ABSTRACT
The business strategies that any firm selects as well as its ability to implement these strategies are both path dependent, that is, they reflect the firm’s past environment and business decisions and their outcomes. Changes in the economic environment were so overwhelming that firm-specific factors, except for managerial skills and managerial autonomy, did little to differentiate among the short-term responses of firms. Much of the literature on transformation of firms stressed that abandoning state ownership would force firms to lay off workers if they were to remain competitive. One of the major areas of emphasis in virtually every successfully transforming firm was quality and quality control. Many of the successful firms revamped their human-resources practices in a variety of ways. Investment is often seen as a key component of the restructuring of firms in transition economies, and the lack of capital in the countries is therefore considered to be a serious barrier to enterprise restructuring.
