The cultural identity of the Bulgarian business world

Bulgaria lies at the crossroads of different cultures. The small country that used to be a great world power and played an active role in shaping history lies on the border between Asia and Europe. The original Bulgarians were a warlike people from Central Asia. In 681 they crossed the Danube and founded the state of Bulgaria together with the Slavic tribes settled there. Through many wars, the first Bulgarian empire established itself as one of the most powerful in Europe and even forced the Byzantines to pay an annual tribute to Bulgaria. Four centuries later the tide turned, and Bulgaria fell under Byzantine rule. From the 12th to the 14th century, the country experienced a cultural heyday. This ended with the conquest of the Ottomans. Bulgaria was under Ottoman rule for almost 500 years.

Orient and Occident

This moving history and the influences of different countries and nations still shape the cultural identity of the Bulgarians today. The country unites the Orient and Occident, the religion is a blend of Christianity and paganism, bordering on atheism. Bulgarians are a compromise between what they are and what they would like to be.

More recently, Bulgaria was influenced by 45 years of socialism. The ruling communist party maintained close political and economic ties to the Soviet Union. Planned economy was the dominant economic system and the state managed the entire economic process through a 5-year plan. There was no private property; all factories, plants, and businesses belonged to the state. The state planning authorities determined what and how much was produced, at what price and where the products were sold. Labor was distributed among the Eastern bloc countries. Each country specialized in the production of certain goods, which they then sold to each other or exchanged for other goods. The interests of the socialist community were more important than those of the individual state. Some countries were forced to operate unprofitable production facilities and quantity was more important than the quality. But their comrades didn’t complain! The main thing was that the statistics showed that the Eastern bloc achieved better results than the West, thereby proving that socialism was the better political system.

Full employment and overfulfilment

Everybody was equal. Citizens were guaranteed assigned workplaces as well as social benefits such as kindergarten places and holidays on the Black Sea coast. There was full employment. The women were all working. Men and women were entitled to equal rights and received equal wages and salaries. The workers strove to fulfill and exceed the 5-year plan. At meetings and party congresses there were jubilatory reports of plan overfulfilment of 200% and more. The best workers were awarded prizes and honorary titles such as “meritorious”.

Obedience, dependence, passive resistance

Freedom of expression was not tolerated. Party state opinion was also the opinion of the population. Personal initiative was not encouraged. The citizens were brought up to be obedient and dependent. People were supposed to do what was asked of them and only when it was asked of them. Powerholders cultivated an authoritarian style of leadership and often abused their power. People avenged themselves with “passive resistance”. They took every opportunity to avoid working. “They pretend to pay me, and I pretend to work!” During socialism, party affiliation, origin and relationships were more important than achievement.

The guiding principles of a market economy are: individualism, achievement, freedom to develop, diversity of opinions, co-determination and self-determination. These are completely the opposite of socialist virtues. After the fall of communism in 1989, Bulgaria was to make a rapid and smooth transition from a planned to a market economy. Bulgarian values were to be viewed critically and radically overhauled. However, no society is in a position to carry out such a process of change overnight. An orientation phase followed, and an attempt was made to adapt to the new circumstances. During socialism, Bulgarians had learned to conform to the system only superficially, so a real change in values will take several generations.

Privatization and development

After the fall of communism, the Bulgarian economy began privatizing. The state only retained shares in strategically important industrial sectors, e.g. the energy sector. The “most appetizing bites” were distributed among those in power. Many state enterprises were run down so that they could be sold at knockdown prices. During this period, these enterprises lost their customers and market positions; machines and equipment were sold individually or just disappeared overnight. The new owners had to procure and rebuild everything. They also had to learn to think and work entrepreneurially.

Legislation could not create new laws and rules quickly enough. In the first years of the transition to a market economy, many fished in murky waters. Improvisation and risk-taking were called for and redistribution of capital was in full swing. Most companies hid their profits from the treasury. In 2008, the government introduced a flat tax of 10%, which remains among the lowest in Europe. Only then did business legalization take off. The shadow economy still accounts for more than 30% of Bulgaria’s gross domestic product.

Bulgarian family business

The business world in Bulgaria is dominated by small and medium-sized family businesses. These young companies were mostly founded at the end of the 90s and have grown rapidly in recent years. As a rule, they are led by the owners in absolute control. These owners make all the important decisions. The hierarchies are relatively flat. The organizational structures could not follow the rapid growth and do not correspond to the size of the company. Much as it was under socialism, quantity was more important than quality. It was only in recent years that international quality standards were introduced. However, changing the way people think will still take some time.

The Bulgarian economy is concentrated in the large cities. Many foreign companies prefer to operate in either the capital Sofia or in the second largest city Plovdiv. There are also several industrial zones throughout the country. Most of the land is mountainous, which makes transport more difficult and slows it down; some roads cannot be used in winter. In recent years, European funds have been used to intensively build motorways. Foreign investors choose locations close to airports and the new motorways. Rural areas promote themselves with low land prices, tax reductions and exemptions as well as cheap production workers as qualified workers are generally drawn to big cities. However, more and more executives are willing to commute, which increases the attractiveness of provincial areas.

Bulgaria offers a developable and future-oriented market. Its emerging business world is seeking its place in the global economy and is looking forward to new business partners.

Eugeniya Weber

+49 (0)711 722 468 44
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