Heft36 1 - SFB 580 - Friedrich-Schiller-Universität Jena
Heft36 1 - SFB 580 - Friedrich-Schiller-Universität Jena
Heft36 1 - SFB 580 - Friedrich-Schiller-Universität Jena
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AUTOMOTIVE MNCS IN CENTRAL EUROPE<br />
firm as a source of valuable industrial capabilities<br />
remained alive. These norms imply a local<br />
commitment to the preservation of industrial<br />
capabilities independent from pure market efficiency<br />
and competitiveness logic. Thus, the<br />
norms related to economic liberalism have<br />
been challenged by the other, non-economic<br />
enterprise norm that partially goes back to a<br />
state socialist enterprise function. The result<br />
of this constant tension between the organising<br />
logic of efficiency and competition, on the<br />
one hand, and the value of industrial capabilities,<br />
on the other, is that the firm continues to<br />
function as a source of competitive industrial<br />
capabilities.<br />
I. STAKEHOLDER COALITION FOR BRAND<br />
SURVIVAL<br />
The system of state socialist central planning<br />
was characterised by the fact that resource<br />
allocation took place through political decisions<br />
rather than being driven by the economic<br />
rationale of the price mechanism, resource<br />
scarcity and cost efficiency. With the regime<br />
change, direct political allocation of productive<br />
resources disappeared and the ‘market rationale’<br />
officially entered the scene either anew or less<br />
disturbed by ‘social intervention’ in countries<br />
such as Hungary where certain market<br />
reforms were already implemented earlier. In<br />
the company context, the new market<br />
rationale meant three things. First,<br />
page 82 the links to the Communist Party<br />
were dismantled. Second, politicallyoriented<br />
setting of production<br />
volumes and prices stopped as production<br />
orders were left to ‘markets’, which meant that<br />
only orders from customers who were ready<br />
to pay in the hard currency at ‘market’ rather<br />
than at the subsidised rates would be taken.<br />
Finally, the state withdrew from the ownership<br />
structures by privatising the previously stateowned<br />
enterprises.<br />
However, despite the new dominant logic<br />
of market efficiency that was established<br />
in the early years of post-communism, the<br />
company level reality was more complex. The<br />
new organising logic of economic liberalism<br />
formulated and defended by the new political<br />
elites did not penetrate the companies overnight<br />
and did not make the previously existing norms<br />
and commitments towards the enterprise<br />
disappear completely. In an environment of<br />
high uncertainty, a medium- and long-term<br />
‘market value’ of enterprises and their viability<br />
in the future was unclear, yet decisions still<br />
had to be made. The governments and other<br />
stakeholders such as managers and trade<br />
union leaders needed to decide which existing<br />
industrial projects were viable for the market<br />
economy environment. It is in these decisions<br />
that the desire of stakeholders to preserve the<br />
existing industrial capabilities despite financial<br />
difficulties can be identified.<br />
At first glance, market-oriented rationale<br />
entered the scene in a very prominent way:<br />
financial viability of entrepreneurship became<br />
a crucial factor considered by stakeholders.<br />
In 1990, it was acknowledged by many that,<br />
economically, Škoda was not a viable company<br />
as it had large debts, declining sales and<br />
falling orders. Due to high debts, the company<br />
was unable to take out new loans that were<br />
urgently needed to pay day-to-day operations<br />
and the suppliers of components. There were<br />
voices among the Czechoslovak public that