Multinational Enterprises and the Emergence of Markets and Networks in Transition Economies

This paper explores the impact that foreign investors in the transition economies have on the evolution of market relationships. Starting points are the role of networks and the process of enterprise transformation in economic transition. On this basis, the evolution of the supplier network of VW-Škoda is explored and related to world-wide trends in the car industry. Relationships within the network are growing increasingly complex, and thus create mutual dependencies and pose particular challenges for managing market relationships. The paper concludes that network relationships have a pivotal role in business-to-business markets and, therefore, have to be taken into account when analysing enterprise transformation in transition economies. Economic policy also has to consider the pivotal role of the flagship firm, and its interdependence with local businesses.