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1. Pathways of Property Transformation: Enterprise Network Careers in Hungary, 1988-2000 Outline of an Analytic Strategy

Author:
Balázs Vedres and David Stark
Publication Date:
10-2001
Content Type:
Working Paper
Institution:
Institute for Social and Economic Research and Policy at Columbia University
Abstract:
This study analyzes the restructuring of a national economy by identifying the career pathways of its enterprises. This analysis is conducted in a setting strategically chosen as a case of rapid and profound economic transformation: the postsocialist Hungarian economy between 1988-2000. The goal of this study is to chart the multiple pathways of property transformation. Property pathways are conceptualized as the patterned sequences of change that firms undergo 1) in the composition of their ownership structure and 2) in their position within network structures of ties to other enterprises. These career pathways are neither unidirectional nor plotted in advance. The landscape and topography of the socioeconomic field are given shape and repeatedly transformed by the interaction of the multiple strategies of firms attempting to survive in the face of variable political, institutional, and market uncertainties. These different types of uncertainties will have different temporalities, and the study explores whether and how they increase or diminish in various periods. We develop and test specific hypotheses about how enterprise pathways along the compositional and positional property dimensions are related to the shifting contexts of these types of uncertainty. The core dataset for this study includes the complete ownership histories of approximately 1,800 of the largest enterprises in Hungary for a twelve year period, starting with the collapse of communism in 1989, recording each change in a company's top 25 owners on a monthly basis. Monthly entries for each enterprise also include changes in top management, boards of directors, major lines of product activity, raising or lowering of capital, and location of establishments and branch offices, as well as the dates of founding, mergers, bankruptcy, etc. Data on revenues, number of employees, and operating profit will be compiled from annual balance sheets. These rich data make it possible to map the life cycles of the business groups that are formed by network ties among enterprises, identifying not only when they arise, merge, or dissipate, but also the changing shapes of their network properties. To identify patterns of change, the study draws on sequence analysis, a research tool that makes possible the study of historical processes in an eventful way similar to historiography while retaining social scientific abstraction. Whereas sequence analysis has given us a perspective on careers as historical processes but has not been applied to business organizations, network analysis has been applied to business organizations but has not been done historically. The methodological innovation at the heart of this study is to combine the tools of sequence analysis and network analysis to yield a sequence analysis of changing network positions.
Topic:
Economics and Government
Political Geography:
Eastern Europe and Hungary

2. 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

3. 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

4. Work, Worth, & Justice in a Socialist Mixed Economy

Author:
David Stark
Publication Date:
01-1990
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
A French translation of this essay appears as "La valeur du travail et sa retribution en Hongrie," in Actes de la Recherche en Sciences Sociales, no. 85, November 1990, pp. 3-19. An earlier version of this paper was presented in a seminar of the Group de Sociologie Politique et Morale, November 1986. It benefitted from conversations with Pierre Bourdieu and from lengthy discussions with Luc Boltanski and Laurent Thevenot while their book, Les economies de la grandeur (Paris: Presses Universitaires de France, 1987), was in progress. My thanks especially to Monique Djokic Stark for her helpful criticisms and suggestions.
Topic:
Justice, Socialism, Work, and Mixed Economy
Political Geography:
Europe, Eastern Europe, and Hungary