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Still a long way to corporate competitiveness in Central Eastern Europe
21-04-2015 HR services/Target source: PeppeR PR
Expats criticise bureaucracy, corruption and lack of customer focus 25 years after the change in regime, critical corporate issues still stop companies in the Central Eastern European region from becoming more competitive. A recent pan-regional survey of foreign senior managers makes clear that still a lot needs to be done in terms of decreasing bureaucracy, eliminating corruption, focusing on customer service and taking more managerial responsibility. The study, commissioned by TARGET Executive Search and conducted by GfK and CEU Business School, highlights significant strengths in the hard work ethos of local management, attitude of women workforce and the strong interpersonal skills. However, to become more competitive, in many respects the region still has to live up to its promise.
  In a recently published pan-regional study of the regional recruitment firm, the opinion of close to 1000 foreign senior managers and their local manager partners working in Bulgaria, Czech Republic, Hungary, Poland, Romania and Slovakia was sought. The study focused on the topics of general business environment, management style, managers and the market, transparency and cross-cultural relations. The survey is in many respects a continuation of a similar study commissioned by TARGET Executive Search in 2009, and allows for comparisons of findings and conclusions on trends. Expats enjoy living in the region, while their reaction about working here is more mixed. "A great place to live, not always a great place to work’ commented one of the foreign managers. Respondents find that locals are usually sociable and setting personal contacts is important in making business. This is most apparent in the case of customer orientation where foreigners claim locals rank interpersonal relations with customers higher than actual customer focused work. Personal relations are important within the companies themselves, where ‘an open exchange of views is often difficult as comments are usually taken personally". "Lack of strong customer focus seems to be one of the key reasons for companies not becoming more competitive. Interestingly, local managers believe this to be much less of a problem, but most of the foreigners consider companies lagging behind in this respect." – explained Klemens Wersonig, CEO of TARGET Executive Search Group. "If this, together with decreasing bureaucracy and eliminating corruption, could be changed, companies in the region could take a head start. They could, with a good chance, regain the momentum they had after the change of the regime and the EU accession, and which they seem to have lost after the economic crisis in 2009." – said Klemens Wersonig. Bureaucracy and corruption remain hot issues in the region. Slow and non-transparent decision-making limits competitiveness and efficient operations of the companies. Foreign managers claim that "local managers like to do things according to the old tradition’ and ‘corruption is common". "The study identifies certain important phenomena in terms of work ethics and company operations" – explained Zoltán Buzády, Associate Professor of Management and Organization at CEU Business School. "In spite of considerable improvements, still a relatively low number of local managers take a strategic view on company issues. Taking responsibility is still not general and working according to a systematic way is criticised in a number of countries. What is good, we see significant improvements in local managers valuing the company they work for, much more than they did 6 years ago. Appreciating the work place may not be unrelated to the effects of the economic crisis. From the academic perspective, the findings of the study are of importance. It is for this reason that at CEU we plan to use it in our further research, educational and professional activities."– commented the professor. "For a headhunter, there are two interesting points from a demographic perspective to note" – added Klemens Wersonig. "Young mangers below 35 seem to be open to new ideas, have a strong educational background and language skills but lack experience and the long-term vision, while many of the older generation like to follow things they have been used to doing. This is sometimes an obstacle for change. Second, the study does not reflect any apparent gender issue. The work attitude and the business role of female managers are well appreciated by the foreign managers. So, if there are any gender issues, these are visibly not in those companies where the survey has been conducted. " – explained the CEO of TARGET Executive Search. Compared to 2009, the overall scores of satisfaction are lower in each of the countries, with Romania seeing a significant increase and Slovakia experiencing a drop in ranking. In many respects, the winner of the survey is Poland with the highest overall scorings. Expat opinions claim Bulgaria suffers of corruption, Czech managers seem to have issues with foreign customers and colleagues, while Hungarians lack customer orientation. A further analysis of the findings and the identification of trends Is planned to take place at a roundtable discussion with international experts in the 26th May in Budapest. Key statements about Hungary Regional competiveness survey backgrounder Hungary is the only country where not one of the questions gained the best score among all 6 countries and ranks 4th in total but with lower total score than in 2009. 
 TOP 5 statements with a significant positive change – the share of agreement has increased - Business deadlines and timetables are taken seriously in this country 
 - It is easy to find well-trained managers in this country 
 - Managers here do place much value on the company they work for - Managers in this country work hard
 - Corruption is not a significant problem in doing business here TOP 5 statements with a negative change – the share of disagreement has increased - Good personal relationships with customers and colleagues are essential - There is no culture of presenteeism (working long hours “just to be seen”)* - On the whole women here tend to be more effective managers than their male counterparts - Humour is important in working relationships in this country - Hierarchies here tend to be informal Remarks from the foreign managers working in Hungary Hungarian work mentality is one of trying to hide in the group rather than taking initiative hoping that this attitude will mean that one can keep their job for a longer time by just doing what is asked and nothing else (manager from Belgium) I find two areas which are hard to change. The first is that comments are taken personally which makes it difficult to have an open exchange of views and to achieve the position of "I personally have a different view, but I accept it and shall implement". The second is the inability to compromise: the best outcome in business is 70/30 in your favour, and not 100/0 where the other party loses. (UK) It gets more instable here, experienced workers are missing or they are leaving the country to go west. (Germany) Hungarians have a life outside the office. They will prioritize work perhaps to a smaller degree than in western Europe. At the same, time I have not experienced any productivity issues. (France) Key managerial challenges in Hungary: reduce the resistance to change, develop the capability to deal with uncertain future, enhance the courage to challenge hierarchy-based decisions, create a strong sense of personal and collective contribution. (Italy) All in all, it is still worth coming here to live and work. What I can never accept and always try to fight against (without success) is corruption. It is simply everywhere. Especially government institutions and local managers of foreign companies when there is lack of control from the mother company. (Austria)

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