Prior to 1989 it was virtually impossible for Western researchers to gain access to information that revealed how industrial enterprises in the Soviet bloc were actually managed, structured and interrelated. Since then serious research on the subject has begun, with an emphasis of considering the changes that have occurred following the fall of communism. This article represents a contribution to this literature, and applies an institutionalist framework to the examination of enterprise transformation in the former Czechoslovakia and the now Czech Republic. The findings are drawn from intensive case studies of two former state-owned enterprises, which have since been privatized. It focuses on the strategies used by enterprise managers both during the communist era and in the early transition period. We find that these managers responded to state socialism by developing more complex and subtle strategies than envisioned by the literature on centrally planned economies. Further, these pre-1989 managerial solutions, coupled with diverse operating experiences, have continued to affect in significant ways the approaches of post-communist managers to the privatization process.