REGIONAL COOPERATION AND ECONOMIC INTEGRATION

PART IV:
been investigated thoroughly in transnational corporations, and show that there are great
differences in the location of the marketing function among companies (Workman et al,
1998; Achrol, 1997). Second, studies reveal that marketing has power, while it depends on
environmental conditions (Homburg et al, 1999). Finally, research into the organization
of marketing activities finds that wide variations exist (Tull et al, 1991) and it should be
investigated in more detail in the future. A major drawback lays in fact that all previous
studies focused large, multinational companies, while marketing strategy and activities in
small, domestic companies are currently understudied.
It should be noted also that there is not any significant differences between service and
manufacturing firms in their approach to goals, policies and overall plans for their offerings
(George and Barksdale, 1974). More precisely, industry sector and societal context, firm
size (Hise, 1965) and global orientation explain a significant proportion of the influence
of the marketing function on strategic decision making (Homburg et al, 1999). Since
MNCs are always larger, more territory spread and more globally oriented than domestic
companies, local firms need to overcome some obstacles in order to achieve level of
marketing activities of MNCs.
There are numerous problems that should be bypassed by local firms. Several studies have
discussed the technology and productivity gaps between MNC affiliates and local firms,
and highlighted the importance of absorptive capacity: local firms need to have sufficient
innovative capabilities to adopt technologies introduced by MNC (Girma, 2003; Kinoshita
2001). In the European transition economies, where “soft” technology – marketing and
management are weak, it can be argued that outward-oriented MNCs might provide some
of the skills that are in shortest supply (Kokko and Kravtsova, 2006).
Furthermore, it could be stated that labour mobility is limited in developing countries, due
to high wage gap that exists between MNCs’ subsidiaries and domestic firms. Actually,
employees prefer to work for foreign companies regarding the fact that they can earn
higher salaries and their jobs are more secure (Wang and Blomstrom 1992; Sjoholm, 1999).
Therefore, marketers are more attracted to look for a job in multinationals.
It is usually supposed that MNCs’ subsidiaries have adopted and apply marketing orientation
completely. However, that is not always a case. Subsidiaries could just sell the parent’s
products in the host country and do not engage in local production or in marketing activities
at all. In that situation, they have small sales department in host countries, which also deal
with marketing activities (Kokko and Kravtsova, 2006). Moreover, parent company can
opt to centralised organisational structure and impose certain limitations on activities to
protect the brand name, as it was recognized that the individualism of branches could dilute
the overall brand (Lloyd and Ogbonna, 2003).
Previous studies (Javorcik, 2004; Yudaeva et al, 2004) imply that higher educational level,
better infrastructure, stronger financial sector, better protection of intellectual rights and
other indicators of relatively high development of domestic country lead to larger and more
diversified marketing departments of MNCs’ affiliates. With regard to that, some specifics
of Eastern Europe and Serbia must be taken into consideration.
Despite the fact that many studies have stressed that the contribution of marketing to the
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