27 Mar 2014
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From Marx to Marketing

Charalambos Vlachoutsicos helped open the
doors of HBS to the former Soviet Bloc.
by Garry Emmons

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The year 2014 marks the 25th anniversary of the fall of the Berlin Wall, the seismic event that symbolized the collapse of the Soviet empire and the end of communist rule in Russia and Eastern Europe. Charalambos Vlachoutsicos (MBA 1954), at the time a partner at the Athens-based Ulysses Commission Trading Company, an agency company representing foreign manufacturers in the Greek market, watched those dramatic days in late 1989 with mixed feelings. "I knew that the decades-long business relations I'd built with East German State Enterprises were over, and was very sorry about that," he recalls. "But that was superseded by my elation that East German people would be freed from the horrible yoke and terror of the Soviet system."

For its part, as the world's leading school of business and management, HBS understood it had a role to play in helping the former Soviet states become integrated into the global economy. Vlachoutsicos would become a key player in that process. Beginning as far back as 1956, as a partner at his family business Ch. Vlachoutsicos Enterprises, a leading Athens-based importer, exporter, and distributor of food products, he had traveled frequently on business to the USSR and other Central and East European countries in the Soviet Bloc, thus gaining a knowledge of Soviet-style commerce few other Westerners could claim.

Between 1985 and 1992, Vlachoutsicos served as a fellow at Harvard's Russian Research Center, a member of HBS professor Howard Raiffa's "Negotiation Roundtable," and a senior research fellow at HBS. Also during that period, he and HBS professor Paul Lawrence would be instrumental in establishing and organizing the School's outreach toward Soviet institutions and individuals steeped in decades of Marxism and anti-Western dogma.

In 1990, the two men coauthored Behind the Factory Walls: Decision Making in Soviet and U.S. Enterprises, a book about US-USSR management systems that itself emerged from an unprecedented joint research project between HBS and Soviet counterparts. That groundbreaking research project was the impetus that would bring a steady stream of professors, managers, and other participants from Russia and Eastern Europe to HBS.

"At HBS," Vlachoutsicos recalls, "the perception was that Soviet power was concentrated at the top. That surprised me, because from my long experience dealing with Soviet organizations, I knew that the way decisions were implemented and what actually happened depended more on the lowest echelon of the hierarchy than the top."

In addition, Vlachoutsicos, in close cooperation with Laura Gordon Fisher, the director of HBS Admissions, made the overseas connections that led to the admission of the first MBA students from the former USSR, four of whom enrolled in 1990. More would follow as Vlachoutsicos continued his travels to Central and Eastern Europe, where he enlisted prestigious individuals and organizations to identify talented young people and encourage them to apply to HBS.

Under the leadership of HBS senior associate dean Thomas Piper, the East-West opening expanded in the early 1990s. Vlachoutsicos, in collaboration with HBS professor Francis Aguilar, laid the groundwork in the Soviet Union and Eastern Europe for HBS to organize a consortium, with four other leading US business schools, that offered a multiphase program to train former Soviet-bloc educators in the teaching of Western-style management. Subsequently, HBS also offered its own, multiweek program to train management professors from the region.

"HBS opened up new horizons for me and offered new perspectives in my life and my personal development," Vlachoutsicos explains. "It was HBS professor Ted Levitt—who, as HBR editor, published my first article on Soviet management in the magazine in 1986—who introduced me to Paul Lawrence. Ted, Paul, and Howard Raiffa influenced my switch from a business career to academia. My 10 years as a senior research fellow at HBS completely changed my life."

Now in his 80s, Vlachoutsicos seems only to be gaining in energy and productivity. He writes blogs for the HBR Blog Network, postings that are also being published in the journal of a leading Russian university. He is writing a book on a system he has developed that he calls Establishing and Sustaining Effective Managerial Interaction. And he shares his business experience and wisdom with students as an adjunct professor at the international MBA program of the Athens University of Economics and Business, where he creates and teaches courses in management and cross-border business. Indeed, in a life filled with accomplishment, these interactions with young people are especially important to him.

"I've spent 10 years—rewarding years—teaching here in Athens," says Vlachoutsicos, "Most of my MBA students and graduates are middle managers and small entrepreneurs in their early thirties. I've established quarterly meetings during which they discuss whether and how my courses have helped them in their work. The positive feedback from my students about the usefulness of what I teach constitutes what I feel is the biggest impact I have made in my life."

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Class of MBA 1954, Section B

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