Czech Business Ethics Get Fresh Dusting Off

BROUGHT up in a political system based on prevarication and pocket-lining, many Central European businesspeople today are finding it hard to break bad habits.

Ask for a one-word description of the current business environment in the Czech Republic or any other Central European state and words like ruthless, rapacious, predatory, and greedy start to roll off tongues.

``There is a lack of morals, and it is an unpleasant thing - a result of 40 years of the Communist system,'' says Borivoj Prazak, deputy chief executive officer of Komercni Bank, one of the largest commercial banks in the Czech Republic.

``Human relations were badly damaged,'' Mr. Prazak says, referring to Communism's effect on society. ``There were only artificial criteria for human relations based on political considerations.''

The ethical vacuum is ``one of the serious enemies of our economic transformation,'' he says. The restoration of values will likely take longer than the reorientation of the economic system, he adds.

The task of changing business conduct may appear daunting, but it can also be viewed as an opportunity. A few people are trying to seize on the need for an ethics infusion by importing Western concepts.

``I think most people here are afraid to be good,'' says Temi Miller, president of the Dale Carnegie Professional Training Center in Prague. ``People long for a decent and ethical way of conducting business, but they're worried that if they do [business ethically], they'll be squashed by those who don't.''

The center, a Dale Carnegie franchise that opened last month, aims to show entrepreneurs and corporate employees alike that it is possible to play fairly and still get ahead. Ms. Miller and Svatoslav Gosman, the center's vice president, have spent extended stints in the United States training in Dale Carnegie methods, which rely on positive thinking and ``Christian values.''

Miller says interest in taking the Dale Carnegie course is high, and she uses this to back up her assertion that many in the Czech business world want to change their ways. ``Part of the problem is many people feel inferior,'' she says. ``But many are capable. All they need is some confidence.''

Many Czechs, when dealing with each other, behave in an assertive manner, Mr. Gosman says. ``With assertiveness you may win, but you leave ruined people in your path - like a steamroller. We try to teach that both sides can win,'' he says. ``We need expertise on human relations more than we need loans.''

Czechs' assertive behavior is understandable considering their country's Communist legacy. Under Communism, chronic shortages of consumer goods meant people had to claw and connive to obtain even the most modest conveniences. At the same time, individual initiative was not only discouraged, it was frequently punished with jail sentences. Those with entrepreneurial zeal, therefore, learned their trade on the black market.

When it came to competition, compromise was an alien concept. The winners under Communism's rules took all, and there was little room for losers. In extreme cases, those defeated in political power struggles were literally written out of history books.

The collapse of Communism in 1989 eliminated the ground rules of the old political and economic game, run by a gerontocracy that paid lip service to egalitarianism while enriching itself.

Huge economic opportunities suddenly opened up, that allowed people with entrepreneurial acumen to quickly accumulate wealth. A few made fortunes overnight. Yesterday's black marketeers were suddenly today's nouveau riche.

But the race for riches also wrought havoc. The bulk of the population now finds itself having to struggle to stay above the poverty line. And there have been plenty of financial scandals and corruption allegations.

At present, for example, the mayor of Prague alleges that bribery is rife among officials in charge of licensing city taxis. Landlords are accused of tossing pensioners and other low-rent tenants out of downtown apartment buildings in order to reap larger profits. And a large bank, Bank Bohemia, was forced into liquidation in late June because top officials were caught operating an illicit moneymaking scheme by offering bogus bank guarantees.

A lack of regulation and enforcement has fueled the temptation to take shortcuts. Czech authorities have struggled to have legislation keep pace with the changing nature of the business world.

Time will be the main factor in changing the Czech business environment, Gosman says. Schools and religious institutions will probably play the most important role in helping the nation reset its moral compass, he says. He adds that programs such as Dale Carnegie will also be able to contribute.