Download Institute for Human Sciences, Vienna

Dioscuri Research Project
Eastern Enlargement – Western Enlargement
Cultural Encounters in the European Economy and Society after the Accession
DIOSCURI Final Conference
Institute for Human Sciences, Vienna
April 20-22, 2007
Viola Zentai
THE RISE OF A BANKING EMPIRE IN CENTRAL AND EASTERN EUROPE
THE RAIFFEISEN INTERNATIONAL
Work in Progress
Please do not cite or circulate without permission of the author
Only for conference discussion
Banking has become a salient component of the transforming economies in Central and Eastern
Europe as only few of them had started to establish commercial banks during the old socialist
system. Due to their actual economic and symbolic power, banks tell about successful and less
successful privatization stories, mobilize imagination on wealth and monetary power, and set
norms of actions in management, organizational and human resource practices. This comparative
study will investigate encounters between actors and organizations in a genuinely transnational
space that the emergence of a successful banking group enacts in the countries of concerned in
the DIOSCURI project. The comparative inquiry has a unique chance for relying on case studies
prepared on five local (national) subsidiaries of Raiffeisen International as well as three other
banks, as test cases1.
Raiffeisen International demonstrates two distinctive phases of the history of a regional
multinational company in the making: the period of massive expansion of an Austria-based
mother firm in a territory where is assumes cultural familiarity, and the period of consolidation of
acquired assets and markets through an international shareholding company with relatively
decentralized organizational structure. Some older subsidiaries of the banking group experience
these two phases in a regular sequence in their lives, for the newer ones expansion phase is
already intertwined with a consolidation story.
1. Post-socialist circumstances shaping cultural encounters
Foreign investments and multinationals
It would be tempting to give an overview of the main paradigms of the literature on economic
transformations in CEE discussing the conditions and results of the appearance of multinational
companies in the region. The literature seems to offer diverging views and lessons depending on
the very subject of the inquiry, whether it is the transfer of social model, management technique,
institutional design, or some more complex topics. One can find in the literature some key nonsurprising observations. Accordingly, the degree to which an organization tends to model itself
on Western institutions depends on the stage of transformation in the country, the importance of
field/sector, and the ownership structure. Further, organizations remodel themselves on Western
organization in a specific field or sector in order to ensure survival, to gain legitimacy and
efficiency. The modes of adaptation differ according to the main characteristics of the
organization, in particular the ownership structure and size. In foreign-owned larger enterprises
imposition and imprinting is common, in large domestic firms acquisition, inducement, and
incorporation prevail, whereas small enterprises follow imprinting, incorporations, bypassing,
and acquisition of knowledge and patterns of economic behavior. It is becoming more interesting
to the DIOSCURI agenda how transfer and adoption of Western management concepts, structures
and instruments often face cultural barriers. It is observed that organizations in CEE countries
tend to solve inconsistency problems by de-coupling different parts of their economic practices
and developing a facade of legitimacy.2
1
Case studies have been completed on Raiffeisen Banks in Croatia, Hungary, Poland, Romania, and Serbia and in
Bulgaria on Z-Bank (fictional name), in Slovenia on Nova Ljubljanska Banka, and in Czech Republic on
Živnostenská Banka.
2
Lang and Steger (2002) p 287.
2
It is also relevant to our inquiry how typical patterns in the arrival of foreign direct investment
(FDI) are discussed in the literature. Many scholars see polarization between the expanding
service sector motivated by market access and the manufacturing sector motivated by efficiency
in terms of their impacts on management culture and in particular labor relations. The efficiency
seeking investment was dominant in the early 1990s in the pioneer countries of transformation in
Central Europe. In the second half of the 1990s, the higher-added value investments in
consideration of labor quality and productivity, not only labor cost, became more dominant. This
latter process is more frequently associated with the transfer of modern managerial technique.
More refined pictures are drawn by incorporating FDI motivations, structure of sectors, country
origin of the expanding multinational companies, and local labor relations. In this context, the
multinationals are becoming contested fields to inquiries that investigate local reactions to global
economic effects3. Within his field, it is debated how market-seeking investments into retail,
tourism, food, beverages and business services are changing local realities. It is not debated that
multinationals in these sectors are becoming the most visible symbols of westernization in the
public eye by introducing new forms of services associated with Western capitalism. It is highly
debated, however, how these visible entities play into the negotiations, competitions, contests,
and fabrication of management models, organizational design, corporate governance, and labor
relations in this part of the world—or economic culture, as we call it in the DIOSCURI project.
Without immersing ourselves in the details of the literature, case studies in our inquiry revealed
that institutional stories depend to a large extent on the very sector of economy the firm belongs
to. Transnational impacts differently reach enterprises in banking, manufacturing, or agriculture.
The market competition in specific sectors (e.g. the availability of regional markets), the typical
purpose of the privatization of multinationals, global trends in consuming practices and fashions
(e.g. food industry) generate different encounters due to particular sets of local and foreign actors,
institutional design, and communication needs in different sectors. The specificities of banking in
transforming economies engaged in global exchanges will be examined.
Case studies also highlighted that different types of enterprise may also limit and enhance
cultural encounters between local and foreign actors. Global and well-established multinationals
trend to bring more ready made patterns for institutional design and business policy and thus
tailor the perceptions and inclinations of both locals and foreigners within the firm in contrast to
regional multinationals, which are often in the making and by default have less norms and rules
of conduct available in standardized and tested format. In the comparative study, the availability
and incentives of transplanting ready-made tools and business practices by Raiffeisen
International and local reactions to it will be investigated.
Although business success is mostly an outcome or intervening factor in our inquiry, it is
impossible not to notice that greater success and convincing market results legitimate different
autonomy of action for managers and thus different space for negotiating cultural compromise.
Some case studies are complex enough to highlight the differences of the cultural encounters in
subsequent stages of decline and growth in the life of an enterprise. The connection between
3
Marginson and Meardi (2004)
3
market performance and freedom of local actions will be scrutinized within the Raiffeisen
context.
Transnational march of banking
Considering the broader European context, the literature explains how the changing competitive
environment in banking contributed to the adjustment of national regulations and EU directives
on banking in the spirit of the single market in financial services. The Second Baking
Coordination Directive (89/646/EEC) has reinforced the principle of universal banking allowing
a range of activities for financial institutions. As a result, one can witness rapid merges and
acquisitions, greater diversification of the products and services due to competition of new
players (leasing companies, mortgage firms, etc.) Banks reacted to the increasing competitiveness
of the environment by specific strategies for internationalization, such as building own network at
high costs, negotiate merger and acquisitions by handling cultural and organizational complexity,
and seek cross-share holdings. Internationalization, however, has not proved to be an easy target
for all actors in banking. Whereas investment and corporate banking has become
internationalized, retail banking until recently has remained national business. Moreover,
extended transnational network presents advantages as well as risks for business results.4
According to mainstream accounts in the Hungarian economics literature, the high profitability of
bank sector and particular banks in CEE by international standards stems from the fact that banks
could easily transfer their relatively high costs to their clients.5 There is evidence to prove that
competition is growing in banking in due to post-socialist economic restructuring but this is true
more for the corporate banking, which is deemed to face international competition. This is much
less so in retail banking in which penetration is still modest in many CEE countries. Thus, the
loan-deposit interest difference is much higher than the EU average. Pricing services both in
deposits and loans opens possibilities for rent seeking.
Leadership and management selection at the privatized banks is constrained by basic domestic
laws on banking. Yet, responsibility and competence in decision making could be largely defined
by the owner. There are two major paths in selecting key senior managers: either to rely heavily
on local professionals or import senior managers from the mother bank. The two strategies often
connected to particular transnational relations. Austrian, German and Italian banks, believing in
their local knowledge are more likely to trust local managers, whereas American, Asian, and
other owners are more likely to trust their own professionals. Among the entrusted local
professionals in CEE, one often finds former employees of the national banks, and some other
financial institutions operating in the late years of state socialism.
The typical avenue for foreign banks’ market expansion was first to enter in corporate banking
and later embark on retail banking. Again, according to the Hungarian experience, the best
performances are shown by those, who came by green-field investment and thus avoided to take
over in-built weaknesses and problems. This does not mean that all green-field operations have
proved to be success, well performing mother banks sponsored unsuccessful local branches due
4
5
Quintana/Warwick: (8-9)
Várhegyi (2003) p 1034
4
to bad business strategy or management problems. Success is also explained by the relatively
early entry to the market: among the four best green-field banks in Hungary, three started to
operate in the 1980s. They could select among the best clients against poorly managed state
banks, ensure lower costs, and recruit the best local experts of the time, who quickly managed to
catch up with their Western partners by capitalizing on their local knowledge better than their
Western counterparts.6 The move of Raiffeisen Bank on the map of CEE and its countries nicely
comply with the conditions of successful investing strategies. To be among the early birds, and if
possible to be the very first, to combine green-field investment and acquisition, and to cautiously
expand from corporate sector to retail and other fields, all belong to the essence of the Raiffeisen
strategy.
2. The Raiffeisen corporate world
From savings to transnational banking
An Austrian savings bank started to buy shares and then establish whole new entities in the
emerging banking sector in Central Europe at the end of the 1980s. It opened its first subsidiary
in Hungary in 1986 and by this it started a seemingly irresistible march eastward on the map of
Europe and later the CIS as well. By the new millennium, the Raiffeisen Bank (RZB) has spread
all over the former socialist countries and established a multinational shareholding company
called Raiffeisen International. At the beginning of the story, the bank ranked only 8-9th in its
home market. Since then, the mother company has moved to the third position at home. By the
mid-2000s, the Raiffeisen Group has become one of the biggest banks in CEE and the leading
Western-owned banking group in the entire CIS. The main market focus of the company is in
retail and corporate banking7.
It is not only the geographical expansion of the company embracing now 17 countries that
appears to be noteworthy but its business results as well. In 2006, Raiffeisen International
achieved a record profit: the consolidated profit (after tax) adjusted for one-off effects rose by
55% and the earning per share increased from 2.79 euros in 2005 to 4.17 euros. Even more telling
is that the profit grew six-fold in the previous four years. The corporate customers segment
remained the largest in terms of assets and profit. The retail customer segment contributed almost
one third to the profit. The banking group has more than 12 million customers served by 2,800
business outlets in 16 markets. “No other international bank in the region offers such a farreaching and closely-knot sales network” claims the 2006 Annual Report of the bank.8 It is
interesting to have a look at the results of the regional segments: excluding the one-off effects,
the profit contributions of the three regions (CE, SEE, and CIS) would be almost equal9. The
largest part of the profit before tax would still arise from the units in CE with a share of 35%. The
largest increase in the next two years is expected from CIS.
Várhegyi (2001) 586-7, 591.
http://ro.co.at/eBusiness/rzb.at
8
http://ar2006.ri.co.at
9
In Central Europe ROE (return on equality) reached 23.4 % and the cost/income ratio 61%, in SEE this figures
amounted to 28.2% and 58,2%; in CIS 32.3 and 57.9%.
6
7
5
The organizational and internal structures of the bank underwent far-reaching changes during
2004. The erstwhile holding company became an operational management company whose
orientation is reflected in its newly created organizational structure. All management functions
were consolidated under the umbrella of Raiffeisen International. The international arm acts
autonomously but in close collaboration with its majority shareholder, RZB (the Austrian mother
firm). RZB owns 70% of the common stock, the rest is free float. The shares are traded on the
Vienna Stock Exchange. New structures were created, new staff was hired, and managing board
remits were defined and assigned. Raiffeisen International’s transformation from a pure holding
company to a management holding company increased the workforce in Vienna from 12 to 83
during 2004.10
In the ambitious plans for building a large, if not the largest, banking group in CEE, and the
steady and successful march of the bank in setting-up a powerful regional network, the current
CEO has taken a decisive role. Herbert Stepic joined RZB in 1973, became member of the
Managing Board in 1987 and was the Deputy to the CEO since 1995. He has been Chairman of
the Managing Board and CEO of Raiffeisen International since June 2001. He is responsible for a
number of tasks at the Bank but what is the utmost tangible in the lives all subsidiaries in CEE is
his lead in Strategy & Acquisitions. Three out of the five members of the Managing Board of
Raiffeisein International moved to the supervisory board of the group in the middle of 2006. Only
Stepic remained and five new members arrived out of which three have international banking
experience other than Raiffeisen.
The bank received numerous decorations in the last couple years. For example, in 2006 the Best
Bank award was given in 5 countries by Global Finance, the title Best Bank in CEE by
Euromoney, and Bank of the Year 2006 from The Banker.
Corporate self-image
According to the self-image of the management, “the secrets of Raiffeisen International’s success
in Central and Eastern Europe undoubtedly also include two characteristic features of Raiffeisen
tradition: the strong local roots of the banking subsidiaries and their high degree of autonomy
within the Group. Management is central wherever a centralized approach is appropriate and
necessary, for instance in the case of IT services and risk policy.” It is a key part of the self-image
that the local managements of subsidiaries are given a large degree of autonomy in their
operational decisions, and only strategic orientation and performance monitoring are kept for the
central management. The local subsidiaries’ strong local anchors are also reflected by the makeup of their senior management personnel, which consist mainly of local experts. Just 22 of the
local 75 managing board members are foreigners. Local roots are also seen to be proved by
business orientation: local constituency is seen as important as international corporate customers.
Prior to having the chance for obtaining first-hand information from senior managers at RI, the
contour of the RI self-image could be drawn through investigating the statements that the
company makes on itself for the wider public. One of these statements could be read in the
10
http://ar2004.ri.co.at
6
Annual Report of RI for 200411. The Preface by the CEO to the report claims that “(I)n-depth
familiarity with the market and awareness of specifically local factors have been key to
Raiffeisen International’s success in Central and Eastern Europe. The Group’s entry into that
market was above all facilitated by RZB’s traditionally close ties with the region. There were
strong economic bonds between Austria and the countries of Central and Eastern Europe even
when the communist regimes were still in power. Austrian banks, including RZB at the forefront,
also had very strong links with the region. Raiffeisen International’s pioneering role was founded
on that crucial initial advantage. In addition to providing banking services for RZB’s Austrian
and foreign customers, Raiffeisen International also identified and exploited many opportunities
for itself within Central and Eastern Europe. The region’s poor service standards and
inadequately developed banking industry created ideal openings for growth and the prospect of
ample profits”. This statement is blatantly open about the fact that the in-depth familiarity means
primarily familiarity with the nature of underdeveloped market conditions and weak banking
penetration in the region.
The 2004 report shows confidence in that the bank quickly established itself both as a prominent
feature of the banking landscape and as an attractive employer. Fifty-six per cent of all staff at
Raiffeisen International is women. At the subsidiaries, that figure ranges from 22 per cent in
Bosnia and Herzegovina to 77 per cent in Croatia. Because of the high proportion of women in
the workforce, Raiffeisen International is stepping up measures to make it easier to combine
working with having a family. For example, in addition to allowing employees to work flextime
without defined core hours of work, they are also offered part-time models that contribute greatly
to achieving a good work-life balance. According to the 2006 report, women employees amount
already to 68%, which of course in itself does not mean high achievement in this region and in
this sector. The report also boosts with the statistics that the staff is highly qualified with 70%
university graduates. The permanently low average staff age of 34 is also reported as the
embodiment of Raiffeisen International’s dynamism.
The annual report for 2006 uses a conscious language of transnational corporate settings and
challenges. On the one hand, it is pronounced that within five years the total staff has increased
five-fold. Therefore, the managing board started a group-wide initiative to expand performance
management and standardize whole process. There is confidence in that centrally supported and
locally implemented actions will expand over years and ensure better integration of each and
every employee in the network. On the other, the bank strives for better results by strengthening
cost containment and increasing efficiency. It is believed that methods like Six Sigma process
optimization will be implemented by a gradual process throughout the network. Newly acquired
local subsidiaries are seen to be in need for specific technical support. To target new segments of
the market, training course for qualification in personal banking and SMEs is offered in Poland,
Romania, Czech R., Croatia, Serbia, and Albania with support of specialists from central Group.
Finally, ambitious new programs are envisioned to enhance management talent and long-term
loyalty in the baking group by sponsoring joint programs at local universities. A pioneer module
11
http://ar2004.ri.co.at
7
is experimented at the Kyiv-Mohyla University in view of continuing development of a powerful
corporate culture and team spirit.
Cultural imagery in corporate communication
Attached to the electronic versions of the 2004 Annual Report, RI released a web-based brochure
entitled „The Sprit of Transition”, which promises a guide to the “cultural landscapes underlying
growth in Central and Eastern Europe”. The initial statement proposes that “Former Eastern
Europe has not just moved closer to the heart of Europe in geopolitical terms. It has also become
a central source of both economic and cultural momentum. There are new freedoms to be oneself;
development is underway. The numbers that quantify economic growth are just part of the reality.
To interpret them, it helps to know something about local backgrounds and the worlds in which
people live.”
The guide gives a great surprise to those who are not familiar with the style of communication of
the RI, but perhaps even to those, who are. In contrast to the sober style and layout of the IR’s
business reports, the cultural guide follows the style of sophisticated tourist brochures with ironic
language, insider knowledge, and unscrupulous use of idiosyncratic selection of information. The
guide is composed by concise country profiles with short and sophisticated pamphlets and
caricatures. It promises to portray everyday cultural landscapes for its readers “on a journey to
inspiring ‘sights’ that often give a better impression of the whole than a ream of statistics.” The
guide gives justification to its role and presence on the business report website by arguing that “A
country is more than a market – and growth is not just a matter of quantity. This is a guide to 15
astonishing destinations where quantity is being translated into quality.”
The guide is cautious of using a language of political correctness by not making strong direct
judgment on countries and cultures. Its ironic approach offers commentaries on cultures with an
ambiguous language of ‘worthiness’ in the cavalcade of European (and non-European) cultures
and traditions but always makes points on the potentials for economic take-off and
entrepreneurship. Interestingly, the guide is not downloadable, only printable. One may wonder if
it is due to copyright safety consideration especially towards users in the region, or due to a will
to make the guide rare and distinctive product.
At a quick look, the 2006 Annual Report kept the breadth and style of the cultural portray it
canvasses on the region. Instead of small introductory texts suitable for a portable tourist guide,
the 2006 cultural map offers recipes of the local cuisines from the broad territory that the banking
group embraces. The recipes are presented with the philosophy that “the local foods convey an
idea of the way the people approach life”. “You are certain to be astonished by the wealth of
ideas and the culinary diversity”. “If you want to get to know a country well, you first have to
become acquainted with its cuisine”. With a more exclusionary manner, the CEO adds that “I am
convinced that joie de vivre and the ability to savor the finer things in life are key characteristics
of good manager.” Accordingly, short texts of recipes are attached to particularly nice, full-page
pictures of a chosen food from each country of the Raiffeisen map. In addition, foods common to
the whole region are offered as a common entry to as well as glue among cultures and people in
region: pickled cucumber, sour pots, vodka, and caviar for the high class (with environmental
conscience). This is the way in which Raiffeisen International sees itself as a “pathfinder and
service provider in a growing interconnection of economic areas within Europe”.
8
3. Corporate culture in “Western”-“Eastern” encounters
Bank cases in a nutshell
It is not the ultimate goal of the comparative inquiry, but as an appetizer, one could sum up the
organizational stories revealed by the case studies on banks in the DIOSCURI research. The
summaries combine the dynamics and the outcomes of the encounters between actors, values and
models, depending on the focus and strength of the case study. Starting with the Raiffeisen
subsidiaries, in the Croatian one, as the first foreign-owned bank in the country, encounters have
been embedded into a subtle negotiation between Raiffeisen corporate culture and some broader
Western business culture. Accounts of differences, conflicts, and adaptations seem to be
smoothly straightened by growth prospects and the sense of genuine local contribution those.
Business success endorsed this strategy and satisfied the ambitions of the main local actors.
Raiffeisen Hungary’s story is captured as an unarmed liberation struggle between the flagship
unit and the center in the network, often told from the (self)ironic perspective of the opposition of
the imperial power and local resistance in the old Hapsburg Empire. But business success and
autonomy so far have left the local subsidiary to elevate itself both above the mainstream quality
of domestic capitalism and also that of the original home of the banking group. Raiffeisen in
Poland can be interpreted as a story of complex local reactions to building up the transnational
company of the bank, namely to handle the dynamics of freedom and standardization. The
account for the outcome spells out successful adaptation with diverging pride and discontent not
only to Raiffeisen corporate culture, but to local capitalism, which is viewed different than its
Western counterparts, yet always measured by its standards. The post-privatization story of the
Raiffeisen subsidiary in Romania tells a lot about the percepts of domestic and global capitalism.
The ultimate experience of buyers’ market, modern human resource, organizational culture, labor
relations are generated by encounters with a transnational capitalist class regardless of the origin
of the mother bank. The early romance is followed by a satiric twist in which skills of double
speak and local creativity are absorbed. In Serbia, Raiffeisen was also the first foreign bank in the
country. Encounters shook and formed both horizontal and vertical relationships, control, work
and organizational culture inside the organization. As for the main outcome effects, cultural
differences are articulated between Westernized Easterners and (genuine) Easterners, more
importantly than between Westerners and locals.
Three other banks serve as test cases for our investigations. In Slovenia, the Nova Ljubljanska
Banka is known as a successful business case. Neither foreign actors, nor their local partners are
inclined to note major gaps in values. The main story is a successful adaptation of Slovenes to the
West despite some unique properties of a Slovenian managerial style. But the distinctions are
subtle and their perception by the local managers moves between some reflexivity and selflegitimation. The Bulgarian Z-Bank (fictional name) is of an unambiguous business success.
Actors taking part in transnational encounters report for win-win situation and smooth cultural
compromises. As an often voiced opinion in other case studies in the broader field of
entrepreneurship, a triadic cultural space is described (foreigners, young local managers, older
local managers). As the most curious encounter story among the bank cases, the Czech
Živnostenská Banka demonstrates a sequenced and complicated privatization story. At the final
stage, Italian investors take majority ownership in a bank that had experienced German banking
models and business environment in the past. The new management has to show Western
standards in a context in which identification with some Central European and German culture is
paramount. The outcome seems to encourage the locals feel superior over the foreigners and
9
engage in a permanent struggle in adjusting to a newly developed hybrid of organizational
culture.
In the following, informed by the case studies and the supporting interviews, accounts, stories,
and lessons will be presented and to some extent explained that actors in the emerging Raiffeisen
empire experienced and were willing to share with us. The locals are overrepresented among our
informants, thus findings will result in an imbalanced picture.
Views on the “mother” and the “center”
Only few among our informants view Raiffeisen International (RI) as a pure embodiment of
Western banking culture. More often local managers and observers conceive of RI as
distinctively international but non-typical financial institution for its management and business
development structure.
Case studies and interviews tell about three types of judgments across the countries observed.
The first type of classification captures the idiosyncratic properties of RI without caring too much
about a distinction between a general Western banking and RI corporate model. The positive
version of the account argues that there is a Raiffeisen spirit saturating the network and its
entities, and it is characterized by respect for colleagues, team work, and entrepreneurship.
Moreover, services for the clients and the organizational culture are isomorphic, both are believed
to be built on respect and grace. The unique role of a visionary CEO of the transnational
company is frequently mentioned by those who are entrusted by founding and/or mastering
transformation in the local subsidiaries. A more critical version of the account proposes that top
foreign managers have distinctive view on the way in which RI marches as a transnational
banking company. Nonetheless, RI does not have a professionally developed culture of banking,
thus it has to be shaped up as the network grows. No institutional knowledge transfer is ensured
by the central management, and the prevalent strategy is based on trial and error. It is also voiced
with mixed acknowledgement and irony that the “strong personal power of the CEO of Raiffeisen
International is combined with Anglo-Saxon pragmatism”.
The second view is shared by mostly those who had had previous business experiences. They
separate large, hierarchically managed, and highly standardized transnational banks and RI,
respectively. From this comparative perspective, RI is valued exclusively positively. “Raiffeisen
is not a Coca Cola bank where the main objective of the marketing department is to translate the
slogan: we love it.” In a stronger language: “Raiffeisen is not a totalitarian bank, leaves a margin
of freedom within the structure. Citibank is a totalitarian bank, where all decisions are made in
hands-on manner”. In another country, the same negative reference, the Citibank is portrayed as
“McDonald’s banking”. Contrariwise, RI respects local success and performance. “We did not
come across any situation in which something completely inapplicable was introduced here”.
Some local actors anchor this unwanted models of banking on the map. Accordingly, the French
and German banks exert much more control on local management and maintain much stricter
hierarchy than Raiffeisen International. In the former ones, due to distance between the center
and the subsidiaries, local managers do not take risk, they only try to avoid mistakes. A more
reserved voice points out that trust in local management is a necessity as RI does not have loads
of high-quality super-experienced managers.
10
Finally, the third classification identifies distinctive Anglo-Saxon and German (Austrian) banking
cultures. In this reasoning, the former is posited explicitly or implicitly as more developed. Some
young managers state that RI, informed by a German school of management, still misses an
Anglo-Saxon approach to remuneration. Another young manager warns that Arthur Andersen is
much ahead of Raiffeisen for its American organizational model. A more senior manager
explains the differences in the concept of human resource: the German/Austrian version is
serving, whereas the Anglo-Saxon is strategic. From the interview it was but evident which one is
preferred. This type of classification of banking enterprises was relatively infrequent in our case
studies.
Images of the local subsidiaries
Those local subsidiaries that became part of RI through acquisition had their own history in the
old state socialist system, and thus have at their disposal both spatial and temporal references to
interpret their transformations. Among their managers, there is a unanimous delight and proud of
a decisive move from a state-owned socialist firm to a Western market one. Ironically, almost all
local banks in the Raiffeisen network, old and new, small and big, have some kind of flagship
conscience for either being the first foreign bank in the country or just having excellent and
unparallel business results, either in the country or within the banking group. Dynamics and
stages of development of the local bank within RI are often spelled out. Some founding fathers of
local subsidiaries propose that at the beginning they overvalued the significance of banking
knowledge. But they realized that the key knowledge is not technical, but “ideological”. These
voices are often combined with strong belief in genuine contribution of the local subsidiary to the
whole Raiffeisen corporate culture, or more often to the success of the local chapter.
Local managers tend to talk of their own banks as full or partial embodiment of a domestic
business culture or model of capitalism, though slightly above its main standards. They claim
difference in sameness: they are part of a Raiffeisen institutional culture but they remain
distinctive. The self-portray is often critical and self-congratulatory simultaneously. “Our people
are usually stronger on individual level than in team work. We do not like designed situations and
procedures. We like the fire in the house, to improvise and solve problems.” These statements
celebrate a heroic or even Quixotic manner of leadership in contrast to some kind of rational,
collaborative and matter-of-fact passages. Nonetheless, identification with and loyalty towards
the bank is reported as an achievement by the local staff. As best pupils of a Raiffeisen school,
everybody is seen ready for “learning by doing”. Many still take joy in that the local leadership is
laced together by consensual and informal ties.
Our informants often use comparative reasoning or refer to peculiarities of an on-going
transformation. They compare the properties, skills, and routines of the local staff to actual or
idealized ones of the foreigners. In these accounts, it is rare to stress unidirectional relations or
neatly set hierarchy between local and Western capacities and values. One could rarely find
traces of inferiority, the case is almost the opposite: local managers found many instances in
which they could prove their superiority over the foreign managers. Most importantly, local
managers are seen more flexible than their foreign colleagues. When something is valued that the
foreigners bring as good to the company, drawbacks are quickly pointed out to prove the equality
of parties. More contentious voices are also heard which pronounce that people in local
subsidiaries are less ambitious than their Western colleagues. It is admitted that domestic
11
managers cannot tolerate failure, tend to fight for their personal rights and interests. They talk in
a rambling way and cannot resist making long speeches.
The local managers’ views frequently emphasize the contribution of the local staff to something
new shaping up in the local organization. Founding fathers take more pride than younger and
recruited colleagues, who are more critical to any structure and acclaimed value. Some ridicule
hypocrisy within the organization by those who stay long hours to please supervisors. Very
young officers conceive of the system of promotion as unsatisfactory for it favors individual
achievements, rather than team work, and thus is greatly influenced by personal relations with
supervisors. The opposite view celebrates that authority is based on performance rather than
position in the hierarchy. Some value in particular that hierarchy is smartly practiced as rarely
surfaces in face-to face communication. Several managers are proud of the way in which their
functional department works, for example if marketing of the local subsidiary is not aggressive
but innovative. Locally mastered CSR is mentioned only by few as source of satisfaction.
To undermine the common place generational gap paradigm, local managers in some countries
observed portray the older generation as conveying an invaluable asset to successful capitalist
transformation. “The greatest flexibility is shown by those who are about 60 and adapted to a
new organization successfully.” The mirror image is also voiced by separating two generational
groups (32-38, 46-55) and marking the year of 40 as a demarcation line.
Split is sometimes pronounced between the general Raiffeisen spirit and the local clients in place
where Raiffeisen is first foreign bank. “We belong to Western European banking culture but you
cannot talk to local clients in West-European way: we somehow have to find some compromise.”
Our case studies were not targeting internal differentiations, yet in some cases it was mentioned
that the status and recognition is saliently lower for those employed in an outlet outside the
capital city.
Dynamics and dialogue between the center and the subsidiaries
Very few respondents remember initial surprises triggered by early encounters between
representatives of local and foreign business communities. Or if so, interviewees never gave
direct reply to targeted questions on surprise, they rather revealed some unexpected experiences
throughout the conversation. Behind this reaction, one might assume a rejection of the idea of
prejudiced thinking but also sincere experience of little surprise. “There was nothing special to
meet the foreigners, nothing impressive, just ok”. By the same token, the first foreign CEOs
sometimes expected more shock on the part of the locals than actually occurred. Some feel that in
the middle of the 1990s, the difference between local and Western managers was more visible
than later. Some local people talk about their pleasant new experience of open communication
and good personal relationships that Raiffeisen brought in the life of their organization setting the
scene for further encounters. A contrasting view occasionally surfaced in the interviews reporting
on an “early shock” because of the “superficial familiarity” style used in the organization.
All local institutional stories we investigated reflect upon the relationship between the mother
firm and the subsidiary. The subsidiaries created in the mid-90s or before first experienced a
great deal of autonomy, which most recently became renegotiated and contained in several
respects. At the beginning unlimited trust was placed in local management knowledge, later a
move occurred to standardization, which is not yet felt too painful or unbearable. Local
managers, however, articulate the fear from the impact of the new trend. For example, they warn
12
that in risk assessment standardization lessens the local knowledge, which is essential amidst
ambiguous market conditions. These managers portray their specific wisdom as “assess by
walking around”. Others straightforwardly express that mainstream international standardization
in banking hinders the job of the local management and undermines local incentives. “Intellectual
power would be in the network but instead, ready-made solutions are applied by the center.”
Some others complain about certain procedures that are simply unnecessary and inadequate, and
generate additional costs. In all local subsidiaries we explored at least some argue that
centralization is triggered by market rationality as bank services become diversified. A kin view
finds the sources of changes in the impact of stock exchange and share holders’ interest. In these
accounts resistance towards a conscious centralization of the center of an empire is mixed with an
dispassionate understanding of the conditions if international banking in global capitalism. For
some, the subsequent strategy is a never ending, mostly virtual, liberation struggle, for others an
enduring complicity, yet none of these manifested in distinctive behavior.
Those local chapters that were established by take-over after 2000 report the prime experience of
encounters with a powerful international firm. They tell a story in which after muddling through
the difficulties of the transformation period, some kind of balanced relationship is established
between the head office and the local subsidiary. Early communication troubles are remembered,
such as an initial allergy to the notion of competence, which at the beginning meant for the locals
“how much one could sign for”. Some informants remember hard times during the reorganization
process in a lack of clear rules. At the beginning, training courses designed by the center were felt
by many as artificially imposed but later internalized rather smoothly. In the acquisition related
stories generational issues created major anxieties in the early period of the institutional marriage.
Several informants complain about prejudice towards older employees in the local subsidiaries.
The counter-image portrays the older staff of the purchased bank with undeserved privilege and
with no sense of service culture. It is noteworthy that interpretations of differences between
Austrian/foreign and local managers and employees in these stories do not rely on cultural
reasoning: people are viewed different due to their hierarchical positions. Difference between the
central and the local bank stems from size and has nothing to do with national cultures. What is
more, some propose that “it is but prejudice to claim much difference between foreign and
domestic bank managers, the only thing that Austrians are not very flexible”.
Within and across these two major types of dynamics, individual accounts refer to a variety of
positions and approaches to the center-subsidiary relations. The ‘colonial’ account is voiced by
bitter statements. “Working in Vienna meant to be better or more powerful no matter of
performance”. “Third class foreigners meet first class locals”. In one country local managers refer
back to enduring oppositional relations formed under the Hapsburg Empire. The contact with the
center is not based on dialogue, rather on a model in which “we manage, you work”. Austrian
staff is often viewed as being afraid of not having control. The center is sometimes in short of
imagination. A recurring theme is the personality of the CEO, who dominates the cultural milieu
of the whole network. The surrendering voice talks about not much involvement in shaping up
the transnational structure of RI and rejects responsibility in finding the final shape of the
transnational corporation.
The liberated account is confident that “We never made here any business move by following
blindly instructions from Vienna”. It is stated with confidence that business success does not
enforce strong transnational governance and the central regulations are always introduced after
13
careful consultations. Some believe that the mother company does not seem to be happy to
impose things: “Austria is close in literal and figurative meanings, and the head office is
accessible for local CEOs.” The explanation for the respect of local knowledge and autonomy
acknowledges a desire for better access to local markets. Others believe that in retail banking
little know-how is needed from the center. Some even value that lack of brain-drain by Vienna.
Local managers are ready to explicate the details of independence in some functional areas, such
as marketing and human resource management. At worst, they see a necessary compromise
between local and central will (e.g. out of 5 training modules only two are taken from Vienna).
Finally, some expected more guidance at the beginning and were positively surprised that they
were not given “cookbooks”.
In one of the examined banks, which does not belong to the Raiffeisen network, local managers’
expectations were saturated by a great deal of idealism at the beginning. Then they felt
disappointed with the organizational practices of the company they became part of. They wished
to receive a clearer vision and strategy of reorganization at the time of the takeover. They were
unhappy with high fluctuation among the Western managers. Yet, younger local managers were
positively surprised by the spirit of the cooperativeness and the sense of the team work
demonstrated by their Western colleagues. Interestingly, the contradiction is clearly seen by
informants in that expressing disagreement with the foreign manager is perceived as bravado but
if foreign managers respect the opinion of the locals, it is also regarded as achievement. It is
voiced that the percentage of the subjective factor is great in promotion, salary setting, and bonus
calculation, etc. Suspicion towards the objectivity and clean competition in new appointments is
also significant and contrasted to an Anglo-Saxon model. In sum, Western managers are seen to
have better capacities to adapt to new situations yet the early overestimation of their qualities
quickly disappears from local accounts.
In another case emerging outside the Raiffeisen map, local managers report major cultural
tensions and mismatch, quite unusually among the banking cases in DIOSCURI. Local managers
report about the takeover of majority ownership as an uncoordinated process. Although the
owners believe that they implement Western standard, locals are shocked and bothered that
nothing is managed by rules. Locals argue that this is evidently different than at other Western
banks. Fragmented and uncoordinated communication remained not only an early childhood
syndrome. Sharper accounts propose that chaos seems to be the strategy in the organization.
Responsible local and relaxed foreign attitudes are contrasted. The foreign representatives
propose that too much rule kills individual initiatives and responsibility. Trust is needed in the
basis of oral agreement which is not liked by local culture. In a similar vein, good informal
relations are preferred for implementing any changes in the organization. Foreigners are
convinced that locals have a distinctively German approach. Their style slows down the process
with negotiating with clients, it is rigid and not enough custom oriented. It adds up to the
difficulties that due to the use of a foreign language by both parties, misunderstandings often
happen in the communication. Regarding reconciliation of the articulated cultural gaps, some
argue that it is easier to arrive at some compromise on lower level of the hierarchy. Others assert
that distinctions are a matter of professionalism rather than cultural traits.
Western managers and business culture
In broader statements on Western or foreign business cultures, references to some abstract notion
of culture and personified representations are combined. In some cases general statements have
14
strong, in other cases less evident connections with the experience of the organizational story that
local managers also tell. In these accounts, in few cases judgments inspired by Raiffeisen
corporate experience and by encounters with other Western business actors are carefully
separated by informants, but in most cases these are inextricably intertwined.
It is a widespread view in the bank case studies that foreigners are task and duty oriented but
much less flexible and spontaneous than local managers. Foreign managers do things more
mechanically. The Western employee is more stressed about the job, more job-oriented, opposite
to the Eastern one who adopts a rather evasive and general perspective on work. Foreigners are
not seen more innovative than locals despite their disproportionate financial rewards. Wellinformed locals argue that French are different than Canadians, Australians, and Scottish: the
former are conceited, the latter are modest. Among the very rare gender related statements, one
manager proposed that the more you go to the West, the fewer women are in the management.
In a more acid and particularizing account, “Austrians do not have big problems to solve, thus
they are crazy about small things”. “In Austria everything is regulated. Vienna is part of Central
Europe with its Grinzing culture: informality and slower deliberative process, personal contacts
matter a lot.” Others suggest that Austria is not the real West, it is part of Central Europe.
Austrians and Germans are viewed as people respecting primarily authority rather than
professional consensus. In addition to deconstructing even seemingly positive characteristics of
Western culture, colonial alertness is also at work. Some warn that shrewd technique of
outsourcing customs deals are used to outsource corruption by many Western firms.
Unambiguously positive accounts of Western and/or foreign business cultures are not articulated
on the same general level than the negative ones. The only exception is the acknowledgement of
skills and spirit of communication in organizations. In particular, the mastery of communication
by foreigners even in top-down settings provokes acknowledgment and formerly unknown
pleasures by the most ardent critics as well. Some voices express appreciation with how
Austrians respect employees regardless of hierarchy. Anything else that is considered as good
about Western capitalism is captured by comparative statements on local and domestic business
culture.
Local business cultures in the light of the “West”
For obvious reasons, encounters observed and explained in the DIOSCURI project inspire the
participants to speculate and articulate reflections, views, and opinions on the domestic or local
conditions more intensively than on Western or global capitalism. Nonetheless, what is seen and
told about capitalism in CEE is understood in referential relations to models that are believed or
experience, or both about economic practices in other parts of the world. It seems that views of
local conditions show some differences between countries that have different positions on the
map of Europe and engagement with regional and global economies.
In one of the old-new EU member states, informants feel that local economic actors do not like
procedures, they feel uncomfortable when finding solutions and establishing routine. They like
pursuing new challenges, thus they are the true entrepreneurs of the emerging capitalism. By the
same token, domestic economic culture is low in trust, respect of law and rational calculation.
“Therefore, you need tricks and games. If you do no cheat, you are screwed.” Many respondents
in this country do not see major differences between local and foreign managers and employees.
15
This view is endorsed by interviewed foreigners. Some are proud to feel that business culture of
the country seems to develop according to the Anglo-Saxon norms. The normative version of this
conviction proposes that difference is not a matter of culture. It is connected to the structure of
financial centers in the world. In banking, it is London. “If you want to learn new things, you
should reach out the markets that set the standards.” But this experience is presented as abstract if
deprived from the local contexts. Here is the main value of local knowledge. It is acknowledged
that foreigners consciously take advantage of the heightened career conscience and individualism
of the new generation of young professionals.
Informants in countries formerly belonging to former Yugoslavia often see themselves having
been more developed than other parts of the CEE in the 1980s, and apparently closer to the West
than Central Europe. They take pride in that some bank services were known and used in the
socialist past. This self-positioning is mixed and merged with EU member identity in certain
cases. Accordingly, managers posit themselves on the top of or at the same level as the CEE
countries. In a more reflexive account, locals are individualistic in making decisions but
collectivist in taking responsibility. Locals prefer a heroic style of management in comparison
with their Western counterparts. In the most critical views, problems are stressed with team work
and information sharing. There is more hierarchy and distance among managers and other groups,
respectively, than in Western references. Managers are reluctant to take risk and more inclined to
micro-management. Leaving open what is valued better, it is argued that Western managers
identify themselves more with the goals they need to achieve and less with the firm. Domestic
managers identify themselves more with the firm, less with the goals. It remains ambiguous how
benign it is that locals tend to trust locals better if it is known that cooperative behavior and
reciprocal relations are more common in the informal sector.
In another non-EU-member country in Southeast Europe, there is conscience of general market
development; the former macro-economic problems are expected to shift micro-economic ones.
In the banking sector, the distance in local and foreign is diminishing. By the same token, the
market still have limited role in many people’s lives as they live through redistribution. Managers
from this country do not want to work abroad on a massive scale despite the fact that conditions
of a market economy and the spirit of capitalism are still fragile. For example, the respective
National Banks sometimes sends hostile message on foreign banks. In yet another non-EUmember country, changes in banking sector are felt to be radical which brings the sector the
closest to the West within the domestic economy. Big differences are seen in this country
between state owned and private companies. Many local firms wish to receive loan based on
personal networks, which “reminds one of Austria 25 years ago organized by party lines”. These
local actors often want to do business based on “buddy’s economy”. Regarding the main cultural
encounters, locals know how to enjoy life, whereas organizational culture could be learnt from
foreigners.
In one of the new member states, Western type of efficiency is acknowledged but seen with
satiric eye. Locals believe that they have “moved towards a more universal approach” in business
in contrast to highly technical one, including banking. Otherwise, diminishing difference could be
grasped between the local and the foreign managers. Demand for young managers has increased
for their flexibility. Yet, flexibility has nothing to do with age. It rather depends on professional
experience, education, and inner qualities. Locals spell out that their fellow citizens do not accept
critique and take it personal. Emotional reactions and individualistic behavior prevail. Like in a
16
Latin nation, everybody has ideas, self-conscience and knows the solution to problems. They are
not adequately adapted to what team work concept implies. At the same time, they have aversion
towards reporting which is inherited from the socialist times. Some feel shame for language
deterioration, the mixing of mother tongue with English.
In another new member state, actors conceive that locals still believe that in transnational firms
“What is not explicitly allowed is forbidden.” Many see their social environments of insecurity
avoidance, full of fears of taking decision, and efforts for not taking responsibilities. “This is not
my job” attitude help generate profound disinterestedness among local employees. Instead, local
actors have inclination to spontaneity and diffuse actions. Older local managers want to see
everything in writing due to lack of confidence. Communication is slowly changing towards
more openness and looking for feedback. Young local managers feel prime tensions in their
relations with domestic colleagues which prevent them from developing their initiatives and
creativity. Yet, they nurture a hope for smooth cultural compromise.
4. Cultural encounters in an empire building
Summary notes on encounters
In the broader field of entrepreneurship, institutional stories that DISOCURI researchers
constructed from the individual accounts depended on the availability of the main actors in the
life a particular firm. All case studies articulated the problem that accounts for cultural encounters
are shaped by the very position of the informants in the firm observed. In several cases key
positions in the enterprise may mean key role in cultural negotiations: economic power is
strongly associated with cultural competence and championship, although not necessarily in a
strict causality.
Basically all cases tell about the significance of preliminary cultural knowledge of the involved
actors, e.g. the exposure of foreign managers to living and doing business in post-socialist
contexts, and the availability of pioneer local managers pursuing studies abroad (through formal
or on the job training), or experimenting with entrepreneurship already during socialism. This
knowledge is frequently obtained in other post-socialist or sometimes developing countries,
which generates specific expectations, prejudice, and cultural understandings. Several cases
discuss the relevance of a globalizing managerial culture, class, way of life, in which localities
and local knowledge may have a diminished role. Cultural encounters are also shaped by the
preliminary experience of the main actors, depending on their Western, local, or mixed
socialization and business career. Preliminary cultural knowledge could also be seen as an
outcome factor of the age and typical socialization models of the main actors.
Some researchers put more emphasis on critically examine the way in which the vocabulary of
cultural encounters is constructed in the encounters of individual actors, institutional customs,
and broader social discourses. It is noteworthy that in many contexts the main actors of our
stories are not willing to use a “cultural” language; they interpret their experiences through
business concepts. In other cases, respondents tend to use East-West, foreign-local, global-local
binaries yet often denying simple contradictions or duality. References to regional (e.g. Central
Europe, Southeast Europe), civilizational/cultural (Latin, Anglo-Saxon) and national
17
constructions or traditions also surface. In the case studies on banking, these were supported by
some broader social imagery, background knowledge acquired in professional training, and
experience based wisdom. One could assume that the way in which the interviews were
conducted influenced the intensity of this sort of coding.
Two distinctive types of corporate models of banking with major transnational spread in the new
post-socialist business arena are identified and explained by our respondents. Many of those who
are currently working at banks privatized by foreign capital have had some encounters with banks
that have hierarchical institutional and management form, leaving little space for local thought
and action. By the same token, in their account Raiffeisen International (at the start RZB) has
introduced a model of banking which relies on a relatively flat organizational model and
decentralized decision making, in most cases to the appreciation of the employees on any level of
the hierarchy. Stories of the local subsidiaries reveal that the strategic moments and models of
privatization/investment in which the mother firm took part in the respected countries matter a lot
in how foreign and local actors interact, and how they negotiate norms of actions in congruence
of the strategy of expanding RI on the map of CEE. In spite of differences of the local
institutional stories, most respondents feel that their respective organizational story is something
peculiar, not necessarily following mainstream rules of the game in global banking and Western
capitalism.
As far as the individual stories are concerned, our informants often refer to the fact the in the
cultural encounters the generational issues are paramount, but not always triumphing the younger
cohort of people employed. Foreign and local managers had had their expectations of cultural
difference about each other, but it very rare that encounters generate dramatic surprises. In terms
of the dynamic of the encounters, sometimes initial difficulties, misunderstandings, false
expectations give their place for genuine recognition, in other cases the originally positive
expectations are turning into critical appraisal and modest disappointment. Some respondents
articulate that differences are felt in “Western” and “Eastern” divide, by very often differences
are articulated by culturally neutral economic terms. Regarding Raiffeisen International with its
regional network, most employees on any level feel that it is a special entity on the map of
banking with business success, cultural embedded operational manner, and substantial autonomy
that the local subsidiaries enjoy. Growing, although not yet overwhelming, fear, concern, and
critique is also expressed as RI introduces standardization of certain processes. Not insignificant
numbers of our respondents assume that what they experience is a particular form of how postindustrial capitalism and banking are shaping up in a global context, that is conflicts and
compromises have nothing to do with cultural differences and adjustment of a mother firm from a
particular Western country developing major presence in CEE.
An empire?
It is a common place belief that states and large enterprises mobilize political and market powers,
which are often antithetical to each other. Market forces transgress political boundaries and
politics often inclined to intervene into market affairs. Nonetheless, there are some constructions
in both realms that might use forms of action, identity, and authority that have some common
roots, grounds, and references in history. Empires may be such. The Raiffeisen story might evoke
18
images of empire, and not because the homeland of the mother bank is in a country, which had
been a successful empire builder along the Danube centuries ago.
Based on some recent treatise on empires, scholars started to contemplate on how the notion of
empire helps explain the emergence of some structures in the new Europe and other entities in the
current global order.12 According to Beck and Grande, imperial rule is not predicated on
inclusion and exclusion but on permanent expansion and delimitation.13 Empires grow on a
territorial level as well as through the assimilation of a variety of denizens. The techniques of
exercising rule are defined by an asymmetry of membership rights for different subunits and the
concession of socio-cultural pluralism.14 Empires are organised in concentric circles.15 Not every
subunit participates fully with all rights and obligations, however, there is status equality among
those who are in the same trenches. The legal structure of an empire is hence articulated in a set
of differential modes of participation. Some may be further removed from the power-core than
others. But they are still associates. The legality of imperial rule, however, tends to diminish
towards the periphery16 where people receive training into becoming fully participating members
or are simply subject to extraction and exploitation by local elites.
Integration means the permanence of change that is effected through interpenetration between
and among the layers of the multilevel system of governance, through the transformation of
national units into components of a larger system, through constantly pushing the envelop and
delimitation and, finally, through the pluralization and interaction of cultures.17 Empires are
enamored with space.18 Empires need to be big. If they were not, they would not live up to their
high appellation. Since nobody can tell how big is big enough in order to attain an imperial
dimension, bigger is better. What is more, ever since the late Roman Republic the scope of an
empire needed to be potentially boundless. Nothing short of universal and exclusive rule is what
an empire expects of itself.
As a review essay on some recent important books on empires argues, for all their differences and
ambiguities, empires have shared in common a will to power that should make us skeptical of
their most optimistic self-assessments.19 From Alexander to the present day, builders of empire
have professed their idealism and described their enterprises in altruistic terms. They aimed to
glorify God by expanding the horizons of the known world, by spreading a gospel, by extending
the benefits of commerce. When its extension fell short, as it always did, the explanation had to
be sought in the presence of contingent factors (i.e., a cost-benefit analysis of expansion) or in the
ironic fact that the empire had taken on a size which made partitioning unavoidable. Ideally,
however, since the early Christian period the Imperium Romanum was looked upon not only as
rule sanctified by divine endorsement but also as the only one. At the very least it is capable of
12
See a insightful review of literature and proposal by Somek, Alexander (2005)
Ulrich Beck & Edgar Grande (2004).p 92. as interpreted by Somek.
See id., p 93.
15
See id., p 95.
16
This observation is made with reference to Münkler. Helfried Münkler, ‘Das Prinzip Empire’ In U. Speck & N.
Szaider (eds.), Empire America. Perspektiven einer neuen Weltordnung (DVA, 2003) 104-125 at 112-113.
17
See Beck & Grande, at 102-103.
18
Which explains why it would be more than ridiculous to attribute imperial quality to Switzerland.
19
Review by Eric Hinderaker
13
14
19
indefinite expansion. The actual reasons claimed for expansion vary, of course. The need for selfstabilization or unlimited potential for accommodation—the ideology underpinning imperial rule
determines the rationalization chosen in support of imperial growth. It is obvious that a divine
endorsement cannot be legitimated in contemporary global economy, the “only and true” should
be replaced by the best and the most authentic.
Contemplating the implications of theories of empire may bring us close to the theorem of Leslie
Sklair on a transnational dominant class that inspired one of the Raiffeisen case studies’
authors.20 For Sklair, the transnational capitalist class in some spheres control forces of
globalization by interlocking directorates and cross-membership in international institutional
complexes. This dominant class possesses internal homogeneity and keeps distance between
them and any citizen in different part of the world. Thus, it seems to rely on network powers,
whereas empires are always hierarchical in their set-up even if both of these structures support
unequal processes in foreign investments and global exchanges. Resistance against the center of
power and its ruling ideology could be differently conceptualized and practiced within an empire
and vis-a vis a transnational class. But in theory they could go hand in hand in controlling
cultural encounters, shaping corporate cultures and models, and shaping discourses on
capitalisms in a broader global order. It is of intellectual curiosity how de-territorialization effects
of post-industrial capitalism and notoriously expanding virtual economies could be inserted in the
theories of transnational empires and transnational capitalist class.
The logic of empire building in transnational economic affairs also resonates with the concept of
transnational cultures that Ulf Hannerz proposed many years ago.21 He argues that transnational
cultures, which have systematic and direct involvement in more than one cultures, that are
territorially still anchored, also have some centers from which particular meanings are produces
and disseminated. Thus, center-periphery relations remain paramount. Institutions often move
together with people. The main actors in this space, the cosmopolitans have specific knowledge,
which is a decontextualized cultural capital. It is usually expansionist and strives towards
mastery. Our Raiffeisen and other bank stories reveal that local actors believe that they are not
subordinated to any transnational capitalist class, empire, or mastery of cosmopolitans. They have
their own power and achievements in the major encounters—for good or bad of local capitalisms
they build.
20
Leslie Sklair (2001)
21
Ulf Hannerz (1996) p 106.
20
Literature
Case studies:
Cengic, Drago: Raiffeisen Bank Austria in Croatia: Global Network, Local Development, and
The Question of Culture Transfer.
Kovacs, Janos Matyas and Violetta Zentai: The Flagship or the Recalcitrant? (Hungary)
Chelcea, Liviu and Diana Mihaloiu: Western Culture, Eastern Culture, Corporate Culture:
Romance with a Satiric Twist. (Romania)
Lewicki, Mikolaj: The Transfer of Knowledge in the Raiffeisein Bank Polska SA.
Pesic, Jelena: Cultural Encounters in Banking Sector. (Serbia)
Chavdarova, Tanya and Georgi Ganev: Privatized Bank (Z-Bank). (Bulgaria)
Stepanova, Lenka, Irena Kasparova, Marek Kaspar: Zivnostenska Banka (Czech Republic).
Rek, Mateja: Domestic and Foreign Managers in the Bank with Mixed Ownership (Slovenia).
Other:
Beck, Ulrich and Edgar Grande (2004): Das kosmopolitische Europa. Suhrkamp.
Clark, Ed and Mike Geppert (2002): Management Learning and Knowledge Transfer in
Transforming Societies. Human Resources Development International 5:3: 263-277.
Dorrenbacher, Chistoph at al: (2000):Transformation and foreign direct investment: Observations
on path dependency, hybridization, and model transfer at the enterprise level. Transfer,
Volume 6, no. 3:434-449.
Dunn, Elisabeth (2001): Carrots, Class, and Capitalism: Employee Management in a PostSocialist Enterprise. In Poland Beyond Communism. "Transition" in Critical Perspective.
Buchowski, E. Conte, C. Nagengast eds. Freiburg: Universitätsverlag M.: 259 279.
Dunn, Elizabeth (1998): Slick Salesmen and Simple People: Negotiated Capitalism in a
Privatized Polish Firm. In Uncertain Transition: Ethnographies of Change in the PostSocialist World, M. Burawoy and K. Verdery, eds. Lanham: Rowman and Littlefield. Pages:
125-150.
Hannerz, Ulf (1996): Transnational connections: cultures, people, places. London. Routledge.
21
Hinderaker, Eric (2004): Still Life with Empire. Common Place. http://www.commonplace.org/vol-02/no-02/reviews/hinderaker.shtml
Lang, Rainhart and Thomas Steger (2002): The Odyssey of Management Knowledge to
Transforming Societies: A Critical View of a Theoretical Alternative. Human Resources
Development International 5:3: 279-294.
Lindstrom, Nicole and Dora Piroska (2004): The Politics of Europeanization in Europe’s
Southeastern Periphery: Slovenian Banks and Breweries in S(c)ale. Queen’s Papers on
Europeanization. No 4. http://www.theslovenian.com/articles/piroska.htm
Marginson, Paul and Giglielmo Meardi (2004): Europeanizing or Americanizing? EU
Enlargement and the FDI Channel of Industrial Relations Transfer. ESPR Conference,
Bologna, 24-26 June, 2004. http://www.jhubc.it/espr-bologna
Quintana, Miriam (2003): The Different Dimensions of ‘Europeanization’ in the Banking Sector:
Implications for EWCs. Warwick Papers in Industrial Relations. No.72.
Sklair, Leslie (2001): The transnational capitalist class. Oxford: Blackwell.
Somek, Alexander (2005): The Benign Empire: A Post-Colonial Legal Study. Institute for
Advanced Studies in Management and Social Sciences, Lancaster University, Working
Papers Series. No.5.
Várhegyi, Eva (2003): Bankverseny Magyarországon (Bank Competition in Hungary).
Közgazdasági Szemle, December: 1027-48.
Várhegyi, Eva (2001): Külföldi tulajdon a Magyar bankrendszerben (Foreign ownership in
Hungarian banking). Közgazdasági Szemle, július-augusztus 581-598.
22