BEG BUSENESS AND BEG BUSINESS LEADERS IN TURKEY Thesis for the Degree of PhD MECREGAN STATE UNIVERSITY GUVENC {1. ALPANDER 1966 ARIES ATE Ule \N 332435 Mmmrfis |lv 3 \\\\\\\\\\\i§\\éx§m3g~x§(\5ggg 1 x x 3 W‘L‘Nifiil ‘0] 2 W l 1' (fl \ m N 152 LI B RAR Y Michigan State University .‘1 This is to certify that the thesis entitled BIG BUSINESS AND BIG BUSINESS LEADERS IN TURKEY presented by GUVENC G. ALPANDER has been accepted towards fulfillment of the requirements for Ph.D. degree in MANAGEMENT r 1/ 1 L‘( ( {I‘ll-L (/5 ICIZ'LI’LI L'h_7t7 / 1"] Major IV Date November 9, 1966 0469 ABSTRACT BIG BUSINESS AND BIG BUSINESS LEADERS IN TURKEY by Guvenc G. Alpander This is a study of the Turkish big business firms amdlfig business leaderso The business leader is seen as he operates within his socio—economic environment. Inning the course of this research the following ques— tions were answered: Who are the business leaders in Tvrkey? From what social and economic levels do they cumm? What are their sociological and psychological traits? How do they perceive their role in the society? Mmat are the predominant characteristics of their im— nmdiate environment, namely the firm? To answer these questions, 103 business leaders from banking, insurance, manufacturing, transportation, commerce, mining, and petroleum industries were inter- viewed. The firms that made up the study were mainly Concentrated in or around Ankara, Istanbul, and Izmir. Ebe Firm Thirty—two per cent of all the firms were founded during the single lO-year period of 1951-1960, whiCh - I'v- ,— . fl - . . “'- '3'“... o 2' ; so," va- . -o' .l-‘-f air "- 'QJ' . , J-‘ v ho- . --O‘f; I . r- ’ ..P" ;'_.-‘- ." .uv - .- - - - .- _ L... ‘ v14,- ‘ -- to, nu". .- :., ---¢~ - ".l - ‘- inlil O" i-odu an, "I. A Ora l... -. Or. . :- In-v IIJ l .P- I -- :. .... _‘ . '- \rV .. u-u Ina-i ,- . .sa-._.- -,--.. u‘ - a... u.- —. out--. - . v...' ,- — “"I V. . . - I 1 "" - 2":_.-- . ' ~-- a--_. . —_._. -‘ up. u. _ — Q .‘* gnu Abe g“-.. ‘-. . n. D l-‘.-‘.'- . . ~ - .4 " -‘n.-_. .‘."v ..- . -- l. I -- ‘ . .-‘ ' -’ Q.— - ru§ ~‘..' ~. -- -"—. ~-~ .1“ u-_‘ o "- . . ' -~ ‘ ‘ .'Q.. .u...‘.~ a,“ . a. ‘I.‘ .~ .. -‘ . _ . - _ ‘ k“.'- —~ ~ I. I -'~‘ U. - . ‘ I .‘o -A '9 Q . i. 3‘ A t.* . 1‘ " c I H‘.~‘- ._‘ ~7 ., .,__ ‘- " w. I.- ~.'_ .- o... o“- .._ l-..- ‘i- 'D- - -‘ -. ‘- “§- r~_ ‘v‘. _ . _.‘- ~ I ‘\.‘ ‘ ~ "-I —. - ~~-: - M ‘ .- M.“ I.“ - .- ‘ .‘v .... I. ‘ y- - . v . . § . . ‘ ~ :~. - ' ~ ‘ \ “Vs; ‘1‘ Q‘. “ u l M, ‘I‘.~ -‘ ‘ \ R “~ \".- “an '5 ‘ v_. _ d -— ‘ V~ s- 2 Guvenc G. Alpander was a time when liberal economic policies were practiced by the Democratic Party. On the average, the net worth of the big business firms is $1,845,530. There is, however, a wide dis-. tribution among firms in terms of net worth. The same firms, at the end of the 1964 financial year, had aver- aged $9,307,100 in gross sales, a total revenue roughly four times their net worth. The arithmetic mean of the number of workers employed is 332.9. The Big Business Leader The 103 men interviewed occupy top positions in the administrative hierarchy of their firms. In fact, al- most 78 per cent are chief executives. The typical Turkish big business leader was born in Istanbul and is now about 50 years old. He is usually an educated man having a college degree. He probably, went to a Turkish University and Specialized in busi- ness or engineering. He knows at least one foreign language —— French being the most common. He has fur— thered his formal education by pursuing additional training. The.bdsiness leader is well-traveled. The model Turkish business leader comes from a middle class family background with whom he normally maintains strong ties. Although he values highly the traditions of the society, he has little religious . c ,_ . ~. 'u-I 0-. -- __.- u . I ' t ' .q-r "' . A " ca- —- -IC .-_--D - . A~r ...--Ar_ 5 ' — - Hui~ ‘ -v-a - - . .I. v“ I .‘---\-.aw — .. .. ~ . ,.....P —_- -4 r. - . - ‘4- . u.“ * ..- . . - _ ' -.—"~ I I“--- ‘h . ‘ Q —. .... ‘_‘_" —’ ~Q '— . 4. v..-- .u‘-_-.. 4. ..“.--l -' -- .. u..--.___l. _. .. . . .. on .. ~ '_ L.- . ’ h-~o . ‘ F‘- " "C. *;_r—-.. .-. u - 5-._'.. n _ u .. ‘. :.- ‘. aar " u- I .5 v-.. . ‘- .'- un. ‘ r--, .. _ _ .~ -__ . .-. ..' . ‘ --. 9-. I. I- ’ - -‘ ~.. -*-_‘A_. v-. p. _ -. ... - .n _‘ _. 5 Il- ‘- . -' -“--‘- .,_ - - ‘. A“ " b..- g." ‘ ~ *u. _ H. 7- v‘. - . ‘- - - .- ... ‘ .‘. "¢-I‘ : v :n.‘ _ . w. ". ~ .- . "“O I- ~ "c. h"~‘ I .. ~.‘ ‘ s .' -_ .— H‘ ' -.. _.. ‘."‘ - y . ' In... .‘. In. r—' -‘II‘. ~ ‘s- .9. ‘.‘ ‘5 _. ’ -“-¢ ‘ F - - "'\. I.- ‘a,. . . ,. ~‘P- ~ " _ ‘ I~ ~".- ‘H ‘I .‘- F I ‘.'- a. ‘. ‘.- 4‘ a -._ . 7‘ ‘~ . r.‘ -. ~-, . ~~ F . l-l Q“ I y- -- 3 Guvenc G. Alpander orientation. In most cases he would have no family relationship with the founder of his firm. There is no single predominant type of business leader in Turkey. Although there is no consistent be- havioral construct for all the business leaders, their motivations are, without exception, strong. Each busi- nessman had a goal he was determined to reach. There is no concensus among the Turkish big busi- ness leaders as to their role in society, nor in their perception of the demands of society. The big business leaders in Turkey were asked: "As the person making important decisions in the firm, what do you conceive your major function to be?" Thirty of the 103 respondents agreed on day—to—day management of their establishment as their chief function. In respect to decision-making, they can be equally divided between the calculatives and the empiricals. Finally, the problems of the business leaders were analyzed. Almost all of them indicated that the gov— ernment, in one way or another, was the prime cause of their environmental problems. This should not be sur— prising since, even today, in Turkey, the notion of the business leader is misunderstood. It was the pur- pose of this research to shed light upon this area shaken by controversial values. I .~—EMV BIG BUSINESS AND BIG BUSINESS LEADERS IN TURKEY BY Guvenc G. Alpander A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Management 1966 ACKNOWLEDGEMENTS Work was begun on this dissertation two years ago, but there was little prospect for its completion until the spring of 1965 when a grant was made available by Michigan State University's Bureau of Business and Economic Research for the completion of the field work. A year later, a Ford Foundation Doctoral Fellowship made possible the completion of the manuscript. I am particularly indebted to Dr. Leo G. Erickson, director of the Bureau of Business and Economic Research and to Professor W. Lloyd Warner for their generous financial assistance. I am grateful to all the members of my disserta— tion committee. To Dr. Eugene E. Jennings, chairman of my dissertation committee, goes my special apprecia- tion for his guidance, encouragement, and stimulation, not only as project director for this thesis, but also as an academic advisor and friend throughout my gra- duate training in the department of management. I am thankful to Professor W. Lloyd Warner for the methodo— logical insight he has provided for this research, and for his critical evaluation, and many recommendations to improve the finished manuscript. Finally, I wish to ii ,_.,. " _,...o .a. f ; , -.n '_.,-'g -.‘-r ’ -‘r I In- ‘ . ’-,~~r- - ~ .J’_ ’A- .',.-s . ., a- a -v—O-‘ ‘0 w- .-- a. r-o our -- - ‘4. Q — - p—r -‘ ~«- - ~ . u- "" -- .-_ —~ .— -- . - — n '- ”6 -l ’0‘ c '. -- a v- .1 J u 4‘ _.a .r extend my sincere gratitude to Dr. Dalton E. MacFarland, and Dr. Darab B. Unwalla for their interest and aid. Without the aid of the business leaders themselves, nothing could have been accomplished. Although their lives were often hectic, they were generous in giving their time and energy to this study. And certainly this manuscript would not have been possible without the cooperation and valued assistance of my wife, Tanju Alpander. iii i.,_\,_._. cud. v. I... .- u-od‘. v. 3". - "oh - -- any! a ‘ -‘l _'n...._—' -d- - a... u- .— ._. - bf .‘ ‘- s .44 TABLE OF CONTENTS Page ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . ii LIST OF TABLES O O O O O O O O O O O O O O O O O 0 Vi LIST OF FIGURES. o o o o o o o o o o o o o o o o o Xii Chapter I. II. III. IV. INTRODUCTION . . . . . . . . . . . . . . . l THEORETICAL FRAMEWORK. . . . . . . . . . . 9 Overall Objective Specific Areas of Concern Previous Work Done on the Topic Definition of the Terms Theory and Practice in the Study of Business Leaders Major Hypotheses METHODOLOGY. 0 O O O O O O O O O O O O O O 55 Selection of the Sample of Big Business Firms Selection of Big Business Leaders Pilot Study Data Collection Coding and Tabulating Conclusion SOCIAL, ECONOMIC, AND POLITICAL ENVIRONMENT OF THE PRIVATE ENTERPRISE IN TURKEY. . 86 Introducing Turkey Social and Political Characteristics of Turkey which Have Influenced the DevelOpment of Private Enterprise Present Situation and Main Problems of the Economy Structure of the Mixed Economy Historical DevelOpment of the Economic Environment of the Private Enterprise Conclusion iii 5» .— " -o—c' v- -..‘: r *‘ -‘ ..-o -.._‘ n- L. A ‘0- .1- v. A u.- ..v u. Dr 5'- ,.- -D'--- “ -_ \ x.. -.—o--—’ .— -’ ,— on. "_ .— -.‘ - -0. a . g, DJ 0 \o p.- U- w..- \9“.. 0-. ‘ "O‘- l-‘--I.- .-* .“uv— — ~~'-~ '7 I.— o._ 0. *- -.‘_ 4-. - —‘- “‘ s. -‘ .--. ~_ -,_~‘ --~ : \ ~d‘ H I‘."- H.| .- '- n...- ..__ I. h..- -_‘_ A .- 5‘ \.' . l \- “.. -§.~ .. \ ‘.\ p‘ ‘ ‘ “A W. .-.\. u. §~..‘_ ‘7 ,_ u :— .-n. cu «.11 ‘. p ‘0 ‘ o... § § ‘v ‘1 A ~ C \'W ~.. ,‘h, ‘. - K. ‘J‘~" 'a \ Chapter Page V. THE FIRM. I O O O O O O O O O O O O O O O O 126 Structural Characteristics of the Firm How Big is Big Business in Turkey Growth Patterns in Big Business VI. TRAITS OF TURKISH BIG BUSINESS LEADERS. . . 162 The Rank of the Business Leader in the Hierarchy of His Firm Natural Characteristics of Business Leaders Intellectual and Educational Back- grounds of Big Business Leaders Socio-Economic Background and Mobility Patterns of Turkish Big Business Leaders Self—Portrait of the Turkish Big Busi— ness Leader VII. MOTIVATIONAL PATTERNS OF TURKISH BIG BUSINESS LEADERS O O O O O O C O. O O O O C O C O 199 Motives of the Big Business Leaders How to Succeed in Business Conclusion VIII. THE BUSINESS LEADER IN HIS SOCIAL ENVIRONMENT O O O O O C O C O C I O O I 282 How the Business Leader Perceives His Role in the Society How Does the Business Leader Per— ceive the Demands of the Society Correlation of the Perceived Social Role of the Business Leader with What He Thinks Society Expects From Him IX. FUNCTIONS OF BIG BUSINESS LEADERS IN TURKEY. . O C O C O O O O C C O O O O O 330 Managerial Functions of the Big Bus- iness Leaders Decision-Making The Business Leader in His Politico- Economic Environment Problems of the Turkish Business Leaders X. SUMMARY AND CONCLUSIONS . . . . . . . . . . 357 iv _-.- _—_"“ .aquo- Q-- n's “J I O Page BIBLIOGRAPHY O O O O O O O O O O O O 0 O O O O O O 367 APPENDICES O O O O O O O O O O O O O O O 0 O O O O 376 Introductory Letters Sent to Business Leaders to be Interviewed Questionnaire Used in Interviews T. .. I. — .7 . .. .2 r. r. .2 .1 . . a. r. r“ a .u r” .1 ‘- ~.. .0. u. u».... a. L. - -— ..¢ -.u a.. A a .«a .- n . av ~ . - . “-u . .... ‘III C. . —- ‘0‘ ya 1. .— L. — .a Table 1. LIST OF TABLES CHAPTER II Usefulness of Selected Books to the Study of the Turkish Business Leaders CHAPTER III Comparative Distribution of the Popu- lation and the Sample by Location of Headquarters Comparative Distribution of the Popu— lation and the Sample by Type of Business CHAPTER IV Major Linguistic Groups in 1960 Major Religions in 1960 Distribution of Villages Without Schools in some of the Eastern Provinces Economically Active Population, 15-64 Years of Age, by Economic Activities and Educational Status Economically Active Population 15 Years Old and Over by last week employment status National Income of Turkey The Share of Agriculture and Industry in Turkey's National Income Distribution of Investments (In Per- centages) Situation of the Turkish Industry in 1921 vi Page 23 68 69 88 ‘89 90 91 93 101 102 104 112 10. 11. 12. 13. 14. CHAPTER V Distribution of Big Business Firms by Industry Firms Established during Distinct Periods of Economic Policy Location of Headquarters Legal Forms of Private Enterprise Type of Private Firms Net Worth of Big Business in 1964 Gross Sales of Big Business Firms in 1964 Number of Employees in 1964 Change in the Net Worth of Big Bus- iness in Selected Years Employment Patterns of Big Business in Selected Years Sales by Selected Years in Big Business Growth of Retail and Wholesale Organi— zations in Terms of Assets Growth of Retail and Wholesale Organi— zations in Terms of Gross Sales Growth of Retail and Wholesale Organi— zations in Terms of Employment CHAPTER VI Rank of the Interviewed Business Leader in the Hierarchy of his Firms Hierarchal Rank and Age of Big Business Leaders Rank and Socio-economic Class of the Big Business Leader Age and Period the Business Leader En- tered Business Life vii Page 128 129 133 134 135 136 137 139 143 146 149 155 157 158 163 165 166 168 '1— ’.- . u a”_ n . .- .. .4 . \ ‘ -J. . ..--.¢o V .. u — _-— ""__-\ - ‘ n.— “_-.,_-u— ' "'_, - wo'!‘ . .. ' - - .' .o-A - ' .. ' - .- '«--¢ .- "" 5... n _., -..---. _ u 1.- .. -.._ - . - -- ,--. ‘u' _ O ---‘s----.. .o P- or- l”, .. ’ 9.. -A — h- - _ . .r-._ . ._ .. .4--..--... ._. I . .‘ «'2’. F " aa~.._-_,‘ . - . .:-a-,.'- ... . «I ._- h \— - -‘v-.r —- ._ “"--\ -- _ .- ‘u -‘-. _‘ _ .ul _‘ b‘o .. 0-. .- a . O ‘.—- _‘ ---__ . u .. _'“vo~-;‘ a. ‘ r g... ‘ -_ .._, A - ." v- , - ~_-\_ . ‘ . -- h. c- '- Fa- u... *‘f -. .-_- - ‘ . . I - ... z. " - r . 1. :¢-.. - I .“ . I .-_- - ~. .s-‘ ‘- ~. - :1.“ .. n o. .,_ s _ “-- [I .. Ir - ‘A;"' ‘ -_ _ . ‘ o..- t ‘ . .-_ . u. ‘ I— -“ . . . C,» -. «— _ u ‘A Q‘-h-o . . I ‘u‘ ‘ h -. ., ‘ ‘ 4“ .— -‘ .- - -- .‘. ‘ s '— w -‘- ‘4- . ~ ~ .. . - .1“- . 4 _ . —. _ 1. ~- ‘0 ‘1 I—- v -‘ , .. 4 ... ‘ 0. - L x v -~ : ‘..- v . -\ t. . s. I n'-.. .{g s“'l -. - r . . - -'~:_ ._ _‘~F‘ ~. ~ , ~ “- _’_ \\ ‘ . .‘ _ ‘~ ‘- - - -_ .. s . Q ~ I ~_ a, \ .. -._ V- ' -. ‘~ In“ L . ' . -s“, - 4. .- » v- \ s V. . . _- Q .- ~~P. _ .. u s‘ q ‘ ~ - . 4 Q ‘ ‘ u. n‘ s. A . .\ w. ‘ i. .. Du. :_ ‘ a r. \‘~-< . -‘L,_ \ \ 10. 11° 12. 13° 14° 15. Social Class and Period When the Business Leader Entered Business Life Employment History and the Period When Business Leaders Entered Business Life Occupation of the Father and Period When the Business Leader Entered Business Life Education of the Business Leader Father's Occupation and the Hierarchal Rank of the Business Leader Family Ties Among Birth and Mobile Elites Promotional History and the Relation- ship of the Business Leader to the Founder of the Firm Employment History of Mobile and Birth Elites Place Where Mobile and Birth Elites were Educated Type of Education of Mobile and Birth Elite Additional Courses Beyond Formal Edu- cation and Knowledge of Foreign Lan— guages of the Birth and Mobile Elite CHAPTER VII Motives Reported as Having Stimulated the Business Leader Average n Achievement Scores of Man- agers and Professionals in the United States, Italy, Turkey, and Poland High n Ach Correlated with the Age, Edu- cation, Mobility, Father's Occupation, Period of Entering Business Life, and Employment History of the Big Business Leaders viii Page 170 171 173 176 181 184 186 187 193 194 196 206 211 214 ‘ l‘\ g.. ’ b 0" II! II' 'l' "' If' I“ ['I fill '( I” O.' - l I ~ [0 I" I - -o- 7 .- a .— . -oa-‘v A '0— or~r \ -...,- .— .,_.-,.. .- ~-\. -..~. . -- '3— nor -—--de I $ P! 'l 3 . - 'S‘ no ‘ ‘ "" -—.o...‘ A-. I -o- ~ 0 vol..- ..__ r. -1- ~---_.. . -' — x u , "“ u... .1- - 7 “‘ :w— u \n- ~'._ _ — M5.." 7-... -‘ u- -1 . r. ‘ s.. ~§--_ -f a, - . .— --.’ '- U. L- . n r._“ r... --v‘ “i 9. V' ’ In h‘ a... q - — h J‘- g "‘ v“- . c . c - a ._~ -‘0 - H ’. h n s: 7" -. "v.. . _ V .. ~ ‘F- on ~ ~ ‘1‘ —. _ . ~q“ - S. ‘-- E ‘ v“-. s. . -Iu_ _.‘-- s . .- ‘. h“... - ~ - -‘ ’s ., .,_ n— _‘ .‘\ ‘ - » w- _ . “. ‘: ~‘n ‘y. ‘ ‘ -_ p- - ‘— a V‘ ~c .-‘ .- - '- - ~-: ‘.~ ‘- “.-.‘ ‘J “h:.- h "5 ~ -_ ~~ ‘ ‘q ‘.D-u-_ ‘§“V“ _.- - “~- 5 N‘. —‘ , ‘.-_~\ ,. . -. '— \.~..‘ Q \~ “ ‘v s '\ '- -'_ -w u u. b s h.‘ ‘ F‘ x“ c x .— _-_.‘ ~ ‘ g '- ‘ “.C‘.. “ 5 -_ ‘I-o' I'\C.r ~.L._., ~ In Table Page 4. Continuous Urge for Work as a Drive Correlated with the Age, Mobility, Father's Occupation, Education, Em- ployment History, and the Period of Entering Business Life 221 5. Profit Motive Correlated with the Age, Mobility, Father's Occupation, Educa— tion, Employment History, and the Period when the Business Leader En- tered Business Life 229 6. Social Motives Correlated with the Age, Mobility, Father's Occupation, Educa- tion, Employment History, and the Per- iod of Entering Business Life 235 7. Power Drives Correlated with the Age, Mobility, Father's Occupation, Educa— tion, Employment History, and the Period when the Business Leader En- tered Business Life 242 8. Security and Safety Motives Correlated with the Age, Mobility, Father's Occu— pation, Education, Employment History, and the Period of Entering Business Life. 246 9. Prestige, Money, and Achievement Drives Correlated with the Age, Mobility, Father's Occupation, Education, Employ- ment History, and the Period when the Business Leader Entered Business Life 251 10. What the Business Leader Considers the Major Constituents of Success 259 ll. Perceived Description of a Successful Businessman by Business Leaders in Different Industries 262 12. Perceived description of a Successful Businessman correlated with the Occu- pation of the Business Leaders' Fathers 264 13. Perceived Description of a Successful Businessman and the Formal Educational Achievements of the Business Leaders 266 ix .7. . . .— ... ... _. .2 .~ .... ... .. ... .... .. .2 .. a. E .5 T. U. ... .. _ ... 9—“ .. L. .3 .u. u. L. —__ .: 4 .u r” .. .: ... .C a: .p. . . ... L. 3. . . .. a. r” .H ;. ... ... . c. .. .ph . .. .. r. 4 5» .. r. «\J o. r. ... o. .n. . . .: r. . ... A. .. .. .ou . .~ .. r“ ... ... .. . . .3 In“ a." . . ... a . ... .. ..o. . a. . u ..u .u Table 14. 15. l. Perceived Description of a Successful Businessman Correlated with the Age of the Respondent To What Does the Business Leader Attribute His Success? CHAPTER VIII A Business Leader's Perception of His Role in Society The Demands of Society as Perceived by the Businessmen Correlations between Perceived Role in Society and Demands of Society on the Business Leader CHAPTER IX Allocation of Time Orientation in Decision—Making Correlated with the Age of the Respondents Orientation in Decision-Making Correlated with the Period when the Business Leader Entered Business Life Orientation in Decision-Making Correlated with the Firm's Date of Establishment Orientation in Decision—Making Correlated with Education Orientation in Decision—Making Correlated with the Type of Univer— sity the Businessman Attended and Graduated From Orientation in Decision—Making Correlated with Employment History Orientation in Decision—Making Correlated with the Degree of Religious Affiliation Degree of Consultation in Decision- Making Page 268 270 288 315 326 333 339 340 341 343 345 347 347 349 —‘ A 'u ...- . -u- tion a . ‘1- F n ~‘rw ul‘i-"-’ -A". ." " h- In «D I -..-,au - ‘ ‘J_.-.-- Table Page 10. The Business Leader's Degree of Concern with Central Planning 351 11. Causes of Organizational and Managerial Problems 354 Xi ". ...... ..... -.- Figure Figure Figure Figure LIST OF FIGURES Page Comparative Development of the Business Firms in Terms of Assets, Sales, and Employment 152 Comparative DevelOpment of Retail and Wholesale Organizations in Terms of Assets, Sales, and Employment 160 Diagram of the Basic Ingredients of Motivation 202 xii u \ "-f---A~ ... .--—..---- raw... a. a .v. r. .1 . . . .Z .: ... o. I . . .2 .. .: F. r. . .~ J‘ u s ¥~ .. .~‘ a. :_ a. .. _; .1. 3 . . . .: p. .. l .n I T 7 Z. _ .. r; .n. .: .u~ L. .: ..‘ s a n . a. 4. v. 4 . a. u. ... .2. :— . s 2 2. .4. v . 0: .. .. . . . . L.‘ . 2. ..u .L . . .... ... .. .2 .3 .. ... .. .... .. ‘ . . av . . t. .. .... .2 .: _. ..A .ns . . . . .. ..s —. .... i. C. . 2. 2. .a- ... ... .. ... a. . ‘ ..s r . p“ . u 5 . ... ... s. . s f. . p . ... . . A ~ . . ... .~. . q n :- p.. s . n. a . ... .u. .— . v o . - u . u N .5. . u . ~ I a. . u . .u- ... . . . o . . . . a .. u . u s . y y . . 6 - .~ CHAPTER I INTRODUCTION In Turkey, the notion of the business leader is misunderstood. Often, he is viewed as a speculator, if not a thief. Business for a long time was downgraded and looked upon as an occupation which no respectable Turk would enter. Respect and prestige of any profess— ion depends on the economic fabrication of a society. There has been the illusion that business is acquisi- tion—minded and self-interested, while professions such as law and medicine are disinterested in acquisition or self but rather altruistic in their services.1 Tradi- tionally, business was carried by minority groups com- posed of Jews, Armenians, Greeks, and Italians. During the 600 years of the Ottoman Empire, commerce was left to those minority groups, while Turks were aspiring to political, military, and administrative positions. "The Turks have placed the skills of the diplomat and bu- reaucrat at the service of the relatively simple, stub- bornly held values of soldier and peasant. Turkey has not been a land of philosophers and poets."2 The —‘ la Talcott Parsons, "Motivationcf Business Profess- ional Activities," in David C. McClelland (ed.), Studies in Motivation, Appleton—Century-Crofts, Inc.; New York, 1955, pp. 246-251. 2. Lynton Keith CaldWell, "Turkish Administration and the Politics of Expediency," in William J. Siffin (ed.), Toward the Comparative Study of Public Ad- ministration, Indiana University Press, Blooming- ton, Indiana, 1959, p. 188. ,-,-—o 9 '-~.':- - I'll. -‘ . - .... ... . ....._ .‘u .- a .. ' 7 ...-4. v- a... "‘ . -- r--r -'- ....» ...... I -- “I. ..‘b k. .. . .-—--¢-—. . - .aog‘ u—mumaa. .... .--ffi-‘ .. 'v— — - .— "‘ "-~-lvu‘ a. “‘ r-~-~,.-... - h .--. ----a..—_- .. ‘- "O'Q— - ... - .-.- s..,___. "' ...—— A .. -... _‘- ..- ‘-- .‘ l .... a r. g.._._“ . . . ' 9'. - -v "‘ -‘ c.— ' .‘- v y .. _ .. .'§ - - - ' ..- ‘p-, -.-... u- ‘- s... . . -. ‘ A. ‘ .. .- .. . __‘ b . - ‘- .. .f‘- — -. - f-- , ‘--. ..r- ... -- - _- fi . - u . ’ u,‘- . b“-~ H P . _‘- k _"~,_ . h s..- In. "-‘. “ s .- - - “. R . A - a F 1" "*- - ._ ~ 4 ‘ A . ‘~ . .. fl-‘ \ ._~ ._“»"~‘ - _‘. ‘I ‘ ’- .‘- u ‘ Ib ““ . -A ‘b '5 7 r.. ~ -‘ .I -" . -‘~ ' . “" ‘_ ’1 § . . '., g \ - I‘ . ‘, —. ‘ > ‘0 h 7‘ ‘- N. ‘ ‘-.' ‘ r “ s- _‘ ~ ‘ ‘ an. ‘ \ «i w _. -\‘ Q ‘1 A» _ - _‘ “ '- ‘ ‘ . x .‘ . 2‘ ‘ u. . ‘\ § . N.” ‘ . ‘ \ \ \ ... \s _ ~ ~ \‘ ‘ . u- - c ‘ '- ‘7 \ . ‘- ~ \ - ‘,‘ ‘ - x . N- - F - _ -. ‘l Turks respect the aesthetic achievements of Celaeddin and Sulieman Celebi, but their great pride is in politi- cal and military action. What has mattered most to the Turks has been their survival as a politically and so- cially distinctive people. No great business heroes have emerged in Turkey, no entrepreneur has gained so- cial recognition, and no business leader has ever held public office. With the foundation of the Republic of Turkey in 1923, Ataturk attempted to eliminate the great mistrust for priute enterprise and thought to build Turkey as a nation of free enterprise. Among others, he encouraged a famed civic leader in Bulgaria, whom he knew in Sofia, to transfer his wealth to Istanbul and plant the seeds of private business in Turkey. That was how the first large private establishment, the Sakir Zumre Corpora— tion, was founded in 1924 to manufacture ammunition and firearms. The trend set by Ataturk, partially to develop the country along the lines of private enterprise and par- tially to fill the vacuum following the great migration of the minority groups, resulted in the formation of a few large scale private enterprises. This promising trend did not last long, and the country adopted the na— tional policy termed etatisme, meaning state responsi- bility for initiating, guiding, and develOping the na- tional economy--"...a policy that is supported by an ~ . .'u-"". : _ - ...—'0'-“ Ar-. .. _ _vv-r ‘- ~~--u-~--~_ . ‘y--- 3 elements of the bureaucracy whose positions might be ad— versely affected by the growth of substantial private enterprise."3 From 1930 on, the growth of business en- terprises was gradual and the path was treacherous. Bus- inessmen faced never—ending governmental investigations, strong controls, and unbreakable red-tape. One can then say that the private corporate econom- ic enterprise, as known in Western societies, has very little receptivity in Turkey.4 In a poll of opinion among Turkish junior civil servants and students of gov- ernment, more than 95 per cent believed that government should pioneer economic develOpment,.and more than half favored state competition with private enterprise. This general lack of receptivity among Turks to the formation of private corporate business organizations has little theoretical foundation; it results rather from pervasive distrust.6 However, there exists today a small sector in the socio-economic structure of Turkey which is privately owned and controlled. It is the intent of this research to study the foster child of the Turkish economy. The 3. Ibid.’ p. 125. 4. Ibid., p. 124. 5. A. T. J. Matthews, "Emergent Turkish Administrators," A Study of the Vocational and Social Attitudes of Junior and Potential AdministratorsJ Ankara: Insti- tute of Administrative Sciences,Faculty of Politi- cal Science, University of Ankara, 1955, pp. 49-50. 6. Siffin (ed.), op.cit.; p. 124. big business leader in Turkey will be portrayed, and thus a contribution will be made to identify his often misin- terpreted and misunderstood image. Research will be car- ried into the origins, motivations and behavior patterns of men who hold top positions in their own or someone else's organization. The role of the business leader in the society will be analyzed, and thus some light will be shed upon an area shaken by controversial values. It is hoped that in the future a series of studies on business leadership in France and Iran will be undertaken. These studies, when compared with those on United States busi- ness leaders, will show whether there is any common de- nominator among the business leaders of France, Iran, Turkey and the United States. The work is divided into ten chapters. The first Huee chapters are the foundation of the study. They pro- xdde the theoretical framework and describe the major di- mensions of the research. The problem is defined, ob— jectives are clarified, and major hypotheses are estab— lished in this section. A review of previous work done mirelated topics is presented. Methodology is exten- sively covered in chapter three. Chapters four and five are the background of the study. The environment of the luminess leader is presented and its influence upon his behavior delineated. Distinction is made between the broader environment, which consists of the social, po- litical, and economic forces, and the immediate envir— ‘ .- r' -- or” '1'" ..— ..- V- ' ... - ’ ‘ - - I, _ p.. pr— ” — ..— . ~v . -.- .... ‘ -- ,o ... ...- ... -- 9' _ . ___ ~v-‘ul - - "A — I.‘ - Q '“v - ... . ~ _ _"cu. . - .~. -. n o._ _r~ ' —..‘ “ ,_ . ‘- .5 V -- . - ‘n - 'g_"- " - -_ r ‘ ”n _ ... -. ‘ -- ~ . . «- '. F -“... v - “’ ...V“ L. . ‘~ .‘s . . ._ s ". " 'w i" I ~' ‘ ‘. . ._ t h‘- ~..-~ ‘- ~ ~‘s & _-‘ ~', , ‘-_ ‘~ '5- " ~".. .4 -‘Il " ‘b s 's. - . p- -_ ~ ,. '\ &’ ~,_-... . \ ‘..~ -.,~ \ ‘- y~ .- \ u‘a‘ . ‘ “as K 1‘. . . . .“ us . ,‘ A - \ ~ ~ .. l \ ‘5 ‘ n . . . ~ \ ‘ ‘ ‘ ‘G “_ . - o“ o- ‘ ~. “V'- M“ ~ ., . a .\ _ N ‘. ‘ ‘l I- v ‘3' - h 5‘.— ‘ -‘ onment of the executive, which is his firm. He is influ- enced by the "business system." The study of Turkish business leaders necessitates the study of the environment if one intends to carry out a full—scale comprehensive survey of their socio-psycho- logical characteristics. The environment of the Turkish business leader will encompass, first, the broader socie- ty in which he operates, and, second his particular firm. The broader environment has a significant impact up— on the apparent behavior of the business leader. It is the environment that infuses the leader with values, shapes his reference patterns, establishes norms of con- duct, and guides the leader throughout his life. The en— vironment not only is felt as an urge for conformity, but also it can shed some light upon the rather strange prac- tices of the business leader when he is observed by an outsider, particularly if he comes from another cultural setting. When the business leader is viewed as an innovator, a.pace setter, and an agent of change, the role of the muivonment upon his decisions becomes more important. CEten the energies of the creative leader are restricted by the traditional elements of the society that stand against social or economic change. A full understanding of the political, social, and economic characteristics of Turkey cannot be achieved in this work and is beyond the scope of this dissertation. (In . u ,_ . .AA ..- ,.- . ‘. : -v-o --.. .. . _‘ ,..-p p- ...... -.- \ «..---- . - . ‘. -r--r. 'V’ _ v. . .- -..- ..- . .. _ . V. ,. ‘ru 0 I! r \ ... ".-_ .. n- .— ‘ . .~~.-'.. :v’“ ‘1 . a .-.-Ir." “.0 ‘-~ "96 p-—~' - - "I.‘-tc- ..-. ‘_ ._ ‘ ' :""' .F; r "~--‘ urn-u .. . - ...'-. ~ .- . \ w ~_r . n...- -.. u..._ .r :p...'.'-;' - - ‘ m. -..... ____ v. n .---’. I...‘ ' - '- .--... a--‘ ‘- - - \4— ‘r‘ ., i ~ .. ‘v “n.‘- . - ~ - v ’A l~~ ".-- ..-__‘. r .-- - '-." ‘ l . 1‘- :r- “0-- ..--"s: -- . _. "A-- . ~..._- ~r~ ‘F‘ ._~‘-, w...: ~,_ -" “'1.- ‘ - .‘ -;~_ ..." " ~_‘ v- .D ‘ -.~ ~‘:_--. . . "~ "' v .I ' I b..- '- . . ~ , _ ..- n -- .. . ‘ “x Q, “‘~ In N _._‘. I . ‘ \ ‘-. 'A . ~ .... ...- ‘ ‘ ‘--. ~:_ E‘\ .‘s. . . " h '\ 1.. ~C'“‘A'_ w_,llb.... . ‘\. ~- '~' . § -- \ ”P - ~'.C‘h‘“ . y \-, n,‘ . I ~ x._ -.‘ '-. \ ~‘ \ w . ~«v-J ‘ ‘§.‘ . .‘ - p‘ .-s '5- V. 5‘“ ... “,1 ¢‘\ _ . v. l~_ _ .. s..- ~~R ‘9»..\ ‘5. 4 o ‘\ .- '~ ~v ..- .‘ ‘ ‘ - ..~“_‘ ’ ‘.. ~A 0-. I .3 y ‘ \ i ’~ “.“ 5‘ ‘ N“. ' ‘ r... ‘ ‘1“ ‘u . - ~ ~ \ .. ‘ «gt-‘- -‘.‘§.F‘ . »‘~ “ r, I I Nevertheless, it is also necessary to provide the reader with a tool kit to facilitate his understanding of the Turkish business leaders. In exploring the broader en— vironment of the business leader, first, important facts and figures will be given in relation to the geography, history, and economy of the country. Next, the reader will acquaint himself with some peculiar problems which may clarify the nature of the Turkish mistrust of the mer- chants in general. Following the study of the broader environment of the business leader, his immediate envir— onment will be analyzed. No analysis will be complete unless the firm is dis- cussed. Attention will be focused upon its structural characteristics. The year of establishment, the type of business, theemmmnt of assets, the volume of sales, and the number of employees will be observed. The firm is the agency through which the business leader expresses his ideas and functions. He molds the firm's character, but he himself is also affected by his firm. The inter- action between the firm and the business leader is a two— way street, highlighted by the give and take that occur in this macro—environment. The business leader occupies a stronger position within his firm and Operates freely and does whatever he deems necessary to be done. On the other hand, he is relatively restricted when he Operates in the macro-environment. Laws, traditions, customs, and the general nature of the economic structure limit his potentials. He is just a small part of a greater system. Alone, the business leader is too microscopic to be able to influence the total economy. He takes for granted what- ever the outside forces describe and set as the boundar— ies for his actions and the rules of the game. The busi- ness leaders in Turkey are too weak and too disorganized to attempt to change the Status quo. They operate as isolated individuals distrusting everyone but themselves. Because business leaders lack the power to change their environment to gratify their needs, they adapt themselves to the changing environment. Flexibility is a desirable quality; but an excess, on the other hand, creates a lack of continuity which prevents long-range planning. Short of any long-range objectives, business operates on a day- to-day basis. Being unable to manipulate their environ— ment and unsure of the future, to retain "plasticity," LEing Wroe Alderson's term,7 the Turkish business firms pflace a high value upon liquidity. Long-range investments are.risky and are only ventured when the returns are high, (H‘when the risks involved are very low, or when a mini- Hmm is guaranteed by the government. When neo-Keynesian Emonomists tried to explain the reasons why people were fmlding speculative money balances, they could have il- lustrated their theories by giving the Turkish business— Hen as an example. Because conditions change So fast A ,_. 'L Wroe Alderson, Marketing_Behavior and Executive Action: A Functionalist Approach to Marketin Theory, Homewood, Illinois, R. D. Irwin, 1957, passim. n-u .- .7— -“ ~ -..‘J . _, ”fl' . -' p _--'r ’ .. . '. :- -....- Q0... .- ' a. If -" .’— ’— v ..- -.. .--- . - - - .‘-¢ ‘ a .- u— --... ... .'-.~Aw . - -‘u-‘ -, ...- u- .- .— t - ..- v: - h l- I- ...-.. . F‘rr‘a- ... ua....-\— -- l--— — -v ’I‘- --—r~r -. -.... . 'D‘~ r .-.... - 'f‘-‘ . .----- . a~-. “r - .—v-»o. - . ‘ I- ' 0......— .y .‘__ .... _ ~~ a 'v u- "_ A..- \ H - v 'D - a " Cy.“ .. ... . Q. - ‘4‘ v ‘z‘-._._ . .— "“ --‘| l. ‘ b 5__ . ;. ‘ ‘.§_ '- &- §.‘ ... u. a? " '-' I r u“ s .. 'A — r» Ilu~ ‘V-g h"‘. '\‘ u -' — -..... . _._ s. '5- - "‘, 4-. -.s ...r - _- . C. ‘ ~._ 7. ~ -.. ._ u-‘ n ‘- , - s . ~ ~‘r-’_ s-...,_'- ‘s . A ‘I ~ . ‘ p ‘: “’- ‘-n_.~" n “ - ~h‘ ‘ .""_’. I ‘I.‘ . ...-r‘ ..- .-- 9". In“. . --. .—- _..- .-.. .... ..r—D - n»- V.‘ -..- - -,. ,- -‘D . .. '- I A. - r... L- . «an -.. . ,- ’ Q.- . . -r ~ « ...-.... -v- _ .‘L- ~ .. ..-. V" O s - . w~.. .....w r~ ‘.—- ”7 .— —-.. - ...-‘Al - v». v‘H- -' ~¢ -. ... "v‘ ~_ ~ - .... 'U 5‘ ‘ 'u .- A t.— - — n . ,. r- L. ‘— I J'- and so inadvertently, it becomes preferable to hold cash rather than non-liquid assets for the least risk of loss.8 When the president of a large merchant-wholesale institu- tion was asked about the planning activities in his firm, his answer reflected very candidly the true situation: Planning, yes, I have heard of the term, Here we play by the ears. Business is dynamic; you cannot predict any action. The best strategy is to watch day by day developments and formulate company policies accordingly. We do not have long-range objectives except we want to operate profitably no matter what happens. Profit maximi- zation is the most important goal of this firm. To keep the firm as a profit yielding institution, we do not valuate growth so highly. No overall characteristics of the Turks in general will be given. The author believes that except for ob- jective categories, the 30 million Turks cannot be class- ified in terms of their socio-psychological characteris— tics. No reliable source exists for this purpose. The remaining chapters form the heart of this dis- sertation. Hypotheses are tested, and all major research findings are presented in chapters five through eight. Muifinally, conclusions are put forth and suggestions fer further research are given. ; 8. Gardner Ackley, Macroeconomic Theory, the MacMillan Company, New York, 1961. - — -‘ ‘ ' ... n- ....- .. ‘—. n-a' H‘booa V . , _ _ .~..-. .-—,.-,- p- l-»4- “--..-.I I.- o . . -.'.-— 9-..- ‘ -~~ ...—. . """--~ --.-u- - .... ---_ _ -- _ nu - - u.-. -0 _ '~ -.. ---: u :. -‘." ‘ "'- u~~-~ _. c . _-__-- . ‘ - .-__—.. 1..., -.- H gun- , -.. ':. "v- - P o. - .' o N‘- . ' a- b "v-- _'.._r _ ~..,_"h r- - - -v" \u‘ .'pn— 5--‘ - .... _ - ‘-~-. - I. -~ ‘i .. ~ .. of ¢p .‘ ‘ . fly a \‘np. ~ n... -. F ‘ - - ~ Q P .' - 'v- ‘..~ “7 \- ‘v A ‘ ‘- - §\- "0' . .‘V‘ 9r- _ ’ .' I -I- - ~ ~ . n. a “a - ‘- ,., 'v.._ “ ~PP it.“ A. ‘ . ~ ..- .- -.. . -_' .~ ~ .“\‘F ~ ‘-~ ‘ - . ‘.. ' . ‘ ‘ l ’ 1- LI ~ . _~_ “‘ h- -‘ C“. -. ~b. . ‘. h— ‘\. _ A‘ v q i ‘5‘. . ‘- § -. Q U . ~ 0 ... . ‘ ‘ d " “‘ ,\ ~. ‘ h .‘ \- ‘u‘u‘ ‘ § ‘5 .‘v- N ‘. S “ ‘ A . A ‘0 0*. \‘I. ‘- . --_ . ...‘F --. ~ ~ v- ‘ . - t V f.— y ~l ‘h ‘ ~I~’~ “~~\ ‘ - _ . _\'-‘ ~‘ _ ‘ CHAPTER II THEORETICAL FRAMEWORK The Overall Objective The business leader in Turkey will be seen Opera- ting within his socio-economic environment. Who are the business leaders in Turkey? From what economic levels did they come? Where do they stand within the power structure of the society? Who were the grandfather and fathers of successful men? How much education did they get? From what part of the country did they come? What is the self- conception of their role in the society? How are they mo— tivated? Is it possible to identify executive types pea culiarvto-Turkey? Specific Areas of Concern In line with the overall objectives, it is feasible to specify the aims of this research as follows: 1. To outline the social, economic, and political environment in which entrepreneurs and business leaders Operate in Turkey. 2. To delineate the growth patterns of big business enterprises in Turkey. 3. To identify the business leader. What are his attitudes and motives? 4. To examine the role conception of the business leader. 5. To come to certain conclusions concerning gener- al characteristics which seem to cover the behavior, .- — ‘ r‘ ...v- k, ..a O‘ - v..- -...“ - ',..~‘ P V... . ..— . .A- . .. - _ ... — _ -, -,_ .- v' ' ..-- ...- .. - .'-f-';"‘ " - .— - ' -..---.. .-- . ',. ..- - ---..- - '— . ~ — -- .-. _': a. ...—v Are.— - -F- - ‘— '£ ‘ .. .. ~.- 7. ---~. _....4 a , .-‘..- ‘ra - -. \ n V .— --v..- ...... .....- _ -" “"“ -4..- ' —._ " ~0-vv‘--. __ ' ‘ ---- ‘r‘ ‘ -‘\ —. 9" - .‘--¢___ .__‘_' - '-— - . ‘fi‘s- . - ‘ - — . .-----~‘.‘ -.. - .,_ - .. ’_“P“r,- {, .. ... -__ .— »-_,.-‘- -_ . a. ‘ on..- -, '- 5", "-_.. b.._ '- "-'.1v' -‘-‘-. - ‘§ . ' w- ' HI. - . ',»~ n “F '- .--l. - ' I O . ‘ " A . w- O. ‘\‘ ~ 5 ' --. '- -.. .— --'- ' ‘-' "..~ ..r-. - "~ r ' “~4. -. . -‘ - -... n ’F- I ‘ L. ‘o- _ 6“ k ‘ v ._. ~‘ In ‘- ...-“r r . "" r- ‘b. ~ O ‘m , - a, “ ’.’ ._ ' " I I ~_ ‘ 't .. ._ § .‘ a L In, 1_. lO motivations, and accomplishments of the business leaders in Turkey. Definition of the Terms The concept of business leader includes both the terms "entrepreneur" and "executive." No differentiation is made between the terms because of the existing struct- ure of the economy and the society in Turkey. The func— tions and roles performed separately by the entrepreneurs and executives in highly industrialized societies wher business has reached the stage of bureaucracy cannot be separated in the Turkish industrial system. The terms "entrepreneur" and "executive" will be defined separately and then combined to obtain the definition of the business leader. Entrepreneurs Defined "Entrepreneurship" has enjoyed a number of defini— tions which have varied to some extent according to time or place.' In the days when the creative aspects of the entrepreneur were first being recognized, he was refErred to as a projector.1 In 1755, Richard Cantillon designa- ted "entrepreneurs" as those who "buy the wares of the country...give for them a fixed price to sell them again wholesale and retail at an uncertain price."2 The modern l. B.F. Hoselitz, "The Early History of Entrepreneur- ial Theory," Ex lorations in Entrepreneurial Histo- ry, 3:193-220 (1950-51) 2. Richard Cantillon, Essai sur la nature du commerce en general, quoted in "Entrepreneur," Encyclopaedia of the Social Science (New York, 1931, Vol V). . .- ay“ ‘7'. R .-P - C -‘.~.- - .... .-c» o " .- . q‘ . 'a" f.- ".v- - uflfll — o . ...p H. ...-v" . - . an. _ — .,-'..5 -r .0 ... -..- u- -r a ..,.. ._ 3-. _ .- -- an a... -.- I“ . u‘.‘. \v n av .. . . r‘ fl uv..-.a. _ .- - - - .-. - a .v ~ --1--J—n. -. u- a- -... ...»... - .. . "'-u~a- q .‘ Or _ ..r ' """- con-u ,_ u.- ' ...-._’ __.'_ I. » '~7.—- ‘ ... it"s-... run. -..-~-_“. -..-1‘ . ‘p -, . ‘ . .- v 0“ ~~.>‘ ....qqnu d- " n a ..._-- \ ' ..-... ,5 .. , . I .-‘ _vv-.‘ I'_ .- "‘.._ a b- b.‘ . .. u. u. 1.- . vg-“-h ~'._ .‘- ' ‘..~ ’4 .- .~_ I .b.»‘ .._ . ‘ "~- ~u fig. _ a ... _ Hg _ “ ‘ . . v. -“‘ A, Q ‘\ - .‘.‘ ‘ v~P~ u.“ ‘~ r. Q -~ ‘ - “’~‘ r-. —» . V-' ‘ 'V‘k Q‘- . v,- i ‘. I. 0-,. “\ z... 3 - “--o. " -,‘ . ‘.—‘~ -_ . -“ "Q. - -‘l. s ... -- s ‘ ‘- ‘. ‘ — .- ' ‘ -‘ . ‘ A ‘_‘ u‘s‘ Vs ‘s; - . n . - - I. z 7- ~ “ .' 7“ ‘ u ‘4 ll term came into use in England only in 1878, when it sig- nified a "director or manager of a public musical insti— tution" or "one who gets up entertainments."3 A function- al definition of the entrepreneur is found in McClelland. Someone who exercises some control over the means of production and produces more than he can consume in order to sell (or exchange) it for in— dividual (or household) income. There remains, however, no great agreement as to the essence and the frontiers of this function. Among many writers, the work of coordination or management has been stressed. The entrepreneur has been identified with the captain of industry, ordering and marshalling the compa- ny under his control. After all, the productive functions concerned with the execution of decisions already made, routine management and coordination can theoretically at least be delegated to particular persons hired for a con— tractual income. But the inseparable nucleus which re- mains, consisting of decision—making with regard to the future that involves uncertainty, and the very political, as distinct from executive element in the conduct of eco- nomic affairs is the entrepreneurial function par excel— 5 . . lence. Furthermore, the entrepreneurial role comprises a number of variations, from basic or creative inventive— - 3. "Entrepreneurfimin Shorter Oxford Dictionary inyfiis- torical‘Principles, 1955. I II 4. David C. McClelland, Achieving Societv,_D. Van Nos- trand Co., Inc., Princeton, New Jersey, 1961, p. 652 5. "Entrepreneur" in Encyclopaedia of the Social Sci- ences, The MacMillan Co., New York, 1931, pp. 558-9. 12 ness at corporate levels down to the point of routine management. It is a broad function, and all of its as— pects are important, particularly those involving inno- vation. The term "innovation" in this context is used by Schumpeter, who applied it to new products, new process— es, new forms of organizations, new markets, and new sources of supply.6 By viewing innovation so broadly, entrepreneur is defined as the man who makes a variety of decisions in order to bring his enterprise to a leader— ship position and thus merit the designation of business leader. The range of these decisions covers a variety of fields, among them being organization, management, mar- keting, employment, production, government relations, and public relations. Cole views entrepreneurship both as a function and as a commonality of entrepreneurs. Specifically, he de- fines entrepreneurship as: A purposeful activity (including an integrated sequence of decisions) of an individual or group of associated individuals, undertaken to initiate, maintain, or aggrandize a profit-oriented business unit for the production or distribution of econom— ic goods and services. Cole goes on to identify the aggregate of individuals which together and cooperatively develop the decisions as the "entrepreneurial team." 6. Joseph A. Schumpeter,_The Theory of Economic Devel— opment, Cambridge,_Massachusetts, 1934, p. 66. 7. Arthur H. Cole, The Business Enterprise in its Social Setting, Harvard University Press, Cambridge, Massa- chusetts, 1959, p. 7. 13 It is really a team in the sense (a) that each person or officer plays a particular position or represents a particular aspect of the total enter— prise, and (b) that each such person or officer is in some measure a complement of others as far as the total purposes of the unit are concerned.8 Like Cole and Harbison and Myers, Alfred Marshall seems to attribute entrepreneurial function to a group of men. Furthermore, he stresses the point that one man within this group tends to be more influential, is generally the chief executive, president, or chairman of the board. Perhaps it should be pointed out here that while there are many people involved in the development of a decision, and while the group may be looked upon as a team, there is no escaping the fact that all the members of such a team are not equals in any adminis- trative sense. The effective element is to some ex- tent compensated for by shifts in the actions, perhaps in the informal subgroupings, of the remaining members. There remains, however, the chief executive, president, or chairman of the board, who undoubtedly exerts more influence than any other individual in the team, and sometimes, depending on personality or force of character may have almost the power of veto over all the rest.9 Sayigh's understanding of entrepreneur is close to the definition of business leader used in this work. An entrepreneur may also be a scientist or technician, a salesman, an organizer, or a public relations man; in other words, any man who has power or decision in or for an enterprise. Similar lines of thought are found in Harbison and Myers. 8. Ibid., p. 7. 9. Ibid., p. 8. 10. Yusif A. Sayigh, Entrepreneurs of Lebanon, Harvard Uni— versity Press, Cambridge, Massachusetts, 1962, p. 22. 0' o-r *0. 5" . I. ' ... N ..-r 7‘ ‘ -- '-_.. y.‘ - ‘ p A’ no: "’..¢ :. Uln- """ ...-o .p-.Ay¢?‘"__ ~ ...-v 4.1-...“ . . i ..--f C'F" " - "‘ g. ...!»g “"V . . .pq ‘f" ’- — A I b -.n\’ ' v. - Z '.: Af~2r ..-- ngwafi ‘- ..A A‘*- '\ p—~. -. -— ad v~ -——- . -A’FA'C- “. ..- -- \ .--.~—-~ - a .. .Aq -- 0.??— -I \ “‘1‘.’ '04.\— a u . - .--. .- 1 -\~ ”'er u~~-~4n.-u - - . , . "‘f. : -.s Uv‘-~v. 4 - - ---. gnu n "w- "D ... "'-’-~ 5...“ . .... ......” . — ap- y-n- L“. ' "'"-b 5.... . ~~. ‘ 'v-‘- 1! ~ ...-‘.~, '<‘.' -_‘ _ “Ls-n -‘ ~bv _-. v. - ‘I‘I V... V v- ‘ . I: I...“ --,.~ '. ~ ....“ .— "I- .' u. 'l‘ r-."‘|A ...- an ..—. -..A._--a ..A\ >' "":-1..., ‘-. .- in ‘v‘..‘ ~r- -.._ 'vn- . _ ~..;~ :~«-._‘ ' d_-" .-. ‘ _‘ 1 u. A-.. A . ¢.._-- r F‘ l‘ u.. ....\ ' ‘~ g. n“ ,‘~‘:‘-., _ ~ ‘ ‘u_~\ "‘ r - ~ I. U “Q. .F. u - >~ ‘ Z‘.‘ "\ ‘~_‘ s.‘ _ 7‘ g —| ’ " rs . ,_ ~5— ~“ ‘. V v .- ~ b . ~ - I V- I... “' ‘- -: \ N -‘w ‘5 . s‘ . .. ‘..‘ “‘\ .' “In. _, . ' . ‘ -.‘C ..- Q “ .~ - d ‘.n ‘ -‘.~ - - "N ~ ‘ ‘v‘~ “ 'o— 5 14 In the hierarchy of management, the organiza- tion builder has a critical role. He may be the own- er of the business, a professional manager, or a government official. In any case, he is the top man- ager who builds the heirarchy. He is the keystone in the arch of management; he cannot be separated from his organization but is fused with it. His function is to establish the conditions under which the other members of management can achieve their own personal goals through performing the tasks which they are assigned in the organization as it achieves its goals.11 Before passing on to the definition of executives, one further point needs to be cleared up. As opposed to Collins, Moore, and Unwalla, no differentiation will be made between an "independent" or "innovating" entrepre- neur and the "bureaucratic" entrepreneur. Collins, Moore, and Unwalla use the term entrepreneur to mean only "the innovating entrepreneur who has developed an ongoing bus- iness activity where none existed before."12 Such a dis- tinction has no place in this research where only the leaders of big business are studied. If one had isolated the business leaders who had developed an ongoing business activity where none existed before, the study would have to be limited to a very small percentage of the economic activity. The generalizations would be meaningless or lost within the broad environment and lack the flavor of the local conditions and characteristics that the re- 11. Frederick Harbison and Charles A. Myers, Manage- ment in the Industrial World, (New York: McGraw- Hill Book Co., Inc., 1959) as quoted in Orvis Col— lins, David G. Moore, Darab Unwalla, The Enterpris- ing Man, MSU Business Studies, 1964, p. 18. 12. Ibid., p. 20. 15 searcher is attempting to describe first and analyze later. For this study, the term entrepreneur denotes "a person who exercises wholly or partly the functions of (a) initiating, co-ordinating, controlling, and institu- ting major changes in a business enterprise and/or (b) bearing those risks of its operation which arise from the dynamic nature of society and imperfect knowledge of the future and which cannot be converted into certain costs through transfer, calculation, or elimination."l3 Executives Defined "Executive" has long been used in business to des- ignate people and positions concerned with certain func- tions in large—scale business organizations. In the so- ciology of formal organizations the term is used to des- ignate the functions of deliberate control, management, supervision, and administration, the people who perform such functions, the positions they occupy, and the sector of the large organization in which they are found.14 Chester Barnard uses the term executive as a noun to de— note the occupant of positions which he terms "executive positions," and these positions in turn are qualified by the adjective "executive" because they are concerned with the performance of executive functions which he describes as those of control, management, supervision, 13. "Entrepreneur," as defined by William H. Wesson in a Dictionary of Social Science, Julius Gould, William L. Kolb (eds.), The Free Press of Glencoe, New York, 1964, p. 240. 14. "Entrepreneur" as defined by Howard Scarrow in Gouls, Kolb (eds.) op.cit., pp. 249-250. It: . :5, pn‘ ‘ ." ~I -- "'. .v- ...v0 . ‘IVFf ...--r ""“ p].— ' - ...; ache- ...-... . . u . u"-.:-‘f~ a : -n.---Jv-n|-, . I ‘ I‘p. '2'Af np~'._‘ ....n .1- U- V~Auoncd - 4 ,. , l , _ “ ‘ .- A—a ‘ -" ' 'Q '- \o-J ..—.-..a u..-_._. .4 ' il D ( L" . 9v-..',. _ b- ; - .m.‘ .. .-...- ...-V‘“.‘ b d -:»-- .:,, _ .. - l- -" "_ ‘C': ‘3 - ~_- - fl ". 'I‘ .I A ‘...l a: L“"".|.: -.. ' p ‘I..__: 2"“ R . T‘V~-: . s .. " 6'- Q \ ..-‘-' -f~_ -.. q -..- “0—. - u. g ‘3 D "V. ' “§ '- v... ‘A( . V- ‘ ‘1‘ — § ' J. . ;_~_-.. . - ~ "I; “v- ‘y.., ' . . c .. u ‘b " ‘ § s “‘\-‘ ‘7- ‘- .O u a . ‘ n .. a Q h. < .‘ §~rflq -‘ L‘ m -— . .- _ ‘ ' s ‘ :0 - ‘5 —. \ ~:*F -. ‘ .- ~__ ‘. ‘- I _ . “‘ F- ‘.“: RA K—I, ’ ‘b‘ ‘. u I \‘§" .' A ‘ '- Q ~ \ v u: H 15 searcher is attempting to describe first and analyze later. For this study, the term entrepreneur denotes "a person who exercises wholly or partly the functions of (a) initiating, co—ordinating, controlling, and institu- ting major changes in a business enterprise and/or (b) bearing those risks of its operation which arise from the dynamic nature of society and imperfect knowledge of the future and which cannot be converted into certain costs through transfer, calculation, or elimination."l3 Executives Defined "Executive" has long been used in business to des— ignate people and positions concerned with certain func- tions in large-scale business organizations. In the so- ciology of formal organizations the term is used to des— ignate the functions of deliberate control, management, supervision, and administration, the people who perform such functions, the positions they occupy, and the sector of the large organization in which they are found.14 Chester Barnard uses the term executive as a noun to de- note the occupant of positions which he terms "executive positions," and these positions in turn are qualified by the adjective "executive" because they are concerned with the performance of executive functions which he describes as those of control, management, supervision, l3. "Entrepreneur," as defined by William H. Wesson in a Dictionary of Social Science, Julius Gould, William L. Kolb (eds.), The Free Press of Glencoe, New York, 1964, p. 240. 14. "Entrepreneur" as defined by Howard Scarrow in Gouls, Kolb (eds.) Op.cit., pp. 249-250. 16 and administration.15 On the other hand, Chartle uses the terms "administrator" and "executive" interchange- ably and applies them to people who are responsible for the performance of a total organization or for important 16 segments or activities of it. Business Leaders Defined In designating the business leader as both an en— trepreneur and an executive,the Schumpererian concept of innovation is partially followed, but the scope of inno- vative activities and decisions is broadened to cover the areas customarily under the jurisdiction of managers and executives. The business leader, in this context, is the man who makes several innovative decisions concerning the factors of production, land, labor, capital, and man— agement, to bring his enterprise to a leading position in the industry. Arthur H. Cole's definition of entrepreneurship as a team effort is close to the meaning of the concept of business leader as used in this dissertation and explains why it was found to be an unnecessary effort to try to isolate entrepreneurs from executives. Such an effort would have led to methodological problems, and efforts made to delineate the minute differences between the two 15. Chester Barnard, The Functions of the Executive, Cam- bridge, Massachusetts, Harvard University Press, 1938. 16. Carrol L. Shartle, Executive Performance and Leader- ship, Prentice-Hall, Inc., Englewood Cliffs, New ‘ _ -.- a-a _ .. nr-r- . : ‘_ .-u~-~ *- o ' ‘9. u . Q 1 . . ...-AA- ..A. -r‘ \d‘ I . ugvu-u. but u». x . .- n — " ”’2. ”I.“ I .--I v‘fi‘ Ans—u- A. -‘ r». >4 -..- - "' v! a... ~ (.3 ,_ “"w-. b. "I’ 1".- a. . l “" nu..- - ’— —.... _- ~— a 5"" H-.-V '- H—V. .- . ’ u 9n V :c -. - _ ..v-n 5"V:€;‘ ""1 n A,“ . q >.-5"-\ ~ ~ “ -. ‘h‘. ‘— ~“~— u‘ ‘ ‘ i v- . ‘.. .. ”hr: “‘— " .— ‘ “‘- . . ..--..- -‘ I "': (3.", y . ~‘ ‘ ." ~‘ . . ‘_v._~’ _ F! ‘ .‘&~ 05‘ u‘. \— h‘ - .“‘- ~"- .. “h- F‘ so - . h“ 'v \ § ‘\~ \‘..4. ‘- ' ‘ u, c . ‘. ' o Q “ \‘V. Ar \ ‘_‘\ ~ ‘1 .... - “ . ". Q - _ _ h . \t-“N~.'- I h—. - ‘ ‘ “s... ‘D - ‘~; “ ~‘~ s-.. ‘\ Q \n‘ .‘s- ‘ '\ \ \ \ ‘sg v1“ 5 ~ ‘ a»: y \ :V-‘ ‘:-$ ‘\ F“I‘ \“ 4 ‘ ‘H >‘ I ‘ g m —\ ‘ ‘v ‘ \ ~- \ - ~‘. Q. p. . V- ‘ xq \ \ 17 would not be justified, first within the theoretical framework and, later, during the development of specif— ic problems and hypotheses. Alfred Marshall's definition of a businessman is the closest to the understanding of a business leader who is in the best sense of the term an executive-entrepreneur. The task of directing production, so that a given effort may be most effective in supplying hu- man wants, is so difficult under the complex con- ditions of modern life that it has to be broken up and given into the hands Of a specialized body Of employers, or to use a more general term, Of busi- nessmen; who 'adventure' or 'undertake' its risks; who bring together the capital and labour required for the work; who arrange or 'engineer‘ its general plan; and who superintend its minor details. When those who possess entrepreneurial and executive be— haviors also showed leadership qualities in their field of work, they were accepted as business leaders. Leader- ship here denotes: "the occupancy of a status and the active performance of a role that mobilizes more or less organized collective and voluntary effort toward the at- tainment of shared goals and objectives."18 Therefore, this study includes men in the Turkish economy whose functions are consistent with entrepreneurial, executive, and leadership patterns. By leadership patterns is meant critical experience rather than routine praCtice. Selznick illustrates this point brilliantly: It is in the realm of policy-~including the areas where policy-formation and organization- building meet--that the distinctive quality of 17. Collins, Moore, Unwalla, Op. cit., p. 18. 18. Kurtland in Gould, Kolb (eds.), Op. cit., p. 380 17 would not be justified, first within the theoretical framework and, later, during the development Of specif— ic problems and hypotheses. Alfred Marshall's definition of a businessman is the closest to the understanding Of a business leader who is in the best sense of the term an executive-entrepreneur. The task Of directing production, so that a given effort may be most effective in supplying hu- man wants, is so difficult under the complex con- ditions of modern life that it has to be broken up and given into the hands of a specialized body of employers, or to use a more general term, Of busi- nessmen; who 'adventure' or 'undertake' its risks; who bring together the capital and labour required for the work; who arrange or"engineer' its general plan; and who superintend its minor details. VWmn those who possess entrepreneurial and executive be- haviors also showed leadership qualities in their field of work, they were accepted as business leaders. Leader— ship here denotes: "the occupancy Of a status and the active performance of a role that mobilizes more or less organized collective and voluntary effort toward the at- tainment Of shared goals and objectives."18 Therefore, Hus study includes men in the Turkish economy whose fUnctions are consistent with entrepreneurial, executive, and leadership patterns. By leadership patterns is meant cxitical experience rather than routine praCtice. Selznick illustrates this point brilliantly: It is in the realm of policy--inc1uding the areas where policy-formation and organization- bUilding meet-~that the distinctive quality of k 17. 18. COllins, Moore, Unwalla, Op. cit., p. 18. KUrtland in Gould, Kolb (eds.), Op. cit., p. 380 18 institutional leadership is found.o.lt is the func- tion of the leader in a business organization to de- find the ends of group existence, to design an en- terprise distinctively adapted to these ends and to see that design becomes a living reality.i These tasks are not routine; they call for continuous self—appraisal on the part of the leaders. A business leader is the one who makes the critical decisions in the organization. The definition Of a business leader used in this con- text follows closely what Selznick defines as institutionw a1 leadership and incorporates the isolated characteris» tics of entrepreneurs on one hand and the functions of the executives on the other hand. The business leader (execu- tive-entrepreneur) is the authority in a firm who makes decisions with regard to innovative combinations of fac- tors as well as effective organization, In case the in— novation requires the establishment of a new firm, our business leader becomes more of an entrepreneurial typeo If, on the other hand, he innovation is adopted in a go- ing concern, he canlxzconsidered as an executive type. Accordingly, this research is concerned with men who are at once or separately, builder, maintainer, and developer of organizations in Turkeyo The term business leader is used to describe such men. The Firm Defined So far, the big business leader has been defined, 19. Philip Selznick, Leadership in Administration, Harper, 1957, p. 37. but nothing about big business itself has been mentioned. The questions to be answered here can be grouped under two distinct but related headings. What is a firm? What is meant by a big business firm? The notion of a firm is surrounded by difficulties, and a thoroughly satisfactory definition of a firm, or theory explaining the determin— ants of the number or the structure of firms, does not exist.20 However, an attempt will be made to provide an Operational answer for each Of the two questions posed above. Individuals in a free society can derive income from any resource they own in only one of two ways: (1) they can enter into a contractual agreement with some other people who consent to pay a sum per unit for the use Of their services. (2) They can use the resource or factor they own alone or in cooperation with other hired resour- ces to produce a product or a service and receive their income as a difference between the amount they receive from the sale of the product or service and the amount they pay to hire the other factors.21 Thus a firm is de- fined as the recipient Of a residual income. Each firm is different from other firms with respect to the product or service produced or in terms of the nature of the con— tractual arrangements binding together the bundle Of 20. Milton Friedman, Price Theory, Aldine, Chicago, 1962, p. 43. 21. Ibid., p. 93. 20 resources the individual controls either through owner- ship or through the contractual arrangements he has en- tered into with their Owners.22 A firm can be formed by a single individual or by a group of persons. Each firm has a distinct character. Following Friedman, one can attribute this uniqueness Of character of each firm to the uniqueness of entrepreneur- ial capacity. The individual entrepreneurial capacity can be specified by a function showing the maximum quant- ity of output each firm is capable of producing under given conditions. When talking about firms and making generalizations, one must consider the uniqueness of en- trepreneurial capacity. Which in turn reflects the dif— ference between the productivity of individuals' resour- ces viewed solely as hired resources and their total pro- ductivity when owned by their firms.23 The firm can also be defined as a person, partner- ship, or corporation selling goods or services that in- corporate goods or services bought from others.24 The terms "firm" and "organization" will be used interchangeably. Each organization has a distinct char- acter. Each firm is unique. The character formation in firms or in organizations is a result of the interaction 22. Ibid., p. 93. 23. Ibid., p. 94. 24. Tibor Scitowsky, Welfare and Competition, Chicago R.D. Irwin, Inc., 1951, p. 109. 21 of historical forces. The character is an integrated pro- duct and is functional in the sense that it is no mere ac- cidental accretion of reSponsive patterns. Finally, the character of an organization is dynamic in that it gen- erates new strivings, needs, and problems, Every firm is unique in character and value, and it is the role of the business leader to preserve the uniqueness of his organ- ization. By big business firm is understood a firm that oc- cupies a leading position in the industry in which it Op— erates. It may or may not be a big firm within the total economy. Previous WQngQone on the Topic There has been very little direct work done on this topic.25 On the other hand, big business executives and leaders in he United States have been thoroughly examin- ed.26 These excellent studies were used not so much for 25. McClelland, Achieving Society; Arif Payaslioglu, Turkiye'de Ozel Sanayi Alanindaki Mutesebbisler ve Tesebbusler, (Entrepreneurs and Private Enter— prise in Turkey), Turk Iktisadi Gelismesi Arastir- ma Projesi, SBFME, Ankara, 1961; A.P. Alexander, Industrial Entrepreneurship in Turkey: Origins and Growth, EDCC, July, 1960. 26. William E. Henry, "Executive Personality and Job Success," Personnel Series NO. 120, A.M.A., N.Y., 1948; W.L. Warner, and J.C. Abegglen, Big Business Leaders in America, Harper & Row, Publishers, Inc., N.Y., 1955; Mabel Newcomer, The Big Business Execu- tive, Columbia University Press, N.Y., 1955; F.W. Taussing and C.S. Joslyn, American Business Leaders: A Study in Social Origins and Social Stratification, The MacMillan Co., N.Y., 1932, etc. ...-r a .— ’ urn--O-i -.. “ . ' ...a ' '...vr~ ”V ..." ...-~- "*-...4 v-- ..- ‘ "_ .....r-nr". .-..-vao—‘v ‘. - A ' ‘ Auu- ~- rV’ ,. .0 -VI-.A_. a .. n p aAq ,- / \H b. Hha'wu AV‘. . Q 0 g y- ‘r o..- n.... ' on Q -"AF~.- ' . l h‘ ' 5---- - . I p. ‘ ‘e‘ -~, ~. "C- .....I . '\—~\._-. -.,~ ‘ . I "F‘ t,- _ ...,H‘ c “M- 4 ' w‘-_.. V‘ n -— . 3" ~r . qr“ .- -. A bf' A ‘4 5‘ ”I I -‘ I .- - a ._ - I "_ ‘-». "r “‘ - u. .. ... -.- V! n t» .2, ‘ < -vu~_ 9 ~. 9 -. e» ’ ‘P.‘ a ' .. _‘—. \ ’P-..__ A. ~ _, s A... .._ ~ .- - h- - - r... ~ - l' . -.._ . «.... ‘ ... -. ~p I . N- -v. -.. H_"" n. b; - “' . -, '-._ N .. ‘5 QA‘. ‘F~ _ . —‘ ' ‘ ~. ‘- ~_ ‘_ r‘ ‘- ._. \ s~ V'-‘ , 5. ~ " v- . .... .C . . ._ r. - I. .. -- ‘~ L‘s” 's‘~‘.. \n ‘ _ 5 ‘- a ‘ ‘ \ -‘ ,._- -.. .’ K ‘s. . . UV 7-._~ .u-‘ - IA‘; -_ ‘ n \ ~-~ ' ‘x p. - \. V‘ v 7| "- . _ .. Q‘- . .‘- .‘ .". \ Y -H. ..-. ‘ ’ . u‘ ~‘ I ~ ‘A .._o... ‘ I'- 5“ ‘ A \~ \ “A v. ‘ . \J y. . § F‘ s -.. v ‘9‘. \“ ‘- I- . ‘ h h. '\ .— ‘ ' i .- .., - '~ A ‘ ‘. ~g ,‘~ “‘s. "- \ . H ‘. V K ‘ ‘\ ‘ v... 22 their content as for their theory and methodology. The following criteria were used in selecting an operational bibliography: 1. Provide guidance for theory. 2. Used for comparison between United States and Turkish business leaders. 3. Direct relevance to the thesis. 4. Research guidelines. Among a wealth of excellent studies, the works of Warner and Abegglen, Collins, Moore, and Unwalla, McClelland, Sayigh, and Friedman and Kalmanoff were Specifically se- lected (see Table 1.) However, there was no previous work dealing directly with the subject matter of this thesis. This then, gives the research its exploratory aspect. Theory and Practice in the Study of Big Business Leaders The Business Leader and His Environment How does the business leader react to the level of economic activity and to the various economic facts and factors that influence economic life? How does he conceive Of the effect Of his role and actions as the facts and factors? Doubtless, the level of economic activity is what it is only because business leaders, among other agents, behave in the way they do. But to ask about the effect of this level on leadership behavior is not to beg the question since, given a certain level in period one, business leaders take certain attitudes and make 23 >OOHO IOOSpOE Ocm mzoz mODz mzom mODz mob: mmcfiampflsm cuumwmmm .v mflmmcp mzom mzoz mzom mzoz mzoz OLD Op mucm> Imamu #UOMHQ .m mumpmma mmmcflmsn mob: mzoz mob: mzom $032 rmflxuze paw .m.D cmmzpmn COmHquEOU .m >uom£p Mom mzoz EDD: mzom $022 mob: mucmpflso .H wwu3p2m> Ill mmmcflmsm Hm COG ICOHDOCMODCH Imnmq mo cm: monume< CH mum DCHOO .mmoc musmcmwm. NuwHUOmeCH mmflumumpcm one Ipmma wmmcflmzm IOEme Ocm Imupcm I>®H£u< one .OHHOBCD OCO mam .cmammm CCOEOOHME .Lmflhmm mpcmaamauuz whooz .mcfiaaou IQ< 0cm umcums .mumpmma mmOCHmzfl nmflxuse mnp wo >Ozpm mnu.ow mxoon Omuumamm wo mmmCHSMOmD .H OHQOH 24 certain decisions influenced by that level which in turn‘ influence the level in period two, by which they will be influenced in their decisions influencing the level in period three, and so on.27 The relationship between the business leader and the economic organization should also be examined. It is important to attribute his reactions to the state of bus- iness legislation, money and credit agencies, research fa- cilities, trainingexd skills, organizational forms of bus— iness establishments, the managerial and foreman classes, the labor force and trade unions, and market structure of inputs and products. Lastly, the businessman's sense of a business community and his solidarity with it, his sense Of conformity or of rebellion, what he expects of this community and what he feels are his obligations toward it are matters examining.28 Chapters 6-9 will basically deal with these questions. Origins and Mobility of Business Leaders Two broad questions about the origins of business leaders are worth examining for the detection of the as- sociation, if any, that exists between these origins and the types, qualities, and performances Of the leaders in various sectors and activities. The first question concerns_the social and cultural origin or background. Here belong such matters as the 27. Sayigh, O . cit., p. 32. 28. Ibid., p. 32. 25 business leader's social class, rural versus urban ori- gin, family's traditional occupation,and affiliation with an activity in cultural and educational organiza— tions. Here also belongs the important matter of religi— ous denomination. The second question to be examined related to train— ing, education,and pre-entrepreneurial travel and exper- ience. These largely define the direction and area of activity that follows them, increasingly so as the busi- ness leader is conscious Of his pool of experience de- riving from these sources. This question is also direct— ly related to the problem of economic development. Through training, the entrepreneurial talents can be directed to activities, which if performed prOperly, will change the social and economic structure of the country. Apart from the origins of business leaders, their mobility between social groupsamuibetween economic sec- tors is a question worth examining. In every complex society, there is a division Of labor and a heirarchy of prestige. Positions of leader- ship and social responsibility are usually ranked at the top, and positions requiring long training and superior intelligence are ranked just below. The term "social mo- bility" refers to the process by which individuals move from one position to another in society——positions which by general consent have been given specific hierarchical ! :i --4- n‘ .,. .- . - - _._.'—.'u. ...u -..., o «c---- u r‘--- .---v ‘ -. --.. :‘-~-.,-,_,_ -- h h‘ --‘-—~_-. u~-._; - - '- ‘¢---. -. ‘ “‘1‘ ‘ m rm. “—- ... ...- ‘. -.- y .. , ‘ ' ‘-.. -- - ‘ --< .._ ... ~- - _. __ -. ~ -.~ - ‘5 .. ..._-. '- —-_ a -i --s- v, _, ~-_ -__ ...._~ . -r- ~ — - _ ._’_- '—_ ~~ .‘ “ -_— — -‘; " a. 5- §‘-" K - “ ‘- ‘ ‘- - ‘ c. ‘ ‘- ‘ \N ‘_ ...- ‘-‘ ... '1 o _. ‘ .s ‘ "x \\ \ ~ ‘ ... c “ \ - \ —. - ‘ - -. ‘ \u w w. ‘ ~ ‘ . g ‘ w x 26 values. When social mobility is studied, the movement of individuals from positions possessing a certain rank to positions either higher or lower in the social system is analyzed.29 Social mobility in Turkey is comparable to social mobility in the United States. Lipset and Bendix give two basic reasons why social mobility exists in every socity: 1. Changes in demands for performance: Complex societies change, and, whether social change is slow or rapid, it leads sooner or later to a change in the de- mands which different positions make on those who occupy them. The few who have interited their high positions may not have the competence to meet the responsibilities which these positions entail.3O 2. Changes in supplies Of talent: Just as there are changes in the demand for various kinds Of talent, there are constant shifts in the supply. No elite or ruling class controls the natural disposition Of talent, intel- ligence, or other abilities, though it may monopolize the Opportunities for education or training. As long as many Of those with high abilities belong to the lower strata, there will be leaders who come from those stra- ta.31 ‘9 ' —L 29. Seymour M. Lipset and Reinhard Bendix, Social Mobil- ity in Industrial Society, University of California Press, Berkeley and Los Angeles, 1963, pp. 1—2. 30. Ibid., p. 3. 31. Ibid., p. 3. -.a' 27 The analysis Of social mobility can be undertaken in many ways. Lipset and Bendix outline an approach that is more conduciverto a study of this kind in Turkey. First, one has to study the relationship between the starting point of a person's career and the point the person has reached at the time Of the analysis. Second, the atten— tion of the researcher should be focused on the relation— ships between social inheritance (or starting position) and the means of mobility. Here, the degree to which giv- en backgrounds determine the level of education, the ac- quisition of skills, access to peOple at different levels in the social structure, intelligence, and motivation to seek higher positions will be a matter of concern. In this research, the business leader will not be analyzed from the point Of view Of social mobility but attention will be concentrated upon occupational mobili- ty. Warner and Abegglen define occupational succession "as the ordered process by which individuals succeed each other in occupation."32 Occupational succession refers to the relationship between the occupation of the father and the occupation of the son; status, to the movement into and out of any occupational position. If there is no dif- ference between he positions of the son and the father, and, if they hold occupations at the same level, there 32. W. Lloyd Warner and James C. Abegglen, Occupational Mobility, University of Minnesota Press, Minneapolis, 1955, p. 4. 28 has been no movement and no occupational distance separ- ates them. If there has been movement, its distance and its direction (up, down, or across) can be identified and measures.33 Occupational mobility may also refer to move- ment within the individual's own occupational career. The Concept of Role Business executives in Turkey suffer role anxiety. An understanding of role anxiety can be established by first analytically separating the concept Of anxiety and the concept of role and,lmnuxn establishing their rela- tionship. Anxiety is among the most compelling human drives. As Sullivan maintains: I believe it fairly safe to say that anybody and everybody devotes much Of his life to avoid— ing more anxiety than he already has. Anxiety occurs along a continuum ranging from inca— pacitating, free-floating dread to mild uneasiness. Func- tional anxiety is the moderate degree of tension or sensi- tivity that tends to sharpen the individual's perception or behavior alternatives appropriate to a given situation and to their probable consequences.36 In the Turkish bus— iness organization, functional anxiety insures greater 33. Ibid., p. 5. 34. Ibid., p. 13. 35. H.S. Sullivan, Interpersonal Theory of Psychiatry, Perry & Gavel (eds.), W.W. Norton and Co., Inc., New York, 1953, p. 11. ' 36. R. Presthus, The Organizational Society, Alfred A. Knopf Pub., New York, p. 164. f 29 sensitivity to the nuance of interpersonal situations in the work place and in the society in which these organi- zations Operate. The business executive in Turkey has been constantly criticized for his actions both by the government and the public. Anxiety appears when something threatens an individual's relations with persons and in— stitutions important to him. At the infantile stage the parents, or the teacher might be the important persons. At the maturity stages, this could be the boss and the so— ciety in general as in the case of the Turkish business leaders. The differences in role perception by the business executives seem to have resulted in a role anxiety. These differences stem from the contrasting conception of the role by the business leader himself, by the members of his enterprise and by the society at large. These dif- ferences are further intensified in a developing country. The concept "role" is defined in Webster's Diction- ary as "a part or function as taken or assumed by anyone; it also means duty."37 For every recognized position, there is an expectation widely shared by members of the community Of what should be the behavior of persons who occupy that position.38 What a typical executive in a 37. Webster's New International Dictionary, Merriam Co. Pub., Springfield, 1957. 38. Krech, Crutchfield, and Ballachey, Individual in Society, McGraw-Hill Book Co., Inc., New York, 1962, p. 310. u" .. v 30 given position, more generally in a given situation is ex- pected to do constitutes the role associated with that position. A role can.be seen as encompassing, among other things, the duties or Obligations of the position.39 Thus a business executive in Turkey is expected to perform certain functions. What an executive does might not be congruent with what the society at large is expecting from him. One reason for this incongruency in role con- ception results from a misunderstanding Of role by both groups, (the executive and the society might misconceive the role Of the business leaders). In order for an execu- tive to be successful, he must first meet the expecta- tions Of his role as conceived by himself. Second, his success as the head of his organization depends on the relative congruence of the three facets of the role con— ception associated with his position--the expectations Of subordinates, and of society, as well as his own. A role can also be seen as encompassing the rights Of the position,40 The rights Of a position are defined in part by the roles of related positions. The rights of the business leader are in part defined by the roles of the clients (society) and the organization participants. For example, if the client's role is to pay promptly for the services he receives, he is expected to do so; the 39. Ibid., p. 311. 40. Ibid., p. 311. :- 31 organization's participants are expected to carry out the boss's orders, and so on. Clearly, if everyone knows his role, this system of roles which regulates the relations between the executive, the subordinates and the client, conflict is minimized and more effective interpersonal functioning is increased. The executive knows what is ex- pected of him and what to eXpect of his environment, the clients and the subordinates, and vice versa. Each can thus tuide his behavior apprOpriately with respect to the others. The purpose of this research will be to pen— etrate and delineate the executive's conception of his role. It is hOped that there will be other researchers studying the role and expectancies Of the society and the lower participants of the organizations. A complete study of such kind might lead to a theory of role congruence which in turn will reduce if not eliminate, role conflict. The reader must be cautioned about the culture—gound as- pects of such studies. It is only after an extensive num— ber of similar studies are conducted in various cultures that generalizations should be reached. Among other spects of this role conception a parti- cular one in respect to society will be elaborated. The ideas, beliefs, and notions about society as conceived by the business leader will be delineated. This particular subject was selected because everyone has notions about this concept and has developed certain ideas about it. Thus, by delineating the role of the buSinessman with re- Spect to society as seen by himself, a common denominator ' -.~ h h ..au. "‘0 N .... I ... ...-v ...-u ..- . ‘ ‘1 O." a. I. a] “waver, L..- x. ' I». ..v a O ' "W's :' ;-.: .25 -Ans‘», ...»: o:.—I nwv- ‘ I y ' 7‘ ’V . i “'A" '2'! I". ..' ~\ us-..) -’ -i an--~ . rup- . . i. | ~ I , ’ Ayr- .”U‘.'A' "7‘ rd 5.. — -‘n-r ..,......_,H k. . , . ‘ ~ 1 . F ...-7 pa "Ht" 7“. ‘ v "I... ."“" ~ g A. \- . :O A uni-'2". A? . .- . Hy.- ~x...“. .V.. . ul ' .-.As or; ‘r‘c‘v: unit in. .nn‘. -.._‘—‘ .. I c .I: ~-~’|.nnr‘ ,.- .‘ . ‘ up. 'i'll---‘..~' " ... . ._ - .I ':: .r;_.-‘: 3‘ . ...”.b -. - uh- U Q -. . . ‘ .' ‘ III“. " .... §Ay~~ " n 0““. .‘~\ '— ‘U .U“ i“ ‘rs.._ ..:. ‘ ”A-” :‘L a! u. ‘1 ~ U—ak ~‘”‘_.. ’I. - .... th‘ ...u .Vse E. ~ ‘ . l . -. '5 ‘Av- n . ......~ ,‘CH 7“. ;‘ 5".“ ~ ‘ .3 . p v.‘ . : AQAA ‘ ‘ ..., \ “I" ~ ~ waV..‘ ‘- , "‘~ .1 n‘ . -.; .. -.L ‘- -- "" O..- -§‘_“‘\ I ‘ ~ “:A . ~ ..I.‘ ‘v‘ichF" n M. . . V3..\“ ‘ ~ ‘ ' A ~\ ::. ~“d o.” 32 will be created through which the role conception of oth— ers about the business leaders will be compared. However, the expectancies about motivations, be- liefs, feelings, attitudes, and values are included in the expectancies making up a role, not just expectancies about actions. Thus, in pointing out the business leader's conception of role, his personality traits which pertain to his role must be examined. Role behavior, like all social behavior, is the pro- duct of the interaction between situational factors and the cognitions, wants, attitudes, and interpersonal re- sponse traits Of the individual. In this respect, Sarbin has formulated a role theory which extensively treats both situationaland.psychological factors gov- erning role enactment. Role behavior and conception is influenced by, first, the individual's knowledge Of the role, second, his motivation to perform the role, third, his attitudes toward himself and other persons in the inter-personal behavior event.41 In analyzing the bus- ness executives of Turkey, the roles of the individuals can be said to vary along a dimension of compatibility- incompatibility. If an executive, who occupies a given position in an organization, perceives that most people hold the same or quite similar expectations as to how he Should behave in his role, this will be an instance of 41. T.R. Sarbin, "The Role Theory," in G. Linzey (ed.) Handbook of Social Psychology, Addison~Wellesley, Cambridge, Massachusetts, 1957. 33 role congruence. If however, he perceives that the ex— pectations and demands of others are contradictory, then he faces role anxiety. In many cases role incompatibil— ity may not be conscious due to the lack of self under— standing and incongruent conceptions of organizational goals, values, and eXpectations.42 The roles which the business leader performs in his various groups both reflect and shape his personality. Successful business executives, for example, seem to dis- play a rather high degree of uniformity in their person— ality. It will, therefore, be useful to outline William E. Henry's study of the personality patterns of successful American executives. William E. Henry studied successful American business executives by means of projective tests, an unstructured interview, and a number of standard personality tests. The results suggest the existence of a successful—busi— ness—executive—personality pattern. The major features Of this pattern were as follows: Successful executives showed a strong drive to work and a high achievement want. Their relations with their superiors were smooth and constructive. All of them had a high degree Of ability to organ— ize unstructured situations, i.e., to see the re- lations between seemingly unrelated or isolated events or facts. The ability to make decisions was a further trait of this group. They also pos— sessed a firm and well—defined self-identity. They know what they are and what they want. The success- ful executives were typically active, striving, ag— gressive persons. But they also harbor a rather 42. Krech, pp, cit., pp. 490-91. 34 pervasive feeling that they may not succeed and be able to do the things they want to do. They are strongly oriented toward practical and immediate realities. They have personal affection for their superiors and tend to identify with them. Their subordinates are viewed in a detached and impersonal way as means for getting work done.43 Henry points out that the role of business executives includes these personality characteristics-—ways of think— ing, feeling, wanting, and acting. And, to some extent, the personality structure of the executive is shaped by these role requirements. Now going back to the suggestions as to the reasons for this uniform business-executive personality, two ma- jor reasons can be put forth: 1. Business executives tend to be selected from all other members of the business group precisely because they already have certain specified characteristics, character— istics which are assumed to be essential for the success— ful performance of this role and the occupancy of this position in the group. Persons who lack these character— istics either are not recruited for the position or, if recruited, fail to make the grade.44 2. As the business executive continues to behave like an executive, as he learns to perform his expected role, his personality characteristics change even more in 43. W.E. Henry, "The Business Executive: the psychody— namics of a social role," American Journal of SO- ciology, 1949, 59, pp. 286. 44. Krech, pp. cit., pp. 488—89. 35 the direction of the business executive personality. The well—cast actor begins to live his role Off the stage as well as on.45 William E. Henry, in his study, shows that there is at least one type of successful man who has been able to release himself from the close ties of his parental home. As an autonomous male, he can leave his father and, with— out unconscious hostility or resistance, relate his own fate with ease to other males in authority. This discus- sion of mobility suggests that to understand the business leaders, social as well as psychological evidence must be used. Notions of Self and the Role Conception It is always difficult to define the role of a bus- ineSs executive. Even the executive himself views his role differently at different times under different cir- cumstances. The purpose of this research as was previously indi— cated, is to define the role of the business executive as viewed by himself. In order to arrive at an understanding of the conception of the executive role by the executive himself, a school of thought pioneered by Snygg and Combs will be followed. The essence Of this school of thought is that one can best understand the behavior of individu— als by looking at the meanings they assign to themselves 45. Ibid., p. 489. 36 and the world around them.46 These meanings, taken to— gether, form a pattern that is internally consistent at any point Of time and constitute reality for the individu- al.47 The individual's overt behavior is an outward ex- pression of his pattern of meaning and is consistent with it so that his behavior always makes sense to him. The pattern of meaning, the self, of an individual tends to persist over time; it has been built up by the internal— ization of the meanings Of past experience and will change over time in an orderly way as the individual gains new experience.48 The central part oferw individual's set of private meanings is the picture he has of himself, his self-concept. The theory holds that, in everything the individual does, he is striving to maintain and enhance his self—concept.49 Notions of self consist Of the characteristic words which one attributes to oneself. In short, they deal with how one perceives and acts toward himself as an Object in the world. It is composed of things about one's self Of which one is conscious. However, an individual is not necessarily conscious 46. Snygg and Combs, Individual Behavior, Harper and Brothers, New York, 1949. 47. P.R. Lawrence, The Changing Of Organizational Behav— ior Patterns, Harvard University Press, Cambridge, 1958. 48. Ibid., p. 144. 49. Snygg and Combs, pp, cit. 50. J. Gordon, Personality and Behavior, Macmillan Co., 1963, pp. 189—192. ,1 37 of his self-concept. He may not respond to his own self evaluational thoughts, and so may not be explicitly aware that he has a self-concept, or of the nature of that con- cept. Self—concepts tend to become self—perpetuating and are positive, in nature. If an executive thinks of him- self as just, honest, hard working, etc., he will not per- ceive those behaviors in himself which ought to be lab- elled lazy, dishonest and unjust. Over a period of time, be becomes more and more convinced of his honesty, jus— tice, and diligence because he is aware of no evidence to the contrary. Self-concepts, therefore, become more sta— ble and consistent as the individual ages and acquires his thoughts about himself.51 The more an executive's self is confirmed, (that is, the more Often his self related re- sponses are reinforced, which in this case means organi— zation success in terms Of mobility) the more likely he is'to'think be same way in the future and the stronger will be the rejection Of inconsistent or contradictory behav- iors for his self-concept.52 Successful executives usually have strong conception Of self. They know who they are, where they are going, and how to get there. They are firm and well defined in their sense Of self identify. One way of differentiating between people is the relative strength or weakness of their notions of 51.- P. Lecky, Self Consistency, Island Press, New York, 1945. 52. Gordon, Op. cit., p. 192. 38 self-identity, their self structure. Some persons lack definiteness and are easily influenced by out— side pressures. Successful executives are firm and well defined in their sense of self—identity. It is, of course, true that too great a sense of self—iden- tity leads to rigidity and inflexibility; and while some of these executives could genuinely be accused of this, in general they maintain considerable flex— ibility and adaptability within the framework of their desires and within Often narrow possibilities of their own budiness organizations.) The executive's view of himself is his most crucial tool in developing and maintaining a productive and sat- isfying administrative career. One of the most important consequences of his self-concept 15 that when it is in- accurate as a reflection of his behavior, the executive finds it difficult to understand the situations in which he finds himself and the reactions other people have to- ward him. Because he is not labelling his own behavior correctly, he cannot understand how his behavior gets him into difficulties or why people respond to him in a way different from the way he expects.5l How Does the Business Leader Perceive the Demands of the Society and the Conception of His Role in the Society? There is no doubt of an increasing awareness cn the part of business leaders that they have important Obliga- tions to society.55 The social role of businessmen has meaning only in relation to the goals or values which are sought from the economic system of the immediate and re- mote environment. In discussing the conception of his 53. Henry, Op. cit., p. 290. 34. Gordon, op, cit., p. 192 55. Howard R. Bowen, Social Responsibilities of the EUSl‘ nessman, Harper and Brothers, New York, 1953, p. 44. 39 role by the business leader himself, the hypotheses W111 be established upon a list of social goals upon which one as- pect of the thesis is built. It should be made clear, however, that this list is not the list of goals accepted by the majority of Turkish people. It is only an illustra- tion of the kinds of goals in terms Of which the social role conception of the business leader must be defined. 1. A certain standard of living. 2. Economic stability. 3. Personal security. 4. Religious attainment. 5. National security. The first step in understanding the businessman's conception Of his social role is to examine his economic ideas. Howard R. Bowen illustrates this point clearly: The businessman is an eloquent spokesman in our society for abundant production. In his view, it is axiomatic that the primary aim of economic life is an ever-higher standard of liv— ing, and, if we are to achieve this aim, that we must produce more and more... The business- man's belief that production is the sole source of our high standard of living and that growing production is a prerequisite to economic progress also leads him to the view that the interests of the various classes of society--laborers and capitalists--are fundamentally in harmony and mu— tual dependence rather than in conflict. 6 Another way of understanding this role conception is to review the relationships Of the business leader with the government. The attitude of the business leader toward 56. Ibid., pp. 46‘7. Q a. " .. - i_av- ...... P‘ ... -..v _‘~,.- . 0'-.. —~ on“ ‘ ‘-_:--‘ n - - — AAP“_ ' — ‘ '._ -x..-..' -..... ...-‘4 . a-“ -"~ Or“ ...... Av.‘ .-.. “OQJ w—- a. Iv..- . —-- — .....— - (- .— -~——.. rev. ~v- 9. un‘ ... _ ‘u- -,.‘ « ho ‘ '3. -__ . ‘- I... . s. v- — -ffl‘ -- .v‘ 2" . - .. ..- ‘-—- ..‘_‘ ‘- :~-:- - - "h., -- - -‘HI 1. n._‘ \ -- 'u__ \ \-. ‘~~ __ . K -‘7, .‘:_" -. ‘..‘_. -- A ~- - n..- ‘-“ "u 5.. ’VI - . '5‘ 1 -' “ "i l -‘ ‘T— ‘ . h “. ‘. K p u: ‘-_ . . ~ '- - v, “ ~— ‘ - .. ‘.. _"-_ ““ ' ~., - 'A ~ ‘ 'I — - \ § ‘- ‘ ~ ‘ ‘ .- ~ ‘1‘ I T . ‘ .. ~ ‘. ‘. ‘ ‘..;V'I’ 40 the government is a good reflection of his role conception. The local community relations form another area which provides the tools to measure and understand the social role conception of the business leader. The corporation is regarded as a citizen and neighbor in the local community in which its establishments are located; hence it has the obligations and duties of a good citizen and a good neighbor. This involves partici— pation by officials and employees in community activities pertaining to government, education, religion, recreation, etc.7 and financial sup- port of these activities. The increasing interest in social responsibilities on the part Of thebusiness leader is an important develop- ment from which much can be expected in terms of the gen- eral welfare. This Optimistic doctrine of social respon- sibility or the social orientation of business has been discussed extensively and expressed in concrete forms by Bowen.58 However, it is subject to several important cri— ticisms. The first argument was that under competitive conditions, socially minded businessmen would be prevented from pursuing their social obligations by the failure of their rivals to be equally concerned about public interest. In answer to this, it was pointed out that many businesses do not Operate in perfectly competitive markets; that even in a competitive industry, socially sanctioned standardsof 57. Ibid., p. 63. 58. Ibid., p. 63. 41 business operation might be adOpted.59 The second argument was that when businessmen take on social Obligations, their costs are likely to rise, that these increased costs will probably be passed on to the consumers, and that in the end the benefits from so— cially oriented business policies will have resulted mere— ly in higher prices. In dealing with this, it was conced- ed that the costs would Often be shifted. However, it was pointed out that the standard of living of a country is in two parts: the final products of industry and the con- ditions under which these products are produced. The im- provement in one part of the standard may often be at the expense of the other part, and the problem is to balance the marginal returns of the two parts.60 The third argument sometimes advanced in Opposition to the doctrine Of social responsibility is that business— men are so strongly oriented toward the profit motive and toward the narrow interest of their companies that it is unrealistic to expect them to assume important social Ob— ligations. Businessmen are so fully imbued with a spirit of profit-making and with pecuniary standards of value that they are unable to see the social implications Of their task.61 In answer to this, it was pointed out that busi- 59. J.A. Schumpeter, Capitalism, Socialism, and Democra- py, 3rd ed., New York, Harper and Brothers, 1950, pp. 72—106. 60. Bowen, Op. cit., p. 123. 61. Ibid. and In Theory of Business Enterprise, New York, Charles Scribner's Sons, 1904. 1. _ . o-r‘ .p "V'Ar’ . .e a 1 u u...a"““ ' ‘ u ‘ - .1 ..’ --~¢PF~H “4'21 9-w— ' . '-~\ 9" z N. ... . ‘— "-..._.~...ban -‘ u. ' ‘ .— a! ,.,.. .. ~ '2 ‘9'“.— . u \u- -1 \_-\— .flv‘” ‘_‘. lab pa r/ .. . vh (- -~:.‘ \ ....4-.-uuv. 4 an ’ ‘ a; .RHrOh nub sV“- uh. u.- . u p 0- IRA RA . "we 1+ . —.- -db----c\. VA 5' "a . . ';‘ Orv- hr ‘y:a -p—q' —... u.‘ \- lyaah L-nd . ..- ..i ‘ ."=‘ ...; 5‘.-- VI.¢.--‘ VI" 5‘.::_-’ ‘- _' . 7"; ~ .‘_ a, "0 CA». ...-» ...-... Vv‘b- 'F n A H" M~ 5‘- J .; . ' .. V“? n“ - v ”v. “‘ c n H: a ....‘Q . I .' - AP“ ' -._. ‘~- 1.19" 2‘ ‘- . .“tt~.5 PI— 5... A.-.’ x F ~ ~u.‘.C.\:: 1 _ ‘\—~~ 5.. ‘~ r... . - ‘ ~ ‘5. J“ “,. ' “‘d - "‘s:.l r‘ ‘ ‘ ‘:.'_ . -. "A.‘ . ‘~. ~ “"s (’9',‘ i. L. via- _. ... . ‘ ‘._ |P‘~ ‘ -H‘: r a“: ~ . *—».‘.. .__ ‘ ‘u ., . ' ,. ‘ i‘ .A. ‘ ‘._ _n \‘~. h. g ‘ a. ~‘V . -. , 1-‘b u. an . . \C“ :- ‘~. \ O. ‘V “P's- s 42 nessmen have many motive, Of which profit is only one, albeit an important one. Among these motives is the desire to conform to the standards of their society. Moreover, businessmen are keenly aware of the fact that their long- range self—interest requires that they heed their social obligations.62 The fourth and much more telling argument against the doctrine of social responsibility is that business— men try to use this doctrine as a device for retaining power and as a justification for that power.63 It was pointed out that there is validity in this argument, but that the social controls to which the modern busi— nessman is subject greatly weaken his power, and that he is not in a position to be the sole arbiter of his social Obligations.64 Against these severe criticisms, it will be argued that business leaders have a conception Of their social role and this role is a function of their attitudes, technical knowledge, profits, and public attitudes. It is in this background that the social role conception of the Turkish business leaders will be investigated and hypotheses formulated. 62. Bowen, Op. cit., p. 124. 63. R.A. Brady, Business as a System of Power, New York, Columbia University Press, 1943, pp. 259—93. 64. Bowen, Op. cit., p. 224. 43 LeadinggDrives Of Business Leaders In order to judge man's deeds and the aspirations, one must discover the reasons for the direction and the persistance of his actions. Psychologists have entertain— ed the hypothesis Of a single basic drive to give meaning and direction to human performance. TO Freud, the molding motive was libido; to Adler, striving for superiority or power; to Horney, the search for security; to Goldstein and the organismic theorists, self-actualization. On the other hand, some of the most prominent theorists rejected the single goal approach to human life, such as Kurt Lewin and H. S. Sullivan, and Observed that goals were deter— mined by the temporal situations and needs. In this work, the existence and recurrence of certain motives will be maintained as abstracted from the interviews. Briefly they are: l. Prestige motive 2. Power motive 3. Affiliation motive 4. Money motive 5. Achievement motive Although these categories are subdivided and devel- oped as interrelated components, they may not be taken as isolated parts of behavior.65 For example, money motive may mean that the businessman is not solely in pursuit of 65. A.H. Maslow, "A Dynamic Theory of Human Motivation," Psychological Review, l943,_50, pp. 370-396. ‘ . " .. 9-0 ‘.,,.. oh 7‘ .1 u-r ’_F ‘ ~‘A. , " Its—o-', v"' . . . -i. n- ... anfl-Wr' __ .... 4 . ...- ‘- :. .VVH. ho- up-v' _ V . a" -.I ‘ Av: ".-- oPr A“? ~."' P. "' a . -5! e. - _,.. .v. u . O V ' - . . , "f‘fh :hnr; r ‘ V. e c .. "...-...-..j .— A- _. .- 'c :‘r ‘p- . .. ... \I. "Ah a..-” a ., .‘ ‘ - .-.. '. -~; .—~Ct In»... «in ...._, H-..-- . I I I . " ‘AF'A0‘~~Ar.. . " N h- ».A .- «4.4._ a...-- _,‘ \..- . l‘ . _ 'I " "‘F ‘9... -" ‘ -- ~~1 c. "" "'\' ~Kls.-_._ 'I A on- ., - ..- .- "voe'fi. " ‘- u . " ""C."'-F_« .... ,_ """"""'~‘\d I‘d .- "‘ ‘ ' V - v . " to . -~.... -.. “" wt. -'-1 -‘ ...» .4 v sea." “7“ D an " ‘4 u... - . ~ . 7n,- . L o-" FA ,‘_ l" ”"v “‘~. ”-J ... vr-‘ v_ U, - . ." P"‘-‘._. l. ‘ W -.I a v‘ .- i"‘ . b-‘.. —-| .. Z" N, A .. . _ ..“.‘ e v.- ._ .- . J_- - .,'- ‘ v. V‘ ~‘ "A § - .- ‘-.- “gr... H V‘- -. n'jp ~_. ‘A . ‘ \v‘o I .I- . '4 ~ In ., v~‘ ‘ l. ' I -~ -...“ v.. ...-s “I ‘ ~,_ \~ _. v v e. M ;"~. “._ "'9..- I 'v. ...\ .- ‘s. k P" '. .....‘ -. -. :P'“ p ‘- V F A - v “.1“ \-~ A ,. s .. ‘\ 5‘ “.~\ ‘ ~ F v“ n ‘4... a... N ~"- . 5“ ._- \ r ‘ .~ ‘ I. sc‘fi V s . “ .~" N . \._ . “-a ‘ "A ~ ‘ A, . ‘ “ v‘ ..- N — u 2‘- N“ ‘1‘ 44 cash wealth, but this wealth would indicate security, safety, accomplishment, social esteem, and affiliation. Need for achievement seldom can be taken literally as ac- complishing something through application Of one's efforts to it. Often this achievement brings to its owner pres— tige, fame, wealth, power, and further Opportunity for future achievement. Businessmen generally are willing to "help the society," but it would be a mistake to visual— ize them as welfare workers. This "help to society” is in- terconnected to their prosperity, again indicating achiev— ing and self—actualization motives. Now, how are the motives defined and classified? In order to demonstrate to the reader the application Of the motivation theory in this research, it is essential to analyze motives as pure notions which were formulated through psychological studies. The term "motive" refers to the disposition within a person to strive to approach a certain class of positive incentives (goals) or to avoid a certain class of negative incentives (threats).66 Thus, the motives demonstrate the direction of one's actions,and the intensity of the mo- tives can predict the degree of persistency of the act- ion. Feld and Smith use the term "incentive" as the sub— ject of the action of motivation. By incentive, they meanea 66. Sheila Feld, Charles P. Smith, "An Evaluation Of the Objectivity Of the Methods of Content Analysis," Atkinson, John (ed.), Motives in Fantagy Action, D. Van Nostrand Co., Inc., New York, 1963. 45 potential reward or goal that can be manipulated by the ex- perimenter--the amount of food, money, or a taskf57 Thus the motives can be classified according to the goals that the organism pursues through his motivated behavior.68 As being the most heavily identified item among business leaders in Turkey, the achievement motive will be given greater concentration here and in Chapter VIII. Achievement Motive. A sense of achievement seems to be the universal incentive to those who strive in the hope of creating something, whether a piece of sculpture, a painting, a building, an organization, government, or wealth. It was the most heavily identified item among business leaders in Turkey. The Thematic Apperception Test method, developed by Henry A. Murray, inspired David McClelland to apply it toward measuring achievement motive as a drive. Here are some of the findings: achievement need is present in all persons to a different extent and is displayed in various contexts.69 The motivated person seeks greater challenge and demands more of himself to get things accomplished. Accomplishment and winning are an end in themselves; re- wards and recognition can be pleasant by—products. Those 67. Ibid., p. 303. 68. Maslow, pp. cit. 69. David C. McClelland, Personality, New York, Rine- hart, 1951, p. 583. ‘1 s.__.___,‘ u- 0 .,~ H . ... a . .- 13" npa - FP- ' " u— '"h- *u‘- _ ..— "" “Ar-----,.,_ - ~ '- >-— ... .¢. ‘ --~ . ~ , ' ‘ o .- ...._ _.--.— ‘ 's .‘ IV.-'.V‘- ~‘_ ‘- ..‘ ”fcz. c ..U' Mi 4‘V“‘ I If .':,F A. ‘ ‘fl -. ag~‘_- “‘2‘ , I “i "~~‘ . _ n a— “ -- a ‘-- I" D A “7" 46 who possess this need strongly are more persistent, real- istic, and action—minded than persons with moderate needs for achievement. They may not necessarily be more pro— ductive. McClelland's studies reveal an interesting phenom- enon about the arousal of achievement as a motivator. High achievement persons are not a product of a certain political system or culture. The intensity of this need becomes greater in middle class backgrounds than in lower or upper classes. McClelland conducted a research on the entrepreneur- ial behavior with respect to achievement need for four pro- totypes; the United States as a most developed country; Italy, as a fairly well develOped country with a backward South and an industrial North; Poland as a communist coun- try; and Turkey as an underdevelOped country. McClelland had several questions in mind. Does business attract persons with higher achievement needs? Does the degree of the country's development affect the achievement mo— tive? Does public ownership of enterprise influence man's incentive to work harder?70 All professions require certain elements for success, but business should require more Of the behavior found in high achievement persons. The situation can be manipula- ted by cultural effects and the concepts of business ac- cording to specific traditions. Often in such situations, 70. McClelland, The Achieving Sociepy, Op. cit., ch. 7. . p»: wt ‘ r rf‘b‘ a J >~ ‘AA_ IVVV-.- ’ .. IQW“ ”"” c c . A b. D. _ -. ‘ _._: .. '3 “‘2‘-.. ... w .. Cob . - ’---- r: . ‘f‘bu ...a.‘ 0’- iv. . a . -,. ., yr-.. --.-.... u ' f“F\y' A f A. _ . v — V ... .- ~ ‘. c}... - s- v _ ......v . . I ‘r-o- ... a ...‘V ‘— .Afi 'IV"-y-~. - e ....v.... . . . ‘.-'~ 7‘ '. a u ".d e... ‘_ 4 ...-pp. .- ._,- '- r-" ‘ ... .-- ‘u n- _‘_ ‘- . . ~A,fi~q~h._p _‘ .. t. .../..“v‘hu ‘ ‘ ' s--‘. _ ‘ V ~ _. b" Y’V r . n __ v:--.o...-A “r- ‘ h N - ‘- .—'.““-5 m-.. o- ‘ _ - ‘ ‘rn- _ “: 9‘...“ ~ ..V— . . ’ ---‘v:_ -‘ :" A" O A _ ‘~. H .- 5.... L_ 3 . 'u ‘P.-- -.. 5'3.“ PC.”- - -.,_~~ ‘ _ ~~ ‘7 . . . . :'r.._- “V ~1“I.~“ ~'~_-‘ --., ‘4. . I ‘ F‘- I "a ~V' -. p . -‘ ‘gk .4..— 7‘. §" ~-".-" ‘ "~ .1... _‘ ~‘.._‘9._. ‘4 \‘A - : s. A.‘ _ . i ‘ C- \“ VB ,.. u :‘s V :- 3 ..'~ xi...“ ..‘N. ~ ..., i~ ‘— s ~51.“ P ‘-i~\ A‘ ‘ ~ -~ , .I v. “‘ \.“ \ VA ‘. r- , . ~~ 7‘ 4 v- ‘.‘L ‘. h" -. ‘ A “‘ 5- ~ db ~N- - ' a‘N 5‘ ~ - V‘ \I '~ « '\.~.: \~. ‘, k u ‘1 .p h I“ ‘I'N . y ‘\ ‘t‘n ‘1'” x . ‘ I‘ ~~ \, ‘ x. v _- \ 47 power motive goes hand in hand with, if it does not re— place, achievement motives. The tests showed that managers in every country ex- cept Turkey had higher achievement needs than men of oth— er professions. If the attitude of Turkish managers is further explored, the results can be justified. It can be assumed that business does not attract high achievement persons. One reason for low N Ach (need for achievement) among Turkish business executives is that they have been compared with people of unusually high N Ach. Bradburn, who conducted the study in Istanbul, selected people from a teaching institute. Most of the students of the teaching institute are village boys who left home in their teens. The freedom from their original authoritarian environ- ment can be a factor in arousing strong achievement needs in these persons, and, therefore when compared with the business executives, the latter have shown higher N Ach. Another issue which is significant in this research should be considered. The executives whoxere tested had an aver— age age of 33.1. In a culture where respect is displayed more toward age than ability, it is possible for achieve- ment needs to take root as conscious motivators in later stages of life. Evidently, after interviewing 23 of the most prominent business leaders of the country, at an av- erage age of 40.6, Bradburn found higher achievement mo— tives. It was found that ownership of an enterprise did not make a significant difference in achievement motives. It u .aRPMO' " .- I- .L\ :.—v¢v-l vu-J - u —. ‘f'fl :' s;- 1'7 n—o v. va----_ . ... liv-.-‘ I .. -.. -~v—'q—.. .- q~ Hic.v-.‘~' \- r' ‘ . ..-..-” ~ . ‘ ---..v‘_... H 4 'r---... -”_ -. _‘ ,. ““"- up... .~q "A..‘_-_ 'sh Vv"..- -'v. “1...“. I - , g. . --__ F- -. -_‘_‘ ‘ “~, ‘ .- ‘.. - . ‘ -"n ...L‘ :A . fi‘.‘ . A n h- . .-.. ‘h‘ - ...-- .- 5‘ Q §, ‘ ‘ ‘b ‘L ui —‘ “‘ . H'N Q \ ‘ ‘~‘ .- ‘Q l - ‘ rA \ ‘ s v ‘ ‘ ...... ... ‘ -‘ b ..F \- ‘ . ‘Q - N . V. ‘ *~ ‘~'. ‘ ‘ \ ~ \ ‘ ‘ .-. ‘ '-‘ ‘. I. l'F‘A'vAu—AV-g — .— 48 is possible that the highest achievement persons are still the owner-managers of small companies. However, the tOp executives of smaller firms were earning considerably low- er salaries than middle managers of large companies. Achievement score for small business owners was 5.4 in contrast to the 5.8 score of large company executives.7 Although statistically this has no signifiance, it illus— trates that owning and Operating small businesses is not a refuge for high achievement persons,wwen in capitalis- 'tic countries where the choice is free. Whether a man works for the Polish government enterprises or for a company, achievement motives can still be present. Hence communism was not a valid suppressor for the mobile man. In a study conducted by Warner, Abegglen, Lipset, and Bendix, it was.found that 50-80 per cent of business— men in the United States came from middle to upper social levels during the last 150 years.72 They also discovered that between 1900 and 1950, the sons of blue collar work- ers in executive levels showed an 8 per cent increase (from 7 per cent, it rose to 15 per cent) although the percentage of these peOple in the total population remain- ed constant. In the United States, businessmen came from less sophisticated backgrounds. McClelland's study in Turkey, however, found that a good proportion of the 71. Ibid., p. 265. 72. M” p. 276. 49 business leaders came from privileged, elite backgrounds. The fact that higher achievement need is more typical of middle class persons can be another explanation why Turk— ish business fails to recruit the high achievement per— sons. Along the same lines, it was discovered that bureau- crats had less drive for achievement in Italy and Turkey than their counterparts in private enterprise. In these countries, the government executives showed less need for achievement than the United States public works execu- tives, who scored about the same as managers from the private sector. Motives can be outwardly expressed, exist but be re- pressed or exist at the subconscious level. For example, a businessman may have an achievement motive. In the in- terview, he may state in his own words that he has this motive and point to his accomplishments as the outcome of his motive. Others may indicate that they have the achievement motive, but can show no appreciable accom— plishment. Yet, there is a third group which does not claim to have achievement motive, but from the way it stresses its wish to "do something in society," the researcher may sense the presence of the need at the subconscious level. Since the researcher is not a train— ed psychoanalyst, equipped with the knowledge to handle the problems of the subconscious, the third group of people is left out of the achievement catetory. The 50 interviewees' words and deeds were sufficient for the purpose of this study. Studying he motivation patterns of Turkish execu- tives, the society must also be considered at large. Erich Fromm reasons that: In order that any society may function well, its members must acquire the kind of character which makes them want to act in the way they have to act...desire what objectively is necessary for them to do. How would the society in Turkey be classified in assessing the motivations of its members? If David Riesman's three models-—namely, tradition-directed, other-directed, and inner—directed—-are taken as dimen- sions, Turkey should be placed somewhere between tradit- ion-directed and inner-directed models. Riesman defines them as such: Tradition directed society is one with high growth potential which develOps in its typical members a social character whose conformity is in- sured by their tendency to follow traditions. In such a model, the primary economic sphere (hunting, fishing, agriculture) is dominant. The inner direct— ed model refers to a society in transition, which envelops in its members a social character whose conformity is insured by their tentendy to acquire early in life an internalized set of goals. Their economy is dzminated with secondary sphere (manu- facturing). Turkey, with characteristics anchored in both tra— ditionalism and transitionalism, engenders needs toward esteem and security. Consequently, motivators are inte- grated and interdependent rather than pure and isolated. 7§. "Individual and Social Origins of Neurosis," American Sociological Review, 1944, p. 380. 74. David Riesman and A. Glazer, R. Denny, The Lonely Crowd, Doubleday, 1953, pp. 19-38. 51 Major Hypotheses The major problem in this area is the lack of avail— able general works that can be used as a frame of refer- ence and as a foundation upon which to build Specific theories about the behavior of Turkish business leaders. Therefore, this research will be of an exploratory na- ture rather than specific. Nevertheless, based upon the review of the available material and numerous theories of business behavior, it is possible to generate two major hypotheses and then draw operational hypotheses from them which will at the same time describe the behavior of bus— iness executives in Turkey and test the assumptions of the major hypotheses. Hypothesis number one: No collective, standard, or patterned behavior and motivation are identifiable for the Turkish business leaders. They all seem to be moti— vated by different drives and do not present a common front. Hypothesis number two: (The second hypothesis is derived from the first one.) Because of their differ— ences, there is no concensus among the Turkish big busi- ness leaders as to the role for which they feel respon— sible in society. Operational hypotheses: The following hypotheses will be used in the process of testing the two major ones. They will be useful in describing and analyzing some Specific areas of behavior of Turkish business 52 leaders. They will also provide the potentials for this research as an exploratory study. The certain elements concerning the Turkish business leaders and firms which can lead the way for comparative studies were particular- ly selected. Although this specific work is not a compar— ative study in itself, it is especially designed to be easily converted into a comparative model. To be effect— ive in future comparative studies, the research is widely patterned after Warner's and Henry's studies of big busi— ness leaders. Yusaf A. Sayigh's The Entrepreneurs of Lebanon was also influential in delineating the present structure. 1. The growth of big business firms was slow up to 1956. In 1958, with the coming of inflation, growth pat- terns were altered. Sales and assets rapidly rose, while employment remained constant. 2. The majority of the business leaders entered bus- iness life between 1949—1960, a period characterized by liberal economic policies. They were less than 50 years of age and came from middle class merchant families. They were previously occupied in a related occupation in the private sector. 3. The role of the formal education in the success of the big business leader is considerable. 4. Turkish big business leaders are equally dis- tributed among both mobile ad birth elites. 5. Motives related to achievement are the leading but not the majority of the drives of the business leader. .‘~ 11-- u-v - a!» "v ... 53 6. A small group of business leaders show an aim- less urge for work. 7. Profit motive is the leading drive of only a handful of business leaders. 8. Society-oriented business leaders are gaining over others. 9. Contrary to general belief, power-oriented business leaders are also found among businessmen. 10. Although business leaders operate in an inse— cure environment, only a few are motivated by safety and security needs. 11. Business leaders in Turkey see expansion in business as the major constituent of success. 12. There is no agreement among business leaders as to what they consider a successful businessman to be. 13. No concensus among business leaders exists as to what they attributettheir success. 14. Business leaders do not agree in perceiving the demands of society. 15. Turkish business leaders are equally divided among calculatives and empiricals in decision-making. 16. Most of the business leaders in Turkey consult friends and relatives in making major decisions. 17. The effects of the develOpment plans on the private enterprises in Turkey are negligible. These are the operational hypotheses that are to be tested in the coming chapters. The reader must be «A‘- -"‘ vn" ‘- 1'. 54 cautioned at this stage about their descriptive nature. This should be understandable due to the exploratory character of this thesis. However, from each hypothesis, conclusions will be derived; where possible, causal re- lationships will be established; and a strong analytical foundation will be created. The hypotheses presented above will be grouped under several headings forming the major areas of this thesis. Proceeding in such a way will assign greater meaning to the hypotheses and add more causality and conclusive- ness to their descriptiveness. The major areas that will be covered by this thesis are the following: The immedi- ate environment of the firms in which the business leader Operates; the greater environment, the society at large that embodies the firm itself; natural characteristics of the business leader; intellectual and educational world of the business leader; his social, economic, and religious background; mobility patterns; the motives of the big business leaders; the process of management, in- cluding the goals and objectives of the firm; and final- ly the problems of the business leader. CHAPTER III METHODOLOGY Research is opening new avenues in science. What purports to be empirical knowledge in our time is generally respected. If it is carefully sought and properly presented, it deserves that respect. To justify the application of his re— sults, first, a researcher must be soundly trained. He must let knowledge speak for itself. The data a technician collects should refrain from reflect— ing his predispositions. In addition to being well-meaning and properly oriented, a researcher must be painstakingly precise in the execution of each phase of the project. He must be frank, and eager to subject his every decision to pro- fessional scrutiny.l In the preceding chapter the purpose of the research was outlined and hypotheses were presented. This chapter in methodology has a dual purpose. First, it will foster the understanding of the reader about the research. Sec- ond, it will justify the conclusions and validate the testing of the hypotheses. In order to achieve this pur— pose, it is necessary to show, first, how big business firms and big business leaders were identified, and, sec— ond, how data-used in the testing of hypotheses was ob- tained from the sample studied. While pursuing the procedure in methodology, the reader will be able to place himself in the position of the researcher and recognize the situation and the condi— tions under which the subject matter was covered. There was agony of frustration in tackling the problems, as 1. Charles Backstrom, & Gerald D. Hursh, Survey Research, Northwestern Univ. Press, Evanston, Ill., 1963, p. 6. 55 ...- . .- . .... op‘ . c p . u ~4- 'u r 56 well as ecstacy in the process of their solution. The Selection of the Sample of Big Business Firms and Big Business Leaders Some General Problems of Sampling Problem of Choice. One of the basic problems that every student is faced with is the problem of choice. Limitations must be imposed upon the areas subject to study, in order to reach a meaningful depth. To achieve this purpose, it was necessary to classify the Turkish business firms as big, medium, and small, and concentrate on one category. As the name of the study implies, the research focused on thelig business firms. Problem of Sample Size. A sample is a miniature rep- resentation of the whole.2 It is the procedure through which we can infer the characteristics of a large body of people from a conversation with only a few persons. To be able to ascertain that the characteristics discovered in the sample are also the characteristics of the popula— tion of big business firms and leaders, certain measures had to be taken. Among these, the closeness of the sam— ple to the population is the most important. From a to— tal of 150 firms classified as big businesses, 103 were included in the sample, making roughly 68 per cent of the 2. Delbert Miller, Handbook of Research Design and So— cial Measurement, David McKay Co., Inc., N.Y., 1964, p. 46. 3. Backstrom, & Hursh, op. cit., p. 28. . - ‘ ... A ..o . . .j-,..v n .. .. \' '3': Vic-r2“ y:Iv-U. A‘Jv - A ‘ A ‘U‘VOH .. -V «-7- . ‘ . .A 'A ~pnlw~afl .. s» ...—-JJ-u -5. . -A Va;' A -quv . ...," ~I..,~ : r .. I'- ....-.I-_lu-_.j u y. . - I 0-- ' P‘ “C— ..V’ ". ‘V 4..- ‘ q . 1 . up, '. .V J_-.v._ "II ‘-..I. - - - A 4" _ ' 'I .3 ‘V ‘¢-vv| “ I P “rn~.~ A _ ~-. ‘ .54“ . _ La.-.¢g~_ :.I.A I. ‘ .- ‘- ._- ,_~r_::; ‘A K." ‘ 0-..- . o I” 5., [, .. _ .F. . - ‘ .... -V' hr‘r- . ‘v‘. - ‘ ~ ~. -..-ls. “ I ‘1 ~‘"” u.- l- in ' . L. ~~_,, . ‘ 5.. l‘ “‘1‘ - On'A o ... ‘p . c. ~ _ . n ..__ ~W~ H".‘-- ‘.'n - ‘ 5 I- D - a \.,~l~ .- v' “ .H‘V«y fl “-‘ ~I -P.,‘. _ ‘I v a .. H r- .14“ ~"“ C. A. .-.-J r q .- .. ‘fim -v F‘ a ‘4'_~ .‘A u . ~ . _ K" ‘ “‘u- ‘. ‘~_ ,F- 57 population. Several reasons accounted for a large sample: 1. To give all big business leaders an equal chance to be included in the sample. I 2. To reduce the percentage of error resulting from interviewing a smaller sample of business executives. 3. To determine the highest degree of confidence. 4. To demonstrate a proof of effective sampling theory. 5. To allow for the lack of homogeneity among the big business executives. Homogeneity here is defined as "the degree to which people are alike with respect to the particular characteristics of the population under sur— vey".4 The more the leaders of the business society are alike, the smaller the sample can be. Logically, if all were exactly alike in every respect, a sample of one per— son would be enough. 6. To accommodate the large number of categories into which the collected data were broken down for analy— sis; that is, the greater the number of categories, such as sex, age, education, birthplace, mobility patterns, and type of business the larger the sample must be.5 The Type of Sample In this project, stratified sampling was used, since 4. Ibid., p. 25. 5. For a complete list of the categories and subdivi— sions see sample questionnaire in the appendix. 58 the exact composition of the total group, with respect to certain significant characteristics, was known to some ex- tent. For example, the largest business firms in Turkey are located respectively in Istanbul, Izmir, Ankara, Adana and a few other places. Because a sample that is repre— sentative of the total population was to serve as the pro- totype, it was necessary to select one that is mathemati— cally representative with regard to some significant char— acteristics. Among numerous forms of stratified random sampling techniques, a stratified proportionate random sampling method was chosen for this research. The big business firms were placed in three categories according to the location of their headquarters: "Ankara, Istanbul, Izmir." Then each of the stratum was subdivided into sev- en standard industrial categories--banking, insurance, mining, petroleum, manufacturing, commerce, and transpor— tation. A simple random sample was then taken from each stratum. Finally, all of the subsamples were added to form the total sample. Proceeding along these lines pro- vided the following advantages: l. Assured representation with respect to property, which forms the basis of classifying the units. 2. Decreased the chance of failing to include some members of the population because of classification processes. 6. Miller, op, cit., p. 48. 7. Ibid., p. 48. 59 3. Made possible the estimation of the characteris- tics of each stratum and thus contributed to their compar- isons. Identification and Definition of the Population of Big Business Firms and Selection of the Sample The definition of the pOpulation refers to the determination of the group which bears the general— izations drawn from the findings.9 In selecting the business leaders and the firms to be studied, a population that would satisfy four criteria had to be established. One, the firms included in the sample must represent the largest establishments of Turkey, such as businesses that were of sufficient size and scope to be more than the corner grocery shops. The research was con— cerned with successful business leaders and used the size of the establishment as the indicator of success. Two, the firms must be Turkish-owned. Only those firms with more than 51 per cent of stocks owned by Turkish nationals were included in the population. Third, the population was limited to private business firms. If the 51 per cent of the stocks were owned by private individuals or insti- tutions, the firm was considered to be a private business. Fourth, all the agricultural firms were eliminated. Only enterprises in manufacturing, mining, petroleum, banking, 8. Ibid., p. 48. 9. Ibid., p. 46. l: 6O insurance, transportation, and trade entered into the re— search. Establishment of a Criterion of Size. In selecting big business firms, two separate criteria of bigness were used: (a) number of employees and (b) amount of capital that the firms had at the time the research was conducted. Unfortunately, information about assets and sales that are generally used as criteria of size was not available. (a) Number of Employees. The larger the number of employees, the bigger is the firm. Firms were compared among themselves, and the largest ones were included in the population. The lower limit for the number of employ— ees was set after comparing each firm. When the differ- ence between a collectivity and a single firm became great, then the determined lower limit had been reached, below which no firm could be accepted as big on the basis of its number of employees. As the result of such sizing, 40 was established as the minimum. Below 40, the number of employees fell sharply to the 20's and even to the 10's. Because of such a steep decline of the number of employees under 40, it was possible to classify the firms into two broad categories: large and small. Those above 40 were considered to be large, and those below 40 were accepted as small enterprises. (b) Size of Capital. The declared or nominal capi— tal of the firm was taken as the second criterion. Again, as in the case of determining the number of employees, no 61 prior arbitrary limits were set. Only after comparing the present capital of the firms, was $10,000 taken as the low— er limit below which the firms fell into the category of small enterprises. It was only after surveying more than 600 of the largest firms from a list provided by the State Institute of Statistics of Turkey that a criterion for bigness in terms of present number of employees and pres- ent capital was established. Method Used in Selecting Big Business Firms. No reli- able published material covering the basic lines of activ- ity, sales, assets, number of employees and profits was available in Turkey during the time this research was con— ducted. Neither the government nor the private agencies accumulated meaningful statistics for the general public's use. The Turkish government through its innumerable agen— cies does collect a large volume of data; however, these materials are unorganized and difficult to obtain. Due to the lack of published and organized materials, methods of obtaining information in Turkey differ sharply from those in the United States. In view of the unavail— ability of studies like Moody's or Poor's indices, identi— fying and then defining the large business enterprises, to define the population has become a major project in itself. Although some data exist in the form of semi—reliable gov— ernmental statistics, several factors make their use rather difficult. Due to the laws and the unnecessary secrecy of the bureaucracy, publiccfifices are extremely .-" ‘.o. .,o .,. n 62 reluctant to release any information. Formalistic pro- cedures, the fetish of the signature, and upward-looking attitude of the bureaucrat, when combined with the slowness of the administrative apparatus, make any attempt at com— munication and cooperation too difficult and too ineffici- ent to be sought by following the usual methods. Extra- ordinary means were used in getting the desired informa- tion. On occasion, friends arranged for contacts and in— formants. Often, special permission and influential per- sons became necessary in order to obtain figures to back up our criteria. The State Institute of Statistics and the Union of Chambers of Trade and Exchange of Turkey were contacted directly from East Lansing. Responsible officials in both institutions responded favorably, but pointed out that they did not have any prepared and readily usable statistics. Due to the lack of statistics to determine the size of the firm and define the population, a second step was taken: two key persons were hired to carry out the research. One, a high official in the State Institute of Statistics of Turkey and the other a Ph.D. from the University of Istanbul. They were assigned the duty of assisting the above named institutions in collecting data concerning the assets of the firms and the number of employees. With the help of these two research assistants, a list containing the names of 200 largest firms was com— piled from a recent, and as of yet unpublished survey of ..~ ~v 63 the State Institute of Statistics. The firms on this list were classified into descending order in terms of the num- ber of their employees based on an average during the year of 1964. The same list contained also the type of activ— ity for each firm. A second list was obtained from the Union of the Chambers of Trade and Exchange in Ankara. While the list from the State Institute of Statistics con— tained 200 of the largest firms based on the number of em— ployees, this second list was arranged in terms of the nom— iJial capital. It also contained the name and address of ezach firm, the line of activity, the location of its head— cqtiarters, and the names and addresses of the three prin— czzipal owners, and those of top administrators, alongside t:}1eir titles. To check these lists, independent chambers of the four rrléijor cities of Turkey were asked to provide similar list— -j—11@;s of large firms. The lists from the three independ— EBFlt: sources were combined to form a criterion for bigness. I:r1 establishing the criterion for bigness——based on the r11lrnber of employees in this case——it was desirable to iso— 1‘511:e one value of the variable that may be considered typ— i‘CZEil of the whole set of values. The arithmetic mean, SSjLrace it is the best known, and the one most widely applied tZCD statistical work, was used in computing the average rituhber of employees of the 200 firms.10 Dispersion of the \ 143'. John Stockton, Business Statistics, Southwestern Publishing Co., 1958, p. 163. -r.. ,,.~ ..vfi" 'k ~ ~\ _' __ fi,- *-.A O ...» _ ,. , ... ' .- .p‘ A“*f " .9 u ‘ Lu-J‘ . ...- u¢v ..- . , u n ----AH 0n:c- * a n .- no .- ...-...; UlA-Av ‘ . - .. . ,. ,,- A..-'.,., ... F I \ --:v avs-V"-.a~6 .. 4 -F ~ . - .v "(T-...». V... ~u Au»..u.;. _ .. . r‘rv «vh~¢- . a .. \ ~u~.d—‘ -.-..u ‘v, “Oq~ .. 6A .... . ‘0 ‘1'- -. "'-- d .— - . ‘I._ O- ‘ ' w . v- -. "r» "-u... ._ P! -.._ U. . r- .,_., . U ‘x ‘I 'Ing w. ...‘n h " “‘?o-~ "‘ d n. y‘. ‘ . 'h, u,. p‘. .A . .‘~‘ V ‘ ..-... ‘r .._ . - Q "~-..‘ ~*.:. ‘ .. . U u‘» - \- II- ,- ‘r . . ". -. ~ -3 . .. -‘ .... ‘— ‘ ‘ uV‘A" .._u k: "‘\ i- J',’ 64 firms was wide. Since the arithmetic mean is not typical of the distribution from which it is computed, it can then be stated that those firms above the average are large. The following statistical analysis illustrates the point. To measure the dispersion of the firms, first, the range, that is, the distance between the smallest and the largest number, is observed (from 2000 to 10 employees). Since the range is based on the two extreme values, it tends to be erratic. For this project, the location where rnost of the firms are concentrated is required. Conser <>ints are located. The first is called the first quar- 1:>i.le, and it is the point that has one-fourth of the fre— <211163ncies smaller and three-fourths larger. The third Cllléartile has one—fourth of the frequencies larger, and tlrlxcee-fourths smaller. Of course, the second quartile is tlfi€e median. Applying interquartile range measurement for— Q Q 3 n‘LJILar-Q= ——-2--l —-it was possible to find that the 200 :fthxrms presented a very large interquartile range. The l‘Eixrger this distance, the smaller is the degree of concen— tllréation of the middle half of the distribution. It indi— <:Eit:ed that the prospective 200 firms displayed a highly Sc:Eattered distribution from the center of the scale. To hna able to observe the direction of this distribution, (1: - - ~--v"‘ .....‘I’ mp-x *‘ - " ’, ......A-» .. 5.- ..av' a ‘I _ A. ~ ‘V‘~' q .1" ‘I " Vfi‘f “ In-..» an: , ~ ... I u u _,.. I- .. ‘ r bar .....ll-..v \v-a. - ..., a. ‘ .‘l - .._-_r;y- .- r‘; ....usv..—n— ~‘p -II ’1 d.-v~u. hn-‘p ...: \I '---~ :- ~ ....~».. .. ’ A..- - C. ,.. hr" "-v «1--., ‘2' a- , " ‘rn-F .... (a “x” -..-.. w (I) .- 'Oou )- Al. ’O A v b p.. *~.‘ - r.- () 65 scatter measures of skewness were used, since measures of skewness indicate the lack of symmetry in a distribution and show the direction in which the skewness extends.ll Following Karl Pearson, a measure of skewness based on the difference between the mean and the mode was applied. The greater the amount of skewness, the more the mean and the mode differ because of the inherent influence of extreme items. The average number of employees for the 200 firms is £150. Of these 200 firms, 150 are in the last three quar— tLiles. The remaining 50 were so definitely below the aver- eacge that it was possible to confirm, on the basis of the rlLamber of employees as the criterion, the first 150 firms c::ited by the State Institute of Statistics were the larg— €3 Est firms in Turkey. But a single criterion for determining the population <3’f7 the large business firms in Turkey was insufficient. C3€3$>ital was used as the second criterion to select the FDCDpulation. First, the firms in the Union of the Chambers C31? Trade and Exchange's list were checked against the lists C31? individual chambers of commerce in Ankara, Istanbul, 3:23nnir, and Adana. Firms included in both city lists and j‘rl union lists, 180, were subtracted from the total number, J‘Eiéaving a total of 420 firms. Following the procedure pre- \r143usly outlined in determining the average number of em— pl«Dyees, the average of the nominal capital of the 420 \ l l . Ibid. . v F" “' ‘- 7‘- a J .~,-: ‘1‘: Vfigv a " ..- d . U' , ”V". """ ‘3 .8. .’-~ a --‘v ' din-v ‘J a. . ' ‘ A. ‘AV' ‘ ‘ '~ 5 _, as“, do .- o‘rfi ' F‘ A. *- ~ “r ‘ C..- . V. ....7» .v. '...-.'..,.~ ..‘ ." u -..u I... nun-vai— ..a. . ..v -.. ...-u ... rap-l a.-. , ' I! ‘ w~1 ‘ . “ 0-- "“"2'fi a ‘l ‘v-d"’*‘v'\- vv v -.,'.q‘.nl‘: '- ...‘~ H‘ L ”..-.-.”A‘. .. . P ‘ - OI. :Iac ‘. ’Fr mu .-L_ a. y - . ... . .- '~L'A“H-1 F l - ... .‘-‘.“V‘A .‘ . . ‘ c. AAF“‘ ~ N v v‘~‘__‘. . p...“ .. . ‘ “- .; .I-‘rc . A I-.- “.v‘ .,. _ C‘ «"Cr 5‘.“ .4. v. ...: . .a‘ ‘ ‘l‘ . ..., a '«"~C‘ I “‘Vg ‘-. u 1 ‘ r.._ I ‘ ‘v. “ ~. C. V‘— . _“‘- ._ . “ML“ "can..- .“h— A., R, .... ‘yfiu n ‘.-\ I ~~‘-" ‘ -_V- ‘ “-4 §-‘ ~ _ ‘ ‘P ‘_ _ N 7. ~ " I“! hire ~‘ ‘- _. 5 ‘,’c l . ‘ ~- -, ‘ fig ‘ I r. V‘gbe s v .~.. .'..|:._fl: ‘1‘” A - ’ -..: . N ~9 \\“. Q ~ ‘K‘I - ~ - - . "‘ ~‘~_‘ ‘ ‘ V n" . “ v :14le \~‘-4 u .- -~ Q" _ ' ~ ' ~ ._‘ ‘15::r q d“ - Q .‘, ."v-,. 's‘~1 ‘- .“ ~‘K . "\ Cr- S~‘ ‘\ ‘ .- , . ‘ I- \ "‘ IR‘ A. V* I.‘ '1 w. .5 66 firms was calculated. Then, using the skewness measures and quartile deviation it was found out that out of 420 firms, 315 were in the last three quartiles. The remaining 105 firms of the first quartile were well below the aver— age, indicating a large difference between the two groups. This wide divergence was the justification for accepting the 315 firms as the largest ones of Turkey, in accordance with their nominal capital. After individually identifying the largest firms in aaccordance to two different criteria, they were cross— cnarrelated. Those receiving high scores for both capital earid size of personnel were isolated. Each group contained 1.225 identical names. In other words, using as criteria the £3 j_ze of capital and the number of employees, 125 of these dF'fi_rms were included in both lists. If a firm was ranked €3$h>ove the average by both criteria, it was selected as l:>€Eing a large firm. Ninety firms were selected through t:}1.is procedure. For the remaining 60, the number of em— 53:L<>yees became the sole criterion. Testing and Results. To be sure that the 150 firms j‘ESCDlated were the largest firms of Turkey, both in terms ()1? the size of their capital and the number of their em- E31Oyees, the follwing tests were made: 1‘9 Statistical Testing. The average number of employees E3r1C3 the average size of the capital of the 150 firms were ChHacked against respective averages of the 400 firms ob— t6Lined after collecting the individual listings of the tthion of Chambers of Trade and Exchange and the State 67 Statistical Institute of Turkey. The results of this com- parison indicated that the averages of the number of em— ployees and of the capitals of these 150 firms were by far larger than those of the remaining firms. 2. Reputational Testing. The statistical testing was sup- plemented by a reputational testing. To avoid any criti— cism about the incompleteness of the criteria, since sales and profits were not available, authoritative sources in business circles were consulted. Among these sources, the IXgricultural Bank of Turkey was the major one. The infor— niation department of the Bank, which is responsible for in- xreastigating the financial standing of the firms that borrow ifirom it, confirmed that all but 10 per cent of the 150 ifzirms were considered to be the largest ones in their cat- egories in Turkey. This reputational approach identifies the leading jErfimrms through public opinion or judgments of other members (:"fr the economy. The researcher then uses a criterion of C2hclusions, another 4 per cent of the firms from Ankara vvstre included in the sample. Eight per cent of the firms 1" 69 had their operation centers in Adana; none of them was in— cluded in the sample for reasons of insufficient time and research funds. The remaining 1 per cent of the large firms were scattered within the country, and were, for the same reasons, omitted from the sample. Table 2. Comparative Distribution of the Population and the Sample by Type of Business. Type of Business Population Sample No. % No. % E3anking 7 5.0 4 3.5 Innsurance 6 4.0 6 5.5 .bqamufacturing 75 50.0 54 53.5 fIEransportation 15 10.0 11 10.5 I%Lining and Petroleum 8 5.0 4 3.5 C:Ommerce (retail-wholesale) 39 26.0 24 23.5 Total 150 100.0 103 100.0 The largest concentration of big business firms was j~r1 the areas of manufacturing. The sample included 54 C3111: of 75 firms falling into this category. The next ma- -j C31: line of activity was commerce; from 39 retail and VV}1<31esale firms, the sample took 24. From 8 mining and E363troleum firms, 4 were in the sample. Out of 15 large t:--":-‘ansportation concerns, 11 were selected. From 7 large 136inks, 4 were included in the sample. Finally, all of the ES ruajor insurance companies of Turkey were in the sample. IEt-.is logical to conclude that the sample was representa- 70 tive of the population, both with respect to geographical distribution of the firms and major lines of activity. The Selection of the Big Business Leaders Business leader means a person who occupies one of the highest offices in the hierarchy of the organization, either as an owner or as a high ranking executive. No dif— ferentiation was made between an entrepreneur and an exe- cutive; both types were included in this study. The im- portant factor in defining a business leader was the degree (of his influence upon the policies and goals of the organi- zsation with which he was associated. A man, therefore, Idraed not be the entrepreneur or the chief executive to be czllassified as a business leader, provided he has the ES'trongest influence in establishing goals and objectives <:>j? the enterprise, and the philosophy of administration ‘J—GEading toward the attainment of those objectives. From 1:2hue Chambers of Commerce the names of the owners and top t:l'lree executives were obtained. In respective order, three ()3? the most important owners were named together with the FDEExrcentage of ownership they held in the organization. In t:}lea case of single ownership, one name appeared. When the C:CZDIlnpany was completely owned by the public or by various j‘rlsstitutions, three of the largest shareholders were E31:Eated. The Chamber of Commerce also provided the names CDf? the three highest ranked executives with their titles. \ 3‘23- See Chapter Two for an extended discussion of the business leaders in regard to this definition. ‘I 71 In order to select a leader from a particular business or—9 ganization, a simple but reliable method was used. A tem— porary list was drawn up following a correlation of the owners and the executives. If the same person were a part- ner or owner, and at the same time a high ranked executive, then he was listed as a business leader. The same proced- ure was followed for each one of the firms to obtain a list of 103 names. However, a problem arose whenever no rela— tionship existed between the owner or partners and the top executives. Who should be selected as the leader? The .person who owned the organization, partially or totally, car the fellow who ran it? In such ambiguous cases both riames were marked. To make a decision for choice, the ex- Lseert opinion of the intelligence department of the Agri— cthltural Bank of Turkey was sought. Pilot Study Once the data-collection instruments had been con— EStiructed, they were pretested before being used in the SStlLde. Questions that seem clear and straightforward to ‘tlfuea research staff may, in a trial testing, prove diffi- C1‘—‘L_‘1:Lt.to comprehend, or ambiguous, or simply not productive C>:f? useful information.13 A pilot study and two pretests h7:f? Turkish business leaders known personally by the author. 7E‘17163 replies, comments and criticisms about the questions h.€E:J_ped in rearranging, rewording, and correcting the lan- €I1.1»Eige of the questionnaire. A final pretest of the ques- t.jL.<>11naire was made in Istanbul by the researcher himself. If:- vvas only after these procedures that the questionnaire and the research methods were finalized. 73 Data Collection The Nature of the Research The relative youth of social science research and the scarcity of social science curiosity in Turkey make it in- evitable that this study, for some time, will bear a pio— neering characteristic. Although there has been some speculative writing on the same tOpic and some research that is incidentally related to executive behavior, the re- searcher entering the area is not in a position to advance from any existing hypotheses. _lpterviews Because of the methodology of this research and the ciharacteristics of the Turkish business leaders, data was c:cfllected through interviewing. The interview approach EDIJt a heavy reliance on the business leader's verbal re— ;Dcart for information about the stimuli or experiences to ‘Vlfiich he was exposed. As opposed to the strict question— 1“laire method, one can ascertain better the validity of the ITEESponses through the interview method. In an interview, £55Lr'1ce the interviewer and the person interviewed are both F>.ITe3sent when the questions are asked and answered, there i— 53 opportunity for greater flexibility in eliciting in- fr<:>1:n@tion. Furthermore, the interviewer has the Oppor- t11;1111ty to observe both the subject and the total situation 1.1t1 inhich he is placed. g 141 .. Selznick, 22' cit., p. 238. 74 Interviews evoked responses that would have been im- possible through mailed questionnaires. In a mailed ques- tionnaire, if the subject misinterprets a question or re— cords his responses in a baffling manner, there is usually little that can be done to remedy the situation. In an interview there is the possibility of repeating or re— phrasing questions to make sure that they are understood, or of asking further questions in order to clarify the meaning of a response. This flexibility makes the inter— view a superior technique. In Turkey, traditionally, the .business leaders are reluctant to give out any information, (especially in writing. But when they are faced by an in- t:erviewer and trust the interviewer, or feel indifferently eahmut him, they become very talkative. It was intended that the questionnaires would be used i:<3 supplement the interviews, in order to achieve more CZCJVerage. Nevertheless, when a pilot study was conducted inf) Istanbul, there was only a 15 per cent return on all t:}fi€e mailed questionnaires and none of them was properly Eiriswered. The poor reputation of the questionnaires sent 13>){’ the State Planning Institution to business leaders pre— C::l1_11ded their use by the researcher. The unreliability of tZLIcnee returned answers prevented the researcher from using t:.}tlee mailed questionnaire approach as the method of data C: o l lection. gm e 5 tion Content Interviews were used to obtain information about what 75 the business leaders believed, expected, felt, wanted, and did concerning their function in society. Statistical in— formation about their firms, and explanations of their methods of procedure in business, were also gathered. The questions were patterned after Yusuf A. Sayigh's research in Lebanon and had strong Warnerian influences. A large portion<3f the questions were aimed at acquiring facts, such as the business leader's age, education, marital status, policies of the organization, problems of his business, etc., in addition to comprehending his feelings, Opinions and role perception. A second set of questions was aimed at disclosing be— ].iefs about how the facts were interpreted. The purpose vqas, for example to find out whether a business leader kbeflieved that increased government efficiency would bene- dEIit his business. The questions in part four of the CZuestionnaire were directed toward discovering present Eilfici past behavior of the respondents.15 Following the VVlicjely accepted and proven fact that in inquiring about E:rxreasent or past behavior, the most valid answers are ob— tZ-Eatined by Specific rather than general questions, the cZZIILcased-end questions were used to seek concrete infor- 1T1 aflzion.l6 Finally some of our questions were designed to ex— p>;1_c>re the reasons which the business leader offered for g 1 ES - See appendix for the detailed questionnaire. 1-65'0 Selznick, 22' cit., p. 252. \ . r" ‘ ‘ . I. p;d y J " "" ~ .... 0 . I8 ”I." N ,’ a ’ ‘J 1- ‘Vu ‘ Liv-v I ‘_ van. ...-v . ‘. . ‘ - OF; \ 1‘ ”l I A‘- ‘a - . -.h 5. ' ' Y' “.y _'_ . . -r\ “5..-: ~- _ ..‘hl‘ w . a—wc‘ “VI "‘ \a 5‘ . ‘ . Iv I oA - ' . [~1-_ 7" ‘-I--u 4- . . ' ‘ -r- I‘~~. — _ . ..- i""‘-\—u . v‘ . J‘ ., ‘ I hv.‘ A“ - ~1h~ r“ .....-v.__~ - 4 . ---""- § - . "" " o-I -..-‘~~ H. . , r 'o._ A . F .r'... O—l ...--.. "~K- .-. O‘ . . ' -.. F- r ’- . u..- ~“~-_. 1’6.“ ‘ I A o. , “ In. 1. -..- ‘~.‘< \ '~ . . ‘ ‘ -‘ ...“ -r . ~“_ 7' ,_ ‘- —A‘I h.-u-‘; A ' ...... § ‘ ‘ I "(v‘ "e. l "- rm,” .. ~ ' ‘ “7" " c - “' .~ . , .\ L '7, ‘- ~‘- ~ . V‘Vv._~ I ‘7. I. . v. .-n fi",-,_‘. ..._ k‘ I "‘-._ -“ . a J. "'I‘- ' h7“"‘v---~ u_ . ~ . ~"J“\J 76 his beliefs, feelings, policies, and behavior. In effect, the why's had to be brought into the Open. "Why" may seem like a simple question, but as Lazarsfeld pointed out, the answers to it are seldom simple.l7 Type of Interview In the standardized portions of the interviews, ques- tions were presented with exactly the same wording, and in the same order, to all respondents. Despite the standardization of the interviews, some of the questions were fixed—alternative and some were Open-end questions. In fixed—alternative questions the responses of the leaders were limited to stated alternatives. The open—end ques— tions were designed to permit a free response from the in— terviewee rather than one limited to stated alternatives. Because of the nature of the research and the intention to obtain the true frame Of reference, as well as the spirit of the business leaders, open-end questions were favored. Even the fixed—alternative questions were supplemented by a last alternative "other". The often difficult and ex- pensive open-end questions were preferred in order to preserve the originality of the response. Compared to the simple process of tabulating the precoded responses to closed questions, the analysis of Open—end questions was complex and often troublesome. Also, by choosing the Open— end questions regarding beliefs, attitudes, and other 17. Paul F. Lazarsfeld, "The Art of Asking Why", National Marketing Review, 1, 1935, pp. 36-38. r 1‘ .- I) ll" n"'l“" ‘ 54 J. _ .:.(-.. .1 «- .. "F rp:€:r"" .y vuv 6~U 4‘ V" ... I, Ar~ n ll." " CI . I V ‘ . -« AF-A g-y-I— ,.,.. u: w”. i ..r ....--ul-..- 1. . . ~r---o . . - . - I .~\ E «‘4' unit: -.- .4. - . V ""“v‘ ‘r'm.’ . '""‘-Vh ‘L v .A L, . T. w ..-- ~~" .2 -‘l.- ,, h R “7“" m- -t- .. . ! .F'n ._ ‘ "'5. -....- ... —. "7‘P9\‘;- n... a r, -""“-¢-v ~ ‘1 ~‘ y. ‘- Pr ‘1.‘ ‘._ ._ \ . ‘~ ‘.‘ ..O‘Vy- _ - . v ‘ - y, ‘- _r.,_. -'§' ~‘v‘ l -Bg': ~ h ‘ \,‘ IN“ "L. . - In; ‘ ... ‘(~ ~":. In IV‘ . b u- A F‘ 'v /, s~. n: V ... ‘1 ... ‘ ‘VW - 1,.“ . "‘~a R It '1‘ I ‘ ‘1-1V'. a..‘| V.-. s ‘r . ,- . ‘c.:\q 1 s. ... .L- \‘ ~- MI v \P‘. . ‘\L A_ .\ r“ \‘U ... . J: .‘m— P‘- ‘4‘ I 77 more subjective matters, the respondent was relieved of making a judgment about his attitude by leaving this task to the researcher. Open-end questions proved to be useful where the original question had to be followed by probes to determine whether the respondent had any information about the issue, whether he had a clearly formulated Opinion about it, and how strongly he felt about it. To summarize, fixed-alternative questions were used to obtain information on issues where the range of the possible alternative replies was known. To be more speci— fic, this type of question was utilized to seek factual information (age, education, etc.). Open—end questions were used when the issue was complex, when the relevant dimensions were not known, and when the interest was fo- cused on exploration not yet undertaken. Conduct of the Interviews The researcher and his two assistants conducted all the interviews. The researcher himself made all the in— terviews in Ankara and Istanbul, while his assistants worked in Izmir. The average length of an interview was anywhere from 75 to 120 minutes. Through the intermediary of the Agri— cultural Bank of Turkey, appointments were made with the business leaders a week in advance. Generally, the re- searcher was greeted with restricted cordiality and semi- suspicion. One of the assistants, being a woman, was received n . A M, .nuw An Afi‘ ' " p.01. UM \- .vnoiV (I) ' I ‘ A ' - - - ...... I: F Cfcpt‘t: '»' -..-bu -x—V . .... .. sq Ivdgv 5V . . , . ‘n'~~—.<. ... .iOV-‘a _. ‘ I ‘ ‘h‘ V.“ VA.‘-¢ Cn¢v I I "~~'._!_‘. ...; .54 O" C‘ n . c '5fiJno “I I 1 .1 . . ' -~":-p-F~ A ... on..‘,..-“d .. a ‘C ~.: ’11: fin f‘ ‘ \uig V‘-‘ an ‘ bu . A Q I w ‘— ‘- nu.g1l, 1“: On,- ~- ‘- . ll~ 'K‘ * ...“ ....‘y; brgzuc v. . r- .- \ 'n.. ~- Uri-...: .30. - V‘n._ . Q. I- u “.e c‘ V‘j . “ k ‘ . i‘:.’h _ .. — ‘ ....»§ «7"! P "H 78 with more ease on the part of the interviewees. As a good reflection on Ottoman concept of the role of a woman, she was regarded to be less dangerous as far as what she might be able to do with the conversation She recorded. In most places she was offered gifts, or social invitations, and the interviewees took greater freedom in diverging from the topic to incidents in their lives or anecdotes. The third person, who was not a part of the American organization Sponsoring this study, had the most trouble in achieving a sincere relationship with the interviewees. He was the only person denied certain statistical infor— mation, and the one who was asked the most questions. He was not trusted. The business leaders feared he might use his information against them in the future. The first contact was made by customary small talk on weather and health. A typical example might very well illustrate the first ten minutes of an average interview. The researcher is now in the office of the business leader. Mr. X is Sitting behind an overcrowded desk. He is smiling but there is no sincerity in this smile. The room is far from being luxurious; the furniture is old and there are no apparent status symbols. After the usual greeting Mr. X asks the interviewer to be seated. Almost as if planned, but quite by accident, Of“? Of his subordinates enters to confer with him about a tlTi‘fial point. Secondary introductions are made and a ciiJSIDJ.ay of how busy the man at the top is, follows. rA:“h‘$l .5-..“ “H "L :a- V! "M re In: -x.) A: «r ’ : I 63‘. V1 Ho. " a ..fi‘ 0 Va: ...».o .v a. V . 3,. .r . ‘ Ob- .. , 1")" “‘N I‘ ‘OV‘A.U u-“ I a u "V‘f‘ *- “a .V“H .bfiA-ny d 1"“ :“lr‘f\ (lie-‘5 le_v '1..- fly! +r‘ thl ‘Ai ... . . . a a W- '1 .‘E a 1;”: "P fifi F‘r 3.. “V UV. .. _ . _~ r-c 5 p .r .05- “‘.‘V‘ «I. +‘“‘.. " ch 7""5. . :‘Y‘ *np" ud- ..‘~.‘ I \ k‘v "f‘V' ‘ J1 I'.‘,,-‘I(‘ 91,4“, .n: a .V“—' l.» n v 2:- 75: ~-__ \—_ vv:.\' a. a.-.” “in I ‘V "'\I\ LE 1.... I!“_‘ ~:‘ Q‘- b‘ 4 ...-:‘4rc. 5“-‘U-\_. I 7|. 'A a.-.” “I . Ch~~cr “Him.“ I .I ‘ . {~th I‘.‘-'-“ v F‘ . Q.".. V. y. n: ‘ .. :Qr‘ .-H“: ‘A. .....- u-‘J V”: 32* ‘., .‘v .AJ ‘ 1 “a " | “'L.. 17,. _' 5“. A 1‘. u'c'r'; .“,. ‘ \ "s s.“.: ‘ a \4 79 Mr. X: 'Oh, yes, sorry to keep you waiting, but all responsibility on one man...I have to be everywhere all over this factory. I know in Western countries the routine is different, but in our country, they all lean on the man who knows everything. Int.: Yes, sir, I can see that. Mr. X: So you are studying in America. For how long did you say? Oh, four years; that is quite a long time. How did you go? Did you win a govern— ment scholarship? You see, I have a son. I educated him in the best schools in the country. He used to be a bright pupil. Every day his teacher called me in to congratulate me, and I would blush all over. He finished as the first in his class, and I saw to it that he would go to Europe to become an engineer. But then_he started to get lazy. He fooled himself by working here and there, and then got married. Today he is sorry that I didn't send him to Europe. Last year I placed him with an insurance agency with 1600 T.L. salary. He can hardly pay rent now. Are you married? Children? Oh, don't worry, God will give you soon. The foundation of a family is children, but at times you worry so much that you wish you didn't have them. I was in America last summer for two weeks. I liked it very much, but I missed Istanbul and the sea. When did you return? Int.: A month ago. Mr. X: Then you were here when we had the last miserable hear wave...Oh, did I wish I could go to the Island, and rest in the shade. Does it get hot in America? Int.: Yes, sir, in certain places. Mr. X: But the bureaus have colling devices, don't they? Like we have in the summer theaters? Int.: Most of them, sir, but not all. Mr. X: Well, what do you think of the Negro prob— lem, since you were there? How do you...? This type of verbal exchange continues until a iTLrendly atmosphere is established. It can take from tflrffia minutes to an hour to discover the human elements of One anothe r . phl- ...-nu p. out. 0 .... .- .. ., . '. ~. ~ '1‘- .L: n F"! "‘ ”1‘1? I.-. 4.“ n 2 fl. ‘1. x. .r ...I I v.. 1 a. FAA a, - , 1. - ‘... \vv a-v‘JguO .‘H- A \IaLQR l JbunyO v 1 ‘ ’ ' A " -‘IL.. V I a I l n g m» . uu&v\-‘. . d ’I hr. C. “ 80 Int.: Mr. X, we contacted you twice from the United States about a project sponsored by Michigan State University. Studies of this type have been conducted in many countries. Mr. X: Oh, it's a hot day. You must be tired. Would you like something cool like a lemonade or a coca-cola? You must be used to it in the United States. Or coffee if you like, tea? Int.: A coffee with sugar will be fine, sir. Mr. X gives a surprised look, but recovers to serious- ness quickly. He reaches for the bell. A "hademe" (doorman) enters the room, bowing with humility in the name of respect and awaits the order of his boss. Mr. X: My son, bring two coffees with sugar. Make it fast and tell him to make it good and foamy. The hademe bows again and utters, "At your service, Sir." Int.: In the letters we tried to explain the pur- pose of the study...and why you have been selected as a participant, mainly because.... While the interviewer chatters along, the business- man is going all over his desk in search of the letter; he finds it among some papers and goes on to read it with— out paying any attention to the explanation. Mr. X: Oh, yes, I remember, and how did you find our name? What a compliment; we are far from being a large firm. I wouldn't count it as the largest in Turkey, but since you are here, I'll feel flattered. For three minutes the interviewer talks in order to emphasize that the study is not related to a government .PIVJJect or any Turkish organization, but is conducted 19Lerily'for academic purposes, to be published in the United States, and not as a tool of propaganda. 81 Int.: Sir, as you see, this is a research on the Turkish business leader's role in Turkey's economic development and his efforts to foster the develop- ment of the society. We shall delineate our goal through interviews with the higher caliber, well— known and successful business leaders.... Mr. X: Before we start, can you summarize what we are going to talk about? The interviewer explains the nature of the questions, and the value of his personal opinion involved in his answers. Mr. X: Good, I hope I can be of use to you. Re- search is a good thing, although in our country we can't yet utilize it valuably. The other day a man came from State Planning. He burst into the room and announced that the government sent him to get information. As if we are here and waiting for his call. They don't notify you in advance, and they don't tell you what they want so that you will be equipped to give it to them when they come. I have work to do; I don't sit here expecting stray calls from whatever comes to the government's mind. I am glad you informed us before, or else I might not have been here. To put the respondent at ease meant making him feel that he was the focal point of the conversation. It was necessary to start questioning with respect to areas fa- miliar to the interviewee. In this research it was found that interviews beginning with questions about one's self, Mmich were answered easily, and then proceeded toward more Complicated questions, yielded better results. Deliberately, questions about sales, assets, employee and profit figures were left to the end. Companies in QHerey do not give out figures. Even the governmental au- tTNDIELties do not have reliable figures about the activié tgieas of the business organizations. A cloud of secrecy -.r "a ‘3: 1. fig: ...-x. .. ‘ Id ' 'W‘:‘.r~c lain-7‘..— . I . - a no. r, "2.:- “...C .....- .1..-» A. . . ' -‘- a .A ‘I _ a ‘ ‘ — ...-Iv. ‘. ‘- ~p- -- ._ ...." ...r "L. I -. .-.-..- ‘ v s,. . .. “pa—ure“, - .i. '~- ‘A Af‘V‘r; ...u 'v rt. _ ‘- ..\v' v-a_,. .. : """“‘~-. v . ”7 *‘VV- vu..- -. V‘d‘.l‘ a ‘r.. . IR, -- .. O— ' r ~ ‘I ...‘i‘ l: . -..- . -\Q ...;_‘_ .4 ‘ . . uu-_'-\ .‘_ ~7-’- ~ .' . " n“ a P. o. "* «1 _. -r-'. . *. hr‘O- 0." . I {II 82 covers the majority of the firms' Operations and returns. But these executives, being assured that none of the an- swers would be revealed individually, opened their books to give exact figures. Because of the fact that the Turkish business leader hasn't been interviewed along these lines before, the interview proved to be fruitful to him also. Many of the business leaders thanked the re+ searcher at the end of the interview for having given him the Opportunity to think along these lines, which helped him to organize his thoughts and perceive himself. The respondents, on several occasions, told the interviewer that they had not previously given any thought to many of these questions. The interviews, they said, opened new avenues in their minds. All these factors created the friendly atmosphere so necessary for the prOper conduct of an interview with valid and reliable answers. Coding and Tabulating After all the interviews were accomplished, the next task was to translate them. While the translations were in progress, a code was also prepared. Since this research can be considered mainly an exploratory one, it was neces— sary to be flexible in the interviews. To keep flexibil— ity and the true flavor of the responses of the business leaders, the questions were not precoded. After being coded, the information was punched on (361115. Sorting and tabulation operations were undertaken Ily’ Pirocess Incorporated, a data processing firm in . 1 1!“.r.; ‘ -“H "l. a» ‘V' "I ...a“ '...-.s y .. . ao- ~ A . 9-n' _‘ . ‘ .4 "~.\- :~.4-_;.4.. ...-V ' ' ‘nv‘ar ' ‘u pa . b ‘ ...«.~\_ I h . . ~ '5 ‘ “ox. “ r 'Uu-r“ . - .- - .-.,‘ A- ‘-"r \h‘ v-‘u..--u u. . u-p nan” ~.‘_,‘._ "‘ -—x 'V- 4-” J.A-... _ . . ' on I. A ' rr _ a ...—“Ca" ...--- "‘.v.~. . . . .. ._A . A“~ " 'L-\ . .. -..n "“""--l n - ‘ -- A q ‘ b ArAcns- .... 'v""\-U-_~ . ;§‘._.'A .l‘ . u \ "v.A_ ‘v “u“ 4 . ‘ - "'rn ‘ 'N '--"‘<._. . . ‘ 1 . ~ _ I- . - .... ¢ ..n ~‘. :1 ; - l s. ‘v V ' . '._: .. A F- . fl... :, l" . "q ‘ w ‘ “rs _ _ N '~'u ~L.. “~~‘ ;:."r" . " ‘-‘ ."-‘ .‘Pw' ‘ H Ld' .- .h; - ‘r-. . ~.. ‘ In” ‘_ ‘vn , - 4 N u v F ‘r’ ‘.‘ ~ —,I_ -‘~ ; . n‘ “. ." \ u - ‘ ‘ ~‘sv'1 \ Vs‘ . .“ \ A“ - .‘.I A‘ 4” . U‘ \ .- .~ ~ '— 'P‘ .. -‘ \K“. ‘x. \- l~‘ .- “s“:- 'v an . § r" ‘a ‘5 _. .A ‘. v-l _ s. \,__ u; ~ “‘ . 2" 83 Portland, Maine. Straight tabulations resulted in 80 tables. Another set of 178 tables was prepared upon the cross-tabulations of significant dependent variables with several independent variables. A coded questionnaire was prepared and each inter— view was transcribed on it. The coded questionnaire, comprised of 73 questions, had 7 to 12 different answers for each question. The questions can be grouped into three different categories, representing the three parts of the thesis. Part one deals particularly with the exec- utive himself, his background, mobility patterns, and his role conception. In part two, the environment of the ex- ecutive is described. The questions are oriented toward obtaining information that will not only give statistical data but also throw light on his personality characteris— tics and his perceived role in the society. Part three is comprised of facts about the firm itself, its year of establishment, type, assets, sales, number of employees, and growth patterns. In the examination and use of tables no elaborate statistical manipulation was attempted. It was felt that the nature of the information simply called for the cal- culation of frequency distributions and of proportions. The cross—tabulations establish associations between vari— ableS; no attempt was made to ascertain functional re— léitixonships, for these can be sought legitimately only .0 ..A- .5 V": .. 4-1 -~‘, \HF‘“ Ag” \ - Irv-ob" ...- ’ “,r p 0.!‘ffl-"~" " -...vJun. a.- .-un _ l “‘0- ,.,.'. .Q-Al'r- A . u v nova--VIQU .4.- n A: ..n- ~r""n‘r\~ : v-~‘v..cu v- . d p o . . I -:':"c: “’5'. w ...-..——~ ‘-\.u.. . , ‘ .- .. “‘ i o." ._ ." _ n C """i -.. ...... " to»- A" >- h ...v ‘""~A-v_ QI~ I- ' In ‘1. Cg’Y fl- . . .wl-" g. ‘ ‘r-uu. ‘ 7.-.]. - “~i' :‘ 1.1" .- . y“ _ .- . I ‘ 3‘. “"r~... ‘ I. \ ‘ :l“~“ I._‘ .-§ I ‘:'.~‘Av-: “‘h-. ""—.‘ 0.. ~ KH" ‘ Q -. ‘- ‘r a ‘ Ca §.._‘ v ‘u‘ 2 "4‘ - “VA'vJ -. -H U . ‘ D "s“ . L .__ '. . .l“’:, "~an 't . I“ s. A- . ‘ “"x .‘ r. ‘ ‘ v ‘ ‘ k.‘ g . .. - - 1 -'.' "r- .' .. u.b- ,. 't . ’nIA‘ “o r‘-. “ F ,— . “J‘ A‘. . u. .._ tn ._ ‘~ “ ‘ ' '- ‘s ~ ‘ “a‘ 7". §_.\ -‘.._ ‘»‘ kr. . _"‘- ‘ n.. .7 L’ ‘ ., v « u.‘ -§ -._ ~ .. .‘ y." \ l‘ .“ “,‘ s“‘ F 4‘. ‘ I. I ’Q I ~.~.,‘~'_ ‘ ‘ I -.V .y’. 1 .. “g. 1. ‘ 84 in the complex of several variables acting on each other.18 Some sense was sought of such entangled patterns of causa- tion through the analysis of data from several cross— tabluations after they had been examined individually. The grouping of finds is anlytical, not statistical. In— ferences drawn from tables and hypotheses tested are pre— sented in the following chapters. Conclusion The method adopted in the selection of the firms is similar to the one used by Warner and Abegglen. A care- ful review of Warner's methodology shows points of simil— arity as well as revealing extensive modification in the means of pursuing the common end. These changes were necessary because of differences in the environment in which the studies were conducted. In providing a basis for selecting the business firms by type, Warner used the data on national income produced by type of business as given in National Income and Pro— duct of the United States, 1929—1950. Then he took the proportion of national income produced by type of busi- ness as an index to the relative proportion of business leaders by type of business in the population. Once this distribution was obtained, he disclosed the largest firms in each type by going over Poor's Register of Directors arxj Executives (1952). In this reference, listings -——f .2530 Yusif A. Sayigh, Entrepreneurs of Lebanon, Cambridge: Harvard University Press, 1952. ‘ 1 . a- __ a rrzr‘r, "...-qr f‘ h..‘~- v . u- -§.-‘. 5 . . ’ ‘ r f ‘.~‘-rh A "‘ ‘ ‘ .a v- "' ‘ y-.. l". .-.. a ' A F0 .. pf: “V‘Hr - w- " ...- V-~A" . A :“"fir‘ ~'r _ ‘ ‘4 ,l..uuvo—nn. - . ~ ..., ...fi: 5’ r“ " ...l ...... _.,_,_, v. .. .. ‘. ’ ,. ‘ - N a ‘r- ‘3'..." ." ,. ... 1...... ‘-.J lbL. _. - F- - .n" ‘ "L—xC.,.' .‘-' .“MV—‘p “A. ' Q ...-A 'n "‘f. _ ' In ,. r "--‘--L’. .‘|_ k- v . . V, _ .|'~"" .r» I- .. L >- 5. . c-.-..a w .,_" I ...“ _ . -. _V‘\ tray, :1 ‘-..A.. _ ‘.\'" . w opn- ‘ - . h-Y’hv‘ g,— -“ ‘."" u. .._ . ... I54 __ . '- ~ ~. .‘Fn ‘0Ivu ‘5 E -... A“:- 'h“ . .‘ ‘ " A “ ’u» ”"u AV: ... -‘y. .‘_. “ .. h-._' _ ‘ n “- p v-_ ‘ A ‘ .-‘.‘ 'I‘ l ‘ v ‘ r 'h \ ‘ ‘4 y « ".IE~\ V‘. .... M L p._. \ ‘. I ‘N ‘ F . Q - ~‘ \ V.-~ " .D F! .1, fl /. ‘ s -.__ gr v 1%.. - .,. .- ., ‘. . 'Q r. i Q. N 85 appear alphabetically according to type of business; fur- ther listing of the business firms is maintained according to the order of the executive officers of each given or— ganization. Once the rank order of the largest firm in each type of business was determined, it was easy for Warner and Abegglen to select its executive officers.19 This research differed from Warner's by including a repu— tational approach to check the other methods in deter— mining the leading firms. In selecting the business leaders from each of the leading firms, the divergence from Warner and Abegglen becomes more apparent. While Warner relied on rank only, here, business leaders are defined as those who influence the goals and policies and the philosophy of management of their organization more than others. However, the researcher proceeded along the same path with Warner and Abegglen by accepting the kinds of business positions relevant to the study as executive positions in business firms, from sole owner to general manager.20 19. W. Lloyd Warner and James C. Abegglen, Big Business Leaders in America, New York: Athenian, 1955, pp. 231-232. 20. Ibid., p. 230. q “1 H‘ .‘,_ v ‘- '. ..‘u‘. n-- h, . .... ‘vI'W‘r A- u . I .4. ...... "-l‘v. v -- A - “"rt-. .. .,:...‘ UV. _“ o ‘ -Ip._.’- r i b'\ by. "I..._‘_, ‘V-“ . . . "-'.“ ... ..I ....~... "‘-. “"‘(aw ‘u...~ , . 3' ... ‘- . ‘ rm;- L: ' "‘ --- ‘I' Q Q ‘ -AA- "‘ a \\ Ia .‘. 1"- ‘ ... . ~“ fw-’q ‘ .-- ‘h‘ . "~~‘_~ : L." 5.“ “A-\ h‘“ - v-~| . V...“ . ‘7- ._‘ ’I\ , ‘ . ~ A .._~ \g "‘y ‘-.“. v ‘. . ~ r.. ....‘C V‘.' , ““ ‘h . ‘b‘- ‘ ‘ . '2‘ .7... - ‘. ‘ . ... l.‘. . h . \ .‘~~ ‘\. ‘ ~r.l'; . -'-‘N “i' -‘ , A... . ‘ ’a ‘ - .... A “E ‘1 ~-_ b, .y ‘ ‘ ~AV‘N c ‘ ‘ ‘ C ‘ \.. . 8 . ‘ ”C v- ., A .‘ I "'_4‘ \. ‘- w“, .- - “ -V‘ y.‘ a '. ~ 1A ,1 ‘ . ~\ CHAPTER IV SOCIAL, ECONOMIC, AND POLITICAL ENVIRONMENT OF THE PRIVATE ENTERPRISE IN TURKEY Introducing Turkey Geographic Characteristics The territorial area of the Turkish Republic is 296,185 square miles, roughly the size of Texas plus Ari— zona. All but 9,256 square miles are in the section of Asia Minor called Anatolia. The remaining, and relatively small, portion of the Turkish Republic is in Thrace, at the southeastern tip of Europe. Turkey has 366 miles of common frontier with Russia. Turkey is a rugged land. The greater part of Anatolia is a treeless plateau, broken up by stretches of marshland and almost completely surrounded by mountains. This pla— teau rises steadily towards the eastern highlands. The highest peak, Mount Ararat (16,945 feet), on the frontier with Soviet Armenia, is the meeting of three great ranges, one skirting the Black Sea, the other two, Taurus and Anti— Taurus, running southwest towards the Mediterranean. South Of the Anti-Taurus range lies a smaller plateau, which fal;1s away into the great plain of Syria and Iraq and is Watkered by the Tigris and Euphrates. The climate of Turkey is one of extremes. The south— Eryn IDarts are warm and temperate, the interior is arid, 6M7C3 t:he North is cold and rainY-l \ 1- . . (:kEoffrey Lew1s, Turkey, Frederick A. Praeger, New York, 1965, p. 173. 86 ‘1 .o-su .U- .H...a.. m~ I l .1 up . ‘ .- , -' ~52! fir "“ "-‘-b v... ~-"-.. ‘-: I- A “‘w-u n: -2. n... "NW‘V‘ “ vu— - . n. ‘ .‘r-. an H " '9 I” u-.._-'.\- 1 ' d.. A f h ‘n ... H' x... ’5 . "'r~n. ~',‘;~V‘ . m‘; ~ .F-I- ...A "‘1 ‘1’. .- ‘J 'v ‘ K. «-4 “-~ Q.‘ ~. My ... I ‘1 A ‘ P \ . a- ‘ ‘4: C..- “-‘ h uF‘ " A .\ ‘Q ‘ ' a \ ._ _~ , " In s ‘\ Q'IQ . v ,1 ~ Q “ . .‘ “ h. '- l ‘ ‘\ N ‘ v. ‘ . s u. :‘i- . \~ ~ \ 87 The People Ethnic Origins. The ethnological history of Asia Minor is one of great complexity. For thousands of years it has been a seat of empires and a highway and a battle— field for migrating peoples. Phrygians, Hitties, Lydians, Cimmerians, Thracians, Persians, and Greeks had all set their seal on the land before the coming of the Romans. After the Roman Empire was divided, the Byzantines con- trolled Asia Minor until the eleventh centruy. But even in the comparatively settled conditions of the early Byzantine Empire, the ethnic picture did not remain stat— . 2 1c. A striking symbol of the heterogeneity of the people of Asia Minor is to be seen at Ankara, where the Mosque of Haci Bayram encroaches on the site of the Temple of Augustus. This was built on the foundations of a Phrygian sanctuary and was con- verted to a place of Christian worship under the Byzantines.3 An anthropometric investigation, carried out in 1937 and 1938 on 64,000 Turks in all parts of the country, pro— duced these results: the average height of Turkish men is 5 feet 5 inches; of women, 5 feet; the tallest people beirg found in the east of the country. Only 14 per Cenit of men and 17 per cent of women have dark eyes, «bllJe eyes being not uncommon. The slanting Mongoloid -¥ 2° Ibid., p. 175. 3- lbid. :nv-v ,. .. r g it: {See 0V4 ' - -.. Wfl‘ ' A 3" 1. | ‘1 ‘. ...- ALVDV V ' '4‘ .fi a .'-.. “ par V I «‘J a»- VI].- . ‘4.“ L... -‘I¢~..:.‘ L ...-U “‘3 a :n LL. . I l ' 'I." 2" "“ an... I I ("r-- .. “u- a._ ‘ .P-n ‘- -._'\ ...-1‘ ."-. a. “\- 1\‘~ ‘ . \ ‘.: .‘.A A ‘I -~‘ - I 5‘ . -. ..r.~ ‘ I “ ‘ .““ ‘. .‘(h ‘ ~‘ .5 ‘k... 88 eyes were found in barely 5 per cent of all those examined. The most common hair coloring is medium to light brown. Only 30 per cent of the samples had dark hair. The gen— eral conclusion was that most Turks are of Alpine type, with a sprinkling of Dinaric.4 Language. Table 1. Major linguistic groups in 1960 Linguistic Group Percentage Turkish 92.0 Kurdish 5.8 Arabic 1.0 Armenian 1.0 Greek 1.0 Others 1.2 Total 100.0 Source: 1960 Population Census of Turkey, Ankara, 1962 Kurdish is spoken in southeastern parts of Turkey. Ikrabic is spoken along the Syrian border. Greek and -Arfinenian are mostly spoken by minority groups in cities liJce Izmir, Istanbul, Antalya, and Manisa. ¥ 4- Ibid., p. 176. E. . . . fOIQflA r. VEIV‘U - "p-wArq a“ . - o.-c-Io-unu¢ 9 I ‘ 1. Asa... '7 h\ “r o~-u-~ van: 9 . 1 ‘IyI - \ Ivfl.~.. ,, in» a h" v”... -A-:. ¢u_“ \“~r(~a A ,. -o 1.. V""' .54 2 a H b 89 Religion. Table 2. Major religions in 1960 Major Religions Percentage Muslims 99.0 Orthodox 0.4 Gregorian 0.3 Roman Catholic 0.3 Protestant 0.2 Jewish 0.1 Others 0.2 Total 100.0 Source: 1960 Population Census of Turkey, Ankara, 1962 As indicated in Table 2, a great majority of Turks are Muslims; this has been the case since the reform movement. There are strong differences between the Turkish Muslims and the Muslims in the neighboring states. Those of Turkey are much less fanatical religiously, which explains the secularity of the country. The head of the Orthodox Church is the Oecumenical Patriarch, whose seat is at Istanbul as is that of the Armenian Patriarch. The latter is under the authority of tflfie Katholikos of Echmaidzin. There is an Apostolic Dele— gfite of Istanbul and a Roman Catholic Archbishop of Izmir. Education. The Law of Unification of Instruction of quLrWZh 3, 1924, added both the medreses and other schools tCD 1:he responsibilities of the Ministry of Education. n'w-z'v“! 1 L. 1..u""' — x I “ .'.Qbfifl F‘V 'VF .. '- ~, ...—~- . - ‘pfi‘fi uIA‘ r . . ..a- uh»-- . - , ’ ‘AR’I‘ : 1""er v‘ :...'~».u huh.-- ‘ . . .- A . A - a ‘ "... ...T‘ C, y‘v.-.Uy un.u .— . .. . . a ~n n4— .r;v r ‘1'- .......l ..-..o..- .....1- . - . * \ rd”, -vu'¢--v \A-nv» .. ‘- o-y-A ' r — Av ...... . . V 1- ‘ ... p~~r--. - ~\ .11.. “-4”-.. _ . -. 5,. - ,- - I ~' .Nh- - "“V c“; v . ""e - -. ‘r‘» f ~.~_ v.1. “ I‘P--‘ ‘1‘ s .-.... 2,9 - .. - .A‘ A. :_ 1 a 1 . ‘ 'I-v.~ a. H‘ ‘ . ,ve." p” nsv.“t.‘e 1 I . .‘n. -. 1“ . ’5’. ~. I 1" 4 ' 90 Ministry of Evkaf had controlled the religious schools created by private Muslim benefactors. The minorities had their own nonprovided schools. There were also schools controlled by foreign organizations like Robert College and schools of Alliance Israelite and many French schools. The Law of Unification brought all schools under the control of the State. At the present time education has, after defense, the highest priority in the national budget. In spite of this fact, education is still far from being satis- factory. Thirty per cent of children of primary school age are not attending school.5 Table 3. Distribution of villages without schools in some of the eastern provinces. Province Number of With Schools Without Schools Villages Agri 623 261 362 Bingol 323 194 129 Diyarbakir 662 240 422 Elazig 506 230 276 Mardin 722 220 502 TPunceli 415 241 174 Urfa 623 261 362 g 5931che: 1960 Population Census, Ankara, 1962 ¥ 57- State Institute of Statistics, 1960 Census of Popu— lation Publication 452, Ankara, 1962, pp. 245—253 . . ~ :~. v-n .y,...~ ..3..__..__::_ o _ ~...1o I-.. .M‘u > ~~1.5... -.hu <.L.l--l. . I... 1;... , Inn“. A. l— firswfu~amzrfiv ...... C >...... ~. ...~ 71?? -.....T. s..2 . Q. ...-.... -. .~ .- . . vausv.-u‘- \)t I: nu - I. N u \ . —u r.‘ hunh~ ...:u \ .l v - . o u . -1..~..~...~ ..\1 ~ ~..< a» u \ ..x~.~:m~.\.--.w ...q 0‘ . ... ..~.~...~. H. n --A 91 mwm .m .mmxuna .mumxc< .muflpmflpmpm mo mDSOHpmcH mpmpm .smxuze mo UHHQSQmm .wa quESZ COHuMUHHQDm .ommH quODUO mm Mo COHpmHSQom mo mzmcmu ”muusom omm.pmm.mH mms.m mov.mm mvmwiznmvk.ooa mmm.mmm www.mmm.m AHm.mmm.m Hmpoe www.mvm owm.H Hom.mm mmH.Hm 46m.mm moo.mm mam.mmm mmm.mmm pmnfluUmmp sfi Impmsomom Doc mmfipfl>flpu< Amo.mfl mm mam map How smm mma.m mos.h mmUA>nmm umnpo w .mmo .spHUHupomHm msm.m¢m 6mm 44m.m vom.m mmm.m mmw.mm mmo.pNH mmm.om nonsmoflcseeoo d .mmmuowm .yuommCMMe 0mm.mmm ovs esp.m mmm.m 04m.mm mam.m¢ mmm.mpa www.0mfi mpmpmm Hmmm w mucmuSmCH .mcflxcmm .mUHwEEOU 05¢.mmm mom 6H4.m mow.m mmm.m mk¢.s mmo.moa mm¢.HpH coupusupmcoo mmp.4pm omo.H pmm.m mmo.mH mmo.H Hmv.oe mwm.mav mma.mkm manuspummscmz Hmm.os m4 man ppm bum mHo.m mmfi.mm www.ma mcflsuumso a mcflcflz sam.oafi.m mna.m amm.m vom.m oov.m mm4.mm moo.as4.fi mmh.mmm.s mcflnmflm a .ocflpcsm .huwmmnom , . ..Uflum< Hopoe czocxcb .HHQU .Uo> wmo>A .Coowm >MMEHum mmusou .EEOU mwflpfl>flpu¢ new . com 1 ompmHQEOU UHEOCOUM .cmoHCD .>HCD H00£om ompmzommw puma one .Umuw poz .mDDMpm HMQOHumosom new mmwuw>auo< ohsocoum sh .mmm mo mumms wonma .:OHpmH:mom m>Huu< zfiflmoasomou . m o v QHQGR qu‘L "',_V' —.‘. abut- J." a . ' ....- A- t”; -~. .2... .1. ° ..n . n _- ~r-__~. ...90091 4 A. ..'. A. 1 .- ..‘- v- -‘v ' I '5 *r"--- o-v -nnu .. g . _ ‘ bun .... 'r - . q —-o.n.-v‘.- - -' ‘V‘ ' “ w‘ l \ -ovu -.., ~- " " . :h"v‘~.1 ...... 'H".Ul . .— v- ., a “ ‘ !~ ,"~ Au, 1" . . n'~,,~-v‘ "-v.‘ a 1 ‘V‘hn a ~—~‘ My“ , 1" f «v . A“, “V.. . 2. C --.. ‘s ,. -... u‘ . -r-“ . .. . . -‘v . . . Y A \‘ \~“ . -_ ~ _‘ . . \- -. R: Q ‘ D . h h. ‘ ~. ‘ ‘| “I ~. \. v ‘ 92 A great many villages do not have schools and 60 per cent of the population aged 15 and over are illiterate.6 Higher education is at a much less desirable level. Out of 1,816,000 persons of school age that ought to be in the universities, only 61,000 are actually enrolled, about 3 per cent.7 There are 6 universities, all pub- lic institutions. In addition, there are colleges and technical school of higher learning. Business educa- tion is provided mostly by four academies of commercial and economic sciences, their total enrollment being about 15,000. Recently a contract was signed with Michigan State University to improve the level of edu- cation provided by these institutions. Social Groupings in Turkey. Turkey is largely an agricultural country. Turkish peasantry, along with the governmental bureaucracy and the relative- ly small business and professional groups, constitute the politically significant elements of the population.’ The intellectual element in Turkey is found pri- marily in the government service and among the relative- ly small professional groups including physicians, k 6 0 Ibid. 7- Ibid- 53- L. K. Caldwell, A. Diamant, F. Heady, A. Lepawsky, J. Mosel, F. W. Riggs, W. R. Sharp, and W. L. Siffin,, Toward the Comparative Study of Public Administration, Indiana University Press, Blooming- ton, Indiana, 1959, p. 123. . . 4..- .-r .4. n v ... 93 lawyers, journalists, engineers, teachers, and the university faculties. The majority of this group favors strong government and public enterprises for development. They believe that the past grandeur of the Ottoman Empire can only be brought back with a strong and economically sound nation. In their minds, economic soundness means public enterprise and govern- ment control of economic activities. Table 5. Economically active population 15 years old and over by last week employment status Last Week Employment Status Male Female Total Employee 2,177,263 259,872 2,437,135 Employer 150,539 5,569 156,108 Workers on Own Account 3,317,683 365,679 3,683,362 Family Workers 1,561,022 4,659,703 6,220,725 Unknown 490,476 4,939 495,915 Total 7,697,483 5,295,762 12,993,245 ¥ Source: Census of Population 23 October 1960, Publica- tion Number 152, Republic of Turkey, State In— stitute of Statistics, Ankara, Turkey, p. 311 The maintenance of the traditional authoritarian Silructure leads to etatisme. The French word etatisme i~S used here rather than the English word statism be— CZEiLlse it's meaning more closely fits Turkey's situation. C>r1€3 consequence of etatisme is the growing number of 94 and technicians in the State Econ— managers, engineers, omic Enterprises are civil service employees rather than businessmen and do not constitute a separate poli— tical or social group apart from the governmental bur- eaucracy. There are also independent and influential businessmen, but they have not formed a group with poli- tical significance comparable to business groups in the Inuited States or other Western societies. One direct ccuusequence of this lack of groupings among public and bLLSinESS managers is the dominance of the state bur- enatlcracy in all phases of economic life. A single i].lJJstration may show how far governmental influence is; ifelt in the private sector: The Turkish Chambers of? (Zommerce are government agencies and their employees arree public servants; consequently, their first alleg— iairlc:e is to the government and not to the business EEEEZ, se. §522125§1 and Political Characteristics of Turkey Which EE§£Z£§ Influenced the Develgpment of Private Enterprise gfliéikggy Is Isolated by Culture a few Apart from the Azarbaijan province of Iran, seatltllements in northern Iraq and in the Balkans, and SeVeral ethnically Turkic subdivisions of the Soviet UrleCDrl, the Republic of Turkey embodies within its b C>LlI’ldaries the only significant Turkish—speaking groups. \ 9- _I . _ Ibid., p. 124 .u“"" ‘. H..rr~.v~ V .'" . . n".Ah: ‘q‘ a)“- b :' n _ . I _ '.r‘ fi.’ h“. .,.-r ‘ b. aorpe. "‘ ~ 5" d_,.’ 5“.- ‘ I . tern-Qr—w-rfi 1"“"f‘l .v‘-.lbau-a.~j Marv. .'.-A c.» ....1 -..-D \A bu. :‘r‘ A- "firc‘ 4 .. .‘ h V K’V‘.‘ - .....t. ‘I-,.f-': a. '- 53“ ' CID HA- q 0---; . ..V'l‘ . i “‘ O-p _ “~-~ a: ... 7.. '5‘ u ' Q - T""(‘~ \A‘. ‘; ~ I ”er. . '5‘. ‘N I .4 . .‘ n.5‘,‘ Jbb gm. ~.- . ‘.'-~Aq . “A h‘. “ “v-9“ 5 ~ \4 ‘FA... .. As .-V" h FA . June‘s” A . <. . “‘95:: .‘A . A -‘ .vV/u V? um“: ‘ ML :4 ”Q ‘ §‘\. ‘ .‘ .‘v..: 2’2“; 'Q“ . ““1 +L~ ’ we C. ‘ . .‘C I‘V'fi v ‘1 Q: ‘_ .— \u -0 ‘l‘ ‘ \ 2'5“.“ “a\ f‘. ‘u b\./ -u‘ &_ H ‘I “o 2‘. ~IP:». Pu..; 3‘ ‘:‘\ ‘1' ~~ ~“ ’ v- “b~ah‘~g 0. '5 A. ~\- 4 “ l ‘1- ‘ Th: ‘N‘d . \I, p s‘ ‘. ‘ 0 IR: \ a V ‘ V. b. 3 k. 95 Turkey has no effective cultural ties with other nations of EurOpe and Asia. Religiously, Turkey stands alone in the Islamic world following Ataturk's reforms in 1923. As a part of the modernization pro- gram, Turkey has declared itself a secular state, thus converging upon itself all the criticisms of Moslem states.10 This cultural isolation accounts partially for true political isolation of Turkey. Turkey does not trWJst its neighbors. It is not easy to explain this leacflc of confidence between Turkey and the surrounding cc>Lnntries. However, one may accept the following feac:1:s as the major causes: 1. Turkish culture and character. Ethnically, Ttlxrlcey is unique among its neighbors. The militaris- txic: character of the Turks differentiates this country fITC>n1 others. 2. Abuses of Turkey following the decay of the otltlcnnon Empire by Western powers. Through capitula- tiCDr1.s.granted to the Western nations during the 19th Cearltnqry, the Ottomon Empire lost most of its natural 'reEESCyumces to foreign powers. It's condition was Si-n'1-Il'..llar to that of a country under occupation. 3. Expansion of Russia. Traditionally, Russia w 5153 éittracted to warm water ports which would serve as \ 1C) 11 " Ibid., p. 118 ‘ Ibid., p. 118 96 an outlet to the Mediterranean Sea, and Istanbul was the natural choice. This pressure from Russia upon the national integrity of Turkey planted seeds of a mutual distrust. Turkey was established within the territories of the declining Roman Empire. But unlike the Germans, the Turks were aware of the decaying Roman Empire and were not impressed with its splendor. When in 1453 Aflohammet, the conqueror, had Opened the gates of ELLEOpe, Turks had known the greater empires of Persia arici Arabia and were more SOphisticated than the con— quered nations . They exacted tribute from their subjects but took on neither the ChriEEian religion nor the Greco-Roman culture. Trieaxre was cultural exchange between Turkey and the neat1finons it had occupied. However, this was not in trlea :form of acculturation. Rather, large numbers of crIITinstians were absorbed as individuals, not as groups. Greeks, Serbs, Albanians, Georgians, and Armenians rose to positions of power in the Turkish government, but not until they had in effect become Turks; had adOpted the Turkish language, and had embraced Islam. TrleES shows how the Turks preserved their identities arle- Jremained as a people apart. \ 1 £2 - Ibid., p. 120 13;- Ibid., p. 121 a—v l. . ...,- A- O-a . .-.) \ rig-howl: \r' n [1 "~"VI-L gnu I H \ . naagnnwu v4 ~A‘ 'Z‘fv- ~ - ha” "'5.“- ‘.l ._. '\ -.,_‘~ way. ...~ g “ ~ - .. -~.'.‘: ‘- . - v- -' ~ ing ' a‘_~‘: 1 §'- -..: “reg 5"“ - . ..‘ s.- .. \A A .d ~ A, \ A A - s~ ‘F ‘ -"-¢ ‘6. y,‘ \ ._ , 1‘ .‘1. ‘4 _ u“ v- a s4 " . \ ~ ~In 'I 97 Effects of Conspicuous Geostrategic Position Upon the Development of Private Enterprise The Republic of Turkey is situated in one of the most strategic areas of the earth, near the conjunc- tion of the land masses of Europe, Asia, and Africa. Turkish cultural and political isolation seem to rise against the logic of geographic position. Because Turks had to preserve the integrity of their country, tlley became more of a fighting and governing peOple.l4 Ccnhmerce was left largely to the Greeks, Armenians, arlci Jews. When Turkey became a republic, the nation- aLL attention was shifted from militaristic values to tries building of the country; but because the popula— tticbrd traditionally favored war heroes, generals, high gc>xztarnment officials, and professionals over merchants, erlillfepreneurs, and business executives, the aspira— tILCDrls of the younger generations remained toward CEiITENers in the armed forces, in the government, and in tide? jprofessions. The best Of the talents went into thoSeoccupations and left the private sector with S ecGrid-class peOple. ELElfiiégent Situation and Main Problems of the Economy Today Turkish economy is again at a turning EDCDILI1t. In this transition to an era of planned \ 1 (1" Ernest Jackh, "The Geostrategic Uniqueness of the Middle East", in Background of the Middle East, Cornell University Press, Ithaca, 1952. ‘ A . - at '- .— '1:."“ v. ¢d . _, 4‘ -v‘ “ ...». F. ~ .lv' .... ..- —~ A :- n-o dick-r «-»r9 'r ’ - ‘unl' -.. b . . .ppAA ...-cw- ... I: ‘ --A —- ...r... n.--.~.-‘_ ~ I 9" V‘“ Ayn. Ii- I.» \‘Q - . A... -. _\ h— ‘n‘--- ~\_ . u . . -r,. .. ~ "“ ...- ~¥ . _ .. ‘ ..."sz ‘ . __“ _‘ ,. -V‘ h At. A u C -bn . y- , . "‘ / “ ho.’ ‘-. 1 . V q" '1“ 1 w.‘ ;. . \ ‘s ‘ Pu ih“ ._ , . . ‘n . ‘”~.~‘;. ‘ ‘A _‘, -.W. \‘ .. s_‘~t -y, 1%.- ‘ ‘-, ~., ...; - 98 develOpment, it is worth while to examine the basic issues and to consider the problems of the economy in general and of the private enterprise in particular. The size of the problems facing Turkey is evi- dent in the following figures: Sixty per cent of school age and Older members of the population are illiterate. Fifty-three per cent of the villages and .fifty-five per cent of the small towns have not enough or? no drinking water. Sixty—nine per cent of the ,pcxpulation have no electricity. 165 of every 1,000 tualoies born die in the first year. Only 2.5 per cent 01? 'the population have tuberculosis. There is one Ineaciical doctor for every 4,000 inhabitants and one IlLLrflse for every 111 hospital beds. There are 60 stu— deer11:s for every school teacher and 25 to 40 villages tCD eevery agricultural expert. On an average there 317$? 2.7 persons per residential room in the cities arlCi 2.1 in.the villages. Thirty per cent of the city dwellings are de- laEDidated and unfit to live in. In the three biggest Cfiit:ngs, 30 per cent of the population live in single- rOOm dwellings and 1.2 million people live in 9‘9 CGkondus (shacks). 15 \ 1 ES ‘ State Planning Organization, First Five-Year _pevelopment Plan (1963-1967), Published by the Central Bank of the Republic of Turkey, .Ankara, 1963, p. 23. ‘...\o n J,- o- .ao 5“ -:l~.'An .-u Va. i“ c.-. O- - u v- n-- a". A ~- I-null V I n ”A A o-p- . y-H nionv-b at. a \' ' ‘ u .... A .‘ V‘: "“'~--n- H ., .... h .. .51“. ..V ...“ ~ . no "' "“‘~ \. .. I" . ...-i ..- V“ c.” -v~ .‘ . .4- ..,, \‘w- ‘- .I‘ — 1“ v .1 ~,. 3». ‘ ‘-. ”‘1 ‘JH 7‘. I. a. . ‘h.~- ' -“‘~ N ‘h ‘ ‘ ‘.‘ A . NL~ ‘~“A- .bv ~ . -"~ ‘- w ’ s. \1 l '0 P‘- < ‘4' h 'n 1 \. I h ,‘ .U. s: 99 The population of Turkey is growing rapidly. Even in the busiest season, there are about one Both million unemployed in the agricultural sector. the present unemployed and future members of the labor force constitute at once a resource for economic de- velOpment and a social problem that must be solved. the economic policy cannot .ignore the employment objective.l6 In view of this problem, hhational Income in Turkey National Income (NI) accounts have been calcu- lxai:ed by the General Directorate of Statistics since 159418. However, for the periods earlier than 1948 tlleere exists some difficulties in establishing NI esstzjmates. Chenery, Brandow and Cohn have estimated PJII :for the period between 1927-1948 as the following: 1S91353 NI taken as an index (100) with constant prices; NI in 1929 was 72; in 1935 it was 86; in 1948 it was 123:3. On the same basis, if 1938 equals 100, per CEiEDista income for the same select years will be re— Spectively 88, 73 and 104.17 \ 16- Ibid., p. 13 l 7'- H. B. Chenery, G. E. Brandow, and E. T. Cohn, Turkish Investment and Economic Development, USA Operation Mission to Turkey, Ankara, 1953, p. 43. 100 In Table 6, NI and per capita income are shown with constant and variable prices. As it is seen with variable Ni has shown a fast increase from 8,814.0 million prices. But the true TL in 1948 to 44,855.2 million TL in 1960. reason for this increase, except for the period between 1950-1953 when prices were relatively stable, can be at— tributed to inflationary increases in prices from 1953- It is therefore necessary to look at the NI with 1958. When cculstant prices in order to evaluate its increase. kasrerved with constant prices, NI has shown regular in- cureeeases with the exceptions in 1949 and 1954. According- ily', N1 in 1953, relative to 1948, was increased by 44 per Ceerlt: and the increase for the period l948-l960 was 90.6 the rate of growth averaged 9631? cent. At the same time, per year while the growth rate between 1954-1960 was The per- 8..;2 4.-le 7. The Share of Agriculture and Industry in Turkey's National Income Current Prices Constant Prices Agriculture's Industry's Agriculture's Industry's 'Y63é3;rs Share of NI Share of NI Share of NI Share of NI % % % % 1948 53.2 10.5 53.2 9.4 1949 47.3 12.7 46.9 11.0 1950 49.9 12.2 50.0 9.8 1951 52.0 11.7 52.3 9.1 1952 49.8 12.0 51.3 8.9 1953 49.2 12.5 50.6 8.8 1954 40.1 15.2 44.9 10.4 1955 41.9 14.2 45.4 10.0 1956 42.9 15.5 46.3 9.8 1957 45.1 15.6 44.7 9.8 i358 47.7 16.0 46.9 9.2 1959 44.3 15.8 44.9 9.2 So 42.6 15.9 43.9 9.3 \ SCDLJITCe: IGM, Turkiyebqilli Geliri 1948—1950 ve Aylik Istatistik Bulteni, No. 92. \ 1 99‘ Necdet Serin, Turkiye' nin Sanayilesmesi, (Indus- trialization of Turkey), Sevinc Matbasi, Ankara, 1963, p. 131. 103 The share of agriculture in NI started to decrease after 1958 and fell back again to 42.6 per cent in 1960. Some decline in the share of agriculture can also be wit- Iuessed with constant prices. In 1948 this share was 53.22 per cent, declining to 44.9 per cent in 1954 and truer) gradually increasing up to 1958, but in 1960 it It is obvious that agriculture fell to 43.9 per cent. If si:i.1.1 plays the most important role in Turkey's NI. Sticzru influence continues to be exercised upon NI, then f]:L1<:‘tuations in it will be imminent because of the unpre- ciic:rt:ab1e nature of agricultural countries. Since employ— level of output, and prices all are affected by meeri‘tz, the latter being mostly dependent upon triea .level of NI, a§3137j_anlture, any change in the agricultural conditions ‘Nj-J—ZL eventually create disturbances in the whole eco— nc>rrp>;- Not only is such a disequilibrium economically dEE'tZIT:Lnental, but its political implications are also ‘VE37ETBK strong. The coup d' etat of May 27, 1960, was pailrtlially due to political unrest and partially to Ap<:><3 . . . 1? economic conditions. with its relative independence from gen— Industry, stands on a more 9.x? €351 conditions affecting agriculture, SIT1 E>arative1y insensitive to factors conditioning gov- eth . I“(ant and state economic enterprises, can be expected ‘t Q Ehlay a rold of safety value by balancing the ups and ask, r18 of the economy while contributing to its growth. -r -. -.. a ~- ~- ._ -_ -‘ ‘~ g -. ‘-< u 4‘ § . ~ ~_ u _.. x 104 Structure of the Mixed Economy The economic structure of Turkey is such that public and private enterprises function together in many brfuqches of the economy. Ediixrate versus State Investments The percentage distribution of all investments be— Table 8. Presently, in many tumeeerd 1959—1961 is shown in areeears government investment surpasses private invest— and in some other sectors private investment is nmerii: , If mutual trust girezeafter than that of the government. beat:vvreen business and government can be created, the mc355't: important prerequisite for harmonious functioning Of? 61 maxed economy will be achieved. Distribution of Investments (In Percentages) bble 8. 1959 1960 1961 \ GeQEral and Annexed Budgets 27.9 29.5 37-1 S -t:511363 Economic Enterprises 19.5 20.3 16.9 L C><::Eil. Administrations 3.3 4.9 5.3 p - I:“‘1“’Eite Sector 49.3 45-3 40-7 Qal 100.0 100.0 100.0 S<:> I“1351‘C2e: Development Plan, p. 66 The percentage of public to total investments rose fix: <:> n“ 36 per cent in 1950 to 55 per cent in 1960 because DIE? Eiri increase of investments in State services and basic S 53 Jr? V O c v - - .lces, and not an increase in the State's productive 105 The investments in the general and annexed activities. 66 per cent and budgets constituted, on the average, 34 per cent of those of State Economic Enterprises, total investments between 1950-1960. Diwflision of Economic Activities between State and Prfiixrate Enterprises The State Economic Enterprises are active in manu- mining, energy, and banking rather than in fac turing, ir1t:ea;rnal and external security services, administration, heeeail th, education, transport, and communications ser— 20 which are under State control. VjLCZGEuS, the private Generally, in the traditional areas, S€3<::t:<3r preponderates the ratio of public to private eco- n<>rrlecz activity, but public enterprise leads where ad— 'VEirlczeed business administration techniques and big capi- tal are required. In the agricultural sector, from which is derived 4 C) EDEBr cent of the NI, private enterprise in the form of s ITI“Ea-ll holdings leads. State farm and other State enter— 131?;1‘53635 create only 1 per cent of agricultural income, 513L -t:}‘<>ugh they are responsible for much of the contribu— ti <:>r1 of forestry to NI. Private enterprise is dominant in f :‘Lshing.22 2 O 2 " State Planning Organization, 0p. cit., pp. 65—66. 1 ‘ Ibid. , pp. 65"67. 2,22: '-'-' ‘ Ibid. , pp. 67-680 _; 1,!!! . -- .. -..-v ..¢ 1 ,- o'...a; -: - ...-HW‘ ' q .- ['A-‘wh ..,1._ .. ...- u . a“ \- . 4-4 .- ”fink .— v‘u. ..s. -- ‘f 'V‘Rri-‘ a. .1."v,._‘ ([1 ..~--_, F-a.» '-x..—-. . . I ’r‘a..~-‘ ~‘V‘4v--. ‘.. I it .“‘§. ‘. ‘ ‘fi‘: "r. u»- t 'C . ‘- A' a "a. \. ~I U R Ln.“ ' ~. r _‘ -.v ‘ § ‘ .) I . x ' I, M‘ a v. “ ‘tv ‘. .. A‘ ' 9‘ *P ‘ ‘ w: v. . ‘ 1‘ ‘ 1 ‘fil ~r‘ .- l‘H. "*- 1 v ‘_ ¢ ‘. .- fl NI “ . ‘ \._ '1 ‘-A . I ,. ~~. 106 In industry, which provides 15 per cent of the N1, the private sector produces 51 per cent of the value add— ed, including the production of about 60,000 small units. Income from these units constitutes 34 per cent of the 23 irnzome that private enterprise creates in industry. Eighty-three per cent of the industrial income ccmrmes from enterprises that employ more than 10 workers 01: rnachines of more than 10 HP. Two hundred and twenty gotlkoilic enterprises and 5,200 private enterprises parti- c:j_§)£ate in this activity in equal ratio in terms of their 5317<>:s;t:ly controlled by private and mixed enterprises. The State mainly controls the paper industry. Pri- ‘vr511:<3. enterprises control raw rubber and textile indus- t?r7jLees. In mining, which yields 2 per cent of the NI, Es‘t;Eit:e:enterprises comprise three—fourths of total produc- t:‘ii—CDI'I. Sixty per cent of the production of the private S'eC-“Ccar is under the control of 20 large enterprises, VJIj‘j~3ue 40 per cent is under control of small enterprises. The State controls hydro—electric and energy estab— 1‘7j‘ESTTments. Ninety per cent of construction (6 per cent <:> 33’ 1:he NI) and 90 per cent of commercial activity (8 per C::c>1:”t. titlea Maritime Transport Corporation (State) and private <3<3H11£Danies. The State controls passenger transport be— tZVVEEWEui Turkish ports, but private enterprise seems to 26 C1C>Ififtdrol freight transport. In industry, private enterprise is most active in t3€35>=t211es, which accounted for 35 per cent of the income C11:“Eiéited by the private manufacturing industry in 1960. quilei Iorivate sector is also active in food, chemical EDJ:‘C>C1ucts (including pharmaceutical plants), stone, and 63 ailrthenware industries, which provide 72 per cent of t:1—~1GE income created by private industrial enterprises. Iron and steel, printing, tobacco and rubber ‘j\:rj Cillstries, of lesser importance, make up 15 per cent 63 Elrivate industrial income. Q a ‘ Ibid., p. 680 ‘ Ibid., pp. 65-66. 108 Public enterprises occupy an important place in the production of alcoholic beverages and in transport,coal, petroleum, iron and steel industries. More than 60 per cent of financial services(banking, iJisurance) are enacted by official institutions. The lib- eiral professions(4 per cent of NI) and the housing sector (t4 per cent of NI) are in the hands of the private sector. 31:51te services account for 10 per cent of NI. SEEECDQJraphical Distribution of State and Private Enterprises Except for some very small enterprises private enter- EDITjLsse is concentrated in Istanbul where more than half of tzrlée income of private industry is created and almost half C31? t:he workers in private industry are employed. Istanbul i-ES ifollowed by Izmir where 15 per cent of the income of pJ:Vi_\rate industry is created, then Ankara, Bursa, Aydin, E:53}<:5_sehir, and Ice1.27° The State enterprises are spread out equally over tfiklfar country and are not concentrated anywhere. £5 . . ”~4EEEEzggctural Differences between State and Private Enterprises In 1959, while the average number of workers in pri- ‘I-EEthee enterprises, employing 10 or more workers, was 67, t115,€3 average number in public enterprises was 675. Private ‘ealil1363rprises employing 10 to 50 persons constitute the C‘;“':“€3iat majority. Workshops in the clothing, metal, food D J:‘<><:essing, and carpentry industries employing less than 22 '7- Ibid., p. 66. .. DP.‘\:Q «1b.» ..--bu.- b . .F‘~y- P V. _-A. -11. ‘ an; C n \ \ s a H 109 10 workers number about 60,000.28 Industrial enterprises in the private sector -- even those of corporate status -- are generally family entera prises. Since enterprises in the private sector are generally family establishments, ownership and the function of admin- is tration have become mixed. The owners of these enter- prises do not yet appreciate the usefulness and need of trained administrators and managers. They usually carry Out administrative functions personally and do not differ- entiate between these separate functions or the incomes derived from them. Also, the control of production, mar- ke1::Lng, and finance is generally not clearly divided and the responsibility for these separate activities is not distinguished. Private enterprises as family enterprises preKrent the formation of a credit market and thus experi— ence great trouble in obtaining capital outside the family into their business for fear of losing their means of con- trOl. ' Long—term financing difficulties that entrepreneurs have experienced in recent years were due largely to the 3 Sence of a capital market and the entrepreneur's habit C) E acting independently. Entrepreneurs who wanted to w '- lden their activities resorted to credits as a means of S QCLIring more money. The inadequacy of long-term invest- 11'} Qrl‘t credits led entrepreneurs to meet their fixed capital 2\ Q ‘ Ibid., p. 67. ..a -9- u.--“ .. .r-ar- n - ...‘q. HA‘lef 'Uv“ ‘ o A”- u '1- "~~- - \"Art- in..- y ‘1‘. A ‘ w-- I ’. I I": v (D I 110 investments with short—term credits. Meeting long—term needs with-high interest short—term credits, resulted in weak and short-lived enterprises. On the other hand, the financing of the State Economic Ekaterprises has not been organized on the basis of sound :fiJuancial resources and a long-term plan. In addition to time: funds that they created themselves, the enterprises seecrured funds from the Amortization and Credit Fund, the .Peerission Fund, and the Workers' Insurance, and have used a 29 fDEiITt: of the counterpart funds from foreign aid. Problems in the private sector result from: uses of ESTICDITt-term credits to finance fixed capital installations; tiriea difficulties met in securing working capital; the in- S1—3liE'f-‘icient development of the market; the difficulty in fliérlciing raw materials of the right quality; prices based C3rj— t:ota1 costs rather than on marginal costs; administra— tliL‘Vree deficiencies,and excessive investment in certain 5563(22t20rs. Solving these problems becomes very difficult s;3L371C2e the private enterprises have not formed effective C) I:”§Jéinizations to combine their knowledge. Historical Development of the Economic Environment of the Private Enterprise 1: ._5££S§£Eistry During the Late Stages of the Ottoman Empire Prior to the foundation of the Republic, the Ottoman E3111 ID-ire had always been an agricultural country. Neverthe— (335353, during the 16¢, 17%, and 18 E centuries when the \ 29 ‘ Ibid. .9 auv" ,» \:l .q“ .. OV‘W ..~-, '\--A. ‘4‘. '1 "Vlul A H ° . I " .1 “*q- .‘. —| u- . - a] *- r-___‘ 111 Ottoman Empire was politically and economically strong, she was at an equal footing in small handicrafts, texa tiles, and ship—building with Western powers. Turkish liandicrafts, arms, carpets, and leather products enjoyed a Idigh reputation. Even during the period between 1560— 16318, Venetians were ordering a portion of their armada fircnn Turkish shipyards. But after the 18¢ century, fr>J_lowing industrialization of Europe, industrial pro- i? ESurOpean products, stimulated the decline of the C1C>Fn£astic industry. It created unfavorable balance of I361h/rnents, brought about unemployment, and destroyed the r163-'t-‘—3'Lve production. To remedy the situation, in 1863 an industrial re- }j”5113:ilitation committee was established. This committee €11Z-"c:os_=,mpted to protect the native industry by setting high t: - . . EarTiff rates on imports. However, its measures were ex— t:;t963rhely hampered by existing capitulations. During the C: (:yklrntry,most of them being owned by foreign capitalists?l \ 33 C) - I. H. Tokin, Iktisadi ve Ictimai TurkiyeLiRakamlarla Turkiye' de Sanayi, (Economical and Sociological Industry in Turkey with Numbers),Istatistik Turkey, Genel Mudurlugu, Ankara, 1946, p. 4. Es ‘Eirrue period, few manufacturing plants were formed in the ~ O.C. Sarc, Tanzimat ve Sanayimiz, Tanzimat Cilt l, Istanbul, (Period of Modernization and our Industry), 1943, p, 433. . o"" '0‘" A- “' H. V - F'Ffl ..- . «'Av. ...-.. \ uo— v. 09-- .... v . a -_ ~ « ..‘va -- Vu" A w ~. ~ ‘ - .- -\ _ L. ‘i " v - "HA . ~ ‘_ ‘. \ F~~ 7‘ s -._‘ ‘ 112 Following the proclamation of the Second Constitu— tional Monarchy in 1908, a period of relative awakening of the national industry was witnessed. With the begin— Iiing of the First World War, capitulations were abolished, btrt no immediate benefits were accrued to the native in— dListry, because natural resources were diverted to war— i:iJne necessities. In 1921, during the Independence War, the Turkish x1€3rnment had prepared industrial statistics. Accord— :iricg 'to these statistics some 76,216 employees were em— E>J_c>§yed in all sectors of the industry. Of this total, 453.134 per cent were in textiles, 23.57 per cent in tan- rléejrties, 10.52 per cent in mining, 7.88 per cent in wood, 55 - E353 per cent were employed by food industries, 4.74 FDGEHIT cent in quarries, and finally 1.06 per cent were in tikiea chemical industry. terilDIle 9. Situation of the Turkish Industry in 1921 \ EYES. of Per Cent of Per Cent of __;:2:E::astry Total Industry , Total Labor Textue 60.7 48.34 Ta-hneries 16.2 23.57 Mining 9.9 10.52 WQQC} 6.3 7.88 Q0d 3.8 5.89 leelirries 2.1 4.74 C:IIKIEEITIical 1.0 1.06 it'{aa 100.0 100.00 ES'CD . . . . . . Llrce' I.H. Tokin, Iktisadixnalctimai Turkiya, Rakam- larla Turkiye' de Sanayi, IGM, Ankara, 1946, p. 27. (l' r" -. -0- ..- 'v ‘1’ 113 The reader must be cautioned about the validity of this table because it excludes industrial concerns in large towns like Istanbul and Izmir which were under foreign control at the time the census was taken. Industrialization during 1923—1930. The Era of Private Enterprise Following the successful end of the War of Inde— pendence and the proclamation of the Republic in 1923, a new era was opened to the young Turkish nation. The capitulations were abolished by the Lausanne Treaty of l 9 24 and the nation now had unconditional control of its economy and resources. The government had decided that to be a strong economic power, it was necessary to industrialize. For purposes of industrialization and economic growth, the country was now facing a Choice of alternatives -— development by private enter— This problem was resolved in March, prise or by state. The mem- l 9 2 3, at the Economic Congress held in Izmir. :hDGE’1?:s of this Congress were 1535 representatives of Ea":EJ-I'S‘iculture, industry, commerce, and labor, who were 63 J‘€3<:ted by their respective organizations throughout the <:1‘:>1-1ntry. The national economic policy of the country ‘A’£3153 decided by this group on a simple majority basis. ‘pkst: ‘the end of a number of week—long sessions, the foun- flat ions of a national economic policy were laid down. A (:1C20rding to this policy, the burden of economic growth -0 - m“-.- .---~ 1‘.— 1 pr-- s-v 1 5~A,. 1 v--.. ‘1 .1- ‘r«-.. : ‘-~.yn v ‘lflrnl .. -“|-‘ . A ~N ._ \- -l “v-- .“-».. A s ‘ :‘P. U.‘ .. . . -‘A m,“ .. '5‘,‘ . ' -s - 4“ ~“ ‘A v.K . 1‘ a. I‘l“ » A i. M'~ _ .. h.‘ h. ‘P . .“ - ~I‘ 1". s ‘ I -\ ‘ ."Qn “h 1 ., “ ‘ I. I A. \ s -‘\ w. ‘fi ’1 ~\. ‘ \ \. x h 1' ‘I \ ~ c y- 114 was to be carried by private enterprise. The role of the state was to begin where the activities of the prie vate sector stOpped. For a period of 10 years, Turkey enjoyed an une- cpJaled freedom for private enterprise. The State was gblxaying a facilitating role by building infrastructural forwojects. Not only did the State refrain from competi— t;i<1n.with private enterprise, but the government pro- ‘Vticjeaj all conceivable help to private investors. In 1.99227 a new law was enacted to encourage industrial QJITCDVvth. According to this law, the government would Cicbruaate the land to private entrepreneurs under certain CZJi—Irczumstances. The entrepreneur would also import duty iFlETEEee all the necessary equipment and machinery for his iF-j—ITTU. This equipment would also be transported by Est153.1:e—owned railraods on reduced rates. Raw materials necessary natural resources owned by the government The and Vv‘:>llflld be sold to these concerns at reduced rateso §;<:>\Irernment would favor domestic products against foreign COITlpetition even if their cost was 10 per cent higher t:}j‘éili their imported counterparts. To facilitate recruit- ITifisfrift of manpower for these concerns, men who had special— fiL. . . . 23€3§ ‘i H a \ .. ~ 115 In spite of all these measures, private enterprise was unsuccessful and only a few large concerns were es— tablished during this liberal period. Among others, the following can be given as reasons: 1. Lack of financial instmtutions to help provide necessary funds to the entrepreneur. 2. Lack of trust between small entrepreneurs to unite and organize larger concerns. 3. General mistrust of the Turks to merchants. 4. The effects of religious dogma to lending and borrowing with an interest. Interest was considered a sin. 5. Lack of a ready entrepreneurial class. During the Ilast years of the Ottoman Empire, Turkish Industry was mostlyrowned and managed by the minority groups. Follow- iJKJ'the proclamation of the Republic of Turkey, there was an enachange of populations between the neighboring couni trier; and Turkey. Most of the Greeks who formed the ma— joriiqy of the entrepreneurial class left the country, and tflu3.resulting vacuum was not filled by native Turkish en- trePreneurs. 6. Lack of technical know-how for large scale opera— tions. 7- Individuals with ambition and/or desire to do SOmething found the government an Open road to satisfy tdjeir achievement needs rather than seeking fulfillment or to 63 :lsewhere, Because of the change among the elite, 11 ESE amore proper term, "displacement of elites," when the k/ ”’- Jo-vr‘ #5- !..«..J "“ ‘ stun—V'- .w‘Ju-u-‘ o .... - .a 5. ..° ..r 1 -..-. . : .F‘Run. ~..-»y-| op-. _ I ..1.-‘ .‘J‘; -"‘h- k . n r... I" ..‘l- I A I -'v_~ _ ... . I.- ' .— rn, . H... v ~_ . d v. s Di... '9 “tu . .. - o ‘ F 116 young Republic was established, it lacked manpower. Most of the high officials and technical personnel of the Otto— man government were not trusted and many had left the country. It was then very easy for a talented person to make his fortune in the government. In short, immediately after the Independence War, government was far more at— tractive to young people craving for the fulfillment of their achievement drives than the non—existent private enterprise. Being a government official, an army officer, or a member of the house of representatives was conside erexfl far more rewarding than being an entrepreneur. Mon— ey beyond a point never meant much to the general public. Li a new nation full of pride, money could not buy every- thirng. Association with the national heroes, particularly witt1.Ataturk, meant much more than amassing a sum of nunney. Also, at that time, in an underdeveloped country like: Turkey, one had not much use for money. Available Serfinices in the country were restricted and consumer action. Starting in 1933, etatisme was accepted as the gguiding principle of the economic life. The principle Of ertatisme in 1935 was incorporated into the philosophy Of tflie Republican Party and in 1937, was put into the con— stitnition. As was mentioned by Ataturk, etatisme in Turkey was IMDt accepted because of ideological reasons but be— <:ause cm'the necessities of the economic life. During tflais period, the politicians thought that in order to ele— ‘Jate the country to a strong economic level, the State haj ‘30 enter‘into the picture and take over the job from the priVate enterprise since it was unable to accomplish what “V95 demanded of it. Fewexcerpts from the writings of the statesmen of 1“lat period may prove helpful in delineating the concept \ 13 ‘1' Necdet Serin, op. cit., pp. 107-112. -- :- .1. .... - .,:... - v.-/‘ .F‘ -~A e. .v .4- . ~~OII "'1! ' 'u- p‘ .. ~.._‘_ ~‘ .‘~:‘ '1- ..- .~ '~"‘ I. l‘l 119 of etatisme. Etatisme as practiced by Turkey is not a system that since 19th century socialist insti- tutions have preached and propagated. It is a system particular to Turkey. The meaning of the concept etatisme is: to consider private initiative and entrepreneurship as the focal point of the system, but also let the government undertake projects that will help the nation as a whole. The common understanding among statesmen was that private enterprise was not in a position to create growth, to use factors of production to their most efficient capa- city, and most of all lacked the sense of social responsi- bility. As was boldly put by the Minister of Finance of the time: If we have to leave the requirements for economic progress and growth to the hands and resources of the private enterprise alone, we will have to wait for another two hundred years. Etatisme being not an ideological system but a prac- 'tiCaJ. solution of economic problems, private enterprise, Iievertlmdess, was not completely extinguished. On the con- "trary, in the areas of textile, food, and building, the priVate sector flourished. The major factor in this devel— 1ltica11y, the country was governed by a one—party an \I‘ a a H v ‘,..-f‘: _ ' ‘ --..-- ”4" - -\ .. .— ..— mvngL a. v. . . 7-Aarn- . ... v»......-\.. I .,.-..~ , ‘ a. ‘ _~V‘ .--.-v ‘ 4 .5.- . -.. ~ ,‘K-- x- V- rm 0...,” "w‘..u 4 . “‘“I-A~. .‘ “A _ --....UIU‘v ~~ . ~-__-_ . " rs q -uygv“- kit: “Vi-u, . “"‘ ... 2.. k | ..-..d 5'0 - _‘ -. ‘ § 5. ‘7‘ ‘4... . “o .. “"'-‘~~. . -."‘VC 2‘ u "‘ '~._ ~F ‘u‘. \ ~L A .1 ~V4,,H V F A r ». p, f-...” q». .\ . n's- . “ ‘Fpr. «I -y‘ \ V“V‘E, .,_‘ ~V‘ . fl ‘ ‘ ‘~ ~ 0- ~‘ " v -‘ _~A“ ‘ .._ v"\ -‘ w“. ‘1‘]; ~— ‘ ‘ ~. 1: -,_ " -‘ ‘ .~._ ‘ H ”s. a .4\ .- s ... a “‘ ~~v . C \p— ~ s ‘0 '\ Urn,.: ~_ . h v, ‘._ -l r ..x “-. “ 121 . 37 regime. Industrialization after 1950 Period between 1950-1960. In 1950 the Republican Party, which had been in power since the establishment of the Republic of Turkey, lost the elections to the Democratic Party. The economic policy of the Demo- cratic Party was one of liberalism. Etatisme began to lose ground to private enterprise. According to the economic policy of this party, private enterprise and capital became once more the nucleus of economic growth. State Economic Enterprises and private enterprises were goixng to function in an environment of mutual under— starnjing and support each other. The economic functions of tflie State were limited to basic services and infra- striuztural activities. As a result of the liberal pol— icy, some operations of the State Economic Enterprise werea planned to be liquidated and transferred to private Gflflxarprise, but for some reason this intention was ne— 'Ver eu2tualized. Among those reasons, lack of capital ‘N38 the most important. However with the elimination of £30me Obstacles, private enterprise found ample room to flourish. The Industrial Development Bank founded in :1950 provided long and short—term credit to the private Ifirms. DevelOpment of banking and other financial agen- czies fostered the growth of the private sector. Within 143 YEars during which Democratic Party was in power private \ .3 7- Necdet Serin, 0p. cit., pp. 110—114. .— .. _ ‘yl. u-II .or" ... -..b yd. - $l: ‘. I (Yi .43.; .1an "r‘ vb- . - "yl I‘-. ~;.__ 'V, ‘1‘ 122 enterprise showed tremendous progress. The State, on the other hand, continued to invest in heavy industry and agri- culture. Once again the private sector had found a favor— able governmental environment. But lack of planning in both private and government sectors soon led to the de— terioration of the general economic conditions. By 1958 Turkey entered into a period of acute inflation. Prices started to rise continuously, and intellectuals and uni- verSities began to argue that liberalism had become det- rimental to economic develOpment and that to save Turkey frtxn a full—fledged inflation and economic chaos three tifixigs were needed: a tight control of the private sector, goverrmemt investment projects, and a central planning agency. Developments after 1960. May 27, 1960, marked the end (If the Democratic Party. A junta of 14 army officers, follxmuing a coupgd'etat, tOppled the Democratic Party and estmflolished a military dictatorship for one year and once ‘agaix1 there was a return to rigid etatisme, The first change brought about by the National Unity Ckmmnittee, the name of the military government, was the establishment of the State Planning Organization on NOvember30, 1960. The functions of the State Planning Organization were the following: 1. To advise the government on all economic and Shacial matters by making a CorreCt inventory Of all the P1 - ‘Jman and non-human resources of the country. 123 2. Preparation of short and long—range plans. 3. To advise the governmental agencies on carrying out these plans. 4. To advise the private sector on arranging its activities and investments as prescribed by the plan.38 Among the activities of the State Planning Organiza— tion, one cannot nelgect to mention the attempts to coor— dinate private and governmental sectors. For this pur— pose, many committees were established with members of the private sectors. The unfortunate fact is that these attempts remained on paper and seldom were put into prac- tice. Seventy-five per cent of all the big business es— tablishments surveyed through this research indicated tinit the First Five—Year Plan did not affect their organ- izatitms nor did it affect their investment policies. This; junta held free elections in October 1961 and re- turTued the political power to the emerging coalition Government. Between 1960 and 1964, a tight foreign trade policy ‘NaS carried, with implications on close control of the private sector. With the exception of the textile indus- try, the remaining part of the private sector was rather stagnant. The textile industry, being traditionally a COnCEr‘nofprivate enterprise, had shown some growth ipotentials during this period. \ 38- Devet Planma Teskilati, Plan Hedeflerive Stratejisi, (Plan; Its Objectives and Strategies), DPT Ankara, 1961, and Resmi Gazete (Official Gazette) July 5, 1961, No: 10846. .. vaug‘-A ,n-v r:--vr .---A- vcbu *«n- \ .,.~ - . V- .‘ f‘ . .l A s‘ ' .. .‘ v ‘. a .' “ e ~r' 124 new elections were held in Turkey and the In 1965, acquiring the votes of the disbanded and Justice Party, managed to win a majority in outlawed Democratic Party, All the indications so far demonstrate a both Chambers. to the chagrin of the minority par- return to liberalism, ties and especially of Inonu's Republican Party which sup— ports strong etatisme as a policy for economic development. Conclusion It is possible to discern six distinct periods of economic policy in relation to private enterprise. Between 1923 and 1930, private enterprise found the Imost.favorable legal environment but lacked economic power anti know—how to organize. Between 1930 and 1938, many ensseential services were provided by the government and ttue infrastructure of the country eased the development Of: gorivate enterprise. ~1955C> was harsh to private sector and its growth stagnated, The 1950's brought favorable changes The following period between 1938- if: I1<3t declined. arnj Clreated an environment of unprecedented revival for prti‘7E1te enterprise which, unfortunately, resulted in an The 1960's 9C0 . . r1CDmicchaos due to unplanned expanSion. bx: C>L1§311t new restrictions to credit which stopped the The period after 1965 is too 9:: (Dhqtlh of free enterprise. ea ITJ‘)’ to judge, but, in general, it is possible to venture tC) State that private enterprise has once more started to e \ r1;)(3 . . . . _ 3' some prestige. However the o inion of the intel 2 p ' .- aru- — ..--v- ..-. baa-«H ..,,, .' n.- 'r-~.‘. ‘.'VJH .. é" ~ " '— y. . ." A-‘ ... v:. a."‘ . - -.., j .A‘ ~ -‘.' ‘v., ' -. €.V‘, {.2 . -H‘ 125 lectuals and of the plan-makers is that private enterprise cannot be trusted. The antagonism between the government officials and businessmen is a result of a vicious circle. Contrary to expectation, the government officials, more than the politicians, criticized big business leaders for not investing. The business leaders, on the other hand, state that they are not sure of the future and that is why they do not invest. Without some kind of certainty about their future, the leaders of big business will al- ways be reluctant to invest, and they perceive that secur— ity can only be created by the government. On the other hand, if they do not invest, the government will never trnist them and, without this trust, will never be able to prryvide the necessary conditions which will lead toward security. a—- - 11‘) v1... (I) CHAPTER V THE FIRM The environmental analysis of Turkish business leaders cannot be completed unless the structural characteristics of their firms are analyzed. How big is private enterprise in Turkey? What are the areas of concentration? Why have some sectors of private economy grown while others have not? These will be a few of the major topics discussed in this chapter. The following operational hypothesis will be tested to provide a frame of reference in analyzing the behavior of the big kNJsiness leaders and to describe the pattern of growth of their firms . Operational hypothesis 1: The growth of big LbLisiness firms was slow up to 1956. In 1958, with the (Icnning of inflation, growth patterns were altered, Siafiles and assets rapidly rose, while employment re— rnéiidfied constant. In testing this hypothesis, first-hand informa— th-CDra has been used, based on data collected through i. . . . . . r11Z'EerViews, questionnaires, and the examination of (:Cbrnlpany financial statements. Such information has been “leiciea available exclusively to the researcher through the figeélifarosity of the firms that have entered the study. The distribution of firms in various industries, tlr‘EEir geographical locations, their worth, their number 126 a '5; O" V x. J; 4 v0' Gr” r-r' k ~ vol-- ”II, cn‘r ‘F‘ R‘ V I" ...4 .CA.: a In rays F: *‘V ".n h» k- . '0- .4» I ' r~r rcg‘. 5- .IA ‘ ‘ ." rib-Uri" u- . .‘ ‘ AA . ‘F I ‘ u‘b.. \C‘ A ...”P.1 Fn‘ k.~ r ..‘~‘~ v. t -_ A f- L‘ h "x- .“‘_1“ ‘ v C‘~ 1* ..‘u . ~ a .. h ‘ . .“\‘I . h ._, ~ a “A -“‘ ~~9rfi O ‘l-‘y ‘\ ~H . A ‘ I . ‘b.‘ 4 .. ‘ “‘ ‘u‘ ‘,~ _ ig.‘r * s 127 and their present sales (1964) will of employees, highlight the first part of this chapter. In the second the principal types of firms will be viewed histori- part, cally and their growth patterns will be delineated. Structural Characteristics of the Firm In the summer of 1965, 103 big business firms were extensively surveyed and the results of this survey will now be presented. Distribution of Big Business Firms by Industry Approximately 52 per cent of all the firms are in The next largest concentra- tflde manufacturing industry. including retailing txion (23 per cent) is in commerce, As shown in Table l, transportation, arid.wholesaling. is the third most common occu— VVixth nearly 11 per cent, Insurance trails EDErtion of the big business leaders. The last position is shared Withless than 6 per cent. eCILJally by banking and the combined category of mining Neither of these categories represents aliCj. petroleum. als Inuch as 4 per cent of the total number of firms sur- v62Efeed. \ 1" According to Bartel's definition, Comparative MarketingLiWholesaling in Fifteen Richard D. Irwin, Inc., Homewood, 1963, p. 61. Robert Bartel, Countries, Illinois, " J n 3' (17 H . U H jme of Indu: # !'-fl..:-\AL1. :‘r ’1 fl {4... a t ‘ ..sJJ. «V «U . ‘nk—vfa rflp V'Vu.-lhb Vy : . o . - A o——.’— H-V']\“"r .V ..uuuuv-.. 3‘ A ’ hi n 1" ‘f’infl -....J- .....g, n_ . n n"? ‘V‘.’V "‘“I ‘Lsu a F: . ,. , . we 3 . . a. ,. ‘ and-1., .. ‘ s-_‘- I“. *5:— V ‘ ‘ ~‘ . h~ , Ly“ 7“ -_~ ‘ \ w- r::: .-~ . ~."'\{.‘.ré. . “..- i‘)‘v- § ‘- F,. 128 Table 1. Distribution of Big Business Firms by Industry Type of Industry Number of Firms Per Cent of Firms Manufacturing 54 52.4 Commerce 24 23.3 Transportation 11 10.7 Insurance 6 5.8 Banking 4 3.9 Mining and Petroleum 4 3.9 103 100.0 Totals Date of Establishment The impact of the government's economic policy is clixectly felt upon the establishment and development of k>j_g business in Turkey. Thirty—two per cent of all the EDITesent firms were founded during the single lO-year EDGLriod of 1951-1960 which was a time when liberal eco— 11<>niic policies were practiced by the Democratic Party. irrifii only other liberal period ran from 1923 to 1930, :Lr1C21usive, when 16.5 per cent of the firms were estab- 1‘iShed. This was the period when Ataturk and the first §3C>\Ternment of Republican Turkey had favored industrial- J"2-’-Eition and economic development mostly through the EiQHEEncy of private enterprise. 129 Table 2. Firms Established during Distinct Periods of Economic Policy Number Per Cent Periods of Economic Policy of Firms of Firms Before 1923 15 14.6 Liberalism, 1923-1930 (8 years) 17 16.5 Mild Etatisme, 1931—1938 (8 years) 13 12.6 Strong Etatisme, 1939—1950 (12 years) 20 19.4 Liberalism, 1951—1960 (10 years) 33 32.0 After 1960 5 4.9 Totals 103 100.0 Following the death of Ataturk, Inonu's government atjvocated full—fledged etatisme. Firms were established IhLlCh less frequently during the period of 1931—1950. It ‘tCDOk 20 years of etatisme to establish the same number C>fr firms which were established during only 10 years of 'tljee following liberal period. From these statistical fiiQJures, it is possible to find a definite relationship bealt-ween economic doctrine and policy of a state and the flCDurishing of its private enterprises. Throughout the long history of the Ottoman Empire, 1bleSiness was never favored. This was reflected in the fei(It that only 14.6 per cent of the firms surveyed were GEEStablished prior to the proclamation of the Republic (illxring the decay of the Ottoman Empire. Of the firms fFCNJnded during the decay of the Ottoman Empire, most of 130 them were in retailing and wholesaling; for instance, only 5.5 per cent of all the manufacturing concerns were estab— lished prior to the proclamation of the Republic of Turkey. Next to commerce, the transportation industry embodies the oldest firms of the private sector. Approximately 36 per cent of the largest transportation companies surveyed in this research were established during the Ottoman regime. This should not be a surprising fact if one considers the general economic conditions of the country at that time. The last 30 years of the Ottoman Empire had put the eco- nomy into a dependency situation. Turkey had become the market of Western corporations. It lacked managerial talxent and capital of its own to operate banks, manu— facrturing companies, and other more sophisticated insti- tutxions. The transportation companies were used to as- sennlale the agricultural surplus of the empire in Istanbul Izmir to be exported and to distribute imported aruj These firms were playing lfirljmshed goods within Turkey. tr“? Iiole of intermediaries in a marketing channel which f]a(3 j_ts originating point abroad. This situation also ENJ§3§JEists that no matter at what stage are the general e <:CDr1CDmic conditions, marketing can best be accomplished b ‘y’ r1Eitive firms sensitive to local environmental con— dltiCDns. During the laissez-faire period of 1923-1930, of 35L 1‘ iFirms established within this decade, 76.5 per cent We IrEE in the manufacturing industries, 17.6 per cent were ‘ F " :.~a~ncrvp .....- v, I". we... '. ...-lair kgn A ...: L1- fir—A‘i v' . “4'4"”.95 u .udd» -- fi wr‘ hr;r~': .v ~‘,‘ '. - -~: -... I‘V... ‘3' -~ ‘ . ‘A ._‘ ‘N. s‘, ‘ V. 4‘ A *‘x ‘ » ~_‘ 5 v.‘.1 1".- .. |~ "a' \_ .\‘- ~ .1‘ ‘ ‘. ‘ - <_ ‘ ‘- . \‘. ‘. ‘ \ ‘s ...y ._‘.‘ ~_ ' -—. '-_ x‘. .\ fi -“ ".~ . \“ fi_ . _ b- ‘n \_ b~. - \ -~.~§\‘ ‘. 133 The next preferred location is Izmir with approximately 25 per cent of all the big business firms. Finally, Ankara's share of big business is almost 5 per cent. Location of the Headquarters Table 3. Headquarters Number of Firms Per Cent of Firms Ankara 5 4.9 Izmir 26 25.1 Istanbul 72 70.0 Totals 103 100.0 Eypes of Ownership in Private Enterprise The number of publicly owned corporations relative to Western societies is very small in Turkey. This awkWard situation is caused by the public's unwilling— n $88 to purchase corporate stocks. There are many 8 - . . . 0ClQlogical, economic, and legal reasons for this lack Of interest. Furthermore, the formalities and red tape 1 . . . . . 1'n’CDlved in establishing such public corporations create additional barriers. It is like the task of Sisyphus f or an individual to invest because of the lack of a C . apltal market. The competition given by high—interest Ylelding government bonds takes away many probable i . . . “VGStors from public corporations. In many instances, 134 government bonds are more attractive than corporation stocks. Table 4 summarizes the results of a survey carried out by Ankara University's Faculty of Political Sciences. It has been found that in 1960, 14.5 per cent of all the enterprises were in the form of single proprietorship. The remaining 85.5 per cent was incorporated. Table 4. Legal Forms of Private Enterprise Imygal Type Number of Firms Per Cent of Firms Single Prxoprietorship 20 14.5 .Firhm 118 85.5 ITTtals 138 100.0 Schlrce: A. Payaslioglu, Turkiye' de Ozel Sanayi Alanindaki Mutesebbisler ve Tesebbusler, Turk Iktisadi Gelismesi Arastirma Projesi, SBFME, Ankara, 1961, p. 48. A further breakdown of the firms, as given in Table 5 Iindicates that approximately 37 per cent were in the 3 fkbrTn of joint stock companies; better than 31 per cent “REITGE collective firms; almost 18 per cent were limited, alldi the comandataire (joint proxy) firms amounted to \ 2 . . . ‘ Arif Payaslioglu, Turkiye' Mutesebbisler ve Tesebbusler, (Entrepreneurs and Private Firms in the Turkish Industry), Turk Iktisadi Gelismesi Atastirma Projesi, SBFME, Ankara, 1961. de Ozel Sanayi Alanindaki A ‘UVALH V o my... H‘ O'U—u 4. ...: n. F‘ ’é-n. ‘ \‘ -\/-$.b .91.») v \, I? ~ ‘4 . ‘. b . n N ~ A, ...‘ VA ‘. ‘. "~ ~ “\\ g, s b \. FL - .*.~ ~ N x 135 about 10 per cent of the total. A little more than 3 per cent of the corporations were in the form of coop- eratives. Table 5. Type of Private Firms Number Per Cent Types of Firms of Firms Joint Stock Company 44 37.2 Collective 37 31.4 Limited 21 17.8 Comandataire 12 10.2 Cooperatives 4 3.4 Totals 118 100.0 Source: A. Payaslioglu, Turkiye' de Ozel Sanayi Alanindaki Mutesebbisler ve Tesebbusler, Turk Iktisadi Gelismesi Arastirma Projesi, SBFME, Ankara, 1961, p. 49. How Big is Big Business in Turkey? 239 Net Worth of Big Business The firms' financial statements were analyzed to find out how big was big business in Turkey. For the first time, such figures were made available to this researcher. It is not customary in Turkey for busi— nesses to discuss or publish their financial statements which include sales, assets, and even the number of employees. 136 Table 6. Net Worth of Big Business in 1964 Number Mid—point Mid- of Per Cent x Per Cent Assets in $1000's point Firms of Firms of Firms 0- 19.9 10 l .9 .90 20- 49.9 35 3 2.9 .87 50— 99.9 75 7 6.8 4.66 100— 199.9 150 19 18.4 27.60 200— 499.9 350 21 20.5 71.75 500- 999.9 750 16 15.5 116.25 1,000- 1,999.9 1,500 12 11.7 175.50 2,000— 4,999.9 3,500 13 12.7 444.50 5,000- 9,999.9 7,500 8 7.7 577.50 10,000-19,999.9 15,000 3 2.9 435.00 Totals 103 100.0 1,854.53 On the average, the net worth of the big business firms is $1,854,530. There is, however, a wide distri— bution among firms in terms of net worth. As shown in Table 6, the largest portion of the firms (20.5 per cent) are worth between $200,000-499,999; 10.6 per cent have total assets of less than $100,000; while 18.4 per cent range between $100,000-199,999; 15.5 per cent are Slightly below average with net worth falling between $500,000-999,999; 11.7 per cent are very close to the is.- ...-rA~ a.“ :16, C I:- 'F" Affi'r‘v‘ ....» Co‘b“‘ ‘,-.- “-7 . xx 3!!" ..--.- ..- ’ an~ r 1‘) ... a- \‘ Uh— (1) .. l ‘ ‘1 ‘A‘ k .1- ... s u‘.~ V‘ I “a ‘ 5 ‘ A -.ux I 'H ~ .. _ « ‘4 . v" ..- “N l. 9,,d .. - 7‘4 - 9., ~ - A N A— ., \ S- ‘ ‘- ‘- 1.. a. - “ ,. - ‘4 . ._ ‘ '§ ‘ ._ ‘ '- u .v u 5 - \ \ “ -__‘ ‘ fl 137 average, and 23.3 per cent of all the firms are above the arithmetic mean. Gross Sales in Big Business The largest firms among big business have a young history. Business in Turkey has not shown any growth comparable to the growth of Western corporations. Business seems to be stagnant. they survive. Firms do not grow, but Table 7. Gross Sales of Big Business Firms in 1964 Number Mid-point Mid- of Per Cent x Per Cent Sales ($1000's) point Firms of Firms of Firms 0— 99.9 50 2 1.9 .90 100— 499.9 300 12 11.6 34.80 500— 999.9 750 17 16.5 123.70 1,000— 1,499.9 1,250 14 13.6 169.00 1,500- 1,999.9 1,750 8 7.7 134.70 2,000- 4,999.9 3,250 25 24.2 786.50 5,000— 7,999.9 6,500 7 6.8 442.00 8,000— 9,999.9 9,000 5 4.8 432.00 l0,000-14,999.9 12,000 10 9.8 1,176.00 15,000—49,999.9 32,500 3 3.1 1,007.50 Totals 103 100.0 4,307.10 R 138 At the end of the 1964 financial year, big business in Turkey had averaged $4,307,100 in gross sales. As a whole, firms have a total revenue 4 times their net worth. There is a wide dispersion of big business firms in terms of sales. As indicated in Table 7, only 1.9 per cent of all the enterprises made less than $100,000 in gross sales, while approximately 3 per cent stood above all the rest at sales exceeding $32,500,000. Between these two extremes stood the bulk of the firms surveyed. Approxi- mately 25 per cent of the firms had average sales that surpassed the arithmetic mean. The sales of the remain— ing 75 per cent ranked below the mean. Twenty—four per cent of the firms within the $2,000,000-4,999,999 sales category made the largest single concentration. The next largest single concentration was made by approxi- mately 17 per cent of the firms within the $500,000— 999,999 sales category. Of the largest 10 firms with gross sales averaging more than $10,000,000, 5 were established between 1948- 1960. On the other hand, of the firms established prior to 1920, 7 had gross sales less than $2,000,000 per year; 4 had between $2,000,000—4,999,999; 2 between $5,000,000-7,999,999, and only 1 had more than $10,000,000 gross sales. Similar results were observed for firms established in the decades 1921-1930, 1931— 1940, and 1941—1950. r"" 7.“ svv na ...V' 5- v ‘WP‘ I‘.;.~‘ \ A Q; .2 .-u‘ «a; . ‘ ‘ n. . a. .7. _~‘ .. v V. . . ufil‘ . /.. .- A Q Q. Q1 :9 139 The Size of Employment in Big Business In a recent industrial census, big firms were classi- fied as those employing more than 10 employees. According to the same census, big business on the average employed 50 workers. In this research, big firms are more narrowly classified. Table 8. Number of Employees in 1964 Number Mid—point Number of Mid- of Per Cent x Per Cent Employees point Firms of Firms of Firms 0- 49 25 17 16.8 4.2 50— 99 75 18 17.9 13.4 100— 199 150 25 24.8 37.2 200— 399 300 21 20.9 62.7 400- 599 500 7 6.9 34.5 600- 799 700 l .9 6.3 800- 999 900 4 3.9 35.1 1,000-1,999 1,500 6 6.0 90.0 2,000-2,999 2,500 2 1.9 49.5 Not available —— 2 —— ~- Totals 103 100.0 332.9 The arithmetic mean of the number of workers employed during 1964 is 332.9. On an average then, employment in Private business is 33. However, as it will be noticed in Table 8, employment figures of big business firms represent Wide variations. On the average, the volume of employment Changes between 25 and 2,500. Out of 103 big firms forming ‘ 3. See Chapters II and III. 140 the sample, only 17 had less than 50 employees. Eighteen firms employed between 50 and 99; twenty-five establish— ments had 100 to 199; ten employed between 200 and 299 workers; eleven others had between 300—399; seven be— tween 400—599; one between 600-799; four between 800—999; six between 1,000-1,999; two more than 2,000 employees. Figures for two firms were not available. These figures indicate a wide distribution of the number of workers employed by big Turkish businesses. The largest firms in terms of present number of em— ployees and assets were those established during the per— iod between 1931-1940 and 1951-1960. These two decades were the most favorable ones for the growth of private enterprise. The first period was characterized by in- tense infrastructural activities and the second by lib- eral economic policies, the two necessary conditions, which, unfortunately, seldom occur simultaneously in developing countries. Growth Patterns in Big Business Growth patterns of the Turkish big business firms will be analyzed first collectively and, secondly, spec- ific industry—wide trends will be investigated. In both Cases, three separate criteria will be used in delineat- ing the growth of the Turkish firms. These criteria will be total assets, total revenue or gross sales, and the number of employees, respectively. Growth patterns will be observed in terms of specific years. The firms will a. ... or“ —~i" a». 2. .1 A - ~q‘I v~ -..w a Q~ ..k‘ 141 be seen developing from 1948 to 1964. In this, and in the following sections, only specified years within the period between 1948—1960 will be analyzed, since 1964 has already been discussed in the preceding section. Nineteen hundred forty—eight indicates the last years of the Republican Party government when there was evidence of awakening in the business circles; wartime hardships having been abolished, and more and more people demand- ing liberal economic policies. Nineteen hundred fifty- two is taken to make an allowance for the time lag that takes in the implementation of any change in economic policies. For this purpose, two years were given as an allowance after the change in the government in 1950. The third critical date is 1956. It indicates a turn- over in economic activities and the beginning of a full- fledged inflation. The final key year of the decade of liberalism is 1960. It is the last year of the Demo- crats in power before being overthrown by a military ggup d'etat. It culminates the strong unrest among the intellectuals, censorship of the press, and political intimidation of big business. _£owth Trends in General Change in Net Worth of Big Business in Selected Years. Figures for 1948, 1952, 1956, and 1960 are expressed in terms of current prices. In 1948, out of 103 firms only 42 were able to provide pertiment information; 61 firms were not in business at that time or data was not ‘ — a:..{,;c' Al U...‘ i “I ‘Vli v- ‘ V‘ \- - ‘7‘ §“‘ ‘ .‘ ‘. ., ”Er fl. ~- I .: \ _ “‘ ‘(v‘ {‘1 ‘. - ‘L-t .‘ .. mi. ‘\ 142 available. In 1952, 50 firms, eight more than in 1948, provided pertinent information. This number increased to 67 in 1956 and to 78 in 1960. In 1948, 16.6 per cent of the existing firms had re- ported a net worth less than $20,000; another 17.5 per cent between $20,000—49,999; 12.0 per cent in the $50,000- 99,999 category; 25.2 per cent between $100,000-l99,999; 16.5 per cent between $200,000—499,999; five per cent between $500,000-999,999; 2.3 per cent between $1,000,000- 1,999,999; and finally, five per cent between $2,000,000— 4,999,999. In 1952 the picture changed only slightly, the net worth of the firms remaining almost the same. Apparently, there was no spectacular growth between 1948 and 1952. The stagnant situation changed in 1956 by a movement of firms to high asset categories. The net worth of 50.3 per cent of the firms was now between $100,000-999,999. This was an increase by 4.3 per cent relative to 1952 figures, and an increase of 2.6 per cent relative to 1948 figures. Also, in 1956 firms with net worth within the $1,000,000-4,999,999 range had increased by 7.9 per cent. In 1960, the growth of the firms had culminated in an all time high. Almost 59 per cent of the firms were now worth between $100,000-999,999, while only 50.3 per Cent were in this category in 1956, and only 47.7 per Cent in 1948. As shown in Table 9, in 1948 the arithmetic mean of the total assets of the existing firms was $359,200. In ......) _.J.:...l..._._.., :_ ”......._.__u...~._r~ ~.~: T; :girzs .917» ...:‘ ~44 ...\.-fi..:.c 04.. ...\.:..~. 143 0.000 0.004 0.000 0.004 0.000 0.004 0.000 0.004 04mpoe I: I: I: I: In I: I: u: 000.04 0.0W0.04I000.04 0.004 0.0 0.044 0.4 In I: nu I- 000.0 0.000.0 1000.0 0.040 4.0 0.000 0.0 0.004 0.0 0.004 0.0 000.0 0.000.0 1000.0 0.440 4.04 0.044 0.0 0.00 0.0 0.00 0.0 000.4 0.000.4 I000.4 0.00 4.0 0.00 0.04 0.00 0.0 0.00 0.0 000 0.000 1000 0.00 0.04 0.00 0.00 0.40 0.04 0.00 0.04 000 0.000 I000 0.00 0.00 0.00 0.04 0.00 0.00 0.00 0.00 004 0.004 :004 0.0 0.04 0.04 0.00 0.0 0.44 0.0 0.04 00 0.00 :00 0.4 0.0 4.0 0.0 4.0 0.04 4.0 0.04 00 0.00 :00 0. 0.0 0. 0.0 0.4 0.04 0.4 0.04 04 0.04 :0 0004 0004 0004 0004 0004 0004 0004 0004 4020 0.00040 04 mEMHm mEMHm mEuHm mEMHm mEuHm mEuHm mEuflm mEMHm ucfloa mpmmmd 0o 0 4o 0 0o 0 00 0 mo 0 0o 0 0o 0 00 0 -042 x a: x m: x m: x m: mummw owuomamm C0 mmmCHmSm 00m mo cuuoz #02 050 CH mmcmnu .0 04000 ,— —. ~ g u— n a C 4“ U. ..I . q . . n 0 . ‘ (I . a 7....» :2 4: .4. E C0 2.. I. a» L. L. r. R. «IV by. r. . .. _ L... 44. .44 ~w., .C r: 2. Tu Q: A,» ...... l 0 0?... 4. a Q4 .3 a. . . 1.. 4 0 ..u ..... r-.. : 4 .... . . 0.. .4. ...... 0 .. 0 I Q. :~ :0 a . 0 0 0 0 rs Fl. :4 4 v ‘1H h .. .n” ... .: 4v 0.... ... .0 C. I 0 .0. 4.: . .0 .0. r. . s :0 :4 :0 . .. . I... 2. 0... .. . .00 .... .00 .. ..u .0. 0 . .... .0. . . w. 0. . \ p. 144 1952, the average worth of the firms rose to $364,600; this figure became $703,400 in 1956. In 1960 the firms had further increased their worth and the arithmetic mean became $906,400. Finally, at the beginning of 1965 the mean value of big business firms in Turkey was $1,854,730. If 1948 figures are taken as an index, it will be possible to calculate the percentage growth in total assets or in net worth of the private sector from 1948 to 1965. If 1948 equals 100, then the arithmetic mean in 1952 will be 102; in 1956 it will be 195; in 1960 it becomes 252; and finally in 1965 it rises to 515. As it was earlier indicated, there was almost no increase between 1948 and 1952; in 1956 a 95 per cent growth was witnessed relative to 1948; and in 1960 this percentage of increase in growth became 152. At the beginning of 1965, the firms had increased their net worth by 415 per cent relative to 1948, and by 338 per cent compared to their net worth in 1960. The reasons for this sud— den increase in net value of the firms' total assets are varied. It may reflect just a more exact valua— tion of the total assets by firms for fear of govern- ment prosecution. Following the coup d'etat of 1960, many new laws were enacted for the purpose of reducing, if not eliminating, fraudulent tax evasions of business in general. However, in the true sense of the work, there was no spectacular overall gain in the net worth of the ,- ‘ fCl ...-.A-~— f~~ l .—“ ’b—. "| . .. .. - ..- -- -..e- r p ..‘Jfi- a . . _ “V. 145 firms. Business, either because of insecurity of the future or because of lack of funds, never did make extremely high capital investments above a certain level. As one owner pointed out, investment in equip— ment was considered unwise. Although assets indicate the size of the firm, in a developing country this is an often misleading measure. For tax purposes and a desire for cash money balances, capital investments are kept at a minimum. A plant may Operate three shifts rather than enlarge present facilities. Growth Patterns in Employment during Selected Years Forty per cent of the firms in 1948 had an employment of less than 50 workers. After 1948, there was a grad— ual reduction in the percentage of firms with such low employment. In 1952, only 35.5 per cent of all the firms, 25.2 per cent in 1956, and 24 per cent in 1960, had less than 50 employees. On the other hand, there was a gradual increase in the percentage of firms with employment between 100—599 persons. In 1948, only 25.5 per cent of the firms were within the 100-599 employ- ment range. This percentage rose to 29.2 per cent in 1952, to 34.4 per cent in 1956, and to 36.3 per cent in 1960. In short, firms became larger in terms of employment. Gradually, employment rose to levels com- parable with Western organizations. 146 0.000 0.004 0.000 0.004 0.400 0.004 0.000 0.004 040000 0.004 0.0 0.044 0.0 0.004 0.0 0.00 0.0 000.0 000.0-000.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00 0.0 000.4 000.4-000.4 0.04 0.4 0.00 0.0 4.04 0.4 0.40 0.0 000 000 -000 0.00 0.0 0.00 0.0 0.40 0.0 0.00 0.0 000 000 -000 0.00 0.0 0.00 0.0 0.00 0.0 0.04 0.0 000 000 -000 0.00 0.04 0.04 0.0 0.40 0.04 0.00 0.0 000 000 -000 0.00 0.04 4.00 0.00 0.04 0.04 0.40 0.04 004 004 -004 0.04 0.00 0.04 0.00 0.04 0.00 0.44 0.04 00 00 -00 0.0 0.00 0.0 0.00 0.0 0.00 0.04 0.00 00 00 -0 .40.... .00 .00 .0... .00 .00. .00 .00 1.040 x 02 mo 0 x 02 00 0 x 02 mo 0 x 0: mo 0 -042 40 000532 mumww omuomdmm CH mmwcflmsm.00m mo mcuwuumm.pcmE>OHQEm...OH manme wl-L . . . 1.- -J C . . . 11. Ni C. e T. I .O «H. C. . .... t0 . . . ... &L. fix- 9. . 0.. G. ..g .0 . A v 04/ a: r. a. . . . 3 0 . . - 0 - 5 a - a T. . .. . A y .- ; ... r. O C. AU an!» a.» a. a. . CW .4. i L A: L. 0 0. .\. . . 0: . - - V L - . t I "H. .0 ...—.1 A—. n- . W5 v-v In-Pd u”. n A I‘V§ PA -L y T. a “Q 5 0 Pg 6 5. AU; PnJ r-l. . N a: ho n... 9.. «\w .. .0 ”H0 A y .Q‘ n . ~ . C. .3 «C O .4 a . . . . . - W. play A u .M\" V“ I .... ‘a‘ “Rs ...\‘~ 3~§ 1.0 0‘ .n n s s Ah. r .. .Nr .. Ars - nvm .FWJ 5U . a VA A: 1- u . a... . 0 «I» .s ..Xu . . NF. 0 .v any $3. .r 0 was .hu .. -4 .JJ Ah. 0 0 .r . .. fl 3 . u . . . . v.0 ‘ . ‘0.» .. 147 As shown in Table 10, in 1948 the average employ— ment in big business was 272.2. This figure rose to 321.8 in 1952, then to 356.8 in 1956. The 1960's were more promising and, on the average, employment became 379.9. In 1956, the arithmetic mean of employment fell to 359.9 employees working full—time in the average big business enterprise. To trace percentage growth from 1948 to 1965, in— dex numbers will be used. If 1948 is taken as an index, then average employment corresponding to 272.2 will be 100. Accordingly, employment in 1952, 1956, 1960, and 1965 will become 11?, 131, 139, and 122, respectively. The fall in employment in 1965 by 14 per cent relative to 1960 is partially accounted for by the ase tonishingly high increase in assets in 1965. Apparently, business had undergone some mechanization and its effects were reflected in reduced employment. It was also men— tioned earlier that the increase in assets was partially due to more exact calculation rather than true increases. In the earlier years between 1948 and 1956, growth in €31“ployment was more drastic than the increase in the net worth of the firms. This reflects the peculiar Characteristics of Turkish business. Firms tend to increase their profits or total returns by increasing the variable factors of production more than the fixed factors of production. This is why the first impres- leU of a visitor to a manufacturing concern in Turkey 148 will be that work stations are overcrowded and there are too many maintenance workers and errand boys. Dis- proportionate use of variable and fixed factors of pro- duction (more variable than fixed) leads to an overuse of machines and equipment which, in turn, accounts for the lack of productivity and efficiency of the existing concerns. Plants are too small to be efficient, and firms operate with facilities below optimum scales. Greater security, increased mutual trust between govern- ment and private enterprise, better consulting services, and low-interest rates on long—term loans might remedy this situation. Increasing Total Revenue in the Private Sector between 1948 and 1965. As shown in Table 11. there was no major change in total revenue between 1948 and 1952. There was even a reverse movement toward very low levels of sales (12.2 per cent of the firms in 1948 had sales of less than $100,000, while in 1952 this per- centage increased to 14.7). However, firms in the low Sales category decreased both in number and per cent in 1960. No net increase was witnessed for high sales Categories (in 1948, 21.9 per cent of the firms had Sales between $2,000,000-7,999,999; in 1952 this per— CEEntage dropped to 18.7). On the other hand, there was a discernible growth in very high sales categories (in 1948 no firms had sales of more than $8,000,000 while in 1952, 6.5 per cent of all the firms were in this .J. «a 01000, a. u .. 0 .ma P. H wk 0 a .fi 0.3-4 ... n-fo «0.4... s a... TV ,~ 0..» .0... \A ...V nu. r... - fi. MA. I W - L.» \ f~ PEN. 149 m.mmwm 0.00H m.mmmm 0.00H 0.0004 0.004 v.wmma 0.00H mHMuoe 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 000.00 0.000.00-000.00 0.000 0.0 0.000 0.0 0.000 4.0 0.0 0.0 000.04 0.000.04-000.04 0.0 0.0 0.000 0.0 0.000 0.0 0.0 0.0 000.0 0.000.0 -000.0 0.000 0.0 0.040 0.0 0.000 0.0 0.000 0.0 000.0 0.000.0 -000.0 0.000 0.00 0.000 0.04 0.000 0.04 0.000 0.04 000.0 0.000.0 -000.0 0.044 0.0 0.004 0.0 0.044 0.0 0.004 0.0 000.4 0.000.4 -000.4 0.004 0.04 0.00 0.0 0.00 0.0 0.00 0.0 000.4 0.000.4 -000.4 0.044 0.04 0.004 0.04 0.00 0.04 0.00 4.04 000 0.000 -000 0.00 0.00 0.00 0.00 0.004 0.00 4.004 0.40 000 0.000 -004 0.0 0.0 0.0 0.04 0.0 0.04 4.0 0.04 00 0.00 -0 .0004 0004 0004 0004 0004 0004 0004 0004 0020 0.00040 :0 mEuflm mEMHL mEuflm mEuflm mEuHm mEuHm mEuHm mEuflm pcfloa mmamm 00 0 mo 0 mo 0 mo 0 00 0 0o 0 mo 0 mo 0 -002 x 02 x 02 x 02 x 0: mwmcflmdm 00m C0 mummw UM0UmHmm xn mmfimm .HH @0303 150 group). From 1948 to 1952, business firms had a very slow growth in terms of sales. In 1956, the firms faced an overall decline in sales and more firms were found in low sales categories ($100,000-499,999). Nineteen hundred sixty, on the other hand, was a period of rapid growth, only 5.2 per cent of all the firms were in the very low sales group (less than $100,000). Only 20.8 per cent of the firms in 1960 were in the low sales group as opposed to 41.7 per cent in 1948, 34.0 per cent in 1952, and 25.0 per cent in 1956. The percentage of firms in average sales group ($500,000-1,999,999) increased to 35.7 in 1960. This was only 24.2 per cent in 1948, 25.1 per cent in 1952, and 31.3 per cent in 1956. The change in sales was more drastic in the high sales group firms ($2,000,000-7,999,999). Thirty and seven—tenths per cent of the firms in 1960 were in this category while this percentage was only 21.9 in 1948, 18.7 in 1952, and 18.7 in 1956. The percentage of firms in the high sales group after increasing to 9.4 per cent in 1956 from 0 per cent in 1948 declined to 7.6 per cent in 1960. The arithmetic mean for 1948 sales is $1,358,400. If this year is taken as an index, as was for measuring the growth in net worth and in employment, the following growth pattern can be traced: 151 If sales in 1948 are taken as 100, then sales in 1952 will be 146; in 1956 will be 164; in 1960, 198; and in 1965 will be 317. There was a 217 per cent of growth in sales with respect to 1948 sales of big busi- ness. This high percentage of growth in 1965 corre- sponds to high net value. All indications are that the firms are witnessing changes since 1960 and especially since 1964. Business is becoming more comparable with its counterparts in Western societies. The present situation shows that business has started to invest and has understood the value of mechanization. This is indicated by the fact that while in 1965 the net worth of the firms was 28 per cent greater than its value just five years ago in 1960, employment rose only by five per cent, and sales skyrocketed to an all time high, 21 per cent more than in 1960. Summary of General Trends. Figure 1 depicts the relative growth of big business by using three dif- ferent criteria. If employment was used alone, one could have reached a conclusion by stating that busi— ness in Turkey is slow to develOp and is almost stag— nant. Sales all through the years, and assets after 1956, will tell another story —- one of extremely rapid growth. 152 Figure 5.1 Comparative develOpment of the business firms in terms of assets, sales and employment. 600 500 Net Worth 400 300 Sales 200 ‘ ;7 “////r Employment 100 1948 1952 1956 1960 1965 Based upon the statistical evidence presented, it is then possible to distinguish two types of growth patterns between 1948 and 1965. The first period is betweem 1948 and 1960 and is characterized by a slow development. Within this period, the overall growth picture of 6he Turkish business firms is often mis- leading. No single criterion can adequately depict the true situation, but rather assets, employment, and sales must be analyzed simultaneously. Increase in sales was mostly accomplished through greater employment. The second period starts after 1960 and begins to form its characteristics around 1964. This is the pic- ture of a mature business, a business that is oriented toward true development and that attempts to mechanize its firms. Scientific business administration has 153 finally started to emerge. This period is distinct from the first period due to the pattern of growth in assets, employment, and sales. It is characterized by fast growth while the first period was one of slow development. Thus the hypothesis put forth in the beginning of this chapter is proved. The general trend observed in industry is representative of all the individual indus— tries surveyed in this research, with the exception of retailing and wholesaling. These two organizations are surveyed in the next section. Development of Retailing and Wholesaling in Selected Years Growth patterns in retailing and wholesaling will be surveyed as a separate industrial category. The criteria will be the same; namely, assets, employment, and sales. A relationship will be formulated in terms of growth patterns using these three different criteria to see whether this category of business in Turkey con- forms to the general trend outlined previously. Nine— teen hundred forty—eight figures will be taken as an index, and the firms' situation in 1952, 1956, 1960, and 1965 will be compared with each other, taking 1948 assets, sales, and employment as 100. First, the arith- metic mean of assets, sales, and employment during each of the selected years must be found. Table 12 will form the basis for the computation. 154 The reluctance of the firms in giving exact figures was eliminated by forming categories and asking the firms to indicate in which specific category they were located. For instance, it would have been very naive to ask for or to seek an exact sales figure for any specific period since very seldom would a sincere answer be given. Instead, asking whether the company sales were within a broad category, say between $400,000-999,999, for 1960 resulted in more favorable responses. If the exact sales figures for that year were $600,000, by checking the proper category, the firm by no means would have given out information that might become incriminatory or detrimental to its competitive position. Total worth of the firms shows physical as well as financial growth and includes all capital invested in fixed or variable assets. It reflects direct con— tributions of the firms to the total economy. For this reason, growth in terms of total worth is very impor— tant. This importance becomes greater in a country craving for develOpment 155 0.400 0.004 0.400 0.004 0.000 0.004 0.000 0.004 040000 - - - - - - - - 000.04 .0.000.04-000.04 - - - - - - - - 000.0 0.000.0 -000.0 0.004 0.0 0.040 0.0 0.000 0.0 0.000 0.0 000.0 0.000.0 -000.0 0.004 0.0 0.004 0.04 0.044 0.0 0.044 0.0 000.4 0.000.4 -000.4 0.40 0.0 0.0 0.0 0.044 0.04 0.00 0.0 000 0.000 -000 0.00 0.04 0.00 0.00 0.00 0.0 0.00 0.04 000 0.000 -000 0.0 0.00 0.0 0.0 4.00 0.04 4.00 0.04 004 0.004 -004 0.04 0.04 0.00 0.40 0.44 0.04 0.44 0.04 00 0.00 -00 0.0 0.0 0.0 0.04 0.0 0.04 0.0 0.04 00 0.00 -00 0. 0.0 0. 0.0 0.4 0.04- 0.4 0.04 04 0.04 -0 0004 0004 0004 0004 0004 0004 0004 0004 0020 0.00040 :0 mEufim mEMHm mEMHL mEuHm mEMHm mEuflm mEuHm mEMHm #CHOQ £0003 #02 00 00 US 00 mo 00 mo 00 mo 00 mo 00 mo 00 mo 00 .60: x0: 002 x0: x0: I m#®mm4 MO WEMQB CH WCOH#MNH.CM@.HO @Hmmmfinvé Ucw HHMuvmm W0 £#30.Hmu.. .04.04000 156 The growth of commercial organizations presents a dim picture. As Table 12 shows, the arithmetic mean of the total worth of the commercial institutions in 1848 is $538,000. In 1952, this is increased to $568,800 and then declined to $531,200 in 1956 and to $451,500 in 1960. Except for 1952, there was no growth at all in the fol- lowing years. As a matter of fact, there was a decline. If 1948 is taken as an index, $538,000 equals 100, then the worth of the commercial organizations in 1952 will be 106, in 1956, 99, and in 1960, 86. According to this picture, there was a six per cent growth in the worth of the firms between 1948 and 1952; however, there was a decline in the worth of the commercial organiza— tions by 1 per cent when compared to 1948, and a decline of 14 per cent in 1960. Although the general industrial trend is no better than this, nevertheless the industry did not show any net reduction or decline in total aver- age worth since 1948. The reasons for this decline, in spite of some evident investments and enlargement of the firms, are the reduction in the net value of the fixed assets due to depreciation. The tendency in this sector of the industry is to continue to use existing facilities until they become unusable. When the worth of total assets of the retail and wholesale organizations were calculated, this was considered the going resale value during specified dates. 0n the other hand, as shown in Table 13, there was a disproportionately high growth in the sales of the same u.—~I~.u-—. -- n 157 0.000.0 0.004 4.000.0 0.004 0.000.4 0.004 0.004 0.004 040000 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 000.00 0.000.00-000.04 0.000 0.0 0.000 0.0 0.0 0.0 0.0 0.0 000.04 0.000.04-000.04 0.0 0.0 0.0 0.0 0.000 0.0 0.0 0.0 000.0 0.000.0 -000.0 0.040 0.0 0.000 0.0 0.0 0.0 0.00 0.04 000.0 0.000.0 -000.0 0.000 0.00 0.000 0.04 0.000 0.0 0.0 0.0 000.0 0.000.0 -000.0 0.0 0.0 0.044 0.0 0.004 0.0 0.04 0.04 000.4 0.000.4 -000.4 0.044 0.0 0.00 0.0 0.044 0.0 0.04 0.04 000.4 0.000.4 -000.4 0.004 0.00 0.000 0.40 0.040 0.00 0.00 0.00 000 0.000 -000 0.40 0.00 0.00 0.04 0.04 0.00 0.04 0.00 000 0.000 -004 0.0 0.0 0.0 0.04 0.0 0.0 0.0 0.0 00 0.00 -0 0004 0004 0004 0004 0004 0004 0004 0004 4020 0,000.40 00 mEMHm mEuflm meuflm mEMHm mEMHm mEMHm mEMHm mEMHm pcflom mmfimm 00 0 00 0 00 0 00 0 00 0 00 0 00 0 00 0 -042 00: x0: x0: 00: mmfimm mmouo mo mEumB CH mCOfluMNHcmmMO 000000053 ocm 00mpmm MO £03000 .MH mHQMB 158 0.000 0.004 0.000 0.004 0.400 0.004 0.000 0.004 040000 0.004 0.0 0.0 0.0 0.0 0.0 0.0 0.0 000.0 000.0-000.0 0.0 0.0 0.00 0.0 0.004 0.0 0.004 4.0 000.4 000.4-000.4 0.0 0.0 0.00 0.0 0.00 0.0 0.40 4.0 000 000 -000 m.00 0.0 0.00 0.0 4.00 0.0 0.00 4.0 000 000 -000 0.00 0.0 0.00 0.44 0.0 0.0 0.0 0.0 000 000 -000 0.0 0.0 0.0 0.0 0.00 0.0 0.00 4.0 000 000 -000 0.00 0.00 0.00 0.00 4.00 0.04 0.0 0.0 004 004 -004 0.004 0.04 0.00 0.44 0.044 0.04 4.04 0.00 00 00 -00 0.00 0.00 0.00 0.00 0.00 0.00 0.0 0.00 00 00 -0 0004 0004 0004 0004 0004 0004 0004 0004 4020 000004000 mEuHm mEuHm mEnHm mEuHm mEuHm mEMHm mEuHm mEuflm #:HOQ we uwnesz 00 x 00 0 mo 0 00 0 00 a mo 0 00 x 00 x -042 x0: x0: x0: x0: pcme>oHQ8m m0 mfiuma CH mCOHpMNHcmmuO mHMmmHOSS Ucm 44000m mo £03040 .VH wHQmB 159 industries within the given years. In 1948, the average sales were $129,500; in 1952 sales jumped to $1,639,500; they went up to $2,088,100 in 1956; then to $2,058,800 in 1960. In terms of index numbers, the rate of growth of sales will be the following, if sales in 1948 equal 100: in 1952, 1266; in 1956, 1612; and in 1960, 1590. This was an unprecedented growth with no direct relationship between total assets and sales, if not an inverse relationship. However, the growth in sales was reflected in the increased number of employment which once more indicates how the Turkish private industry, particularly the marketing organ— izations, are labor intensive. In 1948, the average number of employees in marketing firms was 335.7. In 1952, this figure rose to an all time high of 491.0. Incidentally, this corresponds to the only increase in the worth of these firms. In 1956, the average number employed dropped to 424.6 and in 1960, it rose some- what to 432.4. If 1948 is taken as an index, 335.7 equals 100, then employment in 1952 was 146, 1956 it was 126, and finally employment increased to 128 in 1960. There was then an increase of 46 per cent from 1948 to 1952. This rate of growth declined to 26 per cent in 1956 to again become 28 per cent in 1960. The tremendous growth in the sales of those organizations was internally met by an increase in employment. Commerce is a very lucrative business in Turkey. It does not require high capital investment, nor does it 160 require a high level of employment. Firms do not keep large inventories and there is a rapid turnover, often five to six times a year. This is why with a small investment, it is possible to increase the volume of sales disproportionately. The percentage rate of growth in sales since 1948 was great, as indicated in Figure 2. Figure 5.2 Comparative development of retail and whole- sale organizations in terms of assets, sales, and employment. 1600 “‘ Sales 1500 1400 1300 1200 1100 1000 900 800 700 600 500 400 300 200 ““’ ——4"””’/” —‘———"”’Net Worth Employment lOO 1948 1952 1956 1960 1965 161 Using assets and employment as criteria, retaining and wholesaling institutions conform to the general trend and prove the validity of the operational hypothesis stated in the beginning of this chapter. However, when sales are introduced, as another criterion, the picture is reversed and the development up to 1960 becomes one of rapid growth which starts to decline after 1960. CHAPTER VI TRAITS OF TURKISH BIG BUSINESS LEADERS When business leaders are observed and studied superficially, they have many traits in common; but when they are investigated in depth, they seldom present a regular behavior pattern. It is possible to study sta— tistically the natural characteristics, the intellec— tual, educational, social, economic, religious back- grounds, and the mobility patterns of big business leaders. From these studies, generalizations about the apparent traits of big business leaders can be made. But when more profound socio—psychological surveys are carried out, no sweeping statements can be made about the behavior of big business leaders in Turkey. In this chapter the common traits of the business leader will be analyzed. A presentation of the more sig— nificant findings will reveal a somewhat superficial self-portrait sketched by the big business leader, while Chapter VII will provide a more profound behavioral analy- sis. In this and the following chapters, several opera- tional hypotheses will be tested. They will examine the traits and behavioral characteristics of Turkish big business leaders and thus provide the basis for accept— ing or rejecting the two major hypotheses stated earlier. Proceeding along these lines provides clarity and pro— cedural effectiveness. 162 163 The Rank of the Business Leader in the Hierarchy of his Firm The 103 men interviewed in this research occupy top positions in the administrative hierarchy of their firms. In fact, almost 78 per cent are chief executives. Their titles range from owner, partner, and managing director to general manager. Turkish business does not use the term "president" to indicate its chief executive. The term "president" is strictly limited to mean the chief of state only. The remaining 22 per cent represent the next highest ranks of command. They are assistant general managers, second principal owners, and sons of the owners. Table 1. Rank of the Interviewed Business Leader in the Hierarchy of His Firm. Rank Number Per cent Chief Executive 80 77.7 Second in Command 20 19.4 Third in Command 3 2.9 Totals 103 100.0 This group, composed of the big business leaders of Turkey, is not representative of the total business com— munity. In terms of the type of activities, experience, philosophy, and managerial practices, there exist wide differences between the big business leaders, small 164 merchants, and industrialists making up the bulk of the business community. Big business leaders are engaged in activities that are of narrower scope than those of the whole community but are more significant for the econ— omy. Though trade attracts the large majority of bus- inessmen in the Turkish society, big business leaders are mostly engaged in industry.1 Interviews revealed thatthe top executives among the big business leaders in the Turkish Republic are pre— dominantly men of mature years, almost 16 per cent have passed their sixtieth birthdays. On the other hand, some 22 per cent range between 25 and 39 years of age. The distribution of ages would therefore seem to imply a relatively vigorous business leadership if socio— economic backgrounds and educational stimuli were equally favorable. The principal weakness in the age distribution ap— pears to be the small proportion of younger men in the ranks of those who stand second or third in the hierarchy of command. Slightly more than 60 per cent of these com- bined groups range between 40 and 59 years of age, and only some 30 per cent represent the younger men who might be expected to succeed to the highest executive positions as Openings occur in the future. 1. For additional information, see Chapters IV and V. ‘. A): ..‘J c A-1 ... 165 Table 2. Hierarchical Rank and Age of Big Business Leaders Position of the Business Leader in Age the Hierarchy of His Present Firm First in Second in Third in Command‘ Command" Command Total Youngsters, 20-24 -- —— -— -- Business Youth, 25-29 1 2 -- 3 Young Adults, 30—34 7 2 -— 9 Young Matures, 35-39 10 2 l 13 Matures, 40-49 24 6 —- 30 Experienced, 50—59 25 6 2 33 Old Ones, 60-69 11 2 -— 13 Aged Ones, 70—90 2 —— -- 2 Total 80 20 3 103 ‘ Occupies top position in the administrative group (chairman of the board, president, executive director and owner.) ** Vice president and general manager. More than 90 per cent of those at the head of their organizations come from the upper or upper—middle social classes. They are almost invariably either the founders or have family ties with the founders of their firms. The family ties with the founder of the firm are mainly paternal. 166 Rable 3. Rank and Socio-economic Class of the Big Business Leader The Socio-economic Status of the Family Position of the Business Leader in which the Busi- in the Hierarchy of his Present ness Leader was Firm Raised First in Second in Third in Command Command Command Total Upper—upper 26 6 —— 32 Lower-upper l4 4 l 19 Upper-middle 33 8 2 43 Lower-middle 3 -- -- 3 Upper-lower 4 1 -- 5 Lower-lower -— l -- 1 Totals 80 20 3 103 The fathers of the chief executives almost always have business backgrounds, and the same is true of those second in command. Natural Characteristics of Business Leaders Operational hypotheses 2: The majority of the busi- ness leaders entered business life between 1949-1960, a period characterized by liberal economic policies. They were less than 50 years old, came from middle class mer- chant families, and were previously engaged in a related occupation in the private sector. 167 The 103 respondents are mostly middle-aged and older, three—fourths being over 40, and almost one- half over 50. Those from 50-59 constitute the largest single age group, numbering 33 men; the next largest age groups are those in their 40's, followed by those in their 30's. Although for the most part the busi- ness leaders are not young, the majority of them entered business rather late in life -- between 1949 and 1960. Indeed, 68 per cent started their careers after the Second World War. Between 1939-1949, 34 men started their careers; between 1950-1960, another 34 entered business for the first time; 8 of the respondents started their careers after 1960; but only 6 before 1923. 168 004 0 04 mm 00 m4 0 m 0 040000 0 - - 0 m - 4 - - 0004-4004 .m0flumCOHpSHo>0m 00 - 0 s 0 0 .0 0 - 0004-0004 .000000000 00 - 4 0 04 0 - 4 - 0004-0004 .0000 00004 40 - 0 04 - - - - - 0004-0004 .00000000000 x03000< 0 0 4 4 4 4 - - - 0004-0004 .00000000 H0008 omlow mwlom mmlom mwlov mmlmm fimlom mmlmm wmlom 00cc 0020 00000 0003002 0043002 004304 cwsow 04000 0004 040 Iflu0dxm mcsow 0:30» 000C Imcsow Iflmsm 0MHA mm0CHmsm U0u00cm M00000 mm0Cam5m 030 £053 UOHu0m 000A mm0CHmsm p0u0ucm 000004 mm0Camsm 0:0 poau0m 0:0 004 .0 04009 169 When the period during which the respondents joined the business community is associated with the socio-eco- nomic status of the families in which they were raised, the most striking fact is that half those who started in business during the period between 1950—1960 came from the upper—middle class. They had no family ties with the founder of the firm. This period is characterized by the liberal economic policies of the former Democratic Party, now disbanded and outlawed. Those who started business careers between 1939-1949, on the other hand, tended to come from an upper-upper social stratification and nearly all had paternal family ties with the founder of the firm. The 1940's was the period during which the Republican Party carried out a very firm anti—business policy. It was very difficult to start a business at that time. That is why only the sons of the businessmen went into business. At the same time, public esteem for business was very low and it did not attract either young or experienced men of ambition. 170 Table 5. Social Class and Period when the Business Leader entered Business Life Socio-economic Status of Family in which Business Period when the Business Leader Leader was Raised Entered Business Life Ataturk Revolu- Otto- Genera— Inonu Demo- tion- mans tions Boys crats aries 1900- 1923- 1939- 1950— 1961— 1923 1938 1949 1960 1963 Total Upper-upper 2 6 14 10 —— 32 Lower-upper -— 3 7 6 3 l9 Upper-middle 4 ll 9 l7 2 43 Lower—middle -- —— l -- 2 3 Upper-lower -- l 2 l l 5 Lower-lower -- —- l —- —- 1 Totals 6 21 34 34 8 103 When the year the business leader entered business life is correlated with his employment history, the statements regarding social status and family con— nections with the founder of the firm are confirmed. Of those who entered business between 1939—1949, the dominant group had no previous business or any other employment experience; the companies in which they are presently employed are the one they had joined two decades ago. On the other hand, the largest group of those who started their business careers during the 171 period 1950-1960 had been previously employed in a related occupation in business. They are business executives who had typically changed employment several times in the business community before entering their present positions. Table 6. Employment History and the Period when Business Leaders entered Business Life Employment History Ataturk Revolu- Otto- Genera- Inonu Demo- tion- mans tions Boys crats aries 1900- 1923- 1939- 1950- 1961— 1923 1938 1949 1960 1963 Total First job was with his present company 2 7 l6 7 —- 32 Previously employed in a related occupa- tion in private sector 3 6 ll 9 —— 29 Previously employed in private sector in unrelated occupa— tion —- 3 l 2 1 7 Previously employed in government sector in a related occupa- tion -- -- —— 8 2 10 Previously employed in government sector in unrelated occupa— tion 1 —- l -- 2 4 Previously self- employed -- 5 5 6 -— l6 Occupied high government or political position -- -- -— 2 3 5 Totals 6 21 34 34 8 103 172 The 1939-1949 business leaders are almost entirely first—generation Turks, while the 1950-1960 group is second-generation. This is not surprising, since prior to 1939 Ataturk's government had a policy of encourag— ing private enterprise. But following the fall of the Ottoman Empire, Turkey had lost large portions of land and with them its entrepreneurial talent. The portion of Anatolia remaining, an arid plateau, produced soldiers and farmers, but not businessmen. Therefore, the original business talent had to be recruited from the former holdings of the new Republic of Turkey. However, the picture changed a decade later; the Democrats, by helping trade to change its unfavorable image, encouraged more people to go into business. .F a” nu- 9—1 173 Table 7. Occupation of the Father and Period when the Business Leader Entered Business Life. Occupation of the Business Leader's Period when the Business Leader Father Entered Business Life Ataturk Revolu- Otto- Genera- Inonu Demo- tion- mans tions Boys crats aries 1900- 1923— 1939- 1950- 1961- 1923 1938 1949 1960 1963 Total Small Merchant 2 7 7 7 2 25 Officer in the Armed Forces -- 4 2 6 2 l4 Engineer 1 —- 2 2 —- 5 Doctor —— l l 1 l 4 Civil Servant (memur)-- 4 2 5 -- 11 Farmer -- l 1 5 -— 7 Laborer -- -- l -- -- 1 Teacher 1 —— 4 ‘-- 1 6 Clerk in Private Sector -- —- —— —— l l Politician -- l l 2 -- 4 Successful Entrepreneur 2 3 l3 6 -- 24 Journalist -— -— -- —- 1 1 Totals » 6 21 34 34 8 103 Many of the 1939-1949 business group had parents who were successful entrepreneurs, while the 1950—1960 group had parents who tended to be either small merchants urfi N v> '1'“ '.-‘ -rw vvni (I! o-x ~00 ‘v- .... A. I . I I" r v 1" 174 or professionals. Another striking characteristic of the 1950-1960 group is that almost 21 per cent had fathers who were either politicians or civil servants. This could very well be one of the reasons why the Demo- cratic Party definitely leaned toward liberal economic policies. Of the big business leaders, 18 were born outside the present boundaries of the Republic of Turkey. It is interesting to note that 79 respondents were born in urban centers but only 6 in rural areas. Of those born in cities, 38 were from Istanbul, 16 from Izmir, and 25 from different small towns of central, southern and northern Anatolia. Those who entered business careers during the Inonu regime (1939-1949) were mostly from Istanbul and from abroad, while those who started in business during the Democratic Party regime (1950— 1960) usually came from Istanbul, Izmir, and cities of central Anatolia, including Ankara. It is obvious that big business in Turkey recruited most of its talent from large urban centers like Izmir, Istanbul, Ankara, and Adana. This is a fact which is directly related to the concentration of big business enterprises in Istanbul, Izmir, and Ankara. Big busi- ness leaders are grouped in advanced urban centers. In terms of national and ethnic origins, big busi- ness leaders in Turkey have many outstanding traits in common. Of the 103 respondents, 83 are Turks, 10 are L _ .1 E 7"" 175 Jews, and 5 are Greeks. This common ethnic and national origin puts the Turkish business leader in a unique posi— tion when compared with the industrialists of other middle-eastern countries. For instance, Professor Yusuf A. Sayigh states that there is a wide discrepancy between national, ethnic, and religious distribution of Lebanese business leaders and that of the general population of their areas. The most striking point in the distribution of respondents by religion is the wide discrepancy between this distribution and that the whole population. Thus, though four-fifths of the respondents are of the Christian faith, only half of the population is. On the other hand, the Moslems constitute about one-sixth of the entrepreneurial group, but 44 per cent of the pOpulation. For the Duruz, the discrepancy is ~ even larger: 1.5 per cent of the respondents but 5.6 per cent of the population. Like the Chris— tians, the Jews constitute a larger proportion of business leaders (1.9 per cent) than of the population (0.4 per cent). Although Turkish business leaders form a cohesive ethnic group, the proportion of the minorities among them is much greater than that of the whole pOpulation.3 Intellectual and Educational Backgrounds of Big Business Leaders Operational hypothesis 3: The role of formal educa— tion in the success of big business leaders is consider— able. 2. Yusuf A. Sayigh, Entrepreneurs of Lebanon, Harvard University Press, Cambridge, 1962, p. 69. 3. See Chapter III § _ 176 The illiterate business leader who can hardly sign his name, but who deals in millions of dollars, generally makes sensational news, but such a person is not the prototype of the bushess leader in Turkey. There was no man interviewed who was without some kind of formal education. Only 9 men were found who said they had had a formal education of less than junior high school. There were 4 others who failed to finish high school. On the other hand, 90 men (87.5 per cent) completed high school and 56 of these went on through college. Indeed, 18 of them continued further and received mas— ters' degrees. One has a doctorate degree. Table 8. Education of the Business Leader Formal Education Number Per Cent Less than Junior High School 9 8.7 Junior High and some High School 4 3.8 High School Graduates 27 26.2 Some College 7 6.8 College Graduates 38 36.9 Masters 17 16.7 Doctorate l 0.9 Totals 103 100.0 This distribution is out of proportion with that of the Turkish population, in which the majority has had no 177 more than elementary education, and the next largest segment is illiterate. Those educated in colleges and universities are a small minority of the total popula— tion. It is also important to note where the business leaders received their college education. Although 42 men graduated from or attended Turkish universities, 11 are graduates of American universities, and 10 are graduates of European universities. A further breakdown of those who attended or grad- uated from universities, reveals that the most popular field of concentration was business administration (42.8 per cent). The next major area was engineering (38.0 per cent). In relation to the percentage of lawyers in government and state economic enterprises, the percentage of big business leaders with a legal background is very small. The graduates of law fac- ulties form the majority of all college graduates in Turkey; law being the only field in which universities imposed no restrictions on the number of students, and in addition had no entrance examinations until recently. Thus, law faculties have been jammed with students. Turkish business leaders are bilingual. Of the 103 respondents, 94 know at least one foreign language, 4. Ibid. 178 and 38 of them can speak, read, and write in 2 foreign languages, mostly English, French, or German. Of the 80 chief executives, 55 per cent are college graduates, while 56.5 per cent of the persons who are either second or third in command, have college degrees. From the statistical evidence presented in this section, it is clear that a large majority of the business leaders whether first or second in command, have had some kind of university education. All other factors taken as constant, it is clear that education has now become the avenue of success. Out of 80 chief executives, 30 attended Turkish universities, 11 went to American universities, and 8 to European universities. Of the 23 respondents second in command, none had attended American universities, 2 attended European universities, and 8, Turkish univer- sities. The fact that none of those second in command had attended American universities, can be related to the financial abilities of the individuals. A person educated in the United States seldom accepts a minor role in a business organization. If he does, he believes that his chances are high for advance- ment up the hierarchical ladder. Those respondents second in command, on the average, were mostly more than 45 years of age and had been in the organization for some time. (L 1'3 .'-.‘f A‘ «$7.391 :2 'CQHAyw-lm ““PV‘LQ... . ~ u. hV\r ... u =. D . I; A. u x“; ~n’fi. v‘. \ |H “u . a A . F‘q 7'2“”: V‘r‘ V‘s ~ . ~." ‘ 179 Travel, too, is a form of education. Approximately 89 per cent of the business leaders (92 men) had traveled abroad. Business ranked highest among the purposes of such travel, followed by study and recreation. The older business leaders seemed to have had greater travel experience than their younger colleagues, the amount of travel steadily increasing with age. Among the countries visited, European ones were the first choice, for 62 respondents stated that they had visited several cities in EurOpe. United States was the next choice; but only 25 of the big business leaders had been in the United States, and most of them for educational purposes. The Middle East and Asia have been visited by 3 men, but only 1 man had been into an iron—curtain country. Be- cause distance was given as the major reason for the lack of travel to the United States, geographic distance can be taken as one of the prime reasons for the low intensity of communications between the business com— munities of these two countries. Socio—Economic Background and Mobility Patterns of Turkish Big Business Leaders Operational Hypothesis 4: Turkish big business leaders are almost equally distributed between birth and mobile elites. Businessmen in Turkey are very sensitive to the appeal of economic opportunity and, therefore, are 180 highly mobile. This geographic movement takes many forms. A Turkish businessman, whether important or not, rarely finishes his days in the village of his birth. He is attracted away from his village by greater opportunities in the cities. And the inhabitants of cities tend to gravitate toward Istanbul or Izmir upon achieving a certain degree of success. Fathers of Big Business Leaders The respondents were asked certain questions about the occupations and sources of income of their fathers. Although the answers of some of them may have deviated from the facts, either from lapses of memory or other reasons, the results in general warranted the inquiry. The respondents, when asked for their fathers' business or occupation, listed 12 occupations. The most frequent was small merchant (24.2 per cent), fol- lowed by successful entrepreneurs (23.3 per cent), officer in the armed forces (13.6 per cent), and civil service (10.7 per cent). Those four occupations account for more than two-thirds of the fathers. E‘E 'IIH“ dd‘u .u . R ‘ s: u... M” e t. r. a c 1' . . a A b ~u~ m). . u s 1.5 RVU 181 Table 9. Father's Occupation and the Hierarchical Rank of the Business Leader Occupation of the Position of the Business Leader in Business Leader's the Heirarchy of His Present Firm Father First in Second in Third in Command Command Command Total Small Merchant 18 6 l 25 Officer in the _ Armed Forces l2 2 -- l4 Engineer 4 1 —- 5 Doctor 3 1 -- 4 Civil Servant (memur) 8 2 1 11 Farmer 6 -- l 7 Laborer -— l -- 1 Teacher 5 l -- 6 Clerk in the ' Private Sector 1 -— -- l Politician 4 -— -- 4 Successful Entrepreneur l9 5 -- 24 Journalist -- l -— 1 Total 80 20 3 103 The respondents were also asked to furnish informa— tion about their fathers' education. The fathers of 35 of the big business leaders were college graduates, 6 others had some college educatiOn but did not graduate, my formal . ‘ l -AA9\ 5'“ , ion deUdv fey stem: 80:1 Czu‘y‘ar S Sun-A1». an‘y-l L“. 7"" ‘fiLUI ‘ a “FEE“— I .7 “ &\ ‘ . ‘O‘ .A‘ 1': +V‘; ‘9 5“ . s. . . :;.n R ”‘95“ ~ l 5:: l“ ‘I ~61 fl~:c '9 ‘4‘.' “A ‘ “(PEI-(4H Ul.~.~l. LJ 07-2» 182 19 were high school graduates, 18 were junior high graduates with some high school education, 23 had finished elementary schools, and only 2 did not have any formal education. Although the fathers had less education than the sons in absolute terms, when they are compared with the general population of their time, they stand in a better position than their sons. Socio-economic status of the big business leaders' fathers show that origins in middle and upper classes constitute the majority, approximately 91 per cent being in middle or higher social classes, including 31 per cent in the upper—upper class. Only 8.8 per cent were below middle, with less than 1 per cent in the lower-lower social class. In the majority of cases, the father's occupation was traditional, in the sense that it had been prac— tised by several generations. Men in different age groups have been influenced to different degrees by natural inclination in choosing careers. Furthermore, whenever there has been a high concentration of votes on natural inclination, there has been a low concentration of votes on pecuniary profit and on prestige as influences in choice of a career, and vice versa. This pattern suggests a major dis- tinction between the force of profit and prestige on the one hand, and the force of natural inclination on the other hand. Men guided mainly by profit or prestige 183 considerations seek a form of satisfaction that is externally discernible, whereas men guided mainly by natural inclinication seek an inner satisfaction that does not press strongly for outward expression. Mobility The men who hold the top positions in Turkish busi- ness today have had some kind of family tie with the founder of the firm. From a total of 103 respondents, 35 had family ties with the founder of the firm, and 26 were the actual founders of the firm. Only 42 men had no family tie of any sort with the founder of the firm. Mobility patterns of the business leader are sur— veyed in terms of the extent to which he has or has not cut ties with relatives and family. Having more or less been born into the business, the Turkish big business leader maintains strong ties with his relatives, as evidenced by 60 per cent of the respondents. Less than 11 per cent have completely divorced their child- hood background and acquired total independence. There is, therefore, a relationship between entre- preneurial drives and emotional mobility. Business leaders who have no family tie with the founder of the firnntend to cut the ties with their relatives. 5. Yusuf A. Sayigh, Op. cit., p. 76. of t 726.“. U 1‘»,— 1 o: ' vv'leEVeJ ls rm. .y_: E "”‘ “1‘3 '- ‘h “14:. .~" 4 ‘ l a)“, 184 Table 10. Family Ties among Birth and Mobile Elites Extent of His Ties with Relatives Relationship of the Business Leader to and Family the Founder of the Firm Wife's Father's No Is the Side Side Relation Founder Total Completely cut ties with relatives -- -— 9 2 ll Partially cut ties with relatives 1 -- 21 8 30 Keeps strong ties with relatives 4 3O l2 16 62 Totals 5 3O 42 26 103 It appears that organizational success in Turkish business is based upon traditional relationships. One has to be introduced, backed, and protected if one is to become successful. However, to this rather drab picture some color is added by a few big business leaders who have reached present status on personal initiative. It is a custom in Turkish business to use the family's own means to finance establishment or expansion. Forty— four respondents indicated that they received substan- tial financial help from their families; on the other hand, there were 59 men who received no financial help from family members. The mobile elite seem to have partially or completely cut ties with relatives. 1 1 . C's-‘1 a .34.“;- ‘u a‘. v‘n i A... .. :-M ~ U~-U‘U J an H‘u .'..V~-*l I7! L. 185 Approximately 59 per cent of the 48 respondents, who either are the founders of the firm or who have no family relations with the founder of the firm, have totally or partially cut ties with relatives. This severance is in the form of both geographic and emo- tional separation. The birth elite, or those who were born to their positions, almost invariably have kept strong ties with their relatives. Actual physical association in the activities of the big business leader appears to be as important as financial involvement, for 36 of the respondents have relatives working with them. It can be concluded that a helpful background of family, social, and business connections has stimulated the present success of the typical prominent businessman. Promotional history reveals that hierarchical mobility within a given organization is limited. Only 41 men (39.8 per cent had played lesser roles and had had lower ranks in the hierarchy before they reached their present positions in the same company. On the other hand, 62 men (60.2 per cent) had held their present positions ever since they joined the organiza— tion. Included in this percentage are those who formed their own establishments. 186 Table 11. Promotional History and the Relationship of the Business Leader to the Founder of the Firm Promotional Wife's Father's No Is the History Side Side Relation Founder Total Retained present position since he joined the organization or since the found- ing 4 8 25 25 62 Had played lesser roles and held lower rank in the heirarchy prior to achieve— ing his present position in the same company 1 22 17 l 41 Totals 5 30 42 26 103 A quick look at the employment history of the big business leaders indicates that 32 of the respondents have had no employment experience other than their present jobs. On the other hand, 29 were previously employed in a related occupation in the private sector, and 16 others were previously self-employed before moving to their present occupation. This move was in the form of selling out to a larger concern. Ten men (9.7 per cent) were previously employed in the government sector. II 7"" _._n‘1nyvr ‘P .amv u {my -.pc. ~‘Q ...x. 7" i .'l int (in , 7‘91, 187 Table 12. Employment History of Mobile and Birth Elites Employment Relationship of the Business Leader to History the Founder of the Firm Wife's Father's No Is the Side Side Relation Founder Total First job was with his present company -— 26 3 3 32 Previously employed in a related oc- cupation in pri- vate sector 1 3 14 ll 29 Previously employed in the private sector in an un- related occupa- tion 2 -- 2 3 7 Previously employed in the government sector in a re- lated occupation -- -- 8 2 10 Previously employed in the government sector in an un- related occupa— tion 1 -- 3 -- 4 Previously self- employed 1 l 7 7 l6 Occupied high government or political position -— -- 5 -- 5 Totals 5 30 42 26 103 An analysis of information about the mobility of the business leader opens the door, among other things, to two major discoveries. The first is that some 31 per 188 cent of the total came to assume the authority they now have, without having worked previously in any other oc— cupation. On the other hand, those who entered busi- ness quite recently were more apt to have had a practi- cal business background. Why is this? One tentative explanation is that from the mid—40's to the 60's, business gradually became more popularly accepted. The same cannot be said for the present trend, however. The second finding is that the largest single group of respondents —- almost half of those who had been in business before assuming their present posi- tion -- came from trade. A case history will illustrate the point. The owner-manager of Turkey's largest sea transportation and shipbuilding concern had first gone into the import- export business.\ This man, who is one of the most prom- inent business leaders of Turkey, decided to engage in trade after years of teaching maritime economy in Istanbul. With his savings, he imported $10,000 worth of manufactured goods from Europe. Following two years of such business, he quadrupled his original capital and then bought a salvaged ship. He reconditioned the sfiiip and sold it with high profit. With the help of loank credit, he then bought a small tanker and started liauling kerosene and gas between several cities on the IWarnara Sea. This man is now worth more than $50,000,000. 189 In this general setting, trade plays an important role in business success. Occupational mobility among Turkish business leaders, on the other hand, is, on the average, very low, particularly following some success in a given occupation. When, occasionally, there is a change of occupation, it is most commonly due to expecta- tion of larger profit in a new career. The second most common reason for a change appears to be the expectation of greater security and "future." Diversification is not new in Turkish business, and specialization is highly valued. On the other hand, many business leaders who do not own the majority of shares of the organization in which they are now opera- ting, are inclined to make a shift in their careers. However, the intention to make a shift in career wanes as the respondents grow older, except for those in their 60's, who seem more interested in making a shift than men in their 50's. The chairman of the board of an import—export organization who is in his early 70's, and who has specialized in auto-parts and tires, plans ruow to open a salt manufacturing plant. He demonstrated to the researcher how such a plant would be useful to :society by making available to the Turkish consumer the jlocal production of a particular brand of salt free of :hnpurities. He actually made a small chemical experi- Inent.to prove his point. Can this mean than men who are 'very close to the age of retirement entertain ideas which 190 will give them proof that they are still active and dynamic? Religion is a major factor in mobility. The fathers of the present big business leaders had strong religious inclinations. There is a correlation between those who left home and cut their family ties, and their alienation from religious affiliations. The majority of the respondents who moved away from their families ranked low in religious beliefs and practices. Reli- giously oriented business leaders seem to be attached to their past. Among those men who have kept all their familial attachments, some were found to be fanatically religious. In one manufacturing concern where most of the top level administrative positions were filled by the chief executive's relatives, the researcher was overwhelmed by the amount of religious writings and relics on the company premises. Ironically, many mana- gerial functions and productive efficiency, were left to the mercy of God. In summary, those who entered business life between 1900-1923 seem to be much more religiously oriented than those who entered business careers following the proclamation of the Republic of Turkey. Although most of the big business leaders were born in the middle and upper social classes, there was some movement from the lower to upper classes. All respond- ents presently are in the upper social stratum of 191 Turkish society. If this is taken as the upper boundary of the social class structure in Turkey, then it is possible to ascertain that 52 respondents have arrived at this level from a lower social stratum. Put in per— centage form, 0.9 per cent of all the respondents moved to the upper classes from a lower—lower social class, 4.8 per cent moved from the upper—lower class, 2.9 per cent from the lower—middle class, and finally 41.6 per cent from the upper—middle. Seen in toto, 50.2 per cent of all the respondents moved from a lower social stratum to their present social status and 49.8 per cent were born into it. This is not an outstanding expression of mobility, but it indicates the traditional structure of the society. However, the traditional society is passing and there appear to be indications that a dynamic generation of youth is starting to flood the industrial sectors of the economy. If this is true, business will now be in a position to recruit young men of talent with high mobility drives. The low mobility of present business leaders can Ema associated with father—son relationships in choosing (:areers. Each respondent was asked what course in life tiis father most insistently wanted him to follow and vfliat he would prefer that his own son do. It was made clear to the respondents that the second question re- ferred to the eldest son, if there were one, or to the nearest relative regarded as heir or heiress. The 192 broad similarities between the two generations are striking. It appears that approximately 45 per cent of the older generation wanted their sons to continue in the same career as themselves, 30 per cent wanted to see their sons pursue a profession, and 25 per cent allowed a free choice without interference. As for the present business leaders, about 50 per cent of them would like to see their own sons continue in the same career as themselves, 20 per cent would allow free choice, and 30 per cent would prefer a profession. Apparently, the respondents rate their own business higher in the social and economic scale than their fathers did before them. The answers indicate that business is still looked upon as a rather closed system in Turkey. The close- ness of the system was drastically illustrated by the owner—executive of Turkey's largest retail—wholesale organization. This 62—year-old business leader, who employs more than 2,000 employees, regards his busi- ness as strictly a family affair. He plans new branches solely to place members of his large family. A survey of his organization revealed that, without exception, all key positions were filled by persons with the same :family name as his; only initials and given names were (different. It was a surprising experience for the inesearcher to see more than 25 identical last names assxm:iated with key managerial positions. 193 The answers further indicate that both old and new generations think highly of the professions and both think little of government service or politics. The esteem in which the professions are held is general throughout Turkey. But the low esteem held of public service and politics is atypical, insofar as Turkish society in general is concerned. Table 13. Place where Mobile and Birth Elites were Educated Place where the Business Leaders Received their College Educa— Relationship of the Business Leader tion to the Founder of the Firm Wife's Father's No Is the Side Side Relation Founder Total In Turkish Universities —- 6 22 12 40 In American Universities 1 5 4 1 11 In European Universities 1 l 6 2 10 Not a University Graduate 3 18 10 ll 42 Totals 5 30 42 26 103 Education was especially important in the success (If the mobile elite. As is shown in Table 13, only 30.8 gxar cent of the mobile elite failed to have a university exhication, while this percentage was 60 in the case of 194 the birth elite. On the other hand, the educated members of the birth elite went to better schools, for 43 per cent of the university graduates from this group had attended colleges in the United States. The Warton School of Finance and the University of Michigan ranked as first choices. The college-educated mobile elite attended mostly Turkish Universities (72 per cent); only about 10 per cent were able to attend American universities. Table 14. Type of Education of Mobile and Birth Elite Field of Relationship of the Business Leader to Concentration the Founder of the Firm Wife's Father's No Is the Side Side Relation Founder Total Liberal l -— l -- 2 Business -- 5 l6 6 27 Engineering 1 4 l2 5 22 Medicine -- 2 —— —— 2 LaW' -- —- 4 4 8 Not a University Graduate 3 l9 9 ll 42 Totals 5 30 42 26 103 Although the birth elite and the mobile elite zittended different schools in different countries, their cflmoices of major fields of concentration followed the 195 same pattern. Both favored an education in engineering, very closely followed by business administration. Beyond their formal education, both elite groups have shown a tendency to pursue additional courses. However, in this respect, the birth elite surpassed the mobile elite, for approximately 63 per cent of the birth elite had followed some kind of professional course, beyond or supplementary to their formal education, while only some 51 per cent of the mobile elite had pursued additional courses beyond their formal educa- tion. One tentative explanation of this fact is that once formal education is terminated and a member of the mobile elite has started a new career, he seldom finds the time or money to further his education. He is too busy rising in the organization hierarchy or in the business world. On the other hand, the member of the birth elite finds time to devote some of his energies to furthering his culture and filling in the gaps in his formal education. 196 Table 15. Additional Courses Beyond Formal Education and Knowledge of Foreign Languages of the Birth and Mobile Elite How Many of the Business Leaders Pursued Additional Courses Beyond Their Relationship of the Business Formal Education? Leader to the Founder of Firm Wife's Father's No Is the Side Side Relation Founder Total Affirmative 4 18 24 ll 57 Negative 1 12 18 15 46 Totals 5 30 42 26 103 Does the Business Leader Know any Foreign Language? Affirmative 5 28 38 23 94 Negative -- 2 4 3 9 Totals 5 30 42 26 103 In addition, the mobile elite was found less skilled in languages. While only some 6 per cent of the birth elite do not know any foreign language, the proportion was slightly more than 10 per cent in the case of the mobile elite. The birth elite seem to be more intel- lectual and cultured than the mobile elite. They appear to be more refined and engage more in social and cul- tural activities. Fully 25 per cent of the mobile elite did not belong to any kind of social or 197 professional organization. In the case of the birth elite, this was only about 18 per cent. Also, the types of organizations to which members of the con- trasted elite groups belonged, differed. The birth elite belonged to more exclusive and expensive clubs and less to professional associations, while the op— posite was the case for the mobile elite. In summary, it is very difficult to say whether Turkish big business leaders are mobile or note, if they are compared with the population as a whole. Their previous socio-economic status would generally be found in the upper one—third. However, this would not present a realistic picture. There exist such wide and profound differences between the urban and rural population that most of the city dwellers can be considered "socialite," compared to the rural popu- lation. It is, therefore, unwise to compare the socio- economic background of the big business leaders with the rest of society and decide upon their mobility. Instead, in delineating the mobility patterns of big INJsiness leaders, narrower comparisons must be made. Theyr are considered mobile if they have come to their present situations from a lower social stratum. Chi the basis of this, the operational hypothesis put :forth in the beginning of this section with respect tc> the mobility patterns of big business leaders, is tfluls tested and found true. 198 Self-Portrait of the Turkish Big Business Leader The Turkish big business leader was born in Istanbul and is about 50 years old; he is married and has children. He is Turkish by nationality and ethnic group. He occupies the chief executive's position in his firm. He probably started his career between 1939- 1960. The Turkish big business leader is usually an educated man and holds a college degree. He probably went to a Turkish University and Specialized in busi- ness or engineering. He knows at least one foreign language —- French. He has furthered his formal edu— cation by pursuing additional courses, and he has traveled abroad. He comes from a middle—class family, but he has little religious orientation. He probably has few or no family ties with the founder of the firm, but he normally maintains strong ties with his relatives. He is not a joiner. His first job was with his present company and he has held his present position ever since joining the organization. In the next chapter, this business leader will Ibe analyzed in terms of socio—psychological charac- teristics. CHAPTER VII MOTIVATIONAL PATTERNS OF THE BUSINESS LEADERS Major Hypothesis One: No collective, standard, or patterned behavior and motivation are identifiable for the Turkish business leaders. They all seem to be mo— tivated by different drives and do not present a common front. The Turkish business leaders can be considered as a heterogeneous group only within Turkey itself. Still, one has to be careful in using the term heterogeneity. What has been considered as heterogeneous within a broader inference might not be considered as such by comparative sociologists or social anthrOpologists. They may view the heterogeneity as no more than var- iations within a homogeneous group. Along these lines, Professor W. L. Warner, in a critique of my thesis, pointed out that many studies he has made on American big business leaders could very easily have come out with either heterogeneous or homogeneous groups. With this reservation in mind, we can now start analyzing the behavioral characteristics of the Turkish big business leaders. In this chapter the behavioral, emotional, and motivational characteristics of big business leaders will be analyzed. The rationale underlying such a 199 200 procedure is to demonstrate that knowledge of his traits is not enough to understand the complex pic- ture that he presents. If such an approach is used strictly, as is the case in many of the existing studies of Turkish business leaders, only super— ficial answers will be provided to these problems. One reason for the blurred image of Turkish business leaders is the overemphasis upon what appear to be common traits in an effort to explain individual emotional, motivational, and behavioral problems. Be- cause of high reliance upon superficial character- istics, the business leaders are often categorized into narrow compartments that do not reflect their behavior patterns. The actions of one are general- ized into the actions of all business leaders. This chapter incorporates research findings obf tained through interviews in an analytical form, and is divided into two major parts. In the first part the motivations and the driving forces of the Tur- kish business leaders will be analyzed; in the sec- ond part the meaning of success will be surveyed. Basically, in both parts, the business leader will be described and analyzed as he sees himself. No clear-cut entrepreneurial and managerial behavior can be isolated for the whole group; how- ever, attempts will be made to categorize data 201 Obtained. Motives that have stimulated the business leader will be taken as dependent variables and will be correlated with various independent variables. In the following pages the results of this behavioral analysis will be presented. Motives of the Big Business Leaders Motivation is a difficult and dangerous area; nevertheless, it was decided to survey its outer as- pects at the point where the manifestations of deep- set motives become visible—-in actions and choices. The nature of motivation is ably outlined by McFarland. As he states it: Motivation refers to the way in which urges, drives, desires, aspira- tions, strivings, or needs direct, con- trol, or explain the behavior of human beings. Psychologists attach different technical shades of meaning to all these terms, but for our purposes we can con- sider them in a general sense as forms of tension occurring within individuals, with resulting behavior aimed at reduc- ing, eliminating, or diverting the ten— sion. Understanding the needs and drives and their resulting tensions helps to ex- plain and predict human behavior, ulti- mately providing a sound basis for manager- ial decision and action.1 Needs are the basic motivators in human behav— ior. The dynamics are relatively simple. The indi- ‘Vidual is compelled by inner urges to find ways to .1. Dalton E. McFarland, Management: Principles and Practices, Second edition, The MacMillan Company, New York, 1964, p. 520. 202 satisfy his needs. As Maslow states it, "Man is a perpetually wanting animal."2 Figure 1, as adapted from French, illustrates the process of motivation.3 Figure 7.1 Diagram of the Basic Ingredients of Moti— vation Need--Search for--Percep. of Potential--Attempts--Goal to Ten- Satisfying Need For Satisfying Attain Ach- sion Goal Goal Goal iev. The individual has needs (tensions); he searches for ways of satisfying these needs; he perceives ways (goals) of satisfying these needs; he attempts to attain his goals; and he achieves his goals. There are two main dimensions to the motivation question. One is the character dimension, the nature of the objectives of the Turkish business leaders, which set the direction for their efforts. The other is the dynamic dimension, which is a measure of the force which the motivations exert on the business leader and the energy with which he seeks his ends. 2. A. H. Maslow, "A Theory of Human Motivation," Psychological Review, 50:370, July, 1943. I3. Wendell French, The Personnel Management Process: Hyman Resources Administration, Houghton Mifflin Company, Boston, 1964, p. 26. 4. Ibid., p. 25. 203 The combination of these two dimensions determine the actions of the business leader.5 The attention of this researcher was first fo— cused upon the profit motive. An intriguing question here is posed by any attempts to weigh the relative importance of the pecuniary motive against the non- pecuniary motives that influence the actions of the Turkish big business leader. Bowen theorizes this point by stating: Many economists think that they are approaching a dead end in their effort to erect increasingly elaborate theories upon traditional assumptions concerning busi- ness behavior and motivation. They believe that economics will be significantly ad- vanced only by introducing more fruitful postulates and testing the resulgant hy- potheses against empirical data. Along these lines, a survey of nonpecuniary mo— tives such as sense of achievement, power and status, prestige, acceptance and recognition, and service to community will be interesting and instructive. Re- search uncovered no single predominant drive that stimulated the business leader in Turkey. From a list of motives, the respondents were asked to choose the ones most compelling to them. 5. John Fayerweather, The Executive Overseas, Sy- racuse University Press, Syracuse, 1959, pp. 81—82 0 6. Howard Bowen, "The Business Enterprise as a Subject for Research," Social Science Research Council, Pamph. No. 11, N. Y., 1955, p. 8. 204 On the other hand, an attempt was also made to study the multiple factors that led them to their pre- sent position by including excerpts from interviews with selected business leaders. The reader must be cautioned at this stage that when a business leader is classified as having been stimulated by achieve- ment motives, money motives, or by a continuous urge for work, this does not mean that his only drive was achievement, money or urge for work. Rather, they were the most compelling ones, among other motives, that guided the businessmen. These descriptions were used mainly as a convenient way of classifying the business leaders and studying their behavior. The business leader was given eight cards; each briefly defined a different motive: achievement, prestige, safety and security, affiliation, service to society, continuous urge for work and results, drive for power, and desire for profit. The respon- dent had the option of choosing one of the cards or a combination, if no one card were strong enough to override the others. The respondents were surprisingly sincere in their answers. Each made an effort to analyze his behavior and give an honest answer. Contrary to many expectations, the Turkish businessmen, under the prOper stimulus, exhibited a willingness to 205 discuss their motives. Similar observations were made by A. J. Meyer who reported that the Harvard Business School group in Turkey also found Turkish merchants eager to provide data for the "case-study" teaching technique. Through cross-checking, this data proved to be very frank and complete.7 A. J. Meyer concluded that, where gain was possible, the merchant would shed the picturesque deviousness usually attributed to him.8 When the eight cards were ready for considera- tion, the ice had been broken between the interviewer and interviewee, and confidence established. Ques- tioning the respondents on motivation invariably began by asking general questions such as these: Why did you become what you now are? Why have you chosen this particular present career? What makes you work? The answers to these questions were re— corded; then the researcher asked the respondent to read the cards and make a selection. Before the re- spondent's choice of motives was coded, his selection fronlthe cards and his verbal answers to the first questions were compared and checked for consistency. 'There were very few inconsistencies between oral '7. A. J. Meyer, Middle Eastern Capitalism, Harvard University Press, Cambridge, 1959, p. 35. 8. i122 206 answers and the forced choice. In any case of incon— sistency, a follow-up was made, and the motives out— lined in the verbal answers were taken into consider— ation. No psychological tests were administered; total reliance was put upon the self-analysis of the business leader. The important factor was each man's self—conception. Table 1 outlines the motives that seem to have stimulated the business leaders of Turkey. Table l. Motives Reported as Having Stimulated the ‘ Business Leader. 1“; Motives that Stimulated Number of Per Cent of — Responses Responses Achievement motives 26 25.2 Continuous urge for work 14 13.5 Achievement and prestige 13 12.6 Achievement and money 12 11.7 Social motives (help to society) 12 11.7 Money motives 6 5.8 Power motives 6 5.8 Security and safety 5 4.9 Prestige motives 2 1.9 Other 7 6.8 Total ‘ 103 100.0 207 There was no outstanding common motivator for the 103 respondents, 26 of whom indicated that they were primarily stimulated by achievement drives. Here one has to be careful not to confuse achievement with con— tinuous urge for work and results. Achievement is more general; it may or may not include the latter. On the other hand, 14 of the respondents indi— cated that the reason for their struggle was the love of work. They liked to work either for the sake of working or for the sight of their accomplishment. The majority of these cases were, however, working primar- ily for the sake of work. Three respondents went to work every day, including Saturdays, at 7:30 a.m. and stayed diligently on the job until 7:30 p.m. Several reasons accounted for this behavior. The most strik— ing was the fear of losing a job contract. Also re- lated to this diligent work was the tendency amont Turkish business leaders not to delegate responsibili- ties to others. This was prompted not so much by avarice as by the belief that they could not trust a manager. They believed that the best management could be achieved only by the person who owned the business, and that this function should not be dele- gated. In addition, these men wanted to be seen do— ing their work. In this way they were proving, to themselves and to society, that they were important, 208 indispensible. In an analysis of the daily time- table of one respondent, it was found that 50 per cent of all the work he was doing could have been performed by a middle manager, and 25 per cent of the work was simply clerical. Although most of the 14 respondents who worked for the sake of work were avid to do their best, their businesses did not grow over a period of years. During these years they performed the same functions, made the same product, and maintained the same quantity of output. To Tarik Demirag, the owner and manager of Istanbul's largest wood manufacturing company, the ambition to do his best was his leading drive: I am ambitiously concerned to do the best I can, because if I do well, I lead the others around me to do well, too. I worked orderly and regularly 16 to 18 hours a day and changed the whole personnel when I took over this firm, and saved it from a coma stage. It was a very difficult beginning. This man gave a continuous urge for work as his basic motivator. He has worked to the point of ex— haustion, yet economic results of his work are negligible. It is the contention of this author that even if these men were taken away from their work completely, the firms would continue to func- tion smoothly. These men are fighting themselves. In the following pages the reader will find an analysis in depth of the motives of the Turkish big 209 business leaders based on table 1 on page 206. The Business Leader Motivated by Achievement Needs Operational Hypothesis 5: Motives related to achievement are the leading, but not the majority, drives of the business leaders. Of the 103 respondents, 26 indicated strong achievement drives. In spite of the fact that the achievement motive appeared frequently, it by no means formed the majority of motives of the busi- ness leaders in Turkey. It was a factor, but only one, as a careful analysis of McClelland's study of Turkish managers illustrates. McClelland hypothezies that: A society with a generally high level of n Ach will produce more ener- getic entrepreneurs who, in turn, pro- duce more rapid economic development.9 After stating his hypothesis, McClelland investigated the behavior of men in different countries. Por- tions of his research, dealing with Turkey, will be briefly presented here. McClelland's main theme was that high n Achieve- ment suits men particularly for the entrepreneurial role, or, at least, individuals with high n Ach be- have in many of the ways that theoretically should lead to successful entrepreneurship. He asks the 9. David C. McClelland, The Achieving Society, D. Van Nostrand Company, Inc., N. Y., 1961, p. 205. 210 question whether men with high n Ach, in fact, more often become entrepreneurs, and whether they are more successful in that role, especially if their motiva- tion particularly fits them for it. To answer this question and test his hypothesis, McClelland compared n Ach levels among managers and professionals in four countries. A question of considerable interest is whether managers have higher n Achieve- ment, not only in a highly industrialized country like the United States, but also in less highly developed countries.1 As it is shown in the following table, the managers were higher in n Ach than the professionals in every country except Turkey. 10. Ibid., p. 260 211 Table 2. Average n Achievement Scores of Managers and Professionals in the United States, Italy, Turkey, and Poland. Country and Condition Managers Professionals (Mgrs—Prof) P United States N 31.0 31.0 Mean Age 42.1 42.7 Mean Ach Score 6.74 4.77 1.97 .025pd SD 4.49 4.54 Italy N 68.0 107.0 Mean Age 27.6 21.7 Mean Ach Score 4.18 2.31 1.87 .010pd SD 4.13 4.31 Turkey N 17.0 48.0 Mean Age 33.1 27.2 Mean Ach Score 1.76 3.52 —l.76 ns SD 3.99 5.81 Poland N 31.0 48.0 Mean Age 35.9 27.2 Mean Ach Score 6.58 4.85 1.73 .100pd SD 5.22 4.98 Source: David C. McClelland, The Achieving Society, D. Van Nostrand Co., Inc., New York, 1961. The case of Turkey is interesting because it has reversed the general trend. McClelland hypothesized and explained this fact by stating that this business com- munity may not have recruited men with high n Achievee ment. Bradburn, who collected the data used by McClelland, had evidence that the group of professionals asked for 212 comparison was probably atypically high in n Ach for Turkey. The reason was that the comparison group was composed of educators drawn from a sample of young men, an unusually large percentage of whom had left home by the age of 14 to attend village institutes (primary school teacher-training schools).ll According to McClelland, both on theoretical and em- pirical grounds, a strong case exists for the fact that freeing a boy from the influence of an authori— tarian father tends to favor the development of his n Ach. The village institutes may unintentionally have raised the n Ach level of the teacher popula- tion in Turkey.12 Bradburn, in another study, also tested 23 Turkish business leaders of a much higher level of success and prominence than the middle managers whose average score was presented in Table 2. These executives averaged 3.87 in n Ach which is signi- ficantly higher than the middle managers' scores. In other words, the outstanding business leaders in Istanbul were significantly higher in n Ach than a group of less successful younger managers attending 11. N. M. Bradburn, "The Managerial Role in Turkey: a psychological Study." Unpublished doctoral dissertation. Harvard University, 1960. 12. McClelland, 22, cit., p. 263. u ‘Ay~ Uhlld 1 HI. ~ A ‘54. 213 a middle management program at the University of Istanbul. Apparently in Turkey, too, n Ach is asso— ciated with business success. McClelland relates achievement to age. His general conclusions indicate that n Ach declines with age. However, his data shows that the trend is re— versed in Turkey. There the more successful Turkish senior managers had significantly higher n Ach than the younger, less outstanding middle managers. Table 3 summarizes the characteristics of a group of business leaders with high n Ach isolated by this researcher. 13. Ibid., p. 264. 214 Table 3. High n Ach Correlated with the Age, Educa- tion, Mobility, Father's Occupation, Period of Entering Business Life, and Employment History of the Big Business Leaders. Age High n Ach Type of Ed- High n Ach Respondents ucation Respondents No. % No. % 20-24 0 0.0 Liberal 0 0.0 25-29 1 3.8 Business 5 19.2 30-34 2 7.7 Engineering 9 34.6 35-39 6 23.2 Medicine 0 0.0 40-49 7 26.9 Law 2 7.7 60-69 3 11.6 70-79 0 0.0 Total 26 100.0 Total 26 100.0 High n Ach Respondents Employment History No. % No previous jobs held 7 26.9 Previously employed in a related occupa- tion in the private sector 11 42.3 Previously employed in an unrelated occupation in the private sector 2 7.7 Previously employed in a related occupa- tion in the government sector 1 3.8 Previously employed in an unrelated occupation in the government sector 1 3.8 Previously self-employed 4 15.4 Previously occupied a high government office 0 0.0- Total 26 100.0 Table 3. (cont'd) Period when the Business Leader 215 High n Ach High n Ach Entered Business Respondents Life No. % 1900-1922 1 3.8 1923—1938 6 23.2 1939-1949 7 26.9 1950-1960 10 38.5 1961—1963 2 7.7 Total 26 100.0 Father's Respondents Occupation No. % Small Mer- chant 6 23.2 Officer in Type of Educa- High n Ach tional Insti- Respondents tution No. % Turkish Univ. 9 34.6 American Univ. 4 15.4 European Univ. 3 11.6 Not a Univ. Grad. 10 38.5 Total 26 100.0 Armed Forces 3 11.6 Engineer 4 15.4 Doctor 1 3.8 Civil Ser— vant 5 19.2 Farmer 2 7.7 Laborer 0 0.0 Teacher 2 7.7 Clerk in Private Sec- tor 0 0.0 Politician 0 0.0 Big Entre- preneur 3 11.6 Journalist 0 0.0 26- 100.0 High n Ach Mobility Respondents No. % Mobile Elite 17 65.4 Birth Elite 9 34.6 Total 26 100.0 216 The achievement oriented group was relatively old; ten respondents out of the 26 were between 50 and 69 years old. The next largest age group was 40 to 49 years old (7 men). In total, 65.3 per cent of all the achievement motivated business leaders were between 40 and 69 years old. Mobile elite formed the majority of the n Ach group. Seventeen out of 26 had no parental relation- ship with the owners, or they had founded their own firms with no assistance from relatives. The remain- ing respondents were related to the founder of the firm either on the father's or wife's side. This fact showed that achievement was not absolutely a factor of upward mobility. The birth elite may very well have been motivated by achievement desires, as in the case for 34.6 per cent of the n Ach group. A careful look at the occupations of the fathers of those motivated by achievement will reveal that the greatest concentration of occupations was in business, both large and small. Sons of business— men proved to be higher in n Ach than the sons of men in other occupations (9 respondents). Apparently, in a developing country like Turkey, child rearing practices among business families, more than any other group, instill in their children the urge for achievement. The next groups, according to response 217 were: civil servants (5 respondents); engineers (4 respondents); and officers in the armed forces (3 respondents). Sons of professionals and busi- nessmen were much more motivated by n Ach than any other group. The independent action of their parents was reflected upon the business leaders. Strong n Ach was seen mainly among persons with an urge for independence—-persons who were not afraid of taking independent action. They were the in— novators of the society. The period when the business leader started his business life was an important factor. Approximately 38.5 per cent of the n Ach group had entered business between 1950 and 1960. The economic environment stimulated the expression of achievement needs. In addition to a favorable economic environment, a high n Ach man needs bench marks in his progress toward success. As was mentioned in earlier chapters, the period between 1950 and 1960 was the most promising for private initiative and enterprise. This period provided the needed bench marks by rewarding the person with initiative, ingenuity, and enterprise. There was some degree of relationship between education and achievement motives. Approximately 38.5 per cent of the n Ach group did not have col- lege degrees. On the other hand, the remaining 218 61.5 per cent of the respondents had college educa- tions. If the 16 respondents with university degrees are considered separately, it will be seen that those with a college major in engineering surpassed the others, accounting for 56.3 per cent of the univer- sity graduates. Next came business majors (31.2 per c:ent), followed by law (12.5 per cent). On the kDasis of this sample it appears that an education LLII applied science attracted more peOple with high .r1 Ach. Engineers seemed to be more systematic, and -t:fieir achievement needs found expression in more izuaingible goals. These people had subgoals and al- -t:eeurnative goals. Subgoals play the role of bench rTLEiJTkS and indicate whether a man is on his own true t:r:reack. The alternative goals tend to eliminate the :f?<:>xrnmtion of defense mechanisms and the assessment <:>1?' .success, in case the original goal cannot be .Ei'tzizéained. These men, the engineers, were apparent- :Li)’ rnore adaptable to the changing environment as a 4:763:53111t of this characteristic. Surprisingly, none of the n Ach group had a :1‘:15h363ra1 arts education, and only 2 (12.5 per cent (Def? fihe university graduates) had majored in law. 'jrlfiliiés is a low percentage when compared to the gen— €E=1:‘53£L education of the societY- For example, 31 El“‘Vyers were overcrowding public service and state 219 economic enterprises, but a legal education was not favored by the achievement motivated group. The final educational correlation indicates that the majority of the n Ach group of university gradu- ates attended Turkish Universities (56.2 per cent), 25 per cent were educated in American Uni- whereas, 'versities, and 18.8 per cent in European Univer- ssities. The proportion of those educated in Amer- ixzan Universities was quite high. Out of the en- ‘trire 103 respondents, 11 graduated from American ‘tJriiversities. Attending a college in the United :3 t:ates, by itself, may indicate some degree of n JDLCZkh When employment histories of the big business :1_e3eaders were correlated with achievement drives, it \AIEiiS found that 42.3 per cent of the n Ach group had l:weeeen.previously employed in a related occupation in t:]filee private sector. One may tentatively explain tllfilj;s fact by stating that people with high n Ach (:zrjialige occupations and jobs when they see the pos- £3':-'.L—13.‘i.lity of furthering their occupational success. CI8171€353e people have high social and occupational mo— :k>;i-3L:ity. Although it was also true that 27 per (2 estrli: of the n Ach group had not changed jobs, 53 191(311 persons represented the birth elite group \Ar 171(3’ had inherited their fathers' business. 220 Very few of the present business leaders had been in the government sector previously. Only 7 per cent of the n Ach group were previously in a related or unrelated occupation, in the government. This percentage is low compared to the total num- ber of business leaders with government experience. As a whole, 18.8 per cent of the business leaders came from the government sector, while only 7 per cent of the n Ach group had previous employment in the government sector. Obviously, men with high n Ach either are not numerous in the government, or else they do not leave their jobs to join the pri— vate sector. Those who left the government sector for private enterprise indicated they did this mainly for money, but there are also traces of achievement and accomplishment needs mixed with these profit motives. The remaining persons in the n Ach group (15.3 per cent) had been previously self—employed. They had sold their business or merged with their present companies. Often, in Turkey, a person with entrepreneurial abilities starts a business usually very small. As soon as it starts to grow he either invites a large corporation to buy his busi- ness, or he voluntarily liquidates his own busi- ness to join a larger concern. The rationale 221 behind such action is that once an entrepreneur sees the opportunities in business and realizes that he cannot proceed further alone, he looks for an oppor- tunity to associate with a larger concern. The Business Leader Motivated by a Continuous Urge for .wO_rr- Operational Hypothesis 6: A small group of busi- ness leaders show an aimless urge for work. Continuous urge for work ranked second after the achievement motive. As was previously indicated, 14 respondents had given continuous urge for work as a major motivator. This figure represents 13.8 per cent of the total number of respondents. Table 4. Continuous Urge for Work as a Drive Corre- lated with the Age, Mobility, Father's Oc- cupation, Education, Employment History, and the Period of Entering Business Life. Work Motivated Type of Edu- 'Work Moti- Age Leaders cation yated Leaders No. % No. % 20-24 0 0.0 Liberal ' 0 0.0 25-29 0 0.0 Business 5 35.8 30-34 0 0.0 Engineering. 1 7.1 35-39 2 14.3 Medicine 0 0.0 40-49 5 35.7 Law 2 14.3 50-59 4 28.5 Not a Univ. Grad. 6 42.8 60-69 2 14.3 70-79 1 7.1 TPotal 14 100.0 Total 14 100.0 ¥ 222 Table 4. (Cont'd.) Type of Educa— Work Motiva- Mobility Work Motiva— tional Institu- ted Leaders ted Leaders tion No. % No. % Turkish Univ. 7 50.0 Birth 9 64.2 Elite American Univ. 0 0.0 Mobile 5 35.8 European Univ. 1 7.1 Elite Not a Univ. Grad. 6 42.8 Total 14 100.0 Total 14 100.0 Period when the Business Leader Enter- Work Motiva- Father's Work Motiva- ed Business ted Leaders Occupa- ted Leaders Life No. % tion No. % 1900-1922 2 14.3 Small Mer- chant 4 28.5 1923—1938 2 14.3 Officer in 1939-1949 4 28.5 Armed Forces 1 7.1 1950-1960 5 35.8 Engineer 0 0.0 1961-1963 1 7.1 Doctor 0 0.0 Civil Servant l 7.1 Farmer 2 14.3 Laborer 0 0.0 Teacher 2 14.3 Clerk in Pri- vate Sector 0 0.0 Politician l 7.1 Big Entrepre- neur 3 21.6 Journalist 0 0.0 Total 14 100.0 Total 14 100.0 223 Table 4. (Cont'd.) Work Motivated Employment History Leaders No. % No previous jobs held 6 42.9 Previously employed in a related occu- pation in the private sector 3 21.6 Previously employed in an unrelated occupation in the private sector 1 7.1 Previously employed in a related occu- pation in the government sector 1 7.1 Previously employed in an unrelated occupation in the government sector 1 7.1 Previously self-employed l 7.1 Previously occupied a high government office 1 7.1 Total 14 100.0 As opposed to the n Ach group, these respondents were, for the most part older men. Approximately 50.1 per cent were between the ages of 40 and 49, 28.5 per cent were between the ages of 50 and 59, and 21.4 per cent were above 60 years of age. These men had direc— ted the energy of their youth toward hard work, but, unfortunately, they were not among the most successful businessmen. Their endeavor was a type of restlessness more than an organized effort toward a purposeful goal. The majority of this group of business leaders (64.2 per cent) were born to their present positions. 224 They are known as the birth elite. They have in- herited or been put at the top of their fathers' businesses. They did not have expert knowledge about their own business, but they were eager to learn, to control operations, and to prove to themselves that they deserved this position. Aware of their lack of expert knowledge, they put in long and painful hours on the job to compensate for the difference. Their self appeared to be smaller to them than their role. Without exception, the firms of these men, although big, had stopped growing. They were merely struggling for survival. With proper channeling of accepted advice, their businesses, in time, could expand sig- nificantly. A close look at the occupations of the fathers of these businessmen indicated that 50.1 per cent were either small merchants, or big entrepreneurs who had set up the present businesses. Their fathers were not professionals. Approximately 14.3 per cent were farmers; 7.1 per cent were politicians; and (another 7.1 per cent were officers in the armed fCurces. Most of these respondents indicated, during thEB interviews, that they were not provided with trELining and operational knowledge of the business ej¥t11er before or immediately after joining their fertilers' firms. They criticized their fathers for 225 placing the immense burden of management upon their shoulders before they were trained and ready to accept such responsibility. Of this generation of young birth elite, 42.8 per cent did not graduate from a university. Of those who had graduated from a university, 62.5 per cent had majored in business. Unfortunately, business educa- tion in Turkey can hardly be compared to its counter- part in the United States. In Turkey it is generally the last choice of the student applicants. Busi- ness schools have to be content to gather in, for the most part, only rich drOp—outs. Furthermore, 87.4 per cent of the college graduates attended Turkish universities, whereas only 12.6 per cent attended European universities, and none attended American institutions. It is not surprising, therefore, that these 14 men, although motivated by a continuous urge for work and self-improvement, were inadequate— ly educated and trained for their jobs. Looking at the employment history, it can be seen that 42.9 per cent of these men had no prev- ious work experience, and only 21.6 per cent were previously employed in a related occupation of the private sector. Neither of these groups had ac- quired enough training to carry out the demands of their present work loads. 226 Can it be said that the young birth elite of the Turkish business community, with no previous job ex— perience, with only the Turkish type of university business education, with business experience somewhere in the family background, are inadequately equipped to deal with the requirements of today's business? This researcher is inclined to give an affirmative answer to this question. The Business Leader Motivated by a Drive for Profits Operational Hypothesis 7: The profit motive is the leading drive of only a few business leaders. Money as a motivator has not been found to be the primary drive of a working man. Mayo and W. F. Whyte conducted extensive research to arrive at the common understanding that "money is not everything, but it comes ahead of all secondary things." It facilitates the possibility of satisfying the physical and social wants, since it is a measure of wealth. Thus, it can motivate as a vehicle to the attainment of wants or serve as an incentive in itself. Money is a symbol, not a valuable object in itself. Its power is not confined to a market value alone. Money symbolizes security, achievement, affiliation, prestige, and power. It is a loose con- cept that people use to represent many desirable values. Thus, the function of money as a motivator 227 must be observed in the light of a dual symbolism, economic and emotional. In developing countries, this statement has greater verity. Through money, a man can better his standard of living and gain prominence in society, and he is likely to value money highly. Security lies not in the saving of a man, who is at the mercy of his en— vironment, but in a continued need for his services. Thus, acquisition of money denotes self-actualization as described by A. H. Maslow.l4 The Turkish business leaders identified money motive as their second or third want among thers, if they identified it at all. Money ceases to be a primary motive after a partial gratification, but nonetheless is among the drives. In the United States, a top executive's salary can express fantastic figures. Yet a considerable por- tion of the amount is absorbed into taxes and ser— vices which are not at his disposal. The only bene- fit the executive gets is the distinction he gains through this large salary, among other men in his company. It gives him more importance and higher status. 14. A. H. Maslow, "Some Basic Proportions of a Growth and Self-Actualization Psychology" in Understanding Human Motivation, C. L. Stacey and M. F. Demartino (eds.), Cleveland, Howard Allen, Inc., 1958, p. 110. 228 Gellerman cites an observation of persons in whom money is a primary incentive. He assumes that money want is most prominent in people whose earnings have not satisfied their capital needs and in those whose earning potential is too low ever to fulfill the capital needs. If a substantial income is acquired, after a time the money motive can lose its primary importance. In their present condition, they per- ceive the environment to be unmerciful, people around them unreliable and malevolent toward them. Persons with a true money motive as a goal, rather than a vehicle, naturally choose jobs with higher income or, more often, strive for self-employment in order to escape the boundaries which salaried vocation places on their earnings.15 It is not always easy for the business leader to admit that money is what he wants in life, that he works to increase profits. Only 6 out of 103 respondents clearly indicated that profits were the prime consideration in their work and life. They were in business to make money;.all other con- siderations were by—products. 15. Gellerman, 92. cit., p. 162. 229 Table 5. Profit Motive correlated with the Age, Mo- bility, Father's Occupation, Education, Em- ployment History, and the Period when the Business Leader entered Business Life. Profit Motivated Profit Moti- Age Leaders Type of Edu- vated Leaders No. % cation No. % 20-24 0 0.0 Liberal 0 0.0 25-29 1 16.7 Business 2 33.3 30-34 0 0.0 Engineering 1 16.7 35-39 0 0.0 Medicine 0 0.0 40-49 2 33.3 Law 3 50.0 50-59 2 33.3 Not a Univ. Grad. 0 0.0 60-69 0 0.0 Total 6 100.0 Total 6 100.0 Type of Educa- Profit Moti— Profit Moti- tional Insti— vated Leaders Mobility vated Leaders tution No. % No. % Turkish Univ. 5 83.3 Birth Elite 1 16.7 American Univ. 1 16.7 Mobile European Univ. 0 0.0 Elite 5 83.3 Not a Univ. Grad.0 0.0 ‘ Total 6 100.0 Total 6 100.0 __ 230 Table 5. (Cont'd.) Period When the Profit Business Leader Profit Moti- Father's Motivated Entered Business vated Leaders Occupa- Leaders Life No. % tion No. % 1900-1922 1 16.7 Small Mer- chant 1 16.7 1923-1938 0 0.0 Officer in 1939-1949 0 0.0 Armed Forces 1 16.7 1950-1960 4 66.6 Engineer 0 0.0 Civil Servant 1 16.7 Farmer 0 0.0 Laborer 0 0.0 Teacher 0 0.0 Clerk in Pri- vate Sector 0 0.0 Politician 2 33.3 Big Entre- preneur 0 0.0 Journalist 0 0.0 Total 6 100.0 Total 6 100.0 231 Table 5. (Cont'd.) Employment History Provit Moti- vated Leaders No. % No previous jobs held 1 16.7 Previously employed in a related occu- pation in the private sector 2 33.3 Previously employed in an unrelated occupation in the private sector 0 0.0 Previously employed in a related occupa- tion in the government sector 2 33.3 Previously employed in an unrelated occupation in the government sector 0 0.0 Previously self-employed 0 0.0 Previously occupied a high government office 1 16.7 Total 6 100.0 The distribution of the respondents by age illus— trated the peculiar nature of the Turkish big business leaders. 16.7 per cent were between 25 and 29 years old. They wanted to accumulate wealth. Emphasis on profits drOpped to zero for those between 30 and 34. Here idealism became the primary driving force. When the business leader reached maturity (40-59 years old), profit became, again a prime reason for their existence (66.6 per cent). Between 60 and 69 years of age, the EEmphasis once more shifted away from profits. Since tfliey had nearly reached retirement, their profit goals 232 had probably been reached. On the other hand, when the business leaders reached their 70's, profit, surpris- ingly, regained its importance. Of those who had valued profit as their most important drive, 16.7 per cent were above 70. Around 83 per cent of these profit worshippers had moved to their present status from a lower social class. They were the mobile elite of the Turkish business community. Money, in the form of high pro- fit, was instrumental in their progress along the road to success. These men were, by no means, misers; but they valued money highly as a means to an end. They were also striving to accumulate a commodity that they lacked during their youth. No generalizations can be made about the occu- pations of their fathers. Almost every profession and occupation was represented. There was, however, an interesting feature. For the first time, fathers in politics entered the picture. 33.3 per cent of the business leaders' fathers were politicians. Can we assume that poli- tical fathers instill in their children values that Place profit on a pedestal? When the employment history of this group was iITvestigated, it was found that 50 per cent of the blJsiness leaders in this group had had some previous 233 work experience in the government sector. Eventually, these men had left their former occupations for a new one in business. Why? Could it have been for the financial benefits of the private enterprise? Why did they leave a prestige position for one that was not entirely socially acceptable? Was there more to the shift than financial rewards? Are businessmen in Turkey gaining more prestige and social approval? Answers to these questions are beyond the scope of this dissertation. What were the educational levels of these pro- fit motivated respondents? First, all had college degrees. Fifty per cent of them majored in law, 33.3 per cent in business, and 16.7 per cent in engineer- ing. Around 83 per cent went to Turkish universi- ties, and the rest went to American institutions. The majority (66.6 per cent) of the profit oriented respondents entered business life during the democratic regime between 1950 and 1960. If any conclusion is to be drawn on the basis of so small a sample, the portrait of the profit— oriented business leader in Turkey is as follows. He is a middle aged, mobile man. His father was a politician, and he himself was previously employed in the government sector. He entered business life Chiring the period in the Turkish economy when it was 234 possible to make fortunes overnight. He is well edu- cated and majored in law. He attended Turkish uni- versities exclusively. The Business Leader Inspired by Social Motives Operational Hypothesis 8: Socially oriented business leaders are gaining in numbers over leaders motivated by different drives. Socially oriented business leaders differed markedly from the profit-oriented business leaders. In total, 12 business leaders indicated that their main motives were to reach positions from which they could aid society. They made up 11.65 per cent of all the respondents. Resit Serif Egeli, president of the Industrial DevelOpment Bank is a socially_oriented man: My mother has influenced my educa— tion. We were in extreme financial dif- ficulties when I reached school age. She infused in me the desires for education, maybe so that I could overcome material problems. I went to the Faculty of Pol- itical Sciences on government scholar- ships. Because of this scholarship I feel I owe a great deal to the country. This feeling has always stimulated me to work and to succeed . . . Money, fame, and prestige come after the man achieves success. 235 Table 6. Social Motives Correlated with the Age, Mo- bility, Father's Occupation, Education, Em- ployment History, and the Period when the Business Leader Entered Business Life. Socially Moti- Socially Moti— Age vated Leaders Type of Educa- vated Leaders No. % tion No. % 20-24 0 0.0 Liberal 0 0.0 25-29 0 0.0 Business 3 25.0 30—34 1 8.3 Engineering 3 25.0 35-39 0 0.0 Law 0 0.0 40-49 6 50.0 Medicine 1 8.3 50-59 2 16.7 Not a Univ. Grad. 5 41.7 60-69 3 25.0 70-79 0 0.0 Total 12 100.0 Total 12 100.0 Type of Educa- Socially Moti- Mobil- Socially Moti- tional Insti- vated Leaders ity vated Leaders tution No. % No. % Turkish Univ. 7 58.3 Birth - Elite 6 50.0 American Univ. 0 0.0 Mobile European Univ. 0 0.0 Elite 6 50.0 Not a Univ. Grad. 5 41.7 ¥ Total 12 100.0 Total 12 100.0 ‘ 236 Period when the Business Leader Socially Moti— Father's Socially Moti- Entered Busi- vated Leaders Occupa- vated Leaders ness Life No. % tion No. % 1900-1922 0 0.0 Small Merchant 4 33.4 1923-1938 3 25.0 Officer 1929-1939 4 33.3 in Armed Forces 2 16.7 1950-1960 3 25.0 Engineer 0 0.0 1961-1963 2 16.7 Doctor 1 8.3 Civil Servant l 8.3 Farmer 0 0.0 Teacher 1 8.3 Clerk in Private Sector 0 0.0 Politi- cian l 8.3 Big En- trepre- neur 2 16.7 Journal- ist 0 0.0 Total 12 100.0 Total 12 100.0 237 Table 6. (Cont'd.) Socially Moti— Employment History vated Leaders No. % No previous jobs held 6 50.0 Previously employed in a related occupation in the private sector 0 0.0 Previously employed in an unre- lated occupation in the private sector 2 16.7 Previously employed in a related occupation in the government sector 2 16.7 Previously employed in an unrela- ted occupation in the government sector 0 0.0 Previously self-employed l 8.3 Prneviously occupied a high government office 1 8.3 IKDtal 12 100.0 Most of the socially-oriented men were between 40 afhd. 49 years old (50.0 per cent). The men in the next léirkgest group were between 60 and 69 years old (25.0 p91? cent). Approximately 17 per cent were between 50 anCi 59 years old, and only 8.3 per cent between 30 and 34 ){ears old. In terms of fathers' occupations, 50 per cent had fa”tillers who were in business previously. The fathers of 16.7 per cent were officers in the armed forces. The fathers of the remaining business leaders were doctors, civil servants, teachers, and politicians. 238 Fully 50 per cent of these leaders did not have previous job experience. The remaining men rose to their positions from related occupations in the busi- ness and governmental sectors. These respondents were equally divided among the birth and mobile elite. Approximately 33.3 per cent entered business life during Inonu's regime, between 1939-1949, where- as 25.0 per cent had made their entry into business previously, during the period between 1923-1938. As will be recalled, this was the period immediately after the proclamation of the Republic, character- ized up to 1933 by strong liberalism, and, after 1933, by mild etatisme. Another 25.0 per cent joined the private sector between 1950-1960. The remaining 16. 7 per cent made their entry into the private Sector following the 1960 Revolution. Of the respondents, 41.7 per cent were not uni— VEI‘Sity graduates. Those who had graduated from college (all Turkish universities) were divided e(IL—1?:tlly between business and engineering majors. It is impossible to ascertain linearity be- tween the dependent and independent variables, but a general conclusion can be made based upon obser- vations. The business leaders who were basically motivated by an urge to help society tended to be beat”Ween 40 and 44 years old, rmuimajored in bUSiHESS 239 or engineering, had attended Turkish educational insti- tutions exclusively, and had entered business life be- 'U~een 1923-1949, long before the democratic party take- ovwer. Their fathers had been in business, but they, theanselves, had not held jobs other than their present oneas. EhJSJLnessmen Driven by Power Motives Operational Hypothesis 9: Contrary to general knel:ief, power-oriented leaders are found among busi— nes smen. These power drives of the businessmen were in liJuee with Adlerian concepts. Many of the business lleeuflers appeared to have inferiority complexes and wanted to control their environments. Disposition of power may lead one into a guilt CCNUEJIex. Guilt can result from the earlier trauma Of: busing led, which in latency emerges as antagon- istlik: reSponses toward those rejecting his power.16 SeCNDridly, the temptation to use it irresponsibly re- curfs. Petty obstructions frustrate him excessive- 1y; ‘thus he uses his power to overcome them. Be- inGinguilt leads into the formation of defense mecl”lc‘anisms. Possessing and using power extrava- gantily, forces the individual to make justifica- 16- For Oedipus complex see: Sigmund Freud, Three essays on sexuality in standard edition of the Complete Psychological Works, J. Shackey (ed.), London, Hogarth Press, 1953. 240 tions. He convinces himself that it is only fair and the best possible way. A young owner of a prominent annber factory placed a great emphasis on explaining trust in Western countries an executive does not have tc> police the workers, to scold them or to coerce them into doing their duty: I am fully aware of this practice to be wrong in Western countries, I assured you. But unfortunately in our country, a man will not work the minute you turn your head. I have to tell them every single thing and pounce it on their heads if I want to get this log cut up. Union representatives--come now, do you think I would condescend to deal with those rascals over the same conference table: I throw them out, because they don't care what happens to my business... iIt :is apparent that had this young man not idolized ther'power at his disposition, he could have seen other ways to administer his work. As Adler con- tENflcis, desire for power keeps accumulating directly WiJZFI the attainment of it, as opposed to the sta- biflngty of prestige wants.l7 Since it is a useful de\fixze for enhancing the goals of the self, it Ennerytually becomes the only channel for getting lflfiirugs done. The results may be detrimental or frui:tful depending on the cause to which power is appl ied . In Turkey, business has its problems for not \ 17. A. Adler, Understanding Human Nature, N. Y. Greenberg, 1929, p. 398. 241 being a traditionally reinforced occupation. No com- pany is in a position to compete with the government, arnd insecurity is prevalent. Lack of precedent in mandagement philosophies comparable to those in Western larufls provides a very fertile ground for power plays in. interpersonal relations. Out of 103 respondents, only 6, or 5.84 per cent, of? ‘the business leaders indicated power needs as the nuaj1oyment History vated Leaders No. % NO previous jobs held 2 40.0 Prwaxriously employed in a related occu- Pation in the private sector 1 20.0 Previously employed in an unrelated OCKZLLpation in the private sector 0 0.0 Pr¥3\riously employed in a related occu- Pai:iJon in the government sector 1 20.0 Prwaxriously employed in an unrelated OC1<3L1pation in the government sector 0 0.0 PrfEviously self-employed 1 20.0 pIVEXIiously occupied a high government Office 0 OJ) Total 5 100.0 ‘ 248 Table 8. (Cont'd.) Period when the Business Secur. Moti- Father's Secur. Moti- Leader Entered vated Leaders Occupation vated Leaders Business Life No. % No. % 1900-1922 0 0.0 Small Merchant 1 20.0 1923-1938 2 40.0 Officer in .1939-1949 2 40.0 Armed Forces 0 0.0 1£959-1960 1 20.0 Engineer 0 0.0 1£96l-l963 0 0.0 Doctor 0 0.0 Civil Servant 0 0.0 Farmer 0 0.0 Laborer 1 20.0 Teacher 0 0.0 Clerk in the Private Sec— tor 0 0.0 Politician 0 0.0 Big Entre- preneur 3 60.0 Journalist 0 0.0 Total 5 100.0 Total 5 100.0 g The majority of security-oriented business leaders “”3113 between 35 and 49 years old, with more concentra- tidbrl in the late forties. A large per cent (80.0) were "NDhnile. The fathers of this group had been big entre— preneurs who lost their businesses and fortunes while .trkeidr sons were in their 20's. They did help their sons, 249 however, by introducing them to influential people in the large business circles. It is therefore not sur- prising that 40.0 per cent had held no jobs other than the ones they held at the time of the study, or that 60.0 per cent had no college education. The two uni— versity graduates in the sample had majored respective- .ly'in business and engineering. One attended a Turk— isflu and the other a EurOpean university. Ehlsinessmen Dominated by Prestige Motives Although prestige needs have been one of the ginidelines in cultural constructs throughout history, it: had not been included in objective studies until the: twentieth century. As a concept, prestige has no set: dimensions uniformly followed by all collectivi- tixess, but its effects in a developing country can: ruyt Ibe overlooked. Many revolutions have resulted frTDHI the prestige needs of hard-working, ambitious infiiigviduals who perceive the traditional class ri&gjrdity as a block to their achievements. Saul W. Gellerman describes prestige as an un— erifzten definition of conduct that other people are e)‘ercted to show in one's presence: what degree of respect or disrespect, formality or informality, re- SEiane or frankness. A man's prestige is judged by chn” lie can expect to be treated.18 \ ”183‘ Saul W. Gellerman, Motivation and Productivity, .American Management Association, Inc., 1963, p. 151. 250 One does not select the degree of prestige he wishes to attribute to himself, alone; it is conferred upon him by society. Prestige comes into recognition as a combination of efforts by lower status peOple who want to put someone on a pedestal to satisfy their needs for security and protection and the fact that this someone achieves high status by climbing onto tflue pedestal. For example, when a businessman wanted tc> order coffee for the interviewer, he called in the dcxorman who could have been old enough to be his father, addressing him as "my son." And the latter .reFDIied, "at your service, sir," to the order. Need for~ prestige and social inequality are reciprocal determinants of each other. Only 2 out of the 103 respondents clearly indi- cated that they became what they were in order to aCCILlire a position of prestige in their society.. They Walltzed respect and admiration. The only way they saw of. Eichieving this was to become business leaders. TTLiss was unusual because, as stated before, business leeaxflers are held in low esteem in Turkey; hence, the 343“? number of prestige respondents. £E;hhievement, Money, and Prestige Drives The young president of a maritime transportation CcnnFNany, a Wharton School of Finance graduate, was a 1:Ypi-Cal example of a person stimulated by combined achievement and profit motives. 251 My desire is to be able to reach the highest occupational level in my field. Profit is not an end, but a means to an end. If you accomplish a job successfully, this will neces- sarily increase the profits for your company. Table 9. Prestige, Money, and Achievement Drives cor- related with the Age, Mobility, Father's occupation, Education, Employment History, and the period when the Business Leader en- tered Business Life. Prestige, mon- Prestige, Mon- ey, and achiev. ey, and achiev. motivated lead- motivated lead- ers' Type of Edu- ers Age No. % cation No. % 20—24 0 0.0 Liberal Arts 1 4.0 25-m29 l 4.0 Business 6 24.0 30-fl34 3 12.0 Engineering 6 24.0 35—39 1 4.0 Law ' 0 0.0 40—49 7 28.0 Medicine 1 4.0 50—59 11 44.0 Not a Univ. Grd.ll 49.0 550-69 2 8.0 7O~9o 0 0.0 Total 25 100.0 Total 25 100.0 252 Table 9. (Cont'd) Prestige, mon- Prestige, Mon- Period when ey, and achiev. Fath- ey, and achiev. the Business Motivated Lead— er's Motivated Lead- .Leader Entered ers Occu- ers .Business Life No. % pation No. % 1900-1922 1 4.0 Small Merchant 6 24.0 1923-1938 5 20.0 Officer 19939-1949 11 44.0 in armed forces 3 12.0 1950-1960 7 28.0 Engineer 1 4.0 15961—1963 1 4.0 Doctor 1 4.0 Civil Servant 3 12.0 Farmer 2 8.0 Laborer 0 0.0 Teacher 1 4.0 Clerk in Private Sector 0 0.0 Politi- cian 2 8.0 Big En- trepren- eur 5 20.0 Journal- ist l 4.0 \ Total 25 100.0 Total 25 100.0 253 Table 9. (Cont'd) Prestige, Mon— ey, and achiev. Prestige, Mon— ey, and achiev. Type of Edu- Motivated Lead- Mobil- Motivated Lead- cational In- ers ity ers stitution No. % No. % Thirkish Univ. 6 24.0 Birth Elite 8 32.0 American Univ. 3 12.0 Mobile ELirOpean Univ. 5 20.0 Elite 17 68.0 Ncrt a Un. Grd.ll 44.0 Tcrtal 25 100.0 Total 25 100.0 Ehnployment History Prestige, Money, and achiev. Mo— tivated Leaders No. % NC) previous jobs held 4 16.0 Prwsviously employed in a related occu- Pation in the private sector 9 36.0 Pr‘eviously employed in an unrelated OCKZUpation in the private sector 3 12.0 previously employed in a related occu- Ipaizion in the government sector 2 8.0 PI‘eviously employed in an unrelated 0CZCZUpation in the government sector 0 0.0 previously self—employed 6 24.0 pr‘eviously occupied a high government Office 1 4.0 \ Total 25 100.0 \ 254 The dominant age group for these business leaders was between 50 and 59 years (44.0 per cent). Another 28.0 per cent were between 40 and 49 years old, where- as 12 per cent were rather young, in their early thirties. More striking differences existed in terms of mo- bility. Fully 68.0 per cent of the business leaders in this group were mobile, while only 32.0 per cent were birth elite. Similar patterns were also observed in their fathers' occupations. Fully 44.0 per cent had fathers who were in business, whereas only 12.0 per cent had fathers who were officers in the armed forces, and another 12.0 per cent had fathers who were in the civil service. Paternal professions such as medicine and engineering each represented 8.0 per cent of this group. There was one journalist among the fathers, representing the final 4.0 per cent of the array. No wide differences appeared in the employment history of the big business leaders. Fully 36.0 per Cent were previously employed in a related occupa- tion in the private sector, whereas 24.0 per cent were self-employed before joining their present firms. Only 16.0 per cent had held no other pre- Vious jobs. One person making up the final 4.0 per Cent of the respondents had previously occupied a 255 high government office. A good proportion, 44.0 per cent of the group, entered business life under the Inonu Regime, between 1939—1949, but 20.0 per cent entered much earlier, between 1923-1938. The largest group of business leaders in this motive category did not have a university education (44.0 per cent). Those who had university degrees favored business and engineering as their field of concentration. Of the college educated business leaders in this group, 42.0 per cent had gone to Turkish universities, 36.0 per cent to American uni- versities, and 22.0 per cent to European univer- sities. In this case, foreign universities were favored against native colleges. If a portrait of this group of business leaders were to be drawn, the following picture would appear. The achievement, money, and prestige motivated person is in his late fifties. He is mobile, comes from a merchant family, and has previously been employed in the private sector. Education probably did not play an important role in his career. If a college graduate, he majored in business or engineering, more often than not in a foreign institution, pre- ferably an American university. 256 How to Succeed in Business This title is more suggestive than descriptive. The success stories of the business leaders are not the subject matter for discussion here. Basically, the meaning attributed to success by the business leaders themselves will be studied. Understanding the mean- ing of success as conceived by the business leader, will provide means for further understanding his be- havior. Up to.now in this chapter, certain factual variables such as age, mobility, educational level, etc., have been related to the main motives of the business leader. At this point, the conception of success and of a successful business leader will be analyzed and correlated with the motives, as dis- cussed in the preceding section. Progress along these lines will provide more characteristics to sketch the self—portraits of the business leaders, thus proving the major hypothesis 1 stated in the beginning of this chapter. flhat is Success? Operational Hypothesis 11: Business leaders in Turkey see expansion in business as the major con- Stituent of success. Conception of success is relative. Business leaders could never agree on one meaning because its 257 meaning is highly individual. According to Nuri Cerahoglu, large profit alone does not constitute success in business: If success means only profits, making money is very easy. Success is the combination of fame in business and profits. Success to Tarik Demirag is the proper applica- tion of material resources to a given business: .....He must have a knowledge of business, and some capital. Then one should apply the former to the latter, and give it a right direction. This is success, and the rest of your ele- ments are nuances. Fully 64 respondents, or 62.1 per cent, con- sidered expansion in business as the major constituent of success. The majority of these men are motivated by achievement drives and were previously employed in a related occupation in the private sector. The next constituent of success on the list was recognition and prestige (8.7 per cent). Most of these respondents were motivated by a continuous urge for work. As it will be recalled, those moti- vated by a continuous urge for work were striving to prove to themselves and to society how important and useful they were. Furthermore, these were their first and only jobs. Here there was an element of vanity that was being satisfied. Next came large profits as determinants of suc— cess (7.7 per cent). Money was a common motivator in 258 these cases. The leaders had not been previously em— ployed in other jobs. Particular size and type of wealth constituted the last sizeable determinant of success (7.7 per cent). Power drives were predominant among the moti- vations of the men in this group. Here, too, the men had not been employed previously in other jobs. In addition to the already mentioned constituents of success, 4.8 per cent of the business leaders thought that profits, combined with accomplishments, determined success in business. Another 1.9 per cent indicated social achievements as the major constituent of success. From data presented here, linearity between mo- tives and determinants of success, as perceived by the business leaders, exists. 259 Table 10. What the Business Leader Considers the Major Constituents of Success (total number of reSpondents = 103) Constituents of Success No. of Re- Per Cent spondents Large profits 8 7.7 Recognition and profits 9 8.7 Expansion in business 64 62.1 Social achievements 2 1.9 Certain size and type of wealth 8 7.7 Profits and accomplishments 5 4.8 Other 7 7.1 Total 103 100.0 Business Leaders Describe a Successful Businessman Operational Hypothesis 12: There is no agreement among business leaders in describing a successful busi- nessman. During the interviews, business leaders were asked to describe a fellow businessman whom they considered successful. From these descriptions an individual with the following characteristics emerged as the represen- tative image of a successful businessman. He is hard- working, willing to help society, honest in his per- formance, and at the same time intelligent and oppor— tunistic. A slim minority mentioned also, as prereq- uisites to success, ability to forecast the future and 260 perfection in work. Business leaders from different industries differed in their perception of a successful businessman. Nuri Cerahoglu described a successful businessman as the following: A successful business leader is a person who is helpful to the society and who considers profits, expands his busi- ness by taking profits into consideration. Nurettin Baban, chairman of the board of Sark De- girmencilik T.A.S. (flour manufacturers) described the successful business leader as: A person who has a knowledge of himself. He must know his own capaci- ties. A successful business leader is a person who thinks in the long run. He must be courageous and practical. He must consult and be able to see his own mistakes. Ali Mansur, president of Arcelik (industrial man- ufacturing concern) described a successful business leader as employee-oriented. I always think first of my per- sonnel; this way they will work better and produce good quality merchandise, bringing, therefore, large profits to the firm. Banking executives considered honesty as the most striking characteristic of a successful busi- nessman. Leaders in extraction industries, such as mining and petroleum, pointed out the ability to take preventive measures and maintain perfection in work as the traits of a successful businessman. 261 Leaders in retailing and wholesaling perceived a suc- cessful businessman mainly as hard—working and Oppor- tunistic. The image of a successful businessman in the eyes of the leaders in manufacturing industries varied drastically from the foregoing descriptions. First of all, 33.3 per cent did not agree on any trait. But the majority of the remaining 66.7 per cent conceived a successful businessman as one who was able to forecast the future, was hardworking, and was socially oriented. TranSportation leaders gave hard work, initiative, and intelligence as the most important qualities of the successful businessman. Finally, insurance executives described a successful businessman as one who was honest and Opportunistic. 262 Table 11. Perceived Description of a Successful Busi— nessman by Business Leaders in Different Industries. Perceived Des- cription of Suc- cessful Busi- ness Leader Type of Industry in Which the Business Leader is Operating B M R Ma T I Total Ability to forecast future Honesty Profit not sole concern Hard worker Perfectionist in work Strong social orientation Smart and opportunistic Any combination of the above Respected and influen- tial opinion Intelligence and ini- tiative 0 0 0 3 0 0 3 2 0 1 2 0 0 5 0 0 1 0 0 0 l 0 0 5 8 4 1 18 0 l 0 2 O 0 3 0 0 1 6 1 0 8 1h 0 0 0 1 2 1 4 1 2 10 14 1 3 31 1 0 l 0 0 0 2 0 0 0 0 l 1 2 Other 0 l 5 l8 2 0 26 Total 4 4 24 54 ll 6 103 Key: B = Banking Number of Respondents M = Mining and Petroleum = 103 R = Retailing and Wholesaling Ma: Manufacturing T = Transportation I = Insurance 263 Except for those who seemed to be motivated mainly kpy achievement drives, or by any combination of achieve- nuent, prestige, and money drives, there was no discern— .ilble linear relationship between motives and perceived (jeascription of a successful businessman. In total 'tfuere were 26 respondents motivated mainly by achieve— wmant drives. Fully 61.5 per cent of them indicated trlat a successful businessman was a hard-worker and a pearfectionist in his work. Another 25 respondents pcxinted out that they were motivated by a combination of’ prestige, money,and achievement drives. These men alsso conceived a successful business leader as being liaird—working, intelligent, opportunistic, and a per- SCui whose opinion is consulted within the industry 5J1 which he is operating. Mobile business leaders had a far different con- CEEDtion of a successful business leader than the biJTth elite did. The mobile elite considered the SLu:cessful businessman as being honest, hard-working, arui socially-oriented. On the other hand, for the birth elite, a successful business leader is a per- SOn who has high intelligence, initiative, and abil- ity to forecast the future; and whose opinion is con- sulted on matters of importance. The occupations of these leaders' fathers affec- ted the perceived description of a successful business leader. Table 12 depicts this relationship. 264 CPable l2. Perceived Description of a Successful Business- man Correlated with the Occupation of the Business Leaders' Fathers ——f Occupations of the Fathers Perceived Description of a. Successful é IBLlSlnessman p E 8 c o c Q .p (0 > r0 (1) U) r u u -H u -H u u m m u u u .u H u m m u (A u m m -H c m m U c o m u c x p m C .4 Z -a -H an . E O U u H u m H4 0‘ U :> £4 £2 r0 (1) H C)" :3 4J E w c o -H m m m H o va 0 o m o m Q U a. A B U m m o E4 Ability to forcast fuirure 0 1 0 0 0 0 0 0 0 2 0 Honesty 2 l 0 1 0 0 0 0 O 1 0 0 Haxrd.worker 4 2 0 l 5 0 0 l 0 0 5 0 l8 Pexrfection— ist: in work 1 0 0 0 0 l 0 0 0 0 l 0 3 Stxrong soc. Orientation 2 0 0 2 l 0 0 0 l 0 2 0 8 Smart, oppor- turlistic 2 l 0 0 0 0 l 0 0 0 0 0 4 Ccnnbination 0f the above (any com.) 9 4 2 0 2 4 0 3 0 1 6 0 31 RESpected Opiruon 0 0 0 (3 l. 0 0 0 C) 0 0 l 2 :Pitelligent Irritiative 1 l 0 0 0 0 0 0 0 0 0 0 2 Profit not SOle con- cern 0 0 0 0 0 0 0 0 0 0 l 0 Other 4 4 3 0 2 2 0 2 0 2 7 0 26 Total 25 14 5 4 11 7 1 6 1 4 24 1 103 ‘— 265 Of the respondents whose fathers were small mer- chants, 60.0 per cent perceived a successful business- man as being honest and hard-working, whereas 62.5 per cent of the sons of business leaders pointed out hard work, ability to forecast the future, and strong social orientation as the major qualities of a successful businessman. Of the respondents whose fathers were officers in the armed forces, 57.1 per cent described a successful businessman as honest, hard—working, and intelligent. The majority of the big business leaders with fathers who were career civil servants placed a high value on hard work and described the successful businessman as the one whose opinion is consulted. Similar descriptions were given by those whose fathers were teachers. The following is the distribution of the respondents in terms of educational achievements and perceived descriptions of a successful business leader. 266 Table 13. Perceived Description of a Successful Business- man and the Formal Educational Achievements of the Business Leaders Formal Educational Achievements Perceived ° . . m Description . of a Success , m ful Business— E 0 ° ° E <1) '0 man o o o o m . m u C “O r—1 L9 (1) o o m H p c c u o o m m p m U U ow u u U o o H U) o I (l) H 4—3 «P (U U) :1: U) E r-l U) U H m . - o o m o o p-l '3 II V) U E: Q E-! Ability to forcast future 0 0 2 1 0 0 3 Honesty 0 l l 0 3 0 0 Hard worker 2 0 5 0 9 2 0 18 Perfection- ist in work 0 0 2 0 0 1 0 3 Strong soc. orientation 0 0 l 0 5 l l 8 Smart, Oppor- tunistic l 0 2 l 0 0 0 4 Combination of the above (any com.) 2 2 5 3 12 7 0 31 Respected Opinion 21 0 0 0 1 0 0 22 Intelligence & initiative 0 0 2 0 0 0 0 2 Profit not sole concern 0 l 0 0 0 0 0 1 Other 3 0 7 2 8 6 0 26 Total 29 4 27 7 38 17 1 103 267 Those businessmen having less than a completed junior high school education felt that a leader whose opinion was consulted had reached success (50.0 per cent). They also believed that profits should not be the sole concern of successful business leaders. Being a perfectionist was an attribute that high school graduates mainly put forward (66.6 per cent). They ranked intelligence, Opportuneness, and ini- tiative as criteria for a successful business leader (100.0 per cent). College graduates thought that strong social orientation (62.5 per cent) and hard work (50.0 per cent) were characteristic of a suc- cesful business leader. Ability to forecast the future as a character- istic, was broken up in this way: high school grad- uates, 66.6 per cent; ungraduated college students, 33.3 per cent. Honesty was broken up even further: college graduates, 60.0 per cent; high school grad— uates, 20.0 per cent; and junior high graduates, 20.0 per cent. Table 14 shows the relationship between age and the perceived description of a successful businessman. 268 Table 14. Perceived Description of a Successful Business- man Correlated with the Age of the Respondent Perceived Description of a Success— ful Business- e‘ m o m m m m o H man (\I (\I m m mplishmlent that could be appreciated by the society at 1.arge. Surprisingly, these men were new in busi- nefisss, 54.0 per cent having entered business life during the fifties. 300 The largest segment of this group had come from related or unrelated occupations in the government sector (36.0 per cent). The rest had been either self—employed u o o o o w -H u -a H c w - $9 5% 2‘3 Perceived m Q m m 0 Role in x - o o m - u p Soc1ety O 8 w B m o w 3 m o m 3 c o oa m u u U m m m S x a m 3 u o m o u m m m H 'U o O a S H c c m -H 3 > o H w w m h m H u .u w p m .u 3 p O. C u C u m U m 0 H m E m m -H m m -H -H u m m m c Q m w a U u w u c H x u n o o o m o U U m m B U m z m z 8 Create work 1 6 9 2 2 O l 4 l O 26 Do own work effectively 0 4 5 3 2 3 O 5 O O 22 Make achieve- ments for society 0 2 5 1 O O O l l O 10 Ability to do something in the society 0 5 4 1 l O O l l O 13 To be an idealist 2 O 5 O O 2 O l O O 10 Motivate the environment to work 1 l O l O l O O O O 4 Educate the environment 0 l l O O O l O O 0 Be creative 0 O O O l O O l O O Profits not sole concern 0 O 3 O O O O O O l 4 Very narrow conception of society 0 O 2 O l O O 4 O 2 9 Total 4 19 34 17 3 8 9 4 3 2 103 327 Of the business leaders who perceived idealism as their social role, 5 thought the demands of society on them were provisions of financial help. There was no correlation between those business leaders who perceived that their role in society was to motivate their environ— ment, and what they considered were the demands of society. On the other hand, the business leaders who believed that their main role in society was to accom- plish their own work effectively, were not as widely distributed in terms of their conception of society's demand. Five respondents had no idea about the demands of society; the same number of respondents considered financial help and charity as the demands of society. Four men thought society demanded they champion its causes and solve its problems. Of those who thought their role in society was to create work, 9 respondents believed that society wanted financial help, and 6 believed society wanted them to be its champion. Half of those who believed their role was to help society through their own achievements, believed that society demanded financial help. Only 33.3 per cent of the business leaders who believed that their role was to educate their environment, actually thought that.the society demanded only honesty and trustworthi- :ness. Nevertheless, their perception of social respon- sibility remained unchanged. They insisted upon educat- ing their environment. 328 The only significant correlation between the vari- ables was among those who perceived their role in society very narrowly. They said they had no idea what society demanded of them. While 22 respondents (one of the largest groups) perceived that their role was to accomplish their own work effectively, and another 26 respondents believed it was to create work, 34 of these leading business leaders thought that the demands of society were finan- cial aid, and 19 believed that society expected them to champion its causes and find solutions for its problems. Evidently, no correlation at all existed for this group of business leaders. This is a clear indication that the majority of the business leaders were not responsive to the environ- ment. No matter how they perceived the demands of society, they held unswervingly to their predetermined social image. Because they did not respond to the demands and pressures of the society properly, they acquired an anti-social image. In their hearts they were sincere and wanted to do their best for the good of the society; however, their efforts were not re- warded or appreciated because of the incongruence be- tween what the society wanted from them and what they thought was best for the society. The analysis, carried in this and the preceding cflaapters, of the behavioral and motivational 329 characteristics of the Turkish business leaders revealed that strong differences existed among them, thus proving the major hypotheses of this research. The study of the management patterns of the business leaders in the next chapter will strengthen this position. Because of these differences, business leaders are much too isolated to present a united front. The lack of a common philos0phy among business leaders is an important reason for the existing mistrust between them and the society at large. CHAPTER IX FUNCTIONS OF THE BIG BUSINESS LEADERS IN TURKEY In this chapter, the business leader will be seen in Operation. His management patterns and decision- making procedures will be delineated; and further evi- dence will be given in the process of testing the two previously stated major hypotheses. First, the business leader's time allocation will be studied; then his decision-making and orientation toward authority will be scrutinized. In the third section, the business leader will be observed in his environment; his relationship with the government will be analyzed; and, finally, the business leader and the circumstances of Operation will be discussed. Managerial Functions of the Big Business Leaders The big business leaders in Turkey were asked: "As the person making important decisions in the firm, (what do you conceive your major function to be?" The xmespondents were given total freedom to answer this; it was an Open-end question. Thirty of the 103 res- ‘pondents agreed on day-to-day management of the estab— lififlnnent as their chief function. The next largest Jnesponse, mentioned by 15 persons, had to do with (flesigning the organization and administering the vari- (mJS processes of production, marketing, research, etc. 330 331 Following closely in popularity was the response of 12 others who stated that their major function was the dis- covery of Opportunities for business enterprise, together with the various methods for taking full advantage of each discovery; in other words, a complete conception of the idea of business. Technical decisions attracted an- other 10 business leaders, and finally, 6 respondents indicated that provision of capital was their major function. The remaining answers were so scattered that they will not be discussed. Incidentally, the lack of cohesiveness among the business leaders was reflected by this scattered conception of their major managerial and entrepreneurial functions. An examination of the perceived functions in as- sociation with the age group, level of education, and the sector and form of ownership, will be presented. To begin with, the more mature business leaders favored complete conception of the idea of business, but the younger leaders (20-29) placed their emphasis on manage- ment. When the views of respondents, concerning the entrepreneurial functions, were related to the level of education, no apparent pattern was Observed. Some general Observations can now be made on managerial functions. The conviction with which nearly all the 103 respondents selected their major function showed how much they valued new ideas. The innovation involved, embraced the entire business structure, not just one narrow segment of that business, such as 332 technical processes, organization, or advertising. As Sayigh points out: "Focus on innovation in one seg- ment would reflect a more discriminating attitude and a more sophisticated level of entrepreneurship."1 In Turkey, the business leaders were mainly indiscrimina— tory. There is, lastly, a conclusion which was drawn, not from the aggregate body of tabulated data, but from perusal of individual questionnaires. There was a ten- dency for individuals to relate their choice of main function to the establishment's particular phase of life at the time of the interview, and to the nature and duration of their experience with the establish- ment. Thus, other things being equal, business lead— ers in long—established concerns seemed to attach more significance to their function in introducing innova- tions of value into the everyday life and work of the establishment (such as selling, research, or technical improvement), than to the conception of the original idea. On the other hand, in newly started concerns, the leaders seemed to place more emphasis on concep- 'tion of the original idea. Furthermore, the immediate pressures and crises 1Jppermost in his mind helped to determine the individual xxaspondent's answer; and his answer reflected that he kxalieved to be his most effective role in relieving the 1. Sayigh, Op. cit., p. 61. 333 pressures or meeting the crises. Thus, in an establish- ment that had lost markets to its competitors, the busi- ness leader was likely to concentrate his attention on innovation and improvement in selling and advertising. He would emphasize an aggressive selling policy -- an important aspect of the entrepreneurial function. The business leaders were also asked to answer this question: "How do you use your time?" Table 1 shows the answers to this question. Table l. Allocation of Time Number of Per Cent of Type of Activity Respondents Respondents Routine, day-to—day activities 69 67.0 Policy-making and planning 16 15.6 Financial matters 10 9.7 Public relations 6 5.8 Non-firm activities 2 1.9 Total 103 100.0 Fully two-thirds of the respondents spent most of their time on routine, day—to—day activities. To them, control was important. They wanted to have iron-hand control over their businesses. They tried to keep in their own hands a vast amount of authority, covering numerous aspects of the business, even when it was impossible for them to handle it all properly. In any 334 case, they were jealous of their authority and would not willingly give up any part of it to senior assistants, especially those with technical training who were likely to have minds of their own. Quite often they were not aware of these shortcomings. It was also found that 52 respondents were favor- able toward figures of authority. They accepted author— its; they were also strongly influenced by their fathers. They did not question authority if it emanated from someone on a higher level, and at the same time, they expected strict obedience from their personnel. This was not only the picture of a typical business hierarchy, but of all business leaders in Turkey.2 Once the busi- ness leader reached the top in his organization, he saw to it that nobody below him in the hierarchy usurped his entrepreneurial privileges. Much more delegation of entrepreneurial and mana- gerial authority took place in finance than in industry or commerce. The explanation may lie in the form of ownership. Unlike industry or commerce, Turkish banks are usually corporations; a form in which division of labor in the entrepreneurial—manageria1 pyramid is more accepted. When the association between delegation of authority and form of ownership is examined, clear (evidence emerges that business leaders in corporations 2. See E. E. Jennings, The Executive, Harper & Bros., N.Y., 1962, for an excellent review of this behavior in American business. 335 have a much greater tendency to share their authority with a senior staff than business leaders in private firms. The level of education of the respondents seemed to have a curvilinear relation to the delegation of author- ity. The proportion of those who delegated authority rose when the number of years of schooling rose, up to 12. Then it declined as the years of schooling inw creased. Those respondents with one year of college seemed to fear delegation more than any others. With increasing education, the business leader acquired greater self-confidence and was in a better position to observe the inadequacies of his subordinates. This was where recentralization of authority began. There was another level at which authority could have been shared. This was horizontal sharing among equals, in contrast to vertical sharing with subordinates. Division of areas of responsibility among top men in a firm was not uncommon. The greatest extent of division was in the areas of production and finance. In many instances, particularly in corporations, the men who occupied top positions were either in finance, pro— duction, or both, followed infrequently by marketing. The majority of cases where the respondent shared his authority with no one, were found in individual pro— prietorships. The general idea in Turkey is that, in order for a person to share entrepreneurial and tOp 336 level managerial authority, he must partially own the capital of that enterprise. This idea was held mainly by those business leaders who operated in the middle— ranked businesses within this sample. The larger the firm became, the more tolerant the business leaders were toward delegation of their entrepreneurial authority. Communication was next considered in relation to the flow of responsibility within the firm. Most of the respondents believed that middle and supervisory management were necessary for efficient performance. But when asked why They had so little managerial per— sonnel, the answers seemed to cluster around one main issue. They all seemed to give the size of the business as an apologia. More specifically, these respondents pointed out that their organizations were not large enough to justify numerous administrative personnel. The importance of management did not seem to be under- stood. It is interesting to note the reaction of the typical business leader confronted with the question: "If you were going to make a choice between hiring a manager or a technician, whom would you hire?" The answer invariably favored the technician, showing that the general tendency is a belief that a technician will be more useful than a manager. Such an attitude par- tially reflected the nature of the businessmen's prob— lems. They believed that their internal problems were {more technical and financial than managerial. This 337 aspect of the business leader's behavior will be dis- cussed in detail a few sections later. Decision-Making Operational hypothesis 15: Turkish business leaders are equally divided among calculatives and empiricals in decision-making. The quality of enterprise in Turkey will be ascer- tained through the attitudes of business leaders in two areas of behavior. The first is orientation in decision- making: whether the business leader approaches the prob- lems and decisions rationally, through calculation and scientific research, or by rule of thumb. Many typo- logies have been suggested in contemporary literature. One is the classification of the entrepreneurs into empirical (rule of thumb), rational (informed), and cognitive (sophisticated).3 The second area is con— sultation. Orientation in Decision-Making It was possible to classify the business leaders in Turkey into 2 broad groups. The first group (50.4 per cent), incorporating those who relied on thorough calculation and statistical evidence, will be hereafter .referred to as the calculates or calculative group. The 3. Arthur H. Cole, "An Approach to the Study of Entre- preneurship," in Frederick C. Lane, ed., Enterprise a Secular Change, Readings in Economic History, Homewood, Ill., 1953, pp. 189-191. 338 second group was composed of those who relied on percep- tion and "feel" of a situation in their judgments (49.6 per cent). In the following discussion they will be called the empirical group. The calculatives believed that research institutions rendered valuable service to business. The empirical group, on the other hand, did not believe that the services of research institutions were of value. Turkey has at its disposal most of the professional services and practices available to businessmen all over the in- dustrial world, although these services are not, in some areas, as extensive as in more advanced countries. Attitudes toward research was therefore treated as indi- cations of the degree of sophistication an enterprise had. In spite of the fact that 57 per cent of the lead- ers believed in the value of research institutions and were ready and willing to pay them to conduct their businesses, only a small number of these men actually sought the assistance of research organizations. The general attitude among the business leaders was a lack of trust toward Turkish research institutions. The lmasiness leaders indicated that they would rather pay Idigh fees for a European management-counseling firm .rather than utilize a Turkish research institution. Allfiqough they believed in scientific research, the 'Turkish business leaders did not believe that their own xflesearch institutions had reached a high enough level ‘1‘ 339 of excellence and sophistication in theory and practice. This researcher believes that the blame should be shared by the business leaders who have not given the research institutions a chance to prove themselves, and by the research institutions themselves, which have failed to earn the trust of the businessmen. Table 2. Orientation in Decision—Making Correlated with the Age of the Respondents Orientation Age of Respondents in Decision- 25— 30— 35- 40- 50- 60— 70— Making 29 34 39 49 59 69 79 Totals Calculative 0 3 7 16 19 6 l 52 Empirical 3 6 6 14 14 7 1 51 Total 3 9 13 3O 33 13 2 103 A little over half of the respondents (including a majority of the men more than 50 years of age) stated that in making major decisions, they relied more on thorough calculation and statistical evidence than anything else. The rest (including a majority of the men below 50 years of age) indicated that in making rnajor decisions they relied on their own perception and the feel of a situation. Those relying more on cal- culation took the position that their perception led them to the many possibilities and opportunities their business presented, but that it was down—to-earth cal- anlation and factual evidence that finally helped them 340 make a final decision. The others, who relied on their own perception, contended that in the initial stages of any examination of an issue they used some calculations, but that in the end it was their perception that moved them to a decision. Ultimately, then, the difference between the 2 groups was mainly one of emphasis. Table 3. Orientation in Decision—Making Correlated with the Period when the Business Leader entered Business Life Period when the Business Leader Orientation Entered Business in Decision— 1900— 1924— 1939- 1950- 1961- Totals Making 1923 1938 1949 1960 1963 Calculative 2 9 16 21 4 52 Empirical 4 12 18 13 4 51 Total 6 21 34 34 8 103 Correlating orientation in decision—making with the period when the business leaders entered business life, revealed several worthwhile facts. Almost half of the calculatives made their entry into business after 1950; nearly 31 per cent entered between 1939 and 1949; about 17 per cent entered between 1924 and 1938 and, finally, almost 4 per cent entered between 1900 and 1923. The data indicated that the more recently a business leader entered the business world, the more he relied on cal— culation and statistical evidence. Can it be inferred 341 from this evidence that up to the 1950's a businessman in Turkey could succeed in business without giving much consideration and emphasis to scientific methods of decision-making? Was this because business had only recently become more sophisticated and complicated? This statement is justified when we observe that most of the men who relied on their perception and feel of a situation started in business earlier than the 1950's (65.4 per cent). Table 4. Orientation in Decision-Making Correlated with the Firm's Date of Establishment Orientation Date of Firm Establishment in Decision Prior 1900-1911—1921—1931—1941—1951—1961— Making 1900 1910 1920 1930 1940 1950 1960 1965 Total Calculative 3 l 5 9 5 8 l9 2 52 Empirical 3 l 2 8 8 12 14 3 51 Total 6 2 7 17 13 20 33 5 103 Approximately 55 per cent of the 38 firms estab— lished after 1950 were in the calculative category; the remaining 45 per cent were in the empirical category. The business leaders of firms established between 1941 and 1950, for the most part, relied on perception (60 per cent). About the same percentage held true for those established in the 1930's. The beginning of a more favorable attitude towards calculative decision- making came immediately after the War of Independence 342 in the 1920's. Of the 17 firms established during that decade, 53 per cent of the business leaders were calcu- latives, while the remaining 47 per cent were empiri- cal. No clear cut differentiation between calculatives and empiricals could be made for firms established earl- ier than 1911. Thus, a trend had appeared. Among the firms established up to the 1920's, the calculatives and the empiricals were equally distributed. Calcula- tives outnumbered empiricals in firms established during the twenties. Then, suddenly, empiricals started to outnumber the calculatives in firms established be- tween 1931 and 1950. The Republican Era did not en— courage scientific—minded business leaders because there was no need for sophisticated methods to succeed in business. The picture changed, however, after the democrats took over the government -- the environmental climate was altered. One reason for this new emphasis on calculation in decision-making was that, in order for the newly established firms to compete with the older, long-established ones, they had to become more scientific and sophisticated. Industry and commerce stood at the two extremes; Inanufacturers were heavily in favor of calculation; retailers and wholesalers were in favor of perception. Here again, as in a few other cases, men in commerce revealed a traditionalist attitude and approach. This was in line with the view they held that their activity 343 was non-innovational and, to that extent, did not re— quire the tools of sophisticated enterprise. The level of education appeared to be influential in shaping the positions taken by the respondents. This meant that the more years of schooling a business leader had, the more readily he accepted professional services and altered his decision—making techniques. As the level of education increased, the percentage of calcu- latives also increased. Out of a total of 9 business leaders with less than 8 years of schooling, only one was calculative in decision-making. The other 8 felt that the major decisions were made through a sixth sense. Among junior-high graduates, decisions were totally made by relying on perception and feel of the situation. The ratio of calculatives over empiricals was still lower among the 27 business leaders who were high school graduates only; 33.3 per cent of them favored calculative methods of decision-making, and 66.6 per cent favored rule of thumb methods. Table 5. Orientation in Decision-Making Correlated with Education Jr. Level of Education Less High+ Orientation than Some Some Doc- in Decision— Jr. High High Col— Col- Mas- tor- D4aking High Sch. Sch. lege lege ters ate Total (Calculative l O 9 6 23 13 0 52 Empirical 8 4 18 l 15 4 1 51 'Total 9 4 27 '7 38 17 l. 103 —— 344 College education, like magic, strongly affected decision—making; it switched the emphasis from empiri- cal methods to calculative ones. Seven men had some college education, but did not graduate; 85.7 per cent of them were calculative in decision-making. Of the 38 business leaders who finished college, almost 61 per were calculative in decision—making. On the other hand, a total of 18 men continued their education and ob— tained graduate degrees. Among this group of business leaders, 72 per cent were calculatives. From this data, it appeared that one or two years of college education was enough to change the businessmen's style of decision—making from empirical to calculative. But, curiously, after a certain proportion of leaders had graduated from college, they no longer seemed to be overwhelmed by science. Some apparently started to rely more on perception, as the drop in the percent- age of calculatives indicated. However, when they pressed on to graduate training, the reliance upon scientific method of decision-making increased drasti- cally. With simply one or two years of college train— ing, the business leader was only introduced to the scientific method; he saw it as a mystical device that had to be tried in order to attain success in business. If a leader stOpped his education at the B.A. or B.S. level, upon graduation he realized how much he did not know and how much more he had yet to learn before he 345 could apply scientific methods effectively. Such an attitude would bring about the tendency to return to perception in decision—making. But if the business leader pursued graduate training, then he acquired enough self-confidence to use the scientific tools of decision-making. Just as the level of education had an important effect on the style of decision-making, so also did the type of education. Engineers seemed to be more in favor of calculation and statistical evidence in making major decisions than any other specialized group. The place where the business leader received his education was another important factor that affected the process of decision-making. Table 6. Orientation in Decision—Making Correlated with the Type of University the Business— man Attended and Graduated From Orientation Type of University Not a in Decision- Turkish American European Univ. Making Univ. Univ. Univ. Grad. Total Calculative 25 6 9 12 52 Empirical 15 5 l 30 51 ’Total 40 ll 10 42 103 Graduates of European Universities were much more calculative in their decision-making (90.0 per cent) 346 than the graduates of Turkish Universities (62.5 per cent) or of American Universities (54.5 per cent). Strangely enough, the degree of mobility did not appear to be influential in shaping the positions taken by the respondents. Occupations of the business leader's fathers did not seem to influence their decision—making patterns either, with the exception of 2 instances. The sons of small merchants relied more on perception and feel of the situation (68.0 per cent) than on cal- culation and statistical evidence (32.0 per cent). On the other hand, the sons of military Officers were more calculative (71.4 per cent) in decision—making. When the employment history of the respondents was scrutinized, two interesting facts were found. Approximately 78 per cent of the business leaders who had been previously employed in a related occupation in the government sector identified themselves as more calculative than perceptive in decision-making. On the other hand, 68 per cent of the business leaders whose first job had been with the firm for which they were now working, tended to be empirical in their decisions. 347 Table 7. Orientation in Decision—Making Correlated with Employment History Employment History Orientation NO in Decision— Prev. Self— Making Exp. Gov. Emp. Bus. Polit. Total Calculative 10 ll 8 20 3 52 Empirical 22 3 8 l6 2 51 Total 32 14 16 36 5 103 Religious orientation of the business leaders, to some extent, seemed to be related to their decision— making patterns. Among the respondents who had strong “.1 religious affiliations, 58.3 per cent relied on rule of thumb and sixth sense methods in making major decisions. Of those who had very little religious orientation, 54.7 per cent were calculative in decision-making. Table 8. Orientation in Decision—Making Correlated with the Degree of Religious Affiliation Orientation Degree Of Religious Affiliation in Decision- Making Strong Average Very Little Total Calculative 5 12 35 52 Empirical 7 15 29 51 Total 12 27 64 103 348 Finally, there was a clear-cut relationship between the answers on the style of decision-making and the form of business organization. Calculativeness loomed larger in partnerships than in single ownerships, and was most prevalent in corporations. Consultation in Decision—Making Operational hypothesis 16: Most of the business leaders in Turkey consult friends and relatives in mak- ing major decisions. The alternative in decision-making favored by the largest number of respondents (33.1 per cent) was con— sultation with friends and subordinates. Those who practiced no consultation were next in number (17.5 per cent), followed by a slightly smaller number of those who consulted with relatives but not subordinates. About 66 per cent of the business leaders voted for one of these three alternatives. This excluded re— ferring business matters to the judgment of subordinates and outside experts who did not belong to the establish- Inents. In Turkey there seemed no clear dissociation of ibusiness matters from the realm of personal relations. 349 Table 9. Degree of Consultation in Decision-Making Number of Per Cent Of Process of Decision—Making Respondents Respondents Consults both friends and 34 33.1 subordinates Decides with no consultation 18 17.5 Consults relatives but not subordinates 16 15.5 Consults experts outside the firm 13 12.6 Consults subordinates excludes outsiders 12 11.6 Consults owners 10 9.7 Totals 103 100.0 The Business Leader in his Politico-Economic Environment Operational hypothesis 17: The effects of the development plans on the private enterprise in Turkey are negligible. The business leader embodies in his character elements of conformity with environ- mental roles and sanctions as well as elements of rebellion against them. In the absence of the conformity he would be a rebel without a base, out of context, unable to come to grips with the economic and politico—social realities of his situation. Ultimately, he would flounder and fail. In the absence of rebelliousness, he would not innovate. He would at best imitate but would not be instrumental in bringing about a significant rise in the rate and quality of growth in his economy. 4. Sayigh, Op. cit., p. 112. 350 There are many and complex relationships between the Turkish leader and his environment; therefore, only a few selected relationships will be discussed in this section. In the light of recent trends in Turkey toward planned economy, the big business leaders were asked whether they thought a greater degree of central planning and control of economic activities by the government would help or harm their business. Only 34 respondents agreed that either the first or the second five-year plans would have any effect on the administration and decision—making process of the firm. The remaining 69 business leaders could not think of any effects the development plans would have on their business. At that time at least, the effects of central planning had not been felt in the business sector. Although both of the five—year plans had sections outlining the activities of the private sector as guidelines, they either were not operational, or the agencies in charge of their application were too weak to enforce the principles outlined in the text. Almost 70 per cent of the present big business leaders ignored their existence. A second group of questions about central planning sought to discover the degree of concern with economic planning of the respondents. As Table 10 shows, 15.5 per cent of the business leaders had no knowledge about 351 central planning. This uninformed group of respondents were of all ages and were in all types of business. Another 30.1 per cent of the respondents were somewhat more informed. They had not read the original text of the plans, but they had obtained information about it through the press, conferences, and professional jour- nals. There was one group of business leaders (31.1 per cent) who had studied the plans carefully. This group expressed the Opinion that the plans were un- scientific and unpractical. Finally, 23.3 per cent of the respondents actively participated in the pre- paration of the plans. They were the representatives from various sectors of the private enterprise on the planning sub-committees. They were the ones who felt that the plans had influenced their business, their managerial patterns, and their decision-making pat- terns. Table 10. The Business Leader's Degree of Concern with Central Planning Number of Per Cent of Degree of Concern Respondents Respondents Obtained information about the plans by reading the original text and special reports 32 31.1 Obtained information about the plans through the press, profes- sional journals, and conferences 31 30.1 Participated in its preparation 24 23.3 Had no idea about the plan 16 15.5 Total 103 100.0 352 Although few of the business leaders approved cen- tral planning as it stood, a large majority of them believed that increased efficiency in government and political stability could some day be beneficial to their business. The respondents were asked if they thought it was advisable for businessmen to devote part of their time and efforts to politics. The respondents had mixed ideas about participating in politics. Approximately 58 per cent of the respondents were strongly Opposed to this participation. Of those favoring participa— tion (42 per cent), few were of the opinion that it should be open. Most preferred indirect, covert par— ticipation, mainly through lobbying, financial aid, and influence. Problems of the Turkish Business Leaders The respondents were asked to indicate the relative importance and nature of their major problems. A minority of 46 respondents ranked problems resulting from their interaction with the government and from political conditions at first; organizational and mana— gerial problems were ranked as second in terms of im- portance. This ranking was reversed by a majority of 57 respondents. Without exception, governmental prOblems were attributed to the uncertainty that rose from political 353 conditions, including discontinuity of policy, arbitrary change of policy, nepotism, unnecessary government inter— vention, favoritism in regulating import quotas, etc. In Turkey, the political factor is of unusual weight to the business leader because of his heavy dependence upon the stability of the system. This has been es- pecially true since the year 1956. and culmination of it came after the 1960 Revolution. A great portion of the business leaders' efforts, because of uncer— tainty, were concentrated in predicting what the gov— ernment would do next. The five-year plans, which were to function in the elimination of this uncertain- ty, did not work. They aroused so much controversy If that the business leader did not know what to believe nor what course of action to follow. As a direct con— sequence of this uncertainty and confusion, the busi- ness leaders remained passive in investment. When the respondents were asked what they con- sidered an acceptable protection against this uncer— tainty resulting from political conditions, some of them declared that no effective protection was possible against the uncertainty that caused their anxiety. They pointed out that they had to learn to live with it. Others refused to answer. But the more optimistic businessmen, far from being a majority, put their faith in eventual political stabilization. Unfortunately, 354 they did not indicate how or when this stability would come about. The respondents who gave organizational and mana— gerial problems as their major headaches (55 men) were asked to cite the causes of these problems. Table 11 presents the answers. Table 11. Causes of Organizational and Managerial Problems Number of Per Cent of Causes of Problems Respondents Respondents Lack of managerial knowledge 1 1.9 Unwillingness to delegate authority 12 21.8 Inability to delegate authority 6 10.9 Insufficient training of employees 7 12.8 Labor relations 16 29.0 Lack of skilled personnel 13 23.6 Total 103 100.0 The largest concentration of business leaders (29.0 per cent) attributed their problems to the conflict of interest between management and labor. It was as late as 1963 before Turkish trade unions won the fight to strike; prior to that date strikes had been illegal. Without that powerful weapon, unions were relatively inactive in Turkey. With the enactment of a new labor law, the Turkish labor movement witnessed an unpre- cedented growth. The unions were, and still are, 355 stronger, due to growth in membership, friendly admin- istration, favorable court decisions, and public Opinion. Management, with its traditional methods, finds it dif- ficult to cope with this new pressure. Lack of skilled personnel was mentioned by 23.6 per cent of the respondents. They declared that a shortage of skilled personnel existed at every working level, including the management, supervision, engineering, and technological levels. Twenty-one per cent of the respondents said that their organizational and managerial problems centered around centralization of power, authority, and decision- making. Closely related to this group, 10.9 per cent Y“ of the respondents pointed out the inability to dele- gate authority as the major cause of their problems. They also mentioned the forced centralization caused by a shortage of loyal and properly trained assistants as a notable problem. Finally, 12.8 per cent of the respondents gave insufficient employee training as the major cause of their problems. They did not relate this to centrali- zation or delegation of authority. As to the shortage of trained personnel, the respondents were given a list of 7 possible ways of increasing the level of technical knowledge and were asked to check one or more that they felt were applicable to their business. Nearly one-third of the votes concentrated on two 356 alternatives; sending students and trainees abroad for training, and bringing foreign scientists and techni- cians to train their employees on the job. A small percentage of the voters were in favor of the sugges- tion that the government should undertake the respon— sibility of training workers. Very few respondents suggested providing formal training for their personnel at the company's expense, apart from the training ac- quired in the actual performance of the job. In conclusion, the comments the businessmen made about their environment fit into the general picture outlined in the third chapter. CHAPTER X SUMMARY AND CONCLUSIONS This inquiry started by asking two questions: Who are the business leaders in Turkey? Can a common be- havioral and motivational pattern be identified for the Turkish business leaders? Specifically, the follow- ing hypothesis was tested: No collective, standard, or patterned behavior or motivation is identifiable for the Turkish business leaders. All seem to be motivated by different drives and do not present a common front. From this a second hypothesis was derived: Because of these differences, there is no concensus among the big business leaders as to the role they feel responsi— bel for in society. In the process of testing these two hypotheses, l7 operational hypotheses were used. Each operational hypothesis clarified an aspect of the total inquiry and thus constituted a contribution to the testing of the major hypotheses. As was indicated in chapter 5, Turkish business leaders did have a few common traits, but not in quantity sufficient to attribute to them a common behavioral pattern. The common traits of the lead- ers were also discussed, and a self-portrait com- posed of sociological characteristics was drawn at the conclusion of the chapter. The common traits of 357 358 the Turkish business leaders were found following the testing of Operational hypotheses 2 and 3. Chapters 7 and 8 outlined different types of busi- ness leaders, although many of these men also possessed similar sociological characteristics. It was then pointed out that similar sociological characteristics did not necessarily lead to similar psychological characteristics. Then, it was found, as stated in hypothesis 2, that the business leaders did not have a clear-cut and common perception of their social role. The consequences of these facts were first presented theoretically in Chapters 2 and 4 and empirically analyzed in chapter 9. It was predicted that businessmen in Turkey were motivated by different drives. Support for this pre- diction came from the findings following the testing of operational hypotheses 5, 6, 7, 8, 9, and 10. Em- pirical evidence, as presented in chapter 7, proved that there was no significant concentration of motives among the big business leaders; all had different be— havioral patterns. This lack of uniformity in the behavior of the Turkish big business leaders was re— flected in their diverse descriptions of a successful businessman and the diverse causes to which they attributed their success. As was theorized in chap- ter 2, a business leader projects his own self, or his 359 ideal self, and gives an indication of his own be- havior when he describes his image of a successful business leader. Furthermore, since success was taken as an end in this study, and the businessmen differentiated in their means of attaining that end, this analysis also shows that these men had no com- mon behavior patterns. Support for the second major hypothesis was given in chapter 8. Empirical evidence was gathered by asking the business leaders how they perceived their role in society. As a result, 8 major role patterns were identified. Further proof was obtained by asking the business leaders how they perceived the demands of society. NO concensus or majority Opinion was identified. The answers dispersed in a continum that ranged from having no idea about the demands of society to believing that society deman- ded them to be champions of its problems. More evi- dence was presented along these lines by correlat- ing the social role the businessman perceived for himself with the demand he believed society had on him. NO significant correlation was found. This lack of correlation was important because it added to the demonstration of heterogeneity among Turkish business leaders and supplemented data already pre- sented in proving hypothesis two. 360 Although significant generalizations could not have been made without costly simplifications, 8 dif- ferent types of business leaders were named and dis- cussed in chapters 7 and 8. In chapter 9 the Turkish business leaders were classified into two broad groups in terms of orientation in decision-making, the cal- culatives and the empiricals. An equal number of businessmen were in each category. Only one signi- ficant generalization was made at this stage regard— ing decision-making and its problems, and it was that almost all the business leaders indicated that the government, in one way or another, was the prime cause of their environmental problems. In the following pages some of the straight tab- ulation results will be presented. The rationale be- hind such action is to demonstrate further to the reader the vast differences among Turkish business leaders and to expand upon the evidence presented in the body of this research. Age; 33 respondents were between 50—59 years old, 30 between 40-49; 13 between 60—69; 13 between 35- 39; 9 between 30-34; 3 between 25-29; and 2 between 70-90. Birth Place: 38 respondents were born in Istanbul, 18 outside the present boundaries of Turkey; 16 in Izmir; 9 in the cities of central Anatolia; 5 in 361 the cities of the Black Sea Region; 5 in the cities of the Egean Region excluding Izmir; 4 in the cities of Southern Anatolia; 3 in the villages of the Egean Region; 1 in Adana; l in a village in the Eastern part of Turkey; 1 in the central part of Turkey; 1 in a village in the Southern Anatolia Region; and finally, 1 in a village in the Black Sea Region. Marital Status: 93 of the business leaders were married; 9 were single; and l was a widower. Number of Children: 82 of the respondents had one or more children; 21 had no children. National Origins: 83 respondents were Turks; 10 were jews; 5 were Greeks; and 5 were from various countries. Period When the Business Leaders Engered Business Life: 34 respondents entered business life between 1939- 1949; 34 between 1950-1960; 21 between 1923—1938; 8 between 1961-1963; 6 between 1900-1923. Formal Education: 38 business leaders had 4 years of college education; 27 had 12 years of secondary edu- cation, 17 had 5 years of college education; 9 had less than 8 years of schooling; 7 had 1 year of college; 4 had 10 years of schooling; 1 had 7 years of college education. Where the Business Leaders Received Their College Education: 42 of the business leaders graduated from a Turkish university, 11 from an American university; and 10 362 from a European university. Field of Concentration of the College Graduates: 27 of the respondents majored in business; 24 in engineering; 8 in law; 2 in liberal arts; and 2 in medicine. Additional Courses Beyond Formal Education: 57 of the business leaders pursued additional courses beyond their formal education. Knowledge of Foreign Languages: 94 respondents knew one or more languages in addition to their mother tongue. Travel: 92 respondents had traveled abroad. From this group, 62 visited EurOpe, 25 the United States; 3 Asia and the Middle Eastern countries; and 1 went into communist countries. Degree of Religious Orientation: 64 business leaders had little religious orientation; 27 average; and 12 strong orientation. Relationship with the Founders of the Firms: 42 business leaders had no family relationship with the founder of their firm; 30 were related to the founder on their father's side; 5 were related on their mother's side; 26 were, themselves, the founders of their firms. Type of Social Organization to which the Business Leaders Belonged: 27 of the business leaders were not members of any social organization; 15 belonged 363 to professional associations only; 14 belonged to ex- clusive and expensive clubs only; 11 belonged to sports clubs only; 9 belonged to cultural and educational societies; 8 belonged to the masonic order; 13 belonged to both cultural and professional organizations; 5 were members in both exclusive clubs and the masonic orders; and finally, 1 man belonged to a religious organiza- tion. Number of Social Organizations to which the Business Leaders Belonged: 44 of the business leaders belonged to 2-4 clubs, 21 to only one; and 11 to 5-8 clubs. Kind of Social Organizations the Business Leader was a Member of Prior to Attaining his Present Position: 67 business leaders were not members of any social organization prior to attaining their present posi— tions; 13 belonged to professional associations only; 8 belonged to Sports clubs; 8 belonged to both pro- fessional organizations and exclusive clubs; 4 be- longed to a masonic order; and 3 belonged to ex- clusive clubs only. Change in Social Organization after the Business Leaders Attained their Present Positions: Only 14 business leaders changed social organizations after attaining present positions. Employment History: For 32 business leaders their present jobs were also their first jobs; 29 were also were previously employed in a related occupation 364 in the private sector; 10 were previously employed in a related occupation in the government sector; 7 were previously employed in an unrelated occupation in the private sector; 4 were previously employed in an un— related occupation in the government sector; 5 had previously occupied a high government or political position; and finally, 16 were previously self-employed. To What Causes the Business Leaders Attributed their Success: 39 of the business leaders attributed their success to self only; 7 attributed it to Opportunities they encountered; 18 attributed it to their family background; 12 attributed it to self and Opportunities met; 13 attributed it to people they worked with; 4 attributed it to positive parental influence on themu 4 attributed it to a person whom they chose as an ex- ample and followed; 3 attributed it to everything but self; and 3 attributed it to miscellaneous factors. The Business Leaders Opinions on the Constituents of Success: To 64 business leaders, expansion in busi— ness was the major constituent of success; 8 respond- ents believed that large profits constituted success; 9 respondents believed recognition and prestige con— stituted success; another 8 respondents believed suc- cess was a certain size and type of wealth; 5 re- spondents believed success was profits and accomplish- ments; 2 respondents believed it was social achieve- ment; and for 7 reSpondents there were miscellaneous 365 constituents of success. Social Organizations as Roads to Success: Only 11 busi- ness leaders actively used social organizations as a road to occupational success; on the other hand, 63 respondents did not care about social organizations; 11 joined a social organization because they liked the organization itself; and 18 respondents used social organizations to achieve social prestige only. The Most Important Life-Achievement of the Business Leaders: 34 business leaders could not point out any particularly important achievement; they pointed out that achievement was continuous and had no particular high points; to 51 business leaders, achievement was related to an activity in their company; 16 respond- ents gave examples of achievement that came mainly from an off-the-job situation; and 2 mentioned edu- cational achievements. Finally, a few words about further research should be added. On the basis of his interviews, this researcher is convinced that many insights in- to management can be obtained by first analyzing the problems of the business leaders, and then determining what type of behavior would more ade- quately solve these problems. Another type of research that could yield use- ful insight would be an investigation of the per— ceived image and role of the business leader by the 366 society at large. Here the degree Of congruency between the perceived images and roles would be found. Also this author strongly suggests research that would permit: 1. A SOphisticated means of describing the needs (or drives) of the business lead- ers and the techniques for measuring these needs; 2. a sophisticated means for describing the manner in which these needs are fulfilled. Similar types of research should also be under- taken in other countries. Specifically, similar studies on business leadership could be undertaken in France and Iran. Iran, Turkey, and France represent three different societies that are close enough to permit a comparative study. These countries have had continuous social, economic, and political in- teraction for many centuries. They represent three interrelated steps toward westernization and modern- ization. Iran can be taken as a traditional society, Turkey as a semi—western society, and France as a western institution of continental EurOpe. 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DevelOpment Plan First Five Years (1963—19677i2 Ankara: 1965 Annual Programme Dogus Ltd., Eti Matbaasi, 1964. Riggs, F. W., Sharp, W. R., and Sifflin, W. J. Toward the Comparative Study of Public Administration. Bloomingdale, Indiana: Indiana Univ. Press, 1959. Rinkin, M. D. Area Development for National Growth. New York: Praeger, 1965. Robinson, Richard. DevelOpments Respecting Turkey. New York: American Universities Field Staff, 1954. Robinson, Richard. The First Turkish Republic: a Case Study in National Development. Cambridge: Harvard Univ. Press, 1963. Rosen, Sumner. "Labor Relations in Foreign Countries." Reprint No. 7 from Management Guide to Overseas Operations, New York: McGraw—Hill Book Co., Inc., 1957. 374 Royal Institute of International Affairs. The Middle EastL A Political and Economic Survey, 3rd ed. London: Oxford Univ. Press. 1961. Samli, A. C. "Wholesaling in an Economy Of Scarcity," Journal of Marketing, 28, July, 1964. Serin, Necdet, Turkiye' nin Sanayilesmesi (Industrial- ization of Turkey). Ankara: Sevinc Matbaasi, 1963. State Planning Organization — Turkey. Planning in Turke , No. 2. Ankara: State Planning Organ— ization, August, 1964. State Planning Organization - Turkey. Introducing Turkeyjs State Planning Organization. Ankara: State Planning Organization, 1963. State Planning Organization - Turkey. Planning, No. 14. Ankara: State Planning Organization, 1963. Thomas, L. V. "Recent Developments in Turkish Islam," Middle East Journal, 6, NO. l, 1952. Thomas, L. V., and Frye, R. N. The United States and Turkeyyand Iran. Cambridge: Harvard Univ. Press, 1952. Thornburg, Max Weston. Turkey, an Economic Appraisal. New York: Twentieth Century Fund, 1949. Tokin, I. H. Iktisadi ve Ictimai Turkiye, Rakamlarla Turkiye' de Sanayi (Economical and Sociological Turkey, Industry in Turkey with Numbers). Ankara: Istatistik Genel Mudurlugu, 1946. Turkish Information Office. New Turkey. New York: Turkish Information Office. ' Turkish Information Office. Women in Modern Turkey. New York: Turkish Information Office. United Nations Technical Assistance Program. Insti- tute of Public Administration in Turkay. New York: United Nations Technical Assistance Program, 1954. U. S. Bureau of Foreign Commerce. Investment in Turkey. Washington, D. C.: Basic Informa- tion for U. S. Businessmen. 375 U. S. Department of Commerce. Investment in Turkey. New York: U. S. Department of Commerce, 1956. U. S. Department of Labor. Labor Digast, No. 11, Nov., 1963. Ward, R. E., and Rustow, D. A. (eds.). Conference on Political Modernization in Japan and Turkey. Princeton: Princeton Univ. Press, 1964. Weiker, w. F. "Academic Freedom and Problems of Higher Education in Turkey," Middle East Journal, 16, Summer, 1962, discussion; 17, Winter/Spring/ Autumn, 1963. APPENDIX I INTRODUCTORY LETTER SENT TO THE BUSINESS LEADERS INCLUDED IN THE INTERVIEWS Dear . . . May 31, 1965 The Bureau of Business and Economic Research of the Michigan State University is conducting a research on the "Role of the Business Leaders in the Development of Turkey." The core of this project involves several interviews with prominent business leaders selected from the Turksih business circles. These studies, which will include your valuable contributions, shall investigate the private en— terprise and its leaders in the fields of trade, industry, finance, and transportation, constituting the foundation of the Turkish economic structure. It is hOped that the findings of the research will provide new statistical and conceptual information which will enlighten certain aspects of the big business in re— lation to the whole economy, as well as data to be util— ized toward the future development of the country. As a well-known member of the Turkish business life, we hope that you will be helpful to us, individually. If it is possible for you to devote some of your valuable time to support our project, your efforts toward the re— alization of our goal will be appreciated. In conducting this study, we wish to stress the point that the collected data will be held strictly confidential 376 377 by the University, and the publication will depict ab- stract analogies referring to names, position or figures only where permitted by the individual. We would appreciate an interview with you at your convenience between June 20 and August 20. Thank you for your time and consideration. Under Sincerely yours, Guvenc Alpander Assistant Professor of Business and Economics University of Maine Portland, Maine the directorship of Eugene E. Jennings Professor of Management Michigan State University East Lansing, Michigan 1. APPENDIX II QUESTIONNAIRE USED IN INTERVIEWS PART ONE THE BUSINESS LEADER PERSONAL DATA How Old are the personsywho are leading_the business today? 1. The youngsters 20—29 2. The business youth 25-29 3. The young adults 30-34 4. The young matures 35-39 5. The matures 40—49 6. The experienced 50-59 7. The old ones 60—69 8. The aged ones 70-90 Where do the business leaders come from? 1. The Istanbulits 2. The Dadashes 3. The Efes 4. The villagers from Central Anatolia 5. The citizens from Central Anatolia 6. The villagers from Thrace 7. The citizens from Thrace 8. The villagers from Southern Anatolia 9. Citizens from S. Anatolia 10. Villagers from Egea 11. Citizens from Egea l2. Villagers from East 13. Citizens from East 14. Villagers from Black Sea 15. Citizens from Black Sea 16. The outsiders What is the marital status of the business leader? 1. Married 2. Single 3. Widowed Does he have any children? 1. Affirmative 2. Negative 378 10. 11. 379 What are the national origins Of the business leaders? 1. 2. 3. Turk 4. Arab Jew 5. Greek Armenian 6. Other When did the business leader enter business life? U1J>UJNH The Ottomans 1900-1933 The Ataturk generations 1923-1938 The Inonu boys 1939-1949 The Democrats 1950-1960 The revolutionaries 1961-1963 Position of the business leader in the hierarchy of his present firm. Occupies top position in the administrative group (chairman of the board, president, executive director, owner-manager) Is second in command (vice-president, assistant general manager) Occupies the third layer in the hierarchy INTELLECTUAL AND EDUCATIONAL ACHIEVEMENTS What are their formal educational achievements? 1. Less than junior high 2. Junior high and some high school 3. High school graduates 4. Some college 5. College graduates 6. Masters 7. Doctors Where did the business leaders receive their college education? 1. In Turkish Universities 2. In American Universities 3. In European Universities 4. Not a university graduate~. What is their field of concentration? CWU'vaU-JNH o o o 0 Liberal Business Engineering Medicine Law Not a university graduate 12. 13. 14. 15. 16. 17. 380 How many of the business leaders pursued additional courses beyond their formal education? 1. Affirmative 2. Negative Does the business leader know any_foreign language? 1. Affirmative 2. Negative What are the most common foreign languages spoken by the business leaders? 1. English 7. French and German 2. French 8. Any two languages 3. German but 6 and 7 4. Greek 9. None 5. Other 10. English and French 6. English and French and German SOCIALJ ECONOMIC, AND RELIGIOUS BACKGROUND OF THE BUSINESS LEADER What is the occppation of the business leader's father? 1. Small merchant 7. Laborer 2. Officer in the 8. Teacher armed forces 9. ‘Clerk in the private 3. Engineer sector 4. Doctor 10. Politician 5. Civil servant 11. Successful entrepre- (memur) neur 6. Farmer 12. Journalist What is the education of the father? . Less than junior high. Junior high and some high school High school graduate or equivalent Some college or equivalent . College graduate or equivalent . None 001.5me Where do the fathers of the business leader come from? 1. Turkey 2. Outside Turkey 18. 19° 20. 21. 22. 23. 24. 381 What is the socio-economic status of the family in which the business leader was raised? 1. Upper-upper 4. Middle 2. Upper—middle 5. Upper-lower 3. Lower-middle 6. Lower-lower What is the degree of religious orientation Of the business leader? 1. Strong 2. Average 3. Very little Has the business leader traveled abroad? 1. Yes 2. No What countries has he visited? 1. United States 4. Asia and Middle 2. Europe East 3. Communist countries 5. None MOBILITY PATTERNS What is the relationship of the business leader to the founder of the firm? 1. Has family ties with founder of firm on wife's side 2. Has family ties with founder of firm on father's side 3. Has no family relations with founder of firm 4. Is founder of firm What is the extent of his ties with relatives and his family? 1. Has completely cut ties with his relatives 2. Has partially cut ties with his relatives 3. Keeps strong ties with his relatives What is the extent of financial help received from relatives including own family? 1. None 2. Much 3. Some 25. 26. 27. 28. 29. 382 What is the nature of help received from relatives including Own family other than financial? 1. Family and relatives worked with him 2. Family and relatives did not work with him, or help him 3. Family and relatives introduced him to influenw tial people Type of social organization the business leader is a member of. Exclusive and expensive clubs Cultural and educational societies Professional associations Masonic order Religious organizations Is not a member of any social organization Sports clubs Member of both cultural & professional organiza— tion 9. Any combinationcf the above except 6 and 8 (DQOWU'IbOJNI—J 0 Number Of_clubs and social organizations he is a member of. 1. Only one 4. 9-12 2. 2-4 5. 12 and more 3. 5-8 6. None In what kind of social organizations was the business leader a member of prior attaining present position? 1. Was not a member of any social organization prior attaining present position 2. Professional associations 3. Exclusive clubs 4. Both professional and exclusive organizations 5. Sports clubs 6. Masonic order 7. Religious organizations Did the business leader change social organizations after attaining present position? 1. Yes 2. IJo 3. He was not a member of any social organization 30. 31. 32. 33. 383 Employment history 1. His first job was with his present company 2. He was previously employed in a related occupa- tion in private sector 3. Previously employed in the private sector in an unrelated occupation 4. Previously employed in the government sector in a related occupation 5. Previously employed in the government sector in an unrelated occupation 6. Previously self-employed 7. Occupied high government or political position Promotional history 1. Retained his present position since he joined the organization or since the founding 2. Had played lesser roles and had a lower rank in the heirarchy previously until he achieved his present position in the same company LEADING DRIVES OF THE BUSINESS LEADER Motives that seem to have stimulated the business leader. 1. Achievement motives 2. Rrestige motives 3. Power motives 4. Affiliation motives 5. Money motives 6. Self-actualization 7. Help to society 8. Continuous urge for work and results 9. Achievement and money 10. Prestige and achievement 11. Security and Safety 12. Other motives THE AVENUE TO SUCCESS To what does the business leader attribute his success?. 1. To self only 6. To parental influ- 2. To Opportunities ence on him met , 7. To a person he 3. To family background followed 4. To self and opportune 8. To everything but ities self 5. To peOple he worked 9. To other with 34. 35. 36. 37. 384 What the business leader thinks are the constituents Large profits Recognition and prestige Expansion in business SOCial achievements A certain size and type of wealth Profits and accomplishments Degree ofyparental influence upon the business lead- Strongly influenced by both parents Strongly influenced by father Strongly influenced by mother Not influenced by either parent of success. 1. 2. 3. 4. 5. 6. 7. Other pg. 1. 2. 3. 4. 5. Influenced by father figures other than father Social organizations as a road to success. 1. Used social organizations as a road to occupa— tional success 2. Joined social organization because he liked to 3. Used social organization to achieve social prestige 4. Did not care about social organization Perceived description of a successful business leader. 1. Ability to forecast 7. Strong, social orien- future ' tation 2. Honesty 8. Smart, opportunistic 3. Profit not the sole concern 9. Any combination of 4. Hard worker above 5. Ability to take pre- 10. Other ventive measures 11. Person whose opinion 6. A perfectionist in his is consulted work 12. Has intelligence and initiative 38. 39. 40. 41. 385 SOCIAL ORIENTATIONS OF THE BUSINESS LEADER What was the most impprtant achievement of the busi- ness leader in life? No particularly important achievement; achieve- ment is continuous, has no peak periods Achievement is related to an activity in com— PanY Examples of achievement are mostly given from off—the-job situations Educational achievements What the business leader thinks his role in society is. UJNl-J 43- To be idealist Motivate his environment to work Show that work and achievement instead of profits are or should be the true motivators Concern himself mostly with own work, how to accomplish it most efficiently Create work, thus contribute to economic and social development Has a very narrow conception of society To make his achievements the achievements of society What the business leader thinks are the demands of the society on him. 01.5me 0. m 0 Creation of a spirit of hard work To be a champion of the society's problems Financial help, charity Has no idea Views society very narrowly as composed of his family members only Society demands expert ideas and opinions DECISION MAKING Degree of consultation in decision-making. l. Ultb (UN 0 o o m o Decides with no consultation Consults relatives but not subordinates Consults subordinates but excludes any out- sider Consults both friends and subordinates Consults experts outside the firm for major decisions Consults owners but just to satisfy them 42. 43. 44. 45. 386 Orientation in decision-making. 1. 2. Relies on thorough calculation and statistical evidence Relies more on perception and feel of the situa- tion in his judgments What are the Opinions of the business leader about research and other techniCal agencies? l. Thinks research institutions render a valuable service to business III7 2. Does not believe research institutions render valuable service ALLOCATION OF TIME How does the business leader use his time? 1. He spends most of his time on routine day-to- day activities (Operational and control activi- ties 2. He spends most of his time on public relations as representative of the firm in conventions and conferences with the government 3. Financial matters and bank relations take most of his time 4. He spends his time mostly in the establishment and review of goals and Objectives of the firm (policy-making and long-range activities) 5. Spends most of his time outside the firm as a public figure, in non-firm matters What is the nature of the major problems of the bus- iness leader? 1. 2. \IC‘U'IDPUO to... CD 0 Governmental ' Lack Of reliaBility of supply, quality, and suf- ficiency of raw material Financial Based on market conditions Mostly technical and organizational in nature Rooted in society at large Resulting from differences in Opinion between partners Any combination of the above 46. 47. 48. 387 What are the causes of organizational and managerial problems? 1. Lack of understanding of principle of management and organization 2. Centralization of power, authority, and decision- making and unwillingness to delegate 3. Centralization because of the unavailability of properly trained employees to delegate 4. Insufficient training of employees 5. Conflict of interests between labor and manage- ment 6. Shortage of skilled personnel 7. No particular organizational or managerial prob— 1em GOALS OF THE BUSINESS What is theypredominant goal of the firm? NH 00 \DCDQCWU'IIDUO 0000... Profit motive Preserving the present position in the indus- try Increasing production and sales Increasing capital Increase the core market Create new markets Create new job Opportunities Other Service to society What is the major_policy followed by the firm to attain its goal? NH Komflmmtbw 000.000 Increase the production capacity Acquire new markets at the expense of competi- tors Acquire new markets by finding new customers Decrease the costs Improve production techniques Diversity production Increase the productivity of labor Other Create inner social balance V! 49. 50. 51. 52. 53. 388 REASONS FOR THE SUCCESS OF THE FIRM To what is the success of his firm attributed by the business leader? 1. PrOper timing of the establishment year . Competitive advantage of differentiated de- mand Goals of company Combination of l, 2, and 3 Good government relations Organizational factors Managerial factors Pure environment factors Other [\J \OCDQOWU‘IJSL» ooooooo SIGNIFICANT PERIODS IN THE HISTORY OF THE FIRM When was the most unlucky period of the firm? 1964 1963-1960 1960-1956 1956-1952 1952-l9SQ____ 1950—1946 1946-1939 There wasn't any .000 CDQOWU'I one. ~5me When was the most lucky and prOSperousyperiod of the firm? 1. 1964 2. 1963-1960 3. 1960-1956 4. 1956-1952 1952-1950 1950-1946 1946-1939 There wasn't any ooqowm BUSINESS AND GOVERNMENT RELATIONS What is the opinion of the business leader about gpvernment efficiency? 1. Increased efficiency in government and political stability will benefit his business 2. Negative What is the Opinion Of the business leader about participation in politics? 1. Businessmen must devote some of their time and efforts to politics 2. Negative 54. 55. 56. 57. 58. 59. 60. 61. 62. 63 64. 389 What will be the type of participation in politics? 1. Active 2. Passive, in form of financial and moral help 3. Business Leader should not participate in poli- tics What is his degree of concern with economic planning? 1. Has participated in the preparation of the five year plan 2. Has Obtained informationabout the plan through the press, conferences and professional journals 3. Has obtained information about the plan by read- ing the original plan and special reports 4. Has no idea about plan What were the effects of the plan on his business? 1. The plan had positive effects on the administra- tion and decision-making process in the firm 2. None PART TWO THE FIRM CATEGORY OF BUSINESS What is the type of the firm? 1. Banking 2. Mining and petroleum 3. Commerce (retail-wholesale) 4. Manufacturing 5. Transportation 6. Insurance Date of Founding of Present Establishment Present Worth of the Firm (1964 Financial Year) Present Number of Emplpyees (Average for 1964) Present Gross Sales (1964) GROWTH PATTERNS The Worth of the Firm in 1960 Worth of the Firm in 1956 Worth of the Firm in 1952 390 65. Worth of the Firm in 1948 66. Number of Employees in 1960 67. Number of Employees in 1956 68. Number of Employees in 1952 69. Number of Emplgyees in 1948 70. Gross Sales in 1960 71. Gross Sales in 1956 72. Gross Sales in 1952 73. Gross Sales in 1948 "111111111111111111