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Privatization is a popular strategy for restructuring the national economies of advanced and advancing countries. This strategy centers on promoting the forces of the free market system by transforming state‐owned enterprises into private companies and changing their ownership and management systems. These changes can alter organizational cultures and promote risk‐taking, innovation and entrepreneurship. This article examines the contributions of privatization to entrepreneurship in new ventures and established companies, outlines factors that can limit entreprenurial gains from national privatization programs, and discusses the implications of entrepreneurial changes that occur following privatization for global competitiveness.

As the new mellinum approaches, discussions of the nature and emerging rules of global competitiveness assume greater importance. These discussions are gaining more political currency because competitiveness, however measured, centers on human development, growth and improved quality of life. For a society, improved competitiveness translates into new jobs and better living conditions. For a company, competitiveness means the creation of new growth options that create value for shareholders. Wealth creation is the engine of economic growth and a mainspring of innovation.

Recently some of the most significant work in competitiveness studies has investigated the human side of economics. Concepts such as trust, fairness, and justice have emerged as important components of the healthy functioning of businesses, for both national and multinational corporations (MNCs). In fact, it may well be the case that MNCs have taken the lead in this arena. Ethical and religious issues are most clearly highlighted when cultural differences come into play. A corporate monoculture does not need to examine closely the basic propositions, which all its members share—or are assumed to share. But when a corporation must take into consideration the differing needs and expectations of many of the members of its corporate family, it can, and in fact must, begin to reconsider some of the basic premises upon which that corporation was founded or has been operating. This is manifestly a healthy situation, not only for the new “family members” when, through growth, acquisition, or merger, a national corporation becomes multinational, but also for all members of the original business.