Bulgaria in Transition: Training a New Generation of

Managers for the Turbulent World

John Pourdehnad

Dinner Lecture, Tuesday, June 17, 2008

Organizational Dynamics Degree Programs

University of Pennsylvania

Where is Bulgaria?

http://www.state.gov/r/pa/ei/bgn/3236.htm

Area: 110,910 sq. km.

Climate

Continental--mild summers and cold, snowy winters.

People

Population(2006): 7,679,290

Growth Rate (2006): -0.51%.

Religion (2001) Bulgarian Orthodox 82.6%,

Muslim 12.2%,

others

Ethnic groups (2001):

Bulgarian 83.94%,

Turkish 9.42%

Roma 4.68%

other 2% (including Macedonian, Armenian, Tatar, Circassian).

Health: Life expectancy (2006)—male 68.68 years;female 76.13 years.

Infant mortality rate (2006)--19.85 deaths/1,000 live births.

Work force (2005): 3,34 million

Agriculture--11%;

industry--32.7%;

services--32%

Government

Type: Parliamentary democracy.Constitution: Adopted July 12, 1991.Independence: 1908 (from the Ottoman Empire).Branches: Executive--president (chief of state), prime minister (head of government), Council of Ministers (cabinet). Legislative--unicameral National Assembly or Narodno Subranie--240 seats. Members are elected by popular vote of party/coalition lists of candidates for 4-year terms. As of January 2008, seat allocation is as follows: CfB--82, NMSS--36, MRF--34, UDF--16, DSB--16, BND--16, BPU--13, Ataka--11, and independents--16. Judicial--three-tiered system.Administrative divisions: 28 provinces plus the capital region of Sofia.Suffrage: Universal at 18 years of age.

Economy

• GDP (2006): $31.49 billion.Real GDP growth: 6.1% (2006); 5.5% (2005); 5.7% (2004); 4.3% (2003).Per capita GDP (PPP, 2006): $10,700.Inflation rate: 12.5% (2007), 6.5% (2006); 5% (2005); 6% (2004); 5.6% (2003).Unemployment rate: 6.62% (November 2007), 9.61% (2006 average); 11.5% (2005); 12.7% (2004 average); 14.25% (2003 average).Natural resources: Bauxite, copper, lead, zinc, coal, and timber.Official exchange rate: Lev per $1 U.S.=1.42 (2007 average); 1.56 (2006 average); 1.57 (2005 average); 1.58 (2004 average); 1.73 (2003 average).

Bulgaria's economy contracted dramatically after 1989 with the collapse of the COMECON system and the loss of the Soviet market, to which the Bulgarian economy had been closely tied. The standard of living fell by about 40%. In addition, UN sanctions against Yugoslavia and Iraq took a heavy toll on the Bulgarian economy. The first signs of recovery emerged when GDP grew in 1994 for the first time since 1988, by 1.4% and then by 2.5% in 1995. Inflation, which surged in 1994 to 122%, fell to 32.9% in 1995. During 1996, however, the economy collapsed due to shortsighted economic reforms and an unstable and de-capitalized banking system. Under the leadership of former Prime Minister Ivan Kostov (UDF), who came to power in 1997, an ambitious set of reforms were launched, including introduction

of a currency board regime, bringing growth and stability to the Bulgarian economy. The currency board contained

inflationary pressures and the three-digit inflation in 1997 was cut to only 1% in 1998. Following declines in GDP in both 1996 and 1997, the Bulgarian

Government has delivered strong, steady GDP growth in real terms in recent years. Prime Minister Simeon Saxe-Coburg's economic team

of young, Western-educated financiers continued to implement measures that helped sustain stable economic growth and curb unemployment. Measures

introduced by the government were targeted at reducing corporate and individual taxes, curtailing corruption, and attracting foreign investment. The government also

restructured the country's foreign debt, revived the local stock market, and moved ahead with long-delayed privatization of some major state monopolies. As a result of this progress, in

October 2002 the European Commission declared Bulgaria had a "Functioning Market Economy."

Bulgaria's current government has continued these reforms, and in 2007 the country joined the European Union. According to the World Bank, in 2006 Bulgaria attracted the highest levels of foreign direct investment, as a share of

GDP, among Eastern European countries. A growing current-account deficit (estimated to have reached 20% of GDP at the end of 2007) and excessive reliance on foreign capital inflow render the economy vulnerable to external shocks. In early 2007, to attract additional foreign investment, the Bulgarian Government lowered corporate tax rates to 10%, reportedly the lowest rate in Europe. A flat-tax rate of 10% for personal income, in place as of January 1, 2008, will further decrease domestic labor costs and help reduce the share of the "gray" economy. In response to local governments' demand for financial independence in 2006, parliament passed fiscal decentralization of municipalities, granting them authority over collection and administration of some taxes, thus further enhancing local

economic stability. Despite Bulgaria's many marked successes, organized crime and corruption remain problems.

75/2008 - 2 June 2008 Europe in Figures –

Eurostat Yearbook 2008 The diversity of the EU

through statistics

The population of the EU27 reached 495 million in 2007, compared with 479 million in 1997, a growth of 3.4%. The Member State with the highest population growth was Ireland (+18.0%), followed by Cyprus (+16.9%), Luxembourg (+14.2%) and Spain (+12.5%). The population fell in eight Member States, with the largest declines in Bulgaria (-7.9%), Latvia (-6.7%) and Lithuania (-5.7%).

In 2005, the world population was 6.5 billion, more than double than the 3.0 billion recorded in 1960. The share of the EU27 has, however, declined from 13.3% in 1960 to 7.5% in 2005.

Population change between 1997 and 2007 ranged from -8% in Bulgaria to +18% in Ireland

Expressed in euro, the average hourly labor cost3 in the EU27 in 2006 was €20.35. Sweden (€32.16) had the highest hourly labor cost in 2006, followed by Denmark (€31.98 in 2005), Luxembourg (€31.98) and Belgium (€31.58). Bulgaria (€1.65), Romania (€2.68), Latvia (€3.41) and Lithuania (€4.21) had the lowest.

Within the structure of the labor costs, the highest share of social security costs paid by the employer was found in Sweden (30.6%), followed by Belgium (30.3%) and France (28.6%) and the lowest shares in Malta (6.9%), Denmark (10.9%), Slovenia (13.4%) and Cyprus (15.1%).

Labor costs in 2006 varied by one to twenty in the EU27

There were 1.3 billion nights spent in hotels and other collective accommodation establishments by residents in their own countries in the EU27 in 2006. Germany (298 million nights, 22% of the EU27 total) had the highest number, followed by Italy (210 million, 16%), France (192 million, 14%) and the United Kingdom (175 million, 13%).

In addition, there were almost 1 billion nights spent by non-residents in hotels and other collective accommodation in the Member States of the EU27 in 2006. Spain (225 million nights, 24% of the EU27 total) recorded the highest number, followed by Italy (160 million, 17%) and France (106 million, 11%).

The tourism intensity (total number of nights spent by residents and non-residents per inhabitant) was 4.7 in the EU27 in 2006. The highest intensity was found in Cyprus (18.8), Malta (18.3), Austria (11.9) and Spain (8.7), and the lowest in Lithuania and Romania (both 0.9), Poland (1.3) and Latvia (1.4).

Spain, Italy and France had highest numbers of nights spent in hotels by non-residents

Thanks To:

Yuri Alakalay – Former Dean, School of Management, Chairman Society for Organizational ExcellenceGeorgi Jadkov – e-learning expert at School of Management; CEO Society for Organizational ExcellenceMoris Greenberg – Vice-Rector for Quality ManagementAlexander Pozharliev – Dean School of ManagementMike Yanakiev – Former Fulbright Scholar at the Wharton School and USC

New Bulgarian University

New Bulgarian University (Нов български университет, abbreviated as НБУ, NBU) is a private institution of higher education based in Sofia, the capital of Bulgaria. It was established on 18 September, 1991 by a group of Bulgarian intellectuals aimed at creating a university to modernise Bulgarian higher education yet preserve its traditions.2,500 students were welcomed during the first year and a test of general education was introduced in 1995 and established as a uniform standard for the reception of students in 1996. As of 2004, the university has 7,551 current students and 3,201 graduates.

New Bulgarian University

• School of Management was established in 1993 in collaboration with the Open University (UK).

• Professional Programs – – Certificate in General Management 300 students per year– Diploma in General Management 50 students per year– Both programmes are validated by Open University Validation

Services• Bachelor Program in Business Administration – 50 students per year• Master's Program in Human Resource Management – 120 students

per year. The program is validated be Open University Validation Services

• Master's Program in Management for Organizational Excellence – 50 students per year 

• Certificate Project Management for IT People • In-company training – 300-600 people per year

School of Management

• We define Excellence as the outstanding practice in managing the organisation and achieving results. Truly Excellent organisations are those that strive to satisfy their stakeholders by what they achieve, how they achieve it, what they are likely to achieve and the confidence they have that the results will be sustained in the future.– Students are mainly executives (CEOs, senior and middle

management positions)– Companies – Nestle, Nuclear Power Station, Neftohim

Bourgas, Chelopech Mining.

Management For Organizational Excellence

Library

Administration School of management

Students

Practitioners

Organizational

excellenceCompetition

Employers

Instructors

Alumni

Tech

nol

ogy

Political

Environmental

Economic SocialEU

Design for Master's Program

Management for Organizational Excellence

Education

Research

Consulting

Management for Organizational

Excellence

Systems Thinking

Skill acquisition

Mindset change

Structure of Master's Program

Management for Organizational Excellence

Action learning

Continuous learning

Thinking Differently

• "your people may not have the skills to handle fluid situations. So they do everything in their power to avoid them. It takes a certain mindset and comfort level to deal successfully with risk. That is something that soldiers have long understood. At every military academy, they teach, 'the battle plan is the first casualty of war.' The aphorism means that once the fighting starts, it is almost certain to evolve in a way that no one could foresee.......but if you have the right people, people who have the right mindset, there are specific tools you can use to produce profitable growth.....

» Source: Ram Charan, Profitable Growth, (2004)

This Is the Visual Thesaurus Depiction of the Word ”Thinking”, Which Is the Fundamental Cognitive

Behavior of OE’s As They Try to Manage Complexity. • For example: Outside-

the-box-thinking, divergent thinking, logical thinking, free association, etc., all represent thinking “strategies” that we can explore to help reduce complexity and see the “whole” better.

student

Process ownerReflection

System thinking

Learner centered

Team player

Self-conscious

Mindset Change

The EFQM Excellence Model is a practical tool that can be used in a number of different ways:– As a tool for Self-

Assessment– As a way to Benchmark with

other organizations– As a guide to identify areas

for Improvement– As the basis for a common

Vocabulary and a way of thinking

– As a Structure for the organization's management system

The EFQM Excellence Model

INNOVATION AND LEARNING

KEYPERFORMANCE

INDICATORS

KEYPERFORMANCE

INDICATORSLEADERSHIPLEADERSHIP PROCESSESPROCESSES

PEOPLE RESULTSPEOPLE RESULTS

SOCIETY RESULTSSOCIETY RESULTS

PEOPLEPEOPLE

POLICY & STRATEGYPOLICY & STRATEGY

PARTNERSHIPS& RESOURCES

PARTNERSHIPS& RESOURCES

ENABLERS RESULTS

CUSTOMER RESULTS

CUSTOMER RESULTS

Skill Acquisition

Skill Acquisition

Action Learning

What exactly is action learning? Simply described, action learning is a dynamic process that involves a small group of people solving real problems, while at the same time focusing on what they are learning and how their learning can benefit each group member, the group itself and the organization as a whole.

Components of an Action Learning Program:1. A problem (project, challenge, opportunity, issue or task)2. An action learning group or team 3. A process that emphasizes insightful questioning and reflective listening 4. Taking action on the problem 5. A commitment to learning 6. An action learning coach

Source: http://www.gwu.edu/~bygeorge/021804/actionlearning.html

CONTINUOUS LEARNING

•Self-control

•Ability to distribute attention over many factors

•Ability to perceive dynamic relationships

•A high level of intellectual development

•A powerful memory for the project vision

•Powers of synthetical thought and imagination

•Cognitive fitness

•Ability to think concretely

•Combinative ability

•A disciplined will

•A highly active intellect

•Disciplined emotions

Achievingresults

Workingwith people

Change

management

Providingdirection

Usingrecourses

Self management

Communication skills

IT Skills

Competence Standards

The role of OE graduates

- leader

- strategist

- system integrator- change agent

developing the society for OE!

nbu.bg/um

excellence-bulgaria.org

Slide 2: http://en.wikipedia.org/wiki/Image:EU_location_BUL.png

Slide 3: http://www.state.gov/r/pa/ei/bgn/3236.htm

Slide 4: http://en.wikipedia.org/wiki/Image:Vucha_PAN-HDR.jpg

Slide 32: http://www.ibt.co.uk/transformation/efqm2.jpg

Slide 34: http://www.shropshire.gov.uk/ae.nsf

Slide 35: Based on http://www.management-standards.org.uk/

Slide 36: http://www.flickr.com/photos/kazamatsuri/188655575/

Slide 37: http://flickr.com/photos/purrr/126597849/

References