Showing papers by "Leo Paul Dana published in 1999"

Small Business as a Supplement in the People's Republic of China (PRC)

Abstract: During the past 20 years, several nations that formerly embraced communism, including those with centrally-planned economies, have totally rejected that ideology. They have allowed market forces to transform the economy and have allowed independent small business owners to become major economic players. In the late 1970s, the People's Republic of China (PRC) developed policies of reform that opened it up to the world. Numerous new programs directed the people of China toward a prosperous entrepreneurial sector, especially in the townships and villages. These programs, however, did not abandon the socialist ideology inherent to the PRC, but sought to maintain it as the basis for its policies, with small business as a supplement to the socialist market economy. This article will consider the nature of the integration of socialism and small business in China. Recent History of Business in China On October 1, 1949, the Communist Party of China (CPC) declared the inauguration of the People's Republic of China (PRC), and all private enterprises were absorbed into the state sector of the economy. Small shops were converted into retail outlets for state-produced goods. At first the retailers were entitled to earn a profit, but it soon became obligatory to join a cooperative. No major changes in this policy occurred until 1978, when the nation adopted its third constitution, which led to the legalization of small business. The fourth constitution followed in 1982, placing China's modernization within the guidelines of socialism. The nation's fundamental laws specify four central principles: (1) adherence to the path of socialism; (2) adherence to the dictatorship; (3) adherence to the leadership of the Communist Party of China; and (4) adherence to Marxist-Leninism and to the ideology of Mao Zedong. One article of the constitution stipulates that the private economy in both urban and rural areas should supplement the socialist economy of public ownership. Another article allows the National People's Congress to amend the constitution, and in March 1993, such an amendment proclaimed that China will practice a "socialist market economy." Since this amendment, a siying quiyejia (private enterprise) is defined by the state as a firm owned by individuals and providing jobs for eight or more employees. Under this definition, over 200,000 owner-managers, partners, and shareholders are proprietors of 100,000 private enterprises in China, employing almost 2 million people. Enterprises employing fewer than eight employees are called geteihu, literally "one-man businesses." In rural areas, the xiangzhen qiye evolved, operated by members of an extended family. Chinese Culture and Small Business To understand the current Chinese attitude toward small business, it is important to understand some of the underlying cultural influences on it. One very important influence is Confucianism, the major religion in China. Although Confucianism does not encourage small business per se (Jones and Sakong 1980), it does value hard work, diligence, and frugality (Petersen 1971), qualities that Weber (1904-1905) linked to small business . Wu (1983) suggested that Chinese cultural values also include: (1) a high propensity to save and reinvest business earnings; (2) a universally strong desire to secure a better education for their children, who would then be expected to carry on the business and often do; and (3) a strong sense of loyalty and mutual obligation within the Chinese extended family. Shapero (1984) observed that overseas Chinese in Southeast Asia value small business more than do people from other cultural groups, and Dana (1986-1987) noted the success of Chinese small business owners in Singapore, Vietnam (Dana 1994), and Laos (Dana 1995). The Return of Small Business Without abandoning its ideology, the PRC initiated its program of reform in 1978, and in the following year the State Council of China officially endorsed the policy of encouraging small business owners as a supplement to the socialist economy. …

Preserving Culture through Small Business: Government Support for Artisans and Craftsmen in Greece

Abstract: While literature and governments often link entrepreneurship with innovation, Greece uses small business as a means to preserve cultural tradition. The result of ethnographic field research, this global perspective is about the efforts to promote long-term development of rural, small-scale enterprises in traditional sectors of the Greek economy. Schumpeter (1911), and many after him, linked entrepreneurship with innovation (Barnard 1949: Baumol 1968; Drucker 1974; and Mintzberg 1973). Governments have also associated entrepreneurial behavior with innovation, and numerous policies have been designed to promote innovation among entrepreneurs. For example, the government department known as Industry, Science and Technology Canada instituted the Manufacturing Productivity Improvement Program to assist innovative entrepreneurs in adopting modern technology. In France, various networks have been established to promote technological innovations, among them the Agences Regionales d'Information Scientifique et Technologie (regional agencies for scientific and technological information) and the Centres Regionaux d'Innovation et de Transfert Technologiques (regional centers for innovation and technological transfer). Similar attempts have been initiated in newly industrialized countries. In Singapore, for instance, the Small Business Bureau provides a grant for the promotion of technological upgrading (Dana 1987). Even less-developed nations have developed interest in innovation. As discussed in Dana (1996), an example is the Trust Fund for the Development of Small Industry in Mozambique. Thus, various efforts have focused on encouraging innovation and new technologies within the small business sector. Although the same is true in Greece, innovative technologies are not the prime concern of the Greek government. Rather, emphasis is placed on assisting artisans and craftsmen. The artisan as an entrepreneur is discussed by Stanworth and Curran (1976), while the craftsman is addressed by Chandler (1962), Dunkelberg and Cooper (1982), Filley, House, and Kerr (1976), Smith (1967) and Woo, Dunkelberg, and Cooper (1988). The purpose of this article is to illustrate how the artisanal handicraft sector in Greece has been singled out to be given special priority. The Hellenic Organization for Medium- and Small-Size Enterprises and Handicrafts The Hellenic Organization for Medium- and Small-Size Enterprises and Handicrafts is commonly referred to by its acronym, EOMMEX. Under the supervision of the Ministry of Industry, Research, Technology and Trade, the organization was created by laws passed in 1977 and amended in 1984 and 1991. EOMMEX is a non-profit organization funded by the Greek government and by European Union sources. Its activities are dedicated to maintaining an environment favorable for the long-term development of small-scale entrepreneurs, with special attention being given to handicrafts. Activities include keeping barriers to entry at a minimum and enhancing the economic climate to maximize the probability of success of those doing business in the sector. As well, EOMMEX is actively involved in providing artisans with a wide range of comprehensive services, including training, financial assistance, and marketing. The organization also subsidizes the interest rates on loans to small business owners, and makes available letters of guarantee. EOMMEX employs 650 specialists in Athens and in twenty-six regional offices. It also operates offices in Brussels, Frankfurt, and New York, facilitating collaboration with partners abroad. All of its services are provided free of charge. The Handicraft and Artisan Sector It is of particular interest for EOMMEX to reinforce the arts and crafts sector while preserving traditional handicraft products. Both artistic and technical assistance are provided, as are the marketing and promotion of handicraft products. In various regions, handicraft centers have been established. …

Business and Entrepreneurship in Bosnia-Herzegovina

Abstract: Among countries in transition, Bosnia-Herzegovina is unlike any other. Civil war interrupted the process of privatization, and shelling destroyed much of the industrial sector. A few entrepreneurs prospered during the war, and many new ventures were created; however, their post-war survival is uncertain. The Dayton Agreement created a federal Bosnia-Herzegovina, consisting of two political entities. One of these is the Bosnian Federation, which welcomed the post-war reconstruction boom, and is headed for a market economy. However, the other constituent of Bosnia-Herzegovina, namely Republika Srpska, has encountered a further struggle with post-war politics, and less entrepreneurship is visible there. INTRODUCTION Bosnia-Herzegovina is a unique country; although it is divided into two legal entities, it consists of three economic entities. The country is politically divided into two legal entities, namely the Bosnian Federation and Republika Srpska. In actuality, however, Bosnia-Herzegovina operates as three economies, each with its own regional currency. Coins are scarce, and so retailers give chewing gum and tram tickets in lieu of change. The need for post-war reconstruction has been translated into new opportunities for entrepreneurs. Given the low wage structure in BosniaHerzegovina, there is also tremendous potential in light manufacturing, especially with the technical and financial assistance of foreign partners. Yet, many issues remain unresolved. The objective of this essay is to give an account of, and stimulate future research about, small business in Bosnia-Herzegovina. METHODOLOGY This article is the result of inductive, ethnographic research with an emic design. Research methods included participatory observation and open-ended interviews with entrepreneurs, government policy-makers, and United Nations personnel in Bosnia-Herzegovina. Also contacted were the British Overseas Development Agency; the Council of Bosniak Intellectuals; the Croat National Council; the Muslimanska Bosnjacka Organizacija (Muslim Bosniak Organization); Srpsko Gradansko Vijece Sarajevo (Serb Civil Council of Sarajevo) and Tuzlanski Demokratski Krug (Democratic Circle of Tuzla). The author intended to conduct some interviews in Potkasa, but this plan was canceled as the town's population was reduced to zero. Interviews typically lasted between one and two hours. In total, eighteen interviews with officials (government, diplomatic, military, and NGO) were deemed usable, as were fifty-five interviews with entrepreneurs, journalists, and consumers. Special care was taken in order not to be misled by socially desirable responding, as discussed by Adair (1984), Arnold, Feldman and Purbhoo (1985), Crowne and Marlowe (1960), Lopez (1982), Rahim (1983), and Zerbe and Paulus (1987). Numerous studies (Arnold & Feldman, 1981; Golembiewski & Munzenrider, 1975; Rosenkrantz, Luthans 8c Hennessey, 1983; Stone, Ganser, Woodman, & Fusilier, 1979; Thomas 8c Kilmann, 1975) have raised concerns about the contamination of research findings by such socially desirable responding. Several difficulties were encountered during the data collection stage of this research. Details about the Bosnian Federation and Republika Srpska are not available in any one place. Therefore, it was crucial to travel across ethnic boundaries within Bosnia-Herzegovina. According to the Dayton Agreement, this should not be a problem. However, data collection was interrupted when military police, in Serb-held areas of Bosnia-Herzegovina, repeatedly stopped and interrogated the author. In addition, countless roadblocks (some caused by military forces and others by stray cows) contributed to frequent delays. One must also be cautious, as roadside bandits have been making potholes for the purpose of damaging tires of passing automobiles; when the driver stops the car to change a tire, the bandits rob him and steal the vehicle. …

British Airways plc

Abstract: “There is no sound reason to believe that there will not be a single global market in air transport” Those were the words of Sir Colin Marshall, the chairman of British Airways To give the airline an image of being a global airline, the amount of £60 million had been earmarked Simultaneously, British Airways Chief Executive Robert (Bob) Ayling wanted the firm to become the best‐managed company in Europe, by the year 2000 This case study assesses how British Airways have gone about achieving this goal

Kentucky Fried Chicken

Abstract: Kentucky Fried Chicken has made a very successful entry into China. This case is about the KFC outlet at the Dong Fong Hotel, in Shanghai. The hotel was recently closed for renovations.

Korean Air Lines

Abstract: This case is about Korean Air Lines’ innovative idea to adopt a policy of vertical integration in catering. Rather than out‐source its in‐flight catering, this airline has moved away from industry norms, and is doing its own thing – literally.

Small Business in Israel

Abstract: Israel, a country built on ideology, has experienced rapid economic changes since the reforms and peace initiatives of the mid-1990s. Israel has had an unusual combination of high economic growth indicators and a stable economic infrastructure. Per capita GDP is at par with Western European countries, while its growth has surpassed that of Asia's tigers. Israel was the first nation in the world to have free trade agreements with the European Union, the United States, and Canada. Foreign investment has recently been soaring. However, the state has traditionally done relatively little to encourage small business; instead, private funds have promoted entrepreneurship. Israel since Statehood In 1947, the United Nations' Resolution 181 proposed a partition of British Palestine. As a result, the territory originally known as British Palestine was carved up into three legal entities: the eastern part, called Jordan; a second Arab country, known as Arab Palestine; and Israel, 80 percent of which was already populated or owned by Jews. Israel's declaration of independence, on May 14, 1948, was met by an Arab military invasion. During this war, Jordan succeeded in occupying East Jerusalem and the West Bank (of the Jordan River), and the map of Palestine was re-drawn. In the decades following, a series of short wars between Israel and its neighboring Arab nations continued this pattern of shifting political boundaries and uneasy truces. This turbulent recent history has certainly had an impact on Israel's economy. During its early years, the Israeli government played a paternalistic role, protecting its people - defense expenditures were high and two out of three people worked for the state. In the Six Day War, Israel reunited Jerusalem and occupied the West Bank, the Golan Heights, and the Gaza Strip. All these areas were integrated into the Israeli economy, but this meant higher prices and political discontent. During these turbulent times, taxes were high in order to pay for a high national defense budget. The Labor Party was in power, and the government was intervening heavily in the economy, through heavy regulation, high taxes, empowered unions, and a welfare state. The socialist policies of the Labor-led government were not conducive to the development of the small business sector. In 1977, the conservative Likud Party was elected into power, led by Prime Minister Menachem Begin. Begin abolished foreign exchange controls, import licenses, and the notorious travel tax. Further, Israelis were allowed to open foreign bank accounts. Despite these reforms, the Israeli economy was stagnant and inflation reached as high as 112 percent(1) in 1979. The economy was still over-protected and in need of massive restructuring. In response to this situation, the coalition government launched a comprehensive economic stabilization program in July 1985. This emergency measure included a wage freeze, cuts in public spending, and a pegging of the national currency to the United States dollar. On September 4, 1985, a new currency was introduced. One thousand sheqels became one new sheqel. In spite of opposition from labor unions and public officials, a privatization program was launched in 1987. In 1989, the Soviet Union allowed mass immigration to Israel, and the latter's population grew significantly with the arrival of 500,000 immigrants seeking to improve their standard of living. Although most were well educated, these immigrants lacked expertise in entrepreneurship. Israel also absorbed 30,000 immigrants from Ethiopia during the early 1990s. Housing starts for new immigrants resulted in frenetic construction activity. Continuing immigration and increasing privatization marked the 1990s as the government realized its role had changed. The 1990s also brought inflation under control. The annual rate of inflation had risen from 10 percent in 1970 to 445 percent in 1984, before dropping to 9 percent in 1992 and leveling off at 10 percent in 1996. …

Lublin Coca‐Cola Bottlers Ltd

Abstract: Coca‐Cola is relatively standardised around the world. However, expansion into Poland was exceptionally challenging. This case is about the entry of Coca‐Cola into the Polish market. The reader realises that there are important differences within Poland to consider.

Sheep‐farm in the Pyrenees

Abstract: Two entrepreneurs operate a very successful business enterprise, in a small rural community. The entrepreneurs are seeking to expand, but this will need capital. Students are encouraged to discuss the product line and its suitability for export.

McDonald’s Co. (Japan) Ltd

Abstract: During the post‐bubble bust of the 1990s, many eating establishments closed down. Yet McDonald’s was determined to stay. However, management recognised the importance of slashing prices. This case is an opportunity to learn about price elasticity of demand.

International Beverage Company

Abstract: This case is about a small firm which has been given the opportunity to become a bottler for Coca‐Cola in Vietnam The case addresses competition and product positioning

Orange juice vendor

Abstract: The Rahmin brothers operate one of many undifferentiated orange juice stalls in Marrakech. The brothers are faced with a difficult marketing challenge.

Tajik‐American Pepsi

Abstract: In 1996, capital was raised to launch a Pepsi‐Cola production line in war‐torn Tajikistan. Production capacity was 6,000 bottles per hour, in a country experiencing a painful transition to a market economy.

Coca‐Cola Indochina Pte Ltd

Abstract: Singapore‐based F&N and Bangkok‐based Thai Pure Drinks launched a joint venture to bottle Coca‐Cola in Vietnam. However, Pepsi is the market leader here. For Coca‐Cola to succeed, many factors must be considered, including cultural factors.

Fast food in Istanbul

Abstract: A neighbourhood fast‐food outlet in Istanbul focuses on two target markets, tourists and locals. This case is an exercise in market segmentation.

Nirula’s small business

Abstract: This case is about a local food chain in India, Nirula’s. As McDonald’s penetrates New Delhi, Nirula’s is faced with unprecedented competition from abroad. The small enterprise must be globally competitive in order to sustain competition from global players who are forcing it into a formerly protected market. One strategic option for Nirula’s is to expand its plans for internationalisation.