Electronic Library of Scientific Literature


Volume 45 / No. 8-9 / 1997



Gradual liberalisation of the foreign currency mode is associated with its qualitative change, which started in the year 1996 and continues in the year 1997. Since 1994 the Slovak crown (SKK) has been linked to a currency cocktail of two currencies: the German Mark (DEM) and the American dollar (USD) at a ratio of 60 : 40. The situation of currency encashments and currency payments during the four-year period confirms that the currency blend was set up correctly [1].
Along with the currency cocktail specified by DEM and USD, an artificial cocktail unit IDX was defined. IDX starts from selected units 1 SKK = (1/20.227) DEM and 1 SKK = (1/31.204) USD, while 1 IDX = 0.029633 DEM + 0.012817 USD. At ideally firm fixing the relation 1 SKK = 1 IDX holds true. Since 1st January 1997 is the value of the currency band (1-D, 1+D), where D = ± 7 %. The rules for the currency exchange rate inside the currency band are set by the National Bank of Slovakia (NBS).
This paper evaluates real exchange rate movement and three approaches suitable for the evaluation of exchange rate movement, well known from the economic literature, are presented. These are purchasing power parity (PPP), interest rate parity (IRP) and Fisher's relation. At the end of the paper, quantification of SKK/DEM and SKK/USD exchange rates development up to the year 2000 according to purchasing power parity, is presented.

1. Analysis of real SKK/DEM and SKK/USD currency exchange development after the independent Slovak Republic came into being

During the time span 1994-1997 the percentual exchange rate deviations SKK/DEM and SKK/USD fluctuated within the range of ± 5%. In 1993 when 10% devaluation of the SKK took place, towards the end of that year SKK depreciated against USD by 14% and by 9.4% against DEM. However, in the first quarter of 1994, SKK recovered against USD by about 2% and by about 1.5% against DEM. During all the other year quarters (with the exception of the fourth quarter of 1995) the decline of USD was compensated by the rise of DEM.
As the value of SKK is defined by the currency cocktail, further calculation of the SKK development was made respecting this cocktail for the years 1996 and 1997, when a strong increase of the trade balance deficit has taken place. In spite of the opposite tendency of DEM and USD currency value development, complete compensation of this currency movement within the currency exchange rate value is not occurring and the value of SKK is slowly declining. There were only four months - February, April, July and August of 1996 when a positive appreciation of SKK, i. e. its value increase, occurred.
One can therefore deduce that not only does the import increase of raw materials, energy and other commodities influences negatively the trade balance development, but the slow decrease of SKK value, which increases import prices, also plays a certain part in the current negative balance of the trade balance.
Throughout the period January to August 1997, compared to the year 1996 reverse development has taken place. During these five months positive appreciation of SKK value occurred, in spite of the fact that the SKK value against USD decreased. Eventual positive influence on the negative trade balance will be evaluated no sooner than 1998.

2. Mathematical approach to the evaluation of currency development

The mostly negative approaches of economists towards quantitative analyses of economic processes and indices often result in inadequate decisions. To remedy these is expensive for the community as well as for enterprises. Therefore we consider analyses supported by various calculation alternatives as beneficial.
The paper presents theoretical ways of calculating the currency exchange rate by means of · purchasing power parity · interest rate parity · Fisher's relation. Due to accessible information, the analysis of the currency exchange rate for SKK was made only by purchasing power parity.

3. The influence of inflation on SKK currency exchange rate development

Devaluation of the SKK in 1993 brought for the Slovak economy a temporary improvement of the trade balance; however, since the Slovak economy strongly depends on imports, the price of which increased alongside the decrease of the currency value, prices of domestic production kept rising, and inflation increased.
As already mentioned, SKK movements are regulated on the basis of an artificial currency unit IDX. It is not thus clear if in currency exchange rate movements inflation is considered too. The SKK exchange rate is analysed in the paper from the point of view of inflation in Slovakia and in the countries whose currencies influence SKK exchange rate, e. g. Germany and the USA.
When comparing percentual increase of the exchange rate value of SKK/DEM and SKK/USD one can see that the difference between the inflation rate in individual countries markedly influences currency value development. The big difference between domestic and foreign levels of inflation rates (domestic rate of inflation is higher than foreign one) causes currency depreciation, creates the need for domestic currency devaluation, activates a price increase of imported raw materials, increases prices of domestic products and provokes even higher inflation. This is a vicious circle that can be broken by means of seeking internal resources of economy: production restructuring, making production more effective, decreasing local dependence on raw material imports, increasing productivity, price reduction of domestic production, an increase of competitiveness etc.
The currency cocktail, which defines the value of SKK against DEM and USD, modifies value depreciation of SKK only partially. Percentual decrease of SKK value according to the currency cocktail 60% DEM and 40% USD fluctuates between percentual decrease of the currency value against DEM and against USD. This means that in the years 1994-1998 a gradual SKK devaluation should have taken place. Table 5 presents currency rate SKK/DEM and SKK/USD development up to 1998, taking into account the influence of inflation in Slovakia, Germany and the USA.
One can see from the table that, considering the rate of inflation, the USD exchange rate should reach the value of 38.07 SKK and the DEM exchange rate 23.83 SKK. We have made similar calculations of SKK/DEM and SKK/USD exchange rate development, taking exchange rates of DEM and USD before devaluation (Table 6). Comparing results obtained, we get for 1997 approximately the same exchange rate SKK/USD as really exists at present. However, a different value is obtained for the DEM exchange rate.

One can thus draw the following conclusions:
As started in the first part, the SKK value decreases slowly, however not so intensely as the calculations of SKK movement based on purchasing power parity suggest.
Inflation at home and inflation in the country from which commodities are imported strongly influence the value of domestic currency. If the inflation factor's influence on currency value is ignored, pressure to devaluate arises.
100% devaluation of the Czechoslovak crown (CSK) in 1990 strongly depreciated the Slovak crown, and obviously the Slovak economy is not strong enough to absorb the effects of this devaluation.
For a small open economy strongly dependent on raw material imports (see Table 8), devaluation does not seem to be a suitable tool for improvement of the economic situation.



This paper aims at a mapping of the development of consumer behaviour at the present stage of the transformation process. It has identified the amount of manoeuvring space for the public's consumption and investigates changes in their habits as regards grocery and non-grocery goods and services.
A household's final consumption, the tracked indicator of consumer behaviour, remained the highest share of GDP among elements used. Its dynamic is however not marked, compared to other markers. It is connected with the level of income received, which in l992 and l993 showed only a slight rise in the share of the revenue generated in the economy. This refers to a complicated process of households dealing with price liberalisation and the transformation recession. This meant a significant drop in incomes for a significant part of the population. The share of household spending in gross salaries in l994 was 68%, in l995, 70% and in l996 it rose to 73.7%. Despite a marked rise in work income, albeit regionally differentiated, their development was not an inflationary factor in the observed period.
The household income situation from l992 to l996 was characterised by a faster rise in gross disposable income than the growth tempo of final consumption. Gross savings have shown a sharp increase since l993. The predicted growth in usual earnings and inflation levels in l997 will show a further increase in the income share distributed among the public. Stability in the level of onesided expense transfers (mostly taxes on the incomes of individuals) will enable a small growth of gross savings.
Despite the positive development of individual indicators determining the public's behaviour on the goods and services market, as well as on financial markets, the sharp fall in the income situation following l989 has still not been remedied. It is predicted that the l997 gross disposable income will stand at 80% of the pre-transformation period. As regards consumer habits this means that despite certain positive changes in quality as compared to the pre-l989 times with respect to consumption (besides foodstuffs and housing), the continuing low earnings level will prevent any marked increases either in consumption patterns or savings. Income rises are only very gradual, and for most consumers is reflected in spending on goods of daily consumption. Such limited manoeuvring space means the acquiring of the same real consumable at many times higher nominal expenses. Strong household budgetary restrictions have been shown to be determined during any change to consumer patterns. A sharp fall in real consumption prevails as a result of the more rapid growth of living expenses compared to nominal earnings. The development of the internal structure of consumer prices shows that consumer patterns are progressively conserved in a derivatory way at lower pay levels. The internal tension in consumption expenses, shown by the large share of so-called obligatory outlays, is a determining characteristic of household budgets. The continuing large-scale grocery and public eating expenses have as their result the loss of the first-place standing of non-grocery goods in the cost structure of all types of household. However, this development in the real process of consumption is not connected with qualitative changes leading to healthier diets. This is also illustrated by grocery consumption trends in physical amounts consumed. Neither are the relative smaller fall and gradual approximation of service costs connected to a move to more positive quality in consumer patterns. Since their primary elements are tied to living, it is clear that, due to the absence of substitutes, this is a matter of obligatory consumption. The barrier threatening the degree of free consumer choice on the market of consumable items is that primarily of a general low level of disposable income (on average, l.49 to l.7 times the minimum living level of an adult). This means that not even the continuing positive income situation has, in the last three years, been able to cover the fall in real consumption from the beginning of the l990s. Its results on consumer patterns are long term and lie in:

a continuing high share of consumer expenses for groceries, beverages and public meals along with a continuing reduction of the physical amounts of these grocery groups indispensable for healthy nutrition, mostly in pre-pubescent children;
the rising share of living expenses including accommodation maintenance expenses, the leader in the markedly increased demands on family budgets, creating as a result serious barriers for young couples and for planning a family;
such a rise in the share of expenses for services which, in combination with the con-tinuing low level of earnings and narrowing range of services provided, means a gradual return to performing domestic upkeep oneself and leading generally to the overburdening of women and to an increase in tension between the different civilization levels of individual spheres of life;
a relative reduction in outlays on culture and training as a result of the derivation of consumer resources, which impacts on the formation of future civilization, culture and education levels and life opportunities for the young generation in specific social groups.



The concept of business process re-engineering (BPR) has become very popular in both the management literature and practice of the 1990s. It challenges long-accepted models of how enterprises should be managed and claims to offer radical improvements in competitiveness. However, there doesn't exist a generally accepted definition of the content of re-engineering and its relation to different concepts within management literature (past and recent). Some authors regard re-engineering as a new paradigm, a revolution in management theory and practice (which is a response to radical changes in consumer tastes, the character of competition, and the intensity of changes in the present business environment). Others regard re-engineering as merely another passing management fad.
This paper analyses different views of business process re-engineering and the relation of the re-engineering concept to other, more established management approaches. In the concluding part of the paper, some ideas about the future of the re-engineering concept and its relevance to firms in Slovak Republic are outlined.
In the first part of the paper, the „classical" concept of re-engineering (as defined by Michael Hammer) is characterized. According to this approach, re-engineering is defined as the „fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance, such as cost, quality, service and speed". In Hammer's view, business re-engineering means starting all over, starting from scratch, and forgetting how work was done re-engineering can't be carried out in small and cautious steps, as a series of evolutionary changes.
The opponents of M. Hammer criticize this „revolutionary" treatment of business process reconstruction and point out that evolutionary, continuous changes can lead to a significant improvement in performance and competitiveness. In this case it is possible to make use of the experience and know-how of those who know the business - employees and middlelevel managers. They will probably support improvement initiatives - if conditions are created inspiring them to find innovative ways to deal with new challenges. Such a „business process improvement" (Harrington, Strassmann) is compatible with total quality management (TQM) system and organizational learning.
In the author's opinion, the literature on business process re-engineering can be regarded as a continuum of approaches - from Hammers radical approach, overthrowing the status quo, to emphasizing the importance of incremental improvements within existing processes. A common feature of all these approaches is the concentration on business processes as the main unit of analysis. A business process is usually understood as a series of tasks which produce an output that means a higher value for the customer. For each enterprise a set of specific processes can be defined. Business processes cut across traditional functional boundaries and therefore the proponents of business process re-engineering (or business process redesign) emphasize the importance of the horizontal features of an organization. The traditional functional organizational structure of enterprises can be a barrier to business processes redesign (re-engineering). A radical change in the organization structure is inevitable.
The second part of the paper outlines some more established approaches in management literature which potentiated the shift towards the business process re-engineering concept. Among these approaches are the concepts of „job enrichment" in modern human resources management, TQM system (which also concentrates on business processes but differs from Hammer's re-engineering concept by emphasizing the importance of continuous, incremental changes), Porter's concept of the value chain, all approaches emphasizing the importance of the horizontal aspects of an organization and criticizing the old hierarchical management system, new approaches to relationships with suppliers, etc. Of special importance for the BPR concept, and especially for the practical implementation of re-engineering projects, are the new developments in information technology.
Special attention is paid to the relation between re-engineering and strategic management (third part of the paper). Re-engineering can be regarded as one type of business strategy. Some ideas from strategic management literature have been incorporated into the business process re-engineering concept. The common feature of strategic management and the BPR concept is also emphasis on the linkage between strategy and organizational structure. The strategy literature sees the links between strategy and organizational structure in two ways. Firstly, it suggests that strategies actually „emerge" from the structure of the organization and the process of strategy formulation is analyzed. Secondly, the importance of an adequate organizational structure for strategy implementation is emphasized. Re-engineering literature, on the other hand, acknowledges the importance of an organizational structure for BPR strategy implementation, but a formulation of a BPR strategy occurs somehow independently of the existing organization structure. Business process re-engineering strategy is actually prepared by a re-engineering team (where only a few managers take an active part) and then approved by the top management. Business process re-engineering is usually viewed as a top-down solution imposed by top management and implemented through the use of a BPR project team. The new processes developed through BPR typically require far fewer staff and that's the reason why employees and many managers are not motivated to implement the designed changes.
Insufficient motivation of employees, lack of their commitment to BPR, is very often regarded as the main barrier to the effective implementation of BPR projects. The fourth part of the paper emphasizes the importance of a human factor for successful re-engineering and tries to find some inspiration to solving these problems in the literature on the management of change. It is important to form an organisational culture supportive to planned changes and organisational learning.
In principle, there can be two main ways to motivate employees and achieve their commitment to BPR implementation. First, it is possible to make use of the employees' dissatisfaction with the status quo and show them that without radical changes implemented through BPR they will lose their jobs. Second, it is possible to make a change attractive (financial motivation, creating conditions stimulating employees' imaginative co-operation and self-realization, etc.) The second way seems to be more effective.
The concept of re-engineering is a response to such important changes in the business environment that it can't be regarded as merely another passing management fad. In the author's opinion, this concept will survive (maybe under a different term) for a relatively long time. Most probably, the future of re-engineering will be in incorporating and synthesizing results of other management approaches that respond to the same challenging environment (TQM, lean production, postfordism, new approaches in human resources management, etc.). Many inspiring ideas can be found in the literature on strategic management and the interrelation between strategy and structure. The role of the human factor in the analysis of business processes and implementation of re-engineering projects will be of crucial importance for the future of this concept and the practice of re-engineering in enterprises. However, to activate the initiative of employees and make use of their experience is usually easier when we regard re-engineering not only as a radical change, connected with forming new processes, but include into this concept also incremental changes of existing processes which can lead (although not immediately) to radical improvements.
The need for a more adequate integration comes to the fore also regarding the interrelation between re-engineering and information technology. The new developments in information technology have been a very important factor for the mapping business processes and practical implementing of the re-engineering projects. Very often, information technology departments were responsible for re-engineering projects. However, the architecture of information systems in many enterprises corresponds to the traditional, functional organization structure that is not adequate for identifying and improving transfunctional business processes. Information technology experts (both internal and external) are not familiar enough with business processes that are to be restructured, and sometimes they are not appropriately informed about the strategic objectives of the firm. On the other hand, people who know the business processes very well from their practical experience, are not aware of all application possibilities of the most recent developments in information technology that can be valuable for the re-engineering of specific business processes. A need for synthesis of the know-how and experience of managers from different functions of the organization and the most recent techniques of information technology comes to the fore.
However, the most important source of the future improvement and perhaps be modification of the re-engineering concept will be practical experience of enterprises implementing re-engineering projects. Until now, there has not been sufficient experience with a successful re-engineering of manufacturing processes (or if such cases exist, information on them has been published very scarcely). Probably, in the next years more information from this field will be available.
The last part of the paper tries to answer the question of whether we can expect re-engineering approaches in Slovak enterprises. Many firms in Slovakia are in a situation when a radical reconstruction of business processes is badly needed. This is partly due to dramatic changes in their environment, connected with the transformation of the economy, partly called out by similar factors as in western countries. Many enterprises have radically changed their technology, organization structure, relationships with suppliers, the whole system of human resources management, etc. Although they do not use the word re-engineering, they have actually implemented changes that mean a radical redesign of business processes. Some Slovak enterprises even explicitly speak about re-engineering, form re-engineering teams and with the help of consulting firms try to radically improve their performance and competitiveness.
These re-engineering projects are just starting and it is too early to assess their results. Moreover, firms are not willing to provide information about their most recent initiatives - which is natural. However, even from these first attempts at re-engineering it is clear that some similar problems as in western firms can appear. Especially important will be the role of the human factor, which can be a facilitator or inhibitor of designed radical changes. To form an environment supportive of desirable changes and organizational learning, a radical change in organization culture is inevitable.
Taking into account the lack of financial resources in Slovak enterprises, it is probable that the incremental, step by step approach will be the prevailing method of business process restructuring in Slovakia. A more dramatic redesign of business processes has been implemented mainly in firms which are owned (or where exists majority control) by foreign capital.



Aim of the author of this unconventional paper is to point out certain misunderstandings resulting from the diverse theoretical and methodic cultures of economists. This diversity is a result of their evolution within different philosophic and ideological conditions of economic development which arose after the disintegration of the bipolar world system. He incorporates their different characteristics and features into the overall economic culture of the so-called post-socialist countries. The author, however, tries to consider different communication facilities, including hardware and software equipment, of economists coming from the OECD countries on the one side, and economists from the countries in transition on the other side. These differences prevent unobstructed communication between western and eastern economists.
The paper demonstrates, that success comes only slowly in eliminating these and many other communication obstacles among various streams and schools of economic thought, not only among so-called western and eastern economists, but even inside these big „geographical" groups as well. That is the reason why, in the first part of the paper, the author addresses so much attention to the problems linked with these „geographical" groups by language, concepts and methods. The author pays particular attention to problems of genetic and causal tradition in modern economic science, while particular stress is put on the three circumstances that condition the intersubjectiveness of this problem. These are:
problems of the docility of evolution
problems of causal orientation of the activities of individual agents in the market environment, and lastly
emphasis on the genetic and memetic character of causal relations and connections in the process of economic evolution.

In the second part of the paper the author analyses the variable meanings of knowledge, information and learning for the evolutionary quality of the economy. Great emphasis is put on the differentiating information influence in the evolution of economy in the extrasomatic form and in the form of authentic acquirement of information by particular agents. The author considers equally important to differentiate between the phenomenon and processes of learning as a random process and docility as the specific property of a particular economic unit (a person or a group of persons). From this he deduces particular links and bonds between cognizance of the self realizing subject and cognizance on the superpersonal level. Based on that, the problem of the need for the development of a sort of „cognitive economy" is raised.
In the third part the author suggests some possibilities for simulation and computer experimentation on the model of virtual economics. Here, for methodic, didactic and purely pragmatic reasons the neoclassical concept of general economy equilibrium is taken as a theoretical base. In connection with this the author introduces the concept of the so-called hidden neo-classical economics. By the coupling of the two simulation models, e. g. model of general economic equilibrium and the model of cognitive community of agents, he gets the so-called learner economics with remarkable characteristics that are very near to the features observed in the world of real economy.
In the fourth part of the paper the author presents an example of cognitive adaptation inside the isolated enclave of hidden neo-classical economics which, as a whole, behaves conventionally. The existence of learning „carcinoma" closed inside an isolated enclave supplies during the evolution to the originally conventional economics wholly new qualities. That is true even when we suppose that during the process of simulation the genetic and memetic infection behind the „membrane" of the enclave is not admitted (metaphorically speaking, „carcinoma" cannot expand beyond its envelope). Due to the limited space only a fragment of the possibilities of simulating this interesting evolution story is outlined.
In the fifth part the author further concretizes and evolves the concept of the phase transition from command economics into the non-command (and perhaps even market) economics by means of a simulation model, when he into the originally command economics „immersed" certain condensing nucleus of the economy X , as a subsystem with partial market mechanisms. The author explains that due to the limited space only the general characteristics, instead of a full description of the simulation model, is presented.
The sixth part contains generalization of the research carried out so far, as well as the computer experiments, that the author performed on individual simulation models of the artificial docile economy. He refers (very selectively, though) to current research in this relevant sphere of world science. In hints the author tries to lay out a possible argument with individual schools of thought that are gradually developing in significant research centres abroad. IIASA Centre in Laxenburg, Austria was chosen by the author as an example that is nearest geographically to the Slovak Republic. In the closing portion of the last part of the paper, the author suggests possible generalizations of current research to enhance further development of the theory and methodology, and to eventually implement it in the economic and political reality or directly in partial economic policies.
The author's approach to the treatment of the subject explains that because of lack of space he could not cover the discussion of the current state of development in the relevant sphere, which is being transmitted via Internet. However, he explicitly mentioned the need to summarise the results from Internet discussion, and to inform readers of the Journal of Economics on these results in an acceptably „accessible" form.



The aspirations of the group of Central and East European countries (CEEC) to prepare gradually decisive prerequisits for their successful entry into the European integration structures by transformation of their economies, belongs to the vital social and economic attributes also in the Slovak Republic; dominant attention is therefore paid to implement this aspiration.
In this context many geopolitical and macroeconomic problems arise, which involve not only the significance of economic and political unification of Europe, but concern also motivations and importance of that measure for both parties. Although last valuations, linked with the results agreed at Turin, Amsterdam and Copenhagen top level EU negotiations, are favourable for the new applicants, all the same gradual clarification of mutual positions and suggestions of particular measures aiming at optimum and high efficient preparation of conditions for integration diversify to a great extent not only the views of EU members on whom and under what conditions one should allow to enter; at the same time, however evoked these evaluations extensive discussions on what advantages or disadvantages will this process bring about to both partners. This paper mentions, and by summary sheets clearly demonstrates the intensity of integration rate in economic processes that take place in those developed countries, where the EU plays dominant role. The level of the so called interregional trade (EU countries mutually) definitely demonstrates the importance of strengthening mutual trade links as one of the decisive economic attributes necessary for a success also of the new member states in the European integration community.
The attitudes originally declared by the EU expected to create necessary system prerequisites for the accelerated entry of the first group of countries (Hungary, Poland, Czech Republic and Slovakia), and favourably looked at the fact, that these countries bring with them complementary and substitutory co-operative and specialized links formed already during the days of COMECON. Hence the „en bloc" entry was preferred to separate appraisal of preparedness of individual countries. Since the year 1996 that approach has gradually changed due to the growing internal pressures within the EU, and also as a natural result of growing differences in transformation process success within these countries.
From the European community point of view attention has been paid primarily to the solution of internal problems of the Union as a prerequisite to solve conditions for fail-safe operation of the new member states.
Concentration on the change of institutional structure of the EU and the support for integration of economic policy in relation to the introduction of EURO, where both these activities are linked with enormous expense load on the budget of the EU, caused that mainly economic parameters of the whole process have been taken more and more into account. One stresses above all the problem of vulnerability of the common agricultural policy and possible impacts of the stream of cheap production from the newly admitted countries. Countries, who are the biggest recipients of means from the specific EU funds are not indifferent either. These countries expect that existing resources will be redistributed and thus their ambitious development plans will be adversely affected. Yet another barrier are likewise interests of West European industry, where one fears the threat of big imports of steel and other products, where CEECs have at present better production conditions. Candidates for membership in the EU present currently another optics and interests, that determine their entry. They point out above all at the necessity of fast restructuring of their national economies and stress the need for system integration, which could favourably influence internal social and economic movements. They accept fundamental principles of entry into „the European house", that were presented at the intergovernmental conference in 1996. They apply at the same time for certain „softer" standards that could take into account previous political and economic development and hitherto considerable difference in mechanisms of national economies. As follows from the results of Amsterdam and Copenhagen summits, differentiated success of individual applicants for the EU membership made top EU representatives to differentiate while evaluating the preparedness of these applicant countries as well. This was activated by CEECs themselves, when they asked to evaluate their „higher" preparedness compared to other applicants; on this basis they hoped to get certain further advantages or to accelerate their entry.
Retreat from the „en bloc" policy meant at the same time also the end of a certain euphoria and increased accent on the fulfilment of conditions formulated by the catalogue in political area. The ability to take over the whole system of the so called acquis communautaire and other rules of democratic behaviour brought about the change in approach, and at the same time the postponement of the new member entry schedule. Simultaneously one has begun to stress all the more consistently the need to attain standard level of stability from the domestic institutions, that guarantee democracy, building up the rule of law and observing human and minority rights.
The interest of the Slovak Republic to enter the EU as early as possible has been during the whole existence of the state part of the most important components of political and socio-economic life. On the success of this aspiration depend basic preconditions and ambitions of the future long term course, whereas the process of political polarization is intensifying. Although the time horizon for the entry of selected countries into the EU is not certain yet, and final decision on what countries will be invited to the dialogue on the conditions of entry, will be made at the end of 1997, current recommendation of the European Commission and the opinions of European Parliament members emphasize, that the bargaining position of Slovakia will be very difficult. Because of the violations of the catalogue of political conditions, and in spite of the fulfilment of the majority of economic criteria, Slovakia probably won't be invited to take part in this dialogue. Such a decision would seriously influence our trade balance development, where the EU countries play a dominant role, and gradually would provoke a confrontation in several areas of economic co-operation which, consequently would have an impact on the speed of definite changes in the structure of our economy, which reckoned with a positive influence of the well-disposed reaction from the EU side. Gradual decrease of competitive ability would more and more limit the access to the most modern technologies, deeper integration into the already existing co-operation structures, and in the end would mean an isolation deeper than ever. Therefore the problem of implementation of our economic aims is not only one of our political ambitions, but above all economic necessity; the fate of the Slovak Republic will depend on this in the near future.



Alongside the stock market exists a market with different forms of obligations in an equal market in which various entities participate, either as emitters or investors. A general trend in advanced capital markets, and in Slovakia as well, is to expand the investment space and transfer the risk of investing from main entities, such as bank were up to now, to a wider investing public.
From this point of view it is logical that the investor, because of the risk, has to have sufficient information to know how great that risk is. Everywhere in the world, this is provided by the bond rating which relates both to investor evaluation and to the bonds themselves; however, the rating does not guarantee that the investor will have only profit. Along with insolvency, the investor more and more often runs quite big risks with relation to interest rate movements on the market. Interest rate changes lead to greater or smaller changes in bond prices, which have great significance for market speculators and also contribute to rises in bond trading. This interrelation is also of special interest to emitters, because the placing on the market of new bond emissions should reflect the market interest rate and the expectations of market investors. We are coming not only from our own theoretic knowledge when to put bond emissions below nominal value, and when above, but also from the practical experience of our banks on this market. Due to an incorrect valuation of emissions they have been unsuccessful in placing them on the market.
The question of judging the riskiness of investing in bonds depends on a number of factors. In researching the convexity of bonds, it is logical to the investor that bonds carry an essentially greater risk (in absolute expression) in a falling market than in a rising one. The payment period is also of importance. Long term interest rates have less fluctuation than short term ones, but even a small change will have a marked influence on price movement, thus causing the investor serious losses. In establishing bond prices, it is necessary to take into consideration their duration. Duration, as a significant comparison indicator, expresses the sensitivity of the bond to interest rate changes and measures their mean lifetime. This indicator is also important for judging the effectiveness of the placing of investments because the lower the duration indicator, the more advantageous the investment. The return, convexity and duration indicators are today part of bond analysis and are included in course listings. They are of special interest to portfolio investors who use these guides to „immunize" their portfolio, in other words to combine individual bonds with varying convexity and duration in an attempt to eliminate risk from their portfolio.
A problem of bond analysis, part of which is the evaluation of risk for investors, comes to the fore particularly at the present when there is on the Slovak market a marked movement of interest rates, calling for a revaluation of many investments which have become loss-making. Significant changes in the price of bonds on the market and evaluation of the risk of different bonds have become a focus of interest primarily for portfolio investors who require, and will continue to require ever more information in this area.



Consumer behaviour organization is generally understood as the decision-making process and the actions of people while buying goods and services in organizations which are composed of the manufacturing, intermediary or government markets.
The study of consumer behaviour in these markets has significant meaning with respect to the characters of these markets, their extent, volume and the importance of the transactions taking place. The knowledge for what goal, for what reason and by what means organizations purchase, and mainly, who participates in the process of deciding to buy, is relevant for the choice of marketing strategies and tools.

In a study of customers for solving specific marketing problems, it is necessary:
to identify customers
to analyze the use of the products
to identify the requirements and preferences of customers
to analyze their way of buying
to analyze the process of deciding to purchase.

On a theoretic level, the study of purchasing behaviour of organizations is characterized by searching for typical elements, signs and factors contributing to the creation of theoretic models. The goal is to provide general guidelines for marketing in organization markets.
The purchasing behaviour of consumers, both wholesale and retail, represents a specific area of organized purchasing behaviour. It is determined by the fact that dealers begin with the purchase object and later with the selling of that same product.
Many purchasers in retail and wholesale organizations see themselves as buying agents for their target customers and proceed according to this - they purchase that which they are convinced is an object in demand. Primary is the decision of the type of goods according to which the dealer stakes his position on the market. The type strategy influences the choice of purchased goods, suppliers, the price decision and other purchase conditions.
Dealers, in their parts of transactions carried out in the distribution network, share in the movement of products and by their performance influence the success of manufacterers' marketing efforts. At the same time they are the object of the marketing actions of producers whose aim is to place their goods on the retail chain and thus make them available to final consumers.
The strictness of theoretical research of the purchasing behaviour of members of the distribution network is influenced by the different approaches and goals of purchasers for intermediary organizations as well as by the problem of generalizing information.
For the management of manufacturing and business firms, information on retail sales and stocks is indispenceable. For these goals is recommended the use of trade research, which primarily provides information on the movement and sale of goods and the attitudes, reactions and performance of members of the distribution network.
Purchasers as well as sellers have their own criteria for the choice of partners. The purchase of goods which consumers need and want to buy must be in top position for retailers. So retail managers have the task of choosing suppliers with whom to build long-term cooperation and who provide a reliable source of goods on the most advantageous conditions.
Fulfilling the requirement that products be on hand in the right quantity, place and time when wanted by consumers is what is implied by the term product availability.
On the consumer markets, product availability means that the goods are in continuous supply in the retail outlet and begins with the display arrangement in the shop, a decisive factor for forms of sale based on visual contact with the product. Product availability is a precondition of its sale and on the contrary the lack of the product influences not only the present but also the future purchasing behaviour of consumers.
As part of the teaching of Decision-making in Distribution Networks at the Business Faculty of the Economics University in Bratislava in 1996, research on the availability of selected goods was carried out for the fourth time; 72 types of coffee from one domestic and seven foreign firms were observed. Information on the purchasing decisions of retailers was gethered at the same time.
From the answers focusing on the identification on the purchase place, it followed that the impulse for deciding and ordering in the majority of retail stores (76%) comes from the retailers' side and generally depends on the relationship between sales dynamic and storage of goods. The size of the order is primarily determined by demand and the price of the commodity, while limiting factors are lack of space in the shop and the owner's financial situation. For the choice of supplier, the quality of goods, service, offer and price (in descending order) are operative.
The range of products available in a retail operation and satisfaction with the supplier's services were shown to be relevant in the composite reaction of retailers to the level of supply service. This satisfaction was also evident in evaluations of the stability of business relations, which the majority of retailers classed as long-term. The supplier's business representatives were seen as normal participants in all phases of the purchase decision and retailers react markedly to their activity or lack of it.
A subject of partial research analysis of 55 Bratislava shops was the relation between the product availability of the relevant producer and selected factors. These included the interest of the supplier's representative and the frequency of his visits, the retailers' satisfaction with the supplier's services, the origin of the reason for the supplier decision, the provision of promotional activities by the supplier and the retailers' feelings on the stability of the partnership. Analysis of the influence of the size of retail space and forms of sale reflected the opinion of some retailers that suppliers give preference to large and modern shops.
From the investigated factors, only satisfaction with services was revealed to be statistically significant. In the analysis of the influence of selected factors, the form of sale and supplier promotional activities with relation to the retailer were seen as significant on this level.
Repeated research on the availability of selected product ranges, together with the discovering of facts of buying decisions indicated a means of getting background for better knowledge and the eventual generalizing of information on purchase behaviour of retail dealers. From the point of view of marketing, the investigation of factors in a microenvironment, particularly the type of wholesaler, seems to be timely within a wider conceptualized research of distribution activities.