SASE 2005: | Papers | Abstracts | Final Program

Abstracts Network H/I/J - Organizations, Occupations, and Professions Christina L. Ahmadjian (Hitotsubashi University, Japan) Jaeyong Song (Seoul National University, South Korea) E-Mail address: cahmadjian@ics.hit-u.ac.jp Coopting Globalization: Local Politics and the Transformation of This paper examines the effect of global pressures on local institutions in a comparative study of corporate governance reform in Japan and South Korea in the 1990's. While both countries embarked on programs of reform in law and business practices, the process and outcomes of reform were very different. We present details of corporate governance reform in both countries and develop a framework, which we term "coopting globalization," to this divergence. We argue that the responses to corporate governance reform in South Korea and Japan were the result of the interaction between external pressure to adopt Anglo-American corporate governance practices and local actors. This interaction, however, was not simply one of local actors accepting or rejecting the foreign influence. Rather, Anglo-American corporate governance provided local actors-the state, shareholder activists, foreign investors and corporations-with new ways to frame their existing interests, and new practices through which to pursue their goals. Thus, corporate governance reform in Korea and Japan was not only an encounter between a local system and global influence, but also a product of local politics, as local actors shaped the ideology and practices associated with Anglo-American corporate governance to advance their own interests. Uwe Becker (University of Amsterdam, The Netherlands) E-Mail Address: k.u.becker@uva.nl The CPB and the Common Interest: On the Influence of Epistemic Communities in Dutch Socio-economic Policy-making The importance of experts and expert bodies in corporatist modes of conflict resolution is substantial, as they pacify conflict and facilitate successful negotiations between organised labour and capital and labour (and the state in the tripartite formula) by offering 'scientific' socio-economic data and analyses. Under certain circumstances these experts have a pivotal position in the constitution of epistemic communities that direct the thinking on socio-economic topics. There are good reasons to suppose the existence of such an epistemic community in the Netherlands. Our paper aims at understanding its role in determining socio-economic policy. The focus will be on a very influential expert body: the Central Planning Agency (CPB). It will be argued that because of its crucial role in the formation of public opinion and in defining the margins for collective bargaining the CPB has gained substantial influence on the definition of the Dutch common interest in socio-economic affairs. On the basis of extensive analyses of policy documents and interview evidence the paper will illuminate that the CPB has acquired the central position in the socio-economically dominant epistemic community in the Netherlands. Jens Beckert (Max-Planck-Institute for the Study of Societies, Germany) E-Mail address: beckert@mpifg.de Uncertain Exchanges - Theoretical Considerations on the Sociology of Markets The investigation of markets from a sociological perspective has been a prime concern of economic sociology over the last two decades. Two perspectives dominate: On the one hand Harrison White's network approach which investigates the social role structures in production markets. On the other hand Neil Fligstein's political-cultural approach which looks at market orders from a perspective of institutional embeddedness. Though these approaches have led to substantial progress in the sociological understanding of markets, they have not led to an integrated theory of markets. This has been widely acknowledged (Fligstein 2003; Granovetter 2003.) This state of the sociology of markets makes further theoretical work necessary. In the paper I develop a system of categories for the investigation of markets based on the identification of three core problems market participants face: the problem of value, the problem of competition and the problem of cooperation. The three problems point to the intersubjective constitution of markets. The value of a good or service is established in an interactive process that clarifies its use value and creates status value, moral value and investment value. The problem of competition refers to the paradox that perfect markets lead to optimal efficiency but at the same time discourage investments because profits are zero. Actors must establish barriers to competitors through product differentiation, subsidies, legal barriers etc. This is a political process. Finally, the problem of cooperation refers to the benefits of joint action (market exchanges) and the associated dangers of exploitation emerging from asymmetric distribution of information. Cooperation must be secured through institutional safeguards, social structures and the mobilization of affect in interactive encounters. All three problems find a common denominator in that they confront actors with uncertainty. It is only through reduction of this uncertainty that actors are able to make sense of a situation and engage in exchanges. The network approach and the political-cultural approach to markets are situated within this analytical differentiation of three systematic problems actors face in market exchanges. Types of capitalisms can be distinguished according to how the mentioned problems are resolved. Alexander Bedny (University of Nizhni Novgorod, Russia) Alexandre Groudzinski (University of Nizhni Novgorod) Evgenia Balabanova (University of Nizhni Novgorod) E-Mail addresses: abb@unn.ru; aog@unn.ru; baes@fup.unn.ru Pathways of Efficient Ownership Structures Development in Russian Agriculture: Institutional Analysis Socio-economic problems of the Russian agrarian sector, which have deep historical roots, do not yet have a socially accepted solution. Even after fifteen years of transformation the agriculture and rural areas in Russia are in deep social and economic crisis. In our opinion, inadequate institutional relations and, first of all, ownership relations, have been the core of Russian agriculture's problems all through its historical development. We use the institutional approach of economic sociology in order to analyze the pathways for development of efficient enterprises in the Russian agricultural sector. We have conducted a number of sociological surveys which form an empirical basis of our analysis. The results of our surveys in particular show that those agricultural enterprises, whose managers act as institutional entrepreneurs, have better chances for survival and development in the current socio-economic conditions. Maria Angelica Borges dos Santos (Escola Nacional de Saúde Pública - Fundação Oswaldo Cruz, Brazil) Silvia Gerschman (Escola Nacioal de Saúde Pública-Fundação Oswaldo Cruz, Brazil) E-Mail address: angelicabsantos@uol.com.br; gerschma@terra.com.br A Working Framework for Institutional Environment A working framework for institutional environment and functional aspects of the performance and operation of these institutions, including social practices and perceptions engendered by them and regular operational practices structuring relationships between individuals and the various components of the political and economic system. W. Richard Scott provides a framework for studying relationships between organizations and institutions that could be used as a starting point for assessing the impact of institutional environments on organizations at individual,!¾ such as formal (constitutions, laws, property right structures) and informal (sanctions, taboos, customs and behaviour codes) institutions concurring to promote or constrain specific interests, practices and dispositions ¾Institutional environment is a widely employed term, but still an ill-structured concept not favouring a clear and uniform definition of relevant variables to be tested. We define institutional environments as comprising both structural aspects ¾sectoral, regional, national and international levels. Adding a political or "constitutive" dimension to the three original institutional "pillars" or dimensions - regulative, normative and cognitive and linking each of these dimensions to central concepts relevant to the issue and the discipline under study (be it management, economics, politics or sociology) allows us to define fairly clear and potentially comparable structural and functional variables for institutional environments. Reinoud Bosch (European University Institute, Italy) E-Mail address: reinoudbosch@hotmail.com Bringing the Nuance into the Varieties of Capitalism Debate: A Systematic Synthetic Analysis of Changes in US, Japanese, and German Corporate Governance and HRM Practices The paper presents a systematic synthesis of substantiated empirical and theoretical findings from many different sources regarding changes in US, Japanese, and German corporate governance and HRM practices since the 1980s. A number of 'neoliberal' practices has become more common: flat and decentralized hierarchies; profit centers; outsourcing; contingent work; external labor markets; individual PRP; stock options; income inequality; institutional shareholdings focused on shareholder value; transparency in accounting; M&A activity; a short-term shareholder value orientation; internal goal setting and competition; de-unionization; and decentralized bargaining. In addition, a number of Japanese and/or German practices has become more common: teamwork; job enlargement; lean production; multiskilling; work/life benefits; internal and credit-based financing; universal banking; pressures for long-term shareholder value; corporate culture; low strike levels; joint labor-management programs; and a segmentation between core and peripheral workers. The extent to which practices have become more common has varied. Cultural adaptation has occurred, while certain 'foreign' practices were in fact already in place - thus indicating an expansion of local practices. Changes rarely occurred in a linear fashion. Overall, the paper shows the importance of a systematic attention to detail and nuance and the need to discard simple linear extrapolation. Olivier Butzbach (European University Institute, Italy) Antonio Lopes (University of Foggia, Italy) E-Mail address: olivier.butzbach@iue.it Corporate Control, Relationship Lending and the Performance of Banks: the Case of the Italian Mezzogiorno, 1993-2001 Since the de-regulation and liberalization of banking in the early 1990s, Italian banks have faced greater competition and a more active market for corporate control. Mergers and acquisitions have been rising, involving more than a third of total banking assets over the past ten years. This phenomenon has been particularly acute in the Southern part of the country (the "Mezzogiorno"), where most of the large and medium-sized banks have been acquired by, or merged into, banking groups based in the Northern regions. Southern local banks now hold less than a fifth of total deposits, and represent less than 18% of all lending in the Mezzogiorno. One issue raised by this shift of corporate control in Southern banks is the impact it has had on the strategy and performance of those very banks. In other words, has the "Northern takeover" proved beneficial for Southern banks? And has it led to a shift in strategy, away from lending to small and medium firms? Such issue is particularly relevant in a dual economy like the Italian one, where Southern regions have historically suffered from lower levels of economic development and a restricted access to credit. Indeed, undercapitalized and cash-strained small firms, characteristic of the Southern economic structure, might be adversely affected by the end of local banking. The existing literature gives contrasted answers to the question raised above. On the one hand, the literature on ownership and control tends to view changes in control in a favorable light. On the other hand, by contrast, the literature on "relationship lending" supports the raison d'être of locally-owned and operated banks, emphasizing the gains stemming from closer relationships between borrowers and lenders. Building on econometric tests and balance sheet data for 32 banks over a ten-year period, the paper aims to shed light on this puzzle, and discuss its implications for corporate governance as a whole. Reyes Calderon (University of Navarra, Spain) E-Mail address: rcalderon@unav.es Corruption: A Corporate Perspective Impact of corruption on corporate strategy and governance has received very little attention in management literature. The first objective in this research is to build a framework for corruption taking a corporate perspective. Literature on corporate corruption has mainly focused on both political corruption (i.e. corporation paying bribes to public officials to obtain licenses) and criminal or fraudulent corruption (i.e. financial or accounting fraud). Both types of corrupt acts are or could be condemned by courts. The analysis of legal but ethically questionable actions has been neglected. Merchant (1987:10) suggests that "fraudulent and illegal practices are often preceded by one or more forms of questionable practices". Moreover, evidences suggest that questionable but legal actions that include the intent of the parties to deceive produce strong costs for corporations and societies (Argandoña, 2003; Carson, 2003; Cohan, 2002). The second goal of this paper is concerned with the conceptualization and control of this type of corruption. Helen Callaghan (Max-Planck Institute Cologne, Germany) E-Mail address: hc@mpifg.de Policy Preferences When One Size Does Not Fit All : German, French and British Employer Positions on EU Company Law Proposals My paper compares German, French and British employer preferences regarding two core aspects of corporate governance: worker participation and takeover law. Main theoretical aim is to improve upon existing explanations for the persistent diversity of capitalisms despite strong pressures for convergence. Two influential research programs offer explanations based on different assumptions about the policy preferences of domestic actors. Research on the Politics of Corporate Governance typically assumes that workers, managers, blockholders and minority shareholders have the same conflicting interests everywhere and differ mainly in their relative influence on governments. By contrast, scholars working from a Varieties of Capitalism perspective maintain that employer interests vary across countries. My paper shows that these seemingly irreconcilable assumptions are valid simultaneously and that, by privileging one over the other, both literatures neglect a crucial part of the explanandum: how actors with multiple interests form their policy preferences. By analyzing position statements regarding EU legislative proposals over a period of thirty years, I show that there were sharp divisions both within and across employer federations in the case of takeover regulation, whereas cohesion was maintained on the issue of worker participation. By analyzing intra-associational debates, I show that production regime considerations influenced employer attitudes in both cases. The different salience of these considerations is due to differences in the strategic incentive structure of the two policy subfields. Yordanka Chobanova (European University Institute, Italy) E-Mail address: yordanka.chobanova@iue.it Global Strategies of MNCs in the Food Industry With the EU enlargement, the companies from Central and Eastern Europe (CEE) face a challenge of increasing their competitiveness in order to survive in the EU market. In other words, the CEE firms are motivated to upgrade permanently. A crucial role in this process is played by the Western Multinational Companies (MNCs) involved in local production networks, as they can help in the upgrading of local firms by transferring know-how, technologies, managing skills and innovations. In this sense, it is important whether, and how deeply, the subsidiaries of the MNCs are embedded in the CEE region. In particular, I argue that beneficially embedded are these subsidiaries, which are a part of the local production network, i.e. work with local public and private institutions (business agencies, research centers and universities, financial institutions, regional and local authorities), and help for the upgrading of their local suppliers. The aim of the paper is to explore Western MNCs investing in the food industry in CEECs. The question that drives the paper is: what are the investment strategies of particular Food Multinational companies in the CEE region? To answer the question I analyze the strategies set up in the headquarters (HQ) of the biggest food MNCs investing in CEE - Nestle (Switzerland), Unilever (England-Holland) and InBev (Belgium). The global strategies of these companies toward their CEE subsidiaries present the current and near-future level of industrial integration between Eastern and Western Europe. In-depth interviews have been conducted with the directors responsible for the CEE region at the headquarters of the above-mentioned Multionationals. The CEOs have been asked a standardized questionnaire with open and closed questions, which test the affinity of the MNCs to embed in local economies. Vladimir Cvijanovic (The Institute of Economics, Zagreb, Croatia) Domagoj Racic (The Institute of Economics, Zagreb, Croatia) E-Mail address: vcvijanovic@eizg.hr; dracic@eizg.hr Privatization, Institution Building and Market Development: The Case of Croatia The paper discusses the co-evolution between the privatization process in Croatia and its socio-political context, including the socialist and wider institutional legacies, the processes of institution building and the distribution of political power during transition. The outcomes of privatization and institution building are discussed in terms of their impact on the development of product, labor and capital markets. Privatization in Croatia was primarily embarked upon out of political and budgetary necessity, rather than as a means toward technological and managerial upgrading of companies that would develop their competitiveness, contribute to more efficient product, labor and financial markets, and have positive impact on the economic and political integration into the European Union. Although privatization and institution building were expected to contribute to the constitution of a strong private sector and legal and social prerequisites for its effective functioning, both of these processes have been mismanaged to a significant extent. The patterns and outcomes of privatization have channeled broader development of the Croatian economy, and are likely to continue doing so. Julio Cesar Donadone (Federal University of Sao Carlos, Brazil) Email Address: donado@power.ufscar.br From Survey's Bank to Eva: The Influence of Financial Logic in the Corporate Governance and the Growth and Importance of the Consulting Firms. The present study intends to contribute to the understanding of the growth and importance that consulting firms gained in the 1990s, focusing on the process by which understanding and representations about the organizational world were being colonized by financial logic, and more explicitly, how the change in corporate governance. The analysis centers starting with two reference points. First, the international consulting market, seeking to identify its characteristics and major changes over recent decades and the relationship of the finance aspects on the formation and development of consulting market. In the second part, the focus is on changes in the business and management over recent decades, specially in the 90s as a way of visualizing the activity of managers and corporate governance in the face of the new organizational shapes and demands with the mergers, acquisition and fusion process, referring to the formulations that come to support the concepts associated with the growing influence of financial logic in the ideas and tools about the organizational forms and management's activities, specially focusing on the process of redesign organizational and diffusion of the Balance score card and EVA. Shawn Donnelly (Bremen University, Germany Politics of the European Company What advances and hindrances have national negotiators in the EU experienced over creating European company law? This paper draws on document, interview and field research on four related pieces of legislation that form the foundation of the Societas Europea (SE): the European Company Statute of 2001, the Takeover Directive of 2004, The Cross-Border Merger Directive of 2004 and the pending Migration Directive. How do we explain the legislated retention of barriers to free incorporation and restructuring in the single market despite contrary rulings of the European Court of Justice? What are the implications for the politics of the European Company? Fabrizio Ferraro (IESE Business School, Spain) E-Mail address: fferraro@iese.edu Engineering Sociability: Local Action in Silicon Valley Entrepreneurship This paper investigates how entrepreneurs in Silicon Valley created, maintained and mobilized their social capital, in the process of raising financial resources for their start-ups. I identified three stages in the process: initiation, cultivation and transformation. In each stage, entrepreneurs were engaging in a number of "relational practices" which are embedded in the cultural and institutional milieu of the region and constitute an essential component of entrepreneurial work. The findings of this study suggest that even when entrepreneurs did not receive funding as a result of their networking activity, they enjoyed additional unexpected advantages in terms of idea refinement and role development. What entrepreneurs did in the process of building their networks was shaped by the cultural patterns and schema that constitute the fabric of the local community. This entrepreneurial "local action" (Leifer, 1991)is embedded in a social form that emphasizes expressive action in a context of instrumentality. Borrowing from Simmel (1949), I called this social form "engineered sociability". Local action and sociability shed lights on two different aspects of the same phenomenon and provide a perspective for understanding how social capital can be built and how the entrepreneurship process works in Silicon Valley. Gerhard Fuchs (University of Stuttgart, Germnay) E-Mail address: gerhard.fuchs@soz.uni-stuttgart.de Who is Who in Virtual Organizations? Some time ago virtual organizations were heralded as a new form sui generis of organization: more flexible, more productive than the usual time and place bound type of organization. With the hype of the internet economy gone, interest in virtual organizations has dropped significantly. Attempts to create a sociology of the cyberspace vaguely try to reestablish a certain interest. Nevertheless a number of virtual organizations in fact have come into existence and are operating. Far from being totally fluid entities they struggle with questions like: Who is the person I am dealing with? How is s/he doing at the moment? Is s/he still committed to our project? How can I measure what is going on? What matters - besides work progress? Based on twelve case studies of virtual organizations the socio-cultural preconditions for an effective virtual organization will be discussed. Peder Inge Furseth (Norwegian School of Management, Norway) E-Mail address: peder.i.furseth@bi.no Social Networks and Friendships Among Competitors Traditional economics postulates that managers do not have social relationships, i.e. they are atomists. In this paper however we present unique findings about the existence and strength of friendships among managers in competing companies. Furthermore we analyze the impact such relationships have on competition and price setting. The analysis builds on personal interviews of 190 store managers in the clothing business. The paper reports that the managers meet often and exchange a lot of business information. A considerable part of the managers know about aspects of their competitors that are not publicly known, like what mark-up factors they apply. Most managers have weak friendships with all local competitors. About one out of four managers has strong friendships with managers of competing stores. The postulate in traditional economics that actors are atomistic is therefore refuted. Furthermore we find that friendships among managers in competing stores reduce the degree of price competition with 10-15 per cent. The empirical material also indicates that strong friendships have greater effect on the reduction of the degree of price competition than do weak friendships. The friendships do not however lead to higher prices on the local markets. Zoltan Gal (Centre for Regional Studies, Hungarian Academy of Sciences, University of Kaposvár, Hungary) E-Mail address: galz@rkk.hu Spatial and Structural Development and The Expanding European Integration Of The Hungarian Banking System The paper is concerned with the development stages and the spatial transformation of the Hungarian banking system in the economic transition & post-transition periods. It gives an overview of the development tendencies of the financial re-integration into the global market and particularly concentrates on the spatial polarization factors (concentration - de-concentration; centralization - decentralization) which affect banking. The paper explores the arguments behind the extremely high centralization of headquarter functions in Budapest and the factors that have impact on the establishment of locally-regionally based banks. This is followed by an introduction of the different organizational (institutional) and territorial (location strategies) level of the Hungarian banking system, dealing with either the domestic or the international financial central-function of Budapest and the reorganization of the bank network and with its social consequences (financial exclusion) in the regions. The paper argues that EU membership is not a dramatic event in the integration process of the Hungarian banking sector, partly due to its particular ownership structure, the integration of the banking sector has already taken place. The paper concludes that the EMU integration could have been affected more adversely the Hungarian regions already characterized by the endogenous disparities, which are to a large extent rooted in the deficiency of their financial base. Martin Giraudeau (University of Toulouse 2, France) Jean-Pascal Gond (University of Nottingham) David Martin (University of Toulouse 2) E-Mail address: giraudeau@univ-tlse2.fr; jean-pascal.gond@univ-tlse1.fr; dmartin@univ-tlse2.fr Disciplining Students and Markets: How to Embed Newcomers in Economics Thanks to "Market Games" The purpose of this paper is to inform empirically the dynamics of cognitive embeddedness in economics. This is done through an ethnographic analysis of "market games" organized by French professors as an introduction to microeconomics for their undergraduate students. We studied the whole pedagogical process: conception, preparation, and the game itself. Interviews were conducted with the inventors of the game, animators and students. Game sessions were observed. Market data (result-sheets) were collected. Our analysis of these games reveals the existence of three distinct "disciplines", each one progressively embedding actors in economic theory. The first discipline is that of the economy, and passes by the situational enforcement on students of rules and devices allowing them to count in the market. The second discipline is that of economists, and consists in the socialisation to the professional community through the organization of these ritual games. The third discipline is that of economics: games imply turning the theoretical academic contents into practical mundane tools. These three disciplines differ in their temporality and scope, and therefore show three levels in the dynamics of performing the ever over-flowed frame through which actors can be embedded, as economists, to economics, and to the economy. Anastasia Gnezditskaia (George Mason University/CEU, USA) E-Mail address: pphgna01@phd.ceu.hu The Upshot of a Passive Institutional Design: The Privileged Assets and Murky Liabilities of a 'Most People's Bank' in Russia The paper analyses the profit strategies of the Russian State Savings Bank Sberbank, which currently dominates the country's banking market. It links the functioning of what is called "Russia's ministry of cash", "the most people's bank" and "natural monopolist" to the vicissitudes of an institutional design strategy chosen by the Russian reformers early on during post-Communist transition. This kind of institutional path signified that along with creation of de novo commercial banking sector, the state has retained certain Soviet institutions, that were wholesale transferred into the new socio-economic reality without undergoing any change in ownership, technological or financial capacities. The paper analyzes how Sberbank's high involvement into financing state debt, its domination of deposits market via enjoying state guarantees, its "lopsided" involvement into funding fuel and energy projects and artificially low lending rates render it dominant on major market niches and thus constrain the operations of commercial banks. This leads many analysts to believe that Sberbank plays a rather negative role in the Russian economy, despite its high profits. Francisco J. Granados (University of Minnesota, USA) E-Mail address: Granados@socsci.umn.edu Market Globalization of National Industries: The Case of the Spanish Pharmaceutical Industry The sociological approach to the study of markets is especially appropriate to examine the globalization of industries. Sociologists stress the importance of cultural and regulatory contexts of markets, and how these institutional frames influence business practice while also become infused with economic logics. Adopting these central tenets, I propose a theoretically grounded definition of market globalization that focuses on how domestically or internationally embedded are the two key aspects of the configuration of a market: its key determinant for firm competitiveness, and the array of product quality levels and associated valuations constituting the market. Based on that definition, I assess and explain the market globalization of the Spanish pharmaceutical industry. I investigate how cultural and political institutions supporting the initial domestic configuration of that industry's market are overridden by a different set of institutions supporting an internationally embedded market configuration. The analyses consider multifaceted evidence (21 interviews with key SPI insiders and qualitative and quantitative secondary data, e.g., data on over 600 firms for 1965-2003). I also consider the effect of the new global market configuration on national pharmaceutical innovation and the economic viability of different business strategies, and theoretic implications for the study of markets and economic efficiency. Roberto Grun (Universidade Federal de São Carlos, Brazil) E-Mail address: rgrun@uol.com.br The New Uses of Corporate Governance in Brazil After the importation of Corporate Governance American-Style (CG) in Brazil by the hands of Financial, Economic and Legal academic people, we saw a kind of CG's appropriation by Pension Fund money managers closest to leftwing politicians. Now we are seeing new groups among the Brazilian elites trying to take their part of this new, and appetizing, pie. Firstly we can see the founders of Porto Alegre World Social Forum. In the 90`s, they heralded the lack of "social responsibility" of Brazilian Enterprises and preached the steps to fulfill this absence. In Brazil as a consequence of Enron's scandal, social responsibility is seeing as a device to control moral hazard. So, the trade of Social Responsibility, once an insulated pack close only to philanthropic concerns, become an arm of CG, enhancing the perspectives of both this new brand of Moral Entrepreneurs and the CG's consultants. The first-ones are having access to corporate budgets and the seconds polishing their reputations as "socially concerned". Finally, a new kind of concern is been tailored by the CG language. In the Brazilian biggest economic groups, succession and the relations between shareholders, mostly members of the first owners` families, is been regulated by devices inspired in CG's literature. The devices are the "Family Desks" and "Family Councils". Previously, those groups practiced "pre-Napoleonic" forms of succession between generations, conceding the business to one "Chosen" of the kin and transmitting the properties non-related with the main business to the others. Now the CG-like tongue allows the changing of practices. Of course the changes were already in the way before the passing of CG bandwagon, but CG brought a legitimated "spell" to talk about those concerns. Based in those observations, my aim is: (1) to show that when we want to know why CG is spreading so fast in Brazil we need to consider CG more as a very plastic cultural device than as a economic tool; (2) As part of financial realm, Brazilian's CG shows how financialization and globalization is spreading; (3) In the Political sphere, the spreading of CG shows the convergence of the previously antagonistic sectors of Brazilian elite, giving stability to our Capitalism but freezing the expectations of a deep change in one of the most unequal National economy on the Earth. Brooke Harrington (Brown University, USA) E-Mail address: Brooke_Harrington@brown.edu My Portfolio, Myself: Mental Maps and Everyday Ontologies of the Stock Market A major change facing publicly-traded firms in the new century is the rise of individual investors to financial and social prominence. The 1990s saw an explosion in the number of Americans investing in the stock market, yet little is known about the probable impact of this new majority on corporations and management. The present study explores this question through observation of and interviews with amateur investors, seeking to understand how they view publicly-traded firms and understand their relationship to them as shareholders. The goal will be to identify and analyze the forces likely to be significant for firms in the coming years. The data suggest that corporate ethics and identity will increase in importance, as shareholders demand that the firms in which they invest reflect and enhance their self-concepts. Participants in this study experienced conflicts between their burgeoning identity as investors and their self-concepts in terms of ethics and gender. Thus, they made choices among firms based not only on expected economic returns, but also on the consistency of a firm's identity with their own self-image, as men, women and moral people. Abby Innes (London School of Economics, United Kingdom) E-Mail address: innes@lse.ac.uk From Soft Budget Constraint to the Budgetary Straitjacket: Why Central European States are in a Serious Developmental Bind The main proposition of this article is that, rather than being able to move quickly beyond building the basic institutions of the market to a more strategic and system-balancing approach to state intervention, even the most prosperous Central European states have marketised, only to find themselves with extreme versions of 'post-industrial pressures', as also experienced by the mature welfare states of Western Europe, i.e. low productivity growth, aging populations, growing welfare costs. In addition, however, they continue to grapple with the inherited legacies of communism: high structural unemployment and the necessary re-alignment of skills in the economy. These pressures, moreover, confront a region that has already experienced years of fundamental restructuring, deteriorating infrastructure and rising inequality, all in a context of relatively low political partisanship. The article proposes that the incapacity of these states to escape this developmental bind has a serious effect on party political development in CEE; that this incapacity induces, in effect, a magnified version of the disrupted constituencies and cleavages that state reform is inducing in Western Europe. Juliet Johnson (McGill University, Canada) E-Mail address: juliet.johnson@mcgill.ca Is Eastern Europe's Institutional Convergence with the West Sustainable? Czech and Hungarian Central Banking after Enlargement Since 1989, central banks in East Europe have been transformed from command-economy cash cows into Western-style guardians of price and currency stability. However, international factors, not domestic demand, fuelled this transformation process. The collapse of the Soviet bloc provided the initial opening; the assistance efforts of the transnational central banking community facilitated central bank development; while the requirements of EU membership provided a blueprint for transformation. In this paper, I develop Kathleen Thelen's observation that institutional transformation must be distinguished from institutional reproduction; merely creating an institution does not mean that it can maintain and further develop itself in the future. In this case, while central bank "creation" required external intervention, "reproduction" demands that the banks develop domestic support and achieve economic results. Therefore, this paper asks: 1) To what extent have East European central banks developed domestic support for their altered missions?; and 2) To what extent have these countries attained the promised economic benefits of central bank independence? I investigate these issues through case studies of the Czech and Hungarian national banks, drawing on extensive interview data and primary source material. Eric Kaldor (Rutgers University, USA) E-Mail address: ekaldor@sociology.rutgers.edu The Costs of Foreignness in an Emerging Market: The Case of Hungary's Commercial Banking Sector This paper explores the costs of foreignness for firms entering emerging markets. Both neoliberal economists and dependency/world-systems theorists expect firms from advanced capitalist economies to dominate in emerging markets. However, neoliberal approaches ignore the pre-existing structures of emerging markets, while world-systems approaches ignore the organizational complexities of multinational enterprises. This paper assesses the costs of foreignness in Hungary's commercial banking sector. I analyzed bank profits between 1995 and 1999 using econometric panel analysis methods. This analysis shows that foreign ownership was a significant source of disadvantage. Foreign-owned banks were particularly disadvantaged with poorer returns on their organizational size. When expatriate CEOs represented foreign owner's interests, banks had better returns on their assets. However, expatriate CEOs achieved lower returns on their bank's organizational size. Banks did achieve better returns on their organizational size as representation of Hungarians among the banks top management increased. Significantly, this effect was magnified at banks with an expatriate CEO. Instead of simply transferring their banking techniques and knowledge from developed economies, foreign banks and expatriate CEOs had to adapt to the Hungarian market. Organizational conditions that facilitate local knowledge use and transnational collaboration are critical for this adaptation. Seishi Kimura (Fukushima University, Japan) E-Mail address: s.kimura.97@cantab.net Industrial Upgrading in Global Value Chains: Analytical Framework This paper proposes an analytical framework to understand how suppliers in Global Value Chains (GVCs) may achieve industrial upgrading. Based on the in-depth fieldwork on the Japanese aircraft industry, we identify four significant factors underlying the upgrading process. Those factors are (1) the nature of lead firm's sourcing, which pursues either 'short-term cost reduction' or 'long-term value creation'; (2) supplier's learning capabilities to meet the deepening trends of GVCs; (3) lead firm's control over suppliers' activities within GVCs; and (4) the nature of institutional setting, in which suppliers are locally embedded. Such local institutional setting in turn consists of 'industrial networks' - a collection of various relationships that suppliers maintain with other organizations - and 'policy networks' among business associations, technology centers, and government agencies. The analytical framework expounds the logics behind those factors -why they are significant and how they interrelate with other in the suppliers' upgrading process in GVCs. It derives theoretical insights from various streams of literature, including supplier research, resource-based strategic management, and systems of innovation. It is also briefly operationalized by referring to the upgrading process of the Japanese suppliers in the commercial aircraft GVC led by the Boeing. Tamas Kiss (Democratic Alliance of Hungarians in Romania Executive Presidium, Romania) E-Mail address: t.kiss77@rmdsz.ro Biographical Narratives of Entrepreneurs from Transylvania My paper presents research based on the narrative-biographical interview method elaborated by Gabrielle Rosenthal. We made interviews with 35 entrepreneurs from Transylvania in 1999, and a follow up research in 2004/2005. The paper follows the strategies of self-representation and the identity patterns in the biographical narratives. These strategies were determinate on the one hand by the lived life, and the discursive context of the society on the other. Mandy Krauter (Chemnitz University of Technology, Germany) Andrea Sieber (Chemnitz University of Technology, Germany) E-Mail address: asipi@informatik.tu-chemnitz.de; @informatik.tu-chemnitz.de Changes and Innovations in Cooperative Economic Relations In our research project we found that cooperative actions of small software companies in Germany and the US are based on social relations. In most cases the cooperation practices of the company are determined by the CEO's cooperation attitudes and actions -their cooperation pattern. This pattern has an influence on how staff within the company is working together and how the company cooperates with other business partners and organizations. Four different patterns have been reconstructed from the empirical data: Non-Active, Control-Type, Participator, and Initiator. They result in a specific set of relations being relatively stable. A further question is how changes occur in these patterns and therewith in these stable settings. Changes and especially innovations are processes influenced by motivation, personal, management and organizational characteristics, and the financial situation of the company. The reconstruction of these processes based on our empirical data shows certain methodological difficulties. Therefore it is necessary to develop an approach, which can evaluate change under different perspectives. Soo Hee Lee (Birkbeck College, United Kingdom) Hee Sun Kim (Birkbeck College, United Kingdom) E-Mail address: s.lee@bbk.ac.uk The Estimation of Contagion Effect in the Asian Financial Crisis: A Test of Conventional Wisdom This paper critically assesses the causes and consequences of the East Asian financial crisis characterized by decline in GDP rates, devaluation of national currencies, stagnation of export growth, capital flight, large current account deficit, excessive foreign borrowings, and contagion effects. To test the validity of the neoclassical wisdom of crony capitalism, we empirically investigate a number of channels for contagion such as financial integration, trade linkage and macroeconomic similarities to explain why currency crises are regional; and also, whether financial market linkage and trade linkage are important in explaining the currency crisis. For the purpose, the ADF test, co-integration test, correlation coefficient test and Granger causality test for financial variables (stock indices, real exchange rate, etc.) in five East Asian countries (Thailand, South Korea, Malaysia, Philippines and Indonesia) are performed to find which factors have more important role in transmitting the contagion of the Thai crisis. To develop policy implications, additional comparison of different features of Mexican with South Korea crises is presented to explain why both countries experienced severe economic recessions with debt crisis, currency crisis and banking crisis. Finally, we develop a political economy perspective of the crisis and policy implications. Soo Hee Lee (Birkbeck College, United Kingdom) Suk Bong Choi (Birkbeck College, United Kingdom) E-Mail address: s.lee@bbk.ac.uk Corporate Governance Reform in Emerging and Transition Economies: The Case for Institutional Divergence This paper explores the causes and consequences of corporate governance reform in transition and emerging economies drawing from the institutional theory strand of the comparative corporate governance literature. In particular, we examine the paths of institutional change in these countries and consider the merits and limitations of convergence versus divergence theories. To build a compelling case for institutional divergence, we try to extend Roe's concept of political path dependence Lazonick's analysis of social conditions and innovative capabilities, O'Sullivan's political economy of change and Dore's preconditions argument for institutional change. Our analysis will highlight two prominent cases of corporate governance reform in Asia, Korea and China, with some comparative lessons of institutional design for other emerging and transition economies. The central idea underlying our analysis is that the conceptions of corporate governance rooted in market primacy and agency problems are not only limited in their politically biased prescriptions of policy privileging shareholders and top managers over other members of the society, but also fundamentally flawed in their understanding of unidirectional institutional convergence divorced from political, social and ethical foundations. Xavier Lemaire (University of Warwick, United Kingdom) E-Mail address: Xavier.Lemaire@wbs.ac.uk Energy Reforms in Developing Countries: Can the Market be Regulated to Promote Renewable Energies and Energy Efficiency? In developing countries, there has been a focus on large scale remote power generation using coal, oil and gas. In a similar way as in developed countries, centralized energy generation and long distance transmission systems have been favored to the detriment of decentralized renewable energies like solar photovoltaic systems or wind power generation. The energy market reform - privatization and liberalization - in itself may not change this situation. In fact, the current process of privatization may push companies to keep on with established technologies and networks, which will lead to the upholding of energetic systems that are now generally considered as unsustainable. It appears that standard regulatory mechanisms are not conducive to renewable energy, energy efficiency and distributed generation sources. Relying on case studies, this paper presents regional and local initiatives taken to foster sustainable energy through the implementation of a regulatory framework. This approach is supposed to create a level playing field for renewable energy and energy efficient systems in order to curb current trends of energy consumption in developing countries. This paper analyses the representations of the market that underlie the regulatory attitude and how regulators structure the energy market. Ann Lennarson Greer (University of Wisconsin-Milwaukee, USA) E-Mail address: agreer@uwm.edu The Struggle to Adapt: The Transformation of U.S. Nonprofit Organizations and Community Service to Competitive Bid Over the last thirty years, organizations providing nonprofit health and human services in the United States experienced pressure to re-constitute their operations financially and organizationally in order to function as multiple service competitive organizations. Hospitals integrated vertically and horizontally to compete for private sector contracts. Community mental health agencies grew dependent on government contract. Both accepted models are drawn from the business world including organizational structure and techniques of management, finance, performance measurement and accountability. Drawing on interviews with members of boards of governors, this paper examines 1) how directors juxtaposed old and new concerns including charity and profitability, the smaller community and the larger whole, voluntarism and contract, particularism and universalism; 2) the ascendance of the logic of efficiency and cost effectiveness over alternative values like professional discretion and client responsiveness. The analysis rests on over one hundred personal interviews with hospital and mental health center board members in the United States as they evaluated pressures to change. I look at patterns across a number of organizations to identify the extent to which alternative options were advanced and defended, how and by whom they were advanced or defended, and how they failed. Renato Lyra (Pontifical Catholic University of Rio de Janeiro, Brazil) E-Mail address: renato.lyra@ig.com.br Evaluation of a Performance Construct for Strategic Alliances This paper evaluates a construct designed for performance analysis in Strategic Alliances, originally proposed by Ario (2003), based on a research with 42 Brazilian companies. We also compare our results to the original study that was prepared with two samples of Spanish companies. We analyze the validity of measurements as the general satisfaction, the fulfillment of strategic goals, and the existence of spillover effects as indicators of alliance performance, as well as the use of operational measurements as longevity, contractual changes and survival. Our results support that these measurements may be good indicators of alliance performance and that they are related to a common factor, except for the contractual changes. We then further the investigation proposing a Multiple Indicators Multiple Causes model by adding measurements as the equilibrium between the allies, adaptive capacity, compatibility and dependence. Our results support the use of the new model for the analysis of alliances, and points out that the existence of equilibrium and adaptive capacity between the allies are strongly related to alliance performance. Alexandre Mallard (France Telecom R&D, France) Sophie Dubuisson (Centre de Sociologie des Organisations, CNRS, France) E-Mail address: alex.mallard@francetelecom.com; s.dubuisson@cso.cnrs.fr Small is Beautiful!: On the Plurality of Market Models and Calculative Practices for Very Small Businesses Producing knowledge about the markets has become a very important task in the economy. Industrial companies and services providers spend a significant amount of time and money in consumer research, market tests, prospective studies that produce a continuous flow of data concerning their position in current and future markets. Small economic actors also have to calculate in order to adapt to their markets, but usually they can't afford the financial and organizational resources that large companies invest in this task. How can they perform this work? What does it mean exactly to calculate the market for a butcher, a doctor, a lawyer or a small civil engineering contractor? In this contribution, we propose to carry out an analysis of the calculative practices for small professionals and Very Small Businesses (VSBs). We will draw on a qualitative study that has examined the economic practices of a sample of 30 small professionals working in various areas of commerce and services. The analysis shows that there is a plurality of possible models of relations between the firms and the market. The contribution will explore the various processes, communicative and cognitive tools, tacit knowledge, and mundane and sometimes messy practices through which these professionals are tuned into the demand in order to perform their local markets. Cristina Matos (University of Minho, Portugal) E-Mail address: crism@eeg.uminho.pt Post-socialist Transformation and Institutions: Competing Approaches and Challenges The notion of institution has been increasingly used in economic literature. We propose post-socialist transformation was one of the causes behind this conceptual expansion in the late 1990s. In this paper we aim to 1) demonstrate the increasing institutionalism has related to the multiplication of its meanings; and to 2) outline the challenges faced by an institutionalist framework of post-socialist evolution. 'Washington consensus' late 1990s revisions have encompassed the introduction of institutions, defined as solutions to asymmetrical information problems. North's definition of institutions is broader and encompasses mental models and holds distinct implications to post-socialism. Conversely, Hayek has stressed the implicit, cognitive, character of economic institutions, which evolve through the selection of groups adopting them. Kornai's (1993) systemic coherence and institutional affinity derive from such a model of selection. A fourth institutionalist analysis originates from original American institutionalism. These authors underline, particularly path dependence, defined as a branching process entailed by both previous and more recent reforms. After reviewing these alternative institutionalisms, we outline the main challenges faced by an institutionalist approach to post-socialist evolution. We particularly focus on systemic uncertainty, emergence and constructivism in post-socialist institutional evolution. Gabriela Nava-Campos (Northwestern University, USA) E-Mail address: g-nava@northwestern.edu Performance Under Pressure: Decision-Making Authority and the Resolution of Financial Crises Financial crises have been common during the last two decades and, although recent episodes have been located in developing nations, they have affected rich and poor, democratic and non-democratic countries. To avoid a major collapse, governments tend to support their financial systems and this, in turn, affects the course, duration and socio-economic costs of the crises. Both independent analysts and international organizations have emphasized the importance of timely and effective government action to contain and resolve these distressful events. Little is known, however, about what determines such timeliness and effectiveness. My paper addresses this problem and argues that governments perform more effectively when they are better equipped to handle political conflict. Resolution of financial crises is thus more successful when market governance resources are concentrated in the smallest number of organizations, and when the executive has greater control over the legislative agenda. To test these claims, a series of statistical experiments were conducted on a sample of 63 country-crisis episodes. The results support the hypotheses and suggest that crises tend to be more severe and their resolution more delayed when decision-making authority is more dispersed both inside the financial market governance structure and between political institutions. Mihai Paunescu (IAAEG, Germany) Martin Schneider (IAAEG, Germany) E-Mail addresses: paunescu@iaaeg.de; schneider@iaaeg.de Empirical Varieties of Capitalism: Comparative Advantages and Dynamics during the 1990s In this paper, key implications of the varieties-of-capitalism approach by Hall and Soskice (2001) are tested on data for 26 OECD countries. In cluster analyses with detailed institutional variables, we find: Liberal market economies (LMEs) and coordinated market economies (CMEs) have markedly different institutional configurations, as predicted. Japan is a unique case. Switzerland is not a CME but an LME. A Mediterranean cluster and central European cluster evolve from the data. A comparison over the period 1990-1999 shows considerable institutional change: The Netherlands, Denmark, and Finland went all the way from the CME cluster to the LME cluster. Hall and Soskice (2001) predict that LMEs will specialize in high-tech industries, and coordinated market economies will specialize in medium high-tech industries. We test this hypothesis with three independent variables: the export share of the high-tech sector, the export share of the medium high-tech sector, and the relative contribution to the trade balance of the high-tech sector. We find that LMEs and CMEs specialize as predicted. Even more strongly than the CMEs, the Mediterranean economies and the central European economies specialize in the medium high-tech sector. Gubor Peli (University of Groningen, The Netherlands) Jeroen Bruggeman (University of Amsterdam, The Netherlands) E-Mail address: g.peli@eco.rug.nl; j.p.bruggeman@uva.nl Organizational Trade-offs in Changing Markets The paper concerns three trade-offs between organizational strategies under changing market resource (demand) conditions. (1) When temporal resource states stand for quantitative differences (like conjunctural periods and depressions), in beneficial periods organizations may seek immediate advantages or may invest in reserves (network ties, institutional positions) dampening their growth ("cricket" vs. "ant" strategy). (2) In emerging markets, firms may become "first movers" and flourish until the market is crowded. Alternatively, they may choose an "efficient producer" strategy: more investment and delayed entry but competitive advantage in crowded markets. (3)Having qualitative resource differences (like changing customer tastes), organizations may excel in a single resource state ("specialism") or adapt to different states but at the cost of excellence ("generalism"). The success of a strategy depends on the pattern of resource changes. Market conditions are characterized by three variables: variability (one resource state prevails or not), dissimilarity (the difference between states) and grain (the average length of states). These dichotomic variables imply eight change patterns. We show that a single model can imply the selection-favored strategies in the eight patterns for (1)-(3). For (1), we derive new findings. For (2)-(3), the model reproduces existing results of organizational ecology. Dora Piroska (Central European University / IE, HAS, Hungary) E-Mail address: piroska@econ.core.hu Small Worlds of Finance: Evolution of the State Role as Bank-owner in Post-socialist Cases In this paper, I am concerned with the evolution of a specific set of institutions, which correspond to the state's bank-owner role in Hungary and Slovenia in the increasingly integrated international financial market of the 1990s. I will proceed by examining first the most important global developments in the state bank-owner function. In the next step, I will contrast these developments with the actual changes in Hungary and Slovenia. The purpose of drawing an overall picture of the international development is to establish a baseline and conceptual foundation for examining and theorizing changes in the two selected countries. The proposed approach is also Weberian in as much as I assess empirical realities in the two countries by mapping onto them ideal-typical (here formulated as "international") transformations. In this way, the assessment of the international developments allows at the same time to consider their common constraining impact upon the two cases as well as to better appreciate the differences between the Hungarian and Slovene states' roles, in two small and structurally similar economies. Aaron Pitluck (University of Konstanz, Germany and University of Wisconsin Madison, USA) E-Mail address: Aaron.Pitluck@uni-konstanz.de Honest Brokers & Informers in a Brokered Semi-Anonymous Market Interdisciplinary research in social networks has theorized two ways in which networks of agents and their brokers form information networks: pipes and prisms (Podolny 2001). The empirical literature to date has generally used the aggregate network as the unit of analysis, has been primarily quantitative in methodology, and has to date not examined an information network as both a pipe network and a prism network. I addressed these lacunae by conducting over 100 tape-recorded focused-interviews with stock market fund managers and brokers on the topic of their speculation. In the process, this chapter discovers that despite a discourse that brokers' informational content is insignificant (e.g. Zuckerman 1999, 2000, 2004), fund managers' prosaic and daily interaction with brokers involves receiving and incorporating brokers' information and interpretation in their decision-making. I add that intrinsic to the microsociological aspects of their telephone talk, broker-fund manager interactions are rife with "information games" such as abandoning the role of "honest broker" for one of Informer or Informant. The paper concludes that fund managers' interpretation of the market and their subsequent speculative behavior is bound with their microsociological and strategic interaction with their brokers over the telephone. R. Rajesh (Bangalore University, India) E-Mail address: rajesh_rr@hotmail.com Prominence of Social Factors in the Market Relationship The term 'command', probably has taken the back seat particularly after the collapse of communism (as a political system) and the open market (capitalism) is the only alternative available form of exchange. Subsequently, with the changes in the global phenomenon 'market' has gained more importance in the academic and practical world than ever before. Critiquing the neoclassical economics, this paper examines how economic exchange or 'market' is affected by the social and cultural contexts within which it occurs by exploring the actor dyadic relationship in a medium size city. The understanding of the product market reiterated the fact that the structure and social relationship has evolved over a period of time structuring the market socially, though economic ideas and notions predominated in the academic scene for quiet some time. Market activity adhering to social scenario reinforces that factors like community, caste, religion, we feeling, regional affinity, language affiliation work as catalysts in the market transactions. The 'economic' transactions and exchange of goods in the market is only the resultant of need or routine requirement of units whereas, the selection or preference of products on the one side and preference of shops particularly on the other is purely social in nature. C. Salles (IEP Paris-CNRS, France) E-Mail address: c.salles@cso.cnrs.fr Mutual Influences in the Evaluation of Risks and the Normalization of Therapeutic Uses : the Hormonal Replacement Therapy's Case Study. This research deals with the production and diffusion of medical information by public authorities and professionals, in the field of medical gynecology. More specifically it focuses on the debates around the benefits and risks linked to the therapeutic use of hormones in menopause treatments during the last 30 years. The use of hormones has become a medical issue, produced and conveyed through medical training and public information. The diffusion of this information presents 3 major characteristics : 1) it tends to be more and more present and controversial in the professional sphere; 2) it tends to be more and more popularized, accessible to women at large through the feminine press; 3) it has been more recently viewed as a major sanitarian and political issue after the publication of the 2002 Women's Health Study's results. I have been gathering data first based on the archives of several scientific publications and regular media. Secondly I have interviewed the professionals who have been involved in the sphere of medical information for 20 to 30 years. From this analysis of the opinion leaders, journalists, epidemiologists, pharmaceutical firms and public health's authorities come out diverse rationalities having taken part in these debates over the use of hormones in gynecology. Marc Schneiberg (Reed College, USA) E-Mail address: marc.schneiberg@reed.edu What's on the Path? Path Dependence, Alternative Organizational Forms and the Problem of Institutional Change Institutonalists typically conclude that the legacies of the past lock actors into particular institutional pathways, organized according to a dominant logic, taken-for granted set of understandings, or complementary constellation of interlocking elements. Such approaches help explain both cross-national differences in economic and political systems, and the endurance of distinctive styles or trajectories over time. Yet they create a theoretical impasse for explaining change-an impasse in which analysts either retrospectively recast transformations as elaborations of existing logics, or invoke exogenous shocks to the system to explain ruptures or radical discontinuity. On solution to this impasse has been an "externalist" argument that invokes transposition or translation and the recombination of "foreign" with "domestic" institutional elements as a possible mechanism for change. This paper suggest a complementary "internalist" or "structured alternatives" approach, which argues that even settled institutional systems are populated or littered with fragments of alternatives, abandoned paths, and the organizational legacies of prior conflicts over order. These elements and fragment can be revived, reassembled and recombined in the service of new institutional projects. And they constitute resources for actors to elaborate and sustain new institutional pathways within extant systems. Using data on organizational form and institution building in six American industries between 1875 and 1930, this paper develops this argument into a "structured alternatives" approach to path dependence theory. Such an approach preserves a role for structural constraint, institutional continuity and embeddedness, while foregrounding prospects and conditions for diversity, alternatives and institutional redeployment that conventional path dependence accounts commonly obscure. It also suggests new ways for explaining institutional change. Jolanta Solnyskiniene (Kaunas University of Technology, Lithuania) E-Mail address: jolanta.solnyskiniene@ktu.lt The Impact of Privatization Factor on the Corporative Governance, Changes of Property Structure and Its Control Effectiveness: The Experience of Lithuania Deeper research of the privatization as the phenomenon and as the process now are really interesting and topical, taking into account the fact that in order to know most of transformation processes in Central and East European (CEE) countries, the time distance is needed. Privatization in CEE has been and is one of the most important accelerators of transformational processes, therefore the analysis of the privatization essence, results and effects is very important, in order to reveal post-communistic reality. Privatization in CEE countries has became the key factor determining corporatisation process, initial property structure and features of the corporative governance system formation. Aspiration of the membership in EU has became new challenge and along with it new test to new democracy countries. The article analyzes how privatization factor influences property structure changes in CEE countries, how ownership structure influences enterprise activity effectiveness, and topicality. The test results about the change of the structure of the stock capital in Lithuanian joint-stock companies during the period of 1999-2003 as well as the change of the effectiveness/results of the enterprise activity depending on the ownership constellation of the control block of the shares were given. Peculiarities of the corporative governance were analyzed. Frans van Waarden (University of Utrecht, The Netherlands) E-mail: The Business of Distrust Newspapers in many countries are filled with fraud stories. All these cases have in common that information-asymmetries are abused for personal profit. They add to a major social problem: trust relations are undercut or even destroyed, between customer and supplier, investor and company, government and citizen, politician and administrator. The results can be disastrous: loss of legitimacy of politics and public administration, hesitation to engage in economic transactions, diving stock prices, bankruptcies, unemployment. Even if there is no intention of deception, scandals over the quality of products, services, suppliers, and government increase feelings of risk, uncertainty and distrust. Is beef still to be trusted, after the BSE-scandal? Distrust fuels calls for controls, but even the controllers turned out to be untrustworthy - cf. the Andersen scandal. Thus controls are piled on top of controls. The US Sarbanes-Oxley Act of 2002 has produced as least 7 levels of inter- and intra-organizational supervision of accountants. These new controllers join the already existing armies of public and private agencies that control, inspect, examine, monitor, supervise, check, verify, patrol, and test in the 'audit society' (Power 1997). Distrust and control have become booming business. Dutch private security personnel numbers already up to 75% of that of Dutch policemen. Lawyers smell new market niches; the number of private quality hallmark institutions is exploding; the threat of terrorism has expanded controls of people. In a first assessment, I have estimated employment in the Dutch 'control-industry' at 1.35 mln. jobs (Van Waarden 2003). That is almost equal to total employment in industry and construction. A strange society, where 20% of the working population earns a living by controlling others on behalf of yet others. But how otherwise to satisfy the need for jobs? Economists assume that transaction costs are there for transactions. But perhaps transactions are there for transaction costs? The demand is i nsatiable, as the upward spiral of controls on controls is indefinite: in the end the last level has to be trusted. The paper will: 1- try to estimate the size of this industry for various countries 2- identify some of the causes of growth, notably internationalization; increased mobility of products and people; increases in the scale and scope of production; longer chains of production and distribution; growth in size of organizations, including state organizations (the EU); greater scientific knowledge about risks; regulations and subsidies; and not in the last place deregulation, privatization, and liberalization. The public demands more controls on performance of (privatized) public services: transport companies, hospitals, schools, police departments. 3- identify some of the consequences, notably for the bureaucracy, efficiency, reputation, and legitimation of the various services. The argument will be: It increases bureaucracy, reduces efficiency, and does not reduce feelings of uncertainty, insecurity, and distrust. 4- What institutions are to ensure trust in the controllers of last resort? What is their source of authority? What stops an ever increasing spiral of control upon control? Gilles Verpraet (CNRS, France) E-Mail address: verp@ehess.fr Evaluation and Stakeholders Configuration in Urban Conversion The economic and urban conversions need a specific articulation between evaluation frames et stakeholders framework when the initial evaluations (planning forecast, housing programs) are one part of the guidance solution. European comparative survey set up the possibility of some other evaluation frameworks combining with the specific systems of actors and stakeholders: - The quality evaluation of each action with their relative stakeholders, city users and community expectations - The socio economic evaluation of service implementation and of the attractiveness of the area. - A specific combination between infrastructure investment and service investment following the definition of the new economy requires also an evaluation. So can be framed the different evaluation actions inside a dynamic sequences of actors and stakeholders - To refine programming inside the new economic and infrastructure combination - To settle the quality of evaluation of each actions with city users - To specify the different coordinations (plan, program, dynamic, change in stakeholders system) with their capacity of deliberation on the criteria of evaluation, on the different system of evaluation (arbitrage of each action, perequation of each actions) So can be discussed in dynamic processes, the specific relations between coordination and evaluations proposed by the convention theories (Boyer and Orlean, 1994) Eduardo Villegas H. (Universidad Autónoma Metropolitana, Mexico) Mercedes Fajardo Ortiz (Pontificia Universidad Javeriana, Mexico) Rosa María Ortega Ochoa (Universidad Autónoma Metropolitana) E-Mail address: evillegash@hotmail.com; fajardom@puj.edu.co; rmortegao@hotmail.com Valuation of Sugar Industry in Colombia The purpose of this work is to define the main characteristics of sugar industry in Colombia for evaluating how the enterprises in this industry create value and then to calculate whether these companies were facing bankruptcy. The main variables will be related to the strategic decisions and how the variables related to these, make the industry create or destroy value and how these companies faced the possibility of bankruptcy. The work will be based in the work of Ochoa, Quiroz and Velarde "Rion, Geo y Valore, Tres Instrumentos para Generar Valor" (Rion, Geo and Valore, Three Instruments to Generate Value). The main objectives of our work are: o To reach an approach where corporate strategy concepts may be applied in the sugar industry in Colombia. o To valuate, even without a sound financial market, whether the sugar companies in Colombia were creating economic value. The specific objectives are: o To find out the main characteristics of the sugar industry companies in Colombia o To adapt the use of "Rion, Geo & Valore" to these companies in Colombia. As a conclusion, we will adapt a model of value that may be applied to similar companies in Latin America. The work begins with the historical sugar industry, the corporate strategy concepts and the financial concepts known as "Rion, Geo y Valore." Tino Vordank (Chemnitz University of Technology, Germany) Ralf Wetzel (Chemnitz University of Technology, Germany) E-Mail address: tino.vordank@wirtschaft.tu-chemnitz.de; ralf.wetzel@wirtschaft.tu-chemnitz.de Developing Organizational Reflexivity: A Case Study of Intervention and Diffusion While Implementing a PM-Tool Theory and practice are facing a plethora of management tools designed to meet specific organizational needs. The management literature is full of overwhelming success stories concerning the implementation and use of tools like BSC, TQM, etc. Empirically, most of them turned out to be part of "managerial fads fashions" with no stronger impact for the organization. The introduction and diffusion of such tools and concepts faces profound problems, especially after a "career" of failed tool implementation: the personnel shows symptoms of "tool-resistance" and "change exhaustion" which usually jeopardize any further implementation processes. So questions arise on how to trace and to take into account positive and negative effects of tool usage on their diffusion throughout the organization. How should diffusion and intervention processes are designed to foster a sustainable tool usage? Reflexivity seems to be a promising concept for such a diffusion process. The paper figures out some meaning of reflexivity, conditions for a reflexive tool implementation process and a (surely paradoxical) suggestion about how organizational reflexivity could be created while implementing tools. We illustrate this with a case study and back this up with instructive insights from Innovation and Intervention Theory. Fernanda Wanderley (Universidad de la Cordillera, Bolivia) E-Mail address: wanderleyfernanda@hotmail.com Dense Networks of Relationships and Uneven Levels of Cooperation: The Limits of Social Capital for Competitive Markets The new economic sociology has argued that the networks of social relations and the broad institutional context are central to the expansion of production markets. From this perspective, competitive markets are not constituted by atomized economic actors. On the contrary, the consolidation of markets is the result of collective actions and cooperation between economic actors. However, not many studies have analyzed the social basis for cooperation in developing countries. The presence of spatial agglomerations of economic units or the existence of dense social relationships not always creates a business atmosphere with high levels of trust and cooperation between entrepreneurs adequate to economic growth. Many questions about the conditions that facilitate or restrict cooperation between competing actors are not answered. This paper presents the findings of a doctoral dissertation defended at Columbia University that analyzed why a socio-cultural milieu formed by ethnic, kin and neighborhood relationships as well as a rich associational life have not promoted the risk sharing between firms in core business transactions. My account for the presence of uneven levels of cooperation between firms focuses on the formation of small producers' collective identities which entails the articulation of communities of interests and the organization of joint efforts. Peter Waring (University of Newcastle, Australia) Tony Edwards (Kings College London, United Kingdom) E-Mail addresses: Peter.Waring@newcastle.edu.au; tony.edwards@kcl.ac.uk Socially Responsible Investment: Explaining its Uneven Development and Consequences Socially Responsible Investment (SRI), or investment which incorporates social as well as financial objectives, has been labeled by Sparkes (2002) as a 'global revolution' and there is widespread evidence of growing interest and participation in SRI debt and equity instruments. Yet SRI's uneven adoption across industrialized countries has given rise to a paradox: it appears that SRI is more significant and developed in countries without a strong tradition of 'social regulation' (for example, the United States and the United Kingdom) and far less developed in countries with a reputation for institutional protection of social welfare (continental Europe and Japan for instance). In this paper we map the nature and extent of SRI debt and equities across five industrialized countries - Germany, Japan, United Kingdom, United States and Australia - before attempting to identify the range of independent variables that help to explain SRI's uneven development. It is argued that differences between corporate governance systems, institutional and regulatory characteristics along with cultural and historical differences chiefly explain variances in the size and significance of SRI in each country. Secondly, we speculate on the way in which the uneven development of SRI globally has consequences for its perceived and actual effectiveness. Josh Whitford (Columbia University, USA) E-Mail address: jw2212@columbia.edu Network Production, Uncertainty and Contradiction in The New Old Economy The paper examines the emergence of a 'new old economy', in which relationships between firms have become much more important. It argues that discussion of this shift, in the media and in the academic literature, hits on the right issues - globalization, de-industrialization, and the outsourcing of production in marketized and in network relationships - but in an overly polarized way that obscures as much as it enlightens. Drawing on the results of extensive interviews conducted with manufacturers in the American Upper Midwest, it shows that the range of possibilities is more complex and contingent than is usually recognized. Highlighting heretofore unexamined elements of constraint, contradiction, and innovation that characterize contemporary network production models, it engages literatures in economic and organizational sociology, comparative political economy, and economic geography to reveal ways in which the American economic development apparatus can be adjusted to better meet the challenges of a highly decentralized production regime. Arnold Wilts (Free University, The Netherlands) E-Mail address: as.wilts@fsw.vu.nl The Formation of Firms' Policy Preferences as a Central Category in Analyzing the Institutional Embeddedness of Corporate Political Action In the wake of recent accounting scandals and high-profile bankruptcies, questions of corporate governance, business ethics and the institutional embeddedness of corporate strategies have become central to academic debate. In the management literature there is growing attention for questions of business-government relations and the formation of political strategies of business firms. This concerns the involvement of firms in public decision-making as well as in forms of self-regulation at industry level. Empirical research shows that the involvement of firms in public and regulatory decision-making varies over time and across institutional settings. In the comparative political economy literature this variation has been analyzed in terms of business systems and varieties of capitalism, or market order. This paper integrates insights from these different literatures to explore the firm-internal dimension of corporate political strategy formation in relation to institutionalized patterns of private-public interactions. The research question driving the paper is how institutional features of competitive environments are reproduced in firm-internal decision-making relating to political involvement activities. In answering this question, the paper defines the concept of policy-preference formation as a central category for analyzing the institutional embeddedness of corporate political action.

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