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The dynamic financial environment of Central and Eastern Europe allows for a clear determination of “best practices” in the banking industry through analysis of common patterns in banking and finance. We explain the specific practices that have led to successful adaptation on the part of international banks like ABN AMRO in Romania and to Romanian financial markets. In general, we have found, through a series of case studies designed to assess best practices, that the best performing strategies are those which are based upon “distributed decision making,” allowing for decisive action and rapid organizational learning at the local level. In order for rapid organizational learning to take place, efficient business relationships are critical to the firm's functioning. In addition, the firm must develop a substantial diversity in both its internal and external networks. © 2007 Wiley Periodicals, Inc.

Over a period of approximately 5 years, Pankaj Ghemawat of Harvard Business School and Daniel Levinthal of the Wharton School have been working on a detailed simulation (producing approximately a million fitness landscape graphs) in order to determine optimal patterns of decision-making for corporations. In 2006, we adapted this study, combining it with our own work on terrorism to examine what would happen if we inverted Ghemawat and Levinthal’s findings and sought to provide disinformation or otherwise interfere with the communications and decision processes of terrorist organizations in order to optimize poor decision-making and inefficiencies in organizational coordination, command, and control.

The economies of Central and Eastern Europe (CEE) have been recognized as posing unique challenges to study. The scope and nature of their political and economic development processes vary widely across the region are characterized by substantial volatilities and are inherently complex. In this context, a renewed interest in the mechanisms of economic transition has arisen in order to explain the effects of Eastern European integration into the European Union as well as the consequent integration into global economic structures. This approach, which we shall refer to as “Transition Dynamics”, (TD), differs significantly from the more traditional macroeconomic and polotical science focus on purely internal processes of change. In this regard, the CEE transition to market can be described as a process characterized by out-of-equilibrium dynamics and a heterogeneous competitive landscape with high levels of complexity.