The International Headquarters–Subsidiary Relationship: Projecting Economic Cultural Influences on Management within Selected EU Countries

Rune Gulev
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Rune Gulev: Reutlingen Fachhochschule, Germany

Managing Global Transitions, 2007, vol. 5, issue 1, 63-83

Abstract: 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.

Keywords: economic culture; headquarter–subsidiary relationship; international management (search for similar items in EconPapers)
JEL-codes: F23 Z10 (search for similar items in EconPapers)
Date: 2007
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