Ljndorstanding and Managing Challengos To Tho Romanian Companios During Tfansition

and LJndorstanding Managing Challengos to tho Romanian Companios During Tfansition
Dan Candea
Tec|tn i col LIt't rcr sittt fu of Clrtj-l',lopoce, Romania
Rodica M. Canclea
Carrcleo Consr rlting tt Deueloprnent, C1tr.l-Nap oca, Rornania
RADICAL
CHANGE
IN ROMANIA
of Transitionis a word currentlyusedvery often by many categories people.Alon contents, implithoughthosewho usethe word do not alwaysagree its detailed and regards specificfield of a cationsand requirements, unlessthe conversation who talksor hears would immeabouttransition activity,any commonRomanian 1989andaboutthe entireensuof diatelythink aboutthe turn of events December ing period,which for many,hashad no landmarks hasno end in view. and means moving,changing from one state another, is useful to Sincetransition it comesfrom and whereit is heading Answersto these to. to know whereRomania questions would help us understand challenges hurdlesfacingthe Romathe and the nianeconomy, a whole,and its individualplayers, companies, managing as in As this difficult stageof development. the point from where Romaniacomesis to the only yearsbehindus it is ratherstraightforward delineate startingpoint of the transitionand we will briefly do it below.The targetof the transitionprocess, is however, foggier with respectto details.The targetcan probablybe formulated prior expericnces with with people's terms,consistent and only in more general their wishesfor freedomand prosperity:a marketeconomyand a democraticpolitical and socialsystem. is we kind Obviously, must be awarethatthe whole world economy in another era. of transition,towarda fully global and borderless The global transitionraises provocations imperatives front of the players, and in new,complexcompetitive 93
94
DAN CANDEA AND RODICA IVl CANDEA
novel to traditional responses who will haveto find strategic and organizational wantto become players partners if as in practice. Therefbre, Romanian companies mustincludeobjectives the world transiof transition the big game,the Romanian speed essential. is Romaniais a latestarter, tion.And because The pictureof the pre-1990 Romaniawill be outlinedby looking at threeaspectsof life: political,economic, and social.Romania hashad for over40 yearsa The Partyhadbeenproclairned singlepoliticalparty(Communist). Communist by as the Constitution the driving politicalforceof the society, and its headwas also government With an excessively centralized runningan equally the headof state. in centralized economy, which the privatesectorwas practically absent, market wereby and largeignoredor stifledby decisions economymechanisms that were primarilypoliticallymotivated. As a memberof the now defunctCouncil for Mutual EconomicAssistance (COMECON),dominated the USSR,Romaniaconducted most of its foreign by foreigneconomic tradewith the COMECON partners; kind of dominant that relationswasin no way a betterstimulus properbusiness for makingthanthe decision Structural macroeconomic domestic environment. deviations accumulated overtime and the economygrew to be uncompetitive real terms.The politioalsystem in rootedin the uniquemonolithicCommunist Partyhad a perfectmatchin the economic systembased the state on monopoly. The socialsystem wasalsoin tune.The regimespenttremendous resources in people's influencing attitudes beliefs, whatcounted and but werepeople's eventually behaviors, true or ostensible, loyalty and submission the Communistpreof to cepts,and no eflort was sparedto securesuchconducts: carefulselectionand fajobs, closemonitoringof peopleby the local voritismfor appointnlents various to party'sorganizations units,curtailment a minimum and control over perand to sonalcommunications abroad, coercion. the nameof theCommunist and In egaliprivate property tarianism wasstrictlylimited,thusdepriving peopleof the means for independent action.Along the sameline, salaries and wageswere carefully controlled, with a tight limit on the ratiobetween maximumandtheminimum. the In spite of the egalitarian slogans, party lost no opportunityto emphasize the the supremacy the working classin the Romaniansociety;next in line was the of peasantry. The intellectuals were supposed supportthe workersand peasants to in their endeavors. this way a hiddensocialconflictwas viciouslyfueled.At the In partyeliteconstituted distinctsocialsegment, sametime the Communist a enjoying privileges the form of goodsand services in providedby a special economic sector in parallel andseparately run to from theoverallRomanian economy. There (at wasno unemployment least officially),andeveryone "enjoying"a generalwas ized "securityin misery"and "equalityin poverty." The tumultuous events December1989broughtabouta radicalchangein of a l l of t he abov e.D o z e n so f p o l i ti c a l p a rti e sa ppeared, l procl ai mi nganti al Communist ideologies;the standard systemof representative democracywas with the standard of actorsof a demoadopted: separation powerin the state, the
MANAGING CHALLENGES TO THE ROMANIAN COMPANIES
95
political parties, parliament and labor unions.The cratic systembeing present: suddenly"took its handsoff' the economyreplacing newly formed government the extremecentralismwith an extremeliberalism.As the former political and collapsed. The coundisappeared, socialsystem the tip economic of the structure and try was thrown into a period of turmoil, with violent streetdemonstrations with chaosin the majorityof the companies. governments parliaments committedthemselves and Over time, all intervening to the institutions to the reform process, establishing appropriate and legal framework required the buildingof a democratic for Romanian society, havingat its founproperty wouldbe dominant. economy whichprivate in dationa market The assesssociologists politicians and mentsexpressed economists, by aboutthe progress of but the reform are quite diverse, thereare prevailingopinionsthat the paceof the is reformhasbeenslow,thatthe macroeconomic stabilization at bestfragile,andthe of foundations themacroeconomic of decentralization powerandthemicroeconomic (UnitedNationsDevelopment policiesarepoorly constructed Programme, 1997).
THE SHOCKS OF THE TRANSITION A Macroeconomic Picture

The factthatthe transition involves socialandeconomic costsis a realityfelt in all countriesgoing throughsuch an experience. The more radical the transition,the higherthe costs. this section will present concise In we a macroeconomic outline in 1989. of the situation RomaniaafterDecember Romaniais an average sizecountryby European standards, with a population mlllion,that hasbeenslightlydecreasing since1990and agingat the of over225 sametime. It is a nationalstatewith a majorityof almost90Vo its population of e thnicRom anian s . It is customary look at the movement the GDP and at the inflationrateto to of (ThbleI ). Inflationhasfollowed get an ideaaboutthe rnajortrends an econorny in a patternpretty much comrnonto the Centraland Eastern European countries: a phase first explosive followingpriceliberalization the saturation monetary and of phase a resultof thereduction subsidies a a as circulation channels, second in and pressure, thethird phase reflecting first effects diminishing inflationary and the of fiscal and monetarypoliciessupported economicgrowth.We by anti-inflationary pressure pickedup. One of the causes note that in 1996the inflationary was the pricecontrol by continued blockingof the marketpricemechanisms, maintaining grains, producer over fuel, energy, meat,milk and otherproducts. The associated a n d c ons um ers ub s i d i e s fu e l e dth e i n fl a ti o n ( U ni tedN ati onsD evel opment re Pro-eramm 7997 p. I 6). e, , European countries Romaniahas the second Among the Centraland Eastern periodhassignificantly l.irccst laborpotential afterPoland. The transition affected
96
DAN CANDEA AND RODICA M CANDEA TABLE I Dynamics the GrossDomestic of Productand of Inflation
I 990 t991 -12.9 I 992 -8.8 I 993 l.-5 1994 I 995 I 996
GDP-annual growth Vo Inflation rate yearly averageVo
--5.6
3.9
4.6*
t]0.2
2t0.4
256.1
t36.'7
-)2.-',
57.0*
*EstimatedSource:Centrul Europeutt Ecorutmic Review', July/August1997.
the employment Table2 presents situation. unemployment statistics. Althoughon a downwardtrend in 1994-1996, unemployment expected rise in 1997,beis to cause thecontinued of economic program privatization decline andtheaccelerated of andrestructuring undertaken thecurrentgovernment. by Romaniais facinga longterm employment crisis(UnitedNations Development Programme, l99l). in Salaries Romaniaare amongthe lowestin Centraland Eastern Europe. According to Business CentralEurope of June 1997,in March 1997 the average monthlysalaryin Romania was$92 U.S.,down from $ I 19 U.S.oneyearprior.To compare, Slovenia, countrywith the highest in the salaries the area, average in the monthly salarywas $870 U.S. But if we are to look furtherback,we would note thatthe average salary was$36/mo. U.S.in 1992, and$64lmo.U.S.in 1993(Lascu et al., 1993):salaries smallbut on the riseas a long tenn trend. are We quotefrom the UnitedNationsDevelopment ( Programme l99l) to conclude thatRomania's macroeconomic situation reflects "employment an crisis, decreases power,salaries socialservices, in purchasing and growinginequalities risk of and poverty, deteriorating conditions investment humancapital"which are "the for in main effectsof the economic, socialand moral crisis throughwhich Romanian societyis going.They are in part an inherent resultof the transition period.They alsoprovideproof of inefficient government."
A Microeconomic Picture
We will move now to look at the microeconomic transition. The informationwe will usein the ensuing resulted discussion from the interaction had with manwe agerscoming from over 70 orgamzations, eitherduring consultingwork or in educationaland trainingprograms. alsoquotepublished We data.The organizations we had contactwith spanned large variety of fields: manufacturing, a transportation,utilities, research engineering, otherservices. organizational and and The levels
TABLE 2 (7o) Unemployment Rates
l99l Unemployment 1992 1993 I 994 1995 9.-5 1996
o. -1
3.0
8.2
5.
MANAGING CHALLENGES
TO TI]E ROMANIAN COMPANIES
97
by coveredall hierarchyfrom CEO to first line supervirepresented the managers we were industrial companies, originally sor.Most of the organizations observed of stateownedand thenpartiallyorfully privatrzed, mediumand largesize.They metallurgical products, transportation equipment, are producers capitalgoods, of materials, and clothes. petro-chemicals, construction textiles, We found it useful to pay specialattentionto the problemsfacing industrial in because, spiteof thedecrease its output,theindustrial in in companies transition in to sectoris still the main contributor the GDP with 36Va 1996(UnitedNations Programme, l99l , p. 16).The industry'sperforrnance. therefore, afDevelopment will not exclude fectsin a significantway the welfareof the country.Our approach to whereverthosereferences will support references other kinds of organizations, the argumentation. We will proceedwith a breakdownof the effectsof the microeconomic transiun ti o n by bus inesfs c ti o n s . Marketing and Sales
Saleslevels(in real terms)havedroppedsubstantially since 1990because of with the disintegration the USSR therecamethe dissolution multiplereasons: of of exports former of the COMECON followedby a dramatic shrinkage Romanian to the COMECON members; collapse the domestic of marketfor capitalgoods,as werehaltedandresources redirected (a investments towards consumption populist policy of the first provisional government 1990,that was very hard to revert in later on); the changein the structureof the demandfor goods and services;the "invasion" of the domesticmarketby imports of consumergoodsspurredby the liberalization the foreigntrade;the continuous of declinein the purchasing power of the population. Marketingwaspractically absent a business as functionbefore1990. The supproducts ply anddemand industrial wererigorously of controlled the state, by and and services. The supplyof consumer so were the pricesof all products products "marketing wasat the limit of shortage, particularly the 1980's; in therefore, mix" were of no real consequence mistakes because everything that was produced and reasonably demandgot sold. The salesfunction was limited to contracting, fit and monitoringthe execution contracts, shipment. of Romanian companies foundthemselves suddenly Againstthis backdrop facing combination factors: of .i very unf-avorable shrunkmarkets, disorganized distribuproperlyto the new needs thatcouldnot respond tion systenrs, productstructure a qualityandcostproblems, a general lack of expertise skills ,rt'thcmarket, and and rn the field of marketing. while the abovecharacterization true for the industrial is Horvever, sectoras a ri hole. there are some significant differences among companies, depending on Textile, furniture, wall andfloor tilesmanufacturers, rh,--ir field of activity. clothes, to rh .it*er e s k illedan d q u i c k e n o u g h ma i n ta i nre ori ent , and expand thei rexport
96
DAN CANDEA AND RODICA M CANDEA TABLE I Productand of Inflation Dynamics the GrossDomestic of t 990 -5.6 t 9 9t
r10
I 992 -8.8
I 993
I 994
I 995 7.1
I 996 4.6x
GDP-annual growth 7c Inflation rate yearly averageVo
1.5
3.9
t]0.2
2t0.4
256.1
t36.'7
-1^:.-)
57.0*
*EstimatedSource:Centrul EunryeunEcttnomi<' Reviev.', July/August1997.
the employment situation. Table2 presents unemployment statistics. Althoughon unemployment expected rise in 1991,beis a downwardtrend in 1994-1996, to program privatization economic andtheaccelerated cause thecontinued of decline of government. andrestructuring undertaken thecurrent by Romania facinga longis Programme, 1991). term employmentcrisis (UnitedNationsDevelopment in Europe. Salaries Romaniaare amongthe lowestin Centraland Eastern According to Business CentralEuropeof June 1997,in March 1997 the average was$92 U.S.,down from $ I l9 U.S.oneyearprior.To monthlysalaryin Romania in salaries the area, average in compare, Slovenia, countrywith the highest the the monthly salarywas $870 U.S. But if we are to look furtherback,we would note was$36/mo. salary U.S.tn 1992, thattheaverage and$64lrno. U.S.in 1993(Lascu et al., 1993);salaries small but on the rise as a long term trend. are ( We quotefrom the UnitedNationsDevelopment Programme l99l) to conclude thatRomania's macroeconomic reflects "employment situation an crisis, decreases power,salaries socialservices, growinginequalities risk of in purchasing and and poverty, deteriorating conditions investment humancapital"which are "the for in main effectsof the economic, socialand moral crisis throughwhich Romanian resultof the transition societyis going.They are in part an inherent period.They government." alsoprovideproof of inefficient.
A Microeconomic
Picture
We will move now to look at the microeconomic transition. The informationwe will usein the ensuing resulted from the interaction had with mandiscussion we agerscoming from over 70 organizations, eitherduring consultingwork or in eduWe cationaland trainingprograms. alsoquotepublished data.The organizations we had contactwith spanned largevarietyof fields:manufacturing, a transportaand The tion, utilities,research engineering, otherservices. organizational and levels
TABLE 2 (7o Unemployment Rates )
I 9 9t Unemployment
t992 8.2
t993 10.4
I 994
1995 9.-5
| 996
3.0
10.9
6.3
5.
MANAGING CHALLENGES
TO THE ROMANIAN COMPANIES
97
coveredall hierarchyfrom CEO to first line superviby represented the managers companies, we were industrial originally sor.Most of the organizations observed of stateowned and then partially or fully privatrzed, medium and largesize.They metallurgical products, equipment, of are producers capitalgoods,transportation textiles, and clothes. construction materials, petro-chemicals, We found it useful to pay specialattentionto the problemsfacing industrial in in in because, spiteof thedecrease its output,the industrial companies transition in to sectoris still the rnaincontributor the GDP with 36Vo 1996(UnitedNations therefore, afProgramme, 1997 p. l6). The industry'sperfon.nance, Development , will not exclude fectsin a significantway the welfareof the country.Our approach will support whereverthosereferences to references otherkinds of organizations, th e ar gum ent at ion . with a breakdown the effects the microeconomic of of transiWe will proceed un ti o n by bus inesfs c ti o n s . Marketing and Sales
since 1990because of Saleslevels(in real terms)havedroppedsubstantially with the disintegration the USSR therecamethe dissolution of multiple reasons: of exports former to of theCOMECON followedby adramaticshrinkage Romanian of marketfor capitalgoods,as the COMECON members; collapse the domestic (a werehalted redirected towards consumption populist investments andresources government 1990,that was very hard to revert policy of the first provisional in later on); the changein the structureof the demandfor goods and services;the "invasion" of the domesticmarketby imports of consumergoodsspurredby the power liberalization the foreigntrade;the continuous of declinein the purchasing of the population. absent a business as functionbefore1990. Marketingwaspractically The supproducts wererigorously controlled the state, ply anddemand industrial of and by The supplyof consumer products and services. so were the pricesof all products "marketing particularly the 1980's; in therefore, wasat the limit of shortage, mix" because were of no real consequence everythingthat was producedand mistakes fit reasonably demandgot sold. The salesfunction was limited to contracting. and of monitoringthe execution contracts, shipment. companies foundthemselves facing Romanian suddenly Againstthis backdrop of disorganized distribucombination factors: shrunkmarkets, a very unfavorable properlyto the new needs that a tion systerns, productstructure couldnot respond general lack of expertise skills qualityandcostproblems, a and and of the market, in the field of marketing. is However,while the abovecharacterization true for the industrialsectoras a differences among companies, depending on whole, there are some significant furniture,wall andfloor tiles manufacturers, their field of activity.Textile,clothes, reorientand expandtheir export that were skilledand quick enoughto maintain,
9a
DAN CANDEA AND RODICA M. CANDEA
companies. Thereare alsodifmarkets,are doing betterthan othermanufacturing havinggrowndramatiindustries sectors, someservice ferences amongeconomic privatization of opporand the appearance new business cally due to deregulation, just somefront-runners: telecommunications, media, rnass road to tunities; mention services, publishingand printing,banking,insurance, brokerage transportation, (lawyer's, notarypublic,medicalpractice, management conprofessional services sult ing) . companiesowe their good performance We strongly believe that successful competence. existence marketopportunities a reThe of is largelyto managerial in Managerial competence quirement, not a guarantee suocess business. for is but who detects it manager ingredient because is the competent and puran essential taking advantage good opportunities of suesthe most promisingopportunities; generates resources the that make and keep the companysuccessful. This point into one of the theses this paper. will be developed of Production are With few exceptions, observed the companies producingmuch under carangeare not unusual,evenif pacity.Capacityutilizationfactorsin the 20Va-40Va just in someof the productlinesof a company. In thecase manycompanies foundthattheplanned we capacity wasfrom the of it very beginningunrealistic and, therefore, had neverbeenfully utilizedin the (the historyof the company. This wastheresultof politicaldecisions racebetween had to provesuperior), the Communismand capitalisrn which Communism in of visionof Romania's dictator, of theplanning megalomaniac last and mistakes made levelor in theCOMECON.Beyond eitherat thegovernmental thrs,rhesame causes that produced lall in sales the broughtaboutthe grosscapacity underutilization. Equipmentis ratherold in most of the companies, sincecapitalinvestments weredrastically 1989and,after 1990, situation not curtailed between 1980the did we the equipment wasin the foundry improve(e.g.,in onecompany studied oldest and in the forge and it was over 30 years old). The consequence that many is haveoutdated thatproduces lower quality,costly, Romanian companies technology products. The needfor technology updating obvious. is uncompetitive Another problemaffectingthe efficiencyof Romaniancompanies the manuis facturingstructure, which is usuallyhighly integrated. This leadsto long leadtimes, reducedflexibility in meetingmarketdemand,and an unfavorable cost structure. Human Resource Function
in has Employment industrial companies shown,with few exceptions, steady a in downwardtrendwhich is one determinant the rising unemployment Romaof had to lay off half or evenmore of their nia. In somedramaticcases companies employees.
99
companies the is phenomenon of related the downsizing industrial to A general We in in alongwith thereduction employment. will mendecrease laborproductivity First, in manycases pressure labor unionsprevented the of tion a few of the causes. as by the management from laying off as many employees warranted the reduction thatthe company in sales. manymanagers believe itself hassomeresponsiSecond, bility to provideeconomic security andsocialwelfarefor its employees, evenat the expense the profitability,a practicewhich distortsthe reality of the unemployof hiddenunemployment. Third, in somecompanies, higher mentfiguresby creating a proportion blue-collar workers werelaid off thanwhite-collar workers. of We would alsomentionthat the humanresource functionwas and still is domipersonnel mainly on the maintenatedby day-to-day administration focused and and personnel control.Higher level activitiesthat make nanceof files and records, management systemare yet to be developed. a modernhumanresource Finance and Company Planning
The financial function,with its basicproblems: how much shouldthe company invest, what specific in assets, how shouldthecashrequired investment and for be raised, of these orderto makethe firm's shareholders well off aspossible, all in as was nonexistent the before 1990. The statefinanced companies and madeall investment decisions. could make requests investments specific for Companies in weremadecentrally. assets, decisions but Companyplanningusedto be inward oriented. The balanced development of variouseconomicsectors and, consequently, settingthe levelsof the output of companies were regarded the responsibility the centralplanningauthorities. as of Rather thanbeingthe resultof the self-regulating marketmechanisms, macroand micro levelplanningwas,in the final analysis, politicallycontrolled a administraplanningconcentrated the tactical tive act.Company at andoperational levelsand was supposed lay out the actionplansrequired the achievement the cento for of trally set objectives. The two situationspresented aboveshow that Romaniancon-rpanies were bereft of somedecisionmaking capabilities essential their strategic for orientation: planning Many companies havebeenmarked long-term and investment decisions. period. by this conditionduringthe transition Because chronicpoorperformance, of companies became decapitalized. Comproduced increasing pany resources havemeltedinto the losses by costsand deprofitabilitybroughtaboutby low labor productivityand low capacity creasing With rising illiquidity,companies utilization. becameless and less able to pay andtheirsocialsecurity obligations. Within thepermistheirsuppliers, theirtaxes sive legal framework in effect after 1989,companiesstarteddefaultingon their (with no serious legalconsequences), soonan economywide pheand payments in blockage" which everybody owesevthe nomenon developed: "chainfinancial nobodyhasthe money. else c-r1,body and nobodypaysbecause
loo
Administration
functional wereirnposed organicompanies of all By a Decree 1973, Romanian hardlyknew that therewerealsootherways to strucManagers zationalstructures. we That "tradition" hascontinuedvirtually in all companies ture an organization. from the standard to had contactwith. In someof them we found attempts depart manufacturin,e (plants) up by product units set lines. modelbythecreation distinct of However, thoseunitswerelackingthe individualmarketthrustthat would turn them into realcorporate divisions strategic or business units. The importance theorgaof is nizational structure, which(a)thecompany divided intounitsof manageable by up purpose (b) by whichresponsibility accountability and and sizeandclearmarket for who withina clearsystem controls each unit areassigned managers operate to of and and to become part of the managerial rewards, still to be realized is culture.
ROMANIAN MANAGERS: INHERITANCE AND CHALLE,NGES In presenting general the situation Romanian of industrial companies transition in we havehintedthat their unsatisfactory resultswerecaused only by the effects not from the environment, of unfavorable externalfactorsoriginatingin the threats but In alsoby unfulfilledmanagerial responsibilities. the lastyears, based our exon perience, havebeenmakinga staternent wasnot readilyaccepted we that eitherby academia by managers: crisis which faced Romania in 1990and continthe or ued later on was, in the first place, a managerial crisis; the shortage of resources(particularly financial) was secondaryin severity to the managerial We deficiencies. will explainwhy the managerial crisis occurredand it will be apparent it wasto a largeextent that unavoidable. statement above not meant Our is for problemsduring the transitionon the to cast the responsibilities Romania's ratherit is an attentptto dravvthe attentionto one shoulders companymanagers, of to of the nrcstpressirtg issues be dealt with if our reJorm to be successfuL is Recogcrisis can and nizing the problemis the first step in solving it. The managerial challenge. shouldbecomea managerial section, Romaniar^ industrial As we haveseenin the preceding companies are going throughdifficult timesandsomeof thecauses thatthey aredecapitalized, are is unavailability up-to-date of their equipment aging and thereis a general techholdshugeinventories work-in-process nologies. it is alsotruethatindustry But of products, is true that we have been importing it and slow moving or unsalable a energyworth over$2.6billion U.S.per yearof which much is wasted, very large partof the industrial produotion capacity costs, laborprostaysidle andoverloads ductivityis low, financialdisciplineis shakyto the extentthat it has inducedthe phenomenon "chain financialblockage." the sametime At of abovementioned (Japan with us from could not evencompare Romaniais rich in naturalresources
5.
IOI
capitallooking for this point of view), and outsideRomaniathereis enormous waitingto be developed served. takes and It and investment opportunities, markets ertvironment,lo operatingin a stimulatingmacroecortomic managerialexpertise, by of by solveour shortage resources mobilizingexistingidle assets, attracting of deals,and by taking advantage foreign marforeign capitalinto advantageous why we believe thatthemanagerial shortcomings kets.Thesearethebasicreasons over the resource crisis.It looks like this opinion is alsoshared takeprecedence by whosemissionis to help the advancement the newly internation orgamzations al of we formed democracies after 1989.In this sense would mentionthe impressive numberof PHARE programs supported theEuropean by Union,andby individual countrieslike the United States and Canada, aimed at developingthe managerial skills requiredby the emergingmarketeconomyin Romania. Management a profession, which is particularly is one influenced the politiby via cal,economic and socialsystem the induced culturalvalues and beliefssuperof The managerial imposed overthe background the national culture. competence perceptual conceptual and capability concerns manager's andcanbe analyzed the (a) andevaluated termsof threefactors: themanager's in intelligence manageand (b) in rial aptitudes, expertise his specialist discipline, (c) his managerial and skills. A manager's skills referto the ensemble attitudes behaviors of and thathe adopts whenperforming jobl they areof threekinds:technical, his conceptual, interand personal. we add to the threef'actors competence fourth one: (d) motivation If of a for participation contribution the achievement the organization's and to of objectiveswe havea frameworkwithin which to think aboutmanagerial performance. the Of course, equation performance of requires competence, participatron, and appropriate conditions. We are awarethat part of the "appropriate conditions"for performance externalto the organization are and this is exactly what we meant carlierby mentioningthe "stimulatingmacroeconomic environment." However, the externalfactorsare not the object of our analysis. We are ratherinterested in internal to the organization tlie f-actors and will show that the company'sperformanceis conditioned the first placeby its employees by its managers. in and In the almosteight yearssincethe turn of events Decembe I 989, it is clear of r thiittherecouldhavebeenno change generations managers Romania. of of in The lar-ue majority of the managers today were,before 1990,eithermanagers (at of r arioushierarchical levels) employees nonmanagerial in or positions. Bearingthis in mind, let us look at the four factors mentioned aboveas affectperformance, askourselves rngmanagerial and aboutthe influences produced that .uch rnanagerial practices thatareconsidered deficientin a marketeconomy. (like creativity, Factor(a) referringto intelligence and managerial aptitudes rntuition, entrepreneurial spirit,openness towardinterpersonal relations) doesnot \\ rn'antfurtherconsideration we haveno datato give us reasons believe as to that (b), (c), (d) involve Rrrr111n1nns in aredeficient thisrespect. otherthreefactors The - ()n) plex er m in a n ts f w h i c hl e a rn i n gs a n i mp ortant i det o, one,ei ther n i ts systemi .,tri l-omr(education. learning. training)or as experiential
LC2
to It is herewherewe seethe problem,particularlywith respect the managerial skills and to participatingand contributing:the pre-1990period has deteriorated in themanagrs's1,sqsp valuesand beliefsthroughmassindoctrination the comof that alteredattitudesthrough munist ideology and by meansof forced behaviors The createda kind of cognitivedissonance. political, econonic and social system in of learning that inducedmajor deviations the thinkingand perceptions people, thus leading to the development a managerial of culture unfit for a performing market economy.The managerialculture then shapedthe entire organizational organizations the culture. The Romanian crossed December 1989threshold with a that but culturalinheritance must change, is very slow to change. In our opinion the restructuring of the Romanian organizationsshould be a human resource centered organizational change. It should start at the top managerial throughout organization. extraordithe echelons and thencascade The facingRomanianmanagers nary challenge during the transitionis to changethemselvesfirst so that they can changetheir companies bring them in fit with the to g emergin marketeconomy. (Mdtduan, published studies 1994:Mdtduan Gheorghe, Our findingsandseveral & et 1995; Mereutd al., 1995;Zamtir, M6tduan, Lotreanu, & 1994) pointto a number of managerial shortcomings hinderthe transition that and requireintervention in the organizatron. will mentionjust the few deficiencies We which affectessentially both the inner working of the organization its flt with the environment. and The human resourcefunction and the organizationalculture are neglected. The traditionof the humanresource a low key functionstill makesmany execuas tives considerhuman resourcemanagement practicesas too "soft" to be taken seriously. severe The conditions the transition not conducive an improveof are to ment with respect this issue.In an economicdownturnthe personnel to department is amongthoseorganizational units that receive evenlessattention and reparticularly sources thanbefore, whenthefirm's problemis to lay off people rather than keepingthem on the job. With high unemployment, labor appears be in to which encourages amplesupply, managers regardthe development skills as to of the responsibilityof the employeeratherof the employer's. The disregard hufor issuesand for the needto build a strongand healthy organizational man resource particularly cultureis boundto harmthe company's interests duringan economic personnelreductionsmay lead to losing the most depression: across-the-board skilled and effectiveemployees, and indifference thosewho must be let go will to makepeople feelabandoned will create cultureof nihilismamongthosewho and a are kept,which reduces long-termproductivity. Absenteeism, labordisputes, poor work practices, and poorly trainedmanagement, unimaginative coupledwith low utilizationof production capacities with process and inefficiencies, factors are which reducelabor productivity and,consequently, to low salaries lead and dissatisfied employees; heretheviciouscirclecloses. is our opinion,which It anddemotivated coincideswith the resultsof many studies(Dunphy & Stace,1992)and with the "My company's publiclyexpressed viewsof well known CEO's (e.g.,Bill Gates:
5.
I03
assets that everynight in the elevator"), the most important descend capitalassets if of a companyare its peopleand, therefore, the vicious circle is to be broken,a practices the as the companyshouldengagein developing best humanresource just cannot Management advantage. most. criticalfactorin gaininga competitive they shouldbe investingin people. investin new capitalequipmen'r, most surfacing slowly,although Market and customerorientation is a practice Preliminaryresultsof a recent study of the managersadmit that it is essential. nationwideby one of the first author's performedon a sampleof 150 companies claim to havea marketingstrategy, while 66.7 Va show that.23.3Vo doctoralstudents approach marketing. to admit to not havinga systematic from stateowned companies particiwith managers From our own experience "Who paysyour salary?" patingin training we their courses foundthatwhenasked: "My boss,"or "My employer." "The company," Very many vastmajority answered: answer(adapted showedsurpriseat and someeven arguedagainstour suggested paysyour salary. customer, salary!" We No no after Henry Ford): "The customer from managers comingfrom private haveto mentionthatwe facedsimilarreactions I companies, like: "I gel paid because work for my company"alsofrom managers We companies. believe these thingsto be significant comingfrom private because, know from theirown experience the availabilityof a market that although managers products a must, the marketstill remainsan impersonal, is for their company's A change the system beliefsis yet to be in of fuzzy anddistant concept. qualitative will made;theoneby whichmanagers getto thinkof themarketasa setof customrequiresand deserves meansthat eachand everycustomer ers.Market orientation and from managers from everybody elsein the company. specialtreatment with the marketforcesmany managers From the confrontation derivedlimited They tend to focustoo much on price aboutthe sources success. of conclusions the competition,while underestimating importance competingon valueto the of with due attention quality and customer service. We also note that customer, to suchas "business ethics"and "the socialresponsibility the organizaconcepts of (M6tduan,1994). tion" are still unfamiliarto most managers The reduced role of planningandthe very limited exposure financialmanageto affected over time theconceptual ment problemshaveadversely managerial skills. poor leadership and poor strategic orientaAs a result,managers demonstrate and by tion reflected their lack of vision for the organization by thedifficultiesthey (Mdtduan,1994;Zamftet al., 1994). when formulating strategies experience We arguments suchas: "I do not evenknow haveoften heardfrom generalmanagers nextWednesday, do not askme to plan for the nextsix so how I will pay the salaries Suchstatements showconfusion aboutthe role of planningas monthsor beyond." prophecy and a guidinginstrument, aboutthe factthata plan is not a self-fulfilling implementation through consistent action.Good planningwould ratherit requires will be paid nextWednesday. the We have answered questionabouthow salaries just mentioned a hardchallenge takeon is however, thatthe deficiency to realize, period. environment duringthe transition of because the highly uncertain
t{o4
TAKING ON THE CHALLENGE CHANGE: OF ORGANIZATIONAL TO PEOPLE FROM BUSINESS STRATEGY and socio-political economictransformations takeplace that The unprecedented structures in the first in Romania requirenotjust different underlying societal but, people's In world peopleandtheir place,profoundchanges attitudes. the business in haveto rethinkhow work is done,andhow peopleinterrelate this organizations resources usedin orderto create are process, how human,financialand technical value for the customer. The "standard" frameworkof thinkingassigns tleld of stratmanagement the egy the taskof aligningthe organization the changing to environment reviewby objectives by developing appropriate and the ing its vision,mission, business strategy. In the implementation stageit calls for the development suchfunctional of strategies to supportthe business as strategy. Accordingly, strategy the regarding (HRM) strategy, the management the peopleof an organization, humanresource (1992,p. 130) would follow directlyfrom the business DunphyandStace strategy. take a different view: "it is difficult to predict an organization's HRM strategy strategy," they look for a more from knowledgeof its generictype of business so powerful sourceof inf-luence the HRM strategy. a research on projectdone on In Australian companies transition in they found that sourceof influenceto be the organization's We change strategy. share opinionof the two Australian the researchers and we believethat top management to go beyondthe development the has of (or business of strategy theassessrnent thescope scale)of change, theassessto to ment of the leadership si1,/e needed the repositioning the organization, for of and only afterwardsto deal with the HRM strategyformulation stage.The model is presented Figure I and hascentralto it the organizational in change strategy defined by the scope/scale style. and It resultsfrom the model that oncethe strategy thinkingand formulationprocesshasbeencompleted, next stepis to address question what kind of the the of needs, change strategy organization the afterwhich an effective HRM strategy is What are this model'simplications Romanian for sought. cornpanies'? In what follows we will refer exclusively the strategies or-eanizational to of of changeand to the strategies HRM.
Change Strategies
Variousauthorsadvance differentmodelsof change. We distinguish essentially either gradually two ways to changeas far as the scale of change is concerned: (we can alsocall it incrementally), in a radicalor transforrnative or fashion. Both of on categories changecan have variations a continuumand accordingto the positionon the continuumthey can be calledin differentways.A radicalchange must be transformed at least such a major or meansthat the entire organization has transformation to takeplaceat the levelof the organization's basicunits(divi-
5.
MANAGING CHALLENGES
I05
Societal level
A CHANGING USINESS NDSOCIAL B ENVIRONMENT
BUSINESS STRATEGY
Organizational level
O RGANIZATIONAL CHANGESTRATEGY
HUMANRESOURCE MANAGEMENT STRATEGY
Sentient level
FlG. l.
PEOPLE
trrombusinessstrategy people. to
It sions, departments). is our beliefthatRomanian companies needa radical change because lack of fit with the environment considerable; environment the is the has in way. changed a discontinuous, disruptive providesfor a participaThe style of changedimensionof the changestrategy and consultative) tive approach(collaborative and a non-participative approach (directiveand coercive)(Dunphy & Stace,1992,p. 90). If we combinenow the scaleand the styledimensions and we only limit ourselvesto the radical/transformative changeas suggested above,by the sameAus(radical+ partralianauthorswe would identify: the "charismatic transformation" (radical+ non-participative). ticipative)and "dictatorialtransformation" when thereis an accepCharismatic transformation becomes viableapproach a stakeholders the need for large scale of tance on the part of key organizational when rewards available ensure are transformation, to sufficient supportfrom within the organization, and when thereare no widely divergentviews on how to bring firms not all threeconditions backto fit. Sincein mostRomanian the organization thereis little time for gainingsupportfrom within the organiaremet, andbecause participation, more directiveapproach generallyrequired, is zationfor extensive a
l06
repositioning. Sincethis of of at leastat the beginning the process organizational and to someextentis, the role and skill of top managelike "dictatorial," sounds are ment in leadingchange vital. of We would makeherea noteaboutthe currentrestructuring the mining sector of in in Romaniain which tensof thousands peoplewill be laid off practically no they are inefficient time. No matterwhat, the mineswill be closedboth because from the International Monetary the governmentis under pressure and because to in Fund to do so.The styleis clearlydirective, turn coercive caseof opposition combineto make a is from labor unions,and the change radical;thetwo features by dictatorial transformation the abovescheme.However,to make things more pay has the bearable, government setup a fund from which a severance of up to 20 This is donein an attempt to will be provided all those to dismissed. months'salary (probably manywill migrateLoagriculture) to and helppeoplewith a new start-up p gain ac c ept an c e r th e re s tru c tu ri n g ro g ra mfrom the cmpl oyees, as to so fo process strategy closerto a "charisand pushthechange awayfrom a "dictatorial" many miners(by matic" one.It looks like it is working prettywell, as extremely media accountsabout 70,000 until the first decadeof September1997) volunpay and, at leastfor the moment, there is no teeredto be enlistedfor severance socialunrest.
Human Resource Managemenf Strategy

is the Turningnow to the HRM strategies question what kind of HRM would help which in a Romanian implement radical/transformative a company would change, than consultative/collaborative'? ratherdirective/coercive be i Ref er r ingt o A u s tra l i a nc o mp a n i e s n tra n si ti on(D unphy & S tace, 1992, p. 126),threechoicesare advanced: to The structural HRM strategy,which is oriented findingstructural soluproblems with a directivemanand is usuallyassociated tions to organizational It the styleof change. aimsat redesigning business units,the work teams agement jobs, focuses tangible rewards, intends clarify the key rolesand develop to on and a unit culture. This strategy technical skills,and emphasizes strongbusiness uses the structurallines of the company. . The developmentalHRM strategy in which the emphasis on developing is throughpersonnel and management the workforce and the organization developwith a primarily consultative changemanagement ment; it is associated style. programs, focuseson intrinsic developmental This strategyis basedon extensive on culture.This strategyrequires reward,and puts strong emphasis corporate joint effortsfrom both the central (corporate) unit and the line units(business HR unit s ) . . The turnaround HRM strategywhich is characterized radicallyreviewby structures, methodologies. HR functionis centralize and The d ing theHR systems, .
MANAGING CHALLENGES TO THE ROMANIAN COMPANIE,S
IO7
who changes, downsizing, majorstructural in the hands theexecutives, undertake of with a non-participative is styleof This strategy associated and new recruitment. management. change shouldbe considered the top Romanian by All three of theseHRM strategies companies, beginning the change the promanagers. probablyin Romanian But of We believethis to be the right cessshould rely on a turnaroundHRM strategy. in because most companies radicalchange a affecting entireorganithe approach personnel zationis needed. Sincethe inherited functionusedto play only an adrole (asdescribed in ministrative earlierin thispaper), andbecause lhatcapacity it the effort,the executives cannotsupport change shouldfirst dismantle old perthe function's systems structures put in placean effective function. and and sonnel HR The new HR functionshouldhelp executives breakwith the old cultureand build and beliefs. a new system values of Any change shouldstartwith changing humansideof the enterprise, the the but final choiceof the appropriate HRM strategy lies with the top management the of firm and it depends the productor servicethe companyoffers, the marketsit on the serves, level of the technology involved,the existingorganizational culture, situation thecompany on how readythecompany for change. thefinancial of and is An old sayingwarns:"Changeis a door that can only be opened from inside." If we are to "survive"the transition and be successful afterwards Romanian companies haveto openthatdoor fastif theydid not do it yet.Oncethe lid is takenoff Pandora's box, company's managers facethreeimportant challenges: process, Leadingthe change which requires managers developa vision to aboutthe company andto change themselves before changing organizathe t ion. Managingthe peoplein the organization betterperfbrmance for and competitiveadvantage changingthe organizational by culture. Developing new kind of managerial a communication be usedas an into strument changing overallcommunication in the climate,which would become a new organizational cultural valueto supportthe transformation of the challenges opportunities. into We will dealwith these threeissues the followinethreesections. in
THE
CHALLENGE OF LEADING THE TRANSITION
Lcadingthetransition means very humanprocess initiating and managing the of transformational leaders able to: createa organizationalchangeand it requires n L '\\\ is ionf or t lie f utu rco f th c i r o rg a n i z a ti oa n dd e monstrate n personal commi t-
loB
mentto the vision;communicate visionpowerfullyto the organization's that members,to the stakeholders, to the public; implement vision throughout and the the by orgamzatron startingwith constructing effectivetop team,continuallyinitian ating and managing change, the and buildinga new culture. Therefore, Romanian the manager challenged thispoint in time to monitor is at with the environment, and manage interface the which meansscanning envithe ronmentanddeveloping vision,and to manage process change a the of within the itself,which means organization priorities, planningthechange, setting reallocating resources redirecting and activities.
The Need for Direction

As we mentioned, Romanian the manager shouldbe ableto offer a sense direcof ti on by ar t ic ulat in g n d c o m m u n i c a ti nth e v i s i o n .H e shoul d a g chal l enge someof the existingorg^nrzational valuesand practices, build credibility. should and He know how to work with peopleand how to communicate own beliefs. his What makesthis endeavor very difficult to accomplish the inherited is pre-1990 managerialculture.The Romanian manager was neverasked think aboutthe future of to his organization; Communistparty and the centralauthorities the took chargeof thatandof thenon-routine situations. is significant mentiona findingreported It to i n ( M er eut A al. , 1 9 9 5 ) y a c o n s u l ti n g rg a n i z a t i on et b o commi ssi oned testappl i to cantsfor the positions general of manager state of ownedfirms.The scenario pre'sented the applicants to was: 'Assumethat your companyhasan exportcontract which has been canceledby your foreign partnershortly before shipment.What shouldyou do?" Of the 9,811persons tested fractionof 52.4%lookedfor the a answer outside theircompanies, like: "We will contact Ministry of Industryor the the Ministry of Tradeto tell us what to do," or "We will talk to the Prefect," "We or will phonesuchand suchgovernmental agency." Thosewere indeedthe right approaches the comntand in economy whenmanagers not haveto be leaders, did but ratheradministrators. In the new marketeoonomy, Romanian managers shouldbe ableto address and answerimportant questions: ' ' "Why doesthe organization exist,what is its business purpose?" (thc and Mission); "Which is the distinctive competence the competitive or advantage thc that (the Stratorganization and how doesit intendto fulfill its purpose'/" has egy for achieving mission); the "Which aretheelements the Organizational Culture required achicrc of to the missionand to support implementation the strategy'/" the of
Theseelements can be arranged a sirnpleequation in which reflects ideathar the the ultimategoal of a visionaryleaderis the organization's performance *'hich i. built into the leader's vision:
5.
MANAGING CHALLENGE,S TO THE ROMANIAN COMPANIES
I 09
+ Vision = Mission + Strategy Culture perfordo Mission and strategyby themselves not havethe power to enhance behavioral into policies, actions, job-related and they areconverted manceunless organizaand guidelines. And for thosebehaviors actionsto produceperformance, and haveto serveas underpinnings catalysts. and practices tional values it managers could gain By clarifyinga vision and communicating to everyone as vision promoteschange, serves a roadmapfor the orpowerful resultsbecause plan and it enables It ganization it changes. providesthe basisfor a strategic as peopleto seehow their effortscontributeto the big picture.It motivatesindividuneedsthem and relieson als by instilling in them the feelingthat the orgamzation future for them, that they are accountable the change,and that the organization's depends them. on
"studenfs" and "Tachers" at the Same Time

only if it is initiated and strongly supported Any radicalchangecan be achieved of and by the top management the organization carriedout with the help of other whenRomanian managers wereasked whetherthey However, top agents change. of needed radicalchange,only 40.2Vo a agreedthat their believedtheir organization it, stronglyopposed idea(Mereutl et al., 1995). the companyneeded while 39.4V0 others, managers haveto change themselves Beforebeingableto change which implies that they have to "learn" and "teach" at the same time. And this is, perhaps, most difflcult part of the transition an organization. the of 1993)aboutRornanian managers'attitudes towards A study(Catanl& Catana, that in their opinion: showed change The sources their own resistance changearethe needto preserve of to posi(34.3V0), of decisional stress and tion, relationships, income(50V0 the answers), and authoritycrisis(l1.2Vo). . They cannot implementchangebecause the old mentality about work of (2J,6Va the responses), to instinctive opposition everyone any sortof change of of (9.7Vo), laborunion's structure work climate(11.9Vo), organizational and Q0.9Vo), (9 cl a im sand pr es s ure Va ). . The easiestthings to changeare the organizational structure(44Voof the (3 ), al unti l 1997 a n s wer s )t,ec hnolo g y 6 .6 V0 a n d p e o p l e(l 9 .4 Vo).Indeed, though (both at the macroand micro level),and techhavebeenchanged ntanystructures we nolo-ey made advances, are still paying a very high economicand social has transition mostly because people'smentalities. of price for a slowly progressing companies the stateownedcomare The samestudyfoundthe mostconservative (particularly monopolies). Thereis hope,however, the privatization p.rnies the that * rll bringnew work motivation people in andthuswill be an important contributor ttr th ec hange m e n ta l i ty . in .
llo
haveto learn from scratch how to conduct a processof Romanianmanagers experience not of too nruchhelp to them.As an is their previous changebecause we in performance" conducted 1995for a state illustration,a studyon "managerial showedthatthe groupof 24 of ownedmedium sizemanufacturer heavyequipment in managerswe testedhad lowest performance their innovatingrole (proactive attitudetowardschange,level of creativity,risk taking), ability to motivate (inneeds, understanding complexof psycho-social the volving peopleby delegation, skills,andcapacity manto communication a communicating vision),interpersonal managers haveto skills Romanian are agestress. believethat these important We acquirefast if they desireto be able to leadthe transitionof their organizations.
MANAGING THE ORGANIZNTIONAL BEHAVIOR CULTURE, TO INF'LUENCE the in We havealreadymentionedthat the leaderof the transition, managers general,and all peopleinvolvedin the HR functionshouldthink in termsof the orgaThe nizationalculture and about the way this can supportthe changestrategy. with the company's environment organizational cultureshouldbe consistent and needsin orderto be effective,to strategy and hasto embodywhat the organization be prosperous. The new kind of culturein Romaniancompanies should stress, interpret, throughits valuesand practices, the capacity detect, on to and translate from the environment into new behavior responses would bring supethat signals towardmeetingcustomers' needs. rior flexibility directed The organizational climate,definedas the link between individualand the the generalized organization, themembers' as beliefsandattitudes abouttheorganization,hasto stimulate involvement participation, and commitment accountabiland and o1 ity, to create sense responsibility ownership the transition. a of so are From thediscussion far it is clearthatmostof these still to be acquired by and practices, this Romanian organizational cultures, both in termsof values and is another to challenge meet.
"The Romanian Was Born to Be a Poet": From the National Culture to the Or ganizational Culture
reflectin manyways,throughsomeol'theirvalues The organizational cultures and practices, nationalculture.We will present this sectionsomeof the main in the national cultureon the companies' cultures. influences the Romanian of (Hofstedc. progranrming canbe viewed a collective as mental culture A national way of thinking,feeling,andbehaving, 1991,p. 4), a structured specific materialized in a set of human,economic,and socialvaluesthat are very importanttc) people. are and constitute emotional an Thesevalues deeplyrootedin individuals for culture. background the organizational
5.
MANAGING CHALLENGES
TO THE, ROMANIAN COMPANIES
I I I
of life: culturehasits rootsin the basicconditions the Romanian Our national pastandin the interactions in environment climate, thehistorical and in the natural havebeenearning and in the ways Romanians with othercultures and religions, by over cultureis a mechanism constructed Romanians their living. The national to two millenniato help them copewith the environment, supportthem in mainwith the physical, economic, and in tainingidentityand cohesion the interaction political"occupants" the Romanian territory. of between EastandWestand,thereRomaniais a countryplacedat a crossroads The tribesliving in the territorycame to be fore, in the way of many interests. known as Geti (5'hcenturyB.C.) and lateron as Daci. Their main vocationwas agricultureand animal breeding,hencetheir stability.They had to endurethe coming and going of many migratorywavesand,because the richness the of of were the targetof conlike salt,gold, and forests, territory in naturalresources questcampaigns a numberof powersthat dominated historicalperiods,like by At the RomanEmpireand the OttomanErnpire. 106A.D., after two major wars, the Romansdefeated Daci, occupiedtheir territoryand turnedit into a Rothe lastedunLil271 A.D. when the Roman provincecalledDacia. The occupation had to retreat.However,the population,which man troops and administration the startedbeing Romanizedbecause Roman civilizationhad been superiorto process Romanization (Rome's stayed thecontinuing and of theDaci'scivilization, influenceremainedstrongin the regionevenafter the retreat)lead to the creation of the Romanianpeopleand language. Romanianrs basicallya Latin language with remnantsfrom the languagespokenby the Daci and with influencesfrom the migratory populationsthat came and settledon the Romanianterritory (like th e S lav s ) . cultureis in part,a resultof theLatin heritage, at the same but Our national time populations historical times: migrating reflects influences thechanging the of sweepof and ing overthe territory, centuries foreignoccupation, the Communist period. a Romanians to copewrth theirhistoryby developing properphilosophy: had they events way they were,dreaming the better, they laughed the for citheraccepted or thusmakingthingsmorebearable. at the hardships, "The Romanian wasbornto be a poet" saysa national dictum.This means that the Romanianis rathera dreamerthan a fighter (as illustrated,for example,by a ricll known poem "Miorita - The LittleYoung Sheep"that tells abouta wonder who learns thatothershepherds intendto kill her shepherd takeawayhis shcep to who doesnot fight back,but rather the :heep;shediscloses plan to her shepherd rr'si_qns himself beforethe fate and makesplansfor his own burial in one of his kind of humor:the pret-erred Romanians alsodeveloped strange a scenicplaces). join their as thatpeople, afterdeath, .incient Daci danced funerals theybelieved at God Zontolxis;we also note that at Sapinta,a village in the northernpart of that becamein time a well known tourist attraclhc'country.there is a cenretery havefunny,happy enall litrr. colled the Merry Cemetery, because tombstones
Jr.i\ lnqs.
tt2
DAN CANDEA AND RODICA M CANDEA
the With this background challengeis to analyzeand recognizethe historical way to reconcilethe culturaltraits with the deand in a deliberate inheritance An studyhasbeendoneby Vana(1997) mandsof themarketeconomy. interesting culture,followine in his doctoralthesis aboutthe characteristics the Romanian of 1991). Hofstede's model of the national culture(Hofstede, national of cultureas found bv Vana(1997).on The dimensions the Romanian a scaleof 100points,are: L Distanceto power (referringto social inequalityand to the relation to authority):[DP] = 74. (definingthe individual-group relationship; 2. Individualism/collectivism the low valuesof the indexshowcollectivism): [VC] - 32. (a valuesand practices 3 . Masculinity/femininity largeindex indicates traditionallyascribed men and womenlessinvolvedsocially):tM/Fl = 30. to (definingthe emotionalreactionto uncertainty; 4 . Uncertaintyavoidance a high level of the indexshowslow tolerance ambiguity): for [UC] = 90. (definingthescaleof temporal 5 . Long-termorientation orientation from longterm to short-tenn orientations, with all its implications; high valueindex a orientation): meanslong-term [UfO] = 38. Thus,the Romaniannationalculture charactenzed a very largedistance is by to power,by collectivism, femininecharacteristics, a very high needto control by by uncertainty, a very short-term and orientation. Correspondingly, someof the characteristics easilyrecognized the Romanian in society andrelevant thecontext in of the organizational culture,are: l. As it results from the very high indexof distance power: to find it normalfor peoplenot to be equal;poweris the basisof our Romanians societyand peoplewith little powerdepend the oneswith more power.Power on can dominatethe truth: whoeverhas the power owns the truth, and peoplewho have power benefit from advantages. tend to be centralized(autoOrgamzations subordinates wait to be told what to do. The most frequent cratic governments); sources power are the controlover resources, (family of charisma, and relations amongpeople withoutpoweris difficult because the and fiiends).Cooperation of lack of trustthatmight be stronger thanthe commoninterest. Moreover, mantop mostdecision making.Thereis a latentconflictbetween agers tendto monopolize peoplewith powerand thosewithoutpower. 2. As it resultsfrom the low individualism index,Romanians characterare ized by collectivism:
MANAGING CHALLENGES TO THE ROIV1ANIANCOMPANIES
I I3
The harmonyin a group is importantand conflictsare avoidedor ooncealed relationships rnoreimportant Interpersonal are thanthe instead beingresolved. of are more importantthan the inditask to be performed.The collectiveinterests to of vidualones;the individualtendsto alignhis opinions the opinions one group his The educational degree the individualconditions socialstatus; of or another. promotions based seniority. Politicalpoweris exerted groups interests are on by of Verv manv debates. and decisions madeunderthe influence relations. are of regardless the field, tendto be politicized. of indicates theRomanian 3. The relatively low indexof masculinity that culture "femininevalues": is characterized by fiiendly relations important. are Feelings as importantas For Romanians, are facts. Managers tendto be intuitive. Womenareusuallyemployed thuscontribut, ing to the family income;housekeeping with the men. responsibilities shared are Mereutdet al. (1995,p. 76) showsthat the proportion women in a numberof of was 12.8Vo, 9.8l7 seniormanagers who weretested which is a high percentage by with rnanywestern comparison countries. Thereare alsomany womenwho have (but,interesting theirown business enough, therearevery few womeninvolvedin politicsand few hold governmental positions)! 4. The very high indexof uncertainty avoidingreflects numberof things: a is as Uncertainty perceived a stress and danger, is accompanied a high it by lr'r'clof anxietyand hasto be avoided. Romanians not like to takerisks.Ideas do .,ndbehaviors which are not commonlyaccepted tend to be suppressed. Differ-.nccs regarded individuals dangerous; by are as hence, thereis strong resistance to .rhat is different, resistance can generate that defensive aggressive or attitudes. In rtlc-r reduce thereis a felt needfor manyrules,evenif theyare not to uncertainty, .'l i obey ed. ur eau c ra ciy h i g h . B s
As it results from the very low long-term orientation index, Romanians are short-term oriented:
i-hcre respect traditions, is for socialobligations, status and regardless price. of , f l.. rvill alwaystry to savef'ace. People look for and valuefastresults. 3r positioning the indexes determined the Romaniancultureon various for :-.rndby comparing with theindexes thecultures researched Hof-stede of by we '.:J that: . r na I DP ] r ' s .[/C ] p l o t R o ma n i as p l a c e d l ose Y ugosl aviandMexi co; i c to a ..rn IM/F] vs. [DP] plot Romania positioned a is closeto Yugoslavia, Portug e l .a n dC h i l c :
tt4
a a a
Portugal, is closeto Yugoslavia, on a [I/C] vs. tMlFl plot Romania located and Chile; and comescloseto Yugoslavia Chile; on a [UA] vs. tM/Fl plot Romania and is closeto Yugoslavia Turkey; on a [ V C] v s . [UA] plot Romania placed and is closetoYugoslavia France. on a [UA] vs. [DP] plot Romania situated
to to cultureat all It is interesting noticethe closeresemblance theYugoslavic relevant combinations indexes. of The resultsreportedrecentlyby Vana(1991)for the Romaniancultureopened phenomena, are an imporinterpreting and of many possibilities understanding, Hofstede's data basecombinedwith the findingsin tant sourceof information. comprehend copewith someof the problems and Vana(1997)can help managers of the transition,namelythosethat aredeeplyrootedin the nationalculture.Other in problems a company's transition originate its organizational culture,with its of valuesand practices learntby socializingat the level of the professionand in the organization. values status The Romanian culture, dominated traditionalism, by the quo and peoplearesuspicious and aboutchange may perceive asdisturbing it stability; and even if the needfor changeis self evident.Therefore,we believethat subversive only with the help of betterand continuous change can be implemented informaeffort,and by facilitating tion, with a strongeducational and usingcontacts with (at moredynamiccultures thispoint in time the impactof theAmericaninfluence it different channels is very strongin Romania; comes through eitherat the general level-music, movies,fashionetc.-or at the level of the organizations through training pr ogr am sa s a i d fro m U S AID , PH AR E etc.). C hangecan be easi er from outsidethe organization (for eximposedwhen thereare strongpressures of of ample,the deterioration the standard living). with Romanianmanagers would If we are to compareWesternmanagers we note that the former havemore formal business educationbut, maybeeven more importantly, they are "born" more "aggressive" abouttheir role and position, and Western are more competitive. managers show more accountability while the Romanianoneswait to be told what to do.
Organizational Cultures Can Be and Are Very Different

We havedescribed of someof thecharacteristics theRomanian national culture, its of values practices, eachemployee and that bringswith him into theorganization. the At same time however,each organizational culture has its specificsmolded by the organization's environment, historyof events, the technology its by used, the proby fessions employed, theproducts services by and offered, by the industry which and to it belongs. The organizational culturewill haveits own values andpractices can and (1991 p. 183). as in another of dimensions described Hofstede set be characterrzedby ,
MANAGING CHALLENGES TO THE, ROMANIAN COMPANIES
I I5
culturescan be very differentand, we believethat for the sucOrgamzational their characteristics of cessfulimplementation changein Romaniancompanies, the options.the readiwhen evaluating strategic to arevery critical issues consider the and of the for ness change, strategies change theHRM strategies, paceof change, Very few generalrules can be recommended; of the management changeprocess. the has its own features sameway eachindividual has his own eachorganization personalityand hasto do thingshis own way. We can illustratethis point with two extremecaseswe have studiedrecently: "routine" and "non-routine"technologyorganrzational cultures. l The caseof a "routine technology" organizational culture: a metallurgiis and cal companywith long tradition,wheretechnology standardized well understood.
climate the way they are perof By comparingthe features the organizational with the onesthey would like to havein their organization, ceivedby employees we found that: The generalorientationof peopleis towardsavoidingthe threatsfrom the are the in environment; opportunities the new environment either not perceived,or peopleare reluctantto take them into consideration. andtheold situation stability(pre-1990)is someof is Change not welcome times longedfor. practices perceived beingthe only onesthatcould bring as The defensive are they aregeneralized all manageat somestabilityand safetyand,therefore, rial levels. at Thereis a criticallack of communication all levelsand in all directions, directionof the which creates confusionrelativeto the future,to the general evolution, well as creating as many conflictsand stress. company's climate,our studyalsoidentifiedthe beginningof In spiteof the conservative a drive towardschangecoming from inside the individualsin the company.We found: and innerurgetowards self-actualization self-esteem. An unanimous and work The needfor more work satisfaction for a better,more rnotivating climate. The needto be listenedto and valuedfor what individualsare and for what in they can contribute;the needto be treatedas partners decisionmaking.
We interpreted this situationas the "beginningof an end": It is a latentstateof and manifestneedfor rnnerconflictthat will conductvery soonto the perceived change.
I l6
2. The caseof a "nonroutine technologyt'organizationalculture: a research institute. We are currently in the processof conductinga study on the organizational andevaluatrng institute's the in of institute thecontext defining culture a research of cultures We usedHandy's(1985)frameworkof organizational strategic options. has thateachorganization its own way of doing thingsand works on which states aboutwhat motiaboutthe basisof power and influence, differentassumptions andabouthow thingscanbechanged. people, vates abouthow theythinkandlearn, prostructures, resultin quitedifferentstylesof management, Theseassumptions power, cultures; and rewardsystems, definefour typesof organizational cedures, culture. role,task,and person's by and normsperceived the peoplein the beliefs, Exploringthe setsof values, and the the instituteas characterizing organization, comparing findingswith the "ideal" sets (i.e.,the way theyshould by theemployees' preferenoes), found: we be aboutthe kind of weresplit almostequallyin theiropinions The employees it culture in the institute:someperceived as a power culture othersas a role culthe in ture.This meansthat,by their perceptions, practices the instituteconform When asked aboutthe eitherto "What the bosssays"or to "What the book says." peopleindicated the typical characteristics a task of ideal/desired of values, set the culture. They would like to seeas the major concern "What is the bestway to solvethe problem?"issue. . All agreed (in in is in that a change necessary the organization its structure, in Whenasked and management system). its systems, particularly theperfomrance what they would do in caseof seriousfinancialtroubles(e.g.,the government projects any longer),65Vo answered that they would would not financeresearch while 24Vawould accepteven ch;rnging their look for other financingsources, disciplines. field of work to otherspecialist . It was generallyperceived at that thereis a barrierto change the level of the The are institute's management. top executives blamedfor not havinga sense top to of direction, the extentthatnobodyknows"what we aredoing" and "wherewe are going." . It was considered be imperativeto put to betterusethe capacityand the to and potentialof the humanresources to createa betterwork climate,in particular the communication throughout institute and also to build more open and intense as authorities, well aswith otherinstitutes with the localandcentralgovernmental and businesses. o1'values the of It is clearthat herethereis a misfit between individualsystem ll'ornthe old inherited valuesand practices and the organizational the employees needfor change: a conflict,and a pervasive times.This misfit generated manilest What theyrreed willing andreadyfor change. themselves mostemployees consider (theysay)is a leader, directionand a credible plan of chan-qe. a .
I l6
2. The caseof a "nonroutine technologyttorganizationalculture: a research institute. of a We are currentlyin the process conducting study on the organizational institutein thecontextof definingandevaluating institute's cultureof a research the We usedHandy's(1985)frameworkof organizational strategic options. cultures which states thateachorganization its own way of doing thingsand works on has aboutwhat motidifferentassumptions aboutthe basisof power and influence, people, vates abouthow theythinkandlearn, andabouthow thingscanbe changed. resultin quitedifferentstylesof management, Theseassumptions stl'uctures, procedures, rewardsystems, and define four typesof organizational cultures:power, role, task,and person's culture. Exploringthe setsof values, beliefs, and normsperceived the peoplein the by instituteas characterizing organizatron, comparingthe findings with the the and "ideal" sets(i.e.,the way theyshould by theemployees' be preferences), found: we The employees weresplit almostequallyin theiropinions aboutthe kind of someperceived as a powercultureothersas a role culculturein the institute: it ture. This meansthat, by their perceptions, practices the instituteconform the in eitherto "What the bosssays"or to "What the book says." When asked aboutthe ideal/desired of values,peopleindicated set the typical characteristics a task of culture. They would like to seeas the major concern "What is the bestway to the solvethe problem?"issue. . All agreed (in thal, change necessary the organization its structure, a is in in in its systems, particularly theperformance and management system). Whenasked what they would do in caseof seriousfinancialtroubles(e.g.,the government would not financeresearch projects any longer),65Vc answered that they would look for other financingsources, while 24Vowould accepteven changingtheir field of work to otherspecialist disciplines. . It was generallyperceived that thereis a barrierto changeat the level of the institute's management. top executives blamedfor not havinga sense top The are to of direction, the extentthat nobodyknows"what we aredoing" and "wherewe are going." . It was considered be imperativeto put to betteruse the capacityand the to potential the humanresources to create betterwork climate,in particular and of a to build more open and intense communication throughout instituteand also the governmental with the localandcentral authorities, well aswith otherinstitutcs as and businesses. It is clearthat herethereis a misfit between individualsystemof valueso1' the and values from the old the ernployees the organizational and practices inherited a times.This misfit generated manifest conflict,and a pervasive needfbr chansc-: willing andreadyfor change. themselves mostemployees consider Whattheynecd (theysay)is a leader, directionand a credible plan of change. a .
MANAGING CHALLENGES
I 17
to of needed supporttheprocess bringA powerculturecouldprovidethe values thatthetop manageon in ing the institute line with theenvironment, thecondition in Since is ment (the "Zeus" of the organization) competent leadingthe change. is not the case,the task culture was perceivedas the way to align the here this organizationwith the environmentand to guide it to a more stable,prosperous situation. (a institute in which We believe that in this particularorganization research where the employeesare the innovativeactivitiesare the basisof its operations, with institutions and directcontacts particularly highly educated haveintense and of marketeconothe with cultures supported development successful that in countries process mies)the change shouldstartwith the "hardS's" in the 75 model(i.e.,the (Waterman, Peters, Phillips,l99l)). If the "hard & and strategy, structure, systems line with the environment, change restwill be easier the to than S's" arebroughtin previously metallurgical company mentioned because research the in the caseof the andreadiness change. to institute a goodstepforwardin termsof availability is againon the f-act sectionwe would like to stress that before In closingthis the and changestrategies developed. or-ganizational are culbusiness strategies in very carefullydiagnosed the plans,techbecause designing tureshave to be changethe specifics the organizational of niques,and tacticsfor implementing culturehaveto be takeninto account.
Towards a New Human Resource Function

the and usedas an interAs we havealreadysuggested, HRM hasto be developed The new HR and strategy. f'ace betweenthe peoplein the orgamzation the business settingin which functionshouldbe ableto create and maintainan organizational effectively; new HR the can and managers manage can cmployees be productive commitmentto the organizat'unction shouldplay an importantrole in generating in change and intionalgoalsand will act as a monitoringmechanism managing in performance. of these All definea role much broader scopethanthe list creasing performed Romanian in companies traditionof personnel activities and services .rIl1'. HR to We believe thatan effective functioncouldprovideanswers many of the w rra ns it ion'pr oble ms h e n i t c o me sto w o rk i n g w i th peopl eand i mpl ementi ng s - hange. practices conducted we resource in of A recent( 1996)survey personnel/human produced somepreliminary results worth manufacturing companies i6 Romanian n rr ' nt ioning: personnel/human havean HR functionand a corporate All largecompanies activities delegated are to certainpersonnel in ri:rrurcedepartment, somecases to more thatthis functionstarted encompass But, .:ncntanagers. it is only recently concentrated .:.rr\ irics than durin_s pre-1990era (when their responsibilities the .
t
i
I t8
and administration control)namely:labor planning,lobdemainly on employee probplanning, workertraining, andemployee compensation signandstructuring, like grievances). lem solving(problems . Generally,personnel departments not have "advanced"responsibilities do labor relations, conand management, or like: employeeassessment performance they are not involvedin the process managingthe organrzaof flict management; tionalchange. . The personnel play no importantrole in the company's departments decifrom managers employees. they only respond requests to or sion-making; . Management InformationSystems HR areextremelyfew (besides for computerized personnel files containing most basicdata). the . The top challenges f'aced the HR function,as viewedby the responding by of employees, including HR managers, trainingand development company's are: (the manager the HR functionitself shouldnot be fbrgotten!); of the managers improving the organizational climate,in particular the communication climate; new performance and designing evaluation systems. . The HR managers who took part in the surveyconsidered that they themhaveto acquirenewjob skills:the management change, selves of teamwork, the at management stress work, broadknowledge thecompany's of of business, of and of the principles marketeconomy. research data confirm it, that the Our own experience shows,and published top is attitude Romanian management yet not too encouraging the HR funcof of tion, which in most cases still seenas "the fifth wheelof the carriage," quote is to a local metaphor. According to (Mdtluan, 1994): regardthe humanresource a major issuein Only 30% of the executives as problems the the company; others the consider thatthe reallyimportant are shortage moneyand of new technologies. of Top mana-eers rankedpersonnel matters, the average, in descending ll on orderof priority in a groupof l5 criticalproblems confronting them. In a list of l0 itemsidentifying fieldsin which thetop managers the thought additional knowledge and skills,the areaof HR management they needed againranked,on the average, low 8. a for is One explanation this attitude the engineering economics and background of most executives their ratherlimited exposure management and to training.Becauseof their background they see themselves mainly as administrators the of materialandfinancialresources theoompany, secondly "superintendents" of and as who oversee and direct people. Another challengefor the top management to develop a new HR function is ways,sorne which we of in of that could help the implementation change several mentionhere:
MANAGING CHALLENGES
I I9
planningdone by the HR functionshouldhavein view the The personnel as of and development such skills and capabilities requiredby the employment in to new processes be performed the organization. . The process recruitment selection shouldbe usedto select thoseapand of culture. plicantswho could becomeagents changefor the new organizational of for The new recruits as well as the employeesselected training and promotion should have personalityprofiles such as neededto favor the new valuesof the cultureto help it align betterto the new environment. organizational . The socialization and accommodation the newly recruitedemployees of values organizational and practices. shouldbe usedto instill themdesired . Changingthe practicesof performance management and the rewardsand that new valuesare imbeddedin the orgaincentives systemwould communicate nizationalculture(the rewardsystemreflectsthe company's"philosophy"relative to the mutual relation betweenperformanceand reward and therefore,it sends and very powerful signalsinto the organizatton outside). to In brief: the capacity Romanian of organizations change depends very much (superordinate the goals, on how the HR functiontreats "soft" sideof thecompany et to staff,skills,andstyle(Waterman al.,l99I )), from top executives rank andfile, from developing skills to cultivating attitudes. So far we have beendemonstrating that Romaniancompanies needleadersof in changeand that the HR functioncould alsohelp them succeed the implementaIn we tion of change. both problems can use,unfortunately, limited help from the experience othercountriesor fiom the modelsthey developed of their own of out "transitions." thereis oneareaof management If whicheachnationhasto build by A itself, then that is the management human resources. Romanian manageof ment of human resourcesshould emergeas a central aspectof organizational management. this end moreresearch organizational To on culturesis needed, more work in the field of HRM in the Romanian contextis required. Because most of the techniques the HRM are value-laden, they concern of as values andpractices deeplyrootedin the nationalandmanagerial culture(regarding issueslike individual and group interests, interpersonal and intergrouprelations, motivation, controlof thehumanbehavior), and theymight haveto be redesigned if development they are "imported."For example,organizational methodsbasedon cannotbe usedwhereharmonyand conflictavoidance strongly confrontation are valued;reward systems stimulatingindividualperformance ratherthan collective matrix organizations solidarity might fail in collectivist societies; might not work wherepeoplepreferto receive effectivelyin cultures ordersfrom onesingleauthorcultures). Eventechniques areapparently ity,asin traditionally autocratic that valueneutral(concerning technological, the economic, and financialside of organizacan situations may be value-laden. that tions),whenimplemented generate And, as we have alreadymentioned earlier,each organization has its own, and well understood specific"personality"that has to be discovered before any
t2o-
is That "personality" priand strategy designed evaluated. or lies business change diagnosing, manmarily in its peopleand culture.It is our beliefthat in Romania and aging,carefullymonitoringthe humanresources, the cultureof a companyare at leastas criticalto its survivalas aremoneyand technology.
COMMUNICATING
FOR CHANGE,
We havetried until now to bring arguments supportof our belief that the most in in importantchallenge companies transition the "HR transition," to is one of its goalsbeingto change organizational central the cultureand,asan essential of part it, the managerial culture.We would go now one stepfurtherto investigate the issue thischallenge, whichis highlyinvisible mostimportant of one andneglected. The transition madeby people. is People cannotchange organizations indiby vidual actions; they haveto work together they haveto interactwith and,therefore, their efforts.In fact,one reason why organizations eachother,to coordinate exist peoplecan achieve is because working together by more and can be betteroff than working independently. The only way peoplecan interact with eachotheris throughcommunication. They haveto communicate theirideas, feelings, thoughts, instructions, knowland edge;they haveto communicate informationthat interrelates all them in their work in orderto inform,to convince, to determine and action. Communication imporis tant in buildingproductive relationships in changing and attitudes behaviors; and it in is important handling special situations, coaching counseling, in prelike and and venting, reducing, solving and conflicts; canbe anextremely it important instrument in the motivatingprocess, both in termsof finding out what motivates peopleand in someof their needs, is important problemsolvin-e in decision it satisfying in and performing trainingandby directing making;in makingpeople better by them. Communication the "nervous is system"of an organization ils someone ot', put i t, it is t he " binder "o f th e o rg a n i z a ti o nt; b ri n g sc o hesi on al l ow sfor the syni and ergy of the individualefforts. It is our belief that in the managerial perforrnance crisisaffectingRomanian companies important an issue themanagement is communication, an effective that andefficientmanagerial communication, in special styleto fit these timesof radicould be a competitive cal changes, advantage the process transition. in of The communication leadingthe changeprocess specialrole of the managerial in is in 1997). discussed (Candea Candea, & When comnrunicating duringdramatic changes, manager to know how the has Messages, orderto be effective, to "play" all the emotionalstrings. in haveto be also levelnotjust at the intellectual experienced at the emotional level.Managers haveto "preach," explain,andexplainagain, inform aboutgoodand bad,listento peoples' concerns The "language change"hasto be usedeveryand problems. of wherein the orsanization.
5.
MANAGING CHALLENGES
12I
In trying to find answers someof the mattersencountered Romanianorto by ganizations, matters thatcouldbe traced down to problems communication, of we in have done since 1995several studies the field of managerial communication pursuinga numberof topics:the role of communication the organizational in climate,communication climateandperformance, managing stress throughstrategic communication, typesof communication skills necessary an effective for Romacommunication an instrument implementing as in nianmanager, change. will We briefly mentionheresomeof the more generalresults: . Managers awareof the significance communication are of with their suborit dinates, consider to be:essenti (15%of theanswers), and al veryimportant(31Va), (37Vo). important ' There appears be an evidentdiscrepancy to betweenthe manager's and the perceptions the communication subordinate's of climate.In most cases, while managers consider communication the climateasbeingopenandcooperative, subfeel that they cannottalk freely to the bossand that the communication ordinates climateis defensive. We wouldinsert herethe findings an independent of study(Mereutd al., 1995) et which showthatcommunication considered be very importantin the manwas to agement teamby 52Vo the surveyed of managers. Relative the needof flexibility to (as in communication referringto the style of communication situations in like problemsolving,negotiation) samestudyreportsthat40o/o the respondents the of regarded flexibility as a necessity teamwork, the for while 46% beheved was it unimportant. ' Thereis inadequate communication, only between not managers and their subordinates, alsobetween executives middlemanagers evenwithin but top and and the top management team.We consider this to be an important source conflicts of and leadingto lack of direction, confusion (relative this topic to and suspicion to rve made an analysis sources conflict in Romaniancompanies of of during the (1997). periodin Candea transition andCandea ' In many cases thereis no match betweenword and action,which causes ntanagement's credibilityto drop,induces lack of trust,andasa resultpeopledo a "When I say that I take,I take; not subscribe the objectives the company. to of ri'henI say that I give, I say,"boasted one generalmana-eer. such a climate the In objectives the management of the subordinates seenas beingdisjunct of and are in lnd the interest the survival/prosperity the company seenthroughdifferent of is c Ia s s es . . Generalmanagers spendan average l0-90Vaof their time communicatof (with in companymeetings urg. lnost of it in group communication they spend 4ic'r of their time), and much less in interpersonal (insidethe communication .r)mpan.v: of their time is spenttalkingto employees the employee's 6% at work-
t22
outsidethe company: l57o of their place,and another6Voduring appointments; suppliers,and local time over the phone,and l}Vo during visits with customers, authorities). . The listeningcomponent communication not usedas much as necesis of (and listenthey do sary,is the opinionof most subordinates evenwhenmanagers as This shouldno longerbe a surprise long as Romanian not do it effectively). of not that listeningis: wastedtime (7Vo the answers); necesmanagers consider (22V0). oneof the interviewees it: "Before'89 we put As not sary( 15Vo), important talksbut nobodylistens." were not allowedto talk. Now everybody . Not enoughattentionis paid to the role of the feedbackin motivating for (e.g.,recognizing and praisingperformance) is performance. Positivefeedback seldomused.Criticismis still the main form of feedback. . The objectives the companyareconsidered be management's to business of and explainthem to the employ,n"r.fore, thereis no needto communicate ::1., we From our studiesand other publishedresearch, found that thereis a strong in the climate(participation decisionmakrelationship between communication and adequacy) the organizational and openness, information ing, communication (individuals'identification and involvement the organization, with in commitment goalsand values,willingnessto exof belief in and acceptance the orgamzatron's effort on behalfof the organization). ert considerable are of communication Our conclusions that the imperatives management in Romaniancompanies today are: at behaviors managers all levelsshouldgenerate of credCommunication ibility by consistency, compassion listening and by and feedback. There shouldbe willingnesson all partsto shareinformationfreely and quicklyto promote trustandthefeelingof inclusion; thereshouldbe respect for people's right to know aboutthe thingsthataffecttheirjobs and lives. Managersshould communicate and explain the vision ("where are we ("what is my company/ headed?"), the objectives the company/unit and of plant doing?"). Interpersonal communication shouldbe usedto understand individualneeds ("doesanyone motivate care?"). in orderto be ableto ("what is my shouldcommunicate clearlyjob responsibilities Managers job?") and give positiveas well as negativeperformance feedback("how am I doing?" ). to communication shouldcontribute enpowerment and acManagement ("how can I help?"). countability
process ustbecome del rberatel v communication m a Therefore,the managerial Its shouldredirectthe attentionfrorn management system. language strategized
5.
MANAGING CHALLENGES
123
fingerpointing and control towardschange, customer, teamwork, scapegoating, shouldbe an instrument work responsibility, accountability. Communication of infrastructure. and change,shouldbecomepart of the organizational
THE "WFIAT," OF MANAGING OF ' T H E
"FIO'W," AND "WHO" THE CHALLENGES T R AN SIT ION
In the closingof the paperwe will sumnrarize few key issues a related the manto agementof changeprocess Romanian in organizations askingourselves by questionsand thenputtingforwardanswers. WHY and WHEN the transformation should happenare easy to answer: because times are different;the changewe have been talking about should be process started soonaspossible. as Change shouldbe a continuing sincethe enviwill neverbe againas staticas it usedto be ronmentof Romaniancompanies before 1990. WHAT to do'/ Change to be initiated has and thenmanaged. visionhasto be A and created, communicated, thensupported the way.The leadership all functionis in is essential the process, a proactive and attitude a must.The incompetence a as leadercannotbe compensated competence an administrator. by as HOW to do it? The first stepshouldbe a correctdiagnostic the organization. of The informationresultingfrom diagnosing culturewill be usedin designing the plansbecause canprovideanswers andevaluating strategic options andstrategic it like: How do the characteristics the organizational to questions of culturerelateto the strongand weak pointsof the organization'? the existingculturesupport Can that would bring a betterfit with the environment? the humanrethe strategy Is sourcepreparedfor the new strategy? What kind of changeplans are called for? Are thereagents changein the organization? of Which are the groupsor persons rvho would resistchangestronger, which are the ones who would supportthe change'l In Section4 of this paperwe adopted view that the chan-ue the process should he basedon a proper HR function.To createit, structural changes are usually s c a l l e df o r a n d n e w p r o c e d u r e w i l l h a v e t o b e d e s i g n e d n d i m p l e m e n t e d : a policy and promotionsystem;a renewedperfonnance a new hiring evaluation rnd rewardsystem; new cor.nmunication systems styles; and appropriately designcd t r aining pr og ra m sfo r a l l p e rs o n n e li,n c l u d ing al l manageri alevel s;new l :r mbols,new "artif-acts" haveto be put in placeto showthat thingsare now will dill'erent. 'l WHO shoulddo it The sponsor the change process to be the top manof has .lec'rxent the company,particularlythe generalmanager. of The top executives They alsohaveto build the new HR function, lilr e to initiateand leadthe change. the After change institutionalized is trr*'hich theywill thendelegate HR activities.
t2+
sinceall managers to can someHR responsibilities be delegated line managers, with relationships theirpeople. redefining of haveto takeresponsibility improving, fundamentally the company's on of However,the success the transitiondepends top management.
R.EFERENCES
Bucharest: Expert. nturutgeriuLti upLicutri. R. Candea, M., & Candea.D. ( 1997).Comunicureu to An Catanl, A., & Catand,D. (1993).The Romuniunnrunegers'resisttutce clurnge: enrpiriculstudy. rtrguniz.tttion,s in trurtsitionSydney: Austruliutt D. Dunphy,D., & Stace, ( 1992).Undernewnuutullement: McGraw-Hill Book Company. rtrguniz.utlons. London: PenguinBooks. Handy,C. (1985). Understunding So.f'rwure o.l'themind. London: McGraw-Hill. Hofstede,G. ( l99l ). Cultures und rtrl4uniz.utiotts: Lascu,D. N. et al. (1993).EuropeunJournul of'Muketing, I 1/12, 102-120. n S . m M i t i u a n , G . ( 1 9 9 4 ) .D e z v o l t a r e a a n a g e m e n t u l iu i R o m d n i a : c h i t i d e s t r a t e g i eF I M A N , E d i t u r a Albatros. M. de 3-4, Mdtduan,G., & Gheorghe, ( 1995).Revistu Murutg,ement, 2V25. rominesti (perioadal990societitilorcomerciale Mereuti, C. et al. ( 1995).Tranzitiamanagementului Bucuresti. 2000).Edituru Tehnicu, ( Reytrt, ROMANIA Programme. 1997). NtuionulHumun Development United NationsDevelopment by 1997.New York: Commissioned the authorand producedby the RomanianAcademy. d'applicationdu Comparative manVana,A. (1997).Contributions la determination possibilites a des Doctoraldissertation.Nancy,France, technologique. agementdansle domainede developpement Romania,October. April and Bucharest, ( , W a t e r m a nR . H . ,P e t e r sT . J . & P h i l l i p s J . R . ( l 9 9 l ) . I n D . A . K o l b , L M . R u b i n ,& J . S . O s l a n d E d s . ) , , , EnglewoodCliffs, NJ: PrenticeHall. behuviorreuder(p. -562). The orguniz.eilionul in Nevoi si capacitdti. N. Formarea manageriali Rorndnia: ZarnfiqC., Mf,tluan,G., & Lotreanu, ( 1994). F I M A N . E d i t u r uA l b u tn t s .

Ljndorstanding and Managing Challengos To Tho Romanian Companios During Tfansition

Caricato da

Informazioni sul documento

Descrizione originale:

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Ljndorstanding and Managing Challengos To Tho Romanian Companios During Tfansition

Caricato da

Copyright:

Formati disponibili

and LJndorstanding Managing Challengos to tho Romanian Companios During Tfansition

DAN CANDEA AND RODICA IVl CANDEA

MANAGING CHALLENGES TO THE ROMANIAN COMPANIES

THE SHOCKS OF THE TRANSITION A Macroeconomic Picture

GDP-annual growth Vo Inflation rate yearly averageVo

*EstimatedSource:Centrul Europeutt Ecorutmic Review', July/August1997.

TO TI]E ROMANIAN COMPANIES

GDP-annual growth 7c Inflation rate yearly averageVo

*EstimatedSource:Centrul EunryeunEcttnomi<' Reviev.', July/August1997.

TO THE ROMANIAN COMPANIES

DAN CANDEA AND RODICA M. CANDEA

MANAGING CHALLENGES TO THE ROMANIAN COMPANIES

DAN CANDEA AND RODICA M. CANDEA

MANAGING CHALLENGES TO THE ROMANIAN COMPANIES

DAN CANDEA AND RODICA M. CANDEA

MANAGING CHALLENGES TO THE ROMANIAN COMPANIES

DAN CANDEA AND RODICA M. CANDEA

TO THE ROMANIAN COMPANIES

A CHANGING USINESS NDSOCIAL B ENVIRONMENT

HUMANRESOURCE MANAGEMENT STRATEGY

DAN CANDEA AND RODICA M. CANDEA

Human Resource Managemenf Strategy

MANAGING CHALLENGES TO THE ROMANIAN COMPANIE,S

CHALLENGE OF LEADING THE TRANSITION

DAN CANDEA AND RODICA M. CANDEA

The Need for Direction

MANAGING CHALLENGE,S TO THE ROMANIAN COMPANIES

"studenfs" and "Tachers" at the Same Time

DAN CANDEA AND RODICA M. CANDEA

TO THE, ROMANIAN COMPANIES

DAN CANDEA AND RODICA M CANDEA

MANAGING CHALLENGES TO THE ROIV1ANIANCOMPANIES

DAN CANDEA AND RODICA M. CANDEA

Organizational Cultures Can Be and Are Very Different

MANAGING CHALLENGES TO THE, ROMANIAN COMPANIES

DAN CANDEA AND RODICA M. CANDEA

DAN CANDEA AND RODICA M. CANDEA

TO THE ROMANIAN COMPANIES

Towards a New Human Resource Function

DAN CANDEA AND RODICA M. CANDEA

TO THE ROMANIAN COMPANIES

DAN CANDEA AND RODICA M CANDEA

TO THE ROMANIAN COMPANIES

DAN CANDEA AND RODICA M CANDEA

TO THE ROMANIAN COMPANIES

THE "WFIAT," OF MANAGING OF ' T H E

"FIO'W," AND "WHO" THE CHALLENGES T R AN SIT ION

DAN CANDEA AND RODICA M. CANDEA

Potrebbero piacerti anche