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.)
Written and Produced by Keith Warburton
This country profile has been produced to give a short overview of some of the key concepts to bear in mind when doing business with contacts in the Czech Republic. It is intended to be an aid to business people who have commercial dealings with counterparties in the country but should not be seen as an exhaustive guide to this topic or as a substitute for more substantial research should there be a need.
With this in mind, we have covered the areas which are key to a better understanding of the cultural mindset underpinning business dealings in the Czech Republic and which are, quite often, extremely different from the approach and thought processes associated with business in other parts of the world.
Therefore this briefing note is broken into short, bite-sized sections on the following topics: