Managing Foreign Business Operations Through Institutional Change from Transition to Post-Transition

This article demonstrates how the nature of the post-socialist transition shapes the institutional business environment over time, and how this shows in foreign firms' strategies. We analyze this question through Finnish business operations in two post-socialist countries, Russia and Estonia, drawing on 169 semi-structured interviews. We show how a rapid and goal-oriented transition quickly removes transition-specific problems in relation to the public sector, whereas a slower and undetermined change allows them to persist. Transition-specific problems in relation to personnel and other enterprises have been alleviated in both Estonia and Russia, but followed by new ones rooted in the transition period. Also, three mechanisms prompt institutional change: the stability of national/federal formal institutions, the international formal institutional pressure, and role models embodied in informal institutional practices imported by foreign firms.