Feb 12 • 05:29 UTC 🇵🇱 Poland Rzeczpospolita

Prof. Adam Opalski: Business Does Not Need Binding Orders

Professor Adam Opalski discusses the ineffectiveness of the current group of companies law in Poland, arguing for a need for more managerial flexibility within subsidiaries.

In an analysis of Poland's group of companies law introduced in 2022, Professor Adam Opalski critiques its failure, asserting that it incorrectly identifies the core issue within corporate structures. The primary problem is not the lack of control from a parent company over its subsidiaries but rather that each subsidiary operates as a separate legal entity, constraining collaboration across the group. The law has resulted in only a handful of groups being formalized, indicating its limited effectiveness in fostering cooperative business dynamics.

Opalski emphasizes that the real need is for subsidiary managers to be enabled to work collaboratively for the benefit of the entire group instead of being judged solely on their individual company's performance. The current structure incentivizes a competitive mindset among subsidiaries, treating them as isolated entities rather than integral members of a cohesive group. This disconnect can ultimately harm collective business interests and stifle innovation and cooperation.

To address these challenges, he suggests that businesses should reconsider how they define success and performance metrics for their subsidiaries. The approach should encourage teamwork and shared goals, helping subsidiaries to align their interests with those of the parent company and the broader group. By fostering a more collaborative corporate culture, firms will be better positioned to leverage the full potential of their combined resources and expertise, potentially leading to more successful outcomes in the long run.

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