25TH ANNIVERSARY OF CEEMAN
MOVING FORWARD & REACHING OUT 2003-2007
PART I

SECTION 1
In national referendums about accession, more than 75% of voters favored joining the EU in all CEE countries involved except Estonia and Latvia where the "yes" vote was 67%.
The CEE nations of Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Slovenia, and Hungary, plus the islands of Malta and Cyprus joined the European Union on May 1, 2004. President of the European Commission Romano Prodi led celebrations on the Italian-Slovenian border and at the German-Polish border, the EU flag was raised and Ode to Joy was sung. In national referendums about accession, more than 75% of voters favored joining the EU in all CEE countries involved except Estonia and Latvia where the "yes" vote was 67%.

Still, there were worries about integrating the new members. Questions were raised about the costs of the enlargement, as most of the newcomers had significantly lower income levels than the average of the incumbent member tates. While the newly acceding member states accounted for about 21% of the EU population, they represented only about 7% of EU's GDP. From 2000 to 2003 the European Commission devoted 13.2 billion euros to pre-accession expenditure and more than 41 billion euros would be spent in the period 2004-2006.

EU citizens also saw risks in terms of jobs, wages, security, and identity. A 2002 Euro-barometer survey found that only 29% of the existing EU citizens believed that enlargement would help create jobs in their country. Moreover, many (48%) feared that that it would trigger a wave of migration from CEE countries to their homelands and two-thirds were concerned about increased unemployment, drug trafficking, and organized crime. A Danish report asked, "Does EU enlargement start a race to the bottom?"
7%

While the newly acceding member states accounted for about 21% of the EU population, they represented only about 7% of EU's GDP
54.2 billion

From 2000 to 2003 the European Commission devoted 13.2 billion euros to pre-accession expenditure and more than 41 billion euros would be spent in the period 2004-2006, a total of 54.2 billion.
29%

A 2002 Euro-barometer survey found that only 29% of the existing EU citizens believed that enlargement would help create jobs in their country.
However, according to a 2006 report by the Bureau of European Policy Advisors, examining the impact of integration on new members (EU-10) and old members (EU-15) concluded: "The new member states have undertaken extensive reforms to modernize and are now dynamic market economies. The stability provided by accession has helped to multiply trade and investment between EU-15 and EU-10 as well as within EU-10, creating a win-win situation for all involved: contributing to growth and employment in the EU-10; opening new opportunities for firms in the EU-15, thereby helping them stay competitive in the face of an ever more challenging global environment…."

The EU enlargement would continue in the following years. Bulgaria and Romania joined the EU on January 1, 2007 and Croatia acceded on July 1, 2013, bringing the Union to 28 member states

11th Annual Conference, Sofia, Bulgaria, 2003

SECTION 2
Economic Growth
There were different patterns in employment and participation rates across the EU-10.
Experts estimate that the accession process boosted economic growth in the new member states by about 1¾ percentage points per year. Trade volumes expanded for the EU-10 at double the rate of the EU-15. As a result of enterprise restructuring, there were further job losses in the EU-10 in 2003, but thereafter employment rates grew annually about 1.5% in the new member states, creating roughly 3 million new jobs.

There were, however, different patterns in employment and participation rates across the EU-10. Substantial job losses continued in Lithuania and especially Poland through the period 2002- 2007 and labor force participation rates dropped in the Czech Republic and Slovakia. They increased, by comparison, in Hungary, Latvia, and Slovenia. Overall, men were hit harder with job loss than women, representing declines in heavy industry and mining, and youth were hit hard, too, signaling difficulties in school-to-work transitions.

As for worries over labor migration, estimates are that by 2007 roughly 3.6 million (up from 1.6 million at end-2003) migrated from EU-10 to EU-15 labor markets (several states put limits on importing labor from the EU-10). Here the Bureau of European Policy Advisors finds that the effects of relocation and migration have been "rather modest." Ironically, those states that did not restrict the movement of labor (UK and Ireland) had better employment performance in this period.

Moving beyond the new EU Member States, Russia's economy made real gains of an average 7% per year in 2003-2007, although inflation remained a problem. The economy of Ukraine, which fell sharply and experienced hyperinflation during the first 10 years of its independence from the USSR, enjoyed rapid growth in this period as well.

Pavlo Sheremeta speaking at the international panel, CEEMAN Annual Conference in St. Petersburg, 2004

SECTION 3
CEE Firm Performance
Climbing the "quality ladder" in export growth.
Many businesses operating in the CEE had stronger performance in the improved economic climate of 2003-2007. Some of this can be attributed to continuing restructuring but more has to do with the development of new business models and improvements in product quality. Analysts note that there reductions in resource-intensive exports from many CEE countries during this period, modest increases in labor-intensive exports, and significant increases in human capital intensive exports that involve high technology production and knowledge work. This evidences CEE firms increasingly involved in new product development and making process improvements, thereby climbing the "quality ladder" in export growth.

It also marks a shift from competing solely on costs to competing on quality and innovation. In this regard, surveys on economic priorities of companies in the CEE at that time found higher-quality product designs and production systems to be their highest priorities.

Russia continued to be a resource-intensive exporter in this period, and its industries were dominated by large firms. To support enterprise development, Finance Minister Aleksei Kudrin announced a special government program worth 140 million rubles dedicated to supporting small business:
"This money is being used to facilitate introduction of new technology, including information technology, into the small companies, as well as training and retraining of entrepreneurs."
Aleksei Kudrin, Finance Minister of Russia
He also described a "velvet tax revolution" that would have a number of tax advantages designed for individual entrepreneurs and small business owners "including lower income tax, VAT and social-security tax exemptions, and lower taxes on profits, among other measures."

Finally, there were improvements in this period in business's operating practices. During the 1990s, many CEE and Russian companies were marked by poor corporate governance. To conform to EU guidelines and gain access to export markets, many firms adopted German-style governance systems with a Board of Management and Supervisory Board. During this period, too, Russia's publicly-listed and non-private companies adopted International Financial Reporting Standards.

CEEMAN Annual Conference in St. Petersburg, 2004

SECTION 4
Indigenous Management Scholarship
Topics of scholarly interest in CEE continued to expand and enrich.
A 2005 volume, Corporate Governance in Russia, edited by Daniel J. McCarthy and Sheila M. Puffer, from the US and Stanislav V. Shekshnia from Russia presents case studies and illustrations of other governance improvements. This work exemplifies continued East-West collaboration in producing management scholarship and brings practitioners' voices into the literature. Its contributors include, among others, Russian academics Abel G. Aganbegyan and Vladimir Schein, of the Academy of National Economy in Moscow; Russian governance specialists Igor V. Belikov, founder of the Russian Institute of Directors, plus Stanislav V. Shekshnia and Andrey Mikhaylenko, co-founders of Zest Leadership, a consulting firm; professors with a Russian background such as Igor Filatotchev of King's College, London, Anatoly V. Zhuplev of Loyola Marymount, Los Angeles, and Alina Pekarsky of York University, Toronto, Canada; and professors Mike Wright, Nottingham University Business School and Trevor Buck, then of Loughborough University in the UK.

So, too, the topics of scholarly interest in CEE continued to expand and enrich. Consider, for example, Leaders and Teams: The Winning Partnership with multinational contributions from Danica Purg, Pierre Casse, Lynn A. Isabella, Paul Georges Claudel, and Arnold Walravens (2003); Change Management in Transition Economies: Integrating Corporate Strategy, Structure and Culture, edited by Heinz-Jürgen Stüting, Wolfgang Dorow, Frank Claassen, and Susanne Blazejewski (2003); The Challenges of Sustained Development: The Role of Socio-Cultural Factors in East-Central Europe by Frane Adam, Matej Makarovič, Borut Rončević, and Matevž Tomšič (2005); and The Knowledge-Based Economy in Central and East European Countries: Countries and Industries in a Process of Change, edited by Krzysztof Piech and Slavo Radosevic (2006).
This period also witnessed rising angst and growing debate over the relevance of management research and teaching, particularly in the US but also the spread of the "American" model of scholarship to business and management schools around the world.
Stanford Professors Jeffrey Pfeffer and Christine Fong published "The End of Business schools? Less Success Than Meets the Eye," in the inaugural edition of Academy of Management Learning & Education, 1(1), 2000: 78–95; then came McGill's Henry Mintzberg's Managers not MBAs: A Hard Look at the Soft Practice of Managing and Management Development (Berrett- Koehler, 2004); and finally Warren Bennis and James O'Toole presented "How Business Schools Lost Their Way" in the Harvard Business Review, 83(5), 2005: 96-104.

The underlying critique had many roots and manifestations, but on the research side the main criticisms centered on American scholars' primary focus on theory, as opposed to practice, on the rigor of their research, as opposed to its relevance, and on their wholesale embrace of modern micro-economic theory that posits self-interest at the core of human motivation and discounts attention to social relations and cultural differences and circumstances. On this point, Fabrizio Ferraro, Jeffrey Pfeffer, and Robert I. Sutton noted, "Modern microeconomic theory has been used to design auctions, organize markets, guide privatization efforts, and lead the post-socialist transition of Eastern Europe."

Derek Abell, among others in CEEMAN, took a strong view on what kind of management research was needed in the region. He stated:
There appears to be a drifting apart between businesses and business schools. Business is preoccupied with managing massive changes related to globalization, technological change, meeting new competition from Asia, and so on. Business schools seem to be increasingly preoccupied with very specialized research aimed at very selected journals hardly read by business people themselves. So there must be a huge opportunity for CEEMAN and CEEMAN schools to close this gap. It means developing relevant research and teaching that really satisfies business school customers.

The reasons for the discrepancy between business school agendas and business agendas are that business schools do not see business as their prime customers and that incentive schemes for promotion to professorships are based purely on academic publication rather than contributions to business education and business itself. The very first thing for CEEMAN schools to do is to undertake a massive case-writing effort to produce new relevant teaching material and research publications that meet business needs.
Derek Abell
Other CEE faculty, however, had a more pluralistic view on research topics and methods. IMTA incorporated these diverse views into modules on Case Writing and on Research and Publishing in its development program for young faculty.

IMTA participants on Lake Bohinj, Slovenia 2007

SECTION 5
The MBA Classroom
MBA education was "distorting those subjected to it into critters with lopsided brains, icy hearts, and shrunken souls."
The critique of management scholarship extended as well into the business school classroom. Here, it was noted, the typical American MBA class focused on "analytics" rather than discovery and diagnosis; considered situations from a functional rather than integrative management perspective, and gave scant attention to development of interpersonal and leadership skills. As Harold Leavitt put it, MBA education was "distorting those subjected to it into critters with lopsided brains, icy hearts, and shrunken souls."

By this time, many (but not all) CEEMAN member schools had instead opted for case teaching, project-based learning, and teaching modules with a multi-disciplinary flavor (alongside courses in accounting, finance, marketing, and the like). IEDC-Bled School of Management sought to stretch the boundaries further. In one of its executive education programs, teams of managers are transported to Sarajevo, Bosnia and Herzegovina, to witness the horrors of ethnic conflict and war, see on-the-ground examples of courage and community, and contemplate the lessons for their own personal and collective leadership. There they meet with business, civic, and political leaders, meet filmmaker Haris Pašović who describes how people from different ethnic origins that lived together for centuries could be brought into conflict, walk the streets and cemeteries, and savor the works of artists and musicians. Jonathan Gosling has joined with Danica Purg in designing and facilitating several of these programs.
Art can be a tool for leadership development….it helps you become more creative, innovative and inspired. It promotes reflection.
IEDC-Bled has also been innovating in "arts in management" pedagogy. Danica reports that "Art can be a tool for leadership development….it helps you become more creative, innovative and inspired. It promotes reflection." A troupe of internationally recognized musicians such as Miha Pogačnik (Slovenian violinist), Marko Letonja (Slovenian conductor), Peter Hanke (Danish conductor), and Paul Robertson (British violinist), plus various vocal and instrumental ensembles, film-makers, and visual artists, along with faculty members Ian Sutherland and Arnold Walravens, enrich the leadership development experience of IEDC program participants. They lead workshops on deep listening, music and teamwork, embodied forms of leadership, and creativity in music and management.

These pedagogical innovations from IEDC, and other schools, were shared with CEEMAN members in workshops and the annual conferences of 2003-2007. A related "arts in business" movement was underway in companies and in management education around the world. The rationale is that this prepares managers and managers-to-be to operate in the emerging "creative economy", where design and aesthetics are sources of differentiation for business, and in an "experience economy", where customers are engaged by and actively participate in the "creation" of goods and the "performance" of services.

Bohdan Budzan, host of the CEEMAN Annual Conference in Kiev, 2005

SECTION 6
Global Developments
CEEMAN'S WORLD 2003 - 2007
This lustrum also witnessed global developments germane to management and management development. Skype was founded in 2003; Facebook was launched in 2004; YouTube in 2005; Twitter in 2006; and the Apple iPhone debuted in 2007 all of which had profound effects on communication, social networking, time/space boundaries, and of course managing and learning. These 21st century tools spread around the world faster and farther than anything that preceded them.

On November 11, 2005, the "father of modern management" Peter Drucker died. Born in Austria, Drucker made a video-conference address to attendees of IEDC's 10th anniversary celebration: Manage Yourself and Then Your Company. Set an Example.

On the political front, 2003 saw the invasion of Iraq by the US and coalition forces; 2004 the "Orange Revolution" following a rigged revolution in Ukraine; terrorist bombings in Madrid (2004) and London (2005); and the execution of Saddam Hussein (2006). In addition, Germany got a new chancellor, France a new president, and the UK a new prime minister. North Korea conducted its first successful nuclear test. In testament to rising standards of living and the high quality of life in the EU, Jeremy Rifkin wrote, The European Dream: How Europe's Vision of theFuture Is Quietly Eclipsing the American Dream (New York: Tarcher, 2004).

As for climate and the natural environment, Europe experienced a deadly heat wave (2003); an Indian Ocean earthquake and tsunami left one-quarter million people dead (2004); hurricane Katrina flooded New Orleans (2005); and commentors began to link "weird weather" to global warming. The first meeting of the parties to the Kyoto Protocol (MOP 1) took place in Montreal in 2005. One year later, the BP oil spill discharged 4.9 million barrels of oil into the Gulf of Mexico.

Miha Pogačnik speaking at the CEEMAN Annual Conference in Kiev, Ukraine, 2005 – "Decomposing the Music"

Credits
Text — adapted from the book "CEEMAN - 20 Years of Creating History" by Philip H. Mirvis and Arnold Walravens, 2013

Production and Design — Artyom Ushnichkov, 2018