In my last few months of traveling to Budapest, one thing is clear about the business environment in the CEE region. And that is, it is different from say, the Western Europe or the USA. That’s a very general statement, let me make it even more abstract – business environment in each region is different and needs to be treated that way. Policies and strategies that work perfectly in one environment may fail terribly in another.
This weekend we had the opportunity to listen to a couple of guest lectures under Operations Management course. I thought it’s going to be an extension of the concepts we’ve been learning in the class, but what they shared was actually much more profound and meaningful – their successes and failures.
The ex- commercial director of one of the most successful construction materials company in Hungary, Masterplast, definitely had a lot to say about the good days his company has seen. But they also had to taste the bitter set back in their china operations and finally had to wind-up completely with millions of dollars in losses. Mistake? Using the European management strategy in China. Had it been a Chinese executive or someone that lived or studied in China, learned their way of working, was familiar with the business environment more than a casual traveler and was given enough powers to run the show, the end result could have been different.
Another example was that of a Chinese textile traders, a family business. Dromedar is now a successful jeans brand in Hungary, they setup their operations first in Hungary in 1992 and now have their presence in many countries in the CEE region, Scandinavia, Spain and some Latin American countries. Their recipe of success? They always started with the tried and tested, highly sophisticated market research strategy – word of mouth and personal relations! Really, it doesn’t have to be complicated. Everybody writes about it, learns in the classroom, but companies still make things complicated and try to copy paste strategies from one region to another.
In case of this family business, they stuck to the local expertise, people with knowledge of the region, the market, the demand etc. All they wanted was to use their strengths to become successful in new markets. They were not afraid to make changes to their design or product portfolio to suit a particular market. This was completely missing from the large construction materials company in their China expansion efforts. Masterplast tried to use the exact same product and way of working which made them successful in Hungary and Europe.
Many of the executives that take such critical decisions have an MBA degree. So I guess it all starts right here and goes back to the time when we made the most important decision to study at some school. If you want to help your company expand in the USA, would you choose do an MBA in Africa? If you would like to start business in Germany, would you choose get training in a Chinese Business School? Don’t you think companies need to give away some control to their local executives in return for higher chances of success in a given region? I’m open to your ideas, chip in!