In order to give adequate answers to the main research question of this thesis, the following methodological framework was used: formulation of the key questions, answering of the key questions based on research, review and analysis of the literature.
In the center of this doctoral research is the question:
Don’t waste time! Our writers will create an original "Pilot Project" essay for youCreate order
“Do multinational companies have a positive contribution to Serbia’s socio-economic development and overall economic growth?”
Following questions were formulated with their main objective to answer the research question:
The research process was based on the adopted methodology, which meant in practice that analytical qualitative and descriptive method was applied.
In fact, the methodology of “case study” will be done for each of three multinational companies that located their activities in the Republic of Serbia – having in mind that each company covers a different field of business.
According to the exposed main objectives and the methodological framework of this doctoral research, the first case study was done with Holcim Srbija A.D. The research on this company was conducted by studying the original basic documentation, other relevant printed materials, interviews, revision of the information from the company’s website and the analysis of activities of the company published in specialized reviews.
The most important part of this research process was the realization of interviews that according this methodology had been conducted by using open-ended questionnaires. The questionnaires were formulated for five members of the company on different position -that were interviewed. In fact, the objective was to interview the top-management level (one representative) and the other four, which were representing middle management of the company.
The open-ended questionnaire was constructed in a way to tackle several areas of company’s activities: motivation issues, strategy issues, company’s success and constraints, contributions of the company to different departments and intercultural management issues.
The research focused on the interview of five persons who gave answers concerning the following departments:
At this stage, it is necessary to point out that the five interviewed persons have been extremely cooperative and helpful during the interviews, but it had been very difficult to schedule appointments with them due to their tight daily schedules. This will serve as a valuable lesson for the upcoming research on case studies no. 2 and 3, which the author will try to overcome.
Example of the used open-ended questionnaire:
This interview is a part of an academic research project leading to a DBA thesis at the Grenoble Graduate School of Business. The underlying objective is to answer the research question of the thesis, which is:
“Do multinational companies have a positive contribution to Serbia’s socio-economic development and overall economic growth?”
Furthermore, the research on the case study has been conducted by the revision of the original documentation of the company and consisted of the following:
The above stated contracts had been given to the author at the very site of the interview, with no possibility to make copies, since they were considered as “classified”.
Additionally, the company’s website has been used as a useful source to gather information about the daily activities of the company, media releases, electronic version of the company magazine, employment possibilities, achieved and upcoming projects, gallery of photos etc.
Finally, all promoting brochures and other published material of this company gave the possibility to study and understand the way and methodology that this company adopted in order to make closer contacts and relations with local authorities, NGOs and other organizations – especially those engaged in ecological questions.
It seems necessary to underline the intent of the company’s management to participate also in the cultural life of the region by sponsoring the most important cultural activities. The similar activity is registered in the field of human resource issues.
Holcim Group is a leading global supplier of cement, aggregates (crushed stone, gravel and sand), as well as ready-mix concrete and asphalt including related services. The company was founded in 1912, in connection with the construction of a cement plant in Holderbank, Switzerland.
As early as the 1920s, Holcim began to invest selectively in Europe, and then overseas. The company has been listed on the SWX Swiss Exchange since 1958. Today, the Group operates in more than 70 countries across all continents and employs a workforce of some 90,000.
Holcim is more globally spread than any other building materials group and has a strong foothold in each of its individual markets. Geographic diversification and specialization provides stable earnings for the Group. Solid internal and external growth means that the company expands its market position – in developing and mature markets alike.
Founded in Switzerland, Holcim is committed to global standards in both production and distribution and also with regard to environmental and social responsibility. The local Group companies focus on optimum customer service, which also includes innovative product-specific services.
Holcim was named “Leader of the Industry” in the Dow Jones Sustainability Index (DJSI) for the third time in succession and is recognized as the company with the best sustainability performance in the building materials industry. This recognition confirms that Holcim addresses key issues for the industry regarding sustainable development. The Group’s recycling and energy saving strategies, its dialogue with stakeholder groups, its efforts in occupational health and safety, and its human capital development received top scores in the DJSI.
Generally speaking, it is possible to underline that the vision of Holcim Group is to provide foundations for society’s future. It aspires to be the world’s most respected and attractive company in the cement industry, creating value for all its stakeholders. Placing sustainable development at the core of its business strategy aims to enhance this value, safeguards Holcim`s reputation and contributes to continued success.
Group strategy and its approach to value creation integrates economic, environmental and social impacts – the three elements of the “triple bottom line”. To achieve its business goals and maintain its license to operate, Holcim Group has established ambitious Group-wide sustainable development targets.
According to the consulted material and adequate interviews the strategy of the Group is based on three central pillars:
The most important foundation on which everything rests is a workforce that gives its best on a daily basis.
Holcim is one of the world’s leading building materials groups. The lasting success of Holcim is due to a clear product strategy, among other things. The company emphasizes production and distribution of cement and aggregates – both key basic materials for construction.
The main focus of investment activities and value creation is the processing of raw materials. It is highly capital-intensive and ties up assets over the long term. Because of the continued demand for new production facilities and the higher building cost index, capital expenditures for cement production have risen substantially. The production of cement and aggregates requires a great deal of process know-how.
Investment policy and product range are adapted to suit the market maturity of a country and the local customer needs. In the emerging markets, emphasis is on building up and expanding cement production. As an economy becomes more mature, vertical integration becomes more significant. The ready-mix concrete business is established first in major urban centers. In more mature markets, the range of products is even more diversified and includes aggregates, asphalt and concrete products. Because of the high degree of regulation in industrialized nations, it is strategically important to have high-grade, secure raw material reserves.
Holcim Group is a globally active company. The Group operates in more than 70 countries, employs a workforce of some 90,000 and has production facilities at over 2,000 locations. This geographical diversification stabilizes earnings, as it helps to balance cyclical fluctuations in individual markets.
In 2007, the emerging markets in eastern and southeastern Europe, Latin America, Africa, the Middle East and Asia accounted for 48.3% of Group net sales. Holcim considers these growth markets to be very important in the context of its expansion strategy.
Over the decades, the Group has built up a wide-reaching network of companies in the cement segment. Growth in cement consumption especially in the emerging markets, coupled with the Group’s commitment to sustainable development, prompted Holcim to initiate an extensive capacity expansion and efficiency enhancement program.
The extractions of large quantities of raw materials, the operation of capital-intensive cement plants and the distribution of building materials to a local or regional market require a strong presence in the relevant areas and awareness of the consequent responsibility.
In order to fully exploit its potential, Holcim has standardized all key corporate processes. In this way, local management is able to concentrate on market and cost leadership, on basic and advanced training for senior managers and staff and on nurturing relations at the local level.
The strategy of Holcim Group in the region was to introduce market orientation in the cement industry.
Serbia was the last country of the region where Holcim Group arrived. The explanation for these circumstances could be found in the country’s historic heritage, political and economic isolation, as well as the fact that all other countries began their transition and privatization processes much earlier.
On one hand, Serbia is a relatively small market, with small operations, and on the other hand – due to the fact that it was the last of Holcim`s regional acquisitions – the company is trying very hard to work more and better than its other regional companies, in order to catch up and not get behind Holcim in Croatia or Romania, because of the later start of 5 years.
Cement is considered to be a “commodity business” all over the world, meaning that what company produces – it will sell.
It is a type of merchandise which is highly requested, but on the other hand all participants in the industry are investing in expanding their capacities and surplus of cement will definitely appear in the regional market. In that situation it is crucial that Holcim sells as much as it can with the best possible price, and in order to do a targeted marketing approach and an approach orientated towards consumers is needed.
There is no doubt that Serbia is a developing market, which is expected to develop even more than it has so far, and Holcim believes that Serbia will move forward.
In the field of cement industry, Serbia has not yet reached its full potential, since the construction market has been relatively unstable. However, Hocim`s top management members expect that the market will move forward and that there will be a real construction boom, which is currently present in Romania.
Cement plant Holcim (Srbija) A.D., is one of the three most important cement plants in Serbia, and it exists since 1889, when cement manufacture was 3000 tonnes per year, while the annual cement production capacity of the plant nowadays is 1.350.000,00 tonnes.
Three different types of high quality cement are being produced: PC 52.5N, PC 35 N (S- Q) 42.5 N, MP 30 (S – Q) 32.5N as well as Novimal, masonry mortar and Novimal.
Cement plant “Novi Popovac”, situated in the area of Popovac village, in the proximity of the town of Paracin, officially became a member of the Holcim Group in 2002.
When Holcim decided to set up a company in Serbia, it chose to follow the example of its other regional companies. The countries of the region are relatively alike, the mentality of the people is relatively similar, the circumstances under which the factories have been bought are practically the same, as well as the manufacturing processes.
“All of this actually represents one big advantage a multinational company is giving, since you don’t have to invent new procedures for every particular thing within the company, and therefore we have used the “copy-paste” method in many of the managerial functions. Holcim`s experts from other countries of the region in charge for sales, HR, marketing, communications and other departments, came to Serbia and transferred their experiences to us in order to help us establish a company as soon as possible. They came and stayed for one or two months and their help has been very valuable for us.” (Dzelatovic Maja, director of marketing and communications of Holcim Srbija A.D.)
Holcim Srbija AD was the last acquisition which Holcim Group did in South-Eastern Europe, and the first privatization of a company in Serbia. According to the terms of the General Agreement, Holcim Group was obliged to invest the amount of 85.000.000, 00 US $ and not to let go any workers for a period of 5 years. The period of 5 years expired on April 14th 2007 and in July 2007 the company has officially been notified by the Agency for Privatization of the Republic of Serbia that it has successfully fulfilled all of its obligations.
In this period, Holcim has invested around 90.000.000, 00 US$, meaning that the company invested more than it has been obliged to.
Privatization process has been handled under the wing of the World Bank; the whole tender was completely transparent. It was the best paid privatization process in the region according to the amount of money paid for the tone of manufacturing capacity, according to the privatization agreement.
The company currently conducts its operations on three locations:
Headquarters of the company is located in central Serbia, in the village of Popovac close to Paracin, which is approximately 160 km south from Belgrade, where the cement factory is located. In 2006, the company opened a concrete factory “Belgrade-East” in Krnjaca, close to Belgrade towards Vrsac (border city with Romania) and the third site of the company is the representative office, which is located in Belgrade.
Holcim Srbija has a clear vision of the company: to build foundations for the future generations. Its mission is to become the most attractive and the most respectable company in the cement industry – building values for all its employees, business partners and local community.
After a 10 year period of stagnation, expenditure of cement in Serbia started to grow. During 2006, cement expenditure was 2.377 millions of tons and in 2007 there was a growth of 5 %, which caused the expenditure to rise to 2.492 millions of tons (332 kg per capita). Under the assumption of the yearly growth of 4 %, cement expenditure should reach 2.8 million tons till 2010.
The most important cement markets in Serbia are Belgrade (31%) and Novi Sad (26%). The growing trend of Belgrade market is continuous due to better investment climate, improved living standard, above average GDP and growing number of approved bank loans.
The total sales of Holcim`s cement in Serbia in 2007 reached 882.500, 00 tons, which is 1% less than in 2006. There are two main reasons for this situation: the sales in Kosovo dropped due to lower prices in that region, and the other reason is the company`s focus on production which is compatible with cement demand in Serbia.
On the other hand, Holcim managed to increase the sales of grey cement in Serbia for 6%, mostly because of the significant sales growth of rinfuse cement of over 17% in 2007. Importance of the micro-market of Belgrade lays in the fact that one third of all sales is directed to this region.
“Cement is a type of commodity which needs to be transported quickly and the transport itself is the biggest element of its price. Therefore, in case you need to transport cement to a destination which is more than 100 km away, it simply does not pay off.
In the case of Holcim in Serbia, we are a bit handicapped since our factory in Novi Popovac sold cement mostly to buyers in Central and Southern Serbia. We were not present in the market of Belgrade, since Belgrade is 160 km away from us and it was naturally supplied by the Beocin cement factory (Lafarge).
However, today’s analysis show that there is a big disparity between Belgrade and Novi Sad construction market of on one side, and the market of central and southern Serbia on the other (1:2). Therefore, we have to be present in the Belgrade market as well, it is our market orientation and we have slowly started to penetrate this market which is very competitive and the prices are lower there. As a difficulty, we have higher transport costs but we fight with the quality of our product.” (Dzelatovic Maja, director of marketing and communications of Holcim Srbija A.D.)
After Holcim Group came to the cement plant, sudden development and systematic solution of present problems of environmental protection has begun. The result of such development and improvement in the period 2002-2005 was receiving of ISO 14001 Certificate, which was obtained in September 2005.
While doing a case study on Holcim Srbija A.D., a conclusion is drawn that the company made significant contributions in the following fields:
Being socially responsible is a significant part of Holcim`s business strategy and an integral part of its business plan.
The program is based on five principles:
In 2005 Holcim Srbija introduced the Code of business conduct which sets the criteria of relations with the business partners and ways of business communication. The Code is obligatory for all employees of Holcim.
Holcim is one of few companies where women find themselves in the leading managerial positions. Additionally, it is one of few companies where women have equal salaries as men.
Furthermore, Holcim Srbija is strongly against any kind of discrimination and promotes the rule of equal chances.
Being a part of an international group, the company introduced the program expert exchange – the first expert from Serbia became the member of the management team for the region of Eastern Europe in 2006. Within the Holcim Group, approximately 1000 top managers are the representatives of 53 nationalities.
When Holcim Group took over the company, there were 2500 employees and today there are 470.
„It was a terrible situation; people were on a pay roll and did not show up for work.” (Dzelatovic Maja, director of marketing and communications of Holcim Srbija A.D.)
Taking over the cement plant in Popovac in 2002, Holcim Srbija made a commitment not to dismiss surplus technical employees for a period of five years. This period expired in April 2007, when the company’s board decided to adopt a fair process to release some employees.
“The company had to reduce its workforce to secure the wellbeing of the company and of the remaining employees. The objective was to assume responsibility and offer a sustainable package, for instance, by providing financial security to employees and their families Holcim Srbija benchmarked the packages offered by other employers in the region, with the aim of restructuring in a responsible way. Line managers drew up lists of roles that were considered surplus, and these lists were then approved by ExCo.
All employees attended a joint meeting with the representatives of the company before any announcements were made. At this meeting, details of the package which was to be offered to them were explained. The package, considerably wider in scope than required by local labor laws, consisted of a net payment of €550 for each year of service at Holcim Srbija, with slightly different terms for employees who had five years or less to retirement.”(Rako Nebojsa, Head of the HR Department of Holcim Srbija A.D.)
Therefore, from 2002, the company introduced three programs of consensual leave with excellent financial packages, after which the number of employees was reduced to 700 till April 2007. When the period of 5 years expired (determined by the Agency for Privatization of the Republic of Serbia), the company declared 270 employees as technology surplus.
When the company declared technology surplus, employees were given redundancy fees of approximately 550 euros per working year and the average redundancy fee mounted to the amount of 15.000,00 euros per employee.
Nevertheless, the company did not stop there, as it felt obliged to conduct a follow-up with the workers who left the company and to offer program of training and prequalification , as well as six- month training on how to start your own business (in cooperation with the Regional Agency for Economic Development of Sumadija and Pomoravlje from Kragujevac).
There were approximately forty participants in the program, out of which sixteen completed the training.
Four of them started their own business, sixteen of them found employment in other companies.
“By providing a certain number of people with enough necessary skills and support to start their own business, the community will develop through job creation and a reduced number of unemployed people” (Rako, Nebojsa, Head of the HR department of Holcim Srbija A.D.)
„All of this means that Holcim is really trying to be a responsible employer and to offer something other than money. I have to underline that Serbian people are still not used to this kind of company care and that many of the employees who willingly left the company took their redundancy money, bought agricultural machines and continued to work on their properties.” (Dzelatovic Maja, director of marketing and communications of Holcim Srbija A.D.)
The General Agreement which was signed when Holcim Group bought the plant in Popovac states that the new owner of the company must invest an amount of 2.000.000,00 USD in the period of the next five years, for the purpose of solving living accommodation problems of its employees.
There had been two rounds of money division among employees. During the first round, which occurred in 2003, the amount of 1,8 million USD had been given by the company for this purpose.
“The second round of money division occurred in 2006 when the CEO of Holcim Srbija A.D. Mr. Gustavo Navaro suggested that all employee applications for this kind of means should be accepted.
A total of forty one employee demands had been accepted and consequently, Holcim invested 120.000,00 USD more in this project than it had been obliged to do.”(Rako Nebojsa, Head of the HR department of Holcim Srbija A.D.)
Holcim Srbija enjoys a reputation of a “roll model employer” which sets standards in relations with the employees throughout the region. The company’s main goal is to include employees in the process of decision making and taking on responsibility.
Furthermore, the company is developing good relations with the representatives of the union, which is extremely important for this type of business.
As an example of this good practice, Holcim traditionally organizes “the open door day” to which all of employees are invited together with their families, as well as local people and former employees. On this occasion approximately 5000 people visit the factory. In this way, the company is trying to create the bonding of employees from different sectors.
Since 2007, Holcim Srbija started a team building project with the purpose to create future company leaders, who will act as a team whenever business decisions need to be reached, a group that will jointly decide for the sake of all employees in the company.
As far as the employment politics is concerned, Holcim is taking on young and educated individuals, which will represent leaders of the future.
Holcim is one of the few companies in Serbia, which actually rewards the accomplished employee results. Every year the company rewards its employees with additional 5 % of the company’s achieved profits.
Holcim Srbija AD invests between 300.000,00 and 400.000,00 euros per year for the employee trainings. The main goal of the company is to motivate the staff and to take care of their personal development.
For that purpose, Holcim has created the big master plan, which is being reviewed every two years. In this way, the company takes inputs from both the staff and their superiors, and according to the need, development-training plan is being created for every employee.
This is mostly done for the members of the first line management up to senior top management. As far as the other employees are concerned, they constantly have protection at work education trainings and health trainings.
Company trainings are internal or external – conducted by a specialized agency or the company itself. The company takes pride in its own internally organized trainings, organized by the department of training and development.
Some of the most important types of trainings are:
Furthermore, Holcim also runs English language courses since the official language of the company is English.
When Holcim bought the factory only a few people spoke English. Today, the company has over 100 employees who speak English on a very solid level. Holcim continually runs English language courses. Costs are completely covered by the company and employees go from lower to higher levels and they obtain certificates.
Language courses are organized in the early morning hours or after work.
Marketing did not exist in the company before Holcim Group took over the plant. The new management introduced marketing as the part of the sales department in the beginning, and it is currently located in the communications department.
Holcim Srbija introduced a system of constant consumer satisfaction follow up, where customers can file complaints concerning the quality of cement or the quality of provided service. It was found very successful since it turned out to be the early indicator of all failures that can occur during the business process.
A special body has been formed for this purpose, which takes care of the complaints.
In 2006, the company had four complaints, out of which one has been accepted (complaints are accepted depending on whether they are or not according to ISO standards).
One of the key marketing strategies of Holcim Srbija A.D. is to improve relations with the customers and suppliers. In order to strengthen communication with the customers, the company management started to publish the magazine called “Kontakt”. The magazine focuses on the exchange of ideas and experiences. It enables the flow of useful information regarding projects, application of cement and safety at work.
In the dialogue with the customers, Holcim Srbija A.D. takes a very active approach.
In that sense, in December 2007, another innovation in the marketing department has been introduced. For the first time the company made a big survey called customer satisfaction survey conducted by Strategic marketing agency, and all customers (both cement and concrete customers) have been included in it. The company is obliged to do this type of survey once in every two years, but they do it on a yearly basis.
Through this research, which is very detailed, strengths and weaknesses are observed, areas which should be improved, types of strategies which should be used in sales and marketing etc. The result is permanent improvement of service and expenditure of the products palette.
What the company’s top management considers innovative for Holcim Srbija A.D. as a company and did not exist in the past, is that besides the process monitoring of customer satisfaction, they feel that they should offer their customers some kind of added value.
They try to do that by showing customers that Holcim is very interested to know what they do with the purchased material and which way they use it. In this way, the company offers education how to use the material and this represents a kind of technical support.
For that purpose, Holcim organizes technical seminars two times a year; one usually takes place in Belgrade and the other in the city of Nis and all the customers are invited to participate and attend lectures.
Additionally, Holcim distributes brochures where they point out the most common mistakes and advices regarding the use of their material.
Another big marketing project of the company is called Partner Plus and it was launched in 2007. Holcim currently operates with 24 material storages in Serbia, which are its partners. This is a project of partnership where Holcim does the co-branding of their facilities, it makes their sites look nicer, and they do joint advertising in the local media.
Holcim has organized people to conduct technical seminars on these sites. This actually means that, when the final buyer comes to them, they are trained to offer advice on which type of cement a buyer should take and how they use it.
Over 80% of the company suppliers are from Serbia. The priority which Holcim puts first when working with its suppliers is supplier`s ability to respect deadlines and standards of quality. All suppliers are required to have ISO9001 standard, and to respect norms from the field of security and health given by Holcim Srbija, as well as to respect obligations from the General Agreement which foresees socially responsible activities.
Department OS&H has done tremendous amount of work in the previous two years and obtained official recognition – the project called “the Green pyramid” has finally been completed, as one of the most significant projects in the history of the company.
The “Green pyramid” actually represents the system of internal health and safety standards, set from the side of the Holcim Group and is obligatory for all members of the group.
This project started in the beginning of 2004. The pyramid has 19 blocks and in the very beginning of the project not one of them satisfied criteria to be declared as “green”.
After the revision done by a certified external company in November 2005, Holcim Srbija A.D. officially obtained confirmation and certificate for having the “Green pyramid” of health and safety at work and it was among the first companies of the Holcim Group to do so.
Holcim Srbija is the only company in Serbia, which has ISO, 18001 certificate. This certificate proves that Holcim satisfies all standards from the field of health and safety.
An example which company uses most often to indicate its success in this field is the number of injuries at work.
“Significant improvements at Holcim Srbija A.D. making safety a top priority has helped position Holcim Srbija A.D. as an industry role model. Personally led by the CEO, the company established a Safety Observation System to increase awareness and install a sense of personal responsibility among all employees.”(Taranovski Aleksandar, coordinator of the Safety and Health Department of Holcim Srbija A.D.)
In 1999, 2000 and 2001 there were between seventy and ninety injuries per year. However, in 2003 the injury frequency rate reduced to a number of forty five and in 2004 there were twenty injuries. In 2006 there were a total of six injuries.
Holcim Srbija A.D. spends a lot of time and effort on building relationship with the local community. Management of the company considers local people as a very important partner in the process of decision-making and foreseeing possible consequences.
Therefore, the company introduced transparent communication and several instruments relevant for information exchange with the people. Eight magazines for local community are explaining various possibilities regarding future actions of Holcim and modes that local people can use to get involved in the process.
“During a stakeholder dialogue, the urgent need for the partial “adoption” of the elementary school in Popovac, in the immediate neighborhood of the plant, was identified. The school in Popovac is one of the biggest in the municipality. However, during the past decade, it faced a decreasing number of children attending the school, despite the fact that the number of children being born in the village had not decreased. The reason was due to the deterioration of the school, its equipment and furniture, which resulted in parents enrolling their children in other schools.
The objective of the project was to upgrade the conditions in the school, providing the children with an alternative to traveling sixteen km each day to the next-nearest school. ” (Radovanovic Nevena, coordinator in the HR department, in charge for the local community projects in Holcim Srbija A.D.s)
Through a program of local sponsorship, the classrooms, gym roof and toilets were reconstructed, and windows replaced. Then, the blackboards in all classrooms were replaced and the IT department equipped with 15 new desktop computers. In 2007, Holcim Srbija began the process of fixing the floors in all classrooms, and repairing the old school furniture.
In the school year 2007/08, Holcim Srbija to co-financed, together with the school and the parents, transportation to the school for children who live in the surrounding villages.
When Holcim Group took over the company, it was obliged by the contract to sponsor local community.
It is important to underline that in the previous five years, Holcim Srbija has invested over 2.000.000, 00 dollars and completed several different projects significant for the local community:
On the other hand, in 2006, Holcim Srbija A.D.was the general sponsor of the manifestation called “The Summer of Culture in Paracin”, which received acknowledgment as one of the best-organized manifestations in the territory of Serbia.
Additionally, the company signed cooperation agreement with the Paracin theatre.
According to the contract, Holcim Srbija is providing its employees with theatre tickets for all theatre performances throughout 2007. In this way, the company indirectly became a regular sponsor of the theatre in Paracin, while at the same time providing its employees with an opportunity to participate actively in the cultural events.
During the previous two years, Holcim was also a general sponsor of the big autumn cross running competition, organised by the Sport’s Association of Paracin.
Over 1500 children, age from 3 to 18 participate in this event every year, making it the mass sports event in the municipality.
Another very important mode of cooperation with the local community is cooperation with the universities. Holcim has continuous cooperation with the Serbian universities and the basic idea is that the company gains access to the most talented young individuals and to offer its experience from the practice to people at the universities. The company has a person within the HR department who is in charge of these issues and Holcim Srbija A.D. has signed cooperation protocols with many of the universities.
One of the ways in which Holcim Srbija A.D. cooperates with the universities is that the students do case studies on the company and then present it to the management.
After that, the HR department creates a data base of young talents who would potentially like to work in the company – a talent pool. The HR department keeps in touch with them and sometimes they come to the company to obtain practical experience.
Holcim’s managers are always prepared to give lectures and transfer their experience to the, The company also takes part in various job fairs.
Concerning the issue of the technology development, Holcim Srbija is currently working on a big project where it invested approximately 100.000.000,00 euros. It was launched in 2008 and was planned to be finished in 2010, but due to the world financial crisis the company is moving this deadline for 2011. The project is actually referring to the duplication of production capacity for clinker (clinker is a half product in cement industry). So, the company will duplicate the capacity of its production in order to satisfy market demand, which is expected in the future, and one part of production will be exported to Holcim`s factories in Romania and Bulgaria.
Additionally, all equipment in the Holcim Srbija A.D. factories has been automatized in comparison to the period when the factory was in the ownership of the Serbian state.
For the purpose of automatization of the distributing station, the Schneck equipment has been bought. The control building in the proximity of equilibriums has been redecorated and there is also new equipment installed in it. This system enables automatization of the cement delivery system.
The company entered into a Greenfield investment in 2006. for a project of small concrete factories and it opened the first one in Krnjaca in October 2006 (it was an investment worth approximately 2.000.000,00 euros).
It is perhaps one of the most modern factories of concrete in Serbia, supplied with the best equipment and technologies.
Furthermore, Holcim Srbija A.D. has done a lot more with the infrastructure. The company built a new building for the workers; called the „social building”, where they have locker rooms, ambulance and other facilities they require.
Sanitary facilities for the drivers have also been reconstructed and all installations like electrics, water installations, painting etc. have been provided.
Additionally, buildings where administrative staff and projects are located are completely renovated and additionally rebuilt look fantastic.
Having in mind the fact that cement industry produces high level of pollution, from the very beginning Holcim Srbija is extremely active in developing various methods to preserve environment.
“Living in the era of climate changes made companies think about the actions, depending on the area they operate in, which will improve the conditions of environmental protection. Asides from estimating a company through its achieved profits and its involvement in the field of social responsibility, more and more clients are looking at the wider picture of the industry which insists on urgent actions as a counter-force of the results of environmental protection neglect, which we all witness now days. In this way, relations between business and environment become extremely important.” (Ilic Milan, Head of the Environmental Protection Department of Holcim Srbija A.D.)
The company management is well aware of the inevitable impact of cement manufacture on environment and that is the reason why the company monitors emissions of dust and gasses, noise, impact on water and soll, as well as the changes of the geographical status caused by ore excavation, in a serious and responsible way.
“Holcim has invested over 9.000.000,00 euros in ecology, for example, and it represents our long-term vision to do business, since if you observe only short-term goals, you could do a lot of things with this money. Holcim thinks about the community, employees, etc.”(Dzelatovic Maja, director of marketing and communications of Holcim Srbija A.D.)
Therefore, the company management provides a framework for establishment and reexamination of following goals of environmental protection:
Management is oriented towards continuous improvement of the Environment Management System in compliance with requirements of JUS ISO 14001:2004 standard, and all the employees are directed to work on realization of established goals.
Besides the reduction of its emissions, Holcim Srbija A.D. gives its contribution of the social problem of use of some kind of waste materials, as alternative raw materials, fuels, decreasing in that way use of non – recoverable natural resources (fossil fuels), with maximum compliance of all relevant standards and laws.
So far the following actions have been taken according to the set goals:
Since then and up till the end of 2006, 3.5 tons of waste tires have been co-processed through the system for secondary dosage of heaters. In this way, 3.5 tons of coal and fossil fuel, which represents non – renewable resources has been saved. At the same time, the total amount of emitted dangerous components was reduced for the quantity of the burnt tires.
Holcim greatly respects the significance of Serbian language, as well as Serbian culture and traditions. Internal magazine for employees called „Cement” is being published in Serbian language.
“As an example I can show you our internal magazine for employees, which was in the beginning published both in Serbian and in English. We had much higher expenses and much more work for the interpreters. I suddenly asked myself who should we publish a magazine in English, since only 3 members of the company are foreigner?
In cooperation with the general manager, we started publishing the magazine only in Serbian language (due to the fact that we have 300 workers who don’t speak English), we translated the copies for the foreign members of the team and it was sent to them in a electronic version. In that sense, we are really giving advantage to Serbian language.” (Dzelatovic Maja, director of marketing and communications of Holcim Srbija A.D.)
Nevertheless, when analyzing the managing process we could notice that till now managers communicate a great deal in English, since the fact that they are mainly foreigners and that communication with regional headquarters and office in Vienna is also in English. Furthermore, all incoming documents are in English, too.
What is also very important is that, besides geographic diversification and specialization, Holcim based its fundamental strategy on global standards local management. When Holcim came to Serbia, there were 20 ex-patriots working within the management. Today, the company has 5 of them, out of which three are working only on investment project and it is their sole duty, and practically only 2 of them are here on full-time basis, as members of top- management. One of them is the general manager – which is a technical function, and all other managers are local people.
As far as Serbian culture traditions are concerned, the company pays special attention to this subject. For example, all employees have a day off when it is their “slava” and all Serbian festive occasions are respected.
Additionally, Holcim organizes a Christmas party for all employees every year before the foreign members go away for their Christmas holidays, but the party itself is organized in a Serbian way, with the folk music, just as the local people like it.
However, when it comes to standard work procedures, Holcim insists on the Swiss way – work, order and discipline, and everyone is doing their best to achieve it.
The research question of this thesis, which the author attempts answer by doing a case study on Holcim Srbija A.D. is the following:
“Do multinational companies have a positive contribution to Serbia’s socio-economic development and overall economic growth?”
In order to answer the research question, the author focused on answering key questions set in the chapter of the literature review:
Key question no. 1 has been answered in the chapter “Serbian environment for multinational investment” where the author described the types of business activities multinational companies. The analyzed case study in this chapter also points out to one specific type of multinational enterprise and its operations in the Serbian market.
Regarding the key question no.2 and the contribution of multinational companies to the employment increase of the local staff in Serbia, the case study showed that before the purchase by the Holcim Group, the company had two thousand five hundred employees. Six years after the take over, the number of employees was reduced to four hundred seventy employees. This actually points out to the fact that the new management of the company reduced the number of employees to a reasonable number of workers which a company can objectively employ. Attractive redundancy packages have been provided for all workers who had been declared as a technology surplus, and consequently these people left the company satisfied. Therefore, Holcim Group created a competitive market oriented company, with a realistic number of work places.
Key questions no.3 and no.4 referring to the improvement of managerial and entrepreneurial techniques, strategy of managers and the modes through which this has been achieved, are clearly elaborated in the sub-sections of this chapter which tackle several departments: marketing, human resource, health and safety, technology, infrastructure and environment protection.
While doing interviews 9with the responsible personnel of the company, it is clear that company marketing department did not exist until Holcim Group took over. The new management developed several key marketing priorities such as:
Furthermore, marketing activities also refer to the relationship of Holcim Srbija A.D. with the local community and consequently, the realised projects in this field, which were already described earlier (pp. 19-21).
Similar to the situation in the marketing department, human resource department was poorly developed before the take over by the Holcim Group. Priorities of this department focused on the following:
Health and safety department introduced two important innovations: “the green pyramid project” and ISO standards on safety procedures, as previously described (pp 18)
Technology and infrastructure innovations are also significant and are described earlier (pp.21-22).
Finally, environmental protection department is the one with most innovations (1-26, previously described (pp. 24 – 28)). This indicates that Holcim Srbija A. D. is strongly oriented towards environmental protection, as one of the key goals of its basic platform.
Key question no.5 concerning the variables influencing the success of Holcim Group in Srbija lead to the following conclusion: there are positive things that influence the success of this company, but there are also obstacles which are making certain types of activities difficult to conduct.
Identified positive factors are:
Furthermore, potential obstacles have been identified:
According to the main objectives and the methodological framework of the present doctoral thesis, the first case study research was done with Holcim Srbija A.D. The research on this company, which was conducted by using interviews, revision of original documentation and the analysis of activities of the company, points out the following, very positive effects that could be fragmented on the company level itself, as well as the local and the country level of Serbia:
Therefore, the author concludes that the research done on the first case study of this thesis showed that Holcim Srbija A.D. had a positive influence on Serbia’s socio-economic development and overall economic growth, and consequently contributed the research question.
The author would like to point out to several limitations, which are related to pilot project no.1:
Finally, the author will try to overcome limitations and obstacles detected in pilot project no.1, during the upcoming research in the pilot projects no.2 and no.3.
We will send an essay sample to you in 2 Hours. If you need help faster you can always use our custom writing service.Get help with my paper