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1. Organizing Diversity: Evolutionary Theory, Network Analysis, & Postsocialist Transformations

Author:
Gernot Grabher and David Stark
Publication Date:
01-1996
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
In contrast to the dominant transition framework that examines organizational forms in Eastern Europe according to the degree to which they conform to or depart from the blueprints of already existing capitalisms, this essay exam ines the innovative character. born of necessity. in whicb actors in the postsocialist setting are restructured by re defining and recombining resources. Instead of conceiving these recombinations as accidental aberrations. it explores their evolutionary potentials. Its starting premise is that the actual unit of entrepreneurshp is not the isolated indi vidual personality but the social networks that link firms and the actors within them. Drawing on recent develop ments in evolutionary theory. it cautions that although all-encompassing privatization and marketization might fos ter adaptation in the short run. the consequent loss of organizational diversity will impede adaptability in the long run. *This essay was written while David Stark was a Fellow at the Center for Advanced Study in the Behavioral Sciences sup­ported by grants from the National Science Foundation #SES-9022192 and from the U.S. Department of State Title VIII Funds Grant #1006-304101. Our thanks to Bill Barnett, Pascal Boyer, Geoff Fougere, Istvan Gabor, Szabolcs Kemeny, Ger ald McDermott, and Monique Djokic Stark for their criticisms of an earlier draft. Address correspondence to David Stark Center for Advanced Study in the Behavioral Sciences, 202 Junipero Serra Blvd., Stanford CA 94305 (or to stark@casbs. stanford.edu).
Topic:
Diversity, Network Analysis, Post-Communism, and Democratic Transitions
Political Geography:
Eastern Europe

2. Recombinant Property in East European Capitalism

Author:
David Stark
Publication Date:
01-1994
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
In contrast to the problematic of transition, this paper sees social change not as the passage from one order to another but as rearrangement in the patterns of how a multiplicity of social orders are interwoven. From that perspective we see organizational innovation not as replacement but as recombination. The findings of field research in Hungarian firms. data on ownership of the largest Hungarian enterprises, and interviews with key policy makers in government. banking. and industry indicate the emergence of new property forms that are neither statist nor private, in which the properties of private and public are dissolved. interwoven. and recombined. Recombinant property is a form of organizational hedging, or portfolio management. in which actors are responding to extraordinary uncertainty in the organizational environment. For enterprise actors the question is not simply, "Will I survive the market test?" but also, under what conditions is proof of worth on market principles neither sufficient nor necessary to survive. Recombinant property is an attempt to have resources in more than one organizational form-or similarly-to produce hybrid organizational forms that can be justified or assessed by more than one standard of measure. The clash of competing organizational principles that characterizes post-socialist societies produces new organizational forms; and this organizational diversity can form a basis for greater adaptability. At the same time, however, this multiplicity of ordering principles creates problems of accountability. Accompanying the decentralized reorganization oj assets is a centralization of liabilities. Both processes blur the boundaries between public and private. On the one hand, privatization produces the criss-crossing lines of recombinant property; on the other, debt consolidation transforms private debt into public liabilities. Whereas in the state socialist economy paternalism was based on the state's attempts at the centralized management of assets, in the first years of the post-socialist economy paternalism is based on the state's attempts at the centralized management of liabilities.
Topic:
Capitalism, Property, Social Change, and Post-Communism
Political Geography:
Europe, Eastern Europe, and Hungary