Technological switchbacks: the transition to Western information systems in privatised firms of the former East Germany

Abstract

The work of this paper centres on a study of business organisations of the former German Democratic Republic (GDR), whose continued existence after the reunification of Germany was accomplished by management buyout (MBO), rather than through acquisition by Western firms. The goal was to investigate the circumstances surrounding the sudden and total upgrade of information technology and systems enabled (and necessitated) by the end of Eastern Block isolation from the West. The paper reports on 1992 contacts and site visits with four MBO privatised firms and 1999 follow-up contacts and site visits with the two surviving firms of that group. Analyses are presented, which draw on literature devoted to IT transitions and IS implementation. The notion of technological switchback is introduced to characterise the unique circumstances embodied by the situation under study. It involves a necessary and sudden advance in information technological capabilities, which comes at the expense of a significant and undesirable regression in information system effectiveness. Parallels are drawn to the plights of firms in other transitional economies and firms facing emerging ‘technological imperatives.’ Conclusions are elucidated, regarding effective short- and long-term adjustment to such situations.

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