Promoting and increasing organizational innovation is the key factor of company's competitiveness in the current turbulent conditions. The aim of the paper is to verify the hypothesis, whether the entrepreneurial orientation of business management is effectively related to the organizational innovation of companies and at the same time, whether this relationship is mediated by team connection, work autonomy and building trust between employees and business management. The research sample was 244 managers of medium and large companies in Slovakia. The tool for data collection was a questionnaire survey and the tool for examining the mechanism of functioning of the presumed relationships is mediation with the use of regression analyses and the Sobel test to determine the significance of the indirect effect of median variables. The established hypothesis was confirmed by the study . Full mediation was identified, where up to 88% of the total effect is realized by intermediary variables with a significant influence of building trust and job autonomy. Team connectivity has a negative effect in the indirect effect, which further increases the importance of the other two mediation variables in the mediated transmission. From the controlled variables, management practice was a significant variable. The dependence is positive, i.e., the higher practice of the manager is related to the higher values of the dependent variable organizational innovation.

The growth in the share of industry in the structure of Gross Domestic Product due to an increase in its competitiveness, causes a multiplier effect of accelerating economic growth, reducing unemployment and developing social and transport infrastructure. All these imperatives actualise the task of deepening the analysis of the level of industrialisation and innovative performance of the national economy and its regions. To achieve this goal, a theoretical analysis of the relationship between industrial growth and innovation activity was carried out, and the problems of industrial growth of the Russian economy were identified. The proposed toolkit is based on assessing the level of industrialization and innovative performance of the region. Based on their comparison, four models of industrial and innovative development are distinguished: model of non-industrial development, model of post-industrial development, model of neo-industrial development, and model of industrial development. According to the results of the study, the structure of Russian regions by the type of industrial-innovative development model is relatively stable and insufficiently progressive. Only a third of the regions have high innovative performance. The lack of the required balance between the development of industrial potential and the innovative productivity of Russian regions is associated with the low efficiency of the applied industrial policy measures. The research results can be useful for assessing the quality of industrial growth of regions in countries with transitional economies.

Demographic changes are one of the variables impacting labour supply. When viewing the situation on labour markets, not only quantitative changes in the total population size are significant, but also changes in the population categorised by economic age groups. International research indicates that the population size is decreasing. These processes translate into labour markets experiencing deficiencies in labour force. To counteract and minimise these undesirable conditions, continuous monitoring and diagnosis of the status of labour resources is required. This paper aims to evaluate the impact of demographic changes in labour supply based on the example of the Lithuanian and Polish labour markets and to redefine the groups of people forming unused labour resources. To this end, both secondary and primary data were used. The former were derived from statistical reports originating from the analysed countries, while the latter were obtained from the author’s own studies carried out among 200 respondents classified as unused labour resources. The research found that in the labour markets of both studied countries, very significant changes have occurred and will continue to occur, which may lead to the reduction in the productive-age population and to the increase in the post-productive-age population. The research has been carried out based on the systematic literature review methodology, which included theoretical and empirical research publications from 2000-2019, a diagnostic survey conducted among people classified as unused labour resources, as well as methods of descriptive statistics and induction. The literature review has demonstrated a shortage of studies on the subject of research, which makes the content of the paper a partial answer to the existing knowledge gap.

The general idea of this paper is to present a model that could explain which characteristics of the human reflex arc are inherited by the system of an organization’s human resources when they respond to a signal incoming from the global environment. The possibility of inheritance in an organization is discussed in the theories associated with Sociobiology, Biological view in Strategic Management, Reductionism, Microfoundations, and the advanced experience of inheriting neural activity that can be found in Experimental Neuropsychology. Similarity and consolidation of differences incoming from these theories allowed for the theoretical development of a Reflexes model of an organization’s human resources response to the signals from the global environment. The analysis of organizational response to the signals incoming from the global environment and its reaction to the system’s activity have shown that an organization operates very similarly to the human reflex arc. This insight allowed recognizing the human nervous system’s structure as a constituent in an organization’s decision-making system. In this paper, the model of the biological nature of the organization behavior is presented. It explains how an organization forms its reflexive competitive response to the signals incoming from the global environment.

We argue that the conventional approach to bankruptcy modelling, which relies on accrual-based ratios, is vulnerable to the earnings management of a company threatened by insolvency. This fact may pose significant limits on the possibilities of distress prediction. Business distress is defined as cashflow insufficiency, and cashflow indicators are less vulnerable to earnings management. For these reasons we assume that cashflow ratios are theoretically more suitable for predicting distress. In our research we analysed the usefulness of cashflow-based ratios as potential predictors of bankruptcy. During the research, the cashflow-based ratios take the form of many variants of operating, financial, investment and free cashflow into a firm in combination with total assets, sales, liabilities and other indicators. The research was carried out on a sample of 4,350 Czech manufacturing SMEs operating during the period between 2013 and 2018. We employ the previously published approach of hybrid modelling to create the prediction model, though we propose a modification for the purposes of this paper. The modified hybrid model employs Classification and Regression Trees and Logistic Regression, while we use the Principal Component Analysis method to deal with the problem of multicollinearity. The results showed that operating cashflow ratios play a significant role in financial distress, especially when combined with short-term debts.

The study revisits communication channels currently used to access medical information and investigates perceptions of general practitioners (GPs) about traditional, electronic and mobile-based channels in the context of Lithuania. A total of 254 GPs were surveyed. The findings suggest that the pharmaceutical companies still rely on pharmaceutical sales representatives to disseminate the newest information about prescription drugs. The results indicate that the leading experts in the healthcare industry contribute most to GPs’ drug-prescribing intentions and conferences organised by local and international scientific societies are considered to be the most reliable channels. Further, local websites designed for GPs have the highest perceived value among electronic and mobile-based communication channels. Statistically significant differences among different GPs’ age groups are confirmed regarding channel preferences and their reliability: international scientific conferences and international health journals are more popular and are perceived as more reliable among younger GPs compared to more senior GPs. DOI: http://dx.doi.org/10.5755/j01.ee.26.5.12510

The paper aims to better understand the importance of a company’s external environment uncertainty level and the CEO’s leadership style for innovation. Different leadership styles were assessed in the context of a full range leadership theory, namely: transformational (Tfl), transactional (Tsl) and passive leadership (PL). Partial Least Squares-Structural Equation Model was developed, tested and validated to explain the effect of environment uncertainty and leadership style on organisational innovativeness. The hypotheses were tested using responses of managers from 159 medium and large organisations in the Republic of Serbia during 2017. The results suggest that there is a statistically significant relationship between environment uncertainty and organisational innovativeness, while transformational leadership was described as important leadership style that cannot be ignored if organisation wants to improve organisational innovativeness. Influence of transactional leadership was not statistically significant, while passive leadership style was found to have the negative influence on organisational innovativeness. Based on the results of the study, practical implication of creating a more supportive workplace for all types of innovation is emphasised. Encouraging managers to predominantly use proactive leadership, i.e. transformational style, facilitates significant innovative capacity. The effective use of leadership style and its innovativeness in South-eastern European countries is vastly unexplored. Thus, the results of the research fill the literature gap between Western leadership theory and South-eastern European context.

Information About Article Authors

The scope of the data presented in this study offers a comprehensive view of the issue of the HEI graduates employability in the Czech Republic and also in the Slovak Republic – related to determinants of economic development and their impact on them. This paper examines the impact of gross domestic product, gross domestic expenditure on research and experimental development by only higher education sector and foreign direct investment on HEI graduates employability. The results indicate that correlation between unemployment of tertiary educated Slovaks and GDP, GERD and FDI values was very big. Correlation relationship of similar determinants, except determinant GERD in conditions of the Czech Republic was characterized as weak. On the other hand, significantly stronger (very big to perfect) correlation affecting employment of tertiary educated Czechs regarding to indicators of gross domestic product, gross domestic expenditure on research and experimental development by sector of higher education and foreign direct investments as well. In conditions of the Slovak Republic, correlation relationship between employment of tertiary educated Slovaks and GDP was almost perfect.

The article is directed to determine the most appropriate method for evaluating cost of capital of a manufacturing sector and, using the methodology, to perform a case study of Lithuanian manufacturing sector. For evaluation of cost of capital, calculation of Weighted Average Capital Cost was chosen, as literature analysis distinguished this method as the most widely accepted and used. Some changes were made to the methodology of WACC evaluation in order to adapt the method for countries, which do not contain liquid, mature financial markets, like using country’s credit ranking to assess risk premium and adding this premium to base premium for maturelly developed equity markets. The case study of Lithuanian manufacturing sector was performed for the period of 2001-2016. Empirical study revealed that required rate of return on separate WACC components evolved differently between the years of 2001-2016. Average annual return on equity for the period 2001-2016 was 7.7%, while average annual return on debt was only 4.4%. In the year of 2015 weight of equity capital, first time during the analyzed period, exceeded 50%. In the same year, ratio of net profit before taxes to total assets of Lithuanian manufacturing sector also reached the highest value at the time, later surpassed in 2016. This fact demonstrates, that increased free cash flows from the operations were reinvested into further development of the companies. To maximize value of the shareholders, it would be preferable to pay out portion of earnings as dividends and finance growth with debt, as it is currently a cheaper alternative.