The case is set in the emerging markets of Central Europe, shortly after the fall of communism. IQSOFT Ltd Hungary is a small information technology firm spun off from a centralized government agency. With very little capital, IQSOFT Ltd found itself competing in the same market with large multinational companies. The situation presents the delicate balance between traditional beliefs and values and the need to survive. As an organizational change problem there is an interrelationship between the strategy of the firm, the organizations capabilities, and the capacity to change. These interrelationships must then be meshed within the human context. The biases, opinions, agendas, and experiences of the key decision makers all have an impact on the feasibility of any change recommendation. Balint Domolki, Managing director of IQSoft, realized that the organization had evolved to meet the firm's survival needs, but was it positioned correctly for the future?
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