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	<title>City Compass Blog &#187; Legal &amp; Business</title>
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		<title>All About Money Magazine Article from City Compass</title>
		<link>http://blog.citycompass.ro/bucharest/all-about-money-magazine-article-from-city-compass-2/</link>
		<comments>http://blog.citycompass.ro/bucharest/all-about-money-magazine-article-from-city-compass-2/#comments</comments>
		<pubDate>Fri, 19 Mar 2010 08:02:53 +0000</pubDate>
		<dc:creator>City Compass Mateo</dc:creator>
				<category><![CDATA[Bucharest]]></category>
		<category><![CDATA[CityCompass]]></category>
		<category><![CDATA[Legal & Business]]></category>
		<category><![CDATA[Life in Bucharest]]></category>
		<category><![CDATA[Perspective]]></category>

		<guid isPermaLink="false">http://blog.citycompass.ro/?p=207</guid>
		<description><![CDATA[Originally published in All About Money Magazine March 1, 2010 Tom Sawyer in Romania By Mateo Urquijo In a recent conversation, I asked a Romanian colleague of mine what he thought about hierarchy in business. He told me that business hierarchy in Romania was culturally traditional, although in his companies, he has adopted a much [...]]]></description>
			<content:encoded><![CDATA[<p class="MsoNormal"><em>Originally published in All About Money Magazine March 1, 2010</em></p>
<p class="MsoNormal">Tom Sawyer in Romania</p>
<p class="MsoNormal">By Mateo Urquijo</p>
<div>
<p class="MsoNormal">In a recent conversation, I asked a Romanian colleague of mine what he thought about hierarchy in business. He told me that business hierarchy in Romania was culturally traditional, although in his companies, he has adopted a much more progressive view. When I asked him exactly what he meant, he explained that oftentimes, an employer is seen not only as a superior within the company, but also as a kind of social superior: a life-mentor who guides an employee’s personal career development.<span> </span>Slightly confused, I asked him <em>exactly what do you mean?</em> He said, “I’ll give you an example. If a boss told an employee ‘today you are not going to do your normal job; you are going to my house to paint my fence,’ they would do it.” Astonished, I said, “Ok, but your employees are all accountants and consultants.” He explained again that he was more progressive, that he expected his people to take on a great deal of personal responsibility for their work and he personally wouldn’t ask them to do something like this. But, theoretically, they would. He was quick to add that not every employer asks their employees to do things like this, but still, it was possible.</p>
<p class="MsoNormal">I really thought about this. In my work experience, I’ve had only one employer whose fence I would’ve painted had he told me to: the owner of a construction company I worked for during college. Had any other employer told me to paint their fence, I would’ve thought that they were crazy. I would have thought, <em>that’s not in my job description.</em> I still might have done it, but I would have asked, “How much extra you are going to pay me?” If they had said it was part of my career development, and that I wasn’t getting paid extra, I would have instantly thought they were trying to scam me. And anyhow, did I really trust any of my employers to develop my career?</p>
<p class="MsoNormal">What is of particular interest to me is the idea (I am genuinely intrigued) that there is something like an even remotely universal understanding of this topic in Romania. I can say that with the possible exception of certain parts of the government, American businesses and organisations are pretty much autonomous in their approaches to internal structures. Go into a bookstore and you will find an endless supply of books on the topic: from <em>Management for Dummies</em>, to <em>Models, Methods, Concepts &amp; Applications of the Analytic Hierarchy Process, </em>everyone seems to have the new ‘best’ idea for how to organise a company’s internal hierarchical structures. In fact, companies themselves sometimes use their internal structures to lure employees. Google cleverly refers to their internal hierarchical structure as ‘culture’ rather than a systematised organisation process. But then, maybe I am wrong; I never worked for Google. Better, here are a couple examples of what I mean from personal experience:</p>
<p class="MsoNormal">I worked for a time (also in college) for Starbucks. Their general philosophy was that they had no hierarchy; every employee was a ‘partner’ in the company. This meant that instead of an employee ID number, you got a Partner Number. Instead of employee meeting, it was a Partner’s Meeting, and so on. I was sceptical of all of this because we still had a manger after all, as well as a regional manager etc., all the way up. But the more I learned, the more convinced I became. For example, in addition to truly terrific benefits like full health coverage options even for part-time employees (this is truly incredible in America), I learned that all employees can buy stock in the company at reduced rates. So someone at a lower-level could become vested in the company and while a shareholder is something different from a ‘partner,’ it is a better deal than a mere stakeholder.</p>
<p class="MsoNormal">And it worked. People I worked with, after becoming owners of shares, suddenly worked harder, were quicker to point out their colleagues’ mistakes, and generally provided better customer service. The epiphany of direct profit returns encouraged the behaviour of the company’s lowest-level employees to change, oftentimes, radically. That is not to say they were bad workers beforehand, but when their interest was direct, so was their motivation.</p>
<p class="MsoNormal">Still, being a lowest-level employee myself, I can say that even with stock, it wasn’t all direct profits and corporate adulation. There were daily reminders of your place in the <em>actual</em> hierarchy. Like the time an angry customer demanded that I “do something” about an expired coupon he wanted Starbucks to honour. What could I say? “Sir, I make $7 per hour. They pay me to follow policy, not to make it.”</p>
<p class="MsoNormal">Another example is hierarchy in the airline industry. When I worked for a mid-sized airline for several years, I learned exactly what the word ‘hierarchy’ means. Of course the flight crews have a hierarchical system that is completely and militaristically rigid. The captain is in total command of the aircraft while it is underway (also legally responsible). The first officer (and subsequent officers on larger planes) is under the captain’s command, as well as the rest of the flight crew (flight attendants etc.). They wear stripes to indicate rank, and the whole thing resembles military hierarchy, because, well that’s where it comes from. Ok, but the airline’s internal corporate structures are also quite interesting.</p>
<p class="MsoNormal">I worked as a flight coordinator, managing ground crews. Every so often we would get new ‘internal crew members’ from the corporate office. At first, I was confused. Why would someone in the corporate office come out to work on a ground crew, tossing bags, fuelling, and dumping the plane’s toilets? I learned that in the corporate office there is a glass ceiling; you can only climb so high on the corporate ladder if you don’t have grunt-work experience. So you would see a mid-level financial analyst with an MBA come down after work, take his $400 shoes off, and learn how to drive a bag train or clean toilets from a sweaty 20 year-old. It was a terrific system because <em>everyone </em>had to do grunt-level work for at least six months in order to advance in the company. In this way, when people at the top made decisions about people at the bottom, they could think in very real experiential terms, what this meant (as well as having a more well-rounded idea of company operations).</p>
<p class="MsoNormal">Hierarchy also manifested itself in the airline through its benefits.<span> </span>There was health insurance option, but far more glamorous were the flight benefits. You could fly for free anywhere with our airline, depending on how many empty seats there were. We could also fly for free, or very cheaply (normally just paying taxes), with nearly every other airline in the world (e.g. Chinese airlines were notably excepted). But there were rules about how this worked. Pilots and flight crews oftentimes live in different cities and commute, so their priority was among the highest. They could also jump-seat, which means they could sit in flight crew-only seats: in the cockpit, there are seats for an additional pilot, for example. Next, it was corporate officers, and then down the line. But what if you have two people with the same job who want to get on the same flight and there is only one seat available? Seniority by time with the company rules here. So if I have worked longer for the company than my colleague, I get to fly.</p>
<p class="MsoNormal">Of course this system is terrific for maintaining employee loyalty as well. My airline didn’t have a very high turnover rate at the lowest levels compared to other industries, which was great for the airline since the training process was extremely expensive. Instead, even people that were discontent with their jobs would continue to work because of the benefits their increasing seniority offered. On the other hand, to watch that financial officer you just trained waltz onto the plane ahead of you, while you waited six hours for the next flight, wasn’t very inspiring.</p>
<p class="MsoNormal">In the end, many different internal hierarchical structures seem to work well. Still, I can’t seem to shake this idea of the Romanian boss and the fence. But then, today I thought I might have understood. Having thought about this question a lot, I woke up this morning having dreamt about Mark Twain’s <em>Tom Sawyer</em>. In one story, Tom must paint a fence instead of going out to play. But when his friends come by and laugh at him, he slyly pretends that painting the fence is a special honour. His friends are naturally intrigued and ask him if they too can try. After he pretends to consider the issue, he lets them, but only in return for something: some marbles, an apple, etc.<span> </span>In the end, the friends end up painting the whole fence for him, and Tom gets rich from the deal.</p>
<p class="MsoNormal">Or maybe I missed the point entirely: Am I just too American to understand this particular Romanian traditional virtue?</p>
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		<title>Do you deserve Internet/electronic banking?</title>
		<link>http://blog.citycompass.ro/legal-business-contracts-companies-jobs/do-you-deserve-internetelectronic-banking/</link>
		<comments>http://blog.citycompass.ro/legal-business-contracts-companies-jobs/do-you-deserve-internetelectronic-banking/#comments</comments>
		<pubDate>Tue, 19 May 2009 15:46:35 +0000</pubDate>
		<dc:creator>Bucharest Angel</dc:creator>
				<category><![CDATA[Legal & Business]]></category>
		<category><![CDATA[bank account]]></category>
		<category><![CDATA[internet banking]]></category>

		<guid isPermaLink="false">http://blog.citycompass.ro/?p=46</guid>
		<description><![CDATA[One of my foreign clients wanted to open a bank account for his newly set up company. I suggested the bank I am using, but he chose another one because one of his friends was working there. It is a small Romanian bank which became part of a big international financial group four years ago. [...]]]></description>
			<content:encoded><![CDATA[<p>One of my foreign clients wanted to open a bank account for his newly set up company. I suggested the bank I am using, but he chose another one because one of his friends was working there. It is a small Romanian bank which became part of a big international financial group four years ago.</p>
<p>As at least in the beginning the account was to be operated from abroad, one thing my client needed was Internet/electronic banking. I was sure that the bank offers this service, however I was extremely surprised by their answer. They said &#8220;Yes, we do have e-banking, but before we give you this we have to see for a couple of months what turnovers you have. If they are big enough, our headquarters may grant you the possibility for using e-banking.&#8221;</p>
<p>Incredible, huh? So e-banking was a favor (even if you would anyway have to pay both for set up and maintenance), and the clients getting it could consider themselves blessed. This bank does not consider e-banking a way to offer a better service (so that the client would not waste time on the road for non-cash operations). Or a way to reduce costs (by needing less front office personnel and of course less office space).</p>
<p>What a difference from other banks which offer reduced commisions for the operations done through Internet! I congratuled myself again for using the services of Emporiki Bank (which is now owned by Credit Agricole) which offers me Internet banking free of charge.</p>
<p>Do I have to mention that my client eventually followed my advice and decided to switch the bank?</p>
<p>Cristian Bizau</p>
<p><em>Bucharest Angel</em></p>
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		<title>What time did you set up your company?</title>
		<link>http://blog.citycompass.ro/legal-business-contracts-companies-jobs/what-time-did-you-set-up-your-company/</link>
		<comments>http://blog.citycompass.ro/legal-business-contracts-companies-jobs/what-time-did-you-set-up-your-company/#comments</comments>
		<pubDate>Thu, 07 May 2009 09:30:38 +0000</pubDate>
		<dc:creator>Bucharest Angel</dc:creator>
				<category><![CDATA[Legal & Business]]></category>
		<category><![CDATA[Services]]></category>
		<category><![CDATA[legal business Romania company setup antrepreneur]]></category>

		<guid isPermaLink="false">http://blog.citycompass.ro/?p=28</guid>
		<description><![CDATA[One of my clients is a Romanian-born Swedish guy who is in the business of software development. We helped him set up a Romanian branch of his Swedish company. Of course, he was astonished of how long and complicated the procedure is (probably because he doesn&#8217;t know how it used to be couple of years [...]]]></description>
			<content:encoded><![CDATA[<p>One of my clients is a Romanian-born Swedish guy who is in the business of software development. We helped him set up a Romanian branch of his Swedish company. Of course, he was astonished of how long and complicated the procedure is (probably because he doesn&#8217;t know how it used to be couple of years ago <img src='http://blog.citycompass.ro/wp-includes/images/smilies/icon_smile.gif' alt=':)' class='wp-smiley' />  ). He told me that in Sweden one can set up a company simply by filling in some forms over the Internet. He also shown me the registration certificate of his company. What struck me was that it was mentioned not only the date of incorporation, but also the hour &#8211; 21:23.</p>
<p>I then realised how much freedom such a system gives you. You have an entreprenorial idea &#8211; you can go for it right away, no matter if it is night or day, Monday or Saturday. You do not have to spend much energy and time (a week if you are a Romanian) or money (for a lawyer) to pass the formalities. You can concentrate on creating value through your enterprise.</p>
<p>The Romanian authorities announced three years ago that they will pass a law which will allow the online creation of companies. Couple of month ago they announced that one company managed to be set up via online. This should not be a surprise as the authorities currently are unable even to interconnect the databases of different ministries. This is why the same company taxes have to be declared at 4-5 state institutions.</p>
<p>So my guess is that it will take at least 5 years until the norm will be to use modern means to set up a company in Romania. Until then, I strongly advise you to save time, energy and money by using the knowledge of someone familiar with the system (as opposed to trying to figure out by yourself all the small but important details which can prolong the process for couple of months &#8211; no joking!).</p>
<p>Cristian Bizau</p>
<p><em>Bucharest Angel</em></p>
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