Trans-national Voice Issue 2

Issue 1, Winter 2008

CEU Business School

Trans-national Voice Spring 2009

Student Journal

IN THIS ISSUE 5

In Focus ‘Educatio’ Student Fair

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About... Hogan Hayes Professor of Communications

10 Expert Talk Dr. Buzady on Trust 16 Career Quest

AND 12 Discover The Miracles of Azerbaijan 20

Be the Change Let the Storm Begin

Discover. Inspire. Live.

Trans-national Voice

Trans-national Voice CEU Business School Student Journal

Trans-national Voice is the first and largest student-run organization at the Central European University Business School. Transnational 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 Transnational Voice we provide you an informational platform for intellectual exchange in a global environment. R. Servand

A. Kurmangazina

K. Rowland

R. Jamilov

Editorial Contact Email: [email protected] Tel.: +36-70-254-3101

Trans-national Voice CEU Business School Frankel Leo u. 31-34 Budapest, Hungary H-1023

Email: [email protected]

Your Trans-national Voice team Founder and Editor-in-Chief: Rustam Jamilov (Azerbaijan) Assistant Editor: Rohan Servand (India) Correspondent: Katie Rowland (United Kingdom) Team Coordinator: Aigerima Kurmangazina (Kazakhstan) Writers: Ilya Baltinsky (Belarus) Givi Pantsulaia (Georgia) Hernan Jansen (Venezuela) Wojtek Skrzypczak (Poland)

Tel.: +36-1-887-5014 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 not necessarily shared by the editors or the CEU Business School.

Dear Readers,

For the second time in the history of CEU Business School, I am proud to present the Trans-national Voice. Every once in a while the business world experiences a dramatic change - a shift from the methods more mundane to the life of new dogmas. The global reality of the new millennium is a no simple challenge - it requires originality and an all-around intellect, a combination of skills and knowledge never before considered necessary. The world needs a new type of managers - people who can do it all. We are those people. In this issue we are introducing ‘Discover’: an informal column providing insights into the homelands of our students. We begin our journey with Azerbaijan, the land of fire on the crossroads of time. The fundamentals of entrepreneurship were shared with us by the two CEU Business School students who are managing their own company. We also provide our readers with a look at the implications of the current financial crisis. Finally, we reveal the story of money in the sports industry, the sector which continues to attract massive amounts of capital despite the worsening economic environment. We have our views on the current issues. We voice them here. Enjoy reading the Spring 2009 issue of the Trans-national Voice.

Yours, Rustam Jamilov Founder and Editor-in-Chief

Trans-national Voice

Editor’s Message

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Trans-national Voice| Spring 2009

Trans-national Voice

Transnational Voice

C E U B u s i n e s s S c h o o l S t u d e n t Jo u r n a l

CONTENTS 5

In Focus ‘Educatio’ Student Fair Transnational Voice Reports

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About... Hogan Hayes Professor of Communications

10 Expert Talk Dr. Zoltan Buzady on Business and Trust

16 Career Quest Meet Peder and Jacob

20 Be the Change Imagine and Transform

Yes we can! Can’t we? As Barack Obama takes over and we can all feel privileged to witness the history, great speeches and symbolic gestures must be soon replaced by courageous actions and unpopular decisions. The forty-fourth president raises to power in extremely troubled times, and the great expectations he has awaken are only to amass, not abate, in the forthcoming months. th

On January 20 Obama has been sworn in with the acceptance rate of 83%, the highest ever for any inaugurating president. This denotes the great spirit of American people who react with increased optimism, not fear, to the “gathering clouds and raging storms”. This also means the new Commander-in-Chief is facing what the U.S. media, driven by reason rather than emotions, call “inflated expectations”. They relate to the health care reform, to tax cuts on families, to more accessible education, to tackling of financial crisis, to global warming, to the Middle East conflict, to Iraq, to Afghanistan and, last but not least, to the reputation of America in the world.

9 A Passion for Fencing by Hernan Jansen

12 Discover Azerbaijan by Rustam Jamilov

14 The Crisis Insight by Ilya Baltinsky

18 Sport and Money by Rohan Servand

Quote of the Issue “It is not that the things are difficult we don’t dare; it’s we don’t dare and they are difficult” Seneca

While the last one can be quite easily enhanced with symbolic actions, such as closure of Guantánamo and the ban on interrogation tortures, most of key issues will require an intensive political effort. The withdrawal from Iraq seems years away, and no one can really p r e d i c t t h e developments there, not to mention even an approximate timeframe of completing the m i s s i o n . I n Afghanistan, as Obama himself recognizes, the situation is even more complicated and unpredictable. Back home, Americans might endorse the universal health care ideas but are unlikely to accept a near-socialist Canadianlike system. Eventual ratification of the Kyoto Protocol might be opposed in Congress... (Continued on p. 19)

Spring 2009| Trans-national Voice

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Educatio 2009 Trans-national Voice Reports By Aigerim Kurmangazina th

Morning of January 20 . I am rushing around my room looking for my mobile. I can't be late to school today since I have my Management class instructed by Yusaf Akbar, who appreciates and actually requires punctuality. Nevertheless, just a few minutes before getting out of the dorm for school I decide to quickly check my mailbox. Important e-mails are usually mixed with tons of Facebook and other similar less important mailnotifications. I am looking through the list of new e-mails and one catches my attention at once. The message indicates that on January 23-24 CEU Business School will be presented at “Educatio”, the Higher Educational Fair of Hungary. I get interested immediately because I am asked by the school's recruitment team to participate in this event. I reply promptly as I am eager to share my experience with the enquirers and assist in the activities planned for “Educatio”. Then it is back to the rush of making it to school on time. My trip to school takes about an hour every morning. Usually, I occupy myself with reading, but not this time. This particular invite had occupied my mind. The reason behind this is that my previous professional experience was closely connected with educational recruitment. I am reminded of past experiences. I am glad I can go back to this field and do something I really enjoyed doing during those 5 years. Moreover, the educational fair acted as a platform for us to use all the knowledge about management and marketing and other skills we've been taught at school. It is a shame to admit, but even after one and a half years of living in Budapest I do not know the city as well as I probably should. So, when I was told the event will take place in the SYMA Sportan Event Center, I had to study the directions and even search the address with the “Google

Maps”. But I got lucky and hitched a ride with one of the school's recruiters. By the time we arrived to the SYMA Center it was packed mostly with young people, mostly appearing clueless. The official webpage of the event said that the organizers were expecting between 40,000 and 50,000 people. The SYMA Center was like a huge hive buzzing with future educational opportunities. I would have spent hours checking out different school's booths if I went there alone. Well, I have to admit that we did roam for a while, but after checking the map of the exhibition, which was available almost in every corner we found our way. Despite there being a map, I thought that it would be much easier for potential students to find us if the booth was closer to the center of the hall. The blue and dark red balloons, which signified the colors of the CEU Business School, on top of our booth distinguished us from hundreds of others. When we reached our booth we were happily greeted, especially by Ilya Baltinsky, my school peer. He was working hard distributing cakes, and by the time we had arrived he had already finished giving out one and a half cakes decorated with the CEU Business School logo and various national flags. Distribution of cakes may seem like an easy task. But it got us pretty engaged nevertheless.

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Trans-national Voice| Spring 2009

We were busy giving out the cake, and at the same time telling students and parents about the school and handing them brochures about future events. I must confess the cake worked out to be a good marketing tool. They still took a flyer each, but there was no connection with each customer. It felt that many viewed our food just as food – not a connection point between us and them. Of course old ladies who did not speak any English seem to be an unfavorable target market. However, I prefer to think that it is still worth giving out a flyer together with cake. You never know where the brochure will go. It may end up in the hands of someone who will make their way to the Open Day. Besides cake distribution, we were also busy conducting a competition among interested high school students. Our school's marketing department compiled tests of consisting of ten geographical, political and economical questions. For 5-6 correct answers students could get a USB charm and for 7-8 right answers – a mug with the school logo. Those students getting 9-10 points would be able to take the first step towards getting a full scholarship to study on the Bachelor of Science in Global Management program. If they were successful thhey would have to take another harder and longer test later. This is an opportunity that not all schools would offer. In addition, we had two school representatives conducting presentations during the fair. Hogan Hayes, Senior Lecturer of Communications, was talking about “Independent Learning and University Life” and Paul Garrison, Dean and Managing Director, was giving his speech on Trans-National Leadership, Preparing a New Breed of Managers for a Rapidly Changing World. Mr. Hayes was lecturing in a conference room and did not attract a big crowd since the room was far from the center and it was on the first day of the fair which traditionally attracts slim crowds. On the other hand, Paul Garrison's presentation was on the main stage and attracted a lot of attention. It would make sense for our school to book the main stage to run presentations in the future since there were a large number of students listening at once. The

students would not have much time to go to remote conference rooms, whereas the main stage can always attract attention. By participating in “Educatio”, CEU BS w a s m a i n l y targeting the H u n g a r i a n students. Here in Hungary our school has some strong competitors, namely public H u n g a r i a n universities with free tuition and international schools with lower tuition fees than CEU BS. There are not too many Hungarian students studying at our university. So, probably, there is sense in evaluating the investments and results of local advertising and decide whether it is worth participating in such an event to get a small crowd of Hungarian students. Moreover, since the school is aiming to keep its multicultural nature, which adds value to the programs, it does not actually need to have many local students. It seems that it would be better to invest in foreign advertisement. One of the ways to attract more students is to put a lot of effort to strengthen its brand image, something CEU BS is working hard on in recent times. It would be reasonable to take part in different events and appear in public, as it allows for the school to become more familiar in the educational market.

I believe that the school has better instructors, however less developed student life in comparision to its competitors. That's why the school is making attempts to improve its weakness. The Student Affairs Office is launching starting from February 2009. The main aim of this office will be to support student life, expect new ideas and thoughts from current students, thus creating a much more exciting life outside of the class room. Good luck to the Student Affairs Office and CEU Business School!

Spring 2009| Trans-national Voice

About... Hogan Hayes Professor of Communications

Mr Hayes, you are a Midwesterner with a graduate degree from University of California, living and working in Central Europe. How did you get to a country thousand miles away from the States? What was your incentive to move here? After I finished my undergraduate work at the University of Wisconsin, I decided to explore Europe for a few months before starting any kind of a career. On my trip I met my future wife, Dóra. At that time, she was living in her native Budapest, but she had lived in the States for years. This made her an ideal guide for my time in Hungary, and before I knew it, I had spent nearly a month seeing Budapest and the Hungarian countryside. During that time I convinced Dóra to come back to the U.S. with me. We were in New York City for a few years,

where I tried my hand at Public Relations and hospitality. And then we headed west, to California. After I obtained my Master's degree in English at UC Davis, Dóra applied to the fulltime MBA program here at CEU. When she was accepted, we uprooted ourselves once again. Our intention was to spend a year or two in Hungary, but Budapest is a good town. It's offered us a lot of opportunities and unique experiences. We've been here four years now,

and we've been happy in our lives and work that whole time.

The atypical feature of our school is that our students come from all over the world. What was your first reaction to such a cultural mix? What impact, if any, has teaching in a multinational environment had on you? Before I started teaching here at CEU, I was across town at McDaniel College, Budapest. While the countries represented in the CEU classroom are different than those in the McDaniel classroom, both schools share an impressive multinational student body. While teaching at McDaniel, I started asking questions about how, as an instructor, I could use that quality of diversity as a teaching tool – as opposed to seeing it as an obstacle. There's actually a lot of literature on the subject in the academic journals concerned with Composition & Rhetoric. So, by the time I arrived at CEU, I was already working with teaching tools that address a multinational/multicultural classroom. It has actually become a main area of interest for my research. I plan to write up a paper this spring on the composition workshop dynamic in a diverse classroom. Beyond that, I am always surprised at how much I learn from my students. And I don't just mean the names of the Eurasian capitals; when I engage in discussions with students from other cultures I learn new ways to grapple with ideas. It's exciting for me.

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We know that you have two dogs. Could you tell us something about them? My dogs are named Szóda and Dió. Szóda is the older one. She's got the look of a German Sheppard, but there's reason to believe she's not pure-bred. She turned up on the porch of our country house out in Leányfalu a few summers ago. We fell for her immediately. Her ears were bigger than her whole head back then. It was pretty adorable. She's spent the past few years learning to swim and play Frisbee. Then a year ago Szóda surprised us with a pregnancy. She whelped nine pups. That was quite an experience. If you've ever thought about raising puppies, stop thinking about it now. It is more difficult than you can imagine. Despite the difficulties, however, we kept one of the males and named him Dió. He turned one in January, and he's still got a lot of puppy energy.

You are the founder and director of the Undergraduate Writing Center. What is the idea behind your initiative and what can it give the students? I'm very excited about the UWC. I see academic writing as a skill that we never stop honing. That aspect of writing, the unceasing effort that it demands, is the central preoccupation of my work. So, on the last day of the semester, when a student is walking out of my Writing Skills course with a good grade, I want to stop them and say, “Remember, this was just the beginning. It should only get harder, more complicated, and more interesting from here. As you master more subject matter, you must struggle in your writing to reflect all of the knowledge you've gained. Every time you sit down to communicate your increasingly complex understanding of the world, it should be a wonderfully frustrating experience, an exquisitely painful slog through language and ideas. Enjoy.” Since writing should always present new challenges, the UWC is there to help students understand those challenges. How is a brief essay assigned in an Intro Level course different than a term paper in a course that delves deep into a subject? How can we write current events into our understanding of established theory? How do I effectively question the conclusions of a

respected authority? These and other questions should be on the minds of any student who is serious about engaging in a written dialogue on a subject.

This semester The UWC will introduce peer counselors and extended consultation hours. Students will have the opportunity to have their work read by fresh eyes before turning in their work. Or students can schedule several consultations and get help on each of the steps that lead to a final draft. The idea is, if students feel at all lost during the writing process, they have a place to go.

You are reading and correcting hundreds of student essays on a regular basis. Can you recall a topic that you had never thought a student might write about? I'm always surprised when I read the personal essays about broken hearts. There are two or three of them every year, but they still catch me off guard every time. Regardless of the quality of the writing, these essays are always deeply personal, and often very revealing. Students try to put to paper events that have clearly left them in some very real pain. That kind of emotion is difficult to dredge up, and to hand that kind of material into an instructor takes a kind of openness that is consistently stunning.

Thank you very much, Mr Hayes!

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Fencing: It’s All About Physical and Mental Development By Hernan Jansen

It is not just a sport. It is not just playing with swords. It is a way of life. It is art. It is the art of touching and not being touched. It is fencing.

ready for the unexpected and be willing to modify your plan when necessary. You might win or lose, and there is the beauty.

From ancient times, when princes challenged each other to the one who bled first from the cut of a blade, to the sophisticated Olympic sport that it is today, fencing has always been synonymous with grace, elegance and style.

Action after action you develop your character. The uncertainty is there and, with it, there is failure. You may sometimes fail, but it is up to you to recover and keep on going. It is part of the game as it is part of life. After a failure you can choose to lament, give up and lose hope. Or, you can choose to react, learn and progress. Fencing will teach you that as long as you know where you are going and work for it everyday, eventually you will get there.

It does not matter whether your target is the whole body like it is in epee, or just the upper body as it is in saber, or even only the chest and the back as it is in foil, fencing will shape your body and your mind. Fencing engages physical efforts that demand action after action. This leads you to develop every part of your body. Moving back and forth on the strip develops your lower body. Your thighs, calves and your gluteus, everything is strengthened and the body works as a single unit. Stretching to seek for the adversary and defend from his attacks with your weapon develops your whole upper body to the point of a subtle but strong muscular definition. Your arms, back, neck, thighs, calves, everything must be in shape for a precise and accurate reaction. I aim for perfection every day in training. Each training routine has a purpose and each routine is different. Every adversary is different. Every action is different. You have to be ready to change whenever the situation requires it. As a lion has a plan to hunt its prey, you must have a plan to “hunt” your adversary. You have to be

Fencing has taught me what to expect from and how to win in life. The road to success will be decked with millions of different landscapes. Some of them will be beautiful, easy to walk and very joyful. For good or for bad, these beautiful landscapes are few. The reality is that most of them will be hard to go through. It does not matter how much you complain about them; they will not get any easier. All you can do is learn from the obstacle and move on. Action after action, business deal after business deal, or relationship after relationship you must learn and keep walking. The goal is there. Your dreams are reachable. It is up to you to stop and lament because the way is not what you expected. Or very slowly and methodically, deal by deal, step by step (that’s how it was in my case) and action by action you can choose to boldly engage the walk that can and will change your life: the walk I call ‘the road to success’

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Transnational Voice| Spring 2009

ExpertTalk How Should Leaders Build Trust Effectively? We have heard it again and again over the past months: “Failed leadership caused the financial crisis. And to overcome the global financial crisis, trust has to be created again!” – Trust – a short word that through overuse has lost much of its force. What is its true meaning? If trust can be destroyed almost over night, how can one rebuild it again? How does trust operate at the interpersonal level within a company? And what are the personal implications for managers and leaders? One possible way to describe trust is to say that it is a positive expectation that another will not act opportunistically. Without this positive expectation transactions become very complicated and costly. In order to secure more or less effective transactions we have to build a trust-relationship between the parties. We clearly have to distinguish between two major types of trust in our business interactions: The first being trust in the “legal” or contractual sense, which is more static and tends to be “institutional”. We can consider this “legal” trust as the minimum level of trust for all our transactions. The consequences of breaking this type of trust are more financial, such as fines or liabilities, whereas the enforcement mechanism is typically through administrative adjudication or a similarly regulated forum. The second and much more intricate type is “collaborative trust”. This is created between people, often by no more than a hand-shake or a given word. This type of trust is rather fluid in nature; additions and deletions from the initial agreement may occur frequently as the working relationship evolves over time. The consequences of breaking this trust relationship are more political and result in damaged relationships or reputations. In daily practice, collaborative trust agreements are typically made for much shorter psychological time frames than in the case of legal trust supported with formal agreements. In these cases the contract stipulates several years

Dr. Zoltan Buzady Assistant Professor of Management, Area Coordinator Ph.D. in Strategy and Organization from the Corvinus University of Budapest Master in Business Administration degree from Cass Business School, London Bachelor’s degree in Law from the London School of Economics Management consulting experience and entrepreneurial experiences Research interests and publications focus on strategy, strategic alliances, and regional business strategies in Central Eastern Europe Has been teaching at the University of Passau, on MBA and Executive MBA programs of Corvinus University and CEU during the last 5 years

Spring 2009| Transnational Voice

Leadership eventually comes down to influencing others. Even with a strategic vision and excellent skills in managing change, leaders must know how – and be willing – to influence others. Historically leadership was associated with one's job rank or position. However modern leadership theory now distinguishes between several different types of organizational power, all based on different sources of power. Also the willingness of people to accept power from above has been considerably diminished in our times. In fact none of my many MBA or executive course participants have ever mentioned a superior's “power” as the reason to accept influence. What repeatedly emerges in these very personal discussions is that relationships in which influencing – with or without authority – occurs are actually based on reciprocal exchanges exchanges of psychological – not monetary – units such as praise, recognition, loyalty, compromises and most importantly trust. One might then ask how to create a work environment characterized by trust? Unfortunately I have to disappoint you: the basic rules for doing this are easy to understand, but difficult to put into daily practice. In most organizations the starting-off situation is not that bad after all (except in cases of deep crisis): your people do have some degree of trust into each other. So the first rule is to consider what circumstances need to be changed so as not to destroy what already exists. What are the evil roots of low trust in the workplace in the first place? · Lack of inclusion into to information flow, decision making or social happenings · Feelings of deprivation and loss; habit to do things in the old way · Perception of vulnerability and being replaceable · No positive attachment to the „leader” or „boss” · Previous experiences of the individual and the collective memory It might be of help, if you could think of trust as a special type of lubricant for your organization. It oils the processes between you and your people and then ultimately between them as well. When it comes to sharing ideas and information in organizations, do bear in mind that it is never (!)

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occurring between a person and an organization as such. Such sharing can only happen between real, living people. A trusting work climate is therefore clearly one of the most valuable organizational assets, which enables competiveness and leverages your company's core competence. As I said, creating trust in your people is a difficult and on going task. It not only takes time and exercise, but also the degree of trust is influenced also by specific factors such as your background and personality as well as the given organizational situation you are in. For reasons of nature and survival, by default we distrust anybody new that we do not know. Also it is not possible to simply change your status from being a distrusted person/leader into a trust position directly. The route from distrust to trust leads over personal respect. Only when you have gained the respect of your people, and only then, they will start to share their trust in you. Interestingly there seems to be two routes to gain respect: One way stems from your personal factors as a leader, such as your age, your physical appearance, your personal background, the number of years of work experience, your past positions held etc. These factors are given and therefore rather static. You cannot change them. The other avenue for gaining respect is through behavior-related factors. As a leader you can influence these factors by adequately modifying and adopting your behavior in the daily interactions. In plain text: do trust-worthy actions! These are: consistent behavior, such as predictability and „walk the talk”, sharing or delegating control by creating an economic and social interplay amongst your people, create a more positive work climate and also to demonstrate concern through justice and benevolence. Once you have gained respect in the eyes of your people, with time – and only with time! – you can then eventually get their trust. You cannot buy trust, one has to earn it. And remember that all your efforts into building trust can be easily destroyed if you generate real or perceived misalignments between your words and deeds. A person who trusts no one cannot be trusted!

DISCOVER

On photo: Maiden Tower, Baku, Azerbaijan. Est.: XII century

Azerbaijan By Rustam Jamilov

35% annual economic growth. The regional leader in oil and gas exports. Fantastic climate and unbelievable landscapes. Stable and business-friendly political environment. Discover Azerbaijan the land of fire on the crossroads of time. From a small and fairly unfamiliar land of the Caucasus, Azerbaijan had turned into a strong regional power and an important political player. During the communist regime of the past century, Azerbaijan was known for delivering as much as 70% of the USSR’s total annual oil plan. After the fall of the Soviet Union, the mere presence of valuable natural resources was no guarantee of a prosperous future. Among the common features which all the ‘intransition’ countries shared stands out the simple lack of expertise and knowledge of sovereign governance. In other words, the transition had to be carefully planned and managed. What distinguishes Azerbaijan is the presence of that plan. The nation was inspired and led by one wise man who could be rightly named as one of the most crucial figures in Azerbaijan’s history - Heydar Aliyev.

Heydar Aliyev’s oil strategy. This intelligent document or rather a vision turned Azerbaijan from a country struggling with the postcommunist transition into an important political and economical player of the region. Through a careful planning and hard work some very important international deals and contracts were signed. As a result, more than $60 billion are present in Azerbaijan in form of foreign investments into the oil segment only. Not to mention the rich gas reserves and substantial influx of capital into that sector. In 1999 a multilateral contract signed between the national leaders of the republics of Azerbaijan, Georgia, and Turkey. The agreement, which ensured transportation of crude oil via the Baku-Tbilisi-Ceyhan pipeline, opened a new page in the history of these 3 states. Overall, through numerous years of continuous and comprehensive cooperation with the international institutions and western investors, Azerbaijan has managed to maintain an image of a stable, increasingly business-friendly, and reliable partner. The future prospects seem very positive as well. What I like most about Azerbaijan is its amazingly versatile pattern of experiences which one might find there. Azerbaijan is on the crossroads of time - the admirable combination of an incredible architecture which goes back centuries ago and the rapid and progressive changes happening all across the country, changes that are transforming the land of fire into the land of capital. It’s the balance of past and future which attracts millions of tourists every year from all continents. The Maiden Tower , the Azikh cave where people had lived 1.5 million years ago, the eye-catching cultural and architectural masterpieces in all corners of the country. The flora and fauna of Azerbaijan are truly breathtaking. It’s officially reported that Azerbaijan accounts for 8 out of 11 existent climate zones. With more than 4500 species of plants, the republic accounts for 66% of all plant species found in the Caucasus. 108 animal species are included into the Red Book. The Caspian caviar which Azerbaijan is particularly famous for is extremely unique and very expensive. Some types of caviar do not even appear anywhere else in the world, making Azerbaijan the single worldwide exporter. Azerbaijan is developing quickly. Utilization of the regions, improving business conditions, development of non-oil sectors are all important factors of Azerbaijan’s growth. The future looks very bright. Under the leadership of the current President Ilham Aliyev Azerbaijan is marching proudly into the modern era.

For more information visit: www.azerbaijan.az

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Crisis, Uncle Sam and Gravity By Ilya Baltinsky

How long will the current economic crisis last? I'm sure everyone asks this question at some point. But I doubt that many really tried to look beyond the problem and ask the two hard questions: what is fundamentally wrong with the world that such a crisis could occur, and what are the strategic consequences the current crisis will entail? Answering my very first question in this article unequivocally is impossible. The world has become utterly volatile, so whatever we observe today is likely to be different tomorrow. For example, no one could imagine at the beginning of 2008 that the price of oil would rise to $147/barrel in July and then would suddenly drop to $40/barrel in another four months. Few could imagine so many bankruptcies and employment layoffs. So can we actually tell what is going to happen next? I doubt that. Perhaps it is more important to understand why the crisis began in the first place. Like in physics or math, there are laws in finance as well. The crisis is partly a consequence of one of such laws. Interpreting it from the language of economists, I will put it like this: lenders tend to gain more yield out of weaker borrowers. This is why huge amounts of money were literally given out by banks and mortgage companies, disregarding borrowers' abilities to pay back. This is described as a “bubble:” lenders blow it up until borrowers eventually burst it because they find themselves unable to pay the money back. The events of 2008 followed as a

snowball. Banks and mortgage companies filed for bankruptcies, stocks plummeted, millions of people lost their jobs as companies' balance sheets went negative, and buyers started buying less. The United States were the country with the biggest financial bubble. That bubble was so big that, when it burst, the debris from it pierced all other smaller bubbles overseas. That was the time when the crisis went global. Roger Altman claims in his article “A Geopolitical Setback for the West,” published in the Foreign Affairs periodical, that the damage of the current crisis “has put the American model of freemarket capitalism under a cloud.” Ever since the Great Depression, this model has gained support by a host of countries worldwide. However, Uncle Sam stumbled too much, dragging others to the hole. Now that the world has fallen into the deepest hole in seventy-five years, many governments are nationalizing their financial sectors in a way that contravenes the tenets of modern capitalism. Such governments are therefore abandoning Uncle Sam's track, and they are trying to find a new one. But the change is happening. Obama's leadership in the White House has become a hope for many. In his essay “Renewing A m e r i c a n L e a d e r s h i p , ” M r. O b a m a acknowledges the need for change and recognizes that the world cannot work like it did before. Importantly, USA's new President

Spring 2009| Trans-national Voice

understands that his country cannot meet the century's challenges alone and needs partnership with other states. That seems to be true. Analysts admit that the weaknesses of the current economic system will be repaired, and eventually the USA will be doing well again. But in the meantime, the center of the world's political and economical gravity is expected to shift away from Uncle Sam. Roger Altman suggests that “the crash of 2008” will carry the world away from a unipolar system. Professor Harold James thinks that there is one winner in the crisis, and it is China. He argues that the Chinese financial model “holds keys to fixing the problem.” It doesn't imply, however, that China will now

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possess the world's lead. After all, China is still a poor country, and over a hundred million people there live under 1$/day poverty line. China is also a socialist country, and such political inclination has never made any nation prosperous. So, going back to gravity, we need to understand that it is more likely to be distributed evenly between a wide range of countries rather than centered at a single spot. What all this means for the world, is that the financial crisis unveiled the weaknesses of the current economic system. It is challenging the USA to unite with other states in the effort of building a safer system. Yet what is clear now, is that only united with the rest of the world – not alone anymore – will the USA succeed in fighting the crisis

Peder Broms

Carl Jacob Petersen

Career Quest

with Carl Jacob Petersen and Peder Broms

The Passion for Entrepreneurship Jacob and Peder, you are two quite distinguished undergraduate students at CEU Business School. You have your own business. What exactly is your company doing and what are your respective roles in the management process? Peder: Our business, Millstone HB, is an import company targeting the Scandinavian market with products from East Asia. Until now it's been all about textiles but Millstone will expand to trade all sorts of goods with a potential expansion into Europe. I handle the relations with the Chinese producers and agents as well as shipping and distribution in Scandinavia. Jacob: Millstone is an import company focused

on textile goods. As of now, we deal exclusively with Chinese weaving mills. As a result of the creation, a new company called Nebuli KB emerged. I now manage this as CEO and have stepped down from my duties in Millstone HB. Peder is in full control of the management in Millstone. Tell us about the difficulties you two had to go through. Is there a particular hardship that is especially memorable? Jacob: Since we deal with Chinese suppliers, it took some effort to gain trust with these different manufacturers. In China it's important to be formally introduced, by a third party, to any potential business partner. It's not a question of

Spring 2009| Trans-national Voice

simply approaching someone you want to do business with. Since we deal with clothing and textiles, we had to find a third party that had these specific contacts. Peder: Apart from all the bureaucracy that comes with doing business with Mainland China I remember a trip to a business lunch meeting hosted by the owner of a factory we were to use for our espadrilles. As our A.C. broke down during the six hour drive from Shanghai, the midSummer heat made the temperature inside the black minivan skyrocket. Drooling of sweat, and dehydrated we arrived two hours late to the most challenging meal I've ever had: The food was uneatable and our interpreter was moody, tired and completely gave up on her duties. Furthermore, our driver kept reminding us in Chinese that this was going to cost extra. The local beer proved to be a hit though.

How beneficial is it to go outside the classroom and to apply all the theories of strategic intents, supply chains, and balance sheets in the real world? Jacob: In real life business, I have not yet got the opportunity to use the skills and knowledge I have acquired in class. Nonetheless, many thoughts and innovative ideas of how to manage our companies have come as a result of my studies here at CEU. Peder: Although the business school provides many proven-to-be-effective tools for many aspects of managing a company, I feel the examples concerning strategy in smaller scale companies, SMEs and startups, are missing. I

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understand that we probably need a broad foundation but keeping it a bit more small-scale would be more inspiring for entrepreneurship oriented students. Further, management position straigth out of college will probably be less “what are your thoughts on our distribution network, and how would you like to change it?”, and more like “do as you are told.” A rather delicate question now – are you making profits? Peder: Yes, but not as much as much as we could. Unfortunately neither Jacob nor me can give Millstone the attention that it needs for it to be really successful. Jacob: At Millstone HB we made profit for the FY2008, even though we still hold 60% of last year's inventory. Nebuli is on the up-start and hasn't made any profit. Many ambitious individuals have shied away from trying their luck and have left many unexploited ideas lying on the bookshelves. What has inspired you to risk your money and time and go for it? What has been your inspirational source? Peder: Well, money. Oh, and to be named the Time Magazine’s “Man of the Year”. Also, to stop being self obsessed one day. Jakob: I have always seen myself as an entrepreneur and always had different business ideas. I felt I needed some knowledge of rules and frameworks to be able to implement my ideas into the real life business. We are turning now to the question of why I study business and management. My incentive lies: first, in the “simple” act of succeeding with a set business idea, and second: in profit maximization. Trans-national Voice wishes you all the best in your future endeavors!

Sport

and By Rohan Servand

Money

Manchester City's recent outrageous bid for AC Milan's Kaka is the best example of money in sport gone mad. The bid essentially values the Brazilian star at USD 140 million. It is noteworthy that Chelsea FC was bought over by Russian billionaire Roman Abramovich for a total of USD 200 million just over five years ago. In the space of five seasons, a players net worth has reached figures that were more commonly associated with an entire football club. Whether it is right, worth it or simply outrageous is another issue altogether. But without a hint of a doubt, sport has become a money spinner. Although the economic crisis may have hit price sensitive sports like Formula 1, other franchises seem to be living in a world of unlimited cash reserves and growing incomes. Large capital reserves are capable of achieving goals that one may deem unattainable. This is no exception in sport. When Chelsea was placed in the hands of their new owner with a personal fortune in excess of USD 10 billion in 2003, they regularly featured in the top tier of the English Premier League (EPL), but were never genuine contenders. Their last league success had been in 1955. However after the take over and another USD 150 million spent on new players, Chelsea became only the fifth club to win the league two years in a row in 2005 and 2006. It is no wonder that Manchester City is making ripples in the world of football after being taken over by billionaire Sheikh Mansour Bin Zayed Al Nahyan. Although potential rivals seem to be unaffected, the parallels with Chelsea are visible. Football tends to steal sporting headlines in Europe and South America, however across the Atlantic in North America it is in a period of revived growth ushered in by the arrival of David Beckham in 2007 making him the highest paid Major League Soccer (MLS) player of all time. North America plays host to the world's richest sportsman in Tiger Woods whose annual earnings fluctuate around the figure of USD 90 million. It has several sport teams valued at over a billion dollars in the franchise rich National Football League (NFL) and the Major League Baseball (MLB). Cash dictates terms at a whole new level in terms of advertising here. In 2008 commercial campaigns during the Super Bowl are thought to have reached USD 2.7 million for every 30 seconds with viewership crossing 100 million across the globe. The National Association for Stock Car Auto Racing (NASCAR) may be comparatively smaller in terms of following and finances, but has seen an astronomical upwards trend in the last twenty four months with stock values increasing on average by 65%. DuPont pay Hendrick's #24 Chevrolet USD 13 million for advertising on

Spring 2009| Trans-national Voice

the hood of the car alone. With an array of sports to cash in on, the USA is the epicentre of money in sport. Sport in Asia is region specific. While the south east has keen followers of badminton and pool, they also share a passion for football, largely due to the commercial success of Manchester United FC and Liverpool FC of the EPL. It is impossible to leave out Manchester United in an article about sport and money. They are widely believed to be the first globally successful franchise in value terms. Under the watchful eye of Chief Executive David Gill and manager Sir Alex Ferguson, recently named as the most influential individual in sport by Times magazine, the club has transcended success on the pitch with commercial success off it. Valued at USD 1.8 billion by Forbes, it is the richest football team in the world followed closely by Spanish giants Real Madrid FC. After last season's double success, United saw its profits soar and take it past Real who has held the richest slot for the previous two years. Manchester United has over half its estimated 333 million followers in Asia. It is no wonder that they have made seven pre season tours to Asia since 1995 and profited from the use of global stars like Cristiano Ronaldo and Wayne Rooney. (Continued from p.4) ... just as vehemently as any other climate-change legislation. Finally, financial crisis and recession are not the closest friends of any tax relief bills. Increased government spending, which is unavoidable under reforms promised by Obama, may become just impossible or extremely uneasy in the tough months (years?) to come. As 'The Economist' analysts were unhappy to report, the new president “has to start deciding whom to disappoint”.

Within the “World under Obama”, Europe gets little attention. With the sinister Middle East developments, Russian reemerging imperialism and increased pressure on efficient solutions in Iraq, our part of the world might be the least of global challenges for the new administration. Yet, it seems that Obama's cabinet wish to improve U.S.-Europe relations by the sole fact of being a new team, and taking over from despised Republicans. It is rather unclear, for instance, what Obama's people are designing for the anti-ballistic Missile Shield system, agreed just six months ago after long negotiations with Poland and Czech Republic. The future nature of NATO remains

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Although individual football clubs boast huge incomes and remarkable net worth, they are still smaller than the Board for Control of Cricket in India (BCCI) as franchises. The BCCI has been growing rapidly in the last five years and has a net worth in excess of USD 2 billion. Its players are the highest paid, and its league the most sought after by fans and players alike. Despite tickets being as cheap as USD 5, the BCCI has been able to bolster income through television rights and multiple high value sponsorships.

Money has made its mark in every niche of sport, regardless of following, geographic location and even the turmoil of the current economic crisis. It dictates the future of each sport and those involved, reemphasizing its necessity regardless of the negative press it may awaken

vague as well, and has been left on the very margins of public debate in Washington. Contrary to John McCain and the Republicans, Obama was reluctant to take radical stand on the South Ossetia conflict or on the pro-European ambitions of Ukraine. On top of all uncertainties there is the ever-present visa issue that the governments of Central Europe will continue to raise, for the now promised “open doors” policy was anything but reality in the last decade. On January 20th, the world has also bid a rather joyful farewell to George W. Bush. According to Gallup, he has left the office with over 60% of Americans disapproving of his presidency. The shadows of Iraq, Guantánamo, Hurricane Katrina and most recently the financial crisis have successfully covered all the rest of the presidential record. While some, even in the U.S. mainstream media, enjoy calling Bush the worst U.S. president ever, the “history's verdict” might be completely different. Harry S. Truman, who is nowadays rarely omitted in any “Top 10 Presidents” rank, was leaving the White House with the embarrassing acceptance rate of 22%. Bush, who was judged through the difficulties of our times, might get a much more favorable verdict in the future

Be the Change DEBATES CLUB The CEU Business School Debates Club is aimed to engage our students into lively discussions of world affairs through roundtable talks, lectures and seminars, debate competitions, and conferences. In May 2009 we are planning to organize a large debate tournament with cash prizes. Be a debater, moderator, or a judge! We will also record every game and post the videos online on YouTube or Facebook!

Contacts: Rustam Jamilov, Ilya Baltinsky, Abror Akmalov

INVESTMENT SOCIETY At the Investment Society you can trade stocks online. With the required simulator on your computer and training from a CEU professor you can start buying and selling shares while sitting at home. Everything is real-time which allows you to do actual research and to invest into the best performing firms. Designed as a learning experience for our students, the Investment Society can help you get valuable knowledge and experience to become the next financial guru!

Contacts: Johan Saggar Airey, Rustam Jamilov, Carl Jacob Petersen

CULTURAL AWARENESS Living with a Russian, studying with a Serbian, chatting with a German. This is the life of a typical CEU Business School student. Our new Cultural Awareness Club will engage you into various socializing activities, exchanges of cultural articfacts, experiences and stories. We will be organizing different events such as “The Day of a Country” and many others! Take advantage of our international environment and contribute to the cultural exchange.

Contact: Aigerim Kurmangazina

WEBSITE We are very proud to announce that starting from the Spring Semester of the 2008-2009 academic year, the CEU Business School students will have their very OWN website! This is very exciting for us and we hope that our student website will boost our student life in all directions. The website will have photos and videos, blogs, guest-book, a forum, and many other features. This is a longterm project specifically for the students of CEU Business School. You can discuss a topic on the f o r u m , u p l o a d yo u r favorite videos and simply have fun with your friends from all around the world! More information coming soon.