Business Culture and Leadership in Hungary Part 1

The following essay aims to examine the relationship of business culture and leadership in Hungary in the last decade, to understand the differences and similarities. In order to fulfil this mission I start my journey at a general level, and move in a more and more concrete direction as I come closer from the national to the individual level. In the 1st part I’m going to focus on the business environment and try to give a short overview about the political/economical developments of the ’90s. Also in this part, I’m going to discuss the Hungarian national character, the way how I see it.

According to my intention this part will concentrate on those factors, which I think are valid in the long run, and depict the Hungarians as a nation rather than the narrower business culture. The 2nd part is devoted to the examination of the organizational culture. At this time I’m going to be more specific, and discuss the issues which characterize Hungarian firms. At this point I also rely on the efforts, results and publications of Hungarian researchers and lecturers of the University of Economic Sciences, Budapest, who – as I realized – took an active part in the GLOBE project.

I found the publications of Gyula Bakacsi, academic of the University of Economic Sciences, Budapest extremely useful. In the 3rd part I’m going to narrow down my examination level on the leader/top manager of the given organization. I’m going to answer the questions like: what kind of values and abilities should a successful local top manager possess, how can they be typified according to these abilities or to the decision making practices. As in part 2 I’m also going to rely in greater scale on the publication of local lecturers, like Zoltayne Paprika Zita, Illes Katalin, Takacs Sandor, Branziczki Imre, etc.

Although in both parts I intend to set forth the results of local researchers, I’m going to add my subjective experiences, too. II. Business environment 1. Political system Since Hungary is a more than 1000 years old country it has a very long political history. In this essay I’m only going to deal with the developments of the last 10-15 years and give a broader, general view about recent political developments. In the ’80s Hungary was considered as the “most sunny barrack” among the communist countries.

Both in political and economical meaning there was more freedom in Hungary than in any other “friendly” country, although it was still far away from the pluralistic system of Western democracies. Hungary took the 1st place in initiating the system change and democratic reforms among Central European countries. Its success also stimulated the transition in the neighboring states, it gave an encouraging moral background. It’s important to highlight, that the beginning of the transition period was not benchmarked with any violent, revolutionary event like in several other countries in CE.

For an insider it was rather a period of continuos political reforms, a series of small earthquakes than a vast eruption which sweeps everything away. One possible reason of the relatively small political convulsion lies in the national culture, namely, that Hungarian always preferred the policy of small steps to shock therapy, they never go to fight in the streets unless there is a small chance for reforms and negotiation. The organic transition, which gave people time to adjust, resulted political stability.

Although Hungarians are always unsatisfied with the ruling government (like people do in many Western countries), and at the last 3 election they never voted for the same coalition, all governments fulfilled its total 4 years assignment and there was no need for by-election or any example for violent political actions. The last election strengthens the view that the country is ahead off a two party rotation system, where the leading force of the left side is the Hungarian Socialist Party (a social-democratic party in Western terminology), while the right side is led by the conservative FIDESZ – Hungarian Civil Party.

The 3rd, relatively smaller but still powerful factor is the agricultural Independent Smallholders Party, which joined to the conservative side in the recent coalition.. I think that the institutional background of democracy has already built out in Hungary, it is characterized by mid strong parliament and mid strong government, and independent jurisdiction. The new constitution was accepted by the parliament at the very beginning of the transition period, law harmonization, which aims partly the change of old communist laws into democratic one, and partly the approaching of Hungarian laws to the practice of the EU, is in advanced stage.

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