Financial Times: Lviv aims for ethics and expertise

24 Feb 2014

As the 46m-strong population  of Ukraine, browbeaten by  political and economic crisis,  moves towards the final leg of the presidential election, a recently established business school in the country’s western region may help revitalise a cynical business  community.

Lviv Business School part of the Ukrainian Catholic University, was set up in 2008, in part with the support of three of the state’s business groups. In a country riddled with corruption, one aspect of LvBS’s mission is to inculcate Ukraine’s managers with an ethical approach to business.

Petrol station operator Galnaftogaz, software development provider Softserve and women’s clothing manufacturer Trottola, are all regional employers in Ukraine hoping to expand their international footprint. They have given their support to the school and are also fielding members of the school’s advisory board.

The companies believe that endemic corruption has hampered Ukraine’s progress. They say that putting their managers through an ethically focused school will not only give their executives a clean bill of health  morally, but also makes sound business sense.

With this in mind they approached the rector of UCU and former Harvard academic Father Borys Gudziak, with the suggestion of creating the business school to teach both their MBA hopefuls and ranks of middle managers requiring shorter courses. In the 2008/09 academic year, about 1,000 participants from the three companies and the wider community took part in short courses and seminars at LvBS.

“We want businesses to be ethical and managers to be ethical and  we want those who control firms to love our land and be patriots,” says Fr Gudziak.

Chief executive of Galnaftogaz’s chain of 300 filling stations, Vitaliy Antonov, says a key factor in LvBS’s creation was the appointment of Sophia Opatska, then director of MBA programmes at Kyiv Mohyla Business School, in Kiev, to run Galnaftogaz’s corporate university in 2005.

“At that stage . . . we began to understand it would be much more effective for several business organisations to join forces and create a business school,” says Mr Antonov. Ms Opatska has since been appointed chief executive of LvBS.

“LvBS represents . . .a particularly successful synthesis of business and ethics. At the moment, this is what everybody in the business community is interested in,” says Mr Antonov.

As the business community in Ukraine becomes more mature, “it’s no longer enough to just live on your wits; you need a classical education”, says Taras Vervega, business development director at the fast-growing Lviv-based Softserve, which employs 1,200 people. Mr Verveganeeds LvBS to train middle managers to run regional offices, and branches in Florida and Manila, in the Philippines.

Trottola, with its 2,000 employees, has similar requirements. The company intends to create more jobs in Ukraine in sectors such as clothing design and marketing.

“The Kyiv Mohyla school is number one in Ukraine, but the fees are too high and not everybody can afford to go there,” says Yaroslav Rushchyshyn, Trottola’s chief executive.

“A business school is not just about an MBA, it’s about training people in the local area and the business mentality in Kiev is very different from that in western Ukraine. Our focus on ethics differentiates us hugely from the competition.”

Business education is enjoying a surge of popularity in Ukraine, with approximately 30 business schools in the country. However, according to Alex Frishberg, senior partner of Kiev-based law firm Frishberg & Partners, the most sought after management education is US or English.

Kiev-based, foreign-owned consulting firms such as Boston Consulting Group, McKinsey and Bain typically retain Ukrainian graduates with Harvard or Yale MBA degrees, he adds.

The LvBS EMBA programme currently has 15 students and is taught by Ukrainian and visiting lecturers, including business specialists from companies such as Kraft Foods and Ernst & Young and academics from Moscow State University and the University of Michigan.

It is the ethical dimension of the school that Fr Gudziak, believes will help senior managers focus on legal and morally acceptable solutions to their problems early in their careers. But he does not expect changes to happen overnight.

“Many people in Ukraine are trying to do something about corruption. But it’s a systemic problem and it’s not easy to change the system,” he says.