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General Copy - A copyshop goes global

Case Study Cross-Cultural Management Mahidol University International College Trimester 1 2012
by

Martina Burmann

on 21 November 2012

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Transcript of General Copy - A copyshop goes global

a copyshop goes global Background Challenges Success Factors Timeline Copy General Today Conclusion 1989 - 1991 The fall of Communism in Europe Map of Eastern Europe in 1989 Poland and Hungary were the first in the Eastern Bloc to remove Communists from power Revolutions in Czechoslovakia and Romania led to a swift change in government during November and December 1989. Collapse of the Berlin Wall in November 1989, reunification of East and West Germany and disappearance of communist rule Major differences between communism & capitalism Based on the research of Trompenaar and Hofstede Cultural Differences between USA and CIS Achievement
→ When hiring Erno Duda, Paul and Dirk do not consider his social status or age, but only his qualification. Universalism
→ Paul an Dirk are trying to do business as they do in the US (leasing and renting instead of buying, ask a consulting company to do market research for them) low UAI
→ “We were a little skeptical about the concept, but we signed on” specific challenges Problem: The casual attire and the direct and demanding communication style of the Americans was considered pushy, undiplomatic and tasteless by the Hungarians. Language and communication barriers No organized real estate market and no commercial real estate agents
All retail space was owned and controlled by the government
No rational legal system or clear-cut property laws
Frequently potential landlords wanted equity positions in the business or share space
finding locations by knocking on the doors of stores in areas in which they were interested
finding the first location in Budapest after one year of looking Finding a location Market survey done by a local consulting company was expensive and unsatisfying.
Erno Duda offered to do the market research with the help of some friends and presented a detailed base of 53 companies in downtown Budapest

Most Hungarian Banks refused to work with Copy General, because of the lack of base capital. Budapest bank was the only one that was flexible enough, but due to lack of space for files they couldn’t take any new customers.
Banking system improved over time and Copy General finally became a customer of Budapest Bank. Finding competent Business Partners Xerox, their main supplier in the US wasn’t willing to provide them with the latest equipment in Budapest and didn’t offer equipment lease.
Establishment of a mutually beneficial relationship with Kodak
Lease equipment on very favorable terms
Copy General as a backup for Kodak machines in government offices in Hungary Suppliers Society in post-communist countries was not familiar with the concept of retailing and marketing
people had to be taught how to be consumers
choosing Hungary as the first country, since Hungary was the most westernized of the former Soviet Bloc countries.

Copy General had to create awareness of what they had
use of word of mouth

Uncertainty if there would actually be a demand for self-service copy shops Consumer behavior References http://alumni.gwu.edu/news/2009_04/aprofile.html
http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan007373.pdf
http://www.wwmr.org/teams.htm
http://www.referenceforbusiness.com/encyclopedia/Dev-Eco/Eastern-Europe-Doing-Business-in.html
http://news.bbc.co.uk/2/hi/europe/7972232.stm
http://www.nytimes.com/1994/01/03/business/worldbusiness/03iht-cheap.html
http://www.nytimes.com/1990/12/16/magazine/heard-about-the-copy-shop-in-budapest.html
http://www.spartacus.schoolnet.co.uk/COLDdubcek.htm
http://copygeneralusa.com/
http://copygeneralusa.com/
http://www.executiveleadersradio.com/chaletzky-kenneth-1051.aspx Guided Missile elements: Strong emphasis on equality, oriented to work in teams, close harmony and cooperation, less formal hierarchy
“Down- to- earth mentality“: company flat in working class area instead of luxurious hotel
Company Policy: Use of public transport to get to know locals
"When in Rome, do as the Romans do." Corporate Culture and Values Corporate Culture Started as translator, natural born wheeler-dealer
Country manager of Hungary C.G.
Today a successfull manager of Solvo a biotechnology company in Hungary Erno Duda
Initiator of establishing Copy General in Eastern Europe
"He wanted to do something for newly emerging democracies in Europe, but he didn't want to be a passive investor,“
"He wanted to build the economy by creating jobs."
heroes: Duke Snyder (Major League Baseball center fielder) and Alexander Dubcek (Slovak politician, briefly leader of Czechoslovakia, attempt to reform the communist regime during the Prague Spring) Paul Panitz Co-Founder and Investor of Copy General
1997- present President of Copy General Corp.
Former President of Circle Graphics Ken Chaletzky People Characterized by the management by personnel from the host country and by management by objectives.
Key positions are filled with personnel from the host country, because they know the market and the culture best and have better access (Erno Duda, Roman Petr)
The parent company sets the goals, but the respective national managers are free how to achieve it.
The parent company has only low influence and the authority and decision making is only marginal on part of the parent company
Also there are local regulations instead of standards of the home land. Polycentric approach Strategic approach Lack in managing money, people and time
Try to solve problems with their company´s checkbook (bribery, corruption)
Try to solve problems in-house rather than looking elsewhere for solutions (developing own applications instead of outsourcing)
Strong in technical skills and formal education but lacking in managerial skills, organization, training Eastern European Managers Synergy Motivates their followers by inspiring them, offering challenges, and encouraging individual development (empowerment)
Stresses achievement of higher collective purpose, of common mission and vision.
Applied to C.G: Paul Panitz’s vision of freedom of the press, “creating businesses that create jobs” and his commitment to “doing well by doing good” Transformational Leader Involves consulting with subordinates, evaluation of their opinions and suggestions before manager makes the decision; drawback: time-consuming.
Associated with consensus, consultation, delegation, and involvement
Employees tend to exhibit great involvement, commitment, and loyalty
Interaction between leader and subordinates and between subordinates Participative Leadership Leadership Style June 1991 first store opened with success in Budapest, Hungary

Hungarian Country Manager: Erno Duda Late Spring 1992 first store in Prague, Czech Republic

Czech Country Manager: Roman Petr´s
Still holds the position Further stores in:
Warsaw, Poland
Riga, Latvia
Moscow, Russia
Shanghai, China Nearly 500 employees
25 retail centers and 2 production centers
5000 corporate clients within Eastern and Central Europe Eastern and Central Europe Leading digital printer in the Washington D.C. area
About 30 people working in local operations
Focus on high quality & innovation
Mission: „We work with our clients in a way that makes us look good, by making them look good“ USA Conclusion Thank you for your attention! Most of the success of Copy General in Eastern Europe is due to the vision and persistence of Paul Panitz and the people he choose to join him. The success story of Copy General can be seen as a role model for doing business internationally.
Important lessons can be learned from their experience, e.g. the importance of involving locals.
However, also luck, patience, coincidence, the right people and business sense played an important role in their success. Communism Capitalism centrally planned economy
the community or society solely owns all resources and means of production
profit of any enterprise is equally shared by all the people
society is above individuals
strong censorship with restrictions on what could be said or written
government controls most aspects of people’s live marketplace economic system
private ownership of resources and means of production
profits belong to the private owner only
individual freedom is above the state or society
freedom of speech and movement
limits on government’s interference of people’s live Ascription
→ not achievement, but who you are and relationships are important if you want to do business USA CIS Particularism
→ circumstances of the situation matter;
"every time an American showed up the prices suddenly quadrupled" USA CIS high UAI
→ banks don't want to deal with companies with only 5000 $ as base capital USA CIS Language Barrier use of interpreters and hiring of local people Differences in communication style USA Hungary direct, personal and instrumental

→ Paul Panitz clearly states what he wants and isn't willing to compromise
→ he is direct and focused
→ he doesn't care about formalities (casual attire) indirect, contextual and affective

→ observe formalities, respect one’s opposite
→ negotiate rather than say no
→ respond politely and formally in order to preserve the dignity of the situation. Copy General faced when establishing their business in Eastern Europe Leadership The process of influencing people to direct their efforts towards the achievement of some particular goal. Management vs. Leadership Management primarily responsible for a group of employees and their performance
authority based on their role
ensure necessary works gets done
oversee day to day tasks
manages subordinates activities
managers are often more directive, controlling and tactical in an effort to organize their employees to accomplish tasks and complete deliverables Leadership more strategic approach (rather than directing and controlling)
place special emphasis on motivating and inspiring employees to drive for exceptional performance
outstanding soft skills and able to empower, energize, coach, and create enthusiastic work environments to get the best out of their employees Leaders, unlike managers, promote and concentrate on idea generation and change
Employees represent the ideal opportunity to generate and implement change for continuous improvement and leaders utilize them to achieve this
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