Training the Elephant to Dance: State-Owned Enterprises, Transition, and the Reinterpretation of Legacy

C. Hartwell, V. Korovkin and N. Vershinina
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N. Vershinina: Audencia Business School

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Abstract: This paper explores how the legacy of state-owned enterprises (SOEs) can simultaneously offer advantages and impose constraints, shaping a firm's strategic development over time. Using the transition from communism in Central and Eastern Europe as a backdrop, we examine the case of Sberbank, a Russian SOE. In particular, we show how legacy artifacts rooted in the firm's historical circumstances and experiences shaped Sberbank's approach to the present and the future, operating as both a positive inheritance and a negative burden. As a positive inheritance, Sberbank's SOE legacy provided significant market dominance inherited from its historical role under state ownership, giving it a competitive edge in the post-communist era. However, persistent interference and strong entanglements with the state constrained Sberbank's strategic autonomy substantially. Drawing on interviews, archival materials, and a comprehensive database of corporate communications, we show how Sberbank's management engaged with this challenging legacy. Their main strategy was to incorporate new initiatives that allowed them to de-couple and address the negative aspects of state involvement while capitalizing on the market advantages inherited from their past. This study highlights how the concept of legacy is central to understanding how non-family businesses, and especially SOEs, navigate the tension between inherited strengths and constraints in their strategic evolution.

Keywords: legacy; legacy artifacts; state-owned enterprises; Sberbank; determinants of strategy (search for similar items in EconPapers)
Date: 2025-04
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Published in Academy of Management Perspectives, 2025

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05100167

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