Corporate Culture in Transition: Case Study Evidence from Bulgaria

This paper studies the patterns of corporate culture in Bulgaria with a focus on the impact of communism and transition on Bulgarian organizations. As is well known, Communism left a unique legacy in the organizational culture of the transitional economies by creating a peculiar cultural syndrome at the enterprise level with its distinct set of values, norms, and standards based on the notion of collectivism. This, in turn, stifled the development of management and organizational culture based on risk-taking, initiative, creativity, transparency, and autonomy and prevented competition, and strategic management to achieve efficiency and productivity. Based on surveys and interviews, case studies provide evidence of the underlying characteristics of the current state of the Bulgarian corporate culture in the aftermath of the transition shock. In particular, we try to gauge the impact of transition in transforming the corporate culture in Bulgaria towards more flexibility, competition and risk-taking. We also study the degree of inertia in the organizational culture of Bulgarian companies while highlighting the visible signs of change in terms of conflict management between managers and workers, attitudes towards privatization and the incentive structures implemented to improve company performance. * We wish to thank AUBG students Vania Pashova and Valia Guerdjikova for providing research assistance through their internship projects on AdVenture Limited, and Diana Kostodinova and Galia Docheva for interviewing the managers and workers of Podem, Vissokogovoriteli and Instrument and for their project prepared for the Economics of Transition class taught by Dr. Didar Erdinç in Spring 1999.