Disagreements with local partners caused challenges in the BoD in JVs, even when “T” had the majority of ownership and thought that it had the FC and influence in the BoD

In this period, “T” noticed the first serious disagreements with local partners in JVs, where “T” had the majority and should, in theory, have had substantial influence in both the framework of the BoD and the local company. Most of the discussions and disagreements with local partners were connected to the questions of control: who has influence in the company? During the period of active growth in JVs and transformation to WOS, it was important to implement “T”’s governing principles in doing

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business. Many private local partners were not ready to do that and continued to work as before. The partners behaved as if they still were the big bosses and wished to receive further support from “T”.

While business developed, “T” wanted to achieve more influence and utilize more control mechanisms.

We had ownership, but we did not have influence. We started serious negotiations with our local partners in Eastern Europe. In one of the companies, we could not change the CEOs because of their connections to the political circles, but we could place our people in executive positions. Unfortunately, for the same reasons, we did not have the position of the Chairman of the BoD. We did not manage to increase our ownership to 100% and had to deal with the partners further. The problems became greater and greater; it was obvious to us that we stood for different corporate governance with different business targets. We had the FC, but we did not have control in the company, as long as we did not have other controls. (Interview with an EVP responsible for mobile operations, 2015)

3. The BoD did not see the challenges “on the ground”, even when members reported them to HQ. Several issues were underreported; top management were not consistent in what was and was not reported.

Despite the fact that the majority of respondents connected the BoD to the mechanism of influence and SC and OC control, one respondent noted that OC is to “go onto the ground”

and operate among all the segments in the subsidiary.

The BoD did not function well in understanding the needs on the ground – the members of the BoD and the Chairman only dealing with the top management, and they did not report everything (conversation with a former experienced manager, who worked abroad in several countries, 2016).

The BoD did not see the situation on the ground, does not do it, and didn’t have control “on the ground”. They accepted what was reported to them, and they read the documents. There are many things you can write in the documents; the reality can be different. Many of the decisions that were made by the BoD were made because they did not know the situation “on the ground”. It was easy to hide many things,

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especially in marketing, where a company can have “sudden costs”. (A former international manager, interview, 2014 and 2018)

Thus, the respondents underlined the gap between the perception of the situation by the BoD members and the real situation in the subsidiaries. Decisions that were made by the BoD were based on insufficient information from the company.

4. Continued problems with expatriates in JVs where “T” did not have the majority. Tuning of the expatriate staff where “T” had the majority.

In this period, there were two different causes of the problems with expatriates. The first was connected to the group of expatriates, who were in executive positions in JVs where “T” did not manage to transfer its ownership to WOS. The relationships with them were regulated by the MA, but companies were not enthusiastic about paying the high fees and tried to force “T”’s expatriates out, presenting them as unprofessional. For instance, according to the MA, “T”’ had to cover five to six positions in Ukraine. At the end of this period, there was just one person in an executive position. He was married to a Ukrainian and had a good personal relationship with the local management and partners (Conversation with a former top manager, who worked in Eastern Europe, 2015).

Another possible cause for the challenges with expatriates in executive positions was connected to the level of their competence because of the traditional system of recruitment in “T”. Thus, one of the managers, who worked internationally, expressed that the expatriates had low competence within how to work abroad, and “T” had a focus partly on the professional skills performed in Norwegian operations, or/ and on the factor of the personal contacts. The statement was supported by another manager that illustrated that the process of the recruitment in “T”

It was enough to be Norwegian. Everybody knew everybody and appointed those who they knew. It was a low focus on the competence to work internationally (Interview with a manager, who worked internationally, not Norwegian by nationality, 2015)

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The top management in “T” perceived that it was necessary to start the targeted education of a new pool of expatriates and managers. The Corporate University in “T” started module-based courses, where participants could visit several operations abroad.

I myself participated in the first pool of selected managers; we were 20.

Unfortunately, the choice of the program was not based on the deep evaluation of the business activities. We had a gathering in Barcelona in order to look at “T”’s activities in Spain; shortly after the course was over, “T” sold its operation in Spain.

We had a gathering in St. Petersburg. This operation was incorporated later into one of the subsidiaries in Eastern Europe. This ownership gave “T” several serious challenges. We had a gathering in the USA that was not connected to any of “T”’s activities but to give a “lift” in education in modern international management. No one I met under this educational process got the position of expatriate. Later, the process of recruiting expatriates changed, but there were many strong opinions about this issue in “T”, related to the topic of the transparency of the process. Who were recruited and why? (Personal experience)