented it by grant- ing the right to succeed only to one child of the deceased (Kambič, 2007). It is also interesting that the “wife of the deceased person was entitled only to the movable property in the house, which was a very common custom in the old Austro-Hungarian lands« (Kambič, 2007). While in Eu- rope the change of generations or transfer of ownership in case of non-agricultural SMEs often means closing down or sale of the enterprise (e.g. Croatia 35%, Finland 70%) (Alpeza, Tall, & Mezulić Juric 2018), this is not usually the case in the transfer of the ownership of farms. Nowadays, Inheritance of Agricultural Holdings Act regulates the inheritance of agricultural land in the Repub- lic of Slovenia. It is laid down in Article 7 of the said Act: The agricultural holding shall be inherited by the statutory heir under the general inheritance regulations who plans to cultivate the agricultural land, and who is selected by agreement by all the heirs; in case the agreement referred to in the preceding indent cannot be reached, the inher- itance priority shall be held by the spouse of the deceased and the children who are training or have trained in the field of agricultural or forest activity. In case there are sev- eral such persons, the priority shall be held by those who are or have been growing up on the farm and have con- tributed by their work or earning to maintaining or devel- opment of the farm. In case of equal conditions, the prec- edence in inheriting the protected farm shall be held by the spouse of the deceased. In case the whole or a part of the protected farm comes from the surviving spouse of the deceased, that spouse and the children the spouse has with the deceased, shall have precedence from other children of the deceased; (...).« (Inheritance of Agricultural Holdings Act, 1995). In order to maintain the integrity of agricultural land the Inheritance of Agricultural Holdings Act Article 5 lays down also that “as a rule, a protected farm shall be inherit- ed by one heir only. The farm may be inherited by several heirs only in case the conditions referred to in that Act are met.« (Inheritance of Agricultural Holdings Act, 1995). Intergenerational organisational relationships and co- operation – According to (Dimovski and Žnidaršič, 2007) »It is not rare today that four generations live together. Due to low natality children are surrounded by more adults and elderly people”. Results of an analysis, conducted by Kneževič-Hočevar (2013) on farms in Prekmurje (north- east Slovenia), show that most interviewees are of the 262 Organizacija, Volume 53 Issue 3, August 2020Research Papers opinion that it is an advantage when young and older peo- ple live together, provided they get on well. Older gener- ation stated that among the advantages there is safety and care when they get older, mutual intergenerational learning and the feeling that you always get help when you need it. Social relationships and intergenerational communica- tion are of key importance for several generations to live together. Ramovš and Slana (2010) point out the lack in mutual contacts and quality communication, particularly between the young and older generation. The above are essential in order to strengthen intergenerational solidar- ity and quality aging in the future. Human solidarity is developing and strengthening in parallel with enhancing the quality of intergenerational communication. All those relationships are required for good cooperation and mod- ernising the organisation of tourist farms (de Bel, Kalmijn and van Dujin, 2019). Education – The strategy of lifelong learning is signif- icant for quality development of knowledge and qualifi- cation in the countryside. People in the countryside, who are engaged in subsidiary tourist activities on the farm, are constantly dealing with tasks and problems they did not have prior to starting up the activity. Nowadays, lifelong learning is required as a development concept, upgrading education, developed and created in the past, and provides a new, paradigmatic shift also for schooling of the youth or formal initial education (Bahçelerli, 2018). In the countryside, particularly on tourist farms, life- long learning is essential and therefore we want to em- phasise the important learning objectives. It is of extreme importance for marketing of products and communication with the environment and provides a competitive advan- tage in ever increasing competition. Specific knowledge, required for successful production and processing of foods, and accommodation and food service activities, demands the contents of education in all fields of work on a tourist farm for all age groups to be adapted. They also have to include the programmes of intergenerational cooperation (Kump and Jelenc-Krašovec, 2005; Pažek, Majkovič and Borec, 2005) Social inclusion of the elderly on tourist farms – Ed- ucational and career centres as social networks deal with social inclusion of the tourist farm members. Social envi- ronment monitoring is important as members of all gener- ations on the farm are aware of the responsibility for active participation at all levels of educational and social and cul- tural activities. The knowledge and skills create the organ- isational structure and adapting to the specifics of work by individual family members. In the countryside, there are good conditions for the involvement of the elderly in various societies. This strengthens the feeling of responsi- bility and importance also in later periods of life. There is some dissatisfaction felt among young people regarding the status in the family; due to fear older members are too late to transfer the ownership of the property to younger generation. This often leads to family disputes concerning inheritance and continuation of the family holding (Al- banese and Bocci, 2019). An important topic which should contribute to further training and development of public policy, associated with the social inclusion of the elderly, deals with how different generations can participate and contribute to social inclu- sion and benefit from them. The elderly themselves are a heterogeneous group. This is shown also in the vitality and productive engagement of the generation in the third age group (e.g. 65–84 years of age), contrary to the propor- tionally higher limitations of dependence and health in the fourth age group (e.g. 85 and more years of age). Creative approaches to social inclusion should be focused on how voluntary work by the younger elderly can best support so- cial inclusion and autonomy of the oldest (Windsor, Curtis and Luszcz, 2016). The biggest problems are the basic needs and wishes of the elderly in rural areas where the access or departure from home is more difficult, particularly in winter. This affects the mobility at home and outside or travelling and driving. In rural areas it is essential to drive in order to go to the doctor, cultural institutions or shops as public transport is rare. If the elderly are not able to drive, they become dependent on their families, neighbours or service providers. This is particularly true in winter time when there is a lot of snow in certain areas. The second problem are supporting services such as deliveries, health care sup- port, and similar (Biniok, Menke and Selke, 2018). 3 Research questions and hypothesis For the research purposes four research questions have been posed, explained and justified below: RQ1: »How do inheritance factors affect the percep- tion of the tourist farm modernisation?« According to numerous authors the farms where the ownership was transferred earlier, are more modernised than those subject to later transfer of ownership or those where the ownership has not been transferred yet; parents often transfer their property to their successors late and the future heirs do not dare or are not interested in investing their capital or knowledge if they are not completely sure they will inherit the farm (Fennell, Phillipson and Evers, 1988; Gosar, 1998; Pečjak, 1998). RQ2: »How does the quality of intergenerational rela- tionships with the elderly in the family affect the percep- tion of the tourist farm modernisation?« There are as many as four generations living in the same household (Kerbler, 2011; Burholt and Dobbs, 2012; Glasgow and Brown, 2012). In such cases the relationships 263 Organizacija, Volume 53 Issue 3, August 2020Research Papers concern young, middle and old generations and in those family businesses cooperation is of key importance for the modernisation of the organisation itself (Brandth and Hau- gen, 2012; Kneževič-Hočevar, 2013; Li, Mi and Zhang, 2020). It is assumed that the better the intergenerational relationships the better the modernisation of the organisa- tion of tourist farms. RQ3: »How does the frequency of further training for the needs of subsidiary activity affect the perception of the tourist farm modernisation?« Further training and lifelong learning are important as in the modern world the progress of various technologies is the fastest ever seen; it strengthens reasonable dialogues of two or even three age generations in the family (Amo- ah and Baum, 1997; Kump and Jelenc-Krašovec, 2010; Simándi, 2018). RQ4: »How does the inclusion of the elderly in the af- fect the perception of the tourist farm modernisation? Social inclusion of the older generation in the social and cultural life is of key importance for maintaining their physical, psychological and mental fitness (Biniok, Menke and Selke, 2018; Windsor, Curtis and Luszcz, 2016). RQ4: »Which changes have the highest effect on the perception of the tourist farm modernisation?« 4 Methodology 4.1 Research approach A combined research approach was applied for the needs of the research. A critical review of secondary literature sources has been made and the findings were summarised by applying the synthesis method. Further on, a quantita- tive research, namely a survey was conducted on tourist farms in all Slovenian cohesion. The survey was conduct- ed on web portal https://www.1ka.si and in printed forms, sent to respondents with the help of the agricultural coun- sellors and employees at the Association of Tourist Farms of Slovenia. The survey questionnaire was emailed to 738 units. These were farms with registered subsidiary tourist activity on the farm, and activities, associated with the tra- ditional knowledge on the farm, services or products. The email was received by 585 respondents, opened by 546 people, and 131 respondents answered the questions – val- ues are missing in some questions as not all the respond- ents answered all the questions. Where possible, the results are presented compara- tively, according to the young or the older generation of the tourist farm members. Holders of the tourist farms as well as their spouses and their descendants were surveyed. Statistical analysis under IBM SPSS software, multiple regression analysis and calculation of the Spearman cor- relation coefficient were applied in order to verify the hy- pothesis below. 4.2 Presentation of the sample Representatives of family farms from all 12 Slovenian regions participated in the research. Age structure of the respondents is as follows: 58.0% of the respondents were between 31 and 50 years old, and the lowest sample (3.8 %) were people, aged 65 or more. 5.3% of respondents were between 16 and 30 while the sample of people aged between 51 and 65 accounts for 32.1%, one person did not answer. 50.4% of respondents were female and 36.6% male; 17 people did not answer. Education structure of the sample was as follows: 17.6% of respondents completed primary or vocational school, while the most (35.1%) finished secondary school. 11.5% respondents completed short-cycle college, 4.61 % professional college, 6.1 % higher education, 10.7% uni- versity education, and 2.3% have a master’s degree. Most respondents live in partnership, either married (77.1%) or in cohabitation (14.5%). Only 3.1% are single, 2.3% widowed, 1.5% are in a relationship but they do not live with their partners, two respondents did not answer. Most respondents have a decisive role on the farm as they are either holders of subsidiary activity (74.89%) or owners and heads of the holding (41.2 %). Nearly a tenth of the respondents are future heirs of the farm (8.4%) while 6.1% are already the heirs. Others indicated other roles such as the co-owner of the farm (8.4%), housewife or mother of the holder of the subsidiary activity. 5 Results Dependent variable “perception of the tourist farm mod- ernisation” and the following independent variables: “in- heritance factors”, “quality of intergenerational relation- ships with the elderly”, “frequency of further training for the needs of subsidiary activity”, “inclusion of the elder- ly”, and “modernisation changes” were established. Multiple regression analysis was applied to verify whether there are positive and statistically significant links between the inheritance factors and perception of the tour- ist farm modernisation. As shown in Table 1, they were not recognised. Multiple regression analysis was applied to verify whether there are positive and statistically significant links between the quality of intergenerational relationships with the elderly in the family and perception of the tourist farm modernisation, where the respondents were divided into two groups according to their age – up to 50 years of age and 51 or more. As shown in Tables 2a and 2b, they were not recognised in the case of the elderly while it was recog- 264 Organizacija, Volume 53 Issue 3, August 2020Research Papers nised in the group up to 50 years of age, which shows that the better the intergenerational relationships with the el- derly in the family, the higher the perception of the tourist farm modernisation is (beta is 0.217 and it is statistically significant at the rate of 0.052). Spearman correlation coefficient was applied to verify whether there are positive and statistically significant links between the frequency of further training for the needs of subsidiary activity and perception of the tourist farm mod- ernisation. As shown in Table 3, the link is not statistically significant. Multiple regression analysis was applied to verify whether there are positive and statistically significant links between the inclusion of the elderly and perception of the tourist farm modernisation. As shown in Table 4, they were not recognised. Spearman correlation coefficient was applied to verify which changes have the highest and statistically significant influence on the perception of the tourist farm modernisa- tion. As shown in Table 5, there are positive and statisti- cally significant links between the perception of the tourist farm modernisation and: changes in the organisation of farm work, education and training, expansion of the offer at the farm, enhanced cooperation by all family members, and sharing of work in the family. Table 1: Multiple regression for RQ1 Unstandardized Coefficients Standardized Coefficients Model B Std. Error Beta t Sig. (Constant) 3,176 ,448 7,087 ,000 Early transfer of property to the heir is extremely important -,018 ,092 -,021 -,193 ,847 Planned way of inheritance is ex- tremely important ,145 ,101 ,162 1,442 ,152 We follow the tradition that the heir is the first-born son or daughter if there is no son -,048 ,064 -,072 -,750 ,455 Inheritance causes stress and dis- putes in the family ,020 ,070 ,033 ,282 ,779 Brothers and sisters are on bad terms due to inheritance ,009 ,067 ,015 ,128 ,898 Appropriate inheritance can regulate the relationships in the family ,010 ,063 ,016 ,161 ,872 a. Dependent Variable: Perception of the tourist farm modernisation Table 2a: Multiple regression for RQ2 Model B Unstandardized Coefficients Standardized Coefficients t Sig.Std. Error Beta 1 (Constant) 3,681 ,429 8,582 ,000 Intergenerational relationships with the elderly in the family – 51 years and more -,005 ,099 -,009 -,054 ,957 a. Dependent Variable: Perception of the tourist farm modernisation 265 Organizacija, Volume 53 Issue 3, August 2020Research Papers Table 2b: Multiple regression for RQ2 Model B Unstandardized Coefficients Standardized Coefficients t Sig.Std. Error Beta 1 (Constant) 3,237 ,274 11,815 ,000 Intergenerational relationships with the elderly in the family – up to 50 years of age ,130 ,066 ,217 1,973 ,052 a. Dependent Variable: Perception of the tourist farm modernisation Table 3: Spearman correlation coefficient for RQ3 Frequency of further training for the needs of subsidiary activity Spearman’s rho Perception of the tourist farm mod- ernisation Correlation Coefficient -,025 Sig. (2-t/iled) ,788 n 118 Table 4: Multiple regression for RQ4 Model B Unstandardized Coefficients Standardized Coefficients t Sig.Std. Error Beta 1 (Constant) 3,840 ,519 7,402 ,000 The elderly are good mentors at work ,154 ,118 ,192 1,307 ,195 They strongly influence our de- cisions -,154 ,117 -,173 -1,321 ,191 Quality work would not be pos- sible without parents’ advice and cooperation ,041 ,108 ,061 ,382 ,703 We would not have decided for the subsidiary activity at our farm without the material and financial basis, created by our parents -,091 ,086 -,144 -1,066 ,290 Our parents’ opinions do not help in the organisation of work ,096 ,104 ,138 ,920 ,361 Parents are completely exclud- ed from the subsidiary activity -,104 ,093 -,175 -1,113 ,269 a. Dependent Variable: Perception of the tourist farm modernisation 266 Organizacija, Volume 53 Issue 3, August 2020Research Papers 6 Discussion and conclusion The problems of the change of generations, inheritance and intergenerational relationships on the farm are shown as good examples of developing social and economic pow- er of the topic concerned. As it has been mentioned, tourist farms are facing numerous challenges or problems such as rapid changes and progress where social systems are changing, followed by changing tourist systems (Hollo- way and Humphreys, 2019; Poslad et al., 2001). On the other hand, the number of people aged 65 or more who are still active and motivated for work and help the younger generation on tourist farms is increasing (Kerbler, 2007; Program razvoja podeželja, 2015; Reid, Pezzi and Faggian, 2020). Consequently, it is important to find out the influence of the elderly on the organisation of tourist farms according to four pillars which are as fol- lows: transfer of ownership and inheritance, intergenera- tional organisational relationships and cooperation, further training and social inclusion of the elderly in tourist farms. It follows from the research that the inheritance factors themselves do not affect the perception of the tourist farm modernisation. It was established in the previous qualita- tive research, conducted by Zalar (2014), that in eastern re- gions parents decide to transfer the ownership to the heirs earlier than in western regions. It is common in western re- gions that the heirs divide the property only after their par- ents have died and they agree with that. This often leads to disputes and destruction of the family. Our research does not confirm the link between earlier transfer of property to the heir and the perception of tourist farm modernisation. It was found out that in case of people aged 51 and more intergenerational relationships on tourist farms do not affect organisation modernisation or the introduction of a new paradigm of relationships on the tourist farms, while such effect is present in case of people under the age of 50; the better the relationships, the more modernised the organisation. It follows from the above that the younger and the older generation get on well in all aspects. Con- sequently, at the time of the research tourist farms were modernised well. There are occasional disputes and argu- ments in families but that does not affect the modernisation of organisation or renovation of farm and accommodation facilities. It is a positive influence of intergenerational re- lationships on the self-assessment of the organisation mod- ernisation. The better the relationships, the higher the per- ception of the younger that the organisation of their farm or subsidiary activity is modernised. In spite of the fact that the frequency of further training does not affect the perception of tourist farm modernisa- tion in a statistically significant way, education and train- ing are important and they have a statistically significant positive contribution to the perception of tourist farm mod- ernisation. Social inclusion of the elderly in various social activities does not affect the modernisation of the tourist farm organisation. It regards mainly general knowledge of the elderly about the current topical social issues. In this way, the elderly have more insight in the problems and understanding of the younger generation when faced with organisational and business decisions and plans. That con- tributes to intergenerational coexistence and life in fami- lies where even up to four generations live in one or two households on the same farm. Social inclusion of the elderly affects only their men- tal and health condition and quality spending of free time they have more of than the active younger generation. The latter, particularly the female part of the family, have to go to work and be engaged in the subsidiary activity at home. The elderly are often only moral and financial support- ers of the family organisation of the farm operation. This means mutual influence between the elderly and younger generation. In this case, the elderly do not have a direct influence on the modernisation of the organisation. We would like to point out the factors which positively and statistically significantly affect the perception of the tourist farm modernisation, which are as follows: expan- sion of the offer at the farm, sharing of work in the family, changes in the organisation of farm work, enhanced coop- eration by all family members, and education and training. It has been found out that the influence of the moderni- sation of the organisation is mainly moral, which is reflect- ed particularly in good intergenerational relationships and financial support to young generation who is starting their career path. Survey results show good relationships among the social actors and possible solutions which can be im- plemented in order to help the population of the Slovenian countryside concerned. In the field concerned, attention should be paid to main- taining and development of social actors who strive for the best possible overall image of the organisational structure of the subsidiary activity on the farm. Comparison of the theoretical background and the research topic gave insight in the excellence in improving organisational capabilities of tourist farms in Slovenian countryside. The tasks and objectives are to strive for maintaining the organisational capabilities of tourist farms and keeping rural population in the countryside by encouraging good economic and so- cial position of the inhabitants. Literature Albanese, A. & Bocci, E. (2019). Intergenerational Sus- tainable Tourism and Quality of Life. In Italian Stud- ies on Quality of Life (pp. 273-285). Springer, Cham. Available from: http://doi.org/10.1007/978-3-030- 06022-0_18 Alpeza, M., Tall, J. & Mezulić Juric P. (2018). The Chal- lenges of SME Business Transfers: The Evidence from 267 Organizacija, Volume 53 Issue 3, August 2020Research Papers Croatia and Finland. Organizacija, 52(2), 135-145. https://doi.org/10.2478/orga-2018-0012 Amoah, V. A. & Baum, T. (1997). Tourism education: pol- icy versus practice. International Journal of Contem- porary Hospitality Management, 9, 5—12. https://doi. org/10.1108/09596119710157531 Augé, M. (2011). Nekraji - Uvod v antropologijo nadmod- ernosti [Non-lieux. Introduction à une anthropologie de la surmodernité], Ljubljana: Maska. Bahçelerli, N. M. (2018). Strategy for lifelong learning in vocational schools of tourism education. Quality & Quantity, 52(1), 43-58. http://doi.org/10.1007/s11135- 017-0586-4 Beaulieu, M. S. (2014). Statistics Canada. Demograph- ic Changes in Canadian Agriculture. Available from: http://www.statcan.gc.ca/pub/96-325-x/2014001/arti- cle/11905-eng.htm#a2 Biniok, P., Menke, I., & Selke, S. (2016). Social Inclusion of Elderly People in Rural Areas by Social and Techno- logical Mechanisms. In Domínguez-Rué E. & Nierling L. (Eds.), Ageing and Technology: Perspectives from the Social Sciences (pp. 93-118). Bielefeld: Transcript Verlag. Available from https://www.jstor.org/stable/j. ctv1xxrwd.7?seq=1#metadata_info_tab_contents Brandth, B. in Haugen, M. S. (2012). Farm tourism and dilemmas of commercial activity in the home. Hos- pitality & Society, 2(2), 179—196. http://dx.doi. org/10.1386/hosp.2.2.179_1 Burholt, V. & Dobbs, C. (2012). Research on rural ageing: Where have we got to and where are we going in Eu- rope? Journal of Rural Studies, 28, 432—446. http:// doi.org/10.1016/j.jrurstud.2012.01.009 Cigale, D., Lampič, B., Potočnik Slavič, I. & Repe, B. (2014). Geografsko raziskovanje turizma in rekreacije v Sloveniji [Geographical research of tourism and rec- reation in Slovenia]. GeografFF 15, Ljubljana: Univer- sity of Ljubljana, Faculty of Humanities. Davis, S., Chrothers, N., Grant, J., Young, S. & Smith, K. (2012). Being involved in the country: Productive age- ing in different types of rural communities. Journal of Rural Studies, 28, 338—346. https://doi.org/10.1016/j. jrurstud.2012.01.008 de Bel, V., Kalmijn, M. & van Duijn, M. A. (2019). Bal- ance in family triads: How intergenerational relation- ships affect the adult sibling relationship. Journal of Family Issues, 40(18), 2707-2727. https://doi.org/10.1 177%2F0192513X19860181 Dimovski, V. in Žnidaršič, J. (2007). Ekonomski vidiki staranja prebivalstva v Sloveniji: Kako ublažiti posle- dice s pristopom aktivnega staranja [Economic aspects of population aging in Slovenia: How to mitigate the consequences with an active aging approach]. Kako- vostna starost, 1, 2—15. Dwyer, C. & Bressey, C. (2007). New geographies of race and racism. London and New York: Routledge, Taylor and Francis Group. Fennell, G., Phillipson, C. & Evers, H. (1988). The Sociol- ogy of Old Age. Philadelphia: Open University Press. Glasgow, N. & Brown, D. L. (2012). Rural ageing in the United States: Trends and Contexts. Journal of Rural Studies, 28, 422—431. http://doi.org/10.1016/j.jrur- stud.2012.01.002 Gosar A. (1999). Zrno do zrna pogača, kamen na kamen (turistična) palača [Grain to grain cake, stone to stone (tourist) palace]. Dela, (13), 27-46. https://doi. org/10.4312/dela.13.27-46 Holloway, J. C. & Humphreys, C. (2019). The Business of Tourism. SAGE Publications Limited. Kambič, M. (2007). Recepcija rimskega dednega prava na Slovenskem s posebnim ozirom na dedni red Karla VI [Reception of Roman inheritance law in Slovenia with special regard to the hereditary order of Charles VI]. Ljubljana: Založba ZRC, ZRC SAZU. Kerbler, B. (2007). Nasledstvo na kmetijah kot posledica učinkovanja dejavnikov socialnogeografske strukture kmetij [Succession on farms as a consequence of the effects the factors of the socio-geographical structure of farms]. Urbani izziv, 18(1/2), 106—109. http:// www.dlib.si/?URN=URN:NBN:SI:DOC-Q3HEL63Y Kerbler, B. (2011). Ohranjanje medgeneracijske kontinu- itete kot pogoj za zagotavljanje socialne varnosti stare- jše generacije kmečkega prebivalstva [Maintaining intergenerational continuitiy as condition for ensuring the social security of older generation of farm popu- lation]. Acta Agriculturae Slovenica, 97(1), 53—61. Kneževič Hočevar, D. (2013). Skrb za starejšo gener- acijo na družinskih kmetijah [Caring for the old- er generation on family farms]. Socialno delo, 52(6), 383—392. Available from http://www.dlib. si/?URN=URN:NBN:SI:doc-PF2N4YUC Kump, S. in Jelenc-Krašovec, S. (2005). Izobraževan- je - možni dejavniki krepitve moči in vpliva starejših odraslih [Education - possible factors for strengthening the power and influence of older adults]. Družboslovne razprave, 49/50 (21), 243—261. Available from http:// dk.fdv.uni-lj.si/dr/dr49-50KumpJelenc-Krasovec.PDF Li, B., Mi, Z., & Zhang, Z. (2020). Willingness of the new generation of farmers to participate in rural tourism: The role of perceived impacts and sense of place. Sustainability, 12(3), 766. https://doi.org/10.3390/ su12030766 NIC (2018). Mapping the Global Future, Report of the National Intelligence Council`s 2020 Project. Avail- able from: https://www.dni.gov/files/documents/ Global%20Trends_Mapping%20the%20Global%20 Future%202020%20Project.pdf Pažek, K., Majkovič, D. & Borec, A. (2005). Turizem na ekoloških kmetijah slovenskega podeželja [Tourism on organic farms in the Slovenian countryside]. Geografs- ki vestnik, 77(2), 107—114. Available from http://www. dlib.si/?URN=URN:NBN:SI:DOC-5DVYMD2B Pečjak, V. (1998). Psihologija tretjega življenjskega obd- obja [Psychology of the third period of life]. Ljubljana: University of Ljubljana, Faculty of Humanities. 268 Organizacija, Volume 53 Issue 3, August 2020Research Papers Phillipson, J., Tiwasing, P., Gorton, M., Maioli, S., New- bery, R. & Turner, R. (2018). Shining a spotlight on small rural businesses: How does their performance compere with urban? Journal of Rural Studies, 68, 230- 239. https://doi.org/10.1016/j.jrurstud.2018.09.017 Program razvoja podeželja Republike Slovenije [Rural De- velopment Program of the Republic of Slovenia] (2015). Dostopno na: http://www.program-podezelja.si/sl/ infoteka/sporocila-za-javnost/462-18-8-2015-spreje- ta-nova-uredba-o-dopolnilnih-dejavnostih-na-kmetiji Ramovš, J. & Slana, M. (2010). Komuniciranje med gen- eracijami [Communiction between Generations]. Ka- kovostna starost, 13(3), 16—25. Reid, N., Pezzi, M. G. & Faggian, A. (Eds.) (2020). Tour- ism in peripheral regions: some challenges. Agritour- ism, Wine Tourism, and Craft Beer Tourism: Local Responses to Peripherality Through Tourism Niches. Routledge. Simándi, S. (2018). The role of permanent learning and human capital in the sector of tourism. Turizam, 22(2), 63-70. http://doi.org/10.5937/22-17528 Windsor, T. D., Curtis, R. G., & Luszcz, M. A. (2016). Social Angagement in Late Life v Hel Kendig, Peter McDon- ald in John Piggott: Population Ageing and Australias Future. Available from: https://www.jstor.org/stable/j. ctt1rqc955.14?Search=yes&resultItemClick=true&- searchText=Social&searchText=inclusion&search- Text=of&searchText=older&searchText=adults&- searchText=in&searchText=rural&searchUri=%2Fac- tion%2FdoBasicSearch%3FQuery%3DSocial%2Bincl Zakon o dedovanju kmetijskih gospodarstev/ZDKG/ [In- heritance of Agricultural Holdings Act] (1995). Urad- ni list RS, št. 70/1995 (29.11. 1995). Available from http://www.pisrs.si/Pis.web/pregledPredpisa?id=ZA- KO383 Zalar, J. (2014). Lifelong learning of elderly citizens in ru- ral areas. In: Plenković, M., Galičić, V. & Toplak, L. (Eds). Društvo i tehnologija 2014. [Society and tech- nology 2014: book of manuscripts, pp. 40-45. Zagreb: Hrvatsko komunikološko društvo. Jože Zalar, Master of Tourism, is a lecturer at Vocational College of Hospitality, Wellness and Tourism in Bled, Slovenia. His professional focus is gastronomy and tourism development in Slovenia, especially rural tourism. He is author of several scientific and professional works and author of two monographs on catering, wellness and tourism. He is participates in several projects of Local Action Groups in Slovenia and the European Innovation Partnership. His current research interests are development of tourist farms, education for complementary activities on farms, social inclusion of the elderly, and intergenerational relations. Goran Vukovič, PhD, is full professor at the Faculty of Organisational Sciences, University of Maribor. He is a qualified university teacher in the area of human resources and a qualified university teacher in the area of »Marketing«. He also has more than fifteen years of work experience in the area of functional education and consultancy. Dr Vukovič is a consultant in the areas of human resources, marketing and procurement in the profit and non-profit sectors of the economy. Furthermore, he is the author of many authentic scientific papers, author and co-author of many books, editor, critic, member of the editorial council for the journal »Iskanja«. Rok Ovsenik, PhD, full professor of Tourist Destination Management at Faculty of Organizational studies in Novo mesto, is engaged in education, research, management and consulting activities in area of tourism management on the national and international level. He is author and co-author of several documents focusing tourism strategies, which represented a basis for the growth of Slovenian receptive tourism in 2007- 2011. He is author or co-author of 6 monographies and many scientific articles published in recognized research journals. His current research interests are destination management, measurement of the quality of tourist services, and leisure time and sport activities management. 269 Organizacija, Volume 53 Issue 3, August 2020Research Papers Vpliv starejših odraslih na posodabljanje organizacije turističnih kmetij Slovenije Ozadje in namen: Demografska struktura podeželja stara; vedno več je ljudi, ki so stari 65 ali več let, in so še vedno aktivni in motivirani za delo ter pomagajo mlajši generaciji. Cilj raziskave je proučiti vplive starejših odraslih na or- ganizacijo turističnih kmetij, predvsem dejavnike vpliva na samo organizacijo poslovanja in njeno posodabljanje, kot so dejavniki dedovanja, medgeneracijski organizacijski odnosi in sodelovanje, pogostost dodatnega izobraževanja, vključenost starejših na turističnih kmetijah ter vpliv percipiranih sprememb organizacije dopolnilne turistične dejav- nosti na kmetiji na dojemanje posodobljenosti. Metodologija: Izdelali smo kritičen pregled sekundarnih virov literature in na osnovi metode sintez strnili ugotovitve. V nadaljevanju smo z anketo na turističnih kmetijah v vseh kohezijskih regijah Slovenije zbrali podatke in jih analizi- rali z metodami multiple regresije, ker smo uporabili program IBM SPSS. Rezultati: Dejavniki dedovanja ne vplivajo statistično značilno na dojemanje posodobljenosti turističnih kmetij, po- dobno velja tudi za medgeneracijske odnose pri starejših od 51 let, vendar pa smo ugotovili vpliv pri mlajših od 51 let. Vključenost starejših prav tako ne vpliva, enako je s pogostostjo dodatnih izobraževanj, so pa pomembna sama izobraževanja in usposabljanja. Ugotovili smo, da ima največji vpliv na dojemanje posodobljenosti širitev ponudbe, kateri sledi delitev dela. Zaključek: Rezultati raziskave nakazujejo dobre odnose med socialnimi akterji in možne rešitve, ki jih bo mogoče implementirati v obravnavano področje, da bi z njimi pomagali obravnavani populaciji slovenskega podeželja. Ključne besede: Starejši odrasli, Posodabljanje organizacije, Turizem, Turistična kmetija, Organizacija. AUTHOR GUIDELINES / NAVODILA AVTORJEM Manuscripts considered for publication in Organ- izacija (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 contain all essential features of a complete scientific 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-writ- ten (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. All lettering and figure elements must be large enough to be readable when figure or table has been reduced to fit journal page or column. All figures and tables must be specifically referred 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. Detailed Guidelines for Authors are available from https://content.sciendo.com/supplemental/journals/ orga/orga-overview.xml/Guidelines_for_Authors. pdf. All the papers will be reviewed by at least two ref- erees. 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- formation and clarifications contact Organizacija’s editorial office (organizacija@um.si or joze.zu- pancic@um.si). Address of the Editorial office: University of Maribor, Faculty of Organizational Science Kidričeva cesta 55a 4000 Kranj, Slovenia Fax: +386-4-2374-299 Phone: +386-4-2374-245 V reviji Organizacija objavljamo znanstvene član- ke, rezultate raziskovalnega dela avtorjev. Predlože- ni prispevki naj bodo napisani v angleškem jeziku. Imeti morajo strukturo IMRAD, ki je običajna za znanstvena in strokovna besedila. 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 za- gotovili anonimnost recenziranja, naj se imena av- torjev 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 ta- bele na papirju v obliki pripravljeni za preslikavo. V tem primeru naj bo vsaka slika na posebnem listu, oštevilčene naj bodo z arabskimi številkami, v bese- dilu 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 obja- vljena v reviji. Vse slike naj bodo črno-bele z be- lim ozadjem; barvnih slik v tiskani verziji revije ne moremo objaviti, barve so vidne le v spletni verziji. Članki morajo biti pred objavo v Organizaciji lekto- rirani. Končno verzijo mora lektorirati naravni go- vorec oz. lektor s primerljivim znanjem angleščine. Podrobna navodila avtorjem za pisanje in obliko- vanje člankov so na https://content.sciendo.com/ supplemental/journals/orga/orga-overview.xml/Gu- idelines_for_Authors.pdf. Predložene prispevke pregledata in ocenita najmanj dva recenzenta. Na osnovi mnenj in predlogov re- cenzentov 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 ure- dništvo Organizacije (organizacija@um.si ali joze. zupancic@um.si). Naslov uredništva: Univerza v Mariboru, Fakulteta za organizacijske vede Kidričeva cesta 55a 4000 Kranj Faks: 04-2374-299 Tel.: 04-2374-245 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: Tiskarna Koštomaj 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, Clarivate Analytics - Emerging Sources Citation Index (ESCI), 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, Summon (Serials Solutions/ProQuest), TDOne (TDNet), TEMA Technik und Management, WorldCat (OCLC) CONTENTS - 3/2020 185 198 212 227 246 260 Irfan HELMY, Wiwiek Rabiatul ADAWIYAH, Harini Abrilia SETYAWATI Fostering Frontline Employees’ Innovative Service Behavior: The Role of Workplace Friendship and Knowledge Sharing Process Robert K. MACGREGOR, Włodzimierz Sroka, Radka MACGREGOR PELIKÁNOVÁ The CSR Perception of Front-line Employees of Luxury Fashion Businesses Dana BERNARDOVÁ, Klára KAŠPAROVÁ, Martin FINK, Kateřina IVANOVÁ, Tetiana ARKHANGELSKA Construction and Significance of Corporate Social Responsibility Indices – from Results to the Essence Alenka NAGLIČ, Polona TOMINC, Klavdij LOGOŽAR The Impact of Industry 4.0 on Export Market Orientation, Market Diversification, and Export Performance Farzad SATTARI ARDABILI Moderating-mediating Effects of Leader Member Exchange, Self-efficacy and Psychological Empowerment on Work Outcomes among Nurses Jože ZALAR, Goran VUKOVIČ, Rok OVSENIK The Influence by the Elderly on Modernising the Organisation of Tourist Farms