Academic journal article Management & Marketing

New Managerial Approaches in Organizations' Human Resources as a Result of Privatization

Academic journal article Management & Marketing

New Managerial Approaches in Organizations' Human Resources as a Result of Privatization

Article excerpt

Abstract. One of the main challenges encountered in the privatization process refers to the transformation of the former management of state enterprises into a new management system, able to meet the new demands of a market economy. This challenge is addressed not only to local organizations, but also to multinational companies seeking to expand into former communist countries. They are in a different socio-economic circumstance that conditions opportunities and limits transferability of management practices and concepts of organizational management in the West. These have to be reinvented and/or adapted locally.

Keywords: privatization, organization, human resources, THA, transition.

1. Introduction

In the process, human resource management plays a double role: on the one hand it is the object of change, in the sense that the strategies and methods of the human resource management have to be redesigned, but on the other hand it is the factor that initiates change throughout the organization, in the sense that team within the HR department must think up trainings, courses, workshops, etc., designed to help and inspire other department managers to implement appropriate policies and strategies. The way in which these courses are provided is very important. Numerous studies demonstrate that Western training methods have not proven effective for employees in the East: many trainers have adopted an ethnocentric attitude, considering their methods and work routines superior and the Eastern methods inferior and thus they were perceived negatively by employees working in the East who were offended by this and did not react positively to the trainings provided (Hollinshead and Michailova, 2001; Meyer, 2002).

Strategies applied in emerging economies fundamentally differ from those applied in mature, developed market economies (Gebulda et al., 2008; Meyer, 2002). By default, management practices in Eastern Germany fundamentally differ from those in Western Germany. The main differences occur at the organizational culture level, (Cartwright and Cooper, 1993) cultural integration and human resource level (Birkinshaw et al., 2000).

2. New managerial approaches in organizations' human resources

Of course, changes in the organization management level are directly related to the external environment, and thus the legislative framework, which is usually in a continuously changing process. Thus, on the level of human resources, personnel policies are directly influenced by the Labour Code and the changes implemented with its modification. In terms of Eastern Germany before reunification, like in other socialist countries, labor laws were rather simplistic, usually with the employee and employer having a life-long relationship with reduced inter-institutional mobility. Labor laws in post reunification Germany were created by taking into account the social market economy principles in which employee benefits (including postemployment) were generous, and the law tended to be in their favor. With the labor market situation worsening in 2002, they adopted a new legislative package, known as Hartz (the name comes from the initiator, Peter Hartz, the former human resources director of Volkswagen). This set of reforms resulted in four legislative packages, Hartz I-IV. The Hartz I-III reforms were implemented between 2003-2004, and Hartz IV (the most debated and controversial) starting January 1st, 2005.

The following table presents the main amendments introduced by the Hartz package

As can be seen from table analysis presented above, these legislative packages are also making the transition to a functioning market economy and have human resource management level implications within a company.

They are answers to problems encountered in the labor market and aroused much controversy, even today, despite the fact that after their application there was a decline in the long and short term unemployment rate (Fahrand Sunde, 2009; Krause and Uhlig, 2012). …

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