Darko Tipurić

Concentration of the insurance industry in selected transition countries of Central and Eastern Europe, 1998–2006

Until the beginning of the 1990s the insurance markets of the transition countries of Central and Eastern Europe were highly concentrated, which means that one or only a few state-owned insurance companies operated on the market, with the market share of the leading company higher than 90%. At the beginning of the 1990s private investors entered the majority of economic sectors, including the insurance market. The entry of new companies has led to a decrease in concentration, i.e. to increased competition. This article analyses the dynamics of concentration of the insurance industry, and seeks to determine the impact of the leading insurance company on the development of the insurance market. Furthermore, the article examines the influence of the purchasing power of the population, measured by gross domestic product per capita, on the development of the insurance market and considers the potential scenario of development of the insurance market in the future.

Cultural differences affecting decision-making style: a comparative study between four countries

The aim of this paper was to identify the impact of national culture on decision-making styles in selected countries: Croatia, Slovenia, Bosnia and Herzegovina and Hungary. The estimation of Hofstedes dimensions of national cultures and comparative analyses was carried out by using a narrow-sample strategy. The estimated positions on each dimension confirmed the Hofstedes original research ranking. The result with significant value was the confirmation of the global trend of decreasing power distance and significant movement towards the individualism. Besides the standardization procedure of comparative cross-cultural analyses, variance analyses were used to identify cultural differences in decision-making styles related to complex decisions. The proposition is that complex decisions are, above and beyond all others, the consequence of social and cultural values installed in every individual. Statistically significant dependency was identified for hyper-vigilant and vigilant decision-making style and national cultures dimensions. A beneficial goal was to identify the differences and the similarities in value orientation and those in the decision-making style which should not be mistreated as they may influence future business cooperation and political and economic integrations within the CEE context.

Internal and External Supervisory Mechanisms in Corporate Governance

Internal and External Supervisory Mechanisms in Corporate Governance Good corporate governance depends on well balanced relations between supervisory mechanisms in the corporate governance process. Relations between the supervisory board, as the internal supervisory mechanism, and external auditing, as the external supervisory mechanism, are crucial for the development of good corporate governance practice. This paper focuses on analyzing the relationship between the supervisory board and external auditing in order to determine the current state of that relationship in the Republic of Croatia and to determine possible guidelines for improving the relationship between the supervisory board and external auditing in practice. In addition, this study analyzes the relationship between the supervisory board and external auditing, which could lead to the maximum efficiency of both the supervisory board and external auditing and tests that relationship in practice using publicly traded companies in Croatia. This study also analyzes the impact of the audit committee on the efficiency of the supervisory board and external auditing.

TOP MANAGEMENT CHANGES AND STAKEHOLDER ORIENTATION: CASE OF CROATIA

Stakeholder theory of the corporation was developed as an alternative to the prevalent system of corporate governance with shareholders being the only group managers are responsible to. Top management’s responsibility goes far beyond shareholders alone, because the corporation is not merely an instrument for maximizing shareholders’ wealth, but also is a social entity with broader and more complex purpose and role. Top management should balance multiple interests, demands and claims of various stakeholder groups and therefore top management’s success can not be easily and unambiguously described using traditional performance measures based on return on equity. The challenges top managers are facing can be better expressed by a question: How can they satisfy (often conflicting) stakeholders’ demands while maximizing firms’ wealth creating capacity at the same time? Top management’s position and role within the structure of corporate governance are determined by firm’s stakeholder orientation ; power constellations, shifts in negotiating positions and interactions between various stakeholder groups, so our main research goal was to expand the understanding of the context, reasons and circumstances of top management changes, starting from the basic premises of the stakeholder theory of the corporation. The results of this research indicate that there are differences in stakeholder orientation regarding top management changes, and the observed differences are even larger when the change was forced. The results of this research also suggest that managers may engage in active stakeholder management as to protect their own position-as part of a managerial entrenchment strategy.

Manufacturing Strategies in Selected European Countries

Our contribution to the manufacturing strategy research is to identify the strategic manufacturing practices among manufacturers in selected EU countries and to identify differences, if any, among Croatia, Germany, Hungary, Ireland, Poland, and Ukraine. The Global Manufacturing Research Group (GMRG) is an international community of researchers studying the improvement of manufacturing supply chains worldwide, and the data was a subsample from the Round V GMRG. The multi-focus cluster appeared to compete on all capabilities (but dominantly on quality, cost, and delivery and in that order) and may be supporting the cumulative model rather than the trade-off approach which competes on a single competitive priority. This puts additional pressure on manufacturing companies which have to provide exceptional quality and reliable delivery at the price that is not significantly higher. These findings suggest that the manufacturing strategy needs to be focused at country level rather than as a global perspective with a single dominant model.

Assessing the applicability of a corporate governance index in Maltese listed entities

This paper sets out to establish to what extent, if any, a corporate governance index (CGI) is suitable and applicable to Maltese listed entities (MLEs). Two sets of semi-structured interviews were held with seven financial analysts and 13 MLEs. This was followed by a CGI survey sent to the same MLEs previously interviewed and an analysis of their Annual Reports for the three-year period 2011-2013. A CGI model purposely designed for the present study was then tested on two MLEs. Findings show that corporate governance in Malta is not given appropriate importance by MLEs. Yet respondents agreed to CGI introduction in order to improve current CG practices. The study goes on to assess the impact, benefits and limitations of such a CGI in Malta and provides feasible recommendations which may help towards the consolidation of corporate governance in MLEs.

Exploring Use of Media Content Analysis in Competitive Dynamics Studies

Media content analysis is commonly used as a tool for data collection in competitive dynamics research. Competitive dynamics give a comprehensive longitudinal view on competitive moves and responses effects which are measured through various models that bring insight on the consequences on performance of observed firms. Research in competitive dynamics deeply reveals competitive behavior of firms, focusing not only on the competitive moves of one competitor but also on detailed interaction of all of them in their “market battle”. The prerequisite for the research is undoubtedly the high-quality data sources and well-designed data analysis. Presented in the paper were a number of issues we faced during the conduct of our recent study in which 2,699 media reports on competitive moves were collected in seventeen firm dyads in Croatia.

Market for Corporate Control, an External Mechanism of Corporate Governance – Case Study of Pliva’ s Takeover

Main goals and objectives of this case are to present the market for corporate control, external mechanism of corporate governance, at work. During the summer of 2006, Pliva was the subject of a bidding war between Iceland’ s Actavis and US-based Barr Pharmaceuticals making the first significant takeover of a publicly traded Croatian corporation. Scenario of Pliva’ s takeover offers everything that today’ s takeover can offer – from so called “ hostile takeover” , strong public and hidden pressures on management of the regulatory body for capital markets to classical business and political intrigues.

THE EFFECTS OF ESOP IMPLEMENTATION ON ATTITUDES TOWARDS WORK AND ON OWNERSHIP CULTURE DEVELOPMENT - CASE STUDY OF AD PLASTIC SOLIN

Croatia is a country with the economy in transition from a specific communist system to the market economy, preparing its candidacy for the EU membership. Privatization process in the last decade brought up many problems and opened many questions. Employee ownership was one of those, undoubtedly. AD Plastic, a large manufacturing firm from Croatia, used ESOP as an insider privatization method and as a means of protection against hostile takeover threat from a Canadian company. The AD Plastic case is a framework through which different aspects of employee ownership in a transition economy can be seen and better understood in both firm and worker outcomes terms.

Privatization Process in Croatia – Case Study of Croatia Insurance Company

Croatia insurance company is the leading insurance company in Croatia according to total premium income. The Croatian government started the privatization process twice. The first tender for the sale of 51% of share was announced on July 30th 1999 and due to inadequate offers, which underestimated the value of Croatia insurance company, was revoked. Privatization models differ in implementation models, in ownership structure after privatization and in the way the company itself functions. The choice of privatization model isn’ t easy and should be based on set goals and understanding relevant circumstances of the privatization process. Each model has different implications on political and other goals. The optimal time dynamics of the privatization process for Croatia insurance company should be divided in two phases: first phase in which a part of shares should be offered in a IPO by the middle of 2008 and the rest of the shares should be used for stock distribution to shareholders and second phase which should follow after five years, or after it is certain that preconditions are set out. One of the main goals of privatization is the increase of profitability and success of business activities. It is therefore crucial to ensure that privatization is not reduced to only forming a new owner’ s structure but it should also introduce changes in the system of corporate management of Croatia insurance company.