Abstract

"From Path-Dependency to Co-Creation: Enterprise Survival during Post-Socialist Transformation in Central Europe"

Libor Zidek, Masaryk Univerzity (zidek@econ.muni.cz)

This paper explores how enterprises rooted in centrally planned economies managed to survive the transition to market capitalism after 1989 by co-creating new economic paths. Drawing on more than 100 oral history interviews with former managers and executives of Czech industrial enterprises, the study examines the processes of managerial adaptation in the context of systemic economic transformation. Under central planning, enterprises operated within an institutional environment characterized by soft budget constraints, guaranteed output distribution, the absence of competitive pressure etc. Their products were uncompetitive on global markets. Managers had no experience of how to operate in a market environment—how to attract customers, streamline production, or lay off staff.
The sudden exposure to competitive markets in the early 1990s thus confronted these organizations with unprecedented challenges. Many enterprises collapsed under the weight of their inherited inefficiencies and institutional rigidities, while others succeeded in transforming their organizational routines and managerial practices. Using the conceptual lens of path-dependency and path-creation, the paper investigates how firms and managers navigated the constraints of their socialist legacies to construct new economic and organizational trajectories to survive in new the environment.
The analysis identifies patterns of adaptive behavior that contributed to enterprise survival. By situating these transformations within both a national and a broader comparative post-socialist context, the study contributes to understanding how historical institutional legacies shape the possibilities of economic change. The findings highlight the agency of managers as historical actors who negotiated the tension between continuity and rupture in times of systemic transformation, offering new insights into the micro-foundations of post-socialist capitalism.