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The East European transformation posited a challenge to established theories of institutional systems and business and economic studies. How could a theoretical framework simultaneously account for the radical changes in the institutional system and macroeconomic processes as well as for the rather different pace of changes at micro and mezzo levels? How could the changed attributes of firms and the endurance of old practices within these firms be reconciled in a coherent theoretical framework? It is argued here that without the analysis of enterprise transformation, interpretations of the East European transition inevitably lead to contradictory conclusions. Thus the contribution of this book is the interpretation of the enterprise transformation in the context of the institutional and economic transformation, through the comparative study of enterprise transformation in two former Soviet Republics, now independent states, Estonia and Ukraine.