Background To Business in Czech Republic

Czech Rep.:

As with all the former Soviet bloc countries, the Czech Republic needs to be viewed as a transitional economy which is in the process of moving from a state-controlled, centrally planned economy to one which is embracing a more Anglo-style capitalist model.  Although it could be strongly argued that the Czech Republic has moved faster and more successfully in this direction than some of its neighbours, this does not mean that the transition is complete.

One of the strongest legacies of the former Soviet-style system is in the area of trust in the business environment.  All commentators on Czech business culture focus on the difficulty of developing deep levels of trust within any business relationship.  Czechs, it is argued, start from a level of deep distrust when they engage with a new contact.  This mistrust can only be broken down through time, perseverance and proving to be a trustworthy associate.  Therefore, one of the key messages when attempting to work with Czechs is the need for patience.  Trying to do too much, too quickly could prove very counterproductive.

Another key issue within the Czech business environment is the different attitudes to business issues which you can expect to find in people from different generations.  Older employees (40 – 45+) are influenced by the Soviet-style systems they were brought up to see as the norm.  The younger generations, however, who have been educated and come into the workplace after the changes, are much more likely to be heavily influenced by western business models and thinking.  When doing business in the Czech Republic, you need to know who you are going business with before you can make any conclusions on how they might address various business issues.  (We will return to this generational issue later in this country profile.)

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