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Behind the Factory Walls: Decision Making in Soviet and U.S. Enterprises.

Behind the Factory Walls: Decision Making in Soviet and U.S. Enterprises Behind the Factory Walls: Decision Making in Soviet and U.S. Enterprises. Paul R. Lawrence, Charalambos A. Vlachoutsicos. Harvard Business School Press. $29.95. Until recently, secrecy was the operating norm of the Soviet economy. With Westerners barred from the country's interior as security risk, little was known of the giant factory complexes that stamped out Russian's machinery, trucks, and cars, save for official propaganda out of Moscow. Yet another result of glasnost is this book, the first close-up observation of heartland Soviet industry by U. S. experts, with imporant lessons for America's own managers.

Beginning in 1988, members of the Harvard Business School conducted in-depth examinations of four Russian factories. They looked at two truck engine and two electrical equipment factories in the Ukraine and Great Russia. Working with Soviet scholars, the team walked to employees throughout the organizations, attended factory meetings, and examined relevant documents. They then studied four comparable plants in this country.

Their findings go beyond the current round of self-congratulation about the superiority of U.S. caitalism. On one hand, it will come as no surprise that the Harvard team found the Soviet factory older and more unwieldy than its American counterpart. Such standar management tools as inventory control, cost accounting, and marketing were in primitive stages of development. But contrary to common perceptions, especially in the western press, the Harvard team found that perestroika has made a positive impact on factory management. By and large, Soviet managers are discarding bad bureaucratic habits--establishing direct ties with customers, for example, and paying more attention to the design and delivery of products.

The heart of the book concerns the effects of perestroika on the workers. To an extent that astonished the authors, great strides had been made in engaging the workforce in self-management and shop-floor democracy. In the four factories, newly elected workers councils and team leaders were not only in place, but were emerging as effective players in decision making. At one job site, several hundred workers were observed engaging in a "self-critical" production plan. This was not the political harangue one might expect, but an open forum by the rank and file to reduce bottlenecks in the manufacture of electrical motors. Elsewhere, a workers' council blocked an attempt by the local party functionary to fire a supervisor--a situation unthinkable a few years ago.

The Harvard people use a lot of fancy terminology to describe what comes down to this: Under perestroika Soviet managers tell employee groups what to do, but not how to do it. Management meets on a daily basis with group leaders and takes pains to build a consensus rather than hand down orders. Workers become involved in the process by deciding how to achieve the desired result. Work groups reduce overhead costs by assuming responsibility for scheduling, machine maintenance, even at times training and discipline within the group.

Sound familiar? In America the same goals of teamwork and cooperation are constantly espoused, but with less satisfactory results. "Quality circles" and "gain sharing"--two invogue management concepts--tend to be add-ons, not integral parts, of the traditional American chain-of-command structure. Here, bosses still run the shops through instructions passed down the command ladder. Hourly employees have only limited say outside their prescribed duties. The major difference is that human relations people now come by four upbeat talks and occasional "round circle" meetings. By decentralizing power through the hierarchy, the Soviets have managed to enhance labor productivity in otherwise rickety factories. In this age of dying ideologies and heightened global competition, that's an accomplishment that deserves notice.
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Author:Reutter, Mark
Publication:Washington Monthly
Article Type:Book Review
Date:Apr 1, 1990
Words:604
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