Integration into the World Economy: Companies in Transition in the Czech Republic, Slovakia, and Hungary

The report analyses the behavior of firms and managers in the Czech Republic, Slovakia, and Hungary during their integration into the world economy. The conclusions are based on 23 case studies conducted in 1995. The investigators found a rapidly transforming mosaic of managerial behavior which both changed over time and varied from firm to firm in all three countries. They found no one pattern of behavior that could be labeled as prototypical. Success was determined, to a large extent, by the managers' flexibility to adapt to rapid - and always uncertain - changes. The report also attempts to put the observed managerial experience of the three countries into historical and comparative contexts. In the report, the authors first sketch the macroeconomic and political environment for Central and Eastern Europe (CEE) enterprises in mid-1995 and analyze the financial sectors in the target countries. The marketing, operations, and financial challenges to these companies are illustrated in case examples. Next, the authors characterize managerial behavior within various types of enterprises and comment on the relationships between these behaviors and success or failure. Microeconomics, managerial behavior, and case studies that illustrate them are keys to understanding how economics work. Macroeconomics, fiscal and monetary policies, and stabilization are indeed very important but, by a long shot they don't tell the whole story. The transformation and integration literature is full of microstudies; far too few micro projects have been undertaken because they are so labor intensive. The authors hope that there will be many more micro studies. The report presents four categories of case studies: new firms,joint ventures, privatized companies, and state-owned enterprises (SOEs).