Czech Business Structures

As with many of the central and eastern European states it is very difficult to describe what is the ‘norm’ in the Czech Republic with regard to typical business structures.

The business environment is relatively new and is developing and transforming all the time. After the political changes occurred, there was a vacuum with regard to business direction and models and the Czechs pulled in advice and assistance from all over the world. So what has developed in the intervening years is a confused picture but it could be argued that there are three different types of business structures to be encountered locally:

    Ex-state monopoly enterprises. These large operations suffer with a hangover from the former system of central planning, massive levels of bureaucracy and inertia.
  1. Foreign capital subsidiaries. Many international companies have branch offices in Poland and these branch offices will usually reflect the approach of the parent company. Subsidiaries of a US firm will often have a strong US influence; subsidiaries of a German company will usually have a strong German feel etc.
  2. Local start-up companies. There has been a proliferation of entrepreneur-led companies which will often share the hallmarks of such companies worldwide; fast-moving, lacking in process and with a short-termist approach

Therefore, before entering into negotiations with a Czech counter-party, do your homework. What is the background of the company and what structure have they developed?

A brief overview of some key concepts to consider when doing business in Czech Republic

Written and Produced by Keith Warburton

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Overview

The Czech Republic’s economy has, on the whole, performed very well since the structural and political changes of the 1990’s. Although growth stalled after the banking crises, it seems to have returned through a combination of public expenditure and direct foreign investment. Key indicators such as inflation and unemployment levels show reasons for optimism going forward.

The Czech Republic also scores very highly on many key indictors around ‘well-being’ with personal security, work-life balance, education and skills scoring particularly strongly. In all, the country seems to have come through the transition from Soviet satellite state to modern social economy much better than some of its Central and East European neighbours.

These factors lead us to conclude that the future of the country is bright and that doing business in the Czech Republic probably makes sound commercial sense. The economy is relatively strong, the country is geographically well-positioned, there is an educated workforce and a buoyant consumer culture – all the ingredients would seem to be in place for you to make a success of the Czech market.

However, as with all new markets you really need to do some research before you start to make any plans and it is important to take Czech business culture into account. For example, generational issues will come into play when starting to work with people in the Czech Republic. Are you dealing with people who were educated and worked during the former Soviet era or are your contacts younger professionals raised in a completely different period? Approaches to business can differ significantly between these two groups – and that’s just one of several cultural issues you should understand in advance of starting any business dealings in the country.

This country profile provides an overview of some of the key aspects of Czech business culture in a concise, easy to follow-format. The document includes information on:

  • Background to business
  • Business Structures
  • Management style
  • Meetings
  • Teamwork
  • Communication
  • Women in business
  • Entertaining
  • Top tips