Restructuring practices in Russian provincial companies and their impact on the east gas programme

Abstract

Using data for the period 1991 - 2004, this study investigates the strategic priorities of senior management in provincial Russia. The study is based on interviews with top management in twenty former state owned provincial companies and a number of external respondents. It analyses managerial decision making patterns during the transition and post-transition periods. A strong tendency for Russian provincial managers to pursue operational restructuring with a very little attention to strategic planning was identified. We also argue that managerial attitude toward strategic decision making appears to be a key success factor of large national projects of strategic importance. As there was a lack of prior studies in this geographical area and a general bias towards areas with a high economic activity index, this study employed a phenomenological approach to study strategic managerial priorities and presents qualitative data which enriches understanding of enterprise transformation in the Russian province. Data gathered during the study demonstrate how managerial priorities relate to the Russian companies’ transformational patterns. The study identified a number of pivotal areas which were prioritised by Russian directors as crisis-management strategies. The study suggests that the primary objectives of the top managers in provincial Russia are based around preserving production level, employees, status quo, and personal benefits. The data suggest that in the given underdeveloped institutional environment managers often use corporate objectives for their own benefit. This paper also suggests that an authoritarian model of enterprise management and autarky can be an effective mechanism to combat serious problems of transitional instability