For many years we asked ourselves: „Why did Romanian woodprocessing companies went bankrupt? The answer is a complex one and includes both objective and subjective factors.

An important objective factor for the fall of the Romanian industry, including the woodprocessing industry, was the inflation. An other objective factor has been generated by the shift of the ownership from the state owner form to the private one, fact that allowed installing of the carelessness for the companies’ management and lead to capital losses by incorrect value transfers to third parties.

The companies entered the year 1990 with a „negative financial dowry”. Just a few of them were able to get back the value of the products sold in 1989. Moreover, the centralization of the financial system did not function anymore and the companies started the year 1990 with “zero” capital.

The union dispute regarding the managers and their resignation lead fast and directly to miss important clients (markets), with whom we used to cooperate for years and years. Moreover, a new “wave” of managers – appointed by the union – have focused their activity to satisfy own interests and not to obtain an economical and technical performance of the companies.

Just a few companies had “the luck” to be managed by honest people who cared about the company and its employees. They applied a realistic and accurate policy, not based on their own interests. It is the special merit of these true professionals that their companies managed to resist to the destructive factors and that they were also able to change ownership in such a way as to maintain and develop their distribution market.

The private ownership of the companies – with their own capital or as joint-ventures – has created the bases of a new organizational structure and of a new type of management. This time the manager can be elected on valuable criteria, this fact leading to a responsible, correct and honest activity from his side, being supported at the same time by the modification of the Romanian law.  

It can be said, without faulting, that the subjective factor which lead to the companies fall was the bad management. In fact, the bad management has sustained and amplified the negative effects of the objective factors.

The new type of management that started to develop since (approximately) 1995 is based on the new concept of “strategic management” which represents a science for itself. At present, the “manager job” became a well-defined and own-standing profession.

Prof.univ.dr.eng. Ivan Cismaru
President of Managerial Board of PRO LIGNO Foundation