Organizational Responses to Institutional Upheaval by Central Eurasian Firms and the Ability to Transform Under Uncertainty

Abstract

Firms’ strategic responses to environmental shifts under conditions of uncertainty in the wake of institutional changes are far from understood. We utilize data from over 1,200 firms in seven Central Eurasian transition economies to examine the extent to which institutional inefficiency is predictive of the response strategies employed by the firms in their environments. We also examine how firms maneuver in the environment through an innovative effort in developing new products, opening new plants or upgrading product lines and technologies. Our results seem indicative of both an adaptive and an innovative effort by firms in these countries. The results are discussed with respect to empirical limitations and future research avenues in these transition economies.