HUMAN RESOURCE MANAGEMENT ISSUES AND CHALLENGES IN FOREIGN OWNED COMPANIES: CENTRAL AND EASTERN EUROPE (2011-2013) József Poór – Allen D. Engle – Ágnes Szlávicz – Kinga Kerekes – Katalin Szabó – Ildikó Éva Kovács – Imola Józsa (eds.) 2015 Research monograph Editors Dr. József Poór Ágnes Szlávicz, PhD Ildikó Éva Kovács Professor of Management Associated Professor Faculty Engineer Allen D. Engle, PhD Kinga Kerekes, PhD Imola Józsa, PhD Professor of Management Assistant Professor Candidate Katalin Szabó PhD Candidate Langauge editor Mgr. Zsuzsanna Tóth Senior outside reviewers Levente Komor, PhD János Fehér, PhD Associate Professor, Director of the Institute Associate Professor, Head of Department Autors Ruth Alas, Professor of Management Dr. József Poór, Professor of Management Nemnaja Berber, PhD Candidate Marzena Stor, PhD, Associate Professor Dr. Katalin Dobrai, Associate Professor Ágnes Slavicz, PhD, Associate Professor Dr. Allen D. Engle, Professor of Management Adam Suchodolski, PhD, Associate Professor Dr. Ferenc Farkas, Professor of Management Zoltán Šeben, PhD, Associate Professor Mártonné Karoliny Dr., habil. Associate Professor Katalin Szabó, PhD Candidate Dr. Kinga Kerekes, Assistant Professor Martin Volosin, PhD, Professor of Management Ildikó Éva Kovács, Faculty Engineer Monica Zaharia, PhD, Assistant Professor Imola Józsa, PhD Candidate Contributors to the preparation of the research monograph Dr. Tamás Kolbe and Gábor Varga Prepared with the support of Faculty of Economics, J. Selye University Komárno, Slovakia Faculty of Business and Economics, University Pécs, Hungary Faculty of Economics and Social Science, Szent István University Gödöllő, Hungary Publishing by Faculty of Economics, J. Selye University Komárno, Slovakia Bratislavská cesta 3322, P.O.Box 54, 945 01 Komárno, Slovakia Publication year 2015 ISBN: 978-80-8122-151-4 EAN: 9788081221514 Rukopis bol pripravený s finančnou podporou EÚ v rámci projektu s názvom: "Zvyšovanie kvality vzdelávania tvorbou a inováciou študijných programov, rozvojom ľudských zdrojov a podporou kariérneho poradenstva" (ITMS: 26110230108) spolufinancovaného z Európskeho sociálneho fondu. Moderné vzdelávanie pre vedomostnú spoločnosť/Projekt je spolufinancovaný zo zdrojov EÚ Projekt je spolufinancovaný z Európskeho sociálneho fondu. The overview of the manuscript was supported within the project ´´Zvyšovanie kvality vzdelávania tvorbou a inováciou študijných programov, rozvojom ľudských zdrojov a podporou karierného poradenstva´´ in accordance with the Operational Programme of Education of the Slovak Republic. This project is co-financed by the European Union. Recipient of the grant is J. Selye University. HUMAN RESOURCE MANAGEMENT ISSUES AND CHALLENGES IN FOREIGN OWNED COMPANIES: CENTRAL AND EASTERN EUROPE (2011-2013) CONTENTS 1. INTRODUCTION (JÓZSEF POÓR) ..........................................................11 2. ABOUT THE CEEIRT RESEARCH MODEL (KATALIN DOBRAI–ALLEN D. ENGLE–FERENC FARKAS– MÁRTONNÉ KAROLINY–JÓZSEF POÓR) ....................................................12 2.1. MODEL ..........................................................................12 2.2. EMPIRICAL RESEARCH ...............................................................14 2.3. RESPONDING COUNTRIES ............................................................16 2.4. REPORTING FORMATS ...............................................................16 3. THEORETICAL BACKGROUND (KATALIN DOBRAI–ALLEN D. ENGLE–FERENC FARKAS– MÁRTONNÉ KAROLINY–RUTH ALAS–JÓZSEF POÓR) .........................................17 3.1. FDI AND EMPLOYMENT ..............................................................17 3.1.1. Global and regional trends ......................................................17 3.1.2. FDI and employment ..........................................................20 3.2. STRATEGIC ISSUES OF LOCAL SUBSIDIARIES ..............................................21 3.2.1. Objectives of the Firm .........................................................21 3.2.2. Development of subsidiaries .....................................................21 3.2.3. Origin of the firms ............................................................22 3.2.4. Mandate ...................................................................22 3.2.5. Relationship between HQ and subsidiary HR ........................................22 3.3. HR IN CEE REGION .................................................................23 3.3.1. Past .......................................................................23 3.3.2. HR in progress ...............................................................23 3.3.3. IHRM ......................................................................26 3.4. SOCIO-ECONOMIC AND CULTURAL CHARACTERISTICS OF COUNTRIES SURVEYED (RENATÁ MACHOVÁ) ...27 3.4.1. Socio-economic situation .......................................................27 3.4.2. Cultural characteristics ........................................................28 4. RESEARCH SUMMARY (ALLEN D. ENGLE–JÓZSEF POÓR–KATALIN ÓHEGYI–KATALIN SZABÓ) .......31 4.1. RESEARCH PARTICIPANTS ............................................................31 4.2. KEY INDICATORS OF HR ACTIVITY .....................................................32 5. HUNGARY (JÓZSEF POÓR–KATALIN SZABÓ–ILDIKÓ ÉVA KOVÁCS) .............................34 5.1. INTRODUCTION ...................................................................34 5.2. FDI AND EMPLOYMENT IN HUNGARY ...................................................35 5.2.1. Countries of origin ............................................................35 5.2.2. Sectoral distribution ...........................................................36 4 HUMAN RESOURCE MANAGEMENT ISSUES AND CHALLENGES IN FOREIGN OWNED COMPANIES: CENTRAL AND EASTERN EUROPE (2011-2013) 5.2.3. The number of foreign enterprises ................................................38 5.2.4. Employment .................................................................38 5.3. CHARACTERISTICS OF THE COMPANIES PARTICIPATING IN THE SURVEY ........................39 5.3.1. Company size ...............................................................39 5.3.2. Total number of employees .....................................................39 5.3.3. Mandate of the organization ....................................................40 5.3.4. Origin of the parent company ...................................................40 5.3.5. Year and form of establishment of the subsidiaries ....................................41 5.3.6. Field of operation: sector-industry ................................................42 5.4. MAIN DIRECTIONS OF DEVELOPMENT OF THE COMPANIES IN THE PERIOD EXAMINED .............43 5.4.1. Main strategic issues-orientations ................................................43 5.4.2. Main competitive factors in the period examined ....................................44 5.5. CHARACTERISTICS OF THE KEY INDICATORS OF THE HR FUNCTION ...........................45 5.5.1. Number of HR staff ...........................................................45 5.6. THE MAIN INDICATORS REPRESENTING THE IMPORTANCE AND RESULTS OF THE HR ACTIVITY ......46 5.6.1. Labor cost – operating cost ratio .................................................46 5.6.2. Relative size of the training budget ...............................................47 5.7. EXPATRIATES ......................................................................47 5.7.1. Foreign expatriates and their roles ...............................................47 5.7.2. Hungarian expatriates .........................................................48 5.8. THE OPERATION OF THE HR DEPARTMENT ...............................................49 5.8.1. The relationship between headquarters and local HR .................................49 5.8.2. Changes in the importance of HR functions ........................................50 5.8.3. Typical HR competencies for success ...............................................51 5.8.4. Primary responsibility of decision making in the main functions of HR .....................52 5.8.5. The role of external HR service providers ...........................................52 5.9. KNOWLEDGE MANAGEMENT IN HR ...................................................53 5.9.1. Personal competency development in HR ...........................................53 5.9.2. HR knowledge transfer between the parent company and the subsidiary ..................54 5.10. THE FUTURE TASKS OF HR ...........................................................55 5.10.1. The key business issues, trends for HR to face .......................................55 5.11. CHARACTERISTICS OF THE RESPONDING INDIVIDUALS .....................................55 5.11.1. Demographic characteristics and qualification .......................................55 6. POLAND (MARZENA STOR–ADAM SUCHODOLSKI–IMOLA JÓZSA–ÉVA ILDIKÓ KOVÁCS) ...........57 6.1. INTRODUCTION ...................................................................57 6.2. FDI AND EMPLOYMENT AT THE MULTINATIONAL COMPANIES IN POLAND ......................58 6.2.1. The development and sources of FDI inflow to Poland .................................58 6.2.2. Multinational companies: legal forms, origin of investors, employment ....................60 5 HUMAN RESOURCE MANAGEMENT ISSUES AND CHALLENGES IN FOREIGN OWNED COMPANIES: CENTRAL AND EASTERN EUROPE (2011-2013) 6.3. CHARACTERISTICS OF THE COMPANIES PARTICIPATING IN THE SURVEY ........................62 6.3.1. Company size ................................................................62