The representation of expatriates in the corporate governance of subsidiaries of multinational companies: A study from the czech republic

The issue of the representation of expatriates in the corporate governance of subsidiaries of multinational companies is currently a much debated and yet relatively under-researched topic within the academic community. In connection with the transformation of the economy which has taken place and the activity of multinational companies in CEE countries, there have been discussions about the effect of expatriates on the output and efficiency of the corporate governance of subsidiaries. The main aim of the research carried out was to describe and analyze the representation of expatriates in the exercise of corporate governance in subsidiaries of multinational companies operating in the Czech Republic (CR). The objective of the research was to survey the representation of expatriates in MNC subsidiaries with respect to various characteristics of the subsidiary such as the country where its head office is located (country of headquarters), the size of the subsidiary and the legal form. Using statistical analysis of dependencies, a different representation of expatriates in relation to the legal form of the MNC subsidiary was demonstrated. The size of the subsidiary, measured by the number of employees, also plays a role here. The presence of an expatriate was not demonstrated to have an effect on the financial performance of an MNC subsidiaryProblematika zastoupení expatriantů v corporate governance poboček nadnárodních společností je v současné době diskutovaným nicméně nepříliš prozkoumaným tématem v rámci akademické obce. V souvislosti s proběhlou transformací hospodářství a působením nadnárodních společností v zemích CEE se diskutuje vliv expatriantů na výkon a efektivitu Corporate governance poboček. Hlavním cílem provedeného výzkumu bylo popsat a analyzovat zastoupení expatriantů při výkonu corporate governance v pobočkách nadnárodních společností působících v České republice. V roce 2011 bylo provedeno empirického šetření zastoupení expatriantů ve statutárních orgánech poboček nadnárodních společností v České republice. Výběrový soubor, na kterém byla problematika corporate governance zkoumána, obsahoval 332 poboček nadnárodních společností z nejvýznamnějších odvětví hospodářství České republiky. Předmětem výzkumu bylo mapování zastoupení expatriantů v pobočkách MNC vzhledem k různým charakteristikám pobočky jako je země centrály, velikost pobočky či právní forma. Součástí příspěvku je i podrobnější analýza, na kterých pozicích správních a exekutivních orgánů v pobočce MNC expatrianti působí. Dále byl zkoumán dopad působení expatrianta v pobočce na její finanční výkonnost. Pomocí statistické analýzy závislostí bylo prokázáno odlišné zastoupení expatriantů vzhledem k právní formě pobočky MNC. Hraje zde roli i velikost pobočky měřená počtem zaměstnanců. Vliv působení expatrianta na finanční výkonnost pobočky MNC se neprokázal.The issue of the representation of expatriates in the corporate governance of subsidiaries of multinational companies is currently a much debated and yet relatively under-researched topic within the academic community. In connection with the transformation of the economy which has taken place and the activity of multinational companies in CEE countries, there have been discussions about the effect of expatriates on the output and efficiency of the corporate governance of subsidiaries. The main aim of the research carried out was to describe and analyze the representation of expatriates in the exercise of corporate governance in subsidiaries of multinational companies operating in the Czech Republic (CR). The objective of the research was to survey the representation of expatriates in MNC subsidiaries with respect to various characteristics of the subsidiary such as the country where its head office is located (country of headquarters), the size of the subsidiary and the legal form. Using statistical analysis of dependencies, a different representation of expatriates in relation to the legal form of the MNC subsidiary was demonstrated. The size of the subsidiary, measured by the number of employees, also plays a role here. The presence of an expatriate was not demonstrated to have an effect on the financial performance of an MNC subsidiar

Influence of Legal Form and Non-Anonymous Ownership Structure on Corporate Financial Performance

The paper represents a continuation of our previous results, which were closely linked to the topic of automated search for factors of corporate competitiveness and financial performance. As opposed to the results presented at ICMLG 2014 and ECMLG 2014, the current research deals with other characteristics of organizations not investigated before and related to Corporate Governance, like their legal form, the international diversity of top management (domestic only or also foreign) and particularly the non-anonymity of the ownership structure.The data were gathered in the period 2011 to 2013 from 222 companies with various legal forms. The main purpose of our research was to investigate which of these characteristics have an impact on corporate financial performance that has been assessed by the Return on Assets (ROA) index. The paper attempts to answer the research question of whether the ownership structure, particularly the fact whether the organization or enterprise owners are or are not anonymous, has a major influence on corporate financial performance. The methodology used in analysing and processing the data had to respect the fact that the characteristics (variables) of the companies which were individually investigated are not mutually independent, thus multidimensional methods have to be used. Therefore, we used here our non-linear kernel regression model which had already been successfully verified, having been developed in the field of statistical pattern recognition. Prediction error of the proposed model is then used as a feature selection criterion in the process of identifying factors that affect Corporate Governance and the financial performance the most. The results presented in the paper demonstrate that the type of ownership structure (anonymous or non-anonymous) has a dominant influence on the financial performance among the investigated characteristics. The target audience includes researchers in the fields of management and business science.Příspěvek představuje pokračování našich předchozích výsledků, které úzce souvisí s tématem automatizovaného hledání faktorů firemní konkurenceschopnosti a finanční výkonnosti. Na rozdíl od výsledků prezentovaných na ICMLG 2014 a ECMLG 2014, se současný výzkum se zabýval jinými charakteristikami organizacemi, které také souvisí s Corporate Governance - právní forma, mezinárodní diversita vrcholového managementu (tuzemský versus zahraniční) a zejména anonymita vlastnické struktury. Z údajů vlastníků jsou shromážděny z období 2011 až 2013 a týkají se 220 podniků s různou právní formou. Hlavním účelem našeho výzkumu bylo zjistit, které z těchto charakteristik mít dopad na podnikovou finanční výkonnost, která byla hodnocena ukazatelem ROA. Článek se pokouší odpovědět na výzkumnou otázku, zda anonymizovaná struktura vlastníků, má vliv na firemní finanční výkonnost. Metodika použitá při analýze a zpracování dat musela respektovat skutečnost, že jednotlivé zkoumané podniky vlastnosti (proměnné) nejsou na sobě nezávislé z hlediska použité vícerozměrné metody. Z uvedeného důvodu jsme použili námi již úspěšně ověřený non-lineární regresní model v oblasti statistického rozpoznávání obrazců. Chyba predikce navrhovaného modelu se pak používá jako kritérium výběru funkce v procesu identifikace faktorů, které mají nejvíce vliv na řízení podniků a finanční výkonnost. Dosažené výsledky ukazují, že typ vlastnické struktury (anonymní nebo neanonymní) má dominantní vliv na finanční výkonnost u zkoumaných charakteristik. Cílovou skupinou jsou výzkumní pracovníci v oblasti managementu a podnikání.The paper represents a continuation of our previous results, which were closely linked to the topic of automated search for factors of corporate competitiveness and financial performance. As opposed to the results presented at ICMLG 2014 and ECMLG 2014, the current research deals with other characteristics of organizations not investigated before and related to Corporate Governance, like their legal form, the international diversity of top management (domestic only or also foreign) and particularly the non-anonymity of the ownership structure.The data were gathered in the period 2011 to 2013 from 222 companies with various legal forms. The main purpose of our research was to investigate which of these characteristics have an impact on corporate financial performance that has been assessed by the Return on Assets (ROA) index. The paper attempts to answer the research question of whether the ownership structure, particularly the fact whether the organization or enterprise owners are or are not anonymous, has a major influence on corporate financial performance. The methodology used in analysing and processing the data had to respect the fact that the characteristics (variables) of the companies which were individually investigated are not mutually independent, thus multidimensional methods have to be used. Therefore, we used here our non-linear kernel regression model which had already been successfully verified, having been developed in the field of statistical pattern recognition. Prediction error of the proposed model is then used as a feature selection criterion in the process of identifying factors that affect Corporate Governance and the financial performance the most. The results presented in the paper demonstrate that the type of ownership structure (anonymous or non-anonymous) has a dominant influence on the financial performance among the investigated characteristics. The target audience includes researchers in the fields of management and business science

Corporate board composition in family businesses: Evidence from the Czech Republic

This paper examines the issue of board composition of family businesses which were established in the Czech Republic in the 1990s, after more than 40 years of private enterprises being forcefully suspended by the socialist regime. So far, there has been no available research investigating manufacturing sector in the Czech Republic (CR) from the perspective of board composition, i.e. the representation of external members and gender diversity, on the characteristic behaviours of the boards of family businesses and their strategic adaptability. This longitudinal study of four family businesses provides valuable information which have not yet been observed against the background of board composition in the manufacturing sector. The results of the interviews conducted in these businesses yield interesting findings about the fact that gender diversity along with the exclusive representation of family members on a corporate board has a very positive influence on strategic adaptability and an impact on the current direction of the business. The results of the study also show how family businesses fulfilling these conditions are better able to cope with negative external influences (e.g. the financial crisis)

Gender Diversity in the Management of Hospitals in Czech Republic

Gender diversity has widely been discussed in some sectors of the CEE countries, while there is a lack of more in-depth knowledge in some areas such as the present-day healthcare sector. It is generally presumed that the number of women in top management roles in companies are on the increase in the Czech Republic; however, at a slower rate than in comparison with the other countries of Western Europe/EU. Moreover, the Czech Republic was one of eight countries who opposed a proposed EU regulation from the European Commission in 2012 that set a 40% quota on the mandatory representation of women in the management structures of selected companies. The gradual transformation of economic-legal forms of ownership involved most of the 190 Czech hospitals. These changes gradually affected the transition to the new model in terms of efficiency, but also the supervisory authorities of hospitals in the newly created companies. Logically, such changes brought new demands for both qualifications and specific managerial skills. A whole range of evidence supports the claim that the source of these managerial skills is provided by women. The aim of this contribution is to map the representation of women in top management of health care facilities in the Czech Republic and verify whether there is a spontaneous growth in their representation. To serve this purpose, the gender composition of executive and supervisory bodies for 89 hospitals in 2006 and for 118 hospitals in 2012 was ascertained. A generalized linear model for repeated measurements was used for the analysis. However, despite the general trend of rising gender diversity, a statistically significant increase in the proportion of women has been demonstrated only in the case of executive directors.Současné poznání ukazuje, že tato problematika je převážně řešena ve státech s již dlouhodobě fungujícím tržním hospodářství. Ve státech CEE v post-transformační fázi rozvoje hospodářství je genderová diverzita vrcholových orgánů předmětem široké diskuse a v některých oblastech jako je například oblast zdravotnictví doposud chybí jakékoliv poznatky V rámci České republiky se obecně předpokládá, že počet žen ve vrcholovém vedení firem přibývá, nicméně pomalejším tempem než ve srovnání s ostatními státy západní Evropy/EU. Navíc je to právě Česká republika, která spolu s dalšími osmi zeměmi EU oponuje návrhu směrnice Evropské komise z roku 2012, nařizující 40% kvótu pro povinné zastoupení žen ve vedení vybraných společností. Nicméně společenské změny po roce 1990 a dále pak transformační procesy kulminují zejména v období 2005, až 2006 významným způsobem proměnily vnitřní i vnější prostředí zdravotnického systému České republiky. Postupná transformace ekonomicko-právní formy či vlastnictví se týkala většiny ze 190 českých nemocnic. Přechodem na nový model tyto změny postupně postihly nejen výkonné, ale také dozorčí orgány nemocnic v nově vznikajících obchodních společnostech. Logicky takové změny s sebou přinesly kromě kvalifikačních, také nároky na specifické manažerské dovednosti. Cílem příspěvku je v rámci vybraného segmentu zdravotnických zařízení a na základě analýzy složení exekutivních a dozorčích orgánů v letech 2006 a 2012 představit zastoupení žen v top managementu a dozorčích radách českých nemocnicích ve srovnání s navrhovanou směrnicí EK a a na základě dosažených poznatků zjistit vliv genderové diverzity na úspěšném hospodaření nemocnic v České republice.Gender diversity has widely been discussed in some sectors of the CEE countries, while there is a lack of more in-depth knowledge in some areas such as the present-day healthcare sector. It is generally presumed that the number of women in top management roles in companies are on the increase in the Czech Republic; however, at a slower rate than in comparison with the other countries of Western Europe/EU. Moreover, the Czech Republic was one of eight countries who opposed a proposed EU regulation from the European Commission in 2012 that set a 40% quota on the mandatory representation of women in the management structures of selected companies. The gradual transformation of economic-legal forms of ownership involved most of the 190 Czech hospitals. These changes gradually affected the transition to the new model in terms of efficiency, but also the supervisory authorities of hospitals in the newly created companies. Logically, such changes brought new demands for both qualifications and specific managerial skills. A whole range of evidence supports the claim that the source of these managerial skills is provided by women. The aim of this contribution is to map the representation of women in top management of health care facilities in the Czech Republic and verify whether there is a spontaneous growth in their representation. To serve this purpose, the gender composition of executive and supervisory bodies for 89 hospitals in 2006 and for 118 hospitals in 2012 was ascertained. A generalized linear model for repeated measurements was used for the analysis. However, despite the general trend of rising gender diversity, a statistically significant increase in the proportion of women has been demonstrated only in the case of executive directors

Corporate Governance Against Recommendations: The Cases of the Strong Executive and the Strong Ownership

There are several basic configurations of corporate governance according to the separation of ownership and control (Jensen’s theory). Effective governance is described as a situation when an owner (or group of owners) keeps the right to ratify and monitor strategic decisions while management has the right to initiate and implement those decisions. There are two particular situations how this recommendation is partially broken and both situations are linked to CEO duality. The first case happens when an owner loses or does not exercise the right to monitor management of the organization and is termed as the strong executive. The second case is called the strong ownership and is distinguished by an owner taking over implementations of the decisions. The focus of the study was to explore particularly configurations of the strong executive and the strong governance. A mixed method research design was chosen to explore the differences between the basic governance configurations. The sample was chosen by purposive sampling and covered a hundred for-profit organizations of all size and from all sectors of economy. The data were collected through interviews with representatives, mainly members of top management. We revealed that both of these configurations can bear good corporate performance but also bigger risks. The strong executive is typical for organizations with dispersed ownership or a publicly owned organization and the performance of the organization is fully dependent on competencies but also personalities of managers. This configuration contains a high risk of misuse of authority. The strong ownership is effective in small organizations while in a larger organization leads to an overexertion of owners and low performance because they usually face problems to keep focus on the strategic issues of the organization.Existuje několik základních konfigurací správy podle oddělení vlastnictví a kontroly (Jensen teorie). Efektivní řízení je popsáno jako situace, kdy vlastník (nebo skupina vlastníků) udržuje právoratifikace a sledování strategických rozhodnutí. Při řízení má právo zahájit a provádět tato rozhodnutí. Existují dva zvláštní případy, kde toto doporučení neplatí a obě situace jsou spojeny s CEO dualitou.První případ se stane, když vlastník ztratí, nebo nevyužije právo kontrolovat management organizace a je pojmenován jako silná exekutiva.Druhý případ se nazývá silná správa vlastníka a vyznačuje se tím, že vlastník převezme implementaci rozhodnutí.Zaměření studie bylo zaměřeno na prozkoumání zejména konfigurace se silnou exekutivou a silnou správou.Smíšená metoda designu výzkumu byla vybrána, aby prozkoumala rozdíly mezi stanovenou konfigurací.Vzorek byl vybrán záměrným výběrem a vztahuje se na sto ziskových organizací všech velikostí a ze všech sektorů ekonomiky. Údaje byly získány prostřednictvím rozhovorů se zástupci, zejména členy vrcholového managementu. Zjistili jsme, že obě z těchto konfigurací mohou nést dobré firemní výsledky, ale také větší rizika. Silná exekutiva je typická pro organizace s rozptýleným vlastnictvím nebo ve veřejném vlastnictví organizace a výkonnosti organizace je plně závislá na kompetencích, ale také osobnosti manažerů. Tato konfigurace obsahuje vysoké riziko zneužití pravomoci.Silná správa je účinná v malých organizacích, zatímco ve větších organizacích vede k nízké výkonnosti, protože se obvykle potýká s problémy udržet strategické zaměření organizace.There are several basic configurations of corporate governance according to the separation of ownership and control (Jensen’s theory). Effective governance is described as a situation when an owner (or group of owners) keeps the right to ratify and monitor strategic decisions while management has the right to initiate and implement those decisions. There are two particular situations how this recommendation is partially broken and both situations are linked to CEO duality. The first case happens when an owner loses or does not exercise the right to monitor management of the organization and is termed as the strong executive. The second case is called the strong ownership and is distinguished by an owner taking over implementations of the decisions. The focus of the study was to explore particularly configurations of the strong executive and the strong governance. A mixed method research design was chosen to explore the differences between the basic governance configurations. The sample was chosen by purposive sampling and covered a hundred for-profit organizations of all size and from all sectors of economy. The data were collected through interviews with representatives, mainly members of top management. We revealed that both of these configurations can bear good corporate performance but also bigger risks. The strong executive is typical for organizations with dispersed ownership or a publicly owned organization and the performance of the organization is fully dependent on competencies but also personalities of managers. This configuration contains a high risk of misuse of authority. The strong ownership is effective in small organizations while in a larger organization leads to an overexertion of owners and low performance because they usually face problems to keep focus on the strategic issues of the organization

The association of selected economic parameters in construction output – an international comparison

The aim of this article is to illustrate the impact which the ongoing economic crisis, together with the 2012 amendment to the Public Procurement Act, has had on the construction industry in the Czech Republic (CR) and in neighbouring Austria. In 2012 and 2013, a research project entitled ‘Cross-border cooperation between construction companies in the South Moravian Region, Lower Austria and the city of Vienna’ was carried out. The research took the form of a questionnaire addressed to 3000 construction companies in these regions. The results of the questionnaire then underwent statistical analysis. The research showed that in the CR price was no longer linked with quality in construction work and that customers were guided by other measurable criteria, such as the warranty. The statistical investigation among companies also showed that there is a clear relationship between quality and the cost of the work carried out, and that the warranty is an important criterion for measuring the quality of construction work

Contemporary Approaches to Corporate Governance

The description of contemporary application of Corporate Governance principles in Czech companies. The prezentation of Corporate Governance decision steps. The definition of Corporate Governance individual practices in Czech companies. Presentation of future system development of Corporate Governance in Czech companies.management, Corporate Governance, practices

Family Businesses in the Corporate Governance of MNCs

The issue of family businesses is currently a very topical theme in the academic world. The importance of family businesses increases with internationalization and is associated with business success in global market conditions. A fundamental part of business activities abroad is the correct application of the corporate governance of subsidiaries of multinational family businesses. The available findings do not cover this area sufficiently, especially in the context of transformed economies in CEE. In view of the nature of foreign business activities, the degree of centralization of competences transferred between subsidiaries and headquarters and the presence of expatriates from the headquarters of multinational companies represented by the family firm in statutory bodies can be regarded as important variables. The main aim of the present paper is, based on research carried out, to describe and analyze the degree of centralization and presence of expatriates in the corporate governance of subsidiaries of multinational family businesses operating in the Czech Republic. The paper presents the results of an empirical investigation with a description of the presence of expatriates in the statutory bodies of subsidiaries of multinational companies in the Czech Republic. The results obtained present the number of subsidiaries corresponding to the definition of a family business with an emphasis on SMEs of up to 250 employees and the degree of centralization and presence of expatriates in administrative or executive authority, or in other positions. The sample which was used to research the family business comprised 214 subsidiaries of multinational companies from the most important sectors of the Czech economy