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Business and Management in Emerging EconomiesDirected Revision

Week 10 (B)

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Successful transitions

Countries which have just joined the European Union

Particularly successful: Hungary

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Successful transitions

What were their paths of transition?

Privatization methods Development of western business

practices Active seeking of FDI &

conditions for it to flow Equity or Bank (debt) financing

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Key to transition – FDI? How can FDI help a country What things are needed to attract FDI Why does FDI flow more to some and not

others? Natural Resources What if no decent resources Market for products Competitive advantage Political/economic/legal systems Tax advantages

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Key to transition – FDI

Methods by which MNEs enter a transition country

Joint Venture Greenfield Brownfield/Acquisition Stable business environment

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Underperforming Transition State - Belarus

What are the effects of slow/minimal/gradualist progress to transition?

Lack of privatization Monolithic underperforming SOEs Lack of fair resource allocation Cronyism etc Reliance on Russia Alleged key role in energy transit

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Underperforming Transition State - Belarus

Where are the development opportunities?

Small business sector Informal economy What are the effects of the

development of these sectors?

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Key resource in transition – Labour

How do workforces react to change from lifetime employment to…

Mobile labour market required by capitalist society?

How can this process be managed? What are the general characteristics of labour

force in planned economy? How do you get them to operate in “western”

manner? What motivates? What are the positive and the negative

points? How does Western style HRM practices fit with

a former socialist workforce?

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Privatisation – is this the key to

transition? What does it involve? Mainly transferring SOEs to

private ownership? Does this improve the SOE? What is wrong with it anyway? Can an enterprise remain state-

owned and still compete? Are there some countries or

sectors where privatization does not improve performance?

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Marketing & Trade Deciding what to sell & to whom Methods of advertising Effective media – is marketing universal

or should it be? Does product mix influence entry

method? How do companies assess their position Does product type affect strategy –

does corporate strategy affect marketing strategy?