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Leadership in Mongolia

Choose a news headline from a country other than your own that reflects a leadership issue. Consider the leadership implications contained within the story.

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Mongolia as a nation is facing a leadership challenge. The challenge is not that the government is inept or weak or that businesspeople don't know how to compete in a global economy. The challenge is that many Mongolian citizens and those that govern them do not yet know exactly how to navigate suddenly living in a nation that is attracting a great deal of foreign economic interest. Clifford (2013) presents this illustration: "Think of a lively, but tiny, little kid living in a tough neighborhood who is about to inherit a lot of money and you have a pretty good sense of Mongolia's situation."

Since 1921 and until recently, the Communist Party or a derivative thereof held majority power and the government of Mongolia followed the Soviet model. The country's resources were ravaged in exchange for the Soviet standard of living - a system that turned a resource rich country into one of the poorest nations in East Asia.

In the last decade, huge mineral deposits have been made available for outside development. "In an age of hunger for natural resources, Mongolia now matters. It has the largest coal reserves in the world, and some of the largest reserves of copper and many other resources, from gold to a variety of rare earths." (Clifford, 2013) This influx of foreign spending has triggered significant opportunity and significant risk for many Mongolians but according to some observers, Mongolian business leaders are concerned about the "Dutch Disease" where an influx of foreign cash overwhelms the domestic economy thereby increasing all prices and making businesses outside of the natural resources industries uncompetitive. That is a good concern to have.

But old habits die hard and many Mongolian businesses are looking for government assurances of success "despite the fact that the majority of analysts, and even the President of Mongolia himself, believe that State intervention is the biggest risk in holding back economic growth." (Khash-Erdene, 2013) Khash-Erdene continues with an example of current subsidies where herders receive 2,000 to 3,000 MNT ($1.50-$2.00) per kilogram of wool and animal skin from the government in addition to the selling price.

"The reality is that Mongolia is struggling to build a national identity" on the world market as "a country that peaked as a civilization more than 600 years ago." (Clifford, 2013) The argument can be made that the government should stop supporting these markets - the counter to which is that Mongolia's national producers need support to prevent being pushed out by larger foreign competitors. "This is due to the fact that mass production is much cheaper [elsewhere] per product than the small scale production of Mongolia's producers. There is no doubt that if Mongolia's producers are not aided by the government, it will be difficult for most to compete on the world market, and for some it would take a miracle to be able to establish a well-known brand." (Khash-Erdene, 2013).

A basic tenet of conducting business anywhere is not necessarily to be risk averse, but to minimize the downside of any risk taken. Unfortunately, many business leaders in ...

Solution Summary

This includes an analysis of business-government relationship in Mongolia, addressing the influx of foreign investment vs. traditional nomadic culture. Approximately 1,800 words.