The impact of socialist imprinting and search on resource change: a study of firms in lithuania

Abstract

Firms in transition economies experienced a large exogenous shock in their external business environment in the late 1980s when these economies moved from a socialist-oriented economic environment to a more market-oriented economic environment. This paper examines the following research question in the context of this change: What are some factors that influence transition economy firms to successfully change their operating know-how or knowledge sets to reflect the demands of their new environment? Building on some core ideas from literature on organizational imprinting, knowledge-based view of the firm, and firm search, we suggest that two factors have a profound impact on a firm's ability to change. The imprinting effect of firms' prior socialist institutional and market environment adversely impacts their ability to change their operating knowledge. At the same time, firms that search for new knowledge from distant sources (located in mainly non-socialist countries) are able to successfully change their knowledge to meet the demands of the new market-oriented economy. Both of these aspects also have joint interdependent effects on the success of change; distant search mitigates some of the adverse impact of socialist market imprinting, but that is not the case for the impact of socialist institutional imprinting. These findings have interesting implications for both researchers and practitioners involved in transition economy settings.

The Effects of Internationalization on Innovation: Firm-Level Evidence for Transition Economies

“…During the restructuring period, foreign investors provide knowledge and invest in training local managers. In addition, reorganization efforts increase the demand for managerial capabilities to run a firm in a more competitive environment (Newman, 2000;Filatotchev et al, 2003;Kriauciunas and Kale, 2006).…”

“…Using foreign inputs, domestic firms can quickly unlearn old organizational routines and thus be liberated from the legacy of the communist system (Newman, 2000). In this process of overcoming the administrative heritage based on central planning, contextual factors play a critical role for firms to build dynamic capabilities and organizational routines to meet demands of a market-oriented economy (see Kriauciunas and Kale, 2006;Steensma et al, 2008;Dixon et al, 2010).…”

Managerial ties, strategic initiatives, and firm performance in Central Asia and the Caucasus

“…Firms in institutionally developed environments can invest more time and resources on productive strategic initiatives (Kriauciunas & Kale, 2006). Although in the Central Eurasian region, the establishment of democratic political systems and market economies has been slow (Blank, 2004), certain countries (such as Georgia) have made better progress than others.…”

“…While these studies have used single country data, the theoretical claim for the importance of managerial ties has yet to be tested with cross-country (as opposed to single country) data. Further, to strive for better performance, firms also need to develop capabilities in market-based strategic initiatives, such as developing new product lines and introducing new technologies (Kriauciunas & Kale, 2006;Peng & Luo, 2000;Zhou & Li, 2007).…”

Corporate Social Responsibility Reporting in China: Symbol or Substance?

“…Specifically, we examine how key features of a firm's political embeddedness that shape its need for legitimacy-e.g., state versus private ownership (Chen 2007, Li and, network connections to national political congresses (Hillman 2005, Ma andParish 2006), political legacy (Kriauciunas andKale 2006, Marquis andHuang 2010), and financial resources-result in firms being more or less likely to follow government signals.…”