Free Market in Its Twenties
Modern Business Decision Making in Central and Eastern Europe
Published by: Central European University Press
Title Page, Copyright Page, Dedication
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The story of the rise of democracy and a market economy in Central and Eastern Europe (CEE) over the past twenty-five years is often told as a series of historic events: the fall of the Berlin Wall, the collapse of the Soviet Union, the brutality of the Balkan Wars, the accession of a number of...
Introduction: Managers, Entrepreneurs, and Leaders in the Ever More Complex CEE Environment
Mel Horwitch and Maciej Kisilowski
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This book emerges from a faculty-led initiative at a business school embedded in Central and Eastern Europe (CEE) for twenty-five years. Therefore, the perspectives you will find on the pages to follow are chiefly those of managers, entrepreneurs, and leaders. Before we get there, however, we invite...
Part I. Key Business Trends in Central and Eastern Europe
Chapter 1.1. Preview: CEE Business Environment through the Eyes of a Western Manager
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The title of this chapter can easily be misinterpreted. The statement that this “preview” has been written through the eyes of a Western manager might be taken to imply that the author is perhaps about to pass judgment on the region; that the connotation of a “Western manager” might indicate...
Chapter 1.2. Europe’s Emerging Countries and the Changing Geography of Innovation
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Two recent headlines found in Hungarian newspapers read:
(1) A leading global software firm opens a new development center in Hungary.
(2) One of the largest cutting-edge technology companies in the world reduces the workforce at its Budapest research and development unit...
Chapter 1.3. New Ways of Financing CEE Entrepreneurs
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When one thinks about corporate finance in Central and Eastern Europe (CEE), the first thing that comes to mind is conventional bank financing. Here, the financial system has been traditionally bank-based, but with the Great Recession upending established economic...
Chapter 1.4. The Double Face of Janus: Or How CEE Entrepreneurs Can Use Intellectual Property Rights Smartly
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Vonage was one of the first Internet telephone companies to enter the telecommunications market in the United States. From 2000 to 2006, the firm was able to provide its 2 million subscribers a Voice over Internet Protocol (VOIP) service through traditional landline devices. Verizon...
Chapter 1.5. Time to Fold the Tent: Retail Rivalry in Hungary and its Implication for the Rest of CEE
Charles S. Mayer
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If you live in Central and Eastern Europe (CEE), you may have wondered why yet another supermarket, hypermarket, or mall is opening up in a region already well-served by existing stores. I did the same, and the following chapter is the result of my curiosity. This chapter deals with the subject at three levels...
Chapter 1.6. Corruption in Central and East Europe: Economics, Politics, and Cultural Values
Yusaf H. Akbar and Vukan Vujic
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Interest in corruption research has grown in importance in recent years in response to several related factors. First, there has been a heightened focus by governments and public policymakers on the negative impact of corruption on economic performance and societal welfare. Corruption is believed...
Chapter 1.7. Corporate Social Responsibility in Economies of Transition: The Role of the State
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Over the past decade the interpretation of corporate social responsibility (CSR) has evolved through important changes. In the micro-environment of firms, CSR has become more generally accepted and in several cases it has been incorporated as a regular feature of company strategy. In...
Chapter 1.8. Is There a Way Out? Promoting Integrity in CEE through a Social Enterprise
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This chapter offers a case study based on my personal experience of being the executive director of Transparency International (TI) Hungary. Between 2007 and 2013 I led the social enterprise that stood up to the deeply entrenched culture of corruption that characterizes Hungary—but also...
Chapter 1.9. CEE’s Complex Saga: Authors’ Discussion of Part I
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Maciej Kisilowski: Welcome everybody to our first “Free Market in Its Twenties” discussion. We are discussing chapters from Part I, which— as Stuart wrote in his preview (Chapter 1.1)—are not painting a very happy picture of Central and Eastern Europe (CEE)...
Part II. Central and Eastern Europe and Global Forces
Chapter 2.1. Preview: Global Forces and CEE Competitiveness
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"Which region/country offers the best opportunities to live and work in after earning my MBA diploma?” This is one of the most frequently asked questions by students in Central and Eastern Europe (CEE). In the past, the answer was quite simple: for many years, the United States was...
Chapter 2.2. The Eurozone Crises and CEE
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The Maastricht Treaty, which established a single European currency, the euro, was signed by twelve members of the European Community in February 1992. The historic date was just a little over two years after the fall of the Berlin Wall, less than six weeks after the collapse of the Soviet Union...
Chapter 2.3. The New Silk Road: China and the Emerging Opportunities for CEE
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On 31 August 2012, the 11,179-kilometer Yuxinou (Chongqing-Xinjiang- Europe) International Railway was officially put into operation. It starts at the megacity of Chongqing in Central China and ends at Duisburg near Germany’s western border. It leaves China through its northwestern...
Chapter 2.4. The European Crises and the United States
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The Middle East and Asia dominate the daily foreign policy briefings of a U.S. president, but a region of the world closer to home should be getting more of his attention. The economic and political crisis in Europe poses a direct threat to the United States. The United States and the European...
Chapter 2.5. Climate Change and the Post-CarbonEconomy: Innovation through Shale Gas
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Businesses have a choice: plan and operate in a business-as-usual scenario, or look ahead and develop a sustainable path for the company and environment. Innovative and strong firms choose the latter. Businesses contribute to a post-carbon economy by working with social and government partners...
Chapter 2.6. The Rise of Social Entrepreneurship
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Contemporary entrepreneurship is highly diverse. It can involve traditional business/commercial activities, not-for-profit entrepreneurial activities focused on social outcomes as well as activities focused on social problems, which trigger entrepreneurial behavior. One reason why a major and growing...
Chapter 2.7. A New Generation of Digitally EducatedWorkers
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A pair of young entrepreneurs from Iceland recently set out—with the help of a small grant and a great deal of ambition—to discover what it takes to become a successful entrepreneur. They had their own stories, but they wanted to know about those of others. Throughout their quest...
Chapter 2.8. Back to Reality: Global Trends In Business Education
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Business education has become a very popular concept in recent years and, in fact, many colleges, universities, private business schools, and professional organizations now all offer business education classes. Individuals consider applying for the Master of Business Administration (MBA) degrees...
Chapter 2.9. Boarders and Beyond: Authors’ Discussion of Part II
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Maciej Kisilowski: Welcome back to our faculty discussion. As Mel and I wrote in the introduction to this volume, Part II is about two distinct types of global trends which Central and Eastern European (CEE) managers should be aware of. On the one hand, we have region-specific trends...
Part III. Central and Eastern Europe and New Business Thinking
Chapter 3.1. Preview: The Way Forward
Yusaf H. Akbar
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The third and final section of the book consists of six chapters that focus on the new ways of business thinking. Five of these chapters refer specifically to the Central and East European (CEE) context, and all tackle the issues of new ways of thinking about the issues pertinent to business managers...
Chapter 3.2. Crisis, Renewal, and Leapfrog: Contributions of Contemporary Innovation and Business Strategy in Europe’s Periphery
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The twin impact of the 2008 meltdown and the euro-debt turmoil that followed created a profound sense of disappointment throughout Europe. This upheaval is economic and financial in nature, but not entirely so because it also represents a crisis in confidence over the direction Europe chose...
Chapter 3.3. Redesigning the Bureaucratic Mind: Toward Fact-Based Thinking in Economic Regulation
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If you want a perfect horror story, take Joanna W.’s experience on Thursday night, October 26, 2012.1 Only a few years earlier, she was running a small but profitable flower shop in the southwestern Polish city of Opole. Soon, the business faltered along with her marriage; abandoned by her husband, she closed...
Chapter 3.4. The New Civil Society: Corruption as Discursive Empowerment
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The concept of civil society is one of the oldest and most contested in Western political and sociological thought. One academic definition defines civil society as a “category that both describes and envisages a complex of dynamic ensemble of legally protected nongovernmental institutions that tend...
Chapter 3.5. Breaking with the Leadership Fantasy: Adopting a More Realistic Model of Drive and Motivation
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The preceding three chapters have all outlined the nature of a gap that seems to run right across Europe, dividing the 2004 big bang EU expansion states from the Western part. This is a gap created through differences in thinking about competitiveness and innovation, differences in thinking...
Chapter 3.6. Attack of the Cyborgs: A Note on the Limits of One “New Way of Thinking”
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On the afternoon of 6 May 2010, the Dow Jones Industrial average, the principal measurement of performance of the New York Stock Exchange (NYSE), dropped suddenly and quickly by over 800 points. During the remainder of the trading session much, but not all of the loss was...
Chapter 3.7. Rethinking CEE: Authors’ Discussion of Part III
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Maciej Kisilowski: Thank you for participating in our final discussion. This third part of the book is somewhat different from the previous two but also particularly important. Because academics and teachers in Central and Eastern Europe (CEE) often need to find a balance between...
Conclusion: Joining the Twenty-First Century and the Need for Creative Professionalism
Mel Horwitch and Maciej Kisilowski
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There is a surprising and perplexing level of agreement among the diverse group of contributors to this volume. All are deeply committed to bringing best managerial practices to Central and Eastern Europe (CEE); yet at the same time they convey an underlying sense of puzzlement and even...
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Numerous individuals have contributed in various ways to this collective picture of Central and Eastern European “free market in its twenties.” We are especially grateful to Esztella Fazekas and Antony Tomory for their extraordinary assistance in the process of editing all twenty-eight...
List of Contributors
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Page Count: 268
Series Editor Byline: Maciej Kisilowski