University counsels small “split firms” in post‐communist country

Abstract

The transition from centralised to market economy created a number of difficulties for Polish enterprises and many of them went bankrupt, especially after the Soviet market had been lost. While large companies, such as steelworks, coal mines, railways, etc, have been protected by the government for social reasons, the small and medium enterprises (SMEs) could survive only when they, by themselves or with some external assistance, were able to introduce internal changes and adjust to the market environment. Polish SMEs may be divided into two groups: emerging private firms and split firms which were created by a partition of large state‐owned enterprises. The various reasons for failure are discussed for both groups and compared with those described in the literature. A general model of consultancy intervention is presented and the attitudes of Polish enterprises towards change are described. In general, the state‐owned and split firms are reluctant to change unless their situation is critical, and if restructurisation is done it is rather superficial. Thus, a successful consultant has to be not only convincing and flexible but also must assess how deep a change is wanted by a given enterprise. This paper presents the approach used in helping the split firms by the University of Mining and Metallurgy (UMM), Faculty of Management Consulting Group. In order to find solutions for a given firm, a working team consisting of representatives of an enterprise and university was set up. The team devises a strategy of enterprise survival and prepares a detailed plan of the steps to be taken. This approach, which in many cases has proved to be successful, consists of trying to infuse the employees with the philosophy of enterprise survival and organising a series of relevant training activities. When the employees fully understand the essence of all the actions necessary for enterprise survival (privatisation, improvement of marketing, creation of systems of motivation, quality control, management information and other), the consulting group’s role as “company doctor” is limited to the supervision of the change planning process and the assessment of the solutions chosen. This system of triggering employee initiative has been found to be not only effective but also cheap, an aspect which in the case of small enterprises should not be underestimated.

Citation

Lucki, Z. (1999), "University counsels small “split firms” in post‐communist country", Journal of Small Business and Enterprise Development, Vol. 6 No. 4, pp. 386-400. https://doi.org/10.1108/EUM0000000006692