Last Updated 08 May 2020

Business Culture and Leadership in Hungary Part 2

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To sum up, I can state that the Hungarian political environment is quite well developed in the region and is quite close to Western standards. It's most important benchmark is the stability, which is not only the result of the established institutional system, but has also roots the national culture.

2. Market system / infrastructure Like in case of the political system, Hungary had an encouraging, "better than the neighbors" background in the area of market economy, off which most factors were introduced in the early eighties.

Although these initiatives remained far behind the standard of Western countries, it ensured a good background for the transition. Despite of this encouraging background the country faced several problems, and survived 2 fairly serious crisis situation in the late eighties and the mid nineties. The main reasons of the economical decline were the collapse of Eastern markets, the tear of traditional co-operation with former socialist countries, and the very high debt serving ratio.

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This factors led to series of bankruptcies, bank consolidation, jumping inflation, currency devaluation, increasing unemployment, etc. , which all strengthened the even in itself very pessimistic attitude of locals. The turn point was the year 1995, when the introduction of the crawling peg system and the austerity package of finance minister Lajos Bokros helped to stabilize the economy, cut budget and current account deficit, push down inflation, etc. Privatization speeded up, banks and state-owned big companies were sold to financially powerful strategic investors.

Privatization on one side helped to cover budget gap, while on the other hand it improved productivity and competitiveness and contributed to boost export. Nowadays privatization is almost done, the state has only majority or qualified minority shares in strategically important companies, like the Hungarian Oil Company or the Hungarian Savings Bank (OTP), etc. In relation to financial infrastructure, the banking system in Hungary is one of the most developed one in Central Europe. It's almost totally privatized to strategic investors, to major international banks like ABN-Amro, DG Bank, KBC, Citibank, etc.

As a result, local banks have now a healthy loan portfolio and based on the experiences of the mother company they can offer a wide range of products to local customers. I believe I'm not wrong if I state, that we can speak about a Hungarian story today. GDP growth reached almost 7% in 1Q2000, CPI is just above 9% and expected to drop close to 7% until the year end, budget and current account deficits are declining and are absolutely financable from FDI. Growth is based on strong export potential and competitiveness in international markets, not on retail consumption.

All in all, following the necessary crisis period of the early nineties, at this time the Hungarian economy shows an as healthy outlook, as it has never showed before. Based on the quite preferential rank of the country's political and economical developments in the rank of Central European states, it's throughout possible that Hungary will be able to join the EU first, or among the first countries in CE. 3. National Character It is a quite hard task for an insider like me to depict the national character, to catch those factors in general, which distinguish Hungarians from other nations.

It is difficult, because certain aspects of the national character seem to be obvious in my view, that's why I don't even pay attention to them. Since the task to fully map the national culture is too big, I'm only going to give some, 5-6 examples which I think generally well describe the Hungarian culture. I base my assumptions on conversations with foreigners, typical Hungarian jokes and speeches, which usually criticize an aspect of the national character, my studies in history and my subjective, personal experiences.

Before going into details I have to state that Hungary in its current form is a quite homogenous country in its culture. Although there is some religious and ethnical diversity (geneticians distinguished 17 different types by origin among "Hungarians"), these differences are small, and there are minimal religious, ethnical cultural or regional torsion in the country. In the following, without the intention of being exhaustive, I try to list and depict some factors, which I think quite well describe the national character.

Remember. This is just a sample.
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Business Culture and Leadership in Hungary Part 2. (2018, Jan 08). Retrieved from https://phdessay.com/business-culture-and-leadership-in-hungary-part-2/

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