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Article

Perceived control and performance in Russian privatized enterprises: Western implications

European Management Journal. 1996. Vol. 14. No. 2. P. 160-166.
Gurkov I. B., Maital S.

In a detailed study of 20 newly-privatized Russian enterprises, Igor Gurkov and Shlomo Maital ask two important questions concerning ownership and performance. First, who really controls the newly-privatized enterprises and who is generally thought to control them - are they the same? Second, what is the relationship between the type of control - in particular, does one form of control lead to superior performance?

The authors find that, for nearly half of the firms, managers were perceived to be the real owners and controllers. But this perception is not borne out by reality. In all of the 20 companies surveyed, across a variety of industries, 51 per cent or more of the stock was found to be distributed among the employees. The implications of this situation for Western firms seeking partners with Russian privatized enterprises is spelled out.