IMPLICIT MODELS OF ORGANIZING INVESTMENT PROJECTS WITHIN THE COOPERATION BETWEEN SERBIA AND CHINA OBSERVED THROUGH THE LENSES OF THE DIMENSIONS INHERITED IN THE HOFSTEDE MODEL OF CULTURE
Keywords:
Serbia, Accession to the European Union, China, Hofstede, implicit models of organizing investment projectsAbstract
The research problem revealed here is centered on the question: to what extent China's engagement in the Western Balkans, weaken the Western Balkans's European perspective? China was placed its Belt and Road Initiative in 2013, with a strong mercantile and investment component as well as the "16+1" framework with the aim to add institutional cooperation to the mercantile feature of BRI. The actors incorporated in BRI are government institutions and big businesses, while "16+1" Initiative brings into table more diverse stakeholders such as academia, as well as non-governmental institutions.
When it comes to the Chines interests and focus to the Western Balkan, they are clear: Western Balkan Countries are observed as a Troyan Horse, which can help investors from Chine to penetrate to the European market, precisely to the Central European Manufacturing Core, centered on Germany and partly Austria. On the other side, at the time of the observing this research problem, there is no any strategy prepared by the any of the Western Balkan countries with the aim to deal with BRI and "16+1" Initiative. Serbia is observed as a minor market, from the economic point of the side, but as a Troyan horse which can provide investors from China to reach the Western Balkan area.
Although the European Union offers to the Western Balkan countries access to less costly and more massive funds for infrastructural projects than China, preferences towards investments from China are stronger. While the EU run Project Cycle Management usually takes up several years for applicants, China offers flexible instruments to finance highly visible projects, granted in a top-down manner. Projects usually were not publicly tendered, and there are in breach of EU competition law.
In order to test future Serbian intentions towards investment arrangments from China instead of the EU offered grants, we have revealed two Hofstede's dimensions of Serbian societal culture: power distance and uncertainty avoidance. The abovementioned dimensions were used in order to reveal the preferred configuratios of organizations projected on the uncertainty avoidance index (in the future UAI) and power distance index (in the future PDI) matrix.
According to the Hofstede projections related to the PDI and UAI indices in the future, notably relevant for the small countries in the process of the accession to the regional economic integration (such as Serbia) we set two hypotheses:
1) Serbian accession to the European Union will raise the level of the power distance in Serbia
2) Serbian accession to the European Union will raise the level of the uncertainty avoidance in Serbia
The first hypothesis was confirmed, while the second was not. This unexpected findings tell us that Serbian preferred configuratios of organizations are more similar to the Chines ones than to the European. Smaller cultural distance exists between China and Serbia than between Serbia and Germany (we use here Germany as a center of the newly formed German-Austrian Central European Manufacturing core, and as a proxy for the culture inherent for this core).
These findings can explain to us the culturally embedded preferences towards more flexible Chines investments loans, instead of the preferences towards less costly but in the administrative sense more demanding European grants. Although, we can confirm that Serbia is moderately prepared and in line with the EU acquis for the public procurements issues (according to the Progress Report, 2018, issued by the European Commission), we can also notice the divergent trends in the implementation field.
China is a high power distance country (80) and county with a low uncertainty avoidance index (30). Serbia has shown a tendency towards higher PDI indices (64) and lower UAI indices (60, 2). Based on that we can conclude the existence of the similar preferred configuration of the common Serbian-Chines projects, as well as the similarity in the preferred coordination mechanisms and critical parts of the project staff.
Countries with high or moderately high power distance index and with the weak power uncertainty index are pregnant with the institutions as well as projects featured by the personnel bureaucracy. Implicit model of organizations is family. The preferred configuration is centered on the simple organization or project structure (which is in contrast with the EU funded projects). Preferred configuration mechanism is direct supervision instead of the standardization of skills inherent for Germany as well as many European countries. The essential part of the organizations involved in the technical side of the projects is strategic apex instead of the operation core involvement typical for the EU funded projects.
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