A Leadership Culture That Holds Back
Diagnosing Hungarian Realities Through the Lens of Organizational Dysfunction
Hungary is rarely examined as an organization, yet its stagnation becomes stark once we use the diagnostic tools of dysfunctional institutions and look at how its elites lead. In any large organization, leaders shape culture: healthy cultures evolve, align with mission, and build trust and coordination; unhealthy ones, sustained by self-interested leadership, drift, constrain, and quietly sabotage progress. Today Hungary increasingly resembles the latter: elite-driven short-termism, compliance-over-initiative norms, mismatched values, low trust, and a mythology built on survival rather than growth. This is less a national character flaw than a leadership and governance failure—the result of elites who keep the mission vague and the operating culture optimized for control, not creativity. Until those who run the “Hungary organization” treat culture as a strategic asset and commit to a future-facing mission, the country will keep running on an obsolete operating system built for endurance, not advancement.
We rarely talk about Hungary as an organization. I did that once with the Would You Red Card Your CEO? contrarian essay.
We talk about it as a nation, a long historical arc, a story of grievances and victories. But if we want to understand why Hungary keeps failing to modernize, we may need a different lens—one borrowed from organizational science.
Organizational scholars like Edgar Schein1 argue that culture is not an abstraction; it is the operating system of any institution. Culture either promotes effectiveness or it destroys it. There is no neutral ground. And crucially, as Schein repeatedly emphasizes, leadership is the primary source of culture. Leaders create, reinforce, and reproduce the norms that determine how an organization behaves.
If we apply this (contrarian) logic to Hungary—and examine it the way Schein or Gareth Morgan might examine a large, poorly led corporation—the country’s stagnation becomes far easier to understand. Hungary increasingly resembles a legacy organization whose leaders maintain outdated routines because those routines serve their interests. Policy tweaks cannot overcome this deeper cultural-structural problem.
Below, I use Schein’s classic cultural diagnostic—twelve elements widely used in organizational analysis—to map Hungary’s operating culture. The picture is uncomfortable but clarifying.
1. Observed Behaviors: Daily Survival Mode
Schein calls observed behaviors the “surface level” of culture. In Hungary, these behaviors signal an organization trapped in short-termism: survival over strategy, improvisation over planning, and conflict avoidance over coordination.
These behaviors are not the traits of the people; they are outputs of a leadership class that rewards compliance and tactical survival rather than long-term thinking.
2. Group Norms: Compliance Over Initiative
According to Amy Edmondson2, psychological safety is foundational to innovation. Hungary has the opposite. Informal norms push people toward staying quiet, showing loyalty, and avoiding visibility. Initiative is often punished; risk-taking is coded as naïve. Innovation is tolerated only if it doesn’t disrupt elite networks.
This is not accidental—it is a leadership-produced norm system where predictability is valued over creativity.
3. Espoused Values: “We Value Hard Work”—But Do We?
Chris Argyris3 distinguishes between espoused values (what leaders say) and theories-in-use (what leaders reward).
Hungarian elites publicly praise hard work, competitiveness, and unity.
But everyday life reveals operative values shaped by leadership incentives: suspicion, defensive individualism, loyalty networks, and informal workaround behavior.
The gap between rhetoric and reality is one of Hungary’s deepest structural failures.
4. Formal Philosophy: An Outdated Operating Manual
Schein notes that organizations rely on underlying philosophies—deep stories about who they are and why they exist. Hungary’s philosophy, as cultivated by its elites, is rooted in grievance, historical trauma, and defensive exceptionalism.
This narrative once helped maintain identity under threat. Today, it functions like an obsolete mission statement no CEO dares to rewrite—useful for legitimacy but disastrous for modernization.
5. The Rules of the Game: Loyalty First, Competence Optional
Gareth Morgan’s4 metaphor of the organization as a political system is painfully accurate here. Everyone knows the real organizational rules: connections beat competence, access beats performance, and “don’t challenge the hierarchy” beats “fix the problem.”
These rules are not spontaneous norms; they are leadership-imposed incentives that keep the system closed, predictable, and controllable.
6. Climate: A Permanent Low-Trust Environment
Organizational climate, Schein says, is the emotional atmosphere leaders create through incentives and communication. Hungary’s climate is dominated by low trust, fatigue, resignation, and minimal expectations.
This climate is not cultural fate—it is the natural result of leaders treating transparency as a vulnerability and accountability as a threat.
7. Embedded Skills: Improvisation as a Core Competency
Hungarians are exceptionally adaptive. Improvisation—ügyeskedés—is Hungary’s most embedded skill. Karl Weick5 shows that when formal systems fail, people develop makeshift practices to keep the organization functioning. That is I wrote about corruption is a social resilience here.
Hungarians are superb improvisers because leadership has failed to build systems that reduce the need for improvisation.
Improvisation is not a strategy; it is a coping mechanism.
8. Habits of Thinking: Pessimistic Paradigms
Schein emphasizes that organizational paradigms—the shared assumptions—shape what people believe is possible. The dominant paradigm in Hungary is: “Nothing will change because nothing ever changes.”
This pessimism is not a national trait; it is the predictable cognitive outcome of leadership that discourages autonomy, experimentation, and long-term planning.
9. Shared Meanings: Success = Survival
Weick’s sensemaking theory shows how organizations define success. In many societies, success means achievement. In Hungary, success often means survival: avoiding risks, staying invisible, minimizing exposure.
Why? Because elite leadership has long rewarded stability over initiative, loyalty over achievement.
10. Metaphors and Symbols: The Romantic Past
Schein notes that symbols express an organization’s deepest assumptions.
Hungary’s elite-driven symbols—heroes, martyrdom, lost territory, eternal struggle—anchor identity in the past.
This is the equivalent of a company whose leadership constantly celebrates what it used to be instead of articulating what it aims to become.
11. Artifacts: Institutions Frozen in Time
Artifacts are the visible manifestations of culture. Hungary’s key institutions—schools, bureaucracies, media—behave like legacy systems. They preserve old workflows, resist new ones, and signal stagnation.
These artifacts embody leadership decisions and not public preference that favor control, centralization, and predictability over modernization and agility.
12. Myths and Stories: An Elite-Driven Addiction to Victimhood
Weick shows that stories are how organizations explain their world. That is why every organization has internal myths. Hungary’s dominant stories revolve around betrayal, external threats, heroic failure, and permanent vulnerability.
These once strengthened cohesion.
Now they anchor the nation to dysfunction because elites continually reproduce them to justify centralized control and low accountability.
Core Diagnosis: A Leadership Culture Misaligned With Any Modern Mission
If Hungary were a corporation, any consultant using the Kotter–Schein framework would deliver the same verdict:
The leadership culture no longer supports the mission.
It supports:
survival, not progress
control, not creativity
loyalty, not competence
homogeneity, not innovation
This is not a failure of the population—it is a failure of leadership incentives.
What Needs to Change: Leadership Must Treat Culture as Strategy
Organizational change literature—from Schein to Kotter6 to Amy Edmondson—is unequivocal:
Culture does not change from below.
It changes when leaders redefine:
the mission
the incentives
the norms
the stories
the symbols
the expectations
Hungary’s elites—political, economic, administrative, cultural, academic—have avoided doing this because the existing culture serves them.
But a modern nation cannot thrive with a leadership culture optimized for a 20th-century threat environment.
Closing Thought
Hungary’s stagnation is not a moral failure of its people.
It is an organizational failure produced by a leadership class that maintains an outdated operating system.
Cultures can change.
But only when leaders stop treating the past as a shield and start treating the future as a responsibility.
Hungary doesn’t need a new ideology.
It needs a new leadership culture—and a mission that finally faces forward.
Disagree? Good. I don’t write to be right—I write to be tested. Bring your “Tenth Man” view, your sharpest counterpoint, or even a quiet doubt. Sometimes the most useful critique is the one that unsettles my own thinking.
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A foundational work on how leaders create, shape, and embed organizational culture: Schein, Edgar H. (2010). Organizational Culture and Leadership (4th edition). San Francisco, CA: Jossey-Bass.
The leading contemporary work on psychological safety and its role in enabling learning, innovation, and open communication: Edmondson, Amy C. (2018). The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth. Hoboken, NJ: John Wiley & Sons.
Key theory distinguishing between espoused values and values-in-use, explaining gaps between what leaders say and what they do: Argyris, Chris & Schön, Donald A. (1996). Organizational Learning II: Theory, Method, and Practice. Reading, MA: Addison-Wesley.
A classic exploration of organizational metaphors, showing how culture, power, and meaning structure institutional behavior: Morgan, Gareth (2006). Images of Organization (Updated edition). Thousand Oaks, CA: Sage Publications.
A central text on how organizations construct meaning, identity, and shared interpretations through sensemaking: Weick, Karl E. (1995). Sensemaking in Organizations. Thousand Oaks, CA: Sage Publications.
A foundational framework on organizational transformation and the leadership actions required to shift culture: Kotter, John P. (1996). Leading Change. Boston, MA: Harvard Business School Press.