9th Conference European Sociological Association

RN09 Economic Sociology

2009-09-04 13:30:00 2009-09-04 15:00:00 Friday, 4 September 13:30 - 15:00 Problems of Economies in Transition Building AA, AA.228

Primitivization of Organizational Forms as a Coping Strategy: Russian Retail Trade Under the Economic Crisis

There is a common belief that economic crisis should lead to profound restructuring and renovation. We would argue that, on the contrary, it could stimulate primitivization of the organizational forms. Being taken as a coping and cost-reduction strategy, primitivization tends to become an ideological trend for the future growth.
This argument is illustrated by the current development of Russian retail trade. Since the beginning of the economic reforms in the 1990s this sector has gone through revolutionary structural and institutional changes triggered by the dramatic development of modern chain stores. International and domestic chain store companies introduced the diverse trading formats and new sophisticated technologies. They deliver an increasing variety of goods and bring a great number of new brands to their customers.
When the economic crisis burst out, the situation started to reverse in many important aspects. Discount stores with a low level of services are now considered as a most promising trading format. Instead of an increasing assortment variety the number of store-keeping units tends to decrease at least in two times. It is claimed that consumers have too many choices to make. Nameless private labels production increasingly substitutes the supply of branded goods.
Some political measures contribute to this process changing the patterns of relations between retail business and municipal authorities. For example, the Moscow Government declared a cancellation of their programme aimed to close down all open-air markets which were previously considered as primitive and ?non-civilized? forms of trade dealing with poor services, counterfeited goods, and illegal activities. These primitive formats will be to some extent recovered in the market.
The empirical data for the study were collected from the series of 64 in-depth interviews with top managers of domestic retail companies of four cities: Moscow, Ekaterinburg, Blagovechshensk, and Magadan. Two series of these interviews were conducted by the author and research team in 2006 and 2008.