The Czech Republic

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The Czech Republic is a landlocked country in Central Europe, which was formed on the 1st of January 1993, when Czechoslovakia peacefully dissolved into its constituent states, the Czech Republic and the Slovak Republic. The country is bordered by Poland to the north, Germany to the west, Austria to the south and Slovakia to the east and has an area of 78,886 km2. The population of the Czech Republic is around 10.7 million. Prague is the capital and largest city with 1.3 million inhabitants, followed by Brno with 366,757 inhabitants and then Ostrava with 310,078 inhabitants.

The Czech Republic is the first former member of the Council for Mutual Economic Assistance (Comecon) to achieve the status of a developed country, according to the World Bank. In addition, the country has achieved the highest human development rating in Central and Eastern Europe, ranking as a “Very High Human Development” nation. It is also ranked as the third most peaceful country in Europe, most democratic and healthy, in terms of infant mortality(see Democracy Index and List of countries by infant mortality rate.

The Czech Republic has a low birth rate of 9.6 per 1,000 inhabitants, while the death rate is higher at 10.5 per 1,000 inhabitants (2004). This means more people are dying than are being born. According to the Czech Statistical Office, the age of the population is distributed as follows: 14.8% are 14 years old or younger, 68.7% are between the ages of 15 to 64 and 16.5% are 65 years or older. The main ethnic groups are Czechs at 94%, followed by Slovaks at 2% and the remaining population at (including Poles, Germans and Roma).

The rate of unemployment in the Czech Republic is 8.3%, as of August 2012 and the economy has grown at an average rate of 0.51% since 1996. Since 1990, the Czech Republic has attracted around 10% of Central and Eastern Europe (CEE) inflows of foreign direct investment (FDI), making it the most successful transition country in terms of FDI per capita.

The official language of the Czech Republic is Czech and its official currency is the Czech Crown (CZK). The Czech Republic is in the Central European Time Zone and adheres to CET (UTC +1) during the winter and CEST (UTC +2) during the summer.

The Czech Republic is a parliamentary republic and a member of the European Union, NATO, the OECD, the OSCE, the Council of Europe and the Visegrád Group.

The Czech Republic lies in a temperate climate zone, which is characterized by mild, humid summers with occasional hot spells, and cold, cloudy, humid winters with occasional arctic spells. The winter months are very cold at between 0° and -5°C and temperatures can drop as low as -30°C in extreme conditions. Summer temperatures average somewhere between 25°C to 35°C and can reach 40°C in the extreme.

Xenophobia: being a foreigner in Czech Republic

The Czech attitude to foreigners in business is that of mutual respect, they respond well when they see that they can learn from foreign business associates. However, they may be quite unresponsive if they are not approached by individuals of equivalent status or expertise. The historical appreciation for anything foreign is no longer the case and products and services are evaluated on their own merits. Czechs have the utmost respect for expatriates working in the Czech Republic, but now this respect is more for the individual’s skills and knowledge, rather than just because they are foreign.

International business in Czech Republic

When you visit another country on business, you expect some differences in how business is conducted. However, you do not always have sufficient time to learn these differences through personal experience. Sometimes, you will find yourself in a meeting only a few hours after your arrival, where your lack of local knowledge leads you to make basic cultural mistakes, which can have serious repercussions on your efforts.

This section is intended to equip you with the basic ‘ground rules’ for doing business in the Czech Republic to ensure that you are sufficiently able to deal with most of the business situations that you may encounter.

General educations

It is useful for you to be aware of the educational and linguistic competencies of your business partners to help you prepare for your meetings and negotiations. Can you expect to find people who will speak your language or should you bring an interpreter? What is the general level of computer literacy?

The Czech Republic has a high level of basic education and a long standing tradition in engineering and manufacturing excellence. Czech Universities have a good reputation in the European higher education community with most Czech managers being well-educated and having university degrees and possibly postgraduate degrees in Management, Engineering or the Sciences. Younger managers are now even travelling to Western Europe or to the USA for their Masters’ degree and for further practical experience at the professional level.

Basic education at nursery and primary school level are free of charge and mandatory for every child born in the Czech Republic. The first step of schooling starts with nursery school (Materska škola), every child has the right to attend a nursery school from the age of 3 to 6, although places are sometimes limited and parents have to find a way to get their kids in or place them in a private nursery school at their own expense.

Primary school starts at the age of 6 or 7, depending on the child’s ability, and is divided into two stages. The first stage of primary education takes 4 years and then the parents have to decide whether the child continues to the fifth year in the same school or changes to a different school. The reason for the change is that there are two types of schools at this level; comprehensive schools (Gymnasium) and vocational schools (technical). The comprehensive school is further divided into several specializations such as language, mathematics and science; vocational schools are divided according to trade. A higher percentage of students that attend a comprehensive school go on to university than those attending vocational schools.

Most students finish their secondary education around the age of 18 or 19. After graduation the students going to university continue with their education while the other group joins the workforce.

University education takes a minimum of 4 years for an undergraduate degree, depending on the subject matter and 5 years for a specialist engineering degree, which is accredited at the same level as a postgraduate qualification. Czech Universities have a solid reputation in terms of European education standards. Many local managers even after their acquiring their engineering degree (Ing.) will go on to study for a postgraduate degree, either locally, in Western Europe or at an American university.

Education standards

Education is the fundamental right of every citizen in the Czech Republic and every child is mandatory to go to school from pre-school till they are 18years. The standard of education in the Czech Republic is quite high and the university standard is also quite high.

Cultural taboos

In the Czech Republic, it is important to avoid mixing business with pleasure. Specifically, you should avoid asking questions about intimate personal subjects, such as your host’s personal age, health or finances. Czechs don’t like to flaunt their riches, so asking about where and how they live might also be inappropriate. Always pay attention to matters of social etiquette, wait to be invited to call someone by their first name and behave with common courtesy, especially when dealing with a woman. Czechs might sometimes overstep the acceptable level of making jokes during business meetings. However, some good topics of discussion are generally politics, the economy and important sporting events.

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