Product Innovations Propensity at the Company Level in Centrally Planned Economies (Case Study of Poland)

А П Т А U N I V E R S I T A T I S L O D Z I E N S I S _____________ ______ FOLIA OECONOMICA 85, 1986__________

K ry s ty n a Iwirtska-Knop*

PRODUCT INNOVATIONS PROPENSITY AT THE COMPANY LEVEL IH CENTRALLY PUNNED ECONOMIES

(C ase Study o f P o la n d )

1. In tro rtu c tlo n

The p re s e n t economic s i t u a t i o n in Polan d i s c h a r a c t e r iz e d w ith a deep economic c r i s i s , s h o rta g e s in sup p ly of c a p i t a l and in d u s ­ t r i a l goods, s m a ll d i f f e r e n t i a t i o n o f a sso rtm e n t, wide range of the C e n t r e 's in t e r f e r e n c e in a c t i v i t i e s of companies (among o th e rs in p r i c i n g ) , u n if ie d o r g a n iz a t io n a l s t r u c t u r e o f the m ark et, admi­ n i s t r a t i v e a l l o c a t i o n o f c a p i t a l goods, e t c . The economic reform in tro d u c e d in these c o n d itio n s in 1982 aimed among o th e rs a t r e ­ s t o r a t io n o f m arket fu n c tio n s in c lu d in g a l l o c a t i o n - e f f e c t iv e n e s s mechanisms s tim u la te d by the m arket and s t im u la t io n of in n o v a tio n p r o p e n s ity w it h in the e n t i r e n a t io n a l economy should be a t t r ib u t e d to i t s b a s ic u n it s i . e . com panies. There e x is t s how ever, a dilemma h ere which i s not easy to s o lv e . In the economic system ch aracte­ r iz e d w ith a d e c is iv e predom inance of d i r e c t iv e - t y p e e le m e n ts , a l l k in d s o f in n o v a tio n s in c lu d in g developm ent o f a new p ro d u c t were s te e re d by the C en tre w ith a l l re s e a rc h and developm ent a c t i v i ­ t i e s b e in g s u b o rd in a te d and c o n t r o lle d by i t 1 . In the p re s e n t chan­ ged s i t u a t i o n , the c e n t r a l s t e e r in g of in n o v a tio n s has been p a r t l y curbed but s im u lta n e o u s ly b a r r i e r s r e s u l t in g from c o n t r a d ic t io n s w it h in the r e fo r m 's g u id e lin e s as w e l l as tho se c o n c e rn in g o th e r v a r i a b l e s cause th a t in n o v a tio n p r o p e n s ity a t d i f f e r e n t l e v e l s of the economy has not been s tim u la te d .

‘? P n l S e rtVir l e c t u r e r - I ^ t i t u t e of M a r k e t in g , U n i v e r s i t y of Łódź ( P o l a n d ) .

1

inn tn ThJ “ T niZat. i 0 n a l s t r u c t u r e the n a t i o n a l economy accord-1 _{g to branches and s e c t o r s caused t h a t r e s e a r c h and development}

The aim of t h i s stu d y i s to answer a q u e s tio n w hether mecha­ nisms s t im u la t in g p rod u ct in n o v a tio n s in companies have been r e ­ le a s e d by the economic reform in P o la n d ,

In n o v a tio n s are r e f e r r e d h ere to developm ent of new p ro d u c ts . Two h yp o th eses have been fo rm u la te d :

1. Autonomy o f companies in d e cisio n -m akin g qnd the accep ted o b je c t iv e fu n c tio n o f th e se companies should promote r e le a s in g of i n i t i a t i v e s d ir e c t e d a t p rod u ct in n o v a t io n s .

2. R e s to r a t io n o f the m arket f u n c tio n s i s an’ in d is p e n s a b le c o n d it io n fo r developm ent of new p ro d u c t.

V e r i f i c a t i o n o f th e a cce p te d h yp o th eses en co u n te rs d i f f i c u l t i e s . When s t r e s s in g th e m arket fu n c tio n as a s tim u la to r o f p ro d u c t i n ­ n o v a tio n s i t should be remembered t h a t t h i s m arket does not e x is t in p r a c t i c e . And alth o u g h h o r iz o n t a l c o n ta c ts between companies a re m a in ta in e d , the d em an d -sup p ly-p ricing mechanism o p e ra te s only to a lim it e d e x te n t.

In the economic s i t u a t i o n c h a r a c t e r iz e d w ith a deep d e p re s s io n , th e re ap p ear, m oreover, c o n f l i c t s o f o b je c t iv e s b e tw e e n 'fe a tu r e s and req u ire m e n ts of p ro d u ct in n o v a tio n s and mechanisms put in to o p e r a tio n w it h in the framework o f th e economic reform .

The r e s u l t s p re se n te d in t h i s a r t i c l e r e f e r o n ly to p rod uct in n o v a tio n and th ey c o n s t it u t e a p a rt o f a w id e r re s e a rc h p ro g ra ­ mme co n ce rn in g o p e ra tio n o f companies in th e economic refo rm . The e m p ir ic a l d a ta f o r the stu d y have been p ro v id e d by s tu d ie s carried ou t by the a u th o r w it h in a twe y e a r s ' p e rio d - 1982 and 1983 in 9 i n d u s t r i a l companies in Ł o d i re g io n . The sample in c lu d e d : 9 te x ­ t i l e companies ( c l o t h i n g , k n it t e d goods and c a r p e t s ) , 2 food produ­ c e r s (f r o z e n 4 o o d s and c o n f e c t io n e r y ) , 1 ch em ica l works (cosm e­ t i c s ) and 1 p h a rm a c e u tic a l company. Most o f them were b ig firm s p o s s e s s in g a s tro n g , o ft e n m o n o p o lis tic p o s it io n on the m arket. There were a p p lie d two r e s e a rc h methods. F i r s t th e re were used q u e s tio n n a ir e s u r v e y s . Then, in each o f the companies th e re were conducted a ls o profound in t e r v ie w s w ith the management.

The sm a ll number o f companies encompassed by t h i s stu d y may r a i s e doubts co n c e rn in g g e n e r a liz a t io n of r e s u l t s . Y e t, owing to u n i f i c a t i o n o f economic p ro c e ss in P o la n d , s i m i l a r c o n d it io n s o f

i n s t i t u t e s were su b o rd in a te d to b ranch m i n i s t r i e s . T h is s i t u a t i o n hampered i n t e r d i s c i p l i n a r y s tu d ie s and promoted such s tu d ie s th a t were fo cu sse d on n a rro w ly c o n c e iv e d i n d u s t r i a l b ran ch es.

o p e ra tio n o f companies as w e ll as u t i l i z a t i o n o f s tu d ie s c a r r ie d ou t by o th e r a u th o rs in the a n a ly s is o f l e g i s l a t i v e p ro c e s s , the c o n c lu s io n s p rese n ted in t h i s a r t i c l e a re adequate to r e a l i t y .

2. B a r r i e r s f o r In t r o d u c ing j^rgd u ct In n o v a tio n s

P ro d u c t in n o v a tio n s c a l l to r d e c e n t r a liz a t io n a l l the way down to the b a s ic management l e v e l (com pany) o f d e c is io n s co n ce rn in g range ( p r o f i l e ) o f a c t i v i t y . They should co n ce rn , f i r á t of a l l : d i f f e r e n t i a t i o n o f p ro d u ct a sso rtm e n t, p ro d u c tio n o f s u b s titu e s d evelop ed by d i f f e r e n t com panies, freedom in c r e a t io n o f own mar­ k e t ch an n e ls e t c . The perform ed s tu d ie s re v e a le d th a t the econo­ mic reform equipped com panies w ith b ig g e r d e cisio n -m a k in g powers in the sphere o f p rod u ct s t r a t e g y . This f a c t o r d id not le a d , however, to g r e a t e r a d a p t a b i l i t y o f com panies in r e l a t i o n to the m arket. The prOdui.t s t r a t e g y showed c h a r a c t e r i s t i c f e a t u r e s f o r i t s s t r a t e ­ gy a t the tim e o f c r i s i s . P ro d u c tio n s e r ie s were le n g th e n ed , in n o ­ v a tio n p ro p e n s ity d e c lin e d and asso rtm en t sh ra n k . P ro d u c t d e v e lo p ­ ment was not s u b o rd in a te d to req u ire m e n ts o f the m arket and was a r e s u l t o f sh o rta g e s in s u p p ly . A company coming a c ro s s gaps in procurem ent o f i n d u s t r i a l goods was t r y in g to f i l l them w ith sub­ s t i t u t e s . Scope o f changes d e r iv in g from s u b s t i t u t io n was fo r p a r ­ t i c u l a r p ro d u c ts d i f f e r e n t . I t ranged from s m a ll changes e .g . in the t a s t e o f sw eets to v e ry im p o rtan t ones co n c e rn in g e .g . rep la ce ­ ment o f raw m a t e r ia l used in p ro d u c tio n a t c a r p e t s .

Fo rced out s u b s t i t u t io n e x e rte d in f lu e n c e on th e way p ro d u ct in n o v a tio n was und erstood by com panies. I t was t y p i c a l f o r p rod uct o r i e n t a t i o n . Companies c o n s id e re d new p ro d u ct as the one, th a t was n ot produced y e t in t h e i r f ir m , eg. p ro d u c tio n o f s h i r t s in a company p rod ucing t y p i c a l l y c h i l d r e n 's w ear. In the above m en tio ­ ned f ir m , broadenning o f asso rtm en t was con n ected w ith p r o f i t a b i ­ l i t y o f p ro d u c tio n . P ro d u c tio n manager s ta t e d t h a t th ey would p ro ­ duce s h i r t s because they c o u ld put m arket p r ic e s on them (th e s e p r ic e s were not lim it e d o r f ix e d by the C e n tre and they co u ld be q u it e h ig h ). " I u nd erstan d s o c ia l aim s, he s a id , but we must have some p r o f i t , the w orkers a re in t e r e s t e d o n ly in p r o f i l . O th e rw ise lo t s o f them w ill* q u i t . ”

New p ro d u ct was a ls o u nderstood by com panies as th e one th a t d i f f e r e d from the p r e v io u s ly produced goods in p a t t e r n , d e sig n (eg.

in t e x t i l e in d u s t r y ) or co m p o sitio n of in g r e d ie n t s or raw mate­ r i a l s (e g . c o n f e c t io n e r y , c a r p e t s ) , w h ile from the p o in t of view o f b u yers these changes were o fte n o f minor im p o rtan ce. The 3hare o f p rod uct in n o v a tio n s view ed in t h i s way in t o t a l p ro d u c tio n of the companies under su rv e y was d i f f e r e n t in each c a s e . On the averag e i t ranged from 5 to 20 per c e n t . O nly in the c a r p e t f a c t o r y the scope o f fo rc e d out s u b s t i t u t io n was v e ry h igh arid accounted fo r 60 p er c e n t . P ro d u c t in n o v a t io n s , which sprang up as a r e s u l t of fo rc e d out s u b s t i t u t io n were u s u a lly accompanied by d e t e r io r a t io n o f q u a l i t y . Only two companies in tro d u c e d a new p rod uct - in foods and c h em ica l (c o s m e tic s ) i n d u s t r i e s . The companies co n tin u e d thus to p re s e rv e a t r a d i t i o n a l a t t i t u d e tow ards in n o v a tio n . The s e l l e r s m arket causes th a t new te c h n o lo g ie s d u rin g s h o r t e r p e rio d s are prompted by gaps in su p p ly o f i n d u s t r i a l goods. I t i s o n ly in a lo n g e r tim e p e rio d th a t the in f lu e n c e of changes in te c h n o lo g ic a l environm ent and the m arket b e g in s to be f e l t . T h is among o th e rs e x p la in s a low p r o p e n s ity of compannies to embark on p ro d u ct in n o ­ v a t i o n s . Of co u rse the ensuing changes in tech n o lo g y may be m o ti­ va te d by c o rre sp o n d in g changes in p r ic e r e la t e d to f a c t o r s of p r o d u c tio n . Of e s s e n t i a l or perhaps d e c is iv e im p ortan ce i s , how­ e v e r , such a change in tech n o lo g y w hich red u ces degree of th e

com-2 p a n y 's u n c e r t a in t y or which i s hoped to reduce i t in the f u t u r e .

S h o rta g e s on the s id e of su p p ly c r e a te d a n e c e s s it y o f ex­ panding the scope of c e n t r a li z e d a l l o c a t i o n of raw m a t e r ia ls and h ard c u rr e n c y . Such a l l o c a t i o n r e g a r d le s s o f the .form in which i t i s a p p lie d e x e r t s a n e g a tiv e in f lu e n c e on p ro d u ct in n o v a t io n s . I t found i t s e x p re s s io n in the f i x i n g o f p r e f e r e n t i a l of o b lig a t o r y p ro d u c tio n ta s k s (t h e s o - c a lle d " o p e r a t io n a l program m es") as w e ll as in "governm ent o r d e rs " r e p r e s e n tin g a ls o a c e n t r a li z e d form o f p ro d u c tio n s t e e r in g and im posing an o b lig a t io n on companies to s u p p ly s p e c i f i c p ro d u c ts . V a rio u s forms of such a l l o c a t i o n con­ s t i t u t e a form o f th e C e n t r e 's in t e r f e r e n c e in d e cisio n - m a k in g au­ tonomy o f com panies, and e s p e c i a l l y w ith reg a rd to the p ro d u c t, and g e n e ra te a r e t u r n to the economic- management system based on commands and c e n t r a li z e d a l l o c a t i o n of i n d u s t r i a l p ro d u c ts . They le a d to c o n s o lid a t io n of p r e v io u s p ro d u c tio n d ir e c t io n s as by their v e ry n a tu re they tend to g iv e p r e fe r e n c e to w e ll known p ro d u c ts .

2 J . K o r n a i , Economics of S h o r t a g e , V o l. 1, North-Ho- l l a n d P u b l i s h i n g Company, Amsterdam 1980.

New p ro d u cts rem ain o u ts id e the range o f the government p re ­ fe re n c e s and e n co u n ter b a r r i e r s in sup p ly of i n d u s t r i a l products and raw m a t e r ia ls f o r t h e i r p ro d u c tio n .

At the fo u n d a tio n s o f new p ro d u ct developm ent l i e s a n e c e s ­ s i t y o f m a in ta in in g f r e e p ro d u c tio n c a p a c i t i e s . In P o la n d , the s e l l e r ' s m arket cau ses t h a t th e re e x is t s a p re s s u re on f u l l u t i l ­ iz a t io n o f p ro d u c tio n c a p a c i t i e s . Our s tu d ie s r e v e a le d , how ever, th a t they a re u t i l i z e d o n ly in 70 to 80 per c e n t. U n f o r t u n a t e ly , they are not t r e a te d as the com pany's re s e rv e s a llo w in g to i n ­ c re a s e i t s a d a p t a b i l i t y to the m arket but they a re r a t h e r a fu n c ­ t io n of sh o rta g e s in su p p ly of i n d u s t r i a l p ro d u c ts and in em ploy­ ment. They a re of a com pulsory c h a r a c t e r and a re not a r e s u l t of s t r a t e g i c a n t ic ip a t io n s o f the company. D e s p ite u n d e r u t i liz a t io n of p ro d u c tio n c a p a c it ie s by the s o c ia liz e d in d u s t r y , a p a rt of these c a p a c it ie s has not been made a v a i l a b l e to economic u n it s in a i l s e c t o r s h avin g new c o n c e p ts , i n n í t i a t i v e s , and means th a t could f a c i l i t a t e p rod uct in n o v a t io n s . There a re m issin g a p p ro p ria te r e ­ g u la tio n s in the system and im pulses in the economic p o l i c y 5 .

Development of a new p ro d u ct c a l l s fo r fo rm u la tio n of long-, -term o b je c t iv e s in a c t i v i t y of com panies, and thus fo r s t r a t e ­ g ic t h in k in g . Assum ptions of the economic reform a re o f long-term c h a r a c t e r , and c o n s e q u e n tly , they should ensure s t a b i l i z a t i o n of the coaipany. However, a s h i f t from the c e n t r a l i s t i c to p a ra m e tric system o f management must e n co u n ter some o b s t a c le s , which i s due, among o t h e r s , to the economic s i t u a t i o n . A c c o rd in g ly , th e re are o fte n passed ad hoc new a c t s o f law b eiijg m a k e - sh ift s o lu t io n s and c o n s t it u t in g a b a r r i e r on the way o f s t r a t e g i c t h in k in g . Lack of s t a b i l i t y i s o b se rve d , f i r s t of a l l , in the t a x a tio n system . The perform ed s tu d ie s r e v e a le d th a t com panies were taken unawares by changes in s c a le o f t a x a t io n . T h is g e n e ra te d an atm osphere o f c o n s id e ra b le u n c e r t a in t y , uneasy a n t i c i p a t i o n , and i r r a t i o n a l d e c is io n s in com panies. I t i s ob viou s t h a t the t a x a tio n system cannot undergo any m ajor changes o ver a s h o rt p e rio d o f tim e . I t

J J . M a c i e j a and J . M u j t e 1, In n o w a cyjn o ść s y ­ stemu [in n o v a tiv e n e s s o f the S y s te m ], "P r z e g lą d T e c h n ic z n y " 1983, n r 14, p. 22. We must a g re e , how ever, w ith a sta te m e n t th a t a r t i ­ f i c i a l r e s e r v a t io n o f p ro d u c tio n c a p a c i t i e s by means o f commands, e .g . t h e i r b lo c k in g d u rin g a c e r t a i n p e rio d o f tim e i s a nonsen­ s i c a l p roced ure as i t f a i l s to ensure b ig g e r e l a s t i c i t y and o n ly lo w e rs t h e i r l e v e l o f u t i l i z a t i o n .

should not c o n s t it u t e , how ever, one o f causes behind t h e . com pany's u n c e r t a in t y g e n e ra tin g s e l f - p r e s e r v a t io n a c t i v i t i e s and unexpected r e a c t io n s of com panies. I t i s w e ll known th a t u n c e r t a in t y does not c r e a t e fa v o u ra b le c o n d itio n s fop new p ro d u ct developm ent and i t causes th a t m ax im ization o f p r o f i t s over a s h o rt p e rio d of time becomes the main o b je c t iv e in a c t i v i t y of com panies, which does not in d uce them to u n d e rta k in g a r i s k im m anently connected w ith developm ent of new p ro d u c ts .

P ro d u c t in n o v a tio n s r e q u ir e a d i f f e r e n t i a t e d o r g a n iz a tio n a l s t r u c t u r e o f the m arket not o n ly w ith reg a rd to the number o f com­ p a n ie s in the m arket but a ls o t h e i r s iz e . P ro c e ss e s o f o r g a n iz a ­ t i o n a l c o n c e n tra tio n in Po lan d in the s e v e n tie s le d to c r e a t io n o f b ig companies h o ld in g a m o n o p o lis tic p o s it io n . T h is m onopolistic p o s it io n along w ith b ig s iz e o f such com panies, w hich, a re as a r u le c h a r a c t e r iz e d w ith a low degree о» a d a p t a b i l i t y and e l a s t i ­ c i t y , e x e rt a n e g a tiv e in flu e n c e on developm ent o f new p ro d u c ts . That i s wny i r r e s p e c t i v e o f s e lf - c \ ir r e c t in g f a c t o r s r e le a s e d by the economic re fo rm , th e re i s needed a c o n s is t e n t s t a t e p o lic y o r ie n t e d a t growth in the number of s m a ll companies and t h ü ii sh are in the m arket. The p re s e n t e x p e rie n c e te a c h e s , how ever, th a t t h i s p o l ic y i s not co h e re n t w ith g e n e ra l developm ent needs e.Q . emergency f i s c a l measures le d to a shut-down o f many p la n t s in the sm al1-commodity s e c t o r .

S i m i l a r l y , achievem en ts in the f i e l d o f a n t i t r u s t p o l ic y a re i n s i g n i f i c a n t as w e l l . I t r e t e r s to alm ost a l l a re a s of the s t r u c ­ t u r a l p o l ic y and to l i b e r a l i z a t i o n o f m arket e n t r i e s and e x i s t s , g a in in g autonomy by p la n t s f u n c tio n in g w it h in b ig m u lt i- p la n t com­ p a n ie s p r e v io u s ly , b a r r i e r s in a c c e ss to p a r t i c u l a r i n o u s t r i a l b ra n c h e s , e f f o r t s made to e lim in a t e r e s t o r a t io n o f m o n o p o lis tic b ran ch s t r u c t u r e s , a c t i v a t i o n o f c o m p e titio n by means o f im p o rt, u t i l i z a t i o n of new i n i t i a t i v e s aim ing a t e s ta b lis h m e n t o f sm a ll econom ic u n it s based on l o c a l re s o u rc e s and s a t i s f y i n g needs of l o c a l m ark ets.

I t must be added th a t la c k of any p ro g re s s in t h i s f i e l d i s among o t h e r s , a r e s u l t of a profound d is e q u ilib r iu m , which gene­ r a t e s c e n t r a li z e d a l l o c a t i o n system s as w e ll as m o n o p o lis tic tre n d s promoted by the C e n tre tow ards c r e a t io n o f o r g a n iz a t io n a l s t r u c ­ t u r e s c o rre s p o n d in g to c e n t r a li z e d management o f the n a t io n a l economy.

Development o f a new p ro d u ct i s connected w ith in vestm en t o u t­ l a y s . In the p e rio d o f c e n t r a l i s t i c p la n n in g , ease w ith which c r e d i t s were o b ta in e d as w e ll as p r e s t ig e c h a r a c t e r o f in vestm e n ts and the f a c t th a t they were an argument fo r s t im u la t io n o f demend a l l caused th a t i t was easy to d evelo p a new. p ro d u ct throup*i pur­ chases o f lic e n c e s and know-how. At the same tim e , consumers were p u tt in g h ig h e r req u ire m e n ts b e fo re p ro d u c ts . Today, demand does not re p re s e n t any c o n s t r a in t in a c t i v i t y of companies and tho o n ly p re s s u re on developm ent o f a new p ro d u ct i s th a t on the s id e o f f o r e ig n m ark ets. M ean w hile, e n t r y w ith a new p ro d u ct in t o a f o ­ r e ig n m arket i s d i f f i c u l t . Q u a lit y o f p ro d u c ts i s not c o m p e t itiv e . Companies h avin g no e x p e rie n c e in a p p lic a t io n o f the s t r a t e g y through p ro d u ct in the d om estic market a re unab le to d e velo p i t in a fo r e ig n m arket and fo cu s t h e i r a t t e n t i r on c o m p e titio n through p r i c e s . .On the o th e r hand, th e re a re m issin g system s o lu t io n s and mechanisms th a t would s t im u la t e e x p o rt o r ie n t a t i o n in com panies. D e s p ite the f a c t th a t the s t a t e once in a w h ile lau nch es emergen­ cy measures to promote e x p o rt such as le a v in g a p a rt of revenu es in hard c u rre n c y in the company, premiums f o r im p lem en tatio n of e x p o rt ta s k s , or a system o f r e l i e f s in income ta x , no long-term

4 p o l ic y in t h is sphere has been e la b o r a te d as y e t .

I t i s w orth n o tin g here th a t the v e ry f a c t of p re p a rin g prod u ­ c t io n meant fo r e x p o rt r e p r e s e n ts an im p o rta n t f a c t o r in d e v e lo p ­ ment o f new p ro d u c ts in the d om estic m arket.

As re g a rd s r e s t o r a t io n of com panies' m arket o r ie n t a t i o n i t i s n e c e s s a ry to m a n ip u la te "th is market w ith a p ro d u c t. Taking in t o a c c o u n t, how ever, the a sp e ct of com panies' f i n a n c i a l fe e d in g there a re in o p e ra tio n c o n s t r a in t s to such b e h a v io u r as developm ent of new p ro d u c ts w h ile a sim u ltan e o u s p ro d u c tio n o r ie n t a t i o n o f com­ p a n ie s i s not p r o f i t a b l e . I t i s p r im a r ily due to p r i n c i p l e s of the f i n a n c i a l system and e s p e c i a l l y to m easures used in e v a lu a t io n o f com panies' p erfo rm an ce. S in c e the econonii c - f i n a n c i a l system c o u ld g u ara n te e o n ly r e s t r i c t i o n o f com p an ies' i n c l i n a t i o n to c o ­ l l e c t i n g e x c e s s iv e p r o f i t s and em p lo y e es' e x c e s s i v e p a r t i c i p a t i o n in th e se p r o f i t s w ith o u t s t im u la t in g a c t i v i t i e s prom oting h ig h e r e f f e c t i v e n e s s , i t was a lr e a d y in August 1982 th a t in c re a s e in a v e ­ rage wages was t ie d w ith in c r e a s e in la b o u r p r o d u c t i v i t y measured 4 J . S o b o t a , Handel z a g ra n ic z n y [F o re ig n T r a d e ], " Ż y c ie G ospodarcze" 1984, nr 3.

by s o ld p r o d u c tio n ^ I t meant a re tu r n to gross measures c r i y c i - zed in the p a s t, which a re knewn to le a d to n e u t r a l i z a t i o n o f pro- - in n o v a tio n and p r o - e f fe c t iv e n e s s a t t i t u d e s .

R e s to r a t io n o f the m arket f u n c tio n s and ad o p tio n of m arket o r ie n t a t i o n by the company must be precsded by c r e a t io n o f i n t e r ­ n a l m o tiv a tio n in the company. What i s meant here i s n o t o n ly e- conomic m o tiv a tio n but non-economic as w e l l . As re g a rd s economic m o t iv a tio n , th e re i s no d i r e c t r e la t io n s h ip in com panies between developm ent of new p ro d u c ts and m a te r ia l in c e n t iv e s . In accord ance w ith p r i n c i p l e s o f the economic re fo rm , the economic system of m o tiv a tio n i s based on s e l f - f in a n c in g w ith th e amount of f in a n ­ c i a l re s o u rc e s rem ain in g in the company being dependent upon i t s

f i n a n c i a l r e s u l t s or n et p r o f i t . The main source from which in n o ­ v a t io n s a re fin a n c e d i s the developm ent fund (d im in is h e d by r e ­ payment o f in vestm e n t c r e d i t s ) . An a d d it io n a l f a c t o r th a t should promote in n o v a tio n s a re tax r e l i e f s , which in c r e a s e n et p r o f i t and thus the developm ent fund in com panies. A ls o the wage fund i s c r e a te d from n e t p r o f i t w ith in c r e a s e of t h i s fund b eing depen­ dent on net p ro d u c tio n dynam ics. Such a form ula of economic m o ti­ v a tio n im p lie s t h a t the company s t r i v i n g to maximize i t s p r o f i t s and in t h is way to o b ta in a b ig g e r wage fund w i l l be in t e r e s t e d in im p ro ving I t s economic e f f e c t i v e n e s s , among o t h e r s , through i n ­ t r o d u c t io n of p ro d u ct in n o v a t io n s 6 .

The e f f i c i e n c y o f a system c o n s tr u c te d in t h i s way proved to be i l l u s o r y in c o n d it io n s of- deep m arket d is e q u ilib r iu m as compa­ n ie s were a i l e to in c re a s e t h e i r p r o f i t s and thus t h e i r wage funds

through p r ic in g - a s s o rtm e n t s p e c u la t io n s r a i s i n g t h e i r p ro d u c tio n v a lu e and e n s u rin g sh o rt- te rm p r o f i t a b i l i t y fo r th e m se lv e s.

S in c e the assum ptions o f the economic reform aimed a t a slow r e o r ie n t a t io n of companies (fro m p ro d u c tio n to m arket o r i e n t a t i o n ) and r e c o n s t r u c tio n of d em an d -su p p ly- p ricin g mechanisms, th e re were a p p lie d s e v e r a l p r ic e c a t e g o r ie s wnich were to h elp and accom p lish

‘ Uchwała nr 186 Rady M i n is t r ó w w s p ra w ie dodatkowych zachęt do zw ięk sz a nia p r o d u k c ji w p r z e d s i ę b i o r s t w a c h gospodarki u s p o ł e c z n i o ­ n e j [ a c t Ho. 18£ of the C o u n c il of M i n i s t e r s on I n c e n t i v e s to I n ­ c r e a s e P r o d u c tio n i n S o c i a l i z e d E n t e r p r i s e s ] , "M o n ito r P o l s k i " 1982, nr 20 and Uchwała nr 175 [A ct Ho. 175], ibidem.

£

See: 3. Р е п с , Warunki p r z y s w a ja n i a i n n o w a c ji w przedsię­ b i o r s t w i e [ C o n d it io n s of I n n o v a t io n A b s o rp tio n in Company], [ i n : J

th e se assu m p tio ns. Some c a t e g o r ie s o f p r ic e s were to be d i r e c t l y and i n d i r e c t l y re g u la te d by the s t a t e on the b a s is of the co st- a c- co u n tin g method. T h is concerned p ro d u c ts s a t i s f y i n g b a s ic needs. P r i c e s fo r rem ain ing p ro d u cts were to be fix e d a c c o rd in g to the economic reform i s c h a r a c t e r iz e d , how ever, w ith a p a ra d o x ic a l s i ­ t u a t io n . Namely, l i b e r a l i z a t i o n and d e c e n t r a liz a t io n o f p r ic e s w ith sim u lta n e o u s p r e s e r v a t io n o f the form er o r g a n iz a tio n a l s t r u ­ c t u r e o f the m arket and the s e l l e r ' s market g e n e ra te d a tre n d tow ards i n f l a t i n g p r ic e s аз a r e s u l t of r i s i n g p ro d u c tio n c o s t s , the s o - c a lle d " c o s t i n f l a t i o n " , which was accompanied by the de- m a n d - in fla tio n mechanism in the form of "s u c k in g " p r ic e upwards to the l e v e l b a la n c in g demand w ith s u p p ly 7 . I t i s w orth adding th a t these a re not p r ic e s which a d ju s t't h e m s e lv e s to the m arket but the m arket a d ju s ts i t s e l f to p r ic e s fix e d on the b a s is of the c o s t- - a cco u n tin g method. T h is r e s t r i c t s in n o v a tio n p ro c e ss e s (w it h the e x c e p tio n o f in n o v a tio n s r e s u l t in g from a fo rc e d s u b s t i t u t i o n ) and does not induce com panies to reduce t h e ir c o s t s . On th e . o th e r hand, in the s i t u a t i o n o f p r ic e s fix e d on the b a s is o f the market s i t u a t i o n , c o n s id e ra b le p r o g r e s s iv e ta x a tio n ( e s p e c i a l l y w ith r e ­ gard to c o rp o ra te income t a x ) , and b ig s h o rta g e s in s u p p ly , compa­ n ie s tend to reduce t h e i r p ro d u c tio n w h ile s im u lta n e o u s ly re a p in g monopoly p r o f i t s . Then, c o r r e c t i v e mechanisms were a p p lie d , which would b lo ck m a n ip u la tio n of the m arket w ith a p ro d u c t even in these a re a s where i t was p o s s ib le . An i n d i r e c t tax on tra d e in the s o - c a lle d lu x u ry p ro d u c ts was in tro d u c e d w ith o u t g iv in g any special p r e fe r e n c e s to new p ro d u c ts . Independence of companies in the sphere of p r ic in g was lim it e d as w e l l . The grow ing e x te n t to which the C en tre i n t e r f e r e j w ith p r ic in g impeded achievem ent of the mar­ k e t e q u ilib r iu m and e x e r t s a n e g a tiv e in f lu e n c e on developm ent of new p ro d u c ts .

I t should be f i n a l l y noted th a t non-economic f a c t o r s such as e .g . socio-econ om ic and a d m in is t r a t iv e f a c t o r s e x e rt a s tro n g alth o u g h not alw ays v e ry e f f e c t i v e in flu e n c e on in n o v a t io n s . On the o th e r hand, a t t it u d e s of the m a n a g e ria l cad re th a t would promote in n o v a tio n s are not p r o p e r ly s tim u la te d .

Ruch p ra w n ic z y , ekonomiczny i s o c jo lo g ic z n y , Warszaw3_-Poznań 19Ü4, p. 245.

G. W. К o ł o d к o, L e cz y ć p rzyczyn y - n ie s k u tk i [ i t i s N ece ssa ry to T re a t Causes and not E f f e c t s ] , " P o l i t y k a " 1983 nr

3. Con c l u s ion

The economic reform In Polan d e n v is a g e s g rad u a l r e s t o r a t io n of the m ark et. So f a r i t h*as proved im p o s s ib le to r e c o n s t r u c t the m arket fu n c tio n s and th u s , the m arket does not c r e a t e p ro-in no va- t io n m o t iv a tio n s . In t h i s s i t u a t i o n , th e re a re a p p lie d m a k e - sh ift m easures to d e velo p new p ro d u c ts m a in ly in the form o f economic- - f i n a n c i a l mechanisms s tim u la te d by the C e n tre . T h e ir e f f e c t i v e ­ ness i s , how ever, v e ry s m a ll due to d i f f i c u l t s t a r t i n g c o n d itio n s in w hich com panies have to o p e r a te , w hich g e n e ra te s a r e tu r n to management methods based on d i r e c t i v e s . The degree o f i n i t i a t i v e s th a t s p rin g from com panies i s thus r e s t r i c t e d as q u it e o fte n their freedom of a c t i v i t y cann ot be r e c o n c ile d w ith the g e n e ra l s o c i a l i n t e r e s t . S ea rch fo r mechanisms in the sphere o f the econom y's f u n c tio n in g i s o r ie n te d a t a s u c c e s s f u l com b in atio n o f c e n t r a li z e d and d e c e n t r a liz e d management, o f the m arket mechanism w ith p r i n c i ­ p le s o f c e n t r a l p la n n in g , w hich p ro v e s , how ever, to be v e ry d i f f i ­ c u l t in the p re s e n t s i t u a t i o n in Po lan d and o th e r c e n t r a l l y p l a ­ nned econom ies.

K ry s ty n a Iw ińska-Knop

SKŁONNOŚĆ 00 INNOWACJI W PRZED SIĘBIO RSTW IE

W GOSPOOARCE CENTRALNIE .PLANOWANEJ NA PRZYKŁAOZIE POLSKI

W a r t y k u le p o d ję to próbę oceny s k ło n n o ś c i p r z e d s ię b io rs tw do rozw oju in n o w a c ji produktów w y n ik a ją c e z zasad reform y gosp o d ar­ c z e j . W e r y f ik a c j i p o d le g a ją 2 h ip o te z y : po pierw & ze - s a m o d z ie l­ ność d e c y z y jn a p r z e d s ię b io r s tw oraz p r z y ję t a ic h fu n k c ja c e lu po­ winny wpływać na w yzw olenie i n i c j a t y w w k ie ru n k u rozw oju nowego p ro d u k tu ; pb d ru g ie - o d tw o rze n ie f u n k c ji rynku j e s t niezbędnym warunkiem rozwoju nowego p rod uktu . Wskazano na b a r ie r y rozwoju no­ wego produktu w y n ik a ją c e ze s p rz e c z n o ś c i w ramach reform y a także in n ych zm iennych.

Podstawę źródłow ą rozważań sta n o w ią bad ania em piryczne p rz e p ro ­ wadzane w la t a c h 1982 i 1983 w 9 p r z e d s ię b io rs tw a c h p ro d u k cyjn ych różnych branż na t e r e n ie Ł o d z i. Posłu żono s ię k w e stio n a riu sz em an­ kietowym skierowanym do p r z e d s t a w ic ie li d y r e k c ji ty c h p r z e d s ię ­ b io r s tw , przeprowadzono tak że wywiady głęb inow e z człon kam i kad ry k ie r o w n ic z e j.

Rozważania w y k a z a ły , iż d o ty ch cz a s n ie u d ało s i ę uruchom ić mechanizmów ekonom iczno-finansow ych, k tó r e stym ulo w ałyb y w p rz e d ­ s ię b io r s t w a c h rozw ój in n o w a c ji produktów.