AbstractIn their efforts to adapt to a market economy and capitalism, companies in the Eastern and Central European countries find themselves confronted with a challenge in many ways similar to the situation faced by certain overly bureaucratic companies closed to the outside environment in the capitalist system today. Due to market conditions, monopolistic or oligopolistic concerns such as utilities, railway companies, and airlines are having to abandon traditional practice in order to become outward‐looking, customer‐oriented companies. This involves changing from bureaucratic management toward entrepreneurial management, from closed organizational systems to ones that are open and dynamic—a process affecting the management of all the different subsystems within the firm, including the production, finance, commercial and administration departments, and very especially the management of human resources. In the Eastern and Central European countries, the change will be especially profound since it affects nearly all the companies in the socialist economy. But for overly bureaucratic companies in the capitalist system, the challenge is equally great, since they are being forced into change by new demands arising from the market situation or, as in the case of Spain, by government demands for adequate profitab