SRC Winter Symposium Socio-Cultural Dimensions of the Changes in the Slavic-Eurasian World ( English / Japanese )

Management Culture and Executive Attitudes
Before and After the Economic Reform in Poland

Jan Kaja

Copyright (c) 1996 by the Slavic Research Center( English / Japanese ) All rights reserved.

In 1989, Poland launched deep economic and political reforms to lead from a centrally planned to a market economy. In this paper, I make an attempt to explain how management culture and executive attitudes evolved in the course of the transformation, adapting to different political and economic circumstances. For this purpose, I conducted a series of direct interviews with managers active before and after 1989. Because of the limited length of the paper, conclusions from the research contained in the summary are preceded by two case studies. The first concerns a manager who started his career in the era of fully evolved socialist system and the other tells about a manager who started her career in the dusk of socialism in Poland. With both these persons I spend more than 4 hours in November 1996.


All facts contained in this part of the report are authentic. The only modification is the change of personal details to prevent identification of my respondents.


1. Lech Nowak

1.1 Genealogy
Lech did not remember the dates of birth or even names of his grandparents. All he remembered was that his father, Franciszek, born in 1911, had five brothers and a sister, and his mother, Sabina Trzcinska was born in 1913 and had six sisters. Franciszek and Sabina lived in neighboring villages on the territory now a part of Lithuania. After they married in 1944, they settled at the Franciszek's farm. In 1945, they give birth to Wieslawa. Lech was born in 1947 immediately after repatriation of the Nowak to a village near Augustow in Poland. In 1951, Lech's brother, Marek was born. After his birth, Franciszek and Sabina moved to Bydgoszcz province where they worked in rural elementary schools. Franciszek was a school manager and Sabina worked as a teacher. After four moves to successive villages, they settled in Grudziadz in 1963 (then a district-rank town).
1.2 Education: 1953 - 1969
Lech recalls that because of the jobs of his parents, he spent a lot of time at school. With a sense of pride he said that at the age of six he was enrolled in elementary school. He said: "I wanted to be in the journal and be questioned by teachers." After graduation from the seven-year elementary school, Lech enrolled in a high school in Grudziadz from which he graduated in 1964. Lech admitted with modesty that he was not the best student but he emphasized the high educational level of that school. He said that everybody from his class entered some university or academy and just one of them did not graduate. He also said that he had passed the initial examination to the Agricultural Academy in Bialystok in 1964 without any problems. He said, for instance: "There were one thousand candidates in the room during examination in mathematics. I solved all problems within five minutes. When I gave the answer sheet to the examiner, he asked me whether I had already given up. It told him I had already finished. Then he told me to wait at the door and, after a while, he told me I got "A" grade. Also, I had no problems with passing biology."

Lech's account of his studies at the "Meadow Cultivation" faculty do not contain any mention of his learning achievements. On the other hand, Lech was a political activist. He acted in the Socialist Rural Youth Union and the Polish Students' Socialist Union. He was a member of an academic chorus. He produced regular university radio broadcasts; once a week, he took part in weekly broadcasts of one of the programs of the Polish Radio. He was also a member of a volleyball team and belonged to the Academic Sports Union. However, Lech was not able to provide convincing reasons for choosing this specific topic of studies. It is likely that what he studied did not really matter.

1.3 Work at a state farm: 1969 - 1973
After defending his master's thesis on June 7, 1969, Lech served in the army in July and August. Since September 1, at the suggestion of the promoter of his master's thesis, he started to work in a state farm in Osina near Nowogard (then, Nowogard was a district rank-town in Szczecin province). Lech was appointed to the position of an assistant director of the state farm. He and his wife, a friend from university whom he married in 1968, received a 100 square meter company apartment which they furnished with a loan obtained from a Hire-Purchase Sales Services. At those times, such loans were available to anyone who had a certificate of employment.

After two months of work, Lech was appointed to the position of a manager of the Research and Implementation Farm, forming a part of the state-owned farm. The position was recently vacated because the previous manager was promoted to the position of vice director of the Department of Agriculture at the Provincial Administration Office in Szczecin. Lech could not explain why it was him who had been appointed. He claimed that the director had not known him before and he had chosen him from 20 candidates. Thus, Lech was promoted to the first managerial position in his career. Then, he was responsible for 50 employees.

Lech was fond of talking about that period of his career. He remembered perfectly the first day in the new position. He was really excited. At 6:00 AM, he was introduced to all employees by the general director and he was received with applause. Because, as he said, "I have done something for those people over the 2 months. For instance, I arranged for a trip and people liked that. They saw the outside world for the first time in their lives." Speaking of his first day on the managerial position, Lech said: "There was a custom that everyone dined together. (...) I remember that on that first day I offered coffee to everyone. You know, at those times coffee was a symbol. When you got a promotion, you were supposed to offer coffee to everyone." On that day, Lech visited all work posts because he wanted to talk to everyone of his men. He also told me about two discussions which he remembered particularly well. As he said, the most difficult one was with a drunkard who was afraid of being fired by the new manager. Lech said: "But, you know, he was not a bad man. We had to do something to keep him in the team. And after two months he was quite a different man. He changed his drinking style and organization. He switched to drinking after work and in much smaller quantities." The other discussion Lech remembered was with the oldest member of the team. That man told him: "I trust you. I believe that you will do something good for the company, for the team and for everyone." In the successive part of the interview, Lech concluded: "Those two discussions and the two people I remember best. I met them frequently, even daily to hear their opinion on my performance."

During the interview, Lech spoke very warmly about his team. For instance, he said: "They were great people. They showed an ultimate commitment to their work. (...) They were good workers." However, on another occasion, he said: "At those times, people used to drink all day. Naturally, I had a very disciplined team. But, often, one moment of neglect was enough for the drinking to start again." Therefore, Lech was fond of telling how he fought drinking. He used two methods. One of them involved punishment. He punished every employee caught drinking with a reprimand. It was a painful penalty because three reprimands meant a loss of at least 50% of the "13th salary" (i.e. a bonus paid in the end of the year), the amount of which was then the equivalent of the price a typical car. Asked whether he remembered any instance of catching an employee drinking, Lech said: "I remember all such instances because they were distressing to me. I had to be fair and persistent. This was well received by the team and I never had problems with that." Later in the interview, Lech described the other method of fighting alcohol abuse. He said: "Many people drunk. It was hard to fight that. But I wanted to show people something else, i.e. that they can spend their money on something else. When I came to the farm, only the manager had a TV set and I bought one. After two years, everyone had a TV set."

After one year, Lech was promoted to the position of an assistant to the director general of the state farm. His responsibilities increased, and, accordingly, he stopped to be active in the social sphere, which he recalls with nostalgia. On the other hand, in his new post, Lech started his work at 5:00. At 6:00 there was a briefing for all field personnel. At 8:00 he went home for breakfast and than for lunch at 4:00 PM. At 7:00 PM he had a briefing with foremen and returned home at 8:00 PM. Then he watched TV news and went to bed. Then, Lech had a very busy time.

1.4 Work in Polish United Workers' Party: 1973-1983
In June 1973, Lech jumped on the fast tract in his career development and started to work in the Polish United Workers' Party. According to his accounts, it started as follows: "It was 5:30 AM. I was in a cow shed when I received a message from the police commandant from Nowogard that the first secretary of the Party's Committee in Szczecin was on his way to me. And shortly a car came in, the secretary got out and told me: 'Nowak, you are to come to the plenary session of the District Committee to Nowogard at 9:00 AM.' Lech reported at the designated place and soon he learned that all party secretaries from Nowogard were revoked. The alleged reason was drinking. Lech was appointed a secretary of agriculture at District Committee PUWP. While talking about that day, Lech said: "When we were left alone, we decided to celebrate the event. We sent a driver for vodka. Thus, our predecessors in office were fired for vodka and we started from vodka."

Lech worked two years in the position of a district-rank PUWP's secretary. In this period, he was responsible for all agricultural secretaries and directors of all agricultural organizations active in the district. Thus, the director of the state-owned farm, Lech's former superior, became his subordinate. Discussing that period of his life, Lech said: "Work in the party absorbed me totally. Even on Saturdays and Sundays I was there all day. I moved from one room to another, from village to village, from municipality to municipality. There is no work like that nowadays. Under Gierek, *1 work in the party was very interesting." However, at the end of the interview, answering my question what his work was really like, Lech said: "Various meetings and conferences consumed fifty percent of my time. Then, every decision, even if obvious, required a meeting of some party commission. The whole of economic life was integrated into a system of approvals. Even in obvious matters. For instance, when crops get ripe, it is clear it is time for harvest. But then, the decision required party meetings on all levels, conferences and resolutions." Lech emphasized that a district secretary was a position of great authority in those times.

In May 1975, an administrative reform was carried out in Poland resulting in the liquidation of the existing provinces and districts. Poland was divided into 49 new, smaller provinces and municipalities. Thus, Nowogard lost its status of a district-rank town. On May 28, Lech was appointed a director of the Agricultural Department at the Provincial Committee of the Polish United Workers' Party in Koszalin. Lech, his wife and son moved to an apartment in Koszalin in August 1975. Lech received a telephone and a coupon for a car. He worked on the position until the end of November 1983. Lech described this period in his life in detail. Among other things, he talked about car coupon abuses and about various details of the martial law period but I clearly felt his resentment. He spoke softly and, at times, almost in whisper. His voice became stronger when he started to tell about his resignation from the party announced at a meeting at the Central Committee of PUWP in November 1983. Such meetings of all provincial secretaries were held every Tuesday. Lech told me that he had never missed such a meeting since 1975.

1.5 Vice director in a clothing factory: 1984 - 1988
On December 1, 1983, Lech left the party and the committee of PUWP. He had 5 months of outstanding holidays for which he received payment. However, already in the beginning of January, he was employed in the position of vice director for human resources in a large clothing manufacturer in Koszalin.

In his account of the first day on the new job, Lech said: "I remember that day well. The director general walked me around the company and introduced me to everyone. All senior workmen, foremen, all organizational units. And there were a lot of them because the company had nursery schools, kindergartens, its own vocational school, several small vacation resorts, four canteens, and five ambulatories. There were 3,000 women employees alone so if we add their husbands and children, this adds to several thousand people."

Asked how he found the job, Lech said: "You know, many companies would gladly hire me. Than, it was very important that a candidate for a job not only had some skills but, in addition, established contacts and acquaintances. Such men as I were precious and they were ready to dismiss the past." Later on, however, it became clear that Lech was talked into the job by the director general of the company who was his best friend from the university.

In the company, Lech was responsible for 300 people working in various personnel units. While recalling that period, Lech emphasized that he had very good relations with his subordinates and there were no conflicts. His greatest success was establishing of the Company Housing Cooperative one week after his appointment. The cooperative managed to built a large housing estate for one thousand families. Lech said: "Then, it was an extraordinary achievement. But they knew well that if I came to the company, there would be no housing crisis at all after a few years of my work."

1.6 President of a Sports Club: 1989 - 1992
In May 1988, Lech was approached by a director of the largest company in Koszalin province with a proposal of taking the position of a sports club president.

Lech considered the job a great challenge because the club was immense. It associated ca. 3,000 sportsmen who received scholarships and employed one hundred coaches. Its assets included many sport facilities, i.e. stadiums, sports halls, a hotel with 400 beds, and sportsmen's apartments. At that time, the club faced serious financial problems which became the main reason for the offer. After several days, Lech decided to accept the proposal which he justified as follows: "This was because the job in the club was related to work for people. I know that no one is going to understand that today. Today, I would consider the offer in other terms myself. Now, I would ask: 'Wait a moment. For how much? How much will you pay me?' But I had retained some of that idealism at that time." In other section of the interview, Lech explained his decision by an affinity for sports which dated back to his time at the university.

In his accounts of that period Lech was inconsistent. On the one hand, he explained that this was the only decision in his life he later regretted. He talked much about his conflicts with sponsors of the club, 18 managers of the largest companies in the province. He also talked about hard work at the cost of his family life as a source of great stress. He said that his living standards did not improve while his responsibilities increased. On the other hand, Lech was proud of his work in the club. He was proud that after just one year "his club" was ranked between the top five sports clubs in Poland. He also said: "It was a very interesting job. Every day was so different that it was extremely attractive. I had my great moments at the club. You know, it was fantastic when 10 thousand people came to a stadium to cheer a sportsman in whose success I had played a part. This gave me satisfaction. Great satisfaction. Such a moment is worth living for."

Lech's account of his work with the club shows clearly that his perception of changes in Poland since 1989 is not favorable. Although his conflicts with sponsors ended because managers lost their interest in the sports club in the new environment, Lech did not consider it a benefit. This is because he felt a radical growth of responsibility for the club immediately after the parliamentary elections in June 1989. Lech said: "You know, the socialist system had certain safety valves. Even when you were a manager, there was still someone out there who thought for you and about you. And now everything was finished. Everyone was thrown to the prey of fortunes. Suddenly everyone had so many problems that he or she had to get by on one's own."

Lech quickly understood that the future of the club was now up to him. He rapidly developed a development strategy based on commercialization of some parts of the club's operations. According to Lech, implementation of such a plan required an additional 50 jobs which required approval by the manager of the Sports Department of the Provincial Administration Office. In September, Lech submitted his project for such approval but it was refused. Then, Lech applied to the Sports Office in Warsaw where, after long negotiations, he obtained approval for proceeding with the project. The club started to do a profitable business. In October, a large vehicle exchange was opened at one of the stadiums. The club started to supply goods to several sports stores which was a profitable business. The hotel was turned into a profit-oriented facility. All these measures allowed for maintaining the club intact. However, as Lech admitted, it would not be possible without great support from people who understood that the current system's motto is: "save yourselves because you can rely on no one."

In April 1992, Lech suffered a heart attack. He spent two months in a hospital. He gave up smoking. Before, he smoked 3 packages of cigarettes per day. The doctors advised him to change his lifestyle. Lech did not return to the sports club. At that moment, he had a few months of leave overdue.

1.7 Own business since 1993
Lech does not remember exactly when he decided to start his own business. He may have thought about it in the hospital. In December he resolved all formalities related to registration and his small private company started to operate on January 1, 1995. Lech hired 5 employees who ranked among his acquaintances from the sports club. Together, they started trading with the former Soviet Union because Lech had good contacts on that market, which he established during business trips to the Soviet Union as the president of the club. The 1993 sales figure was large and could give rise to the necessity of employing an accountant. To avoid this, Lech established another company with the same name, acting as a private partner since January 1, 1994. This measure allowed him to maintain the finance system based on income and revenue register, which was maintained by Lech personally. After one year, he switched to the first company again because its 1994 sales were null. Likewise, in 1996 Lech switched to the other company. Since 1994, Lech employs 10 people. His company has two affiliated offices in two countries, eastern neighbors of Poland.

Lech told me about his and his personnel's work in detail. He spoke about successes and losses. He claimed he had immense opportunities for increasing trade volumes because his operations were very profitable and many former acquaintances from the sports club asked him for jobs. However, Lech does not intend to develop the company any further. He told me that large business tends to lead to bureaucracy in the accounting which he does not like. The decision to remain small is also related to frequent inspections from the Tax Office and Lech had serious problems with that already in 1996. Finally, he is afraid of organized crime which was another source of his problems.

Everyone in Lech's company earns the same salary. This is because Lech believes that he pays for readiness to work first of all, and responsibilities are distributed fairly. In his opinion, everyone does what he does best. The salary is paid always on the last working day of the month and then everyone signs the payroll. Once a month, Lech meets everybody at a banquet during which they discuss problems of the company.