F23 - Multinational Firms; International BusinessReturn

The business environment, its quality, and its development are important indicators of the global competitiveness of individual economies. The situation is enhanced in the European area, where the open community brings specific opportunities to expand and grow in new markets. However, it is not that easy to find the proper place to start a business, considering the financial performance and cost-effectiveness. Thus, the paper focuses on the comparative analysis of selected European countries (Slovakia, Czech Republic, Hungary, Poland, Croatia, Latvia, Lithuania, Estonia, Germany, and France) in the context of their macroeconomic and inner-markets factors in the 8-year horizon (2013-2020). The quality of the business environment is evaluated using a multi-criteria decision-making method TOPSIS and global multi-level indices such as the Global Competitiveness Index, Corruption Perception Index, and Doing Business Index. Their mutual dependence is tested by correlation coefficients. To find the statistically significant differences among the countries, the one-way analysis of variance (ANOVA) and Scheffé´s post hoc tests were used. The results reveal the subsets of countries with similar business environments, which may be beneficial in increasing the global competitiveness of enterprises.
Implications for Central European audience: The comparative analysis is focused on the selected (mostly) Central European countries. This selection enables comparing the business environments with similar features and grouping them into subsets based on their economic, political, and social peculiarities. The analysis of variance proved that the business environments in Slovakia, Hungary, and Croatia are very similar, which may simplify the way of doing business in these countries. Thus, the implications of this study are crucial for better evaluation of the factors influencing the business environment, grouping attractiveness from the perspective of national enterprises, and understanding the indicators that increase the international competitiveness of enterprises.

The article deals with China’s outward direct investment (ODI) in Europe. The ODI has been on the rise and is unique in the sense that its development is much faster than in any other developing country. We investigate the determinants of Chinese ODI in ten countries of Central and Eastern Europe in the time span of 2005 and 2018. Using panel data analysis, the regression model incorporates both traditional macroeconomic variables as well as selected institutional variables, trying to test which of those work best at explaining the Chinese investment activity in the countries of interest. The quality of the institutional framework is represented by EBRD indicators, which seem to be more suitable for transition economies. Findings generally suggest that Chinese multinational enterprises do not access Central and Eastern European countries primarily for market-seeking reasons. However, the fact of being a member of the EU helps Chinese ODI since the membership is used as a sort of “backdoor” to the large European markets. Still, Chinese ODI is less likely associated with a sound institutional environment of a host country, as the opposite appears to be true. These findings, therefore, support the hypothesis that access to the single EU market and R&D spending are more important determinants of the Chinese ODI than almost any other factors.
Implications for Central European audience: The article explores the main drivers of Chinese foreign direct investment in the CEE region while it employs the most relevant theoretical framework, including several recently developed theories. The quantitative analysis then thoroughly explores the weight and sign of selected drivers using recent data and questions some of the conventionally accepted surmises about motivations of Chinese investment activity in the CEE region. This is an important topic given the ongoing debates about China’s influence in the region as well as about the intensity and general value added of its investment activity.

The main goal of this paper is to identify the major factors for the decision of Swiss IT service firms to nearshore their locations and to quantify their relative importance. Moreover, we develop an IT Nearshoring Index ranking the attractiveness of different European regions. We use a quantitative survey of 56 Swiss IT service firms that are either actively engaging in nearshoring or planning to nearshore parts of their business. Using the survey, we identified five main factors for the nearshoring location decision of Swiss IT firms: economic, labour, institutional, social and location. We pin down the relative importance (weights) of the aforementioned factors using the survey results and expert interviews. The labour factors (including labour costs on the one and the availability of skilled IT workforce on the other side) proved to be most important. We use the obtained weights to construct a (weighted) IT Nearshoring Index. Based on the IT Nearshoring Index, we find that in contrast to general belief, the most attractive locations cannot be found in Eastern Europe, but in Southern UK or Western Germany. The first is due to their high availability of IT workforce, the latter due to their cultural and geographical proximity. Eastern European regions can base their competitive advantage on offering attractive labour costs, but this cannot make up for the disadvantage of greater cultural and geographical distance to Switzerland.

People usually view negotiations as either an integrative process in which both sides can gain (win-win) or a distributive struggle in which one side wins and the other loses (win-lose). Culture affects how people conduct negotiations, and the Chinese people can rely on a long civilizational tradition of both – highly refined integrative as well as smart and ruthless distributive negotiation styles. The coexistence of both styles may lead to ambiguous negotiation situations. The purpose of this study is to explore whether the relationship relevance influences the Chinese people’s choice of negotiation style. We investigated the research question by conducting ten in-depth interviews among European executives with long-term experience in China and analyzed the content of the transcripts by deductively building qualitative categories. The findings indicate that high relationship relevance influences the Chinese negotiation style towards a more collaborative integrative approach. By focusing on the relationship aspect of negotiations, we aim to contribute towards better understanding in an under researched field of relationship’s impact on negotiation.

The study of internationalization processes of multinational enterprises and its evolution is one of the most important topics in the domain of international business. According to the Uppsala model and the business network view, being an insider in local networks is a fundamental issue for service companies such as banking groups because of their strong intangible dimension. That’s why VUB Bank is an extraordinary bank. It has a little office in Prague, the only one in Czech Republic, and, at the same time, owns 233 branches in Slovakia. But this bank is a subsidiary of Intesa Sanpaolo, the biggest Italian banking Group, one of the leaders in the European market. Starting from this empirical observation, and using an inductive methodology, this paper will try to explain how the Intesa Sanpaolo Group successfully created a business network in Slovakia, its first market by total assets in Central and Eastern Europe. Our study shows that Banking Groups can overcome the liability of outsidership through a progressive commitment and a “local-passport strategy” based on the acquisition of existing companies.

The participation of national V4 electronic industry in global value chains is a source of additional output, in addition to, a driver of technological development and employment. The aim of the study is to analyse whether the V4 region has the expertise capacity to upgrade its position in the electronics GVC integrated into the Samsung company. The analysis is built on the theory of GVC and the methodology of surveying the V4 labour market and education related to engineering. The quantitative results are supplemented with research interviews with Samsung managers and related municipal leaders. The analysis concludes on V4 upgrading opportunities in electronics GVCs determined by expertise.

Business excellence develops and strengthens the management systems and processes of an organization to improve performance and create value for stakeholders. Business excellence models frameworks can help to an organization to focus thought and action in a more systematic and structured way leads to increased performance. The paper focuses on the business strategy of Czech enterprises in the context of business excellence models. The objective of the paper is to identify the relationship between business strategy and international performance of Czech enterprises. The enterprises included in the study are 490 enterprises established in the Czech Republic. The primary data collection method was a questionnaire-interview. The results demonstrate that the business knowledge of managers and company resources significantly correspond with the business strategy of Czech enterprises on international markets.

Realization of international entrepreneurial activities is a significant step influencing the business strategy of each enterprise. The paper raises the question of which internal factors, particularly human resources, influence the decisions on the realization of international entrepreneurial activities in Czech family SMEs. The objective of the paper is to determine the effect of selected internal factors on the decisions on the realization of international entrepreneurial activities by Czech family SMEs. The enterprises included in the study are those Czech family SMEs that have already undertaken internationalization activities and were established in the Czech Republic. The research study includes 246 Czech family SMEs. The method included oral questioning and a questionnaire as the principal instruments applied for researching the relationship between human resources and decision making. The results of the research study show the significant influence of human resources on the decision in Czech family SMEs.

The purpose of the paper is to demonstrate the beneficial impact of advanced manufacturing technologies (AMT) on firms' environmental performance. Drawing on interviews conducted with 16 Hungarian manufacturing subsidiaries on their experience with AMT, we find three functional areas, where industry 4.0 solutions can not only enhance operational excellence and cost-efficiency, but they can also improve eco-efficiency, but they can also improve eco-efficiency, namely in the field of quality management (through smart production control, data analytics and predictive modelling solutions); process optimization (through capacity planning and production scheduling solutions); and product and process engineering (through advanced virtual technologies). We also find that AMT adoption facilitated subsidiary upgrading along various dimensions. The main managerial implication is that subsidiaries need to be proactive, and emphasize also the benefits stemming from energy and resource efficiency improvement when lobbying for investment in AMT.

The goal of this paper is to compare the characteristics of Polish and Czech companies which follow the Born Global internationalization model. More concretely, the analysis aims to discover the differences or similarities in terms of the internationalization paths of Polish and Czech SMEs in the characteristics of their managers in terms of the so-called "international vision" and in their innovativeness level. The introductory part of article provides a description of this internationalization model and the International New Ventures traits (INV) and summarizes the recent studies on this topic conducted in Poland and Czech Republic. In the empirical part, the International New Ventures from the two countries are compared. The Polish sample includes 105 companies which were surveyed with use of computer assisted telephone interviews in autumn 2014. For the Czech Republic, the sample consists of 54 small and medium-sized companies, which were surveyed using the computer assisted web interviews from November 2013 till January 2014. The surveyed companies in both countries fulfilled the definition of Born Globals. Descriptive statistics, cross-tabulation analysis and non-parametric tests are applied to accomplish the goals of the paper.

The purpose of this paper is to investigate the impact of MNCs' crisis-driven cost-cutting and organizational restructuring actions on their local subsidiaries in Hungary. We hypothesize that much of the cost-cutting minded and efficiency-focused organizational transformation prompted by the global crisis of 2008 can actually be beneficial to some subsidiaries. Drawing on interviews carried out at 13 manufacturing subsidiaries, we find that upgrading occurs partly as a consequence of MNCs' pressure to reduce costs and improve efficiency, partly as an outcome of organizational restructuring and resources reallocation, and partly as a result of an increasing delegation of advanced functions to production subsidiaries. Although the Hungarian subsidiaries were on the receiving end: they hosted some of the relocated production activities, the main managerial implication is that caution is needed, success often breeds failure. The resulting overconfidence may prevent local managers and policy-makers from monitoring and analyzing industry-specific technological and market trends to detect opportunities and threats as early as possible.

This article elaborates the export promotion framework in the Czech Republic. It reviews the current literature and introduces the basic approaches and objectives that should be followed by a properly established export promotion system and describes the historical as well as contemporary development of the export support scheme in the Czech Republic. Subsequent research was then conducted in order to obtain a basic idea how the awareness about export support is spread among Czech companies. Outcomes of the survey are then used as inputs to suggest how to increase the effectiveness of export support.

Multinational companies that have settled in Central and Eastern Europe (CEE) significantly contribute to the recognition of modern HRM concepts and implementation of the relevant HRM practices in the region (Lewis, 2005). To be a strategic partner, HRM managers have to possess various professional and personal competences (Orme, 2010). The aim of this paper is to analyze the main competences of HR managers and their impact on companies' performances. The research hypothesis, based on 2012-2013 CEEIRT data, is that there is a statistically significant relationship among the HR managers' competences and the performances of the MNCs' subsidiaries in Hungary, Poland, Romania, Serbia and Slovakia. The analyzed HR competences are: business knowledge, strategic contribution, personal credibility, HR services, HR information system and foreign language competences. The research analyzed the following organizational performances: profitability, service quality, rate of innovations and environmental matters.

Internationalization has different connotations for different social sciences and its social, economic and cultural impacts have been examined by a number of studies. While firms' internationalization processes have been understood as being dynamic, the concept of international readiness has rarely been the main focus of research efforts, which until a decade ago, focused principally on explaining sequences of entry modes and choices of markets. The emergence of the study of international entrepreneurship has enhanced the role of readiness. This study reviews the concept of international readiness by experimental and theoretical studies. Axioms in this research are based on content analysis. The framework incorporates measures to evaluate SMEs' international readiness. The paper concludes with a research agenda as a guide for future work on considering the readiness as a critical phase before the internationalization process.

In recent years, some of China's leading firms have made headlines with their European expansion, by either opening new facilities or by acquiring or merging with significant enterprises in Europe. The goal of this paper is to contribute to the existing literature by examining Chinese enterprises expanding into Switzerland. The study also allows some conclusions for Chinese companies entering Central and Eastern Europe. We analyze via interviews the motivations of Chinese companies to expand into Switzerland as well as their behavior and the impediments in their internationalization process. Our findings show that Chinese companies fail to take advantage of certain benefits of western economies (such as open information and stable rule of law). To move forward efficiently, they should develop competence in dealing systematically with readily available market information, building professional networks that recognize a separation between business life and personal life, and managing their Chinese and foreign employees in the foreign cultural environment.

This conceptual paper contributes to the discussion of the effects of the Great Recession on strategies of multinational companies operating in CEE. The author argues that the original business model that guided the "going East" of Western companies is still valid. However, foreign investors have adapted their strategies for CEE in the aftermath of the crisis: they differentiate stronger between the individual economies, follow a more cautious and selective investment approach, rationalize product portfolios, test new cost-efficient organizational arrangements and consider increasingly "value-for-money" strategies to tap the mass markets.

This article sheds light on the organizational context enhancing development of relational capabilities and examines the significance of relational capabilities for SMEs' financial and non-financial performance. The firm's relational capability is measured separately in customers' and suppliers' networks. This study is based on a sample of 67 SMEs from the five most internationalized industries in Slovenia. Research hypotheses are tested with linear regression models. The results support our prediction that fostering internal social capital, coupled with the usage of economic motivators, augments a firm's relational capability in a supplier network, which in turn is associated with better performance outcomes, both financial and non-financial. The results on relational capability in a customer network with respect to performance are less conclusive, indicating that vertical ties of internationally oriented SMEs (with suppliers and customers) are not of equal importance.