The article aims to fill research gap and to contribute to better understanding of how the entrepreneurship has become one of the vital components of many Central and Eastern European economies, and of Lithuanian economy in particular. The paper focuses on the emergence and growth of new company during turbulent transition time of 1990s. According to Aidis and Mickiewitcz, the dynamic growth of the new private sector was driving force of transition from former plan to market economies. On the other hand, the nature of entrepreneurship in transition and post-transition countries is distinctive compared with mature market economies, in which external environment is more stable and where private business has old and rich traditions. Most of the studies tend to concentrate on the specific features, such as privatization, «nomenclature» business, institutional inefficiencies, socialist inheritances and others. However, almost neglected phenomenon is the emergence and growth of new ventures established and managed by young ambitious entrepreneurs. This field of research lacks of retrospective view and reflections on what have happened with entrepreneurship in the first decade of transition (1990 — 1999).Also it lacks new methods and approaches of investigation. Therefore, in this article we employ semiotic analysis in order to provide better understanding of how entrepreneurs reflect on and explain past events and experiences.
Story reconstruction
Our analysis is based on the story of «Libra» company, which was established in early 1990s by students of Vilnius University. To reconstruct the story, multiple sources of evidence were used: interviews, documents, archival data, direct observation, and physical artifacts. Interview respondents were asked to recall past events and to tell about emergence and grow of «Libra»company. The story covers ten years period (1990–1999) and is divided in four key episodes.
Episode 1
In the fall of 1990, they were a second year business management students (20–22 years) at Vilnius University. For all Lithuanians, the first years of independence and democratic state building were very emotional experience and everybody was full of expectations. These fundamental changes also affected the students, many of whom were eager to participate in and to contribute somehow to the creation of free market economy in Lithuania.
Four students received an invitation to join a new Free market Institute (FMI) and assist in drafting laws and regulations for the establishing of a National Commodity Exchange (NCE). None of them had experience and they started by writing letters to leading international commodity exchanges requesting a copy of their regulations. After the regulations were created and NCE was established, thestudents became the Exchange brokersand established a limited partnership company «Libra».Theystarted from writing letters to establish contacts with potential clients offering brokerage services for localand foreign companies. For half a year «Libra» was knocking the doors of various companies and therefore company finished 1991 being still on the scratch.1992 was the year of real breakthrough. «Libra» got the first trade contracts and step-by-step the business started to move on. Very soon «Libra» took the position as one of most active brokerage companies in National Commodity Exchange.
Episode 2
At the end of 1992 «Libra» received an order from an Italian company, which worked closely with a Turkish partner of «Libra». Italians were interested to buy oak strips. Surprisingly, «Libra» was not able to find any single oak strips producer in Lithuania. At that time the labour was cheap and raw materials were in abundance in Lithuania, so «Libra» considered starting production business. Also hardwood specialisation seemed quite promising since hardwood procession is more labour intensive than softwood. Emilis, the guy from Academy of Agriculture, was the only one person in «Libra» who had something to do with wood. He had an experience in wood processing. So Emilis have found premises in farm and started production. During the 1993 «Libra» closed the brokerage business in National Commodity Exchange and all human, financial resources were transferred to the production place. In 1993 «Libra» has moved all the production to just recently bought old farm. It was the place were the first factory»Dominga»was established. Old staff and management were invited to help to start up new factory.
Episode 3
Due to active marketing «Libra» has started to receive more and more orders from foreign partners. The main problem was how to manage the growing demand. Finally it was realised that in order to increase the production capacity and quality «Libra» has to use Western machinery. There were no such kind of equipment in Lithuania and «Libra» bought it in Poland. «Libra» understood that supply of modern woodworking machinery is a real niche in Lithuania market. Therefore, in 1993 «Medziomasinos» company was established. «Medziomasinos» was selling woodworking equipment to other Lithuanian companies within the wood industry.
From 1994 «Libra»started to expand very rapidly. In 1994 seeking to secure the supply of oak strips form Russia, «Lidos» company was founded. Encouraged with relative success of «Dominga» factory «Libra» has started to expand by setting up new factories. «Dominga» was the knowledge incubator and people from «Dominga» participated in establishing new companies. At the same time, «Libra» was constantly looking for new contacts in the West. In 1995 «Libra» together with German partner established company «Oblinta» (glued panels from birch and oak). Also «Libra» has managed to attract Norwegian and Great Britain investors.
Episode 4
After a period of remarkable growth, 1995 was the first of three years of decline, which was conditioned by too rapid growth, over-stretching internal resources and unprofessional management. Problems culminated in 1997 when, due to complicated financial situation, «Libra» had to sell «Dominga» factory to Norwegian investors. They reorganised the company to «Dominga Mill» ltd. The first «Libra» group factory «Dominga» ceased its existence. At the same time, financial problems had positive effect in the sense that «Libra» was forced to reorganise management structure and managed to get a loan from a Canadian Bank.
During the 1997 «Libra» group was transformed to «Libra» holding. The group structure was completely reorganised setting new clear rules of the game, defining the company’s competence areas and making the financial system transparent for outside investors. In 1998 after a long period of stagnation, total profit of «Libra Group» started to grow. Finally, an old «Libra» client BoenBruk A/S from Norway agreed to enter into partnership, and in 1999 «Dominga Hardwood» as a new «green field» project was started with Norwegians.
Analysis: from story to narrative
Our analysis starts with simple question: how to read this story? According to Hernandi’s hermeneutic triad, explication is the simplest way to read the text and answer the question «what does this text say?» This text seems to be a pretty odd entrepreneurship story: young enthusiastic people continuously seek for opportunities, manage to realise them, face many problems, create new companies, and start new businesses. While reading it, we might come up with a trivial «success story» how smart guys were making good business when Lithuania transited from plan to market economy [1–3].
From the perspective of explication, the story could be understandlike many other entrepreneurial stories which seek to motivate people to start their own business and to move ahead in their lives. Itfalls withinmainstream entrepreneurial discourse created by «the continuous supply of personal stories and accounts of business venturing in bookshops, airport lounges, the business press, television dramas or documentary programmes» [4].
But what lies behind the story? What it reveals? This is not just a simple story, it is written with the particular purpose as an integral part of the research paper. The paper aims to answer the question «why in spite of complete ignorance and lack of resources «story heroes» manage to create «something out of nothing»? According to Fletcher [4], narrative analysis is helpful for understanding entrepreneurial activities and helps to answer the question «why?» First we have to discuss what qualifies «Libra» story as a narrative. Hosking and Hjorth [5] define narrative as process of reality creation in which story teller is clearly part of the story.
The story is based on the series of interviews with former and present owners of companies belonging to «Libra» holding. All of interviewees were standing at the origins of «Libra» and were contributing, to lesser or greater extent, to company victories and failures. Also, this is not a «true story» in the sense that it describes objective business reality; neither is it fiction or fantasy. In fact, it represents a creative re-description of the world from the perspective of the actors who were directly involved inthe events.
Second. In order to be a narrative, the story has to have at least a minimal plot. According to Todorov [3], minimal plot represents a sequence of stages proceeding from equilibrium to disequilibrium. An «ideal» narrative begins with a stable situation, when some power or force disturbs it, and situation turns to disequilibrium, but the equilibrium is re-established by the action of force, and the second equilibrium comes, but the two are never identical.
The minimal plot of narrative could be expressed by formula
En→F→D→En+1.
Where En and En+1 are equilibriums, F — forces and D disequilibriums.Therefore, four episodes of «Libra» narrative representthe following plot (Tables № 1–4).
Narrative episode 1
T a b l e 1
Narrative episode 2
T a b l e 2
Narrative episode 3
T a b l e 3
Narrative episode 4
T a b l e 4
The paper aims to identify certain basic narrative structures of «Libra» story andto analyse how story tellers explain facts, events and outcomes. Each deep structure could come in different patterns and different ways, and we have not only different versions of stories but even different versions of reality. In order to explain what kind of reality «Libra» story brings out we turn to structural text analysis. From the perspective of structuralism, the text is autonomous object with an internal dynamics and has literary features such as plot and actions.We have discussed the plot issue by dividing «Libra» story into a set of episodes with a sequence of stages proceeding from equilibrium to disequilibrium. Now we turn to the concept of action and actant model in our analysis. According to A.J.Greimas [3], each episode represents a narrative program (NP) which is the function of action. Action is defined by temporal succession from one state to the opposite state, affected by any agent (S1). A state may be broken down into a subject of state (S2) and an object of state (O) and the junction between them, which is either a conjunction ( I : the subject with the object) or a disjunction ( U : the subject without the object).
NP = F {S1 ® (S 2 I 0)} (the conjuctive NP)
NP = F {S1 ® (S 2 U 0)} (the disjuctive NP)
The subject of doing may or may not correspond to the subject of state; in other words, what accomplishes the action may or may not be what is affected by it. When the subject of doing is identical to the subject of state (S1 = S2), it is called reflexive action or performance; otherwise, the action is transitive (S1 ≠ S2).
In order to describenarrative program of episodes, fist we have to define the subject and the object of «Libra» story. According to Hebert [6], the subjectmay correspond to (1) an anthropomorphic being; (2) a concrete, inanimate element, including things; (3) a concept. The type of subject differs according to narrative category. O’Connor [7] identifies six basic narratives (founding, visionary, marketing, strategy, historical, and conventional) in three main categories (personal, generic, and situational). Personalnarratives represent the life history that qualifies the founder to call himself an entrepreneur and the inspiration that transforms the idea into a promising company. Usually they start by the incident or event that triggered an idea to create the company. «Libra» story begins when students received the invitation to join Free Market Institute, and that suggested them an idea to start brokerage business. Personal narrative builds credibility for both the success of the entrepreneur as an individual and for the success of his idea. «Libra» story, told by company founders, has strong personal sensemaking aspect, aiming to justify actions taken by story «heroes». The central figure (the subject) of «Libra» narrative is a collective person — «four company founders».
According to the rules of semiotics, the object is what the subject seeks for, or to put in another way, it is an object of subject’s desire. In many academic entrepreneurship researchdiscoursesthe «object of desire» is defined as opportunity. For example S.Shane [8; 4] provides one of the most popular definitions of entrepreneurship, based on the concept of opportunity:
«[entrepreneurship] is an activity that involves the discovery, evaluation and exploitation of opportunities to introduce new goods and services, ways of organizing, markets, processes, and raw material through organizing efforts that previously had not existed».
By deconstructing the definition we see that it is conjunctive narrative program — the entrepreneur seeks opportunity and «joins» with it (exploitation).
NP = F {S1 ® (S 2 I 0)} (the conjuctive NP).
Where the subjects S1 and S2 are»four entrepreneurs», and the subject of doing S1 is identical to the subject of state S2, since entrepreneurship is an activity of discovery, evaluation and exploitation. Speaking about opportunity, entrepreneurs seek to join with «object of desire», i.e. to introduce new ways of organizing (Episode 1 and Episode 4), new goods (Episode 2), new processes (Episode 3). Opportunity realisation, or to put in semiotic language joining with the «object», produces new equilibrium state in «Libra» company.
Conclusions
The aim of this article was to provide new insights of entrepreneurship emergence in transition economies and to show how semiotic analysis could contribute to better understanding of this phenomenon. First, semiotic approachrevealed a deeper structure of entrepreneurial narrative. «Libra»narrative episodes represent a sequence of stages proceeding from former equilibrium to disequilibrium, and then to new equilibrium. Second, the dynamics of change is defined by subject’s desire to «join with the object». While the subject is «four company founders», the object is an opportunity. Semiotic analysis of narrative reveals how individual explains opportunity discovery, and how it integrates it into experience structure.
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