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Why your MBA degree might mean nothing in one party countries

Ted Blackwater |
When you are on your way to be a manager, things look straightforward: you learn something in a business school, put a pinch of experience on it, and if you're smart enough you're there. Surprisingly, there are places where you can forget your experience and where your MBA is worth literally nothing because you entered a wholly different business universe.

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When you need to establish a new business this is probably what you will say: "I have to choose people. I know how to do that. I have to establish a company. I know how to do that. I need to think about products. I know how to do that. I need to enter the market. I know how to do that. I need to take care of my workers. I know how to do that."

And that's OK and understandable if you are an experienced manager. But in some countries and cultures, the problem is that you really do not know how to do that. It's not because you are not experience enough, it's because you entered a whole new world. So, let's take a look through some example what can go wrong.

You know how to choose people. You get a bunch of candidates, give your people or an agency a task to choose them, and of course, you don't think about that anymore because all processes are well known and established.

The problem is if you came to a country that's not western, a country where there is no democracy or it is young, or a country that just relatively recently stepped out from some form of one party system, it's hard to find people.

In former socialist countries, or undeveloped for that matter, the school system was and maybe still is radically different from the western system. Take for example former socialist countries in Europe. They have great educational systems, and that's their heritage, but their problem is that the state forms the school system, not the market.

The outcome: you don't have the one single person you need, but you have 1,000 workers with skills nobody needs anymore. You'll have on your disposal thousands of people with skills for working places that don't exist anymore or thousands of economists because it's "in" to enroll in a business school.

If you want to formally establish a company, the next problem is bureaucracy. If you think that in your western country bureaucracy is slow, wait till you try to do something formally in a former socialist or one party country.

In a fast business life you are accustomed to get all your problems solved in days or weeks but no, in some countries you'll have to wait for months. It's not that they don't want to do anything, it's all about history.

In one party system, which lasts for decades, people in state agencies have some habits that are not market oriented.

They learned to work slow. They learned that they will get paid no matter what, so nobody cares will they approve your business now or in two months, they will get paid. They don't think about benefits your company could bring, they are thinking about themselves.

State employees in such countries are a bit afraid of making decisions on their own. They are used to get permission "from above" so now when they are on their own, they still have that mentality ingrained in them. They will wait and wait and if it really can't be the other way, they will do their job. That will repeat for any single paper you need, which is good for them because they got paid anyway but bad for your shrink bill that could go sky high.

Add to that new kinds of businesses they never heard of, and that doesn't exist in their laws, and you have a big problem before you even started. If you don't want a good old factory that makes something, you are in a big trouble although they know what the whole world is doing and they know something new like that exists but they don't have it in their rulebooks.

Stop, we can add something more to that before we move onto another step. You know, life is hard. People must feed their children, pay for their education, they would go to see a movie, something must be done around the house, a new car would be welcome. You are expected to contribute to their personal needs. Privately. Outside official channels. You know, a bit of money that will find its way from you to that key person(s) and that will leave no trace behind. We call that bribery and corruption, some call it intangible cultural heritage.

Now you need to think about products. Now you will have a hard time. Look, people in former socialist countries know very well what exists in the world but they are tied to some historic friends or products like they are their family. "A German car is a car." You may have a rocket that's cheapest than a slice of bread, if it's not German you smack your head against the wall. That will not help either.

So, you need to learn hard about what's appreciated in your new country and what isn't before you even think about your product.

Now when you have your product and your hair is almost grey, it's time to enter the market. Now, that's a task in some countries that's harder than to discover Pacific in a boat alone.

Former socialist countries or those emerged from one party system or those that still have one ruling party, have a simple rule: all decision must be approved from above. Somebody must decide that your product will be needed or your business will fail.

It doesn't matter how good your product is, or how beneficial it could be for society, if the top bureaucrat doesn't get it, you will have a problem.

Now, even the top bureaucrat has a life. You know, kids, car etc. soooo think about "showing your gratitude" through some "donation". If you are with a normal brain, you will conclude very fast how much gratitude and to whom. I mean, that's how things work. That's heritage. For such an act you would end up in jail, but you are not in your home country, you are, say, in a country that has one party since Lenin. So, when in Rome act like Roman.

Now when you did that, you think you're happy but you aren't. You are still miserable because there might be a monopolist in your business and it will be very hard to fight them. Remember, you are not in a free market, you are in a combination of socialism and capitalism, and that's a combination that's totally unnatural but it exists.

Your competition has well established position, and, of course, more money to show gratitude to whoever it must. So, if you are not a multinational company with billions ready to spend, you are in a trouble.

Now let's say you did all that, all you need, and you are on the market. Now you have to take care of your people you had a hard time to find. That's not that easy.

They need a father. They may be skilled, very skilled, but they are afraid to make their own decision. They need your approval for anything. From a complex tasks to simplest ones. Because, you never know what can go wrong and it's better that it's somebody else's fault. Although we all know it's about a thing even a child could do. But no, they need approval. Remember that they lived for a decade in a society that established that thinking in them, there was always somebody above to approve something.

Now, you have to pay your people well and give them all benefits. But that's not enough. People may appreciate more a day off or a few hours off to "finish some of their own business" than a corner office with a great view. An unexpected gift for their children might be more appreciated than a raise. And if they can get something from the factory to take home now and then, the happiness is endless.

Then you have to deal with a foreign health system that may be good but complicated, unions that exist for god knows what reason, committees of all kinds, government agencies that do who knows what, hardly understandable laws and rules, and families.

Yes, families. You may set in stone the nondisclosure rules and threat your people with any kind of punishment, you can be sure your business secret will find a way out. "I told my brother in law." Or someone else. Or someone that's linked to someone that's in turn linked to someone that was a family hundred years ago. Because family ties are strong and you can't work against the family and keep the secret for yourself. You must tell. You simply must tell. If you set a top secret project this morning, you will read about it in the evening news. Because, you know, family.

And forget setting a management team that will take care of the business. The rule is simple: the more steps in a hierarchy, the better. That's how things work. People feel more secure if they have more bosses and in the end people must work. So, your decision to hire five instead of one manager will be welcomed and you will be perceived like a good boss.

That of course means that you'll have endless conversations in all levels but that's how things work when you have many managers.

And there are all kinds of taxes for who knows what. The only thing you know is that you pay them for the state to have the money.

And stamps. There are two groups of people: one that knows what a stamp is, and another that worships stamps like a god. You might need a stamp for everything and on everything. A change of business, a new building, a change of workers, a change of working hours, a change of moon phases. You will need a stamp on the paper for that. And you will pay for that, of course.

And now when you did all that, there comes the country. No matter how successful you are, the country will come. They will ask for your customers' data. They will tell you which market "would be good" for you. What kind of products would be good. What can you do for your worker besides everything you do. What's the shoe size of your mother.

And you will give all of that to them. Because you can't change the society or fight the state. If you want to stay in business, you'll give. In return you will get a product well made, cheap. A good product. But you have to sell your soul for it.

Then, don't get into trouble. The laws are, well, complicated in some places and the judicial system is slow. In extremely complicated financial cases, it may take up to two years to sort things out before the court. In very very complicated cases. In western countries. In a former or current socialist country, it may take 10 to 20 years or more. And that leaves you very vulnerable and without protection. Why does it take so long, well that's one of the mysteries of life.

If you didn't find in this text any connection with your business education and experience, you are right. There are no connections. Your education from the western world is worth exactly nothing in one party of former one party system.

You will achieve good things in your whole business life in such countries. Great things. Something you will achieve in a western country in a year. Or less.


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