Marina Lovrinčević

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.

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.