Dr. Marianne Afanassieva Lecturer in Organisational - PowerPoint PPT Presentation

Dr. Marianne Afanassieva Lecturer in Organisational Analysis/Behaviour Business School, University of Hull Cottingham Road, Hull, HU6 7RX, UK Email: M.Afanassieva@hull.ac.uk 5 th Workshop on New Institutionalism in Organization Theory, 26 th – 27 th March 2009, Naples, Italy

 Russian enterprises restructured – a result of post-Soviet market reforms: ◦ unbundling profitable from non-profitable aspects (Blanchard et al., 1994; Aghion and Blanchard, 1994; Carlin et al., 1994)  Defence enterprises – a different case: ◦ Production shops shrunk and / or frozen – not closed

 Inconsistent and changing legislation (Levin and Satarov, 2000; Aouzan, 2005)  Problems complying with the law (Leitzel, 1997; Prokhorov, 2002)  „Rules of the game‟ - not transparent (Ledeneva, 2006)

 krugo gova vaya ya poruka (ties of joint responsibility) in professional circles  dvoin inay aya a bukhga galte lteriy iya (keeping two sets of accounts) and financial scheming  tenevoi voi bart rter (shadow barter) barter chains, and nonmonetary markets  alternative enforcement and selective use of law (Ledeneva, 2006)

 Misztal‟s (1996: 9) conceptualisation : “a social mechanism which can be explained by people‟s beliefs and motivations”  is rooted in social relations and the obligations inherent in them  is linked to uncertainty about other people‟s motivations

 Low compared to Western Europe (Mishler and Rose, 1998; Rose, 1998)  Networks of personal connections or informal social networks - necessary components of a survival mechanism in Russia (Rose, 1998)  The stock of social capital is low in Russia  Exclusionary nature of social capital in Russia (closer to Bourdieu,1986, rather than to Putnam et al., 1993)

 serving as channels of confidential information  forming business reputations  establishing trust and decreasing uncertainty  providing systems of mutual assistance  arranging barter exchanges and mutual offsets (Radaev, 2002: 69)

 Examines the conditions that the enterprises being considered have faced since the beginning of transition  Applies New Economic Sociology‟s concepts of network, embeddedness and social capital to the case of the studied companies, identifying „new‟ and „old‟ types of networks  Applies relevant concepts from the New Institutionalism in Organisational Analysis  Conclusion

From 1995-2000:  semi-structur tructured d interv rvie iews ws with directors and heads of relevant departments at four defence enterprises in one Russian region ( oblast‟ ):  Russ ssia ian n newspape pers rs – nation onal l and local  Chambe ber r of Commerce and Industr stry - nation onal l and local Beyond December 2000:  report rts in Russia ian newspapers rs (local l and nationa onal) l)  company ny websites Company A and Company C – privatised; Enterprise B and Enterprise D - state-owned 

Double uble press ssure ure :  Transition from planned economy to market economy  Conversion from military to civilian production http://www.un.org/russian/images/tour-12.gif

 „old‟  „new‟

… these are an extension of what Raiser calls: “ networks based on existing ties between the previous members of the communist nomenclatura – recombined during the transition to accommodate the reorganisation of the enterprise sector through corporatisation and privatisation, but continuing to be built primarily on process-based trust” (Raiser, 1999: 8). www.transtour-odessa. com/gallery/main.php/d/ 5394-2/krasnaya_ploschad.jpg

http://www.procurementserviceprovider.com/images/supply_chain.jpg

Source: van Norman Baer, 1991: 140

 Company A ◦ „new‟ networks - successful development of ◦ „old‟ networks - maintained and developed  Enterprise B ◦ „old‟ networks - successful use of ◦ „new‟ networks - no perceived necessity to develop  Company C ◦ „old‟ networks - survival based on ◦ „new‟ networks - failed to develop them  Enterprise D ◦ „old‟ networks - difficulty maintaining and developing ◦ „new‟ networks - difficulty initiating

 Two types of networks identified - „old‟ and „new‟  Dual and contradictory effect of closed networks: ◦ survival mechanism - effective ◦ growth and innovation – constrained

 Past and present  Soviet and post-Soviet  Military and civilian  Maintain and initiate  Grow and stagnate  Survival and ……….. Left: Man, designed by Vladimir Stenberg and Georgii Stenberg for a character in the operetta Day and Night , 1926 (source: van Norman Baer, 1991: 114)

Aghion, P., and Blanchard, O. (1994) 'On the speed of transition in Eastern Europe', NBER Macroeconomics Annual . Aouzan, A. A. (2005) Institutsional'naya Ekonomika: Novaya Institutsional'naya Ekonomicheskaya Teoriya , Moscow: INFRA-M. Blanchard, O. J., Froot, K. A., and Sachs, J. D. (Eds.) (1994) The Transition in Eastern Europe. Volume 2: Restructuring , Chicago and London: The University of Chicago Press. Bourdieu, P. (1986) 'The forms of capital', in J. G. Richardson (Ed.), Handbook of Theory and Research for the Sociology of Education , Westport: Greenwood. Carlin, W., van Reenen, J., and Wolfe, T. (1994) 'Enterprise restructuring in the transition: an analystical survey of the case study evidence from central and eastern Europe', EBRD Working Paper No.14 . Ledeneva, A. V. (2006) How Russia Really Works: The Informal Practices That Shaped Post-Soviet Politics and Business , Ithaca and London: Cornell University Press. Leitzel, J. (1997) 'Rule evasion in transitional Russia', in J. M. Nelson, C. Tilly, and L. Walker (Eds.), Transforming Post-Communist Political Economies , Washington, D.C.: National Academy Press. Levin, M., and Satarov, G. (2000) 'Corruption and institutions in Russia', European Journal of Political Economy , 16, 2: 113-132. Mishler, W., and Rose, R. (1998) 'Trust in untrustworthy institutions: culture and institutional performance in post-Communist societies', University of Strathclyde Centre for the Study of Public Policy, Studies in Public Policy No. 310 . Misztal, B. A. (1996) Trust in Modern Societies: The Search for the Bases of Social Order , Cambridge: Polity Press. Prokhorov, A. P. (2002) Russkaya Model Upravleniya , Moscow: Zhurnal Ekspert. Putnam, R. D., Leonardi, R., and Nanetti, R. Y. (1993) Making Democracy Work: Civic Traditions in Modern Italy , Princeton: Princeton University Press. Radaev, V. (2002) 'Entrepreneurial strategies and the structure of transaction costs in Russian business', Problems of Economic Transition , 44, 12: 57-84. Rose, R. (1998) 'Getting things done in an anti-modern society: social capital networks in Russia', World Bank Social Capital Initiative Working Paper , No. 6. van Norman Baer, N. (1991) Theatre in Revolution: Russian Avant-Garde Stage Design 1913-1935 , London: Thames and Hudson.