Organization-Community Embeddedness: The Social Impact of Enterprise Restructuring in the Post-Communist Czech Republic

Abstract

The aim of this paper is to examine the impact of the enterprise restructuring process, which has typified the experience of post-communist industry, on local communities. It is argued that restructuring has had differential impacts on communities, and one key factor in making this judgment is the nature of the enterprise-community relationship inherited from the former state socialist regime. Conceptually, this relationship can be understood in terms of the social and institutional embeddedness of the enterprise in its local community. The paper draws upon research into three large former state enterprises in the now Czech Republic in order to examine the effects of different degrees of embeddedness on the impact of restructuring decisions to reduce enterprise overstaffing, and to unburden the enterprise of its social and welfare assets and activities.