Czech Republic Essay, Research Paper

Czech Republic

Overview

After the fall of communism in 1989 there was an “unrealistic” optimism regarding a quick a reform, and a drastic improvement of the poor living standards that existed for the Czechoslovakian people. Czechoslovakia was seen as a country with a bright future and also the country in the east that would have the smoothest transition the west market economy. The prospect looked even better when Czechoslovakia was divided into the Czech Republic and Slovakia, especially for the Czech Republic.

Vaclav Klaus became prime minister and his main task was to as fast as possible lead the country in the right direction towards a market economy. Many big state-owned companies should be privatized which to a certain extent was done. The problem was that even though the ownership now was transferred to banks and other organizations, the state still had full control since they owned the banks and the organizations. This resulted in continued inefficiency and a lot of corruption in many parts of the Czech industry. It also kept the unemployment under the 90’s low around 2% since all the meaningless labor continued to exist. Another problem was that Klaus increased the import of attractive items from the west, which resulted in a huge trade deficit. All the problems ended in economic crises in 1996 and Vaclev Klaus and his party had to give up the power in 1997. A new government entered and they tried to repair what Klaus had spoiled. The economic crises in Russia at the end of the 90’s made it hard for the Czech Republic to change the negative trend. The trend has changed a little bit in 2000. The productivity and the interest from American and Western companies have increased. The exception of the negative trend after the velvet revolution in Czech Republic was the Skoda factory in Mlada Boleslav. It has developed a top modern production industry with big successes in export. This is connected to technology and the ownership from Volkswagen in Germany.

The average income in The Czech Republic is 10,000-11,000 Koruna per month ($250-$300). Educated youth with good language skills can expect at least twice as much since foreign companies have a constant lack of educated work force. This leads to a big gap when it comes to living standards between the poor and the rich in the Czech Republic. This big gap did not exist under communism. This is one reason why people with the worst living standards miss the old communism. The low unemployment has resulted in a lack of responsibility and loyalty among the workforce, this is something that is completely different in Sweden. Especially the young educated workforce is switching from company to company in order to push up salaries.

The population in the Czech Republic is about 10 millions and 1.3 million live in Prague. Slovakia has 5.5 million people. People in Prague live primarily in big concentrated blocks in cheap apartments and it reminds a lot of the former east. There is a lot of renovation and new buildings on the way however.

Problems and Differences

There are some problems and differences that should be considered when working in the Czech Republic and I will mention a few.

There are a lot of uneducated Czechs which results in communication problems. The older part of the population can usually no other language than Czech and in some cases German. The youth are usually bi or tri lingual (Czech, German, and English) The lack of language skills can be a big problem when dealing with customers, employees, and government. It is difficult to sense the attitude in the company and this can lead to bad decisions and other misunderstandings.

Culture is also different in many different aspects. It is hard to practice leadership according to the Swedish model. The employees are very demanding and need to get direct orders instead of using their own head. Often unreasonable demands of higher wages and more benefits. Loyalty a lot lower compared to Sweden and this has to do with the non-existing unemployment. It is sometimes hard to get the employees to follow times and regulations that are necessary in order for the company to work properly. One positive side of the Czech culture is the strive to get educated and develop ones skills.

To prepare foreigners planning to work in the Czech Republic for these problems the following preparations should be taken:

?Get language education

?Education and information regarding culture and the Czech working standards.