Decision-making and human factors in the context of privatization and transformation

This contribution is based on a longitudinal research project in six Hungarian companies. The field-work lasted two years and included four years of retrospective tracing of events, giving data covering six years during the transition from centralized state control to attempts at introducing a market economy. The project adopted a micro-economic decision-making perspective to discover critical intra-organizational factors that could account for successful or unsuccessful adaptation during the transition between two different external politico-economic systems. We reach four main conclusions: (1) privatization is multidimensional, being decisively influenced by the recent or even long-term history of identifiable organizational circumstances; (2) it is not evident, at least in the short run, that new organizational structures or leadership behaviour result from external pressures as theory tends to assume; (3) to understand managerial behaviour, one has to consider distinct phases of development from pre-privatization onward; (4) more generally, organizational adaptation tends to be slow rather than rapid; learning is influenced by an identifiable number of individual, group and sectorial circumstances that impede rapid adaptation.