Экономические науки/6.Маркетинг и менеджмент

Moiseyeva Farida, Titova Ekaterina

Donetsk national university of economics and trade

named after Mykhailo Tugan-Baranovsky

Overseas marketing government organizations

Investment promotion organizations established within the ambit of the normal government and civil service system have tended to regard the entire promotion function as a traditional government function. These agencies have, accordingly, seen fit to conduct overseas marketing through the country's network of consulates or embassies.

In 1987 all four government agencies in the sample-Investment Canada, Britain's IBB, Thailand's BOI, and Indonesia's BKPM conducted overseas marketing through consulates or embassies. For the BKPM, this had not always been the case. Between 1983 and 1986, the BKPM had three investment promotion offices overseas, in Paris, Frankfurt, and New York. The offices were physically located within offices of Hill and Knowlton, the U.S. public relations firm that represented the Indonesian government. They were passive operations, primarily responding to requests from investors for information. In 1986, in response to a growing sentiment that the offices were generating no investment, they were closed and the funds that had been used to finance their operations were used to add an investment promotion component to the functions of twelve economic consuls in Indonesian consulates and embassies overseas. The other three government organizations, the IBB, Investment Canada, and the BOI, had always conducted investment promotion activities through the network of consulates and embassies of their respective countries.

Officials from government organizations suggested certain advantages they felt their organizations gained by conducting overseas marketing activities through consulates and embassies. One apparent advantage, as the Indonesian example illustrates, is that promotional resources can be spread over a broader geographical area. In the Indonesian case, the funds that had been used to support three investment promotion offices were later used to support investment promotion activities in twelve locations. An official from one government agency suggested another advantage: since a country's embassies and consulates are well known, investors might approach an embassy when they might never be aware of the existence or the location of a promotion office standing alone. There are several disadvantages to this particular form of organization for overseas marketing, however. Although promotional resources might be spread over a broader geographical area, this is often achieved by using part-time rather than full-time investment promoters. Government organizations do not spend more on investment promotion; they simply spread their resources more thinly. The relative effectiveness of these alternative ways of spreading promotional resources is ultimately an empirical question. Our observations suggest that in situations in which investment promotion is a part-time activity of consular officials, there is a substantial risk that promotional activities will receive little attention. Investment promotion is a difficult marketing endeavor to implement, and results are difficult to measure. In situations in which it is a subsidiary function of the individual--or of an organization there is a tendency to ignore it and concentrate on the primary function or on an easier function. The risk that diplomatic staff will not emphasize promotional activities is exacerbated because of two typical, although by no means necessary, characteristics of the government organization that promotes foreign investment through diplomatic channels.

The first is that diplomatic staff are normally trained as diplomats, have had little experience in industrial development, business, or marketing, and do not tend to be predisposed toward aggressive marketing. The second is that government organizations often do not develop comprehensive reporting and control systems between the organization at home and the diplomatic offices. Government promotion organizations can generally offer no incentives to motivate and reward the effort of consular officials, nor do they have power to control performance. In many situations no information system exists to make it possible even to evaluate performance. That these are not necessary characteristics of government organizations is illustrated by the example of the Canadian promotional program that spent considerable time and effort in developing a management control system to monitor the performance of diplomatic staff.

Development of a Management Control System. In 1987 the Canadian investment promotion program was in the middle of an attempt to institute comprehensive information and evaluation system to improve the productivity of diplomatic staff engaged in investment promotion activities. Although Investment Canada was the agency principally responsible for promoting investment in Canada, this agency worked very closely with the Department of External Affairs (DEA), which was responsible in part for investment promotion activities conducted at the "posts" (consulates or embassies), and the Department of Regional and Industrial Expansion (DRIE), which was responsible in part for providing sectoral expertise in the targeting and other industry- or sector-specific functions of investment promotion. The DEA developed a comprehensive tracking system designed to monitor and evaluate the performance of consular officials involved in all DEA functions, such as trade promotion, tourism, and investment promotion. DEA officials felt that the process of government had to become more disciplined and that this would happen only if government officials were held accountable for their efforts and the associated results or lack of results. This was the rationale for the development of the tracking system. The Canadian system included a planning component, which functioned in advance of each fiscal year. At the beginning of each year a package of materials would be sent to each post. The posts all contained at least three sections: export promotion, investment promotion, and tourism. Each of these sections was expected to complete a report. The priorities for the coming year and the results expected were to be included in the report. Investment promotion sections were to indicate how they planned to identify and develop potential investment opportunities and the quantity of investment they planned to achieve for the year. They were required to provide analyses of the external environment, indicating, for instance, why companies from this particular territory would seek to go abroad, and what group of companies might be most interested in investing in Canada. On the basis of the forms submitted from posts all over the world, the DEA would put together a sectoral and geographical investment promotion program for the forthcoming year. The DEA'S tracking system took fourteen months to develop and came on line in November 1986. In conjunction with Investment Canada, the DEA in 1987 was working on a more elaborate tracking system for investment promotion tool would enable all promotional contacts to be tied to eventual investment decisions. In the interim, investment activity was recorded on Business Activity Forms, which also indicated what promotional technique had led to initial contacts with the prospective investor. As this description demonstrates, the Canadian promotional program made intense efforts to counteract what the agency saw as problems that often afflict government organizations-namely, lack of motivation and accountability on the part of employees. Most government promotion organizations do not make such efforts, and in their absence it becomes very difficult for these organizations to monitor, evaluate, and motivate the performance of diplomatic promotion staff.