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

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

Structural Separation and Access in Telecommunications Markets

This paper presents a basic framework to assess whether structural (vertical) separation is desirable. It is discussed within the setting of fixed telecommunications markets. From an economist’s perspective, the key question that underlies the case for structural separation is: is there a persistent bottleneck? The obvious candidate is the ‘local loop’, or local access network. If yes then it makes sense to compare the costs and benefits of structural separation. The framework provides a set of options that the regulator can use strategically, by using the threat of a break-up to influence an incumbent’s competitive stance in the wholesale market.

Contested resources: unions, employers, and the adoption of new work practices in US and UK telecommunications

The pattern of adoption of high-performance work practices has been explained in terms of strategic contingency and in terms of union presence. We compare the post-deregulation/privatization changes in work practice at AT&T, Bell Atlantic and British Telecom. On the basis of these cases, we argue that the choice of new work practices should be understood as a consequence not only of the company's resources or changes in its environment, nor of a simple union presence, but also as a consequence of the practices' effects on union power, the nature of the union's engagement, and the union's strategic choices

Nordic small countries in the global high-tech value chains: the case of telecommunications systems production in Estonia

In this paper we focus on the electronics industry, and more specifically on the production of telecommunications systems, which is characterised both by very rapid growth of the global trade and very high ratio of R&D investments in the sales revenues (Moncada-Paternoo-Castello et al 2010). More specifically, we analyse the distinctly different development paths of the three major telecommunications systems producers in the Nordic countries: Ericsson, Elcoteq and Skype. Ericsson was established in 1876, and has been a well-known brand name for decades. By contrast, Elcoteq grew from a small company into a global multinational corporation in less than a decade only in the 1990s. As a global company, Skype is still less than ten years old, but it facilitates today more international calls than any other telecommunications operator on the planet.

Further evidence on game theory, simulated interaction, and unaided judgement for forecasting decisions in conflicts.

If people in conflicts can more accurately forecast how others will respond, that should help them to make better decisions. Contrary to expert expectations, earlier research found game theorists' forecasts were less accurate than forecasts from simulated interactions using student role players. To assess whether the game theorists had been disadvantaged by the selection of conflicts, I obtained forecasts for three new conflicts (an escalating international confrontation, a takeover battle in the telecommunications industry, and a personal grievance dispute) of types preferred by game theory experts. As before, students were used as role-players, and others provided forecasts using their judgement. When averaged across eight conflicts including five from earlier research, 102 forecasts by 23 game theorists were no more accurate (31% correct predictions) than 357 forecasts by students who used their unaided judgement (32%). Sixty-two percent of 105 simulated-interaction forecasts were accurate, providing an average error reduction of 47% over game-theorist forecasts. Forecasts can sometimes have value without being strictly accurate. Assessing the forecasts using the alternative criterion of usefulness led to the same conclusions about the relative merits of the methods.accuracy, conflict, forecasting, game theory, judgement, methods, role playing, simulated interaction.

Leading in Service Innovation: Three perspectives on service value delivery in a European context

This paper explores the relationships between the shaping of “service value propositions” according to three dimensions: “intangible mix”, “physical support”, and “time”, and the strengthening of Innovative Capability in service organizations. After the first introductory section, we describe a series of related innovative moves experienced in the European context by leading companies. We analyze how JCDecaux addresses service recipients simultaneously as citizens and consumers, focusing especially on the Cyclocity project. With CS2 Lawyers in the UK, we envision how automation and technology adoption in professional services may lead to significant productivity improvement for the good of society. Finally, we study how SNCF in France has succeeded in implementing a permanently strengthening value proposition in public service through the recent launching of the IDTGV initiative. In these situations, the service companies have clearly addressed their market considering three different forms of interrelated, yet distinct, targets: “ultimate beneficiaries”, “paying bodies”, and entities or individuals who somehow “prescribe” the consumption of services. In these three situations, we investigate the robustness of the “value propositions” thus implemented, and analyze the particular role played by technology in the success of the new ventures.Service and innovation; value proposition; technology implementation

The Wheel of Business Model Reinvention: How to Reshape Your Business Model and Organizational Fitness to Leapfrog Competitors

In today's rapidly changing business landscapes, new sources of sustainable competitive advantage can often only be attained from business model reinvention, based on disruptive innovation and not incremental change or continuous improvement. Extant literature indicates that business models and their reinvention have recently been the focus of scholarly investigations in the field of strategic management, especially focusing on the search for new bases of building strategic competitive advantage, not only to outperform competitors but to especially leapfrog them into new areas of competitive advantage. While the available results indicate that progress is being made on clarifying the nature and key dimensions of business models, relatively little guidance of how to reshape business models and its organizational fitness dimensions have emerged. This article presents a systemic framework for business model reinvention, illustrates its key dimensions, and proposes a systemic operationalization process. Moreover, it provides a tool that helps organizations to evaluate both existing and proposed new business models.

Privatization in Italy 1993-2002: Goals, Institutions, Outcomes, and Outstanding Issues

This paper describes the privatization program in Italy during the 1990s and puts that policy in the context of macroeconomic adjustment, general market deregulation, and promotion of private investment in the provision of public infrastructure. The wave of state divestitures reached Italy later than other OECD countries. A deep-rooted tradition of state intervention, coupled with the use of public enterprises as a source of employment and political support, hindered the timid attempts at privatization of the 1980s, delaying until 1992 the start of largescale privatizations. These were imposed on Italian politicians and electorate by a host of factors: the financial crisis affecting both the general government and, sometimes irreversibly, state-owned enterprises (SOEs); the increasing aversion of the European Commission towards state aid to ailing firms; and the discredit thrown on public enterprises by their involvement in corruption scandals. An evaluation of its results in manufacturing, performed on the basis of a set of operative and restructuring performance indicators for a representative sample of privatized firms, indicates the lack of statistically significant improvements in efficiency scores. The analysis of the consequences of privatization on corporate governance show that, notwithstanding considerable changes in the structure of ownership and a sizeable contribution to capitalization and liquidity growth, the market for corporate control remains insufficiently transparent. These results appear to relect multiple factors – the preference accorded to quantitative targets in the context of EMU convergence, the weakness of the executive and its dependence on shaky parliamentary majorities in the Italian political system, and finally the resistance of politicians to relinquish control over SOEs. In the broader framework of fiscal decentralization, this last factor seems if anything reinforced by recent normative changes and proposals.privatization, regulatory reform, industrial restructuring, Italy