Posted: May 25th, 2022

The communist model to capitalistic system.

Poland: Case Study

What are some current issues facing Poland? What is the climate for doing business in Poland today?

Poland is classified as a transition economy. It is gradually making the shift from the communist model to capitalistic system. Overall, demand for doing business in Poland is increasing. More than 350 foreign firms have established inroads in the Polish economy, and it is attractive to foreign investors. The population is highly educated, and in contrast to many residents of transition economies, is extremely hard-working, second only to South Korea in hours worked per year.

Is the Canadian manufacturing firm using an economic, political or quality imperative approach to strategy?

The Canadian manufacturing firm is using an economic strategy. Few competitors presently exist within the power tool market in Eastern Europe, and a supply of these tools will be necessary if the region is to attain economic parity with the West.

Q3. How should the firm carry out the environmental scanning process? Would the process be of any practical value?

Environmental scanning, such as a PESTLE (Political-Economic-Social-Technological-Legal-Environmental) analysis would be advisable, given how many of these factors could impact the firm’s success and ability to be efficient and profitable within the nation. The political situation in many Eastern European nations is highly unstable. However, Poland’s government has been very welcoming to foreign investment and offers grants and tax exemptions to foreign firms. Economically Poland is still in transition but the lack of competitor firms makes this venture attractive. While culturally and socially many former communist countries are still shifting to the mindset of a capitalist nation, the willingness to work hard of the Polish people combined with a high unemployment rate suggests that labor will be cheap and also that the quality of workmanship and dedication will be high. Although it might be feared that a former communist nation’s technological capacity would be sub-par compared with the West, it has a well-maintained and modern transportation system. Many other successful Western firms have thrived and could offer resources to the company in Poland. Legally, the central government is attempting to ensure that there will be no additional bureaucratic burdens not manifest in the west for foreign firms. While even environmental pollution can be a concern, in terms of worker safety in some areas of Eastern Europe, Poland still has a substantial amount of pristine land.

Q4. What are two key factors for success that will be important if this project is to be successful?

Key success factors include availing one’s self of a cheaper yet skilled labor supply to produce a high-quality product that is still affordable in the region, and ensuring the cooperation of the government so the company will not be burdened by unnecessary regulations. At present, Poland has experienced some setbacks: its budget deficit increased “7.1% last year after the global economic crisis depleted government revenue,” and preventing it meeting its goal of adopting the euro in 2012, as formerly hoped (Bartyzel & Rozlal.). But virtually all European nations were hard-hit by the recession, and Poland’s deficit does not indicate a crisis of governance or chronic misspending as manifested in Greece.

Hofstede dimensions for the country of Poland

Power distance: Higher in Poland

Individualism: Much higher in the United States

Uncertainty avoidance: Much higher in Poland

Masculinity: About the same

Long-term orientation: About the same

Like most nations, Poland is notably less individualistic than Canada and the United States, and there is a higher degree of uncertainty avoidance, given it recent history, and a higher respect for authority. This may partially be due to its conservative, homogenous Catholic culture and partially due to the legacy of communism. This suggests that employees may benefit from more team-oriented strategies and direction than their Canadian counterparts might, but there is sufficient commonality of values that there is a high likelihood of success of the partnership.

References

Bartyzel Dorota & Monika Rozlal. (2010). Poland’s budget draft may not make progress toward

EU budget deficit goal. Bloomberg. Retrieved November 5, 2011 at http://www.bloomberg.com/news/2010-07-12/poland-s-budget-draft-may-not-make-progress-toward-eu-budget-deficit-goal.html

Geert Hofstede cultural dimensions. (2011). Comparison. Retrieved November 5, 2011 at http://www.geert-hofstede.com/hofstede_dimensions.php?culture1=95&culture2=70#compare

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