The Modernization of Soviet Industrial Management: Socioeconomic Development and the Search for Viability

344 Pages·1982·2.793 MB·English

by  William J. Conyngham

The problems of efficiently managing large enterprises are com­
mon to both the West and to the Soviet Union. The growth in
management science in the West has been paralleled in the Soviet
Union in the years since Khrushchev's fall. Professor Conyngham
provides a comprehensive discussion of the efforts in the Soviet
Union to develop techniques of scientific management that are
consistent with the requirements of communist ideology and a
planned economy.
The opening chapter outlines the reforms of Soviet industrial
management during the post-Khrushchev era and, in particular,
indicates the role that increased decentralization has played in the
developing importance of management science. Conyngham then
concentrates on the generation of management theory and its
application to the existing economic system. Topics covered in­
clude the emergence of systems analysis as the basic approach to
management reform, the application of mathematical models and
computers to decision making, and the introduction of economic
and behavioral methods of management control. The last part of
the book deals with the impact of functional rationalization on the
structure of the existing system and the ministerial reforms of the
1970s.
Conyngham concludes that the efforts to modernize Soviet in­
dustrial management under Brezhnev have been severely ham­
pered by political, ideological, technical, and institutional con­
straints. The resolution of the problems of Soviet socioeconomic
development remains a critical issue for the 1980s.
The Modernization of Soviet Industrial Management will interest
specialists and students in Soviet politics, economics, and man­
agement and those concerned with organizational theory and
management science.
THE MODERNIZATION OF
SOVIET INDUSTRIAL MANAGEMENT
SOVIET AND EAST EUROPEAN STUDIES
Editorial Board
JOHN BARBER, KAREN DAWISHA, RON HILL,
LESLIE HOLMES, MICHAEL KASER, ALISTAIR MCAULEY,
FRED SINGLETON
The National Association for Soviet and East European
Studies exists for the purpose of promoting study and
research on the social sciences as they relate to the Soviet
Union and the countries of Eastern Europe. The Mono­
graph Series is intended to promote the publication of
works presenting substantial and original research in the
economics, politics, sociology, and modern history of the
USSR and Eastern Europe.
SOVIET AND EAST EUROPEAN STUDIES
Books in the series
A. Boltho Foreign Trade Criteria in Socialist Economies
Sheila Fitzpatrick The Commissariat of Enlightenment
Donald Male Russian Peasant Organisation before Collectivisation
P. Wiles, ed. The Prediction of Communist Economic Performance
Vladimir V. Kusin The Intellectual Origins of the Prague Spring
Galia Golan The Czechoslovak Reform Movement
Naum Jasny Soviet Economists of the Twenties
Asha L. Datar India's Economic Relations with the USSR and Eastern
Europe, I953-1969
T. M. Podolski Socialist Banking and Monetary Control
Rudolf Bifanic Economic Policy in Socialist Yugoslavia
S. Galai Liberation in Russia
Richard B. Day Leon Trotsky and the Politics of Economic Isolation
G. Hosking The Russian Constitutional Experiment: Government and Duma
1907-14
A. Teichova An Economic Background to Munich
J. Ciechanowski The Warsaw Rising of 1944
Edward A. Hewett Foreign Trade Prices in the Councilf or Mutual Economic
Assistance
Daniel F. Calhoun The United Front: The TUC and the Russians 1923 -28
Galia Golan Yom Kippur and After: The Soviet Union and the Middle East
Crisis
Maureen Perrie The Agrarian Policy of the Russian Socialist-Revolutionary
Party from Its Origins through the Revolutions of 1905-1907
Gabriel Gorodetsky The Precarious Truce: Anglo-Soviet Relations 1924-27
Paul Vysny Neo-Slavism and the Czechs 1898-1914
James Riordan Sport in Soviet Society: Development of Sport and Physical
Education in Russia and the USSR
Gregory Walker Soviet Book Publishing Policy
Felicity Ann O'Dell Socialisation through Children's Literature: The Soviet
Example
Stella Alexander Church and State in Yugoslavia since 1945
Sheila Fitzpatrick Education and Social Mobility in the Soviet Union
1921-1934
T. H. Rigby Lenin's Government: Sovnarkom 1917 -1922
M. Cave Computers and Economic Planning: The Soviet Experience
Jozef M. van Brabant Socialist Economic Integration: Aspect5 of
Contemporary Economic Problems in Eastern Europe
R. F. Leslie, ed. The History of Poland since 1863
M. R. Myant Socialism and Democracy in Czechoslovakia, 194 5- 1948
Blair A. Ruble Soviet Trade Unions: Their Development in the 1970s
Angela Stent From Embargo to Ostpolitik: The Political Economy of West
German-Soviet Relations, 1955-1980
THE
MODERNIZATION OF
SOVIET INDUSTRIAL
MANAGEMENT
SOCIOECONOMIC DEVELOPMENT
AND THE SEARCH FOR VIABILITY
J.
WILLIAM CONYNGHAM
CATHOLIC UNIVERSITY OF AMERICA
WASHINGTON, D.C.
CAMBRIDGE UNIVERSITY PRESS
CAMBRIDGE
LONDON NEW YORK NEW ROCHELLE
MELBOURNE SYDNEY
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A catalogue record for this publication is available from the British Library
Library of Congress Cataloguing in Publication data
ConynghaWmi,l liJa. m
Them odernizaotfiS oonv iientd ustrial
management.
(SoviaentdE asEtu ropean studies)
Bibliograpp.h y:
1. Industmrainaalg eme-nSto viUenti on.
I.T itleI.I S.e ries.
HD70.S63C6665 8'.00947 81-21630
ISBN9 78-0-521-24h3a8r1d-b0a ck
ISBN9 78-0-521-07p0a2p6e-r3b ack
For Margaret Frances
Contents
Preface page ix
1 The context of management reform 1
2 The systems approach to management reform 51
3 Developing a technology of management 84
4 Modernizing the methods of management 131
5 Rationalization of formal structure 175
6 Toward a new ministerial structure 214
Afterword 255
Notes 275
Bibliography 311
Index 323
Vll

Preface
This study began in a deceptively simple way as an investigation
of the impact of the 1965 economic reforms on industrial or­
ganization. In an earlier book, Industrial Management in the Soviet
Union, my examination of th� Communist Party's leading role in
industrial decision making had raised several interesting ques­
tions that I hoped to pursue more systematically with respect to
the reforms. These questions arose quite naturally from
Khrushchev's repeated failures to revitalize industrial manage­
ment in the late 1950s and early 1960s. During those turbulent
years, it became strikingly clear that his striving to make the
management system viable through the ideological and political
mobilization of economic management was quite irrelevant
under contemporary conditions. His trial-and-error approach,
directed primarily at reorganizing the Party and state bureauc­
racies, failed to address the massive changes in the Soviet Union
that had resulted from socioeconomic development. In a fun­
damental sense, Khrushchev's experience put into question
whether any management system as big and complex as the
existing Soviet system can, in fact, be rationally directed and
controlled.
In the post-Khrushchev period, the continuing effort to create
a modern management system has been simultaneously a reac­
tion to the earlier period and a thrust to transcend it. The les­
sons of the political backlash that toppled Khrushchev have not
been lost upon his successors, who have approached the prob­
lems of management cautiously. Nevertheless, there has been a
gradually increasing awareness within the political leadership of
the formidable challenges that a very complex socioeconomic
lX
x Preface
system presents to a traditionally organized industrial system.
Perhaps more acutely for Brezhnev than for Khrushchev, the
central problem remains of how to increase the effectiveness of
industrial management without simultaneously undermining
the regime's political structure.
The genuinely new element in the search since 1964 for a
modern industrial organization has been the complex and still
not fully completed effort to develop a scientific theory of man­
agement as the starting point for rationalizing the management
system. The assumption that social and economic processes can
be consciously and rationally planned and controlled has been
fundamental to Soviet Marxism. To define this issue in clear
operational terms, however, has been extremely difficult ·for
Soviet as well as Western specialists. At the beginning of the
1980s, there is still theoretical ambiguity as to whether a Soviet­
type management system can direct a complex industrial econ­
omy with measurable efficiency. The experience of the past fif­
teen years strongly suggests that the organizational development
of industrial management within the existing institutional
framework remains an uncertain task.
The processes of rationalization have been centered on the
resolution of two fundamental operational problems. The first
encompasses those chronic problems of economic efficiency that
have plagued the command economy since the early 1930s. The
second, closely associated probl-=m has been the expansion of
organizational pluralism, which has been experienced as a
growth in the role of the intermediate organs of management
and as a suboptimization and corresponding loss of centralized
direction and control. The twin objectives have been to improve
both the efficiency of resource allocation and the integration
and responsiveness of industrial organization.
The pursuit of these objectives over the past fifteen years has
been a complicated process and has proceeded on a variety of
levels under diverse circumstances. The most basic level, clearly,
has been the quest for a theory of how to manage a complex
industrial system. This search has, of course, been heavily con­
ditioned by the complexity and institutional inertia characteristic
of the present management system and by the paradigm of clas­
sical rationality that defines and legitimates it. In this respect, the
central issue in management modernization has been whether