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The Nature of Business Policy Business policy — or general management — is concerned with the following six major functions:

This chapter reports the current status of management practices in the Central and Eastern Europe (CEE) region as seen by international expatriates. Based on the results and expert insights, we aim at giving guidance to MNE leaders and strategy makers as well as operative HRM staff and other expatriate managers how to best exploit the value-added opportunities in the CEE region by adopting the region-specific talent management and staffing policies and practices.

This study is based on the views of 1108 managers on the local management in six CEE countries: Bulgaria, Czechia,¹

In this chapter, the term Czechia is used to refer to the Czech Republic.

MNEs have been able to successfully capitalize on the economic integration and growth of the CEE region during the past 25 years. A new generation of competitive local managers is now growing into leadership positions, but MNEs need to find a more sophisticated way to retain those in the region in order to be able to exploit growth opportunities in future too.

Because the national cultural differences between the six analyzed CEE countries remain very characteristic and divergent, talent management and staffing strategies and policies of MNEs must be adopted and fine-tuned accordingly. Language and communication difficulties, knowledge of the standards management techniques are not a challenge anymore. Instead local management’s soft skills, leadership values and attitudes need to be developed now simultaneously with increasing wages, as the most talented local staff and management is readily relocating into higher-wage countries.

The originality and scholarly interest of this study lies in its cross-cultural, comparative approach. The originality and practical interest of this study is that it gives clear recommendations to MNE and expat managers. Furthermore the presented results have been tested during critical forum discussions with more than 60 CEE-experienced managers, expatriates, and the representatives several foreign chambers of trade and commerce held at the Central European University Business School in spring 2015.

This paper aims to illustrate how institutional factors, such as Guanxi (connectedness) mechanism in a transition economy, could impact managerial cognition and their temporal orientation at individual level as well as induced change on corporate environmental strategy (CES). More specifically, this paper explores the micro foundation of corporate strategy change in an attempt to examine how corporate strategic choice and actions evolve with managerial cognition of “Guanxi” with various temporal orientations.

The paper reviews the extant literature focusing on Guanxi and CES with special attention to the temporal orientation in strategy formulation. A conceptual framework is proposed to analyze the underlying mechanism of Guanxi in mediating and shaping CES. A multi-case study with four companies operating in two industry sectors were investigated considering their relative long foothold as well as their different postures and dynamic change of corporate environment strategy in the past decades.

The findings support recent critiques on the likely shift in strategic choice of firms from the traditional Guanxi-based to a rule-based format. The interactions between entrepreneurial cognition and strategic activities toward environmental issues were still influenced by deep relational embeddedness. The findings proved that managerial Guanxi cognition impacts managers’ temporal orientation and their strategic choice on CES. Foreign-invested enterprises in the process of localization face the potential risk of emerging backdrop of their CES, i.e. from more active strategy to more reactive strategic posture, whereas local private-owned enterprises show a transformation from reactor to follower and even pioneer in the wave of those entrepreneurs’ changing cognition on the role of Guanxi in their businesses.

One main limitation of the study is the lacking of quantitative measurement of corporate environment performance. Although the paper used multiple cases to explore the dynamics of Guanxi on impacting CES, only with further development of effective scale measurement to test corporate environment performance can increase the explaining power of the proposed theoretical model in this study. It is important to note that with data of longitudinal measurement of corporate environment performance, it would be more convincing to show the outcome of the temporal lens of Guanxi on CES. However, the lacking availability of qualified disclosed data on indicating corporate environment performance constrains another limitation for the study. Considering the complexity of corporate environment strategy, the focus cases in the paper might still lack powerful and convincing illustration to prove the impact of Guanxi on CES despite the enriched contextual data and description. It is necessary to conduct deeper analysis to exclude the impact of other possible factors on CES to highlight the direct impact of Guanxi on CES.

The results of the in-depth analysis and interpretation of the exploration of the cases suggest that Guanxi still seems to dominate managerial thinking process as the norm is deeply rooted in their mind sets. However, Guanxi is no longer considered as a mere reactive cultural norm rather a positive mechanism through which Chinese firms can achieve their sustainable environmental strategic goals as well as economies prosperity in the rapidly competitive business landscape in modern China.

Previous research on CES largely neglected the context factors. This paper presents a conceptual model to deepen our understanding of the contextual factor of Guanxi with a temporal perspective and its consequent influence on CES. This helps policy makers as well as strategic management researchers and academics to reconsider the mechanism of adaptation and selection in shaping CES in the event of large scale institutional change.

Surveys based on standard questionnaires have long been a major research tool of the social scientist. The great majority have focused on one type of respondent — the workers of a given firm, the voters in a particular constituency, or whatever. For one sort of survey, namely, those that seek to know about the individuals in question, this is plainly sensible. But another sort of survey uses a respondent to provide information about the organisation for which he/she can be taken to be an authoritative informant. Questionnaires sent to the head offices of companies or unions and asking about the organisation's policy are a good example. How do we know whether the replies are in some sense representative of the organisation or are just the views of the respondent chosen?

Explores the relationship between the firm characteristics and the control mechanisms in 85 multinational manufacturing companies operating in Turkey. Takes size, age and country of origin as firm characteristics. Control mechanisms include ownership, board of directors, top management team and training. Size is more strongly associated with control mechanisms than age or country of origin. MNCs have majority ownership in nearly 70 per cent of the firms. Size is inversely related to ownership. Large MNCs have training programmes when small ones do not. Ownership significantly influences the composition of board of directors. The level of perceived control is related to the amount of ownership.

Inspired by leadership research, this paper aims to further the literature on management controls (MCs) by highlighting two managerial capabilities that cultivate dynamic tension. More specifically, we explore how countervailing MCs can be designed and used to create a coordinated and adaptable organisation. These capabilities reveal key insights into dynamic tension because they help us to understand the role of managers and why, how and when some companies succeed in creating dynamic tension while others struggle.

These research objectives are met through a case study on a global manufacturing company called GLOCOMP to preserve anonymity. The authors chose GLOCOMP because it comprises many internal units that must work in a coordinated fashion. However, it is equally important that the units are flexible enough to adapt to their unique local conditions. These two aspirations must be balanced, which necessitates dynamic tension between MCs. Hence, the case provides fertile ground for us to investigate the capabilities that help managers design and use countervailing MCs.

The empirical setting shows that cognitive and behavioural complexity are the keys to successfully designing and using countervailing loose and tight MCs concurrently. Using MCs that work in opposite directions produces a dynamic tension that helps individual units to coordinate their internal supply chains while adapting to fulfil unique roles within the company.

This paper extends previous research by exploring two specific managerial capabilities that enable dynamic tension – cognitive and behavioural complexity. The authors provide specific insights into how managers can create dynamic tension and, further, by highlighting the specific capabilities that give rise to dynamic tension, the authors outline a procedural perspective where a manager’s capabilities and dynamic tension inform one another. The resulting virtuous circle extends the understanding of the relationship between dynamic tension and managerial expertise beyond what the authors currently know as a linear cause-effect correlation.

Drawing on Price Waterhouse Cranfield survey data, examines whether the common challenges to local authorities in Europe have resulted in similar national trends in human resource management. Compares public and private sector developments in line management responsibility, remuneration, appraisal and management development in six countries: Denmark, France, Germany, Norway, Sweden and the UK. While line mangement responsibility has expanded rapidly in all countries apart from Germany, local authorities generally lag behind the private sector in relation to performance management. Analyses the implications of the observed changes in human resource management policies for managerial roles and concludes by looking at the management development consequences for local authorities.

This chapter contends that the international business (IB) and strategic management (SM) fields have many commonalities that should be considered in a turbulent globalized business context. IB studies refer to the need for local integration and local adaptation whereas empirics in SM pinpoint the complementary effects of central planning and decentralized decision-making. We present and synthesize these rather field specific perspectives and try to synthesize insights from both fields in an adaptive strategy-making model including the effects of autonomous subsidiary initiatives and intended mandates from corporate headquarters. The model considers local subsidiary actions of both operational and strategic nature and we argue that it may be futile to distinguish between these effects as incremental operational responses can cumulate into more substantial changes over time with dimensions of strategic adaptation. The model provides a foundation for further considerations about how to combine central intent and direction with decentralization and autonomous initiatives in the multinational corporation.

Draws on two surveys of New Zealand general managers – the first conducted in early 1984, the second at the end of 1991 – to assess the impact on managers of the substantial deregulation of the domestic economy. Average age, work hours, educational level and career path changed little over the period. However, the expectation that external pressures would lead to the adoption of more directive management styles is not borne out. Perceived future challenges accord with those revealed in a recent study of European managers, suggesting that the internalization of the New Zealand economy has led to the “internationalization” of managers.

Hotels conducting international business are acknowledging the importance of an expatriate general manager (GM), to increase the effectiveness of their knowledge management system through the sharing of knowledge between expatriates and local employees. In the aspect of comparative leadership studies, this study attempts to compare and analyze the effects of knowledge sharing (KS) efforts, which are competencies of expatriate GMs and local GMs, on employee trust, organizational KS and employee loyalty.

Data were collected from employees of 7 hotels managed by expatriate GMs among 16 franchising luxury (5-star) hotels, and from employees of 6 hotels operated by local GMs among 9 local luxury hotels located in Korea. Structural equation modeling method using SmartPLS 3.3.3 was used to analyze the data.

Expatriate GM’s two-way KS influences affective trust but does not influence cognitive trust. Affective trust influences cognitive and organizational KS but does not influence employee loyalty. Cognitive trust does not influence organizational KS but influences employee loyalty. Finally, organizational KS significantly affects employee loyalty. In addition, in the analysis comparing the estimates between expatriate and local GM group, significant differences in groups were found for the impact of GM’s two-way KS on cognitive trust, for the impact of affective trust on organizational KS, for the impact of affective trust on employee loyalty and for the impact of cognitive trust on organizational KS.

This study shows that knowledge management designs need to consider different effects of expatriate GMs’ and local GMs’ capabilities on employee attitudes and behavior considering cultural impacts. Expatriate GMs will greatly benefit their effort for KS by assuring employees that they are attentive to their needs, interests and problems.

This study not only contributes to the existing social capital theory but also provides managerial implications for human resources management in the hospitality field through a comparative study of KS efforts of expatriate and local GMs.