The analysis of governance structures in Russian manufacturing does not only
enable exploring the industrial organization and upgrading of companies, but also
brings forefront the transaction costs faced by market participants. From this
perspective, it is important to examine Russian industries, since models of
organizational structure have been developing in Russia only within the last 20
years, under the influence of transaction costs associated with the transition
economy.
Despite the importance of governance structures within the framework of
analysis of markets, competition, and inter-firm cooperation in transition economy,
the model of Russian organizational structure has been studied insufficiently. The
main objective of this work is to fill the gaps in studies of alternative governance
mechanisms in Russian industries, and to review organization and behavior of
enterprises as a part of hierarchical, market, and hybrid models. The empirical
analysis is based on the data obtained from interviews of Russia’s mid-sized manufacturing enterprises.
Preliminary results show that, first, in contrary to expectation, hierarchical governance does not prevail in the manufacturing industries, and second, governance structures affect organization of corporate control, willingness to priceand non-price competition, investment decisions, incentives and possibilities to upgrade and also the assessment of contract risk and contract protection in directions predicted by institutional theory and theory of value chain
