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 Building Capitalism and Ending Communism in East European Business Culture
 Michael D. Kennedy
Sessions
Session 1
Session 2

Culture in Transition

For many a Western advisor landing in Eastern Europe to advise those who would build markets and capitalist firms, the "old socialist manager" was clearly a thing of the past. For many East Europeans, this new advisor represented hope and a chance for their country to become "normal" and their firm to gain the competitive edge. Indeed, the whole concept of "transition" with its two mantras--from plan to market and from dictatorship to democracy--depended on the stability of these oppositions and the teleology built into them. But as in other such instances of grand ideological visions, the oppositions are not always so clear, and their national ownership not always so obvious.

Böröcz has introduced an extremely valuable concept for understanding these labilities (or instabilities) with "fusion." By this he understands the "creative reinterpretation of old and new elements, creating substantively distinguishable qualities of social experience." He uses the musical repertoire of Béla Bartók to produce the image. Citing the Hungarian pianist Zoltán Kocsis, "Bartók's oeuvre is a perfect synthesis between central East European folklore and composed music in the hands of a superbly creative individual." While making capitalist firms in countries formerly ruled by communists may not be so artistic, business leaders often develop practices that fuse important elements of the socialist past and of the capitalist West in the making of post-communist capitalist firms. But whose culture needs to be superceded is not always so obvious.

In what follows, I draw upon a larger study of the cultural formations of post-communism to suggest some of the ways in which Western experts and East European business leaders have not only worked together, but also against each other, to define the leading edge in designing their firm's future, and the business culture of transition.

To many, transition culture is a contradiction in terms. Culture involves values, beliefs, symbols and rituals. Transition is about a transformation of political and economic systems from dictatorship and economic planning to democracy and markets. Culture also implies something enduring, clearly bounded and held in common--a nation's history or language for example. Culture is not a dynamic process that occurs across the world in widely differing circumstances. And if one is limited to these conceptions of culture--something in opposition to other spheres of action in the economy or polity, and something that is shared by an obviously bounded group--then transition culture must be an oxymoron.

Thinking Point

Is the transition culture that Kennedy describes here limited to business, or can it be seen in other areas of cultural exchanges?

Culture also has a broader reference. Social life is cultural because meaning is imbued in every human action and its recognition. People need to understand what "planning" is in order to change it, and need to know what markets mean in order to adopt the appropriate dispositions. In this sense, transition culture might simply mean that set of understandings involved in the transition from plan to market and dictatorship to democracy. I wish to suggest, however, something more ambitious in naming transition culture.

Transition culture is a mobilizing culture. It is organized around certain logical and normative oppositions, valuations of expertise and interpretations of history. This mobilizing culture provides a basic framework through which actors (e.g., East European managers) undertake strategic action to realize their needs and wishes. That mobilizing culture, in turn, structures transition. Transition culture emphasizes the fundamental opposition of socialism and capitalism, and the exhaustion of the former and normative superiority of the latter. It values broad generalizing expertise around the workings of market economies and democratic polities. The technologies of accounting and finance as well as legal infrastructures are typically taken as inadequate. To resist their change is taken as evidence of belonging to the past or a dysfunctional present. These inadequacies then become central to the analysis of the system itself and the remaking of institutions. Their inadequacies become the basis for understanding and intervening in the system, based on knowledge of a desirable future. These stories about the normal and the deviant are cultural resources on which experts and entrepreneurs draw to legitimate their claims to competence in administering business, and to identify who is part of the past that should be left behind. One might draw the structure of transition culture, and its oppositions, this way:

The structure of transition culture and its oppositions.

Different countries can be mapped on this set of oppositions. Russia and Ukraine are typically identified as being located more in the past than those further to their west, especially in Poland, Hungary or the Czech Republic. During the 1990s, the World Bank offered some of the most authoritative assessments of who were the leaders and who were the laggards in making the transition from communist rule to democratic capitalism. But this structure of transition culture was transformed when it landed in Eastern Europe. After all, recognizing opportunity and the entrepreneur who might lead a firm, or a country, to that democratic future in association with Western markets required knowing something about local contexts. Those with global expertise needed those with contextual expertise to make transition work.



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