Ministry of Heavy Machine Building - Operations
There were 1,600 persons working at Mintyazhmash in the mid-1980s. It was hard to say whether this was too large or too small a number. First, the number has been building for years and second it was less than the statutory allotment. The ministry got people for its bureaucracy from the factories and associations. Ministry personnel were not specially trained for their work. That's why it was so surprising that two-thirds of branch headquarters workers had never worked in the branch's enterprises.
A characteristic feature was the average age of Mintyazhmash workers was over 40. This is a mature age but one can still be daring. However, not much daring was noted. Did this mean that there was a problem of aging in the bureaucracy? Without a doubt. The problem seemed to differ in different types of workers. All was quiet at the executive level. In fact there was stagnation: people stayed in the same jobs for decades. It was almost impossible to get around the absence of any hope for stimulating breakthroughs on the job. This had been the work environment of most ministry employees.
Where were middle-level managers and ordinary ministry workers trained? Practically nowhere. The personnel training system did not go in to specific detail concerning management work. The traditional conviction that the career path was from worker to minister hadn't been confirmed in practice. Leading specialists, senior engineers and ministry department chiefs often came to their posts by chance and without special training. They simply changed their specialization and learned on the job.
The ministry's bureaucracy functioned within a defined structure. Until the early 1980s, two types of subunits predominated in this structure. The first consisted of functional management administrations (economic planning, labor and wages, capital construction, equipment, finance, and personnel and educational institution management) which encompassed the entire branch, although each operated within its own expertise. The second type consisted ofspecialized offices in charge of individual subsectors. It was a conventional structure.
The decision to change branch management to a two-tier system can be listed among the revolutionary measures. Just what does this mean? Specialized offices such as the All-union Industrial Associations (VPOs) have played their role in the development of branch complexes. But they had outlived their usefulness as the lower level had become stronger. A decision was made to eliminate them and link the enterprises and production associations directly to the ministry and its functional management administrations. How has this revolutionary measure been implemented at the Mintyazhmash? Half-heartedly. Some of the VPOs had actually been dissolved. Three, to be exact: Soyuzmetallurgmash, Soyuzteplovozputmash and Spetstekhnologiya.
The enterprises formerly under these associations were being managed according to the two-tier system, but not all of them. There used to be a total of seven such enterprises in the branch, by 1986 there are 21. A three-fold increase would seem to be significant growth, but the truth was that the ministry had four specialized central boards operating according to the old method: Glavgormash, Glavpodyemtransmash, Glavvagon and Glavdizel. The material and equipment supply, finance and some other functions had been transferred to the functional management administrations while the central boards were only left with operational control over production and technical policy.
But whether the subunit is called an all-union industrial association or a central board, if it had operational authority and can affect the future it constituted yet another (a third?) tier of a two-tier system. Furthermore, two-thirds of the branch's enterprises and production associations were still subordinated to central boards. The ministry retained the central boards in the two-tier structure because it did not want to release some of the reins of power to the enterprises. This management "stinginess" was a drawback because the bureaucracy's work was unintentionally being shifted to a short-sighted outlook more suited to solving operational questions rather than strategic ones.
Paperwork was overwhelming, annoying and stifling. Sergo Ordzhonikidze spoke, passionately as usual, of the fondness managers had for creating paperwork. Bringing up the example of the Mossukno Trust's accounts which occupied 13 volumes and 7354 pages, he said, "It's not enough that people write, make fools of themselves, grow stupid and themselves don't understand what they write, we are not in a position to sort out what is written in [these documents]... it all comes down to the fact that man is engaging in correspondence with himself."
The paper flow in a single main administration for design and capital construction for seven months in 1986 (such a period had been adopted and there were monthly corrections for paperflow in each administration) consisted of 3365 incoming and 2020 outgoing documents. That meant 70 central board workers had nearly 5500 "document units" to contend with. This was (actually this should be) in addition to their normal duties. Now, at the same time these administration personnel participated in the preparation of 60 ministry decrees, 54 board decisions and 90 protocols it became clear that it must be difficult for ministry construction strategists to devote time to their primary jobs.
The problem was not simply that the workers were addicted to creating paperwork. The same virus had affected many of the ministry's associates. There was an enormous flow of surplus paperwork between the ministry, USSR Gosplan, the Ministry of Finance, the State Committee for Science and Technology and the USSR Council of Ministers' Bureau for Machine Building. Each department held tightly to its set of indicators and the related paperwork bureaucracy.
As long as the granting of extensive autonomy to enterprises remained only a dream, not even the strongest orders would stem the stream of paper flowing between the enterprises and their ministries. The ministry was not able to fundamentally change the situation because it was operating in the national economy's uniform system of paper flow and it could not truly isolate itself from that system.
Mintyazhmash personnel were the pioneers in this economic experiment and brought it into their hearts and minds. Many links in the new management system had been forged behind the ministry's walls and in its offices. These included means of establishing stable standards and asset allocation sizes, as well as methods for distributing rights and duties between branch headquarters and the enterprises.
The leader slowed down at some stage. Suddenly it became apparent that it was behind. By 1986 many branches had converted to self-financing and self-support, Mintyazhmash as a member of the second group would wait until 1988. Only three of its enterprises (Uralmash, Voronezh's Rudgormash and Lvov's Konveyer) set out on the road to profitability in 1987.
In most enterprises the wheels of production hardly move at all during the first part of the month. By the end of the month there was a rush and each day sees a 2- to 3-fold over-fulfilment of the plan. More often than not the numbers can be brought into correspondence with the plan, but at what cost? Rush production is paid for in reduced quality, improper resource utilization and increased production costs.
The most important incentive criterion and the fundamental means of praising, reproaching or reaching conclusions about an organization was the quantity of items which had already been placed on stream. Efforts were liberally expended to that end. The good intentions and infinite pains involved with a new technology were unreliable stimuli. Furthermore, there was no competition pushing the innovation forward, no need to surpass anyone and no need to fight for customers. For instance, what work did the Mintyazhmash workers responsible for new equipment production actually perform?
The Diesel Main Administration's chief designer, A. Popov, like five of his colleagues in the experimental designdepartment, didn't conduct any experiments and didn't design anything. Their main function was coordinating the efforts of designers, factories and the ministry itself. In practical terms, coordination meant handling paperwork, conducting meetings and clarifying various types of information on the performance of plans involving new equipment, etc. In other words, the chief designer was involved only in an ongoing process of correcting problems rather than supervision. Time and effort were expended on oral and written pushing of factories, institutes and their departments.
The ministry's plans called for bringing 90 percent of its production output up to worldwide standards during the five-year plan period. This was a more than grandiose plan considering that 58 percent of the mineral recovery machines, half of the lifting and hauling machines and none of petroleum drilling rigs met worldwide standards by 1986. The higher the position, the greater the optimism, while the alarm and doubt grow getting closer to the factory.
What substantive economic achievement can be undertaken by the head of a ministry central board (not just a production administration)? Grant the right to factories themselves to change the prices of their products according to their management circumstances and to seek out the required suppliers and even credit-worthy clients? Absurd! No central board chief would allow any such thing to happen.
The 22 July 1987 Ukase of the Presidium of the USSR Supreme Soviet "On the Formation of the All-Union Ministry of Heavy, Power and Transport Machine Building of the USSR" decreed that the Ail-Union Ministry of Heavy, Power and Transport Machine Building of the USSR Be Formed Out of the Ministry of Heavy and Transport Machine Building of the USSR and the Ministry of Power Machine Building of the USSR.
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