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We believe that the world is standing on the very edge of
the fastest industrial revolution ever. A revolution which
will rapidly increase the efficiency of many production pro-
cesses. Automation (both mechanical and the one happen-
ing with computer processes) will reduce the demand for hu-
man work and release a huge amount of time we can use for
further development.

The Future

of Management
With this book we try to provide the reader with information

The Future
about various aspects of life and the socio-economic envi-
ronment. For this purpose, we have invited authors repre-

of Management
senting the leading scientific research centers in Poland and
specialists from foreign universities.
Piotr Buła
Bogdan Nogalski

Industry 4.0 and Digitalization

The monograph stands out from the publications related to
change management in the context of entrepreneurial op-
portunities and flexibility of the organization. The authors at-
tempt to integrate retrospective and prognostic approach-
Industry 4.0
and Digitalization
es, so they not only assess the current status, but also point
to challenges for management science. The work has been
prepared by scholars whose authority in management sci-
ences is undisputed.
I positively assess the empirical and methodological layer of
individual chapters of the monograph. Discussing the results
of their scientific and research work, the authors presented
the determinants of management processes described from
the perspective of entrepreneurial opportunities and flexi-
Scientific editors
bility of the organization. Piotr Buła • Bogdan Nogalski
Szymon Cyfert

Jagiellonian University Press

The Future
of Management
The Future
of Management
Industry 4.0
and Digitalization

Scientific editors
Piotr Buła • Bogdan Nogalski

Jagiellonian University Press

Scientific editors
Prof. Piotr Buła, Ph.D.
Department of International Management, Cracow University of Economics
Department of Business Management, University of Johannesburg

Prof. Bogdan Nogalski, Ph.D.

WSB University in Gdańsk
Committee on Organizational and Management Sciences of the Polish Academy of Sciences

Scientific reviewer
Prof. Szymon Cyfert, Ph.D.
Department of Organization and Management Theory, Poznań University of Economics and Business

Publication coordination
Piotr Sedlak, Ph.D.
Department of International Management, Cracow University of Economics

Cover design
Sebastian Wojnowski

Publication financed by Cracow University of Economics

©C
 opyright by Piotr Buła, Bogdan Nogalski & Wydawnictwo Uniwersytetu Jagiellońskiego
First Edition, Kraków 2020
All rights reserved

No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or
other means, now known or hereafter invented, including photocopying and recording, or in any information
storage or retrieval system, without permission in writing from the publishers.

ISBN 978-83-233-4859-7
ISBN 978-83-233-7123-6 (e-book)

www.wuj.pl

Jagiellonian University Press

Editorial Offices: Michałowskiego 9/2, 31-126 Kraków
Phone: +48 12 663 23 80, Fax: +48 12 663 23 83
Distribution: Phone: +48 12 631 01 97, Fax: +48 12 631 01 98
Cell Phone: +48 506 006 674, e-mail: [email protected]
Bank: PEKAO SA, IBAN PL 80 1240 4722 1111 0000 4856 3325
Contents

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Prof. Piotr Buła, Ph.D.
Prof. Bogdan Nogalski, Ph.D.

Industry 4.0: Social Impacts and Operations Management Challenges . . . . . 9

Prof. Grażyna Leśniak-Łebkowska, Ph.D.

Business Model Changes in the Presence of Challenges Brought

by Industry 4.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Prof. Jan Brzóska, Ph.D. Eng.
Prof. Lilla Knop, Ph.D. Eng.

Communication in Traditional and Network Organisation:

Transformation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Prof. Jerzy Kisielnicki, Ph.D.

Consequences of the Fourth Industrial Revolution in Social and Economic

Development in the 21st Century . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Prof. Kazimierz Górka, Ph.D.
Agnieszka Thier, Ph.D.
Prof. Marcin Łuszczyk, Ph.D.

Ideology, Trust, and Spirituality: A Framework for Management Control

Research in the Era of Industry 4.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Roman Lewandowski, Ph.D. 
Prof. Anatoliy G. Goncharuk, Ph.D. 
Prof. Jarosław J. Fedorowski, M.D., Ph.D., MBA
6 Contents

Renewable Energy through Industry 4.0 on the Example of Photovoltaic

Development in Selected European Countries . . . . . . . . . . . . . . . . . . . . 92
Prof. Piotr Buła, Ph.D.
Tomasz Schroeder, M.Sc. Eng.
Monika Ziółko, Ph.D.

Employee Loyalty in the ICT Sector as a Challenge for Building

Industry 4.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Prof. Jerzy Rosiński, Ph.D.

The Importance of Flexibility of Human, Tangible and Intangible

Resources in Selected Production Entrepreneurships: Results of Empirical
Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Michał Teczke, Ph.D.
Maciej Teczke, Ph.D.

Challenges Posed for Universities by the Industry 4.0 Environment . . . . . . 141

Prof. Marcin Geryk, Ph.D.

Big Data in Managing Marketing Communication . . . . . . . . . . . . . . . . . . 149

Agnieszka Smalec, Ph.D.

Mathematical Risk Assessment Method in the Implementation of Logistic

Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
Prof. Piotr Buła, Ph.D.
Dorota Dziedzic, Ph.D.
Marta Uznańska, MA

Management and Digitisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

Prof. Walter Sorg, Ph.D.

Branding of Time as a New Direction in Tomorrow’s Management . . . . . . . 201

Prof. Kakhaber Djakeli, Ph.D.

The Future of Branding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210

Prof. Grzegorz Urbanek, Ph.D.
Preface

The world is standing on the very edge of the fastest industrial revolution ever. A rev-
olution which will rapidly increase the efficiency of many production processes.
Automation (both mechanical and the one happening with computer processes) will
reduce the demand for human work and release a huge amount of time we can use
for further development. Industry 4.0 has been a buzz word recently. It is about inter-
connecting devices and giving them the possibility of making autonomous decisions.
It is certainly a way of increasing efficiency of production, but it will also have impact
on the facilitation of other processes within the organization.
At the same time, it is said that we are on the verge of an ecological catastrophe
and that we have merely a few years before irreversible climate changes may endanger
the future of our species.1 Some say, that the development of AI will solve most of our
problems. We believe that the need for the activity of human beings will be even bigger.

Piotr Buła
Bogdan Nogalski

1
World Scientists’ Warning of a Climate Emergency, https://academic.oup.com/bioscience/advance-article/
doi/10.1093/biosci/biz088/5610806 (access: 2 November 2019).
Industry 4.0: Social Impacts and
Operations Management Challenges

Prof. Grażyna Leśniak-Łebkowska, Ph.D.  https://orcid.org/0000-0003-3035-6676

Warsaw School of Economics

Abstract
The new Industry 4.0 is designed to respond to major global challenges, such as global warming, ageing
population, globalisation, deregulation, depletion of raw materials, growth of the young (born digital)
generation with rising demands and expectations, political frictions, economic growth uncertainties, social
unrest, mass migrations, etc. On the reverse side—the Industry 4.0, which is to meet new expectations also
has its dark side if not managed wisely with a human-centred focus. It is the set of social costs of transition.
In such settings corporate leaders attempt to rethink not only the winning logic of competitiveness but also
with whom and how they have to cooperate “in the crafting of a new societal deal that helps individuals
cope with disruptive technological change.” 1
Facing up to the Fourth Revolution is the major challenge for managers in their professional career in the
industry. They have to find their way of managing transition from the past routines and present problems
to brand new reality to be invented and constructed, based on the innovations offered by technology
revolution with its overwhelming disruptive power and competition based on the Amazon Effect.
In this article focus will be put on the transition process to be navigated by three types of companies: old
fashioned and lagging behind the new stream of inventions, adopting new technology in a human-friendly
way, and new-born entrepreneurial digital platform companies. For all of them, the key success factor is
accelerated and focused education.

Keywords: industry revolution, innovations, cyber security, retail, digitalisation

1
E. Greenberg, M. Hirt, S. Smit, The Global Forces Inspiring a New Narrative of Progress, “McKinsey
Quarterly” 2017, p. 1.
Table 1. Revolutions (not only) in industry2

Industrial
Major drivers of change
Revolutions
1st Industrial The water and steam engine enabled the growth of manufacturing productivity,
Revolution transportation and other areas where hard human work could be replaced by steam
power. It did not reduce employment, quite the contrary—it fostered the industrial
1765 until the activity of mass production due to mechanisation, moving workforce from agricul-
mid-1800s ture to factories, thus initiating the emergence of management science.
2nd Industrial Electricity, gas and oil enabled further facilitation of work, replaced horsepower,
Revolution illuminated life space in households and cities, thus making it possible to work and
be active longer than the daylight. It caused a high growth of productivity, econo-
1870 until 1914 my and quality of life. Major inventions included the combustion engine, the steel
At present its industry, chemical synthesis.
significance New communication modes (telephone and telegraph). Automobile and plane. Model
continues to grow of large factory. Electrification is still in progress, as 1.3 billion people do not have
access to electricity yet, mainly in Africa and India. Electricity became a public good.
New industries emerged active in energy generation, transmission, distribution
and use. Electricity changed the work of all other industries. It has been called “the
greatest engineering achievement of the 20th century.”
New sources of energy aimed at decarbonisation of the economy are forced at present
to enable further growth without sacrificing climate safety.
3rd Industrial Computers, IT systems and programmable logic controllers (PLCs)
Revolution
The era of information organised for diverse needs of users, scalability.
From 1950s
Nuclear energy. Rise of electronics (transistors, microprocessors). Miniaturised
materials to develop biotechnology and space research.
Rise of high-level automation and robotics in manufacturing.
The emergence of the Internet (the end of the second millennium).
4th Industrial The first industrial revolution not rooted in a new source of energy but rather con-
Revolution stituting a new technological phenomenon in itself: digitalisation enabling the
construction of a virtual world from which we steer the physical world.2 It builds
Underway upon the 3rd revolution inventions. The key issue is connectivity and interaction of
all production means in real time. Enabling solutions for Factories 4.0 to connect
different objects in a production line and different players (Cloud Computing, Big
Data Analytics, Industrial Internet of Things (and Services), Machine Learning,
Virtual and Augmented Reality, 3D Printing and Artificial Intelligence).
The use of technology blurring the border between physical, digital and biological
spheres to completely uproot industries all over the world. Transformations of entire
production, management and governance systems.
Energy still becomes an issue. Diversified alternative sources of renewable energy
to be adopted (geothermal, wind, solar, water) to reduce the adverse impact of car-
bonisation on climate, health and reduce costs.

Source: prepared by the author.

2
Although the digital transformation already has a 10-year history with the launch of the first smartphone,
cloud computing and social media, all of them increasing the scale and ease of communication, the pace
of its spread in the business applications has not reached the stage of maturity yet.
Industry 4.0: Social Impacts and Operations Management Challenges 11

1. Industrial revolutions: Change of technologies, products and mindset

From a historical perspective, Revolution 4.0 is the natural step ahead on the road of
achievements and shortages of previous revolutions to meet the evolving needs of the
growing global population.
The already existing applications for the industrial sectors of the economy repre-
sent a broad range of new possibilities, such as “predictive maintenance, improved
decision-making in real time, anticipating inventory based on production, improved
coordination among jobs, etc. Day after day, all these improvements are gradually
optimizing production tools and revealing endless possibilities for the future of In-
dustry 4.0.”3
Adaptability and agility become the distinctive features of Industry 4.0 in view of
dramatically changing conditions. From a psychological point of view it creates a per-
manent strain on people on how to survive, how to innovate and become the winner
in the competitive gain. It is difficult to manage people oscillating between hope and
fear, opportunity and threat. They expect job safety and such management that will
secure it. Thus, the focus changes from the strategy of competing for the future with
a strategic intent, core competences and industry foresights,4 to a disciplined execu-
tion of operations. It is, in a sense, a comeback to the era of quality movement with its
concepts of J. Juran and E. Deming5 on converting tools and methods into capability.
Embedded capability as the master use of a resource became the vehicle of change
towards inventing a new future. It was rooted in the early 1990s, when the digital era
followed by world-class companies from Internet start-ups to biggest multinationals
changing the approach to competition. Instead of reacting to competitive moves they
started leading the revolution with passion to make radical innovations fuelled by stra-
tegic imagination.6 So, this new mindset and strong capability fostered a radical change
in manufacturing instead of small incremental improvements with limited potential.

2. Organisational contingencies of innovations

In order to create adequate conditions for innovations, a company needs to combine two
components: creativity and execution, with creativity needing freedom and execution
needing resources and discipline. In reality, a number of ingredients of the management

3
www. sentryo.net (access: 5 June 2019).
4
G. Hamel, C. K. Prahalad, Competing for the Future, Harvard Business School Press, Cambridge (Mass.)
1993.
5
Both of them are the pioneers of the quality movement. See: R. T. Westcott, The Certified Manager of
Quality/Organization Excellence Handbook, 4th ed., ACQ Quality Management Division, Chicago 2013.
6
G. Hamel, Leading the Revolution, Harvard Business School Press, Cambridge (Mass.) 2000.
12 Prof. Grażyna Leśniak-Łebkowska, Ph.D.

system should be logically integrated with soft factors playing an important role in this
process. The major ones are embraced in the vision framework (Figure 1).
Aligning the culture with formal systems and management structure leads to
a platform for sustainable growth.
Every admired company has its value-based purpose and distinctive culture. The
executive group plays the key role in elaborating the inspiring and agreed vision taking
into account different perspectives, promoting it across the organisation, managing
conflicts, guiding execution through development of the action plans in all related areas
of competence and not foresaking teamwork and responsibility for integrated imple-
mentation. It is a continuous process of setting and sharing values that lead execution.
The organisational structure determines the way of dividing jobs to be done, infor-
mation flows and decision-making patterns. The more formalised and centralised the
structure, the less flexibility and initiative is left to employees. That is why Industry 4.0
promotes more organic structures to encourage creativity, impact and responsibility.
People-related issues are no longer the unique domain of the HR department re-
sponsible for major processes of recruitment, development and retainment of the best

Select and Build

the Executive Group

The Growth Vision Form and Maintain

Manage People
Processes Growth:
Values Strategy
Enabling Culture

Raison
d’etre

Determine Organization
Structure

Figure 1. The vision framework

Source: based on M. Lipton, Guiding Growth. How Vision Keeps Companies on Course, Harvard Business
School Press, Boston, Massachusets 2003, p. 28.
Industry 4.0: Social Impacts and Operations Management Challenges 13

possible employees to meet organisational needs. Human factors become strategic

in view of their potential contribution to company survival and growth. Although
new technologies tend to reduce employment in all areas that could be automated,
the turbulent environment requires intelligent responses of well-educated cadres on
all organisational positions. Some human values cannot be substituted, especially in
critical situations. Lagging behind new demands may pose new risks on operations.
Growth should be guided by a vision of the future. Entrepreneurial trend-setting
companies need visionaries with capabilities to guide growth and its new pathways.
Technology is the key enabling factor, while human needs are the initial and final
reference factors for the evaluation of ideas and achievements.
Innovation, being the cornerstone of Industry 4.0, wherever it is being elaborated,
requires a full readiness of people engaged to:
• Think big, be ambitious.
• Be enterprising and investigative.
• Be nonconformist and flexible.
• Be open-minded to irrational and outside the box ideas.
• Be ready for failures and being wrong, it is a good lesson learned.
• Stop pretending to know everything and being a perfectionist.
• Stand up for crazy ideas.

Without such an attitude creativity becomes compressed to filtered, old ideas.7

3. To be or not to be hyper-connected: The cyber security challenge

The big promise is that “communication between tools and controls will be instanta-
neous and all intra, inter and exterior networks will be interacting with each other.
These connection nodes will facilitate the adjustment of production rates in real time.
Tomorrow plants will be intelligent, will function on their own, and remote control
will be the norm.”8 They will be automatically adapting to inputs they receive thanks
to nine types of sensors of lighting, acceleration, magnetism, coprocessor of movement,
sounds, orientation, distance, temperature and humidity, and atmospheric pressure.9
For example, quality failures will immediately trigger an automatic analysis thanks
to communication sensors, determine the cause of the problem and initiate automatic

7
Ibidem, p. 159.
8
Industrial Cyber-security: Monitoring and Anomaly Detection, Report produced by Sentryo in collaboration
with Schneider Electric, Siemens, and CEA, www.sentryo.net (access: 5 June 2019). This report illustrates
informal exchanges, joint projects, solution tests and field experience of the authors. The goals are to
share a realistic and pragmatic vision of industrial monitoring and detection systems and to enhance the
knowledge on industrial systems and the implementation of monitoring and anomaly detection solutions.
9
It is worth noting that the price of sensors goes down with the connectivity of objects growth.
14 Prof. Grażyna Leśniak-Łebkowska, Ph.D.

corrective action. A smart plant will also adjust its production output to demand
fluctuations being evidenced in the company dynamic sales database. It will allow for
greater flexibility and will support competitiveness, while keeping costs under control.
Industrial devices are designed according to strict physical security and safety
standards in order to work in unfriendly to humans, rough conditions with extreme
temperature ranges, vibrations, and electromagnetic noise. The ubiquity and flexibility
demanded by Industry 4.0 trend pose specific contradictory demands on industrial
devices. They should be flexible, easy to deploy, and not necessarily require any special
security or IT skills. These opposing design requirements make producers very prone
to introducing software bugs. Vendors have not yet successfully solved this problem.
A smart plant will unfortunately be broadly exposed to security risk of operations.
New services have emerged to protect manufacturing plants against cyberattacks of
hackers. They integrate the operation system with the IT system, which becomes critical
for maintaining continuous screening of all systems.
Security Operating Centres are likely to become units responsible for performing
these controls, which offers new career opportunities for humans.
Politecnico di Milano (POLIMI) and the Trend Micro Forward-Looking Threat
Research (FTR) Team conducted a joint research on robotics-related risks.10 They
analysed the impact of system-specific attacks and demonstrated attack scenarios on
actual standard industrial robots in a controlled environment.
In their security analysis, they found that the software running on these devices
was outdated; based on vulnerable OSs and libraries, sometimes relying on obsolete or
cryptographic libraries. They had weak authentication systems with default, unchange-
able credentials. Additionally, the Trend Micro FTR Team found tens of thousands
of industrial devices residing on public IP addresses, which could expose industrial
robots to further increasing the risk of hacking. In conclusion, the authors of the
report alerted the industrial control sector to undertake more intensive efforts in this
area. Moreover, using a standard robot installed in their laboratory, the researchers
showed how remote attackers could violate fundamental laws referring to robots setup
to the point where they can alter or introduce minor defects in the manufactured
product, physically damage the robot, steal industry secrets, or injure humans. They
also designed threat scenarios on how attackers capitalised on these attacks.
Nevertheless, robotics and automation represent major trends in Industry 4.0 smart
factories. The International Federation of Robotics forecasted the need for employing
1.3 million industrial robot units in factories globally, mainly in such operations as
welding, packaging, food processing or die casting, what makes the market value for

10
Research Report: Rogue Robots: Testing the Limits of an Industrial Robot’s Security, ed. by F. Maggi
(Trend Micro Forward-Looking Threat Research), D. Quarta, M. Pogliani, M. Polino, A. M. Zanchettin,
S. Zanero (Politecnico di Milano), https://documents.trendmicro.com/assets/wp/wp-in… (access: 10
June 2019).
Industry 4.0: Social Impacts and Operations Management Challenges 15

robotic systems reach a level of about US $32 billion.11 The customers are from large-
and medium-sized enterprises, mainly from industries critical for every nation, such as:
automotive, aerospace, alternative energy, defence, plastics, electrical and electronics,
glassmaking, welding, food and beverages, metal fabrication, wood industries, paper
and printing, pharmaceutical, packaging and palletising, distribution centres, die
casting, off-road vehicle manufacturing, railway, foundry and forging.12

4. “The Amazon Effect” challenge

The Internet has enabled the initiation, and nowadays the boom, of online retailers and
e-commerce at the cost of heavy equity brands in old distribution models. Consumers
are able to access virtually any product or service using their mobile devices. The agency
FutureCast13 specialising in helping brands and agencies adapt in the ever-evolving
marketing systems, described the new situation as “the Amazon Effect,” which is the
impact that the digital marketplace has on traditional business in view of changing
customer preferences and a new competitive landscape. Today, consumers, with special
regard to millennials, expect their buying experience to be immediate and friction-
less. Thus, the role of brands has outperformed any other advantages of competitive
offerings. Amazon, through creating the platform, offers not only convenience but also
influences value characteristic and extensive networks. Those, in turn, further influence
consumer expectations. The research of FutureCast proves that the largest generation,
i.e. the millennials, are two times more likely to be adopters of new technology and
digital trends, and they have very specific behaviours and attitudes in the market. In
regards to brands, they attribute high value to six areas related to brand performance
regardless of the industry sector or product:
• Social Circle (a part of the consumer’s close social circle).
• Self-Does (emotional connection to the brand).
• Innovative (brand in a constant state of beta).
• Trusted (consumer needs put first).
• Purposeful (doing good for the larger community).
• Accessible (simplifying the lives of consumers).

Next Gen X puts almost equal value on mindsets. The FutureCast study also allows
to draw conclusions from benchmarking modern brands and mass appeal brands,

11
International Federation of Robotics, Highlights, http://www.ifr.org/index. php?id=59&df=2016FEB_
Press_Release_IFR_Robot_density_by_region_EN_QS.pdf (access: 5 April 2017).
12
Research Report: Rogue Robots…
13
See: www. thefuturecast.com. Its motto is: “The FutureCast. Established tomorrow.” Below their research
results are reported.
16 Prof. Grażyna Leśniak-Łebkowska, Ph.D.

such as Amazon, Apple, Netflix, Tom’s Shoes and Uber. It turned out that Amazon
outperformed all other brands when scored against the mindsets of millennials, with
Apple as a follower, also across generations.
The main reason was the consistent ability to reduce friction in the consumer
journey and stay at the forefront of market innovation. This is the lesson that should
be learned by other brands to stay relevant and develop relationships.
Amazon became the most successful disruptor of retail trade achieving the leading
position in e-commerce (both on-line and through physical outlets). Its early entry
and deliberate strategy of platform development secured it an unquestionable dom-
inance. By mid-2018 Amazon was already responsible for approximately 50% of the
US e-commerce sales and 5% of all combined offline-online sales.
Two new inventions may further strengthen its leadership in setting new trends on
the retail market: Fulfilment by Amazon and Merch by Amazon. These two programmes
offer new services to potential partners from SMEs, which are not able to navigate the
growth path fast enough and to build scale to stay competitive. Through the Fulfilment
project, Amazon offers them its business infrastructure, such as warehouses, shipping,
administrative paperwork, etc., for a fee. Merch by Amazon may strongly appeal to
designers of T-shirts who have artwork concepts ready to be leveraged worldwide
with no upfront costs, with Amazon taking care of everything else needed in retail
distribution through the largest e-commerce platform. Amazon takes royalties only
for the sale of T-shirts, while the rest is free of charge.14
Taking into account the impact of the Amazon Effect, retailers and manufacturers
have a difficult task to compete on the base of costs and product differentiation.
The bargaining power of manufacturers who want to sell through such platforms
is also limited, so the cost, quality and customisation has become critical to meet
customer expectations.
However, there are attempts to battle the Amazon Effect. One of them is by
Kroger and Ocado who announced their first robotic warehouse in the US to take
on Ama­zon in the competitive online grocery market, which in the US is still rela-
tively untapped, not exceeding 2% of sales as compared to 6% in the UK. It could be
explained by the perishable nature of grocery food items and a relatively low profit
margin. From the entry strategy point of view it is logical to choose the weakest
defended segment of the market and next to strengthen the position. According to
Reuters, Ocado is known for the innovative robotics used in their warehouses to
process and pack food orders.

The company newest machines can pull together a 50-item grocery order in as little as five
minutes—potentially slashing Kroger’s labor costs at a time when US grocers are looking

14
It is roughly estimated that for a T-shirt sold for USD 20 the designer may receive USD 7. All parties
involved navigate the offerings and positioning through Amazon’s SEO.
Industry 4.0: Social Impacts and Operations Management Challenges 17

for ways to profitably deliver milk, eggs and other necessities to customer doorsteps. This
is the first of 20 high-tech warehouses (or “sheds”) planned for the US in a bid to edge out
Amazon and Walmart and become America’s top online grocery delivery service.15

5. Transition paths to the new market reality in Poland

Since 2016, Dell Technologies together with Intel have been conducting a survey on
a group of large- and medium-sized companies in Poland on their road to the adoption
of new models of digitalisation maturity.16
In their 2018 conclusions they pointed out that 73% of interviewed managers plan to
adopt broader new digital business models, but only 5% are real transformation leaders,
24% implementing, while the dominant group represented a reserved attitude with
34% of them with the lowest level of digitalisation. The main barriers, in the opinion
of 91% of managers, were related to:
• Changes in legislation.
• Shortage of financial and other resources.
• Excess of information.
• Lack of support from the company leadership.
• Lack of consistent strategy and vision of digital transformation.

The McKinsey team of researchers elaborated a very inspiring report on the potential
impact of digitisation on Poland’s improvement of productivity and contribution to
economic growth within the next decade.17 It should be based on online communi-
cation between different parts of the production process, the use of advanced data
analytics, which will favour low operating costs of intelligent production systems
as well as an easy adaptation to market needs. Optimistic projections of the possible
increase in economic value by 27–47% in the EU-15 leading countries within the
decade, are based on such advantages of Poland as a high number of science grad-
uates, high quality and affordability of talents, broad Internet access of households
and intensity of its use.
The authors distinguished four ways for digital transformation: digitally enabled
process optimisation, access to broader market space, more innovative products and
increase in labour participation. Each of them consists of specific steps (Table 2).

15
www.2.novacura.com (access: 5 June 2019).
16
Dell Technologies Digital Transformation Index. Source: aleBank.pl (access: 11 September 2018).
17
McKinsey Global Institute Report, Digital Poland, by D. Boniecki, W. Krok, W. Namysł, M. Borowik,
J. Iszkowska, M. Rabij, 2016.
18 Prof. Grażyna Leśniak-Łebkowska, Ph.D.

Table 2. Digital transformation

Digitally enabled Access to broader More innovative Increase in labour

process optimisation market space products participation
Digitally supported Access to niche clients More effective The possibility of
value—chain R&D processes remote work
management Global reach without
a physical footprint New business models Greater specialisation
Process automation within advanced tech-
Data based analysis New ways of commu- nological processes
Optimisation of of client needs nicating with clients
resource utilisation
through advanced
analytics

Source: based on McKinsey Global Institute Report, Digital Poland, 2016, pp. 1–25. Based on the research
on Hidden Champions in Poland conducted in 2018, we can identify three types of enterprises, which
require different ways to reach their target markets with a view to using the potential of Industry 4.0.18

The first and largest group consisted of mature companies of all sizes with an estab-
lished market position in the respective supply network and strong brand recognition.
In view of market changes they frequently had to change ownership, (including the
privatisation of state-owned companies and foreign direct investments) and deeply
reengineer their companies to meet the high industry standards to gain international
recognition. In case of producers of tangible products, large scale, capital and compe-
tences became a must to survive. Examples of such fast growing Polish private com-
panies are TZMO (Toruńskie Zakłady Materiałów Opatrunkowych), Fakro (global
producer of roof windows), Drutex (one of the top leaders in window manufacturing
in the EU) and Wiśniowski (international seller of garage and property gates). Other
companies selling to foreign investors are, e.g. Solaris (busses) Morpol (global leader
of salmon processing) and Korona Candles.
Their major focus was on sustaining strong relationships and adopting evolutionary
methods for large scale innovations as part of Revolution 4.0 (products, technologies,
sales, services), at the same time educating their employees, building partnerships and
a client base, educating them about their efforts to innovate and stay close to their needs.
The organisational inertia and worsening financial performance may slow down the
transition, eventually leading to the failure of some. However, their potential attracts
new investors ready for takeover. A special category in this group is constituted by a debt
recovery company Kruk, which disrupted the service model of this type of business.
The second group is created by young entrepreneurial start-ups, hungry for success.
They usually have well-educated leaders or creative inventors, but scarce financial re-
sources (in relation to their ambitions) and management competences, a weak market

18
The examples are extracted from the research report on Hidden Champions in Poland (co-author)
conducted in 2018 in the CEE region for EBRD, coordinated by the Bled School of Management (IEDC).
Industry 4.0: Social Impacts and Operations Management Challenges 19

position and limited trust of the community. Support for their business depends on
the business idea and scalability, with reliable managerial competences. Start-ups not
necessarily build upon Revolution 4.0 ideas, but at least they start business from scratch
and do not have a heavy past behind them. Young start-upers are usually digital savvies
and have an ease in using digital communication and work tools. The success ratio in
this group is rather low, only a few are able to build their strong position in a niche due
to a unique product, service or solution, frequently based on a distinctive technology
and know-how. Many companies of this type stay hidden in the public sphere and try
to overcome the existing market and financial barriers in a step-by-step approach to
build a broader presence. There are numerous examples of such companies identified
in the research on hidden champions initiated by Herman Simon, who defined this
special category of companies as attaining leadership positions in their respective mar-
kets and industry sectors and enjoying decent financial performance to foster further
growth.19 An example of international success is HTL Strefa going global with their
innovative safety lancets, CD Project and City Interactive (computer games), WATT
(solar collectors), Carlex Design (automobile, maritime and aviation designs).
The third group brings together companies named “born global” by nature, which
are ICT platform-based companies with intangible products created with full develop-
ment of Revolution 4.0 innovations. Their leadership is based on global data profiling
with the use of innovative technologies. Usually they operate in networks and adopt
a coopetition strategy to cooperate and compete with their partners. Examples of such
companies in Poland are: Cloud Technologies with automated data profiling and selling,
Growbots with an automated B2B sales platform, Codiwise (applications for mobile
phones), RTB (state-of-the-art retargeting technology for top brands worldwide. Its
proprietary ad buying engine is the first and only in the world to be powered entirely
by deep learning algorithms, enabling advertisers to generate outstanding results and
reach their short-, mid- and long-term goals).

Conclusions

The key observations made in major areas of the contemporary strategies and methods
of operational management allow to conclude that increased growth will be more and
more closely related to the accelerating technological disruption and rising societal
tensions. Industry leaders will have to reshape their strategies, operations and work-
force to stay ahead of competition.
Industry 4.0 does not appear in a vacuum. It has already started to deeply change
the rules of the market game, disrupting business models and undermining the

19
Simon, Kutcher & Partners, Hidden Champions. Lessons Learned from 500 of the World’s Best Unknown
Companies, Springer, Berlin 1999.
20 Prof. Grażyna Leśniak-Łebkowska, Ph.D.

value of companies which are not resilient to market turbulences and lacking strong
leadership and survival capabilities. It is worth pointing out the unquestionable role
of financial institutions’ engagement to enable this transition as well as supportive
policies of the state.
The winning companies, regardless of their lifespan on the market and traditions,
are determined innovators capable of mastering their uniqueness in their industry
sectors or narrow niches, consistently following a fast growth trajectory, frequently
on an international and global scale. Some adopt a diversification strategy to better
manage the demand risks, which requires flexibility of manufacturing systems and
agility in management to keep a high pace of growth.
The soft factors behind business success refer to culture, and especially to team
spirit, passion, determination of dedicated staff, fast learning, knowledge and creativity,
even more than financial factors. More than ever, the following set of competences
becomes highly valued: quality focus, operations excellence, service support, top de-
signs, competitive pricing, omni-channel marketing, and customer-friendly financing.
The key issue is the mindset of being open to new ideas and conditions, going beyond
traditional business, engaging in CSR activities, understanding and undertaking new
opportunities.
The departure point for further growth is not as important as the drive ahead with
the use of Industry 4.0 vehicles and understanding threats. Such transition requires
a strong transformational type of leadership, effective management and disciplined
execution of strategic changes.
Defensive reactions against the new reality, ignoring education adjusted to new
contingencies and sticking to obsolete knowledge lead to failure. One could not expect
lifelong employment with outdated skills and mindset. It is evident that many tradi-
tional jobs will disappear but, on the other hand, a broad range of new professions and
jobs are to be created. The transition has just started with digitisation and Big Data
profiling allowing for the optimisation of business ventures and processes. Robotics
and automation followed by cybersecurity solutions are already changing manufac-
turing operations. Distributed financial systems, like blockchain, are globally tested
as innovative forms of support for innovations.
As it was pointed out at the World Economic Forum in Davos in 2017, creating
a shared future in a fractured world makes a point for international collaboration
as a means of solving critical global challenges. The existing modern ICT platforms
help to communicate, but real capability to communicate, cooperate and successfully
coordinate complex ventures on the global scale are strongly dependent on trust and
credibility in human relations.
Industry 4.0: Social Impacts and Operations Management Challenges 21

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Business Model Changes in the Presence
of Challenges Brought by Industry 4.0

Prof. Jan Brzóska, Ph.D. Eng.  https://orcid.org/0000-0002-0753-6444

Prof. Lilla Knop, Ph.D. Eng.  https://orcid.org/0000-0001-6796-7695

Silesian University of Technology

Abstract
The business model is a new research area, becoming more and more clear on the research map of strategic
management sciences. Global competition, the requirements of sustainable development, the construction
of an innovative economy and Industry 4.0 induce the need for creating new or changing current business
models. The business models of companies applying various types of innovations constituted the main focus
of the research. These companies used digitisation for creating value for clients as well as maintaining
(capturing) it, and gaining competitive edge. The purpose of the paper is the presentation of modern
business models using features and elements of Industry 4.0. The work underlines their attributes as well
as directions of changes of current business models adapting to effective functioning under the conditions
of the fourth industrial revolution. It identifies the antecedents of creating and changing business models in
the aspect of implementing Industry 4.0. The paper presents the role of innovation and digital technologies
as elements in creating value through business models. It also presents case studies, i.e. undertakings using
the elements of Industry 4.0 to create their own business models based on renewable energy.

Keywords: Industry 4.0, digital economy, business models, photovoltaics, passive buildings

Introduction

The dynamics of the surroundings, especially the increasing competition and the pro-
gressing globalisation, pose new challenges before organisations within their strategic
and operational management. This leads to the search for the creation and applica-
tion of even more complex systems, methods and management instruments. At the
moment, business models deciding about competitiveness potential and effectiveness
of a given organisation are one of the major management instruments, representing
Business Model Changes in the Presence of Challenges Brought by Industry 4.0 23

a generator of value for a client and growth of goodwill. Business models capture the
concepts of creating value based on various sources; this may be resources, processes
or competences, and now numerous innovations play a significant role in creating value
and achieving competitive edge. The creation of new business models or a change of
the existing ones is affected both by the internal conditions of a given organisation
and external factors resulting from the surrounding dynamics. One of such substantial
external factors affecting the concept of new business models or adaptive changes in
the functioning business models, is the fourth industrial revolution, or the so-called
Industry 4.0. This term is defined differently and even understood in varying ways. In
the case of this study, one may assume that Industry 4.0 is a definition of innovative
solutions and technical processes as well as concepts concerning the organisation
(management) of the value chain.1 Within the scope of these processes

within modularly structured smart factories, the cybernetic and physical systems moni-
tor real (physical) processes, create virtual copies of the real (physical) world and take de-
centralized decisions. Through the Internet of things, the cybernetic and physical systems
communicate with each other and cooperate with each other and the people acting in real
time. Through the Internet of services, the internal as well as inter-organizational services
are offered and used by the users of the value chain.2

The main component (foundation) and condition for practical functioning is thorough
utilisation of digital economy (widely comprehended digitization). The purpose of the
paper is to present modern business models using features and elements of Industry
4.0. It shows the attributes as well as directions of changes in current business models
adapting themselves to efficient functioning under the conditions of the fourth in-
dustrial revolution. It also presents case studies, i.e. undertakings using elements of
Industry 4.0 to create own business models based on renewable energy. Business models
of companies applying various types of innovations were the object of the research.
Those companies used digitisation for creating value for the client and maintaining
(capturing) it as well as gaining competitive edge. The studies in question and the
implementation of the paper objectives concerned the following research questions:
• What are the specific antecedents for creating and changing business models in
the aspect of implementing Industry 4.0?
• What is the meaning of innovation and digital technology in creating value through
business models?

1
J. Barata, P. Rupino Da Cunha, J. Stal, Mobile Supply Chain Management in the Industry 4.0 Era: An
Annotated Bibliography and Guide for Future Research, “Journal of Enterprise Information Management”
2018, 31 (1), pp. 173–192.
2
M. Herman, T. Pentek, B. Otto, Design Principles for Industry 4.0 Scenarios: A Literature Review, Working
Paper No. 1, Dortmund 2015, p. 11.
24 Prof. Jan Brzóska, Ph.D. Eng. · Prof. Lilla Knop, Ph.D. Eng.

The presented paper is mostly the result of the authors’ research performed for many
years within the scope of the research projects related to innovation management and
business models in companies and regions.3 The developed methodology of business
models research in the aspect of creating value through innovations consists of three
steps. The first step is analytical and consists in studying works devoted to the condi-
tions and concepts of digital economy and Industry 4.0. The second step is related to
the conditions and theories of business models, in particular to their structure and
creating value through innovations and instruments of digital economy. One present-
ed concept of digital economy models regards Industry 4.0. The third step concerns
empirical studies presenting the structure of two business models using the concept
of the New Era of Innovation model.

1. D
 igital economy, creating a communication network:
The foundation of Industry 4.0

The concept of the fourth industrial revolution, also called Industry 4.0, is a result and
consequence of the development of humanity, including technical progress. We have
seen three significant points of development across the history of the world, which
have given rise to new technologies and organisations:
• The first industrial revolution (Industry 1.0) meant the mechanisation of work. The
discovery and application of the steam engine introduced production companies
into the industrialization era. Workshops and manufactories were forced out by
factories employing often a few hundred employees.
• The second industrial revolution (Industry 2.0) based on the generation of electrical
energy allowed for replacing steam engines with electrical drives. Electrification
enabled the organisation of mass, bulk production based on production lines. Fac-
tories and concerns were established, and they employed thousands of employees.
• The third industrial revolutions (Industry 3.0). Computerisation (including digi-
tisation), automation, the application of highly efficient computers as well as data
and information processing systems, allowed for the application of ICT for con-
trolling machines and devices. The efficiency, quality and flexibility of production
increased incrementally. Production management systems were introduced that
optimised the utilisation of resources and responded to client needs. The meaning
of competences and skills of human capital increased.

3
Currently, two projects are carried out in this area at the Faculty of Organization and Management of
the Silesian University of Technology: Methods and Management Instruments Influencing the Growth
of the Organization’s Innovativeness (internal project: 2018/2019) and the Network of Regional Special
Observatories in the Entrepreneurial Discovery Process (EDP)—Project Leader—Marshal’s Office of the
Silesia Voivodeship (2017/2019).
Business Model Changes in the Presence of Challenges Brought by Industry 4.0 25

At the moment, we stand on the threshold of the fourth industrial revolution, also
called Industry 4.0, meaning the integration of systems and creation of networks that
integrate employees as well as digitally controlled machines and devices using ICT
programmes and the Internet. Materials and components manufactured or used for
production can be digitally traced, they are able to communicate independently with
each other. The vertical flow of information concerning individual components is di-
rected to the control centre (platform) of a given organisation and back from the centre
to components and subunits. Another orientation of the information flow is executed
in horizontal direction: between machines engaged in the production process and the
company production control system. Within the said new depiction of the industry’s
functioning concept, it is necessary to apply the instruments of technology and digital
economy to a very broad extent. There are many definitions of digital economy, but all
of them underline a common consecutive element of this concept—i.e. the role and
meaning of ICT technology within all domains of life, particularly within contem-
porary economy.4 Of course, there are many factors and movers for the development
of digitisation (digital economy), the most important of which include dynamically
developing knowledge and innovations that enable not only the exponential growth
of ICT techniques and technologies, but also innovations within many fields, such
as nanotechnology, medicine, bioengineering, material engineering or distributed
power engineering. Within this context, it is necessary to answer the question of:
What is digital economy based on, and what creates digital economy? At this point, it
is necessary to mention:
• the development and utilisation of the Internet of Things, i.e. a system wherein
objects, equipped with special sensors, communicate and exchange data with com-
puters and other devices. The process takes place using various network solutions,
in particular wireless ones;5
• artificial intelligence—systems, machines, devices, products mirroring human in-
telligence while executing tasks that are able to interactively correct them based on
gathered information. They increase the abilities and productivity of human capital;
• cloud computing. Computing clouds are also used to store data and represent
data repositories made available through networks of very large capacities as well
as equipped with fast access mechanisms. The following clouds are used: Private
Cloud managed by a company using it and Public Cloud;

4
J. Lee, B. Bagheri, H. Kao, A Cyber-Physical Systems Architecture for Industry 4.0-based Manufacturing
Systems, “Manufacturing Letters” 2015, 3, pp. 18–23; M. Goliński, Gospodarka cyfrowa, gospodarka
informacyjna, gospodarka oparta na wiedzy – różne określenia tych samych zjawisk czy podobne pojęcia
określające różne zjawiska?, Szkoła Główna Handlowa, Warszawa 2013, pp. 180–184.
5
N. G. Nayak, F. Dürr, K. Rothermel, Software-defined Environment for Reconfigurable Manufacturing
Systems, 5th International Conference on the Internet of Things (IOT), Seoul 2015, pp. 122–129; R. Mącik,
Internet rzeczy – postrzegane przez młodych konsumentów korzyści i zagrożenia – wyniki badań wstępnych,
“Przedsiębiorczość i Zarządzanie” 2016, 17 (4), pp. 11–27.
26 Prof. Jan Brzóska, Ph.D. Eng. · Prof. Lilla Knop, Ph.D. Eng.

• the dissemination and commercial utilisation of social media;

• the application, as a standard, of multimodular (including CRM and e-commerce),
integrated information systems for Enterprise Resource Management (ERP) using
mass data analyses gathered automatically (Big Data). Such systems enable delivering
management information using a hierarchical system for each level of management
within economic entities (Business Intelligence);
• the development and popularisation of mobile technologies. Mobile technologies
do not only include GSM cellular network technologies. Mobility can be char-
acterised first and foremost by wireless communication (radio communication,
connectivity using infrared waves, Bluetooth technology) between devices, not
necessarily of the same kind or serving the same purpose. New forms of mobile
technologies include augmented reality, i.e. systems connecting the real world
with computer-generated content.6 Other forms of mobile technologies, so called
beacons, i.e. small radio transmitters using the technology of Bluetooth Low
Energy that communicate with mobile devices, transfer valuable information to
users in the surrounding world, i.e. offers of shops in the vicinity. In turn, Near
Field Communication (NFC) is a radio communication standard that allows for
the exchange of data within 20 cm. Cellular phones equipped with NFC trans-
mitters enable mobile payments;
• 3D printing, i.e. manufacturing three-dimensional physical objects based on
a computer model. They are more and more often applied in building prototypes
and ready-made objects;
• blockchain, i.e. a decentralised and distributed database within an open-source
model in the Internet. It is used to register transactions, settle payments and for
traceability of products. It is a public and open register of transactions, processes
and products;
• smart grids allowing for communication between all participants of the energy
market in order to deliver power services ensuring the reduction of costs and
increase of efficiency as well as the integration of distributed energy sources and
smart metering covering electronic meters of electrical energy that enable two-way
communication between the meter and energy provider, also remote reading of
consumed energy.

The mentioned elements of digital economy permit the creation of networks cover-
ing integrated digital, physical and human systems. These created “social networks”
often provide hyperconnectivity, meaning billions of connections between people,
organisations, devices, data and processes resulting in the growing interdependence
and cooperation of these elements. It is expected that the networks of Industry 4.0

6
P. Kwiatkowski, Technologie mobilne – rosnący potencjał, “Harvard Business Review Polska” 2016, 164.
Business Model Changes in the Presence of Challenges Brought by Industry 4.0 27

would allow better flexibility of economic entities and other organisations. They will
provide better business interactions, more benefits for clients, employees and partners
compared to traditional economy. They are the antecedents of creating and changing
business models within many sectors of economy, including the renewable energy sector.

2. Innovative business models: A strategic component of Industry 4.0

The business model is a new research area, becoming more and more clear on the
research map of strategic management sciences. There are many premises justifying
the exploration of business model issues both for practitioners and theoreticians of
management. Of course, global competition, the requirements of sustainable develop-
ment or the construction of an innovative economy (including Industry 4.0) induce
the need for creating and applying even more complex company management systems
and searching for effective management methods and instruments.7 Within this aspect,
changes of the existing business models as well as the implementation of their new
concepts represent one of the most important systems and instruments of contemporary
management. Their meaning results from the following reasons:
• contemporary business models allow for creating value based on various types of
innovations, including digital technologies;
• the application of a business model as a transparent concept of capturing and cre-
ating value. This applies both to value for the client and for company owners. The
created value is based on innovations;
• the ability to create unique combinations of resources as well as cybernetic-phys-
ical-human networks capable of generating value;
• treating the business model as a system of mutually dependent activities and pro-
cesses strongly focused on creating value;
• the ability to search for instruments and methods creating competitive edge through
the implementation of innovations;
• treating the business model as an architecture of business operations, which could
make the organisation more effective by generating profit;
• business models may be used as instruments for managing the existing compa-
nies, furthermore, they represent the basis for planning start-ups, while creating
substantial organisational innovations at the same time.

7
A. Janik, A. Ryszko, Mapping the Field of Industry 4.0 Based on Bibliometric Analysis [in:] Vision 2020:
Sustainable Economic Development and Application of Innovation Management from Regional Expansion
to Global Growth, Proceedings of the 32nd International Business Information Management Association
Conference (IBIMA), 15–16 November 2018, Seville, Spain, ed. by Kh. S. Soliman, International Business
Information Management Association, 2018, pp. 6316–6330.
28 Prof. Jan Brzóska, Ph.D. Eng. · Prof. Lilla Knop, Ph.D. Eng.

The observed dynamics of strategies and business models of organisations cover

all sectors of the economy and apply both to large, as well as medium and small or-
ganisations. Changes of business models are the manifestation of a pursuit of these
organisations to achieve competitive edge and effectiveness of operations, as well
as limit risk. These changes and the creation of new business models are affected
both by internal and external conditions. Of course, among the latter, an important
role is played by globalisation, increasing competition as well as pro-innovative and
environmentally friendly politics. At the moment, the application of various kinds
of innovations (including ICT technology) plays a major role in creating value. The
concepts and implemented business models show methods and processes related to
creating value both for the client and the stakeholders. The first one concerns the
satisfaction of client’s needs, solving his/her problems; this means specifically the
formation of value exchange with the client. The changing role of the client from
a passive buyer to a prosumer significantly affecting the activation of user-driven
innovations is a material challenge for the development of business models possible
because of the digital economy instruments. The same applies to treating business
models as a carrier of many types of innovation that allow for achieving competitive
edge through their implementation. In turn, the developed and implemented business
model may re­present a valid and effective organisational innovation, as manifested by
the business models of transport or hotel service providers. Only these synthetically
presented attributes, expectations and challenges standing before business models
point to the complexity, interdisciplinarity and multidimensionality of the business
modelling issue. Within this context, the issue of business models has been very inter-
esting within the recent period for both theoreticians and practitioners of management.
This interest is accompanied by very differentiated approaches and understandings
of business modelling (a multitude of definitions and concepts), thus the stipulations
concerning the necessity to create a common scientific platform for a better and more
effective study of the business model.8 Cognitive difficulties (definitions, structure)
result from the multidimensional and interdisciplinary nature of the business model,
determining the research approach.9
As mentioned, the development of studies over business models has resulted in many
definitions and concepts.10 In the context of the subject in question, the ones related

8
C. Zott, R. Amit, L. Massa, The Business Model: Recent Developments and Future Research, “Journal of
Management” 2011, 37 (4), pp. 1019–1042.
9
M. Kalinowski, L. Vives, Multi-perspective View on Business Models. Review and Research Agenda,
“Academy of Management Proceedings” 2013, 1, pp. 1–6.
10
See also: H. W. Chesbrough, Business Model Innovation: Opportunities and Barriers, “Long Range
Planning” 2010, 43 (2–3), pp. 354–363; N. M. Dahan, J. P. Doh, J. Oetzel, M. Yaziji, Corporate-NGO
Collaboration: Co-creating New Business Models for Developing Markets, “Long Range Planning”
2010, 43 (2–3), pp. 326–342; D. J. Teece, Business Models, Business Strategy and Innovation, “Long
Range Planning” 2010, 43 (2–3), pp. 172–194; C. Zott, R. Amit, L. Massa, The Business Model….;
Business Model Changes in the Presence of Challenges Brought by Industry 4.0 29

to creating the value and meaning of innovation within business modelling are valid.
In this case, business models can be treated as a system of resource configuration and
mutually dependent activities focused on creating value. In many discussions, the
fact of close relationships between the business model and creation of value for clients
and company is underlined, and the role of configuration of tangible and intangible
factors is emphasised together with the option to capture a part of income from the
value.11 In concepts of the business model, two main dimensions are underlined.
The first one is the way in which the value for a client is created, particularly which
elements of the business models play a key role and how the value will be rendered.12
The second dimension of the business model is capturing value for a company that
provides profit for it. Its size depends to a high extent on the architecture and char-
acter of resources as well as tasks included within the business model.13 One must
also underline their mutual harmonisation and level of innovation. A higher level
of harmonisation between elements of the activities system affects the growth of
the created value, and thus the ability of its greater appropriation. The dependency
between value for a client and capturing values is related to networks of value and
strategic selections being components of the business model. Within the theory of
business models, addressees of the created value are perceived differently. Treating
the business model as a specific combination of resources, generates value through
transactions both for clients and organisations.14 Stakeholders are also depicted as
addressees of the value, implementing the term of creating and capturing value
within the value network.15 In turn, creating a unique value and competitive edge is

S. Svejenova, M. Planellas, L. Vives, An Individual Business Model in the Making: A Chef ’s Quest for
Creative Freedom, “Long Range Planning” 2010, 43 (2–3), pp. 408–430; C. Zott, R. Amit, Business
Model Design: An Activity System Perspective, “Long Range Planning” 2010, 43 (2–3), pp. 216–226;
R. Boulton, B. Libert, S. Samek, Cracking the Value Code, Arthur Andersen, HarperCollins, New
York 2000, pp. 244–258.
11
F. Newth, Business Models and Strategic Management. A New Integration, Business Expert, New York
2012, p. 8; M. Jabłoński, Kształtowanie modeli biznesu w procesie kreacji wartości przedsiębiorstw, Difin,
Warszawa 2013, pp. 31–38.
12
A. Osterwalder, Y. Pigneur, Business Model Generation: A Handbook of Visionaries, Game Changers
and Challengers, Strategyzer Series, Wiley, Amsterdam 2010, pp. 26–29; T. Gołębiowski, T. M. Dudzik,
M. Lewandowska, M. Witek-Hajduk, Modele biznesu polskich przedsiębiorstw, Szkoła Główna Hand-
lowa, Warszawa 2008, pp. 56–68; H. Chesbrough, R. S. Rosenbloom, The Role of the Business Model in
Capturing Value from Innovation: Evidence from Xerox Corporation’s Technology Spin‐Off Companies,
“Industrial Corporate Change” 2002, 11 (3), pp. 529–555.
13
C. Zott, R. Amit, L. Massa, Business Model…; R. Casades-Masanell, J. E. Ricart, From Strategy to Business
Model and onto Tactics, “Long Range Planning” 2010, 43 (2–3), pp. 195–215; B. Nogalski, A. A. Szpitter,
J. Brzóska, Modele i strategie biznesu w obszarze dystrybucji energii elektrycznej w Polsce, Wydawnictwo
Uniwersytetu Gdańskiego, Gdańsk 2017, pp. 17–27.
14
H. Chesbrough, R. S. Rosenbloom, The Role…, pp. 530–555; A. Osterwalder, Y. Pigneur, Business…,
pp. 26–29.
15
S. M. Shafer, H. J. Smith, J. C. Linder, The Power of Business Models, Indiana University, Business Hori-
zons, Bloomington 2005, 48, pp. 199–207; L. Knop, The Process of Cluster Management [in:] Management
30 Prof. Jan Brzóska, Ph.D. Eng. · Prof. Lilla Knop, Ph.D. Eng.

related to innovations (innovation level), for which the business model is a carrier.16
Innovations allow for creating value for the client (new products, new methods of
client service) as well as for stakeholders (environmental protection, new technologies,
new value chains, growth of effectiveness).17 The implementation of innovation is to
prevent imitation threats.18 The business models themselves may represent organisa-
tional innovation important for competitiveness.19 An example may be the business
model of hidden revenues and digitisation. This means that we offer our products
and services in digital form, therefore easier and faster distribution is possible. The
model of hidden revenues means that the products and services are available free
of charge and users are not the main sources of revenue. Revenues are generated
by other entities, e.g. advertisers.20 This model was used by the start-up Qpony.pl
Sp. z o.o. utilising mobile technologies, especially mobile applications. Features of
the business models of digital economy relevant for Industry 4.0 are presented in
Table 1. It is worth pointing to the multidimensionality of the value proposal and
differentiation of revenue types.
The dynamic growth of innovativeness and development of digital technologies
created a potential enabling the construction and application of innovative business
models significantly varying from current business modelling concepts. Table 2 pre-
sents ten most “revolutionary” business models.

of Network Organization. Theoretical Problems and Dilemmas in Practice, ed. by W. Sroka, Š. Hittmár,
Springer, Heidelberg 2015, pp. 105–120; N. M. Dahan, J. P. Doh, J. Oetzel, M. Yaziji, Corporate…,
pp. 328–332.
16
G. Hamel, Leading the Revolution, Harvard Business School Press, Boston 2002, pp. 59–68; C. K. Prahalad,
M. S. Krishnan, New Age of Innovation, McGraw-Hill, New York 2008, pp. 15–29; J. Brzóska, Innovations
as a Factor of Business Models Dynamics in Metallurgical Companies, Proceedings of 23rd International
Conference on Metallurgy and Materials, Brno, Czech Republic, May 2014, pp. 1842–1849.
17
K. Dohn, A. Gumiński, W. Zoleński, Early Warning Concept in Identifying Risks in Business Activity
[in:] Risk Management in Public Administration, ed. by K. Raczkowski, Springer, Cham 2017, pp. 149–
187; A. Szmal, M. Jodkowski, Technical-Economic Perspective of Using Composite Alternative Fuels in
Metallurgical Production, 24th International Conference on Metallurgy and Materials, Brno, Czech
Republic, June 2015, pp. 2–4; J. Baran, A. Janik, A. Ryszko, M. Szafraniec, Making Eco-Innovation
Measurable—Are We Moving towards Diversity or Uniformity of Methods and Indicators?, SGEM Con-
ference Proceedings 2015, 2, 2, pp. 787–798; M. Kramarz, Flexibility Strategy in Delayed Differentiation
Model of Steel Products [in:] Intelligent Systems in Production Engineering and Maintenance, ISPEM,
17–18 September, Wroclaw 2018, ed. by A. Burduk, E. Chlebus, T. Nowakowski, A. Tubis, Springer,
Cham 2019, pp. 731–741.
18
K. Obłój, Tworzywo skutecznych strategii, PWE, Warszawa 2002, pp. 97–99.
19
G. Hamel, Leading…, pp. 69–72.
20
M. Kardas, Pojęcia i typy modeli biznesu [in:] Zarządzanie, organizacje i organizowanie. Przegląd pers-
pektyw teoretycznych, ed. by K. Klincewicz, Wydawnictwo Naukowe Wydziału Zarządzania Uniwersytetu
Warszawskiego, Warszawa 2017, pp. 298–318.
Table 1. Features of the digital economy business model relevant for Industry 4.0

Business model attributes Specification

Platform type Web-based platform Mobile app
Key activity Data services Community building Content creation
Price discovery Fixed prices Set by sellers Set by buyers Auction Negotiation

dimension
Value creation
Review system User reviews Review by marketplace None
Key value proposition Price/cost/efficiency Emotional value Social value
Transaction content Product Service
Transaction type Digital Offline
Industry scope Vertical Horizontal
Marketplace participants C2C B2C B2B

dimension
Value delivery
Geographic scope Global Regional Local
Key revenue stream Commissions Subscriptions Advertising Service sales
Pricing mechanism Fixed pricing Market pricing Differentiated pricing
Price discrimination Feature based Location based Quantity based None/other

dimension
Value capture
Revenue source Seller Buyer Third party None/other

Source: K. Tauscher, S. M. Laudien, Understanding Platform Business Models: A Mixed Methods Study of Marketplaces, “Journal on Management” 2018, 36 (3).
pp. 319–329.
Table 2. Ten most “revolutionary” business models

Business model Enterprise example—disruptor Business model description

Subscription Netflix, HelloFresh, Dollar The user pays a fixed fee for access to the offered product /service.
Model Shave Club, Kindle, One
Freemium Model Spotify, Dropbox, LinkedIn, Skype, The product or service (mostly software, computer game, Internet service) is available for free,
(free and premium The New York Times, Farmville however using advanced functions or gaining some virtual goods requires purchasing the pre-
connection) mium version.
Free Model Google, Facebook, Snapchat The final user has free access to a product service, however the operator acting as a service provider
earns on advertisements and the sale of information on consumer preferences, who are users of
the free service.
Market Place eBay, Alibaba, Friendsurance, The company makes the platform available for transactions made by third parties.
priceline.com, Upwork
Access over Zipcar, ParkCirca, Peerby, Car2Share Users may use the services without the need to purchase the product which is used while using
Ownership the service.
Hyper Market Amazon, Zalando, Coolblue Companies engaged in e-commerce offer a very wide assortment of goods and services, often
making the products or services available based on exclusivity principle.
Experience Apple, Tesla, Disney Companies use the propensity of users to pay more based on previous experiences resulting from
World, Tomorrowland using the products or contacts with the company.
The Pyramid Amazon, and other e-shops Companies generate a large part of their revenues using the cooperating entities and sellers of
other goods.
On Demand Uber, Operator, Tsk-Rabbit Companies offer products/services “immediately” available for users at the moment of the de-
mand’s emergence.
Ecosystem Apple, Google Companies create a closed ecosystem of products and services that makes the users buy other
products of the same company.

Source: J. Gajewski, W. Paprocki, J. Pieriegud, Cyfryzacja gospodarki i społeczeństwa. Szanse i wyzwania dla sektorów infrastrukturalnych, Instytut Badań nad
Gospodarką Rynkową, Gdańska Akademia Bankowa, Gdańsk 2016, p. 19.
Business Model Changes in the Presence of Challenges Brought by Industry 4.0 33

In turn, when studying the trends and concepts related to the development of digital
economy business models, A. Jabłoński and M. Jabłoński21 distinguish the following:
• business models in the sharing economy representing a very wide scope of business
and social activity, covering unconventional forms of consumption activities, such
as exchange, barter trade, rental, sharing and replacement;
• business models using Big Data. Running a business and social activities is based
on the application of Big Data’s usefulness. The key attributes include variety, pace,
size, reliability and ability to create value using Big Data;
• circulating economy business models oriented at the development of a regenerative
economic system. These are business models related to the recovery of materials and
energy, using resources within the recycling processes, extensions of product life
as well as components through activities such as: repair, modernisation or resale
or offering services instead of sale;
• sustainable business models of digital economy. Business models consider the
balance of ecological, social and economic factors. The proposal of value must
ensure both ecological, social and economic value through offering products and
services. These models are to include the achievement of fair success for employees;
• social business models within the digital economy. This is a business model of
operating companies, the development stimulation factors of which are social
aspects expressed by the sustainability of economic, ecological and social issues
with the engagement of the society and their dynamic communication focused on
selected business model attributes, based on digital platforms stimulating growth
and fostering the achievement of success. Economic revenue may also be the man-
ifestation of such success.22

Start-ups are other important entities of Industry 4.0. From this perspective, they may
be perceived as an “undertaking that satisfies at least one of two conditions: belongs
to the digital economy sector . . . or creates new technological solutions within IT/
ITC.”23 However, S. Blank and B. Dorf define the start-up as “temporary organization
engaged in the search for scalable, repeatable and profitable business model.”24 These
are the features of such companies: relatively low expenditures and costs of initiation
of economic activities, increased risk comparing to standard undertakings, better
return on investment comparing to standard undertakings, basing the business model
on knowledge and innovativeness, using different forms of support often related to
cooperation.

21
Perspektywy rozwoju modeli biznesu przedsiębiorstw – uwarunkowania strategiczne, ed. by A. Jabłoński,
M. Jabłoński, CeDeWu, Warszawa 2019, p. 48.
22
Ibidem, p. 80.
23
Polskie startupy, Raport Fundacji Startup Poland, 2017, p. 16.
24
S. Blank, B. Dorf, Podręcznik startupu. Budowa wielkiej firmy krok po kroku, transl. B. Sałbut, Helion,
Gliwice 2013, p. 19.
34 Prof. Jan Brzóska, Ph.D. Eng. · Prof. Lilla Knop, Ph.D. Eng.

The presented synthetic review of innovative business models shows a significant

meaning of various types of innovations in creating value. The fundamental meaning
of creating value for the growth of competitiveness and development of companies
means that digital technologies and instruments related to the contemporary industry
have even more impact on new business models.

3. Innovative business models—case study

3.1. Methodology of the study

The concept of the New Era of Innovation is a very interesting approach that allows
for analysing and creating innovative business models (including innovation, Industry
4.0), as created by C. K. Prahalad, M. S. Krishnan.25 The operational business model
according to the New Era of Innovation principles is presented in Figure 1. The business
models create three basic components: the first two are social architecture and technical
architecture, representing specified resources, while the third one is business processes.

N = 1 Personalised cocreated experiences R = G Global access to resources and talent

Value created by innovations

Social architecture Technical architecture

of the firm Business processes of the firm
– human resources – material resources
– strategic competences – ICT resources (include:
– skills the Internet of Things
– knowledge resources and Artificial Intelligence)

Competition Dynamics of the global environment Stakeholders Cooperation networks

Figure 1. Operational business model according to principles of the New Era of Innovation
Source: prepared by the authors based on C. K. Prahalad, M. S. Krishnan, New Age of Innovation, McGraw-
-Hill, 2008, p. 6.

25
C. K. Prahalad, M. S. Krishnan, New Age…, pp. 13–47.
Business Model Changes in the Presence of Challenges Brought by Industry 4.0 35

Based on the performed studies of the business modelling theory and own research,
we may define the business model as a configuration of business processes combining
and developing resources, shaped in the form of social and technical architecture,
creating a value. The paper uses the analysis of two cases, whose business processes
and resources are focused on renewable sources of energy and digital technology
that allow for balancing energy. It also assumes the creation of value for the client as
well as the option of its creation by the client. In case of the methodology developed
and applied in the studies, elements of the business model based on the New Era of
Innovation principles were used, i.e. an undertaking was briefly presented followed
by a discussion of the business model elements:
• social architecture including first and foremost: human resources and strategic
competences, skills and knowledge resources;
• technical architecture including: material resources (size and structure of property,
potential characteristics, sources of supplies, organisation, global resources) and
ICT resources (systems);
• business processes including: processes map and business processes;
• created value, including: sources of achievable value and its innovation effects.

3.2. Business model: Photovoltaic farm within a developer’s undertaking

The business model of such a company consists in using the technology of processing
solar light into electrical energy, i.e. generating electrical current from solar radiation
using the photovoltaic effect. Based on using smart networks and the application of
smart metering software, it is possible to transfer the surplus of energy to the net-
work. The undertaking is an element of a developer’s investment within a residential
building estate “Słoneczne wzgórze” (transl. Sunny Hill) consisting in the first stage of
24 buildings with four apartments each. The installation will be operated by tenants of
the estate and the farm maintenance personnel. The installed power of each building
is 11 kW. The elements and features of the business model are presented in Table 3.
Total financial expenditures amounted PLN 1,056,000 and the return on investment
period, considering additional funds, is around four years.
36 Prof. Jan Brzóska, Ph.D. Eng. · Prof. Lilla Knop, Ph.D. Eng.

Table 3. Elements and features of the business model: A photovoltaic farm within a developer’s
undertaking

Operational
time
20 years (starting on 1 March 2019)
Elements
of the model
Social architecture
Human resources Installation maintenance personnel (services contract), tenants (owners of
(including prosumers) apartments within the estate). Maintenance of the farm by natural persons and
a periodical services contract with the maintenance personnel.
Strategic compe-
tences, skills and Strategic competences include the knowledge of law concerning RES and duties
knowledge resources of the DSO within the scope of connecting and cooperating with prosumers. The
ability to obtain financial assistance by the developer. Experience in settling
net energy principles by balancing electrical energy.
Technical architecture
Material resources (size Having one’s own apartment.
and structure of prop-
erty, characteristics of RES installation, 960 pieces of panels Sharp Solar 275 Wp. Efficiency ca. 98%.
potential, sources of Connection as well as metering and settlement system.
supplies, organisation, The application of smart grids and proper software, including a two-way meter.
global resources) Using the Internet and smartphones for net metering by apartment owners.
ICT resources (systems)
Business processes
Processes map The basic process consists in the production of electrical energy based on solar
energy. The remaining processes: optimisation of own energy consumption,
Business processes settlement of and balancing of energy, net metering and settlement of net energy.
This consists in deduction by the DSO from the bill of the generated surplus that
has been sent to the grid, imposing only the fee for transfer of energy received
from the DSO. Possible process control using the Internet and smartphone.
Maintenance and repair process (after the guarantee period).
Created value
Sources of The basic source of value is the application of RES. Value for the prosumer is
attained value the generated electrical energy used for own needs and the surplus is sent to
a power company for balancing purposes. Provision of energy independence
(within the scope of electrical energy).
Effects • Production of energy 230,400 kW/h;
• Savings in virtue of own production of energy PLN 149,760;
• Fixed fees for distribution of energy PLN 18,432;
• Savings in total resulting from the fees for electrical energy—per annum:
PLN 131,760

Source: prepared by the authors.

Business Model Changes in the Presence of Challenges Brought by Industry 4.0 37

3.3. B
 usiness model: Low-energy (passive) office building in the Scientific
and Technological Park “Euro-Centrum” in Katowice26

The presented undertaking is an example of using many types of innovations and in-
formation technologies. This is a low-energy (passive) office building in the Scientific
and Technological Park “Euro-Centrum” in Katowice. The elements and features of
the business model are presented in Table 4.

Table 4. Elements and features of the business model concerning a passive building

Time
Elements Min. 30 years (commissioning in February 2014)
of the model
Social architecture
Human resources Employment of specialists within the scope of energy and environmental
protection.
Strategic compe-
tences, skills and Skills within maintenance of the applied technical and digital systems and
knowledge resources installation. Large object management skills. Property market marketing skills.
Technical architecture
Material resources Within the scope of structural and construction solutions, the following was
(size and structure applied: column and slab construction system, walls insulated with Styrofoam
of property, with a thickness of 30 cm; glazed centre of the building providing the maxi-
characteristics of mum possible amount of daylight; automatic facade shutters stopping exces-
potential, sources of sive transfer of sun radiation and protecting the rooms against heating; triple
supplies, organisation, glazed windows of high insulation power, achieving a transfer coefficient of 0.7.
global resources)
The building installation includes, among other things:
ICT resources
(systems) • geothermal probes located within vertical bore holes at a depth of ca. 50 m
(total length of bore holes is 4 km) that represent the bottom source of heat
for the heat pumps;
• 6 heat pumps, heating the building by raising the water temperature in the
installation and transferring it to the system of heating and cooling ceilings
BKT. Heating power of the pumps is 256.8 kW. Cooling power is 186.9 kW;
• integrated smart metering system and utilisation of smart grids;
• 10 solar collectors (vacuum) located on the building roof, using solar
radiation energy to warm up water in the accumulation tanks;
• 3 sets of photovoltaic panels: roof panels;
• 231 modules, installed within the system;
• double-axis photovoltaic tracker system, i.e. 3 tracking systems with
36 installed modules, tracking the apparent movement of the Sun;

26
Based on information included on the website of the Scientific and Technological Park “Euro-Centrum”
in Katowice.
38 Prof. Jan Brzóska, Ph.D. Eng. · Prof. Lilla Knop, Ph.D. Eng.

Time
Elements Min. 30 years (commissioning in February 2014)
of the model
• heat recovery system within the air handling unit (recuperator)
in order to recover 80% of thermal energy from the expelled air;
• process cold installation adapting the internal temperature
to the laboratory and implementation rooms requirements.
The passive building at the Scientific and Technological Park “Euro-Centrum”
in Katowice also has a modern Data Centre.
Business processes
Processes map The basic process consists in the management of the building (BMS) that
allows for integrating and managing the systems from one place and con-
Business processes trolling operational parameters of individual devices. An Internet-guided
monitoring process of the installations, including power systems. The re-
maining processes: building administration; rental and cooperation with
tenants; maintenance and repair process; office building maintenance;
human resources management.
Created value
Sources of The basic source of value is the application of the RES
attained value solutions and obtaining energy savings.
Effects The value for tenants is a modern and safe interior and a good location.
The power of total photovoltaic installation is 107 kWp, which is enough
to cover the annual demand for energy of the technological systems of
the building, i.e. heating, ventilation and air-conditioning. Promoting
the Scientific and Technological Park “Euro-Centrum” in Katowice and
building its image as a centre of renewable energy and effectiveness.

Source: prepared by the authors.

In case of the second undertaking, it is worth mentioning the significant number

of applied innovations and information technologies, relevant for Industry 4.0. The
passive building “Euro-Centrum” satisfies the EU requirements concerning this type
of constructions from both the technical and economic point of view. As assumed,
the building uses only 12.5% of energy that would have otherwise been used by an
analogical traditional building. In 2012, the construction has been honoured during
the contest “Innowator Śląska” (transl. “The Innovator of Silesia”), and in 2013 has
been awarded with the European Green Building Award. Implementation of the
project was possible because of the additional funds from the European Regional
Development Fund.
The presented cases assumed that the basic source of value is the application of re-
newable sources of energy. The applied technical resources correspond with the digital
economy assumptions wherein the omnipresence of digital technologies answers the
needs (even these subconscious) of clients. Technical resources are followed by social
ones, not only in the context of possessed skills and competences of employees, but
Business Model Changes in the Presence of Challenges Brought by Industry 4.0 39

also a broad prosumer approach. Changes in business processes result both from the
created value and the resources necessary for its creation. This means, among other
things, net metering or the Internet of things.

Summary

The results of theoretical and empirical studies show the multidimensional charac-
ter of circumstances that create the new and modify the existing business models.
Dynamically developing knowledge and innovations allow not only the incremental
increase of ICT techniques and the level of technologies, but also innovations within
all sectors of life, mostly in economy, having its impact on the management of busi-
ness and non-business organisations. Proper business models will be decisive for the
implementation and development of the modern industry. Specific antecedents for
creating new and changing the existing business models are instruments of digital
economy, used skilfully to create social networks including both digital, physical
(infrastructural) and human systems. The success of Industry 4.0 companies will be
affected by both digital and production technologies as well as modern infrastructure
and properly competent human capital.
Moreover, a review of theory and case studies shows that value based on innovations
represents a central dimension of the contemporary business model. This is created
by the application of innovations which are frequently related to the newest ICT tech-
nologies. The presented business models constitute examples of undertakings that use
many innovations, especially technological (process), organisational and marketing
(prosumer relationships). This was possible due to the application of modern informa-
tion technologies attributable to Industry 4.0.

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Communication in Traditional and
Network Organisation: Transformation

Prof. Jerzy Kisielnicki, Ph.D.  https://orcid.org/0000-0002-2451-7202

Warsaw University

Abstract
I wish to compare the communication systems of network and traditional (hierarchical) organisations. The
communication system as a tool supporting the management system may be, depending on the situation,
a component delaying or supporting the implementation of the Industry 4.0 concept. The author also
examines the factors that impact the smooth functioning of modern communication systems, focusing in
particular on the role of ICT as a determinant of the operation of such systems. Communication systems of
organisations depend on many factors, of which the main ones include: 1) the purposes that these systems
are to serve and 2) the resources allocated to them. Communication systems are analysed in numerous
works of literature on organisation and management sciences. In order to present communication in
organisation management, the author applied a model approach simplifying managerial communication.
The selection of analysed sources is anchored in the study of literature and research reports as well as in
his own experience as a designer and researcher.

Keywords: communication systems, network organizations, models of communication

Introduction

We wish to compare the communication systems of network and traditional (hierar-

chical) organisations. The communication system as a tool supporting the manage-
ment system may be, depending on the situation, a component delaying or supporting
the implementation of the Industry 4.0 concept. The implementation of this concept
requires a shift from hierarchical communication systems to the use of network solu-
tions. We will also examine the factors that affect the smooth functioning of modern
communication systems. We are particularly interested in the role of ICT as a deter-
minant of the operation of such systems. Communication systems of organisations
depend on many factors. The crucial ones include the purposes that these systems are
Communication in Traditional and Network Organisation: Transformation 43

to serve and the resources allocated to them. Communication systems are analysed
in numerous works of literature on organisation and management sciences. In order
to present communication in organisation management, we will employ a model ap-
proach that outlines managerial communication in a simplified way. The selection of
analysed sources is anchored in the study of literature and research reports as well as
in our own experience as designers and researchers.

Models of communication systems and their elements

The cybernetic model of contemporary communication was first presented in the

literature by Shannon and Weaver. The Shannon–Weaver model of communication
has been called the “mother of all models.”1 It is considered when many senders and
receivers exist and when information channels are broadened and extended. Thereby,
we can prove that when analysing the extended model presented in the figure, the risk
of losses and changes in sent information increases. This model justifies the assertion
that IT systems allow the information transmission process to be organised in such
a way that we reduce the possibility of noise as an element of information loss.
The notion of communication model is applied in various contexts, and research
into communication is multidisciplinary. Such research is associated with theories
and research in the fields of psychology, economics, sociology, political science, and
sciences. In our discussion, we focus on management and organisations. We analyse
the processes pertaining to two key management issues, namely efficient transmission
of reliable and up-to-date information and knowledge to all authorised members of
the organisation. Today’s communication system fulfils the following two tasks:
• Transfer of information.
• Transfer of knowledge, including the transformation of information into knowledge
by means of BI information systems.

The primary objective of communication projects is to design such a process of infor-

mation and knowledge transfer within an organisation that will satisfy user needs. At
the same time, the implementation process should be effective, smooth and efficient.
In the related literature, similar aspects of communication processes were addressed
by many researchers.
Analysis of the communication system concerns both intra-organisational processes
and those between the organisation and its environment. The communication model
in an organisation is shaped by the following groups of factors:

1
D. Woods, E. Hollnagel, Joint Cognitive Systems: Foundations of Cognitive Systems Engineering, Taylor
& Francis, Boca Raton 2005.
44 Prof. Jerzy Kisielnicki, Ph.D.

1. The management process structure as the backbone of the communication model;

2. Semantics, meaning the content being sent;
3. The communication system infrastructure (hardware and software), meaning
hardware and software tools used in the communication system.
A specific communication system is chosen depending on the situation of the
examined organisation, including its needs as well as both tangible and financial
resources available. This choice is also influenced by the progress in hardware and
software solutions.

The management process structure and its role in the communication system

Management is an element of the communication model that directly affects the

structure of the communication process. This structure is represented graphically or
descriptively as an organisational chart. The organisational management chart may
be analysed from the perspective of models of individual (among various actors in the
organisation) and global communication (among some or all actors in the organisations
and between the organisation and its environment). The communication structure
is a derivative of the management style of a particular organisation. Elements of the
communication model include: individual organisational posts, their agglomerates
(units, departments, divisions), and existing relationships (ties). The communication
model structure both connects and divides in this respect. The basic relationships that
are reflected in the communication system are: linear (hierarchical, formal), express-
ing superior-subordinate relations, and functional, including matrix relationships.
Communication structures can be analysed and assessed against a variety of cri-
teria. The central criterion is the number of intermediate levels. The number of levels
(intermediate tiers) determines both the degree of organisational complexity and the
way in which knowledge and information are transmitted and absorbed. There is
a tendency to reduce the number of intermediate levels and transmit information and
knowledge directly. In many organisations, however, a system of traditional hierarchical
communication is applied.
The effectiveness and efficiency of the information system depends on the function-
ing of its individual tiers as well as on the operation of the so-called feedbacks. Tiers
providing appropriate “portions” of information and knowledge should get signals of
receipt and understanding in relation to the transmitted content and if the message
was an order, of the stage of task completion.
Contemporary communication systems are becoming increasingly network-based
and relational. The network communication system bears the following essential
characteristics:
• Flexible actions undertaken in order to continuously improve the effectiveness and
efficiency of the organisation as a whole;
Communication in Traditional and Network Organisation: Transformation 45

• A constant flow of information and knowledge among all those involved: employees,
investors, suppliers, customers, which is connected with cooperation in different
cultures and time zones within a uniform global network;
• Building teams that can quickly deliver high-quality solutions based on the knowl-
edge gained from work in network teams.

The model of network links comprises direct links, yet they exist among all employees
of the organisation whether they cooperate with one another or not. The relational
system can be accused of being more “lavish” to a certain extent. However, it is more
secure than a network system. Among all employees of the organisation, there are direct
links that can be activated at any time. Each row of the matrix contains communication
links between individual employees in the organisation. In practice, a hybrid model
is used. It can be referred to as a network-relational or object-relational model where
links between objects are network-based and links inside objects are relational. In
each analysed communication system, the role of people responsible for the design of
the information and knowledge transmission system also involves building a system
of mutual trust between individual members of the organisation.
As an example we could use the implementation of MRP systems and the design
and implementation of BI systems in large organisations such as banks, trading and
manufacturing companies.2 The network communication system was well received
by the project workers. It turned out to be both efficient and effective. The use of this
type of communication made it possible to achieve obvious results such as increased
speed of information transfer and a reduced scale of disinformation. What is the add-
ed value? This communication model enabled the application of agile methodologies
during a research project.3

Semantics as a description of the transmitted content

A semantic description is a part of a comprehensive communication model that ad-

dresses the content and meaning of transmitted data, information, knowledge, and their
aggregates. For example, it takes the form of words, phrases, ideas, sentences, and texts.
Communication requires more and more information and knowledge that is transmitted
in units or as specific aggregates. Global networks such as the Internet make contents

2
F. Baumann, R. Hussein, D. Roller, State of the Art of BPM—Approach to Business Process Models and
Its Perspective, “International Journal of Electronics Communication and Computer Engineering” 2015,
6 (6), pp. 649–657.
3
J. Kisielnicki, Intellectual Capital in the Knowledge Management Process—Relations-Factors [in:] Business
Environment in Poland, ed. by A. Z. Nowak, B. Glinka, P. Hensel, Wydawnictwo Wydziału Zarządzania
Uniwersytetu Warszawskiego, Warszawa 2008; idem, Zarządzanie projektami badawczo-rozwojowymi,
Wydawnictwo Nieoczywiste, Warszawa 2017; idem, Zarządzanie i informatyka, Placet, Warszawa 2017.
46 Prof. Jerzy Kisielnicki, Ph.D.

accumulate very fast. The development of IT tools today allows large data sets, or Big
Data, to be used. According to some authors4 Big Data is a term referring to large, vari-
able and diverse data sets that are difficult to process and analyse; yet, such an analysis
is valuable as it can lead to gaining new knowledge. In a report by L. Douglas5 Big Data
is referred to as a 3V model: a large volume of data; high data velocity; a wide variety of
data. It is now assumed that Big Data consists of the following four dimensions called
the “4Vs”: volume—the amount of data counted in tera- or petabytes; variety—the di-
versity of data that come from different, often incoherent, sources; velocity—the speed
of new data inflow and data analysis, in nearly real time; value—the value of data, the
most important data are distinguished from among the mass of insignificant informa-
tion. Big Data also refers to sets of information that require new forms of processing in
order to: support decision-making, discover new phenomena, and optimise processes.
Managing large sets is a challenge faced by contemporary communication processes.
Apart from sets of information and knowledge, communication systems also com-
prise networks of relations between individual elements and their aggregates. Sets of
notions as aggregates are often termed concepts. Their presentation creates conceptual
schemas that, as a description of a certain domain of knowledge, can serve simulta-
neously as a basis for inference. Such a set of information and relations is defined as
ontology. Ontology is a formal representation of a user-defined knowledge domain. It
is the records of sets of concepts and relations between them. Creating ontology fulfils
the tasks of the users of the communication process in a formalised way.6 Thanks to
the communication system, users will obtain the needed data, information, knowledge,
ideas, and strategies. Thereby, their information needs are satisfied. The analysed part
of the communication system also includes a set of concepts, techniques and notations
aimed at projecting the semantics of data, or their meaning in the outside world. The
literature uses different types of notations to present information, knowledge and their
aggregates in accordance with the facts.7
How transmitted information and knowledge are recorded can be defined as a seman-
tic model representing a particular ontology. An example of a simple semantic model
is the entity-relationship model. The term “semantic model” or “conceptual model” is
sometimes also used to refer to a specific diagram (or another linguistic-graphic form)

4
T. Erl, W. Khattak, P. Buhler, Big Data Fundamentals: Concepts. Drivers & Techniques, Prentice Hall,
Upper Saddle River 2016.
5
Gartner Business Activity Monitoring (BAM), 2013, http://www.gartner.com/it-glossary/bam-business-
activity-monitoring (access: 2 January 2018).
6
D. Fensel, H. Lausen, Enabling Semantic Web Services: Web Service Modeling Ontology, Springer, Hei-
delberg 2006.
7
A. Tatnall, Web Technologies: Concepts, Methodologies, Tools and Applications, Information Science
Reference, Hershey, New York 2010; M. Dumas, M. La Rosa, J. Mendling, H. A. Reijers, Fundamentals
of Business Process Management, Springer, Heidelberg 2013; Domain-Specific Conceptual Modeling, ed.
by D. Karagiannis, H. C. Mayer, J. Mylopoulos, Springer, Heidelberg 2016.
Communication in Traditional and Network Organisation: Transformation 47

that reflects the reality described by data. The semantic model consists of a network
of concepts and relationships between these concepts. Concepts are ideas, objects or
topics of interest to the user.
Effective communication requires a number of factors to be taken into account, re-
gardless of the communication model applied. As was written,8 it is important to convey
relatively full information and knowledge in this process. Nonetheless, the difficulty
of conveying information and knowledge in a multicultural and global world must be
realised. Our core task is a knowledge transfer system. It is this system that influences
communication models in organisations. M. Polanyi9 noticed that there is knowledge
that man is not aware of. In his work, he distinguished two types of knowledge:
• Tacit knowledge existing only in the mind of the person who possesses it, produced
by experience and not fully realised (“I know that I can do it”), manifested only
through skilful action.
• Explicit knowledge (formal knowledge) expressed as signs and recorded on knowl-
edge carriers.

In the communication system, we should pay particular attention to cultural prob-

lems that can be categorised as tacit knowledge. The weight of this issue is noted by
many researchers. The works by A. Trompenaars and Ch. Hampden-Turner10 report
interesting findings in this respect. Inter-cultural communication is a meaningful
part of communication processes that affect communication models in organisations.
According to F. Trompenaars and Ch. Hampden-Turner, the condition of the economy
is not determined solely by economic laws. Also communication systems influence the
economic situation of organisations and countries. Their research covered a group of
fifteen thousand senior managers from 43 different countries who were responsible
for international projects. The results showed that even people who performed inter-
national tasks and were in constant contact with representatives of other nationalities
used national stereotypes in communication systems. Moreover, what could be noticed
was that those stereotypes were reinforced in their case. Those works resulted in the
so-called “Trompenaars model.” It is a framework for semantic analysis of inter-cul-
tural communication and serves to understand communication systems and activities
of international corporations. It can be employed to design communication systems
and to understand transmitted content. There are seven components of the model:

8
Among others L. Beamer, I. Varne, Intercultural Communication in the Global Workplace, McGraw-Hill/
Irwin, Boston–New York 2011.
9
M. Polanyi, Personal Knowledge: Towards a Post-Critical Philosophy, University of Chicago Press, Chicago
1974.
10
B. F. Trompenaars, Ch. Hampden-Turner, Siedem wymiarów kultury. Znaczenie różnic kulturowych
w działalności gospodarczej, transl. B. Nawrot, Oficyna Ekonomiczna, Kraków 2002; idem, Business
Across Cultures, Capstone Publishing, Oxford 2003; idem, Culture for Business, 2017, http://www2.
thtconsulting.com (access: 4 May 2019).
48 Prof. Jerzy Kisielnicki, Ph.D.

• Universalism vs particularism (What is more important, rules or relationships?).

• Individualism vs collectivism (Can we function in a group or individually?).
• Neutral vs emotional (Do we display our emotions?).
• Specific vs diffuse (How to separate our private and working lives?).
• Achievement vs ascription (Do we have to prove ourselves to achieve status or is
it given to us?).
• Sequential vs synchronic (Do we do one thing at a time or several things simul-
taneously?).
• Internal vs external control (Are we able to control our environment or are we
controlled by it?).

Understanding these factors can help us control our behaviour and know and under-
stand the behaviour of people who grew up in other cultures.
The analysis of research results is based on the view that the communication system,
including the knowledge transfer system, should comprise, among other things, solu-
tions that take into account factors such as values, habits, and applied cultural models.
How par­ticipants of the communication process perceive time, family, history, ethics in
progressing the career ladder and how they see the hierarchy of needs—all this, even sub-
consciously, influences decision-making processes. The diversity of the world we live in
should be taken into account. We should remember that there are differences in adopted
management styles and conflict-resolution and negotiation tactics in other countries. If
we not only remember but also know them, we can effectively communicate in a multicul-
tural world. It should always be borne in mind that a prominent element of information
is the context of what we communicate. It is not always possible to send context directly.

Communication system infrastructure

The use of data, knowledge and information resources and their transmission requires
infrastructure appropriate to the management system and to the semantic content of
information and knowledge. Infrastructure consists of hardware and software tools as
well as networks connecting them. At this point, we wish to focus on some elements
that are essential to the communication process. The changes in the infrastructure
supporting communication systems are directed towards building faster and faster
computers with increased capacities. It should be taken into account that new possi-
bilities in the communication system will occur when quantum computers become
widespread. The reason will be that the quantum bit (qubit) does not have a fixed value
of 1 or 0, like a standard computer, but may remain in an intermediate state. The ap-
plication of this notation will have a significant impact on the efficiency of computers
as tools supporting complex decision-making based on multiple criteria and will help
solve multidimensional decision problems.
Communication in Traditional and Network Organisation: Transformation 49

The establishment of network organisations is aided by the emergence and develop-

ment of mobile technologies. It is their development that contributes to the enhanced
computing power of mobile devices, increased data throughput, and users gaining
access to databases and knowledge whenever and wherever they need them. Mobile
technologies contribute substantially to the changes in both business and society. They
have led to the formulation of new rules and patterns of communication behaviour. In
their works, researchers clearly pointed to the immense potential of wireless solutions
for the development of communication systems.11 Even the most complex management
structures can work in this way. The intensive advancement of mobile technologies in
recent years has enabled the improvement of communication processes. This has been
achieved through the deployment of mobile infrastructure, smartphones, and accelerated
data transmission processes. With the rapid development of mobile technologies, it will
soon be possible to talk about organisations whose employees have access to the data they
need, regardless of place and time. As a result, mobile technologies allow for the mini-
misation of constraints ensuing from the distance between the sender and the receiver.
These changes are aimed at supporting the management of network organisations.
The contemporary communication model within a computer network provides all hosts
with the same authorisations. This is interchangeability which depends on specific
client-server architecture.
As argued by M. Castells,12 mobile solutions result in the emergence of a new power
theory based on the management of communications networks in the information era.
Hence, we can recognise that hierarchical structures typical of traditional organisa-
tions are gradually making room for network structures. Network organisations use
BI systems, in particular Business Activity Monitoring (BAM) solutions, to a greater
extent than traditional ones. Their application allows the operation of the entire or-
ganisation to be analysed comprehensively in real time.
When comparing communication infrastructures of network and traditional or-
ganisations, we can assume that any hardware and software solution can support the
management system of a hierarchical organisation. This is not the opposite relationship.
A network organisation, even with a decentralised management system, needs modern
infrastructure with high network capacity, as well as Big Data technology supported
by Business Intelligence systems together with tools such as Business Activity Moni-
toring. As claimed by E. B. Kerr and S. R. Hiltz,13 international network organisations
with inter-cultural management are much more demanding than national network
organisations.

11
J. Wan, L. Zhuohua, Z. Keliang, L. Rongshuang, Mobile Cloud Computing: Application Scenarios and
Service Models, 9th International Wireless Communications and Mobile Computing Conference (IWCMC),
Sardinia 2013, pp. 644–648.
12
M. Castells, Communication Power, Oxford University Press, Oxford 2013.
13
E. B. Kerr, S. R. Hiltz, Computer-Mediated Communication Systems: Status and Evaluation, Academic
Press, Cambridge 2013.
Another Random Scribd Document
with Unrelated Content
"Yes, cats!" screamed the swallow in alarm, fluttering away. Mr. Thompson was too late.
He felt the sharp claws in his leg, and with a jump and a scream he awoke, to find
himself sitting in the barn, with the big house cat standing beside him, and looking
somewhat surprised at his sudden movement. Slowly Tabby lifted her paw, and putting it
on Mr. Thompson's knee, stretched herself lazily. 'Lisha, who was feeding the horses,
remarked: "Reckon it's goin' to rain; the swallers fly low, and it's a great sign of rain
when a cat stretches like that."
Mr. Thompson walked slowly to the house, thinking that, after all, the bird's life was not
all happiness.
 A PRINCELY ART.
BY SHERWOOD RYSE.
It is not much more than a hundred years since gentlemen gave up wearing rapiers at
their sides—a practice which was once as common as is that of carrying a cane among
us. And with a weapon so handy, it can easily be believed that it was drawn on very
slight provocation. Hence every gentleman who valued a whole skin was diligent to make
himself a master of the small-sword, as it was generally called. Small it was originally,
however, only by comparison with more formidable weapons. Richard Cœur de Lion's
sword, you will remember, was so large and heavy that none other than himself could
wield it.
In the reign of the haughty Queen Elizabeth, the rapier, only lately introduced into
England, was so much in fashion that he was the greatest dandy who wore the longest
rapier and the widest "ruff." Queen Bess herself set the fashion in ruffs, but the flattery of
imitation was not dear to her. She loved flattery; but to have every one copying her large
ruffs—and who ever saw a picture of Elizabeth without one?—was more than her quick
temper could put up with. And so she issued one of those orders which seem so strange
to us now: she stationed "grave persons" at the gate of every town to break the points of
all rapiers exceeding one yard in length, and to cut all ruffs measuring more than the
"nayle of a yard."
Skill with the small-sword was a necessary part of the education of a gentleman. At the
age when the boy of our day is just about opening his Latin grammar for the first time,
the young prince or noble of two hundred years ago was being taught the art of longe
and parry, of tierce and carte. And besides the usefulness of being skillful with a weapon
which every gentleman carried and was ready to use at short notice, the practice of
fencing gave an easy carriage to the body, making the joints supple, and strengthening
every muscle.
The art of fencing, says an old French comedy, consists of two simple things—to hit, and
not to be hit; but like a great many other simple things, its simplicity takes a vast deal of
finding out. Each position, whether for thrust or parry, is easy by itself, but when your
thrust is quickly parried, and the point of your opponent's foil is reaching for your breast
quick as thought, then the cool head, the quick eye, the ready hand, are brought into
play. The first thing for the beginner to do after equipping himself for the contest—and
about this we shall have a few words to say later on—is to master the proper position. In
no exercise is position of greater importance. Let the right side of your body be half
turned toward your adversary; feet at right angles, with the left foot pointing to the left,
and placed behind the right. The foil is held in the left hand, down by your side. Grasping
it by the hilt with the right hand, you draw it through the left hand, at the same time
raising both hands so that by the time the point of your foil comes into your left hand
both hands are above your head, the one holding the hilt and the other the point of the
foil.
From this position you will easily and gracefully fall into the third position, "on guard," by
bringing your sword-hand down in front of you, and bending your elbow until the fore-
arm and the sword make one straight line. The left arm will remain where it was. While
you are doing this, bend the knees, and advance the right foot about twelve inches,
sinking down only just so far as that the shin-bone of the right leg shall be perpendicular
to the floor. This position is the position of defense, and is always returned to after a
thrust.
Thus far you have maintained an attitude of defense only, and if you have mastered that,
you have laid the foundation of your future skill. Watch your adversary's eye, and decide
instantly when you will thrust, or longe, as it is called. Straightening the right arm, you
advance the right foot about eighteen inches, taking care not to lean forward so far that
the shin-bone makes anything less than a right angle with the floor. If you get up from
the seat where you are sitting to read this, and try the movement, you will see why this
right angle formed by leg and floor is important. Lean too far forward, and you can not
spring back instantly and without effort to the position of defense, and thus you are at
the mercy of your opponent, who will quickly parry your blow, and be able to reach you
almost without advancing his right foot. Instantly after longeing you must spring back, in
order to be able to parry the longe of your adversary.
In longeing, as in the "on-guard" position, the nails of the sword-hand must be turned
up. This may seem a trifle, but in reality it is of the greatest importance, since the force
and directness of the blow depend upon it. Try it with a cane, and you will at once feel
how much firmer your wrist is than when you thrust with your nails turned down. To
prove it another way: do the stroke with a long poker, and see how much easier it is to
extend the poker and hold it extended with your nails turned up than when they are
turned down.
There are four thrusts in fencing, and twice as many parries; that is, there are two
parries for each thrust. The object of this is that having parried a thrust, you may at once
return the blow; and were you always to parry the same kind of thrust in the same
manner, you would always be obliged to attack in the same manner. The difference
between the two kinds of parries for each thrust is that one is done with the nails turned
up, the other with them turned down. Thus, having parried a thrust, the hand is in one of
two positions for making a return thrust.
The various thrusts and parries are too large a subject to be gone into here. The thrust,
however, it may be remarked, is always some kind of a longe, and in parrying the one
sword does not beat the other aside, but simply turns it by a turn of the wrist. The idea
of the parry may be gathered from the fact that the point of the foil always describes a
circle of not more than three feet in diameter in the air. Thus the adversary's point is
turned aside from its object.
The art of fencing is so difficult to learn without a master that it is useless for any one to
attempt by himself to do more than acquire skill in the simpler movements; and it is so
graceful an accomplishment that if it is worth doing, it is worth doing well.
 A YOUNG PRINCE PRACTICING THE ART OF FENCING.
Without attempting, therefore, to go into all the mysteries of tierce and carte, of ripost
and reprise, we will add a few words which an instructor might omit. In the first place,
never cross your blade with any one who is not dressed for the exercise. He may say he
will take his chances of getting hurt, but you can not afford to take the chance of putting
out his eye. The proper armor to wear is a padded leather jacket, a gauntlet on the right
hand, a piece of padded leather on the right thigh, and a wire mask over the head.
Secondly, never use any but a good and sound foil, and see that the button is firm: many
accidents have been caused by a broken foil or an unsafe button. Lastly—and though this
applies to all games, it is perhaps more necessary in small-sword exercise than in
anything else—remember that the coolest head always goes with the quickest eye and
the surest hand.
"THEY PULLED WITH A WILL WHEN THE
WORD WAS GIVEN."
 PERIL AND PRIVATION.
BY JAMES PAYN.

THE LOSS OF THE "HALSEWELL."

On Sunday, the 1st of January, 1786, the Halsewell, a vessel of 758 tons burden, bound
for the East Indies, sailed through the Downs with a fair wind and under exceptionally
favorable circumstances. She had a well-tried commander, Captain Pierce, good officers,
and a numerous crew. To these were added a considerable number of soldiers of "John
Company," as the East India Company was called, so that security seemed assured both
by sea and land.
There were, moreover, several lady passengers aboard, most of whom were known to
one another, including the daughters of the Captain, two of his cousins, and one still
younger lady, Miss Mansell, returning from a school in England to her parents in Madras.
The chief mate too was related to Captain Pierce, so that the company in the chief cabin
was almost a family party.
On Monday very thick weather came on, so that the ship was compelled to anchor, and
on Tuesday a gale arose that obliged her to cut her cables and run out to sea. The gale
grew to a tempest, which continued for three days, and on Friday night the ship ended
her voyage.
At two in the morning of that day she was driving to her doom on the sharp rocks
between Peverel Point and St. Alban's Head, in Dorsetshire. These rocks run sheer down
to the sea, so that to approach them even in fine weather is fraught with danger.
There is a story told by the great humorist Thomas Hood of a terrible scene on board
ship, when every one was running about distracted with fear, save one cheerful old lady.
"There is nothing whatever to be alarmed at," she said, when some one asked her how it
was she showed such courage, "for the Captain has just told me we are 'running on
shore.'" To her the land seemed like safety. And so it doubtless was with some of the
poor ladies on board the Halsewell.
The Captain, as they drove nearer the rocky shore on that awful night, consulted with his
second mate, Mr. Meriton, as to their chances of escape, and especially with reference to
his daughters.
"We can do nothing, sir, but wait for the morning," was the sad reply; and even while he
spoke the ship struck with a violence that dashed the heads of those standing in the
cuddy, as the saloon in an Indiaman was called, against the deck above them.
A frightful scene followed. The sailors had acted ill throughout the storm, and, skulking in
their hammocks, had compelled their officers and the soldiers, who behaved admirably,
to man the pumps; but now that the catastrophe, which they might have helped to avert,
was upon them, they exhibited a frantic fear.
The ship lay beating against the rocks, with her broadside toward them, and the
Captain's advice was that each man should take what opportunity should offer itself to
reach the land. The ensign staff was accordingly unshipped, and laid between the ship's
side and a rock; but it snapped asunder with the weight of the first man who attempted
to cross, so that there was nothing for the rest to do but to drop into the raging sea, and
trust to the waves to carry them to the unknown shore.
This desperate attempt, made by a number of the men, was of course impossible for the
ladies, who with the passengers, three black women, and two soldiers' wives, had
collected in the roundhouse upon deck to the number of no less than fifty. The Captain,
whose use was gone in these dreadful straits, sat on a cot with a daughter upon each
side, whom he alternately pressed to his breast. The scene was indescribably mournful.
Mr. Meriton procured a quantity of wax candles, and stuck them about the place in which
it was their hope to wait for dawn; then perceiving that the poor women were parched
with thirst, he brought a basket of oranges, with which they refreshed themselves. This
was the last meal they were ever to take on earth.
At this time they were all tolerably composed, except Miss Mansell, who lay sobbing upon
the floor. Mr. Meriton thought he perceived that the sides of the ship were visibly giving
way; that her deck was lifting, and that consequently she could not much longer hold
together.
On leaving the roundhouse to see whether his suspicions were correct, they received a
terrible confirmation. The ship had separated in the middle, and not a moment was to be
lost in seizing the slender chance of saving his life. As a great sea struck the ship the
poor ladies cried out: "Oh, poor Meriton, he is drowned! Had he staid with us he would
have been safe." Whereupon Mr. Rogers, another officer, offered to go and look for him.
This they opposed, lest he should share the same fate.
Rogers and the Captain, however, went out with a lantern, but being able to see nothing
but the black face of the perpendicular rock, the Captain returned to his daughters, and
was no more seen. A very heavy sea struck the ship, and burst into the roundhouse, and
Mr. Rogers heard the ladies shriek at intervals until the water drowned their voices.
He seized a hen-coop, and was carried by a wave on to a rock, where it left him,
miserably bruised, in the company of no less than one hundred and twenty-four persons,
among whom he found Mr. Meriton. The meeting between these two was very touching,
for they were old friends, and had just survived a calamity, little less terrible, in another
Indiaman, between which event and their present peril an interval of only twenty-five
days had elapsed. They were prevented, however, from the interchange of mutual
congratulations by at least twenty men between them, none of whom could move
without imperilling his life.
They were, in fact, on the ledge of a cavern overhung by the precipice, as closely packed
and with as little room to move in as those sea-birds which we often see clustered on
some ridge of rock. The full horror of their situation was, however, hid from them. They
could not even see the ship they had just quitted, though in a few minutes a universal
shriek, which long vibrated in their ears, and in which the voice of female agony was
plainly distinguishable, informed them that she had gone to pieces. Not one atom of the
wreck of the Halsewell was ever afterward beheld.
This terrible incident gave such a shock to the poor trembling wretches on the ledge that
many of them, being already unnerved and weak from bruises, lost their feeble hold, and
fell upon the rocks below. Their groans and cries for succor increased the misery of the
survivors. After three hours, which seemed as many ages, the daylight broke, and
revealed the fact that unless aid was given from the cliff above them, escape was
impossible, while the total disappearance of the ship left no evidence of their position,
their guns and signals of distress through the night having been unheard by reason of
the roaring of the gale.
The only hope of escape was to creep along the ledge to its extremity, and then, on a
ridge nearly as broad as a man's hand, to turn a corner, and then scale a precipice almost
perpendicular and two hundred feet in height! Such was the courage of their despair that
even this was essayed. What with fear and fatigue, many lost their footing, and perished
in the attempt. The cook and quarter-master alone succeeded in reaching the cliff top,
and at once hastened to the nearest house.
This chanced to be the residence of the steward of the Purbeck stone quarries, who
instantly collected his workmen, and furnished them with ropes. Next to the two men
who had escaped, and after an interval in which many must have failed, a soldier and Mr.
Meriton were trying to make their way to the summit, as the quarrymen arrived. They
perceived the soldier, and dropped him a rope, of which he laid hold, but in the effort
loosened the stone on which he stood, which also supported Mr. Meriton. The latter,
however, seized another rope as he was in the very act of falling. He had probably the
narrowest escape of all.
The perils of the rest were by no means at an end. The most fortunate crawled to the
edge of the ledge and waited for the rope held by two strong men at the very brink of
the cliff. Other ropes were tied about them and fastened to an iron bar fixed in the
ground. Four other men, standing behind these, also held the rope which was let down,
and we may be sure that they pulled with a will when the word was given.
Many of the poor shipwrecked souls, however, were too benumbed and weak to help
themselves even thus far; and for these the rope, with a strong loop at the end of it, had
to be let down. The force of the wind blew the rope into the cavern, when whoever was
so fortunate as to catch it put the noose round his body and was drawn up. Many even of
these perished from nervousness or loss of presence of mind. One especially, who lost his
hold, fell into the sea, and being a strong swimmer, added to the general distress by
dying, as it were, by inches before the eyes of the survivors.
It was evening before they found themselves in safety; indeed, one poor fellow, a soldier,
remained in this perilous position until the next morning. On being mustered at the
steward's house, they were found to number seventy-four out of a crew of two hundred
and fifty.
They were treated with the utmost hospitality, and word of their coming was sent to the
towns through which they would have to pass on their way to London, that they might be
helped along. "It is worthy of commemoration," says the biographer, in which all my
readers will agree, "that the landlord of the Brown Inn at Blandford not only refreshed all
these distressed seamen at his house, but presented each with half a crown."
As one lies on the cliff-top above Peverel Point in the summer sun, with the blue sea
below smiling so smoothly, it is difficult to imagine what took place in that unseen cavern
beneath, or even the tears of joy which were shed by those who, after such a night of
horror, set foot for the first time upon that grassy slope.
 THE SPECKLED PIG.
BY WILLIAM O. STODDARD.
"I'm glad spring's come," remarked Grandmother Gates, as she looked out through the
kitchen window, "if it's only so that boy can spend his time out-of-doors. There isn't any
house can hold him."
"What, Bun?" said Aunt Dorcas, while the skimmer in her hand was dripping over the
soap-kettle. "He's all spring and India rubber. What's he doing now?"
"Doing?" said grandmother. "I'd say so! If he hasn't rigged some leathers and strings,
and he's trying to harness that little speckled pig into his wagon. Can't you hear the pig
squeal?"
"He's always a-squealing," said Mrs. Gates, from the milk-room. She was a large,
motherly looking woman; but now she hurried to the door, and shouted, "Audubon, my
son, what are you doing to that poor critter?"
"Why, mother, spring's come, and it's time he did something. I can drive him if I can once
get him harnessed. He's half in now; but he does just plunge around!"
The speckled pig was a small one, truly, and he was well acquainted with Bun Gates; but
his present occupation was new to him. The wagon matched him fairly well as to size,
and it was only a little too plain that he had strength enough to haul it anywhere the
moment he should have a fair chance. The best he could do at that moment was to make
music, and his voice was uncommonly clear and shrill.
"Dorcas! mother!" exclaimed Mrs. Gates, "do come here and look at that boy."
"I see him," said grandma, but Aunt Dorcas put down her skimmer, and came to the door
just as another boy, a head shorter than Bun, trotted up the garden walk to see what
was the matter with the pig.
"Harnessed! harnessed! Oh, what a horse! I'll get in for a ride."
"Jump in, Jeff," said Bun. "You take the reins that belong to his head, and I'll hold on to
the rein that goes to his hind-leg. We'll break him in."
Jeff was hardly more than eight years old, while his stoutly built and chubby elder
brother was at least thirteen. There was "boy" enough in either of them, but the "spring"
was tremendously developed in Bun. He was so full of it that he could hardly stand still.
Neither could the pig stand still, and while the women at the kitchen door and window
were laughing until the tears came into their eyes, the speckled unfortunate was dodging
in every direction in a desperate effort to regain his freedom. Bun had deceived him
when he enticed him from the barn-yard. The gate through which he had consented to
be driven was well known to Speckle as leading into the garden, and all the free rooting
to be desired of any pig could be had there. He had marched through the gate meekly
enough, and he had looked over the "promised land," with its neatly kept walks and
beds, and with all its green things just coming up, and yet here he was with a rope still
restraining his hind-leg and a queer net-work of pig harness all over him. No part of that
harness worked as a muzzle, and Speckle did what he could with his voice to express his
opinion of the matter.
"Don't you let him get away from you," said Aunt Dorcas. "There's no telling what he'd
do."
Jeff was in the wagon now, and grandmother was on the point of remarking, "Do?—why,
he might run away with that there child, and break his precious neck," when the precise
help Bun Gates was wishing for came hurrying through the front gate.
"What you got there, Bun? I'm a-coming. Hold him."
"You hold the shaft on that side, Rube, till we get him aimed right. I want to point him
for the front gate, and drive him into the street. We'll have more room there to train
him."
"Biggest kind of an idea ever was," said Rube. "I saw a learned pig once. He could play
checkers, and count twenty. Smoke a pipe too. He was bigger'n this one."
"This one knows more'n most people now."
"Can't he squeal, though!"
"Audubon," said Mrs. Gates, "I want you to go to the store for me pretty soon. You'll
have to take your wagon."
"All right," said Bun.
"Stand back, Rube. Hold on tight, Jeff. He'll make things rattle. Look, mother!"
She looked, and so did Grandmother Gates and Aunt Dorcas, but it was half a minute
before there was anything to see, and Bun punched his queer "horse" with a long stick to
set him going. A short sharp grunt replied to the punch, and suddenly the speckled pig
made a plunging dart forward, and the wagon went with him.
"See!" shouted Bun. "That harness is just beautiful. It pulls first-rate. He'll go anywhere."
The pig felt about it in that way exactly, and the only drawback, so far as he was
concerned, was the strong cord that was so well knotted around his left hind-leg. It had
been a very strong cord in its day, and it was so now in many places, but there was
about an inch of it, not a foot away from the pig's leg, that had seen its best and cordiest
days. It was frayed and worn out and weak, and it had been severely tested all that
morning. Fibre after fibre and strand after strand had given way, until now it needed but
one more long, strong, willful tug with a boy pulling one way and an angry pig another,
and the cord parted at its weak spot.
His first rush was straight forward for several yards; but the wagon did not seem to
hinder him at all, even with Jeff pulling his best upon the "reins." He would have had to
pull that pig's head nearly off before he could have stopped him in that manner, and it
was fastened on too strongly.
"Stop him!" shouted Jeff. "He's running away; he's dodging."
That meant that he was making a sudden wheel across the grass-plot, under the big
cherry-tree, and that brought him in full view of the garden.
The pig knew where he wanted to go now, and he sprang away in that direction with all
his might and main. The boys were after him; but Rube's first attempt at heading him off
only made him give so sudden a side rush that poor Jeff was pitched out, as the wagon
keeled over, right into the middle of the raspberry bushes. The kick he gave as he landed
set the wagon back on its wheels again, and it was easier running for the pig after that.
"Oh, my son!" was all Mrs. Gates could say,
and nobody could guess whether she meant
Bun or Jeff; but Jeff himself was remarking
at that very moment, "Oh, that pig!" and it
was plain enough of whom he was speaking.
Aunt Dorcas and Grandmother Gates were
at the same instant, as with one united
voice, saying the same words, and Aunt
Dorcas added:
"The garden'll just be ruined. There he goes,
right through the tomato plants, and they
ain't but just been sot out."
"Oh dear!" exclaimed Bun. "He's stopped in
the spinach bed, and he's gone to rooting
right away."
"Never mind," said Rube. "The wagon's all
"OH, THAT PIG!" right. He might have broken that."
"We must get him out somehow."
Yes, that was precisely the task they had before them; but the pig was in the garden,
and he knew it, and believed that he too had duties to perform. He could run, and he
could dodge, and he could change work from one bed to another, but at any moment
when he got at all away from those boys, he found uses for his long, busy, root-hunting
nose.
Jeff crept out from among the raspberry bushes right away, and when his mother and the
two other women reached that spot, he was able to answer them: "No, I ain't hurt a bit,
but I'm scratched the worst kind. Oh, that pig!"
"Run, Jeff," said Aunt Dorcas, "and hold the barn-yard gate open. Don't let any other pigs
get in. There are three more out of the pen. Must be Bun let 'em out when he went for
that one."
The pig was now making a stand among the young beets; but suddenly an idea came to
Bun, and he sprang forward. In an instant he was seated in the wagon, and was goading
his victim with the sharp end of his long stick.
"Got him, Rube! I've got him, mother! He'll have to go now."
"Oh, my son! Yes, Dorcas, he's starting off. Look, mother; if he isn't pulling wagon and
all!"
"He's going for the barn-yard gate, too," said Rube. "Punch him, Bun. We'll train him in
the barn-yard."
Jeff was holding the gate open, but he was also shouting loudly at the other pigs, and it
was an open question—as wide open as the gate itself—whether or not all three of them
would not soon be at work in the garden. Very likely they would have been but for Bun's
presence of mind in getting into the wagon. That puzzled the speckled pig, and the sharp
stick made it worse for him. He saw the open gate, and he made a desperate rush for it.
There was a deep drain furrow just before he reached it, and Bun was thinking, "He can't
pull me over that," when the fore-wheels went down into it. The pig uttered the loudest
squeal he had squealed all that morning as he struggled forward. The three women
shouted in one breath, "Oh, Bun!"
Rube Hollenhauser stooped down to pick up a stone, and Bun punched harder than ever;
but the pig had the best of it. That harness had not been calculated for any such strain.
There was a faint snap, then another, and the pig was free.
He did not pause to look back at the garden he had lost, but he dashed wildly through
the open gate, and Jeff banged it shut after him.
"Mother," said Bun, "I believe I can train him to draw."
"Draw?" exclaimed Aunt Dorcas. "He draws well enough now. The trouble is to steer him.
What'll your father say to that garden?"
"I'll tell him my 'horse' ran away," said Bun.
"Well," said his mother, "don't you bring him into this yard again. Do your pig-training on
the pigs' side of the fence. Come, now; it's time you went on your errand."
"Come on, Rube," remarked Bun. "We'll see about a better harness."
"May I go too?" asked Jeff. "I'm all scratched up."
"Come on, then. You may haul the wagon if you want to."
In a few minutes more they were all away up the street; but the speckled pig over in the
barn-yard seemed to be in a manner grunting his morning's experiences for the
information of his three relatives. Every now and then, too, one of them answered him
with a grunt that seemed to have surprise in it, for neither of them had ever before heard
of or from a pig in harness.
"SAIL A BOAT."

MOVING DAY.
 .
How the Postmistress wishes, on these bright May mornings, that she could turn herself
into a fairy godmother!
"What would she do then," do you ask?
Why, print ever so many more of the dear little letters, bright stories, and tangled puzzles
which every day are dropped for her into Uncle Sam's great mail-bags by the children's
hands.
Her heart almost aches sometimes when she has to put aside so many clever, amusing,
and affectionate letters which can not possibly be crowded into Our Post-office Box. Still,
the dear little folks are too sensible to be vexed at the Postmistress, when she can not
possibly help herself. You all know she must try to be fair in her treatment of each of her
host of correspondents.
When you have anything interesting to write, do not mind even though you may have
sent two or three letters already and they have not appeared. Write again.
Now for a word to the Exchangers. I am sorry that several complaints have come about
careless little people who forget, when they send their exchanges, to inclose plain
directions as to where they live; and, worse still, stories have been told about some who
appear to be dishonorable. I will not believe that a single boy who reads Young People
ever willfully cheats another boy. I am sure this can not happen. But I fear that some
lads do not attend as they ought to the standing notice at the head of our exchange list,
and I think some may not be sufficiently careful to fully prepay the postage on their
budgets, and so the pretty treasures and rare curiosities are sent away to the Dead-letter
Office.
Please be very careful about this in future.

Charlie's letter has been waiting its turn a long time, but his pleasant way of telling about
what he saw on the other side of the Atlantic has lost nothing of its freshness, while lying
in the Postmistress's drawer:
 New York
City.

I went up to the top of Mount Vesuvius, and it burned my feet, and almost
suffocated me with smoke. We were about three hours going up. First we rode in a
carriage for two hours, and then we took a car, something like the car at Mount
Washington, except that the engine did not go along with us, but was left at the
station from which we started, and we were pulled up by a wire rope. When we got
out of the car, mamma and papa were carried in chairs on men's shoulders, but as I
am only nine years old, a man took me on his back and carried me up. I had been
carried in Switzerland on a man's back before this, when we crossed the Mer de
Glace (that is French for sea of ice). The man said I was a heavy boy, but I think I
am not so fat now as then.
I brought home a lot of foreign coin and stamps and curiosities. A little girl gave me
a bullet at Waterloo that she said she found in the field. I drove over the road that
Napoleon built across the Alps, and saw at the house where the monks live the big
dogs that go out and find travellers when lost in the snow. I like to read about
Napoleon. I went to his tomb when we were in Paris; it is all built of marble, and the
church too.
We had awful bad weather coming home, and I had a big pitcher of water thrown all
over me when asleep in my berth.

Charlie P. R.

Carlinville,
Illinois.

I would like to tell Wickie J. M., of Ann Arbor, about two little brothers who are as
fond of playing marbles as he is. Their names are Harry and Louis W., of this place. I
am Harry. Mamma does not think marbles a very nice game, because we wear such
big holes in the knees of our pants and stockings. We don't intend to play it very
often any more, but are trying to get a collection of pretty ones. I would like to take
a peep into that bag of beautiful marbles of yours, Wickie. We never play keeps.
Louis is six and I am eight years of age. We both go to school, and take lessons on
the piano. The only pets we have now are four little kittens, whose eyes are just
open. We once had two rabbits, but they were killed by dogs. The mother of our
little kittens is a beautiful tortoise-shell and white cat. She does not like children very
much, but she catches rats and mice. She always wants mamma to notice her when
she has a mouse, and when she can will bring it to her and purr and rub around her
until she speaks to her.
There are apple-trees in our yard, and every spring a great many robins and other
birds come and build in them. Louis and I often feed them. One day we put some
 bread in some empty cigar-boxes and set them on the ground for the birds; but they
did not eat out of the boxes, so we emptied the bread off the ground, and very soon
we saw a number of birds eating it. I think they did not like the smell of tobacco
which was about the boxes. Last year two robins had a nest of young ones in one of
the trees. The old cat killed the mother, and the father fed and took care of the little
robins until they were grown. The cat killed so many birds last year that we had to
keep her shut up in the chicken-coop a great deal of the time.
I must tell you that we have a dear little blue-eyed brother nearly three years old,
named Willis, whom we all think lovelier and sweeter than any other pet.
Mamma wishes me to tell you of a few funny things that Louis has said. One day,
when he was about five years old, mamma was teaching him his Sunday-school
lesson, and she asked the question, "How did Adam and Eve feel when the angel
drove them out of the garden?" He answered, "Dus spendid." He had been told a
story of a little boy who was lost. After the parents and friends had searched the
woods and town in vain, he was found in the hay-loft fast asleep. Louis said, "When
a little boy is lost, you must always look in the hay-loft, for that is a specially place
for boys." One very warm and dusty day, while at play, Louis in some way got the
top of his head quite covered with dirt and ashes. When mamma saw it, she said,
"Why, Louis, I believe I could plant potatoes on the top of your head." He said, "But
you mustn't; for if you should, when I go up town everybody would say, 'Hello,
garden!'"
I have not learned to write with a pen, and I suppose you will think my letter is not
written very nicely. If it will do to put in the Post-office Box, it will surprise and
please my papa very much to see it there.

Harry W.
If the four new kittens should resemble their mother, I'm afraid the robins will have to fly
away from your apple-trees, Harry. Thank your mamma for remembering those nice
stories about Louis. Next time she must tell us some of your droll little speeches.

LATE.

The minute-hand points to the quarter,

And Jennie is there at the gate;
The clock is too fast, I am certain—
It always is fast when I'm late.
There! Jennie has gone on without me.
Mean thing! pray why couldn't she wait?

Has any one seen my examples?

Please, mother, help look for my slate.
I wonder who last had the shoe-hook;
 My pencil has dropped in the grate.
How everything hinders a person
So sure as a person is late!

Glendale,
Ohio.

As I have never seen a letter from this place. I thought I would write one to Our
Post-office Box.
We are to have our school picnic next month, and we shall have a Queen and King.
We have not selected them yet, but intend doing so in about two weeks. We will
have a May-pole dance and a band of music. All the scholars are looking forward to
the day with great pleasure. I will write again after the picnic, and tell you all about
it.

Carrie C.
Are the King and Queen chosen to their positions for their beauty, their scholarship, or
their winning ways? I suppose the other pupils vote for them. Do you remember the
story of "Susie Kingman's Decision," and has anything like it ever happened in your
school? When I was a little girl I used to look forward to our May party just as you do.
We elected our Queen and her Maids of Honor, but had no King, as our only boy school-
mates were little fellows just tall enough to make the sweetest small pages you ever saw.
The Queen's crown was a wreath of roses, and two of the girls carried it between them
to the woods on a board.

Indianapolis,
Indiana.

I am a little boy eight years old. I have taken your paper almost two years. I like
every story in it, and think they are all good. I like to read the letters. I go to school
every day, and am in the Third Reader, and like my teacher. Every time it rains very
hard here White River overflows. This is the capital of the State, and they are
building a new State-house of stone. They have been working on it for the last three
years, and it will take them three more at least to finish it. I have but one pet, a
bird, which we call Trouble, because he was so hard to raise. He is a very pretty
singer. I would like to see this published, as it is the second letter I have written to
you. My ma is writing this for me, as I am sick.

H. R. C.
It is a new idea to call a bird Trouble, after the trouble he gave, isn't it? It would be fair
to change his name to Pleasure, now that he sings so well. I hope, dear, that you have by
this time quite recovered from your illness.

Birdie M.—Please pardon me for not having sooner thanked you for the pretty daffodil
which you sent in your letter all the way from Cherokee, Kansas. Now, to pay you for it,
let me give you a pretty poem from the poet Wordsworth, to copy into your little book of
extracts. In fact, I would be glad to hear that a great many of my little friends had done
the same. It is a good plan to copy gems of thought from great authors into little books
of our own. Even though you may not quite understand the poet's meaning in these
verses, you will like their musical sound, and, believe me, that when you are older the
meaning will be plain to you:
I wandered lonely as a cloud
That floats on high o'er vales and hills,
When all at once I saw a crowd,
A host of golden daffodils,
Beside the lake, beneath the trees,
Fluttering and dancing in the breeze.

Continuous as the stars that shine

And twinkle on the Milky Way,
They stretched in never-ending line
Along the margin of the bay;
Ten thousand saw I at a glance,
Tossing their heads in sprightly dance.

The waves beside them danced, but they

Outdid the sparkling waves in glee;
A poet could not but be gay
In such a jocund company.
I gazed and gazed, but little thought
What wealth the show to me had
brought.

For oft, when on my couch I lie

In vacant or in pensive mood,
They flash upon that inward eye
Which is the bliss of solitude,
And then my heart with pleasure fills,
And dances with the daffodils.
A Little Boy's Composition.—The subject assigned by mamma was "Quadrupeds." Ernest
retired to the attic, and wrote very patiently until he had finished this, which is not so bad
for a first attempt:

"Quadrupeds are animals. Animals live on grass, hay, oats, bran, and water. A
quadruped is anything that has four legs."

That was all Ernest could possibly think of. But mamma, who sends it, wants the children
to say whether everything with four legs is, of course, a quadruped.
Here is another little composition, by a wee girlie, who writes about kittens:

"I have a little kitty, jet-black, full of frisking and fun, and I hope she will never get to
be a dreadful old cat, and run away. She plays with my apron strings, and likes a red
ball best of any. My sister Lucy, when she went to the store, asked the shoe man for
a pair of shoes for a baby without any heels on. This is all I can write about kittens.

"Lottie (aged
8)."

Osakis,
Minnesota.

My aunt sends me Young People, and I read it as soon as it comes from the Post-
office. We live on the bank of the most beautiful lake in the world. The lake is twelve
miles long, and is full of fish. Boat-riding and fishing are our chief amusements. I am
the only girl in the family, and my papa says that I am the prettiest girl in the
Northwest.

Lunetta E. C.
Don't let papa make you vain, dear. That would be a great misfortune, wouldn't it? Do
you tell him that he is the best and handsomest papa in the whole United States? I am
sure you think so.

Clarkstown,
New York.

We thought we would like to tell about our pets. We each have a rabbit. One is black
with a white breast, and the other two are white and gray. We give them apple-
wood, and they peel the bark off so clean! We have two cats, both gray. One of
them is very old; we call her Kitty Gray. The other is a kitten, and is named
Christopher. He will run up my dress to fetch a piece of bread which I hold as high as
 I can. We have eight bantams; one of them is blind. We ourselves write a paper
called "The Monthly Budget"; we compose it all. We like Young People very much. I
am ten. Robert is eight, and Pauline is five. We can all read.

Marianne W.
Send me a copy of your "Budget," please. I would like to have a peep at it.

Huntington,
West Virginia.

The boiler in a flour mill here blew up the other day. It lifted the large chimney away
up in the air, and that came down with an awful crash. When the boiler blew up it
shook all the houses near it. It blew the large water tank that was on the roof clear
up into the air. Pieces of the boiler and engine were blown across the street. Some
bricks and large pieces of timber were blown over the street, and burst in the side of
a house. There was a real large barrel factory that caught fire here, and the fire-
engine worked from seven until eleven o'clock, but could not stop it, it had got under
headway so much. It rained almost every day in the next week, but the fire kept on
smoking. We have good teachers at our day school. I am ten years old, and study
spelling, reading, arithmetic, grammar, and geography.

Charlie A. P.
What an exciting time you have had between the explosion and the fire! I am afraid you
boys enjoyed the fun more than you thought about the calamities.
Not long ago I saw an explosion of a different kind. Some boys were playing marbles
near my house, and a quarrel had arisen. One little man jumped up, shook his fist at
another, and with blazing eyes said, "You just get me mad, now, and see what I'll do!" He
looked as though he might turn into a torpedo on the spot. It made me think of a Bible
verse which I like very much: "Better is he that ruleth his spirit than he that taketh a
city." I fear the angry boy had not learned that verse by heart, if, indeed, he had ever
heard of it.

Grattan,
Michigan.

Although I am thirteen years old, I am not too old to write to a young people's
paper. I went to school in the winter, but just a week before school closed the
school-house burned. My papa owns a hop yard, and in the fall we have a number of
girls to pick hops. I like to pick quite well, but when the sun is hot the hops settle,
and you don't get your box full so quickly. I have only two pets. One is a large,
 playful yellow-dog, and the other is a ferret. Her name is Jennie, and she is very
nice. She looks very much like a weasel, only her fur is yellow and black. She likes
bread and milk very much, and if we give her a cracker she will run and hide it. We
can take a saucer of milk and hold it up a foot and a half from the floor, and she will
jump and catch hold of the edge of the saucer and eat. I have taken Young People for
about four months, and like it real well. This is the first letter I have ever written to a
paper.

Ollie L. W.
So even a ferret appreciates kindness! It must be a pretty sight when the girls go out to
pick the hops. I am sure they have a happy time over their work. Are they paid according
to the number of boxes they fill in a day?

Josie E. L.—For a little girl still in the Primary Department your letter is very well written
indeed. I hope the new Maltese kitten will be as cunning and as great a pet as the one
that died.

Margaret S. S.—Your account of your travels almost took away my breath. Twice across
the continent; twice from New York, by Panama, and thence by steamer, to San
Francisco; and then, last summer in the Yosemite! You are a fortunate girl to have seen
so many places. Well, dear, when you grow up you will have many pleasant and some
droll things to remember, and you will not be a timid or fussy traveller, making every one
around you uncomfortable. Your room must be very beautiful, decorated as you describe
it. I presume your sister and you are both fond of natural history.

C. Y. P. R. U.

Effie D.—Pot-pourri is a French word which means a mixture. In music it is used to

describe a piece or a series of pieces in which fragments of various melodies are oddly
contrasted. But its prettier meaning, and the one which you will probably like to carry out
for yourself, is that by which it was known to our grandmothers when they were young.
The pot-pourri was a vase or jar into which rose petals, sprigs of lavender, bits of fern,
and other delicate flowers were thrown, often with perfumes and essences, and all the
year round it shed a faint sweetness through the parlor where it stood.
The Postmistress was much interested, not long ago, in the description given by an
English lady residing in Pekin of the funeral of a Chinese Empress. The manners and
customs of China are not at all like our own. Their way of showing their love and respect
for the dead is quite different from ours, as you will see by reading about the procession
which followed the lady Tung-tai-how to her resting-place in the Imperial Tombs. Her
body was inclosed in a splendid coffin, and the tablet telling her name and the story of
her life was hung in a niche in the Temple of Ancestors. The road to the Tombs was
spread with yellow earth, and banners were hung across it at intervals, while blue cloth
was festooned at crossings, and wherever there was danger that the curious eyes of the
common people should peep at the tablet. In complete silence came the imperial
umbrella, flag, and Sedan-chair, all of beautiful yellow satin. The chair containing the
tablet was carried by eight bearers in crimson dresses with yellow spots. It was followed
by a train of Mandarins in court dress, their garments glittering with embroidery. After
them came a troop of spearmen, wearing yellow jackets with black sleeves, and bearing
long slender lances.
On arriving at the Temple of Ancestors, which is within the palace, the procession was
met by some of the ministers of state and the princes. The tablet was lifted to its place of
honor, and then the ceremonies were over for the time, though offerings will be placed
before it, as before the tablets of other ancestors, whenever any event of importance
takes place in the royal family.
Perhaps some of you do not know that the Chinese worship their ancestors. They fancy
that the souls of the dead linger around these tablets, and so they place food, clothing,
and money near them. Even the poorest consider this a sacred duty. Every home has its
tablets, if not its ancestral hall. It is their idea that the spiritual part only of the food is
eaten by the dead, and so, after a while, most families use the rice and fruit themselves.
Money and clothing are represented by paper, which, at stated periods, is very devoutly
burned before the shrines.

Two Amusing Games.—By the same mail which brought the Postmistress a letter from the
pupils of the Prairie Mound School, Watkins, Iowa, asking her to tell them of a nice game
to play at recess, came another letter from St. Louis, Missouri, telling of two games. So
what can be better than to let Olga answer the Prairie-Mounders? The Postmistress is
sure they were thinking of games for rainy days. On fine days top, ball, I-spy, and tag
usually enlist active boys and girls, and those are the best plays for them which give
them wholesome exercise in the open air:

I have two very interesting games that may be played in-doors—one is called "Cross-
Purposes," and the other is "The Cook who likes no Peas." The first is played in the
following manner: One player goes around among the circle, and whispers in each
one's ear an answer which he is to make to the next player who shall come after him
asking questions. For instance, Charles goes around to Nos. 1, 2, 3, and 4. To No. 1
he whispers, "Hot, sweet, and strong," to No. 2, "With pepper and vinegar," to No. 3,
"With my best love," and to No. 4, "No, indeed." Jane comes after Charles to ask any
 questions her own wit may suggest. She asks No. 1, "What kind of a week have you
passed?" No. 1 answers, "Hot, sweet, and strong." She asks No. 2, "Shall you ever
marry?" No. 2 answers, "With pepper and vinegar." To No. 3, "How will you keep
house on these?" No. 3 answers, "With my best love." To No. 4, "Where do you
live?" No. 4 answers, "No, indeed." Much amusement is sometimes made by the
total variance of the questions and answers, and sometimes a very hard blow is
administered to some of the company, but of course no offense can be taken.
Now for "The Cook who likes no Peas." The leader of the game must put the
following question to his right-hand neighbor, and also to all the players in
succession: "My cook likes no peas; what shall I give her to eat?" If any player
replies, "Potatoes, apples, and parsnips," the other answers, "She does not like them
—pay a forfeit." But if another says, "Onions, carrots, veal," she likes them, and
consequently no forfeit is required of the player. The trick of this game is evident: it
is the letter "p" that must be avoided. Thus, to escape the penalty of a forfeit, it is
necessary that the player should propose some kind of food in which the letter "p"
does not occur.

Olga C. B.

We would call the attention of the C. Y. P. R. U. this week to the article, by Sarah Cooper,
entitled "How Jelly-Fish Live and Move"; to the story of shipwreck entitled the "Loss of
the Halsewell," and told under the head of "Peril and Privation" by Mr. James Payn; and to
the article on fencing, by Sherwood Ryse, entitled "A Princely Art."

Correct answers to puzzles have been received from "Fleur-de-lis," Kitty Hoyt, Jennie
Belknap, Jack Hayes, Robbie Keyes, Mary Jane Nichols, "Lodestar," H. W. B., "Bo-Peep,"
Mary Stansbery, Emily Atkinson, G. P. Taggart, Samuel S. Wolfsohn, S. May, Herman Metz,
William H. Shine, B. J. Lautz, L. E. C., Caspar Van Gieson, Lillie D., Willie T. Blew, Smith
Olcott, Lulu Payne, Dudley Long, Henry Clayton, Fanny Grey, John Hobson, Archie
McIntosh, Dick Fanshaw, Thomas B. Irons, Elsie V. Bess, Mollie Ramsay, "I. Scycle," D.
Herman Winter, Jun., Allie E. Cressingham, "Benny Fishel," Eddie Lawler, and Everett C. F.

PUZZLES FROM YOUNG CONTRIBUTORS.

No. 1.

CHARADE.
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