Doing Business with Transition Economies
Special concerns must be considered by the international manager when dealing with former centrally planned economies in transition. Although the emerging market economies offer vast opportunities for trade, business practices mat be significantly different from those to which the executive is accustomed.
Many transition economies face major infrastructure shortages. These infrastructure shortcomings will inhibit economic growth for years to come. Capital shortages are also a major constraint. Even though major programs have been designed to attract hidden personal savings into the economy, transition economies must rely to a large degree on attracting capital from abroad.
Firms doing business with transition economies often encounter interesting demand condition. Buyers’ preferences are frequently vague and undefined. Available market information is inaccurate.
Adjusting to Global Change
In the emerging market economies, the key to international business success will be an understanding of the fact that societies in transition require special adaptation of business skills and time to complete the transformation. Due to their growing degree of industrialization, other economies are also becoming part of the world trade and investment picture. In turn, it must be recognized that these global changes will precipitate adjustments in industrialized nations, particularly in the manufacturing and trade sectors. Adapting early to these changes can offer new opportunities to the international firm. Large populations offer new potential consumer demand and production capability. Many opportunities arise out of the enthusiasm with which a market orientation is embraced in some nations.
State Enterprises and Privatization
One other area where the international business executive must deal with a period of transition is that of state-owned enterprises that have been formed in non-communist nations for reasons of national or economic security. These firms may inhibit foreign market entry and they frequently reflect in their transactions the overall domestic and foreign policy of the country rather than any economic rationale. The current global trend toward privatization offers new opportunities to the international firm, either through investment or by offering business skills and knowledge to assist in the success of privatization.
The Role of the Multinational Firm
However, multinational firms have experienced higher rates of success in transition economies for a variety reasons. Multinational corporations are very often the only ones that can realistically make a difference in solving some of the problems in developing markets. Developing new technologies or products is a resource-intensive task and requires knowledge transfer from one market to another. Without multinationals as catalysts, nongovernmental organizations, local governments, and communities will continue to flounder in their attempts to bring development to the poorest nations in the world.
Tidak ada komentar:
Posting Komentar