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Insider Privatization and Careers

Insider Privatization and Careers

A Study of a Russian Firm in Transition

(p.253) 8 Insider Privatization and Careers
The Analysis of Firms and Employees
Guido FriebelElena Panova
University of Chicago Press

How do firms adjust their personnel policies and internal structure to changes in their economic and institutional environment? A number of studies indicate that a firm's organizational structure and career paths remain remarkably stable, even in turbulent times. This chapter investigates how Russia's transition from a centrally planned to a market economy has affected the human resource policies of a heavy-industry firm. Using a personnel data set that covers 1,538 white-collar workers over up to seventeen years (1984 to 2000), it shows that from 1984 to 1991, the firm featured stable patterns of upward mobility that look quite similar to the career paths in Western firms. From the year 1992, when Yegor Gaidar's reforms began, to 2000 (during the transition), these career paths seem blocked. In all tiers of the firm's hierarchy except for the lowest one, more managers are hired from the outside market and fewer managers leave the firm. As a result, the firm becomes toploaded, and promotions are blocked. The privatization law probably provided insiders with favors through the so-called option 2 of the Russian voucher privatization.

Keywords:   Russia, privatization, human resource policies, career paths, organizational structure, market economy, white-collar workers, upward mobility, managers, promotions

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