The Editor's Corner
Boštjan Antončič
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Institutional Environment and MNEs’ Strategy in Transitional China
Yongqiang Gao

MNEs face a complex institutional environment when doing business in the international market. As a result, MNEs adopt strategies to deal with the institutional pressures. However, present studies seldom discuss the institutional environment of a given country, specifically China. Therefore, the strategies that MNEs can use to cope with the institutions in China are far from being discussed. This study contributes to making up this gap. In this study, the identified important institutions in China are Chinese culture, governmental system, and non-governmental organizations (NGOs). They exert coercive and normative pressures on the operations of MNEs. Four strategies can be selected by MNEs to deal with the institutional pressures: guanxi strategy, commitment strategy, competitive strategy and leverage strategy. Guanxi strategy and commitment strategy are commonly used to build good guanxi with Chinese governors and NGOs. Competitive strategy is used when MNEs have high bargaining power against Chinese governments, while leverage strategy is used MNEs in setting conflicts between different institutions or parties to resist the unfavorable pressures from institutions in China.

Key Words: China, institutional theory, institutional environment/pressure, multinational enterprise (MNE)
JEL Classification: F23
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Service Recovery in Transition Economies: Russia and China
Wendy K. T. Gubler, Matthew W. McCarter, Kristie K. W. Seawright, and Yuli Zhang

While processes for transition from planned to market economy vary, there is one common outcome from the transition process – more discriminating customers. Growing customer expectations increase the possibility of failing to meet those expectations. In competitive market economies service failures are accompanied by new consequences of lost customer loyalty. These potential losses to service providers that can result from service failures necessitate the implementation of service recovery. In this study researchers investigated the role of service recovery in two major economies that are currently in transition from a planned to a market economy: Russia and China. Four recovery systems were examined within the context of two levels of service failure criticality. Service recovery system design was found to matter in customer recovery in both Russia and China, but Chinese respondents reported higher levels of recovery success. Interaction effects also suggest that the common experience of transition from planned to market economy did not produce exactly the same response to service recovery efforts.

Key Words: economies in transition, cross-cultural customer perceptions, empirical research, service recovery
JEL Classification: F23, L80
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The Impact of the Quality Management System ISO 9000 on Customer Satisfaction of Slovenian Companies
Franka Piskar

Many companies invest great efforts into achieving appropriate organization and through it better quality of products and services. They try to achieve this in a systematic way following the standard ISO 9000. Implementing iso is a management decision that requires consideration of company’s operations, strategy, staff and, most importantly, customers. The theoretical part of the research is focused on literature review. Second part-empirical research has been done on the basis of structured questionnaires gathered from 212 responses of Slovenian companies that had already acquired the iso 9000 quality standard certificate by 2002. We have posed eight questions about the impact of the ISO 9000 on customer satisfaction. The research results in Slovenian companies confirm the ISO 9000 quality standard’s impact on better satisfying customers’ needs and demands, but not the direct impact on business success. This paper also presents a very useful source of solutions and information for managers and researchers in the field of quality systems and customer satisfaction. Additionally, it comprises an short overview of customer relationship management (CRM) as a system that companies can use for monitoring and satisfying the needs of a customer during any given interaction.

Key Words: ISO 9000, quality management systems, customer satisfaction, customer relationship management, marketing
JEL Classification: L15, M31
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The International Headquarters–Subsidiary Relationship: Projecting Economic Cultural Influences on Management within Selected EU Countries
Rune Gulev

Through the recent European Union (EU) enlargement it is now supposed that there exists significant divergence within European economic cultures that can negatively impact international managerial functions. This article systematically investigates two dimensions through which economic culture can be measured and compared between four EU countries: Slovenia, a new Central European entrant into the EU, and Germany, Austria and Denmark, three westernized EU members, and projects their respective impacts onto several international management functions. The findings suggest that there exists a strong link between highly interpersonal and institutional trust driven economic cultures (IITDEC) to induce increased horizontal knowledge sharing. Further evidence was found, although statistically weaker, that IITDEC is negatively correlated to expatriate utilization. Results were also obtained regarding authority driven economic cultures (ADEC). A negative correlation between ADEC and decentralization was established as well as a negative correlation between ADEC and vertical knowledge flows.

Key Words: economic culture, headquarter–subsidiary relationship, international management
JEL Classification: Z10, F23
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Cultural Diversity, Competencies and Behaviour: Workforce Adaptation of Minorities
Waheeda Lillevik

The increasing mobility of people around the world has resulted in an increasingly culturally diverse workforce, particularly in Canada, where multiculturalism is embraced and government policies are enforced in order to ensure that the Canadian workforce is representative of its population in terms of race and ethnicity. However, there are still differences in employment conditions between minorities and non-minorities in Canada. Many organizations use competency modeling as a basis for employment decisions, particularly for managerial jobs, and some of the behaviours outlined in competency models can be linked to what has been identified as organizational citizenship behaviours (OCB). This use of competencies (and thus possibly OCBS) may be a contributor to the employment gap in Canada. Acculturation as a way to mitigate this gap is also discussed. More research in these areas needs to be done to bridge the gap between practice and theory.

Key Words: cultural diversity, acculturation, competency, OCB
JEL Classification: J61, J71
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