How ABN AMRO and Other International Banks Are Succeeding in Romania ROXANA WRIGHT AND PHILIP VOS FELLMAN The dynamic ﬁnancial environment of Central and Eastern Europe allows for a clear determination of “best practices” in the banking industry through analysis of common patterns in banking and ﬁnance. We explain the speciﬁc practices that have led to suc- cessful adaptation on the part of international banks like ABN AMRO in Romania and to Romanian ﬁnancial markets. In general, we have found, through a series of case studies designed to assess best practices, that the best performing strategies are those which are based upon “distributed decision making,” allowing for decisive action and rapid organizational learning at the local level. In order for rapid organizational learning to take place, efﬁcient business relation- ships are critical to the ﬁrm’s functioning. In addi- tion, the ﬁrm must develop a substantial diversity in both its internal and external networks. © 2007 Wiley Periodicals, Inc. The dynamic ﬁnancial environments found in Cen- tral and Eastern Europe (CEE) can easily serve as a kind of incubator for new and innovative busi- ness strategies by multinational ﬁrms seeking new markets. Especially interesting is the fact that, as these markets evolve, they provide a chance to ex- periment with new strategies while the large-scale development of market mechanisms is taking place in real time. This situation provides a unique oppor- tunity for developing and testing new strategies and new mechanisms for winning brand loyalty, mar- ket share, and proﬁtability in complex ﬁnancial and regulatory environments. The Romanian market particularly offers decision makers, CEOs, and strategists in the international banking sector a series of unusual opportunities for ﬁnancial and banking investments, with the poten- tial for strong growth and long-term stability. With the country’s entry into the European Union, many European banks and ﬁnancial institutions have ex- pressed interest in entering the Romanian market. 1 The strategic approaches recommended in this paper are derived from primary data, including a substan- tial number of interviews with top executives in the largest banks in Romania, as well as interviews with the representatives of relevant governmental and regulatory institutions undertaken in 2004–2006. 2 In addition, statistical and interview data was gath- ered from local companies in supporting industries. Finally, a series of in-depth interviews were under- taken with the local ABN AMRO management in Romania as a separate case study. 3 Performance and Competition The Romanian banking sector is highly competi- tive with major players such as BRD (“Banca Ro- mana de Dezvoltare”), Groupe Soci´ et´ e G´ en´ erale, Raiffeisen, “Casa de Economii si Consemnatiuni” (CEC—Romanian Savings Bank), ING, HVB Bank, Banc Post, Alpha Bank, and “Banca Transilvania.” A relatively new large entrant is Erste Bank (which took over the majority equity of one of the largest local banks—BCR “Banca Comerciala Romana” in 2006). According to recent rankings, the gap be- tween the leading performing banks (i.e., the ﬁrst ﬁve banks on the list) and the other banks has closed signiﬁcantly, as some of the previously poorer performing or smaller banks have gained market share to the disadvantage of market leaders. ABN AMRO has been one of the banks which has re- cently fallen behind its competition and represents a typical example of how large-scale organizations 40 c  2007 Wiley Periodicals, Inc. Published online in Wiley InterScience (www.interscience.wiley.com) Global Business and Organizational Excellence • DOI: 10.1002/joe.20183 • November/December 2007