Future blocks, brick by BRIC

Updated: Jan 21 2007, 06:11am hrs
Its a book that promises a lot to all sections of readers, from students, those interested in reading about business in BRIC countries to the obvious reader, businessmen. Understanding Emerging Markets: Building Business BRIC by Brick by Stefano Pelle, Chairman of Perfetti India and vice-president of the Perfetti Van Melle Group, is just published in India by Response Books. The book is based on many years of practical experience in various industries across several developed and emerging countries. However, it carries a solid base of management and business strategy acquired through the study and interaction with Professors in European and Asian Management schools, says Pelle in a chat with Sulekha Nair. Excerpts:

Isnt this book a trifle late in coming, considering that understanding emerging markets has been well researched by now

I agree. The book is late for those markets that have evolved. But there are a number of industries still emerging in markets around the world. I am not just talking about India. Take the banking, insurance or any other sectors or the highly developed service industry or even FMCGs. All these are highly developed in India. But there are other BRIC countries where they are only emerging to some extent.

What are the hiccups in setting up markets in emerging countries

The usual, such as infrastructure and red tape. The number of procedures to set up a business varies in countries. For instance, to set up a business that requires 50 employees in Brazil, one needs to get 70 procedures in place and it takes 152 days to start a business.

India is not that bad in comparison. A study done last year reveals that it takes only 35 days. In some countries, it is just impossible to find good talent, which is not the case in India. In China, 10 years ago, setting up a business was very difficult. It is not the same now. Also, the framework is not always transparent and easy. For instance, in Africa where there is a coup almost every three months, even the systems change that often.

What about cultural differences

This is a problem that MNCs and anyone coming to set up business in developing countries must pay attention to. For instance in India, there is a great deal of managerial talent but they need to be handled differently.

One must be careful not to offend them. When I came here, I realised that managers in India must be treated the same way as you handle a father-son relationship. The Chinese are used to good technology and so they need to be told exactly what is it that is required of them. In Russia, sometimes, the employees can get extremely egocentric and quite rude. So they have to be dealt with care.

What about corruption and red tapism

One has to be very clear that there will be no cutting of corners to achieve any goals. Normally, when a big name comes to any country to set up business, these are names that are respected. Every company should spell out their internal values and ethics to the employees and to the powers-that-be whom they have to deal with for their business needs.

Usually, the people at the top, like the bureaucrats do not indulge in corruption. It is the middle level people who indulge in it. At least that has been my experience. The best thing to do is to go to the highest authority or to the highest level and deal with them.

What advice would you give to companies that set up businesses in emerging markets

First, avoid cultural chaos. Deal with employees and locals directly. Outline your business motives, ideals, values at the outset. Be as transparent as possible.