Post-Communist Countries in Central Europe

Emma Jane Riddle, 2013

Overview

• Business culture in Poland • Managing employees in the Czech Republic• Statistics: population and GDP• The European Union and the euro currency• Economic and political news• Business and industry

Business Culture in Poland

• Design products for Poland.• Win-win negotiations work well.• You can be direct, but be tactful. • Be prepared to provide data. People are not

impressed by "sales talk".• Take time to build relationships and gain trust.• Be willing to "give something back" to the

community.

Business Culture in Poland (2)

• Local governments have a large role in business regulation. Some areas are more conducive to business than others.

• Professional titles are used in Poland.Example: engineer

• Do not call older people by their first names until you are invited to do so.

• Business entertainment should be reciprocated.• People are reluctant to share personal information.

Managing Czech Employees

• Establish a good rapport with employees.• Managers must be trustworthy and credible• Younger Czech employees

– Are eager to learn and often creative– Want work that is meaningful and appreciated– Want opportunities for professional development

• Some older Czechs may lack motivation and are not accustomed to taking initiative

Managing Czech Employees (2)

• Czechs may be reluctant to tackle new responsibilities because– They tend to be perfectionists.– They don’t want to lose the respect of colleagues by

making a mistake.

• Many Czechs do not like to take risks.– Responsibilities and work procedures should be clear.

• People are reluctant to share personal information.Source: Karin Genton-L’Epee, Prague Post, Jan. 6, 2005

Population (Millions)2011 Estimates

U. S. Population = 314 Million

Czech Republic

Hungary

Poland

Slovakia

Slovenia

0 5 10 15 20 25 30 35 40

10.2

9.8

38.4

5.5

2.0

Population (millions) - 2011 Estimate

Gross Domestic Product (Billion $)2011 Estimates

U. S. GDP = $15.09 Trillion = $15,090 Billion

Czech Republic

Hungary

Poland

Slovakia

Slovenia

0 100 200 300 400 500 600

215.3

140.3

513.8

96.1

49.6

GDP (Billion U. S. $) - 2011 Estimate

GDP Per Capita (Thousand $)(Purchasing Power Parity)

U. S. GDP Per Capita = $49,000

Czech Republic

Hungary

Poland

Slovakia

Slovenia

0 5 10 15 20 25 30 35

27.4

19.8

20.6

23.6

29.1

GDP Per Capita (Thousand $), PPP 2011 Estimate

Requirements to Join the EU

• Be a stable democracy, respecting human rights, the rule of law, and the rights of minorities.

• Have a functioning market economy that can compete in the EU.– Many state enterprises were privatized.– Foreign investment was needed to develop the

economies. • Adopt EU laws, product standards, and regulations.• Agree to adopt the euro currency at a future date

Requirements to Use the Euro Currency

• Stable consumer prices – low inflation• Government budget deficit <= 3% of GDP• National debt <= 60% of GDP• Stable long-term interest rates• Value of the national currency must be

stable relative to the euro• Slovenia and Slovakia use the euro

Benefits of EU Membership

• Ability to export to other EU countries, with no tariffs charged.

• Citizens of an EU country can live, work, and study in any EU country.

• Economic development aid from the EU • Easier to attract foreign investment

Higher Education

• Mixture of public and private universities• Higher education in the European Union

– Five-year Master’s degree program– Three-year Bachelor’s degree program– Two-year Master’s completion program– After completion of a Master’s degree, a doctorate can

be completed in three years.

• European Credit Transfer System (ECTS)

Economic and Political News

• In 2009, Poland was the only country in the EU to have growth in real GDP.

• In most recent elections in the EU, incumbent leaders have been defeated.

• Hungary had a financial crisis.– Real estate bubble, financed by loans that had to be

paid back in euros– The Hungarian forint lost value, relative to the euro– Many people could not pay off their loans.

Threats to Democracy in Hungary

• The central bank is now under political control.• Judges were forced to retire at age 62, instead of 70.• The head of the National Judicial Office names all new judges. • Public television is being told what stories to cover, whom to

interview, and what not to cover.• The Media Council cancelled the license of an independent television

station because of stories that the Prime Minister disliked.• The Media Council can fine media outlets with whom it disagrees. • The Constitution was amended to allow ethnic Hungarians living

outside Hungary to vote in Hungarian elections, regardless of how long they or their families have lived elsewhere.

Economic Growth in Central Europe

• Automotive industry• Fashion• Financial services• Information technology

• Internet services• Pharmaceuticals• Tourism and hospitality• Transportation, distribution

Gedeon Richter – Hungary

Skoda – Czech Republic

Price Waterhouse Coopers - Prague

Allied Irish Banks - Poland

Wrigley Factory - Poland

Dell

Automotive Industry

Poland• Fiat• Opel• Toyota• Volkswagen• Solaris• Volvo• Scania

Czech Republic• Skoda Auto• Toyota/Peugeot• Hyundai• Several Czech bus

manufacturers

Automotive Industry (2)

Slovakia• Kia• Peugeot• Volkswagen

Slovenia• Automotive parts

Hungary• Audi• Opel• Daimler• Primarily engines and

transmissions