Managing in Developing Countries: Strategic Analysis and Operating Techniques

As consumers, suppliers, competitors, and capital users, the 142 developing countries in the world are of major and growing importance to more than 140,000 Western managers who do business with the Third World on a daily basis, often as partners in strategic alliances. Yet, other than theoretical articles in the economic development literature, there are few sources to which these managers, faced with a very different and difficult business environment, can turn. Now, building on 25 years as a teacher, researcher, and advisor to companies, governments, and international agencies in developing nations, James Austin presents the most complete and comprehensive analysis of the dynamics of the Third World business environment available today.

Seemingly insurmountable obstacles confront a Western company setting up operations in a Third World country: governmental controls, rampant inflation and devaluation, cumbersome bureaucratic procedures for obtaining import licenses, skill scarcity, difficulties with training new employees in new technology -- and not least, the possibility that the entire venture could go up in the flames of a revolution. Through his lucid Environmental Analysis Framework -- a powerful, field-tested analytical tool -- Austin first systematically and masterfully examines these economic, political, cultural, and demographic factors at the international, national, industry, and company levels. The second and largest portion of the book comprises Austin's detailed, brilliantly insightful analysis of the most critical strategic issues and operating problems that managers will encounter in developing countries -- in governmental relations, finance, marketing, production, and organization -- together with a battery of tested operating techniques illustrated with numerous experiences of multinational companies operating in the Third World, such as Cummins Engine, Mitsubishi, PepsiCo, Ciba-Geigy, ICI, Nestlé, and Philips.

In his concluding chapters, Austin returns to his Environmental Analysis Framework to show managers how they should determine the scale and scope -- the projected financial investment and the degree of managerial involvement -- of their activity in a particular developing country; how they should decide on ownership strategy and the use of joint ventures; and how cultural factors will affect the structure of the projected enterprise. Finally, Austin offers his perspective on the evolving business environment in developing countries.