Soviets Try Western Management. A BOOST TO TRADE?
THE Soviet Union is a land where ``time can run like molasses'' says Thomas Horton of the American Management Association (AMA). But it is determined to make perestroika a success, thanks in part to an infusion of Yankee managerial know-how. One possible result, says Mr. Horton, is increased trade between the two superpowers.
In the past, most of that know-how has come in the form of technical assistance. Now, the Soviet Union is about to receive some Western management ideas.
The AMA recently signed a protocol of intent with the Academy on National Economy and the All-Union Academy of Foreign Trade, two key economic agencies in Moscow, for mutual cooperation in the training of managerial specialists. Starting this spring, the AMA will take United States and European business leaders into the Soviet Union for managerial programs. The AMA, in turn, will train Soviet managers in such businesses as computers.
The Soviets, Mr. Horton says, are ``enormously interested'' in improving their management practices. The AMA is considered the leading nonprofit management education trade association in the US.
Horton, who is president and chief executive officer of the AMA, argues that stepped-up trade between the two sides would not only be commercially beneficial, but is also necessary for peace.
``I truly believe in world peace through world trade,'' says Horton, who has visited the Soviet Union twice in this decade, most recently last October.
US-Soviet trade added up to $2 billion in 1987, according to the US Department of Commerce. Much of that trade involved agricultural exports from the US and the combined total, as Horton points out, makes up less than 1 percent of total US foreign trade. Two-way trade for the first seven months of 1988 exceeded $2 billion, but only because of larger US grain shipments. Final year-end figures are not yet available.
Some financial analysts question whether total US trade with the Soviets will constitute any significant volume over the next few years, given the political and economic differences between the two nations.
``Obviously, there is going to be no quick increase'' in US-Soviet trade, says Benalder Bayse, vice-president and senior portfolio manager of First Investors Management Company Inc. First Investors tracks trade statistics as part of its assessment of interest rates and economic growth.
``I can make a strong case that in the next 4 or 5 years'' US-Soviet trade will expand considerably, Mr. Bayse adds. ``The Soviets need access to manufacturing and operating technologies, heavy equipment for their infrastructure, and perhaps some light consumer goods.''
Horton tells the story of a plane trip within the USSR when a fellow passenger, a Soviet woman, recognized him from a picture she had seen of him in an article on managerial practices. ``The Soviets are voracious readers,'' he says.
``The USSR is also akin to being governed by the Department of Motor Vehicles.'' In other words, it is cumbersome, slow, and marked by entrenched bureaucracy.
``When it comes to huge projects, such as building a pipeline, the Soviets can do things very well,'' he says. ``But a good pair of shoes or a decent meal in a restaurant is something of a rarity.''
Horton is impressed at the extent to which Soviet leader Mikhail Gorbachev's reform of the Soviet economic system is gradually altering the economic outlook throughout the Soviet Union. He notes, for example, that there are some 300 entrepreneurial collectives called ``centers of creativity,'' run by young persons who work up to 12 hours a day. The young people, many right out of graduate school, receive substantial funding (up to 70 percent) from the Young Communist League, Horton notes. The remaining 30 percent of the start-up costs come from private solicitations.
The need for management reform, Horton stresses, is not confined to the Soviet Union. Indeed, he says, if a company offers good products, treats its employees fairly, behaves ethically, and shows concern for the community, it will make a profit.