Blockholding and organisational diversity: the case of a transition economy

Abstract

We approached the issue of blockholding effectiveness and behaviour by studying some exemplary organisational transformations in the Republic of Srpska. We found two distinct clusters of blockholdings. The first cluster is workerentrenched blockholdings, where most workers are unionised. The second cluster constitutes worker-liberal blockholdings, where most workers are not unionised. There are two distinct subgroups in this cluster. The vast majority of blockholdings in the first subgroup developed a prevailing role of the capital owner, heavyweight management and a less trained workforce. The second subgroup nurtures reciprocity of management and core workers' cognitive assets, and is also the most productive. Wir haben die Wirksamkeit und das Verhalten von Großaktionären anhand von organisationalen Transformationen in der Republik Srpska erforscht. Wir entdeckten zwei verschiedene Gruppen von Großaktionären. Die erste Gruppe besteht aus fest verwurzelten Arbeiternehmer-Großaktionären, wobei die meisten Arbeitnehmer gewerkschaftlich organisiert sind. Die zweite Gruppe umfasst liberale Arbeitnehmer-Großaktionäre, wobei die meisten Arbeiter nicht gewerkschaftlich organisiert sind. Es gibt zwei verschiedene Untergruppen in dieser Gruppierung. Die große Mehrheit der Großaktionäre in der ersten Untergruppe entwickelte eine dominante Rolle der Kapitaleigner, ein starkes Management und weniger gut ausgebildete Arbeitskräfte. Die zweite Untergruppe fördert die Wechselwirkung zwischen dem kognitiven Vermögen von Management und Kernarbeitern und stellt zudem die produktivste Gruppe dar.

When is blockholding growth enhanced?

“…It is found that blockholding relates more to Continental European governance structure (insider governance structure) than to Anglo-American governance structure market-oriented or outsider governance structure [5,12]. Empirical literature also indicates prevailing formation of blockholding after privatization in transition countries of Central and Eastern Europe (See for example, Earle, Kuscera, and Telegedy (2004) for Hungary; [25] for Slovenia; and [26] for Bosnia and Herzegovina). Private benefits of control or expropriating minority shareholders generating inefficiency has most often been emphasized as causing the problem for blockholding and multiple controls [16,30] (Other potential costs of blockholding could be due to decreased liquidity of equity [23] and misguided corporate strategic alignment [31].…”

The nature of corporate governance and performance in the conditions of ownership concentration

“…However, the situation has been strongly influenced by economic reforms on account of privatisation, liberalisation and globalisation in the past decades. One of the purposes of privatisation was to reform corporate governance and increase corporate efficiency (Prasnikar et al, 2014).…”