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December 5th, 2008
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10 questions

With Thomas E. Mershon

For Mershon, of the University of Pittsburgh's Executive MBA program, education investment is key.
By Frantisek Bouc
 Staff Writer, The Prague Post
April 14, 2005


While the government continues to receive criticism for undervaluing education, more and more international business schools are offering postgraduate MBA programs for executives. Thomas E. Mershon is director of the Prague-based Executive MBA program for Central Europe, part of the University of Pittsburgh's Katz Graduate School of Business. His program targets professionals by allowing students to continue working while taking a class schedule that minimizes time spent away from the office.

Mershon talks to The Prague Post about the reputation of Western degrees among Czech businessmen, and who is to blame for the lack of sufficient investment into education. He also offers advice on how to eventually kick off crucial reforms of public finance.

University of Pittsburgh is among a few U.S. business schools that provide full-time MBA programs here. Do you think Czechs prefer getting their MBA degree from a U.S. business school?

I do believe that Czechs value a Western business education for a variety of reasons. ... Now that the Czech Republic is part of an international economic community, learning how business is done globally is extremely important. This is why many Czech managers have told me that they prefer the international business schools to local ones.

• By the way, many Czechs still tend to perceive Pittsburgh as the city where hockey star Jaromir Jagr celebrated his greatest triumphs in the NHL. Have you come across any remarks of this sort when presenting your school here?

Funny enough, yes. I introduced myself to someone recently and as soon as I said Pittsburgh he almost yelled, "Jaaaggrrrr!"

• MBA programs represent a good opportunity for companies to invest in their employees. Do you see many local firms sending their employees to do an MBA?

Not enough. Many local firms are constantly looking for talented employees, yet fear investing in current employees because they might go to another company. If they do invest, it tends to be on technical training or specific, individual courses. Unfortunately, this can leave companies without proper leaders capable of taking care of the business as a whole. That said, I am meeting more company managers that are thinking about succession planning and leader development — both of which are greatly helped by an MBA education. The return on investment to companies that send their key managers for an MBA education is well worth the initial cost.

• On the other hand, how much do you think the government values education? How would you respond to the fact that teachers in this country are paid much less than policemen?

Of course the government values education, but often it seems that when making decisions, it is easier for them to ignore educational reforms. As with most countries, the younger generations have to compete politically with older generations. And guess who has more voting power? So education falls to the side while 'stamping out crime' receives political favor. As for the differences in pay, what are we really talking about? Bad pay versus almost-as-bad pay? They both deserve salary increases.

• Speaking of financial remuneration, do you believe Czech top managers should be forced to disclose their incomes and bonuses, as is the case in the United States?

THOMAS E. MERSHON

• Job title: Central European director, Executive MBA Program, Katz Graduate School of Business, University of Pittsburgh

• Age: 34

• Nationality: American

• Previous job: Private
consultant

• Education: Colorado Northwestern, Rangely; The Colorado College, Colorado Springs, BA Int'l Political Economy; USBSP, Prague, MBA

• Family: Married, one daughter
I think that top managers of publicly held companies should disclose their income and bonuses to shareholders. In fact, I thought they already were required to here. This allows the owners to track what is going on with the company incentive schemes, especially since it affects their distributions and earnings. The disparity between salaries will always be grounds for dissent, but in reality it is only the owners who should care. The former CEO of Intel was always under media attack for his salaries and bonuses, but the shareholders were certainly happy with 30 percent growth per year during the '90s.

• Until recently, the Czech Cabinet did not include an economist in its ranks. Do you think it is possible for the Cabinet to launch crucial public finance reforms without economists on board?

That is what consultants are for. If the politicians don't have the answers, they should seek out those who do. Of course they can make reforms, but if they want those reforms to be effective they need to get help. Otherwise they shouldn't be too surprised when they are voted out of power. Which might not be such a bad thing.

• The issue of public finance reform is very hot nowadays. Don't you think it would be a suicidal move for a new government to start fiscally restrictive reforms immediately after assuming power?

When exactly is a good time for these types of reforms? Yes, it could be suicidal, but tough choices are sometimes needed in the beginning. There will always be a reason not to follow through with them later. Unfortunately, the current coalition with the communists will ultimately prove to be the biggest problem. How can you launch effective reforms with those guys?

• How well does the Czech government sell the need for reforms to the people? What improvements could be done in this field?

As I said, the main problem I see is a lack of center-right politicians in power. The main reforms that need to be pushed through are the entitlement system reforms [pensions]. You cannot market those reforms with the communists in your coalition. They need to go before effective reforms can be made.

• Despite the current political turmoil, the Czech economy does not seem to be affected at all. Is it a good sign that national economies have grown into such mammoth dimensions that they became virtually independent of local governments?

Around 10 years ago the U.S. government had to shut down for a few days because it couldn't pay its employees. It was funny how much of a nonevent this was for the average person.

The name of the game now is convergence toward Western standards. The Czech Republic is in a great geographic location, with educated workers, and this is going to drive the economy for some time. I think it is a great thing that the economy is thriving while the government is going crazy. Hopefully the economy will pull the government back into line as the benefits of being part of an economic community start to cause the local politics to converge into more Western standards.

• If you were the business adviser to the prime minister, what would be your most important piece of advice?

Of course I would recommend increased funding for educational programs as well as the lowering of the marginal tax rate. In addition I would push for bankruptcy law reforms, such as the changes proposed by the American Chamber of Commerce recently. Better education and business are at the heart of a strong economy.

Want your top manager to answer our 10 Questions? Send a message to Frantisek Bouc at fbouc@praguepost.com




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