Transition and human
resources in Slovakia
Transition and
human resources
in Slovakia
Hugo Letiche
Keele University, Keele, UK and Rotterdam School of Management,
Erasmus University, The Netherlands
Introduction
The theme of human resources in Slovakia has confronted this researcher with
problems in identifying the subject under study; a crisis in his ability to know
what is “really” happening in the field; and (to top things off) a major dilemma
in interpretation.
Is it appropriate to examine human resources in Slovakia as a managerial
problem? For example, what HR tools are in use or ought to be put in use to
manage Slovak employees? Or is it better to see HR as a developmental theme?
For example, how in a post-communist society can one change organisational
culture and attitudes to facilitate the acquisition of the skills needed to be
effective in a market economy? In addition, on the level of firms, it is necessary
to attend to the strategic perspective – i.e. what goals and expectations do firms
have towards HR in their enterprises in the “new Europe”? What assumptions
do they have concerning empowerment and the “human factor?”
My involvement in Czechoslovakia/Slovakia[1] like that of many western
European academics, began on the developmental (HRD) level. I participated in
EU programmes such as ACE, PHARE and TEMPUS that were designed to
play a developmental role in management education in support of the
transformation process to a market economy. The HR focus in my research has
been directed to the developmental and strategic factors. The “personnel office”
in communist companies seems to have limited itself to administrating the
payroll. The department of “personnel and organisation”, which one often finds
in north-western European companies, whose tasks include: recruitment and
selection, organisational problem solving and conflict resolution, training and
development, appraisal and evaluation, did not exist in communist Europe.
Many of these functions were prerogatives of management, and were a means of
“earning” favours. In the extreme clientelism of the communist system, money
was often less important than connections. You had to know someone to obtain
the goods or services you desired. There was (virtually) nothing for sale in the
shops; only via the “back door” could one buy what one desired. The trading of
“favours” was rampant; the value of money as a motivator was restricted. Since
the fall of the Berlin Wall and the introduction of a market economy, the value of
money has increased enormously. In the popular public espousals, “everything
is now for sale”. But most people do not have the money to make very many
purchases. Money has taken over as the primary HR driving factor. The
213
Received June 1997
Revised November 1997
Accepted November 1997
Personnel Review,
Vol. 27 No. 3, 1998, pp. 213-226,
© MCB University Press, 0048-3486
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financial factor in a negative sense (the fear of unemployment and
impoverishment) as well as in a positive one (the desire to catch up with the
West and to join in on the consumer society) seems to “reign supreme”. While
the media and popular stereotypes advocate unbridled materialism, there is a
lot of private poverty, doubting of the espoused goal(s) and uncertainty. It is
hard to discover just how crassly most people really would want to behave – for
one thing they are very limited in their behaviour by their low level of welfare.
For another, the culture has a very strong conflict-avoiding nature to it. While
doing field work, I discovered that the western identification of “conflict
resolution” with a department of “personnel and organisation” runs countercultural to Slovak values. The first time (in 1997) I discussed managing conflict
with Slovaks, they were appalled by the idea. That one could choose to make
use of “conflict” to generate creativity, clarify organisational goals or achieve
new organisational structure, was unthinkable to my Slovak audience. For
them, conflict was irrevocable; if one defines that a “conflict” exists between
oneself and another, the relationship cannot be restored. “Conflict” is thought of
as absolute, total and entirely destructive. If one has a “conflict” with another
there is a “life-or-death” struggle between the persons. Seeing “conflict” as a
necessary and normal aspect of change, of shifts in authority and of interaction,
was unthinkable to the Slovaks. In their mind-frame “conflict” is total, absolute
and terrifying. Thus, unsurprisingly, Slovaks strongly want to avoid “conflict.”
They report that they do so by escaping from close interaction. They avoid
strong personal contact with non-family members, in order to make the chance
of “conflict” minimal. Thus, developmental process-oriented thinking, which
tends to stress dynamic interaction(s), strong feelings and open discussion,
cannot develop easily in a Slovak context.
While strategic HR is very important to Slovakia, it is mostly concealed.
Slovak companies seem to follow opportunistic strategies, which are largely
implicit and not verbalised. Foreign investors do not seem to share the strategic
thinking of headquarters with their “distant” Slovak cousins. Thus, explicit and
accurate statements of human resource strategy were not easily obtained in the
field. Furthermore, vague idealistic statements of intent will effectively serve
their goal of avoiding (the all so dreaded by Slovaks) “conflict”.
How should I analyse what I was able to discover about human resources
while in the field? Judgements of practice, based on western European
performance criteria, or multinational benchmarking, seem less than pertinent.
Obviously Slovak wages and productivity levels differ, at present, enormously
from those in western Europe. Thus, what criteria of judgement are
appropriate, in a discussion of Slovak human resource practices and/or
thinking? As Karen Legge has made very clear, the rhetoric of HR practices has
often been a mere rationalisation of deliberate corporate efforts to achieve profit
maximisation which are indifferent to worker (employee) development or wellbeing (Legge, 1995). To share in her embrace of Whittington’s strategy model: is
there anything more going on than classical top-down pursuit of competitive
advantage? The alternative options would be an evolutionary model wherein
pure market competition determines the winners and losers; systemic
Transition and
development wherein shared vision and social policy play a significant role in human resources
social-economic development; and the processual model wherein culture and
in Slovakia
values play a strong emergent and process role in activity (Whittington, 1993).
This paper will focus on the systemic and processual theses. The classical
approach to HR sees labour as a necessary cost factor which, as much as
215
possible, needs to be kept under control. If HR in Slovakia merely amounts to
the intensification of Taylorism, then there is precious little “new” to report.
Evolutionary development of SMEs in the “new Europe” has certainly occurred.
SMEs are started with a minimum of planning, evolve in any way the market
influences them, and survive on the basis of their entrepreneurial owners’
actions. This is the world of many “starters” and few survivors. There are few
plans, very little is written down; improvisation reigns supreme. I have
observed much evolutionary entrepreneurship in Poland, but comparatively
little in Slovakia. Furthermore, small SMEs, which are here today and gone
tomorrow, pretty much escape from the researcher’s vision – and their HR
behaviour is opportunistic, unplanned and purely short-term market-focused.
The research focus is on the remaining systemic and processual strategies of
HR development and policy, and on how these can be understood or judged.
First, I provide a short description of HR practice in (Czecho)Slovakia; and
then a discussion of criteria appropriate for judging Slovak HR practice.
Three cases[2]
Company A is a Dutch cardboard and paper company with plants throughout
the world. After the fall of the Berlin Wall it decided to enter the eastern
European market. It purchased a Czechoslovakian packaging firm, in order to
gain market share and experience. The company that was bought had some 400
employees who produced less finished product than 80 employees would in the
West. Because, during the communist period, the company could not rely on
suppliers or local government services it had everything from its own fire
station, to its own restaurant, to trucks and buses, to an infirmary, etc. The
Dutch multinational decided to make all the non-essential facets to the company
independent. The managers were offered management buy-outs, and support in
setting up independently. Initially, the loss of security involved provoked a
reaction of fear. But slowly the parent company’s vision was communicated to
the Czechoslovakian subsidiary. Only the core business (cardboard and
packaging) would be kept in Dutch hands; all other aspects of the old business
would be made independent with support in know-how and guaranteed
business to facilitate the change. At present some 120 employees are left in the
core business, and the rest have been dispersed into the various SMEs
emanating from the former structure. Wage levels are at ± 20 per cent of
western standards and productivity is low. But return on investment is now at
10 per cent per year. The parent company entered the central European market
for long-term market presence. Thus the initial losses needed to re-organise and
change attitudes, as well as structures, were expected and not problematical.
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The biggest problem, initially, was with expatriate management. To start the
change process, outsiders were brought in; but they were not effective in the
local cultural setting. Also they were not especially good in displaying the
patience needed to facilitate the change process. Thus, an absolute minimum of
Dutch presence has emerged as the better solution. The parent company sets
the strategic goals, sees to it that the Czechoslovak managers are adequately
trained, and then leaves the leadership in the change process pretty much to the
locals. The first step in the change process (reorganising the corporate structure
to separate core business from the rest) has been achieved. The second step is
to train personnel to work more efficiently. The parent company has determined
that most of the current machinery is too obsolete to be worth preserving. A
piecemeal modernisation would only produce an endless string of bottlenecks.
Putting current technology piecemeal into a production line that is so obsolete
would never be effective. Thus, the second stage to the change strategy is to
train the labourforce. Once that labourforce is brought up to near western levels
of training, a new green field plant will be built. Thus, the third phase is to
transfer business to an entirely new plant now being constructed on an un-used
portion of the old site. The workforce is to be actively involved in the design of
the new plant; in part to maximise efficiency and in part as a training technique
to prepare them to function effectively in a work environment which they
understand and have committed themselves to.
Company B is a North American multinational that produces “white goods”.
It purchased a Slovak washing-machine producer in 1992 from the Slovak
government. The American parent company has increased its percentage of
ownership from 28 per cent, via 78 per cent, to 100 per cent. Total investment
has amounted to 27.5 million dollars making it one of the ten top foreign
investors in Slovakia. The factory is slated to produce ± 300,000 washingmachines per year with ± 400 employees. Labour costs amount to less than 10
per cent of revenues. Only three expatriate managers are on site; a director, a
consultant for IT and an expert for finance. At a minimum, 85 per cent of the
production is for export. Thus, the factory’s profitability depends on the
transfer costs set by the multinational. One can let the national marketing
companies buy the washing-machines at near-cost price, increasing profits in
the long established markets and organisation; or one can put the transfer costs
higher, allowing more profit to flow to the Slovak factory.
Labour contracting has been undertaken to minimise costs. Only half of the
production workers have full-time contracts. All the others are part-timers who
are employed month by month, as needed. These “part-timers” are mainly exemployees of the prior washing-machine company from the communist period.
Thus, there is a reserve pool of skilled labour which the company can exploit
pretty much as it sees fit. The company’s attitude to labour is that it must
achieve western productivity standards “or leave”. Some 40 per cent of the
original labourforce have left the company. The speed-up imposed by the
foreign owners met, initially, with strong worker resistance. The multinational
benchmarks its factories and has determined that the Slovak factory performs
at less than 50 per cent of the productivity levels of its western European plants.
Transition and
The multinational demands that the factory achieve a level of at least 75 per human resources
cent (or higher) of western productivity. Employees have no input in production
in Slovakia
planning or the production floor layout (which is constantly changing). The
multinational has a head office elsewhere in Slovakia, which determines
monthly production quotas. The international marketing division (in the West),
217
in turn, determines the room for manoeuvre of the Slovak operation. Engineers
are responsible for plant design without any feedback loop to the workers
directly involved. Lots of top-down training occurs, to make workers aware of
benchmarking and of the productivity progress being demanded of them. Most
of the components used are Slovak. The company has made effective use of its
bargaining power to lower the price paid to suppliers and to force them to
achieve ISO certification. Likewise, the washing-machine factory is ISO
certified in order to give the national marketing companies more confidence in
the product delivered from Slovakia. Inventories have been cut dramatically
(from 40 to seven days).
The Slovak factory is, thus, merely a cheap site for production. No R&D or
commercial planning takes place at the plant site. All commercial decision
making is done at another office, close to international transport that is much
better integrated into the multinational’s culture than is the factory. The
multinational puts a minimum of core competencies into the factory, keeping its
dependence on the factory to a minimum. Development of a client or customer
focus is made impossible by blocking all contact between the factory and the
market. During the research visit to the factory the field workers observed that
health and safety measures were primitive. Work was being carried out without
proper protection for ears or eyes.
The technical director who showed us around the washing-machine factory
had to stop to show an assembly line worker how to use a tool to complete a task
instead of doing it manually. He said: “They used to do that manually. It is only
recently that we started to use those tools. But the workers still prefer doing
things the old way. In their mentality, if they have a chance of not learning how
to use the tools they’ll just go on doing the work manually. It takes time to
change their thinking and work attitude.” But the attitudes on display are not
going to produce a one-company culture: there is one entrance for white collar
workers and another for blue collar workers; an earlier start time for blue collar
workers than white collar, and more perks for white collar workers.
Furthermore, the difference in welfare between the foreign managers or visitors
and the local staff is enormous. One set of managers drives German luxury cars
and the other Skodas; for the set of managers only the best available is good
enough and the other is pretty much left to its own lot.
Obviously the attitude to (Czecho)-Slovak human resources is very different
in Company A and B. It is disturbing to have to note that all the examples of
“good practice” encountered were on the Czech side of the Czecho-Slovak divide.
The Slovak case material has reflected a business philosophy focused on profit
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maximisation, (extreme) worker speed-up, and very little (to no) empowerment
of management, not to mention the workforce.
Company C is a domestic Slovak firm. It was founded in 1991 in a provincial
Slovak city by four partners all with a technical university background. In 1988,
the future partners had begun with developing payroll software for PCs. In 1991
Company C began with 25 personnel and has grown (1996) to 500. Their
customer base grew from 200 to 5,000 clients, and their market share has
stabilized around ±10 per cent. They have opened offices throughout Slovakia,
and have become the only national IT player to be present throughout the
country. Thus, the IT market is very “Balkanised” with numerous local players.
This makes Company C the “natural” partner for more nationalisticallyoriented enterprises, such as some of the banks and insurance companies,
which want to “buy-local”.
Company C does have a value added retailer (VAR) relationship with a multinational hardware producer whose hardware they sell. Their home-gown
software products provide systems integration; linking the planning and
managing of production, to the storage of documents, to corporate accounting
system(s), to strategic planning and asset management, etc. Company C’s “cash
cows” are in the financial services sphere: payroll software, software for branch
banking, software for cash register systems. They also sell a wide range of
hardware (PCs, but also cash registers) and provide training in six training
centres. Thus, Company C provides a total customer package for automating
the client’s financial management. Furthermore, they are willing to integrate
their products with whatever existing systems a client possesses and to take
care of the client’s total hardware and software maintenance. They have a help
desk and offer service contracts, for instance providing service within 24 hours
if a breakdown occurs. All in all, Company C offers one-stop-shopping for the
Slovak companies that want or need to update their financial automatisation. In
fact, almost every Slovak company has had to update its IT. Changes in Slovak
law, designed to implement a modern market economy, have changed tax,
financial transaction and accounting procedures. Old systems became instantly
obsolete, as they failed to be able to handle data in the newly required manner.
Company C’s competitive advantage is its ability to “know” what requirements
the government is planning to place on financial transactions. At each juncture
that the government has changed the national norms (value-added tax, import
taxes, corporate taxation, payroll taxes), Company C has almost immediately
brought a software product on to the market that perfectly matched the new
requirement(s). Though no one is willing to talk about it, there must be a close
link between the company and the government. Company C definitely has prior
knowledge of exactly what standards the government is planning to implement
and what sort of software products will be needed. The rapid tempo of
economic reform has led to speedy product obsolescence and continual
additional sales. Company C has consistently offered updated software as addons, so clients do not have to throw out what they have already purchased.
What it sells perfectly matches, on each occasion, the legal requirements set by
the government. Moreover, Company C’s training is done by Slovaks for
Slovaks, and is based on Slovak training manuals. The cultural fit is perfect.
Transition and
Foreign competitors often have better software (faster, more flexible, adapted to human resources
more situations) but they lag way behind in their ability to demonstrate the
in Slovakia
match between their products and local needs/demands.
Company C has a modern electronic system connecting all its offices and
personnel. While information is exchanged by e-mail, face-to-face
communication is used to solve any problems. A drip-down-method is used for
219
training; a few seniors attend training provided by externals (often foreigners)
and then repeat the training for their colleagues.
The corporate philosophy was geared to long-term growth, based on a
strong market share. The owners, from 1991-1995, reinvested their considerable
profits in growth and the training of their personnel. But a sign of the times is
that the owners have recently changed their Skodas and austere life style for
BMWs and large villas. The policy of reinvestment has started to make way for
a “marketing concept” based on a flashy new logo, and a strategy making the
company “brand” highly visible and well-known. So far, Company C did not
have to do any marketing; more than enough customers contacted the company
independently. But the company’s inability to maintain its service quality is
emerging as its weakness. As the market for automatisation has become more
competitive, the supply of skilled IT personnel has not kept up with the
demand. Foreign competitors offer higher salaries, better secondary labour
conditions and significantly more training. Very few employees have actually
left Company C, but it is having trouble in recruiting new personnel. Slowly
Company C is slipping behind the foreign competition in its ability to offer
expert solutions and tailor-made responses. Furthermore, Company C has
never kept track of its customers – it does not know who ordered what, which
client made use of what services, or what the future needs of customers are
likely to be. The company does not have the marketing skills needed to segment
their clients, track their customers, or to analyse their market. There is no
central database from which to analyse company activity. Knowledge of the
competition is, at best, rudimentary and anecdotal. The partners have noticed a
certain slippage; the most advanced, state-of-the-art clients do not seem to be
coming back with further return business. Important players in the somewhat
more conservative and nationalistic insurance and banking sectors, though,
continue to pay premium prices and remain loyal customers.
Company C is a knowledge work company, i.e. its people and their skills are
its crucial resource. Because man-hours are relatively inexpensive in Slovakia,
it could in its pioneer phase develop its own software products. But if Slovakia
becomes more integrated in the world economy, a company of the size of
Company C will no longer be able to finance homemade software development.
Competition from the best international software houses will catch up with
Company C. While the company prospers because Slovakia is changing into a
modern market economy (i.e. that is the source of the demand for their
products); if Slovakia becomes just another market economy, like all the others,
Company C will lose out as a software developer. Instead of being a knowledge
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work firm, which develops software solutions, it will have to become a
marketing company that sells more or less standard IT products and provides
the back-up needed to use them. The company is now knowledge-led, but it is
already starting to change into being sales (market)-led. The current highly
trained and motivated personnel neither have the skills, nor are they probably
motivated, to work in a sales-focused organisation. Even the owners are
basically engineers, rather than salesmen. For Company C to remain a
knowledge work organisation, it would have to develop software which is
qualitatively as good as what is made anywhere else in the world, and be able to
sell its know-how in a world marketplace. Their software simply is not that
good. Thus, their market will progressively dry up, as standard products
adapted to the Slovak situation (language) become increasingly available.
Company C will lose its cost-effectiveness when the multinational competitors
move in. Of course, it can remain a value added retailer for foreign suppliers,
providing local adaptations, service and training. But that is a more modest
corporate self-definition than that which Company C has portrayed up to now.
The change would require internal cultural and skills shifts. The loose alliance
of offices would need to become a much more tightly co-ordinated sales
organisation. Engineer values would need to be replaced by commercial values.
Corporate identity will have to be found less in producing “solutions” than in
making sales. It seems likely that the owners will profit from their current
success and sell the company at the moment the change in identity becomes
absolutely necessary. Some personnel will be able to change unproblematically
from the knowledge-based to a sales-based mind set; but many will become
disillusioned, looking back to the pioneer phase of the company with nostalgia;
and will try to find another job.
Analysis[3]
To try to determine appropriate criteria of analysis: How can one understand
current Slovak HR actions? Legge (1995) and Whittington (1993) are critics of
rationalised profit maximisation, i.e. of hyper-Taylorism. Whittington thinks
that systemic strategies may be able to produce socially sustainable
profitability with a reasonable chance of enhancing human wellbeing. Legge
thinks that post-modern society has produced a rhetoric which has so obscured
analysis, that hyper-real distortions and ingénue claims may be inescapable.
She doubts if any humanist HR action is really possible. But these thinkers are
analysing a postmodern, hyper-consumerist society wrought by flexibility,
virtuality, BPR, out-sourcing, just-in-time ( JIT), etc. Certainly their terms of
reference are not appropriate to a post-communist Slovakia which resembles
more post-Second World War (1946-55) than current, western Europe. Thus, the
hypothesis seems worth pursuing that US theories of modernisation dating
from the 1950s and 1960s might throw more light on the current Slovak
situation than contemporary ideas could do. To demonstrate this thought
experiment, the comparison will be made between Talcott Parsons’ article
“Evolutionary universals in society” from the American Sociological Review
(1964a), in which he discussed his theory of modernisation, and the lessons of
Transition and
our recent field work in Slovakia.
human resources
Parsons argued that societies develop in an evolutionary way. He based his
in Slovakia
argument on an analogy between the evolution of living systems, wherein new
developments supposedly have increased the adaptive capacity of systems; and
the evolution of societies: “An evolutionary universal is a complex of structures
221
and associated processes the development of which so increases the long-run
adaptive capacity of living systems in a given class that only systems that
develop the complex can attain certain higher levels of general adaptive
capacity …” (Parsons, 1965). Progress is grounded, thus, in society’s improved
adaptive capacity: i.e. society has developed from the primitive, to the archaic,
to the modern. Key prerequisites needed to form a primitive society are:
religion, language, kinship and (basic) technology. Archaic society added, as
crucial factors: social stratification and cultural legitimisation. Finally, the
modern society has brought about the development of bureaucratic
organisation, money and markets, universalistic legal systems and democratic
association (Parsons, 1965). Thus, the earliest level of human society includes
religion to give it a basic social orientation, communication via language
whereby the cultural system can be shared, social organisation through kinship
which manifests society’s evolutionary origins, and (some basic) technology
whereby the system adapts itself to its physical environment. The transition
from a primitive society to an archaic one brings increased differentiation and
stratification, i.e. a primary break with primitive kinship ascription, and the
development of new, alternative, patterns of cultural legitimisation. A modern
society is characterised by the bureaucratic organisation of collective goalattainment, money and market systems, generalised universalistic legal
systems and democratic association with elective leadership and mediated
membership support for policy orientations.
At present one can see the (re)assertion of some elements of primitive society
in Slovakia. In the split between the Czechs and Slovaks a strong appeal, linked
to language and national (kinship) ties, was made to the local bias of the
Slovaks. The place where people are born and grow up is often the place where
they settle and work. Most of the people observed in Slovak companies were
born and raised within an area of 20 kilometres of their present work. Many
remnants of traditional agrarian society – wherein the person you are is defined
by where you are born and who are your parents – are evident in contemporary
Slovakia.
The archaic society is a “society emerging from primitiveness”, wherein a
“primary break with primitive kinship ascription” leads to stratification and
cultural legitimisation. Primitive society defines people in terms of shared
kinship and territory; stratification ascribes social status to differences in
biological and territorial existence. Two questions determine the class or group
to which you belong: “Where do you come from?” and “What are your marriage
opportunities?” These questions are also pertinent in the primitive society, but
do not determine institutionalised class boundaries. People in Slovakia report
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that they are very dependent in their careers, on having family and friends in
the “right positions”. When you belong to the right group, you can “get ahead”.
In the archaic society, primitive kinship homogeneity is replaced by the
heterogeneity of class society. The development of a class system, which
divides society – providing an upper class that can be contrasted with the mass
of the population – is crucial to archaic society. Society has gained a core (the
élite, wealthy, powerful) and a periphery (the faceless, poor, nondescript). In
Slovakia if you have the right contacts with influential people, and are active in
the ruling political class, you are part of the “core”. Otherwise, you are in the
“periphery”. The gap between management and workers is enormous. Between
the workers and the management there is a social vacuum that in the West
would be filled by staff experts and/or middle management. This middle class
is hardly present in Slovakia. Some technically skilled people may form a sort
of “middle class”, but their numbers have decreased under capitalism. Nor do
these people have much influence or power. The housing situation is indicative
of the social structure: it is split into two categories, grey high-rise apartment
buildings for the workers, and luxury villas for the upper class. For Parsons,
stratification is an “evolutionary universal”, because of the potential for
development that it opens. Thanks to stratification, an opportunity arises for
the individual to break through the “nexus of kinship” by developing from one
class to another. Within archaic society two parallel class systems – one rural,
one urban – can develop. Each of them is divided into two classes.
The second, key “organisational complex” of archaic society is cultural
legitimisation. It is “an emergence of an institutionalised cultural definition of
the society of reference, namely a referent of ‘we’ which is differentiated,
historically or comparatively or both, from other societies, while the merit of
we-ness is asserted in a normative context” (Parsons, 1964a, p. 345). The feeling
of identity becomes politically organised; political identity depends, in Parsons’
view, on the creation of political institutions and leadership. These can only
exist if society is stratified. In primitive society, the principal source of social
legitimisation is to be found in religion, which relates the society to a
metaphysical and/or supernatural order. Order is defined by the metaphysical;
whose representative(s), i.e. the priesthood, give authority to the political
power(s), (i.e. the king). Similarly, communism legitimised itself by appealing to
the “laws of history”, which supposedly empowered the leaders to rule on the
basis of “scientific Marxism”. In the stratified archaic society, different classes
can potentially create different structures of cultural differentiation; and these
differences function as a motor of evolution. The process of stratification and
differentiation is very present in current Slovakia; the Revolution of 1989, the
separation of the Czech and Slovak Republics, the privatisation of companies
and the entry of powerful foreign companies, have all shaken the old “we-ness”
of 1948-89, which was largely defined in an ideology of “we” (the people) versus
“them” (the communists). But in Slovakia, one sees the old archaic structures
reasserting themselves via political apathy, wherein clientelism and the
enormous gap in welfare between the élite and masses stays the same. The
running crisis (1995-97) in political legitimisation, between the prime minister
Transition and
and the president, is part and parcel of political (mis-)order, which is able to human resources
integrate Slovakia neither into eastern (Ukraine/Russia) nor into western (the
in Slovakia
EU) Europe; and reflects the deep instability in the social as well as cultural
identity.
While there are undeniably elements of primitive and anarchic society to be
223
found in contemporary Slovakia, the crucial question remains: how is Slovakia
dealing with the last stage in the evolution of societies, i.e. modernisation? For
Parsons the four universals of a modern society are bureaucratic organisation,
money and markets, generalised universalistic norms and the democratic
association. When we use the term “the bureaucratic system” to signify the
institutionalisation of the authority of office, we see it everywhere, very clearly,
in Slovakia. Roles are strongly differentiated in organisations that are seen as
fixed structures of rules and procedures. When visiting factories one sees at the
gate that the rules are taken very seriously. The ritual of passes and inspection
brings with it excuses for the inconvenience the organisation causes, but “the
rules are the rules”. People are afraid of doing anything that contradicts the
procedures and guidelines that have been issued by somebody unknown. Often
during in-factory field work comments were heard such as “The rules are
probably useful for something, otherwise they would not exist”. Organisation
did not seem to be perceived as a medium to achieve broadly shared goals, but
as a source of power for the (ruling/managing) few. In one of the companies
visited, there were a lot of quality control mechanisms. Workers had to complete
numerous documents, and products were checked repeatedly. The workers were
told that such a system was required for the functioning of the organisation. In
reality, it was just so many ways for the managers to exert control. The manner
of organising was less suited to achieving effective co-ordination, than to
restricting the actions of the workers. One expects, in a bureaucratic
organisation, that the roles people play are precisely defined. Via procedures the
rights and duties of employees as well as the line(s) of command are all written
down. Formal power, attributed to one’s position within the organisation,
creates an aura of rationality having been substituted for kinship. But in
Slovakia well-known friends or relatives often replace higher members of the
organisation, on retirement. When your origins are lower in the social hierarchy,
your chances of promotion are not very high. On the one hand, Slovakia is
characterised by formal rational organisation; and on the other, kinship and
social position are all powerful. While rationality would demand “the best
person in the right place”, archaic social processes are at work to block any such
organisational principle. The paradox between the two is a cause for
uncertainty and distrust – it does not really matter how good you are – how
many important people you know counts more. In a bureaucratic system, the
division of power and authority ought to be purely rational and functional.
Within a bureaucratic organisation, personal power, built up by using
relationships, ought not to reign supreme. But in Slovakia the manager’s level of
authority and power is almost always linked to his (almost all managers are
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men) social background, and the class position of his family. The current trend
to “management buy-outs” seems to be rewarding high social status and, if
anything, to be making the perspectives of the “outsiders” even bleaker. Most
middle managers and foremen interviewed had the feeling that they cannot
influence anything; their willingness or motivation to adapt is low.
Furthermore, this lack of motivation legitimates top management’s efforts to
keep the lower class(es) under control. The ability of the society, as a system, to
change is compromised when the largest number of people falls into
unmotivated apathy. The extreme division of labour practised in Slovakia
further alienates people from one another. Companies are rigidly divided up
along functional lines. Each function is an island unto itself. For example, in the
production department there are only engineers and technical people focused
on manufacturing. In the sales department, commercial issues dominate –
selling is the key factor. Links between the two are almost non-existent, and if
they do exist they are often competitive (i.e. fighting for scarce resources).
Although the malfunctioning of the “system” is recognised, no one seems
willing to change it. The prevailing interpretation of bureaucratic organisation
does not allow for any other relations. Functional organisational design, as
implemented in Slovakia, leads to the exclusion of variety, within the specific
group (organisational segment, department, part of society, etc.). Within this
sort of bureaucratic system, variety is not very functional. The prevailing view
is that for every problem there is one answer. Problem definition is self-evident;
anything not defined (definable) simply does not exist. But the elimination of
variety also eliminates the possibility to adapt, or to learn. Thus, within the
bureaucracies observed, the capacity to learn was very small. This is a major
problem for Slovakia, since in post-communist Europe there is a lot of pressure
for change. Without an adequate capacity to learn, it would seem to be
impossible to adapt.
For Parsons, bureaucratic organisation is synonymous with rational
organisation. In modern society everything fits together; everything has its
place; and everything works together towards a goal (Parsons, 1964b; 1966;
1977). Perfect tuning is reachable and necessary. Human resources in Parsons’
bureaucracy supposedly flow logically from the organisational goals. Some sort
of automatism leads people to embrace rational goals and to be motivated for
their realisation. But in the companies observed in Slovakia a lot of people were
congregating, waiting and talking. Workers claimed to be motivated by the
money they received, which they needed to feed their families. Persons in higher
positions were motivated by personal interests that had nothing to do with the
goals of the company. Bureaucracy seems to ensure that the centralisation of
power is “legitimised” more by the apathy of the people than by rationality.
Most employees do not dare risk their jobs by trying to change the situation.
While under communism, people were dependent in the barter of “favours” on
one another to arrange the exchange of goods and services, “capitalism” is
proving to be more impersonal. Relationships count, now, for far less; “money
talks”. Ties between buyers and sellers have become more depersonalised; there
are less social control and bigger differences in power and wealth. People are
Transition and
much less dependent on social relationships; money can buy whatever you human resources
want.
in Slovakia
According to Parsons, bureaucracy in general, and money and markets in
particular, can only exist within a universal legal system legitimised by
universalistic norms. But the construction of the Slovak legal system has been
hindered by the slow speed of change, a dubious willingness to submit the
225
political élite to the rule of law, a lack of control of officialdom and a scarcity of
legal scholars. Furthermore, the law is only as strong as the norms of justice
and integrity. In Slovakia such norms are still very weak. The legal system is
not able to effectively punish corrupt practices, or to ensure that abuses of the
money markets do not occur. Without clearly-shared values, the honouring of
civil rights and respect for common rules and norms, there is insufficient
legitimisation; and governmental action will be (close to) worthless. Likewise,
effective political power depends on a consensus in fundamental values. In
Slovakia many people are indifferent, cynical and try to shield themselves from
any political involvement. Many people say they do not care any more about
politics and that Slovak politics are a farce. Without the necessary ethical and
political legitimisation, a strong legal system cannot be built.
Obviously, features of the primitive and archaic societies – the two-class
system, the limited institutionalisation of rational philosophy (in the rule of law,
leadership styles and politics), and the crucial role of kinship – remain strong.
The substantial role of bureaucracy within companies is a crucial modern
aspect. But this is not a bureaucracy able to co-ordinate relations and events
into a genuinely functional and strongly inter-related society. According to
Parsons’ theory, the ability of Slovakia to modernise and develop depends on
the dynamics of the evolution within the society, and its adaptive capacity to
change. A society’s adaptive capacity is defined as its capacity to cope with its
environment, instead of just passively responding to it. According to Parsons,
societies attain higher levels of adaptation by attuning themselves, ever more,
to their environment. Slovakia has not found a creative form of adaptation to
liberal democracy, the consumer society, multi-culturalism or the international
division of labour.
Conclusion
Slovakia’s crisis in modernisation does explain its human resources crisis. A
political élite which is much too focused on its own best interests is not genuinely
committed to the welfare, not to mention the empowerment, of the population at
large. Nostalgia for the holism of primitive society is creating a brake on
modernisation. A small and weak middle class has little domestic support and
faces great difficulty when forced to compete with world standards. Slovak
products have not been effectively adapted to the demands of the 1990s, either in
quality or design. The economy is much too dependent on “sunset” industries,
mainly in metalworking. The norms and values needed for adaptation are far too
weak and only seem to becoming weaker. Company A (the Dutch acquisition of a
Czech cardboard and packaging company) was an illustration of good practice. In
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it modernisation with a strong HR focus was practised. But after the split into
separate Czech and Slovak Republics, one has seen more and more Company B
(the US multinational, producing washing-machines in Slovakia) scenarios,
wherein the investment in the local workforce is minimal. This is a profit
maximisation strategy wherein cheap skilled labour is being exploited and high
value added activity is being reserved for a small (mainly absentee and/or
expatriate) élite. Company B is merely internationalising the structure of premodern relationships already evident in the relationship between the
economic/political élite of Slovakia and the greatest mass of the population.
Company C is a brave attempt, of the rather small Slovak middle class, to assert
itself; but it is not a sustainable, economically competitive, venture. Furthermore,
its dependence on advance knowledge of government action is definitely nonmodern and reveals its dependence on the dominant corrupt political culture.
Despite my many philosophical doubts about Parsons’ idealisation of
bureaucracy and his unlimited trust in rationality, the comparison of Slovak
development with his system does seem to reveal where the problems are. I do not
believe that the Slovak élite is prepared to adapt its power and privileges in order
to create a co-operative model of managing. Apathy rather than win/win
relationships, rules and paper work rather than teamwork, the denigration of the
mass of workers rather than the valuing of them as an important resource, seem
to be the course set. Thus, neither on a systemic (i.e. pertaining to social economic
goals and policies) nor a processual (i.e. regarding social interact(s)) level are
human resources being viewed in Slovakia in a manner which transcends profit
maximisation.
Notes
1. Initially the author was involved in a PHARE project in Poland and Czechoslovakia with
Poznań and Bratislava as the co-ordinating universities in central Europe. After the breakup of Czechoslovakia, project work on the third project in which he was involved
continued in the Slovak Republic and ended in the Czech Republic. The western partners
were the Vienna Economic University, Lancaster University and RSM Rotterdam.
2. Researchers for this section included Robert Hewins, Karin Kinsey, Jasmine Lin, Barry
Koperberg, Eric Oellerer and the author.
3. Research assistants who provided input for this section were Henjo Grisnigt, Christine
Geluk and Mattijs Reumerman.
References
Legge, K. (1995), Human Resource Management, Macmillan, London.
Parsons, T. (1964a), “Evolutionary universals in society”, American Sociological Review, Vol. 29,
pp. 339-57.
Parsons, T. (1964b), The Social System, The Free Press, New York, NY.
Parsons, T. (1965), Theories of Society: Foundations of Modern Sociological Theory, The Free
Press, New York, NY.
Parsons, T. (1966), Societies, Prentice-Hall, Englewood Cliffs, NJ.
Parsons, T. (1977), The Evolution of Societies, Prentice-Hall, Englewood Cliffs, NJ.
Whittington, R. (1993), What Is Strategy and Does It Matter?, Routledge, London.