Employing Foreign Managers: A Noteworthy Economic Move

Management is a science, the mastery of which like all other scientific subjects requires education and experience gained by engaging in internships in different enterprises.

Senior presidential advisor Masoud Nili has listed faulty and weak management as the main reason for Iranian firms’ failure to survive in international markets.

Addressing the problem, some experts have suggested employing foreign managers in domestic industries. Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh is also an advocate of the idea.

“We have said before that we need to bring foreign export managers to the country. Yet, some people criticize or make fun of us and others don’t want to hear us at all,” Nematzadeh has been quoted as saying.

 An Erroneous Approach

Over the past several years, we have become alienated to the principles of the science of management, and the reason is that we have adopted an erroneous approach toward western science and technology, the head of Tehran Chamber of Commerce, Industries, Mines and Agriculture’s Industries and Mines Commission, Mehdi Pourqazi, wrote in Financial Tribune’s sister publication Tejarat-e Farda Persian economic weekly.

“Our approach has been a political one, especially in the field of humanities. We have viewed their science through a suspicious lens and tried instead to go about our business using methods that are not based on scientific principles. This approach has cost us dearly in the competitive international market,” he said.

“We are wanting in proficiency and productivity in industrial activity because we fail to pay attention to principles of management, teamwork, discipline and planning.”

Pourqazi noted that happiness and success require discipline, not disturbing the order that others have spent years to achieve, in addition to cultural issues that need to be addressed.

 The Safest Way

The official said foreign managers will hopefully enter the country alongside foreign investments.

“This is one of the easiest ways of attracting FDI, because when potential foreign investors enter a country, they would like to employ a manager of their own choice to oversee their projects. This type of managerial job is widely known as ‘country manager’. As a result, the Iranian side can also benefit and upgrade its management skills. Iranian managers can be taught and acquire relevant skills from that foreign representative,” he said.

Yet, Pourqazi noted that if employment of foreign managers is not accompanied by foreign investment, there is no defined procedure to go through.

“For instance, I, as a businessman active in the private sector, do not know where to start from or how to gain access to a foreign manager if I intended to employ one,” he said.

Echoing similar remarks, Morteza Emadzadeh, a faculty member at the Industrial Management Institute, said employing foreigners to manage our firms should be such that they form part of a management group or else there will be concerns that they may take advantage of their position to pursue foreign interests.

This, Emadzadeh explains, stems from the collective memory in the Iranian society that distrusts the presence of foreigners at the helm of domestic affairs.

“The safest way is to attract foreign investment, meaning that foreign managers will enter the country along with foreign technology, financial resources and machinery and as part of a bigger package. This way, the scheme will not stir up any sensitivities or disagreements,” he said.

 Reality Check

Pourqazi also said by taking on foreign managers, particularly those who have worked in many companies in numerous countries and have precious experiences, is an international routine.

“Yet, if we are to do the same, we have to pay attention to the prerequisites and the required infrastructure. Often, in other countries, the strategies applied by a foreign manager are expected to raise the value of the company’s shares, but no guarantee is demanded. They try to arrive at this goal by carefully selecting a manager,” he said.

“But this is not the same in our country, as we expect a foreign manager to guarantee success. Later, if we fail to fulfill part of our goals, we jump to the conclusion that taking on a foreign manager was wrong. So we need to change our mindset and reform our culture in this regard.”

The official goes on to explain one of the most fallacious paths taken in Iran to appoint managers.

“We have never avoided choosing political figures for managing our firms, especially in major industries. When choosing a manager, we ask how many times this person has been a member of parliament. Have they been deputy ministers or general directors at any governmental bodies? We are mistaken in believing these to be the points of strength for the person to whom we want to hand over an industrial, commercial or service providing company,” he said.

Pourqazi reminded that employment of foreign managers can only be successful when it is accompanied by a supportive and obedient team.

“If the Iranian team is going to place stumbling blocks in front of these managers, nothing will be achieved. We should also consider the fact that taking on a foreign manager is not something permanent. Alongside employing foreign managers, their Iranian counterparts must be trained so that they can, after gaining experience, run our major enterprises and industries,” he said.