2. ABSTRACT
This case will provide a detailed analysis of the issues Michael
Thomas has confronted in AMEX’s Hungarian venture.
AMEX launched Thomas into Hungary without any formal training,
therefore he faced a multitude of issues, including economic, cultural,
and regulatory. Also discuss how Thomas responded to the issues, as
well as recommendations for how he should have responded.
4. INTRODUCTION
AMEX Petroleum is an oil company that has established an overseas
project in the Eastern European nation of Hungary. The scope of the
project entails forming a market presence in the country by
establishing between 10 and 14 gas stations in an unspecified time
period. These gas stations may be obtained in different ways,
including the purchasing of existing stations, building new ones, and
negotiating franchise agreements with current owners.
Michael Thomas an expatriate working for AMEX, was promoted to
project manager and has been on site in Budapest, Hungary for four
months. Although Thomas’s primary goal is establishing the gas
stations, renovating the AMEX offices in Hungary and hiring of
personnel are secondary goals that are overall essential factors of the
international project.
5. WHAT’S ISSUES?
1. Economics ： AMEX’s strategy for success in Hungary hugely
depends on the prediction that an increase in automobile sales will
take place. However, inflation has increased in the country to
thirty-two percent, causing a general rise of prices for goods and
services. A high inflation percentage may discourage Hungarians
from purchasing high-involvement products, such as motor
vehicles.
2. High Unemployment & Low Motivation：Ever since his arrival at
AMEX Hungary, Thomas has been confronted by employees who
exhibit a lack of motivation. Due to the high turnover rate, Thomas
had difficulty delegating work and therefore failed to complete his
assignments punctually and efficiently. The low level of motivation
may be provoked by several factors, including the change from a
6. WHAT’S ISSUES?
3. Cultural：Cultural differences are extremely important to consider,
for a lack of understanding of the differences associated with
culture will create enormous difficulty in the completion of the
international project. Thomas faced occurred during his interaction
with a Hungarian businessman, Zoltán Kodaly. Different business
etiquette factors include punctuality and relationship building prior
to the discussion of business. Both of these factors were displayed
during Thomas’s interaction with Kodaly.
4. Security ： Personal and safety risks are important factors to
consider when relocating to a foreign country. It is imperative to
evaluate security risks before deciding to pursue international
projects. Expatriate Michael Thomas came upon a potential threat
four months into his international assignment.
7. RECOMMENDATIONS
1. Economics：Due to these uncontrollable forces, in order to gain a
larger market share, Thomas should focus on capturing car-
owning customers instead of hoping that the percentage of car
owners will increase. For example, Thomas could focus on
attempting to acquire existing gas stations that reside in areas
with high concentrations of car traffic. Unless the percentage of car
owners increase, establishing a strong presence is the country is
the only approach that will ensure AMEX’s survival.
2. High Unemployment & Low Motivation ： Thomas needs to
acknowledge that his American managerial style might contribute
to the demotivation of his employees. In order to assure that he is
performing according to Hungarian standards, Thomas should hire
a business consultant who will teach him how to lead his
Hungarian team successfully.
8. RECOMMENDATIONS
3. Cultural：Cultural differences also occurred when Thomas mentioned to
Kodaly that because the stations were over-staffed, 15 employees had to
be let go. Thomas’s alternative would be to relocate the employees to
areas of the business where they may be needed. This act will show
Kodaly that both the welfare of the business and employees matter to
him.
4. Security：Thomas should become a member of International SOS, an
organization that manages the health and security of expatriates. Some of
the services the organization offers include a 24/7 hotline that provides
medical and security advice and reassurance, crisis support, and
emergency evacuations. Implementing these safety precautions will
assure that the Thomas family will live safely and comfortably in Hungary.
9. CONCLUSION
The pursuit of globalization has become nothing short of a necessity
for aspiring companies to succeed. With increased competition and
government regulations, locating and exploiting alternative
competitive markets may be the only way for a firm to generate a
profit. That being said, the pursuit of international projects presents
many challenges for both the company and its affected employees.
In the case of AMEX Petroleum, Michael Thomas entered Hungary
without conducting any research or formal training, as evident by the
number of issues he’s facing. It is the responsibility of both the
company and the affected parties to ensure that all members involved
receive training, especially project managers
10. HOW DID YOU THINK?
If you were assigned as the project manager instead of Thomas,
how would you prepare and what would you do before you start the
project ?
I would take the time to study the culture and learn how business is
conducted in Hungary. I would look into the possibility of hiring a
local business consultant that has established ties in Budapest, which
could help me to acclimate and to move my project forward.
11. HOW DID YOU THINK?
How would you handle the hiring process ?
The hiring process may be better handled by a recruiting firm. Also,
based on customary business practices, I would try to handle the
process as if I were local.
12. HOW DID YOU THINK?
What is the difference working as a project manager in Local and on
an international project ?
The big difference is that you are out of your element and you need
to adapt your management style to fit the country you are working in.
It would be very difficult to succeed if you did not.
