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Doing Business in Central and Eastern Europe Despite the numerous business opportunities related to the opening of the Central and Eastern European countries since 1989, doing business in this region poses considerable challenges and risks for Western companies. How can we meet these challenges and minimize these risks while maximizing their professional exchanges with citizens of CEE? What are the key information and practical advice that will help Western employees build and maintain productive relationships? The paper begins with a reference to the development of interculturalism in post-World War II Europe and how it was taken on board and applied by multinationals. A key factor in understanding the CEE region is the impact of Soviet rule from 1945 to 1989 on interpersonal and social relations. From a business perspective the legacy of this period profoundly affects how individuals and organizations behave in terms of trust, risk and attitudes to change. The Western model of organizational culture and behaviour cannot be transposed wholesale to CEE since the principles and mechanics of hierarchy, decisionmaking, contracts and personal responsibility differ considerably. The transition from Communism to Capitalism has resulted in a number of excesses that are visible in consumer behaviour. The persistence of nepotism and corruption, the absence of strong regulation and an inadequate legal environment exacerbate the risks of doing business locally. The paper concludes with practical advice relating to communication and negotiation in CEE.
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Doing business in cee
10 COUNTRIES…
1945-1989
ONE HISTORY
ANNIHILATION OF
ENTERPRISE
FATALISM
LACK OF TRUST
AVERSION TO RISK
FEAR OF RESPONSIBILITY
ISOLATION
FEAR AND
LOATHING
ORGANIZATIONAL
CULTURE
CHAIN OF COMMAND
CONCENTRATION OF POWER
MICRO-MANAGEMENT
No initiative
SURVIVAL STRATEGIES
SEE, HEAR AND
SPEAK NO EVIL
EUROPEAN UNION
HOPE FOR A BETTER LIFE
NEPOTISM
Expectations shattered
TRANSITION…
…TO CAPITALISM
Case study
ALSTOM vs. BKV
ADVICE
Study market with consultant
Understand and adapt to local culture
FIND A TRUSTWORTHY LOCAL PARTNER
Build a strong relationship
Establish a network
Work informally to assess performance
Get legal advice before signing contract
Hire local managers
Round table participants
Dr. Leslie Shaw, escp europe
Dr. Christopher jano, attorney
Nicholas Sarvari, cns risk ltd.
Richard ford, exedy clutch europe