Turkish Companies in European Union – Planning and Preparation Essay
Turkey is an associated member of European Union since 1963 (Berument, Malatyali, Neyapti, p.50, 2001) and it has applied for the full membership of the union in 1987 and later in the year 1999 it was officially accepted as a candidate of the membership of EU. At present Turkey is considered very near to become a member of European Union (Hakan, Kilinç, Yücel, p1, 2005).
There are certain governing factors that have make difference in the Turkish position as a candidate of EU membership. The country’s approach towards the EU membership efforts has been influenced by the business sector of the country as well because it is an important sector of the Turkish economy and in this context it is very crucial that the economical conditions of Turkey remain aligned with that of EU and its member countries. Hence it is very important to study the Turkish accession in the business context.
The dissertation is based on the objective of studying and examining the role of the business sector particularly the Turkish businesses in the perspective of the EU membership application of Turkey. The dissertation strives to unfold the planning and strategies of the Turkish businesses in the context of the possible membership of the Turkey in EU. In this regard the paper utilizes a mixed methodological approach and after collecting data and information from the secondary and primary sources, the dissertation presents a detailed account of information about the strategies of the Turkish businesses for joining EU.
Moreover the paper also provides deep understanding of the background and other related issues and describes the EU – Turkey relationship in the perspective of Turkish application for the membership. The potential economic and financial effects and benefits of the EU membership are also studied specially for Turkey and the planning of the Turkish companies is also compared with the existing EU members and other membership candidate countries of EU so that the strategies of Turkish business sector could be examine at EU standards.
The information is collected though the secondary analysis of data as well as from the interviews that are conducted from the representatives of some of the major Turkish companies. The interviews draw qualitative as well as quantitative data and provide detailed account of information about the strategies of the Turkish businesses. The dissertation also put some suggestions for the Turkish businesses with a view that it can help them the Turkish business sector in securing better position among the European Union members and candidate countries.
1.1 Goals of the Study
The Study is concerned with the strategies and planning of the Turkish companies in the European Union membership perspective and in this regard the main goals of the study is to examine the strategies and planning of the Turkish businesses in accordance with the European Union standards as well as in comparison with the existing and candidate members of the European Union. The paper is also aimed at portraying the picture of the Turkish Business scenario to provide a better understanding of the related issues. It is also an important goal of the study to have a look at the benefits of joining European Union. Hence there are following main goals of the study
To study the background of the Turkish business sector and to trade the performance of the sector over the decades.
To study the advantages and effects of joining European Union as full member
To study the strategies of Turkish firms in the perspective of Turkish membership
To examine the strategies of Turkish firms at European Union’s standards
To compare the planning of the Turkish businesses with the strategies of companies of the existing members of European Union and with the companies of the candidate countries for European Union membership
1.2 Need and Significance of the study
The membership of Turkey in European Union is an important issue and despite many years of the Turkish application for the EU membership, there is not yet confirmation about granting the full membership of union to Turkey. An important reason that hinders the Turkish way towards the European Union membership is the instability of the business sector of the country over the decades. At present when it is believed that Turkey has now reached to a nearer point with the full membership of European Union, the examination of the Turkish companies’ strategies and planning is very important because an important concern for the European Union and its member countries is the alignment of the Turkish companies with the European Union standards.
In this context there is great need for a study that can focus on these emerging issues and present comprehensive information about the Turkish companies’ strategies for the European Union membership. There are some studies conducted to study the Turkish businesses in the perspective of the European Union membership but none of the study has yet provided detailed account of information about the strategies of the companies. Hence to fulfill this requirement this study is conducted so that with the help of in depth interviews of the representative of the Turkish businesses, information could be gathered and presented related with the planning of the Turkish firms for the membership of European Union.
The study possesses great significance because it is expected to come up with comprehensive information and deep understanding of some emerging issues that are very important to study in the current scenario. The study finding will not only help in understanding the issue completely but will also enable to present some recommendations and suggestions to the Turkish companies so that they can do well according to the European Union standards and in comparison with the members and candidates of the European Union.
This chapter presents the review of the existing literature related with the topic of the study. As the dissertation is focused on the planning and strategies of the Turkish businesses with regard to the expected accession to Turkey with European Union, the related literature is reviewed to get better understanding of the background issues related with the topic. It is necessary to review the literature and researches conducted around the topic because to analyze the strategies of the Turkish business it is very necessary to understand the background and performance of the Turkish business sector in the perspective of membership in EU.
Moreover other important issues like the benefits and effects of EU membership and the business strategies of other candidate countries are also studies to get a deep insight of the entire situation. The literature review presents the information about the relationship between Turkey and European Union and the potential benefits of joining EU. In addition to this, the Turkish business sector is also introduced to examine the strategies and planning of business sector to become a part of European Union. In addition to this the case studies of some of the countries is also presented that are either existing members of EU of willing to join European Union; these countries are studied so that the strategies and planning of the businesses of these countries could be compared with the strategies of Turkish businesses.
Thus this chapter comprises of review of the literature and research work conducted around the topic of European and EU relations, the early days of Turkish business sector and its development over the years, effects and benefits of joining EU, Turkish businesses’ strategies in membership perspective, and the case studies of other candidate countries of EU membership. All these issue are closely linked with the topic of the dissertation thus they are studied and understood with the help of the review of the existing literature.
2.2 Turkey Relations with European Union
In the year 1987 Turkey formally applies for the membership of European Union. Turkey is an associate member of the organization since 1963 and since 1949 Turkey is the member of the Council of Europe. The country also got the associate membership of the Western European Union in the year 1992. Though the country applied for the membership of European Union many years ago but in 1995 Turkey signed the “Customs Union agreement” with European Union and since 1999 it has been recognized as a candidate of full membership of European Union (Berument, Malatyali, Neyapti, p.50, 2001). In 1995 the customs union agreement was signed between EU and Turkey with the objective of increasing the export and production of industrial goods and to attract more foreign investment from the European Union countries (Sayek, D. Selover, p2, 2002).
The Turkey membership process in EU was started many years ago (See Appendix I) and it is expected that the issue of the membership of Turkey will take more time to settle down because there are many controversies surrounding the issue. To become a member of the European Union it is not only must for Turkey to successfully complete the negotiation process with European Union on the 35 chapters of European Union acquisition but the collective response of the existing members of the commission is also required that they are agree with the Turkey accession on European Union (Neill Nugent, p3, 2005).
The issue of Turkish membership has tuned in to a long debate because many of the European Union members countries are not in favor of allowing membership to Turkey. France and Austria have suggested that this matter should be decided by conducting a referendum amongst the member countries of European Union.
There are some basic issues that are listed by the opposing countries as reasons for example the existing members of European Union argues about the conditions of human rights and democracy and the unfriendly relationship of Turkey with its neighboring countries however the basic issue is the cultural difference and the people of most of the European Countries believe that there are many cultural and social differences occurs between EU and Turkey and there is also a fear that this membership will lead to a wave of Muslim migrants towards Europe so Turkey should not become a part of the European Union (Berument, Malatyali, Neyapti, p.50, 2001).
To become a member of European Union it is necessary for the candidate country to fulfill the specific criteria set by EU for membership. European Union asks the countries to secure institutional stability where democracy and law should be the dominating agents. In addition the country there should also be adequate respect for human rights and minority rights and the market economy must be well functioning. After possessing all these attributes the fact also has to be established that the membership of the candidate country will provide benefits to both; the country and the European Union (Hakan, Kilinç, Yücel, p1, 2005)
European Union has published the document “European Strategy for Turkey” that is based on the agreements done between European Union and Turkey during the Luxembourg meetings. This publication of European Union describes all the conditions that Turkey is required to meet in order to become a member of European Union (Berument, Malatyali, Neyapti, p.50, 2001).
The membership of Turkey in European Union will effects many plans of the EU regarding the future enlargement and after giving membership to Turkey the commission has to revise the rejected membership applications of some other countries like Morocco etc. Due to this fact the members of European Union like France and Germany are afraid of the fact that if the commission starts giving membership to different countries then the borders of the Europe will be expanded and the political union of the European Union will be destroyed (Reuters, n.p., 2007).
Despite all these oppositions the citizens of Turkey have warmly welcomed the government decision to open the membership talk with European Union however the continuous delay in the process is disappointing the people (Neill Nugent, p3, 2005). Till date the negotiations between Turkey and European Union have not reached any final results and it can not be assure that Turkey will get the membership of European Union in coming few years however it is believes that at present Turkey is as close with full membership as it was never before (Hakan, Kilinç, Yücel, p1, 2005)
2.3 Introduction of Turkish Business Sector
Turkey is enjoying sound economic growth at present but the history of the country has witnessed several financial crises and economic instability as well. The most recent crisis was faced by the Turkish economy is the year 2001 when the inflation rate was reached at 70 percent and the budget deficit was exceeding GDP by 15 percent. This economic condition was considered a poor condition that acts as a barrier for Turkey to become the member of European Union.
The existing European Union countries were afraid that due to poor economic conditions there is increased unemployment in Turkey and in case of membership in European Union the unskilled Turkish labor will rushed towards the European countries for getting rid of unemployment and poverty that prevails in their homeland. The member countries also thought that the EU budget will also be negatively affected by the Turkey membership and the poor economic conditions of the country will prove to be a threat for the European Union (Malatyali, K., p45, 1998).
However after the crisis were end for Turkey, it concentrated towards the economic recovery and along with the time the foreign investment also increased in Turkey from the European Union countries. At present European Union is the biggest trading partner of Turkey because 42 percent of the import came from the European Union countries in Turkey whereas 52 percent of the exports of Turkey go to the European Union countries (Sahin, R, p2, 1998).
Despite all the opposition of the Turkish membership in EU from the existing member countries of European Union but the attitude of the multinational companies is quite different from the political point of views. At present there are many European multinational companies that are investing billions in the Turkish economy as they are confident about the sound progress of the Turkish economy. The multinationals are also investing in Turkey because it is expected that the economic growth of the country will be further accelerated when Turkey will become a member of EU (Sahin, R, p2, 1998).
The development of the economic sector of Turkey is well supported by the multinational companies and as a result of the greater participation of the foreign companies, the FDI flows are also increased for Turkey especially after the year 2004. The participation of the foreign forms in the economic growth of Turkey could be understood by the fact that among the top 500 companies operating in Turkey, one quarter are run by the foreign investment.
The FDI inflows were just $1 billion or less even less than that in some years until 2004 but after that there was a massive increase in the foreign investment and the FDI inflows reached to the level of $9 billion in 2005 and $20 billion in 2006. It is important point to notice that at present 60 percent of the total stock of FDI inflows is contributed by the European Union countries only that shows the favor of the business sectors of the European Union countries towards Turkey. There are about 15,000 foreign companies operating in Turkey and out of them 8,300 belong to the European Union countries including Germany, Netherlands, the UK, France and Italy (Sahin, R, p2, 1998).
The business sector of Turkey is expanding as the economy continues to grow. Earlier Turkey used to export mostly farm goods, steel, cheap t-shirts to different countries of Western Europe but now there is change in the export transaction of the country and at present Turkey not only exports TV, garments, fabrics, fashion accessories but also cars and car parts.
The rise in the export level of Turkey to the European countries is proved from the fact that at present four out of 10 TV bought in the European Union countries come from Turkey. Moreover Turkey was the leading producer of car and car parts in the year 2006 when one million cars, busses and trucks were produced in the country and one third of them were exported mostly to the EU countries (Katinka, Hermann, p2, 2007).
Turkey is one its way to provide garments to the European Union countries at such low rates that it stands in competition with China and the Turkish garment companies are not only producing higher quality fabrics but many of the Turkish brands are also successfully launched in the market. Along with this the manufacturing and banking sector of the country is also attracting the investors. In the Turkish banking sector there was no foreign investment done few years ago but at present 40 percent of the investment done in the banking sector of Turkey is contributed by the foreign investors. In addition to this more then 50 percent of the insurance sector is operated by the foreign investors (Katinka, Hermann, p2, 2007).
There are several important factors behind the increased interest of the foreign companies towards the Turkish business sector and among them the most important one is the fast growth of the domestic markets of Turkey. The strategic location of Turkey and availability of low cost labor also play a major role in enhancing the opportunities of the business sector of the country.
Turkey is located between Europe, Asia and Middle East that’s why it possesses great geographical importance moreover the workforce of the country mostly belongs with the occupation of farming where they receive low labor and most of them migrate towards urban areas from the rural to get better jobs. These people are unskilled or semiskilled that’s why they work at very low salaries due to which the companies easily get labor at low rate. The income per head of Turkey is just around 30 percent of the European Union average income per head however it is expected that in coming years this rate will be increased and the people in Turkey will become in better positions to buy luxury cars and homes (Katinka, Hermann, p3, 2007).
Despite all the attraction in the business sector of Turkey there are some weaknesses and negative points that often discourage the international trade activities and also act as controversial issues due to which many of the countries remain unsure about granting the full membership to Turkey. An important weakness in the business sector of Turkey is lack of control over the industrial subsidies.
Though Turkey has build up a well functioning competition authority but still there is no system controlling industrial subsidies due to which Turkey is listed among the world top 5 countries with respect to the production of the pirated good. The countries of European Union are much concerned over this matter because the EU drug markets are apprehensive for the enforcement of the patents in the pharmaceutical industry (Katinka, Hermann, p2, 2007).
The Secretary General of Organization for Economic Cooperation and Development – OECD (2006) reviews the business scenario of Turkey and informed that the Turkish business sector is moving towards securing a strong regulatory framework for the corporate governance. Not only the companies are concentrating towards getting listed in different markets but they are also adopting international standards of accounting and auditing. The role of Turkish Capital Markets Board (CBM) is very significant in this context as the board is effectively working to develop Turkish investment regime as an investor friendly market place.
Some challenges are also pointed out by the representative of OECD that a common feature of the Turkish business scene is the family controlled groups of companies and there is also high degree of cross-ownership between companies that affects the performance of the companies because there is potential of abuse in such situation.
Another important challenge for the Turkish companies is to meet the corporate governance standards for which they have to strengthen the legislative and regulatory framework. There is great need of supervisory, regulatory and enforcement authorities in the business sector of Turkey that can work will power, integrity and resources and can add to the soundness and efficiency of the Turkish business sector. The independent business organizations and regulatory boards are also required to work freely and more effectively (Angel Gurría, n.p., 2006)
2.4 Effects of Joining European Union
The potential effects of European Union membership are very positive because once a country is declared as the official candidate of the membership in European Union, the multinational companies start relying on the businesses sector of that country because they expect that in case of European Union full membership the country will grow and the business sector will also be stable (Baxter, King, 1999, p 575).
The multinational companies also keep in perspective that after the possible membership of European Union they will enjoy several trade related benefits and the export and import transactions will become flexible for them. Due to this reason Turkey also gained the confidence of the multinational companies and the participation of the multinational companies rose in Turkey (Malatyali, K., p45, 1998).
As a member of the European Union Turkey will have to implement the EU rules in the business sector of the country and then the European Union business related rules including the “the right of establishment, company law, public procurement, food safety, consumer protection, taxation and environmental rules” will be implemented in the business sector of Turkey and due to improved regulatory environment new business opportunities will be generated and the Turkish companies will be able to take the advantage of the consultancy services and technologies from the European Union companies.
The full membership of Turkey in the European Union expects to bring more positive developments in the business sector of Turkey and it is expected that Turkey will become more attractive for the foreign investors when it will adopt the policies and agreements of European Union. The companies of Turkey will not only have the facility for the free movement of goods but the implementation of competition policy and intellectual property right will become situation ideal for the international companies (Katinka, Hermann, p3, 2007).
2.5 Benefits of Joining European Union
The membership of European Union provides several financial benefits to the member countries and these benefits are not only enjoyed by the full members but the associate members can also receive the financial aid that they can continue to receive in case of full membership also (Hakan, Kilinç, Yücel, p4, 2005). The commission provides financial aid to the candidate countries as well if it doesn’t cause excessive burden on the common budget of European Union.
There are 74.8 billion Euros provided to ten countries during the time period of 2000 to 2006 as a financial aid. Most of these candidate countries belong to Central and East Europe (Hakan, Kilinç, Yücel, p8, 2005). The approval of providing financial aids to the candidate countries was decided in the “Brussels European Commission published Agenda 2000” that allows the commission to provide financial aid to the candidate countries in the agricultural, technical and structural fields (Malatyali, K., p45, 1998)
As Turkey also became an official candidate for the European Union membership in Helsinki Summit that why Turkey is also eligible to get the financial aid from European Union declared in the Agenda 2000 however the Turkey has got just one third of the granted aid and due to political conflicts and vetoed by other countries the rest of the amount is not given to the country (See Appendix II). The financial aid possess great important to Turkey to keep its economic conditions align with the European Union standards and the unavailability of the aid caused many difficulties to the country (Malatyali, K., p45, 1998).
After becoming a member of European Union the situation will be change for Turkey and then it can get adequate financial support from the union that is not received by Turkey being an associate member only. Turkey will get the right to oblige towards the Union budget and it will also become in a position to use the funds (Hakan, Kilinç, Yücel, p9, 2005).
An important benefit of the EU membership is the transfer of financial aid through different funds. There are different funds that are established in the European Union to provide assistance to the member countries to progress in different sectors. For example EAGGF – European Agricultural Guidance and Guarantee Fund provide support to the member countries to help them in restructuring their agriculture markets and to promote their agriculture export, storage capacities and acquisitions of goods. In this way the differences in the economic and social development level of the member countries could be reduced and the financial resource allocation rises.
Another fund in ERDF – European Regional Development Fund (Sahin, R, p2, 1998) that assists the less developed member countries in the development process and provide them finance to work on different development projects in different sectors. There is another fund of EU that is ESF – European Social Fund (Sahin, R, p2, 1998); the main objective of this fund is to improve the living standard of the people of the member countries by generating more employment opportunities.
The money obtained from this fund is used by the member countries for the payment of the occupational retraining and unemployment insurance. Another fund of European Union is the Adjustment Fund that is aimed at providing financial assistance in the environmental and transportation infrastructure projects in the member countries so that the social adjustment of the member countries could be improved (Hakan, Kilinç, Yücel, p10, 2005).
Turkey also receives started financial aid from European Union under the MEDA Program (Financial and Technical Measures to Accompany the Reform of Economic and Social Structures in the framework of Euro-Mediterranean Partnership) that provide aid to the non member countries. Earlier Turkey was not obliged to receive aid this program because the member of ERU vetoed against Turkey however during the time period of 1996 to 1999 Turkey received worth 375 millions ecu from EU through the MEDA program. Later in 199 all the financial aid except coming from MEDA program was canceled by the European Union (Berument, Malatyali, Neyapti, p.50, 2001).
In short the major economic benefits that Turkey can enjoy from the full membership of European Union can be listed as:
Rise in the Employment level: In case of getting membership in European Union, more multinational companies will invest in different sectors of the Turkish economy as they were facilitated and encourages by the liberalize trade policies of European Union that will take effect in Turkey also in case of membership. As a result of increased foreign investment there will be more jobs openings in different sectors and the unskilled and semiskilled labor of Turkey will get opportunities to work in different field other than farming and agriculture (Katinka, Hermann, p2, 2007). It can be predicted because at present when Turkey is just a candidate for the European Union membership, the FDI inflows are raised in the country and many European Union countries are already investing in different projects due to which there were 2 million jobs created outside the agriculture sector of the country during the year 2005 and there are many well settled companies that have established their subsidiaries in Turkey for example the subsidiary of German car producer company “Bosch” is working in Turkey by employing here almost 7000 people and this number is expected to go further high (Katinka, Hermann, p2, 2007).
Transformation in Economy: With the help of the foreign direct investment projects, Turkey could be able to move its economy from the agriculture and farming sector to the manufacturing and services sector (Katinka, Hermann, p2, 2007).
Sustainable Economic Growth: Low rate of unemployment, growth in the per capita income and the economic optimism; all these factors can lead the Turkish economy towards sustainable growth and these factors enter the Turkish economy when it will become a member of European Union (Katinka, Hermann, p2, 2007).
2.6 Role and Strategies of Turkish businesses in Turkey’s European Union Accession
The economic crisis in Turkey keep engage the Turkish businesses in straggle to survive and bear the shocks of the economic crisis due to which there was little attention paid by the Turkish businesses towards the trade liberalization policies and the Turkish companies were not dedicated towards adopting the European Union standards. But along with the passage of time, change occurred in the attitude of the Turkish companies and awareness was created in the Turkish business sector that they should work to get integrated with European Union to support the Turkish membership in European Union.
This awareness resulted in the increased interest of the Turkish businesses in the perspective of European Union membership and they develop some strategic plans to incorporate with the European Union standards. An important preparation of the Turkish businesses for the possible membership of European Union is the establishment of the “Economic Development Foundation – IKV” that was aimed at providing support to the objectives of Turkey in European Union. (Sinan Ulgen, p2, 2006)
The Turkish companies are not only backing the government to take such steps that can implement European Union standards within the Turkish corporate sector but many of the firms have developed their own strategies to keep then align with European Union standards. The organizations of Turkish companies like IKV, TUSAID and TOBB start taking keen interest and role in the process of the membership negotiations.
These organizations use to collaborate with the civil society organizations of Turkey and in case any setback is faced by the reform agenda, these organization express their interest through media and meetings with the government officials that they are in great favor of continuing the membership negotiations and are ready to implement the economic reforms within their operations to meet the European Union criteria. In the year 2006 when Turkey was set in the EU summit a delegation of the Turkish companies meet the Turkish PM and assure the business support in the membership process (Sinan Ulgen, p2, 2006).
The Turkish companies are not only expressing their support and favor for the Turkish membership in European Union but they have also takes some practical steps for example the federations of the Turkish companies are working on many informational and educational programs that are meant to educate the members of the companies and business organizations as well as the farmers and workers about the EU accession process so that they can keep them update with the European Union criteria.
One of the organizations of Turkish companies TUSIAD has published several papers that provide information to the people that what changes are required in the agriculture policy, energy sector and other business segments so that they can be prepared to get the accession in European Union. In addition to this some informational campaigns are also held by other business organizations like IKV and TOBB that create awareness in the business people especially about the reforms needed in the sector (Sinan Ulgen, p3, 2006).
The Turkish companies have also made their presence at Brussels to strengthen the EU-Turkey relationship. The office of TUSAID was opened in Brussels in the year 1995 and later two other business organizations TOBB and ITKIB opened their offices there. Through these offices the Turkish companies strives to understand the trade policies and working patterns of the European Union countries. Moreover through these offices good links are also established between Turkey and Commission. Continuing to this strategy, TUSAID has opened its offices in Paris and Berlin as well (Sinan Ulgen, p4, 2006).
The active role of the Turkish companies in the Turkey can be seen through the different activities of the Turkish business organizations that are working to built alliances with the European Union wide business organizations. For example TUSAID joined UNICE that is the federation of the European employers whereas TOBB made its presence in the European Association of Chamber of Commerce – “Euro chambers”.
In addition to this IKTIB that is the organization of the textile and clothing companies; has joined the counter part of Euro chambers “Euratex”. IMMIM that is the association of the Turkish metal producers has become the member of the “Eurofer” that is a metal related trade organization of Europe. In this way the Turkish companies have made their presence in the EU and they are also acting as influential agents that strive to push these polices of the European Union organizations in favor of Turkish businesses (Sinan Ulgen, p5, 2006).
The Turkish companies have also realized that across the countries of European Union there is not very strong public support for Turkish accession in EU. Hence the Turkish companies are also trying to build a better image of their country in front of world and for this purpose they are doing lobbying though difference international organizations like UNICE etc.
Moreover the Turkish business organizations also send their delegations in different European countries like France and Germany where these delegates meet with the leaders, opinion formers and press in order to form a favorable opinion about the country’s membership bid. The Turkish companies run PR campaigns in the countries where there is more opposition for the Turkish membership like in Germany, France and Austria (Sinan Ulgen, p5, 2006).
Through all these steps and activities the Turkish companies have proved that they are concentrating towards the issue of Turkish membership in European Union and they are designing plans and strategies to face the up coming challenges of the membership. Moreover the role of Turkish companies during the application process is also significant and the business organizations are doing well to support the Turkish bid for European Union membership (Sinan Ulgen, p5, 2006).
2.7 Competition between Turkish and European Union member’s companies
As Turkey is a candidate for the full membership in the European Union, it has to prove in every sector that it deserves the full membership that will be beneficial for both the country as well as the Union. The economic performance of the country is an important point of concern and the role of Turkish companies becomes more crucial in this context as they are directly in competition with the companies of European Union and they have to prove that their performance, planning and strategies aligned with the standard of the European Union.
In this regard there are some many important factors over which the Turkish companies have to concentrate. There is great possibility that is case of the Turkey accession in EU there will be tough competition in the corporate sector that might result in the defeat of some companies who can either belong to Turkey or European Union countries (Katinka, Hermann, p2, 2007).
At present the business patterns of Turkey is quite different from that of the European Union countries but there is great possibility that Turkey will get economic stability by aligning its businesses sector with the EU standards and on the other hand the European countries will also get the benefit of investing in Turkey and this will give rise to the competition between the Turkish based international firms and the EU international companies. (Sayek, D. Selover, p2, 2002)
The Turkish companies are on their way of adopting many legislative and structural reforms so that they can meet the European Union standards and it is expected that the Turkish companies will successfully survive in the European Union markets. The World Economic Forum rated Turkey in the Business Competitiveness Index at the 52nd position among 103 countries.
An important point is that in this rating there are some EU countries that are ranked higher then Turkey for example Czech Republic is at the 42nd position whereas Hungary is at the 42nd rank. At the same time there are some European countries that stand very closely with Turkey in the Business Competitiveness Index like Romania stands at 56th rank, Poland at 57th and Bulgaria is at 75th position (Bryane Michael Erika, p3, 2005). It shows that Turkey will face a tough competition with the European countries.
As far as the competition that Turkish companies have to face in European Union is concerned there are some many important factors that play the leading role and the concept of “CSR” is an important one among them. “CRS – Corporate Social Responsibility refer to the concept that the companies have to give priority to the social and environmental concerns within their business operations as well as in their interaction with the stakeholders” (European Commission, n.p, 2001). The European Union countries give considerable important to this issue and in the companies of EU the stakeholders are cared for the social concerns.
The Turkish companies have a big challenge in form of the CSR application within their organizations because this concept is not very popular among the Turkish companies whereas the companies of European Union have adopted such strategies that promote CSR in their firms. If the Turkish companies over look this issue they may loose the battle on this ground because adopting CSR is an important tool to gain success in the EU markets (Bryane Michael Erika, p3, 2005).
European Union gives considerable importance to the issue of CSR that’s why Turkish companies have to take care of the matter that they have to compete with the European Union firms in this field as well. In the year 2004 European Commission evaluated the countries performance regarding the CSR and disclosed that the EU countries are paying proper attention towards attaining CSR in their business cycles and many of the European Union countries like Belgium, Austria, Germany, Spain, France and the Netherlands etc have taken some remarkable steps towards the promotion of CSR and for the development of the CSR supporting policies.
These activities of the European Union countries are challenge for the Turkey and the companies of Turkey also have to take some steps that can prove its seriousness towards the implementation of CRS. The European Union also published a paper to highlight all the activities of its member countries that revolve around supporting and promoting the CSR in their business sector (See Appendix III)
Hence it is revealed that the Turkish companies will face tough competition in the European Union as most of the European Union companies stand very close to the Turkish companies with regard of the performance and many are performing better. The accession of Turkey in European Union will not be a simple process for the Turkish companies and they have to struggle lot to capture the 380 millions of potential consumers in European Union that have market demand worth € 8.5 trillion (Bryane Michael Erika, p2, 2005).
2.8 Case Studies of Countries Joined and Willing to Join European Union
There are many other countries that are willing to join European Union and for this purpose these countries are designing their strategies to comply with the European Union standards so that they can pave way towards the accession in EU. Following are the case studies of some countries regarding their business strategies in the perspective of membership in European Union.
Romania – Business Strategies for European Union Accession
In 2005 European Union declares the readiness of the Romania to join EU and in the year 2007 the country becomes the member of EU. The economic growth of the country is felt at a satisfactory level however the business plans and strategies plays a critical role in the upcoming days. In Romania the business sector had felt the importance of designing plans and preparation for the European Union succession. In this regard the business organizations supported the policies of the country and took active role in the reforming process so that the business sector of Romania could become acceptable for European Union. The Chamber of Commerce and Industry of Romania is concerned with the active role of the business sector in the accession process and the organization is doing best to improve the performance of the business sector.
The chamber of commerce has also arranged some awareness programs aimed at informing and consulting with different companies regarding the European Union membership of Romania. Moreover the Chamber of Commerce is also committed to make changes in its organizational structure so that it can [play a very effective role in the Romania’s European Union accession process. In this regard many position papers have also been published and debates and public hearings are arranges so that there could be greater awareness of the issue in the general public as well as in the business sector.
The companies operating in Romania also keep them in touch with the higher government officials and assure the support of the business sector during the membership talks. Along with all these steps an important strategy of the Romanian companies is to get prepare for the moment when Romania will get the full membership of European Union. For this purpose the companies arrange different European Programs with the aim of strengthening the businesses and to get prepare to face the competition and challenges of the EU markets.
The chamber of commerce of Romania has designed a program “CAPE – Chamber Accession Program for Central Europe” and through this program the Romanian companies did the research work and collect information about the market so that the Romanian companies can be kept updated with the emerging trends of the EU markets. The CAPE also conduct surveys to find out the trends and opinions formed in the business community if the country regarding the membership in European Union. There is also great awareness in the business sector of Romania that to face the competition in the EU markets every large scale business has to design its own plans and strategies so that it can effectively handle the situation (George Cojocaro, p2, 2003)
Croatia – Business Strategies for European Union Accession
Croatia got the status of an independent state in 1991 and from 1992 the relations between European Union and the country were established. Croatia used to receive financial assistance from European Union under different projects and on 21 February 2003 Croatia filled the application in European Union for membership. In 2005 membership talks were started between EU and Croatia and after several sessions of negotiations Croatia expects to become a member of EU in 2009.
The economic conditions of the country are considered satisfying and European Union has declared that Croatia is doing well to achieve considerable degree of macroeconomic stability. The companies of Croatia have also adopted some strategies and planning so that they can adjust in the EU markets. An important plan of the Croatian businesses is to establish the statistical system of the businesses on the patterns of the European Union so that it become easy to collect, produce and disseminate the information about the overall activities and performance of the economy. Moreover the business sector is transforming the structure and functioning of their business structures so that the companies can get the support from the European Union countries easily (Zagreb, p10, 2003).
Albania – Business Strategies for European Union Accession
Albania is also amongst the countries that are willing to join European Union by taking up its full membership. The membership talks were begun in 2001 between EU and Albania. In order to support the country’s plan the business sector is acting as a supporting agent and many of the companies in Albania are positively playing their role in the situation. The companies are not only making legislative changes in their organizational structures but they are also trying to achieve trade liberalism, adopt WTO compliance, export, and FDI promotion.
In this regard the Ministry of the Economy plays an important role that work for the capacity building and promotion of trade liberalization process in the country so that they business sector of the country can reached at a point where it can stand along with the European Union countries. The business community of the country is supporting the Albanian membership bid in EU and they have prepared some short term as well as some long term strategies so that they can achieve managerial and coordination capacities and they can also implement all the strategies effectively within the organizations (EC-UNDP Project, p1, 2000).
The chapter discussed in details the important issues associated with the strategies of the Turkish businesses in the membership perspective of EU. The review of the literature portrayed a clear picture of the whole scenario and the development, growth and expansion of the Turkish business sector after passing through the early crisis and setbacks is traced out. The chapter also described the effects and potential benefits of EU membership that will be drawn on Turkish economy.
In order to illustrate the situation that Turkey will face after the membership in EU, the competition in the EU market place is discussed and in this context the main strategies of the Turkish businesses are also studied. To further evaluate the Turkish strategies, the cases of other candidate countries of EU membership are studies with respect to their business sector. Thus this part of the dissertation clarified all the background issues related with the topic and provided detailed information and data that was necessary to get better understanding of the issue.
3.1 Research Question/Problem Statement
The research is aimed a finding out the answer of the following question:
“Turkey is hoping to join the European Union. How Turkish businesses are planning for this and how effective is this planning likely to prove?”
3.2 Research Objective
The research is aimed at exploring and examining the planning of Turkish businesses to become a member of European Union. In this regard there are following key objectives of the research:
To have a look at the early days of the Turkish businesses and portray picture of the current businesses situation
To highlight the potential benefits that the businesses of Turkey can enjoy after becoming a member of European Union
To study the strategies and planning of the Turkish businesses to meet the standards of Europe Union
3.3 Research Type
In order to achieve the research objectives a mixed methodological method has been selected because it is believes that a great level of reliability and validity could be achieved through a combination of qualitative and quantitative method. “Mixed Method kind of research draws upon the strengths of both quantitative and qualitative analysis, which enables the researcher to draw upon several methodologies in measuring the variables of the study” (Johnson and Onwuegbuzie, p14, 2004)
As far as the qualitative research is concerned there are several methods that have been used by the social scientists to conduct the research. These methods include “case study, literature review, natural experiment, participant observation, interviews based, secondary analysis of data or the combination of these” (Berg, B., p57, 1989).
From these methods there are two methods selected for the study; one for secondary research and the other for primary. It was decided to conduct the study with the help of the “secondary analysis of data” that basically means to reanalyze the data that is already compiled by other researchers and organizations to meet the requirements of their own study or data base” (Miles, M. & M. Huberman, n.p, 1994). The secondary analysis of data allows having a deep insight of the issues covered in the research by summarizing and analyzing the existing researches and material related with the topic.
The primary research method selected is the “interviews”. Hence the presents the secondary analysis of the related available material to find the qualitative support for the study, moreover interviews form the representatives of four international Turkish companies are also conducted with the help of structures questionnaire so that quantitative and qualitative information about their planning and strategies could be gathered. According to the requirement of the topic, the study concentrates towards obtaining more of the qualitative information rather then quantitative data and information however some of the issues are unfolded with the help of the quantitative data obtained from the primary resources i.e. interviews.
3.3.1. Significance of Interviews
An interview is an important method of collecting qualitative as well as quantitative data and information for the research. It is explained by Yin (1994) that “in depth interviews are most vital source for gathering information for research study”. Keeping in view the significance of the interviews for researchers, it was decided to conduct interviews because as per requirement of the research study, in depth information are required from the perspective of the Turkish businesses regarding the issue of Turkey full membership in European Union. This information could not be gathered from any other research method and the interviews were found the most appropriate method of conducting the research.
3.4 Sources for Data Collection
The information and data is collected for the study by utilizing both the secondary as well as primary sources
3.4.1 Secondary Sources
In order to get secondary material for the review and analysis, different sources are approached that include “books, journals, research reports, policy documents of the organization (European Union), magazines, newspapers, web portals and other print material resources”.
3.4.2. Primary Sources
The primary sources for the gathering of information are the interviews. Structured questionnaire were used to conduct the interviews and it was decides to come up with interviews of at least four representatives of the Turkish businesses
3.4.3 Criteria for Selecting the Interviewees
The Turkish business directory and Yellow pages were accessed to get information about the Turkish companies. from the top 50 companies 10 names were randomly picked and then the representatives of these firms were send the questionnaire via email and post along with a cover letter describing the purposes of the research.
The respondents were assured that of they don’t want to disclose their identity then their confidentiality should be respected. After getting responses from the firms interviews were scheduled and after taking the appointments from the representatives of the firms, face to face interviews were conducted. Preference was given to conduct the interview of the people working at the top management positions of the firms and finally the research has come up with four interviews of the executive director, senior manager, Deputy Director and Deputy General Manager of four different Turkish companies.
3.4.4 Questionnaire for the Interviews
In order to conduct the interviews a structured questionnaire was prepared that was sent to the respondents via email prior to the interviews so that they can get prepare for the answers. The questionnaire was consisting of both the open ended and close ended questions so that qualitative as well as quantitative information could be achieved. Attempt was made to keep the questions as simple as possible. The number of the questions was also kept at minimum keeping in view the working positions of the interviewees so that they don’t have to take out much time for the interviews. The questionnaire was divided in to two sections so that the qualitative and quantitative data can be easily gathered and calculated from the interviews.
Company Name ……………………………………
Company Postal Address ……………………………………
Email address ……………………………………
Company website ……………………………………
Q1. How do you see the ongoing process of Turkish full membership in European Union?
Q2. Do you think that the businesses community has some crucial role to play in the context?
Q3. Are you designing some strategies for transforming your businesses so that it can come to the level of the European Union standards?
Q4. What are you planning for your companies in case Turkey gets the membership in European Union?
Q5. Do you think that the full membership of Turkey in European Union will bring improvement in the performance and standards of the Turkish companies?
Q6. What are your key strategies and planning for facing up the changed situation that will result from the Turkey membership in EU?
Q7. Are you in favor of Turkish full membership in the Union? Give reasons for your answer
Section II (Choose from the given options)
Q1. Are you satisfied with the present working and performance standards of the Turkish companies?
Yes No Up to some extent
Q2. Do you think that the Turkish businesses meet the standards of the European Union?
Yes No Up to some extent
Q3. If no, then what are the main reasons behind the low standard of the Turkish companies?
Yes No Up to some extent
Q4. The full membership of Turkey is European Union will benefit your company in any way?
Yes No Up to some extent
Q5. If Yes then what will be the benefits and if No then why?
Q6. D o you think that there will be rise in the competition between foreign and national companies due to European Union membership?
Yes No Up to some extent
The research was conducted by utilizing the secondary as well as primary sources. Following are the information gathered from these sources regarding the topic.
4.1 Key findings of the Primary Research – Interviews
The interviews were conducted from the representatives of some Turkish companies with the help of a structured questionnaire. There were two sections in the questionnaire and the results and information gathered from the interviews is described below. The personal and company information of the interviewees is kept undisclosed and the interviewees were assured about it however it is to be notify that the interviewees work at key positions in some of the leading Turkish companies.
4.1.1 Section I – Key Findings
There were total seven questions in the first section of the questionnaire that were aimed at bringing up detailed opinion of the interviews about certain matters related with the topic and the answers of the first section bring following results
The first question of the first section asked the interviews that how they see the ongoing process of Turkish full membership in European Union. In reply to this question there was an overall positive response of the people and the representative of company “A” told that the ongoing process of Turkish membership is bringing hope in the businesses community of the country however the delay in negotiation disappoints them and they want that European Union complete the membership talk with the country soon and declare weather or not Turkey can become a member to European Union. The representative of company “B” informed that the membership process of prolong that draws both positive as well as negative impact on the Turkish businesses.
He explained that as the process take too much time there is growing uncertainty among the business people about the results of the membership talks and they are afraid that if in the end the Turkish membership application is rejected on any ground then all the efforts of the Turkish companies to align them according to the European Union standards will be wasted however the membership talk process is also benefiting the business sector and they are getting more time to get prepared for the expected membership in European Union and during the time of the membership process they can adopt the legislative and organizational patterns of the European Union companies.
The representative of company “C” told that the membership process is significant for the Turkish companies because the multinationals especially belonging to the EU countries are attracted towards Turkey and their interest bring more business, employment and investment in the country so it is a beneficial process for the Turkish companies. The representative of company “D” also expressed his concerns towards the matter and said that we are waiting to see the results of negotiation talk because they are going to draw some significant effects on our business operations and strategies.
The second question of the first section asked the interviewees if they believe that the businesses community has some crucial role to play in the membership context or not. In reply to this question the representative of company “A” told that he strongly believe that the business sector has to play a crucial role in the membership context because an important concern for the European Union is the economic conditions of the country that depend upon the performance of the companies hence the companies have to perform well to bring overall improvement in the economic conditions.
The representative of company “B” revealed that International companies have a big responsibility in the membership context. They not only have to improve their own performance but also have to design strategies at their own so that they can meet the EU standards. The representative of company “C” informed that the Turkish companies have to do much more then performing well. They have to transform their legislative and organizational framework and along with that they have to work to create awareness in the people of the business sector about the European Union standards so that all the companies concentrate towards reforming their working patterns according to the European Union standards. The representative of company “D” said that the current situation is a challenge for the Turkish business because we have to take our firms up to the EU standards and at the same time we have to be sound enough in our strategies and planning to face the competition with the EU countries.
The third question asked the interviews if they are designing some strategies for transforming their businesses so that it can come to the level of the European Union standards or not and the results of this question revealed that the Turkish companies are emphasizing towards designing their strategies to meet the membership requirements. The representative of company “A” told that their strategies revolve around the objective of making changes within their working patterns and they are also trying to get more information about the membership requirement so that they can do well in the membership period.
The representative of company “B” told that they also support the government to take positive initiatives in the membership talk. For example they have assured the government that they are willing to adopt and implement the rules and regulations of the EU in their businesses so of the European Union asks Turkey to make changes in the working of the companies then the government should reply favorably because of the support provided by the Turkish firms.
The representative of company “C” disclosed that they are also planning to open their branch office in some of the major cities of European Union countries so that they can build communication with the business organizational and consumers of European Union. The representative of company “D” said that it is very necessary for us to design the strategies and plans in the context of membership with EU and work is on progress not only at firm’s level but also through the joint business forums like TOBB, TUSAID and IKTIB
The fourth question asked the people that what they have planned for the Turkish membership in EU and the representative of company “A” informed that they are ready to make all the required changes in their working patterns and for this they are thoroughly studying the working styles of the EU businesses. The representative of company “B” told that they are aware of the possible tough competition so they are trying to build their companies of strong basis so that it can compete with the European Union companies.
The representative of company “C” informed that they will do whatever will be required so that the benefits of the European Union membership could be enjoyed by their company at maximum level. The representative of company “D” said that lot of work has to be done and we are on our way of transforming our organizational culture in accordance with the EU standards. Moreover we are also looking that how can we adopt the legislations and other necessary changes within our businesses
The fifth question asked if the representatives of the Turkish companies believe that the full membership of Turkey in European Union will bring improvement in the performance and standards of the Turkish companies or not and there was a common type of response from the interviewees. The representative of company “A” believe that there will be improvement in the performance and standard of the Turkish firms however at the same time he was also concerned about the competition that will be faced by the Turkish companies.
The representative of company “B” said that we are also worried regarding tough competition that membership in EU will bring and we are aware that the companies who will not adopt successful strategies might fail to survive in the high competitive market place that will emerged from the Turkish membership in European Union. The representative of company “C” said that lot of improvement in expected because we are expecting preparing for the competition and this preparation is making our businesses strong and comparable at EU standards. The representative of company “D” said that the fear of tough competition in EU is leading the Turkish companies towards the improvement in the performance level of the companies.
The sixth question asked the people that what are their key strategies and planning for facing up the changed situation that will result from the Turkey membership in European Union and the representative of company “A” told that the key strategies include the adoption of the European Union business patterns an standards, creation of effective link between Turkish and EU companies and getting membership in different European Union business organizations. The representative of company “B” said that they are working to create awareness in the Turkish business sector about the potential effects of the Turkish full membership in European Union.
The representative of company “C” said that we are strengthening out businesses internally and externally by managing our work force effectively, deciding our goals and making sound plans to meet our targets. There will be a tough competition for us and if we will stand strong only then we can survive in the new situation. The representative of company “D” said that our key strategy is to follow the EU standards so that we can easily cope up with the challenges of the expected competition with the EU companies.
The seventh questions asked the interviewees if they are in favor of Turkish full membership in the Union or not, and it is revealed from the interviews that all the four representatives of the Turkish companies are in favor of the full membership in European Union. While giving the reasons for this favor the representative of company “A” told the membership will improve the performance and widen the scope of the businesses and then there will be more employment opportunities in the country.
The representative of company “B” said that the people related with the companies will also enjoy high rate of profits and other benefits of the European Union membership. The representative of company “C” we are looking positively towards the membership because it will broad our horizons and we will get more opportunities to grow and operate at international level. The representative of company “D” we favor and support the Turkish membership in EU because we look for various positive effects of this membership.
Hence in this way the opinions are collected from the representatives of Turkish firms to know their perspective regarding the full membership of Turkey in EU.
4.1.2 Section II – Key Findings
There were total six questions in the second part of the questionnaire that were intended to bring immediate response of the interviewees about the topic. The results of the second part of the questionnaire are as follow:
The first questions asked the people of they are satisfied with the present working and performance standards of the Turkish companies or not, and it is revealed that there are 50 percent (2 out of four) people that are completely satisfied from the present working and performance standards of the Turkish international companies whereas 25 percent (1 out of four) partially satisfied and 25 percent are not satisfied at all.
The second question was: “Do you think that the Turkish international companies meet the standards of the European Union?” In reply to this question there were 25 percent people who believe that the Turkish companies do not met the European Union standards whereas rest of the 75 percent think that up to some extent the Turkish firms meet the standards of the European Union.
The third question of the second section asked about the reasons behind the answer of the people regarding the answer of the second question and it is revealed that the representative of the Turkish companies believe that Turkish companies are trying to meet the standards of the European Union and they are trying to meet the legislative and organizational requirements as well however the current position of the Turkish companies could not me marked at completely in accordance with the European Union standards. at the same time there were 25 percent of the respondents who told the Turkish companies have along way to go and they have to make many changes in the working patterns to me the European Union standards so at present the working standard of the Turkish firms is very low due to lack of European Union level organizational structure and legislative aspects.
While answering the fourth questions of the second questions, 75 percent of the interviewees revealed that they believe that the Turkish accession in European Union will benefit their companies and 25 percent told that it would be beneficial but up to some extent.
In the next question the interviewees disclose the reasons behind their answer of the fourth question and told that the Turkish membership in European Union will bring great opportunities and scope for their company that why they believe that the membership will prove to be beneficial while the rest of the 25 percent said that the membership will be beneficial up to some extent because in case of membership the Turkish firms have to face very tough competition as well and if the companies failed to compete with the European Union firms then these can not take the benefits from the Turkish membership in European Union.
The sixth and the last question asked the interviewees if they believe that there will be rise in the competition between foreign and national companies due to European Union membership or not. While responding to this question all the 100 percent of the interviewees informed that they believe that the Turkish membership in European Union will give rise to the competition between the Turkish national companies and the companies of European Union countries.
4.2 Key Findings of the Secondary Research
The research study was conducted by using both the secondary and primary sources and the available secondary material was also accessed to gather the relevant information about the topic. Hence the secondary sources unfold many aspects of the planning and strategies of the Turkish business in the perspective of European Union membership. The secondary sources not only enabled to understand the background issue but also present detailed information about the Turkish companies and their strategies. Hence key findings of the secondary sources are as follow:
Turkey has filled application for the European Union membership many year ago however since 1999 it has been officially reorganized as a candidate of full membership in European Union. At present Turkey is associate member of the union (Berument, Malatyali, Neyapti, p.50, 2001).
There are many reasons based on which many of the European Union countries opposes the Turkish membership in European Union and among them the weak economic performance is an important one (Malatyali, K., p45, 1998).
Turkey faced many financial crises due to which the economic growth was badly affected however now after going through many financial crises in past and the economic conditions are stable in country and the economic growth is also accelerated in terms of FDI inflows, GDP growth and employment rate etc (Sahin, R, p2, 1998).
Despite the opposition of the European Union countries the multinationals of the European Union countries view Turkey as an important trade destination and they also favor the membership of Turkey in European Union so that the trade becomes easy between them (Hakan, Kilinç, Yücel, p1, 2005)
The business community of Turkey is in favor of Turkish membership in European Union and they are also attempting to adopt the legislative and organizational patterns of EU businesses (Sinan Ulgen, p2, 2006)
The Turkish companies are also expanding their businesses towards better standards and variety of production and from the agriculture and farming now they are moving towards TV, auto parts and car production and these products are also exported mainly to the European Union countries (Katinka, Hermann, p2, 2007).
In case of European Union membership, Turkey will enjoy variety of benefits like the rise in foreign trade and investment, technology transfer from European Union countries, high FDI inflow and improvement in the employment rate but at the same time there will be tough competition in the European Union markets (Malatyali, K., p45, 1998).
Turkey companies have to work over many issues yet to come at the European Union standards and the companies are striving to achieve these standards through their efforts.
The Turkish companies have designed their strategies and plans to face the challenges of the situation that will emerge from the Turkish membership in European Union. In this regard the main plans and strategies of the Turkish business includes : establishment of trade organizations that support the membership process (e.g. IKV), the monitoring of the membership talks and process and ensuring government the support of business community, adoption of legislative and organizational framework of European Union countries, building links with the EU business organizations by getting membership in the European Business associations, making presence in EU countries by opening their offices there and creating awareness about the European Union standards in the business community with the help of publications, campaigns and awareness programs (Sinan Ulgen, p2, 2006).
4.3 Supporting the Primary Research Finding by Secondary Research
There are many findings of the secondary analysis that further support the findings of the primary sources. For example as discovered from the secondary sources that Turkish companies are adopting the European Union standards to get ready for the membership, the primary sources also confirmed that there is great willingness and awareness in the Turkish companies to adopt the legislative and organizational structure of European Union so that they can meet the EU standards. Moreover the favorable response of the Turkish companies towards the Turkish membership in EU is also found in the findings of both the secondary and primary sources.
In the same way many of the strategies of the Turkish businesses are highlighted in the secondary data and it is revealed from the interviews that the companies’ representatives also confirmed that their companies are designing strategies and plans in the perspective of the Turkey’s European Union membership.
At present the role and strategies of the Turkish companies is not completely satisfying for many of the social scientist and in many research papers and studies (Sinan Ulgen, p2, 2006; Malatyali, K., p45, 1998) the strategies of the Turkish business have been discussed however there are some important points pointed out upon which the Turkish companies have to concentrate for example the concept of Corporate Social Responsibility has not yet get popularity in the business community of Turkey but in the European Union business considerable importance in given to CSR and the European Union countries take CSR as an important component of their business policies that’s why there are many remarkable steps taken by the EU countries for the promotion and support of CSR (European Commission, n.p, 2001) but as far as Turkey are no evidence found that can establish the fact that Turkish companies are also concentrating towards promotion and adoption of CRS.
Hence a weak point in highlighted by the social scientist that the Turkish companies still have to look towards certain important factor to compete with the European Union firms and at present these factors are lacking in the Turkish companies (Bryane Michael Erika, p3, 2005). The interviews also confirmed this impression as it is revealed from the interviews that there is no complete satisfaction among the representatives of the Turkish companies about the present performance of the Turkish companies in meeting the European Union criteria.
The interviewees as well as the social scientist are noticing that the process of Turkish membership is long time and for successful completion of the process the business sector also has an important role to play because the European Union countries consider the economic performance of the country as an important factor to decide the membership approval to any country (Berument, Malatyali, Neyapti, p.50, 2001). The interviews also revealed that the Turkish companies have to play a vital role in the membership process and there is awareness in the business sector about the importance of the performance of the economic sector in the membership process.
The interviewees informed that the Turkish companies are designing plans and strategies in the perspective of the Turkey membership in European Union for example the representatives told that they are working to create awareness and building link with the European Union business organizations. This information is well supported by the secondary data and it is revealed in a study (Sinan Ulgen, p5, 2006) that the Turkish companies have taken some notable and remarkable steps in the membership perspective and in this way the planning and strategies of the Turkish companies are notified through primary as well as secondary research.
Hence it is observed that what is revealed from the secondary analysis of data, supports well the answers of the interviewees and there was no contradiction found in the opinions of the representatives of the Turkish companies and in the observations and findings of the social scientist who have conducted research on the topic of Turkish membership in European Union from different perspective and in this way the dissertation presents the research results gathered from different sources but supporting well each other.
Analysis and Interpretation
With the help of the data and information gathered though different sources, the dissertation now presents the analysis and interpretation of the research findings so that the arising issues can be discussed and the answer of the research question can also be found.
5.1 Analysis of the research findings
The study highlighted various important aspects related to the planning and the strategies of the Turkish companies for expected membership of Turkey in European Union. It is observed that the economy of the country is flourishing at the moment and there is growing interest of the foreign multinational companies in the investment projects in Turkey and an important reason found behind this interest is the Turkish bid for membership in European Union. The foreign investors have realized that after becoming a member of European Union Turkey will become an important economic center of the region because it has a strategic geographical location moreover the labor is also very cheap in the country due to these reasons there is growing FDI coming in to the country and ultimately the economic growth of the country is accelerated.
The main emphasis of the study is upon the planning and strategies of the Turkish business regarding the Turkish membership in European Union and it is found that the way foreign investors have noticed the business benefits of the Turkish membership in European Union, the Turkish companies are also aware of the fact that a great change will occur in the situation when Turkey will become the member of European Union. In this regard the Turkish companies have also felt the need for strategic planning so that they can face the challenges of the up coming situation. The study describes various steps that have been taken by the Turkish companies to maintain a standard that would be acceptable for the EU and to implement the legislation and structural framework of European Union companies within their businesses so that after becoming a member of European Union they can easily collaborate with them.
It is a positive point of the Turkish companies that they are planning for the Turkish expected membership in European Union at individual as well as at collective forums. The Turkish companies have set some strategic goals that they are aimed at achieve in their own organization, moreover there are many business organizations like TOBB, IKTIB, TUSAID and IKV etc that are engage in some remarkable activities to strengthen the Turkish perspective of joining European Union. These organizations are working at national as well as international level so that they can make a difference in the membership process of Turkey. It is found that these organizations are not only working to create awareness about the European Union standards within heir on organizations but also among the general public.
In addition to this these organizations also send their delegates to government so that they can discuss the membership issues with the government and can assure the government that the Turkish companies are not only in full favor of the membership but they are also ready to go through the transformation in their organizations so that they can work on the same patterns of the European Union companies. In this regard some practical steps have also been taken by the companies and many of the companies have implemented the rules and regulations that can take them at the same level where the European Union countries operate.
Another significant move of the Turkish companies in the membership perspective is to raise their profile in the European business associations. Many of the Turkish business groups like TUSAID and IMMIM etc have become the member of the European business organizations and it this way they have got a prominent position in the business scenario of EU. In addition to this the Turkish companies are also opening their offices in different important cities of the European Union. TOBB, TUSAID and IKV have established their offices in Brussels and France etc.
This is a positive strategy to take part in the business activities of the European Union and to understand the business scene of European Union by making presence there. In this way several plans and strategies of the Turkish companies are discovered that are aimed at supporting the membership process, creating suitable environment for membership, meeting the European Union organizational and legislative standards and to secure a better position where they can compete with the EU firms.
However despite all these plans and strategies there are still some loop holes in the strategies of the Turkish companies and it is found that they are not giving proper attention towards adopting the values and organizational behaviors that exist in the companies belonging to European Union. In this regard the Turkish companies have to work out so that there will be no point of objection for the EU countries as far as the business sector is concerned. The concept of CSR possesses great importance in this regard and Turkish companies have to adopt the corporate social responsibility within their organizations so that in any aspect they can not be left behind by the European Union companies.
5.2 Discussion of the Arising Issues
The study has come up with some important issues that are related with the planning of the Turkish companies in the perspective of Turkish membership in European Union. It is notified that the Turkish companies are well aware of their role and need of strategic planning for supporting the membership process and they have also taken some positive steps in this regard but still the current situation is not satisfying for the representative of the Turkish companies themselves (Interviews), for the social scientists (Bryane Michael Erika, p3, 2005) and for the countries of the European Union (Berument, Malatyali, Neyapti, p.50, 2001). Hence it is proved that despite all the efforts and planning the Turkish companies has not done a completely satisfying job.
The objection of the EU countries on the economic condition and business patterns show that the Turkish companies have not yet built a very positive image of their country in front of the European Union countries. though the Turkish business organizations used to arrange meeting with the press and opinion leaders of EU countries so that their country image regarding the economic performance could become better and FDI has also increased in the country but there is still unlikeness of Turkish membership on economic grounds that is a big challenge for the Turkish businesses because along with the government they are the important player of the economic situation and an important responsibility lies on their shoulders to support the membership process and to pave the way for favorable response from other countries about the business sector of Turkey.
But despite all the unlikeness of European Union countries we can not establish the fact that the Turkish companies are completely failed in performing their job in the membership perspective because along with the economic performance of the country there are several other political and social reasons on the basis of which the EU countries are opposing the Turkish membership and the entire responsibility is not solely on the business sector. Hence an important issue is raised in the study that the Turkish countries are doing their best to support the membership process and to meet the European Union standards but still there is unlikeness of the EU country’s government on granting membership permission to Turkey because there are some very strong political and social ground behind this opposition and it is not the failure of the Turkish companies.
It is required that the government should take care of the issues so that the efforts of the business sector will not be ruined on political and social grounds. The Turkish companies are on their way to reach their target and there are few weaknesses that they have to overcome, after that they can stand along with the European Union countries and prove them a deserving business sector to get the membership of European Union. In turn there are wide range of benefits that will be enjoyed by the Turkish companies when Turkey will become a member of EU, not only the individual profitability and scope of the Turkish businesses will be increase but the Turkish economy as a whole will take the economic benefits of the membership.
5.3 Answering the Research Question
The dissertation is based on the objective of finding the answer of the research question that “”Turkey is hoping to join the European Union. How are Turkish businesses planning for this and how effective is this planning likely to prove?” The answer to this question is going to be presented in light of the research findings, analysis and discussion.
The Turkish companies are well aware of their role to support the membership process and in this regard there is wide range of plans, activities and strategies that have been employed by the Turkish companies to become at the level that they can claim that they operate at the same level as the companies of European Union and they also meet the EU standards. The planning of the Turkish companies regarding the membership in European Union can be sum up in their following activities and steps.
Creating awareness within organization and general public about the European Union requirement and standards
Working at joint forums for developing and implementing the strategies
Supporting the government by assuring the assistance and willingness to make changes in the organizational structures
Adopting different legislative and organizational policies within the Turkish companies that match with the European Union standards
Publishing material for propagating the benefits of European Union membership so that the importance of aligning with European Union standards could be understood by the people
Joining the business organizations of European Union to raise the profile and to make some favorable decisions through these organizations to support the business sector of the country
Creating good links with the European Union business organizations by arranging different meetings and seminars
Launching PR campaigns in the countries where there is opposing of Turkish member ship so that the image of the country can become better in the eyes of the world.
Opening the offices in the European Union countries to blend with the business community of EU countries and to work close with them to get better understanding of their work patterns
Interacting with the business community of EU to observe them closely and to convey positive information about the country’s economy to them
5.4 Recommendations and Suggestions for the Turkish Businesses
The dissertation has come up with a list of activities and plans that have been taken by the Turkish companies in the perspective of European Union membership and the overall impression of the activities of the Turkish companies is quite positive and convincing however the research has also point out that the Turkish companies are on their way to achieving the targets and there are many weak points where the Turkish companies are not concentrating though they can not be successful without overcoming those weaknesses. In this regard the dissertation presents some suggestions and recommendation for the Turkish companies so that they can overcome their weakness and can stand at a prominent and stable position.
At first the Turkish companies have to closely review the working patterns of the European Union countries and along with that they have to keep in mind the working culture and patterns of their own country so that any change that they adopt can be easily implement in their firm. It is necessary to have deep understanding of the psychology and culture of own workers because the successful implementation of any policy in any organization mainly depend upon the employees and if the employee feel uncomfortable with any change then that change can not bring the desired results in the firm.
So the managers of the Turkish companies have to blend the working patters and organizational structure of the European Union companies with their own working culture and values so that they can come up with a solution that could be acceptable for the employees and at the same time at also meet the European Union standards. This blending is very necessary otherwise the desired change can not be positively take place in the organization.
The Turkish business have to develop a broad view of the EU standards and they don’t have to go for adopting the values and patterns that are easy in implementing and adopting but they must have a deep insight in the European Union companies and each and every value adopted by the EU companies should be reviewed by the Turkish companies so that they can decide that how can they use this value in their organization.
For example the Turkish companies have to follow the concept of CSR within their organizations which is very common in the European Union companies. The Turkish companies have to understand the relative importance of this issue and then they have to develop a strategy that how can they use this concept within their organization in the long run so that the employees can get the benefit from the system and the Turkish companies can be listed among the companies that respect the concept of CSR and have implemented it their businesses.
The role of the government is very curtail in this situation and it is very necessary that the Turkish companies remain in touch with the government officials so that they can express their views about certain government policies that can effect the transformational process and also for getting help from the government in the implementation of several laws and values in the business world. If the representatives of the Turkish businesses noticed any policy or law should be beneficial to implement in the Turkish business to take them towards the EU standards, it is not necessary that the entire business community accept that change and implement it.
In this context the cooperation of the government is very necessary and the Turkish companies can put come suggestions in front of the government officials so that after studying the potential impacts of that proposal the government can take the step to implement that law or policy in the business sector. In this way the Turkish businesses can achieve a higher level of performance and active role in the membership process and by concentrating on the points mentioned above, they can improve their strategies and planning and can act as a vital supportive player of Turkey in its membership bid in European Union.
The dissertation is aimed at examining the role of the Turkish businesses in the context of the membership process with EU and the main objectives of the research were to have a look at the early days of the Turkish businesses and portray picture of the current businesses situation; to highlight the potential benefits that the businesses of Turkey can enjoy after becoming a member of European Union and to study the strategies and planning of the Turkish companies to meet the standards of Europe Union. Moreover the dissertation also intended to point out the challenges and competitors situation that the Turkish business will have to face after the membership in EU.
In order to achieve these objectives a mixed methodological approach was used and with the help of the secondary analysis of the data and interviews of the representative of the Turkish companies, the dissertation achieved its objectives and presented the analysis of the issues that come under the topic. All the above described objectives of dissertation are successfully achieves and the dissertation presents comprehensive and in-depth information about the Turkish businesses, their planning strategies and role in the context of Turkish accession in European Union.
The study revealed that the Turkish companies are doing well in the current situation and they are playing a significant role for the county to support the membership process and in this regard the planning and strategies of the Turkish companies are satisfying as they have bring many favorable results that the overall economic condition of the country is become better and the foreign investors are also attracted towards the investment regime of the country due to better image of the corporate sector.
But at the same time there are some weaknesses and challenges and the Turkish companies have to overcome all of these problems also so that they can play an effective and supportive role for their country and the membership process could be well supported by the remarkable performance of the business sector. The growing interest of the foreign investors in the Turkish business sector has strengthen the economic growth of the country and the possible membership in EU has further acted as a positive point for the Turkish economy because many of the EU firms have drawn their attention towards Turkish firms because they expect favorable market condition in Turkey after EU membership.
The dissertation not only reviewed the strategies and planning of the Turkish companies but also studied the cases of other candidate countries so that it can noticed if there is any important aspect being missed by the Turkish companies in comparison with other candidate countries however it is found that there are almost same strategies and plans that have been designed by other candidate countries according to the requirement and functioning of their own economy and culture and the Turkish businesses are also supporting the membership application with sound policies and strategies.
In the end the dissertation also presented some recommendations and suggestions that can be adopted by the Turkish companies to remove the flaws in their planning and to perform better in the emerging situation. An important weakness pointed out in the Turkish business sector is lack of awareness about the concept of Corporate Social Responsibility. In EU special emphasis and attention has been given towards the adoption of CSR hence it is recommended that along with other issues the Turkish companies should also get deep understanding of this issue to incorporate with the EU standards.
There were several limitations that came across while conducting the study. An important and time taken issue was the arrangement of meetings with the representatives of the Turkish businesses so that their interviews could be conducted. There were 10 companies chosen from the list of the Turkish companies and the letters were send to them but unfortunately there were just 4 companies that replied favorably and the rest of the companies excuses for busy schedule of their high officials. In this way only four interviews were conducted but even the appointments of those interviews were granted on the basis that the interviews will be short and there will not be too much questions to prolong the interviews. Due to this reasons only 13 questions were included in the questionnaire so that the high officials can answer these questions in less time.
The entire process took many days and the dissertation is hardly completed in the given days However despite all these limitations the dissertation has achieves all its objectives and the answer to the research question is also presented with the help of the research findings and analysis. Though the representatives of different Turkish companies replied briefly to the questions due to time shortage but they provide their concrete opinions about the discussed matters and all the issues are clarified by them.
For future researches in same field it is recommended to arrange more and in depth interviews with the representatives of the Turkish companies and the officials from the Turkish joint business organizations like TUSAID, TOBB etc should also be interviewed so that they can inform in details about the strategies, planning and steps that they are taken from the joint forums at national and international level in support of the Turkish membership in EU. In this way the research could come up with more aspects of the issues and could provide a better understanding of all the related matters.
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