Estonian Enterprises Research Articles

Parallels and Differences in Earnings Management of the Visegrad Four and the Baltics

Earnings management is a legal and widely preferred phenomenon of business finance that financial managers use to maintain and improve the enterprise’s competitiveness. Managers purposely manipulate business earnings to achieve the required status of the enterprise. The consequence of these activities is to provide a positive perspective for the owners, encourage the profitability for the creditor and the investors as well as demonstrate economic strengths to competitors. This article aims to identify parallels and differences in earnings management of enterprises in the Visegrad Four and the Baltics in terms of competitiveness for the nineyear period 2010-2018. The research uses a final sample of 4,543 observations from the EBITs of Slovak, Czech, Hungarian and Polish enterprises as well as 1,633 observations from the EBITs of Latvian, Lithuanian and Estonian enterprises. Time-series methods with all necessary assumptions have been run for the analyzed financial dataset. The results of the econometric modeling of unit roots show significant parallels in these groups of countries. The enterprises from the Visegrad group and the Baltics group use the apparatus of earnings management to be competitive. The obtained results confirm the systematic but legal manipulation from the side of management. A quantitative analysis of homogeneity tests using 1,000,000 Monte Carlo simulations indicates significant time differences of manipulation in these emerging countries. The year 2014 signaled a radical “accelerando” in earnings management for the V4, and the year 2016 is highlighted for the Baltics.

Evaluation of Perception of Accountant`s Role at the Enterprise in Latvia and Lithuania

The development of an accountant`s profession is quite a widespread subject in scientists` researches in different countries. It topicality has especially been underlined recently in connection with international conditions affecting the above profession, for example, Framework for International Education Standards for Professional Accountants and Aspiring Accountants (2015). This refers to the need of the investigation of accountant's role at the enterprise. Following the research methodology carried out at Tallinn University of Technology (Estonia) in 2016 to find out the students' point of view as regards the accountants` role in Estonian enterprises has been aggregated in Latvia and Lithuania. The purpose of the article is to evaluate the perception of accountant's role at the enterprise and the skills required for the profession in Latvia and in Lithuania. A questionnaire-based study among practicing accountants working in Latvian and Lithuanian enterprises and students of the accounting study program at both the University of Latvia and University of Vilnius was used. The study is based on the hypothesis that on these issues the views of accountants - practitioners as to the role of accountants in an enterprise, the scope and character of their daily work functions as well as the necessary knowledge and skills are different from those of students. The conclusions made at the end of this research regarding the connection of the survey data with the knowledge and skills accounting students will gain at completing the university study program allowed us to identify the directions for improvement in accounting study programs.

EMPLOYERS’ ROLE IN THE IMPROVEMENT OF SAFETY LEVEL IN ESTONIAN ENTERPRISES

The key persons in safety activities at enterprises are: top manager, his(her) representatives, working environment specialist, all acting for the employer; and working environment representatives, selected by the workers and holding the workers’ rights in safety and health area. The main possibilities to improve the safety level in the firm have the working environment specialists, as they are usually educated and supported by the employer and the law. The current paper is looking for the possibilities to raise the employers’ interest for improvement of their knowledge in safety and through this also the safety level in the workplace. Safety level in 12 Estonian enterprises was investigated using MISHA method (based on standard OHSAS 18001). Some of the firms have implemented OHSAS 18001 or belong to the foreign companies. The investigated enterprises were from different industries and agriculture firms. The safety level is very much depended on the owner of the firm. The larger the enterprise is the better are the possibilities to educate the employers and employees. One of the ideas to improve the safety level at enterprise is the method “learning through the interviews”. The interview is worked out basing on MISHA method. The latter is a tool of quantitative study. The safety performance key elements were divided into three parts: formal, real, combined ones. Three hypothesis were formulated and the area in which they are proved concerning employer’s activities were as follows: H1) Standard OHSAS 18001 has an impact on Formal safety performance in companies (p value< 0.013) – if OHSAS 18001 has been implemented, then: the assignment of tasks and responsibilities in OHS is committed to the top management, the employer is revising the safety policy, and the personnel’s responsibilities in OHS are clearly defined. H2) Standard OHSAS 18001 has an impact on Real safety performance. (p< 0.013) - if OHSAS 18001 is implemented, then: the top manager promotes dissemination of safety policy: the policy is made available to all of the personnel; resources for improvement are arranged by the top management; the top manager arranges meetings in OHS; there is a system for redesigning the workplaces for the persons who have difficulties in coping with the work. H3) Standard OHSAS 18001 has an impact on Combined safety performance (p< 0.007) - if OHSAS 18001 implemented, then: the top management is participating in the preparation of safety policy, top manager is reviewing the safety policy, is it operating effectively? He is informing the external bodies about the company’s safety policy’s effectiveness; the top manager arranges safety training for all of the personnel; there is a plan for reduction of accidents; it has been elaborated by the top manager; the company has a system for measuring the social climate in the company.

The Role of Accountant in the Estonian Enterprise

Recent developments and changes in the modern economy as well as falls and rises of large corporations have brought up the public interest towards the accounting discipline, and have resulted in a growing demand for accountant specialists as educated professionals. The aim of the present research is to find out what is the role of the accountant in the modern enterprise. The authors conducted a survey among Estonian accounting specialists and managers. The results of the survey clearly indicate that in most Estonian companies, accountants are actively assisting members of the board to make vital decisions, and their competence, knowledge and skills are highly valued by managers. The findings of the survey emphasize that Estonian accountants are highly qualified, keeping in line with the latest developments in the modern financial world.

Emergency preparedness and response in ISO 14001 enterprises: an Estonian case study

Emergency preparedness and response is one of the key elements of the 14001 standard of the International Organisation for Standardisation (ISO). ISO 14001 requires participating organisations to implement procedures for emergency preparedness and response. Organisations implementing and certifying environmental management systems (EMS) are obliged to identify potential emergency situations and accidents that can impact the environment and plan an appropriate response. In this context, we studied Estonian enterprises to analyse the variety of approaches to emergency preparedness and response. The main aim of this survey was to examine the identification and assessment of, as well as the response to, accidents and emergency situations in a selection of Estonian organisations that had implemented the requirements of ISO 14001. As a result of this study, we reached a number of conclusions that organisations can consider during the implementation and later improvement of their environmental or integrated management systems.

DISCLOSURE ON INTELLECTUAL CAPITAL IN ANNUAL REPORTS OF NASDAQ OMX BALTIC-LISTED COMPANIES

According to the current accounting standards, only a minor part of intellectual capital is presented in financial statements. Nevertheless, more and more companies in Lithuania and abroad reveal information about their intellectual capital in their annual statements. Therefore, the object of this paper is the disclosure of information on intellectual capital, and the aim is to reveal the trends of disclosure of information on intellectual capital based on annual reports by Nasdaq OMX Baltic-listed companies in the years 2010 to 2012. The main method applied in the present article is content analysis. Results. On the grounds of the described research methodology, the content analysis of annual reports dated from 2010 to 2012 by Nasdaq OMX Baltic-listed companies was performed. By applying the “QDA Miner” software, intellectual capital-related terms were calculated and distributed into three categories (human, relational, and organizational) in terms of the assets and liabilities. The obtained results of the three countries were compared in order to reveal the trends of development; furthermore, a correlation analysis was conducted to reveal the relationship between the market capitalization of a specific country and the level of disclosure on the intellectual capital of enterprises. Conclusions. The present research reveals that the total disclosed information on the intellectual capital of the Nasdaq OMX Baltic-listed companies was increasing each year from 2010 to 2012. On the other hand, the research shows that the trends and the structure of the disclosed information on the intellectual capital are different in each Baltic country. The highest amount of information was revealed by Lithuanian enterprises and the lowest amount is shared by Estonian enterprises. The best-covered information on the intellectual capital presents the employees as an asset while the most scantily revealed information describes intellectual liabilities.

An Investigation of the Characteristics of Learning Organizations in Turkish Companies: Scale Validation

In this study it was aimed to identify the characteristics of learning organizations and testing the learning organization scale in Turkish companies. The questionnaire was applied to 48 managers and 426 employees in 11 companies, operating in outsourcing for call center industry. The reliability and validity of the “Organizational Learning” scales developed by Mets and Torokoff (2007), which were based on Senge's five disciplines, in order to determine the characteristics of the learning organizations was investigated for Turkish study population within the scope of this study. According to study findings, it can be stated that aforementioned scale is a powerful tool that can be used to measure organizational learning with its high reliability and validity, specifically for Turkish respondents. The reliability and validity of the “Organizational Learning” scales developed by Mets and Torokoff (2007), which were based on Senge's five learning disciplines and Mets’ three-dimensional learning model, for the Estonian enterprises, were investigated for Turkish study population within the scope of the study and results indicate that this scale is considered valid and reliable for Turkish use.

Health Risks to Computer Workers in Various Indoor Facilities

Musculoskeletal disorders (MSDs) are the main cause of occupational diseases in Estonia and Europe. The number of MSDs has increased with the increasing number of computer workers and the increasing workload overall. In the current paper, the survey of 295 workers in Estonian enterprises is carried out to clarify the reasons of occupational stress. The causes of occupational stress are non-ergonomically designed workplace, social and human factors. The main questionnaires used were KIVA and GPSnordic. The conclusion is that KIVA questionnaire alone is too mild to point out the risk factors. The comparison with other questionnaires has to be carried out.

Innovation Activities in Baltic Countries

Article discusses a research framework which brings together variety of related factors to innovation process on the basis of systemic review of theoretical and empirical studies.Aim – investigate human capital, R&D, cooperation with external environment, on innovation oriented organizational culture, and market orientation, state policy relation to the process of innovation creation in Latvian, Lithuanian and Estonian innovative enterprises. Main research methods used. Monographs method - information collection and compilation of the influential factors on innovation creation. This method makes it possible to carry out a detailed study of the object, based on scientific literature and research results. Grouping method - creation process of homogenous group on the basis of statistical cluster division, or research unit merging particular group taking into account constructive unit feature. Statistical analysis techniques: correlation analysis. Graphical method - illustration of graphics design, image building, correlation phenomena and nature of relations and shapes. Content analysis - the systematic numeral processing, evaluation and interpretation of the form and content of the information source. Survey - empirical, economic, social, management research method proceed in order to gather information from representatives of innovative enterprises in Latvia, Lithuania and Estonia. The type of questionnaire is the same for Latvian, Lithuanian and Estonian enterprises. Main results and conclusions of the paper. There was created a theoretical model of analysis of influential factors on innovation creation that reflects on the enterprise capacity to achieve competitive advantage. There was empirically tested different factor impact on innovation in Latvian, Lithuanian and Estonian innovative companies.There was created methodology of evaluation of influential factors on innovation creation. There was estimated human capital, R&D, cooperation with scientific-research centers, universities, organizational culture, and market orientation impact on the process of innovation in Latvian, Lithuanian and Estonian innovative companies.

Implementation of the Theoretical Concept of Green Procurement and Supplier Selection in Estonian Shipbuilding Industry

Industrial companies are to an increasing extent faced with requirements for better sustainability performance. Green market expands and green purchasing is regarded as a contribution to sustainable development. This paper examines impacts of implementing environmental management systems on enterprises' competitiveness in international supply chains at the example of Estonian ship- building enterprises. The theoretical concept of supplier selection process is used. The alignment problems of green procurement requirements and conditions are considered. The paper focuses on the relationships in the chain affecting the procurement and selection processes. The ship's chain and life cycle of the product specifics are also provided. Management of sustainability in ship design requires a methodology targeted towards physically large and complex systems with long life spans and multiple stakeholders. For the purpose of this paper, only the environmental aspects of sustainability are considered. This paper introduces and discusses the green supplier selection and green purchasing as environmental management tools and how in general they can be used to improve a system's environmental performance, corporate social responsibility to be environmentally friendly, ensure sustainable development and pure environment. A question is raised about Estonian possibilities to participate in the global competitive chains through the green supplier selection process. The paper analyses effects of implementing environmental management systems on enterprises' competitiveness in international supply chains and problems involved in alignment of green procurement requirements and conditions. An objective is to map the implementation of an environmental management system in ship-building enterprises, and based on that, their participation in international supply chains. The paper focuses on the relationships in the chain that affect the procurement and selection processes. It represents an analytical-conceptual approach as well as a pilot study on green procurement based on Estonian ship-building enterprises. The theoretical concept of supplier selection process developed by Igarashi et al. (2013) in the Norwegian University of Science and Technology (NTNU) is used. The author explores the possibilities of and obstacles to implementing this concept. An in-depth empirical research, i.e. interviews with representatives of ship-building enterprises, is intended in next stages of the research. Another aim is to explore how the green outsourcing companies could contribute to strengthening their competitiveness in the supply chain. What are the benefits of the green business strategy process for enterprises in the supply chains? Estonian companies are mostly young, during the privatization process large enterprises were split up, new firms and foreign investments were small. In most cases they are outsourcing firms and produce intermediate goods (not high-value-added end- products) in value chains. Therefore, they do not have sufficient power to influence the product chains. Environmental regulations may be inhibiting the development of relatively small businesses. Estonian companies are only part of the chain, even if the end product is made here (e.g., log homes, furniture and other wood products), these are sold through the Nordic countries. In contrast, the shipbuilding industry is a relatively independent branch. Providers participating in important segments of a product's life cycle are represented locally. There are also a small number of focal final product companies. The first section of this paper opens the background of green procurement and supplier selection. The second section focuses on the relationships that exist in the chain affecting the procurement and selection processes. The third section covers the environmental requirements in the supply chain. The fourth section provides an overview of the ship's chain and life cycle of the product specifics. The main part uses and supports Igarashi, de Boer and Fet's (2013) theoretical concept of green supplier selection process, which is based on 60 articles containing the keywordsgreen procurement´, ´supplier selectionandgreen purchasing´. Finally, utilisation sample of the GSS concept in Estonian shipbuilding industry is given. Data for the research were taken from the Estonian Quality Association database. The shipbuilding and repair activities are sorted out from among the metal and engineering industries, based on the most commonly used environmental management standard ISO 14001. Additionally, for example, ABB, E-Profiil, Toci, and other known suppliers of important offshore installations and large

County level economic sustainability of Estonian enterprises

County level economic sustainability of Estonian enterprises

Cost-Effectiveness of Safety Measures in Enterprises

Safety auditing is a systematic method to evaluate the company’s safety management system. The main task of auditing is to establish whether the correct types of safety methods are used and whether they are effectively implemented. The safety auditing in Estonian enterprises (on the basis of European Union legislation, Standards OHSAS 18001:1999 and BS 8800:1996) is only in the beginning stage. As the prerequisite to the paper the safety auditing in 12 medium- and small-scale enterprises in Estonia from 5 branches of industry (metal and wood processing, plastic, garment and printing) has been carried out. The modified Diekemper & Spartz (DS industrial hazard control; fire control and industrial hygiene; supervisory participation, motivation and training; accident investigation, statistics and reporting procedures. The maximum score was gained in the plastics industry: 62.9% and the minimum score in a printing industry: 40.9%. Economically developed enterprises have possibilities to pay also more attention to safety matters. The cost-effectiveness of the planned safety measures is calculated. The method considers the cost, the effectiveness and the uncertainty of the safety measure (Roed method). These three variables integrate the cost-effectiveness of a safety measure. The most cost-effective measures by investigated industries were: provide the workers with protective footwear in metal industry; the analysis of the spectrum of noise in printing industry; analysis of chemicals in the workrooms’ air (risk analysis of chemicals) in plastic industry; the analysis of chemicals and medical examinations of workers in wood processing industry; advanced training of workers to prevent the injuries with fingers in garment industry. The safety policy and safety plan that set the framework for health and safety activities in enterprises are usually not available in written form in Estonian firms. In addition, there is a need for raising the awareness of workers in the field of occupational health and safety. Supervisory participation, motivation and training were the activities that received quite low scores. The recommendations to the employers were given: to improve the information of workers, motivation to use the personal protective equipment and to carry out continuing training of workers as well as the leaders in work safety and health.

Analysis of Directing the Innovation Process and its Relation to Middle Level Manager's Work: the Case of Estonian Enterprises

In the process of innovation learning in the organisation (individually and as a team) plays an important role. Many entrepreneurs underestimate and dedicate little energy and time to formulating teams where members’ skills complement one another; and also do not engage in improving their own managerial abilities (Fitzsimons, 2002). One has to know how to gather and analyse information, make balanced decisions and constantly find new solutions in order to support the success of a business in a demanding and fast-changing world of technology. The mid-level manager can also support innovation and contribute to the innovative culture in the company. In the analysis of directing innovation process this article derives from the concept of learning organisation. The model and questionnaire were based on the five discipline model (Senge, 1990) and the three-dimension model of organisational development framework − “3-D model” (Mets, 2002). The study covers the years of 2005– 2008; the questionnaire was filled out by 573 employees from different companies in Estonia. The study of different samples delineates different patterns of a learning organisation. Based on factor analysis, it became clear that the patterns of characteristics are substantially different for companies whose learning is based on employees or managers. From the analysis of free-form answers in the questionnaire it came out that if the company lacks a clear vision the employees are unable to connect their development with the enterprise, information does not travel between different levels without hindrances, and learning in organisation is less structured for employees than for managers. One of the conclusions of this study is that the perception of an enterprise as a learning organisation is more simplistic for employees than for managers. Therefore the role of mid-level managers in directing the development of their direct subordinates is more important than it has been realised thus far. Mid-level managers have to learn the skill of communicating the strategy of the company to the employees and conveying the ideas and views from the bottom to the top management. The development of the learning organisation is one precondition for directing the innovation process; for that the author of the article proposes a new model of a motivational cycle.

Differences in implementing management and organization development directions between domestic and foreign companies in Estonia

PurposeThe purpose of this paper is to find out which contemporary management ideas have been implemented in Estonian business organizations and what are the differences between domestic and foreign companies in the field of management innovation.Design/methodology/approachExperts selected among management development approaches that were most frequently reflected in Harvard Business Review, Fortune Magazine and in the ProQuest database 8 direction that are most relevant for the survey in the transition economy context. The survey format is a qualitative questionnaire submitted to top managers in 141 Estonian enterprises.FindingsThe most frequently followed management development directions are balanced scorecard/management by objectives, supply chain management, learning organization, and total quality management. General differences between contemporary management directions in the domestic‐ and foreign‐owned companies researched are not significant. The initial hypothesis that contemporary management directions implemented in Estonian enterprises are mainly based on knowledge transfer by foreign enterprises or investors is not affirmed.Research limitations/implicationsBy using only a selection of management directions, it is not possible to draw final conclusions about the development process of management practice. The nature of the sample does not allow the authors to draw conclusions about all business sectors in Estonia.Practical implicationsThe results provide insight into the value of contemporary management directions for Estonian enterprises and enable the authors to make some forecasts about future management trends in Estonia depending on domestic and foreign ownership of enterprises that can be taken into consideration in management training programmes.Originality/valueThe paper provides an overview of innovations in management practice in a transition economy that has not been researched earlier by using a tool that operationalizes contemporary management directions.

Innovations at Workplace: An Evidence-Based Model for Safety Management

Safety culture is a sub-unit of organisational culture, which affects members’ attitudes and behaviour in relation to organisation’s ongoing health and safety performance. Many companies want to enhance their safety culture or some aspect of safety behaviour trying to find the effective way forward. Safety culture in small and medium-scale (SMEs) enterprises has received very little attention in Estonia. Estimates suggest that these enterprises have serious problems aggravated by limited access to human, economic, technological resources as well as lack of relevant occupational health and safety (OH&S) knowledge. The current paper commences with a discussion on the Reciprocal Model of Safety Culture and different perspectives on a framework espoused by Cooper (1999). The concept of safety culture and knowledge management is also discussed. Authors present supplemented Cooper’s Reciprocal Model of Safety Culture with Knowledge Management System Dimensions. The exploratory study based on workplace visits and interviews with owner-managers of SMEs manufacturing enterprises gives an overview of the most characteristic oH&S representations and practices. An overview of the current Estonian OH&S system is also presented based on occupational health (OH) physicians’ questionnaire surveys conducted in 2002 and 2009. The study suggests that there is need for discussion and improvement of collaboration between employers and OH professionals in order to strengthen knowledge management and infrastructure as well as safety culture at the Estonian enterprises. Competence and expertise in work and health topics is the foundation for the added value of OH professionals to the health of working population. Inovacijos darbo vietoje: konstruktyvus darbo saugos vadybos modelis Santrauka. Darbo saugos kultūra yra organizacinės kultūros subvienetas, darantis įtaką organizacijos narių požiūriui ir elgesiui, atsižvelgiant į organizacijoje vykdomą profesinės sveikatos ir darbo saugos politikos lygį. Daugelis kompanijų nori pagerinti saugos kultūrą ar tam tikrą aspektą ir bando rasti efektyvių būdų tam pasiekti. Saugos kultūrai mažose ir vidutinėse įmonėse Estijoje skiriama labai mažai dėmesio. Šios įmonės susiduria su rimtomis problemomis, kurias pagilina ribotas galimybės prieiti prie žmogiškųjų, ekonominių, technologinių išteklių, taip pat žinių trūkumas profesinės sveikatos ir darbo saugos klausimais. Straipsnyje aptariama saugos kultūros ir žinių valdymo koncepcija. Autoriai papildo Cooper (1999) saugos kultūros modelį, įtraukdami ir žinių valdymo sistemos elementus. Remiantis interviu su smulkių ir vidutinių gamybos įmonių vadovais, buvo atliktas tyrimas, kuris atskleidė situaciją, susidariusią profesinės sveikatos ir darbo saugos srityje. Pateikiama Estijos profesinės sveikatos ir darbo saugos sistemos apžvalga, pagrįsta profesinės sveikatos gydytojų anketine apklausa, atlikta 2002–2009 m. Tyrimas parodė, kad reikalingos diskusijos ir bendradarbiavimas tarp darbdavių ir profesinės sveikatos specialistų siekiant pagerinti žinių valdymą bei saugos kultūrą Estijos įmonėse.  Reikšminiai žodžiai: žinių vadyba, darbo saugos vadyba, darbo saugos kultūra, darbo aplinka. First published online: 29 May 2009

Behaviour patterns in Estonian enterprises from the perspective of the value chain

PurposeThe aim of this paper is to evaluate how Estonian enterprises understand their position in the value chain, and to explore what kind of behaviour patterns correspond to the different positions. It also aims to focus on the question of whether and how Estonian enterprises see the need to improve their position in the value chain.Design/methodology/approachThe approach is based on an empirical study in the course of which original interviews were conducted on the basis of a common plan (primary sources), and expert opinions were gathered on the basis of earlier studies. Two kinds of sources were analyzed to obtain an overview of the situation in Estonian companies in respect to strategy, and more specifically how companies evaluate their position in the value chain and what their aspirations for future are. First, the figureheads from the enterprises were interviewed in 14 enterprises. Second, expert assessments were drawn up about 25 enterprises. Those compiling the expert opinions possessed prior direct contacts with the enterprises under focus.FindingsFirst, it was discovered that Estonian enterprises presented three types of behaviour patterns along with their interest in and/or potential for changing their position in the value chain. Second, several behavioural patterns were indicated by what the figureheads had to say about the current economic situation. Third, the main problems in Estonian enterprises were identified.Research limitations/implicationsThe study has limitations due to the number of companies that were investigated, and therefore the authors also admit a certain degree of subjectivity in the defining of the behaviour patterns. Nevertheless, this study highlights various issues that Estonian enterprises consider in respect to strategy.Originality/valueThe main value of the paper is its contribution to our understanding of which factors impact the development of Estonian enterprises. This knowledge allows us to analyze how organizations from former Soviet bloc countries can better manage their position in the value chain.

Free movement of labour and strategic Human Resource Management challenges in new European Union member states: a study of Estonian enterprises

The paper will present the results of a survey questionnaire conducted in Estonia in order to identify links between forecasts of cross-border labour mobility, opportunities and threats from European integration, development projects supported by the EU, and human resource development, in order to gain and retain international competitiveness. Research results reveal that smaller enterprises expect higher mobility than larger companies. Enterprises that have a long-term human resource strategy and link personnel training to international networking, technology and product development by participating in EU-supported development projects are less vulnerable to labour mobility risks.

Applying cross‐cultural student teams for supporting international networking of Estonian enterprises

PurposeThe purpose of this paper is to explore the action learning experience of business students in cross‐cultural teams in the role of international business information gatekeepers for small‐ and medium‐sized enterprises (SME) focused on international business opportunities.Design/methodology/approachAction research is applied by combining a questionnaire survey, analysis of mid‐term and final project reports, reflective team discussions and feedback from representatives of enterprises.FindingsThe cross‐cultural alignment of teamwork habits – offering leads for business contacts when presenting broader innovative ideas to SMEs, demonstrating the competence of the team when specifying the preliminary task and sharing knowledge with other teams – are essential challenges for project teams. Reflections of the teamwork process reveal the impact of some of the dimensions of cultural diversity introduced by Hofstede and Trompenaars.Research limitations/implicationsStudent teams and enterprises did not represent all key Estonian export destinations. Southern European countries and China are overrepresented in comparison with northern European countries that are culturally closer to Estonia. Further research could link action research, follow‐up surveys of SMEs involved in the projects and comparisons of SME samples from different business sectors.Practical implicationsEntrepreneurs in Baltic countries and in other new EU member states can benefit from gatekeepers that help entrepreneurs understand more advanced markets and to develop cross‐border networking with partners in other regions of Europe. A virtual community that can match students from different cultures, before and after their Erasmus exchange, in a co‐operation network for a cross‐border market study and search for contacts within enterprises is needed to facilitate more advanced cross‐border networking in the entrepreneurship‐education process.Originality/valueThe paper highlights factors supporting and inhibiting cross‐cultural synergies between action learning and e‐learning, cross‐border student exchange and knowledge sharing between SMEs and international student teams.

Corporate governance in Estonia

The corporate governance problems as known in a market economy arose in CEE countries in connection with the privatisation of large enterprises at the beginning of the 1990s, and to a large degree even afterwards. The emerging pattern of CG is quite difficult to interpret according to the traditional Western models and varied greatly from country to country, because in the case of transition countries various institutions and the environment as a whole do not work or at least do not work fully (Tafel et al, 2006). Therefore CEE-countries represent a very good testing ground for Corporate Governance (CG) related research. This paper studies forms of corporate governance in foreign owned companies situating in Estonia: cooperation between the owners, council and board in Estonian enterprises. The paper starts with the theoretical part followed by methodology and results of empirical study in Estonian companies

International competitiveness and organizational change drivers anticipated by Estonian managers in the context of European integration

PurposeThe purpose of this paper is to explore the way Estonian enterprises adapt strategically to European union membership. The research question is: what are the main patterns of internationally competitive business development and related organizational change and learning drivers for managers in a transitional country in the European integration process?Design/methodology/approachThis explorative research combines a questionnaire survey and follow‐up interviews of managers from 87 enterprises in food processing, transportation and logistics, wood and furniture, information technology, mechanical engineering, textiles and professional services. The timing of the survey and follow‐up interviews brings longitudinal features to the research design.FindingsThe paper offers insights into managerial visions of future competitive advantage and links to changes induced by European integration. Respondents most often pointed out flexibility and competent staff as the key element of their competitiveness vision. Three clusters of organizational change drivers were identified: “subcontracting efficiency boosters”, “diversified internationalization opportunity users”, and “international value chain members”.Research limitations/implicationsThe research focuses on industries directly influenced by EU accession, but does not build a representative sample of all enterprises operating in Estonia. Comparing the questionnaire survey and interview results with secondary information about enterprises involved in the research supports a triangulation of data sources, but the main focus of this research is to explore future change visions, rather than tracking the strategies that have already been implemented.Practical implicationsThe research highlights differences in managerial perceptions of changes in the strategic environment and strategic choices in order to attain sustainable competitiveness on European markets. That information can be used as input for organizational development and learning programmes and for identifying the challenges in implementing policy initiatives supporting innovation.Originality/valueThe paper differentiates types of enterprises in a transitional country that can be described using different patterns of organizational change drivers in the context of European integration.