ABSTRACT
So far we have been considering the nature and organization of economically active enterprises. Now we pass to an examination of the ways by which the political, administrative and planning organs control and direct these enterprises, and thereby the economic life of the Soviet Union. There must be a flow of operational orders to enterprises, plans must be devised for various sectors and co-ordin-ated with those of other sectors. The orders given to enterprises about what to produce must be backed by the necessary material supplies, and the output plans must, of course, be related to the planned inputs. Every economic decision is interconnected with a great many other decisions, or involves a number of necessary consequential effects. Therefore, the situation appears to call for an all knowing and all-seeing Planner, whose brain takes decisions in full awareness of all the relevant alternatives and of all the consequences of his acts. However, such a Planner cannot exist, outside the imagination of model-builders or of over-simplifying writers of textbooks. The tasks must be divided, and each possible arrangement of planning and operational powers involves its own set of advantages and disadvantages, solving some difficulties and creating others, a fact familiar to the management of large firms in the west. We should distinguish between several major aspects of organization. The first category lays stress on industrial sector-, the process of planning and control is then based on the particular industry (e.g. textiles, metallurgy, coal), with general co-ordination between industries at government level. The second is often referred to as junctional: powers are given to functional bodies, concerned on a national scale with supplies, labour, investment, wholesaling and so on, which give orders within the scope of their responsibility to subordinates in the industrial hierarchy. Finally, there is the territorial principle, which would devolve planning and operational powers to regional authorities. It must be emphasized from the beginning that none of these categories are ever present in pure form. Thus planning and control which operate 'functionally' or territorially must involve separate consideration of the problems of each industry in some office in Moscow, headed by an official; the office may have the status of a branch of some larger organization, such as Gosplan, or possess the dignity of a 'ministry', but it is impossible to do away with it altogether. In any conceivable organizational arrangement, co-ordination between functions, industries and regions, between output plans and investment, between production and material supplier, and so forth, will present difficulties; these difficulties find their administrative expression in the creation of offices and departments to deal with them. None the less, the basis of organization chosen does make an appreciable difference to the chain of command, to the levels at which decision-making on various matters takes place, and to the weight given to certain species of problems within the planning machine; this should become apparent in the following pages.
