Searching the known, discovering the unknown : The Russian transition from plan to market as network processes

Abstract: The present study examines the transition from a planned economy to a market economy in Russia. In light of the fact that one of the main problems perceived by Russian firms during the transition is the management of their relations with the contexts, mainly customers and suppliers, a network approach is used as the theoretical framework. In the network, two levels are identified, the exchange level and the use level. This is based on the assumption that few resources are actually exchanged, but instead are used in combinations and activated by a set of actors that, partly, but not completely, share knowledge. Search and discovery are introduced as sources for change on both the exchange and use levels in the network.A case study of Tipografiya, the largest printing house in Novgorod, covers the period from 1986 to 1998. Thirty-five interviews were undertaken with key staff members. The case study addresses change and stability in Tipografiya's network, which is defined as a set of relationships with large and important customers and suppliers. In the analysis that follows the first part of the case study, which covered the period from 1986 to 1991, a model of network logic in the planned economy is presented. These networks were hierarchical and stable structures, which had a tendency to cause anonymity between the firms in the network. Moreover, multilateral dependence prevailed on the use level, which limited the room for manoeuvre when it came to establishing and dissolving relationships and was a constraint for changes in the networks during the transition.The second part of the case study concentrates on the period from 1992 to 1998. The focus here is on the change processes in Tipografiya's network during the transition economy. An emerging imbalance between experience about the network in the planned economy and expectation about the network in the transition economy is put forward as the starting point for three types of change processes: the search process, the discovery-initiated process, and the combined process of search and discovery. Tipografiya's various relationships are discussed in relation to these change processes. Owing to the multilateral dependence on the use level in the network and the fact that so many relationships were partial, that is, containing only one of the two levels, but not both, several of the change processes are connected during the transition period. The conclusion proposed is that a movement from a network consisting mostly of partial relationships to a network with full- fledged relationships is taking place, which in turn results in a parallel movement from anonymity to network identity.