Management and Bureaucracy In The Russian Factory

...On construction projects the famous Russian winter provides a most natural pretext— snow shoveling...

...Another device—also tantamount to "plain swindling"—is to report the output of sub-standard quality ogods as part of acceptable materials for shipment...

...There appear to be established views among the workers as to what constitutes a "fair" income, and the foremen were under pressure from their men to pad the wage bill with various fictitious jobs...

...They are willing to give a few months' premiums for this...

...The aggressive competi tion for labor aggravated the prob lem of workers "flitting" from job to job in search of "the long ruble...

...for example, one periodical reported "Last month twenty workers in this plant were paid over 2,700 rubles by work orders without numbers on them, for some unidentified work...

...it is the place to commend Professor Berliner for a careful study which shows the reality of Soviet economic life, especially at a moment when all sorts of extravagant delusions are once again in the air...

...Said Informant 65, "We had particular trouble with the women's brigade...

...Plant managers have been known to enlarge inventories of raw materials and to try to reduce plant production programs, in order to create "safety factors" by which additional assurance can be given for a later fulfillment of production plans...

...Director Burdin of Factory Number Two of the Moscow City Leather Footwear Trust found himself in a worse position at the end of 1951...

...So they would take part of the gross output and include it with the market output in order to raise the figure for market output...

...Their ac• counts of their job experiences were then extensively supplemented and thus "controlled' by information culled from Soviet journals—so that it is impossible to dismiss this material on the ground that it comes from "hostile" sources...

...Finally, Berliner's analysis of Soviet management compels one to ask: Are there alternatives to the managerial mode of decision-making over industrial production...

...Some officials find it unnecessary to take the trouble to cover up such activities...

...judging from the work orders for shoveling snow, commented an informant, "it would seem that all the snows of Siberia fell on our project...

...Professor Berliner's book is rich with materials of this kind, but there is no space for further quotation...

...Because of the scarcity of virtually all • Harvard University Press, Cambridge, 1957...

...Not a single enterprise, if it worked in full accord with all orders and decrees of the government and planning organs, would be able to function without interruption...

...Orthodox theoreticians of planned economies do not devote much attention to this matter: It is an embarrassing deviation from their schemes...

...386 pp...

...In Factory and Manager in the U.S.S.R.,* Professor Joseph Berliner of Syracuse University has written a most valuable study of the actual operating conditions in the Soviet factory...

...We draw up a special work order for sweeping the floors or cleaning up...

...A second major difference between Soviet and, say, American conditions of management is the absence of autonomous worker organizations in Russia...

...It is as though the whole of an economy consisted of vast firms like General Motors, all of them controlled by the cen tral office of a superfirm whose management is finally found in the highest political body of the country...

...These industrial practices give the clue to why total paid wages have tended to be higher than the planned wages fund of Soviet industry...

...For example, we say that he had to carry materials and we use a false work order...

...It is a pity that this material did not appear in the published volume, since it is of great interest and deserves elaboration...

...The central role of the physical output plan, and the readiness to use many kinds of manipulation to achieve it have thus come to be decisive in shaping the character of managerial practice...

...Substantial bonus payments to both management and the workers of the firm help at times to stimulate this fulfillment...

...And the director agrees also...

...Promotions within and outside the firm are based substantially on the manager's ability to reach output quotas...

...and class differences, as expressed in bargaining conditions of work are not supposed to exist...

...The Russian trade unions being substantially company unions, management is seldom impeded by the claims of freely-operating organizations that parallel its own lines of decision in the productive process...

...Informant 90...

...This feature, as well as the problems of pervasive industrial shortages, indicate a major characteristic of Soviet industrial economy: it has operated as though it were a permanent war economy...

...Influence is obtained in many ways, many of them quite familiar in private business firms...

...or English businessmanaged firm as necessary both for decision-making and for production...

...Many people have held to the view that there is something in the very nature of production technology and the size of industrial plants which, both in the capitalist West and the Communist East, precludes democratic mass participation and requires a managerial, hierarchical rule over industrial work...

...The energies devoted in the United States to selling have in Russia largely gone into procurement, though similar techniques have been evolved for these different ends...

...Goods to be produced during a subsequent period are reported as already having been produced...

...SOME OF THE MOST INTRIGUING details given by Berliner pertain to the practices of blat and the tolkach...

...Every day, for the sake of production, the official norms are violated, everywhere there is evasion, false figures, untrue reports, and so forth...

...Bribery is extensively employed in the Soviet economy in order to get necessary action in the behalf of one's firm...

...The closing chapter of that dissertation includes a valuable analysis which gives a broad comparison of similarities in managerial modes of behavior in the United States, Russia and Germany...

...he must carry out operations within the limits of a financial budget and produce the budgeted profit...

...I have tried in a recent book (Decision-Making and Productivity, published by John Wiley*) to demonstrate that there are realistic alternatives to managerial rule over production...

...Looming above all else is the pressure to fulfill the relentlessly expanding production plan...

...and the facts he advances show that, for many purposes, the similarities between modes of management at the plant level under private (Western) and state (Russian) capitalism are at least as important as the differences...

...Formal reports have indicated the production of goods that in fact never were completed...

...The purpose of this is to give the assistant commissar the impression that he is really putting pressure upon the enterprise...

...They underfulfill it because they want to remove any suspicion that might arise if the plan is fulfilled every single month...

...In addition some managers tried to secure their enterprises with labor and embarked on the antistate course of illegal increase in wages by means of all sorts of increased job valuations, surpayments, and so forth, thus adding to the great mobility of the labor force...

...I should mention, however, his neat contrast between the conditions of labor under Soviet industrialization and the conditions of the workers under early English industrialization, as the latter was described by Marx —a parallel, by the way, that even includes the Stakhanovite techniques for setting work standards...

...This may happen once or twice a year...

...Connected with this was a feverish state of affairs in filling up their planned contingent of workers, rather than concentrating on a better organization of production and labor...

...Informant 388...

...Sometimes, however, tactical needs may dictate the underreporting of output: Sometimes the plan is deliberately underfulfilled...

...This is not the place to rehearse the arguments of that book...

...The parallels to business enterprise under private management are both numerous and significant...

...Thirdly, the Soviet manager, unlike his equivalent in the West, has functioned under close political and police surveillance...

...An important merit of Berliner's book is, therefore, that it gives sufficient data to show that worker decision-making on production, as a by-product of their efforts to improve their conditions of employment, will have to be included as a regular element in studying factory and management in the USSR...

...Personal relations with people are used in order to get such favors as delivery of scarce materials...

...He announced that the December plan has been fulfilled 110.8 per cent when it had actually been fulfilled only 73.9 per cent...

...Though formally bound by a wage budget, managements found various devices for raising worker earnings while keeping formal wage structures intact...

...Workers, in turn, since they could not negotiate with management through representatives of their own choice, have utilized the pervasive labor shortage as a means of tacit pressure upon management...

...The director of the Stalin Kiev Boat Repair Yards, Comrade Tikhienko, exaggerated his 1953 report by 683,000 rubles and thus reported that his annual plan had been fulfilled 100 per cent...

...Here too, first priority has been given to fulfillment of the physical output requirement, with cost and allied considerations given second priority...

...We hope to review this book in a forthcoming issue of DISSENT.—Editors...

...Sometimes at the end of the quarter the market-output plan was fulfilled only 90 per cent...

...This was plain swindling...

...But once we turn to the occupational performance of these Russian specialists, we observe certain features specific to a Soviet managerial system working under the stresses of a sustained war economy and an unrelenting predatory competition between the units of that economy...

...Blat refers to "influence...

...Within the factories there have systematically operated "parallel organizations" of the party and the police assigned to check on managerial performance and guard against "subversive," i.e., independent, action by the workers...

...No one wanted to send a telegram like this to the ministry, or else the director and the Party secretary may both be brought up on charges...

...Most of them, however, manifest considerable ingenuity in finding appropriate jobs to enter on these false work orders as having been done...

...Done with the collaboration of accountants and engineers in the given firm, who also have a stake in the appearance of fulfilled goals, this has become a systematized feature of Soviet economic life: There is no shortage of evidence on the prevalence of this form of simulation...

...It is the similarities in managerial rule that are most striking, yet to understand them one has first to glance at some of the differences...

...Materials in process may be listed as finished goods...

...The reader may recall that this view of managerial attainment is rather similar to the pattern in many U.S...

...Similar conditions have made it possible for workers to press for higher earnings...

...One of the most reliable informants expressed his judgment in these words: "The Soviet system of enterprise administration, the method of calculating the degree of success of the work of the enterprise and the system of financial operations are founded upon an enormous amount of falsification in all branches of production and in their accounting systems...

...Therefore we had to spend much time in various forms of deceit, write out different work orders, give them makeshift jobs to increase their pay...

...But if in some months the plan is not fulfilled, then it will seem like a very hard program...

...In preparing his book Professor Berliner made use of data derived from interviews with emigres who had once been managers and technicians in Soviet factories...

...7.50...

...They had the easiest jobs, yet they never earned the full amount which was due them...

...While attention is given to the cost and financial aspects of the plan, success is achieved when the physical plan has been carried out within acceptable limits of variation in the cost and financial categories...

...Their theories do not include occupational class as a significant category...

...defense industries, especcially under wartime conditions...

...Anyone interested in these matters will want to examine the original manuscript of Professor Berliner's book which is on file at the Harvard University library as a doctoral dissertation and therefore available on inter-library loan...

...A work order may be given to a worker for some job which has never actually been performed...

...From the standpoint of everyone interested in a free society it is important to know whether there are workable, efficient alternatives to managerial rule over production...

...We often ascribe to a man work which he did not do at all...

...His manager, in turn, is interested in the results and not in the devices he may use to reach them...

...The promised rewards for achieving output goals—and threatened penalties for missing them—have driven Soviet managers to devise an intricate array of ingenious devices for getting around problems of shortages, for handling difficulties never anticipated in the formal plan, and for simulating the fulfillment of targets...

...whether the modes of management we have in both Russia and the United States are the consequence of particular social arrangements or are inherent in "the nature of things...

...ONE OF THE MOST IMPORTANT sections of Berliner's book is the discussion of wage and allied labor practices...

...But while there is abundant qualitative evidence, it is more difficult to estimate the extensiveness of the practice...

...Finally, the hierarchical rule of management in Russia is organized from the factory floor to the pinnacle of national power...

...This means that the job has to be made acceptable, or even attractive, so as to enable them to "pirate" workers from other plants...

...A major legend of Soviet ideology has it that the rule over production in the USSR is qualitatively different from that of private capitalism...

...Because if month after month the plan is fulfilled, then the commissar might crack down upon them...

...The shortage of labor created . . . uncertainty in the supply of labor power for the planning period...

...As Berliner describes it, the Soviet manager has had to work toward several simultaneous, but not always harmonious, goals: He must fulfill the physical production targets...

...As a result of the labor shortage, labor pirating was widely reported in the prewar press and managers were criticized for the "intoler able practice of recruiting labor at the gates of neighboring plants, and tempting people with higher wages...

...Informant 202...

...Because they have often been under severe pressure to enlarge outputs, managements respond with extensive efforts to retain and recruit workers...

...and he must also attain other targets shown in the plan, e.g., improvements in labor productivity, economies in utilization of raw materials, etc...

...This activity, in turn, is frequently carried out by the tolkach who is a kind of Soviet "five-percenter," an expediter, equipped with expense account funds, sent out by firms to get materials and speed deliveries...

...IN THE TABLE of organization of each enterprise there is provided a whole range of staff specialists for carrying out the kinds of functions which are recognized in a U.S...

...Malenkov called attention to "the following corrupt practice: after having provided an incentive for the good workers, they artificially raise up to their level the wages of those groups of workers who lag in productivity, who do not improve their skills, and who do not fulfill their output norms...

...We say that water must be pumped out somewhere, or that the materials must be brought in from a further distance than they really are...

...kinds of consumer goods as well as capital goods, selling products has not been a problem in Russia...