Michigan MBAs Assist Czech Republic With Economic Strategizing
MBA students provide economic strategy reports to high-level Czech Republic officials as the country joins the EU and prepares to adopt the Euro.
ANN ARBOR, Mich. Last month, the Czech Republic and nine other countries took the historic step of joining the European Union, ending centuries of economic and political division. In preparing for EU entry and eventual adoption of the Euro, Czech Republic Prime Minister Vladimir Spidla and Minister of Finance Bohuslav Sobotka were aided by detailed economic strategy reports compiled by two teams of MBA students from the University of Michigan Business School.
The reports are currently being reviewed and incorporated into an overall economic strategy for the country by a team of advisers to the prime minister and finance minister. The advisory team is headed by Jan Svejnar, the Everett E. Berg Professor of Business Administration and professor of business economics, corporate strategy and international business at the Michigan Business School.
Svejnar says he was approached in late 2003 and early 2004 by high-ranking Czech Republic officials who asked him to prepare an economic strategy for moving their country toward successful economic and monetary integration with the European community. At the time, Svejnar was starting to teach his Strategy in Transition and Emerging Markets class at the Michigan Business School and offered MBA students the option of working with him on developing the Czech Republic strategy as their class project.
Two teams volunteered and began an in-depth analysis of the country's political climate, economic outlook, legal and regulatory features and European Union accession policy. As part of their reports, the MBA teams presented recommendations in specific areas, such as research and development, information technology, education, labor mobility, entrepreneurship and legal reform, which were designed to help increase GDP. In addition, the teams addressed the current challenges the country faces in reducing its budget deficit, reforming its pension and social-benefit systems and alleviating the regional disparity of unemployment. They received special assistance from Olga Tausingerova, a Czech manager who monitored the class during the winter term.
"The students did a very good job and had a pretty significant impact on the formation of the Czech Republic's economic strategy," says Svejnar, who has been an adviser to Czech Republic leaders for 14 years. "The prime minister and finance minister were very pleased with the students' work and have been using these two reports as background for their economic strategizing."
Through their participation in the project, the MBA students gained a great deal of valuable experience, both personally and professionally, according to Svejnar.
"They learned how to do an analytical study for use by national policy-makers and had the opportunity to work with the top management of a country rather than at the bureaucratic level," he says. "Since the students couldn't choose the topic, they had to respond to the clients' needs. They also had to work efficiently and effectively in order to meet the tight seven-week deadline."
Svejnar anticipates the Czech Republic government will follow up on several key issues addressed by the students. These include the need to make the nation's labor market more flexible and to carry out reform of the pension and health care systems. Other top priorities will include making the country's economic, legal and institutional environments more business-friendly and attempting to increase the public partnership.
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