IDEAS home Printed from https://ideas.repec.org/a/eee/eurman/v31y2013i4p373-389.html
   My bibliography  Save this article

Path-dependent evolution of compensation systems in Central and Eastern Europe: A case study of multinational corporation subsidiaries in the Czech Republic, Poland and Hungary

Author

Listed:
  • Festing, Marion
  • Sahakiants, Ihar

Abstract

This article presents the results of an embedded case study of compensation practices in the subsidiaries of a multinational corporation (MNC) in the Czech Republic, Poland and Hungary. We explore the path dependence of compensation systems in Central and Eastern European (CEE) countries prior to transformation and after the fall of state-socialist regimes. The results show that while major complementary institutions such as extensive state-socialist-type social welfare systems, which enhanced the developmental path during the state-socialist period, are non-existent during transformation, several factors on the macro, organisational and individual levels preserve the path. In addition, there are indications that the path dependence of pay practices in the region studied is moderated by a number of exogenous and endogenous sources of change, namely foreign parent companies of international subsidiaries, international management consulting companies, the growing importance and skill levels of HR professionals and generational change.

Suggested Citation

  • Festing, Marion & Sahakiants, Ihar, 2013. "Path-dependent evolution of compensation systems in Central and Eastern Europe: A case study of multinational corporation subsidiaries in the Czech Republic, Poland and Hungary," European Management Journal, Elsevier, vol. 31(4), pages 373-389.
    • Handle: RePEc:eee:eurman:v:31:y:2013:i:4:p:373-389
    DOI: 10.1016/j.emj.2013.01.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0263237313000170
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.emj.2013.01.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zbigniew M. Fallenbuchl, 1987. "Employment Policies in Poland," Palgrave Macmillan Books, in: Jan Adam (ed.), Employment Policies in the Soviet Union and Eastern Europe, edition 0, chapter 2, pages 27-54, Palgrave Macmillan.
    2. Gelbuda, Modestas & Meyer, Klaus E. & Delios, Andrew, 2008. "International business and institutional development in Central and Eastern Europe," Journal of International Management, Elsevier, vol. 14(1), pages 1-11, March.
    3. Buckley, Robert M & Hendershott, Patric H & Villani, Kevin E, 1995. "Rapid Housing Privatization in Reforming Economies: Pay the Special Dividend Now," The Journal of Real Estate Finance and Economics, Springer, vol. 10(1), pages 63-80, January.
    4. Kiriazov, Dimiter & Sullivan, Sherry E. & Tu, Howard S., 2000. "Business success in Eastern Europe: Understanding and customizing HRM," Business Horizons, Elsevier, vol. 43(1), pages 39-43.
    5. Rein,Martin & Friedman,Barry L. & Wörgötter,Andreas (ed.), 1997. "Enterprise and Social Benefits after Communism," Cambridge Books, Cambridge University Press, number 9780521584036.
    6. Jan Adam, 1984. "Employment and Wage Policies in Poland, Czechoslovakia and Hungary since 1950," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-06832-6, December.
    7. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    8. David, Paul A., 1994. "Why are institutions the 'carriers of history'?: Path dependence and the evolution of conventions, organizations and institutions," Structural Change and Economic Dynamics, Elsevier, vol. 5(2), pages 205-220, December.
    9. Roth, Kendall & Kostova, Tatiana, 2003. "Organizational coping with institutional upheaval in transition economies," Journal of World Business, Elsevier, vol. 38(4), pages 314-330, November.
    10. Angelo Giardini & Ruediger Kabst & Michael Muller-Camen, 2005. "HRM in the German Business System: A Review," management revue. Socio-economic Studies, Rainer Hampp Verlag, vol. 16(1), pages 63-80.
    11. David R. Henderson & Robert M. McNab & Tamas Rozsas, 2008. "Did Inequality Increase in Transition?: An Analysis of the Transition Countries of Eastern Europe and Central Asia," Eastern European Economics, Taylor & Francis Journals, vol. 46(2), pages 28-49, March.
    12. Jan Adam, 1987. "Similarities and Differences in the Treatment of Labour Shortages," Palgrave Macmillan Books, in: Jan Adam (ed.), Employment Policies in the Soviet Union and Eastern Europe, edition 0, chapter 6, pages 127-148, Palgrave Macmillan.
    13. Adina Dabu & Ruth V. Aguilera, 2005. "The Transformation of Employment Relations Systems in Central and Eastern Europe," Post-Print hal-00480384, HAL.
    14. Pierson, Paul, 2000. "Increasing Returns, Path Dependence, and the Study of Politics," American Political Science Review, Cambridge University Press, vol. 94(2), pages 251-267, June.
    15. Franz-Lothar Altmann, 1987. "Employment Policies in Czechoslovakia," Palgrave Macmillan Books, in: Jan Adam (ed.), Employment Policies in the Soviet Union and Eastern Europe, edition 0, chapter 4, pages 78-102, Palgrave Macmillan.
    16. Angelo Giardini & Ruediger Kabst & Michael Muller-Camen, 2005. "HRM in the German Business System: A Review," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 16(1), pages 63-80.
    17. Klaus E Meyer & Mike W Peng, 2005. "Probing theoretically into Central and Eastern Europe: transactions, resources, and institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(6), pages 600-621, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stor Marzena & Poór József & Engle Allen D., 2017. "Juxtaposition of Organizational Competitive Factors and Performance Evaluation in Conjunction with Their Implications for HRM in MNCs: Part One, Contextual Review and Comparison of Central European an," Journal of Intercultural Management, Sciendo, vol. 9(3), pages 79-118, September.
    2. Stor Marzena & Engle Allen D. & Poór József, 2017. "Juxtaposition of Organizational Competitive Factors and Performance Evaluation in Conjunction with Their Implications for HRM in MNCs: Part Two, Statistical Correlation Analysis within the Polish Find," Journal of Intercultural Management, Sciendo, vol. 9(3), pages 119-143, September.
    3. Berber Nemanja & Slavić Agneš, 2018. "The Development of Compensation System in Serbia: A Comparison of Two Successive Cranet Research Rounds," Economic Themes, Sciendo, vol. 56(1), pages 79-90, April.
    4. Akiebe Humphrey Ahworegba & Christophe Estay & Myropi Garri, 2020. "Institutional duality incidence on subsidiaries: configuration, differentiation and avoidance strategies," Post-Print hal-03632783, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carolina Castaldi & Giovanni Dosi, 2003. "The Grip of History and the Scope for Novelty: Some Results and Open Questions on Path Dependence in Economic Processes," LEM Papers Series 2003/02, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    2. Ron Martin, 2010. "Roepke Lecture in Economic Geography—Rethinking Regional Path Dependence: Beyond Lock-in to Evolution," Economic Geography, Taylor & Francis Journals, vol. 86(1), pages 1-27, January.
    3. Nicolò Bellanca & Stefania Innocenti, 2013. "Resistance to Change in Recent Italy: Some Elements for a Theoretical Framework," Working Papers - Economics wp2013_31.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    4. Ron Martin & Peter Sunley, 2010. "The Place of Path Dependence in an Evolutionary Perspective on the Economic Landscape," Chapters, in: Ron Boschma & Ron Martin (ed.), The Handbook of Evolutionary Economic Geography, chapter 3, Edward Elgar Publishing.
    5. Bruno Grancelli, 2012. "Bastions Of Irrational Conservatism? Shop-Floor Accounts And The Co-Evolution Of Organizational And Institutional Change In Russia," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 3(2).
    6. Leonhard Dobusch & Elke Schüßler, 2013. "Theorizing path dependence: a review of positive feedback mechanisms in technology markets, regional clusters, and organizations," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(3), pages 617-647, June.
    7. Jean‐Philippe Vergne & Rodolphe Durand, 2010. "The Missing Link Between the Theory and Empirics of Path Dependence: Conceptual Clarification, Testability Issue, and Methodological Implications," Journal of Management Studies, Wiley Blackwell, vol. 47(4), pages 736-759, June.
    8. Kiran Ismail & David Ford & Qingsheng Wu & Mike Peng, 2013. "Managerial ties, strategic initiatives, and firm performance in Central Asia and the Caucasus," Asia Pacific Journal of Management, Springer, vol. 30(2), pages 433-446, June.
    9. Arne Petermann & Georg Schreyögg & Daniel Fürstenau, 2019. "Can hierarchy hold back the dynamics of self-reinforcing processes? A simulation study on path dependence in hierarchies," Business Research, Springer;German Academic Association for Business Research, vol. 12(2), pages 637-669, December.
    10. Paeivi Karhunen, 2008. "Toward convergence in the St. Petersburg hotel industry through the lens of institutional theory," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 13(2), pages 106-128.
    11. Schien Ninan & Jonas F. Puck, 2010. "The internationalization of Austrian firms in Central and Eastern Europe," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 15(3), pages 237-259.
    12. Hugo Priemus & Bert van Wee (ed.), 2013. "International Handbook on Mega-Projects," Books, Edward Elgar Publishing, number 14791.
    13. Irina Jormanainen & Alexei Koveshnikov, 2012. "International Activities of Emerging Market Firms," Management International Review, Springer, vol. 52(5), pages 691-725, October.
    14. Mihailova, Irina, 2015. "Outcomes of learning through JVs for local parent firms in transition economies: Evidence from Russia," Journal of World Business, Elsevier, vol. 50(1), pages 220-233.
    15. Kevin Deegan-Krause & Zsolt Enyedi, 2010. "Agency and the Structure of Party Competition: Alignment, Stability and the Role of Political Elites," EUI-RSCAS Working Papers 9, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    16. Khurshid Djalilov & Christopher A. Hartwell, 2023. "The spirit is willing, but the institutions are weak: disclosure of corporate social responsibility and the financial sector in transition," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(2), pages 385-427, June.
    17. Chantal C. Cantarelli & Bent Flyvbjerg, 2013. "Mega-projects’ cost performance and lock-in: problems and solutions," Chapters, in: Hugo Priemus & Bert van Wee (ed.), International Handbook on Mega-Projects, chapter 15, pages 333-355, Edward Elgar Publishing.
    18. Foxon, Timothy J. & Pearson, Peter J.G. & Arapostathis, Stathis & Carlsson-Hyslop, Anna & Thornton, Judith, 2013. "Branching points for transition pathways: assessing responses of actors to challenges on pathways to a low carbon future," Energy Policy, Elsevier, vol. 52(C), pages 146-158.
    19. E. Conesa, 1998. "Organizational Dynamics and the Evolutionary Dilemma between Diversity and Standardization in Mission-Oriented Research Programmes: An Illustration," Working Papers ir98023, International Institute for Applied Systems Analysis.
    20. Jakob Edler & Jan Fagerberg, 2017. "Innovation policy: what, why, and how," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 33(1), pages 2-23.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eurman:v:31:y:2013:i:4:p:373-389. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/115/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.