Issue 1, Winter 2008

Trans-national Voice
Student Journal

IN THE ISSUE
6 In Focus:
Launch of the Trans-national
Leadership Series

8 About...
Assistant Dean of Academics
Eva Porras

12 Think Business
Become a Leader

16 Globalization:
Discover the McDonald’s
Empire

AND...
14 CEU Stories
Exclusive interview

22 Expert Talk
Yusaf Akbar on Emerging Markets
be the
change
 Trans-national
Voice Trans-national Voice
CEU Business School Student Journal

Trans-national Voice is the

first student-run
organization at the Central
European University
Business School. Trans-
national Voice is a
publication devoted to
presenting the most
significant topics from the
world of business and
politics. The Journal is
created for the benefit of
the students, faculty, staff,
and alumni of the CEU
community. At Trans-
national Voice we provide
you an informational
platform for intellectual
exchange in a global
environment.
R. Servand A. Kurmangazina K. Rowland R. Jamilov
Editorial Contact
Your Trans-national Voice team
Email:
ceubsjournal@ceubusiness.org Founder and Editor-in-Chief: Rustam Jamilov (Azerbaijan)
Tel.: +36-70-254-3101 Assistant Editor: Rohan Servand (India)
Correspondent: Katie Rowland (United Kingdom)
Team Coordinator: Aigerim Kurmangazina (Kazakhstan)
More information on
CEU Business School Writers:
Ilya Baltinsky (Belarus), Givi Pantsulaia (Georgia)
CEU Business School Faculty Advisers:
Frankel Leo u. 31-34 Yusaf Akbar (Professor of Management at CEU BS)
Budapest, Hungary Jay Fogelman (Program Director at CEU BS)
H-1023 Hogan Hayes (Professor of Communications at CEU BS)
Email:
Special thanks to:
info@ceubusiness.org Tony Kmetty, Ewout van der Schaft, Noemi Sidlo ,Eszter Zakarias,
Tel.: +36-1-887-5014 Katalin Gelencser, Dora Samak, and the Career Development Office
 Winter 2008| Trans-national Voice 3

Dean’s Column
We are living in an era of rapid change, to which the business world tries to
adapt. In most fields universities lead the way with innovation and new
thinking. With business schools we struggle to keep up with the real world and
often find ourselves debating issues and practices that have already become
obsolete.

Introducing socio-political elements into our programs is an opportunity to

finally leap ahead of business rather than continuing to struggle just to catch
up. In the area of socio-political expertise, businesses have been incredibly
slow to grasp the impact social trends and public policy can have on their
business. Political structures change, the society driver changes, the
competition changes, the industries change. This is a very critical moment in
time when business and public policy could benefit from some cross-
pollination. To cope with change our school aims at helping you to become the
first breed of Trans-national Leaders who can move in and quickly adapt to a local market regardless of their country of
origin. Leading the change however is also in your hands.

In Europe, the expansion of decision-making and regulatory power of the EU is not just freeing up markets but also
creating what Brussels perceives to be acceptable regulatory regimes across a continent of 350 million consumers. The
newest phase in globalization (post-internet globalization) will focus on environmental technologies and their global
diffusion. It will be required for managers to think within and across borders not just in terms of trade and investment
but also to anticipate the in-country social and governmental impact of their strategies and tactics. Our goal is educating
and empowering students to become future leaders of the rapidly changing, multi-cultural and trans-national
environment. A good leader has a vision, sees the place to go and he/she also needs to get all the stakeholders, the
employees, the community, politicians, and government regulators to believe in his vision. A good leader needs to have
a broad view of society, and an extensive knowledge on different cultures is a must. We raise leaders, not just managers
and we teach you skills that reach beyond the analytical methods of business.

Because we are a part of the larger Central European University with a strong reputation in law, public policy and the
humanities, we are able to draw upon the experts in these fields to ensure our graduates will appreciate the overlaps
between business and society. Our socio-political courses are integrated with the core subjects in the curriculum such
as marketing, finance and economics to help managers understand that they cannot make decisions on functional
issues in isolation from the broader environment.

You are the first breed of the future Trans-national Leaders, so it is up to you to make the change. I envision you, walking
out of this school's door, to maintain your curiosity to be confident businessmen, with the appreciation for a deeper
knowledge on the history and tradition of the different countries you will find yourselves in over your career, because
these affect business and economy.

Enjoy reading the first issue of the The Trans-national Voice!

Sincerely,

Paul Garrison
Dean and Managing Director
Central European University Business School
 4 Trans-national Voice| Winter 2008

Trans-national Voice Trans-national

Voice

S t u dent Jour nal

Contents Falling. Fallen. Hurt. by Rohan Servand

6 In Focus The current fiscal year is etching itself into
The launch of the history for all the wrong reasons. As the
Trans-national populace of a rapidly changing world we stand
Leadership Series at an economic crossroad, with the road we
are journeying currently going downhill. Its
8 About... ability to pick itself up relies heavily upon
Academic Dean capital injection and lower interests rates for
borrowers. It is also necessary that the
Eva Porras
injection made be systematic in nature. The
United States Government recently passed a
12 Think $700 billion bailout out plan after an
Business unsuccessful first attempt. The objective of
Become a leader this plan is to buy out the troubled mortgages
today! before reselling them to investors in the
future. This in turn will allow banks to resume
14 CEU Stories lending money, and in turn begin turning the
Interview with wheels of the economy again. If this goes according to plan, it should essentially clear the
nation of these large debts that financial firms are currently burdened under.
Dr. Paul Marer
The initiation of this problem leads back to real estate agents and lenders who showed a
16 Globalization considerable amount of greed. They recognized an untapped market for sub-prime housing in
Discover the the late 1990's. With attractive loan and interest figures, they lured in masses of people who
McDonald’s empire could otherwise not meet the criteria for market interest rates. With predictions at the time
showing a rise in property value and with favourable initial terms, that were adjustable
20 Career Quest further, many were enticed. But as property values began to regress in 2006, coupled with
The journey growing interest rates and higher adjustable rate mortgages, many individuals took to
foreclosure. This essentially marked the beginning of the Global Financial Crisis that we are
towards a better job
currently contained in.
(Continued on p. 24 )
22 Expert Talk
Dr. Akbar on Point of view Quote of the Issue
emerging markets
10 Belarus: Land Between Powers (I. Baltinsky) “A fly may sting a
stately horse and make it
18 The Western “Support” to Georgia (G. Pantsulaia) wince, but one is but an
insect and the other is a
19 Guess Who? (Anonymous) horse still”
(S. Johnson)
No material appearing in this publication may be reproduced without written consent of the publisher. The opinions expressed in this journal are those of the
contributors and are not necessarily shared by the CEU Business School.
 Winter 2008| Trans-national Voice 5

Editor’s Voice
Dear Readers,

I am proud to present the Trans-national Voice – the first

student-run organization at the CEU Business School.

Business is more than just academics. No theory will prove to be useful without real-life
experience. And there are few better ways to explore the world than through a student
journal. Trans-national Voice is a unique project that will allow students, faculty, and alumn i
of the CEU community to speak about most vital components that constitute the today's
world – the global world.

Trans-national Voice is a massive informational platform for students and experts from over
50 countries. The Voice symbolizes the multicultural environment of the CEU Business
School as well as our unique competitive advantage – the global approach to learning. CEU
Business School has developed an innovative model of education. Here we are taught to
become trans-national leaders in a trans-national environment, to understand the
economical, socio-cultural, and political complexities of other countries. No school in the
world can match us with that.

In the first Issue of the Trans-national Voice you, together with Rohan Servand, will discover
the global empire of McDonald's Corporation. Exclusively for our first issue we conducted an
interview with one of the School's founding fathers – Dr. Paul Marer. Ilya Baltinsky and Givi
Pantsulaia talk about complex environments of their national states. In “Think Business” we
present you a quick guide on how to boost leadership skills. In addition, Katie Rowland
narrates about the launch of Trans-national Leadership Series and our first guest – Dr. Arpad
von Lazar, Professor Emeritus of the Fletcher School of Law and Diplomacy.

I hope you will enjoy reading The Trans-national Voice!

Sincerely,

Rustam Jamilov
Founder and Editor-in-Chief
The Trans-national Voice
6 Trans-national Voice| Winter 2008

Trans-national
Leadership Series IN
FOC U S
“In Focus” is our regular section that provides a coverage of the most significant
event in the school life of the pastt weeks . In this issue our correspondent talks
about the visit of Dr. Arpad von Lazar, Professor Emeritus of Fletcher School of
Law and Diplomacy.
By Katie Rowland

0800 hours… I joined roughly twenty of my
peers for a discussion on 'Transnational
Leadership' with Dr. Arpad Von Lazar. The room
seemed a little sparse considering the status of
this speaker. I found it hard to comprehend that
only twenty people wanted to hear this man
speak. After all, Mr. Lazar is a famous
international businessman. A quick google
search reveals that he has been involved in
international affairs, global finance, the oil
market and higher education. Furthermore, he is
at the top of most of these fields. But
when the school organized this discussion they
omitted to adhere to the first basic rule of
marketing: know your audience!
It wouldn't matter whether it was George Bush or
Vladimir Putin or even the Queen of England
coming to speak. The fact would still remain that
at 8.00 a.m on a Tuesday morning, the average
student desires only sleep, or coffee, or sleep +
coffee.

20 people attended this

unique event. Those
who missed it must
have certainly had a
strong opportunity cost
- comparable with and
important enough to
outweigh the wisdom
and experience of a
professor of Fletcher
School of Diplomacy
 Winter 2008| Trans-national Voice 7

Luckily, the British Boarding school system taught me how to handle an early

morning, so I was among a minority of people who were awake enough to hear

the views of this distinguished man at such an early hour.

Mr Lazar spoke in an eloquent yet relaxed tone. It was soon apparent to all of us

that the man speaking possessed a wealth of knowledge. He transitioned

between the oil market, the current economic crisis, the Chinese economy, the

US political structure and the modern education system seamlessly. And whilst

effortlessly discussing the economic h istory of the world, Mr Lazar even found
Dr. Arpad von the time to pass around the croissants.
Lazar
Professor Emeritus,
Fletcher School of Law and “We are all too busy looking f or the big lesson. We
Diplomacy
tend to forget tha t under nea th ther e ar e millions of
Dr. von Lazar is valuable e xperiences.”
currently Professor
Emeritus of International
Affairs at the Fletcher
School of Law and
Managing to tackle the issues of 'transnational leadership' in under an hour is a
Diplomacy. While at
Fletcher he was a founding challenging feat for any speaker. Mr. Lazar knew this. Rather than trying and
member of the academic
programs on international failing, Mr Lazar relaxed and simply 'chatted' about a few issues and some of the
development, international
energy studies and the things that business life has taught him. He focused specifically on the idea that
international environmental
program. During his we should all be like 'Junkies', constantly searching for new things to try. He
academic career Dr. von
Lazar has worked as a senior remarked: “We are all too busy looking for the big lesson. We tend to forget that
advisor to major US and underneath there are millions of valuable experiences. ”
foreign oil companies,
financial institutions,
foundations, the US
Wise words from a wise man. Mr Lazar is certainly one of few inspirational
government and foreign
governments. figures in society. It was touching to hear him refer to CEU as his 'last love'. But

Dr. Arpad von Lazar
holds a Ph.D. and an M.A.
from the University of North
Carolina, as well as a degree
from the University of
Vienna. He is also a recipient
of numerous honorary awards
and grants.
the sixty minute chat left me wanting more. I believe that Mr Lazar could have
spoken all day about almost anything. In such a short space of time and on such
broad subjects he was only able to touch the surfaces. I hope that Mr Lazar will
return to us (at a more sociable hour), because like a 'Junkie' I am craving my
next fix.
8 Trans-national Voice| Winter 2008
What do you, as a specialist in finance, think the CEU
Business School students should learn from the
current financial crisis? What are the take-away
points? Is there anything from what we are
observing now that we must never repeat?
As a finance specialist I would remind everyone that
the markets are mechanisms for exchanging certain
assets. Price discovery is a result of this exchange and
it is therefore independent of the fundamental value
of the assets traded. That is, the price of a certain
share at a specific moment will be determined by a
number of variables including volume traded which is
itself affected by the liquidity in the market and
alternative uses for the money, the cash flows the
given company is expected to generate in the future,
and so on. Therefore, as conditions and expectations
change, so do prices.
I believe we cannot prevent traders behaving in a
speculative manner because investors saving and
postponing consumption logically want the maximum
return for that sacrifice. Other people have been
accused of having had a major role in the crises such as
those who assisted low income citizens obtain
mortgages. Well, this requires another opportunity
for discussion as simplification of the issues and
tradeoffs does not help understand the situation.
What we can do is remember that well developed
markets, such as the NYSE in USA, have average
annual standard deviations of approx 20% for the
price of large company shares. This should help
everyone infer how markets behave regularly and in
extraordinary situations. This should also be a call of
about...
Associate Dean of Academics,
Dr. Eva Porras
“About...” is our new series of interviews with
the School faculty members, staff, and alumni.
In this issue we talk to Dr. Porras, our Professor
of Finance and Associate Dean.
By Rustam Jamilov
attention to the fact that the market is not the
place to keep all those savings you need to
maintain a certain life style, and much less if that
life style is making ends meet.
What qualities do you think a fresh graduate should
have in order to become successful in business? And
any specific qualities for finance sphere?
I think “success” if understood in the business sense is
a very relative term and partially the result of a
number of factors, some of which the student cannot
control. However, success in a larger sense- which is
the one that should concern us - is to be in peace. In
my experience, this means to do “your duty”. So
whichever the definition of success, within those
variables we can control, hard work accompanied by
other qualities such as honesty, kindness and
generosity are a good mix to start off. In the financial
sphere, just as probably any other, it is fundamental
to keep updated and to have a deep understanding
of the issues.
Could you recall an example from your past
academic/work experience, when you had to
overcome a challenging situation? What was the
outcome?
Yes, I do remember many instances when I had to
overcome a challenge. The interesting thing about
this is not when you successfully resolve a situation
because there exists such a clear solution you can
reach without compromising.
 Winter 2008 | Trans-national Voice
The truth is that life presents you with options in
which there are no absolute “goods”, “truths” or
“wins”, but tradeoffs among which we have to
choose. Learning how to compromise, how to live
with difficulties and with lack of optimal solutions is
key in becoming an adult in the full extent of the
word.
Did you participate in any college or graduate-level
extracurricular activities that you think have helped
you become successful?
No. I began working full time when I finished
attending my first college by the time I was 19. Ever
since then I worked full time while I moved on to
studying a number of things which are not in my
resume, such as photography, literature, etc. It was
later, after I had already worked for CBS/FOX that I
moved to the USA and began studying my BS in
Business Administration, my masters, and my PhD,
but I never stopped working. What I want to say is
that, unfortunately, I had literally no time for college
activities. Still, in college I managed to make the best
friends I keep today, that I consider my success.
However, I always wish I could have enjoyed a time
during which I could solely focus on my studies and
the wonderful community around them.
Nevertheless, it was just not possible for me.
“A new vision is critical to
identify, understand, and
deal with in “non-standard”
environments.”
Is there any specific reason for joining the CEU
Business School?
Yes, I am personally committed to CEU's vision. It has
been my life-long belief that progress can be
advanced through knowledge and education and
that research is critical in identifying and
understanding problems. Nevertheless, it has also
become obvious that these words have a different
meaning in this time and age. A new visión is critical
to identify, understand, and deal with situations in
9
“non-standard” environments. It is CEU ´s mission to
take on that challenge. In addition, once I had come to
do my interviews, my wonderful colleagues and the
beautiful city were two very strong additional
motivators for wanting to join to CEU.
As far as we know, you are currently in a process of
writing two books. Could you give us a brief insight
on what their major focus will be? Was there any
specific reason or interest for choosing the particular
topics?
For several years, the publishing house had been
asking me to write something in the area of finance.
There are several topics I enjoy and consider my area
of expertise. One of them is the Cost of Capital, which
is the title for the volume scheduled to come out first.
The reason why this subject interests me is because
even though this variable is the engine of the economy
(obviously not alone) and even though capital is
utilized by every business, in my experience
managers do not have a clear complete
understanding of the subject. I thought that a
comprehensive, easy to read, and detailed book
targeting managers was needed. I also have talked
about completing other books for the same publishing
house such as one on Derivatives and another in
Facility Management.
Ìs there anything you would like to say or wish to our
readers?
Yes, I would like to recommend them to focus on
today. First, because I believe it is an excellent practice
to achieve some “mind and emotions” control.
Second, because it is the only way to fully take
pleasure in what life brings your way. So I would ask
them to work very hard and get out of the
classes and experiences with the colleagues and
professors as much as possible. I would also ask
them to enjoy the opportunity of creating a small,
wonderful, fun community around the school that
they can take with themselves in their memory once
they move on to other challenges. If they do today the
best they can, then, they will also be ready to do their
best in future new environments.
Thank you for talking with us!
10 Trans-national Voice | Winter 2008

Land Between
Powers
by Ilya Baltinsky

Belarus? Yeah, I've heard a little about it… it's a part of Ukrainian Slavs, came from the merge of Slavs and Balts,

Russia, isn't it? I've encountered such a question almost a Scandinavian people. That certainly made the people

every time I was abroad making friends with people. inhabiting my country somewhat different in terms of

People barely ever knew it was a single country; nor did culture and values.

they know the country's location. In fact, Belarus is

That couldn't but arouse people's interest in creating an
located in the geographical center of Europe and is
independent state in the Belarusian land. Small
greater in area than Austria, Netherlands, Belgium, and
principalities of Central and North-Western Belarus
Switzerland put together. Home to Mark Chagall and
consolidated into the Grand Duchy of Lithuania (GDL),
Thaddeus Kosciusko, Belarus has always been at the

crossroads of two worlds, European and Russian, which “People in my country differ in
dramatically affected lives of all Belarusian generations. terms of culture and values”
The story of international influence on my home country which had by the middle of the sixteenth century grown

unfolds along with the development of the Belarusian into one of the biggest states in Europe. As it covered the

state. Starting from the tenth century, the conquerors area between the Baltic and the Black Sea, it drew all the

from the East furiously attacked the Principality of wars in the region. But then again, Tsars in Moscow

Polatsk, the first known state to establish here. continuously claimed the land belonged to Russia and by

Consequently, the Principality was subordinated to all means, including wars and assimilation through

Kievan Rus, a stronghold of Moscow's future religion, tried to seize the land. GDL, as a pro-Western

speculations that the peoples of Russia, Belarus and catholic state, didn't accept the ideas implemented by

Ukraine descended from one nationality. However, most orthodox Moscow and sought for closer cooperation

scientists agree that Belarusians, unlike Russian and with Poland on the West.
 Winter 2008| Trans-national Voice
GDL and Poland eventually merged, creating an
even bigger country. Political center shifted from
Lithuania (that was the name for Belarus at that
time) to the Polish side. Lithuanian unique culture
started experiencing a decline as it was vigorously
oppressed by Warsaw. Subsequently, Belarusian
language was prohibited everywhere; instead,
Polish was deemed the language for all. Moscow, in
turn, applied its politics of “religious intervention,”
that is, convinced Belarusians to adopt Orthodoxy.
Some were persuaded. Coming from a slightly
different origin than that of Russians', those who
took up Orthodoxy still drew in a great deal of
Russian culture in Belarus. However, there also
remained Catholics – chiefly the rich, who lived up
to the Polish way of life; in addition, the whole
population of Western Belarus professed
Catholicism. All that, together with the originality
brought about by those who still maintained the
culture of Eastern Slavs and Balts, archetypal for
Belarus, mixed together to create something new. It
was a society of tolerance and hospitality, bearing
cultural particularities of all bordering countries.
The wealthy had a rather progressive mind-set, and
in 1791, together with the Polish, accepted the first
Constitution in the continent, second in the world
11
after the USA. The commons, on the other hand,
preferred to stay calm and obedient as it came to
politics.
The Belarusian society today in many ways
resembles that of the end of the eighteenth century.
Having come through the Russian Empire's
intervention in the nineteenth century and then
through the hardships of the Soviet Union,
Belarusian folk failed to maintain control over their
own authenticity. Use of Belarusian language was
banned until the mid-1920s, the time when
communist Moscow searched for support among
periphery republics. However, Stalin repressions of
the 30s and the World War II, in which Belarus lost
every forth man, added up conservatism and
reluctance to get involved into politics to the
character of a common Belarusian.
Only after the USSR collapse in the 90s, Belarusian
identity started reviving. Events of the history left
their trace on what Belarus is now. Conservatives
are still awake; liberals now have their say. In shape
of Belarusian original traditions, they represent
confluence of two different world perceptions,
offspring of the ever-lasting struggle of the West and
East. This is Belarus, the Land between Powers.
12 Trans-national Voice | Winter 2008

think business
In Think Business we are providing you with insights on the most vital techniques necessary for becoming a
successful businessman. Think Business will assist you in your life-long quest for personal, academic, and career
development. Our series of informal articles and real-life stories will be beneficial for both students and
professionals.
By Rustam Jamilov

Leadership has become a common buzz word in the

world of business. It is a skill worth possessing by some
means. It allows for one to break out of the ordinary
and exercise their ideas via their leadership. More
importantly it can take you places.

Leadership is often linked with management.

However, the two concepts differ in essence.
Management is the process of managing people.
Managers assign appropriate tasks to people they
think can handle the problems. Leaders, on the other
hand, share this unique emotional belongingness with
the team to reach the common goal. Leaders attempt
to supply others with the necessary skills with an “Management is doing things right; leadership is
emotional touch in order to succeed. doing the right thing”
Peter F. Drucker

Common Leadership Traits

Most leaders, regardless of nationality, upbringing and mind set, share several common traits. These
traits are called Leadership Traits. Generally, true leaders tend to be:

Intelligent – Continuously
progress. Develop critical
reasoning, and analytical skills.
Broad-minded – Diversity is an Honest – They are sincere with
ally. Look for different angles on their team members. Deception
the same question. has not yet helped anybody.

Inspiring – Being confident in your actions. Competent – Behave and

Constantly show your team that they know reason in a mature way.
what they are doing. Don't dominate however; Reasoning and moral values are
lead, not rule. Remember that no one can't do always above unwise emotional
everything alone desires.
 Winter 2008| Trans-national Voice
10 Steps to Become a Better Leader
Plan thoroughly. Planning is 30% of success
Gather your team wisely
Ensure effective and comfortable communication
Build trust and confidence
Manage your time efficiently
Be responsible for your words and actions
Serve as a role model
Know when to take the mask off and laugh
Remember about social responsibility
Learn throughout your whole life. Remember the Socrates'
“All I know is that I know nothing”
Editor’s Insight
“Leaders are commonly defined as individuals with an
extraordinarily developed ability to effectively inspire and
lead people or organizations. Effective is perhaps the crucial
word here, because many of us understand the importance of
taking the leading role, representing a group, and directing
towards the set goal. However, leaders are not just charismatic
people full of motivational drive. Given the complexity of the
world we are living in today, energy is not sufficient to
effectiveness. And it is only effective leadership that brings
result. When aiming to start your own business, organize an
event or take any kind of initiative that implies leadership
duties, the not-to-be-neglected aspect is the productive
application of knowledge. For leaders are praised only when
the right skills are employed on the right paths.”
13
Try it Now!
The theoretical insight on leadership is very
important. Although it takes time to develop
these skills, there are numerous possible
ways to make a good practical start. Here is
our advice for you to become a better
leader now:
Establish. A small-scale project. Invite
your friends to volunteer at a local elderly
house, or organize a trip to a local
museum.
Develop. Set the goal of your project.
Inform others of your ideas. Build the
timeline and plan your actions.
Motivate. Pass your passion to your
friends. Let them share your beliefs.
Explain the importance of your initiative.
Integrate. Coordinate the work. Delegate
tasks if necessary.
Handle every unpredictable situation
with confidence.
Tolerate. Be flexible. Keep in mind the
cultural differences. Accept opposing
views. True leaders are lenient and ready
for challenges.
Leadership Statistics
69% of business leaders say it's important
to have a mentor.
75% of executives say good physical fitness
is critical for career success at the executive
level.
11% of surveyed CEOs either have or are
considering establishing a charitable
foundation or donor-advised fund.
When dealing with suppliers, 86% of senior
executives say a lack of ethical standards
would be enough to not do business with a
supplier
14 Trans-national Voice| Winter 2008

CEU stories
CEU Stories is our section on the facts and affairs of the lives of
Central European University and the Business School. Here we
will attempt to share some of the less known truths about our
university. In this issue we present you an interview with
Dr. Paul Marer, Professor Emeritus and one of our founders.
By Rustam Jamilov

Dr. Marer, you are one of the founding fathers of
the Central European University Business
School. Could you tell us a few “insider” facts
about the foundation of the School?
Students might be interested in knowing something
about the fascinating history of the CEU Business
School. As someone who was present at its “creation”,
let me tell you a brief story about it.
Between 1975 and 2000, I was professor of
international business at the Kelley School of Business
of Indiana University, Bloomington, in the USA. My
friend and colleague across campus, Hungarian-Chair
Professor George Ranki, called one day in 1987: “I just
learned that George Soros [one of the world's most
successful, Hungarian-born U.S. investors, a prolific
author of books, a major philanthropist], and a friend
of his, Sandor Demjan [then the head of a large, state-
owned bank in Hungary; today, Hungary's richest
entrepreneur] are thinking about establishing a
graduate school of management in Hungary, to train
outstanding students for management roles in the
then still Communist Central Europe. Soros asked if
Indiana University could help. What can and should
we do?”
Ranki and I invited George Soros and Sandor Demjan
to spend two days in Bloomington in October 1987.
The first day I arranged for them a program, with the
participation of dozens of business faculty and deans,
of what an effective business school is like, how it is
managed, and what are some of the opportunities and
pitfalls of setting up a business school in the
communist world. It so happened that a member of
the Business School faculty, Joseph Battat, had the
recent experience of having established the first
Western-style business school in Shanghai, at the
request of the Chinese government, so he was able to
share his experiences and make many practical
suggestions.
“My friend called me one da y: ‘George
Soros and Sandor Demjan are thinking
about establishing a school of
management in Hungar y’”
In the evening of the first day we organized a banquet
and asked Mr. Soros to speak. He sketched his dream
about the first Western-style business school in
Central Europe. He also spoke, humorously, about just
the day before having lost $287 million dollars as the
result of the dramatic decline of the stock market.
The next day Soros and Demjan worked out the
funding details of the new school, called the
International Management Center (IMC), and asked
Prof. Battat and me to help with the task. We had
volunteered to work on this exciting project for eight
months, whenever we could find the time. At the
end of that period one of Mr. Soros' organizations
took over the planning details.
 Winter 2008 | Trans-national Voice 15

The IMC was established in 1988 and the first group of 30 students was admitted in
Dr. Paul Marer
1989. In 2001 the IMC became a part of Central European University, established
Emeritus Professor,
M.A., Ph.D., University of by Mr. Soros in 1991, that is, several years after the IMC. Since then the School has
Pennsylvania (Wharton) grown in size and reach; for example, we now also have two undergraduate
degree programs.
Professor of International
Business, CEU Business What was the reaction of Mr. Soros to the loss of $287 million in just few
School, Budapest; Academic
days?
Director (2000-2004);
Professor and Associate Dean
for Academics (August 2006- Last year, at an event involving the CEU Business School, where Messrs. Soros and
August 2008).
Demjan were the featured speakers, Mr. Demjan recalled the Bloomington
Appointed by President meetings in 1987: “On the second day, when George and I were discussing the
George Bush in 1990, re- details of setting up the IMC, I asked: 'George, how can you focus so sharply on the
appointed by President
Clinton in 1996 and by minute details of setting up a new school in Budapest when just yesterday you lost
George W. Bush in 2001, to $287 million on the stock market?' George replied: 'There will be plenty of
the Board of Trustees of the opportunities to regain the money lost, so I am not worried. But the
Hungarian-American
Enterprise Fund. opportunity to establish a management school to serve (communist)
Central and Eastern Europe may not ever again present itself, so I am
Twenty-five years at the
making the most of the opportunity.'”
Indiana University's Kelley
School of Business (1975-
2000), promoted to full What should the students learn from your narrative? What is the key
professor of international
conclusion?
business.

Consulting experience with This story tells you a great deal about the man whose far-sightedness and
the IMF, the World Bank, the
UN, the OECD, USAID, Eli generosity is responsible, more than anyone else, for you studying at this School
Lilly, Cummins Engine Co today. I hope that you'll make the most of the opportunity, first and foremost for
and other firms. your own sake, but also as a good way to express your appreciation to the School's
Wrote or edited 20 books and founders.
150 articles and chapters,
mainly on the changing
With so much experience to share with us, would you mind continuing
political, economic and
business situation in this series of interviews in our future issues?
Hungary, the other countries
of Central and Eastern
Yes. In subsequent issues I'll tell you more about George Soros, who is not only the
Europe, Russia and China.
founder, benefactor, and Honorary Chancellor of CEU but is also one of the most
Honorary doctorate, influential thinkers and personalities of our time.
Budapest University of
Economic Sciences (1999).
Thank you very much, Dr. Marer!
16 T r a n s - n a t i o n a l V o i c e | Winter 2008

globalization In “Globalization” we discover the largest

corporations on Earth that had the most
influence on the business, political, and
social aspects of our lives

By Rohan Servand

business political

society

E. Hobsbawm has labeled the period since 1991 onwards as the Globalization Epoch. Indeed, quite lately the
world has experienced the fast ongoing process of globalization. This term has several definitions and
explanations. However, for us, future businessmen, only one fact really matters - most of our business
transactions and negotiations will include 2 foreign positions or more. Should that be political factors, cultural
differences, or historically embedded ways of doing business, one thing remains crucial and that is
preparedness to work in a global environment. In this issue we discover the McDonald’s Corporation and
how its global expansion has affected people across the globe. Here we look at how McDonald’s manages to
integrate its food strategy and think globally, while considering regional differences and act locally.
 Winter 2 0 0 8 | T r a n s - n a t i o n a l V o i c e 17

Food has proved itself to be one of the best agents of

cultural migration. It is no longer impossible to find a
foreign cuisine in most major cities across the globe.
People are able to enjoy cuisines from countries they
have only heard of, and in turn get a small taste of its
culture. Foreign culture is often intriguing to the
point that people temporarily lose their own
traditions in order to get the best experience from
another.

Food has always had the ability to push some of its

values on a host nation. The large, yellow,
unconventional 'M' that symbolizes McDonalds is a
powerful example of cultural invasion. With over
31,000 outlets across the globe, it is safe to say that
there is a little bit of America in each one of
them. The food that it has to offer is just one medium
of cultural transfer. The outlets are often designed to
offer an American look or at least a look that is
synonymous with the company. Its franchise base is
amongst the strongest and best in the world.
Regardless of where you are you can almost always
get the same taste on products. I say almost always
because McDonalds has often gone out of its way to
alter products to get a better reception in certain
locales. For example, in India where the majority of
the country do not consume beef, McDonalds wiped
all beef burgers off the menu and replaced them with
chicken along with a twist of Indian flavour.
However there are other tiny details that bring
America to the world through McDonalds that often
go unnoticed, especially in Europe. In many Arabic
countries clothing is a modest affair for the majority
of the country. However, even in such locales, where
possible, McDonalds has imposed polo shirts and
trousers for women and men alike. With bright
colours they obviously stand out and in turn impose
western dress culture on foreign soil. Even the toys
that come along with every Happy Meal transfers a
little bit of America to the world. They often depict
fictional characters from animated movies that are
being released or shown at the time. Through such
marketing tools, companies like Walt Disney better
their revenues in multiplex' outside the USA. If not
toys that relate to characters, they instigate children
outside the USA to follow the latest pastimes. For
example in the early 1990's 'Pogs' became a
sensation across North America. McDonald’s caught
onto this and began offering colourful 'Pogs' in Happy
Meals across the Atlantic in Europe where the trend
never actually managed to go into full throttle.
However McDonalds does not go global solely
through its venues and products. Sponsorship of
colossal sporting events like the 2008 Olympics, and
providing meals at the Athletic Village are other
methods. Its appeal globally has even found itself a
place in the British weekly, 'The Economist'. With the
help of the Big Mac, the Economist compares
Purchasing Power Parity across the globe. They chose
a product that could be found in most markets, going
to show the widespread presence of McDonalds and
in turn American culture worldwide.
McDonald’s has entered so many markets by
adapting to them. However while doing so, they
never have forgotten to remind their customers and
employees that they are an American brand. With the
help of fast food they
have been able to
impose their culture in
every corner. After all,
food is an awesome
a g e n t o f c u l t u ra l
migration!
Ron welcoming
guests in Traditional
Thai fashion
18 Trans-national Voice | Winter 2008
Western “Support”
to Georgia
More than two and a half
months have passed since
the the 5-day war
between Georgia and Russia ended. Many questions
arose about the preliminary actions that could be
implemented for avoiding the military confrontation
in the Samachablo region. (A historic name for the
former Soviet “South Ossetian Autonomous District”,
nowadays called “South Ossetia” by the local
separatists, Russia and unfortunately by the
International Community) Indeed, the West had more
than enough power to generously contribute to
maintaining peace in this breakaway region of
Georgia, taking into account the fact that there were
serious signs of a potential conflict that had been
frozen for more than 15 years. Far more was expected
than what was actually done.
A month before the start of the clash between the
Georgian military forces and the illegal separatist
formations which were later joined by the Russian
Army, the Russian Federation conducted military
training “Caucasus 2008” close to its border with
separatist region. Later on, just a few days before the
opening fire, the de-facto government announced the
evacuation of the local population. Six Georgian
police officers were killed. These facts should have
by Givi Pantsulaia
been a serious signal for the International
Community. However, there were no reactions.
Finally, on August 6 the separatists did not let the
Georgian members of the Control Commission on
Conflict Resolution enter the region to attend the
commission’s meeting. Negotiations broke down. Still
no actual response from Georgia's “Supporters”.
Certainly, the US and western-European states,
alongside the UN, NATO and the EU showed their
support for Georgia against Russia within this matter.
However in the time of need there was no practical
aid. Even when Russian troops came out of the
conflict region of Samachablo and occupied the
neighboring town of Gori which is under the
jurisdiction of Georgia's central government, the
official statement made by Nicolas Sarkozy on behalf
of the EU “condemns the Russians' disproportionate
reaction to Georgia's aggression to South Ossetia”.
This made it clear how weak EU appeared to be in
confronting Russia and pushing it for maintaining
peace. Neither economic nor diplomatic sanctions
were posed against Russian Federation. The UN,
which stands on the basis of keeping global peace
failed to carry out the mission it was built upon.
Each and every victim state will always ask the
International Community a question:
what did they do in order to
? avoid the war and maintain the
peace? Georgia is one of these
victims asking this very question.
What did THEY do to avoid war and
maintain the peace?
 Winter 2008| Trans-national Voice
Based on my high-school experience
Class was full today, but still the sounds of shuffling
papers and cross-talk could not drown out the loud
bell at the beginning of class. Sitting next to me, one
of the schools hockey players was sunken low in his
seat, probably avoiding any unwanted attention he
might draw.
“How's it going man?” I asked softly, as class
had slowly start to begin. “Fine. Just a little tired,
that's all.” He replied.
“Well, we have short classes today because
of the assembly. Woohoo! How late were you up
anyway?” I asked. He hesitated at first, but
eventually said “Pretty late, I just flew back from the
lower 48 last night with my Mom.”
“Man, you gotta be tired” I said.
“Yeah, and I almost died of boredom at all
those conventions with Mr. John and others” He
said.
I laughed and said “I don't really follow all
that stuff too much, to be honest.” It was a safe reply,
fairly neutral I thought. The conversation came to an
awkward halt and we both retreated to our
notebooks.
When class ended he hurried out, everyone
else took their time. At my locker, I couldn't help but
overhear him talking on his phone:
“No, you really don't
have to.”
“What for?”
“I'll just meet you
somewhere else.”
? “Yeah, I made my bed
this morning.”
“Fine, bye.”
I approached him,
“Track, Is everything
alright?” I asked.
“I guess,” he said,
with certain distress,
“it's just that I'm a little
19
Guess Who?
Anonymous
uneasy about all this attention.” I couldn't blame
him. Track wasn't my close friend, however we did
chat occasionally. I could see the emotional mix he
was experience. All too soon the small town he grew
up in was beginning to single him out because of his
Mom. I patted his shoulder, and continued on to my
next class.
By lunch, rumors began to circulate.
Apparently his mother was dropping by the school to
speak at our assembly. Now I understood. That
makes a lot of sense.
The rest of the day was lost in a haze, as many
of the kids anxiously awaited the coming assembly,
each of them eager to see if the rumors were true. It
was to be held in the schools gym, the only room
large enough to house the school's still growing
population.
The room filled quickly, and I found my
place amongst a few friends. Let the games begin.
The lights dimmed a bit, provoking the rooms
anticipation even more. Afterwards, the crowd
slowly fell silent. A dark figure made its way to the
center of the gym. It was our Principle. He took his
time adjusting the microphone in hand, but soon his
voice was resonating clearly throughout the gym.
“I think most of you know what this
assembly is about,” he said, “so I can skip the
introduction.”
The whole room went dead, frozen with
expectations to finally hear Her speak in the school
“Students, I give you the next class
President.” he announced. Everyone gasped for air.
What is this? Instantly the gym was filled with a tide
of whispers. I sensed disappointment.
“I wanna go home!” someone yelled in the
distance. I agreed to that, this was a waste of our
time. I turned to my friend, and with a sarcastic tone
of voice he said, “Well, we sure expected someone
else.” “Whom?” someone asked. “Track Palin’s
mom, of course. Sarah Palin”
 20 Trans-national Voice| Winter 2008

N
e

Expert Advisory
t
Workshops
Student

w
o
r
k
i
n
g

Career Quest landing

a job
In Career Quest the Trans-national Voice, in
cooperation with the CEU Business School
Career Development Office, provides the
readers with various advice and tools for
building a better career. Find out what events By Rustam Jamilov
took place at CEU Business School in the past No matter what degree one is pursuing, the ultimate goal for any
month and make sure you attend the
student is to get a well-paid job in a good location with vast
upcoming fairs and showcases since they are
potential for growth. The problem is that everyone wants a well-
bricks on your life-long career construction!
paid job in a good location and potential for growth. Moreover, the
market requirements are growing more rigid every year. For
instance, if 10 years ago a fluency in one foreign language was very
much sufficient to landing a decent job, the situation is different
today. Most successful graduates speak 3-5 languages, not
“Choose a job you love, and you will never mentioning the academic and extracurricular achievements
have to work a day in your life” shining out from their resumes . Therefore, it’s quite difficult given
(Confucius) the modern flow of events to secure a job.
 Winter 2008 | Trans-national Voice 21

There is good news, however: CEU Business School is one of the unique
institutions that highly stresses the importance of assisting students in
making the right career choices. Only in recent weeks the members of
the CEU community had a chance to attend corporate showcases of
Credit Suisse, CEMI, and Egon Zehnder, as well as several
undergraduate and graduate workshops.

Overall, the career related events at CEU Business School constitute

the very core of the “success cannonball”. As seen from the illustration
on page X the four principal activities that will help a student land a job
are: corporate showcases, advisory from experts,
workshops, and networking. The latter one comes perhaps in
consequence of the other 3. By attending various conferences and Credit Suisse Corporate Showcase. October 28, 2008
affairs participants not only increase their chances of getting a call

Past Events
from, say, Credit Suisse a few weeks after the showcase, but also to
meet new people, exchange business cards, and contribute to the list
of personal contacts. It’s crucial to remember that the freshmen and 15 October: Resumé Writing Workshop
sophomores of today are future decision-makers in their home
countries. Given the fact that 80% of the CEU Business School student 20 October: Global Management Challenge (GMC)
body is international, and the country portfolio includes some 30 presentation
nations, we are talking about a massive networking platform hiding
behind the three lettered “CEU”. It’s at the same time beneficial for the 28 October: Corporate Showcase – Credit Suisse
visiting companies as well to ask for an e-mail of our student: you never
know who you will be doing business with in 5 years. 4 November: Undergraduate Workshop, Resumé
and Cover letter writing
While the career events are the cannonball, the cannon itself is - the
14 November: Egon Zehnder Corporate Showcase
student. No matter what resources a school implements to see its
graduates on the list of “The Best Companies to Work For”, the 20-21 November: Careers in Europe – job fair in
motivation and effort must come from the student only. For example, Budapest
one should take care of the grades before applying for
jobs. Yes, one might argue that grades are not sufficient to higher 28 November: CEMI Corporate Showcase
incomes or faster promotions. And we in no way disagree. However,
grades just... matter. Everything on the checklist matters: experience,
grades, recommendation letters. Letting one of the factors down hits
your chances of getting your dream position. And academic
performance, we believe, although with some room for speculation, is
the easiest basis for a company to make the final decision concerning a
particular candidate. Seeing the numbers on the list is way less
complicated than judging the listed internships, whether the
description and difficulty would actually be similar in a different
company and/or country. Hard facts are always more persuasive.

So, landing a good job is never easy. However, results usually outweigh
the costs. Construct your steel cannon in classes, and don’t disregard
the career affairs. Those provide the necessary intellectual weapons to
hit the bull’s eye of your life.

Finally, it’s important to note that all our corporate showcases and
student workshops would never take place without the diligent efforts
of our Career Development Office staff. Every day those people are
working really hard to make sure we receive the appropriate advice
and training on all career-related topics. On behalf of the Trans-
national Voice team, I would like to express our sincere gratitude for
everything they have done for us so far!
22 Trans-national Voice | Winter 2008

expert talk

Can the BRIC Emerging Markets help the World

through the Global Financial Crisis?
by Dr. Yusaf Akbar
Yusaf Akbar Received
?
his doctorate at the So now we are at a moment of reckoning debacle has pointed out on numerous
Sussex European
Institute, University of in the current phase of the global occasions that speculative bubbles will
Sussex, UK.
financial crisis that have frozen credit occur and it is a matter of managing
? Editor- in- Chief of
the International Journal markets and sent equity markets into a them. We appear to have let this bubble
of Emerging Markets
? Main teaching tailspin. The big issue we now face is grow to fast and without adequate
interests are in
whether or not the leading emerging oversight.
International Business,
Strategy, International markets of the world economy, notably
Trade and Investment.
? Main research the BRIC group (Brazil, Russia, India and While the blame game will need to be
interests are in China), can save us from a global played as we consider future regulatory
international trade and
investment, EU depression or whether they too are strategies to harness the power of free
integration and the
politics of multinational being dragged down in the after markets without becoming wedded to
enterprise strategy. currents of the US, UK, Japanese and libertarian ideology, we need to focus
? He published two
books in 2003, the first West European slowdown.` right now on how we can manage this
entitled EU
slide and who will be the key players in
Enlargenment and
Central Europe: Comparisons been drawn between the making this slide a gentle one.
Regulatory Convergence
and the Multinational current crisis and that of 1929 and 1908
Enterprise and another
- where financial markets collapsed What is unique about Brazil, India and
volume, Global
Antitrust: Trade and after a speculative bubble burst. Indeed, China (and to a make lesser degree
Competition Linkages.
? Dr. Akbar has taught this comparison makes sense - and as Russia) is that they have significant
in many countries such
George Soros - one of the few finance domestic market potential.
as USA, Italy, UK,
Bulgaria, Canada, etc. gurus to have financially survived this
 Winter 2008| Trans-national Voice 23

With populations in India and China in excess of 1 face of the global turndown – we cannot afford a repeat

billion people in each country, if the floor on of the post-1929 response. Fourth, developed country

developed country demand collapses, there's the companies will also need to intensify their efforts to sell

possibility that insatiable growth in these countries more in emerging markets.

will pick up some of the slack. Quite simply, we have Given these four conditions, I am more confident about

no clear idea from economic history what a 1 billion- India then China. China's growth has been predicated on

person consumer market behaves like. What we do a weak RMB and cost-based competitive advantage of

know is that there are probably around 100 to 150 companies located there. By contrast, India's

million Chinese middle class consumers and a smaller development, while having a significant export focus,

number in India who could continue to consume has also been based on rapid growth in domestic

products while the developed countries are licking demand in the major cities of the country. I am even less

confident about Brazil and Russia. Just this week,

President Lula da Silva in Brazil referred to the Wall

Street meltdown as “Bush's problem”. News for

President Lula: it's become everyone's problem! Russian

prosperity is based on commodity price appreciation

their wounds from this collapse. We will expect this
(notably oil and gas). With a relatively undiversified
number of middle class consumers to grow in the BRIC
economy and stagnant population growth, I'm not sure
countries.
that Russia can really help (unless Gazprom decides to

cut gas prices this winter and beyond to help West

What is key here are the following. First, export-led
European economies – don't hold your breath).
companies in the BRIC will need to re-orient their

strategies towards their domestic market – a task

As a final thought: the difference between Indians and
easier said than done and one that will take some time.
Chinese buying more of their own products and services
But if they want to avoid a collapse in their sales, they'll
to prop up the world economy and Asian and Middle
need to do just that. Second, in the immediate term,
Eastern investment funds buying developed country
they'll have to cut prices to their export markets
companies is obvious. The first implies breathing room
because falling incomes in the developed countries
for the Europeans and Americans while the latter implies
will necessitate this. Third, developed countries must
a wholesale shift in economic power and ownership
resist the temptation towards protectionism in the
from the North to the South.
24 Trans-national Voice | Winter 2008
Continued from page 4
In recent months there have been rapid reactions
from various nations in order to save their financial
systems. Global negligence would inevitably lead to a
global economic recession. With the United States in
the thick of elections over the past months, countries
have often had to take the first step forward to ensure
that money is safe. Ireland and Greece recently
guaranteed that all savings would be untouched. This
angered their EU neighbours as their own citizens
may look to transfer money to a place where their
money is safe.
As markets continue to plunge due to a widespread
fear amongst investors of a global recession,
governments battle hard to restore investor
confidence by regulating economic policies and
injecting large sums of money into the economy. In
India the Reserve Bank of India has slashed Cash
Reserve Ratios in order to release large sums of
money into the economy and in turn improve
liquidity. Japan on the other hand has been
withholding large sums of cash in order to dilute
losses that they fear have not been calculated yet
post the collapse of Lehman Brothers. This in turn has
regulated loans and hampered economic activity. In
London the primary concern is the number of skilled
workers entering the labour market. Unemployment
may hit all-time new lows in coming months as
financial firms declare bankruptcy or are taken over
by their more fortunate rivals. China is facing similar
problems. Whilst the government cuts interest rates
and the stamp price on share purchases post the
Olympics, unemployment seems to be on the rise as
infant competitors fail to receive orders from the
West, where expenditure is declining. These are
indications of the Chinese economy slowing down
drastically. Russia on the other hand has faced few
difficulties as very few Russians own shares. However
the rapid changes in markets has led to the closing of
markets for up to 48 hours at times in mid October.
A pessimistic wave has engulfed investors across the
globe in the light of what they fear may be a global
recession. Banks are largely unable to provide loans
in the West. As a result, governments have made it
their top priority concern to bring these firms out of
debt by purchasing their problems and reducing
interest levels. This in turn will allow for more credit
for borrowers. Credit was the ingredient of this
downfall, and ironically it appears to be the sole cure;
however at the price of innocent tax payers.