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The issues of enterprise growth in transition and post-transition period: the case of Polish 'Elektrim'

Author

Listed:
  • Slavo Radosevic

    (UCL School of Slavonic and East European Studies)

  • Deniz Eylem Yoruk

    (UCL School of Slavonic and East European Studies)

  • David Dornisch

    (Central European University Warsaw)

Abstract

Case study of Polish company Elektrim illustrates the changing basis of growth of enterprises between the transition and post-transition periods. Elektrim grew primarily through conglomeration in the transition period. After the exhaustion of this mode of growth Elektrim has started to focus on a few core areas (telecoms, cables, energy). The strategic shift to telecommunications has been based on partnerships with foreign firms and it is likely that this will be the pattern in other areas. In this respect, the case of Elektrim shows the importance of internationalisation for the growth of enterprises in CEE. Based on the case study the paper draws several analytical issues: First, Elektrim's shift from conglomeration to focusing suggests that the institutional context, which drives firm strategy in post-socialist economies like Poland, is, perhaps, also changing. Second, in order to grow Elektrim is forced to enter into equity relationships and partnerships like with French Vivendi. This suggests that the possibilities for firm growth in post-socialist economies, like Poland, through generic expansion are still fewer when compared to growth based on mergers & acquisitions or different forms of alliances. Third, Elektrim's relationship with government is complex and refutes the simplified dichotomy of markets vs. governments. This raises the issue of to what extent post-socialist governments operate as a 'compensatory mechanism' on which firms like Elektrim can rely to grow. Fourth, the opening of the CEECs has led to relocations of EU and other MNCs into this region with the result that they are also transferring the oligopolistic competition from EU into new markets. The case of Elektrim shows how CEE companies and goverment regulations become factors in the oligopolistic competition between big EU companies. CEE companies and governments may use this competition to their advantage but also their limited bargaining powers may lead to outcomes unfavourable to them.

Suggested Citation

  • Slavo Radosevic & Deniz Eylem Yoruk & David Dornisch, 2001. "The issues of enterprise growth in transition and post-transition period: the case of Polish 'Elektrim'," UCL SSEES Economics and Business working paper series 1, UCL School of Slavonic and East European Studies (SSEES).
    • Handle: RePEc:see:wpaper:1
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    References listed on IDEAS

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    1. Pankaj Ghemawat & Tarun Khanna, 1998. "The Nature of Diversified Business Groups: A Research Design and Two Case Studies," Journal of Industrial Economics, Wiley Blackwell, vol. 46(1), pages 35-61, March.
    2. Encaoua, David & Jacquemin, Alexis, 1982. "Organizational efficiency and monopoly power : The case of French industrial groups," European Economic Review, Elsevier, vol. 19(1), pages 25-51.
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    Cited by:

    1. Filatotchev, Igor & Wright, Mike & Uhlenbruck, Klaus & Tihanyi, Laszlo & Hoskisson, Robert E., 2003. "Governance, organizational capabilities, and restructuring in transition economies," Journal of World Business, Elsevier, vol. 38(4), pages 331-347, November.
    2. Slavo Radosevic, 2003. "The emerging industrial architecture of the wider Europe: The co-evolution of industrial and political structures," UCL SSEES Economics and Business working paper series 29, UCL School of Slavonic and East European Studies (SSEES).

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