HOBA 2016_PROCEEDINGS

insurance competition but closer to company’s environment. This model is also subject to individual
interpretation and abilities. Additionally, it requires knowledge about the Greek insurance industry.
Factors, such as substitution of insurance products, are difficult to analyze, and possible substitutes can be
missed. For example, governance protection for catastrophic events could be seen as a substitute threat.
Also it is clear that if we have chosen to analyze Porter’s five- forces model only for the Life or for the
Non-life insurance industry then we would have different results. Finally, the use of Porter’s model must
be granular since, the existence and the intense of a factor is not always the same over time.

Strategic group mapping is one of the methods for revealing the competitive structure of an industry. It can
be used for explaining the performance deviation between firms which follow different strategies. The first
difficulty when using this model is when setting the right dimensions for the analysis. At this study we
used only public published data. For better analysis we need more information, for instance on brand
preferences, claims or combined ratio, number of employees, product characteristics and sales channel
traits. Our analysis in Greek insurance industry with the use of the Gross written premiums, the age of the
brand, the line of business and the origin of the brand cannot demonstrate a clear relationship or clusters
within the insurance industry. We saw many small brands that had similar production but this model could
not give any insight of the dynamics, the similarities or the differences between firms which are very close
to each other. It is obvious that a large amount of companies which compete in the Greek insurance
industry show similar performance and may have similar competencies but it is not easy to identify with
few only components to analyze.

7. DISCUSSION AND CONCLUSIONS

In this section, we examine the level of research questions’s reply based on the relevant literature and the
findings of the analysis that took place in the previous sections. Moreover, we present the theoretical and
practical implications of this study and we suggest further research in areas that might be interesting for
someone to explore.

The study was set out to explore the concept of competition analysis models in Greek insurance industry
and to examine the use of four models: macro-environment analysis, industry life cycle, Porter’s five
forces model of competition, and strategic group mapping. The theoretical literature on strategic
management and specifically in the context of competition analysis has criticisms and restrictions. Thus,
the study also examined if these limitations exist for the Greek insurance industry. The study sought to
answer five questions:

1. What kind of competitive forces are Greek industry members facing, and how strong is each force?
2. What factors are driving changes in the Greek insurance industry, and what impact will these changes
have on competitive intensity?
3. What market positions do industry competitors hold ;who is strongly positioned and who is not?
4. To what extent can the selected models help an analyst to identify significant features, opportunities
and threats that form the competition in the Greek insurance market?
5. Is it feasible for a strategist to analyze the Greek insurance industry using the selected models with
only published information?

The application of Porter’s five forces model answers the first question of the study. The competitive
forces which Greek insurance industry members are facing arise from the study of the five forces model.
First, the study of risk of new entry by potential competitors showed that Global and European insurers
might enter in Greek market. Google might be another new entry. In addition, we found that the low
barriers of entry of the new freedom of services’ companies make easier their entrance to the Greek
market. Secondly, the study of the extent of competition among established firms shows that there is strong
competition in Greek market. Leader Greek, top Global and European firms, and many smaller similar
sized companies create an intense competitive environment in a shrinking market. Thirdly, studies of the
bargaining power of consumers showed that the power is concentrated on few large companies in Greece,
which insure their personnel, property and operation and on big broker’s branches. Additionally, the study

301

of the power of suppliers showed that talented insurance executives, underwriters, actuaries and account
managers are easier to be attracted by a competitor. Moreover, the study of the threat of substitute products
identifies that Greek social security and health system, products sold from banks and other financial
institutions and medical discount cards are seen as insurance substitutes for the Greek consumers. The
study shows that strategic analysts can use Porter’s five forces in an insurance industry to identify potential
profitable areas, to mitigate risks and to avoid mistakes.

The second research question: “What factors are driving changes in the Greek insurance industry, and what
impact will these changes have on competitive intensity?” was answered with the macro-environment
model and the industry life time model. The scan of the seven macro-environment factors for the Greek
insurance industry leads as to focus on five of them which can been seen as the most important at that
period. These five factors are: general economic conditions, demographics, global forces, technological
improvements, and political, legal and regulatory conditions. The structured approached of the macro-
environment analysis showed factors that can be opportunities or threats for all or for specific segments of
Greek insurance companies and probably will affect directly or indirectly competition in the Greek market.
The factors which were identified by this research were: economic crisis and instability, new no-frills
products that appeared in the market, increasing demand for lower prices especially in Motor insurance,
consumer affordability, improvement of the insurance combined ratio in Motor business, increase in life
expectancy, aging of population, insurance industry transformations, power of Global and European
insurers, economic integration, entrance of new companies from other industries, new technologies, new
ways to reach a customer, multi-channel management, solvency II, and freedom of services’ companies.
Even that many factors were identified; somebody could find more or fewer factors. On the other hand, the
analysis of the Greek insurance industry life time model confirmed industry’s traits. The characteristics of
the Greek market are mass market saturation (especially in Motor business), price sensitive customers,
continuous need for technological improvements, trends to commoditization, efforts to differentiate by
branding, quality, bundling, slower product differentiation, standardization, market segmentation,
advertising competition especially in Motor business, multi-line of business and the multi- distribution,
efforts to have competitive costs, and price competition among rivals. Greek insurance industry life cycle
is a survival tool not only for businesses to compete in the industry effectively but also for potential new
entrants.

The third research question: “What market positions do industry rivals hold, who is strongly positioned
and who is not?” was approached with the strategic group mapping model. Strategic group mapping
showed market positions of the insurance industry members. Four strategic group maps not only showed
the market position of each insurance company in the market but also the relevant position of each
company according to characteristics: Origin, years in Greek market and business line of the insurance
company. According to our study in Greek insurance industry, there are many companies which, at least in
2012, were very close in terms of gross insurance premiums. Only few companies excelled for their
production.

For the fourth question: “To what extent can the selected models help an analyst to identify significant
features, opportunities and threats that form the competition in the Greek insurance market?”, we cannot be
sure if the analysis brought all the possible options. Although the macro-environment analysis model is a
structured methodology to identify threats and opportunities it is complex and difficult, and it is subject to
individual interpretation and abilities. This means that different analysts might get different results. Similar
to this, Porters’ five models analysis is based also to individual interpretation and knowledge of the
business environment under analysis. An analyst might see more or less threats and opportunities not
because of the model but due to his personal interpretation and knowledge on the Greek insurance
industry. It is important to note that, if an analyst wants further understand or wishes to predict
competitors’ strategies then the analysis needs to take place regularly. Events in the macro-environment
may arise in sequence or in parallel, slowly or rapidly, simultaneously to all factors or to only one.

302

For the last question: “Is it feasible for a strategist to analyze the Greek insurance industry using the
selected models with only published information?” the results showed that it is feasible. More than 60
basic industry’s key success factors and indexes were used for the analysis. Nevertheless, for the strategic
group mapping we would have a better analysis if we could have more available information, particularly
on company’s key success factor.

All models relied on historical, backward looking data to extrapolate future assumptions. For this reason,
we found that it is important to be cautious when interpreting strategic analysis results. Otherwise the
analysis may be unduly influenced by individual’s preconceptions.

The topic of the study is, undoubtedly, important; it combines an essential subject from strategic
management theory and a major business sector. Insurance has a significant role on the global economy,
not only because it is a precondition for sustainable development of economic activities mitigating
financial risks for individuals and organizations, but also, because it offers alternative access to credit by
providing savings into long-term investment products, supporting capital movement, and in addition,
providing further support to the economy due to people connected directly or indirectly with the industry.
Similarly, the competition analysis of an insurance industry is crucial and sometimes vital. Timely,
identification of the risks may prove critical for an insurance company.

Based on the above, it seems that strategic management models which were used were key to ensuring that
discipline and consistency was applied to the analysis of the Greek insurance industry. These analytical
models improved the focus of our analysis and ensured a methodical, and more balanced approach to the
competition analysis of the Greek insurance industry competition.

The research presented in this paper is limited for several reasons. At the outset, the observed phenomena
were approached from an empirical viewpoint assuming that even though a factual reality exists, it is only
imperfectly apprehensible as the observations are distorted by the observer’s own understandings.
Moreover, the study relied on multiple data sources consisting of both primary and secondary data.
Nevertheless, the number of data sources was inevitably limited and due to the scarcity of available
academic research on this topic, the study relies mostly on non-academic secondary data. Finally, the
limitations of the models also limited the research scope.

Concerning future research, several interesting directions could be identified with respect to analysis of the
Greek insurance industry. For instance, we suggest using more variables for the strategic group mapping.
Particularly, we propose: brand preferences, sales channel preferences, product diversification, price
differentiation, geographical criteria, cost efficiency, number of employees, distribution channels
characteristics and customer classification. This sophisticated competitor analysis is needed to deeper
understand the structure of the Greek insurance industry. Moreover, we suggest a continuous and
periodically study of the Greek strategic group maps. If an analyst monitors the strategic groups every 6
months, then he might find more insights and depicts the differences or the similarities of the Greek
insurance companies. Relative to competition analysis and insurance industry, the findings of the study
raise maybe another interesting topic of a possible future research. Α comparison of macro-environment
model and Porter’s five forces model with other countries, particularly from South European countries,
might reveal interesting correlations. It seems that some strategies come to Greece, with a delay, from
other more mature insurance industries.

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1970–84. Strategic Management Journal, 11(3), 197-215.

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Hellenic association of insurance companies, (2014) Annual statistical report 2013 private insurance in
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press
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create value: Looking inside the black box. Academy of management review, 32(1), 273-292.
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Volberda, HW., Morgan, RE., Reinmoeller, P., Hitt, MA., Ireland, RD., & Hoskisson, RE. (2011)
Strategic Management: Competitiveness and Globalization. Hampshire: Cengage.

304

EUROPEAN YOUTH GUARANTEE: A NEW PATHWAY FOR THE TRANSITION OF YOUNG

PEOPLE TO THE LABOUR MARKET?

SOFIA BOUTSIOUKI, University of Macedonia, Greece

Abstract
In recent years the European Union has undertaken multilevel actions in order to address the economic
consequences of the 2008 financial crisis and the rising socio-economic challenges. The European Youth
Guarantee Initiative was introduced in an effort to proactively endorse youth transition to the labour
market amid unfavourable employment prospects. It articulates the European decisiveness “to ensure that
all young people under the age of 25 years receive a good quality offer of employment, continued
education, an apprenticeship or a traineeship within a period of four months of becoming unemployed or
leaving formal education”. First, the paper explores the determinant circumstances which incited such an
initiative. Then, it analyses its aims and focuses on the opportunities, the challenges and the prospects of
the Youth Guarantee Initiative on both a symbolic and a realistic basis. Finally, it highlights deficiencies
that would potentially hinder its implementation, in order to indicate potential policy interventions.

Keywords: Youth Guarantee, European policy, youth, education and training, employment, labour market

1. INTRODUCTION
In recent years the European Union (EU) has undertaken multilevel actions in order to address the
economic consequences of the 2008 global financial crisis and the rising social confrontations. Strong
emphasis has been given to the interactive relation between the fields of learning and employment. Their
key position as factors that largely determine the member states’ and the individuals’ socioeconomic
welfare and their crucial role in every developmental strategy designated them as important elements of
EU policies and national practices.
This paper attempts a critical approach of the European Youth Guarantee Intiative. Established by the EU
in 2013, it constitutes an effort of the European countries to proactivley endorse the transition of young
cohorts to the labour market amid unfavourable conditions. The particular initiative articulates the
decisiveness of the EU and of national authorities “to ensure that all young people under the age of 25
years receive a good quality offer of employment, continued education, an apprenticeship or a traineeship
within a period of four months of becoming unemployed or leaving formal education”. First, the paper
describes the determinant circumstances which incited the introduction of the European Youth Guarantee
Initiative. Then, it analyses its aims and focuses on the aspired opportunities, the challenges and the
prospects of such an initiative for its stakeholders on both a symbolic and a realistic basis. Finally, the
paper highlights certain deficiencies that would potentially hinder its effective implementation, in order to
designate potential policy interventions.

2. DETERMINANT CIRCUMSTANCES
The transformation of economies and the massive technological change have deeply modified the labour
market conditions globally. The increase in the demand for better skilled workforce not only depends on
the availability of employment positions, but also appears to exercise a strong influential role on the policy
interventions which target rising inequality (OECD 2011). In addition, the effects of unemployment on
individuals and countries are being constantly highlighted over the years, as they are not confined only to
economic consequences; on the contrary, they extend to social implications, thus seriously undermining
the socioeconomic prospects of modern states and societies. On one hand, the limited professional
opportunities and the gradual erosion of competences constrain people’s employment prospects and
increase the danger of social exclusion and poverty. On the other hand, individuals often attempt to enter
or to remain in the labour market by accepting job positions with unfavourable working conditions, low
wages and limited social security (Borjas 2008; ILO 2013a). Furthermore, unemployment results in
individuals losing their self-confidence and sense of control, which may lead to a decrease of cognitive
abilities in general and may diminish their motivation to undertake initiatives in order to exit
unemployment (Sen 1997). Other ‘costs’ must be added, such as the dramatic effects on health, personal
and family life, and social behavior; de-socialisation and loss of networks and opportunities, of self-esteem

305

and personal fulfillment not only reduce human capital, but also impair one’s ability to augment it
(Wisman 2010). The loss or the systematic abuse of valuable human capital results in economic recession
and undermines the collective social welfare (Ahn, García and Jimeno 2004).
The phenomenon of unemployment has become a serious long-term threat for the EU. Unemployment is
8.9% in average in the EU-28 and 10.3% in the 19 countries of the eurozone area (Eurostat, January 2016).
The situation appears more aggravated in countries that have been severely affected by the economic crisis,
such as Greece (24.6%), Spain (20.5%), Cyprus (15.3%) and Portugal (12.2%). Nevertheless, the
instability of the global economic environment challenges the employment achievements of many other
European countries, which experience the consequences of the financial crisis indirectly, such as Croatia
(16.4%), Italy (11.5%) and Slovakia (10.3%) (Figure 1).

Figure 1. Unemployment rates, seasonally adjusted, January 2016 (%)

Source: Eurostat (une_rt_m)
Young people usually are the most vulnerable part of the population, when economic transformations take
place, and always confront greater difficulty in entering the labour market. They are often recruited under
temporary (short-term) contracts and usually accept less favourable working conditions, because they have
limited professional experience and run greater danger of losing their jobs (Bussi and Geyer 2013;
O’Higgins 2010). However, there is no doubt that their employment prospects have been affected by the
2008 financial crisis much more dramatically than those of the rest of the population. In most countries the
rates of youth unemployment increased very steeply (Figure 2) and persistently remain very high. The rates
of the young unemployed less than 25 years old are double or even triple than those of the total population
(Table 1), thus igniting fears for a ‘lost’ generation and serious concerns regarding the necessary
interventions, which would prevent their discouragement and marginalisation.

Figure 2. Youth unemployment rates, EU-28 and EA-19 (Jan. 2000-Jan. 2016)

Source: Eurostat (une_rt_m)

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Table 1. Unemployment rates in the EU (total population and persons <25 years) (%)

200 201 201 201 201 201 201

Countrie 9 200 0 201 1 201 2 201 3 201 4 201 5 201

s (<2 9 (<2 0 (<2 1 (<2 2 (<2 3 (<2 4 (<2 5

5) 5) 5) 5) 5) 5) 5)

EU-28 20. 8.9 21. 9.6 21. 9.6 23. 10. 23. 10. 22. 10. 20. 9.4
3 4 7 2 5 7 9 2 2 4

Austria 10. 4.8 8.8 4.4 8.3 4.2 8.7 4.3 9.2 4.9 10. 5.6 ::
0 3

Belgium 21. 7.9 22. 8.3 18. 7.2 19. 7.6 23. 8.4 23. 8.5 21. 8.3
9 4 7 8 7 2 2

Bulgaria 15. 6.8 21. 10. 25. 11. 28. 12. 28. 13. 23. 11. 21. 9.4
1 83 03 1 3 4 0 8 4 5

Croatia 25. 9.2 32. 11. 36. 13. 42. 16. 50. 17. 45. 17. 44. 16.
2 47 77 1 0 0 3 5 3 66

Cyprus 13. 5.4 16. 6.3 22. 7.9 27. 11. 38. 15. 36. 16. 33. 15.
8 6 4 7 9 9 9 0 1 26

Czech 16. 6.7 18. 7.3 18. 6.7 19. 7.0 18. 7.0 15. 6.1 12. 5.1
Republic 6 3 1 5 9 9 6

Denmark 11. 6.0 13. 7.5 14. 7.6 14. 7.5 13. 7.0 12. 6.6 10. 6.2
8 9 2 1 0 6 8

Estonia 27. 13. 32. 16. 22. 12. 20. 10. 18. 8.6 15. 7.4 ::
45 97 43 9 0 7 0

Finland 21. 8.2 21. 8.4 20. 7.8 19. 7.7 19. 8.2 20. 8.7 22. 9.4
5 4 1 0 9 5 4

France 23. 9.1 23. 9.3 22. 9.2 24. 9.8 24. 10. 24. 10. 25. 10.
6 3 6 4 8 3 2 3 14

Germany 11. 7.6 9.8 7.0 8.5 5.8 8.0 5.4 7.8 5.2 7.7 5.0 7.3 4.6
1

Greece 25. 9.6 33. 12. 44. 17. 55. 24. 58. 27. 52. 26. ::
7 07 79 3 5 3 5 4 5

Hungary 26. 10. 26. 11. 26. 11. 28. 11. 26. 10. 20. 7.7 17. 6.8
40 42 00 2 0 6 2 4 3

Ireland 24. 12. 27. 13. 29. 14. 30. 14. 26. 13. 23. 11. 20. 9.4
00 69 17 4 7 8 1 9 3 9

Italy 25. 7.7 27. 8.4 29. 8.4 35. 10. 40. 12. 42. 12. ::
3 9 2 3 7 0 1 7 7

Latvia 33. 17. 36. 19. 31. 16. 28. 15. 23. 11. 19. 10. 16. 9.9
35 25 02 5 0 2 9 6 8 3

Lithuania 29. 13. 35. 17. 32. 15. 26. 13. 21. 11. 19. 10. 16. 9.1
68 78 64 7 4 9 8 3 7 3

Luxembo 16. 5.1 15. 4.6 16. 4.8 18. 5.1 16. 5.9 22. 6.0 14. 6.1
urg 5 8 4 0 9 3 0

Malta 14. 6.9 13. 6.9 13. 6.4 14. 6.3 13. 6.4 11. 5.8 12. 5.3
5 2 3 1 0 7 1

Netherla 10. 4.4 11. 5.0 10. 5.0 11. 5.8 13. 7.3 12. 7.4 11. 6.9
nds 2 1 0 7 2 7 3

Poland 20. 8.1 23. 9.7 25. 9.7 26. 10. 27. 10. 23. 9.0 20. 7.5
6 7 8 5 1 3 3 9 9

Portugal 25. 10. 27. 12. 30. 12. 37. 15. 38. 16. 34. 14. 32. 12.
37 90 39 98 14 71 06

Romania 20. 6.5 22. 7.0 23. 7.2 22. 6.8 23. 7.1 24. 6.8 21. 6.8

307

0 1 9 6707

Slovakia 27. 12. 33. 14. 33. 13. 34. 14. 33. 14. 29. 13. 26. 11.

Slovenia 61 95 77 00 72 72 45

Spain 13. 5.9 14. 7.3 15. 8.2 20. 8.9 21. 10. 20. 9.7 15. 9.1
6 7 7 6 6 1 2 7
Sweden
United 37. 17. 41. 19. 46. 21. 52. 24. 55. 26. 53. 24. 48. 22.
Kingdom
79 59 24 98 51 25 31

25. 8.3 24. 8.6 22. 7.8 23. 8.0 23. 8.0 22. 7.9 20. 7.4
0 8 8 7 6 9 4

19. 7.6 19. 7.8 21. 8.1 21. 7.9 20. 7.6 16. 6.1 ::
1 9 3 2 7 9

Source: Eurostat (update: 01.03.2016)

Special emphasis must be given to NEETs. The term refers to young people 15-29 years old who are not in
employment, education or training (Eurofound 2012a). The particular group experiences very complex
challenges regarding their access to employment or to education/training opportunities. Besides their
failure to increase their work experience, their exclusion from education and training activities decreases
their opportunities to enter (or re-enter) employment. For this reason they confront obstacles which
outweigh those experienced by other groups of the population and constitute a matter of serious policy
concern in most countries; the NEETs rates actually act as an indicator of exclusion from both the labour
market and education/training. The fact that so many young individuals experience intense difficulties in
their transition to employment, while at the same time they lack access to educational activities, increases
the danger of valuable human potential remaining inactive or becoming involved in the informal economy
(OECD 2013). Moreover, such a probability aggravates the long-term individual and societal costs further.
The case of NEETs projects an additional interesting dimension; the rates of NEETs who are 25-29 years
old are bigger than those of NEETs who are 15-24 years old (Table 2). This is probably due to the fact that
most young people 15-24 years old are still involved in education and training activities, whereas the
majority of individuals 25-29 years old are expected to have already finished their studies and to be
actively seeking for work, but many of them do not appear to be very successful. Therefore, the high rates
of NEETs in this particular age group should be seriously taken into consideration, when interventions for
young people are being planned.

Table 2. Young people neither in employment nor in education and training (NEETs) by

age group

Countri 2009 2010 2011 2012 2013 2014
es 15- 25- 15- 25- 15- 25- 15- 25- 15- 25- 15- 25-
24 29 24 29 24 29 24 29 24 29 24 29

EU-28 12. 18. 12. 19. 12. 19. 13. 20. 13. 21. 12. 20.
497698270054

Austria 7.8 11. 7.1 11. 6.9 10. 6.8 10. 7.3 11. 7.7 12.
4 6 3 8 0 2

Belgium 11. 16. 10. 17. 11. 17. 12. 18. 12. 19. 12. 17.
1 2 9 0 8 7 3 3 7 2 0 9

Bulgaria 19. 24. 21. 27. 21. 29. 21. 30. 21. 32. 20. 29.
5 0 8 8 8 9 5 0 6 3 2 6

Croatia 11. 16. 14. 21. 15. 23. 16. 25. 19. 27. 19. 26.
959271626132

Cyprus 9.9 14. 11. 14. 14. 15. 16. 19. 18. 22. 17. 23.
0 7 7 6 1 0 2 7 8 0 0

Czech 8.5 19. 8.8 19. 8.3 18. 8.9 19. 9.1 18. 8.1 18.
Republi 8 8 7 6 8 4

c

308

Denmar 5.4 8.9 6.0 10. 6.3 10. 6.6 11. 6.0 10. 5.8 10.
k 1 5 6 8 4

Estonia 14. 26. 14. 25. 11. 20. 12. 20. 11. 18. 11. 16.
500662213978

Finland 9.9 14. 9.0 13. 8.4 13. 8.6 13. 9.3 13. 10. 14.
1 3 0 7 8 2 8

France 12. 18. 12. 19. 11. 19. 12. 20. 11. 18. 11. 19.
453094522847

German 8.8 16. 8.3 15. 7.5 13. 7.1 13. 6.3 13. 6.4 12.
y 1 2 7 3 1 6

Greece 12. 21. 14. 24. 17. 31. 20. 37. 20. 42. 19. 39.
428649254115

Hungary 13. 24. 12. 26. 13. 25. 14. 26. 15. 24. 13. 21.
4 9 4 6 3 5 8 3 5 1 6 7

Ireland 18. 23. 19. 25. 18. 27. 18. 25. 16. 22. 15. 23.
612181751720

Italy 17. 25. 19. 27. 19. 27. 21. 28. 22. 33. 22. 33.
751388082018

Latvia 17. 27. 17. 26. 16. 24. 14. 21. 13. 19. 12. 19.
588509920709

Lithuani 12. 21. 13. 25. 11. 21. 11. 20. 11. 19. 9.9 19.
a 1 4 2 7 8 7 2 3 1 4 1

Luxemb 5.8 10. 5.1 7.7 4.7 9.8 5.9 10. 5.0 11. 6.3 6.9
ourg 5 4 0

Malta 9.9 17. 9.5 17. 10. 15. 10. 13. 9.9 13. 10. 14.
7 1 2 6 6 8 8 5 2

Netherla 4.1 7.6 4.3 8.7 3.8 9.1 4.9 9.9 5.6 11. 5.5 11.
nds 2 6

Poland 10. 20. 10. 21. 11. 21. 11. 22. 12. 22. 12. 21.
158654812702

Portugal 11. 14. 11. 17. 12. 16. 13. 18. 14. 20. 12. 19.
2 6 4 3 6 2 9 7 1 8 3 2

Romani 13. 19. 16. 22. 17. 22. 16. 24. 17. 24. 17. 24.

a 904042800106

Slovakia 12. 25. 14. 27. 13. 27. 13. 27. 13. 27. 12. 27.
5 8 1 5 8 1 8 1 7 8 8 1

Slovenia 7.5 12. 7.1 13. 7.1 13. 9.3 15. 9.2 18. 9.4 18.
5 2 2 9 7 5

Spain 18. 22. 17. 23. 18. 24. 18. 27. 18. 28. 17. 26.
158222686717

Sweden 9.6 10. 7.7 9.5 7.5 8.6 7.8 9.4 7.5 8.7 7.2 9.0
4

United 13. 16. 13. 16. 14. 17. 13. 17. 13. 17. 11. 16.
Kingdo 367335992292

m

Source: Eurostat (update: 05.01.2016)

Beside the social burden caused by the inactivity of so many young people, the economic costs for

countries are considerable. In 2011 7.5m people 15-24 years old and 6.5m people 25-29 years old were not

involved in any kind of employment or in education/training activities (Eurofound 2012a). 14m NEETs
encumber European economy with a cost of €15bn, which is equivalent to 1.2% of EU GDP (Eurofound

309

2012a) and their rates continue to rise in most European countries; NEETs decreased only in four countries

(Austria, Germany, Luxembourg and Sweden) (Table 2).
Consequently, the countries’ attempts for economic recovery are hindered. Greece–with a 54.7% increase
of NEETs–has a burden of €7.1bn; in Spain NEETs increased by 34.4% and caused a cost of €15.7bn; in
Ireland they increased by 37.5% and caused a cost of €4.3bn, while the cost is €32.6bn for Italy, €2.7bn for
Portugal and €0.5bn for Cyprus. Certainly, the impact should not be calculated strictly on economic

grounds as a percentage of the GDP, but should be particularly perceived as a factor of serious social

unrest.

The aforementioned facts are of great importance for the decisions that concern the implementation of the
Youth Guarantee Initiative and draw the attention especially–but nor eclusively–to the rising debate on the

eligibility criteria for participants and to the feasibility of provisions for the inclusion of broader groups of

young individuals.

Table 3. NEETs in the EU: numbers and costs

Number of % change in
NEET cost
Countries NEETs, aged 15- Total cost % of GDP (2008-2011)

EU-26 29 (2011) (2011) 28,33

Austria (2011) € 1,21 3.59
Belgium 28.08
Bulgaria 13,941,264 153,013,053,902 1.06 52.06
Cyprus € 3,174,088,942 1.42 50.18
Czech 124,894 € 5,212,677,869 3.31
Republic 278,610 € 1,272,066,372 2.39 20.59
Denmark 316,901
Estonia 23,799 € 424,582,494
Finland
France 242,213 € 1,799,781,276 1.16
Germany
Greece 76,201 € 1,287,222,442 0.54 65.31
Hungary 41,764 € 309,028,277 1.93 46.95
Ireland 98,625 1.07 23.27
1,634,599 € 2,020,035,528 1.11 25.20
Italy 1,350,524 € 22,179,184,354 0.60 -5.97
Latvia 419,102 € 15,464,150,265 3.28 74.74
Lithuania 329,915 € 7,065,609,793 2.12 30.69
Luxembourg 193,606 € 2,132,937,655 2.77 38.28
Netherlands 2,157,052 € 4,327,415,557 2.06 29.78
Poland 90,361 € 32,613,386,658 2.67 59.59
Portugal 102,226 1.07 46.59
Romania 6,163 € 535,755,173 0.23 -20.69
Slovakia 166,254 € 328,040,537 0.66 27.85
Slovenia 1,253,504 € 96,837,652 2.04 40.17
Spain 260,392 € 3,957,261,493 1.57 25.79
Sweden 849,452 € 7,535,945,953 1.54 77.97
United 226,340 € 2,680,128,907 0.99 32.55
Kingdom 34,969 € 2,102,787,690 1.31 35.79
1,643,928 € 685,900,206 1.47 45.77
142,918 € 465,709,508 0.33 4.98
€ 15,735,159,614
€ 1,260,246,895

1,872,403 € 18,347,112,792 1.05 36.49

Source: Eurofound, 2012a

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3. EUROPEAN YOUTH GUARANTEE INITIATIVE: CONCEPT AND FRAMEWORK

3.1. The tradition of youth guarantee schemes in Europe
The concept of youth guarantees has a long tradition in Europe. In the past, such schemes have been
successfully implemented in many countries, where the public employment services had the primary role
for their implementation. Mechanisms that secured training or employment opportunities for young people
were put into effect for the first time by the Nordic countries. Although they were introduced amid many
difficulties, these projects served as valuable experiences for future ventures (Hummeluhr 1997). Sweden
in 1984, Norway in 1993, Denmark and Finland in 1996 established their youth guarantee programmes in
an attempt to confront the existing deficiencies in youth employment in a more innovative and effective
way. They were followed by Germany and Austria in 2004, and by Belgium in 2007 (Besamusca, Stanesku
and Vauhkonen 2012; Lecerf 2014).
In general youth guarantee schemes can include various forms of interventions in the fields of
education/training and the labour market. They include provisions for compensation, which not only
support the financial status of young persons, but also contribute to the increase of their self-esteem and
confidence (ILO 2013b). Depending on the country, they promote measures that operate either
independently from each other or in mutual cooperation under the supervision of national or regional
services. Three different types of measures can be identified (European Commission 2011; Hummeluhr
1997; ILO 2013b):
a) Education/training measures; they include interventions in general education, in vocational education
and training (VET) and in labour market training.
b) Measures for the improvement of employment services and programmes; such measures target the
improvement of employment planning, job-search assistance and subsidies.
c) Other active labour market policies (ALMPs); they include various forms of support through public
works, community services and business start-up programmes.
Furthermore, the youth guarantee eligibility is determined differently by different states. National
authorities usually introduce particular criteria that are related to age (up to 24 or to 29 years of age), the
educational level (up to tertiary education or other), the duration of interventions and the period of time
between one’s graduation and the beginning of the programme (ILO 2013b). The paper makes a short
reference to the cases of three European countries that are interesting models of youth guarantee schemes.
In Denmark youth guarantee schemes are successfully implemented through the Danish Flexicutiy
Programme. The country’s labour market is characterised by great flexibility and it is not uncommon for
individuals to lose their jobs with a week’s notice. Nevertheless, a combination of provisions for training
opportunities and high unemployment benefits establish a sense of relative security. The particular
programme involves passive and active labour market policies. Although all unemployed people are
expected to seek for a new job, the programme focuses on establishing effective state policies that can
ensure the existence of adequate job positions and proper training for them; if no jobs exist, the
government has to provide them. When individuals become unemployed, they qualify for two years
benefits. In addition, they are obliged to fill in a resumé within a month and to meet with an employment
consultant within three months, in order to receive guidance and job search assistance. Most individuals
find a job in a short period of time; if someone is still unemployed two years later, he/she enters a
compulsory training programme, which is part of the national ALMPs and is planned according to local
needs. In spite of the high overall cost of the initiative, which amounts to 4% of the GDP, the results
appear quite successful; there is a continuous reduction of unemployment and a significant GDP growth,
while the national economy enjoys many advantages (Wisman 2010).
The organisation of youth guarantee schemes in Sweden is similar to that of Denmark, but the time
management is much stricter. Young unemployed people must register in the list of unemployed of the
public employment services. If they don’t secure a job position within ninety days, they are offered a
personalised four-month programme, which aims at them either entering the labour market or participating
in training. During the first three months they are involved in specific activities, such as assessment,
educational and vocational guidance and job search assistance with the help of specialised coaches. When
the four-months period ends, the schemes are enriched with provisions that endorse their transition to the
labour market, such as opportunities for work experience or education/training, support for business start-

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ups and for employability enhancement. The outcomes of the Swedish youth guarantee have been
successful for almost half participants (Eurofound 2012b; European Monitoring Centre on Change 2012;
ILO 2012a).
In Finland the present youth guarantee schemes started in 2005 and were revised in 2010. In the beginning,
they targetted young people less than 25 years old, but since 2013 they include all young people less than
30 years old, who are not engaged in employment or education. The aim is to help young unemployed
individuals to enter (or to re-enter) the labour market through the implementation of personalised plans
within the first three months of unemployment. Each plan includes provisions for job offering, for
placement in education/training schemes or other activities that improve employment prospects. The
Finnish youth guarantee schemes have very high success rates, as more than four out of five individuals re-
enter the labour market. However, large part of the success is associated with the significant budget
increase for the public employment services, that allowed for more advisors to be allocated and, thus, for
larger numbers of young people to be supported within shorter periods of time (Eurofound 2012b; ILO
2012a).
The valuable experience from youth guarantee initiatives that were successfully implemented in various
national socioeconomic environments ignited the interest of other European countries in introducing
similar practices, when other piecemeal measures did not prove successful. Considerable evidence, though,
indicates that, over the years, youth guarantee projects proved to be rather successful in improving youth
transition to the labour market, but they seem to lose part of their dynamics during an economic crisis (ILO
2013b).

3.2. Promotion of youth potential in the EU: institutional framework and policy interventions
The Youth Guarantee Initiative has been designated as part of the EU youth policies, which have been
reinforced by the international debate over the confrontation of employment difficulties and the
enhancement of the young individuals’ role as economic and social actors and as citizens. Youth
aspirations are discouraged by the deficiencies in the socioeconomic environment, from which they feel
more and more detached. For this reason international organisations and countries have engaged in a more
intense effort to intervene with the appropriate policy measures and to improve youth prospects.
The International Labour Organization (ILO 2012a; 2012b) promotes the improvement of the labour
market environment through a multi-level approach, which involves a basic policy mix that could (and
should) be adapted to the particular conditions of each country. Five policy areas are highlighted:
a) Introduction of policies that aim at increasing aggregate demand and at improving access to finance.
b) Provisions for education/training in order to support the school-to-work transition.
c) Introduction of labour market policies especially for young people from disadvantaged groups.
d) Enhancement of youth entrepreneurship in order to support job creation for both entrepreneurs and
employees.
e) Introduction of the necessary legislation in order to secure young individuals’ equal treatment and
working rights in their jobs.
The necessity of sustainable policy reforms and practices that would support the employment opportunities
of young people has been repeatedly designated by different political entities in the EU. In 2010 the
European Parliament appealed for interventions that would facilitate youth access to the labour market. It
placed emphasis on the communication between education and the labour market, on mobility and work
placements (apprenticeships, traineeships/internships), as well as on the educational and financial support
for corporate ventures undertaken by young individuals (European Parliament 2010). The aggravation of
the economic conditions and their social implications led to more proactive youth policy interventions by
European authorities. The Youth Employment Package that was introduced by the European Commission
in December 2012 suggested the establishment of innovative practices as means for smoother transition
from education to the labour market (European Commission 2012). The European Parliament repeatedly
expressed its support to particular interventions towards this aim; it agreed on the further promotion of the
Youth Opportunities Initiative (European Parliament 2012) and urged for a European Commission
resolution (European Parliament 2013).
Having succeeded a certain consensus, the European authorities gave a concrete character to the
implementation of the Youth Employment Package through the establishment of the Youth Employment

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Initiative/YEI in March 2013 (European Commission 2013b). Its actions focus on regions where youth
unemployment rates are higher than 25%, as well as on NEETs 15-24 years old, who are extremely
vulnerable to labour market transformations. Member states are expected to undertake actions directly
targeting education and employment deficiencies. In addition, they are encouraged to make the appropriate
qualitative adjustments in their educational, employment and social services and to enhance the interaction
between education and the labour market. The initiative is supplemented by funding provisions for a
budget of €6bn for the period 2014-2020, which are to be drawn from two different sources. €3bn will be
drawn from a specific EU budget line dedicated to youth employment, which will act as an informal youth
unemployment fund and will exploit any margins that will be left available below the Multiannual
Financial Framework ceilings for the years 2014-2017; another €3bn will be drawn from the European
Social Fund national allocations that should be used in projects combating youth unemployment. The
allocation of funds especially to the YEI has its own symbolic importance. Nevertheless, it must be
emphasised that these financial resources do not come from an actual increase in the relevant European
funding, but from a further reduction in the cohesion budget, which had already been reduced compared to
the previous 2007-2013 financing period. Therefore, concerns regarding the financial sustainability of the
initiative appear to be completely justified.
Besides its aspired contribution to the effectiveness of the Youth Employment Package, the YEI was
timely designed in order to exercise a supportive role for future interventions. Consequently, the
introduction of the European Youth Guarantee Initiative in April 2013 (Council of the European Union
2013) came at a time when the EU had already gained experience in establishing initiatives that supported
youth prospects. Through this initiative the EU and national authorities pledged “to ensure that all young
people under the age of 25 years receive a good quality offer of employment, continued education, an
apprenticeship or a traineeship within a period of four months of becoming unemployed or leaving formal
education”. Youth Guarantee projects should include coordinated actions aiming at broadening the
professional opportunities of young people. Such actions should either facilitate youth transition to the
labour market or help them develop their learning competences and qualifications further in order to match
the labour market demands. Since its aim is to operate as a means of proactively confronting the
socioeconomic implications of an unfavourable labour market for the younger cohorts especially, it
addresses multiple recipients.
A few months later, the European Commission suggested an organised model in order to reinforce young
people’s efforts to get into work, education or training. Its implementation required the proactive support
of stakeholders and of the European authorities to a number of measures. It encouraged immediate actions
that would get youth into employment and the adoption of measures supporting apprenticeship schemes
and high quality training in order to address skills shortages. For this reason it supported mobility within
the EU with the help of EURES, as well as the adoption of measures that increase the creation of jobs,
especially by SMEs, and youth recruitment. Furthermore, it called for the acceleration of reforms that in
the long-term would lead to an integrated European labour market. It also recognised that, besides the
organisational and administrative dimensions, the implementation of Youth Guarantee schemes involves
an economic dimension, which can determine the prospects of its success. For this reason the European
Structural Funds were designated as funding sources that should be used in coordination with national
resources (European Commission 2013a).
Shortly after, the European Council enhanced the supportive orientation of the European authorities by
explicitly acknowledging the importance of the issue; it characterised the phenomenon of high youth
unemployment as ‘unacceptable’ and placed the priority to confront it first in the agenda (Conclusions of
the European Council 2013). It urged the EU member states to take immediate action by adopting their
national plans, which were required in order to confront youth unemployment and to implement the Youth
Guarantee principles according to their needs. Finally, it gave greater priority to countries with youth
unemployment rates higher than 25% by encouraging them to submit their national Youth Guarantee plans
by January 2014, when the first funding disbursements would be allocated. However, the primary focus on
countries with unemployment higher than 25% raises concerns, as the mid- and long-term consequences
for other countries might be equally serious and dangerous, if they are not properly addressed. By April
2014 all EU member states had submitted their national Youth Guarantee plans, but the final outcomes

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require close supervision and careful implementation of the measures that will be put into effect by each
one of them.

4. EUROPEAN YOUTH GUARANTEE INITIATIVE: AIMS, CHALLENGES AND PROSPECTS
As the adverse circumstances challenged the countries’ social cohesion and economic stability, the
pressures on the states’ decision-making intensified. During the first months of 2014 twenty-eight national
Youth Guarantee plans were submitted to the European authorities. For the first time the EU attempts to
promote a regulated action at such scale and to achieve some form of homogeneity in confronting youth
unemployment, skills mismatches and lack of job opportunities. At the same time, the different dimensions
involved in the schemes’ implementation are being clearly designated as new challenges for the entire EU
and for each one of the member states. Four pillars can be identified in the construction of the initiative and
the most important challenges can decisively determine its outcomes in the relevant fields.
The first pillar includes the institutionalisation of the Youth Guarantee interventions, which applies on
both the statutory framework and the collective mindset. There is no doubt that the favourability of the
broader socioeconomic environment is the primary prerequisite for the successful implementation of the
Youth Guarantee. More analytically, the macroeconomic stability and the prevalence of a positive mindset
towards its interventions constitute the necessary foundations for the implementation of the schemes. On
one hand, the institutional framework has to provide for the dissemination of good practices. Moreover, the
credibility (and therefore the attractiveness) of the institution can be enhanced by the close monitoring and
the quality assurance of its processes. The latter would mitigate the serious concerns about the danger of
having older workers dismissed in favour of younger individuals, whose placement might be subsidised by
financial or other motivational advantages for employers. The initiative’s outcomes can be decisively
determined by preparatory actions which support job search and creation, by the promotion of training as a
means to combat unemployment in the short- and medium-turn, as well as by institutional factors that
influence the level and the quality of its organisation (Bussi and Geyer 2013). Furthermore, the
institutional framework has to be supplemented by provisions ensuring professional experience
opportunities for young people through their involvement in specific projects with alternative actions and
tangible results. A well regulated operational framework for work placements and the establishment of
more and better quality apprenticeship/traineeship schemes would contribute to shorter periods of
inactivity between their graduation from all forms of learning and their entrance in the labour market for
the first time. Mobility is an additional instrument for the reinforcement of youth prospects through
common youth guarantee projects. It improves the language skills and the cultural interaction between
young Europeans, is associated with increased opportunities for first-hand experience in the integrated
European working environment and allows for better allocation of human resources in different regions
according to their competitive advantage. On the other hand, special emphasis has to be attributed to the
ideological preparation of the stakeholders and of the public opinion regarding the content and the
importance of the success of the Youth Guarantee. Finally, it must not be overlooked that the collection of
data concerning school-to-work transition is valuable for the implementation of the Youth Guarantee
Initiative and the monitoring of its needs. The interactive and continuous communication between
education and the world of work, and the development of qualifications and specialisations in demand
would be enhanced by regular data flow and would ignite growth.
The second pillar refers to the establishment of a consistent stakeholders’ participation. The main
challenge is to incite as many potential actors as possible to actually be involved in the schemes, regardless
of their position in the initiative’s processes. The beneficiaries–young people in general and NEETs in
particular–need special motivation in order to pursue new opportunities through training or work. The
longer they ‘tolerate’ their potential being inactive and their dynamics remaining unexpressed, the more
they run the risk of professional and social exclusion. Vocational education and training should become an
attractive instrument through which young people can develop skills that match the labour market demands
and ultimately restart their professional dynamism. Furthermore, more opportunities for effective
professional guidance could be established by public or private employment services and young
individuals could be supported to develop the necessary competences and to avoid skills mismatches and
erosion. However, such an endeavour requires the proactive cooperation between education and the labour
market. The engagement of key stakeholders–such as education providers and employers–in every stage of

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the planning and the implementation of the Youth Guarantee interventions would enable their particular
expertise and recommendations to be properly deployed.
The third pillar refers to the inclusiveness of the Youth Guarantee; the challenges are multidimensional
and will determine the eligibility of the young individuals who will benefit from the projects. Firstly, the
age limitations, which appointed that only young individuals less than 25 years old are eligible in the
projects, have not taken into account the worse circumstances experienced by individuals 25-30 years old.
Secondly, space is a parameter that should also be considered. By targeting deficiencies at regional and
local level rather than at national, the initiative can actually invest in greater effectiveness and restrain the
ongoing ‘brain drain’, the unprecedented emigration of valuable human capital from the weaker European
economies towards other centres. Thus, through successful Youth Guarantee projects the countries would
be able to maintain the specialised human capital they need in order to achieve their economic and social
stability. In addition, the commitment of member states to provide work or training opportunities depends
upon their ability to provide access to the relevant information and upon the proactive interaction between
all stakeholders, such as state authorities, education and training providers, public and private employment
services, employers and unions. As projects are usually implemented by many different institutions, the
dissemination of information regarding the coordination of and the access to their activities becomes very
important. The EU member states are required to assess the socioeconomic conditions carefully, to
establish objective monitoring and evaluation processes, to draw useful experience from existing good
practices and to improvise, in order to develop inclusive initiatives.
The fourth pillar involves the funding prospects of the initiative, which will determine the outcomes of its
various interventions at social and economic level. Previous experience has established that the
combination of different measures–training, career guidance and job search assistance, apprenticeships,
subsidised employment and support of self-employment–has proven more successful than any intervention
based on separate measures (O’Higgins 2010). However, high–direct and indirect–costs cannot be avoided.
So, the concerns about the ability of the EU and of member states to support such projects financially not
only are justified, but should also be expected to intensify along with the development of projects.
Countries with a lot of inactive youth potential will face great difficulty in contributing to Youth Guarantee
projects through their budgets and such economic support will certainly aggravate their national financial
position, even though EU funds will be used as well. Moreover, the allocation of €6bn by the EU seems
insufficient in contrast to the large numbers of young people who should be eligible. Consequently, a
different approach becomes necessary; the financial cooperation between the public and the private sector
appears more likely to prove successful and cost-effective. Besides the creation of more education/training
or employment opportunities for young individuals, the overall system can establish active networks with
the entrepreneurial world that will supply organisational expertise, guidance and counseling services and
strong role models. In this way broader involvement of benefactors can be incited and youth
entrepreneurship can be encouraged. More young people will be able to exit unemployment by undertaking
their own entrepreneurial ventures and to achieve their social integration, while at the same time they will
probably become active supporters of job creation projects for their peers.

5. CONCLUSIONS
The Youth Guarantee Initiative constitutes part of the European youth policies and is developed towards a
twofold aim. On one hand, it attempts to coordinate targeted interventions in order to mobilise more
stakeholders and resources to support the social integration and the smoother labour market transition of
young individuals. On the other hand, it aims at raising awareness with regards to future youth
employment prospects, so that broader and actually sustainable commitments can be undertaken. The
paper attempted to approach the particular challenges concerning the implementation of the Youth
Guarantee Initiative by designating the multiple and often interrelated factors involved. Four different
pillars were identified in the Youth Guarantee construction and each one of them confronts different
challenges.
One of them is related to the institutional dimension of the venture. The tight time frame imposed by the
Youth Guarantee Initiative obliges the EU member states to combine its particular actions with structural
reforms, in order to allow long-term dynamics and special interventions for youth potential to be
established. The proactive implementation of active labour market policies (ALMPs), the quality

315

improvement of education/training systems and the establishment of specific institutional frameworks to
regulate labour costs and conditions are considered important.
Two of the pillars are associated with the supply-side and the demand-side dimension. The focus on the
supply-side dimension is related to the definition of the eligibility criteria and requires proactive measures
for the enhancement of training opportunities and of job search assistance and guidance for more
beneficiaries. However, it is equally important to encourage interventions in favour of the demand-side,
which requires the involvement of more stakeholders. The establishment of an effective regulatory
framework and of monitoring mechanisms, as well as of apprenticeship/traineeship schemes with benefits
for employers and trainees would increase the demand for young employees considerably, while the
participation in educational activities would be upgraded.
The fourth pillar includes the funding dimension that appears to require additional provisions, in order to
secure the projects’ sustainability and inclusiveness. The allocation of more financial resources, the
stability of the funding flow and the engagement of more contributors to actions investing in youth
potential are important for the achievement of successful outcomes.
Although the European Youth Guarantee Initiative cannot by itself actually guarantee success, it can be
argued that it will definitely operate as a highly motivating factor with significant symbolic features. Youth
Guarantee projects have to be carefully planned in order to succeed in their objectives. Moreover, they
carry a symbolic importance that goes beyond the increase in learning and professional opportunities for
young people. As the danger of younger cohorts being socially marginalised and politically excluded from
decisions and initiatives regarding their future prospects becomes more apparent, a potential failure will
increase their disappointment of the unfavourable socioeconomic environment and augment their
frustration. Inclusive interventions and successful outcomes can positively affect the future of the existing
youth potential and considerably improve the ability of the EU to manage it more effectively.

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317



RESEARCH ON THE REFORM OF THE BROADBAND SALARY SYSTEM OF CHINESE GRASS-
ROOTS CIVIL SERVANTS
XING LIANG, Hebei University of Economics and Business
CHENGJING NIE, Hebei University of Economics and Business

Abstract：Civil service pay system is an important part and the internal power and basic guarantee of the
civil service system, which is related to the economic interests of civil servants and the efficiency of the
public sector. Broadband pay is a new salary structure, accompanied by the new management strategy,
such as organization flattening, process reengineering, competency orientation. It has incentive effect, such
as correct orientation and flexibility advantages etc. This paper first elaborates the related concepts of civil
servants' pay system as well as its advantages and disadvantages of the broadband salary system; then
points out the problems of Chinese grass-roots civil servants' pay system; Finally, it puts forward the
implementation path of reforming the Civil service Broadband salary pay system from aspects of
transforming the civil servants' pay management concept, Promoting the legalization proceedings of the
salary system, improving the mechanism of civil servant performance evaluation and Strengthening the
grass-roots civil servants' pay budget management.
Key words: Civil servant; Broadband salary; Rank salary system; Reform ; Feasibility ;Implement path

我国基层公务员宽带薪酬制度改革研究

梁星 李万县

摘要：公务员薪酬制度是公务员制度的重要组成部分，是公务员制度的内在动力和基本保障，关
系到我国公务员自身的经济利益和公共部门的工作效率。宽带薪酬是伴随着组织扁平化、流程再
造、能力导向等新的管理战略而产生的新的薪酬结构，有着激励效果明显，导向正确、灵活性强
的优点。本文首先对公务员薪酬制度的相关概念理论进行阐述，指出了当前宽带薪酬制度的优势
与缺点，接着结合理论指出我国基层公务员薪酬制度存在的问题，进而从转变公务员薪酬管理理
念、推进公务员薪酬制度的法治化进程、完善公务员绩效评估机制和加强基层公务员薪酬预算管
理这几方面具体指出了我国基层公务员宽带薪酬改革的实施路径。
关键词：公务员；薪酬制度；宽带薪酬；改革；可行性；实施路径

公务员薪酬制度是公务员制度的内在动力和基本保障，薪酬制度是否合理，不但影响公务员
队伍的稳定性和工作的积极性，而且关系到公共部门行政管理的效率和公平，甚至还会影响公众
与政府之间的关系。基层公务员薪酬制度的改革，对稳定基层公务员队伍、提升基层公务员行政
效率具有深远的理论和现实意义。

1. 宽带薪酬理论概述
1.1 宽带薪酬的涵义

传统的薪酬管理与现代组织在结构匹配上发生失调，为顺应现代薪酬管理思想和现代组织结
构变革，欧美等发达国家开始对其传统的薪酬进行改造，“一种在职位薪酬基础上注重能力开发
导向的新型设计模式”，宽带薪酬的概念及设计也随之进入人们视野。

美国薪酬管理协会定义宽带薪酬是由多个薪酬级别及其相对较窄的薪酬浮动范围重新加以组
合，已形成数量薪酬等级相对较少但是每一薪酬级别的浮动范围相对较宽的薪酬管理体系。它表
示某个工作岗位的薪酬不再是一个定数，而是变成了一个薪酬范围，从“一岗一薪”变成了“一
岗数薪”。在宽带薪酬结构中，每个薪酬等级的最高值与最低值之间的区间变化比率可以达到

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100%，甚至是 100%以上，典型的宽带薪酬是薪酬等级不超过 4 个，但每个薪酬等级的最高值与最
低值之间的区间变动比率却可达到 200-300%。74
1.2 宽带薪酬体系的特点及其优势
1.2.1 宽带薪酬层级少，支持扁平化组织

宽带薪酬打破了传统薪酬对于等级的严格要求，主张简化过于精细的职务分割，有利于组织
提高运作效率和创造学习型的组织文化，有助于组织保持和提高自身结构的灵活性，提高组织的
竞争力。
1.2.2 宽带薪酬体系支持团队文化

宽带薪酬使很多个员工在同一薪酬等级中，员工会因此产生一种平等感，弱化了员工间不必
要的内部间的恶性竞争，通过不断强调知识的共享、员工间的合作、共同的成长来支持团队的文
化，从而提高整体效率。

1.2.3 宽带薪酬结构设计引导员工注重自身能力的提升
宽带薪酬的结构设计使得员工的薪酬与员工的绩效相结合，不晋升的前提下加薪，有利于员

工转变自己的观念，注重自身技术和能力上的提升，起到一定的激励作用，从而提高了组织的绩
效。
1.2.4 宽带薪酬体系有利于职位轮换

宽带薪酬减少了薪酬等级，大量的职位会集中在一个较宽的薪酬带中，组织不必因为人员的
变动去做频繁的调整，保持了薪酬制度的稳定性，具有很强的灵活性。宽带薪酬制度的设计鼓励
员工之间进行跨职能的流动，保证了企业自身组织结构的灵活性。

2. 我国公务员薪酬制度现状与存在的问题
2.1 对目前我国公务员薪酬制度的评价

我国现行的公务员薪酬制度的优点：（1）管理成本低，操作也比较简单，有利于按职位进行
公务员的薪酬管理；（2）凭借资历或等级制度得到晋升和更高的报酬，对于提高公务员对公共服
务的忠诚度有很好的促进作用；（3）与特定的职位等级对应的工资级别，是一种真正意义上的按
劳分配；（4）晋升和增加薪酬之间的连带性可以增加员工提高自身能力和技术的动力。

然而，人类社会开始迈入后工业化社会，经济的快速发展使各国政府开始把提高效率，降低
治理成本放在首要的位置，职级工资制本身的弊端和其不利的影响日益明显。
2.2 我国基层公务员薪酬制度存在的问题
2.2.1 薪酬标准的决定机制缺乏

目前公务员工资制度水平标准很难与在其工作岗位所承担的职责、工作复杂度及相应的价值
贡献相匹配，公务员薪酬制度不符合按市场效率和贡献应提供的相应报酬，没有科学合理的薪酬
标准决定机制，薪酬水平标准缺乏市场竞争力，不利于人才的吸引，保持基层公务员系统的稳定
性。
2.2.2 激励效果不明显

在现实中不同部门、行业的公务员素质差别比较大，同是公务员，各自的含金量不同但工资
收入却相同，工作积极性不能得到很好的发挥。因此，职级工资制尽管自称可奖励业绩，实际上
却以资历、权力为基础，并不能真正起到激励的作用。
2.2.3 薪酬制度缺乏公平性

随着经济体制改革的深化和行政部门机构改革速度的加快，国家公务人员的薪酬制度与基层
公务员管理的基本改革相比滞后了些，特别是公平性问题已经越来越明显。
2.2.4 不利于公务员队伍加强团队合作

由于公务员职位的有限和过少的级别设置，往往容易激发多个同级员工为了获得同一个晋升
职位的内部竞争，这样就会导致个人与群体间缺乏协调与合作，组织的业绩达不到最优。

74李宝元.薪酬管理原理·方法·实践 [M].北京：清华大学、北京交通大学出版社,2013：116

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3.宽带薪酬理论在我国基层公务员薪酬中应用的必要性与可行性分析
3.1 必要性分析
3.1.1 完善了职级工资制与公务员职位分类管理相配套的薪酬设计

通过公务员的绩效和能力对薪酬级别进行宽带薪酬制度的划分，提高了专业技术类公务员的
工作热情，激励作用十分明显。与此同时，宽带薪酬制度的设计灵活，更有利于公务员职位的分
类管理。
3.1.2 有效地改善了增薪方式单一的问题

宽带薪酬制度重点强调对薪酬的等级进行合并和拓宽，同样宽带下可提供较传统的职级工资
制更多的薪酬浮动，有效缓解了公务员关于职位晋升和薪酬增加间的矛盾，技术类公务员表现最
为明显。
3.1.3 有效缓解了职级工资制公平性较低的问题

宽带薪酬体系作为动态的、开放的、科学的方法，能够有效的缓解人员的外部公平感；同时
可以更好的平衡内部的不公平感，从而可避免优秀人才的流失，留住人才。
3.2 可行性分析
3.2.1 扁平化的组织结构

组织的职级层次太多，会导致绩效考核的困难。只有保证了扁平化的组织结构和清晰明了的
流程，才能真正实现薪酬的宽带化。也可以说，非扁平化的组织相比而言不太适合宽带薪酬的方
式。
3.2.2 科学完善的绩效评价系统

建立一套科学、公正的绩效考核评价系统，客观、公平公正的考核员工的工作绩效，是实施
宽带薪酬的关键。在实际工作过程中如果出现了对员工不合理的考核措施，员工心里会产生不公
平感，产生不良的心理情绪，使得工作效率低下，因此在政府部门推行宽带薪酬的前提就是要事
先运作好一套成熟的绩效评价系统，保证宽带薪酬制度的实施。
3.2.3 易于衡量的岗位绩效

如果一个组织实施宽带薪酬，则需要其工作岗位的绩效便于衡量，当组织的绩效考量滞后，
薪酬的设定会出现问题。此时绩效考核不能有效实施，宽带薪酬制度不能顺利地进行。
3.3 电子政务的发展为宽带薪酬实施提供了必备条件

电子政务的快速发展保证了组织的扁平化管理，计算机网络信息技术有助于政府及时准确的
从外部获取最新的信息，减少了行政层级，提高了行政效率，有利于宽带薪酬的实施。

4.我国基层公务员宽带薪酬改革的实施路径
4.1 转变公务员薪酬管理理念
4.1.1 建立全面薪酬体系的理念

我国市场经济快速发展，政府行政机构改革不断深入，为了更好地适应市场经济环境，政府
的组织结构、人员构成和职能等均发生变化，传统的薪酬管理出现种种问题，需要政府变革现行
的薪酬管理，此时，应树立全面薪酬体系的理念，来改变现有薪酬制度的困境。
4.1.2 增强以人为本的管理理念

有效的薪酬管理符合组织的人力资源发展战略，能够实现组织的整体经营战略。在设计薪酬
管理制度的时候应强化以人为本的理念，加强能力和绩效的比重，提高薪酬的公平性，从而提升
组织凝聚力，实现人力资源战略。
4.1.3 树立全员参与的薪酬管理理念

薪酬管理关系到组织内部的每一个人，与每个人的切身利益息息相关，需要组织的全员参与
，而全体人员参与薪酬的管理确保了薪酬管理有利于组织战略的实施。
4.2 推进公务员薪酬制度的法治化进程
4.2.1 完善公务员薪酬制度法规体系

首先应修改关于薪酬的有关条款。只有将有关薪酬制度方面的有关规定作相应的修改，才能
保证基层公务员进行宽带薪酬改革有法律的保障。其次要做好《公务员薪酬法》的立法工作。通

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过法律手段统一和规范公务员的薪酬、奖金、津补贴和福利的发放，对公务员薪酬标准的决定机
制、薪酬结构的设计、工作环境和工作时间等做出了具体的规定，为公务员薪酬的合理分配提供
了法律的依据。
4.2.2 规范公务员薪酬调整程序

每当进行公务员薪酬调整时，首先应由政府提出薪酬调整的方案和实施办法，在广泛征求了
民众意见的前提下，提交人大进行审议，待人大审议通过后，再由组织实施政府对薪酬的调整，
不仅提高了公务员薪酬水平的公开性透明度，还可以提高公务员薪酬调整程序的规范性。
4.2.3 明确公务员薪酬标准决定机制

当薪酬调查比较时，应该以劳动力市场的各类人员作为参考对象，每年进行一次薪酬调查比
较，对产品市场的物价指数水平和劳动力价格市场的薪酬水平进行评估，不仅可以提高公务员薪
酬的外部竞争力，而且可以提高公务员薪酬水平确定的公信力。
4.3 完善公务员绩效评估机制
4.3.1 建立公正的评估环境

只有创建良好的舆论环境、资源环境、组织环境和制度环境，才能保证绩效评估的公开、公
平、公正。首先，应该加强宣传引导，从而提高认识评估的意义。其次，要完善制度的规定，切
实规范评估的程序。同时，要保证资源条件有力促进评估的实施。
4.3.2 增加必须的评估程序

被评估者必须参与评估的全过程，是最重要的主体；要建立相关的平台，提升评估的相关性
和公平性；同时通过必要的面谈，减少误解，增加共鸣，形成合力保证制度的实施。
4.3.3 改进现有的评估体系

首先，要选择合适的评估者，这是保证评估有效的重要前提；其次，应进行全方位的评估，
这样能保证评估结果更加真实可靠；同时还要扩大评估面，将对个人的评估与对团体的评估结合
起来；还要更好地杜绝人情化，避免因为人情、心理因素的影响而导致评估结果的片面化、集中
化。
4.4 加强基层公务员薪酬预算管理

公务员薪酬直接影响着公共财政的支出状况，是公共组织人工成本的重要组成部分。宽带薪
酬虽然可以改变薪酬的分配方式，但却不能改变所分配薪酬的数量和总量。薪酬的浮动很大，基
层公务员的薪酬控制点不够精准，如果领导者对于薪酬的决策处理不当，可能会导致薪酬成本的
大幅上升，增加公共财政的支出。因此，基层公务员在实施宽带薪酬后，必须加强薪酬预算管理
，使薪酬管理涉及到的人工成本的结构调整和水平变动符合公共财政计划的要求和目标，从而尽
可能的最大限度满足人力资源管理战略所提出的吸引、保留和激励优秀人才的发展要求和目标。

我国基层公务员薪酬制度的改革势在必行，但需要一个较长时期的渐进过程，需要时间，不
是一蹴而就的。我们应具有与时俱进的时代精神和创新精神，推进基层公务员薪酬制度走向完善
。宽带薪酬是一种新型的结构模式，与我国传统的公务员职级制薪酬相比有一定的优势，我们应
在宽带薪酬理念的指导下构建基层公务员的宽带薪酬结构，对基层公务员职级制薪酬制度进行改
革，并在薪酬的法规体系建设、绩效评估、薪酬成本预算等方面进行配套建设，从而完善我国基
层公务员的薪酬制度。

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AN INVESTIGATION OF THE FACTORS THAT CAN HINDER THE GROWTH OF LOW COST

DIGITAL MARKETING OF INDEPENDENT MUSIC

GEORGIOS.P. HELIADES, Technological Institute of Ionian Islands
FABRICIO LAZAKIS, Technological Institute of Ionian Islands

Abstract
As the Internet forms itself towards music distribution, it offers a huge range of services for musicians,
most of which fall in the low cost section. This paper investigates the adoption of the Internet as a mean of
music distribution by musicians of independent style. It builds up on our previous effort to map the
independent music scene across the country, discovering a poor volume of musicians that actually spend
significant time to market their music over the time they spend to create it. In this research, employing 300
independent musicians and groups in Athens, we confirm a high expectation out of Internet services by
musicians but a relatively low engagement rate. A number of reasons can be blamed for that, relating to the
use of technology. However, the most interesting finding was a lack of the right communication instinct,
leading to an opportunistic treatment of the social media and related facilities. It is obvious that certain
steps will have to be taken if this sort of music is to be grown over the new distribution channels. These
steps may include certain technical improvements on services. However, the main issue is the maturity of
attitude towards the public, translated into the right marketing steps.
Keywords: Independent music, music marketing, music distribution, Internet services, social media,
communication.

1. INTRODUCTION
There is currently a huge host of Internet-based capabilities for independent musicians to promote their
artistic substance, some of which were literally unthinkable 20 years ago. Apart from the obvious option of
maintaining a personal web page, musicians have the potential of promotion and communication through
social networks as well as the inexpensive display of their material via streaming audio and video services.
There is also the possibility of selling physical CDs/vinyl discs or digital releases in every part of the world
through independent digital music stores. With a relatively low cost, an independent artist can dispose for
sale material in numerous digital music stores. It can also be posted to subscription streaming services
making it available at any time for instant playback and to register it in music recognition service.
Furthermore, there are independent artist promotion services, advertising placement on websites with high
traffic and commercial exploitation of the material (in advertisements, movies, video games, etc.). The
Internet also offers the possibility of finding partners of any kind (producer, mastering studio, musical
partner from abroad etc.) more easily than in the past. The Internet is now recognized as an essential tool
for artists. Our long-term research investigates issues that have to do with independent musicians in Greece
and the way they engage with the available Internet services: the degree of engagement, their knowledge of
such services, engagement scenarios and so forth. In this paper, we focus on the combinations of services
that are chosen and the planning and marketing strategies that are employed on those services.

2. BACKGROUNG
2.1 The “digital revolution”
Given the development of digital technology in the professional audio sector, the recording production
costs have fallen significantly over the last 15 to 20 years. Digital technology now provides more and more
features. With the right expertise, offers the possibility of creating music productions with respectable
sound quality and low budget. Consequently, the quality difference between the production of professional
and amateur circulations has been decreased, giving a theoretical opportunity for more artists to compete
with the big names on an equal basis. Furthermore, the Internet has significantly reduced the cost of
distribution. It is much easier now for independent artists to release their digital material, which moreover
does not cause transport or storage costs, given the intangible nature. Moreover, the information storage
cost on Internet servers is constantly decreasing. The distribution on a global scale, an unthinkable
possibility for an independent artist until the late 20th century, is possible nowadays with minimal cost.
Due to the lower cost, the musical productions have grown dramatically in quantity. Only in 2005, the

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albums released in the US were 60,000, 36% more than the previous year, which were 44.000 (Anderson,
2008).
2.2 Internet music marketing
In the digital world, the challenge is always running, so the artist to create large enough audience to be able
eventually to profit from their supporters will gather (Kusek and Leonhard, 2005). The marketing of a
product describes the overall strategy of transmission from the producer to the consumer, including
distribution and promotion thereof. Promoting a product is aimed firstly in view in the widest range of
media or communication channels as possible and secondly to persuade the consumer to buy. In the music
industry, marketing primary purpose is to promote the music. However, the goal of a successful online
marketing campaign of an independent artist is to develop relationships with their listeners, exploiting the
opportunity to attract interest and possibly delight with their music, to conquer their supporters. This
translates into profits for record companies and independent artists are no longer interested in recorded
music sales, but the relationships they have developed with their listeners (Trepy, 2010). The bond
between the artists and their listeners becomes even resistant through time in cases where the cultural
background of the listeners’ group has got strong traditional or local origins (Heliades, 2011).
It is argued (King, 2012) that the best way forward are tours, arguing that the emotional impact that will
have the listener out of an impressive live performance is much stronger than any positive image possibly
formed listening to a recording of the same artist. Therefore, he suggests artists to focus on being good at
their live performances. This means that the Internet should not be the only promotional activity with the
independent artists. Conversely, the presence on the Internet should be complementary to other activities,
such as frequent live performances, or if possible tour.
King (2012) describes the relationship between the artist and their audience as an erotic encounter. The
ultimate goal in this case however is the revenue inflow. But before this happens, listeners should be
familiar with the artist's material, preferably via repeated exposure to it. There are many artists e.g. that
lead directly visitors from their profile in a social network to a digital music store. However, most often the
visitor will not be willing to pay money to get music of an unknown to him (until that moment) artist, even
if they have the opportunity to hear the songs before buying. The most effective way of promoting musical
material is to divert the public's exposure to it. The radio proves this for decades (Dubber, 2007). Listeners
should hear many times a release free, to feel the desire to buy and to obtain, especially for an artist who
they do not know. Therefore, the artist must first lead the visitor to a preferably familiar online
environment (such as YouTube(TM)), where the listener is able to enjoy the music. In this environment, one
useful strategy could be to provide an incentive (such as free downloading a song high quality), so that the
visitor can choose to subscribe to the artist in the service channel. In this way they develop a relationship
with more cohesion, the subscriber is informed of the new posts of the artist to the original page on
YouTube (TM), which may encourage the user to proceed with such hearings. In the above example, the
independent artist will have achieved its purpose, having managed to lure once more the listener towards
the material.
2.3 Healthy strategies for independent musicians
Therefore, a key objective of an independent artist should be to come across as many platforms and
recorded digital content distribution services as well as social media. King (2012) also argues that it makes
sense for an artist to have a presence in all digital retail music sales and subscription services available to
hearing music for a monthly subscription, as there are users who prefer the environment of the service. For
King, it is a good start to place the material in spots already frequented by users who are interested in the
kind of music so that the artist is interpreted. The independent artist should use these services and social
media to appeal to prospective listeners at home, that is where they frequent. The artist should get to where
the listeners are, instead of waiting for them to get close to him. To accomplish this, the artist will have to
deliver part of the control held over the material. Moreover, the nature of the Internet significantly hinders
the ability to control the flow of information e.g. the holder of the copyright rights of recorded material.
For creating successful marketing strategies, Winter (2012) argues that the public should be treated
completely differently. The public uses the existing technology (mobile devices, social networks,
audiovisual mounting platforms and writing) rather than as a consumer, but as a content creator, which is
changing the economy and society. The public is a producer of new connectivity modes. Active Internet
users and the artists are developing the music culture and economy to be smarter, to provide more services

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and are economically viable. Benefiting from new relationships and structures to ensure that not only new
sources of social and cultural capital for themselves, but also more freedom and choice (Winter, 2012).
Internet refers to Web 2.0, which is no longer composed of static pages such as Web 1.0. The pages of
Web 2.0 offer guests an environment within which to create their own content, would categorize favorite
locations and connect with other users. In this way, the most popular destinations on the Internet at the
moment are places that are more like software than with static file and show different material at each visit,
and based on the creation of content by users.
Data of Internet communication structures, show that marketing strategies have made a shift from mass
appeal and are based on the same public which aim to complete the view of the artist in the middle
(Wikström, 2009). Therefore, the artists will have to work hard to attract interest around their name and be
inventive in how to seek, creating communicative links. Furthermore, they must embrace the notion of the
availability of the material at any time. They should also try to encourage their supporters to promote the
material through notifications in social networks and other means.
2.4 Necessitation of study
As illustrated above, there are many studies on the impact brought about by the digital revolution in the
music industry. Most of them, at the beginning of the 2000s, focused on the impact that P2P networks have
on the music industry. The use of the Internet, however, continues to evolve and is now under investigation
in many ways, even as a social phenomenon. In recent years, there is a lot of research studying the online
behavior of the public and its interaction with the music. Similarly, there has been a lot of work on the
social behavior of people in digital environments such as iTunes(TM) and Spotify(TM). However not much
research is found that examines the issue from the perspective of the independent artists and their
prospective audience.

3. METHOD OF STUDY
In order to lay down the preferable services and the accompanying strategies that independent musicians in
Greece employ to promote their pre-recorded music, we conducted a thorough research study that took a
six-month period. Initially, we had to form a picture of the available web sites that offer promotion
services to our targeted artists and this was done by searching the Internet for such info. As a long list of
such sites and services came up, these services were categorized according to the company and type of
service in order to have a manageable number, in the end. Following that, we were able to conduct a
survey by forming an electronic questionnaire that was designed to extract the views of independent
musicians on a host of specific issues relating to their use of their services and aiming to spot in every
detail their marketing practices. A separate section aimed at collecting information regarding their attitude
and opinion on certain matters such as copyright and unauthorized music processing, free distribution of
their music, etc. The questionnaire remained on line for a period of three months and attracted the attention
of just over 300 Greek independent artists.
Since there is no way to determine even approximately the number of active independent Greek artists who
interpret original material, the research was based on a hypothetical estimate. In making this assessment,
the independent Greek artists surpass 10,000. Therefore, in order to gather a representative sample we
aimed at collecting at least 300 completed questionnaires. To find artists willing to participate in the
survey, the questionnaire was posted on Facebook(TM). Beyond the circle of known and their own
acquaintances, approached over 1,000 artists who were identified by searching a variety of services
(Facebook(TM), Bandcamp(TM), Soundcloud (TM), Reverbnation(TM), Last.fm(TM)), online databases (Metal-
archives.com(TM), Jumping Fish(TM), Rockoverdose.gr) and finally through announcements posted on the
Internet, advertising gigs. The approach was made using an identical text which was sent via email or
through personal messaging system. Ultimately, nearly 300 responses received, which means that about 3
out of 10 artists responded to the call.
When the answering period completed, we performed a rough verification of the allegations of the survey
sample and in the search of some more data. We visited the official pages of artists in various services and
collected data on their activity in some popular services. We searched the official page on Facebook(TM) for
every artist who participated in the survey and the number of people who had “Liked” it. Also searched the
official channel to YouTube(TM) of each artist and recorded: the number of "subscriber", the number of
videos that are uploaded to the service and the total number of sightings all videos each channel. In

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addition, it confirmed the existence of the official page of each artist on Soundcloud(TM) and the number
"following" and songs you have uploaded to the service for each profile. Moreover, the number searched
"following" on Twitter(TM) and "contacts" in Myspace(TM). Finally, as there was no location information in
our questionnaire, we had to complete their geographical location afterwards.
When visiting the pages of the sampled artists to these services, made comments on the presentation of the
artist in them. Large enough attention was given to how the artists hosted online links to other web
services, and how visible the services of choice were.
4. RESULTS AND DISCUSSION
4.1 Internet Use
In terms of the usage of the most popular Internet services, in figure 1 there is a collective view of the
related responses.

Figure 1: Percentage of artists that use popular Internet services.
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Out of the participating artists, 30.6% said that they own a website, while the remaining 69.4% have not
yet done so. Consequently, 7 out of 10 artists investigation does not possess the appropriate base (website)
around which you build the promotion of their material. Many artists seem to use social networks as their
web-based, since only 1.6% of the sample said that has no page on Facebook(TM). This suggests that the
vast majority of respondents consider it necessary to have a presence in this social network. While few
users now visit Myspace(TM) compared to the large percentage of artists that use other social networks
(38.8%) still has a profile on it. Much of the profile of those most likely created the time that Myspace(TM)
was the most popular social networking medium of the Internet and it is questionable whether is the one
used systematically. More than 1 in 3 performers (36.5%) said they use Twitter(TM), and its social network
Google(TM) gathered a lower percentage (22.8%).
In the field of streaming services, as expected, is the dominant YouTube(TM). Of responding artists, 88.3%
said that they have channel on popular video streaming service. More than half of artists (59%) also using
Soundcloud(TM). However, the two services in the streaming field (without financial assistance) following
the aforementioned popularity gather very low rates: Internet radio without producer Jango(TM) only 2%
and ready for listening online discotheque Grooveshark(TM) only 6 2%.
Instead, half of respondents (50.2%) said they have a profile and have posted material on the discovery
service new ReverbNation Artists(TM). Also, quite a large proportion (29%) collected by local support
services and promoting independent artists Jumping Fish(TM). No other service in the emergence of new
artists not raised higher than 2%. Lower the participation of research artists in music databases: 27.4% of
respondents have presence in Last.fm(TM), however, only 10.4% registered the releases in Discogs service
(TM). Finally, quite impressive is the fact that only 3.6% of respondents reported having registered his
artistic personality in the online encyclopedia Wikipedia(TM).
Regarding the sale of equipment, 42.3% of respondents have chosen to distribute the releases through
digital store Bandcamp(TM). Despite the high rate, sample artists who claim to know the service but do not
use it (42.7%) are more than those who use (42.3%). The set of artists who say they use online distributor
for passing the material to multiple services amounts to 22.8%. The fact that online distributors have an
additional cost for artists, unlike eg with Bandcamp(TM), in which there are only deductions from revenue,
it may work as a deterrent to their use, despite the advantages they offer. The use of digital music stores
and subscription services seems to have no blossom -even at least, in Greece as in other countries such as
USA. Because of this behavior, may the independent Greek artists to consider that the use of online
distribution is not as essential as for example posting material to YouTube(TM).
4.2 Creating revenue
In our research, participants were asked their views on making profit out of the Internet. Their responses
are summarized in figure 2. In particular, they were asked to state what they believe to be the best way for
an independent artist to find revenue through the Internet. The most popular answer (60.6%) on the sale of
products such as clothing, ie products that do not serve the purpose of reproduction of recorded musical
material. The fact that this is the most popular answer to this question is surprising, given that in question
15, only 34.5% said they use Facebook(TM) for the promotion of products such as clothing. The collection
of revenue from the sale of this type of goods is a popular way for independent artists to have receipts to
their live performances or during a tour.
The sale of digital files is the second most popular response rate of 55.7%. According to the survey
sample, the digital files are a better source of revenue from CD sales (52.8%). High importance seems to
give artists and collectible editions as vinyl discs and picture discs or special goods packages, e.g. CD with
shirt, as a percentage of 41.7% of the respondents has included the best ways for an independent artist to
find revenue through the Internet. The percentage indicates that the sale of concert tickets on the Internet is
a good way of earning is 31.6%. Donations and crowdfunding considered by 25.4% of respondents as a
good source of revenue from the Internet to an independent artist, while 21.2% said that the collection of
copyright is profitable. A small percentage (8.8%) said that there are other ways of earning other than the
above, while 5.2% of respondents believe that none of these ways is capable of generating revenues to
independent artists.

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Figure 2: Independent artists’ responses on the best way of creating revenue out of the Internet.
During the analysis of the results showed the possibility of confusion on the part of artists between the
revenue they can expect from the Internet and revenues from non-web resources. As to our knowledge,
only a few independent artists sell tickets for concerts online. Additionally, some inconsistencies found
between research findings and personal appraisal of artists. As mentioned above, a portion of the public
buys items not recorded material via the Internet, but the artists highlighted in the best way to find revenue
through the Internet. One has to consider that often artists express their overall view and do not answer
based on their personal experience. In this case, the results do not necessarily indicate confusion or
contradiction but merely conjectures product, which are far from reality.
4.3 Marketing options
Internet advertising is an affordable way for independent artists to be able to reach a wider audience. As
shown in figure 3, a large proportion of respondents (43.3%), the question whether to pay to advertise on
the Internet, chose to answer "as the cost." Of the respondents, 30.3% said they have no intention to pay to
advertise, while 20.8% stated willingness to advertise online.

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Figure 3: Most popular responses on a list of issues relating to the marketing options of their music.
Recall here that the question concerning the use of Facebook(TM), 15.6% of respondents said they have
already been advertised through social network. This indicates that respondents prefer to advertise through
Facebook(TM), rather than through specialized music company. Of respondents, 4.2% said they have paid to
advertise via ReverbNation(TM) and 1.3% that has been advertised through another Internet company, five
reported questionnaire.
It is fairly safe to assume that most artists are quite sensitive to their materials. This attitude justifies that
almost half of them (49.8%), the question concerning the commercial use of their material, they stated that
"depends on the purpose for which the songs" will be used. These artists may not be willing eg to sell their
songs for use in advertising company whose product does not approve. A large enough percentage of
artists (22.1%) said that he has not thought about the possibility, and the smaller the percentage of
respondents artists (17.3%) who replied that it intends to place the songs for commercial purpose. Our
main target is the financial benefit replied that it would decide on this question 9.1% of the sample, while

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1.6% said that already the material available to another company, more than four juxtaposed to the
questionnaire.
When asked which artists were asked to state whether they would use collective financing services
(crowdfunding), three responses make up the vast majority of the sample with the rates between them are
fairly distributed. The most popular answer, chosen by 33.9% of respondents was that they have not
thought to use such service. 32.2% of the total said that it would campaign of collective financing, while
30% answered negatively. Only 3.9% said they have used collective financing service. Of these, 2.9% said
they chose IndieGoGo(TM) for their campaign, while 1% of respondents said they used another company
than nine listed in the questionnaire.
Occasionally they appear in Internet competitions, which give rare opportunities to independent artists,
such as To open the concert of a great name, to participate in a festival abroad or even to secure a
recording contract. Of the respondents, 43.6% said they would be willing to participate in online contests,
28.7% said they have already participated in the online contest, while 27.7% of the sampled artists had a
negative attitude to this idea.
The way chosen by most artists (71.3%) to promote their material online, it was through music forum and
communities (e.g. social networks). Also, 69.7% of respondents said they have approached Internet radio
stations for the same purpose. Fewer (59.9%) artists have chosen to appeal to bloggers and online media,
while 31.3% of respondents have used and other promotional methods online.
As to the question of collective funding, so in case of assignment of the online promotion of the artist in
person or company, the most popular answer, chosen by 31.3% of respondents, was that he has not thought
of such a possibility. Quite a high percentage (24.4%) said that the promotion will be enlisted person in
connection with an online company. Also, a high percentage (22.5%) obtained by the intake of choosing a
person who will be paid a percentage of the revenue derived from operations of the same. Fewer (14.3%)
are the artists who will not be using any of the two juxtaposed ways to promote them on the Internet. The
same percentage (14.3%) favors an individual recruitment option that will be paid by taking a percentage
of the sales revenue (CDs etc.). An even smaller percentage of the responding artists (8.8%) trust the
online promotion of a company. Quite small (5.5%) is also the percentage of the total that would hire a
person without pay, at least not until they scored significant revenues. Only 2.6% of respondents said they
would make the step to hire a marketer with fixed monthly salary. Also, 1.6% of the artists surveyed said
they have used both ways (individual and company) to promote the Internet. From 11 companies cited the
respondents, only one said it has used its services, while 2,9% BandPage(TM) in total reported having
cooperated with other online company.
4.4 Concluding remarks
The promotion of the recorded material is as important as the quality of the music in the music industry.
For this reason, independent artists should make the same effort in the field of promotion made and the
music sector, investing in this as much as possible time.
The survey found that the sampled artists have great expectations for the course, as almost half (48.9%)
stated as their ultimate goal of international recognition. However, few follow the right steps to go through
completely amateur stage to a more professional presence on the Internet.
It is important to note that through this research and personal findings of the writer, the average
independent Greek artist gives the impression that a number of deals with the Internet in an attempt to
garner interest around the material. However, it was found that probably spends much or even more time
on leisure and services they have to offer much less than some who ignores. However, if you choose to
invest the time in primary research, a small search on the Internet will be enough to find most of the
services mentioned in this questionnaire. But instead, the artists seem to be consumed in repeating patterns
themselves - when the question formulated different; cancel.
Each artist is the only one who can know exactly what wants to earn with his music. The aim was to
conclude what is knowledge in relation to the possibilities of providing the Internet and act advisory in any
gaps that may be discovered. The author's view is that the average Greek freelance artist is fully aware that
the promotion of music is online case now, but for now, has not fully understood the ways of using the
Internet to enable it to reap substantial benefit.
The answers gathered the highest rates, like the overall picture that emerges shows that Greek artists prefer
digitized traditional promotion methods. It seems that that both exploit the Internet as a broader platform

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(forum, social networks and communities) to implement advertising through direct dissemination (word of
mouth) and other trust more advertising channels that are essentially digital version older structures
(electronic Type and blogs) with which they are most familiar. Without being wrong, this is a notion that
certainly a constraint. The advent of the Internet not turned the music industry in digital only because of
the music files digitization but because globally impacted the way we asked to move to remain relevant in
today's digital world. In short, if the independent artists who want to benefit from the new possibilities
afforded them by the Internet, you must first realize that there.
One of the main findings of this survey is that despite the high contribution made by participants in social
networks (only 1.6% of respondents said they did not use them) and streaming video services (2.3% has
not posted material in most popular of them), only 3 out of 10 artists have proprietary website, which is the
basis to which all other activities of the artist on the Internet should lead. The role of the freehold site of an
artist, could be compared to the "house" on the Internet and is one of the most important steps towards a
more professional approach of the object. Around it, you can build an interconnected network of pages on
various other services. In this way, one can approach listeners in locations frequented by surfing the
Internet and try to lead them to the destination desired.
Unfortunately, the majority of our sample does not seem to have fully understood how to use the tools at
their disposal. It is hoped that this paper serves as an introduction to the indicated ways of using the
Internet to promote music.
For artists to work on the promotion of their work and get their music to reach their target, the statistics of
social networks can be very useful. Rather than considering the limited success, the artists can study and
compare other statistics, the most popular independent artists or off-line in order to determine the ways in
which they more effectively use social networks and then to adopt similar approach.
The aim of the artist should be not only the presence in the maximum number of sites, and the linking of
these separate sites together. In this way, the artist creates an interconnected network between pages in
various Internet services, with a view to leading the visitor to the private website. Equally important is
each page to promote all the rest. This is achieved by ensuring that there are visible web links to all other
media in which the artist is present. There is no reason for an artist to create a private site on the Internet if
you do not have links to other, popular sites (Facebook page (TM), YouTube channel(TM) and
Soundcloud(TM), Twitter profile(TM), etc.) which will lead visitors towards it.
Ιn terms of theoretical analysis, some conclusions can be considered almost self explanatory. In practice,
however, because independent artists are expected to assume multiple roles beyond the music creator, it is
easy to commit a most errors and omissions. Indicative worth mentioning the case of an artist of surveyed
whose official website does not have any links to social networks, despite the fact that it had profile
enough of them. In fact, few artists were properly registered online links to their pages. In many cases, if a
visitor of the page an artist on Facebook(TM) wanted to explore the official channel on YouTube(TM), I could
not find a readily available and visible link. Specifically, you should look for a video posted on the artist
notifications to visit in the YouTube(TM) environment and from there to find the channel. Chances are that
this process will deter the majority of users to explore the artist's channel on YouTube(TM).
However, if the artist has placed a link to a characteristic image (the service's logo or a representative icon)
in a prominent position on the page, the visitor might click on this even though previously had not even
thought to look for the channel artist on YouTube(TM). Equally important are the links provided by the artist
to work properly. Among the pages of the sampled artists there have been several cases where the location
that directed the visitor was not correct. Another wrong portion of the artists who participated in the
survey, is that the material is posted eg on Soundcloud(TM) or YouTube(TM) through the channel of the
independent record label with which cooperate. This leads to the opposite effect from what would an
independent artist seeks, as he ends up promoting the record company and not that of him.
These are some of the simplest examples of incorrect usage. A less obvious but quite common mistake
observed on Facebook(TM) pages of the sampled artists. The only link leading to the artist's Bandcamp(TM)
page led to a digital store where the material was available for sale in exchange for a fee. Despite the fact
that the service offers the possibility to hear the preview of the songs, this environment in which he wishes
to the user is not necessary. Moreover, these artists essentially trying to convert visitors to the page to
consumers in their material without intermediate steps have occurred leading to this behavior. The listener
should be first become familiar with either the artist or the material before you even consider the purchase.

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Initially, independent artists should treat their material as a promotional tool and not as a revenue source.
The conversion point of the recorded material to a source of revenue follows, when the artist has achieved
is recognizable from quite a large audience. To use the Internet to increase the number of listeners, a good
step would be to dispose of the material with the maximum number of ways. As people are willing to
spend less money to artists who do not know, freelance artists must earn their audience with their material
preferably free whenever possible. This does not mean that the offer, but that exchanging. The
consideration may be the ability to communicate with users who upload the material.
The artist aims to excite the maximum number of listeners closer. If they succeed, they will promote the
material on their own, through social networks and other media (eg blog). However, for this to happen,
listeners should have easy access to the artist's material, preferably in the online environment they prefer,
or even for upload to the H / PC hard drive if they wish, possibly by a voluntary contribution. Only if
listeners have easy access to the materials will be allowed the artist to win more. When an artist sells their
music asking for money from the listener before they even had time to become familiar with the material,
then that artist certainly needs to rethink of their strategy. One needs to consider that the promotion of the
material and its name is even more important than selling, especially in the early stages of the course of an
independent artist.

5. FUTURE WORK
An interesting future goal would be to analyze in depth how artists use the various online services such as
social networks etc. It would be interesting to see whether they have a meaningful structure on their pages,
whether they invoke the right links to all other sites of the artist and the degree to which they involve the
visitor. It is of high value to determine the musicians’ communication tactics in various digital social
environments and to evaluate as to how they create interest around their own material or whether they seek
into maintaining contact with their listeners. An additional element that could be investigated is the time
spent by artists on the Internet to promote their artistic existence. If they believe that invest their time
productively and whether they evaluate the compensation received. Further research could also be
conducted on the attitudes of artists to the free distribution of music and its use as promotional material
rather than a finished product.

REFERENCES
Anderson, C. (2008). The Long Tail: Why the future of business is selling less of more. Hyperion e-books,
New York.
Dubber, A. (2007). New Music Strategies: The 20 things you must know about music online.Ebook.
Διαθέσιμο: http://newmusicstrategies.com/wp-content/uploads/2008/06/nms.pdf
Heliades G. P., (2011), Recommender Systems: The new “fruit” of the internationalised music industry
and the perspectives of growing on soils of deep cultural roots, Petrakis K. (Ed.), ECONOMIA
Publications, Culture-Communication- Internationalization Series, Greece, 2011.
King, M. (2012). Berklee Online Music Marketing Clinic: Mike King, YouTube interview Viewed 2014,
Aυγ. 9, http://www.youtube.com/watch?v=Ll3j_5VbNlY&index=2&list=RDVCJcTm_YsXA [].
Kusek, D., Leonhard, G. (2005). The future of music: Manifesto for the digital music revolution. Berklee
Press, Boston.
Trepy, G. (2010). Digital music distribution: An analysis into the contemporary consumption patterns of
recorded music and their influence over the music marketing implemented on the Internet. Dissertation,
SAE Institute, Oxford.
Winter, C. (2012), Presentation at the 3rd Vienna Music Business Research Days, University of Music and
Performing Arts Vienna, June 29-30, 2012. Viewed 8/8/14,
http://musikwirtschaftsforschung.files.wordpress.com/2012/07/winter_1.mp3
Wikström, P. (2009). The Music Industry: Music in the Cloud (DMS - Digital Media and Society). Polity
Press, Cambridge.

334

MUSEUM ATMOSPHERICS : A MARKETING AND AN INTERPRETIVE TOOL
KALI TZORTZI, University of Patras

ABSTRACT

In the competitive leisure marketplace, in which museums play a key role, architecture can add value to
their experience and contribute to their ‘differential advantage’. Increasingly museum buildings are being
addressed in the marketing literature not only as influencing the positive image of visitors and their
intention to revisit, but also as affecting their experience of the museum display. This paper aims to further
this idea and explore how the building’s physical and spatial form can add new dimensions to the meaning-
making of the museum. Literature from different fields is brought together in the first part of the paper and
the key concepts of museum atmospherics and the related model of servicescape are discussed as the
theoretical background for this exploration. The paper takes as case studies two European museums which
present aspects of the city’s history and share in common the character of their buildings as landmarks,
their innovative spatial design, and the sensory qualities of their architecture. It shows how in both cases
the museum’s powerful narrative is not in the discursive dimension of the experience of the exhibits, but in
the holistic experience of the spatial setting, which visitors are invited to explore, with affective as well as
cognitive outcomes. Through the analysis, the paper brings to the surface common paired themes between
consumption and museum settings, such as atmosphere and tangible product, spatial layout and
functioning, physical environment and distinctiveness, rational and embodied.

Keywords: museum architecture; marketing; atmospherics; servicescape; spatial layout

1. INTRODUCTION

In the competitive leisure marketplace, in which museums play a key role, architecture can add value to
their experience and contribute to their ‘differential advantage’. Increasingly museum buildings are being
addressed in the marketing literature not only as influencing the positive image of visitors and their
intention to revisit, but also as affecting their experience of the museum display. This paper aims to further
this idea and explore how the building’s physical and spatial form can add new dimensions to the meaning-
making of the museum. Literature from different fields is brought together in the first part of the paper and
the key concepts of museum atmospherics and the related model of servicescape are discussed as the
theoretical background for this exploration. The paper takes as case studies two European museums which
show how the museum’s powerful narrative is not in the discursive dimension of the experience of the
exhibits, but in the holistic experience of the spatial setting, which visitors are invited to explore, with
affective as well as cognitive outcomes. Through the analysis, the paper brings to the surface common
paired themes between consumption and museum settings.

2. ATMOSPHERICS AS A MARKETING TOOL

In the context of the ‘experience economy’ (Pine and Gilmore 1999), and in the globalized environment
where ‘museums have to compete for audiences, support, and resources’ (Kotler et al. 2008, xxiii),
architecture is seen, in marketing terms, as part of the museum’s tangible product (Kotler et al. 2008: 28–
29) and an added value to the experience it offers (Kotler et al. 2008: 311). By enhancing the ‘offer’ in this
sense, it can contribute to greater visitor satisfaction and create a competitive advantage, thus leading to
increased attendance and so economic benefits. It is commonly argued that buildings designed by major
architects have become landmarks of cities, and ‘turned museums to destinations’ (Kotler et al. 2008: 311).
But it is also thought that contemporary museum design has contributed to changing positively the
perception of the museum by the public and building diverse audiences (Kotler et al. 2008: 463–4; Sweet
2011: 228).

Interestingly, from an architectural point of view, it is recognized that these effects derive not only
from the exterior form of the building but also from its interior design (Kotler et al. 2008: 317; also
Bradburne 2001; Sweet 2011). For example, the 21st Century Museum of Contemporary Art, Kanazawa,

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Japan (2004), is discussed as a model in increasing tourism and contributing to the urban renewal by
relating its innovative architectural and spatial design with the museum’s mission, programmes and
community (Kotler et al. 2008: 317–21). The building, designed by SANAA (Kazuyo Sejima and Ryue
Nishizawa, 2004), has a circular form which eliminates the distinction between the main façade and the

other sides, allowing approach equally from any direction. In addition, its transparency and its low volume

emphasize the accessibility of the museum and its close relation to the city. In the interior, galleries and

spaces that serve a variety of programmes, have been designed as if a downtown area, so as to allow for
flexibility in their arrangement, actively discourage a predetermined route, and enhance visitors’ awareness

of each other.

Likewise, the extension of the Royal Ontario Museum, Toronto, has been seen as a response to
declining attendance and reduced funding (Turi and Brunet 2009). The new building (known as ‘Crystal’),
designed by Daniel Libeskind (2007), with its ‘iconic architectural design’ and its ‘innovative use of
space’, has contributed to physically engaging the audience, and reinventing the museum experience that,
as visitor surveys have shown, have been thought to be ‘outdated’ and characterized by ‘an inadequate
visitor-orientation system’. As Libeskind notes, ‘the well-tested presentations of Nature and Culture [the

museum collections] are not only updated through interactive technology but are visualized within the true
magic and power of physically built space’ (2002, cited in Turi and Brunet 2009: 80).

The ‘ability of the physical environment to influence behaviour and create an image’ is also

discussed, in marketing literature, in relation to the concepts of servicescape (service environments) and
atmospherics – two terms sometimes used interchangeably (Forrest 2013: 205). The concept of

servicescape, first used in service settings and then extended to leisure services, describes the totality of the

environment in which a transaction takes place, exclusive of the product (Doering 1999: 93). But there are

differences in the dimensions of servicescapes that are taken into account by various marketing
researchers. In Bitner’s fundamental model (1992), ambient conditions (e.g. noise), space and functionality

(e.g. layout) and signs, symbols and artifacts (e.g. decor) are the environmental aspects that constitute the
servicescape. Strokes (1995) emphasizes the ‘setting’, that is the layout and the ability of visitors to find

their way around. Turley and Milliman (2000) add to the environmental variables the human variables such
as customer’s characteristics.

To draw attention to the role of the place in consumption settings, the atmosphere of the place and

spatial aesthetics, which can be in some cases more influential that the tangible object or service itself,
Kotler (1973) coined the term atmospherics. As he argues, the term describes ‘the conscious planning of
atmospheres’ with the intention to produce specific emotional effects, as opposed to the atmosphere
‘developed casually or organically’ (1973: 50, 64). Atmospherics can be seen, he notes, as a ‘ “silent
language” in communication’ (1973: 48) and be described in sensory terms (visual, aural, olfactory and
tactile). For Kotler, architecture and interior design contribute to the atmosphere realization – the

atmospherics of the exterior structure of the building and the atmospherics of its interior space

respectively.

3. ATMOSPHERICS AS AN INTERPRETATIVE TOOL

What is more striking is that in museum marketing literature we also find the idea that the architecture and

the atmosphere of the museum can play a role in its key functions of display and interpretation. Kotler et
al. (2008: 293) argue that the design and architecture of the building are among ‘the presentational forms
and media’ of the museum, one of the ways ‘visitors encounter information’. Biehl-Missal and vom Lehn
(2015) introduce the idea of ‘challenging atmospheres’ in museums. They argue that, unlike marketing
environments, museums can also create ‘different, not positive atmospheres’ so as to achieve an experience

of history. For all the above authors, the U.S. Holocaust Memorial Museum, Washington, D.C., is used as
an example to illustrate their arguments. Biehl-Missal and vom Lehn (2015: 247–9) also instance the
‘voids’ that run vertically through the Jewish Museum, Berlin (see below) as a case where architecture is
perceived through ‘the synaesthetic character of the museum space’ (e.g. absence of warm light or sound,

chilly air, walls of bare concrete).

In this paper we take this argument about the way museum atmosphere can affect visitors one step

further and show the key role that the spatial layout can play in adapting the servicescape to create distinct

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and meaningful atmospheres, so that the powerful narrative for the visitor is at the level of the spatial

setting or the museum as a whole. From this perspective we will analyze the Jewish Museum, Berlin, and

the Museum aan de Stroom (MAS), Antwerp, two museums that share in common their intention to
‘display’ aspects of the city’s history and relate it to the present (see also Tzortzi 2016).

The Museum aan de Stroom (MAS) is a newly built museum (2011) in the port area of Antwerp,

and part of a major urban renewal project. It is characterized by innovation both in terms of its

architectural and its museological concept. The building, designed by Neutelings Riedijk Architects, has a

tower-form like containers stacked on top of each other. It is thus conceptually integrated into its context

(an old warehouse area) while making a symbolic reference to the past, as, according to the architect W.J.
Neutelings, the tower-form aims ‘to make the weight of history physically visible’. The museum was
created with the intention to show a synthetic account of Antwerp’s history by bringing together

collections form three former museums (Ethnographic, Folk, Maritime) and an art collection, and organize
them through universal themes such as ‘Metropolis’ and ‘World Port’.

The spatial layout of the museum distinguishes spaces of circulation and display spaces. The former

shape a continuous route, known as the MAS boulevard, from the entrance to the top, the tenth floor, of the
building, characterized by complete transparency and openness to the city. As each floor is rotated by ‘a
quarter turn’, visitors are offered impressive and constantly changing views overlooking the living city, the
port and the river. In contrast, display spaces are designed as ‘black boxes’, as enclosed areas linked to the

boulevard on each floor, but disconnected from each other. Each display space offers a different

experience of an intense theatricality, based on the scenography of B-Architects. The top floor constitutes

the exception: devoid of a display space, it is entirely devoted to a panoramic view of the whole city. The
highest point of the route, and the space most remote from the entrance, makes the ‘city’ the exhibit of the

museum.

It could then be argued that, through its spatial layout, the MAS complements and alternates the

display narrative, the stories of objects about the city, with the powerful visual experience of the living city
itself, linking the experience of the past with that of the present. Moreover, visitors’ movement in museum

space acquires an additional meaning in relation to the urban context. The museum route designed to
represent a vertical ‘exploration’ of the city through movement is found to work in this way: visitors

studies suggest that people use the space as a continuation of external public space for events or walks, so
that in 2011 ‘40% of visitors go through the boulevard and up to the panoramic rooftop’ (De Caro 2012:

126).

The Jewish Museum, the extension to the Berlin Museum by Daniel Libeskind, is known as being

the museum that, as seen by some, better communicated its social meaning when it opened in 1999 without

its collection, which was displayed three years later. This argument about the meaning of building rests on
its symbolic layers – its location, its exterior form, its relation to the main building, and its ‘voids’
(mentioned above) – but perhaps it is most clearly expressed in the spatial design of its lower, underground
level. It is organized around three intersecting axes: the longest, the ‘Axis of Continuity’, which represents
the continuation of Berlin’s history, and leads to the two exhibition upper floors; and the ‘Axis of the
Holocaust’ and the ‘Axis of Exile’ at the end of which are located two dead-end spaces. To the symbolic
meaning of the axes, the ‘routes’ in the history of the Jewish Berliners, is added the highly distinctive

spatial experience created by each of these spaces which becomes the expression of events which took
place over years: the enclosed garden, the ‘E.T.A. Hoffmann Garden’ or ‘Garden of Exile’, with forty-nine

tall concrete columns on uneven ground, creating the sense of instability and lack of orientation in exile;
and, the ‘Holocaust Tower’, a tall empty ‘silo’, with different acoustical conditions and light coming from

a small slit in its roof (a symbol of hope, according to the architect). They both illustrate what has been
described as the ‘emotional narrative’ (Storrie 2006: 171) of the architecture.

As in the MAS, the powerful experience is in these two spaces, which are most remote from the

entrance. These two structures externally are physically independent of the main body of the building, and

in the interior, though linked spatially through the underground axes, they are accessed through heavy

doors. As in MAS as well, bodily movement through space is augmented by an intense local experience:
movement is highly localized in the ‘Garden of Exile’, and the experience is about stillness in the
‘Holocaust Tower’. But, more significantly, instead of offering open views to the city like MAS, the

Jewish Museum proposes links to the city which are invisible, and symbolic. As Libeskind explains, the

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underground axes link the upper city of Berlin to ‘the hidden, lower city of the museum’, while the
‘Holocaust Tower’ and the ‘Garden of Exile’ may be seen to belong to both levels (Hansen-Glucklich
2014: 34). So here the architecture of the museum constructs a space which renders visible the ‘invisible’
and acts as a ‘substitute’ for the experience of the city. Moreover, by creating immersive experiences in
darkened and enclosed spaces, it makes the past felt as now, and invites visitors to sense the silence and
‘inexistence’ of what has been lost to the present.

4. LINKING MARKETING CONCEPTS AND MUSEOLOGICAL IDEAS ABOUT
SPACE

What is clear from this discussion is that the spatial analysis of the museums brings to the surface common
preoccupations with the marketing literature, and allows the identification of parallels between museum
and consumption settings. Underlying both cases is the idea that museum architecture does not simply
provide a physical context for the objects, but organizes meaningful experiences that complement the
conceptual narrative of the display. This can be paralleled to the idea that consumers in their purchase
decision-making do not respond only to the tangible product, but to the total product, including one of its
most significant features, the atmosphere of the place where it is consumed (Kotler 1973: 48). In museums
bodily experience of the physical setting shapes meaning-making beyond the explicit messages expressed
in the formal communication of information, and can create affective engagement that complements
cognitive learning. Likewise, from a marketing perspective, the environment is seen as a form of non-
verbal communication imparting meaning, influencing cognition, as well as eliciting affective responses
(Bitner 1992: 62–3). Common to both settings is, finally, the importance of the layout as a key variable in
the museum serviscape and of the physical environment in creating differential advantage (Kotler 1973:
64).

REFERENCES

Biehl-Missal, B. and vom Lehn, D. (2015) Aesthetics and Atmosphere in Museums: A Critical Marketing
Perspective, in Henning, M. (ed.), The International Handbooks of Museum Studies: Museum Media, vol.
3, Wiley-Blackwell, Chichester: 235–258.
Bitner, M. J. (1992) Servicescapes: The impact of Physical Surroundings on Customers and Employees,
Journal of Marketing 56 (2): 57–71.
Bradburne, J. (2001) A New Strategic Approach to the Museum and its Relationship to Society, Museum
Management and Curatorship 19 (1): 75–84.
De Caro, L. (2012) Moulding the Museum Medium: Explorations on Embodied and Multisensory
Experience in Contemporary Museum Environments, MA thesis, University of Leicester, viewed 1 April
2016,
http://www.collectionstrust.org.uk/images/documents/c1/a737/f6/MA_Dissertation_LauraDeCaro.pdf.pdf
Doering, Z.D. (1999) Strangers, Guests, or Clients? Visitor Experiences in Museums, Curator 42 (2): 74–
87.
Forrest, R. (2013) Museum Atmospherics: The Role of the Exhibition Environment in the Visitor
Experience, Visitor Studies 16 (2): 201–216.
Hansen-Glucklich, J. (2014) Holocaust Memory Reframed : Museums and the Challenges of
Representation, Rutgers University Press, New Brunswick, NJ: chapter 2.
Kotler, Ph. (1973) Atmospherics as a Marketing Tool, Journal of Retailing 49 (4): 48–64.
Kotler, N.G., Kotler, Ph. and Kotler, W.I. (2008) Museum Marketing and Strategy: Designing Missions,
Building Audiences, Generating Revenue and Resources, 2nd ed., Jossey-Bass, San Francisco, CA.
Pine, B.J and Gilmore, J.H. (1999) The Experience Economy, Harvard Business Review Press, Boston,
Mass.
Storrie, C. (2006) The Delirious Museum: A Journey from the Louvre to Las Vegas, I.B.Tauris, London.
Stokes, E. (1995) Through the Eyes of the Guest: How Guest Services Can Influence the Visitor Studies
Agenda, Visitor Studies: Theory, Research and Practice 7: 3–6.
Sweet, J. (2011) Museum Architecture and Visitor Experience, in Rentschler, R. and Hede A.-M. (eds.)

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Museum Marketing, Routledge, Abingdon: 226–237.
Turi, A. and Brunet, J. (2009) The Renaissance of the Royal Ontario Museum: Architecture Meets
Experiential Marketing, International Journal of Arts Management 11 (3): 74–88.
Turley, L.W. and Milliman, R.E. (2000) Atmospheric Effects on Shopping Behavior: A Review of the
Empirical Evidence, Journal of Business Research 49 (2): 193–211.
Tzortzi, K. (2016) Displaying Cities: Museum Space as a Presentational Device, Interiors: Design,
Architecture, Culture 7 (1) (in press).
http://dx.doi.org/10.1080/20419112.2016.1169748

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OFFSHORE SAFETY AND RISK MANAGEMENT: A COMPARATIVE STUDY IN THE OIL
INDUSTRY
EVANGELIA FRAGOULI, University of Dundee

ABSTRACT

One of the greatest threat to wildlife and marine animals, health and the environment is the activities of
petroleum companies located offshore. Their operations at times results in accidents where million gallons
of crude oil find their way into the natural ecology with its attendant damage to the environment. The
manner in which this accidents/spills are managed determines the extent of damage these accidents would
have on our safety, health and environment at large. The purpose of this paper is to compare the two
offshore accidents involving the PAA in the Refugio Oil Spill and the EAPC in the Israeli Oil Spill in
relation to how both companies managed their crisis. Secondary data, analysis of documentation from
selected journals and critical literature review was applied. This paper concludes that a standard
contingency plan, good team co-ordination, and effective communication is needed to effectively manage a
crisis situation.

Keywords: oil, risk management, risk, environment, offshore companies

1. INTRODUCTION

The exploration and production of oil and natural gas involves a huge amount of capital outlays and are
subject to natural risks and other uncertainties. The uncertainties are augmented in oil operations located
offshore which are inherently riskier than those located onshore. According to International Association
Oil and Gas Producers (IOGP) (March 2010, 434-17) during the period 1997 to 2007, there are 48 major
accidents that resulted in casualties on offshore operation worldwide. Not only cost to human life, the
accidents also have adverse impacts to other aspects in human life. As shown by some offshore disasters,
such as the Piper Alpha field accident the North Sea, the Macondo accident in the Gulf of Mexico, the
potential negative impacts of offshore accidents and spills to safety, health, security and the environment
can be catastrophic due to the complications in handling hydrocarbons containment and other factors. Also
offshore operations are subject to marine perils, such as extreme storms and other adverse weather
conditions and vessel collisions, as well as interruptions or termination by governmental authorities based
on safety and environmental considerations. Failure to manage these risks could result in harm or fatality,
damage to property, environmental damage, regulatory action, legal liability, loss of revenues and damage
to reputation and could have a significant adverse effect on the operations or financial condition of the
company.
The research paper aims at answering the following questions
1. What are the causes of the offshore accidents in the cases understudy?
2. What should take place but did not take place in the cases understudy?
3. How the operator companies managed the crisis?
4. Which company managed the crisis better?
The value of this paper is to contribute to understanding of the need to effectively manage crisis that
emanates from offshore oil operations as it negatively impact safety, health of humans, wildlife animals
and the environment at large, and also provide recommendations for practitioners in the oil industry and
policy makers on the need to supervise and put stringent measures in place to prevent avoidable oil spills
which monitoring, maintenance and adequate care could have averted in the cases understudied. The
recommendations would help prevent similar avoidable accidents from occurring in the future. Secondary
data and evidence from selected journals and articles, news from internet, books, were collected and
analyzed from the perspective of the risk and crisis management theory.

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2. OVERVIEW OF THE CONCEPTS OF RISK AND CRISIS MANAGEMENT

2.1. Risk and risk management
“Risk is a probability or threat of a damage, injury, liability, loss, or other negative occurrence that is
caused by external or internal vulnerabilities, and that may be neutralized through pre-emptive action”
(BusinessDictionary.com, 2016). International Standard Organization (ISO) (2002) defined risk as the
“effect of uncertainty on objectives. In this definition, uncertainties include any events (which may or may
not happen) caused by ambiguity or a lack of information. It also includes both negative and positive
impacts on objectives. Although risk and hazard are sometimes used interchangeably, the two terms are
different. Sperber (2001) defined hazard as any biological, chemical, mechanical, or physical agent that is
likely to cause harm to humans or the environment with sufficient exposure. From this definition, we can
draw a conclusion that a hazard is the cause of harm, damage, loss or any detrimental events. Although risk
and hazard are two different terms, they are related to each other as stated by Ropeik (2002):

Risk = Hazard x Exposure/Vulnerability

Risk needs to be well-managed in order to prevent exposure of any hazards. Risk management is “the
identification, analysis, assessment, control, avoidance, minimization, or elimination of unacceptable risks.
An organization may use risk assumption, risk avoidance, risk retention, risk transfer, or any other strategy
(or may combine several strategies) in proper management of future events” (www.business-
dictionary.com). Holmes (2004) defined Risk Management as “a deliberate set of actions designed to
identify, quantify, manage and then monitor events or actions that could lead to loss, which in most cases
equates to financial loss”. Mark (2011) stated that there is no example of companies who implement risk
management strategies without external triggers (economic crisis, change in law and regulations,
competitor’s actions) or internal triggers (top management decisions, employee’s actions). Therefore it is
safe to conclude that companies are more likely to take a re-active approach towards risk management,
since there has to be a risk in the air (hidden or obvious). An organization needs to have identified the risk
involved in their operation in order to develop their risk management policy.

2.2. Crisis and crisis management

Understanding and dealing with crisis is becoming more challenging for both researchers and business
practitioners because we live in an “era of crises” (Lerbinger, 1997). Crisis has been defined by so many
authors and there is no generally accepted definition. Some definitions focus on the effects of a crisis on
the organisation. Coombs (1999) defined crisis as a situation that brings about undesirable or negative
outcomes for an organization. Merriam-Webster Dictionary defines it as “a difficult or dangerous situation
that needs serious attention”, this is a general definition that apply to many fields of study (Merriam-
webster.com, 2016). It is important for organizations to effectively manage their crisis as failure to do this
could have a damaging effect on both current and future operation of an organization. Burnett (1998)
defined crisis management as a strategic action designed to avoid or mitigate undesirable developments
and bring about a desirable resolution to the problems, he however recognised the fact that crisis
management is a strategic issue that is difficult to resolve because of time pressure, limited control and
high uncertainty. Crisis management aims to help organizations to manage crisis and minimize its negative
impacts. Coombs (2007) states that crisis management is a critical function for an organisation, as failure
in managing a crisis can result in great harm to the stakeholders, losses for an organisation, or may even
end its very existence. It is therefore imperative that organisations effectively manage its crisis.

2.3. Risks inherent to petroleum offshore operations

Petroleum operations located in offshore is promising economic benefits for both companies and
government. According to Straessle (2014), offshore petroleum operations contribute more than US$ 70
billion per year to the U.S. economy, and it is expected more than US$ 200 billion in cumulative by 2035
and creates nearly 840,000 jobs for American. The same thing happens in the North-Sea oil industry, that

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vital for the UK energy security and creates jobs for more than 400,000 people. However, this immense
benefits comes with its high risk. Yanting and Liyun (2011) categorized risks involved in petroleum sector
in to four broad types:

Natural-environmental risks
There is a great uncertainty involved in conducting petroleum operations offshore as natural forces are
involved which cannot be controlled such as great wave or storm (natural risks). Installations are also
prone to be burnt when the weather is really hot.

Engineering risks
Engineering risk encompasses Exploration risk, Development risk and Construction risk. Factors such as,
inappropriate mining method, engineering design changes, technical problems in the development process,
inaccurate interpretation of seismic data, incorrect understanding of the layer, over-pressure in geological
formation, technical insufficiency, incompatible equipment, extended construction period during the
process of installation and inaccurate positioning of the exploration wells in the exploration process may
cause losses to the petroleum enterprise.

Management risks
Management risk includes human resource risk that cover areas such as the overall personnel quality,
operational level, cultural level, age composition of employees and the overall quality, management
ability, leadership and charisma of managers will affect petroleum operations. Management risk also
includes organization risk that cover areas such as unreasonable organizational mechanisms, inappropriate
staffing, and illogical allocation of responsibilities. Organization risk will occur because of different
understanding, attitudes and actions of the sectors of the petroleum operations.

Economic risks
One type of economic risk is financial risk. Oil and gas operations have a long-time cycle, wide
geographical spreading, a large number of employees, and involving a huge amount of money, this implies
that petroleum companies will face uncertainty such as financing, capital turnover, interest and exchange
rate in the course of petroleum operations. Another type of Economic risk is market risk which covers
changes in the external economic situation and the volatile market could lead to a loss of petroleum
operations. For example, factors such as rising workover material price and fuel prices will result to higher
workover costs, and will lead to decreased effectiveness of petroleum operations.
Another aspect of Economic risk is economic policy risk such as tax regulation which is an important
means for the state to control oil and gas production, supply and demand, and directly influence the level
of profits of petroleum enterprise. For example, China's petroleum enterprise taxes include value added
tax, mineral exploration right purchase price, consumption tax, corporate income tax, resource tax, mineral
resources compensation fee, business tax, urban construction tax, education surtax, resource tax, the
mineral exploration right user's fee, property tax, land use tax, tariff duties and stamp duty and other taxes.
In addition, petroleum companies also accept implicit taxes, including the coordination costs of workers,
river maintenance costs, road bridge compensation, comprehensive management costs, security guard
costs, build projects and direct losses of stolen oil, gas and water. These costs and changes in national
economic policy will bring benefits of oil construction operation to the uncertainty.

3. CASE STUDY 1: THE REFUGIO OIL SPILL

The Refugio Oil Spill located nearly north of Refugio State Beach in Santa Barbara County, California, the
United States (Figure 1), happened on May 19, 2015.The spill which dropped 142,800 U.S. gallons (3,400
barrels) of crude oil originated from a 2 feet (61 cm) diameter in-depth pipeline named Line 901 owned by
the Plains All American Pipeline (PAA). The pipeline which was built in 1987 transports produced oil
from ExxonMobil’s Las Flores Canyon processing facility near Refugio to the plains-owned Gaviota
pumping station. The pipeline route was evaluated through an Environmental Impact Report process and
the route was identified as the environmentally preferred route. The pipelines are fitted with pigs which

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perform various maintenance operations on pipeline. There are basically various types of pigs. One
scrapes the inside of the pipelines to remove debris and the other applies corrosion inhibitor. A very smart
pig inspects the internal walls of a pipeline looking for imperfections that could result in operational
failure. Pipeline operators rely on the results of their internal tests-pigging the line-for preliminary
information as to where the trouble spots might lie. The PAA had pigged the line on May 5- two weeks
before the rupture as an internal inspection and detection process but the report of the inspection was not
receive by the company before the accident. Typical under Pipeline Hazardous Materials Administration
(PHMSA) such inspections were done every 5 years.
The incident occurred as a result of “extensive” external corrosion, and metal losses up to 74 percent of the
pipe wall’s thickness in the area of the break despite the fact that the pipeline was operating below capacity
when it ruptured carrying 1,300 barrels per hour below maximum 2,000 per hour. The corroded pipeline
was blamed for the spill and the company said the leaked oil reached a culvert, and spilled into the Pacific
Ocean. The culvert was later blocked to stop the flow. All pipelines coming from platforms to the shore
have automatic shutdown systems as do the main transmission pipelines that carry product form the major
processing facilities to refinery destinations. This Pipeline was an exception as it does not have automatic
shutdown system (countyofsb.org, 2016). The company had been cited for failing to install equipment to
prevent pipe corrosion, failing to prove it had completed repairs recommended by inspectors and failing to
maintain adequate fire fighting gear and relying on local volunteer fire departments (Times, 2015)
Plains All American Pipeline was among worst violators according to the U.S. PHMSA and surpassed all
but 4 of more than 16,000 barrels in spills that have resulted to more than $23 million worth of property
damage. For the period from 2004 to 2007 the company had been fined 10 times where about 273,420
gallons of crude oil were discharged into waste or shorelines in Texas, Louisiana, Oklahoma and Kansas
(Times, 2015).

Figure 1: Location of Refugio Oil Spill (Source: Santa Barbara Energy Division)
The pipeline company had 175 federal safety and maintenance violations since 2006. On top of this more
than 1,700 operator’s reported safety and maintenance infractions, according to the federal agency said.
This is an indication that the company was operationally inefficient.
In 2013 the PAA filed application with county energy planners to investigate 82 anomalies.

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The most reported for a single year was 15 in 2008 between Las Flores Canyon and Gaviota, the stretch
where the current rupture took place.

3.1. How did the crisis unfold?

PHMSA found out that the pipeline had “extensive” external corrosion, and metal losses up to 74 percent
of the pipe wall’s thickness in the area of the break and this shows its fragile state. The company failed to
install equipment to prevent pipe corrosion and it also failed to prove it had completed repairs
recommended by inspectors prior to the accident.

The area where the pipe broke had been repaired at least three times since the most recent comprehensive
internal inspection, in July 2012. It was also discovered that, though the area that failed had lost nearly half
of the walls thickness, other areas of the pipe had experienced more extensive losses and this obviously
indicates the poor state of the pipe. Line 903 which is connected to the failed pipeline had shown numerous
signs of corrosion during three inspections in 2013 and 2014 (Panzar and Cart: 2016). The pipe operated at
a high temperature and heated pipe is an obvious risk threat coupled with its history of past concerns. Thus
our findings revealed that this pipeline was an accident waiting to occur. Also PHMSA which was in
charge of the administration of safety regulations of pipeline activities had been underfunded and the office
of the director had been without one for 10 months and this obviously shows lack of commitment on the
part of the state agency to adequately monitor and regulate safety operations in pipeline activities.

3.2. What the company did in managing the crisis

After the accident had occurred priority was safety for human beings, protection of the environment and
containment of the spill. To keep public informed, responders from a myriad agencies held press briefings,
and the company days after the spill started releasing updates on daily basis containing number of wildlife
affected, equipment and personal active in the response, estimates on the located oil recover, closures and
restrictions.In efforts to clean up the affected areas volunteers were mobilized as there were insufficient
readily available personnel to handle the extent of the spill. Over 650 people were mobilized to respond to
the spill. As a safety measure they were provided with training and protective wear. Five Shoreline
Cleanup Assessment Technique (SCAT) teams worked along the shore from Gaviota Beach to the west
side of Ellwood Beach and there were also three helicopters, one vacuum truck and six wildlife recovery
teams in operation. According to National Oceanic and Atmospheric Administration, oil was removed
from the kelp beds by spraying water’s surface with a fire monitor (water cannon) to generate artificial
current and agitating oil from the kelp. The oil is then "herded" and put together. Clean-up operations were
suspended at night for safety reasons to avoid stressing the Grunion with the presence of the lights and
equipment (Response.restoration.noaa.gov, 2016).
The clean-up was taking so long because much of the deep water clean is by hand and also because of the
impact of the wind and tide cycles. To dispose the oil, once its recovered it was assessed and categorized,
then handled by an environmental protection agency or an independent contractor, depending on its
classification.The pipeline company apologised for the damage that was done to the wildlife and
environment. The cost of the clean-up was estimated by the company to be $96 million with overall
expenses including expected legal claims and potential settlements to be. Plain All American Pipeline was
identified as the responsible party for the spill and were mandated to fund the clean-up.

3.3. What should take place but did not take place?

There should be immediate and sound communication of the crisis to the affected stakeholders but this did
not take place. The company took a while to provide information about the exact happenings and in order
to keep the public informed responders from a myriad agencies held press briefings. This obviously
implies that initially the public were fed with numerous conflicting accounts and details of happenings.

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The Pipelines should have an automatic shut-off valve as required of all pipelines coming from platforms
to the shore that can shut off an active line in times when there is an anomaly such as breakage, but this
was not the case of the line under discussion (Line 901).
The Company should have reported the spill to the National Response Corporation as soon as possible but
did not do this and it was only the members of the fire Department who reported the matter an hour after it
had occurred.

4. CASE STUDY 2: THE ISRAELI OIL SPILL

The Israeli Oil Spill happened in December 2014 and it's being considered as one of the largest in the
history of Israel, occurred in the vicinity of Eilat, Israel (Figure 2), with an estimated 3-5 million litres of
crude oil leaking from a broken pipeline, operated by the Eilat Ashkelon Pipeline Company (EAPC).

Figure 2: Location of Israel oil spill location (Source: AFP-Agence France Presse)
As reported by Reuters, on 3rd December 2014 millions of litres of crude oil spread out of a pipeline owned
and operated by EAPC to flood 200 acres of a desert nature reserve in the southern Israel. The EAPC was
founded in 1968 as a joint Israeli-Iranian venture to transport Asian oil from Eilat to Europe via a network
of pipelines that extended from Eilat to Ashkelon and up the length of Israel to Haifa. As relations between
Israel and Iran get worse after 1979 Iranian Revolution, the latter partner dropped out of agreement and the
company is now managed only by Israeli Government (Winer, 2014). EAPC’s pipelines have suffered a
series of polluting leaks over the past eight years. In 2007 about 40 tons of oil leaked from a pipe near Tirat
Carmel in the north of the country. In 2011 a tractor working on an EAPC project hit one of the company’s
pipelines releasing 1.5 million of liters of jet fuel into the Nahal Zin River in the south of the country.
Weeks later, another company tractor hit the same pipe barely half a kilometer away causing yet another
leak. In 2012 leakage from an EAPC’s pipe near the Givati Junction needed the removal of some 2,000
tons of contaminated soil. Other incidents included a burst pipe near Poleg in 2008, and oil leaks into the
sea in 1998,1999, and 2002 that eventually saw the company fined NIS 100,000 ($25 million). Eight
months ago, another leak occurred at a facility in Eilat (Winer, 2014). The month of December 2014 will
long be remembered as the month in which an immense oil spill in the south of Israel threatened human
health, endangered water sources, polluted the soil, ravaged a unique nature reserve and posed a major risk
to the Gulf of Eilat/Aqaba and its distinctive coral reefs. Due to a breach in the 42’’ pipeline of the Eilat-
Ashkelon Pipeline Company (EAPC), about 5 million litres of crude oil gushed southwards alongside
Route 90, Israel’s major north-south highway, then cut across the road eastward toward the acacia grove at
the edge of the Evrona salt flats, stopping just 400 meters short of the international border with Jordan
(Anon, 2016).

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4.1.Reasons of the accident and crisis management in the Israeli Oil Spill case
The Jerusalem Post (JPost.com, 2016) reported the breach happened by accident which occurred during
maintenance work on Wednesday night on the Eilat-Ashkelon pipeline, some 18 km (12 miles) north of the
Red Sea, resort of Eilat. NBC News (2014) also reported the spill in the Eilat region was caused by "the
systematic failure" of construction workers who were upgrading the pipeline. It was regarded as an
accident caused by human error as there is no available evidence to show that the pipeline was in a poor
state or that maintenance was left undone prior to the accident.
The Ministry of Environmental Protection reported that the first thing the EAPC did is to report the
accident to the Ministry. After receiving the first report of the rupture at 9:00 pm on December 3, 2014, the
Nature and Parks Authority and engineers and maintenance teams of the EAPC, firefighters, the Ministry
of Environmental Protection, police, immediately reached at the scene. Emergency crews worked day-and-
night. Within the first 24 hours, they created embankment dams to halt the flow of oil, pumped the oil from
the ground, and began removing heavily polluted soil to the nearby Nimra landfill, which was especially
designated to receive the soil. At the same time, sorbents and containment booms were deployed to prepare
for a potentially devastating scenario whereby rain would carry the oil to the Gulf of Eilat. More than 90%
of the oil had been removed by vacuum pumping within just over a week.
The actions taken in the first days following the soil spill can at best be referred to as “a race against time.”
All stakeholders were mobilized to respond to the event, with the Ministry of Environmental Protection
responsible for overall coordination, including risk assessment, removal and treatment of the polluted soil,
environmental monitoring and preparedness for possible marine pollution. The Nature and Parks Authority
on its part was charged with the responsibility to minimize damages to the Evrona Nature Reserve and
remove contaminated soil from the reserve.
The Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea (REMPEC) was
also immediately informed and expert advice was sought from Mediterranean Assistance Unit on how to
block the flow of oil to the sea and on known ways and techniques to treat the contaminated land. The
consultation system worked excellently and also served well in informing neighbouring countries of the
event.
Concern for human health was foremost in the minds of Ministry of Environmental Protection personnel.
All necessary measures were put in place to prevent the crude oil from spreading in order to avoid a health
and environmental disaster. Side walls of the dam that have been built in the Arava were raised to prevent
flooding and this reduced the risk that the oil will spread. The government also approved a NIS 17 million
to treat the soils as well as help restore the wildlife populations that was damaged over the cause of the
event. A special team was also to be appointed to evaluate the environmental impact of various Eilat
Ashkelon Pipeline Company activities on both onshore and offshore. Minimizing the damage to the
surrounding environment, and especially to the nature reserve, was, of course, a top priority, and actions
included pumping the oil from the main pools that was formed as a result of the spill and removing the
surface layer in which the oil was absorbed and moving as much of the polluted soil as possible for
temporary storage at specially designated cells in the nearby Nimra landfill.
In the first 24 hours, surveillance aircraft were sent to assist in identifying the flow veins of oil. This
helped in identifying the best locations in which to place sand barriers to collect the storm water mixed
with oil, so as to prevent its flow downstream and enable the oil to be pumped out of the water, should it
rain. The Nature and Parks Authority undertook similar activities in the Evrona Nature Reserve. Within
two days, a sorbent boom and oil traps was deployed to absorb the oil should it flow downstream.
In accordance with their contingency plan for large-scale oil spills, the Eilat-Ashkelon Pipeline Company
immediately put its equipment stockpiles out to tackle the spill. A 250 meter open-sea oil boom was spread
in the area surrounding the Kinet Canal’s opening to the sea to assure that the flow of oil could be
contained and skimmed by vessels from the seawater. All the ministries involved, including the EAPC and
the Eilat municipality, acted in accordance with the steps outlined in the contingency plan. Everyone was
on ground to help, making advice and equipment readily available.
Ongoing assessment and preparation of clean-up and rehabilitation plans was initiated. In addition to the
clean-up operations, the Green Police of the Ministry of Environmental Protection mobilized to work
together with the relevant authorities on investigating the causes of the oil spill and the actions taken to

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prevent and contain it. Most importantly, from the onset, the Ministry of Environmental Protection kept
Jordanian authorities, local authorities and international environmental organizations up to date on the spill
throughout the course of the event and the actions taken to mitigate its impacts (Anon, 2016).

4.2.What should take place but did not and what conclusions can be drawn?

The only noticeable lapse in the Israeli Oil Spill crisis situation is the inadequate human resources to tackle
the situation at first hand. The extent of the oil spill was massive and the readily available human
personnel could not effectively deal with such magnitude. However, this was later rectified as more people
were mobilised to tackle the situation .
The incident demonstrated that the Ministry of Environmental Protection, EAPC, and all other relevant
authorities involved in the Crisis Management of the Israeli Oil Spill were in a good position when it
comes to know-how about the steps to be taken in tackling such emergencies. They were relatively well-
prepared in terms of procedures and information. However they were not prepared for such a potentially
disastrous, largescale oil spill. Although they have an excellent team of highly professional marine
pollution prevention inspectors, they lack the necessary quantity of human resources, the necessary modern
equipment, and also the necessary barges and vessels, both in the Gulf of Eilat and in the Mediterranean
Sea.

5. COMPARISON OF APPLIED PRACTICES THE CRISES TO BE MANAGED

The practices that were applied in both cases are illustrated by Table 1.

No Israeli Oil Spill Refugio Oil Spill

1 They had a contingency plan to They had no contingency plan in place for
deal with large-scale oil spill and such large-scale emergency
this allowed for quick response.
This enabled them to work round
the clock immediately after the
spill was reported.

2 They had a good understanding of They did not exhibit a good understanding
the necessary steps that needed to of necessary steps to be taken in tackling
be taken in tackling such such emergencies
emergencies

3 They had a coordinated and There was no coordination in the response
excellent team of human resources to the crisis as different agencies
needed to manage the situation i. e responded at different times based on what
The Ministry of Environmental they learned of the oil spill incident
Protection, Nature and Parks
Authority, Engineers and
Maintenance teams of EAPC.

4 Faster response to the crisis Their response was not so fast.

Table 1: Comparison on how the companies handled the crisis

5.1.What both companies did effectively?

Both companies had priority for the safety of the people, protection of wild life and the environment, and
containment of the oil spill. They also both had continuous communication with all the important/affected
stakeholders and provided constant update throughout the course of the event.

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Based on our analysis of the two cases, the EAPC of the Israeli Oil Spill managed the crisis better than the
PAA of the Refugio Oil Spill based on the following reasons;
a. They had contingency plans in place to deal with large-scale oil spill which helped them to respond

immediately unlike the PAA of Refugio Oil Spill.
b. The co-ordination of their response shows that the EAPC of the Israeli Oil Spill had a Risk and

Crisis Management Policy in place which was not typical of the PAA.
c. They exhibited an excellent communication strategy in their involvement with the affected

stakeholders.

6. CONCLUSION AND RECOMMENDATIONS

Offshore petroleum operations involves a lot of complexities which requires that much more needs to be
done by industry practitioners and analyst to identify risk causes, characteristics and nature which to a
large extent would help prevent crisis.
After a critical analysis of the two cases, we realized that some accidents could be avoided if stakeholders
in the oil industry do the following:
a. Petroleum enterprise prioritize the implementation of risk identification measures and monitor

safety program development.
b. Oil companies maintain a good maintenance culture, the Refugio Oil Spill happened as a result of

external corrosion which could have been prevented by adhering to a rigorous inspection and
monitoring program.
c. The regulatory bodies should be more responsible, improve supervisory and inspection of job site
safety and put in place strict penalty system to deal with violations of safety regulations.
d. Oil companies employ highly qualified personnel to deal with the complexity involved in oil
operations and personnel should work carefully to avoid human errors during petroleum operations.

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AFP LIST OF ABBREVIATIONS
ALARP Agence France-Presse / French Press Agency
API As Low As Reasonably Possible
ASCADA American Petroleum Institute
EAPC Supervisory Control and Data Acquisition
HAVS Eilat Ashkelon Pipeline Company
HCRs Hand-Arm Vibration Syndrome
HSE Hydro Carbon Releases
IOGP Healths and Safety Executive
ISO International Oil and Gas Producers
PAA International Standard Organization
PHMSA Plains All American Pipeline
REMPEC Pipeline and Hazardous Materials Safety Administration
Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea

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