European Business Forum articles from June 2006

European Business Forum archives from June 2006

Letter from the editor.(Editorial)
June 22, 2006... Flat tax has been sweeping across Central and Eastern Europe. Pioneered by the tiny Baltic nation of Estonia in 1994, flat tax has now been adopted by nine European countries. Will the model spread to the more advanced economies of Western...

EBF and the European perspective on global management issues.
June 22, 2006... EBF: A CEMS INITIATIVE European Business Forum (EBF) represents an original departure from the traditional positioning of business publications. It is neither an academic journal nor a business news magazine. EBF draws on the contributions of...

CEMS: an authority in management education.
June 22, 2006... The Community of European Management Schools and International Companies (CEMS) is an alliance of leaders in business and higher education. Founded in 1988, the network has grown steadily, largely due to the success and popularity of the CEMS...

Western Europe will lose out to the flat tax countries of Central and Eastern Europe unless it improves its business and investment environment, says Alvin Rabushka. He states the case for adopting flat tax, while Richard Murphy makes the counter case on page 8.(Should Europe adopt the flat tax?)
June 22, 2006... FOR The first article I wrote on flat tax appeared on the editorial pages of The Wall Street Journal on March 25, 1981, under the title, "The attractions of a flat-rate tax system". Later that year I collaborated with my Stanford...

The introduction of a 19 per cent flat tax has helped Slovakia boost economic growth, attract foreign direct investment and reduce tax evasion. The politicians of Western Europe should muster the courage to follow suit.(Should Europe adopt the flat tax?)
June 22, 2006... The biggest European economies have been suffering from relatively low economic growth for more than a decade. The real cause of this under performance is well known: sluggish activity due to a lack of structural reform. Several years ago, the...

If Finland is to keep pace with its tax-competitive neighbours and encourage economic growth, it should sweep away its current convoluted system in favour of a single, 29 per cent tax rate on wages and business income.(Should Europe adopt the flat tax?)
June 22, 2006... Finnish taxation is currently so complex that it is difficult to believe any committee of experts working from a clean slate could propose a similarly tangled system. Leaks in the system are constantly being patched up to satisfy the wishes of...

Fears of a public backlash have muted the political debate on flat tax in Belgium. Despite astronomical tax rates and collection costs, the country's cautious politicians are convinced that flat tax equals electoral suicide.(Should Europe adopt the flat tax?)
June 22, 2006... For a small country, Belgium has an impressive tax record. It has the highest tax rate on earnings of any OECD country with a tax wedge of 55.4 per cent of the cost of labour to the employer. While the statutory corporate tax rate has been...

The government's big brother mentality is stifling Europe. greater economic freedom and lower taxes will help Europe pull itself out of its current slump and compete against the emerging economies of India and China. John Redwood.(Should Europe adopt the flat tax?)
June 22, 2006... It's not so much flat taxes as low taxes that the EU needs to become more prosperous. The EU mentality is a tamer version of the old Soviet approach, where the state knows best and where planned economies deliver better results than the muddle...

With 2,692 different tax forms, an annual Finance Bill approaching 500 pages and a convoluted tax system that even accountants no longer understand, surely Britain's taxes should be lower and simpler, as well as flatter?(Should Europe adopt the flat tax?)
June 22, 2006... The tiny Baltic nation of Estonia cannot have bequeathed many ideas to the world. Yet the bold innovations introduced by former prime minister Mart Laar to have a simple, uniform flat tax is a concept that I believe will catch fire and sweep...

Although the flat tax system has all the appeal of greater simplicity and transparency, it is hard to see how it could be introduced without being balanced by steep increases in other taxes or dramatic cuts in public spending.(Should Europe adopt the flat tax?)
June 22, 2006... Any business knows it has to pay its taxes - it's part of the price of being allowed to operate. But while all businesses would prefer lower taxes, top of the wish list is certainty. Businesses want to factor in the tax cost regarding likely...

Belgium.(DOES HUMOUR TRAVEL?)(Cartoon)
June 22, 2006... QUAND JE SERAi RiCHE, JE SERAi PoUR LE TAUX D' iMPoSiTiON UNiQUE... BELGIUM "I will support the flat tax when I'm rich"

UK.(DOES HUMOUR TRAVEL?)(Cartoon)
June 22, 2006... WESTERN EUROPE UNITED IN UNCERTAINTY ABOUT FLAT TAX REFORMS "I'm not sure which comes as the greatest surprise: innovative economic ideas from Eastern Europe or us agreeing with the French?"

Czech Republic.(DOES HUMOUR TRAVEL)(Cartoon)
June 22, 2006... STEJNY AUTA STEJNY DANE! CZECH REPUBLIC "The same car, the same taxes!" [ILLUSTRATION OMITTED]

Italy.(DOES HUMOUR TRAVEL?)(Cartoon)
June 22, 2006... CERTO, LALIQUOTA FISSA INFLIGGERA TERRIBILI STENTI AI PIU' POVER, MA E' ANCHE UN GROSSO INCENTIVO PEROHE TUTTI DIVENTINO MILIARDARI. WWW.PIEROTONIN.COM ITALY "Sure, the flat tax will inflict terrible hardship on the poor, but...

Germany.(DOES HUMOUR TRAVEL?)(Cartoon)
June 22, 2006... KEIN WUNDER, DASS DER SICH FREUT! ER BEZAHLT JA AUCH DENSELBEN STEUERSATZ WIE ICH! GERMANY "No wonder he's gloating. He pays the same rate of tax as me" [ILLUSTRATION OMITTED]

The art of followership: business publications dedicated to the analysis and attributes of great leaders tend to ignore half of the equation. The nature of leadership can best be understood by turning over the coin and studying followership.(IN DEPTH)
June 22, 2006... Look on the shelves labelled "Leadership" in your local bookshop and you will see an array of publications on the characteristics of great leaders. Beleaguered executives are invited to compare themselves with lists of leadership competencies,...

Leaders should not be studied in isolation.(IN BRIEF)
June 22, 2006... Leaders should not be studied in isolation. Followers are a crucial part of the business equation.

They demand authenticity.(IN BRIEF)
June 22, 2006... Followers look for certain characteristics in their leaders. They demand authenticity, significance, a sense of community and excitement.

Even the greatest leaders are not infallible.(IN BRIEF)
June 22, 2006... Even the greatest leaders are not infallible. Followers should avoid blind, unswerving obedience.

All leaders must first learn.(IN BRIEF)
June 22, 2006... All leaders must first learn to follow.

Ethical exits: French food group Danone shows how companies can close down production plants without damaging the social fabric of the region.(IN DEPTH)
June 22, 2006... Between 1965-95, Danone operated a manufacturing plant specialising in the production of the fresh dairy products in the town of Iraitzoz in the Ultzama Valley, 26km from Pamplona. Danone's management team took the decision to close the plant...

The 7 signs of ethical collapse What makes a good company go bad? Recognising and remedying the warning signs of ethical collapse can help prevent accounting scandals and restore market trust.(IN DEPTH)(Company overview)
June 22, 2006... There came a point, as all the corporate scandals of the past year continued to break, that we passed beyond simply uttering the emotional declarative, "How could they have done that?" We entered into the intellectual and logical inquiry of,...

Key to future prevention.(IN BRIEF)
June 22, 2006... Understanding why corporate fraud occurs is a key to future prevention.

A number of warning signs can be detected in advance.(IN BRIEF)
June 22, 2006... A number of warning signs can be detected in advance, including excessive pressure to meet financial targets and organisational cultures of silence.

CEOs who believe their own publicity.(IN BRIEF)
June 22, 2006... CEOs who believe their own publicity and behave immorally in their personal lives may also be a sign of risk.

The antidotes to ethical failure include a strong.(IN BRIEF)
June 22, 2006... The antidotes to ethical failure include a strong and responsible board of directors, cultures that encourage employees to speak up, and promoting long-term vision over short-term financial pressure.

Globalisation strategies: how to crack new markets: with two out of three retailers failing outside their home market, foreign expansion is no easy task. The most common mistakes? Overconfidence and poor timing.(IN DEPTH)
June 22, 2006... Most companies regard new and attractive global markets as a metaphorical gold mine. But two out of three retailers actually fail outside their home market. This failure is often due to poor timing of market entry and the tendency to simply...

Markets outside their home country.(IN BRIEF)
June 22, 2006... Two out of three retailers fail when entering markets outside their home country.

The classic mistake many retailers make concerns market timing.(IN BRIEF)
June 22, 2006... The classic mistake many retailers make concerns market timing: they enter the market too soon, or too late.

Developing a successful retail operation.(IN BRIEF)
June 22, 2006... Developing a successful retail operation in a foreign market requires time, investment and patience.

The principles of retailing are universal.(IN BRIEF)
June 22, 2006... The principles of retailing are universal, but their implementation varies by country, market and culture.

Managing the media: the financial press plays a crucial role in shaping business ideas. If corporate leaders wish to influence public opinion, they need to learn the art of media management.(IN DEPTH)
June 22, 2006... The media plays an important role in shaping ideas and promoting particular versions of social reality. Journalists not only report on business phenomena, but they are also important actors in the legitimation or de-legitimation of management...

Commun!cat!on crisis? "No comment". Those two simple words can shatter a company's reputation and cost it millions in lost sales. So how can you turn a corporate crisis into competitive advantage?(IN DEPTH)
June 22, 2006... In October 2001, news of potentially harmful bacteria found in a McChicken Burger in Buenos Aires, Argentina, spread across South America via television and the interest. Although no one was proved to have been made sick or placed at risk, the...

You can never over plan.(IN BRIEF)
June 22, 2006... You can never over plan. Being prepared for a crisis will help you tackle a problem before it snowballs into a disaster.

Have a clear strategy.(IN BRIEF)
June 22, 2006... Have a clear strategy and a chain of command set up for the worst-case scenario.

Be honest and accept responsibility.(IN BRIEF)
June 22, 2006... Be honest and accept responsibility. Remember that reputations can be ruined within seconds.

Even the most damaging event.(IN BRIEF)
June 22, 2006... Even the most damaging event can be turned into a competitive advantage if it is handled properly.

Grey hairs and low growth.(SUMMARIES OF RESEARCH PROJECTS FROM AROUND THE WORLD)
June 22, 2006... If Europe is to achieve its Lisbon Accord targets, it needs to pay serious attention to demographics. That is the conclusion of a new report, Pas de croissance durable sans enfants, by Philippe Durance and Michel Godet of the Conservatoire...

Singapore: a "funky town"?(SUMMARIES OF RESEARCH PROJECTS FROM AROUND THE WORLD)
June 22, 2006... In the minds of many, Singapore is famous for two things. The first is its outstanding economic success. The small island, with a population of four million people and no natural resources of its own, has the highest per capita income in Asia...

Chernobyl: the fall-out continues.(SUMMARIES OF RESEARCH PROJECTS FROM AROUND THE WORLD)
June 22, 2006... Twenty years after the world's worst nuclear accident at Chernobyl, the damage caused by the accident is still being assessed. Chernobyl's Legacy: Health, Environmental and Socio-economic Impacts is a detailed report compiled by the Chernobyl...

Economics and thermodynamics.(SUMMARIES OF RESEARCH PROJECTS FROM AROUND THE WORLD)
June 22, 2006... Ernst Schrodinger argued that all human activities including mental activities, are governed by physical laws and are essentially thermodynamic processes. In his book. The Physical Foundation of Economics, Professor Jing Chen of the University...

Is risk becoming more risky?(SUMMARIES OF RESEARCH PROJECTS FROM AROUND THE WORLD)
June 22, 2006... There is good news and bad news in Three Decades of Financial Sector Risk, a new report compiled by Joel F Houston of the University of Florida and Kevin J Stiroh of the Federal Reserve Bank of New York. Their study examines the evolution of...

The origins of Stockmarket indices.(SUMMARIES OF RESEARCH PROJECTS FROM AROUND THE WORLD)
June 22, 2006... Stockmarket indices are a vital tool, used by both economists and players in financial markets. Long-term analysis of stock-markets is commonly used to shed light on both the overall activity of the market, and the performance of individual...

Ringing the changes: with slow growth in its core European market, mobile phone giant Vodafone must focus its attention on emerging countries and new data services.(CASE STUDY)(Industry overview)(Company overview)
June 22, 2006... A run Sarin reclined in his seat in a first-class compartment en route to London. The CEO of Vodafone, the world's largest mobile telephone operator, reflected on the events of the past few days, in particular Vodafone's decision to sell its...

In my opinion.
June 22, 2006... Surprises are characteristic of the mobile phone market. Consider the astonishing popularity of SMS messaging, for example, or the frustrating technical glitches with 3G. The latest surprise has been the surge of new subscribers in emerging...

The unsung master of management: an original thinker and a pioneer of the theory of harmonisation, Polish-born Karol Adamiecki deserves to regain his place as one of Europe's foremost management gurus.
June 22, 2006... Virtually unknown today, the Polish engineer and lecturer Karol Adamiecki pioneered in the early 20th century a system of management remarkably similar to scientific management, but quite independent of US or other foreign influence. His...

In the first of a series on routes to performance improvement, Jean-Paul Thill, chief executive officer for KPMG in Europe, Middle East and Africa, shares his views on how European companies can capitalise on new growth opportunities in emerging countries.(EBF SPECIAL FEATURE IN ASSOCIATION WITH KPMG)(Interview)
June 22, 2006... Q The so-called BRIC (Brazil, Russia, India and China) are posed to experience explosive growth. In which other markets do you foresee opportunities for business? A Baby-BRIC countries--Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico,...

Vittorio Merloni, chairman of Indesit, says that innovation will be the driver for companies in the coming 30 years. This spirit of innovation applies just as much to a company's culture as it does to its products and processes.(Insights and opinions from the boardroom and beyond)(Company overview)
June 22, 2006... IN THIS SECTION 68 Vittorio Merloni, Indesit 72 Neelie Kroes, European Commission 76 Ruben Vardanian, Troika Dialog 80 Charles Handy, management thinker There are many fascinating works of art in Vittorio Merloni's office....

Neelie kroes, European Commissioner for competition, on structural reform, the battle against cartels, and the delicate balance between state intervention and free competition.(LEADERS)(Interview)
June 22, 2006... EBF: You have developed policies for using state aid to encourage and stimulate competition. How do you respond to criticism that state aid distorts markets and actually prevents free and fair competition? [ILLUSTRATION OMITTED] NK:...

Ruben Vardanian, CEO of Troika Dialog, shares his views on how Russia's economy has evolved since the demise of the Soviet Union and why corporate governance has risen to the top of the business agenda.(LEADERS)
June 22, 2006... Ruben Vardanian, CEO of Troika Dialog, one of the largest investment banks in Russia, has seen Russian businesses going through significant change. Corporate governance issues, in which Vardanian has a key interest, are now rising up the...

Charles handy, Britain's most respected management guru and a founder of London business school, reflects on schools, management education, and eudaimonia.(LEADERS)(Interview)
June 22, 2006... EBF: You describe your latest book as a series of "reflections". What are your reflections on education? CH: Schools don't prepare children for life any more; they prepare them for life as it used to be. Most schools close their doors at...