Trends in international business thought and literature: Filling competence and skills gaps in management education and training in the baltic states

After a 50-year Soviet occupation, the three Baltic states, Estonia, Latvia, and Lithuania gained independence in the early 1990s (Nordberg, 1993: 27). The socialist planned economy left the Baltic countries' economies and industrial structures in a state of disarray. Industries developed during the Soviet occupation were, in fact, inefficient, old-fashioned, and too large in size for these small countries. The planned industrial and demand base was the Soviet Union. After independence, products could not be sold on Western markets without significant new Western investments (Nordberg, 1993: 37, 68-69, 110). The underdeveloped industrial sector and the centralized influence of the Gosplan-system had a significant detrimental influence on the management of the state-run companies. In the centrally planned system, the skills and competencies of management were not necessarily success factors; political priorities dominated. Large numbers of Russians were sent to all three Baltic states as workers, middle management, and as executives. In 1989 nearly 34 percent of the citizens of Latvia were of Russian origin, in Estonia the figure was 30 percent, and in Lithuania nearly 10 percent (Nordberg, 1993: 38). The companies in the Baltic states were seen as production units of a large centrally managed system. Marketing, sales, finance, and investment decisions were made in Moscow. Management training was production oriented. Most companies were primarily concerned with filling production quotas. With independence, everything changed. Markets, marketing, management, financing, and other normal business skills became essential for success. As privatization of state-owned industries commenced and Western competitors appeared on the market, the competence and skills gap of the Baltic executive became apparent to international partners as well as to Baltic national governments. © 1995 John Wiley & Sons, Inc.