Rainhart Lang Economic, Social and Cultural ...

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managers in small and medium sized enterprises in Saxony (Alt/Lang 1997) ..... businessmen in Russia have no higher education and don't care for things like.

Rainhart Lang Chemnitz University ofTechnology

Economic, Social and Cultural Resources of Russian and East German Managers

Abstract The transformation process in Central and East European countries is closely connected with a breakdown of the old structures and value systems. As a tendency which is also more and more typical of radical changes in the westem countries, leadership is seen as of high importance for the transformation of enterprises and corporate cultures in the East So, it seems to be interesting to look for changes in the field of leadership. One research topic of general interest is the question of reproduction or change in the social structure of the management elite. The literature suggests that the new management staff are mainly recruited from the old one, but that there are also new careers into the management and within. Tue main questions to be answered in the article are: What are the origins of the new management staff? What are the economic, cultural and social resources of managers, that have allowed them to obtain management positions or to stay in them during the transformation?


Are there different patterns of resources with regard to managers of different

countries, leadership is seen as of high importance for the transformation of


enterprises and corporate cultures in the East (e.g.,

1 will try to answer these questions with respect to the situation in East

Lang/Wald 1992,

Germany in comparison with Russia.

Pohlmann/Schmidt 1995 and 1996, Puffer et al. 1996, Lang 1994, 1996). This

Bourdieu's concept of social, cultural and symbolic capital, habits and practices

notion also implies that the role of managers and their influence is sometimes

(1979, 1983, 1988, 1992) serves as the theoretical background of the analysis.

overestimated in the literature, e.g. in the discussion about charismatic or

The empirical basis of the description is drawn from two studies: a study on

transformational leadership (see Lang 1997).

managers in small and medium sized enterprises in Saxony (Alt/Lang 1997)

interesting to look for changes in the field of leadership. One research topic of

with 45 narrative interviews and a study on Russian managers in the Novgorod

general interest is the question of reproduction or change in the social structure

region (Bilz 1997) with 15 narrative interviews about the work and the biogra­

of management. The literature (e.g. Eberwein/Tholen 1994, Lang 1994, 1998,

phies of the managers.

Szomolanyi 1994, Puffer 1996, Todeeva 1996, Glotz/Ladensack 1994, 1996,

The results of the studies will be discussed in the paper using results of other

Kulke 1996, Pohlmann/Gergs 1996, Kutsche 1998, Windolf et al. 1998,

(Marz 1991, Myritz 1993,

Aderhold et


Hentze/Lindert 1992,

1994, Marr 1994,



Nevertheless it seems to be

Aderhold et al. 1994, von Rosenstiel

Clark/Soulsby 1999) suggests that the new management staff are mainly

1994, Glotz/Ladensack 1994, 1996, Kulke 1996, Pohlmann/Gergs 1996, Lettke

recruited from the old one, but that there are also new careers into the


management and within. Tue main questions arising from these facts are:

studies as well










Eberwein/Tholen 1994, Leiulfsrud/Sohlberg 1996 and partly Steinle et al. 1996

What are the origins of the new management staff?

for Russia).

What are the economic, cultural and social resources of managers, that have

1. Introduction: The Problem

allowed them to obtain management positions or to stay in them during the transformation?

The transformation process in Central and East European countries is closely

Are there different patterns of resources with regard to managers of different

connected with a breakdown of the old structures and value systems. As a


tendency which is also more and more typical of radical changes in the westem



Tue paper will try to answer these questions with respect to the situation in East

transitional period. This leads to the question of an adequate theoretical basis to

Germany in comparison with Russia.

explain the developments in transformational settings. Traditional theories of

Bourdieu's concept of social, cultural and symbolic capital, habits and practices

modernization or neo-classical economics seem to be too simple for a

(1979, 1983, 1988, 1992) serves as the theoretical basis of the analysis.

transformational development (e.g. Reißig 1994, Müller 1995).

The empirical basis of the description is drawn from two studies: a study on

Despite the general problems, the micro level of transformation, which 1 want to

managers in small and medium sized enterprises in Saxony (Alt/Lang 1997)

deal with there, is also not addressed by modernization theories. Bourdieu's

with 45 narrative interviews and a study on Russian managers in the Novgorod

writings about the forms of capital and the concept of "habitus" (1979, 1983,

region (Bilz 1997) with 15 narrative interviews about the work and biography of

1988, 1992) seems to me very relevant to the research problems in question.

the manager.

This is due to four reasons: Firstly, societal transformations with fundamental

The results of the studies will be discussed in the paper using results of other

social changes seems to be a field for theoretical approaches which include

studies as well (Marz 1991, Myritz 1993, Adethold et al. 1994, von Rosenstiel

economic, cultural and social factors, structures, actions and power relations in

1994, Glotz/Ladensack 1994, 1996, Kulke 1996, Pohlmann/Gergs 1996, Lettke

Puffer 1996,

their explanation of the developments (see Leiulfsrud/Sohlberg 1996 or Ahbe 38 1998) . Secondly, with the concept of habitus, the influence of former

Eberwein/Tholen 1994, Leiulfsrud/Sohlberg 1996 and partly Steinle et al. 1996

processes of enculturation or socialization could be included and tendencies of

for Russia).

stability or reproduction ofvalues and attitudes acquired in the past society could


Rump 1997 for Germany and Kozminski 1995,

be explained.

2. Theoretical background

Thirdly, the different forms of capital and the structural differences in the

Tue transformation societies are characterized by an "openness" of structures

possibilities to acquire and exchange them, could be used on the one hand to

caused by the breakdown of the old system with its values, mies and practices.

support the argument for a structural stability. On the other hand, changes

At the same time, the "new", system obviously could not just simply be trans­

within the given management structure as well as individual differences and

ferred: it had to be, learned. The learning process included an "unlearning" of the old system, a partial preservation of the past as well as the experiences of the .

38 Ahbe describes the system change as a change in the modes of transfer to Bourdieu.



of capital with respect

variations in the individual careers of the managers could probably be better understood. Fourthly, the concept of habitus and capitals not only a theoretical construction but a "concrete tool of analysis at the individual or group level to examine the actions, attitudes, opinions and strategies..." (Leiulfsrud/Sohlberg

1996:36). Bourdieu' s concepts will not be explained in detail here. lnstead, 1 will just give an overview of the main terms and their relations with respect to research questions. Capital is seen as an accumulated, internalized, incorporated, materialized or institutionalized resource which has to be appropriated by the people and allows them to act in a social environment. According to Bourdieu (1983), it is possible to distinguish between economic capital, cultural capital and social capital. Each form of capital can be transformed or converted into the others; with some limitations. This conversion is supported by the symbolic capital. The chances for capital accumulation and exchange depend on structural settings, the specific social environments people belong to. These environments form a special pattern of habits of the actors which allows them to act but, at the same

The pattern of habits as well as the possession of capital is therefore the basis 9 for the actors to develop strategies of reproduction and exchange3 .

The different forms of capital could be described as follows:

Economic capital is the amount of money or items of financial value, e.g. property, objects of value, shares and patents, that the actors have at their disposal. Thus, economic capital is directly convertible into money, and, according to Bourdieu (1983; 1985), it is particularly suitable for institutionali­ zation in the form of property law. lnstances of a "lucky" birth, i.e. the growing up in a wealthy family, are treated here as well as the collection of values in the course of a life or rare lucky moments of a sudden change of social status, e.g. because of an inheritance or the winning of prizes.


Cultural capital denominates available knowledge and competence m general40 This includes human resources (training) as well as academic titles and the abili­ ty and possibility to invest in education. These investments depend not only on available time but also on the existence of economic capital.41 Cultural capital is frequently connected to a specific personality and is handed down by the way

time, structures in advance the field, the conditions, the access to different forms of capital and chances of their actions to a certain extent. ( 1990) for the special group of managers.


See Boltanski


Nahapiet and Goshal ( 1998) discuss the issue on the level of organizations with the tenn "intellectual capital" which they see as a capability for action based on knowledge and knowing (pp. 245-250).



This is an example of the convertibility of the different kinds of capital.


of social heredity. In our world, cultural capital is understood as something

legitimization of the different forms of capital. This collective term is frequently

special and thus becomes the basis for further material and symbolic profits.42

synonyrnous with prestige or reputation. lt can be acquired and accumulated

"The social capital is the sum total of actual and potential resources connected to

along with the other forms of capital and is useful as it supports exchange

the possession of a lasting network of more or less institutionalized relations,

processes as well as further accumulation.

mutual acquaintance and recognition, or put differently, it is the resources

In the transformation process, the managers' position depends on the possession

resulting from membership of a group." (Bourdieu, 1983: 190).

lt includes

of different forms of capital closely connected with their biography. An analysis

permanent obligations arising from feelings of gratitude, respect, and friendship

of the biographies of managers in the transfonnation could, therefore, provide

or from institutionally guaranteed rights derived from membership in a family, a

some insight into their survival under difficult social conditions in a changing

class or a school (Bourdieu 1986). In order to clarify the meaning of the term

environment, as it was shown by Lettke (1996) or Kochffhomas (1997) for

"social capital" Napahiet and Goshal (1998) describe three dimensions: a

entrepreneurs in East Germany, by Clark/Soulsby (1999) for manager in Czech

structural dimension (e.g. networks of ties, network configuration), a cognitive

firms, by Puffer (1996) and McCarthy et al. (1997) for Russian managers and by

dimension (shared codes and language, shared narratives) and a relational

Windolf et al. ( 1998), Pohlmann/Gergs ( 1996) and our own studies (Lang 1994,

dimension (e.g. trust, norms, obligations, identification). Therefore, this partic­

Alt/Lang 1997) for managers in East Gennany.

ular capital can only be seen in the context of the relationships an actor has with other actors, who also have social, economic and cultural capital at their disposal. In order to reproduce social capital, continuous relationships in the form of exchanges are necessary.

3. Empirical Studies: Methodology and Results

3.1 Methodology ofthe Studies

Tue last term, introduced by Bourdieu, is that of symbolic capita/. lt stands for

Tue empirical data are from two studies, which have used Bourdieu's approach as

the perceived and recognized form of the three kinds of capital, economic, social

a theoretical background.

and cultural capital. lt expresses the level of importance, acceptance and

The German study is on managers in small and medium-sized enterprises in Saxony (Alt/Lang 1997). The main aim of this study was to describe am

42 Bourdieu, P„ Soziale Ungleichheiten (Social lnequalities), (1983) p. 190.



explain the development ofvalues and attitudes ofmanagers within tbe course of

for tbe German study, results ofthe questionnaire were also included.


For the discussion,

Tue empirical basis consists of 45 narrative interviews with mainly top

order to develop a more general view ofthe topic.


bave tried to confront the findings with other studies in

management staffon tbeir work biographies and professional careers, on values and attitudes about organization and leadership as well as 236 questionnaires about values and attitudes. lt includes new enterprises as well as frrms whicb already existed before the cbange.

3.2 Main Results ofthe two Studies

rces 3.2.l Tue Origins oftbe Management Staffandforms ofResou

Tbe Russian study is on top and middle managers m the Nizhni Novgorod

In tbe Gennan study, it could be sbown tbat around 85% bad been in

region (Bilz 1997). Tbe empirical basis includes 15 narrative interviews about

management functions even before the cbange. Tbe "new", old staff bad been in

the biographies ofmanagers, their careers, their values and their experiences witb tbe transformation process. Tue interviews were conducted in Russian and


ment, in tbe past. Tbe cbanges in top management were mainly made througb an excbange ofparts ofthe old "nomenclature ". Tbey were replaced by managers

translated by the interviewer. All the interviews were

positions in tbe lower or middle management, sometimes in the top manage­

and tbe German transcripts were used for a

from the West as well as by second level staff. In the study, around

content analysis in order to fmd typical pattems. In a first step, the biographies

1O % of tbe managers came from tbe West, and these were mainly in top

were classified very rougbly according to the main resources accumulated and

management pos1hons .

used in tbe transformation. In a second step, typical biograpbies were selected.

Tbe main resource of the managers of East German origin were their

On tbe basis ofthe analysis ofthe studies' authors (Bilz 1997, Alt/Lang 1997),

technological knowledge resulting from tbeir studies and other professional

bave tried to re-construct

education, the special (tacit) knowledge about the production processes as well as

the third step includes two activities: on tbe one band


tbe biograpbies of the selected managers to find specific combinations of

. .


their familiarity with tbe culture oftbe firm.

resources, strategies or pattems of action. On tbe other band, tbe managers' perception oftheir careers, tbe way they talk about their special abilities whicb bave made them successful, bas been a focus ofthe analysis.

43 One

has to take into account the structure of the sample. In bigger enterprises with a stronger

westem influence the percentage of management staff from the West is higher, especially at the top.



attitudes seem to have proved valuable during the transformation (Alt/Lang

public or even friends. Taking into account the fonner colleagues, partners that the e Seilschaften"), it seems understandable discussion about "ropes" ("alt personal d dow n by the managers when asked for role of social capital was playe see tioned personal contacts (Alt/Lang l997:XIX success factors: only 11% men

1997:40, 43). At the same time their formal qualification often became obsolete.

also 60).

These factors were accompanied by a relatively stable set of values and attitudes throughout the transformation process such as discipline, diligence, orientation towards results, order, rule setting and responsibility. These culturally acquired

coincides with the perception of the managers themselves. The following factors

tives, the people's movement, a little bit, and "...and we used the people's initia and to get rid of the old combine ("Kombinat") the employees ask us to do so...

were mentioned first:

the old company X..."

Nevertheless, cultural capital seems to have had an important influence. Tuis

technological knowledge and competence

(61 %),

familiarity with the firm (50%) and management experience as well as orientation towards results (each 43% Alt/Lang 1997:XIX). "I studied civil engineering more than 6 years at the university, worked as project engineer, project manager, manager of more complex projects, worked as an executive in the production management,... and before the change, I was the head of a separate part of the company. 1 known the firm inside out... I was never in the party, at no time... "(G7) "Knowledge about the topic is absolutely necessary, nothing is more stupid than a manager with no idea of the process ... without this, it is impossible to give detailed instructions... "(G10) A second important resource were the relationships. The study shows the importance of this factor, too. The East German managers tried to establish new relationships with managers from the West, used the relations to westem

.... the West!R.L.) was sacked by his firm "...if we observed that Dr. X (from we both try to borrow the money and now and he knows us very well, then we firm." are the owners and executives of our n s to economic capital is difficult, as show for East German managers the acces them had the chance to accumulate enough by the example above. Only a few of hand" in a management buy out, or get money to buy the firm from the "Treu ution act. The salary of managers before their old firm back as a part of the restit of their co-workers and after the change, the turn was not much more than that the increase was often moderate.

a lot of bureaucratic problems to be "When I had got my firm back, there were place, due to environmental protection, solved... They asked me to go to another h 1 did not have...all 1 had was invested it would be around 8 million DM, whic to modemize the firm a bit... (G20)

managers and firms established before the change or networks of relations to



For the managers from West Germany it could be stated that their cultural

with the East Germans. But this group is more focused on the control of social

capital consists of knowledge in marketing and finance as well as experience in

relations and networks. They see themselves often as "social technologist'',

running a business under market conditions. This includes also the cultural

"teacher" or as "the doctor, who comes to eure" (G8).

knowledge about the creation of profitable relationships with different partners.

Social capital played a decisive role for the group of westem managers. They

"We have around ten West German managers here, in a few selected positions,

were frequently included in social networks in the West before getting their

where it seems to be unavoidable, for example the executive for commercial

current position in East Germany and they could profit from these connections

activities, finance and controlling, the personnel manager, and in general

and ties on the basis of their shared codes. Especially their relations to the new

administration... due to a lot of new and difficult things, where one needs

owners, the managers from the "Treuhand" (mainly also from the West) strongly

someone with experience in market economy.. .I don't know exactly but 1 think

supported their positions in the enterprises.

around 6 5 % of the managers stayed in their posts. A few departments were

Asking for the factors of their personal success, a lot of them pointed out that

newly established. We had no controlling...the new manager came from the

they had a unique chance of a fast career, due to the networks and their special

West, the distribution department was reorganized, with a manager from the


West...." (G 17)

"I have to say, in a West German company 1 would have got this position after

"I studied business administration in Austria at an Academy of Commerce, and


then at the University in Vienna. 1 started in a textile firm where 1 worked first

years ... and in 1990, I saw an offer for lecturers in business administration... and

in the department of marketing. All the age of 29, 1 was export manager and

so 1 am here..." (G l2).

later on marketing manager and 1 have worked for different companies as senior

"One day, I was asked by a supervisory board of an East German textile firm to

executive." (G l 9)

analyse the finn and to evaluate the potentials and chances of a reconstruction...


lnstead of traditional values, participation, democracy and seif actualization


years...with Daimler probably in 10 years, in smaller enterprises in 3 or 4

and after having presented my plan, 1 was asked to join

as a top

more important for this group than for managers from the East. Bureaucratic or

executive..."(G 19).

tayloristic attitudes are less important for the West German managers, the same

The access to economic capital was also much better than for managers from the

applies to the integration into and the commitrnent to the firm in comparison




And finally, at least in the first period of transformation, the western origins,

anyone in school how well we were doing. But I was always warned never to tell

western titles and habits were seen as symbols of success. This led to an easier

every two years and owned a large everyone knew that we had a new car

access to other resources and contributed to the exchange process.

In school, no teacher would have dared "Dats cha" and a six-room flat in the city.

In the Russian study, a very homogeneous childhood of the managers, influenced

my father might call and complain." (R9) to reprimand me; they all feared that

by school and mass organizations was found. Military toughness for the male

took a crate of vodka. As the "When my father needed something, he always

and an attempt at emancipation for the female led to the development of different

pleasure good factory of Nizhni leader of the goods storage of the state

genderroles (Bilz 1997:20-22).

no problem for him; and literally Novgorod, access to high quality spirits was

Despite an orientation towards modesty economic capital played an important

vodka as a gift. Later, 1 simply took every door opened for him with that crate of

and increasing role for the Russian managers. Three types were identified:

1 did not enter with a gift of over this tradition, and there was no office that

persons grew up wealthy and want to retain this standard, persons who now want

some sort for those who were working there."

to make up for lost time at any cost and persons who still live a modest life

the sample, from less wealthy The second and third group, only a few in

despite their new wealth (1997:25).

experienced a lack of economic families or with working class background, have

The first group consists of former party "nomenclature" ("apparatchiks") and


their families, and of "owners of exchange goods" with an excellent access to

part in my childhood; it "I remember that money always played an important

economic capital. Tue "owners of exchange goods" are people who had access to

was something one did not have or had to be very careful with. A rouble was a

scarce goods during the time of the Soviet Union, branch managers, managers of

lot of money, pocket money was always exactly rationed and many desires were

food companies, car repair services etc. They were in a position to exchange

left unfulfilled. But that was not as bad as it sounds now

scarce goods for other goods or advantages.

that yet!" was a rather common advice, and for me it was only natural that I

"My father was the manager of the largest armament company in the region of

would work for everything myself later on." (R3)

N.N.; he was also a member of the Party Control Board. For us, the family, it

"My parents were always an example of modesty and this modest behaviour has

was understood that everything was brought into the house for us. There was

stayed with me to the piesent day..." (R5)

nothing that lacked; 1 only heard of scarce goods, 1 never experienced a lack. But .





"You have to eam

Especially with the new possibilities since the mid-80s a positive evaluation of "money making" seems to have gained ground. "... now it finally makes sense to earn money ... if you earn a lot of money

really important whole university education is far away from the real world. The 4) things can only be learnt in daily life in business." (R l and successful "... of course it is true that many of the new managers

Only a fey are more critical:

things like businessmen in Russia have no higher education and don't care for if not primitive. But art, literature and music. Their attitude is often simple,

"Where money grows, everything grows" (e.g., criminality /R.L.) (R5).

surprisingly these people

Regarding cultural capital, the study shows a relatively high educational standard

longer important...." (R l 5)

due to the free access to education in the past.

But not all parts of cultural capital were devaluated: While foreign language

"My parents

both simple workers, however, they reacted positively to the

skills were not seen as very important in the past, they now developed more and

suggestion that 1 should do my A-levels. They were also in favour of me parti­

more into a key resource. Foreign languages were seen as "opening the gate" to

cipating in several cultural groups, after all it did not cost them anything and

the West:

they somehow regretted that they hardly bad any time for culture anymore." (R8)

"... it was also very important that 1 studied at the linguistic faculty in N.N.

Up to the mid-80s it was nearly impossible to get a job in higher management

There were no teething problems with my American partners, somehow an

without a university degree (Bilz 1997:31).

atmosphere oftrust dominated immediately.... " (R8)

But with the transformation, the traditional degrees lost their symbolic value and

"Ifyou apply for ajob at a bank with a good knowledge of German or English,

became more and more obsolete. For the occupation of management positions,

your chances are quite good, particularly since the bosses, if they

social and economic capital seems to be of more importance.

don't have that knowledge... " (Rl )

"lt has long since ceased to be important whether you were at university or not;

"... after all, it is no langer a secret that the former members of the Russian

what counts is courage and talent for business only. An academic title today is

forces, who were stationed in the former GDR or in Poland and learnt the

met with a pitying smile rather than respected. The time needed to achieve a

language of those countries while they were there, today belong to the leaders of

PhD might be used much more profitably. What does a doctor earn anyway? Tue

the Russian Mafia. After the great reforms they simply used their experience and

today, you finally are somebody"(R7).




often very successful in business; but




is no

old cadres,

relations in order to reproduce their social capital and to reinforce their

First, there is no official body "To apply for a job in Russia is almost pointless. irnportant posts are always which informs you of vacant jobs and secondly who will get the job..." (R7) allott ed 'non-officially'. lt is clear long in advance and one has plenty of course one does not get these positions just like that sible for one's career. Don't of obligations towards the people who are respon d accepting certaill people's think those people are forgetful. 1 have often regrette

reputation. But at the same time, especially for the group of older managers, the

help...." (RIO)

traditional system of nepotism based on strong family connections seems to be

comparison of the groups Another interesting result of the study comes from a management level, a lot of of lower, middle and top managers. At the l�wer 44 of them profited from their younger executives are found . The great majority

connections to build a network of legal and illegal actions abroad. The money they made from that was often the beginning of their incredible wealth..." (R2) On the basis of accumulated economic capital and financial reputation, a system of obligation among the new Russian managers developed, which rested only partly on family relations. They try to preserve this system of social exchange

still functioning (1997:37). The results support to the assumption that the symbolic capital was of special importance for Russian managers.



parties and receptions of the economical elite of the former Soviet Union, which

in economics and educational ( cultural) capital: university degrees, often This allows them to business administration as well as foreign language skills. four tirnes of the average eam far about the average income in Russia, up to ment of the middle (1997:55,56). Their prospects seem to depend on the develop

remained inaccessible to other, ordinary, Russians. 1 grew up feeling that our


family was respected, 'that's the Wolga constructor's son' is something 1 often

who thought they were better and showed it to all the world." (R3)

ment in Russia in This group started their careers with the new economic develop organizations. Investments the 80s and they now occupy influential positions in is interesting to note that in educational capital were the basis of their success. lt or business, but they this group often bad no special knowledge in economics

Tue importance of a network of relations based on family connections was also

economic change. Tue profited from a management vacuum in the early years of

The irnportance of social capital obviously was also understood in the past: "My father was chief constructor in the Wolga-automotive factory, which was quite a high position. So we had access to a lot of festivities, parties, hunting

heard. But sometirnes 1 was amazed that the party, which constantly propagated the equality of everyone, would tolerate a group or maybe even class of people

experienced by the interviewed managers when starting their career: 44 lt should be taken into account that the Russian study started with the idea to deal ofyoung Russian managers. The field was widened a little bit later on.



with the group

managers in this homogeneous group have a very strong elitist thinking along

Mrs. Adler, 54, works as a senior executive, responsible for economic questions,

the line of castes.

in a print-office. The enterprise with around 100 employees was resituated to

The group of top managers among the interviewees consists of very different

private owners in 1993. Mrs. Adler has worked in the firm for 20 years. Before

characters. The main difference with respect to the other groups is that

the "change" in 1989, she was senior accountant for many years.

investments in cultural capital or cultural capital itself does not play a role in

"I have always seen myself as the economist of the firm, to get the economic

their managerial career ( 1997:63,64). Instead of the cultural resources, based on

figures balanced and not as a supervisor of the state„.that was very difficult

education, they have the ability to adapt quickly to new situations. Another

because there was no orientation of the production towards economic aspects.

decisive strength is their social capital: a complex of network relations with

The fulfilment of the plan was in the centre and the costs were, at the end, of no

local governments, new party leaders or the local Mafia give approval and


support. Reputation within these circles is very important for the managers. Due

After her school Mrs. Adler starts a commercial apprenticeship, in a small firm

to the social networks, and partly the former positions, they accumulated

at the age of 14. Her father was also a shop-keeper; so she follows the tradition.

economic wealth, thereby stabilizing their network positions. Symbols of

Then she changes to a bigger enterprise, where she works as an accountant. For

wealth (Mercedes, western fashion etc.) demonstrate their power.

three years she stays at home with her children and then goes back into her last


firm. She works in different jobs in the commercial and economic field of the

Biographically embedded Resource Patterns: Four examples of Russian

firm. Then she experiences the importance of formal qualification.

and German Managerial Careers

"I remember this situation very well. A lot of mainly younger women came into In the following part, the biographical context of resource patterns will be

the firm. The bad a qualification from a business school and they have got

shown with two examples from Germany as weil as two from Russia. They

higher posts. They did not know more than me but they had these studies.„and

stand for typical careers of managers in the transformation process and show also

so they could direct me. That was the first time that 1 feit myself imperfect and

how the resources were acquired, accumulated and combined for use.

with the little children, 1 saw no chance to change this situation."

Mrs. Adler (G): "! always have been an economic expert!"

In the 60s she takes the opportunity of a special study progr arnme for women in business and she continues her studies with a correspondence course at a



university. She finishes her studies in the 70s and joins the print-office, where

1972 within a combine ("Kombinat"). 40% of the products before the change

she works as a senior accountant.

were produced for military purposes. Therefore the firm had a relatively modern

In her work today, she looks at every detail and she also works with the

technical equipment.

computer if necessary.

After his school, the military service and 3 years of studies in engineering at a

"If noen of the accounting staff are in the office, I also use the opportunity to

technical college, Mr. Salamander starts 'his work in the finn in 1976.

work with the computer. You can see a lot. But I leam from this and see it as an

He asked for ajob "because I knew that they wanted to invest".

exercise... and I enjoy it too ... "

"The job was not in line with my qualification, but I thought that it is just for

If important tasks are on the agenda, she is in the office trying to supervise the

the start. They will need me as an engineer later on... but the time was really

ongoing work. And she also tries to instruct and prepare a young employee for

nice. I remember, that we had a lot of fun. lt was a very good team and we did

her job. He was to leam everything right from the beginning, as she did in the

much together and the supervisors were often included. lt reminded me of the

past ("There must be no chaos once I leave. ")

time of my studies."

After the change she was able to stay in the finn. Her perception is that this was

In 1979, Mr. Salamander obtains a higher managerial post.

due to her economic knowledge and competence and her willingness to take

"There was only a small problem, I had to join the party, and I was asked to cb

responsibility. At the same time she neglects the fact that her second husband is

so. But I was not aware of the trouble with the new job. Everyone, the top

the top executive of her enterprise.

executives from the firm, from the combine ("Kombinat") as well as party

Mr. Salamander (G): "! am really an obstinate, in many things conscientious cori

leaders from different levels, wanted answers if the plan was not fulfilled . . and

ambitious human!"

everyone had different ideas and orders what I should do."

Mr Salamander is one of the two senior executives of an enterprise with 77

In order to develop his economic knowledge, "Mr. Salamander studies economics

employees. The finn produces plastic foils for the construction industry. He is

and business administration in a correspondence course at a University.

44 and has held managerial positions in the finn, for 15 years. The second

After the change he is very active to adapt the firm to the new conditions. He

executive and main owner of the company is from West Germany. The firm was

uses the "people's movement" for this, and he survives after some problems.

founded in 1948, and was a state owned enterprise from 1952 to 1989; since

The combine is blamed, and the strategy to regain autonomy is successful. He




tries to develop new products with the help of "old connections" to universities

Wasilij Klemjen, 30 years old, is general manager of International Trading LTD

and to find new a owner.

Nizhni Novgorod. When he was born in 1967, nobody would have thought that

Despite these activities, massive reductions of employees are necessary. He tries

the son of a simple worker and a boxing coach would in a relatively short time

to keep the "best".

advance to be one of the most influential people in Nizhni Novgorod and lead an

In 1994, he finds a small family enterprise, who buy 50%, the other 50% are

empire of approximately 34 companies, all subordinate to International Trading.

bought by a private person. After some trouble in the firm of the buyer, and

Grown up in rather moderate circumstances, bis main interest were sports. He

their "draw back", Mr. Salamander asks the former top executive of the family

soon developed a feeling for strength and superiority:

enterprise from the West, to buy the free part of the firm with him and to act as

"I always found school and learning a burden. Not that it was hard for me - to


my parents' surprise 1 stood out rather soon because of my quickness and some

Mr. Salamander considers good relations with the employees very important. He

kind of aptness or let's call it cleverness. But 1 just preferred boxing with m y

mentions that he always used a eo-operative style, also in the GDR.

father. Somehow 1 found i t more important then t o become stronger than

" ... we need the identification with the firm, today more than in the past. ..

cleverer. The strong always make it in the world... "

Before the change, one had to have good relations because of the influence of the

Although he is not one of the best at school and has only very limited financial

party or the security service„. now it is more honest, because one really needs

means at his disposal, he soon succeeds in fighting for and winning a respected

good results and therefore 1 need many satisfied people„. and people who are

position for himself.

against this, do not fit in."

" „.

of course one somehow felt unimportant in a country where education was

The workers should participate with their ideas, but they should respect "the

preached all day long,


"Learning, leaming, and leaming again!". But 1 trained my body, became the

and the workers should "subordinate themselves





best sportsman of the school, won every school and county championship. I

introduced by the management".


where Lenin was always quoted with his

Klemjen (R): "Jf you don't risk




be drinldng

realized very soon that physical superiority in connection with a self-assured appearance leads to a different distribution of positions in negotiations of various





Klemjen wins recognition with his sportive successes. To win these, a high

problem in a certain way. 1 just had the right friends who always solved my

amount of ambition is necessary. Youths with a talent for sports are especially

problems with a call at the Municipal Ministry for Interna! Affairs ... "

supported in the Soviet Union. In addition, he earns money by working in his

At the age of 18 Klemjen is drafted to Afghanistan. There he is only confinned

free time as doorman in what used to be called a dance club and is now called a

in bis view of life.

disco. There he comes into contact with the demi-monde of bar managers and

11 • • •

in Afghanistan only the strongest survived. If you were frightened or

black marketers and the illegal Russian red light milieu. Tue zealous claimsof

hesitant to kill your enemy, you didn't live long. 1 am not saying that I liked i t

the communist leaders in Russia that there was no organized crime in the

there, but I had n o problems and thank God stayed alive."

Soviet Union were renounced during the Gorbatchev era and organized crime

When he comes back, reintegration measures of the state for people returning

was fought.

home from Afghanistan provide him with an apprenticeship for car mechanics,

"lt was a completely new world that I stumbled into. Money was all that

which was particularly sought after during the Soviet Union. Again he contacts

counted there, and I never would have thought that there was something like that in the Soviet Union. 1 don't think it is surprising that a youth is interested in this world." 11 •• •

his former friends from the demi-monde. In several comments his two-fold relationship to the Soviet Union becomes apparent: "This country bad done far too little for me for me to have to be grateful to the

maybe they liked my way of solving problems quickly. Mostly


appearance was enough to gain me respect. Who would argue with a man of 6

state in any way..." 11

• • •

of course I feit secure, everything was clear and not as chaotic and dangerous

foot 6 and 120 kilograms?"

as it is now. We very quickly found out then who was a friend and who was an

Several fights with the police lead to problems with the school and the

enemy. Now a new competitor emerges every day and nobody knows where

authorities; but they have no further consequences:

these people and their money come from...

11 •••


1 understood even then that there were two kinds of justice in Russia, the

Gorbatchev's appeals to everyone's own initiative also confirm Klemjen in his

paper justice and the telephone justice. Telephone justice is to call an influential

views, so he begins building up .an automobile trade network and a spare parts

person with whom you have good connections and ask or order them to handle a

trade. lt is the advantage of many business activists of the time that they have the opportunity to lead the way to a completely new field.



"1 came at exactly the right time. Tue foreign car trade was booming. lt was all


very simple. We commissioned officers who were stationed in the fonner GDR

face, on the nose, fight back! "

to buy cars and they transported them to Moscow with military vehicles. There

"Of course i t i s dangerous t o d o business i n Russia today and you may b e found

we received them and sorted things out with the official bodies."

face down very quickly. But 1 think 1 have the right influential friends and we

Interviewer: "What do you mean by 'sorting things out'?"

still on top in N.N.. If you have no courage it's no use starting in business; if

K. : "Well, 300-500$ of bribes were usually paid out to the customs people, and

you don't risk anything, you won't be drinking Champanskoje!"

the police on the way to N.N. also got a few hundred dollars. lf you remember

His understanding of management and income may be called simple; it shows a

that in the beginning our profit was 30% for every car, you can calculate our

pragmatic attitude which is typical for the Russian situation:

profits for a few hundred cars during the first three years."


Entrepreneurial long-tenn planning or simply an instinct for new situations

Every day I look after the concems of over 30 stores and more than 200

soon lead Klemjen to re-orient himself.

employees, argue with our rather slow official bodies; and no day passes with

" ... even then I had a feeling that this would not work very long; more and more

less than 15 hours of work."

people mingled in the business and spoilt the prices. So we took on other items

" . . . 1'11 be honest and say that 1 think the relationship westem managers have to

in our commissions, such as HiFi technology and kitchen machinery, food and

the subject of salary is insincere and ridiculous. 1 think that income is a just

clothes and we opened a few shops in N.N."

participation in success. lf you have earned a lot, you have worked a lot, why

" ... the International Trading Ltd. today comprises about 12 food stores, 2

shouldn't you be proud of that and tell everyone how much you eam. So, a

discotheques, 4 car stores, 3 garages, 7 stores for audio-video technology and 6

month where I eam less than 20.000 US-dollars is a bad month for me."

clothes stores... "

The attitude that money can buy everything is continually present. Social

Mr Klemjen can hardly be seen as averse to risk. The dangers of everyday

relations, such as marriage, friendship and recognition, are reduced to a purely

Russian economy are not denied, but the personal risk is played down or

financial basis.

justified by the "magnificent" opportunities one gets if one shows only a little

"... one of my friends is the Gubemator (govemor) of the town, and 1 play tennis

courage to risk something:

with the chief of police. There is no broadcast on economics on local


my father always said, if somebody threatens you, hit him directly in the


rightly call myself a manager because 1 make decisions and solve problems.



stations where my name is not mentioned at least once. But you shouldn't think

career has been astonishingly straightforward; and exactly for this reason it is

that this is so because I'm so clever or popular; it is just because 1 have money

representative for the biographies of many Russian managers who resist a world


of crime and fast dirty money and nevertheless do not want or have to do without

and money in Russia means influence . . . 11 •••

all this could be over tomorrow and nobody will remember me. 1 have to be

financially secure by then.


a career and success. Even though bis working life begins in an atmosphere already intluenced by Gorbatchev's reforms, his socialist upbringing and views

Tue uncertain political and economic conditions force many people in Russia to

cannot be denied.

keep their money on foreign accounts in foreign currencies in order to avoid

Mr. Grinitschkin was born in 1968 as the third child of a car constructor and a

inflation . . . also Mr. Klemjin:

taylor in Nizhni Novgorod. After his A-levels he was registered for the

11 •••

Economics faculty of the State University N.N. with top results for the entrance

I am not afraid of the situation changing again. I am used to fighting my

way; I am not to be subjected so easily. And if they think I have my money here


in Russia, they would be quite wrong. My money is in a Swiss bank, my

"I myself see it that way: ever since 1 can remember I have worked towards a

daughter attends a school in London and 1 spend a few weeks in Paris and in

goal. First it was good results at school which made me learn, then the entrance

Switzerland every year. At some point I want to buy a house in Florida, and if

exam for the university; I knew quite soon what 1 wanted to be - an accountant,

everything breaks down here, I will be gone very quickly. This country has done

working with numbers, comprehensible and exact. . . .

too little for me; so 1 would not fight for Russia in order to be able to stay here.


I can smell changes very quickly . . .



• • •


ambition is probably innate, together with constancy and purposefulness i t

enables everybody t o achieve a lot. . . . 1


/ot to the Soviet Union! "

Mr Grinitschkin is always careful to point out his childhood in the socialist

Michael Jurewitsch Grinitschkin, 29 years old, is Deputy General Manager of

Soviet Union and to mention those parts of the system which he thinks were

1 1 the largest private TV station in Russia, 1 SETI NN 1 • Despite his youth he

positive .

occupies one of the most influential posts within the Russian media. As finance

11The security that socialism offered had many good sides. You grew up securely,

manager he is responsible for over 400 employees and his annual budget is 30

without social need. There was no kind of competition at school and at

Mr. Grinitschkin


"! owe


million US $. Mr. Grinitschkin is married and has a 4-year-old daughter. His



university. You could concentrate completely on the most important thing, your

"I worked as chief accountant in three different firms; there 1 had to watch the

studies, without worrying about your future."

management enriching themselves, numbers being forged, taxes being evaded

"Our generation is still quite fresh and unburdened. When 1 see how early young

And I was the only one who worried about these things. After that 1 knew that

people today are confronted with existential problems, 1 have my doubts whether

this new kind of business was not for me."

they will start their working life with quite the same motivation and drive as we

He sees the only chance for serious business and proper management in

did. This is where socialism had its advantages and 1 owe a lot to the Soviet

companies that work with western participation or are led by foreign specialists.


In 1992 he obtains a post as chief accountant in the newly founded private 1V

After graduation, Grinitschkin is drafted into the army for three years. Quickly

station SETI NN where he is still working today.

he becomes an officer and a group commander.

"I think two important things account for the fact that 1 still work for the station

"Everybody who had studied became an officer. 1 don't mean to play down the

and have had an unprecedented career. First, my perseverance and my ambition to

hardships of the army, but still the army service was special for me. 1 realized

put all my power into my work for the station and not to be discouraged by

that 1 had this talent to lead others, to make decisions

initial failures. Secondly, my clear idea of what 1 wanted to achieve. 1 am and




responsibility. You could even say 1 enjoyed commanding people . . . " Conscious of his talents for mathematics and leadership he looks for work

have always been in favour of a slow but constant rising as opposed to ups and downs on the career ladder."

purposefully after his army service. But he meets with the typical problems of

"lt is with a certain relief that 1 always discover anew how good it is to work

the Russian economy in the transition process:

with new young cadres and managers. Tue old leaders also call themselves

" Shockingly 1 found that there were hardly any serious businesses in our country

managers today, rather promisingly, but they have no idea what it means to

at that time. Either the individual companies were only interested in making a lot of money as soon as possible and then disappearing again or you found a system of incapable old cadres who ruined their companies more than they reformed them . . . . "

work in a market economy. Even worse, they are incapable of making decisions quickly and responsibly. The party used to take every responsibility out of your hands, and if you have lived like that for 20 years or more, you don't change overnight. Anyway, 1 think these old granite heads won't ever change. Their time is simply over."


20 1

Today, Mr. Grinitschkin is Deputy General Manager and General Finance

While special sources in Russia were connected with the old party authorities,

Manager with an average annual salary of 30.000 US $.

this group was mainly excluded in East Germany45. Instead westem managers

"Of course 1 know that many managers in Russia today are earning a lot more

play an important role, not only temporarily. But a dominance of westem

money and laughing at me. But 1 have the compensation of a job that will be

managers is often limited to the few large companies, while in the smaller ones

secure for quite some time yet and of working for a rising company. 1 have a

the typical pattem is a mixed on with one top executive from the West and one

clean conscience because 1 earn honest money. This is saying a lot in Russia

from the

today. 1 wouldn't know how to face my parents otherwise. 1 say again: 1 owe a

Pohlmann/Gergs (1996) and Windolf at al. ( 1998). Tue phenomenon of an easier

lot to this country and would like to keep some of the socialist morals and

access of non-economists to management posts could be observed in both

ethics . . . "

countries, but seems to have created a more influential group in Russia, while in

4. Discussion: Different Patterns in Russia and East Germany




have been reported by

Kulke ( 1996),

East Germany and especially in small and medium-sized companies some economic knowledge was of special importance in order to adapt to market

The results of the studies and the different biographies show that different

economy, so that the exclusion of this group of "old system economists" did not

pattems in Russia and East Germany of management careers have emerged. I

work that well. In Russia as well as in other East European countries (Kutsche

will now shortly discuss the differences with regard to the research questions.

1998: 1 12), a higher mobility of the managers between the enterprises and firms

Origin ofthe "New" Management Staf f: Reproduction and Conversion instead of

could be observed. In East Germany, a decreasing number of posts as a result of


deindustrialization and downsizing of the firms leading to a limited mobility

In Russia as well as in East Germany it seems that the "new" management staff

must be mentioned (Glotz/Ladensack 1994, 1996). Another important difference

is the "old". As in other East European countries (Todeva, 1996, for Bulgaria, Kutsche, 1998, in a comparison for Hungary, Czech Republic and Slovakia, Clark/Soulsby for the Czech Republic), a lot of the new managers had at least


Windolf et al. shows that membership in the party was not an obstacle for a management c areer after the change, especially in combination with a move to another enterprise, but the chances

some management background, often in first and second level posts.

were lower than for non-party-members.


But one has to take into consideration that the firrns are mainly owned by West Gerrnan companies.



seems to be that in East Germany the privatization process finished with the

been combined with cultural capital. In East Germany, cultural capital in

result of more or less clear patterns of ownership and control. In Russia, the

connection with social capital seems to be a typical structure.

managers seem to have had more chances to become the owner themselves.

These findings are also supported by the literature. The importance of language

Forms of Resources: The Jmportance ofSocial and Cultural Capita/

knowledge as a key to western skills in business can be seen in the analysis of

The analysis has shown that there are striking differences between Russia and

McCarthy et al. ( 1 997). The Russian entrepreneur and manager Kirova grew up

East Germany with respect to the access to the different forms of capital, the

in Russia, but had been living in the U . S . for a long time and studied there.

accumulation and the chances for an exchange. While the position of Russian

This knowledge along with her connections provides her a lot of opportunities

managers rest on social capital and an easier access to economic capital for the

(for similar cases see Puffer et al. 1 996, e.g. 56, 57). The easier access to

top management and cultural/educational capital for the younger, including

economic capital for those who occupied a strong position in the old system was

language skills, the managers from East Germany have to rely on their cultural

reported by Leiulfsrud/Sohlberg ( 1 990: 46f). For Germany, the studies of


Pohlmann and Schmidt ( 1 996) as well as Windolf et al. ( 1 998) lend some



dominant resource:






experiences within the firm have to be mentioned first. But it must be noticed

support to the findings.

too, that in the very special East German transformation, social capital should

Strategies: The Use of Capital in the Political Arena of Transformation

not be underestimated in its influence on the career of the manager. Those East

The findings in both studies make it clear that there have been typical exchange

Germans who were able to build up relationships to owners from the West or to

modes or even ways in which one form of capital was converted into another or

the incoming management staff, or who were actively searching for partners,

could be used to get access and to accumulate another form, giving the actor

have often survived in the companies.

more room to develop strategies of action. Typical patterns are the use of

Tue Russian culture and the completely different transformation process in

cultural capital to build up a network of relationships as shown by Mr.

comparison with East Germany, have obviously led to a different structural

Salamander for East Germany, or the use of an existing basis of social relations

pattern of capital. In Russia, networks of relationships are closely connected

and its development to accumulate economic capital, as shown in the case of

with the access and accumulation or even possession of economic capital for one

Mr. Klemjen. But it could be also shown that the main differences in the

important group of managers. For a second group, especially intellectuals, it has

transformation process, also result in different chances for the actors: In East



Germany, with the transfer of westem institutions, the room for managers seems to be pre-structured or even more limited, whereas in Russia there are more


possibilities to get access to different types of capital, and therefore the options

Aderhold, J . et al. (1994): Von der Betriebs- zur Zweckgemeinschaft. Berlin.

of the actors to develop their own strategies, are more open there.

Ahbe, T. (1998): Kapitalismus-Sozialismus-Kapitalismus - Systembrüche in Ostdeutschland als tiefgreifender Wechsel im Modus des Kapitalsortentransfers. Workshop on Transformation Theory. TU Magdeburg (unpublished manuscript).

5. Conclusions

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sächsi schen Klein- und Mittelunternehmen. In: Lang, R. (Hrsg.)(1998): Führungskräfte im ostdeutschen Transformationsprozeß. München!Mering, 247-269.

be useful to explain individual and partly organizational developments in trans­

Bilz, F. ( 1997): Die neuen russischen Manager. Diploma thesis. Chemnitz University of

formation processes.

Technology (unpublished). Biom, R./Melin, H./Nikula, J. (eds)( l 996): Between Plan and Market: Social Change in the Baltic

lt provides a perspective which includes power as well as culture and allows us to confront the individual action with organizational and societal settings, which

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Frankfurt/M./New York.

give the actors different chances and, at the same time, limit their strategies. For comparative purposes it seems quite possible to use the approach to contrast

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results from qualitative studies done in different countries.

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Glotz, P./Ladensack, K. ( 1994): Personeller Wandel im Management ostdeutscher Unternehmen.

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Kontinuität im








Transformation. München, 2 1 -46. Todeva, E. ( 1 996), Dynamics of Management Practices in Eastem Europe: The Case of Bulgaria, in: Journal of East European Management Studies (JEEMS), Vol. 1 , No. 4, 47-70. Windolf, P./Brinkmann, U./Kulke, D. ( 1 998): Warum blilht der Osten nicht? Zur Transformation ostdeutscher Betriebe. Schlußbericht an die Volkswagen-Stiftung. Trier.


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