Forces and effects in the privatisation process: an empirical study of telecommunications companies in Germany and Romania

Abstract

Privatisation is supposed to lead to an increased efficiency and performance of a company. However, the internal and external environment of an enterprise is quite complex and many factors influence the organisation before and after the privatisation. The privatisation of a company (especially if it holds a natural monopoly) might be accompanied by a liberalisation of the market and the introduction of regulation. A model was developed which integrates all the major forces and effects with an influence on the performance of the company – incorporating also the peculiarities of transition economies. The model was verified on two telecommunications companies from Germany and Romania and shows inter alia that the effects “Laws and policies” and “Economic condition” may influence the overall performance of privatised companies in transition economies.