From USSR to Russia - An Analysis of the Evolution of Organizational Design

ABSTRACT

During the recent past a movement towards a greater amount of centralization occurred within the Russian government structure. At the same time the president accumulated a more authoritarian leadership style. This movement was examined in order to figure out which consequences it could have for world politics as well as world economics.

INTRODUCTION

The main purpose of this paper was to examine consequences changes in organizational design in post communist Russia and the ‘Big Picture’ of how these consequences changes will affect Russia.. We posed the question if it is possible for Russia to gain back some of its former power by centralization within the whole government structure.

This paper consists of five main parts. The first two parts will be a quick review of the history of the Union of Soviet Socialist Republics (USSR) and with the actual government structure. In the first part we briefly described how the Soviet’s government was structured during its communism time (1917 – 1991). Therefore, we took a closer look to the origins of communism which is closely related to Lenin and Stalin as well as the development that occur within the USSR. In the second part, we pictured how the power structure switched during the disintegration process of Russia from the USSR.

The third section mainly deals with the former USSR’s organizational design. Additionally, we brought out the Soviet’s dependencies on the external environment as well as former U.S. President Reagan’s way to take advantage of these dependencies in order to win the Cold War and to bring down the USSR’ system. Finally, we showed how the measures taken by the Reagan Administration influenced and shaped the external environment of the USSR.

The fourth section briefly describes McGregor’s theory X and theory Y. Furthermore, we used these theories in order to illustrate why centralization and vertical government structures still exist in Russia. Moreover, we showed how the government took advantage of the population’s mood to strengthen its own power. Therefore, we used the bloodshed in a Beslan school siege as an example.

The final section mainly deals with the economic influence of the Russian government. To illustrate this influence we examined the case of the Russian oil producer Yukos. We pointed out which consequences the actions taken by President Vladimir Putin and the Kremlin will have to the Russian economy as well as worldwide, e.g. we showed some possible changes to the ‘Big Picture’. However, at the beginning of this section there is be a brief introduction of President Putin and his objectives.

Structure of the USSR’s Government between 1917 and 1991

During the October Revolution in 1917 Lenin and his Bolshevik Party came to power. Lenin’s “ideology proclaimed the abolition of the market, the introduction of social, national and political equality, the direct and unmediated power of the working masses, and the spread of the revolution to all corners of the earth.”^[1] Originally, the Bolshevik Party governed within a coalition but in 1918 the Soviet government became a political monopoly and it acted “in the name of a ‘dictatorship of a proletariat’”.^[2] This dictatorship became external as well as internal merciless. A concrete censorship was implemented and elections were only a show. Opposition parties got forbidden and were closed down. “Within the party itself, internal opposition and differing opinions of any kind were gradually eliminated.”^[3] From 1922 on Joseph Stalin became general secretary. This was the leading figure within the party and it had all the power. By the end of the 1920s Stalin has strengthen his power and used it to terrorize the Soviet population. “The principles of command and administer were […] universalized to every aspect of economic and social life, including the arts and personal life.”^[4] During the years of Stalinist rule at least 600,000 people lost their lives.

The Soviet Union became ‘famous’ for its five-year plans which were first introduced in 1928. These five-year plans emphasized the heavy industry and defense. At the beginning the whole country was involved to reach each plans objective. From 1928 till 1938 the Soviet Union was able to improve its industrial output from 7% to 45% compared to the level in the United States.^[5]

After World War II Communist rule began to liberalize in conjunction with the new general secretary Khrushchev. He tried to establish at least a limited number of laws. “Internationally, the Soviet Union established closer relations with India, Egypt, and other developing countries.”^[6] During the time between 1964 and 1982 Leonid Brezhnev became party leader. Under his leadership the momentum of reform slowed down, “but it speeded up under Yuri Andropov (1982-84) and then acquired an entirely new scope and purpose under Mikhail Gorbachev (1985-91)”.^[7]

But this increased reform process could not obscure the fact that the USSR’s economy was in trouble. It became clearer that not only the leadership style was the problem but the Communist system as a whole. For instance, in 1980 the estimated per Capita Soviet GDP was at $6,500/year compared to $14,000/year within the United States. In the Soviet Union most of the population was inadequately housed. Only two-thirds had running water and only one-third had hot water. Only 18 households per 1000 owned a car and telephones were a luxurious good. Soviet employees had to surrender about two-thirds of their monthly salary to the ruling party. The population was exploited by the government. Moreover, the communist system led unpredicted. T he Soviet Union, compared to other countries, rarely monetary incentives for employees to be productive the result of which precipitated a great deal of corruption.^[8] It was these facts that lead to the disintegration of Russia from the USSR and the crash down of the whole Soviet Union in 1991.

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^[1] Cp. Sakwa, 2002, p.3

^[2] Cp. Hancock, 2003, p.409

^[3] Cp. Hancock, 2003, p.409

^[4] Cp. Sakwa, 2002, p.6

^[5] Cp. Hancock, 2003, p.409-410

^[6] Cp. Hancock, 2003, p.410

^[7] Cp. Hancock, 2003, p.410

^[8] Cp. Norquist, 2002, p.8-9