Devolution or (de)centralization of HRM function in European organizations

This article deals with the condition and changes of the HRM function in various European states. These changes have shown a shift of HRM tasks from HRM departments to managers themselves, and are according to the literature, this shift is known as devolution or decentralization. Our attention is focused on important factors in this process (from organizational ones, such as HRM strategies and policies, to more environmental ones, such as the sector or the state). Analysis shows that the country (as an institutional environment) sets the limits or encourages development towards devolution. HRM policy within the individual institutional context is of only secondary importance. Results show that country is a factor that fosters divergent tendencies and HRM policy accelerates convergence in HRM practice.     

Outward FDI and Productivity: Micro‐evidence from Slovenia

This paper uses a rich data set of Slovenian manufacturing firms active in the period 1994–2002 that contains information on outward FDI and exports to different markets in order to test three empirical hypotheses that relate the decision for outward FDI to total factor productivity. First, the evidence supports the hypothesis proposed by Helpman, Melitz and Yeaple (2004) that more productive firms are more likely to invest in a foreign affiliate. Second, the hypothesis proposed by Head and Ries (2003 ) that less productive firms may be encouraged to invest in low‐income countries is rejected by the data. However, the main contribution of the paper is to confirm the third hypothesis that required firm's productivity increases with the number of markets that the firm serves, i.e. there is a positive relationship between the number of a firm's foreign affiliates and its total factor productivity.     

Endogenous gradualism and the Slovenian puzzle

We use EBRD transition index to classify transition countries into gradualist and orthodox reformers. When comparing this classification with records of economic and political reforms before the breakdown of socialism, an apparent historical regularity emerges. Countries where transition was to an extent »endogenous« were more likely to choose a gradualist strategy, whereas countries where a strict socialist regime was upheld until its breakdown, were more likely to decide for an orthodox »big-bang« approach to transition. Some political economy explanations for this regularity are suggested.The second part of the paper explores Slovenia's experience in some detail. We present the discussion on the benefits and pitfalls of its gradual approach to reforms, showing that gradualism may slow down important structural reforms in the second phase of transition and thus negatively affect competitiveness and the long-run growth performance of a country. Moreover, since the gradualist approach to transition has increased institutional rigidity and created a kind of political economic equilibrium, an »endogenous« changeover to a more dynamic reform agenda is unlikely. We report on the recent more ambitious structural reforms agenda introduced in the country and conclude that it amounts to merely a »gradual move away from gradualism«. We conclude by offering some tentative political economy interpretations of these developments.