Marc Day

Stages of Organizational Transformation in Transition Economies: A Dynamic Capabilities Approach

How do organizations previously dominated by the state develop dynamic capabilities that would support their growth in a competitive market economy? We develop a theoretical framework of organizational transformation that explains the processes by which organizations learn and develop dynamic capabilities in transition economies. Specifically, the framework theorizes about the importance of, and inter-relationships between, leadership, organizational learning, dynamic capabilities, and performance over three stages of transformation. Propositions derived from this framework explain the pre-conditions enabling organizational learning, the linkages between types of learning and functions of dynamic capabilities, and the feedback from dynamic capabilities to organizational learning that allows firms in transition economies to regain their footing and build long-term competitive advantage. We focus on transition contexts, where these processes have been magnified and thus offer new insights into strategizing in radically altered environments.

Exploitation and exploration learning and the development of organizational capabilities: A cross-case analysis of the Russian oil industry

We use a cross-case analysis of four Russian oil majors to develop a framework explaining the relationship between exploitation and exploration learning, and the development of organizational capabilities in transition economies. Our research explains how the changing top management style influences organizational learning over time. In the first stage of organizational transformation an authoritarian management style initiates a break with the administrative heritage of the organization to facilitate exploitation learning and the development of operational capabilities. These are required for survival in the new conditions of a market economy. In the second stage a more participatory management style fosters exploration learning and the development of strategic flexibility, required for sustainable competitive advantage. We demonstrate that exploitation and exploration learning do not coexist in the initial stages of transformation but are sequential. We found that the western-derived constructs of organizational learning add to our understanding of the process of organizational transformation in a transition context. Our study of the Russian oil industry also provides new ways to think about the processes of organizational learning in western companies, particularly large bureaucratic ones, anchored in their administrative heritage and needing to undergo organizational transformation.

Leadership, administrative heritage and absorptive capacity

Purpose – The purpose of this paper is to identify critical success factors for the management of change in transition economies.Design/methodology/approach – Four longitudinal case studies of Russian oil companies covering a ten‐year period from 1995, based on 71 in‐depth interviews. Examines organisational change from a resource‐based and organisational learning perspective.Findings – Explains how top managers firstly, break with administrative heritage to increase absorptive capacity and secondly, leverage administrative heritage for rapid implementation of change. Intra‐ and cross‐case analyses demonstrate that absorptive capacity increases and organisational change occurs where the top management team has radically different skills and mindsets from the dominant logic of the post‐Soviet organisation, an entrepreneurial orientation and the capability to drive through change due to a top‐down management style.Research limitations/implications – The research is restricted to four case studies. However, ...

Changing HRM systems in two Russian oil companies: Western hegemony or Russian spetsifika?

We contrast attempts to introduce what were seen as sophisticated Western-style human resource management (HRM) systems into two Russian oil companies – a joint venture with a Western multinational corporation (TNK-BP) and a wholly Russian-owned company (Yukos). The drivers for Western hegemony within the joint venture, heavily influenced by expatriates and the established HRM processes introduced by the Western parent, were counteracted to a significant degree by the Russian spetsifika – the peculiarly Russian way of thinking and doing things. In contrast, developments were absorbed faster in the more authoritarian Russian-owned company. The research adds to the theoretical debate about international knowledge transfer and provides detailed empirical data to support our understanding of the effect of both organizational and cultural context on the knowledge-transfer mechanisms of local and multinational companies. As the analysis is based on the perspective of senior local nationals, we also address a relatively under-researched area in the international HRM literature which mostly relies on empirical data collected from expatriates and those based solely in multinational headquarters.

Art as an Alternative Investment Asset

The paper constitutes a discussion of the trend around the rise of art as an alternative investment. With financial markets in turmoil, art as an alternative asset class is being incorporated into portfolios in the interest of diversification. Arts low correlation with the equities market and desirable risk and reward ratio, as price appreciation defies all logic, makes it an attractive investment. The volatility, irrationality and illiquidity of the art market make it hard to compare to more conventional investments. The paper will look at how investors are treating art as an asset class and how art compares to more traditional assets such as equities and bonds.

Relational architecture and relational capability: organisational levers to support strategic supplier relationships

The resource-based view of strategy suggests that competitiveness in part derives from a firms ability to collaborate with a subset of its supply network to co-create highly valued products and services. This relational capability relies on a foundational intra and inter-organisational architecture, the manifestation of strategic, people and process decisions facilitating the interface between the firm and its strategic suppliers. Using covariance-based structural equation modelling we examine the relationships between internal and external features of relational architecture and their relationship with relational capability and relational quality. This is undertaken on data collected by mail survey. We find significant relationships between both internal and external relational architecture and relational capability and between relational capability and relational quality. Novel constructs for internal and external elements of relational architecture are specified to demonstrate their positive influence on relational capability and relationship quality.