Going from entreprenorial to corporate – What a challenge!  

Going from entreprenorial to corporate – What a challenge!
Foto: kchungtw / depositphotos.com

Many international companies have started their activity in Romania with a local representation and local management, especially in the `90s. It was the easiest way to develop the markets without too much involvement. Local Managers were often (and sometimes still are) self-made leaders with a way of their own. Because of their networks and strong personality they succeeded often to build impressive power and delivering promising results. As soon as markets reached a more mature level, corporate head offices were tempted to interfere more into local businesses with strategies, rules and reporting lines to develop the business further.

More than once this lead to conflicts between the local General Manager and the head office up to the point of even changing the leader.

It happened that the transition was not often well prepared. In the past, local leaders were accepted as they were and there was a reluctance to make them align to international standards by fear of losing in on the business. Sometimes the power of local leaders is indeed very strong because of long-term relationships with customers, colleagues and institutions that are not so transparent to outsiders. This in return makes it difficult to understand what is really going on.

The shift from the self-made to the corporate style is also a shift of power which is often difficult to accept by local leaders. The modern management world is based on alignment, consistency and compliance, this is often a hard pill to swallow since it limits decision power and doing things “my way”. Local managers often took this as a sign of lack of confidence in their work, their reputation locally was threatened.

In many cases, such a shift also reveals the lack of capacity to adapt to a new world that is not
anymore based on the model of “șeful mare” (the big boss) with an autocratic leadership style. I have seen good local leaders who prefer to leave the company instead of adapting and learning new things.

What can an international player do when this kind of transition problems may arise in the local subsidiary? Prepare and explain your transition carefully with clear signs to the local management that you are willing to go ahead. Do not wait too long with the change, it may get harder later. Be clear about what you want. A local GM may be a good match nevertheless to handle the job. Corporate people should therefore carefully weigh up the pros and cons before taking action. Can the organization support strong individuals with their own style even if they are a bit edgy sometimes? Very few can.

Make sure you also build relationships with the second layer locally by integrating them into international working groups and projects. It may also be a solution to insist on building up talents and especially a potential no.2 behind the General manager. This person may then get modern training and can be kept closer to corporate thinking. In doing this you will reduce the danger of losing everything if the leader is leaving.

Dr. Michael Schroeder

michael.schroeder@linarson.com

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27 November 2021

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