Toward Convergence in the St. Petersburg Hotel Industry Through the Lens of Institutional Theory

Zusammenfassung

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The article assesses the power of institutional organization theory in explaining enterprise adaptation in post-socialism. Empirical analysis of the hotel sector in St. Petersburg, Russia, shows that industry-level isomorphic forces are not at work during economic transition. Combined with market imperfections, this results in intra-industry strategic diversity. The underlying logic however changes as the transition proceeds. During the transition, diversity is based on local versus foreign management and during the post-transition on the legitimacy of operations. The majority of hotels start operating according to shared norms and practices, whereas the lack of coercive pressures from the state still allows some hotels to operate in the shadow and ignore institutional norms.

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Toward Convergence in the St. Petersburg Hotel Industry Through the Lens of Institutional Theory

Introduction

Enterprise adaptation to economic transition has generated a substantial number of studies in management research. The strategies of foreign entrants and the restructuring of local incumbents have been the focus of research, and questions related to new business creation have started to receive attention. The theoretical perspectives applied in existing research have varied, but due to the emphasized relationship between institutions and business strategies in transition economies, institutional theory has become a new dominant approach (Hoskisson et al. 2000; Meyer/Peng 2005; Wright et al. 2005).

Recent research has identified a number of institutionally derived forces (Meyer/Peng 2005) that affect business strategies in a post-socialist environment through transaction costs (Meyer 2001) or relational networks (Peng/Heath 1996). Such research has aimed at advancing institutional theory by building on the evidence of post-socialist transition as a specific empirical context. For example, it has been shown that the institutional framework in transition economies constrains foreign entry strategies in terms of choice of entry mode (Salmi 1995; Brouthers/Bamossy 1997; Peng 2000; Meyer/Estrin 2001; Meyer 2001; Karhunen 2002; Meyer/Nguyen 2005) and location choice (Bevan et al. 2004).

Another body of research has investigated institutionally derived phenomena, such as the management culture in local enterprises, without explicitly referring to institutional scholars in their theoretical framework. For example, differences between Western and Russian management cultures (Puffer et al. 1996; Ralston et al. 1997) and their implications for managerial practices regarding, for example, knowledge sharing (Michailova/Husted 2003; Hutchings/Michailova 2004), learning (Child/Markoczy 1993) and the implementation of organizational change (Michailova 2000) have been analyzed.

Characteristically, existing studies building on institutional theory have often focused on one group of enterprises (foreign entrants, local incumbents, or new start-ups) at a time. Treating these enterprise groups separately has been justified, as in the early years of economic transition, the challenges faced by each of them varied greatly (Peng 2003). Foreign entrants had to cope with a novel host environment, formerly state-owned enterprises had to restructure their operations to meet market conditions, and new businesses...

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