Organizational process, strategic content and socio-economic resources: small enterprises in East Germany, 1990-94

Note that the action logics identified in the quadrants are not the same as industrial sector or industry. A specific market that may have been populated by a particular action logic may witness the entry of firms that assert a different logic successfully, and different action logics may henceforth compete or coexist in what initially was the same industrial niche. But in consequence, what the population ecologists call resource partitioning may occur. While such niches, from a certain level of precision on, are inevitably characterized by one and the same action logic, they are therefore not identical at all times.

Concept, Design and Methods of Investigation

The investigation basically adopts and implements the Hrebiniak and Joyce typology in all its hypothetical complexity, linking action logic in the firm's posture in the face of determinism and choice with substantive strategy. It then examines to what extent the suggested co-evolution with market forms and resource outcomes can be established. The field study was directed at the landscape of newly emerging small firms in East Germany, after the accession of East German states to the Federal Republic in 1991 and the radical transformation of the East German economy which had already preceded the accession. This had led to the disintegration of the former large-scale and vertically integrated state enterprises, and took East Germany from a population of a few large-scale enterprises to one in which small and medium-sized companies abounded and large ones were almost absent in a time span of roughly four years. The radical transition from a large plant and combine economy, in which firms were not just firms but complete institutions covering most societal functions, to a small-firm economy with properly capitalist firms is probably unique in human history. The situation, historical background, development, strengths and weaknesses of these enterprises have been a point of interest and concern in research and policy-making. Such interest and concern have equally focused on commercial, marketing, technical, organization, personnel, and industrial relations issues. We defined 'small enterprise' for the purpose of the present study as including all those with up to 100 employees.

Such firms are scarcely functionally differentiate& personalized employment relations abound, owner-managers are dominant, and work organization and organization structure are simple. But most of the firms investigated had undergone more or less radical change in enterprise configuration, charter, ownership, size, products, processes and techniques used, markets, skills and in almost any other aspect of their internal operations, external relations and the institutional fabric of the economy. The firms, or personnel in them, had most frequently been hived off from a previous socialist enterprise of much larger size. Thus, although organizational architecture at the time of the study was not excitingly complex, the process by which the firm had established its products or service portfolio, workforce, market, core competencies and external input and output relations in the transition from socialism to small-firm capitalism was breathtakingly complex and different between firms. It was a paradise for exploring the constitution of the firm, going by what, according to co-evolutionism, is an ideal setting for conducting an enquiry into how enterprises constitute themselves.