American

Investor
DECEMBER 2010
Vol. XX, No. 9 • ISSN 1506-3240

© American Chamber of Commerce in Poland 2010 www.amcham.com.pl

Virtual melting pot

How to sustain a business model
when the technology
keeps moving
but consumer
attitudes
don’t
catch
up

AmCham CEO Forum: Implementing culture AmCham Monthly Meeting: Across the aisle and over the
AmCham online
Investor
American
DECEMBER 2010
what’s on
www.amcham.com.pl
Your online guide to AmCham activities
Download this magazine!
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By clicking on red links in the Calen-
dar you may visit photo coverage of
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Events
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ers each Monthly Meeting exten-
sively, including full-page pictorials,
you can search through picture
archives of past events that include
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go to Events and Activities, pick
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Regions
AmCham may be closer than you
think. Apart from Warsaw, AmCham
has two regional branches which are
active all year long and offer many ex-
citing opportunities to interface with
regional business leaders and politi-
cians. To find out more about our ac-
tivities in Kraków and the region of
southern Poland, and Wrocław, go to
Regions in the horizontal menu bar,
and pick your region of interest.
Policy Watch
Intelligence: For AmCham position
papers, policy statements, official let-
ters to government ministers and re-
search papers, visit the Advocacy link
on the horizontal menu to download
the latest AmCham position papers.
Other useful sites
U.S. Chamber of Commerce
http://www.uschamber.com
American Chamber of Commerce
in the European Union
http://www.amchameu.be
European Council of American
Chambers of Commerce
http://www.amchamseurope.com
COVER STORY:
Vol. XX, No. 9
Virtual melting pot
There are more drivers of
electronic media conver-
gence than technology
itself. With diverse con-
sumer attitudes to differ-
ent media across
regions and demo-
graphics, no single busi-
ness model that is sus-
tainable for the longer
term appears anywhere
on the horizon,
page 16.
MONTHLY BREAKFAST MEETING
Across the aisle and over the sea The shakeup in the U.S. Congress should be neutral
for Poland, but old opportunities remain underexploited, p. 23
CEO FORUM
Implementing culture Senior teams must work together to create an organizational cul-
ture that reflects the company’s business strategy, p. 26
FOCUS
The great enabler An AmCham conference in Kraków showcases IT applications across
different fields of knowledge and business, p. 28
Truly amazing AmCham Kraków’s Tomasz Szczerbina talks with Mike Dietz, vice presi-
dent of Sabre Holding’s European Center for Software Development in Kraków, about the
center’s 10 years in operation, p. 30
THE EXPERTS
Winning battles Customs authorities and businesses make progress in the fight
against counterfeit products, p. 31
A high-performance culture Hard-wired attitudes can change and must change to move
the organization forward, p. 32
Game, set, match Once a dispute has been decided by arbitrators, the state court has
the final say on enforcement, p. 33
The trust factor Upfront community involvement cuts investment risk and generates up-
side on the backend, p. 34
Taming the dark force "Flamboyant" language at the workplace may earn the speaker
charges of sexual harassment, p. 35
EVENTS
Monthly Breakfast Meeting, p. 36; CEO Forum, p. 37; AmCham Business Mixer, p. 39;
AmCham IT Giants, p. 39
DEPARTMENTS
From the Editor, p. 2; From the Chairman, p. 5; Newsline, p. 6; Agenda, p. 10; Guide to
AmCham Committees, p. 14; Content summaries in Polish, p. 40
DECEMBER 2010 AMERICAN INVESTOR 1
YOUR AMCHAM FROM THE EDITOR

BOARD OF Survival of the cheapest?

DIRECTORS
The American Chamber of Commerce in Poland

O
ur Cover Story in this issue of American Investor reports on the main thanks to its interactivity and measurability of what you view (the “click-through” rate), has changed advertising into an impulse-
Roman Rewald – Weil, Gotshal & Manges findings of an excellent KPMG report that maps consumer attitudes in
Chairman guided behavior. If you see an ad, you are supposed to click on it to let the marketer know the ad worked for you.
the virtual reality of converging media, across different criteria such as There is one basic flaw in this model. Do not expect me—or most other consumers—when I see an ad for a new car, to rush
Judith Y. Gliniecki – Wierzbowski Eversheds
Vice Chair geographical location, technology in use, and demographics. One of its to click and find out what engine options it comes with, the interior color schemes, paint finishes and pricing. It is enough that I
RichaRd lada – Telesto main conclusions is that the prevailing attitudes of consumers oscillate hap- make a mental note about the model in the advertising, and then when I DO need a new car I may still remember the ad and
Vice Chairman pily around the idea that online content should be made available to them consider learning more about that model.
PeteR kaY – KPMG Polska free of charge. Indeed, it seems that the moving force behind the develop- Advertising is supposed to help consumers, not distract them. That is why, the KPMG report also revealed, in the online
Secretary ment of the Internet, alongside technological progress, is the determination world advertising is perceived by consumers more as an irrelevant irritant. Popup windows that cover entire displays of smart
Stan PoPow – Finacorp of Internet businesses to give away as much as possible for nothing. phones are a nuisance, the report indicated. So are popup ads that have no relevance to consumers.
Treasurer We note in the Cover Story that the website of the Times of London has re- The good news is that at the recent conference of the Interactive Advertising Bureau in Warsaw this fall, some advertising ex-
cently become available only by subscription. Technology itself generates a ecutives from big portals indeed talked about the need to find the right balance between advertising and non-advertising con-
MEMBERS significant number of subscribers—iPad users—who pay a monthly fee to tent offered to consumers on the Internet. They hinted that the formats developed by the print media are probably the best.
be able to “experience” the Times in a specially designed browser. But now, when it comes to print media, the click-through philosophy, which is essentially wrong and may work with cheap
Tony Housh Robert L. Koński The Times is not the first periodical to hide its content online behind a pay advertising but not serious ads, is actually affecting advertising clients’ behavior. Some clients offer “performance-based”
APCO Worldwide Kulczyk Investments
wall. Scientific American, a magazine that for a long time did not even pub- models to the print media they want to advertise with,in which the ad fee is based on reader response and in some cases
Joseph Wancer John Lynch lish its articles online, in the spring of this year made its feature stories avail- even actual sales demonstrated to have been generated by the ad. This is nothing but shifting part of the advertiser’s business
Deloitte Lynka
able for a fee. Announcing that move in a podcast available for free from risk onto the shoulders of the media. This is as if a press title that depends on advertising revenue offered to pay salaries to its
Paul Fogo
Miller Canfield
Mac Raczkiewicz
Ex officio
iTunes, the podcast host, Steve Mirsky, said that as much as he likes things staff and printers only after the advertising “worked” for the clients, but the clients determine whether it worked or not. How sus-
to be free when he is the consumer, “I also recognize that for professional tainable a business model is that?
journalists writing is not their hobby. If you want quality journalism you have to Speaking of costs, running a website is not a cheap enterprise. The world’s largest encyclopedia site, wikipedia.org, pays
get used to still paying for it. If you want to send professional journalists to, approximately USD 10 million a year. Its founding father, Jimmy Wales, who expresses a religious fervor in content-free dogma
say, Iraq, to find out what’s going on there, some money has to flow into that juxtaposed with a strong dislike for online advertising characteristic for computer nerds, still thrives on a business model of get-
SPONSORS journalistic enterprise. Otherwise we will be getting restaurant reviews from ting people to do enormous amounts of work for free. In a fundraising effort every December, Wales posts his “personal mes-
people about their neighborhoods.” sage” on Wikipedia asking for donations. To enhance the campaign, similar appeals for money were prepared by some of
Obviously, Scientific American has good reasons to care about the quality Wikipedia’s hardest-working editors.
of its journalism. Its contributors include renowned scientists, often Nobel
Prize winners. Professional editors are a must to work with them—interns or
“science enthusiasts” just will not do.
The idea of offering content on the Internet for free is a potent one, and it
occasionally influences offline reality. Polish Deputy Prime Minister and Minis-
ter of Economy Waldemar Pawlak, who was the guest speaker at the Am-
Cham IT Giants conference in Kraków (see article on page 28) said that on-
line and other IT platforms for free exchange of thoughts and ideas should
continue to develop. He praised the model of free access to online content
provided by companies who support their business by exclusively selling In a fundraising effort every December, Wikipedia founder Jimmy Wales posts his “personal message” on Wikipedia
asking for donations.
advertising online, without subscription fees. He went on to say that this
model should be expanded beyond the virtual world: “Students’ textbooks I think that the editors of Wikipedia deserve more than that. Wikipedia is a perfect platform for offering intelligent, search-re-
have four covers. If those four pages carry advertising from the book’s spon- lated advertising. Who would not appreciate, when searching for information about a person, getting a list of the latest book or
sor, the book may be offered for free to students, while the ads pay for the multimedia release about him or her? Wikipedia is where advertising has a huge role to play. When applied in line with a tradi-
author’s copyright.” tional commercial philosophy, advertising will only enrich the value of Wikipedia for its users.
While it is a noble idea, it has at least one flaw. The first is that Pawlak did The hollow faith in providing services for free, which the Internet has promoted to the extreme, has to collapse when con-
not mention the production cost. Say we need 20,000 algebra textbooks fronted with the realities of the offline world. The KPMG report reflects that. The bottom line is that instead of trying to challenge
printed in this model. The production cost may well be PLN 10 per copy. the commercial principles of business in virtual reality, Internet businesses should have the stamina and determination to apply
The total bill the advertiser has to foot is PLN 200,000. But this kind of them. If they do not have a working model for providing a good quality service, then no one is served. There is no such thing in
money can buy more than an annual presence for multiple advertising for- nature as the survival of the cheapest.
mats at any virtual portal that is visited by the target group more often and
more happily than the algebra book.
So some ideas developed by the Internet culture, when juxtaposed with Tomasz Ćwiok
offline reality, come off as naive at best. This also applies to the ways the In-
ternet has affected the idea of advertising. The nature of advertising, as we
know it from the traditional media, is commercial messages from businesses
about new products and services available to consumers in the market-
place. The role of ads is to inform. The longer you remember an ad the bet-
ter. That is all that is required for good advertising to “work.” The Internet,

AmCham Auditor:

2 AMERICAN INVESTOR DECEMBER 2010 DECEMBER 2010 AMERICAN INVESTOR 3

 YOUR AMCHAM FROM THE CHAIRMAN

AmCham Member to Member

Investor What goes around
American

comes around
Published by the American Chamber of Commerce in Poland

I
EDITOR-IN-CHIEF
hate saying goodbye. Since I was sixteen, my family was split between the United
tomaSz Ćwiok
tomasz.cwiok@amcham.com.pl States and Poland, and I quickly learned that the best way to reduce the trauma of
EDITOR-AT-LARGE goodbyes is to ignore the finality of the departure. So, I am far from bidding good-
chRiStoPheR Smith bye, but the end of the term is a good opportunity to reflect on the past six years.
christopher.smith@neostrada.pl
Pursuant to the AmCham bylaws, which I designed and whose adoption I pro-
moted, the Chairperson may serve for only three consecutive terms. Before I de-
AMCHAM STAFF
Dorota Dabrowski cided to put myself up as a candidate for Chairman of the Board of AmCham, I
Executive Director
director@amcham.com.pl
made sure that I would not succumb to the temptation to stay in the position forever. I
predicted the temptation, and, indeed, the temptation arrived. The fact that people
Marzena Drela
Deputy Director for whom I have a lot of respect and good friends explored the possibility of chang-
marzena.drela@amcham.com.pl
ing the bylaws again to remove the term limitation nicely fed that temptation and flat-
Anita Kowalska tered me as well. Nevertheless, I still believe that a limitation on the term of the chair-
Events & Media Manager
anita.kowalska@amcham.com.pl person is a good idea for any organization, for many reasons, and I will stick to my
Robert Kruszyna guns. The same amendment to the bylaws that instituted the term limit for the Chair-
Office Manager
robert.kruszyna@amcham.com.pl person also introduced the provision that any past Chairperson remains a member of
Barbara Pocialik-Malinowska
the Board ex officio. So I will stay on the Board of AmCham and,
Membership and Committees Coordinator hopefully, will be able to contribute to the development and
barbara.pocialik@amcham.com.pl
prosperity of this magnificent business organization.
Marta Pawlak Magnificent it is! I feel deeply honored and privileged that I
Research and Policy Coordinator
marta.pawlak@amcham.com.pl
can say that I was the Chairman during a period in which Am-
Robert Chomik Cham developed greatly from the phenomenal foundation built
Project Assistant
robert.chomik@amcham.com.pl by our preceding Boards and the first Chairman, Mac
AmCham in Kraków Raczkiewicz. From the outset, I believed that the best thing a
Monika Pilarska chairperson can do for the organization is to provide it with
krakow@amcham.com.pl
common-sense leadership and inspire people involved in the
AmCham in Wrocław Roman Rewald organization to do whatever they do best, while running their
Joanna Bensz AMCHAM CHAIRMAN
particular courses on their own. The role of the Chairperson and
amcham.wroclaw@pmg.pl
the Board is to provide the organization with direction and guid-
ance and to watch over the basic principles of equality and good competition. The
Printing
rest can be handled by a large number of volunteers and a very competent staff.

We’re all
Q Invest Ltd
+48 22 424 6600 The AmCham staff deserve a separate paragraph. We have the most stable
group of dedicated, competent and passionate people running the day-to-day activi-
To contact AmCham ties of the chamber, under the excellent leadership of Dorota Dabrowski. The fact that
please write or call:
AmCham was able to attract a permanent director of Dorota’s quality speaks loudly

in this ul. Emilii Plater 53, WFC

00-113 Warsaw
tel: +48 22 520 5999
fax: +48 22 520 5998
e-mail: office@amcham.com.pl
for the organization.
All of the members of AmCham’s staff are excellent and must be applauded.
Marzena Drela, the Deputy Director, Anita Kowalska and Basia Pocialik are long-term
employees. You would never tell it from their youthful looks, but they have been with

together
www.amcham.com.pl
© American Chamber of Commerce
in Poland 2010. All rights reserved.
American Investor is the official publication
of the American Chamber of Commerce in
Poland. It is a voice for foreign investors and
the business community in Poland. The
magazine strives to keep our members and
other readers up to date by following cham-
ber news and reporting on the leading
trends in business and policy.
the chamber since I joined the organization. There are also excellent new members
of the staff: Tomek Ćwiok, the editor of American Investor, who has brought this pub-
lication to a new, higher level; Marta Pawlak, our Research Coordinator; Robert
Chomik and Robert Kruszyna—all excellent, excellent workers for whom this organi-
zation is obviously not only a place of work, but also their passion.
The newly elected Board, where I can also point out several “old-timers,” inherits
a well-run organization, and the newly elected Chairperson (in January 2011) will
have a great foundation on which to build an even better and stronger organization in
the future. As an ex officio member of the Board, I wish this for myself and all my fel-
low Board members and all the members of this 20-year-old organization.
So, no goodbyes, please! Let us make some changes here and there, and con-
tinue the good work for the betterment of this magnificent society.

letters to the editor should be e-mailed to

tomasz.cwiok@amcham.com.pl

DECEMBER 2010 AMERICAN INVESTOR 5

Newsline News from AmCham and its members
AmCham Advocacy
In response to an invitation from the Polish
Senate to participate in the Senate Commit-
tee for the National Economy session de-
voted to public-private partnerships, Am-
Cham has sent a position paper to the Senate
highlighting the chamber’s stand on the is-
sues surrounding PPP. In particular, AmCham
positively evaluated the principle of PPP as a
form of generating investment money to sup-
port important public investment projects.
AmCham noted, however, that the reason
PPP is not being fully utilized in Poland is the
lack of knowledge about PPP, the reluctance
of the public sector to cooperate with the pri-
vate sector, and well as the lack of a govern-
ment program for promoting PPP and the fact
that there is no government agency charged
with coordinating PPP projects across the
country. AmCham concluded that in order to
utilize the full potential of PPP, a business-
friendly interpretation of the Public-Private
Partnership Act should become the norm.
AmCham also said that the government
should draw on the experience of other coun-
tries where PPP has proved successful, and
include their legal solutions in the Polish sys-
tem. The “bonus” system used in public pro-
curement procedures in the U.S. was indi-
cated as a good example to follow.
AmCham Assistance
Thanks to an AmCham grant of PLN 2,800,
Anna Paciejewska, a graduate of the War-
saw University of Life Sciences, was able to
carry out a three-month internship that she
won at the Geneva-based United Nations
System Standing Committee on Nutrition.
With the U.N. in Geneva, she had the oppor-
tunity to study problems of world hunger and
malnutrition. “The internship was not paid,
and I knew I would not be able to support my-
self for the three months in Geneva without
some external financial assistance,” Paciejew-
ska said. “I asked several institutions for help,
including the U.S. Embassy in Warsaw, and
they redirected me to AmCham. The money
paid for one month in Geneva, for which I’m
very grateful.”
Paciejewska, who earned a degree from
the Faculty of Human Nutrition and Consumer
Sciences in Warsaw, said the internship expe-
rience helped her gain a practical under-
6 AMERICAN INVESTOR DECEMBER 2010
standing of world hunger problems and
strengthened her resolve to pursue a scientific
career in the fight against hunger, because, as
she said, it is “one of the most fundamental
problems for the human race to cope with in
the decades to come.”
AmCham Conference
AmCham Vice Chairman Rick Lada, pictured,
who spoke at the AmCham IT Giants annual
conference in Kraków, said that today the im-
pact of information technology on the econ-
omy is unprecedented. “IT is arguably the
most important staple of the economy in the
21st century,” Lada said. He noted that this
was not all that clear in the 1990s when a
group of IT enthusiasts tried to persuade Mo-
torola to invest in Kraków. Lada was pivotal in
establishing Motorola’s first big IT investment
in Poland.
Other conference speakers, including Do-
minik Kania from Woodward Governor
Poland, Peter Knazko from GE, Mike Dietz
from Sabre Holdings, Arkadiusz Bober from
GM Manufacturing, Tomasz Nitsch from the
media group IT, and Marek Suczyk from Kroll
Ontrack, presented practical applications of IT
in developing and expanding business in
such areas as intelligent grid management
and energy control, supporting the travel in-
dustry in real time, and developing media for-
mats for forensic IT.
Prof. Maciej Ogorzałek from Jagiellonian
University presented the potential of computa-
tional intelligence in biomedical applications,
while Prof. Andrzej Dziech from AGH Univer-
sity of Science and Technology showcased
applications that enhance public security
against different types of threats. Sławomir
Kopeć, the head of the Kraków Technology
Park, gave a presentation on the park’s seed
fund program and how it can help young en-
trepreneurs in the innovative economy to start
their first company. U.S. Consul Jeff Vick en-
couraged young programmers in the audi-
ence to try and study in the U.S., where tal-
ented candidates can find many educational
institutions that not only provide excellent pro-
grams but also offer scholarships.
Deputy Prime Minister Waldemar Pawlak,
who was the special guest at the conference,
said that IT professionals should have as
broad an understanding of the world as pos-
sible, because IT today is a vital part of every
sphere of economic development.
AmCham Kraków has conducted a day-
long IT Giants conference every year since
2007.
Baker & McKenzie
Law firm Baker & McKenzie has advised Uni-
credit on the IPO of Fortuna Entertainment
Group N.V. and the dual listing of the com-
pany on the Warsaw and Prague stock ex-
changes. Baker & McKenzie advised on all
aspects of the IPO, including drafting and fil-
ing the prospectus. The multi-jurisdictional
legal work was managed and coordinated by
Baker & McKenzie’s Warsaw office, with sup-
port from the Amsterdam, Prague and Lon-
don offices and correspondent law firms in
Slovakia, Malta and Croatia.
The prospectus of Fortuna, which is regis-
tered in the Netherlands, was approved by
the Netherlands Authority for the Financial
Markets, and the shares began trading in
Prague on October 27 and in Warsaw on Oc-
tober 28. The aggregate market capitalization
of the company following the issue of new
shares is almost PLN 1 billion.
The Fortuna IPO was the first transaction
ever involving a concurrent public offering in
Poland, the Czech Republic and Slovakia as
well as a listing on the Warsaw and Prague
stock exchanges. It was also the first IPO of a
company from the gaming sector in Central &
Eastern Europe. Preparations for the IPO took
almost a year.
In other news, Baker & McKenzie has pub-
lished Pro Bono Service by In-House Counsel:
Strategies and Perspectives, a first-of-its-kind
book designed to provide in-house counsel
with best practices for developing in-house
pro bono efforts. Spearheaded by David P.
Hackett, a partner at the firm’s Chicago of-
fice, and Madeleine Schachter, the New
York-based Global Director of Pro Bono and
Corporate Social Responsibility for Baker &
McKenzie, the book combines the collective
knowledge of a group of in-house counsel
from leading global corporations with proven
pro bono programs, providing insights to
real-world counsel on the risks and rewards
of such a program.
Pro bono service has been institutionalized
at law firms for decades and is increasingly
gaining ground in legal departments within
corporations. With chapters from in-house
counsel at Accenture, American Express,
AOL, Caterpillar, Citigroup, Deloitte, Ernst &
Young, General Electric, Intel, LexisNexis, Mi-
crosoft, Starbucks and Time Warner, as well
as NGOs Ashoka, Concern Worldwide, the
Feerick Center for Social Justice, the Institute
of International Humanitarian Affairs, and the
Pro Bono Institute, the book serves as a win-
dow to how corporations have conceived of,
developed and grown their own pro bono
programs.
FLASH
BACK
From the pages of American Investor
DECEMBER 2000
Boeing
Boeing received the first on-orbit signals from
LightSquared’s SkyTerra 1 satellite following
launch on November 14 on an International
Launch Services Proton vehicle from the
Baikonur Cosmodrome in Kazakhstan. Con-
trollers at the ground station in Harte-
beesthoek, South Africa, confirmed initial con-
tact with the spacecraft the next day. Signal
acquisition indicated that the satellite was
healthy and ready to begin operational testing
and on-orbit maneuvers.
SkyTerra 1 is a Boeing 702HP satellite de-
signed for geomobile services that will provide
satellite coverage as part of LightSquared’s
new broadband mobile wireless network in the
United States.
“There is a large and rapidly growing de-
mand for data services to U.S. businesses, in-
dividuals and other end users, and Boeing has
accomplished the first step in delivering this
capability to LightSquared with the successful
launch of SkyTerra 1,” said Craig Cooning,
vice president and general manager of Boeing
Space & Intelligence Systems. “Boeing has
been designing advanced geomobile satellite
systems for the past 13 years, and our experi-
ence enables us to provide LightSquared with
a high-value solution.”
Cushman & Wakefield
Trading volumes on the investment market for
European commercial property hit EUR 23.3
billion in 3Q 2010, down 12.5% from the 2nd
quarter, according to a report issued by real
estate specialist Cushman & Wakefield. The
agency said that modest improvement in prop-
erty and debt availability should support
stronger activity in the coming months, with
volumes expected to increase as much as
70% in the 4th quarter, to reach EUR 110 billion
for the year overall. While this would represent
a significant recovery on last year (up 49%), it
would still only take trading volumes back to
2003–2004 levels, just over 40% of the peak in
2007.
Cushman & Wakefield noted that core mar-
kets fared best this year, with France, Ger-
many and the U.K. accounting for 69% of all
trading in the 3rd quarter. Buying demand con-
tinued to spread both to secure Western mar-
kets, such as the Netherlands and Norway,
and Eastern targets, notably Poland and now
Turkey and Russia.
In another report, devoted to retail property,
Cushman & Wakefield noted a fall in total
property investment activity by 12.5% in 3Q
2010, while trading in the retail market actually
increased, by 7.6% overall. This continues a
strong run over recent quarters, with year-to-
date investment up 66% over the same period
of 2009, compared to a 42% increase for the
rest of the market.
As explained by Michael Rodda, head of
the Retail Cross Border Capital Markets team,
“Greater investor demand has been met, at
least in some areas, by more opportunities be-
“The Board believes AmCham has reached the point where changes in the
organization's by-laws are needed to recognize the evolution of our
organization during the previous decade.”
MAC RACZKIEWICZ, AMCHAM CHAIRMAN
coming available, but the increase in invest-
ment supply has been steady rather than dra- Members on the move
matic, coming from institutions reorganizing
their portfolios as well as bank and corporate
sales. It is clear that if supply were greater, ac-
Baker &
tivity would be higher still. A fall in yields has
McKenzie
Eduardo Leite has been
helped bring stock to the market and pricing elected the next Chairman
for core product is definitely getting more ag-
gressive. It is also notable that more investors
of the Executive Commit-
tee of the international law
now have the confidence to relax their require- firm Baker & McKenzie.
ments a little. Everyone still wants prime, but Leite is a São Paulo-
definitions of what prime is are a little less based lawyer specializing
stringent, for example with respect to required in energy, infrastructure
lease terms.” projects, and mergers and
acquisitions. He currently heads the firm’s Global
Energy, Mining & Infrastructure Practice Group
and, since 2003, has been the managing partner
of the firm’s four offices in Brazil.
CB
Richard Ellis
Colin Waddell has been
appointed Managing Direc-
tor of CB Richard Ellis’s Pol-
ish operations. Waddell has
been with CBRE since 2000,
and in 2003 was appointed
to head CBRE in the Czech
Republic. In 2007, he be-
came Managing Director of the CEE region, with a
particular focus on the company’s cross-border
In other news, Cushman & Wakefield has
signed an agreement with Europolis to man-
services and its expansion further east.
age its Lipowy Office Park (above) a complex
of four buildings in the Okęcie district of War-
saw. It is the 6th Europolis property in Poland Marriott
managed by C&W. The anchor tenant at the Warsaw
complex is Bank Pekao S.A. Tomasz Zadrożny has
been appointed Chief En-
CB Richard Ellis gineer for the Marriott War-
saw. A graduate of the
The U.S. edition of Newsweek has ranked Warsaw University of Tech-
CB Richard Ellis Group at No. 30 out of 500 nology, Zadrożny joined
companies on its 2010 Green Rankings. CBRE Marriott in 1989, during its
was also the highest-ranked company in the fi- first year in Poland. Over
nancial services sector. the next 19 years he rose
from mechanic to director of the Technical De-
The Newsweek list, published in October,
partment. In 2008–2010 Zadrożny was a building
measures the environmental performance of
manager at FMP Planning and Facility Manage-
the 500 largest U.S.-based publicly traded
ment Polska.
companies. The ranking is based on each
company’s resource use and emission levels,
environmental policies and strategies, and Salans
reputation among peers. Dariusz Oleszczuk has
In other news, CBRE’s Development Con- been re-elected as
sultancy Team, together with the CBRE Span- Salans’ Global Managing
ish office, represented Acciona in the sale of a Partner for a third term.
development site at ul. Konstruktorska 111, Oleszczuk will continue to
Warsaw. The property was purchased by HB develop the business
across Salans’ interna-
Reavis, a leading CEE commercial property
tional network, focusing
developer. The property holds a building per-
particular attention on the
mit for construction of 45,000 sq. m. of offices.
firm’s strengths in cross-border work and inter-of-
Construction will start in 1Q 2011. fice synergies. Oleszczuk has served as Global
In other news, CB Richard Ellis advised Managing Partner since 2005. He has been a
RREEF Investment GmbH on the acquisition of partner at Salans since establishing the Warsaw
Nefryt and Topaz, two of Warsaw’s prime office office in 1991, and is now based in the Paris of-
buildings. The transaction value was about fice. He is qualified in Poland as a legal adviser
EUR 80 million. Nefryt and Topaz, in the and a judge, and is an arbitrator of the Court of
Mokotów business district, were developed by Arbitration at the Polish Chamber of Commerce
Globe Trade Centre. The properties, totaling as well as a member of the International Bar As-
27,000 sq. m., are fully let. sociation.
DECEMBER 2010 AMERICAN INVESTOR 7
 Newsline News from AmCham and its members
CB RE has also launched its 3rd annual Urban
Photographer of the Year competition across
Europe, the Middle East and Africa—one of
the largest competitions of its kind in the
world. The contest is designed to explore and
capture the essence of urban life and is open
to all amateur and professional photogra-
phers across the EMEA region. First prize for
2010 is a photography safari for two to Turkey.
There are also 24 prizes for the best photo-
graphs representing each hour of the day.
The theme this year is “Cities at Work.” Last
year’s winning image (above) was taken by
Ralf Pascual from Madrid.
General Electric
GE has further expanded its oil and gas port-
folio capabilities with the opening of a new
USD 3 million investment subsea equipment
testing facility in Warsaw, in partnership with
the Warsaw Institute of Aviation and Engineer-
ing Design Center.
The new Warsaw Subsea Test Lab provides
GE Oil & Gas with increased capacity for test-
ing and qualification of subsea equipment for
its global drilling and production operations,
increased support of sales activity in Poland
and across Central Europe, as well as highly
talented, experienced engineers.
“GE is a strategic partner to the Warsaw In-
stitute of Aviation, and this year we have cele-
brated the 10th anniversary of our successful
cooperation,” said Witold Wiśniowski, man-
aging director of the Institute of Aviation.
“Today’s opening of the new GE Oil & Gas
subsea test facility is a result of our close rela-
tions and the trust placed in the world-class
engineering capabilities we have in Poland.
This is also a unique opportunity for our engi-
neers to develop strong expertise in such
complex projects as subsea oil and gas ex-
traction.”
8 AMERICAN INVESTOR DECEMBER 2010
Pictured in the previous column: Lesław
Kuzaj, GE Regional Director of Central Eu-
rope; John Lammas; Witold Wiśniowski.
Hewlett-Packard
HP Poland has partnered with the municipality
of Nowa Sól, Sinersio, and the University of
Zielona Góra in creation of a technology park
for the logistics sector in Nowa Sól (southwest
Poland). The park will deliver a technology
stimulus for development of the region around
Zielona Góra. HP developed IT solutions for
the park’s data center. The IT package from
HP meets the most critical norms of power
consumption and includes several variants for
cooling the infrastructure. The entire system
can be developed in a modular fashion. The
data center will also include a research lab to
be designed by HP, where students and
teachers can access state-of-the-art data pro-
cessing technology. Pictured: Wadim
Tyszkiewicz, mayor of Nowa Sól; Rafał
Szowiński, Technological Services Depart-
ment Director, HP; Marcin Bąkowski, presi-
dent, and Tomasz Stąpski, vice president,
Sinersio Polska.
In other news, HP has opened the Solu-
tions Discovery Center, a customer service
center, at HP’s Warsaw headquarters. The
center, part of the HP Global Customer Center
Network, is charged with promotion of HP
technology in Poland, but it will add other
countries in Central & Eastern Europe to its
roster. The center enables HP business cus-
tomers to test HP technology and the newest
products developed in all HP departments.
“We are proud that HP SDC was located at
the Polish branch of HP,” said Paweł Cza-
jkowski, president and general manager of
HP Polska. “The business position of Poland
in the region as well as the country's geo-
graphical location were the factors that con-
tributed to that decision.” Czajkowski added
that the success of the Systemic Solutions
Laboratory, which had been in operation in
Poland for the last 10 years, was also a big
factor in that decision. The lab has been re-
placed by the new HP SDC.
IBM
IBM has inaugurated the Smarter Cities Chal-
lenge, a competitive grant program in which
IBM will award USD 50 million worth of tech-
nology and services to help 100 municipalities
around the world. Teams of IBM experts will
provide city leaders with recommendations for
successful growth, better delivery of munici-
pal services, more citizen engagement, and
improved efficiency.
This new program is the largest single phil-
anthropic investment currently planned by
IBM, which made USD 186 million worth of
charitable contributions in 2009, in the form of
cash, technology, and consulting services.
Over the next three years, IBM will send its
top experts to the cities that have made the
strongest case for participating in the Smarter
Cities Challenge. IBM consultants will im-
merse themselves in local issues involving
healthcare, education, safety, social services,
transportation, communications, sustainabil-
ity, budget management, energy, and utilities.
IBM’s consultants and technology special-
ists will help the municipalities analyze and
prioritize their needs, review strengths and
weaknesses, and learn from the successful
strategies used by other cities. After studying
the role that intelligent technology might play
in uniting and advancing different aspects of
city life, IBM will recommend concrete strate-
gies designed to help make regions healthier,
safer, smarter, more prosperous, and attrac-
tive to current and prospective residents and
businesses. 
The Smarter Cities Challenge will also draw
on the experience gained by the IBM Corpo-
rate Service Corps within the last three years.
One of the pioneering projects was under-
taken in Katowice.
Manpower
Lack of a long-term workforce strategy will de-
prive companies of the talent they need to
gain a competitive edge, according to the
Workforce Strategy Survey published by HR
specialist Manpower in November.
The survey reveals that almost a quarter of
employers across 36 countries surveyed con-
cede that their organizations’ workforce strat-
egy does not support their business strat-
egy—or they have no idea whether it does or
not. This opinion is shared by 12% of Polish
employers. Among those two subsets of re-
spondents, 53% globally and 55% in Poland
admit they are not taking steps to address this
issue. With talent mismatch—the inability to
find the right skills in the right place at the
right time—becoming more acute as the
global economy thaws, companies risk being
without the skills they need to execute their
business strategy.
“Organizations need to develop expertise in
identifying where talent gaps are and to know
how to fill them,” said Iwona Janas, Country
Manager for Manpower Poland. “This means
building from within by placing high-potential
employees and top performers in business-
critical areas, as well as hiring in from out-
side.”
FLASH
BACK
From the pages of American Investor
DECEMBER 2005
Norton Rose
International legal practice Norton Rose
Group will be joined by the Canadian law firm
Ogilvy Renault and the South African law firm
Deneys Reitz in June 2011. Together the en-
larged group will be one of the 10 largest
legal practices in the world, by number of
lawyers, with more than 2,500 lawyers in 38
offices worldwide.
CEO Peter Martyr said, “This is a very ex-
citing move for the group and constitutes a
significant step towards realizing the group’s
global ambition of becoming one of the
world’s leading providers of legal services,
with offices in the world’s principal business
and financial centers.”
Panattoni
Industrial property developer Panattoni Eu-
rope has created a new joint venture with
Pramerica Real Estate Investors to develop a
portfolio of up to EUR 100 million of Class A
warehouses in Poland, the Czech Republic
and Slovakia. Pramerica is the real estate in-
vestment and advisory business of U.S.-
based Prudential Financial.
The joint venture has closed with an initial
32,000 sq. m. pre-let seed asset, and is pursu-
ing three additional Polish assets totaling over
45,000 sq. m. The joint venture will target new
developments with a minimum area of 10,000
sq. m., at least 50% pre-let before construc-
tion. It will invest over a period of 18 months,
and a minimum of 65% of its total assets will
be in Poland.
Pramerica and Panattoni have established
the joint venture to take advantage of continu-
ing demand from tenants for prime logistics
space in Central & Eastern Europe, Poland in
particular, as well as growing investor demand
for this type of product in the region.
In other news, Panattoni Europe Tesco BTS
has been named Best Warehouse/Logistics
Industrial & Logistics Development the Year
2010 by the industry magazine CIJ Journal.
The CIJ Awards Ceremony was held in No-
vember at the InterContinental Hotel in War-
saw.
In other news, Panattoni Europe has con-
cluded a lease at Panattoni Park Łódź South
(above) with Poltraf for 2,300 sq. m. of ware-
house space. With this contract the park is
100% let. Poltraf is a logistics operator in the
“Overwhelmingly, E.U. accession has turned out to be very good for Poland.
Farmers are ecstatic, entrepreneurs are happy, and exporters are blissful. As
a result, foreign direct investment into Poland
pharmaceutical industry which is also a tenant
at Panattoni Park Błonie.
Panattoni Europe has also leased out
space in building six at Panattoni Park Poznań
I. The new customer is Hendi Polska, pro-
ducer and marketer of professional catering
equipment. Hendi will take up 3,500 sq. m. of
warehouse and office space. The investment
at building six at Panattoni Park Poznań I
commenced in mid-September and had so far
attracted one customer. The warehouse, cur-
rently under construction, will offer 10,700 sq.
m. of industrial space. The building will be
commissioned around the end of 1Q 2011.
PM Group
PM Group in Poland is helping Pittsburgh
Glass Works in its latest expansion in Europe,
the construction of a new automotive glass
manufacturing facility in Środa Śląska near
Wrocław.
PM Group is providing engineering and
procurement services to the company, with re-
sponsibilities ranging from concept design
and building permit design, to detailed design
and tender preparation. “We will also act as
the contract engineer and supervise the con-
struction works on the site,” said PM Group
project manager Krzysztof Suwalski.
The 21,000 sq. m. facility, computer ren-
dered picture above, will product high-tech,
high-content windshields with full surface con-
trol for the European premium vehicle market.
The plant is scheduled to start production in
early 2012. When fully operational, it will em-
ploy over 170 people.
PwC
PwC has signed a joint venture with Com-
petitive Capabilities International Inc. to help
manufacturing clients across Central & East-
ern Europe improve their operational effi-
ciency. The new alliance works to deploy an
integrative improvement management system,
created by CCI, which helps clients continu-
ally save as much as 3 to 5% of production
cost.
The new venture gives PwC’s manufactur-
ing clients access to a management solution
that powers improvement across multiple lo-
cations and languages. “The system is a
repository of best-practice implementation ac-
tions and knowhow built up from 1,000 com-
panies in 55 countries,” said Andrew Friars,
managing partner of PwC Poland Advisory.
is on the rise once again. ”
JOHN P. LYNCH, AMCHAM BOARD MEMBER
According to Friars, positive market response
indicates the emergence of an opportunity
pipeline. “All the elements we could wish for
are present. There is implementation reach,
14 languages, operations as well as supply
chain, best practices, organization-wide
focus, sustainability, system and support.”
ProLogis
In the first 3 quarters of 2010, ProLogis, a
global provider of distribution facilities, leased
more than 511,000 sq. m. of office and ware-
house space in logistics parks in Poland, an
increase of 129% over the same period last
year. In Q3 2010 alone, ProLogis leased
75,600 sq. m. to new tenants—an increase of
315% over 3Q 2009.
“The consistent growth in both the number
and volume of lease agreements signed by
ProLogis this year is a gleam of recovery in
the warehouse/industrial market,” said Ben
Bannatyne, ProLogis managing director for
Central & Eastern Europe. “Although in certain
submarkets rental levels remain under pres-
sure due to an oversupply of vacant space, in
general we are seeing rental levels stabilize.
In a couple of markets we start to see an in-
crease in rents due to the lack of available
stock.”
New Members
AECOM (www.aecom.com), a global provider of
professional technical and management support
services to a broad range of markets, including
transportation, facilities, environmental, energy,
water and government, has joined AmCham. The
company is represented in Poland by Paweł Fert,
Country Manager, who can be contacted in Warsaw
at +48 22 822-0051.
The International Herald Tribune (global.ny-
times.com) publishing and printing specialist, has
joined AmCham. The company’s representative for
Poland is Carina Pierre Rochard, Regional Director.
She is based in France where she can be reached
at +33 1 4143-9257.
Pharmaceutical specialist Kato Labs (www.kato.pl)
has joined AmCham. The company is represented
in Poland by Janusz A. Wołejko, President. Wołejko
is based in Warsaw, where he can be reached at
+48 22 816-1450 or kato@kato.pl.
IT and legal services provider Kroll Ontrack
(www.krollontrack.pl) has joined AmCham. The rep-
resentative in Poland is Marek Suczyk, Managing Di-
rector. Based in Katowice, Suczyk can be contacted
at +48 32 779-9999 or biuro@krollontrack.pl.
DECEMBER 2010 AMERICAN INVESTOR 9
HOT DATE
Dec.07.10
Event: AmCham General Meeting and
Board Election
Place: Marriott Warsaw
Time: 9:00 A.M.
Tax Committee
Up VAT creek without a paddle?
Under new VAT regulations U.S. companies will not be able to recover VAT paid
in Poland
F
acing budgetary constraints in 2011,
the Polish government decided to raise
the tax on goods and services, effective
in January next year. The standard VAT rate
will increase from 22% to 23% and the re-
duced rate of 7% will go up to 8%. The 3%
rate will be cancelled, and a new preferential
rate of 5% will be introduced. The 0% VAT
rate will remain unchanged. The new rates
are expected to remain in place through
2013. It will be up to the government then to
extend the new rates, return to the 2010
rates, or implement a new approach, de-
pending on the state of Polish public fi-
nances at that point.
The increase is the first across-the-board
change in VAT rates since the tax was intro-
duced in Poland in 1993. Experts are confi-
dent that companies will handle the change
well, because even though the standard VAT
rate has remained unchanged for 17 years,
VAT regulations have changed almost con-
stantly and businesses have learned to deal
with changes.
However, as KPMG partner Tomasz Grun-
wald said at the meeting of the AmCham Tax
Committee in October, the issue of the VAT
raise is clear only on the surface. First off, the
increase coincides with the expiration of the
European Commission’s consent to apply
the 3% rate to non-processed foods and the
0% rate to books and specialized magazines.
Therefore, come 2011, non-processed foods
and books and magazines, as well as low-
processed foods, currently taxed at 7%, will
be subject to the new 5% rate.
Grunwald said that when it comes to the
standard VAT rate, the increase by one per-
centage point does not seem to be a signifi-
cant hike. The technical part of dealing with
the hike is perhaps a more significant issue
for companies, as they have to input the new
rates into their computer systems, SAP and
cash register programs.
The government sought to make the tran-
sition from 22% to 23% as business-friendly
as possible by adopting a transition period
for December 2010 and January 2011, when
companies will be able to apply either VAT
rate, as they see fit, in line with the specifics
of their business and in synchronization with
the dates marking the completion of their
services (when they charge for a service). For
instance, telecoms will be able to apply the
old VAT to bills issued in January 2011 for
services rendered to customers in December.
10 AMERICAN INVESTOR DECEMBER 2010
As Grunwald explained, “It may seem obvi-
ous, but when you look at the construction of
VAT regulations it is not certain, because the
law provides a bit more complex way of deal-
ing with VAT in prepayments by saying that
you need to apply the rate that is applicable
on the last day of the settlement period.
Imagine water suppliers: The meters are
checked once a quarter, so how should this
be settled? What rate of VAT should be ap-
plied to those bills?”
Another set of problems will be faced by
companies which have already produced
some supplies and stockpiled them for sales
in 2011. If the price is printed
on the label there is no way
to change it. This means that
the seller will have to cover
the difference because it can-
not sell the item for a higher
price than indicated on the
label, but will have to pay the
higher VAT. This may not turn
out to be a problem if the
government comes up with
additional regulations that
would allow sellers to tem-
porarily avoid the cross-set-
tlement price for a certain pe-
riod. Work is underway on
these regulations, Grunwald
said.
There is yet another ele-
ment to rollout of the new
VAT rates, which concerns
correction of invoices. As
Grunwald said, “What if we
issue some invoices in 2010,
and in 2011 it may transpire With new VAT regulations U.S. companies will have
that an improper value of the no choice but to leave their VAT dollars in Poland
transaction was used or the parties agreed to
increase or decrease the value? Then they
need to issue their correcting invoices. The
point is, which rate should be used for that?”
Grunwald noted that these things happen
when initial prices of some goods are later
amended through an agreement between the ices and all other supplies of services without
producer and seller so that sales go better.
“So which VAT rate should be applied to the
correction? The old rate reflects the original
transaction, but the new rate may also be ar-
gued, because the change of price was
agreed later, in 2011. So what is the key ele-
ment: the transaction or the price of the
transaction?”
There will be a problem for companies that
have enjoyed liberal Polish rules on in-house
use of goods and services, enabling certain
individuals to use the company’s goods and
services for free without any assessment of
VAT. Under E.U. law, the use of all goods,
with an exception for “low-value” goods,
should be subject to VAT. Therefore, the use
of goods that are assets of a business for
purposes other than those related to the
company’s business activity will be subject to
VAT. In particular, VAT will be imposed on
services delivered free of charge for the per-
sonal use of the taxpayer or its employees,
including former employees, partners, share-
holders, members of a cooperative, or mem-
bers of their households, members of deci-
sion-making bodies of legal persons, and
members of an association. Now it is clear
that VAT will be imposed on these free serv-
consideration for purposes unrelated to the
business activity of the taxpayer. “Poland will
no longer continue its liberal tax course in
this area,” Grunwald said.
Poland will also no longer allow foreign
companies registered in Poland for VAT pur-
poses, but without a seat or establishment in
Poland, to choose whether they charge VAT
on their services and actually pay VAT in
Poland, or issue a net value invoice, which
technically means that the VAT payment obli-
gation is shifted to the recipient of the serv-
ice, who is then required to settle the VAT in
Poland under the reverse charge mecha-
nism.
From 2011, VAT will be an obligatory pay-
ment, not a choice for the company. “Any
purchase from a foreign entity will undergo
VAT,” Grunwald said. “Foreign companies
registered for Polish VAT will not be allowed
to issue an invoice in Poland with Polish VAT.
By default, the purchaser will be obliged to
pay VAT via the reverse charge mechanism.
This seems to be a simplification of the regu-
lations, because it is quite easy to settle VAT
in the reverse charge mechanism. It may ap-
pear to be beneficial because they would not
credit the state budget. But it is not such a
brilliant change after all.”
As Grunwald explained, in the case of for-
eign service providers, in order to provide
their services they also have to buy goods
and services. “If a foreign company buys
something in Poland, it pays VAT on the
transaction. As a consequence, it seems that
with the new VAT regulations, foreign compa-
nies active in Poland will have a significant
amount of outgoing VAT but no incoming
VAT at all. How then can they get the VAT
back?” As Grunwald pointed out, in fact there
is no possibility to recover input VAT incurred
in Poland through a VAT return (recovery of
input VAT based solely on the E.U. VAT Di-
rective). “They will therefore have to submit
special applications to the tax authorities in
their country of origin. The authorities then
will have to ask the Polish tax authorities to
refund what they have paid to the company
who applied. Therefore foreign entities may
be in a position where it will be difficult for
them to get the VAT paid back to them in a
short time—if it is possible at all.”
Grunwald noted that this is exactly the
case with U.S. companies. They will not be
able to ask their tax authorities for a VAT re-
imbursement, because there is no VAT in the
U.S. (Most of the states have sales tax, but it
is a very different system from VAT.) “The Pol-
ish government therefore relies on the reci-
procity clause, arguing that as long as Polish
companies do not get paid their VAT in the
U.S., U.S. companies in Poland are also not
able to have their VAT paid back to them. So,
after all, the new VAT regulations are not a
change for the better when it comes to Amer-
ican companies.”
If it is any solace, Grunwald pointed out
that this appears to be a mistake in the new
legislation. “There is still time to provide argu-
ments to the government against this provi-
sion, so that this clause may be amended.
Many foreign investors may find themselves
in a very uncomfortable position. The govern-
ment will have to fix the problem.”
Environment & Energy Committee
All roads lead to electric
Hybrid cars will be around for a while as they com-
bine performance and low emissions. But full-elec-
tric vehicles are the ultimate destination.
F
actors determining how fast electric cars
may be introduced to the marketplace
were on the agenda of the AmCham En-
vironment & Energy Committee meeting in
November, with speakers including Andreas
Biehler, managing director of BMW Group Pol-
ska, Peter Fahrni, managing director of GM
Poland, and Arkadiusz Tomala, managing di-
rector of Mitsubishi Motor Corporation Car
Poland.
According to Biehler, BMW’s mid-range de-
velopment strategy focuses on the develop-
ment of hybrid cars as the optimal way of link-
ing the good old internal combustion engine
with the electric power of the future. The exist-
ing fuel distribution infrastructure is something
that gives customers the confidence to use
hybrids for long-range travel, while on the
other hand the development of new battery
technologies hopefully will extend the range
an electric car may travel on one charge.
“Efficient Dynamics is a new car from BMW
which has a two-cylinder turbo diesel engine
with some electric propulsion,” Biehler said. “It
has over 300 HP, and accelerates to 100 km/h
in less than 5 seconds. Fuel consumption is
below 4 liters [per 100 km], and CO2 emis-
sions are below 100 grams [per km]. That’s
what we understand as efficient dynamics.
You have a car that is fast and you can have
fun with. Being environmentally friendly does
not mean that you have to drive a very boring
car. This car comes in 2013.”
Because BMW’s customers pay attention to
the performance of their vehicles, an important
strategy for the company is development of
hydrogen cars, which emit a fraction of the
greenhouse gases that traditional cars do but
still offer high performance.
While the internal combustion engine will
not die within the mid- to long-term perspec-
tive, BMW is also developing a fully electric
city car, Megacity Vehicle, to be released in
2013. It is designed to meet the needs of
urban commuters.
It seems that hybrids will be the way to go
for a few years to come. GM’s intermediate
transitional strategy to a fully electric vehicle is
also hybrid. The concept behind GM’s
Chevrolet Volt (known outside the U.S. market
as the Opel Ampera) is to have a car which
can drive in two modes, “electric” and “ex-
tended,” which is powered by gas. In practice
the car has a 150 HP electric engine and a 1.4
liter gas engine. It can cover 60 km in electric
DECEMBER 2010
HOT DATE
Dec.08.10
Event: AmCham International Christmas
Evening
Place: Puppet Theater, Wrocław
Time: Evening
mode and 500 km in extended range.
The combination of gas and electric propul-
sion makes the vehicle a relatively good per-
former—a very important aspect for con-
sumers. According to Fahrni, “When you drive
faster than 120 km/h, both engines work. The
gas engine gears into the gear box to support
the electric drive train. Also in the extended
mode, the gas engine gears in to help propel
the vehicle. In practice it means that regard-
less of the mode you are in you always have
the same power on the vehicle.”
Fahrni added that governments have a
huge role to play in making low-emission cars
more affordable for consumers. “In Poland it
would be advisable for the government to
change luxury taxation on cars into something
which would promote low-emission vehicles.”
High performance is not the main concern
at Mitsubishi, a company with a history of all-
electric car production dating back to the
1970s. It already has one all-electric model on
the market, the MiEV, with an energy source
that is a new generation of lithium-ion battery
developed by Mitsubishi in cooperation with a
U.S. company. Several thousand MiEV’s have
already been sold in Japan. After changes to
meet E.U. regulations it is coming to Europe.
The pivotal point for the MiEV commercial
rationale is that 80% of consumers drive less
than 80 km on workdays, which is within one
battery charge for the MiEV, and practical for
users given that they can charge their electric
cars at night. Tomala said that an important
aspect for all-electric drivers is the availability
of quick-charging infrastructure, without which
they are afraid they may get stuck in traffic.
“Quick chargers help more people decide to
buy electric cars, as experience shows from
Japan,” Tomala said. “Research shows that
they do not necessarily use those quick
chargers, but they are happy to know that
they are there in case they need them.”
Tomala added that while there are no quick
chargers in Poland so far, the company is
working to install some within a year.
For Tomala, the electric car is the ultimate
answer to the problem of CO2 emissions gen-
erated by private vehicles. Mitsubishi forecasts
that the biggest demand for electric cars will
come from Europe when E.U. countries intro-
duce a tax on CO2 emissions: “More than 50%
of all electric cars will be sold to Europe. Prob-
ably some will come to the U.S. and some of
them to Japan.”
AMERICAN INVESTOR 11
HOT DATE
Dec.15.10
Event: AmCham Defense Committee
meeting with Malcolm Ross O'Neill, As-
sistant Secretary of the U.S. Army
Place: InterContinental Warsaw
Time: 8:30 A.M.
Energy & Environment Committee
Landfills may be good sources of energy because they contain methane deposits
There’s gold in that greenhouse gas
The need to cut methane emissions brews new business opportunities
I
n November Tom Frankiewicz from the U.S.
Environmental Protection Agency met with
the AmCham Energy & Environment Com-
mittee to showcase the EPA’s Landfill Methane
Outreach Program, which seeks to limit emis-
sions of methane, a gas that contributes signif-
icantly to the greenhouse effect.
Frankiewicz, who is the manager of the pro-
gram, said that methane is the second most
important gas, after carbon dioxide, responsi-
ble for the greenhouse effect. Therefore it is
critical that methane emissions, estimated to
rise by 23% over the next 10 years, be re-
duced worldwide—particularly given that
methane’s global warming potential is esti-
mated to be 20–25 times higher than that of
carbon dioxide, the gas viewed as the main
culprit behind global warming because of the
massive scale of CO2 emissions.
But methane, unlike CO2, is also an energy
source, and this offers opportunities for busi-
ness. “The agency has two main goals,” said
Frankiewicz, “and they are based on the na-
ture of methane: to capture the gas and utilize
it as energy.”
The program was initiated in 2004, but this
summer the U.S. and Mexican environment
secretaries worked together to re-launch
methane to markets as the Global Methane
Initiative. The program has been expanded to
include wastewater, which is one of the top
methane-emitting sources, so now it covers
landfills, wastewater, oil and gas, coal and
agriculture. The U.S. brings to the program 14
years of experience with utilizing methane as
an energy source, including 10 years at the
12 AMERICAN INVESTOR DECEMBER 2010
EPA.
“We are just starting to work with multina-
tional companies,” Frankiewicz said. The EPA
offers technical assistance on projects, train-
ing and capacity building to help others go
out and assess these projects. However, as
Frankiewicz explained, because of U.S. fed-
eral contracting requirements, the EPA cannot
contract directly with a foreign company. “The
arrangement will be a subcontract. There are
different contract vehicles, but we work in part-
nership with different American and foreign
companies. This capacity building is through
subcontractor relationships or grantee rela-
tionships for building the capability within the
country to do this type of work.”
Frankiewicz noted that the agency’s objec-
tive is purely environmental, and it does not try
to promote specific companies or technolo-
gies. He said that although methane recovery
from landfills and other sources can bring sig-
nificant benefits for communities, such as be-
coming local energy sources which may con-
tribute to the development of sustainable en-
ergy techniques, the barriers for development
include a lack awareness of emission levels
and the value of lost fuel. The strength of tradi-
tional practices is also a problem, as are regu-
latory and legal issues, as well as the uncer-
tain investment climate.
There is a big role for business in the devel-
opment of landfill-based energy sources, be-
cause they require specific infrastructure, such
as pipelines to deliver methane from the
source to the end user.
There are already success stories. General
Motors uses four direct sources of methane
gas, which saves the company a total of over
USD 2 million a year. BMW expanded its
methane energy project so that it now saves
USD 1 million on energy bills. With its link to a
methane source, NASA saves over USD
350,000 a year of taxpayers’ money.
Based on the initial successes of many pio-
Photos: Tom Ćwiok
neers, the EPA now handles requests from 20
international companies which have asked for
assistance to identify landfill opportunities.
The agency is active in Poland through its
Global Methane Initiative as well.
Mark your calendar
DECEMBER 8, 2010
Time: evening
Place: Puppet Theater, Wrocław
Event: AmCham International
Chrismas Evening
DECEMBER 13-14, 2010
Event: 11th Polish-American Conference on
Science and Technology
Place: Main Conference Room of the Min-
istry of Economy
R.S.V.P.: Przemysław Szpojnowski,
przemszp@ilot.edu.pl, or 22 846 00 11 ext. 552.
DECEMBER 15, 2010
Time: 9:00 A.M.
Place: AmCham Board Room
Event: Health Committee meeting
For updates on our events visit:
www.amcham.com.pl
European Union Affairs Committee
Profiting from the Presidency
New member states use the rotating E.U. Presidency to achieve regional goals
T
he Belgian Presidency of the Euro-
pean Union was about balancing the
old ways of the union with new posi-
tions created by the Lisbon Treaty, namely
the E.U. president and the E.U. foreign min-
ister, according to Belgian Ambassador to
Poland Raoul Delcorde, who met with the
AmCham European Union Affairs Commit-
tee in November.
The Belgian presidency is the second in a
“trio” with Spain and Hungary. The concept
of trios was another innovation of the Lisbon
Treaty, aimed at keeping certain issues on
the agenda for longer than a single presi-
dency, which lasts only six months. Spain
held the Presidency for the first half of 2010, that we are not able to run the presidency.”
and Belgium will turn it over to Hungary for
the first half of 2011.
Ambassador Del-
corde said that for the
Belgian government,
diplomats and civil
servants, the E.U.
Presidency is almost
business as usual, as
the capital of Belgium,
Brussels, happens to
be the capital of the
European Union as
well, and Belgium has
now held the presi-
dency for the 12th
time since the cre-
ation of the European
Union in 1993. “The
essence of the E.U.
Belgian Ambassador Raoul
Presidency is actually Delcorde
about striking a good
balance between the ambition of the presid-
ing country and the political reality of the
union,” Delcorde said. “This is universal and
applies to any country which has chaired
the E.U. Presidency and will chair it.”
The Belgian Presidency, four months in at
the time of the meeting, has cost the Bel-
gian government EUR 120 million. It has fo-
cused on finding a balance between differ-
ent E.U. institutions and E.U. governance,
which provides a new regulatory environ-
ment under the Lisbon Treaty. “This is about
structure coordination, the organization of
the E.U. External Service, and the willing-
ness to make the E.U. policy credible,” said
Delcorde.
The ambassador said that because of its
huge experience in running the business of
the E.U. Presidency, Belgium is comfortable
handling the requirements of the presi-
dency. “For new E.U. states, however, such
as Poland, the E.U. Presidency, when
chaired for the first time, has a symbolic im-
portance that the countries may try to ex-
plore and exploit for their own ends.”
This view was confirmed by Hungarian
Ambassador to Poland Robert Kiss, who
also appeared at the AmCham event. Kiss
said that from the international point of view,
the presidency is a great responsibility for a
presiding country which is a new member
state of the European Union. “We are still
seen as newcomers in the club,” the ambas-
sador said. “If we fail with our presidencies
it will be easy for the general public to say
Hungary, like Poland, sees the presidency
as a unique opportunity for the region to be
more visible. “We are not talking
about manipulating or modifying
the E.U. agenda,” Kiss said.
“But the two presidencies are
one after another, and it is an
opportunity to showcase the
problems of the region, trying to
win more attention to it from
other partners in the commu-
nity.”
As far as the Hungarian priori-
ties are concerned, although
they had not been agreed on
yet by the Hungarian govern-
ment by the time of the Am-
Cham meeting, Kiss said that
they will focus on a discussion
of common E.U. policies, such as
the common agricultural policy
and the cohesion policy. “We will
try to focus on better economic policy coor-
dination between all countries of the Euro-
pean Union,” he said, referring to the new
E.U. economic development strategy called
Europe 2020, which seeks to make the
union the most economically competitive re-
gion of the world by 2020.
“The reform of the European cohesion
policy is another important issue,” Kiss said.
“The present evolution of the European co-
hesion policy is quite conservative. We are
for keeping the cohesion policy as an impor-
tant part of the E.U. policies, because we
believe that it is a part of the E.U. integration
and making Europe a successful competitor
on the world scale.”
Another issue is the union’s policy to-
wards its eastern neighbors. “Eastern part-
nership is not a Polish specialty, and Poland
is not the only country that is interested in
DECEMBER 2010
HOT DATE
Dec.15.10
Event: AmCham Health Commitee
Meeting
Place: AmCham Board Room
Time: 9:00 P.M.
it,” Kiss said. “It is a part of the common Eu-
ropean foreign policy and it cannot be neg-
lected. We will organize an Eastern Partner-
ship Summit in Budapest next year, with a
special role for Poland.”
Hungary will also do its best to help Croa-
tia enter the union. Hungary believes that
despite “enlargement fatigue”—the prob-
lems with E.U. policy integration across new
member states—the union should not close
its doors to new entrants. Enlargement fa-
tigue is a managerial issue, Kiss said, while
the question of E.U. enlargement is a
geopolitical and security issue.
Discussing Hungary’s role in shaping E.U.
security policies, Kiss said that energy secu-
rity is a big issue for his country: “We be-
lieve that we need more European energy
policy,
not less.
We will
initiate a
major
and seri-
ous de-
bate on
this sub-
ject dur-
ing our
presi-
dency,
starting
with an
Energy
Summit
in Brus-
Hungarian Ambassador
sels, and Robert Kiss
it will be
an important message as well that we take it
so seriously.”
The development of the E.U. community
is another big issue for Hungary. “We will
put on the table the idea of bringing the
union closer to its citizens,” the ambassador
said. “We have different views about it and
different fields where we can act, but we
want to speak about civic rights, cultural
rights, and maintaining cultural diversity as
a significant part of the overall economic de-
velopment of the European community. In
this scope Hungary would like to include the
issue of the Roma people living in Europe.”
Poland, which will take over the E.U. Pres-
idency from Hungary for the first half of
2011, will be the first presiding country in
the next trio, followed by Denmark and
Cyprus.
AMERICAN INVESTOR 13
AMCHAM: Guide to Committees AMERICAN INVESTOR: Advertising rate card

For the most recent information about the work of AmCham Committees, and upcoming events: www.amcham.com.pl

Agri & Food European Union Affairs Pharmaceutical American Investor

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www.amcham.com.pl/agri_food www.amcham.com.pl/eu www.amcham.com.pl/pharmaceutical
Mission: To provide a plat- Mission: To provide Mission: To discuss and
form for discussing and members with relevant identify common interests

Fields in dark blue represent advertising format and how it looks

solving issues and identify- information on E.U. re- and exchange information re-
ing opportunities for com- lated issues, including garding Poland’s pharmaceu-

on single page or spread.

panies in the agricultural
and food sector by creat-
ing a base for dialogue and expertise leveraged
among producers, sector professionals, experts and
decision-makers. Co-chairs: Andrzej Pawelczak,
Animex; Maciej Łubieński, Universal Leaf Tobacco
Poland.
Consumer Products
www.amcham.com.pl/consumer
Mission: to provide a
forum to share knowl-
edge and exchange ex-
perience in all areas
common and relevant to
manufacturers and dis-
tributors of goods. Co-Chairs: Małgorzata Surdek,
CMS Cameron McKenna; Agnieszka
Dzięgielewska-Jończyk, HP Polska.
Corporate Social Responsibility
www.amcham.com.pl/csr
Mission: To encourage and
facilitate responsible busi-
ness practices among Am-
Cham members to support
them to improve the quality
and effectiveness of their
CSR programs. Co-Chairs: Wojciech Arszewski,
UPS Polska; Anna Jawor, IBM Polska.
Defense & Security
www.amcham.com.pl/defense
Mission: To serve as a plat-
form for defense industry is-
sues and exchange relevant
information. The committee
creates a networking forum
and fosters a positive work-
ing relationship with the government and people of
Poland. Co-Chairs: Leda Zilinskas, Raytheon Inter-
national; Paul Zalucky.
E.U. funds, and to repre- tical market; to act as a repre-
sent American investors sentative body and collective
before the Commission and the Polish govern- voice of pharmaceutical companies before governmen-
ment. Co-Chairs: Magdalena Burnat Mikosz, De- tal institutions. Co-Chairs: Peter Koetsier, Bristol-Myers
loitte; Jerzy Thieme. Squibb Polska; Roberto Servi, Eli Lilly Polska.
Technical note
Financial Services Prices in Polish złoty.
www.amcham.com.pl/financial Political Discussion Forum
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Mission: The Financial 22% VAT.
Services Committee aims Mission: To build relation-
ships with key players in For discount schemes,
to identify and promote is-
sues related to and in sup- Polish politics, regardless of and prices of advertis-
whether within the govern-
port of the financial serv-
ment or not, in small groups
ing on AI covers, please
ices sector, as well as to
provide a forum for dialogue among sector profes- and in private settings, to contact AI editor.
sionals and decision-makers in government. Co- serve as a vehicle into the
Chairs: Andrew Hope; Adam Michon, MetLife. world of Polish politics behind official curtains. Co-
chairs: Richard Knauff; Marek Matraszek, CEC Govern-
ment Relations.
Health
www.amcham.com.pl/health
Real Estate Committee
Mission: To provide a www.amcham.com.pl/real_estate
united forum for U.S. com-
panies to share their ex- Mission: To discuss issues regarding the
pertise on the healthcare complexities of the real estate market in Quarter page Box 2/3 Box Half-page Horizontal
Poland, and exchange information. To be
system and exchange
an educational and networking forum for Size.....................87x120 Size...................120x120 Size.................180x125
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with national counterparts, contribute to the positive members and to lobby and influence leg- Price.......................1,100 Price.......................1,500 Price.....................2,500
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perience and capital while establishing the best con- ment. Chair: Halina Więckowska, K & L Gates.
ditions and opportunities for investments.Co-Chairs:
Elisabeth Asirifi, IBM Polska; Jolanta Chlebicka-Do-
miniak, Johnson & Johnson. Small & Medium-Sized Enterprises
www.amcham.com.pl/sme
Infrastructure Mission: To provide a forum
www.amcham.com.pl/infrastructure for exchange of ideas/best
practices to improve the per-
Mission: To discuss is- formance of SMEs; to iden-
sues of the development tify and promote solutions to
of infrastructure; to pro- facilitate and support the
mote infrastructure solu- managerial and operational
tions for cooperation be- efforts of SMEs through educational, networking or lob-
tween private and public bying efforts that leverage the resources and knowl-
partners. Co-Chairs: Krzysztof Wierzbowski, edge of AmCham and its membership. Co-Chairs:
Wierzbowski Eversheds; Andrew C. Kapusto, Alain Bobet; Cezary Krasodomski, Cisco Systems.
Raytheon Homeland Security.

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together interested part- create an educational forum to
HR professionals and so-
ners; to share information keep AmCham members in-
cial policy experts from
with decision-makers and formed on current and up-
multinational and local law enforcement. The police, judiciary, prosecu-
companies to share, dis-
coming legislation. To create a Technical note
tors, customs officials, legislators and journalists network to share information, comments and best prac-
cuss and learn about the latest trends in HR man- are among the target groups, while the curriculum tices. To lobby decision-makers in the government.
Measurements: width
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Mission: To provide a plat- AmCham umbrella for the exchange of Note that full page resolution and CMYK
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develop their environmental fying and addressing com- the telecommunications sector in Poland; ad requires bleed color
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ness and help learn about, in telecommunications legislation, policy
identify and overcome any
lated to high tech opera-
and practice; to promote innovative trends in telecom-
each edge.
tions; to maintain contact
difficulties connected with with local authorities, educational and governmental munications; to modernize communications technol-
environmental laws, and develop a discussion forum institutions to present a unified business perspective ogy for business and the average Polish consumer.
among members about environmental issues and and to suggest ways of possible cooperation. To Co-Chairs: Jarosław Roszkowski, Crowley Data
maintain contacts with Polish authorities responsible
for making and implementing environmental policies.
identify the possibilities/areas of state assistance, to Poland. For more information about American Investor contact magazine editor Tomasz Ćwiok at
share experience and leverage knowledge. Co-
Co-Chairs: Adam de Sola Pool, Jerzy Chlebowski, Mit- Chairs: Ramón A. Tancinco II, Cisco Systems tomasz.cwiok@amcham.com.pl or call +48 22-520-9553 or +48 506-536-551
subishi. Poland; Jacek Stryczyński, Lionbridge.

14 AMERICAN INVESTOR DECEMBER 2010 DECEMBER 2010 AMERICAN INVESTOR 15


Virtual melting pot
There are more drivers of electronic media con-
vergence than technology itself. With diverse con-
sumer attitudes to different media across regions
and demographics, no single business model that
is sustainable for the longer term appears any-
where on the horizon.
16 AMERICAN INVESTOR DECEMBER 2010
COVER STORY: Media convergence
A
pparently dissatisfied with the advertis-
ing revenue its website was generating,
the New York Times announced earlier
this year that it will start charging “frequent
readers” for access to its website. In fact the
Times had already tried and abandoned more
limited online pay models. In the 1990s it
charged overseas readers, and from 2005 to
2007 its TimesSelect service charged for ac-
cess to editorials and columns. It did not
work.
In November, in London, The Times and
The Sunday Times closed access to articles
on their websites for non-subscribers. James
Harding, editor in chief of The Times, said
that fewer users of the website than antici-
pated had dropped out as result of the
change. As of the end of 3Q 2010, the two ti-
tles had a total of 189,000 paid subscribers,
twice the number they had at the beginning
of the year, according to the publisher, News
Corp.
In Poland, the major dailies and weeklies
are not talking about charging for online ac-
cess to their content. Presspublica, the pub-
lisher of Rzeczpospolita daily, charges for
downloads of one of its supplements, “Plus-
Minus.” Kraków-based Dziennik Polski
charges PLN 25 a month for access to its on-
line version. The major national dailies—
Rzeczpospolita, Gazeta Wyborcza, and
Dziennik Gazeta Prawna—generally rely on
selling advertising.
But selling interactive ads is no piece of
cake. Last October Internet Group, a Polish
and CEE specialist in marketing across new
media platforms whose affiliated network of
websites, Ad.Net, claims 13.5 million Inter-
net users a month, was declared bankrupt by
a district court.
Mobile phone operators, who also provide
their subscribers with wireless Internet ac-
cess (including television), are not faring
much better. Vodafone has announced it is
happy to sell its 75% stake in Plus, one of the
largest GSM operators in Poland. “Virtual”
mobile phone operators are struggling to sign
up enough subscribers to make their busi-
nesses commercially feasible. Some never got
beyond the planning stage. Others, such as
wRodzinie, a network opened last year by the
Radio Maryja Catholic televangelism empire,
is now quarrelling with the network operator.
These are just a few examples suggesting
that in the midst of media convergence, no
business model has yet proved sustainable.
too many factors?
One of the big promises of online advertising
is that media providers could track Internet
users as they browse the World Wide Web,
collect information about the sites they visit,
and based on that, send them only the adver-
tising that matches their profile. This could
work as long as users provide accurate infor-
mation and, less likely, allow “cookies” to
send out tracking data from their computers
to feed interactive ad network operators’
databases.
And with the advent of portable devices
such as smart phones, online advertising has
become the bane of users. Popup ads not only
disrupt web browsing on the small screens of
handsets, but oftentimes obliterate it alto-
gether.
There is yet another mystery for interac-
tive businesses to solve. Users of mobile
phones with Internet access comprise a com-
pletely different group of consumers, who
follow different patterns in their use of online
resources than users of PCs and laptops. The
dividing line runs across the users’ genera-
tions, the type of phone they use, and their
geographic location.
The markets for converged media, which
embrace information, communications and
entertainment, with their emerging and sub-
siding trends, consumer behavioral patterns
and technological impact on consumers’ likes
and dislikes, have been analyzed by KPMG
every year for the past four years. The latest
edition of the KPMG report, Consumers and
Convergence, compiled in July this year, cov-
ers 20 markets all over the world, including
the U.S., Canada, Mexico, France, Germany,
Italy, Poland, Spain, Korea, Japan and India.
The report concludes that media conver-
gence has become a fact of life, while its
many implications are the determinants for
future business models to be invented for an
interactive, mobile world.
clinging to “old” ways
One of the facts revealed by the report is that
the not-so-old world of wired network access
to the Internet is dying hard. Globally, 84% of
consumers said that they continue to use a
wired Internet connection. The reasons are
many, but the most prevalent one is “tradi-
tion” and a concern for senior family mem-
bers who prefer to use landline phones (In-
ternet is often provided over phone line con-
nections) and often enjoy special low rates.
There are also technical reasons wired ac-
cess is still popular. Wireless access from
GSM operators can be slow, unreliable, and
unavailable in certain spots. And consumers
who often make international calls tend to
stick to landline phone providers because
their charges for international calls are much
more agreeable than those offered by GSM
operators.
Another reason consumers do not jump on
the offers from wireless Internet providers is
that there is no one universal way of using
mobile phones (voice calls, but also SMS and
data exchange), and therefore no one price
model for services that could dominate the
market. This means that consumers pick the
schemes that best suit their needs and budg-
ets, and they differ substantially from con-
sumer to consumer.
KPMG partner Jerzy Kalinowski ex-
plained, however, that no-limit plans for voice
calls are becoming more and more popular
globally, at least as far as mobile phones are
concerned. “For USD 120, AT&T offers un-
limited voice calls,” Kalinowski said. “No
such offer exists in Poland, but also not all
consumers really need that.”
DECEMBER 2010
The report concludes that it won’t be any-
time soon that GSM wireless replaces land-
line phones altogether. This of course is of
paramount consequence to the players in the
market.
what do they do?
It is no big surprise that the technological
advance in Internet-capable hardware pro-
gresses at a much faster pace than the Inter-
net-related behavior of consumers. Globally,
users mostly rely on the Internet for brows-
ing websites and for e-mail. Just as it has
been for years, the primary tool for support-
ing those activities is a personal computer.
However, new trends are emerging, and
emerging fast. Consumers with mobile
phones feel less and less constrained about
hooking up to the net. Their preferred web-
sites to visit are those that offer information,
often the websites of renowned press titles
such as the New York Times. In Poland, the
Onet portal is atop the list.
A relatively large group of consumers, 11%,
said they use mobile phones for connecting
to online social networks such as Facebook or
LinkedIn. Games are a popular time-killer
when travelling. The KPMG report revealed
that among the new trends in using mobile
phones are those connected with personal fi-
nance and banking. The new trends were the
strongest in Asia and within the youngest
consumer group, age 18 to 25.
what they can pay for
Perhaps the most interesting (and surpris-
ing) part of the KPMG report is the analysis
of the willingness of consumers to pay for on-
line services and “goods.” Globally, as many
as 57% of the sample said they do not want to
pay. “We have to understand that this is a
consequence of a business model that
emerged in the late 1990s,” said Kalinowski.
“Consumers have gotten used to it, and they
are disinclined to pay for content or services,
in both mobile and stationary Internet.”
With this comes a conclusion that there is
a group of Internet users who are willing to
pay, mostly for purchasing video and music
online. But they will pay for only the items
that they think are of value to them. The
group includes both mobile and stationary
Internet users, but the latter make up a much
larger group. Free applications are popular
with mobile phone users. Kalinowski noted
that 1 in 10 users of Apple’s online service
iTunes who download applications chose ap-
plications that they have to pay for to down-
load. “This proportion should be taken into
consideration when devising business mod-
els for paid access to content and services.”
interactive advertising
Websites that do not know how to make con-
sumers pay for content, services or applica-
tions have no choice but to sell interactive
advertising to cover their costs.
Yet, as the KPMG survey revealed, online
advertising is becoming an increasingly diffi-
cult way of making money. And when it car-
AMERICAN INVESTOR 17
COVER STORY: Media convergence
Older people have difficulty using certain functions of mobile phones.
Because of poor eyesight they tend to avoid activities that require on-screen
reading before making decisions and pushing the “yes” or “no” button. With
an aging population, this could be bad news for mobile marketers.
ries over to the mobile Internet, it becomes
an intrusive artifact of the Internet’s desktop
computer infancy.
The first conclusion is that no matter
where they live in the world, all consumers
are more willing to tolerate online advertising
while browsing the Internet from their desk-
top computers or laptops, rather than mobile
phones. The reason is simple: while a com-
puter screen is usually big enough to accom-
modate an interactive ad without interfering
with the overall browsing experience, a hand-
set screen is not.
Apart from popup windows displayed in
web browsers, mobile marketers often use
SMS and voice ads from the era preceding
access to mobile services. While SMSs can
easily be ignored by consumers, voice ads
cannot. “The models of mobile advertising
therefore differ significantly from those for
desktop computers,” Kalinowski said.
While they are generally hostile to advertis-
ing in mobile phones, consumers are ready to
accept it if they are given something extra in
return: more free voice calls, access to games
or entertainment platforms, music, movies,
or more megabytes of data exchange, maps
and GPS navigation services, or, least favored
by consumers, business applications. This is
not all, however. As Kalinowski said, “What is
important for consumers is that the advertis-
ing they receive fits their profile.”
the challenge
But adjusting advertising to match their au-
diences’ business profile is something mar-
keters find confusing. On the one hand, al-
18 AMERICAN INVESTOR DECEMBER 2010
most universally, consumers are disinclined
to reveal their personal data, and they disable
cookies and other activity tracking programs.
But without that data, marketers cannot
begin to think of personalized advertising,
even though they recognize that personalized
advertising is the way to go—the only way
forward. “Unless interactive marketers arrive
at full micro-segmentation, they will not
know who is interested in exactly what,” said
Kalinowski. “Until then, interactive advertis-
ing in not going to be enjoyed by consumers
either.”
One of the barriers for marketers in ob-
taining reliable personal data from mobile
phone users is the users’ fear for data safety.
Such data as passwords, credit card numbers
and other personal information are obviously
sensitive. Consumers generally believe that
mobile phones are not super-reliable devices
for storing such data. “The fear is not fully
justified,” Kalinowski said, “but nevertheless
it is how consumers see things. That is why
there is no universal agreement for services
that could have been much more popular in
mobile Internet than they actually are.”
The KPMG survey revealed that despite
their concerns about data security, mobile
phone users generally do not mind disclosing
their activities and behavior to marketers.
“Consumers are not secretive about what
they do, where they go and what they use,”
Kalinowski said. “This is an area for mar-
keters to collect data and compile a much
better personalized advertising offer for con-
sumers.”
age divides
Another interesting finding of the KPMG
study is how consumers’ age shapes their at-
titude to services and content offered via mo-
bile phones. The older they are, the less in-
clined they are to pay for access to content
available online. As many as 88% of the sam-
ple age 65+, and 72% of those between 55
and 64, said they would refuse to pay. This
may be explained by the fact that they stick to
print and are less used to thinking of the In-
ternet as their source for daily news.
Those most willing to pay for access to on-
line content were consumers age 25 to 34,
where “only” 52% of the sample indicated
their disapproval of paying for content. Sur-
prisingly, the youngest group of respondents,
16 to 24, said they would not be willing to pay
for content. Only 12% of that age group said
they would pay, while 28% said they would
pay but only for access to specific content of
their choice.
Age not only affects the willingness to pay
for content, but also consumers’ expectations
of what they should receive in exchange for
their consent to be exposed to more advertis-
ing. Among those who agree to receive adver-
tising in exchange for value-added services,
consumers age 65+ are the most inclined to
receive fairly basic services, such as more
voice call time or SMS exchange capability
for the same price, while only 14% of the
sample would be willing to have more ads in
exchange for free access to entertainment
services with music and games, 35% for ac-
cess to information services such as maps
and restaurant guides, and 19% to business
applications. In other words, for seniors, the
preferred use of mobile phones is for voice
calls.
Their conservative outlook is also visible in
their attitudes toward collection of marketing
data. The older users are, the less inclined
they become to share their personal data with
marketers. As many as 58% of the sample
said they would not share their data under
any condition. By contrast, only 40% of the
sample in the 16–24 and 25–34 age groups
expressed this reservation, and 39% in the
35–44 age group. Fewer than 1% of the sam-
ple age 65+ said they would willingly share
their personal information with marketers.
According to Kalinowski, older people have
difficulty using certain functions of mobile
phones. Because of poor eyesight, for in-
stance, they tend to avoid activities that re-
quire on-screen reading before making deci-
sions and pushing the “yes” or “no” button.
“If they don’t have big fonts available on their
mobile phones, older people naturally try to
avoid additional services that require working
with the phone’s user interface.” With an
aging population, this could be bad news for
mobile marketers.
mobile finance
One of the new trends that the KPMG survey
captured is that mobile phone users are be-
coming increasingly willing to access per-
sonal finance services from their handsets. In
the 2010 survey, the percentage who had
used financial services on their mobiles dou-
bled from the previous year. “The ways they
use the services are diverse,” Kalinowski
said. “Some use mobile phones to receive
service SMSs, others to manage their ac-
counts. What is evident, however, is that
slowly but surely mobile phones are becom-
ing a tool to manage personal finance.” Glob-
ally, 28% of the sample said they had made
online financial transactions with the use of a
mobile phone.
This growing trend is connected to better
and more user-friendly interfaces available
with new smart phones. According to Kali-
nowski the trend to use mobile phones in
managing personal finances is the strongest
in Asia, but Central Europe is close behind.
hanging on to the cloud
Cloud computing, where users access data
and software stored on web servers, is not a
new thing, at least in terms of the speed with
which Internet and mobile technologies de-
velop. E-mail services that can be accessed
via a web browser, such as Gmail, have been
around for years. Yahoo and Google signifi-
cantly diversified the services available
through cloud computing, with such items as
Google Maps, which has won over the
masses. MagCloud use cloud computing to
help small magazine publishers print and sell
their products in the U.S. and the U.K. for a
fraction of the cost they would pay using tra-
ditional printing techniques. Last year, the
U.S. government gave a boost to cloud com-
puting by offering businesses in the U.S.
software and services to help them cut IT
costs. In Poland, cloud computing is behind
such popular services as Nasza Klasa.
The KPMG report revealed that cloud
computing has growth potential globally. Ac-
cording to Andrzej Rysiak, a telecom and
media analyst at KPMG, “Although at present
cloud computing applications are accessed by
computers rather than mobile phones, they
offer a huge development opportunity for
mobile phone operators because their con-
cept is strongly associated with accessing
data, etc., from any place in any time.”
The content that cloud computing users
are dealing with now most likely is photos, e-
mail, contact information, and videos.
Rysiak noted that the least popular content
stored in cloud computing services involves
personal, financial and health information.
“Cloud computing is still a sphere in which
consumers do not feel confident about data
protection and safety,” Rysiak said.
According to him, impediments to wider
use of cloud computing stem from the lack of
knowledge of how the technology works and
what it can offer to individual consumers and
businesses. “Over 30% of the respondents
said they knew nothing about cloud comput-
ing and did not have any need to use it.”
where cee is
The KPMG study found that consumers in
Poland do not differ much from other users
DECEMBER 2010 AMERICAN INVESTOR 19
COVER STORY: Media convergence
Proportionally the number of smart phones in use in Poland is only a third of
the smart phone use in Spain or the Benelux countries. There is much less
availability of smart phones for Polish consumers than in the West, because
of the relatively high price. This in turns translates into a relatively small ag-
gregated consumer experience in using the Internet via smart phones.
in Central & Eastern Europe. All reveal a
much lower inclination to pay for anything
connected with the Internet, including ac-
cess to online content, applications and
other goodies. According to Jerzy Kali-
nowski, there are two reasons for that. The
first is that the development of the Internet
in Central & Eastern Europe coincided
with the free-for-all phase of Internet de-
velopment in the West. Consumers in Cen-
tral & Eastern Europe got hooked on that
business model and are not eager to con-
vert. Another issue is that social condem-
nation of pirated software is much less ex-
plicit in this part of the world. “In the ini-
tial phase of our political transformation,
the dissemination of pirated software was
very popular,” Kalinowski said. “At present
it is not as much stigmatized as it is in
Western societies, which perceive dealing
in pirated software as deeply unethical be-
havior.”
Because they have a different economic
heritage, consumers in Poland and other
CEE countries have developed their spe-
cific attitudes to various aspects of online
and mobile commerce, ranging from atti-
tudes to advertising and sharing personal
data, to preferences for computers versus
mobile phones in accessing certain online
services.
Consumers in the region are less toler-
ant of interactive advertising on mobile
phones than consumers in other parts of
the world. According to Kalinowski this is a
side effect of the intense bombardment of
20 AMERICAN INVESTOR DECEMBER 2010
foreign-made TV commercials that con-
sumers in the region were exposed to and
grew to dislike. “Those commercials were
not perceived as suiting the local market,”
Kalinowski said. “The same applies now to
consumers who use mobile phones. They ex-
pect ads to suit their needs.”
Consumers in Central & Eastern Europe
have a lower inclination than the global aver-
age to share their personal data with mar-
keters, but at the same time their concerns
about personal data safety are much lower
than globally. “This may stem from the rela-
tively low knowledge of the real threats to
data safety in mobile Internet,” Kalinowski
said. “There have been no spectacular data
breach cases in the region which would open
the eyes of the public to the problem. As a re-
sult, consumers in the region have not devel-
oped any strong opinions about this issue
yet.”
Poland-specific
Along with measuring qualitative differences
between consumers globally and in Central &
Eastern Europe, KPMG took a look at the
ways consumers in Poland are specific as
compared to the global consumer. The dif-
ferences are not big. Polish consumers are
more inclined than their global colleagues to
keep their telephone landline up and run-
ning. Older consumers especially tend to put
more faith in wired connections, which they
perceive as more reliable than wireless.
Younger consumers tend to perceive phone
lines in terms of providing a more reliable
and faster connection to the Internet. As in Poland it was only 10%,” Kalinowski said. nowski said, “Many consumers in Poland payment for rights to songs sold online. The
compared to the global results of the survey, He explained that this is linked with Poles’ think cloud computing is for business only.” regulatory hassle, combined with the notori-
only a tiny fraction of the sample surveyed in above-average tendency to take risks when ous inclination of Polish consumers to swap
Poland said their primary reason for main- they start using new services. “Partially it is impediments to growth pirated software, caused Apple to decide not
taining a fixed-line connection was to sup- also connected with lower-than-average According to Kalinowski, customers’ use of to offer iTunes on the Polish market.
port Internet television. knowledge of threats to personal data on the Internet-enabled hardware is determined to a Another major hurdle for successful Inter-
When asked about the reasons they might Internet and the lack of negative experience large degree by the user interface. Thus net-based business is consumer confidence
change phone operators, Polish consumers with it.” older-style mobile phones with small screens in the safety and security of their personal
said the main one is the quality of service, Polish consumers are venturing into online naturally encourage voice calls and basic data entrusted to interactive companies. Al-
coverage and pricing, and that is consistent banking services. While their preferred tool SMS exchanges, rather than accessing online though in Poland there has been no major
with global trends. A Poland-specific trend, for online banking is still the PC, the per- content through the browser. abuse in this respect, consumer recognition
however, is to downplay the importance of centage of respondents who said they use But web-enabled smart phones also fall of potential threats is growing. “Mutual con-
the quality of customer support. The variety mobile access to personal financial services short of consumer expectations, because the fidence of all sides concerned in business is a
of phones available from the given operator, at least once a month is twice as high as in ease of Internet use is below that offered by must,” Kalinowski said.
however, plays a much higher role here than the West. Even more peculiar, Poles access laptops, not to mention desktop computers In terms of cloud computing business
it does globally. According to Kalinowski, this personal finance almost exclusively to man- with big screens. A merger of the two func- models, it seems that globally cloud comput-
is because Poles have became accustomed to age their bank accounts. “Investment trans- tions, mobility and an easy-to-use interface, ing is slowly gaining the upper hand over the
fishing for cool new phones available from actions are nearly absent here,” Kalinowski is perhaps the ultimate solution for providing older model that required software to be in-
different operators for a token price linked to said—much less popular than in Western economically feasible mobile and interactive stalled on each consumer’s computer. For
a subscription commitment. Europe. services. Here it seems that the tablet com- business users, cloud computing offers sig-
The way consumers use Internet via mo- Poland also has a long way to go before puter is a game-changer. “Tablets radically nificant cuts in IT-related costs, because
bile phones is similar to global trends. consumers recognize cloud computing as alter consumers’ experience in dealing with there is no need to buy software upgrades or
Phones are favorite tools for accessing social something they need. Although as many as mobile Internet,” Kalinowski said. KPMG is boost disc space. But it seems that cloud
services online, such as Facebook. Poles are 50% of the sample in Poland said they use thinking of focusing on tablets in its next an- computing has a long way to go before it is
also less inclined to use personal computers cloud computing, which is close to the global nual study of consumer and media conver- universally recognized and acknowledged by
to access personal finance services. average, they pointed to many barriers in ac- gence. business. Globally 38% of the sample said
Poles are among the least willing to pay for cessing cloud computing, including the lack When it comes to selling music online, a they were not aware of cloud computing,
online content. Two-thirds of respondents in of knowledge about cloud computing and problem that Poland is facing is complex reg- while 33% said they did not need such serv-
Poland said that if required to pay for access what it provides for customers. As Kali- ulations governing copyright protection and ices.
to the content they use now, they would try to
find a free equivalent. “The reason such atti-
tudes prevail is similar to elsewhere in Cen-
tral & Eastern Europe,” Kalinowski said. Pol-
ish consumers came of age online when
everything on the Internet was free, and they
have higher than average tolerance for pirat-
ing software. Those are obviously important
conclusions for any business that would like
to charge consumers in Poland for online
content anytime soon.
Another point in which Polish consumers
differ significantly from those in the West is
that they use mobile phones to access the In-
ternet much less frequently. Kalinowski
noted that this is conditioned by the type of
mobile phones that are most popular in
Poland. Older models that do not support a
convenient browsing experience remain the
most popular. “Proportionally the number of
smart phones in use in Poland is only a third
of the smart phone use in Spain or the
Benelux countries,” Kalinowski said. “There
is much less availability of smart phones for
Polish consumers than in the West, because
of the relatively high price. This in turns
translates into a relatively small aggregated
consumer experience in using the Internet
via smart phones.”
Polish consumers are also unpromising for
online marketers with mobile ambitions. In
other words, they are within the global stan-
dards: while they tend to tolerate advertising
when browsing the internet on their PCs,
they loathe seeing interactive ads on the dis-
play of their mobile phone.
Polish consumers have much lower con-
cerns about the safety of their personal data,
a trend significantly different from the global
one. “While globally over 50% of the sample
expressed fear for the safety of personal data,
COVER STORY: Media convergence

through various hoops. For the sake of cloud

computing, these rules should be changed,
the sooner the better.
Kalinowski is confident that ultimately
cloud computing will prevail, partly because
of its ability to deliver added value in surpris-
ing fields. For example, he said, “Thanks to
central depositories of medical data, doctors
will be able to diagnose patients better and
more quickly, which may revolutionize emer-
gency medical services.”

anticipating the inevitable

The development of Internet infrastructure,
both wired and wireless, is a sign of our
times. With more and more Internet users
developing more and more complex needs for
online content and applications, the demand
for data transfer capacity is growing expo-
nentially. For now there are no limits on how
much data users can transmit. Internet and
telephone infrastructure is governed by the
principle of “technological neutrality,” which
means they cannot discriminate against users
with respect to their right to send and receive
data. But the traffic is huge already.
Internet and telephone network infrastruc-
Web-enabled smart phones also fall short of consumer expectations, because ture is physical, not virtual. It costs money to Roman Rewald, AmCham Chairman, with speakers Victor Ashe, Daniel Sainz and Michał Kobosko
the ease of Internet use is below that offered by laptops, not to mention desk- build and operate. There are limits to in-

Across the aisle and over the sea

top computers with big screens.
Businesses in Poland seem to undervalue
the benefits of cloud computing. “There are
natural concerns about data safety and acces-
sibility,” Kalinowski said. He also pointed to
such practical questions as what is going to
they are not in a position to assess their fu-
ture needs for premium services.
Despite the question marks, Kalinowski
said he is positive that cloud computing will
dominate the market, and in about 10 years it
creases in data transfer capacity. There is no
free data lunch. Network data congestion is
already forcing mobile phone operators to put
restrictions on “unlimited data transfer”
packages they doled out cheaply to users.
The shakeup in the U.S. Congress should be neutral for Poland, but old
For KPMG’s Jerzy Kalinowski, there is
only one feasible solution. “It seems that the
opportunities remain underexploited

happen to your company’s data if the
provider of your cloud computing services
goes bankrupt. It goes without saying that
even a momentary lack of access to some vital
data may have dire results for sales networks
and other time-critical business.
Cloud computing is also eyed with suspi-
cion by potential customers because the
business model typically offers basic services
for free but charges a premium for service
upgrades. Users prefer not to pay, and often
will be the primary business model for online
services delivered to businesses and individ-
ual users.
Other impediments to growth of cloud
computing in Poland include personal data
protection regulations. Cloud computing re-
quires big servers, and typically they are
physically located in low-tax countries out-
side the European Union. Under the Per-
sonal Data Protection Act, personal data can-
not be sent outside the E.U. without jumping
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T
introduction of a user-based fee for sending he November election to the U.S.
data over the Internet is unavoidable, or there Senate and House of Representa-
will be limits on the amount of data users can tives, although significant in the
send free of charge.”
number of seats the Democrats lost to the
For consumers in Central & Eastern Eu-
Republicans, will have zero impact on the
rope who have grown accustomed to a virtual
development of Polish-American relations,
world where everything is free, that’s not
according to the panel of speakers at the
what they want to hear.
AmCham Monthly Meeting in November.
Victor Ashe, former U.S. ambassador to
Poland, said that the election will not have a
Tomasz Ćwiok
great effect here, except to the degree that
any commitments that U.S. President
Barack Obama makes in foreign policy that
require congressional approval are not as as-
sured of being approved as they were before,
“particularly issues governing climate
change and cap-and-trade, which did pass
the House of Representatives but never
passed the Senate.”
America remains a stable partner for
Poland in energy security, an area of strate-
gic importance in which U.S. firms have
been expressing steady interest, especially
when it comes to shale gas and nuclear en-
ergy. Poles in general, as many surveys
demonstrate, still remain one of the most
pro-American nations within the European
Union. According to journalist Michał Ko-
bosko, “The pro-American approach is
strong in Poland. It would be hard to imag-
ine what needs to change in the U.S. policy
towards Poland or Central & Eastern Europe
to negatively impact this strong pro-Ameri- nervous and uncertain of the outcome,” Ko-
can feeling significantly.” bosko said. “We have a number of nice
Daniel Sainz, from the U.S. Embassy, events and speeches by Russian and Ameri-
cited a survey conducted by the German can officials, who were saying the bilateral
relations were on a fine course, with strong
Marshall Fund of the United States, a non-
partisan organization charged with promot- indications of getting even better in future.
ing transatlantic cooperation, which found This is one point at which Poland has been
that 73% of the sample in Poland supported looking closely during Obama’s term in of-
close ties with the U.S. “The trend is cer- fice. But, also, we are looking at what may
tainly upward,” Sainz said. “Arguably the possibly happen after the new Congress is
public opinion about the U.S. did not get as in place.”
“The pro-American approach is strong in Poland. It would be
hard to imagine what needs to change in the U.S. policy to-
wards Poland or Central & Eastern Europe to negatively im-
pact this strong pro-American feeling significantly.”
MICHAŁ KOBOSKO
much of a bounce in Poland as it did in
Western Europe with the election of Obama,
but it got enough of a bounce, and Poland closer to the e.u.
came in as the most pro-American country The panelists agreed that the issue also re-
among all surveyed in Europe.” quires consideration of changes in Poland’s
Kobosko noted, however, that this is sub- foreign policy and its political activities
ject to abrupt changes. Every time the rela- within the European Union. Six years after
tions between the U.S. and Russia get a new joining the E.U., Poland is trying hard to be-
start and seem to improve, Poland is always come one of the key players, something the
suspicious that its own interests are at previous government failed to do entirely.
stake. “In 2008 a reset in U.S.-Russian rela- Poland is building new relations with Ger-
tions took place, and it always makes us many and France around such issues as

22 AMERICAN INVESTOR DECEMBER 2010 DECEMBER 2010 AMERICAN INVESTOR 23

MONTHLY MEETING:Poland-U.S. relations
clear we need a strong economic and mili-
Meet the speakers tary partner in Brussels,” Sainz said. He
added that U.S. Secretary of State Hillary
Clinton often says that a few years ago when
she visited Europe it sounded like she was
more interested in Europe’s energy security
than Europe was. “That has changed to a
large degree thanks to Polish leadership,”
Sainz said. “It is great for the U.S. to see the
Poles taking their rightful place as a leader
of the E.U.”
As Sainz put it, Poland is a like-minded
partner for the U.S. Both countries have
many shared perspectives in such areas as
Eastern policy and energy policy. “It is a
good thing that the Poles are more and more
VICTOR H. ASHE was U.S. Ambassador
engaged with the E.U.,” he said.
to Poland from 2004 to 2009—the
american business in Poland
longest-serving U.S. Ambassador to
Poland in peacetime. Ashe has had a The relationship between American busi-
distinguished career in public service. ness and Poland has been extremely strong
Prior to becoming ambassador, he since 1989 and has increased with each
served for 16 years as the mayor of passing year. Victor Ashe noted, however,
Knoxville, Tennessee. In 2003 Ashe re- that while Poland largely escaped the nega-
ceived the Distinguished Public Service tive aspects of the international economic
Award of the U.S. Conference of Mayors,
recession, which is a good thing for foreign
which he had served as president. Ashe
investors, some of the biggest barriers for
served for four years on the National
investment still remain. “I would still come
Service Corporation Board, appointed
back to what I said when I was the ambassa-
by President Bill Clinton. He also served
on the Advisory Commission on Inter-
dor, that Poland’s biggest barrier remains its
governmental Relations, appointed by infrastructure,” Ashe said. “With the fact
presidents George H. W. Bush and that the presidency of Poland and the prime
Ronald Reagan. In 2010 Ashe was ap- minister now in the same party, there is
pointed to the Broadcasting Board of more opportunity to work together and
Governors, a U.S. governmental agency there is less opportunity for excuses as to
which supervises civilian international why it did not happen.”
broadcasting. Its organizations include AmCham Chairman Roman Rewald, who
the Voice of America, Radio Free Eu- moderated the discussion, noted that five
rope/Radio Liberty, the Middle East years ago AmCham diagnosed that the rea-
Broadcasting Networks (Alhurra TV and son new highways were not being delivered
Radio Sawa), Radio Free Asia and the
was mismanagement and bureaucracy. But,
Office of Cuba Broadcasting (Radio and
TV Marti).
he said, “With the change of the govern-
ment the problems remain.”
For Ashe, the issue of highways, as well as
amendments to the Lisbon Treaty, as sug- fast train connections and convenient air
gested by Germany recently, and at home is connections between regional business cen-
busy preparing for reform of the pension ters across Poland, should be a high priority
system, with the impact that will have on the for any Polish government, because they
domestic budget deficit, and preparing to “cry out for reforms.” Ashe went on to ex-
join the Eurozone. As Kobosko said, “If you plain that building roads creates new jobs.
“Poland’s biggest barrier remains its infrastructure. With the fact that the presidency of Poland
and the prime minister now in the same party, there is more opportunity to work together and
there is less opportunity for excuses as to why it did not happen.”
look at the political side, indeed Poland will And, as he added, “New roads and trans-
now be much closer to the E.U. than to the portation infrastructure help the country
U.S.” develop economically at a higher level than
For Sainz, Poland’s involvement in E.U. it can develop without it.”
affairs is a good thing for the U.S., and the Michał Kobosko said that along with the
American government is looking forward to problems surrounding Poland’s transport
having a strong E.U. partner. “It is pretty infrastructure, there is yet another area of
24 AMERICAN INVESTOR DECEMBER 2010
development—IT infrastructure and access
to the Internet—where the country could do
better. “When you live in Warsaw everything
is more or less okay, as more and more free
access points are established,” Kobosko
said. “But leave Warsaw and 60 kilometers
away from the capital you are lost in
nowhere. Poland looks like a Third World
country when you look at IT, Internet con-
nections and infrastructure. Hopefully,
American companies can change that some-
time in the future.”
Flagship issues
While weak infrastructure is every investor’s
problem in Poland, the focus of U.S. in-
vestors is specifically nuclear energy and
shale gas exploration.
This year Poland announced a program to
develop the country’s first nuclear power
plant. Obviously, American companies who
have experience in construction of nuclear
plants and operating nuclear technology are
interested.
Poland has been found to have geological
formations similar to those in North Amer-
ica, encouraging U.S. companies to deploy
their unique technologies to explore for
shale gas deposits in Poland. The interest is
mutual. If, indeed, Poland is sitting on vast
deposits of shale gas, commercial exploita-
tion of the deposits could enable the coun-
try to break its gas dependency on Russia.
We may be skating on thin ice in both of
those areas, however, Kobosko warned.
When it comes to the development of nu-
clear energy, it seems that Poland is more
likely to partner with France, a country
which produces over 70% of its power at nu-
clear plants. Working with France would
boost European cooperation and build a
stronger position for Poland within the E.U.
Poland will be able to play the Franco-Amer-
ican competition to chose the better partner,
but, as Kobosko, said, “We need that energy
badly.”
When it comes to the exploration for
shale gas, an area in which only U.S. compa-
nies have the technological expertise, Poland
seems to have built up very high expecta-
VICTOR ASHE
tions, but the reality of the business is much
more complex. “Huge investments are re-
quired and huge challenges lie ahead,” Ko-
bosko said. He added that shale gas explo-
ration is a very new phenomenon in Poland,
and most potential locations for shale gas
exploration are in densely populated areas or
natural areas protected by law under the
Natura 2000 program. This all will create
legal problems for mining.
Kobosko said that because shale gas ex-
ploration may have a huge impact on
Poland’s future, he was happy to see that
American companies are so active in this
area. By contrast, he said, “I was a bit
ashamed that the Polish state-owned com-
panies were behind the American ones.”
Daniel Sainz also warned against eupho-
ria over shale gas potential. He said there
will be plenty of problems to solve, some en-
“You are already seeing some improved leverage because of
the prospects of significant shale gas deposits. Polish officials
are very pleased with the renegotiation of the gas deal and
improved terms for Poland, including the right to re-export gas
purchased from Russia.”
vironmental and some technological. Ac-
cording to initial reports from drilling spe-
cialists, shale gas reserves lie much deeper
in Europe than in North America.
Sainz said, however, that the issue must
not be approached without some healthy
dose of optimism and hope that the explo-
ration will lead to success for all sides con-
cerned. “Perhaps you are already seeing
some improved leverage because of the
prospects of significant shale gas deposits,”
Sainz said. “You saw really good leverage in
the gas talks with Russia. Polish officials are
very pleased with the renegotiation of the
gas deal and improved terms for Poland, in-
cluding the right to re-export gas purchased
from Russia.”
issues to solve
American businesspeople tend to perceive
Poland now as an island of economic growth
in a sea of recession in the E.U. Poland is
also seen as having a well-trained labor force
and a government that is determined to ac-
centuate Poland’s innovative edge.
But it is also common knowledge that
Poland’s potential is not being fully utilized
to promote the country’s role in U.S. policy-
making. As Roman Rewald noted, promotion
of Poland in the U.S. is one of the issues
that AmCham concentrated on during its
presidency of the Entrepreneurship Con-
gress, an association of the largest employer
organizations in Poland.
Rewald pointed out that recently a good
opportunity opened up with the creation of
the U.S.-Poland Business Council, in Wash-
ington, D.C., by a group of American com-
panies who have a commercial presence in
Poland. Rewald said the hope is that the new
organization will prove a good tool to lobby
for Poland in Washington.
But the issue of promoting Poland in the
U.S. has its mirror issue in promotion of the
U.S. in Poland. According to Sainz, Ameri-
can universities and R&D centers would
Meet the speakers
love to see more talent enrolling from
Poland. However, the country’s best and
brightest tend to choose the much less ex-
pensive programs offered by many universi-
ties across the European Union. “It is really
hard to compete with such programs as
Erasmus,” Sainz said. “We are aware of the
challenge and we are working on it. We have
the Parliamentary Youth Exchange, which
the U.S. Embassy is trying to find additional
MICHAŁ KOBOSKO is a journalist spe-
cializing in the economy. He began his
career at Gazeta Wyborcza, Poland’s
largest quality daily, then served as
deputy editor in chief of Puls Biznesu, the
largest business newspaper. Following a
A. DANIEL SAINZ
short post as deputy editor in chief of the
Polish edition of Business Week, Kobosko
funding for so more students can be in- then moved to the Polish edition of
volved in those exchanges. We are looking at Forbes, and in 2006 became the editor in
chief of Newsweek Polska. In 2009 Ko-
the possibility of doubling the number of
bosko was appointed editor in chief of the
participants in the Fulbright program every
new daily Dziennik, published by Axel
year. There have been some positive signals Springer Polska. When Dziennik merged
of U.S. corporations offering internships to with Gazeta Prawna, Kobosko returned to
young Polish professionals. So these are Axel Springer, where he now serves as
good trends that we should encourage.” publisher of Newsweek Polska and
This would be helped if Poland were a Forbes.
part of the U.S. Visa Waiver Program. Unfor-
tunately, Poles are among the few citizens of
E.U. member states who still need a visa to
enter the U.S. All the panelist agreed that
the process of obtaining a visa is cumber-
some and irritating for applicants.
“Poland should be a part of the Visa
Waiver Program,” said former ambassador
Ashe. “The fact that the rejection rate is
under 10% would have made the day had it
happened two years ago, but this threshold
no longer applies. The rate now has to be
under 3% for Poland to be eligible to the
Visa Waiver Program, and I don’t think it is
going to take place anytime soon.” A. DANIEL SAINZ joined the U.S. Em-
Ashe added that the U.S. Congress may bassy in Warsaw in 2008. He previously
make some change, at least as regards served overseas as political and eco-
Poland, but that can happen only if Presi- nomic counselor in the U.S. Interest Sec-
dent Obama makes a recommendation. “I tion in Havana. In 1998–2002 Sainz
do not think this issue is one on which there served as political and military officer at
would be partisan divisions between De- the U.S. embassies in Lisbon and
mocrats and Republicans,” Ashe said. “Of Bucharest. He also served a tour at the
U.S. Embassy in Moscow. His first For-
course the State Department may say that if
eign Service post was as vice consul at
we do it for Poland then we will have to do it the U.S. Consulate in Mexico. He also
for other nations, and then it becomes so served as principal deputy director in the
complicated. But at some point you have to European Bureau for South and Central
bite the bullet and go do it.” Europe at the U.S. Department of State
and served in the Soviet Affairs Office,
where he covered human rights issues.
Sainz earned a master’s degree in inter-
national relations at John Hopkins and a
bachelor’s degree at Whitman College in
Walla Walla, Washington.
Tomasz Ćwiok
DECEMBER 2010 AMERICAN INVESTOR 25
AmCham CEO Forum: High-performance corporate culture
Peter Strupp runs presentation for the AmCham CEOs
Implementing culture
Senior teams must work together to create an organizational culture that
reflects the company’s business strategy
R
etooling a company’s culture to serve
its business goals is not unusual. CEOs
who come to work from abroad may
immediately face two issues: the culture of the
country and the culture of the company. To
their surprise, a company with the same brand
name in different countries may be deeply
embedded in different corporate cultures, de-
pending on the country it is in. Sometimes the
prevailing culture may be holding the com-
pany back from achieving its business goals.
Then the CEO has to change it.
Stop spreading malaise
In times of economic uncertainty, managers
who for various reasons feel insecure in their
jobs tend to rely heavily on the formal aspects
of the company’s organizational culture. They
file cold reports to their immediate bosses and
supervise the people down the corporate hier-
archy in equally disengaged ways. They exist
within the silo of the responsibility channel
they are part of. They communicate either
with people above them or below them. They
do not allow for any synergy with their peers in
other departments, and their thinking and de-
cision-making become irrelevant to the busi-
ness of the company. Eventually, they lose
touch with the market reality. Their primary
concern is their own future within the com-
26 AMERICAN INVESTOR DECEMBER 2010
pany—or even without it.
Such attitudes of indifference, especially
when they spring from higher echelons of the
company’s structure, such as the CEO or the
board, soon spread through the whole organi-
zation, and in the end find their way to the
company’s customers. Their experience of the
company, as seen by customers through the
company’s products and services, is inferior.
Customers intuitively sense that their rela-
tionship with the company is nearing an end.
According to Peter Strupp, president of the
supervisory board of HR specialists United
Business Development, and John Guziak, sen-
ior development officer at UBD, who were the
speakers at the AmCham CEO Forum in No-
vember, this scenario is not just theory, but a
reality that many companies have to cope with
in today’s harsh business realities. In the end,
it is up to the CEO to determine how to
change the company’s culture to improve
business and financial results.
Gear up
The question is really how to create a high-
performance culture that has an impact on the
customer experience in a way that is unique
and creates a bond between the company and
its customers. “In the 1970s and 1980s we dis-
cussed high-performance products and how
we can have products that work well,” said
Guziak. “Those products came around. Then
the question was how do we get a high-perfor-
mance process. Now we have ‘Lean’ and other
ways of making sure we have that. So today the
key question is how do we have a key differen-
tiating customer experience?”
Guziak observed that Chinese products are
the result of the same production process as
we have in Europe. However, apparently,
China does not have the same way of creating
an experience for customers: “That’s the rea-
son why culture is so critically important for
business, because it not only impacts our
business, but our customers as well. That is
the bottom line.”
Step out of the silo
According to Guziak the first problem that
often occurs in underperforming companies is
that their CEOs do not take advantage of their
senior teams. In other words, senior teams are
not recognized in trying to change the culture
by shifting it by themselves. Instead, it is
wrongly believed that if the CEO has a specific
behavior, everybody else will automatically re-
structure to the same thing. “The reality is,
that does not work,” said Guziak, “especially
in large organizations. It is a question of what
is your senior team doing?”
According to Strupp the correlation with
leadership behavior is the biggest impact on
organizational culture: “That is the senior
teams’ impact, also your supervisory doubles.
That leadership behavior change has an enor-
mous impact on changing the company's cul-
ture. People listen to you, talk about your val-
ues and strategy, what is important to the
mission of your company. But what they are
really looking at is your daily behaviors. They
are checking to see whether what you declare
and what you do are consistent. That’s what
they are checking out always, every day.”
Strupp noted that many organizations, es-
pecially large ones such as banks, have a ten-
dency toward “silo functioning.” However,
synergies between departments and individ-
ual top managers are more important than
that formal organizational structure. As
Guziak put it, “If synergies are there, the next
question is whether the functional leaders see
themselves as a team, or is the function they
play more important for them.” Guziak pro-
duced an example of a company that was per-
forming significantly below its competition
and had a supervisory board made up of indi-
viduals who were not interested in cooperat-
ing with one another. Some of them did not
even go to the trouble of meeting with the
company’s customers to find out what they
thought about the company’s products and
services. But when board meetings were reor-
ganized to make them less formal, the indi-
vidual members became more open to one
another, information began to flow, and new
ideas for the business started to be developed.
The next important thing is to be clear on
what culture means, and what culture should
be instituted in the company. As Guziak said,
“What we know is that what we have, we don’t
want, but what we do want we are not sure.”
Third, the HR specialists stressed, is to
avoid too much HR jargon. “We are now talk-
ing of a culture as a business outcome,” said
Guziak, “not as an HR check-the-box. HR di-
rectors are often frustrated because they are
constantly seen as the store of the culture.
The reality is that CEOs and their boards, as
well as HR directors, are the source of the
company culture.”
The next important point is that the power
of the front-line management team is under-
estimated from the top. Top managers are
very important, because when board mem-
bers change—and often they change a lot—
the stewards of the company culture are at the
next level down. This echelon of people has to
be influenced by the CEO as well.
But there are dangers when trying to
change your company’s culture. The first is
that the CEO and the board may become
completely internally focused. “The board
may start thinking who they are and where
they want to go rather than recognizing the
fact that they need to focus on their cus-
tomers and what experience they need,” said
MORE ON HIGH-PERFORMANCE CULTURE IN ARTICLE ON PAGE 32
Guziak. “This is how you adjust your cul-
ture.”
consider the upside
The upside of changing your company’s cul-
ture into a high-performing one is that be-
yond any doubt the company’s customers will
also experience the change. This is the ulti-
mate goal of the whole process.
According to Strupp, what can be expected
out of changing a company’s culture into a
high-performing one is customer satisfaction,
retention and loyalty, a higher repurchase Peter Strupp is president of the
rate, productivity improvements, innovation supervisory board and co-founder
capability, quality decision-making, and of United Business Development.
Prior to founding UBD, he was
strategic agility. “These are the areas we
CEO of Randstad (formally known
focus on primarily,” Strupp said. “Obviously, as Intersource/TempService),
businesspeople still have a hard time under- which became one of the largest
standing what kind of return on invested cap- recruitment and staffing compa-
ital they can get with regard to intangible as- nies in Poland. He has also acted
sets. I would say that if we are looking at in- as an adviser to training company
vesting in fixed assets versus investing in cer- AchieveGlobal for the past eight
tain types of organizational culture and years. Prior to Intersource, Strupp
human capital strategies, return on invest- was adviser to the president of
ment can be huge. The calculation for being Bank Rozwoju Eksportu S.A. and a
able to do that is not that difficult, using very commercial banker with Constella-
conservative assumptions. From my perspec- tion Bancorp in the United States.
He earned a B.A. in history from
tive if you are going to put a dollar down on an
George Washington University in
investment, you know intuitively in certain 1989, and in 2004 he completed
situations that you are getting 15 or 20 dollars the Owner/President Management
back on return because you are investing in (OPM 33) program at Harvard
people in terms of process.” Business School.
This does not necessarily mean investing
in employee training. As Strupp observed, in-
vesting in training simply because of the em-
ployees creates value for the employees them-
selves but not for the company. “It is only for
the person who gets the training so their CV
looks better, but it is not increasing the share-
holder value of the company.”
clear the air on atmosphere
According to Strupp, one of the most impor-
tant things for the company’s CEO is to dis-
tinguish between the type of culture the com-
pany needs and the type of atmosphere it has
for its employees. “Many HR agencies provide John Guziak is senior development
surveys of engagement and perception of the officer and co-founder of United
workplace atmosphere,” he said. “The atmos- Business Development. Guziak is
phere is like the weather. It changes daily. It is also a founder of AchieveGlobal and
has served as a board member there
important to understand the difference, be-
since 1994. AchieveGlobal has
cause when you think of a culture change you
trained over 45,000 business profes-
may think it is too big, too much to do, too
sionals in Central Europe over the
much investment or something that you can- past ten years. Guziak has worked
not focus on.” directly with over 120 international
For Strupp, culture is about creating values companies, primarily in Poland and
and behavioral norms for the people who Romania, in the areas of training and
work for the company. “It is important to un- consulting. He was a founder of the
derstand this distinction, because it is climate AmCham HR Committee and the In-
versus culture. Culture is deeply embedded in ternational Federation of Coaching.
your organization. It covers people who have He is a graduate of the University of
been working in your company since the Virginia, with a B.A. in foreign affairs,
1990s. They have deeply held assumptions and did graduate work under a
Kosciuszko Scholarship at Jagiellon-
and behaviors and values that are deep inside
ian University. He also holds INSEAD
the company.”
Tomasz Ćwiok executive certifications.
DECEMBER 2010 AMERICAN INVESTOR 27
FOCUS: IT Giants 2010

it does not require making Beta tape copies
of all materials for further production,”
Nitsch said. In addition, one person can
manage the entire archive, which means the
material can be optimally used for the broad-
caster’s commercial purposes. “It can bring
new life to an old show,” Nitsch concluded.
Mike Dietz from Sabre Holdings, a soft-
ware provider for over 100,000 travel agencies
around the world, presented the many ways
in which IT can empower travelers in their
search for the best air connections, given a
set of criteria that include destination, travel
supplier, date, time and price. “Our system
can suggest different connections than those
requested if they offer a better bargain for
the traveler,” Dietz said. “It also analyzes
trends and suggests when is the best time to
buy air tickets for the required air connec-
tions.”
nal activities were also discussed by Marek
Suczyk, executive director of Kroll Ontrack
Sp. z o.o. He said that today most informa-
tion about individuals and companies is
stored in computers. Individuals who obtain
access to this information may use it in ille-
gal ways to harm individuals and businesses.
This relatively new phenomenon is now rec-
ognized as a major threat that requires more
and more IT power to fight.
it is not all
Deputy Prime Minister and Minister of
Economy Waldemar Pawlak, who attended
the second part of the conference, said that
Kraków has made a giant leap in develop-
ment of the scientific potential of IT profes-
sionals. AGH University of Science and
Technology, where the conference was held,
with 35,000 students, is only one university in

The great enabler

summer the demand for electricity grows
steeply but only for two to three months,”
Kania explained. “This is not long enough to
make it feasible for power stations to boost
their energy production potential. But with the
smart grid we would be able to use alternative
An AmCham conference in Kraków showcases IT ap- energy sources, such as windmills, photo-
voltaic energy and others, to support the
cess, but also work requiring constant repeti-
tion of movements, precision and quality. Ac-
cording to Arkadiusz Bober, director of the
engineering department at the Opel factory in
Gliwice, owned by General Motors, robots
allow manufacturers to output more techno-
logically sophisticated cars that are more reli-
able, as each unit passes through a quality
The growing role of IT in medical re-
search and diagnosis was demonstrated by
Prof. Maciej Ogorzałek from Jagiellonian
University, who presented a system that ana-
lyzes images of skin discoloration to help
doctors determine whether it is cancerous or
not. The system uses pre-fed data of images
a town that has over 200,000 students. The
scientific potential is important to investors.
But what is also important is that Kraków,
with its special economic zone, the Kraków
Technology Park, offers a good entrepreneur-
ial atmosphere for investors. “Foreign in-
vestors say that not only pure business as-

plications across different fields of knowledge and higher demand for energy.” control process that is also robotized. “We
classified as cancerous to analyze the size
and color spectrum of discolorations.
pects are important to them, but also the en-
vironment,” Pawlak said. “The cultural envi-
IT is a big part of the success of smart have robots that open the hood to allow an-
business “The system helps doctors do good diag- ronment, the intellectual atmosphere, the

I
grids. Thanks to new information exchange other robot access to the engine compart-
nformation technology is changing the nosis,” Ogorzałek said. “It helps downsize potential to reach individuals who are dy-
empowering energy protocols and new IT technologies, dispersed ment,” Bober said. “Robots scan with cameras
world we live in and has become one of wrong diagnoses, especially those that fail to namic and entrepreneurial, all matter. And
Energy production and distribution are where control systems will be able to support smart selected points of the car body for quality con-
the main drivers of the economy, said recognize skin cancer. Statistical analysis of Kraków has it.”
the chances of making a big technological grids. “Dispersed control systems are faster, trol. And at the end of the assembly line there
AmCham Vice Chairman Rick Lada, the information is involved.” Ogorzałek noted In his closing speech at the end of the con-
breakthrough are arguably the greatest. Do- more reliable and less expensive to run,” is a robot that inserts the spare wheel into the
keynote speaker at this year’s annual IT Gi- that similar systems are used to test new ference, Prof. Karol Musioł, rector of Jagiel-
minik Kania, managing director of the Polish Kania said. car.” Bober added that the robot’s arms are
ants conference in Kraków. Lada, the man drugs. Instead of laboratory research involv- lonian University, said that IT alone is noth-
subsidiary of Woodward Governor, a global Before we see ideal smart grids connect all positioned with a precision of 0.2 mm, which
who brought Apple to Poland and Motorola to ing millions of tests, which is time-consum- ing if people do not accept the fact that
provider of IT components to energy systems, the world, the way to go is to increase grid effi- allows for many uses for robotized power.
Kraków, said that while at the end of the 20th ing and expensive, with the use of software human progress is unstoppable. He said that
talked about the challenges for IT engineers ciency, and there IT is the solution too. Ac- “The scope in which robots can be used in a
century only a few IT enthusiasts believed and computing power to analyze chemical he wished there were more IT in the human-
in creating smart grids, a new way of distribut- cording to Peter Knazko, digital energy ac- car factory is limited only by the imagination
Poland was an excellent place for investment properties in conjunction with certain viruses ities and a more human approach in IT itself.
ing electricity that allows for changing the di- count director in Central & Eastern Europe of the engineers,” Bober said.
in IT programs, today it is common knowl- or bacteria, software can map chemical sub- “It will not be too long before IT is applied to
rection the current flows depending on where for GE Energy, smart grids may increase the
edge in the IT world. stances for their molecular makeup and cre- biosciences,” Musioł said. “Will there be the
the demand is. The system not only distrib- efficiency of a power system because it is empowering the people
The conference presentations were in the ate images of their chemical properties. public consent for it?”
utes energy but also supports information ex- much cheaper to increase the efficiency and The application of IT solutions in a media
aggregate a testimony to these words. From “This helps design a new drug by narrowing Speaking in more universal terms, Musioł
change among its many control centers. “The reliability of the grid than to increase the ca- company was discussed by another conference
digital multimedia libraries, and intelligent down the set of chemicals for further testing also noted that Poland needs dramatic and
ideal situation would be to deliver energy from pacity: “With smart grids the consumers will speaker, Tomasz Nitsch, IT director at the na-
power grid control, to image analysis for in the lab,” Ogorzałek said. fast growth of the English language across
any given energy source to any given energy have more potential to be critical in the way tion-vide television TVN. With many distribu-
medical diagnosis, computer simulation of Prof. Andrzej Dziech from AGH University different echelons of society in order to bene-
consumption point anywhere in the world,” they use the energy system so it is efficient. tion channels for TVN programs, each requir-
how chemicals might react with certain of Science and Technology discussed com- fit from the increasing mobility of people
Kania said. In his view, although this ideal is Smart grids will better participate in meeting ing different types of coding, TVN decided to
viruses, precision control of giant steam tur- puter analysis to boost public security. within the European Union. “The lack of
now more vision than reality, with the develop- the needs of our society. For customers, an in- create a massive digital library of its products,
bines and robots on assembly lines, to soft- Dziech is project coordinator of an E.U.- knowledge of English pushes us down eco-
ment of power grid infrastructure and the IT telligent grid will help understand their power which not only supports high-quality storage
ware enhancing travel experience through sponsored study, code-named INDECT, to nomically,” Musioł said. “If Poland is to live
that supports intelligent functioning of the needs and decisions better.” of movies and TV shows but also allows for a
zillions of bytes of travel-related data, image- support different visual surveillance systems up to its aspirations, foreigners in Poland
system, including its ability to divide itself into fast-track production process to match re-
analyzing software enhancing public security, by identifying threats. The system can, for should be able to communicate in English in
several small grids that function independ- Substituting for manpower quired format, and provides control over what
to forensic analysis of hardware for electronic instance, recognize a knife in a camera hospitals, at the police stations, in shopping
ently, we will not only be able to create dis- IT applications can replace people power in happens with the materials in a commercial
evidence relevant to court cases, the IT Gi- image, and signal a potential criminal situa- centers. Otherwise we will remain a nation of
persed power generating systems, but the areas where it is undesirable to employ hu- sense, including info on the distribution chan-
ants conference proved that IT applications tion to the officer on duty. strangers for them.”
threat of blackouts affecting areas with huge mans, in hazardous work conditions or areas nels they were utilized in. “Thanks to IT, the Tomasz Ćwiok
have encompassed nearly all spheres of life. Opportunities to use IT to combat crimi-
populations will be a thing of the past. “In where it is difficult for humans to obtain ac- process of production was simplified and now

28 AMERICAN INVESTOR DECEMBER 2010 DECEMBER 2010 AMERICAN INVESTOR 29

FOCUS: Information technology
Truly amazing
AmCham Kraków’s Tomasz Szczerbina talks with Mike Dietz, vice president of Sabre Holding’s European Center for Soft-
ware Development in Kraków, about the center’s 10 years in operation.
S
abre’s software development
center was established in
kraków in 2000. ten years on,
the center employs over 900 peo-
ple and is one of the largest employers
in kraków and the province of
małopolska. how was it possible for
Sabre to grow at such a fast pace?
Our growth story is an interesting one. We ac-
tually acquired our Kraków office in late 2000
as part of the acquisition of an Irish company,
Gradient Solutions, that had a development
office here with 20 employees. Sabre Polska
grew slowly for the first six years, adding 300
people by the end of 2006. By that time we had
a solid team of great software engineers and a
good base of knowledge about Sabre. It was
then that we really began to ramp up our
growth to take advantage of the talent avail-
able in Kraków. We doubled our staff to 600 in
2007, spent 2008 training and developing the
new staff, and have added another 300 over
the past two years. The bottom line is that we
have been able to grow to this size due to the
tremendous talent we have been able to hire
and retain.
Sabre holdings offers a wide spectrum of
technology solutions for the tourist in-
dustry and for aviation. what does the
kraków center specialize in?
Sabre Holdings has four primary business
units: Sabre Travel Network, which serves the
global travel agency community; Sabre Airline
Solutions, which provides solutions to airlines
and airports; Travelocity, our consumer direct
travel offering that includes lastminute.com
in the European market; and Sabre Hospital-
ity Solutions, which provides technology so-
lutions to the hotel industry.
Our development team in Kraków does not
specialize in any one area of the business but
rather provides software engineering services
to all of Sabre Holdings’ business units. Our
software development teams coordinate with
their counterparts in Dallas as well as Sabre’s
other global development centers and work on
the majority of all significant development
projects at Sabre.
In addition to software engineering, we also
have approximately 150 customer service and
support employees that provide services to
the Travel Network and lastminute.com busi-
nesses, and we are a shared service center for
human resources supporting our European
operations.
every year, employees of Sabre holdings
spend over 10,000 working hours on vol-
unteer projects. how important is cSR
for the company?
Corporate social responsibility has been an
important part of the Sabre culture for many
30 AMERICAN INVESTOR DECEMBER 2010
years and is something that we stress in all of
our offices around the globe. We have two
major CSR actions each year. The first takes
place in the spring and is called Give Time
Together. This is when employees volunteer
to work on projects in their local communi-
ties. In Kraków close to 40% of our employees
took place in activities ranging from picking
up trash in parks, to painting classrooms at
local schools, to painting apartments for the
underprivileged. In the fall we have our Give
Together campaign, which is when we raise
money for local charities. We just finished our
most recent campaign in October. Across
Sabre globally our employees raised over USD
850,000, and with Sabre’s match we will be
donating over USD 1,350,000 to charities in
the communities we live and work in.
We believe that not only are CSR activities a
great way to give back to our communities,
but they are also a good way to build cama-
raderie among our employees and teams. A
few quick statistics from a survey after our lat-
est campaign: 72% met a coworker whom
they did not previously know; 88% said that
volunteer activities enhance internal commu-
nication; 88% said volunteer activities en-
hance employee morale. Surveys said volun-
teer activities are valuable to the volunteers
personally 90%, to the community 88%, and
to the company 88% of the time.
the Polish branch of Sabre holdings is
the main partner of the project dziew-
czyny na Politechniki (“Girls Study
technology”) and the company is also
involved in the women’s exchange pro-
gram which is dedicated to all female
company employees. why has the com-
pany decided to get involved in these
projects?
The percentage of students enrolled in tech-
nical programs at local universities that are
women, and hence the percentage of women
in our development rolls, is relatively low. We
want to encourage women to think about
technology as a career choice and also to en-
sure that Sabre is a great place for women to
work. Dziewczyny na Politechniki helps us
with the first objective. The Sabre Women’s
Exchange helps us with the second. Our
Women’s Exchange program provides an op-
portunity for our female employees to talk
about issues that may be unique to women in
the workplace. However, not all topics dis-
cussed are relevant to women only or are
specifically work-related. Many of the pro-
grams put on by the Women’s Exchange are
open to all employees. For example, we re-
cently had a psychologist come and lead a dis-
cussion on how to communicate with young
children. That session was attended by a large
number of new parents at Sabre Polska, both
mothers and fathers.
the Sabre name is widely known among
kraków students. the company actively
cooperates with universities and gets in-
volved in a multitude of projects, includ-
ing the it Giants in kraków conference.
why is cooperation with academia so
important for Sabre?
There are a number of reasons why we try to
work closely with the local universities. They
are our greatest source of talent, and by work-
ing with them we have the opportunity to get
to know some of the students before they
graduate, the students get to learn more about
Sabre, and we get to work with the students
on some of the skills that are important to us
and that are important to their success with
Sabre. Our cooperation with the universities
has included a very active summer intern pro-
gram, teaching classes at the university, and
holding coding seminars. We are always look-
ing for ways to expand our cooperation with
the universities.
how do you find your Polish experience?
I have lived in Kraków for close to two years
now. I can honestly say this has been one of
the best assignments I have had with Sabre.
Kraków is a fantastic city to live in, with its
combination of history and culture. There is
so much to see and do in the city that even
after almost two years I still find new things
on a regular basis. In addition, the great num-
ber and variety of good restaurants in the city
make it a culinary delight. One of my daugh-
ters lived here with me for the first year and a
half and completed her high school education
in Kraków. It was a great experience for her to
live in another country and to go to school
with people from over 30 different countries.
It provided her with a whole new outlook on
the world. The way she matured in the time
she was here was incredible. Add to all of that
the fact that I get to work with 900 talented
people that do a tremendous job day-in and
day-out, and it makes my time here truly
amazing.
EXPERT: Intellectual property rights
Winning battles
Customs authorities
and businesses make
progress in the fight
against counterfeit
products
A
2009 European Commis-
sion report indicates that
E.U. customs authorities
are becoming increasingly effec-
tive in the fight against imports
of counterfeit and pirated prod-
ucts.
Despite a decrease in the
overall number of customs
seizures in 2009—presumably
because of the global economic
crisis—the number remains rel-
atively high. The report indi-
cates 43,572 matters in which
customs officials seized more
than 118 million counterfeit or
pirated goods last year. Nine out
of ten involved counterfeit
trademarks.
According to the report, the
categories of goods with the
largest number of seizures in
2009 were cigarettes and other
tobacco products (35%), labels,
tags and emblems (13%), and
medicines (10%). Whereas in-
fringement of IP rights used to
involve mainly luxury goods, in
recent years there are more
mundane items being seized,
like shampoo or toothpaste.
The report also shows that
China continues to be the main
source of goods sent to the E.U.
that are suspected of infringing
IP rights.
While the high number of
custom seizures is the result of
the growing efficacy of customs
authorities, it is also reflects the
active role that businesses have
taken in protecting their IP
rights. Rights holders increas-
ingly appear to understand the
importance of effective IPR en-
forcement and have taken meas-
KATARZYNA LEVILLE
Adwokat
Intellectual Property
Practice Group
Wardyński & Partners
ures to protect the strength of
their own brands, creativity, and
consumer safety.
legal tools
IP protection at the E.U. bor-
ders is provided under Council
Regulation (EC) No. 1383/2003.
Since May 1, 2004, businesses
in Poland have successfully used
the regulation to ensure that
customs authorities in the E.U.
impound goods that are sus-
pected of infringing IP rights.
The legal grounds for cus-
toms to seize suspected prod-
ucts is an application, on a na-
tional or E.U. basis, submitted
by the holder of the IP right or
other authorized person (such
as a licensee).
If the holder confirms that
the seized goods are not au-
thentic, it can have them de-
stroyed (with the importer’s
consent) or file a claim in court
against the importer. Determi-
nation of whether an infringe-
ment occurred is made under
national law. Consequently, if a
seizure is in Poland, the pro-
ceedings will be conducted
under Polish procedures, in a
Polish court.
It is important to remember
that Regulation 1383/2003 does
not apply to “parallel imports,”
which occur when a holder con-
sents to manufacturing or
trademarking of goods but not
to importation of the goods into
the E.U. In essence, customs
authorities will not intervene in
what they regard as only a busi-
ness dispute, rather than coun-
terfeiting or piracy.
An application for action
must include detailed informa-
tion on original and counterfeit
products. It is in the holder’s
best interests to provide the
tools for customs to be able to
effectively recognize suspect
items. The importance of team-
work between rights holders
and customs authorities cannot
be underestimated.
The EC report states that the
evidence of close cooperation
between customs and the pri-
vate sector can be seen in the
growing number of applications
filed with the customs services.
Applications for action filed in
member states have increased
from less than 1,000 in 2000 to
almost 15,000 in 2009. Similarly,
a report from the Polish Min-
istry of Finance indicates that
the number of national and
E.U.-based applications here
has increased steadily since
Poland joined the E.U., from 99
applications in 2004 to 605 in
2009.
Problems remain
The regulation does not give a
definitive answer on whether
the scope of the authority con-
ferred on customs includes the
right to take action against
counterfeit goods that are in
transit through the E.U. to an-
other country.
Another problem is the cost
of storage of goods that are not
destroyed but are abandoned by
the importer. This cost is cur-
rently borne by the holder of the
IP rights.
Moreover, the current proce-
dures do not offer effective pro-
tection against the growing
problem of ordering small
quantities of counterfeit or pi-
rated goods over the Internet
and importing them by mail
into the E.U. In many such in-
stances, rights holders are not
willing to take action against the
infringer, and the goods are re-
leased.
changes coming
For these reasons, the E.U. pro-
visions need to be reviewed. In
the spring of 2010, the Euro-
DECEMBER 2010
pean Commission consulted
the public to examine the expe-
riences of rights holders, and it
is now drafting amendments to
Regulation 1383/2003.
Changes are inevitable and
certainly necessary, not only in
the law, but also in the aware-
ness of consumers and the
owners of small businesses.
According to Polish business
daily Puls Biznesu, the market
value of counterfeit goods in
Poland is USD 830 million, and
almost a third of Poles know-
ingly buy non-genuine prod-
ucts. A study commissioned by
the Allegro group shows that
merely 18% of Poles believe
that selling counterfeit prod-
ucts should be penalized, and
28% do not see anything uneth-
ical in trading in such items.
Forty-three percent admitted
purchasing a fake item, and
29% did so consciously.
That could explain why im-
porters are often surprised
when counterfeit goods are
seized by customs authorities
and rights holders initiate legal
action against them. Importers
should remember, though, that
courts often reject the defense
that the importer intended to
buy genuine products. Any en-
tity importing goods, especially
from a country known for man-
ufacturing counterfeits, such as
China, is obliged to check
whether the products ordered
infringe IP rights.
As a result of these problems,
rights holders are looking for-
ward to an amended regulation
that will broaden the scope of
protection of IP rights and give
them additional implements in
the fight against the importa-
tion of counterfeit and pirated
products into the E.U.
AMERICAN INVESTOR 31
EXPERT: Human resources
A high-performance culture
Hard-wired attitudes can change
and must change to move the or-
ganization forward.
B on enforcement.
usinesspeople have a hard
time grasping the concept
of managing organizational
culture to create greater economic
value. It seems too nebulous a
subject and too difficult to discuss
in concrete business terms. How-
ever, as we can see from the head-
lines every day, business culture
has a huge impact on shareholder
value.
If a senior leadership team un-
derstands the business outputs
they want from investing in corpo-
rate culture, then there are plenty
of concrete ways for the leader-
ship team to effect fundamental
change to support concrete re-
sults.
Corporate culture influences
vital organizational issues relating
to employee effectiveness: quality
levels, customer satisfaction and
loyalty, teamwork effectiveness, in-
novation, decision-making quality,
and strategic agility and flexibility.
These output measurements can
be translated into financial results,
often in a fairly straightforward
way. If senior teams seek to lower
employee costs through greater
organizational effectiveness, then
they should take a serious ap-
proach to managing organizational
culture for greater productivity.
Culture is not an “HR issue” but a
company-wide workforce issue.
what is corporate culture?
There are many lenses through
which executives can look at orga-
nizational culture. Paul Sanchez,
global director for organization re-
search and effectiveness at Mercer
Human Resource Consulting,
states that corporate culture can
be defined as the sum total of how
an organization accomplishes all
that it has to do to fulfill its pur-
pose or mission. This definition
covers an organization’s opera-
tional procedures as well as the
standards, behavioral norms and
deep-rooted values that underpin
them.
The behavior of individuals in
the organization is a key focal
point when clearly defining an or-
ganizational culture. It needs to be
understood that there is the pre-
32 AMERICAN INVESTOR DECEMBER 2010
By PETER STRUPP
president of the
supervisory board
United Business
Development
scribed culture and the real survival
operation culture. Many senior lead-
ers believe vision, values and mis-
sion are the defined culture, but the
real operating culture is how em-
ployees must behave in order to
survive and thrive. The declared
culture and the real operating cul-
ture may be extremely different.
It should be noted that there are a
few major companies that have ac-
tively tried to bypass having a corpo-
rate culture. These are companies
with very standardized operating
procedures and do not want their
employees to deliver outside of that
strict process.
culture does not equal climate
A clear distinction must be made
between a company’s organizational
culture and its climate. Culture is
deeply held organization-wide val-
ues and behaviors which tend to be
difficult to change. Climate, on the
other hand, is the perception of the
work environment among employ-
ees. It is like the weather; it can
change very quickly. This is good
news for leaders that want to go
after some short-term wins. Organi-
zations with poor climate or em-
ployee engagement can institute
new practices, such as having lead-
ers clearly visible and listening to
employees, implementing frequent
and informal reward and recognition
events, celebrating short-term suc-
cesses, utilizing high communica-
tion practices, and so on. These can
make big changes in climate in a
matter of weeks. There is plenty of
empirical evidence to show that a
markedly better organizational cli-
mate con occur within 60 to 90 days
of implementing new leadership be-
haviors.
Business culture and leadership
The relationship between organiza-
tional culture and leadership behav-
iors is huge. This means leader-
ship behavior on every level of the
organization. Employees watch
very closely the daily behaviors of
leaders to see that they “walk the
talk.” They actively seek discrep-
ancies between what leaders com-
municate and how they behave
daily.
One prism through which to
view culture is the measure of
constructive, aggressive and pas-
sive behaviors that occur daily on
all levels of the company. Very
often companies will reward lead-
ership behaviors that are authori-
tarian, with a focus on power and
status. Aggressive cultures are
highly competitive, with a zero-
sum game mentality. If you lose, I
win. Decisions are highly central-
ized and are often not communi-
cated well to the rest of the organ-
ization.
However, a company leadership
that behaves in an aggressive cul-
ture also needs to understand that
it is creating a passive employee
organization. Employees will not
take on decentralized decisions.
This is especially dangerous as
the company grows and quick de-
cisions are needed. Passive em-
ployees will keep their heads
down, primarily behaving in an
over-conforming manner so as
not to upset the hierarchy. They
may superficially acknowledge
new ideas then fall back into their
comfort-zone behaviors, even
when the external market has
changed dramatically.
A constructive organizational
culture is focused on accountabil-
ity and achievement. The leaders
show that they are being held ac-
countable and focus everyone on
the key goals that need to be ac-
complished. Leaders focus on
employee developmental growth
in order to support the organiza-
tion. Constructive cultures have
the right people in the right posi-
tions. They discriminate in terms
of investing more heavily on the
development of employees who
are critical to the execution of the
company’s strategy. It is not about
universal equality but internal eq-
uity.
Leaders see employees as peo-
ple and encourage people with
praise. Leaders are open and ac-
countable. They understand the
need to communicate often and
to be clear and to the point. The
constructive culture is not about
making employees “happy.”
Happy and even highly motivated
employees do not necessarily
translate into better business re-
sults. The constructive culture
does, however, foster behaviors of
collaboration, development, em-
powerment and accountability
that are empirically proven to
contribute to higher business and
financial results over time.
levers for change
Leadership behaviors have very
high leverage for changing an or-
ganizational culture. There are
many important practical factors,
however, for changing a culture to
one that is constructive. These
include the ability to decentralize
decision-making, to have clarity
on decision rights, to upgrade ap-
praisal systems, to institute infor-
mal and formal coaching
processes, to create planned lead-
ership development processes
that involve internal promotion,
and to change key internal oper-
ating processes that enhance em-
ployee involvement. Job design
has a high effect on what type of
culture exists. Companies with
employees that do different types
of tasks tend to be more open and
collaborative than when the work
is routine and unvarying. Work
without diversity contributes to
conformist, passive behaviors.
Given that the senior teams
have limited time, money, people
and information to effect change,
they should pick their battles
carefully. A comprehensive cul-
tural diagnostics audit can break
out in great detail specific factors
that can have the highest effect
on culture change. It is absolutely
critical that senior management
first be very clear on what specify
behaviors it wants to change and
what end business and financial
results can be measured for suc-
cess. Cultural change which is in-
cremental rather than transfor-
mational (radical) has a much
higher chance of success. But
often the environmental changes
in the market will dictate how
radical change must occur. Doing
nothing as a fast-changing mar-
ket emerges and rapidly evolves is
a recipe for disaster.
EXPERT: Arbitration
Game, set, match
Once a dispute has been de-
cided by arbitrators, the
state court has the final say
A
rbitration is not a court. It
is private dispute resolu-
tion mechanism. It offers
parties flexibility, efficiency, cost
control and a business approach.
But, one may ask, does it also
offer what parties in dispute
need the most—an enforceable
ruling? The answer is yes. Al-
though it is private, the product
of an arbitration, the award, may
be enforced and recognized as
having the effects of a court
judgment.
State court reviews
Before this may happen, the ar-
bitration award, as a private doc-
ument, is subject to review by
the state court. In Poland such
review is limited to the validity
of the arbitration agreement,
basic rules of procedural fair-
ness, and the most important
principles of public policy. The
court does not review the merits
of the ruling.
In case of domestic awards,
the review is two-fold. First, ei-
ther party may file a petition to
set aside the award, if it was is-
sued in Poland. Such action may
be filed within a strictly limited
period and may be based on the
limited grounds enumerated in
the Civil Procedure Code. If the
court finds any of the grounds
justified, it should set aside the
award, which means that it will
cease to have any effects.
Notwithstanding an action to
set aside the award, in order for
the award, whether issued in
Poland or abroad, to be treated
as if it were a court judgment,
an order of the state court on
recognition or enforcement is
needed. This requires initiation
of a proceeding before the state
court, which will also perform
JUSTYNA SZPARA world may be enforced or rec-
Managing Partner,
Łaszczuk & Partners
limited review of the award. As a generally applies to foreign ar-
result of recognition or enforce-
ment, the award obtains legal
force equal to that of a judg-
ment of a state court. Awards
capable of enforcement by way
of execution, for example order- does, however, authorize a state
ing payment, become writs of
enforcement, allowing the
bailiff to commence execution.
Other awards (typically, non-
monetary awards) are subject to
“recognition.”
types of awards
From the point of view of recog-
nition and enforcement, it is es-
sential to distinguish between
domestic awards and foreign
awards. This is essentially de-
termined by the place where the of these reservations. This
award is issued.
If the award was issued in
Poland, the Polish Civil Proce-
dure Code provides only two
grounds for refusal of recogni-
tion or enforcement: the dis-
pute was not arbitrable, or the
award is contrary to Polish pub-
lic policy. This is a short list,
but a party that believes a do-
mestic award is erroneous may
also seek review by filing a peti-
tion to set aside the award.
With respect to foreign
awards, the review conducted by New York Convention, as well as
state courts before recognition
or enforcement in Poland is
somewhat broader. This is tied
to the fact that foreign awards
are not subject to an action in
Poland to set aside the award.
Recognition and enforcement
of the vast majority of foreign
awards is governed by the Con-
vention on the Recognition and
Enforcement of Foreign Arbitral the few states that have not
Awards, which was adopted at
the United Nations in New York
in 1958. During the 50 years in
which the New York Convention
has been in force, it has become
the most important legal act in
the area of international arbitra-
tion. Currently there are 145
countries that are parties to the
New York Convention. This
means that an arbitration award
issued almost anywhere in the
ognized on a uniform basis
worldwide. The same certainly
cannot be said for court judg-
ments.
The New York Convention
bitration awards regardless of
where they were issued—not
necessarily in another country
that is a party to the convention.
The New York Convention
joining the convention to assert
two types of reservations: a reci-
procity reservation, under
which the state may apply the
convention only to awards is-
sued in another convention
state, and a commercial reser-
vation, under which the conven-
tion will apply only to disputes
regarded as “commercial”
under that country’s national
law. Poland has adopted the
New York Convention with both
means that the convention is
applicable in Poland only to
awards that were issued in com-
mercial matters in another state
that is also a party to the con-
vention. Other foreign awards
are subject to recognition or en-
forcement in Poland under the
rules set forth in the Civil Pro-
cedure Code.
convention implications
Given the significant number of
countries that are parties to the
the liberalization of domestic
rules for recognition and en-
forcement of foreign awards,
the reciprocity reservation is
now practically moot, and some
states that had previously de-
clared the reciprocity reserva-
tion have since withdrawn the
reservation. Nonetheless, if par-
ties select arbitration in one of
joined the convention, they
should be aware that the award
will not be subject to recogni-
DECEMBER 2010
tion or enforcement under the
New York Convention in about
70 of the contracting states.
The New York Convention
provides for a general obligation
on the part of contracting states
to recognize or enforce awards
that are covered by the conven-
tion. The grounds for refusal of
recognition or enforcement of
an arbitral award are exhaus-
tively set forth in the conven-
tion, and in this respect it sets a
maximum standard. Contract-
ing states may not establish ad-
ditional or stricter grounds for
refusing recognition or enforce-
ment, but they may establish
conditions that are less strict.
The New York Convention
does not affect other multilat-
eral or bilateral treaties con-
cerning recognition or enforce-
ment of arbitration awards en-
tered into by contracting states,
or deprive a party of the right to
exercise more favorable rules
for recognition and enforce-
ment under domestic law or
other treaties. This is relevant,
because in addition to the New
York Convention, Poland is also
party to a number of bilateral
treaties covering recognition
and enforcement of arbitration
awards. However, given the uni-
versal sweep of the New York
Convention and accession to
the convention by more and
more countries, the signifi-
cance of these treaties is
steadily declining.
arbitration’s spirit
It is not the main purpose of ar-
bitration to produce awards that
must be enforced or carried out
using state compulsion. On the
contrary, the conception of ar-
bitration as a private means of
dispute resolution assumes that
the parties, by submitting their
dispute to be resolved by arbi-
tration, at the same time under-
take to comply with the award
and perform it voluntarily. The
authority of the state is available
if a party believes the award is
erroneous, or if a party refuses
to comply with the award volun-
tarily.
AMERICAN INVESTOR 33
EXPERT: Infrastructure
The trust factor
Upfront community involve-
ment cuts investment risk
and generates upside on the
backend
T sexual harassment.
he centrally planned
economy of the commu-
nist system was hardly
conducive to development of
Poland’s infrastructure after
World War II. Through the 1980s
Poles could enjoy new schools,
hospitals and plants, which were
relatively easy to build and con-
venient for propaganda purposes,
but what they missed was com-
prehensive, unspectacular, worka-
day infrastructure investment in
such areas as road and rail net-
works, advanced sewage systems,
and the power grid.
For the last 20 years or so
Poland has been trying to make
up for lost time. Although
Poland’s accession to the Euro-
pean Union enhanced the imple-
mentation of many investment
plans, foreign private investors
also contributed remarkably to
the process. American companies
alone have invested over USD 20
billion in Poland in the last 20
years. Many American brands
have settled here for good and
enjoy remarkable success.
Foreign capital in Poland con-
tributes not only to the country’s
industrial development, but also
to the growth of Polish infrastruc-
ture. Many companies of French
or German origin have commit-
ted resources to the utility sector.
Spanish companies are support-
ing Polish road infrastructure. All
these ventures have one thing in
common: at their planning,
preparation and implementation
stages, they require a special ap-
proach to risk management.
Among the challenges facing for-
eign investors in infrastructure
are legal and tax regulations, but
the level of complexity here does
not differ much from what they
face in other ventures. The real
difference is the risk related to
environmental impact and how it
affects local communities living in
the investment area.
local consent
This is why Polish law (in accor-
dance with E.U. legislation) holds
34 AMERICAN INVESTOR DECEMBER 2010
By AGATA STAFIEJ-
BARTOSIK
Sustainable Business
Solutions,
PwC
local governments responsible for
carrying out community consulta-
tion over infrastructure projects.
Consequently, private investors are
obliged to deliver specific docu-
mentation regarding planned con-
struction, including an environ-
mental impact assessment. Poles do
not seem particularly keen on this
kind of dialogue. Sociologists claim
that only about 20% of the popula-
tion are involved in the civil society,
including all social participation
mechanisms (Raciborski 2010). On
the other hand, it is impossible to
disregard Poles’ ability to unite
when confronted with a perceived
common threat—national or local.
Though non-governmental organi-
zations in Poland are few and far
between (with most of them operat-
ing in the province of Mazovia,
which has 22 NGOs per 10,000 citi-
zens), in the face of real adversity—
and controversial projects tend to
be perceived as such—Poles are ca-
pable of taking effective action,
making the most use of tools pro-
vided for voicing social objection.
One of the most remarkable exam-
ples has been blocking of the sec-
tion of the Augustów bypass
planned to cut through the sensitive
wetlands of the Rospuda Valley,
which resulted in a decision to
reroute the new highway. This was
a success for Polish environmental
organizations, who managed to in-
volve the media to gain public sup-
port for the protests. The loss suf-
fered by the investor in terms of
money and image must have ex-
ceeded many times over the cost of
conducting a proper community
consultation process in the first
place.
need for social dialogue
Carrying out investments in the
spirit of social dialogue, which is
enshrined in Art. 20 of the Polish
Constitution as a fundamental
business principle, and guided by
the ideals of sustainable develop-
ment, is a requirement for insti-
tutions co-financing infrastruc-
tural investments in Poland. In-
ternational banks such as EBRD
and the European Investment
Bank, as well as some Polish
banks (e.g. BRE Bank and BOŚ)
and E.U. development programs,
hold investors responsible for
conducting additional commu-
nity consultations (in addition to
whatever consultation may be re-
quired of local government),
alongside development and im-
plementation of a stakeholder en-
gagement plan and preparation of
a non-technical summary of the
environmental impact assess-
ment report. These requirements
are meant to restrict environ-
mental and social risks in the in-
vestment process.
Managing investment-related
risks connected with the environ-
ment and the community should
start at the stage of project plan-
ning, when environmental and
demographic issues are being
considered as part of feasibility
studies. Demographic criteria
define the population density, the
distance between residential
areas, the employment profile,
and the educational level of in-
habitants who may be affected by
the project. Drawing on these
basic data alone when working
out social relations strategies
around the project is a common
mistake, since demographic data
by themselves reveal little about
social attitudes towards invest-
ment projects and the needs and
concerns of the local community.
These would be of little or no
concern to investors were it not
for the fact that it is precisely
these concerns that often lie at
the root of social protests, pickets
and campaigns.
what do they really want
A thorough diagnosis of local
community attitudes enables ef-
fective information and educa-
tion, while at the same time
framing the terms for future de-
bate. While most infrastructure
projects raise no controversy in
terms of their legitimacy or util-
ity, the most common challenge
is of the “not in my backyard” va-
riety. The Anglo-Saxon saying
“my home is my castle” is coun-
tered by the Polish attitude “my
home is my motherland.” Many
foreign investors miss this sub-
tlety, and it costs them much
time, effort and money to man-
age relations with local commu-
nities or their members who feel
that their freedom or property
rights are being trampled. Just
ask investors who have faced hos-
tile pensioners fearing the loss of
small allotment gardens where
they grow fruit and vegetables.
When managing relations with
communities affected by a proj-
ect, the most sensitive stage is
the debate phase, when conflict-
ing standpoints are presented
but common goals may also be
identified. This can foster coop-
eration among all the stakehold-
ers as well as reduce the level of
possible compensation claims. It
may be worthwhile at this crucial
moment to involve external facili-
tators or mediators in community
consultations to help streamline
the process and maintain an ob-
jective focus. This approach al-
lows a project to go forward more
smoothly and efficiently. In some
cases it may even add to the ben-
efits achievable after project
completion.
Sensitive management
Investors who value social re-
sponsibility should consider the
ability “soft” agents have to con-
tain investment risks. Engineers
responsible for investment proj-
ects rarely have the skill set to ef-
fectively manage such issues as
relations with the local commu-
nity and strategic dialogue. It is
therefore important for responsi-
ble and safe project planning and
implementation to take into con-
sideration the fact that Poles dis-
play a low level of social trust and
a negative attitude to business in
general. On the other hand, in-
vestors’ openness to suggestions
coming from the local commu-
nity is priceless. On top of reduc-
ing risks, investors who take this
approach can win local trust,
which gives them valuable lati-
tude in conducting future ven-
tures and translates into tangi-
ble financial benefits.
EXPERT: Sexual harassment
Taming the dark force
"Flamboyant" lan-
guage at the work-
place may earn the
speaker charges of
I
magine your boss asking you
to dress more sexily, or a col-
league telling off-color jokes
or using vulgar language every
time he speaks to you. If these or
similar situations make you feel
uncomfortable, embarrassed or
stressed, you are probably the
victim of sexual harassment in
the workplace.
Every employee, male or fe-
male, has a right to sexual au-
tonomy—protection against
other people’s behavior intrud-
ing into the sexual sphere of life.
Despite the existence of anti-
discrimination legislation, sexual
harassment is still a widespread
phenomenon affecting signifi-
cant numbers of employees.
Alas, neither Polish nor Euro-
pean jurisprudence has proved
to be of much practical assis-
tance. Often, victims of sexual
harassment prefer to quit in-
stead of fighting for their rights.
And so the ball passes to em-
ployers, management and staff:
they need to learn what prac-
tices, under the law, actually fall
within the scope of sexual ha-
rassment, how to avoid becom-
ing a victim, and how wronged
employees can seek legal help
and possibly compensation.
Sexual harassment
Under the Polish Labor Code
(Art. 18(3a) §6), sexual harass-
ment in the workplace is a par-
ticular form of gender discrimi-
nation related to matters of a
sexual nature. Sexual harass-
ment consists of any form of un-
wanted conduct of a sexual na-
ture or in relation to the em-
By ADAM BRZEZIŃSKI they make an objection, the re-
and PAWEŁ KRZYKOWSKI
lawyers, associates at Salans
ployee’s gender with the pur-
pose or effect of violating the
dignity of the employee, in par-
ticular by creating an intimidat-
ing, hostile, degrading, humili-
ating or offensive atmosphere.
The conduct may include physi-
cal, verbal or non-verbal ele-
ments.
Sexual harassment in the
workplace may occur in two
forms: (1) sexual blackmail, or
“quid pro quo,” and (2) creation
of a hostile working environ-
ment. In the first case the per-
petrator can only be the em-
ployer or a representative of the
employer, but in the second case ees and required to pay moral
it could also be a coworker.
Categorizing behavior as un-
wanted and hence as sexual ha-
rassment is a very subjective
matter. For that reason it is cen-
tral to any case that the victim
should express immediate and
firm objection, which demon-
strates that the behavior was un- Scenario 2
wanted and thus illegal.
case studies
Sexual discrimination and ha-
rassment in the workplace are
depressingly common. Let’s
consider some typical scenarios.
Scenario 1
The male boss asks his female
employees to dress more sexily
in hopes of boosting sales fig-
ures.
Sexy clothes typically mean, in has no right to ask whether the
this context, provocative clothes.
The request appears inappro-
priate because it may cause em-
barrassment among female em-
ployees. Sexy clothing certainly
arouses sexual associations. The
women may feel under pressure
to wear such clothes, as they are
obviously in a relation of subor-
dination to their employer. If the
women feel offended by their
employer’s request to dress sex-
ily on the ground that it intrudes
on their sexual autonomy, and
quest may be classified as sexual
harassment. Moreover, it may be
argued that by making the re-
quest, the employer is inducing
his employees to engage in im-
proper behavior. After all, sales
should be based on objective
product information, not on the
provocative appearance of sales-
women. However, an employer
does have a right to make re-
marks on employees’ appear-
ance or clothing insofar as it
may impact on the company’s
brand and image. Moreover, em-
ployees are duty-bound to repre-
sent the employer with dignity,
which includes wearing present-
able clothes or a uniform.
Everything depends on the con-
text. If the women feel embar-
rassed and the proposal creates
a hostile atmosphere at work,
the request may be deemed sex-
ual harassment. The employer
may be sued by female employ-
damages. Under Art. 18(3d) of
the Labor Code, the victim of an
employer’s breach of the princi-
ple of equal treatment is entitled
to damages in an amount not
lower than the minimum legal
monthly salary.
An employer hiring a woman
asks her to sign a declaration
that she will not become preg-
nant for a certain time.
Art. 22(1) of the Labor Code
specifies what information can
be requested from a job candi-
date, to wit: full name, names of
parents, date of birth, residen-
tial and mailing address, educa-
tion, and employment history.
Other information is out of
bounds. Hence, the employer
candidate is pregnant at the
time of application.
By logical extension, demand-
ing a declaration of any sort
about future pregnancy is an
DECEMBER 2010
egregious case of sex discrimi-
nation, but not sexual harass-
ment. Any conditioning of em-
ployment on signing a preg-
nancy declaration is sex dis-
crimination, because it pertains
to the applicant’s gender and
gender-related characteristics,
and therefore creates an uneven
playing field compared to other
job applicants, especially men. A
failed candidate may sue the
employer, who may be forced by
the court to employ her. In case
of termination of employment
due to refusal to sign a preg-
nancy declaration, the employee
may obtain a court order for job
reinstatement, or compensation.
Scenario 3
A boss often tells dirty jokes or
makes vulgar comments on a fe-
male employee’s appearance.
He may propose sexual rela-
tions.
These behaviors have strong
and unmistakable sexual associ-
ations. Since they create an em-
barrassing and hostile atmos-
phere at work, they may consti-
tute sexual harassment.
In such case it is advisable
for the employee to state imme-
diate and firm objection, to
show clearly that the behavior
was unwanted even if he or she
fears losing his or her job. As in
scenario 1, if the behavior is
found by the court to constitute
sexual harassment, the victim is
entitled to damages in an
amount not lower than the min-
imum legal monthly salary.
liability
Victims of sexual harassment
may bring an action in the labor
court against the perpetrators.
Liability may be based on the
Labor Code. While the burden
of proof lies on the employer,
the employee should first de-
scribe the circumstances and
the fact that harassment took
place.Damages may also be ob-
tained under the Civil Code.
The Penal Code also provides
that it is a crime to exploit a po-
sition of dependency to obtain
sexual favors (Art. 199), and this
provision may come into play as
well in cases of sexual harass-
ment.
AMERICAN INVESTOR 35
EVENT: AmCham Monthly Meeting Generously sponsored by:

Discussing Polish-American relations Corporate culture inside out

T T
he Warsaw InterConti-
nental was the venue
of the AmCham
Monthly Meeting in Novem-
ber, devoted to the future of
Polish-American relations
after the elections to the U.S.
Senate and House of Repre-
sentatives. Former U.S. Am-
bassador to Poland Victor Ashe
was one of the speakers. For
coverage of the meeting go to
the article on page 23.
1 2 he Westin Warsaw was 1 2
the venue of the Am-
Cham CEO Forum in
November. The get-together of
AmCham CEOs combined food
and drink with a bit of lecturing
about changing corporate cul-
ture so it best fits the company's
business goals. The event was
sponsored by the Westin and
United Business Development.
For more about the event go to
the article on page 26.

3 4 5 3 4

5 6 1. Peter Strupp,
UBD. 2. AmCham
CEOs. 3. Mike
Majchrzak, Trade
6 7 Media Interna-
tional Holdings;
John Guziak
(standing) UBD;
Roman Rewald,
AmCham Chair-
man; Rick Lada,
AmCham Vice
Chair. 4. Paul
Fogo, Peter Kay,
AmCham Board
Members.
5. Peter Kay;
7 Alain Bobet, indi-
8 vidual member. 6.
Loic Fretard,
Medicover;
Roman Rewald.
7. Pamela Gmiter,
Ari Hecht, Staffer;
John Guziak. 8.
Adam Ilczuk, indi-
1. Roman Rewald, AmCham Chairman; Christian Henkemeier, InterContinental Warsaw, Victor Ashe, former U.S. Ambassador to vidual member;
Poland. 2. Thomas Kolaja, Alvarez & Marsal Poland; Victor Ashe; Robert Ożyłowski, Lockheed Martin. 3. Jarosław Mulewicz, Andrzej Kuras,
Avon; Jerzy Kleniewski, Member of the European Parliament. 4. Marek Matraszek, CEC Government Relations; Joe Smoczyński, Crestcom Interna-
Baker Tilly Smoczyński i Partnerzy. 5. George Osypowicz; Dorota Dabrowski, AmCham Executive Director. 6. Richard Lada, Am- tional.
Cham Vice Chair; Randy Mott, Ceeres; Victor Ashe. 7. Tony Housh, Apco Worldwide; Angelo Pressello, Direct Communication;
Jon Gerald Kolasinski, Mike Majchrzak, Trade Media International; Glenn Gregory, Java Coffee Company.

36 AMERICAN INVESTOR DECEMBER 2010 DECEMBER 2010 AMERICAN INVESTOR 37

 Sponsors: Media patrons: Partners: Sponsors:
EVENT: Business Mixer EVENT: IT Giants Kraków

T T
he Le Meridien Bris- 1 2 he main hall of AGH University 1 2
tol Warsaw was the of Science and Technology in
venue of the Am- Kraków was the venue of the
Cham Business Mixer in 2010 IT Giants Conference, an annual
November. The get-to-
gether of AmCham mem- AmCham conference on business and
bers and friends combined information technology, which took
food and drink with a raffle place in November. The conference
and fun. The event was partners were the AGH and the Jagiel-
sponsored by the the Le lonian University. For coverage of the
Meridien Bristol Warsaw conference read the article on page 28.
and the Business Angels
Guild (Gilda Aniołów Biz- 3 4 5 6 7
nesu) of the Łódź Special
Economic Zone.

3 4 5

8 9 10 11 12 13

6 7 8

14 15

Photos: REPORTER

9 10 1. Joanna Bensz, PM Group; Mike Majchrzak, Trade

Media International Holdings; Jacek Jońca, Kajima
Poland. 2. Błażej Moder, Anna Łaszkiewicz, Krzysztof
Kałużny, Business Angels Organization. 3. Agata
Prosińska, Le Meridien Bristol Warsaw; Błażej Moder.
4. Robert Gray, Krynica Economic Forum; Paul
Fogo, AmCham Board Member. 5. Weronika
Karnowska, Miller Canfield; Błażej Moder. 6. Jacek
Błocki, HP; Roland Dubois, TP; Pierre Couderq,
Couderq & Partners; Józef Sobolewski, HP. 7. Paweł
Pudłowski, Marathon Petroleum Poland Services;
Anna Pudłowska; Andrzej Pawelczak, Animex.
8. Agnieszka Jakowiecka, U.S. Embassy; Jolanta
Rutowicz, television personality; Agata Zielińska,
Łaszczuk i Wspólnicy; Renata Piecychna, Deloitte.
9. Randy Mott, CEERES; David F. Dixon, Norton
Rose; Dorota Dabrowski, AmCham Executive Direc-
tor. 10. A lucky raffle winner.
1. Waldemar Pawlak, Deputy Prime Minister and the Minister of the Economy delivers keynote 16
speech. 2. Prof. Tomasz Szmuc, Vice President, AGH University of Science and Technology. 3. Do-
minik Kania, Woodward Governor Poland. 4. Rick Lada, AmCham Vice Chair. 5. Peter Knazko, GE
Energy. 6. Tomasz Nitsh, TVN. 7. Allen S. Greenberg, U.S. Consul General, U.S. Consulate in
Kraków. 8. Arkadiusz Bober, General Motors Poland. 9. Prof. Maciej Ogorzałek, the Jagiellonian Uni-
versity. 10. Jeff Vick, Consul, U.S. Consulate in Kraków. 11. Prof. Andrzej Dziech, AGH University of
Science and Technology. 12. Marek Suczyk, Kroll Ontrack Poland. 13. Waldemar Pawlak. 14. Sła-
womir Kopeć, Kraków Technology Park; Monika Pilarska, AmCham Kraków Director; Karol Musioł,
President, the Jagiellonian Univeristy. 15. Prof. Antoni Tajduś, President, AGH University of Science
and Technology; Prof. Karol Musioł; Waldemar Pawlak; Prof. Tomasz Szmuc; Prof. Maciej Kaliski,
Department of Oil and Gas a the Ministry of Economy. 16. Mike Dietz, Sabre Holdings.

38 AMERICAN INVESTOR DECEMBER 2010 DECEMBER 2010 AMERICAN INVESTOR 39

SUMMARIES: in Polish
W tym numerze:
Monthly Meeting
amerykański kongres a sprawa polska Zmiany po wybo-
rach do Kongresu Stanów Zjednoczonych nie powinny
przyniść zmian w stosunkach amerykańsko-polskich, str. 23
CEO Forum
zmiana kultury firmy Zespoły najwyższego stopnia
zarządzające firmą muszą współpracować ze sobą aby stworzyć
taką kulture firmy, która jest zgodna ze strategią biznesową
firmy, str. 26
Focus
uwalnianie potencjału Konferencja AmCham w Krakowie
pokazuje szerokie zastosowania technologii informacyjnych w
tworzeniu wartości dodanej produktów i usług, str. 28
naprawdę zadziwiające Tomasz Szczerbina z AmCham
Krakow rozmawia z Mike Dietz, wiceprezydent europejskiego
centrum aplikacji w Sabre Holdings rozmawia z Tomaszem
Szczerbiną z AmCham Kraków w 10-tą rocznię powstania cen-
trum, str. 30
Eksperci
wygrywanie bitew Administracja celna i biznes dokonują
postępu w walce z podrobionymi produktami, str. 31
wysoko wydajna kultura firmy Zachowania, które stoją na
drodze firmy do osiągnięcia większej wydajności muszą się
zmienić , str. 32
arbitraż i sądy Po zakończeniu postępowania arbitrażowego
państwowy sąd ma decydujący głos na temat wdrożenia ustaleń
wynikających z arbitrażu, str. 33
czynnik zaufania Zaangażowanie środowisk lokalnych w
proces inwestycyjny zmniejsza ryzyko inwestycji, str. 34
40 AMERICAN INVESTOR DECEMBER 2010
COVER STORY AmCham
wirtualny garnek Charity
Nie tylko technologia jest siła napę-
dową różnych modeli biznesu Drive
stosowanych w Internecie. Postawy
konsumenckie wobec nowych pro- 2010
duktów i usług mają krytyczny
wpływ na działanie poszczególnych
modeli biznesowych. Raport
KPMG analizuje te postawy
uwzględniając geograficzne re-
giony, wiek konsumentów oraz
technologie, którymi się posługują,
str. 16.
niedopuszczalne rozmowy Zbyt bezpośrednie rozmowy w
miejscu pracy mogą skończyć się zarzutami o sexual harassment, str.
For the 15th consecutive year, we are organizing the AmCham Charity Drive
35 to help children from nine orphanages across the country and two single
mothers’ shelters (in Warsaw and Słomczyn) and, for the first time,
Relacje zdjęciowe the Children’s Heart Foundation (Fundacja Serce Dziecka).*
You can help by making cash donations, by contributing your company products,
Spotkanie Miesięczne AmCham, str. 36
Konferencja CEO Forum, str. 37 or by donating gifts. Items most needed include new clothing and shoes,
Spotkanie biznesowe AmChamu, str. 38 food and beverages, cosmetics and detergents, school supplies,
Konferencja IT Giants Kraków 2010, str. 39 sporting gear, books, toys and games.
Działy stałe In order to deliver the goods for Christmas we must have them by Friday,
Briefing redakcyjny, str. 2
December 10 at the AmCham office, Warsaw Financial Center, 14th Floor,
List Prezesa AmCham, str. 5
ul. Emilii Plater 53, 00-113 Warsaw.
Informacje o firmach członkowskich Izby, str. 6
We are open from 9:00 a.m. to 5:00 p.m.
Informacje o działalności Komitetów Izby, str. 10
Przewodnik po Komitetach Izby, str. 14
Podsumowanie zawartości numeru w języku polskim, str. 40 Cash donations should be made
to our account in the name of:
Fundacja Amerykańskiej Izby Handlowej w Polsce
© American Chamber of Commerce
in Poland 2010. All rights reserved.
Account No. 29 1030 1508 0000 0005 0093 8005 
American Investor to oficjalny magazyn Amerykańskiej Izby Handlowej w Polsce. Magazyn
reprezentuje głos środowisk międzynarodowego biznesu w Polsce. Celem magazynu jest
dostarczanie członkom Izby i innym czytelnikom aktualnych informacji na temat działal- If you want to help us make the holiday season a little brighter for those who need it
ności Izby a także trendów biznesowych i polityce społecznej firm.
listy do rekacji prosimy wysyłać na adres poczty elektronicznej:
most, please contact us at +48 22 520-5994 or anita.kowalska@amcham.com.pl
tomasz.cwiok@amcham.com.pl * Fundacja Serce Dziecka is a charity whose main goal is to help children with heart defects. The mission of the foundation is to
promote knowledge about heart defects, support families with children suffering from heart defects, and cooperate with med-
ical centers and other organizations. More information about the foundation is available at www.sercedziecka.org.pl