Tuesday, 30 October 2007

Focus on Poland

Three reasons make Poland a different market from other post-Soviet block states. To start with, Poles were able to travel to the Western countries during the Soviet regime. Small businesses and private ownership were allowed to exist after 1945. And finally, around 19m people outside Poland claim Polish background and maintain contact with Poland. These factors made a significant contribution to the latest rapid growth of the economy.

Firstly, those who travelled abroad (250-500,000 people per year) brought back not only hard currency earned "moonlighting" in Germany or the UK but also ideas and Western notions of quality. Sums were significant, this was quickly recognised by the regime, which legalised foreign currency accounts in the early 70's.

As soon as democracy was re-established in Poland, many expatriates or second generation Poles were willing to return and bring contacts, knowledge of Western technology and business practices back to Poland. Businesses, large and small, were set up using cash, credit or expertise supplied from Chicago, London or Sydney. The Polish SME Sector received an enormous boost, unprecedented in Eastern Europe, and quickly became an important contributor to the economic recovery.

The Polish market is relatively large and promises good growth in the years to come. Entry barriers to many market segments are still low. Its geographical location is ideal for entering the post Soviet markets. However, Polish corporate and social cultures are different from those in the West, so a number of issues should be remembered:

Emotions play a very serious role in Polish business and politics.

Organisations have rigid structures and hierarchies. Task delegation is poor.

Bureaucracy is still ripe and so is corruption and nepotism.

In negotiations, small talk is important, as are personal relationships with partners.

Corporate hierarchy is often based on age and on university degrees. It is unwise to send a young technician to negotiate with an experienced Commercial Director with a PhD or MSc to his credit.

Poles are macho-oriented, easy to offend, intolerant and racist.

Poles are also hospitable, emotional and optimistic. Most of them tend to make promises, which they hope to be able to deliver "somehow".

Gadgets, mobile phones, cars and computers play a significant part in creating a corporate image.

Business ethics are dubious and working relations bear marks of the past era.

When searching for a partner, look outside Warsaw. Provincial towns offer lower costs and staff are easier to keep.

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