Change Management in Transition Economies: Integrating Corporate Strategy, Structure and Culture

Company strategies have been conceptualized as positions , configurations, core competences and sets of simple rules (Porter, 1980; Hamel and Prahalad, 1994; Porter, 1996; Miller, 1999; Eisenhardt and Martin, 2000). The dominant theme in all these approaches is that a pattern is embedded in organizational decisions and actions. This pattern is variously called a ˜strategic frame (Huff, 1982), a ˜dominant theme or ˜configuration (Miller, 1999), ˜ interconnected choices (Siggielkow, 2000) or, most often, ˜dominant logic (Prahalad and Bettis, 1986). Many of these models are an extension of Cyert and March s (1963) argument that in their decision-making managers rely on a repertoire of schemas, frameworks and solutions. In cognitive terms this is effective because it prevents them from being overwhelmed by a flood of information and decision options. Once set in place, a dominant logic becomes a dominant force shaping an organization s actions.

To date only limited light has been shed on how dominant logic influences organizational performance. Does the evolution towards a coherent dominant logic enhance performance, as notions of fit and alignment suggest (Miles and Snow, 1978; Powell, 1992; Jennings and Seaman, 1994; Zajac et al. , 2000)? Or, as the literature on inertia suggests (Tushman et al. , 1986; Kelly and Amburgey, 1991), does a dominant logic eventually create rigidities that limit performance, resulting in the need for change? Or perhaps the influence of dominant logic depends on the specific set of external opportunities and threats that firms face in the industry (Cavaleri and Ob‚oj, 1993)? In short, we do not fully understand how a dominant logic can create winners and losers in a dynamic marketplace .

This chapter addresses this question by examining the dominant logic of several firms that attained leading or peripheral positions in Poland during the decade 1989 “99. In doing so it follows Bettis et al. s (1978) suggestion and focuses on outliers rather than central tendencies.