Author: H. Zerrouki
Publisher:
Published: 2010
Total Pages:
ISBN-13:
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Our understanding of enterprise restructuring in a transition context is predominantly drawn from the ex-communist countries of Europe. Those countries have their own cultural values, social structures, were subject to the Soviet political and economic managemet styles and had their own political and economic reasons to move to the free market system. Without doubt, these factors had influenced their enterprise restructuring and its determinants. Given this influence, our understanding of enterprise restructuring and its determinants can be considered limited especially when one takes into consideration the fact that mnay developing countries with centrally planned economic systems had moved to the free market system almost at the same time as the ex-communist countries. Very important, the restructuring behaviour of their state and privatised enterprises and the determinants of their behaviour have been neglected by researchers. This neglect was, indeed, a stimulus to carry out a research study on enterprise restructuring and its determinants in Algeria. The aim of this research study was to develop an understanding of the kind of restructuring taking place in the state enterprises slated for privatisation in Algeria and the factors that stimulated or hindered their restructuring from 1990 to 2005. Algeria is a country that combines a mixture of historical backgrounds. It has a history of more than one hundred years of French colonial rule and has a deep rooted link with the Arab and Islamic cultures. It is also a country which had followed, after gaining independence from the colonial rule in 1962, its own style of socialism where the private sector, in light manufacturing and some service industries, was tolerated and workers of the state-owned enterprise were given the power to share the decision makings with management. More significantly, Algerial was and still is a country where almost 90 percent of its foreign revenues come from hydrocarbons export. Its move to the free market in 1989 came as a result of the sharp drop in the price of oil and therefore a sharp decrease in its foreign revenues. It was a move imposed by the IMF in return for the extension of its debts repayment and the provision of fresh loans. With these socio-cultural, political and economic characteristics of Algeria, it was expected that the restructuring behaviour of the enterprises under investigation and the determinants of this behaviour would exhibit some differences from those experienced in the transition countries of Europe. The investigation was carried out on three enterprises operating in different industries: Saidal in pharmaceuticals, the SNVI in heavy vehicles and Eriad Alger in wheat processing and manufacturing. The data was collected and analysed using qualitative and quantitative research strategies. Semi-structured and unstructured interviews were used to collect data on the restructuring actions and their determinants. They were carried out with senior managers at the head offices, divisions and functional departments of the enterprises; managers at the trade union (UGTA); managers at one state-owned consultancy organisation called CNAT; managers at the ministry of industry; two visiting managers at the trade union (UGTA); and a small number of workers of the three enterprises under investigation. A survey using a self-completion questionnaire was also used to investigate the characteristics of the top management teams of the three enterprises. Primary documents such as state, private company and media reports and secondary document such as journal articles and books were also used. The findings drawn from the study reveal that Saidal was the only enterprise that restructured effectively despite the strong competition in its market. This was possible through the determination of Saidal's president general manager and his top management team to restructure and through the enterprise partnership with many multinational firms. The findings also indicate that controllable and uncontrollable factors had significant impact on the restructuring behaviour of the three enterprises. The controllable factors were the corporatisation of the state enterprise and the underdevelopment of the institutional environment. Corporatisation was an important incentive that encouraged effective restructuring but this was possible only when the enterprise was financially healthy, as was the case with Saidal. The financial autonomy of Saidal reduced the intervention of the government administration in its internal affairs. Government intervention was strong when the enterprise was perceived by the government as strategically important, as was the case with the SNVI, or when the government intended to totally privatise the enterprise, as was the case with Eriad Alger. The underdevelopment of the institutional environment, especially corruption, the shortage of technical skills and the lack of adequate market information hampered competition and slowed down effective restructuring. The uncontrollable factors were the trend in the market and the cultural values. The growing market for pharmaceuticals in Algeria was a stimulus for attracting foreign investment in Saidal which consequently encouraged effective restructuring. As for the cultural values, the family and friendship ties, the social responsibility stemming from religious belief, the regional belonging and the legacy of French colonial rule in Algeria played a significant role in the selection and recruitment of managers and workers, in slowing down the progress of shedding workers surplus and in slowing down foreign participation in privatisation. Future research on enterprise restructuring and its determinants in Algeria should be carried out on a larger sample of enterprises with different ownership using quantitative and qualitative research strategies. Research should also explore enterprise restructuring and its determinants in other developing countries which moved to the free market system and in countries which share similar cultural and social structures with Algeria. It is time for researchers to move away from exploring effective and ineffective enterprise restructuring and concentrate more on exploring how partnership with foreign firms, the shortage of technicla skills, the lack of market information and the cultural values, be it religious beliefs, customs of the legacy of colonialism, affect the restructuring behaviour of state, privatised and private enterprises and the determinants of this behaviour.
