Men of Steel Meet the Market: Interpreting Firm Behavior in Russia's Metallurgy Industry
The transformation of industrial enterprises from formerly state-owned entities, operating within a centrally managed economic system, to relatively autonomous, market-oriented firms, making independent production and investment decisions, represents a cornerstone of Russia's transition plan. Indeed, such a transformation underlay the Chubais privatization program, as proponents of the plan argued that private ownership of industrial enterprises would ensure needed organizational and technological restructuring. The results of the first stage of the privatization program suggested, however, that the transformation of industrial enterprises-far from being assured by a change in ownership-would be a more difficult, lengthy, and uncertain process than had initially been anticipated. This re-evaluation is linked to three broad trends. First, the inconsistent and unstable macroeconomic policies in the early transitional period helped to create an environment in which short-term survival (without a significant adjustment in how industry operates) became the sole objective of firms. Second,