ARE ESTONIAN EXECUTIVES FULLY PREPARED TO OPERATE SUCCESSFULLY IN A MARKET ECONOMY? SURVEY FINDINGS OF ESTONIAN AND FINNISH FIRMS.
Our world has stepped into a new era, reached on the new level of its development. Unquestionably, a large part of this new age concerns globalization of business activities. Not only in terms of global market, global competition, etc., but also in terms of new opportunities, threats, problems, needs and challenges on the domestic level. As a result of these changes and in anticipation of new ones, well-established companies in Europe, North America, and South-East Asia are trying to keep pace with the new developments and to hold their leading role in the future.
At the same time, a lot of other regions and nations are struggling to get started on that road and to have a share in global market as well. Among the others that is a point for the countries and companies in Eastern Europe, including Baltic States. Trade walls having stood there for decades are beginning to crumble in the face of perestroika and the democratization process. Facing a chance to get out from formerly locked situation at last these new entrants are willing to exploit any kind of available opportunities. In a prevailing do-or-die atmosphere nations and firms are driving to, enter in the world market as well they know, can or are able to do that. Estonia is one of these countries and all what has been said above is also extremely vital for the people there.
Estonia and Finland
Similarities in the Midst of Economic Disparities
Estonian business people's eagerness to go to world market is, in fact, only one side of the model. The other, and not less important side, is-are they prepared, at least satisfactorily, for entering in international market? To find it out a special research was under-taken by the author among business executives of Estonia and Finland on company level. The objective of this study is to discover differences in activities and problem areas they are dealing with at present, and understandings and attitudes they have in several basic economic and management issues inside and outside of their organisations.
Finish executives as subjects of comparison were selected for several reasons. Not only languages but way of thinking and acting of Finnish and Estonians are pretty similar. Having borders with Russia they have approximately the same position and situation between East and West. Estonian businessmen new export and import activities are mostly concentrated and executed in Finland. Last but not least, in spite of being approximately on the same level of economic development in 1940 there is a big difference between Finland and Estonia now. What is the cause and what are the consequences of that difference?
To conduct the study special questionnaire was prepared consisting of 42 questions for which 31 of them had prepared answers. The questionnaire covered three basic fields : economic situation and problems in Estonia, state of affairs in Finnish and Estonian firms, and export-import activities in Estonia on the state level and at Finnish and Estonian firms. From 250 questionnaires distributed to executives in Finland and Estonia in autumn 1990 36 Finnish and 38 Estonian executives replied. They represented a big variety of businesses, business organizations, and regions in Estonia and South-west of Finland. Taking into account the scope of business activities in Estonia and Finland the number of respondents may be considered a fairly representative one. On that ground the answers received allow in some points to draw firm distinctions and conclusions.
When asked "How do you regard the current economic conditions in Estonia ?", top managers from both sides of the Finnish Gulf drew the same conclusion. With only a couple of exceptions they assessed the economic situation there either worrying or poor. This outcome not only shows the position Estonia has at the present moment. It also indicates the point from where Estonian executives have begun their way to market economy, and to international market in particular.
The question, ''What are the greatest problems in the Estonian business life at presents " opens the background of this evaluation in some respect and, at the same time, produces notable differences in the understandings and opinions among Finnish and Estonian executives.
According to this information different ideologies can be seen to form the base of thinking and acting for Finnish and Estonian executives.
Analysis (Table 1)
* Finnish executives' starting point is clearly market economy. They lay great emphasis on areas closely related to it and, first of all, on people's knowledge, skills, initiative, and entrepreneurship. Not denying the importance of the normal functioning of society and economy material or hardware side of the business like technology, money, and raw materials, takes only the second place in their minds.
Estonian executives, vice versa, trying to overcome the shortcomings of the past start from the present transformation or perestroika period. They lay their stress respectively on the hardware side of the issue-lack of proper legislation, raw materials, monetary and fiscal policy and so on. People or the soft side of the problems involved has been hardly mentioned by Estonian executives. One cannot deny that unstable and insecure operating conditions are due to several difficulties in the Soviet Union and generally out of reach to solve by executives on company level. But rearrangement of economic relationships with the Soviet Union, activities of the local government, speculation, and stealing and many other fields can be improved also by skillful people operating on that level. In a search for remedies to cure the present situation in Estonian economy, two closely related questions were put before executives.
First, executives were asked, 'Who do you think is best able to solve these problems?'. Responses show that in respect of the most important institution capable to solve the current economic problems in Estonia, Finnish and Estonian executives actually shared the same opinion. As the most important problem solver Estonian executives predominantly indicated the Estonian government. It was closely followed by the Supreme Soviet (Parliament) of Estonia. By Finnish executives the most important institution in that case is the Supreme Soviet, and the Estonian government taking closely the second place. The Ministry of Economics was put by both groups of executives on the third place, and quite a bit behind them followed business organizations.
Both groups of executives had the same opinion also about the two least important institutions as problem solvers of Estonian economy. They are cooperatives and the Citizen Committee (a new political organization). They strongly disagreed, however, in the middle of the list. Finnish executives assessed highly the role of the Ministry of Industry and Energetics and the Department of Foreign Trade of Estonia. Estonian managers, from their part, placed local authorities and the Ministry of Finance high on their list. But they both almost equally assessed the role of some intelligent individual as the problem solver placing him in the middle of the 15 possible answers.
Second, executives were asked, 'When attempting to solve Estonia's economic problems, which points should the Estonian government give priority to?". In this respect, as shown in Table 2, differences between Finnish and Estonian executives' opinions appear again.
Analysis (Table 2)
* To some extent Finnish and Estonian executives do share their opinion about the steps the Estonian government should take to improve the economic situation in Estonia. Spheres like economic cooperation between among the Baltic states, development of foreign economic relationships, formation of differentiated tax system, and transfer of ownership of centrally-owned (and directed) companies to the Republic are almost equally important for both groups. At the same time, and interestingly enough, two items on the Finnish list of priorities,--i.e., transfer of ownership to the Republic and closing the border, that led to hard and intensive arguing between Estonian politicians and as a hot topic gained much publicity in local mass media were very low assessed as very low by Finnish business executives.
Beside spheres just mentioned there are others where opinions of Finnish and Estonian executives considerably differ and where the differences may be considered as a result of the existence or lack (or coming to the scene) of market forces.
* To that category might be included, for instance, the following spheres: privatization, reduction of unproductive expenses, training of new business cadre, reduction of institutions operating on state budget, preparation of business legislation, and negotiations with central agencies in Moscow. Operating in their corresponding situations Finnish executives evaluate the first four spheres considerably higher than Estonian executives. Estonian executives from their part put stronger accent on the last two spheres.
* Last but not least, in some spheres, like closing the borders of the Republic, and correct pricing of products and services, the opinions of Finnish and Estonian executives are completely opposite ones.
* The same overall pattern of attitudes and thinking habits described before becomes evident when analyzing the responses of executives in connection with their firms. From that movement Finnish companies were also included as objects of study. This approach was used for two important reasons.
First, not having direct access to Estonian companies, Finnish executives were supposed not to be in a position of saying something relevant to their day-to-day activities.
Second, presenting data about companies operating in different environments furnish favorable conditions for sound comparisons on market and planned economy influences and peculiarities. Differences in opinions and estimations between Finnish and Estonian executives begin to appear on that level from the very first question, i.e., How do you regard the present situation in your firm?
According to past and present economic difficulties, Estonian executives response almost without exception was satisfactory or worrying. Nobody considered the situation excellent and only two executives evaluated the state of affairs at their firms good. In turn, all Finnish executives had an opinion that the circumstances at their firm were either good or satisfactory. Not indicating any excellent businesses only one Finnish executive judged the situation in his company as worrying. Basic differences in thinking and behavioral attitudes, due to different operating conditions and practices, come to light between Finnish and Estonian executives in responses to the following question: "In what respect has the situation in your firm improved in the past few years? "
Analysis (Table 3)
* Opinions closely related by their content were compounded into one answer in that case. It is necessary to emphasize here as well that Finnish executives had a lot more spheres to indicate where improvements have occurred than Estonian executives. Moreover, one-fifth of Estonian executives pointed no improvements at all at their firms.
* Opinions exhibited in the table, on the one hand, indicate certain similarity of understanding their basic activities by Finnish and Estonian executives. This outcome is very likely due to their common field of occupation and activities involved there. On the other hand, judgements of Estonian executives strongly unearth the outcomes of perestroika in Estonian economy and several important features typical of the transition period. And the last one is still far from market economy.
* For instance, success in sales activities, so important for Finnish executives and high on the list of their achievements, has not received any place in the row of achievements for Estonian executives. On the contrary, the top accomplishment for Estonian executives, i.e., a free hand in their everyday operations, as a normal way of conducting business is so natural for Finnish executives that they consider it not worthwhile to mention anywhere.
* The other spheres listed in Table 3 reflect the same basic operating conditions and corresponding evaluations of results achieved. Improved financial standing and internationalization of activities are very important for Finnish executives. For Estonian executives, on the contrary, much more important than those issues are increased wages and salaries, and better administration of them. In general, responses clearly indicate who is operating in market economy and who is still a slave of planned economy.
The validity of this conclusion becomes stronger on the ground of responses to the question, What are the greatest problems facing your company at present?'
Analysis (Table 4)
* Again, the standing of Finnish and Estonian executives on that issue is in several principal points an opposite one reflecting operating conditions typical of each business environment. For Finnish executives sales matters are of prime concern while supplies of materials cause no much worry. On the contrary, for Estonian executives availability and supplies of materials is number one problem while problems associated with marketing do not matter much.
These priorities, and in association especially with technical and technological issues indicate another important difference between the standing of Western and Eastern executives. Lack of supplies in the East is actually a chance to sell something for the West. Lack of real marketing problem and little care of them by Eastern executives do show how lengthy track they have to pass through as in their minds as well in their practical steps.
* There are two other things worthwhile to mention. First, in spite of general understanding in the West, and quite a popular understanding in Estonia, political issues and an "anything goes"-attitude cause no particular worry for Estonian executives. Second, while Estonian executives did not add any single problem sphere to the list of problems Finnish managers mentioned several of them. For instance, uncertainty of the market standing of new products, competitors, and increased competition. One more time - all they are typical areas of concern for executives operating in market, not planned economy:
When asked, in addition, "What do you consider the most acute resource shortage at present ?", executives' responses turned out in the following way.
Analysis (Table 5)
* The patterns of responses indicate the basic concerns and corresponding thinking of people used to achieve results in certain operating environment and atmosphere. While Finnish executives lay great emphasis on people or software, Estonian executives firmly put on the first place materials, technology, and money or hardware. This attitude typical in the East has lasted for many decades. Thanks to this past and not so much changed situation at present, this kind of attitude and understanding still prevails in the brains and activities of the managers here.
What is more important in that case is not priorities indicated in the table but some facts behind them. One of them is the amount or intensity of responses by executives to that question. Only some Bstonian executives did not indicate the first four spheres of shortages in their answers. Almost half of the Finnish executives questioned either did not respond at all or gave one or two answers. What it proves is that this point is in no way an important matter for Western Executives. They experienced lack of innovations, personnel for research and development, and leaders, for instance.
* Another important fact is the great need for foreign, and particularly for hard currency in Estonian companies. To get up-to-date technology, and even a lot of raw materials to keep operations going and to raise Estonian economy on the needed level depend to a great extent on having foreign exchange. For that reason establishing joint ventures with foreign firms is quite a lot ahead in Estonia to compare with the Soviet Union in average or the other republics in that block of these countries.
In spite of this achievement Estonian firms have not planted their foot firmly in international markets as discussed earlier. To find out what are the reasons for such results the following question was asked, "What is it that at present prevents your company from entering the export market? ".
Analysis (Table 6)
* Some differences regarding factors on Finnish and Estonian sides are due to the compulsory sale of a certain percentage of the currency earned by firms to the state in Estonia. This factor does not exist in market economy but is important not only for Estonian firms but also for the Estonian government as well going to form a base for market economy.
Finnish executives' response to that point was not particularly active. Nevertheless, their list of priorities not only indicates the important factors for going to international markets. It also explains the basic rules of the functioning of the foreign market, and market place in general. In that sense the first two factors pointed heavily by Finnish executives, i.e., price level on the international market and high production cost, are especially important. High quality of products and services is so natural a pre-requisite for selling something in international markets that it is not even worthwhile to mention it. In addition, several Finnish executives have indicated international competition or competitors as a prime obstacle to operate in the world market.
It cannot be said that Estonian executives do not know these basic rules of market economy in general. Low quality of products and services in their firms is clearly one of the main concerns for them. But willingness to go to export market and to earn some hard currency is so high that they do not pay so much attention to the cost involved. Their usual way of operating in that case is to compensate these costs at the expense of their home market.
The most important matter for Estonian executives, however, is to know more about the functioning of export market. And there is nothing to be astonished about. Most of them have had only a limited access to export-import market in the past Therefore, their keen interest in its details like, for instance, demand and supply, prices, competitors, rules, and so on, is quite natural. To overcome these difficulties search for reliable middlemen and increase of own initiative are high on the list of their priorities. To investigate the above-mentioned areas in more detail, executives were asked, "Which are the problems associated with your firm that take up most of your time at present? ".
Analysis (Table 7)
* While marketing activities and hiring, keeping, developing and motivating personnel are top issues for Finnish executives, they are of minor importance or not existing for Estonian executives. At the same time, privatisation, ownership, supplies, and wages, i.e., the areas that are the spheres of major concern for Estonian executives do not bother Finnish executives at all.
Yet there is more involved than the typical patterns of executive activities due to different operating environments and conditions. The location and nuances of problem spheres mentioned indicate some important characters regarding the transition period and process. Take, for instance, privatisation and selecting proper ownership for firms. It is a multisided, intricate, and extremely tough issue in Estonia at present. In most cases no correct fair and righteous solution for everybody is in sight. Much of that is true in reorganizing the company, Improving production, developing export potential, or dealing with the discontent of employees or prices.
Here is the point where many people from the West make a mistake, and inspite of having good intentions. This mistake is expressed by rebuke, or direct accusation, "Why you do this and this instead of that and that?!" However, as true their best advice may be at home in the well-known environment, its application in another and not so well-known environment may be extremely difficult or not profitable at the present moment. The transition process in Estonia, and in East Europe in general is in many aspects so unique that it is impossible to apply market economy rules exactly, immediately and directly.
Who or where is the place then that have given the most support in the resolution of executives' problems? To clarify this point executives were asked, "From where have you received the most assistance in solving of your problems over the past few years? "
Analysis (Table 8)
* The most important conclusion seems to be : regardless of the political system or economic standing business executives are trying to overcome their problems and difficulties by the same ground rules. Good relationships and personal connections are important in solving problems everywhere and in any time. At the same time executives do not put big hopes in getting help from central or local government agencies. They do lay big expectations on government actions in improving the overall economic situation in Estonia and Finland as it was stated in the earlier part of this paper. But in their everyday business they rely more on themselves, their organization and relationships.
Because of a mistake in translating the questionnaire from Estonian into Finnish the prepared answer, "Help from own organization" was replaced with point "Help from consulting firms". As a result, both sides in Table 8 became partly incomparable, and above all at the top. However, this mistake added some new interesting dimensions to this issue. We cannot evaluate, as a pity, how important is inter-organizational help for Finnish executives in solving their problems. On the other hand, Estonian executives hardly would have assessed the help by consulting firms as highly as did the Finnish executives. In spite of some consulting activities in. Estonia the degree of difference in economic development between these two countries today is too big to consider this source of assistance for Estonian executives the most important one. In addition, while Estonian executives did not mention any other additional sources helping to solve their problems, Finnish executives on their part extended this list of priorities. Responses like, front nowhere, from universities, and from special training institutions were indicated by them.
* There has been much publicity in Estonia about the intensive activity of Estonians living abroad, and about the great importance of their mental and material support in bringing relief to Estonian problems. To clear up this issue Estonian executives were asked, "How do you regard the contribution made to your corporate operations in the last few years by Estonians living abroad?"
From all the responses received 89 per cent of Estonian executives replied non-existent, 6 per cent slight, and 5 per cent moderate. Not one of, them mentioned large. These figures do indicate that despite high emotions involved in this issue or, may be, some help on the governmental level, actual support was not felt by business executives on the corporate level. The situation was remarkably better on the Finnish side-49 per cent of executives answered slight, 9 per cent moderate, 9 per cent non- existent, and one per cent large.
In trying to answer some questions un-earthed in the 'earlier parts of this paper one issue should be cleared first of all, and namely : can Estonian executives operate successfully in a market economy, or, or, at least, do they have, any presumption for that ? From the author's point of view they have such a capacity, and for two reasons, at least.
First, inspite of many important differences on the ground of the data presented in Table 8, Estonian executives act like their colleagues in the West. They rely in the first place on the knowledge and skills of their own and that of their subordinates and the least on central and local government authorities. It does prove their inherent understanding and touch of the functioning of market economy - one must be able to act by his or her own. In a more careful approach one can say that they are not completely spoilt by the conditions and forces prevailing in planned economy.
Second, during the last couple of years hundreds and thousands of new cooperatives and companies have been established in Estonia. By the official data there were 19,737 registered companies in Estonia on March 15, 1991: among this, 1814 companies having stock, and 212 joint ventures with foreign companies. This process has not ended yet. As a result of privatisation hundreds of new ventures are being created every month. And a package of new laws is to these conditions and on microeconomic level in particular. The most important remedy, might be, is something else, lies somewhere else, or is unknown or out of touch for both sides.
There are revolutionary changes under-going in Estonia, and in the Baltic states in general that pose complex challenges on every level of economy, and for everybody supporting this kind of activity. Quite a lot of people in the West will be very likely surprised about these data. But one should have in his mind, after all, that in Estonian case, and in Baltic case in general there is nothing to do with the creation of market economy. The point is that market economy has existed there all the time. Therefore, what is happening there is rather re-creation of market economy, And this is something giving to the transition period in the Baltic a special flavor. Above all, it facilitates many processes and activities in economy in comparison with the many regions in the Soviet Union.
Anyway, differences in thinking and/acting habits between Finnish and Estonian executives as exhibited in table after table do show that Estonian executives are not fully prepared to operate successfully in a market economy or assume the role of competent international managers today. There is a long way waiting ahead for that. Hopefully, the data set forth in this paper create a better understanding for the Westeners about the situation executives in the Baltic are facing and the roles they have to perform. To be sure, along with training and developing existing executives there is a sharp need for a new breed of executive talent in Estonia today. There is no chance, of course, to do both overnight. Government can issue a new decree one day, or parliament can pass a new law in a couple of weeks. But even they together cannot change or prepare new market oriented managers and professionals with such a pace. Meantime, the West has to deal with managers and professionals as they are now. Like or do not like it.
Moreover, to understand better the motives of the executives operating in the Baltic and in that way also problems, needs, and opportunities there is of great importance. But how to treat them in an appropriate way, and with good results is another story. It seems up to now that deeply rooted and highly appreciated standard remedies belonging to the arsenal of market economy are not quite appropriate and timely for the economy in a transition process. Something is missing and something needs to be modified involved. These are challenges ill-served by quick fixes that grab headlines but offer little in the way of meaningful results. In consequence of this situation what is needed beside other means is a lot of serious research and investigation of that situation. On that ground sound information can be offered to those in charge of making important decisions on business, or the political level in the Baltic.
Professor RAOUL UKSVARAV
Formerly Director of Research, Estonian Management Institute Tallinn, REPUBLIC OF ESTONIA
(*) Estonia has an area of 45,215 sq km, of which 33 per cent is agricultural land and 40 per cent covered by forests. Its total population is 1.57 million of whom 72 per cent live in urban areas. The Estonian language belongs to the Finno-Ugric branch of languages, and is similar to Finnish. Estonians have been living along the coast of the Baltic Sea for more than 5000 years. In 1918 Estonia declared itself an independent state and in 1920 entered the family of European states and became a member of the League of Nations. As a result of the Molotov-Ribbentrop Treaty signed in 1939, Estonia was occupied by the Soviet Union and incorporated into the USSR. This marked the beginning of the Stalinist period of terror which for several decades deprived the country of the freedom to choose its own economic and national policy. The country became isolated from the outside world. A new era of national awakening started explosively in 1988. Demands are being made to put right the historical injustice of 1939, to reinstate Estonia's national statehood and its rightful place among the other states of Europe.
Because of the same location, general historical background and development, political and economic situation, and people's attitudes and behavior much of what is said about Estonia is true for the two other Baltic republics--Latvia and Lithuania--as well.
(**) At the time of writing this paper, the Soviet Union had existed and, therefore, the name Soviet Union/U.S.S.R. appears in the text. However, the topical relevance of this paper still holds true.
The author owns full responsibility for the contents of the paper.
TABLE 1 CURRENT PROBLEMS ENCOUNTERED BY ESTONIAN FIRMS Problem Areas in Order of Their Importance Finnish Executives Ranking Estonian Executives Lack of market machanism and I Lack of needful legislation corresponding knowledge and skills and business laws Disorder in Society and economy II Overcoming the shortcomings of the old economic system Lack of modern technology III Lack of raw materials and Shortcomings in monetary shortcomings in purchasing and fiscal policy IV Unstable and insecure operating conditions and uncertain future Shortage lack of needful knowledge and skills V Speculation and stealing Shortage / lack of hard currency VI Price policy and regulation of Dependence on the Soviet prices Union and obscure VII Re-assessment and rearrangement relationships with it of economic relationships with Handicapped entrepreneurship the Soviet Union and lack of VIII Valuelenessness of rouble and entrepreneurs shortage of our own money Lack of commodities and foodstuffs IX Insufficient resoluteness and consistency of government Lack of raw materials and oil X Openness of the border with the Lack of knowledge and Soviet Union skills about XI Slowness of privatization and international markets lack of legislation about property and ownership Pollution of environment XII Out-of-date machinery and Undeveloped and backward difficulties to get new one organization of XIII Outflow of labor force from economy industry and to the West Lack of private property XIV Shortcomings of taxation policy Low-productivity in industry, agriculture, etc. XV Low qualification of people as compared with the West TABLE 2 ESTONIAN GOVERNMENT PRIORITY MEASURES TO SOLVE ECONOMIC PROBLEMS Areas of Improvement in Order of Their Importance Finnish Executives Ranking Estonian Executives Privatisation I Closing the borders of the Republic Reduction of unproductive expenses II Correct pricing of products and Training of new services business cadre III Negotiations with central agencies Economic cooperation in Moscow between among the IV Development of foreign economic Baltic states relationships Measures to curb inflation V Economic cooperation between the Development of foreign Baltic States economic relationships VI Preparation of business legislation Estonian economy in the year 2000 VII Privatisation Negotiation with central agencies in Moscow VIII Training of new business cadre Preparation of business legislation IX Reduction of unproductive expenses Subsidising entrepreneurs X Measures to curb inflation Reduction of institutions operating on state XI Estonian economy in the year 2000 budget Correct pricing of products and services XII Formation of differentiated tax Formation of system differentiated tax system XIII Transfer of ownership of centrally-owned companies to the republic Transfer of ownership of centrally-owned XIV Subsidising entrepreneurs companies to the Republic Closing the borders of the Republic XV Reduction of institutions operating on state budget TABLE 3 SPHERES OF IMPROVEMENT IN FINNISH AND ESTONIAN FIRMS Spheres of Improvement in Order of Their Importance Finnish Executives Ranking Estonian Executives End results and financial standing have I Freedom in activities and in improved decision making has increased Sales of products and services have increased II Wages and salaries of employees have Production activities increased have improved III Working conditions and well-being of employees have improved Internationalisation of activities has increased IV Freedom in relationships with foreign firms has increased Quality of products and services have improved V Wages and salaries administration Composition and quality has improved of personnel have VI Technical base of production process Composition of spending has improved money has improved VII Quality of products and services Turnover has increased VIII have improved Economic certainty has Economical thinking and strengthened business like IX Financial situation has improved or attitudes have improved stabilized Reaction to changes has become faster X Computers and copying machines have Delegation of authority been added and responsibility is XI Work arrangement has improved clearer Forming an organization based on profit centres XII Output of products and services has Planning of activities increased has increased XIII Motivation of personnel has Trustworthiness and increased contacts have improved XIV Cooperation has improved Unncessary activities have been eliminated XV Personnel has stabilized Profits from basic activities are bigger XVI Initiative of employees has increased TABLE 4 PROBLEM AREAS OF FINNISH AND ESTONIAN COMPANIES Problem Areas in Order of Their Importance Finnish Executives Ranking Estonian Executives Arising from the company's activities I Availability and supplies of raw materials Associated with marketing II Arising from the overall Arising from overall economic conditions economic conditions III Legislative Associated with organization of work IV Personnel Personnel V Arising from the company's activities Legislative VI Technical Organizational VII Lack of initiative Managerial VIII Associated with organization of work Technical IX Managerial Lack of initiative X Technological Political XI Organizational Availability and supplies of raw materials XII Associated with discipline Associated with discipline XIII Political An "anything goes" - attitude XIV An "anything goes"- attitude Technological XV Associated with marketing TABLE 5 ACUTE RESOURCE SHORTAGE AT FINNISH AND ESTONIAN COMPANIES Spheres in Order of Their Importance Finnish Executives Ranking Estonian Executives Manpower I Raw Materials Technology II Technology Domestic Money III Foreign Exchange Raw Materials IV Manpower Building Capacity V Domestic Money Foreign Exchange VI Building Capacity TABLE 6 FACTOR IN PREVENTING ESTONIAN FIRMS FROM ENTERING THE EXPORT MARKET Factor in Order of Their Importance Finnish Executives Ranking Estonian Executives Price level on the export market I Lack of information about exporting High cost price of our products (services) II Low quality of our products (services) Lack of suitable export agents III Lack of suitable export agents Lack of needed organization in the company IV Lack of own initiative Lack of information about exporting V Compulsory sale of some earned currency to the state Lack of own initiative VI Difficulties in obtaining licences Difficulties in obtaining licences VII High cost price of our products (services) Foreign customs tariff barriers VIII Price level on the export market Low quality of our products (services) IX Foreign customs tariff barriers TABLE 7 ESTONIAN EXECUTIVES' TACKLING OF PROBLEM AREAS Problem areas in Order of Their Importance Finnish Executives Ranking Estonian Executives Marketing and its supporting activities I Privatisation and property Hiring, keeping, and matters developing personnel II Supplies of raw materials Organization design and development III Wages and salaries of personnel Motivation of people IV Reorganization of the company Machinery and technology V Finances Management of operations and management VI Improvement and rationalization of production process Cutting expenses VII Developing and realizing export Improvement of the quality potential of products and services VIII Construction of new facilities Reinforcement of results IX Overative and strategic Adjusting production to management demand X Dealing with agreements and contracts Logistics XI Discontent of employees Tracing, planning and executing routine operations XII Strategy of the firm Increase of productivity XIII Equipment and technology Development of information and communication system XIV Prices of products and services Finances XV Domestic and international marketing TABLE 8 ESTONIAN AUTHORITIES GIVING THE MOST ASSISTANCE TO EXECUTIVES Places in Order of Their Importance Finnish Executives Ranking Estonian Executives Consulting firms I Ties based on earlier contacts Firms collaborating II Your own with your firm organization Ties based on III Your own central earlier contacts organization Your own central IV Firms collaborating organization with your firm Local authorities V Government authorities Government VI Local authorities authorities