Adaptive Steps by Hungary’s Industries during the Transition Crisis

Abstract

The disorder accompanying the systemic transformation has fundamentally disrupted the environment in which Hungarian industrial firms operate. The two most significant changes were the crisis of solvency, resulting in part from the loss of markets, and the proprietorial uncertainty. Some of the firms suffered the blows submissively, while others tried to adapt in a more active fashion. According to research conducted at the Research Institute for World Economy of the Hungarian Academy of Sciences, even some of the active steps, such as taking on contracted projects or compulsively enforced export activities, failed to solve the problems of solvency. At the same time, some other steps proved to be more effective. Real success came from those adaptive moves in which managements' strategies combined fundamental operational change with ownership transfer, enabling them to preserve their leadership role during the transformation process.