Abstract

The crumble of the Soviet Union left Lithuania, like many of its former republics, at a standstill. With the demise of USSR came the demise of markets in the east and it became important for Lithuania to establish economic ties with the west. The first step in this direction is to privatize much of the public property so that it can be managed with a goal of profitability. The privatization of housing and small firms is very important, but the successful privatization of large enterprises plays a crucial role in the country's overall economic success. Profitability of a large enterprise affects directly the GDP, standards of living, distribution of income and unemployment in countries such as Lithuania which in size barely equal the state of Georgia. In this paper, I will attempt to demonstrate that successful privatization depends on the following four conditions: the competitiveness in international markets and existence of domestic markets, method of privatization, corruption issues, and the role of the IMF. Further, I will show the effects of these conditions specifically in the past privatization experiences of three such large firms in Lithuania. Lastly, I will measure the success of privatization in each firm based on the number of jobs created or saved, profitability of the firm, progress in modernization and investment in infrastructure.

Disciplines

Business Administration, Management, and Operations