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July 1999Internal Barriers in the Transition of Enterprises from Central Plan to Market

By  and Charalambos Vlachoutsicos and Charalambos Vlachoutsicos

Abstract

While a number of transition countries have been able to make significant progress with macroeconomic stabilization, little is being done to understand and to address the horrendous difficulties and barriers that attend the process of transition at the level of the enterprise. Not knowing what to change and what to leave in place-either because of its intrinsic value or because of its impenetrable and unyielding nature- exacerbates the complexity of the challenge. The purpose of this paper is to present the insights revealed by our study on the barriers obstructing the transition of enterprises from central plan to market. Stakeholders ' fears and institutional uncertainty seem to be the major impediments to the transition of enterprises from central plan to market. It is the fears of “being independent and self responsible, not having the protecting ‘umbrella ’ of the state”, of ignorance of markets, of “too many fast changes”, of “losing one's own job ” and most importantly the fear of “losing power and status”. These fears are derived from a deep suspicion of the consequences of any change. Thus workers fear the loss of job and of the enterprise umbrella, managers fear the loss of power and status and boards fear financial losses and loss of ownership

Year: 1999
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