ABSTRACT
Analysis of what determines whether enterprises fall into the dysfunctional category or not is a daunting but interesting task.4 Sectoral and geographical location is very likely to play a role; chance, in the form of the qualities of owners and managers, is also likely to be a relevant factor. This author believes there is another factor, albeit one which at the moment cannot be claimed as much more than an unconfirmed hypothesis: that dysfunctional enterprises are likely to be owned or controlled by managers who have retained their posts from the Soviet period (for both biological and historical reasons they are likely to have gained their topmanagement positions under Gorbachev, rather than being the classic 'Red directors' of the Brezhnev period). They will have retained their places at the head of their enterprises through the privatisation process, with some sort of paternalistic 'social contract' with the workforce possibly being involved.
