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SUMMARY

LIVING IN THEIR SHOES: A UNITED STATES-BASED LOOK AT THE MANAGERIAL PROCESSES IN LOCALLY OWNED, EASTERN EUROPEAN ENTREPRENEURIAL ORGANIZATIONS

Amy L. Kenworthy, University of North Carolina at Chapel Hill
William J. Bigoness, Boston University

Principal Topic

Today’s business environment is becoming increasingly global. United States multinational organizations are investing heavily in overseas markets. These organizations often enter into partnerships with small, locally owned entrepreneurial ventures. For many of these partnerships, or joint ventures, one of the most difficult stumbling blocks for effective partnering relates to organizations’ internal human resource processes. The purpose of this study is to better understand the patterns across human resource procedures adopted by small entrepreneurial firms in emerging markets. This study empirically explores western-trained MBAs’ perceptions of the managerial processes employed by host-national organizations in three Eastern European emerging economies: Lithuania, Poland, and Slovakia.

Method

Two forms of data, interview-based and archival, are used. The interviews were conducted with a sample of sixteen MBA Enterprise Corps participants. MBA Enterprise Corps participants are MBA graduates from top-tier business schools in the United States. Prior to the interview, each Corps member spent 12–16 months working as a manager in a small, locally owned entrepreneurial firm in Eastern Europe. The interviews were textually analyzed for Corps members’ perceptions of “managerial problem areas” in the entrepreneurial organizations. Follow up analyses, to test the frequencies of the problem areas derived from the interviews, were performed on 132 MBA Corps members’ quarterly reports (archival data). Results demonstrated twelve “problem areas” (e.g., responsibility avoidance, fear of change, inadequate training) in three managerial challenge categories (structural, behavioral, and cognitive).

Implications

These findings have both practical and theoretical implications. Practically speaking, partnerships often fail because the involved partners do not spend enough time exploring potential managerial differences and ways to overcome them. The results of this empirical examination should provide managers from U.S. based multinational organizations with a better understanding of the human resource procedures employed across small locally-owned entrepreneurial organizations in Eastern Europe. With a clearer understanding of what happens inside small entrepreneurial organizations in emerging markets, managers from large U.S. based multinational organizations can better prepare themselves for the potential managerial conflicts associated with joint venture partnerships. For both scholars and practitioners, the problem areas identified in this study provide a foundation for further investigation into perceived differences across managerial processes in developed versus emerging economies.

CONTACT: Amy Kenworthy, 4404 McColl Building CB#3490, Kenan-Flagler Business School, University of North Carolina at Chapel Hill, Chapel Hill, NC, 27599-3490; (T) 919-962-3114; (F) 919-929-7088; kenworta@icarus.bschool.unc.edu.