Russian Managers' Perspectives on Enterprise Restructuring

In mid-1994 a representative sample of 369 managers of Russian industrial enterprises ranked from most important to least importance enterprise restructuring initiatives in four areas :

Managers' priorities in general did not depend on the type of dominant ownership of the enterprise. Production and employment priorities were very similar when the dominant owner was the state, the managers, the workers, or other outsiders. Newly created firms also had similar production and employment priorities, although they naturally attached less importance to employment reduction. With respect to investment and marketing priorities, manager-owned firms placed less importance on attracting foreign investors and increasing exports..

Source Commander, Fan, and Schaffer

Russian Managers' Production Priorities
(from highest priority to lowest)

  1. More efficient use of productive resources
  2. New investments
  3. Change production mix among existing products
  4. Change product quality
  5. Change inventory policy
  6. Change area of activity
  7. Change technology
  8. Seek foreign consulting advice
  9. Dispose of assets

Russian Managers' Labor Priorities
(from highest priority to lowest)

  1. Increase wages
  2. Increase wage differentials
  3. Modify or establish an internal wage scale
  4. Decrease employment
  5. Cut social benefits
  6. Increase employment
  7. Cut wages

Russian Managers' Investment Priorities
(from highest priority to lowest)

  1. Reduce outstanding receivables
  2. Lengthen period for payables
  3. Reduce new bank borrowing
  4. Seek foreign investors
  5. Reschedule loans
  6. Obtain new loans from banks
  7. Change bank connections
  8. Obtain new loans from non-banks

Russian Managers' Marketing Priorities
(from highest priority to lowest)

  1. Improve marketing
  2. Seek new domestic markets
  3. Change distribution network
  4. Increase export efforts
  5. Drop product price relative to competitors
  6. Change suppliers
  7. Increase product price relative to competitors

topic Enterprise Restructuring in the FSU