The Role of Managerial Competencies in Foreign Direct Investments

Abstract

Foreign direct investments (FDIs) are perceived to be the most advanced internationalization form. FDIs bring benefits not only to the country’s economy but most importantly to the companies that make investments abroad. In case of Poland, the incoming FDI flow significantly outnumbers the Polish outward FDIs. One of the greatest barriers for Polish companies to invest abroad are lack or insufficient financials as well as investment risk aversion. Another crucial factor that can deter organizations from FDIs might be insufficient managerial competencies. The aim of the study is to verify if the managerial competencies are important for deciding and conducting FDIs as well as to determine what are the most crucial managerial competencies required in this process. The author conducted the literature review as well as in-depth interviews with managers, who participated in the process of foreign direct investments made by Polish companies in the period of 2010-2020. The results od the study confirm that there is imbalance between demand and supply for qualified managers. There are more Polish companies willing to invest abroad but they struggle to find competent managers as the knowledge, skills and experience related to the FDIs are very scarce. Respondents find international experience, industry knowledge, openness as well as cultural management skill as the most important managerial competencies in context of internationalization through FDI. The results of the study advance the knowledge in the field of international management. As far as the author is aware, previous works have not comprehensively considered the importance of managerial competencies in FDIs.