The Response of MNCs to Radical Systemic Change in a Transition Environment

After the collapse of the communist system, multinational corporations (MNCs) embarked on direct investments in Poland and launched export operations through their subsidiaries at astonishing speed, in spite of the initially weak institutional environment. These developments challenge the explanatory power of institutional theories explaining the patterns of MNC expansion into Central and Eastern Europe after 1989. We propose an alternative theoretical framework based on a stream of organizational research that focuses specifically on strategic responses to radical changes in external operating environments. The analysis is based on a dataset covering 4,000 subsidiaries operating in the Polish manufacturing sector during the transition period 1989–2003.