Performance effects of privatisation: an empirical analysis of telecommunication companies in Germany and Romania

Abstract

The privatisation of state-owned companies is still on the agenda of many governments worldwide. One often stated goal in the privatisation process is the increase of efficiency of the company. The question is which factors do lead to an increase in efficiency and performance of a privatised company. Where are the fundamental differences between public and private companies in this respect? One goal of this paper is also to determine if other or additional variables influence the efficiency of privatised companies in transitional countries - in contrast to developed economies. Based on the research literature, a model was developed that displays all major forces and effects in the privatisation process. Two case studies of telecommunications companies in Germany and Romania are utilised to verify the model. It is expected that privatisation will lead to an increase of efficiency, but that the main thrust derives from competition. Regulation and organisational change will typically also increase the efficiency of the company. The variables “laws and policies” and “economic condition” are of special importance for privatisations in transition economies.

The Transformation of the Romanian Economy Through Privatization and Internationalization

“…The Transformation of the Romanian Economy for inefficiency, in contrast to private ownership (Cuervo-Cazurra et al, 2014;Bartels and Weiss, 2019). SOEs are viewed as an extension of the state, with social objectives, little concern for productivity, and managed by politically appointed administrators without intrinsic merit (Megginson and Netter, 2001;Arocena and Oliveros, 2012).…”

“…Privatization was viewed as the best remedy (Vickers and Yarrow, 1988;Jormanainen and Koveshnikov, 2012) for this government-created inefficiency Bratu, 2018;Estrin & Pelletier, 2018). While a SOE can be made more efficient through competition within its sector (Bartels and Weiss, 2019), private ownership was perceived to generate better strategic and operational results in the long run (Vickers and Yarrow, 1988;Jormanainen and Koveshnikov, 2012) Furthermore, in emerging economies such as Romania, a significant distinction was made between autochthon private ownership and foreign ownership (Jormanainen and Koveshnikov, 2012). Some local owners privatized stateowned organizations by corrupt means and lacked the managerial skills and incentives to operate in the new free markets (Vaduva, 2016).…”

Integrated Strategic Communication in Romanian Organizations

“…The concept of communication has several meanings, which is the consequence of the fact that communication has been developed over the years by a series of disciplines with a sufficiently large scope: sociology, biology, political sciences, economic sciences, philosophy, cybernetics, linguistics, etiology etc. In this context, it is obvious why an economist approaches communication in a different manner compared to a computer scientist or a biologist (Bartels & Weiss, 2019).…”

Human Resources Management in Organizational Performance

“…In the organizations with trade unions established, the human resource management responsibilities are always included in various clauses of the collective employment agreement. These clauses cover important issues pertaining to human resources management: employment, training, promotion, fair and equal treatment of persons (Bartels & Weiss, 2019).…”