What it's all about

 

“Entering the EU – Broadening boundaries or breaking limits?”

After signing the accession treaties, which provide the legal basis for entry in the European Union (EU), Slovakia has faced a lot of change. The entry in 2004 has not only been associated with gaining new rights and responsibilities, but also with the demand to comply with EU standards. For instance, each candidate country must be institutionally stable as a guarantee for democratic governance, protect minorities and show respect for human rights. Concerning economic criteria, the market economy has to be functioning with the ability to withstand competitive pressure in the enlarged European Union. And most important, a Member State needs to harmonize the system of law with the EU and demonstrate the ability of its implementation in practice. 

Ever since, compliance has been one of the upcoming key terms in the emerging business world. Compliance refers to the observance of all measures designed to ensure that the business activities are conducted in a manner that complies with applicable legislation and business practice. Furthermore, compliance also ensures that all business transactions are conducted in accordance with social rules and values that are morally and ethically acceptable. The compliance system should serve to prevent or limit damage, to discover and correct violations in a timely manner and to meet statutory organizational obligations. However, compliance aims not only to reach different requirements, but also establish new business opportunities for the future. 

Not only in improving business processes, but also in enhancing the effectiveness of regulations and organizational goals, compliance plays a significant role. Especially, in today´s times where multinational enterprises (MNE) spread their subsidiaries across several countries on different continents, the exchange of information and experience leads to the development of a more consistent approach towards various processes. The great variety of both environmental and institutional challenges within Europe can only be tackled through close cooperation between existing networks.

 Particularly in the newly acceded Central European Members States, such as Slovakia, this topic is very up to date, since no matter whether it is a huge MNEs or a local company, entities in these emerging markets have to comply with both, company, governmental and EU wide regulations. Key words, such as corporate conduct, know how protection and antitrust law, play a major role during merger and acquisition (M&A) and foreign direct investment (FDI) in these countries. With the theme “Entering the EU – Broadening boundaries of breaking limits?” we want to investigate whether a country such as Slovakia meets the demands and expectations of other European countries and the international business community, and while doing so, what difficulties might be faced. 

Within the different subthemes we try to discover, what exactly has changed after entering the EU and particularly which rules and regulations are either beneficiary for Slovakia or rather a burden on the country´s economy. Nonetheless, three distinctive perspectives need to be taken into account: Firstly, what has changed from a company´s point of view? How do the different units spread across the continent all comply with certain rules and standards? Secondly, what has changed on the country’s level? How did the market change and what effect did specific Slovakian regulations influence have on the corporation? Thirdly, what has changed on the EU level? Which new rules and regulations have been established or harmonized after the entry in the EU? What were the key challenges the government faced in this transition phase and how did the environment change over time?

 

Subthemes:

Each subgroup has been assigned to a certain subtheme. As the conceptual model indicates, each subtheme has a unique contribution to the main theme. In this research we are particularly interested, which standards, demands and expectations have to be met in order to successfully enter the EU and improve business processes. Please do not hesitate to come up with your own questions and think beyond the framework given. However, please keep in mind that subthemes must not overlap. 

1. Strategy

Obviously, not only local firms, but especially many multinational companies are located in Slovakia. Strategy is the direction and scope of an organisation over the long-term, which achieves advantage for the organisation through its configuration of resources within a challenging environment. Different companies might use various entry modes and different approaches to FDI to successfully establish business in a foreign country. The entry mode in general depends on the organization’s objectives, which are influenced by the choice or need for reaching certain requirements and establishing further business opportunities. Without doubt, the organization needs to find the best fitting strategy to compete on the European market and comply with all existing regulations and requirements. In general, what is the best strategy to survive on the market with an increasing number of competitors, standards and regulations? With the entry in the European Union, did the strategy specifically change, not only FDI wise, but also company wise? To what extent does the fast moving environment call for a change or adjustment in the strategy? Concerning international trade, has any significant change in the strategy taken place after the entry in the EU?

 2. Sustainability

 In times of international collaboration and globalization, sustainability plays an increasingly significant role. In most industries, companies can only maintain their market position by retaining a high rate of innovation and continuous development process. Additionally, technology can be adapted or changed in order to be able to produce in a more sustainable way. These new sustainable business processes might lead to new opportunities, while complying with existing rules and regulations. Additionally, many organizations want to be sustainable and protect the environment through corporate governance and corporate social responsibility (CSR) policies. CSR, for instance, encourages organizations to consider the interests of society by taking responsibility for the impact of the organization's activities on customers, employees, shareholders, communities and the environment in all aspects of its operations. This extends legislation and is seen as organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large. Both dimensions of sustainability, the development that has a long term viability to survive for the company involved, as well as the development that incorporates respect for the environment need to be taken into account. What are key factors for a company to survive in the long run on a market? Did the approach to sustainable development change over time? In which way might sustainability provide new opportunities?

3. Market environment

Generally, the environment can be divided in the 'macro-environment,' (national level), the 'micro-environment' (individual company) and the ’meso-level’ (sector level, for instance the dairy industry or metal industry). It surrounds the organization and affects a company's operations. Different actors can be found in the environment, each responsible for meeting specific demands and expectations on local, national and global level, including, consumers, competitors, stakeholder, suppliers, market barriers, government regulations and industry trends. Concerning the entry in the EU and the change which has taken place in the enlarged market environment, the focus will be on consumers, suppliers and market barriers: After the EU entry in 2004, did significant changes take place within the market environment? Did the level of market barriers increase due to more intense competition and competitive pressure from other European countries? Is there an important difference between operating on the local (domestic) market and the export market? What impact does the market environment have on consumers and suppliers in the domestic, import and export market?

 4. Culture

 When entering the EU not only economic factors, but also a country’s culture, corporate values and business ethics need to be taken into account. In general, culture can be divided into corporate and national culture. While corporate culture focuses more on the way things are done and consists of largely unspoken values, norms and behaviours; national culture consists of the values and norms of a specific country, as well as its history, believes, shared attitudes, values and goals. A company’s success is largely built on trust - not only on that of its business partners, shareholders and the public, but also and especially on that of its employees. But trust cannot be taken for granted. It has to be earned by ensuring transparency, reliability and fairness. In the long term, only a company that respects both law and ethics can succeed nationally and internationally in today's business world. Thus companies want to hold company values high in order to maintain and strengthen the reputation as a credible and reliable partner throughout the business community. But, which are the most important factors within the corporate, as well as national culture? Which professional business ethics and corporate values does a company esteem highly? Do foreign firms adapt to the host countries culture and how do they deal with these cultural differences? Or, do they simply demand that their employees share their international company values, work attitudes and norms?

 5. Labour

When entering the EU and complying with certain standards and regulations, both companies and countries have to focus on their labour market. Not only local demographic characteristics, such as age, gender, education, income, but also the human resource management (HRM) strategy needs to be taken into account. When entering the EU, logically, the labour market expands, since, for instance, the General Agreement on Trades and Services (GATS) allows citizen to freely provide services in several countries. A couple of years ago Slovakia has been an attractive country for investment due to low labour costs – but times have changed. Certainly, each and every company has its own HRM strategy and standards, when hiring and training their employees, but so does the bargaining power of labour unions differ as well. In general, what are the main difference between the large multinational companies and local Slovakian firms, concerning the wage levels, training, terms of contract and job opportunities? Does the labour force meet the demands of the EU? Do certain labour regulations exist and how does the company manager their staff in general? Additionally, where are the higher and lower educated people living, in the cities or rather in the rural areas? How are various skill levels and occupations geographically distributed?

To apply for ESR Bratislava please click here and fill out the application before 24.2.2012

Please notice that after you send the application you will be asked to send your CV, your motivation letter and a short answer to the question: “In your opinion, what are the effects of entering the EU on a country?”

We are looking forward to receiving your application

The committee consists of:

Erik de Jong           -    Chairman

Erik Breeuwsma    -   Treasurer and travel coordinator

Celine Göbel          -    Research coordinator

Steven Verhoeven -    Aquisition

Carolina Castillo   -   Aquisition

Eike Ellerbrock      -    Publich relations