The Value of Business Expertise in Eastern EuropeSkip other details (including permanent urls, DOI, citation information)
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In the aftermath of communism's collapse, western experts have rushed to Eastern Europe to guide the formation of market economies, offering advice on the development of stock markets, the reformulation of trade policies, and the reconstruction of management along capitalist lines.
But to a significant degree, those in the West have defined what it is that post-communist capitalist economies need. Indigenous assessments of needs and expertise are sometimes hard to hear. To win the promise of continued cooperation or additional western contacts, and simply to be polite, East Europeans can reinforce the notion that expertise flows from west to east. But East European business experts learn quickly, acquiring "our" expertise while integrating it into a range of experiences and cultural frameworks that those in the West do not possess.
In the summer of 1996, the Center for Russian and East European Studies (CREES), in collaboration with the William Davidson Institute, initiated a series of workshops to incorporate the expertise and experience of indigenous business experts — consultants, scholars and business practitioners — into discussions of the value of expertise for the transformation of business practices in post- communist capitalism.
Alexander Plotkin of Tallinn, Estonia, visited U-M under the auspices of the CREES project on "Identity Formation and Social Issues in Estonia, Ukraine and Uzbekistan." Plotkin is a managing director of SAIBO, a training firm specializing in management, sales and customer service and is a consultant for the Chamber of Estonian- Russian Entrepreneurs.
Bogdan Siewierski, associate professor of Sociology at the University of Silesia in Katowice, Poland, is a business trainer for EXBIS, which provides short-term courses in human resource management and customer service. He spent five months at U-M conducting research on the culture of western management training.
Our workshops focused on the "backstage knowledge" typically hidden in encounters that privilege western expertise and experience. I also conducted videotaped interviews with both men, from which the text below is adapted.
I am the boss—you are the fool
Beyond taxes, legal problems, transportation and communication infrastructure and other conditions over which managers have no control, our two East European business experts identified several areas of need, especially in the general culture of management.
Ya nachal'nik, ty durak; ty nachal'nik, ya durak — "I am the boss, you are the fool; if you are the boss, then I am the fool" — Alexander Plotkin offered this Russian expression as an illustration of an authoritarian management practice that needs changing. While managers typically recognize the need to develop better planning in their firm, Plotkin found that it is difficult to convince them that they need to change their style of leadership. Western experts often approach this problem by training their managers in various "team- building" exercises.
In the case of Poland, however, managers often view such approaches to human resource management as inappropriate for their employees. Siewierski cautioned that team-building might work well in training sessions, and might be an appropriate theoretical response to authoritarian management problems, but it doesn't fit very well with Polish culture or with past communist experience.
Japanese culture appears to fit with team management, Siewierski said, but Polish culture's combination of individualism and willingness to submit to strong authority undermines the team approach to management. It also reminds Poles of communist "teamwork" where nobody was responsible for anything and the whole group was held responsible for any individual's (mis)behavior.
Other western management practices also prompt negative associations. Public displays of recognition, such as "employee-of-the-month" are considered "outrageous" and managers fear they could promote slackness. They also remind Poles of communism, where such awards were based less on merit and more on political connections. Polish managers also seem to think that their employees are motivated only by money. Siewierski has found that employees seek other forms of recognition, and advocates developing culturally- suitable forms of non-monetary motivation.
Communication and style
Siewierski and Plotkin identified improvements in communication as one of the great needs of post-communist firms and one of the contributions of western expertise. Plotkin has found that East European managers are often surprised to learn that communication is a problem. Managers may have daily meetings with their associate managers to discuss firm issues, but because of authoritarian management practices these issues are rarely shared with lower-level employees. Information, rather than a resource for the firm, is treated as a resource for each department in competition with one another. The problem lies also in the style of communication.
To Siewierski, one of the most valuable contributions of western experts is their style of presentation. In his work with business training programs, Polish managers often praise the style of the presenter as much as the substance of the instruction. Managers applaud the clear, well-prepared, and self-confident presentations of foreign instructors. While Poles might conclude an apparently spontaneous lecture with a statement like "Are there any questions, and if not, thank you very much," foreigners take pains to be open to questions.
Western use of visual aids also has changed the Polish culture of communication. In pre-transition Polish management, visual aids were perceived as vulgar —those with higher education should rely more on abstract thinking than graphs and charts. Polish business professionals are increasingly using the presentation techniques found in western management.
The customer is always right
Western experts and East European consultants also agree on the need to make businesses more customer-oriented. In his consulting work Plotkin uses a video that shows employees how they act from the customer's point of view. Yet Siewierski noted that training also must challenge more deeply ingrained cultural dispositions. The roots of poor customer service run very deep, he says, reflecting a commonly-understood view that the customer should be dependent on the salesperson, and that there is a kind of shame in appearing too responsive to customer needs. Siewierski gave the following example:
"A customer entered a private store in Poland in order to buy a frying pan. On display was a frying pan but with a shorter handle than the customer wanted. When asked if a frying pan with a longer handle was available, the salesclerk replied that there was none. The customer decided to buy it anyway. After a couple minutes the salesclerk returned with a frying pan with the longer handle. The enthusiastic customer replied, 'Oh! You found what I wanted!' But the salesclerk simply replied, 'No, I didn't look for any special pan; this was simply the one on the shelf.'"
Here, it would have been easy to feign service, but instead, the sales clerk resisted that pose. Siewierski suggested that for the service-oriented firm to be transformed, one must directly challenge the belief that helpfulness is akin to servility.
Business and culture
Good consulting is not only a matter or providing the "correct" advice. According to Siewierski, it also demands a sensitivity to culture that western management experts typically downplay. This oversight is evident in American management textbooks — while a growing number of books might have a chapter devoted to culture, they discuss few if any explicit implications of cultural difference for management training. Even in cross-cultural management training, where the significance of culture is obvious in language differences, cultural difference is rarely seen as a problem.
For example, "delegation" is one of the central concepts of management science, which itself relies on a distinction between responsibility and accountability. Siewierski points out, however, that there is no such distinction in Polish, and both words are described in terms of a single term, odpowiedzialnosc. A translator must take a considerable amount of time to describe accountability, even while such a distinction might be obvious in the English-speaking world.
This difference has implications for action. In a survey based on the Management Potential Questionnaire, a group of Polish managers was asked to agree or disagree with the following statement: "If a team does not meet its goal, I as a manager will report an individual's failure to my superior." Over 85 percent of Polish managers agreed. The expert-preferred answer, and one typically provided by British managers, was disagreement, reasoning that to be accountable for a team, a manager must take responsibility for the mistakes of a subordinate. The Polish managers, Siewierski explained, did not imagine themselves "responsible" because odpowiedzialnosc does not extend beyond their person.
The road ahead
As Poles and others become increasingly familiar with the market economy, some western experts believe that cultural differences ought to diminish. Siewierski identified two ways in which cultural difference has actually increased.
In the initial euphoria of communism's collapse, anything a westerner might teach was perceived as valuable. Siewierski called it the "placebo effect of management training." Westerners made people focus on management techniques and practices in ways they had not before. Thus, even if naive or innocent of real communist practices, training had consequence. But after six or seven years of market experience, disenchantment has set in. Polish managers demand more of western expertise and are not so ready to blindly imitate western business practices.
Plotkin and Siewierski agree that managers in transitional economies are no longer interested in the theory of how things ought to work, or how things work in developed capitalist economies. They expect specialized knowledge and specifically-tailored techniques, expertise they can use to solve their particular problems. After all, managers say, we have learned so much these last six years, we expect that western trainers should have also learned from our experience.
One of the most important problems for Estonia, Plotkin finds, is how to identify western partners and markets. Estonia with its 1.5 million residents is a much smaller country than Poland with a population of nearly 40 million, and thus has a much smaller domestic market. Too, Estonia has changed trading partners more radically than Poland has, from a Russian focus to a European one. To the degree that East European problems are centered on how to fit with the European Union and other developed market economies, western expertise is the expertise they need.
To the extent that fit with the West depends on knowing whence new market economies have come, business consulting in post-communist capitalism also needs the cultural awareness and "backstage knowledge" difficult to acquire in business encounters that emphasize future investments. While our workshops could not avoid all the pitfalls of communication, they were an important step in examining how cultural differences and the practices of western experts influence our assessment of the value of business expertise in making markets out of communism.
Together with the William Davidson Institute and U-M professional schools, CREES is extending this series in the coming year.
Michael D. Kennedy is professor of Sociology and director of the Center for Russian and East European Studies.