Sucala, Voicu Ion (2018) Inside the Romanian communist economy: state planning, factory and manager. PhD thesis. https://theses.gla.ac.uk/30636/ Copyright and moral rights for this work are retained by the author A copy can be downloaded for personal non-commercial research or study, without prior permission or charge This work cannot be reproduced or quoted extensively from without first obtaining permission in writing from the author The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the author When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given Enlighten: Theses https://theses.gla.ac.uk/ [email protected] Inside the Romanian Communist Economy: State Planning, Factory and Manager Voicu Ion Sucală Submitted in fulfilment of the requirements of the Degree of Doctor of Philosophy School of Social & Political Sciences, College of Social Sciences University of Glasgow February 2018 Abstract The aim of this research was to examine the main organisational and social characteristics of the Romanian industrial enterprise under communist rule. The research explored the complex relations between state planning bodies, enterprises, and the managers. The research’s approach was multi-disciplinary drawing on industrial management, economics, organisation studies sociology, and political science. The research had also a consistent trans-disciplinary character because it aimed to create an over-arching perspective on Romanian industrialisation process. The approach employed in this study was the one labelled by Burrell & Morgan interpretivist. This means that author’s set of assumptions over society and social research lies on the subjective side of the philosophy of science dimension, and is characterised by an integrationist view over society. The research methods employed were predominantly qualitative, based on interpretation of data collected using interviews and document analysis. The empirical research focused on the formation and key features of Romanian industrial enterprises, on the process of negotiation of the plan objectives between enterprises and central state structures, and on the analysis of the human resources processes of the enterprise. The empirical findings offer an in-depth perspective over the practices, mechanisms, and actors involved in the activity of the Romanian industrial enterprises for almost four decades. The findings also confirm the consistent potential of the interpretive approach to provide a better understanding of the way organisations work in a challenging environment as the communist regime was. 2 Table of contents List of tables 7 List of figures 8 Acknowledgement 9 Author’s declaration 10 Chapter 1. Introduction 11 1.1. The broader context of the research 15 1.1.1. The legacy of backwardness 15 1.1.2. The Romanian Communist Party – a short and obscure history 28 1.1.3. Relations with the Soviet Union 33 1.2. Research objectives 34 1.2.1. The formation and key features of Romanian industrial enterprises during the process of industrialisation under the communist regime 35 1.2.2. An in-depth description of the continuous process of negotiation of the plan objectives between enterprises and central state structures 37 1.2.3. The analysis of the ‘human side of the communist enterprise’ 39 1.3. Thesis structure 43 Chapter 2. Organisation, power and politics in the communist regime 45 2.1. The Social Character of Societies under Communist Rule 46 2.1.1. “The Building of Socialism” 46 2.1.2. Critical Theories 47 2.1.3. Was there a new ruling class? 48 2.2. The problem of the state managed economy 57 3 2.3. The role and position of industrial managers 64 2.4. Meta-Theories of Communist Society and Organisation 73 2.5. Conclusions 80 Chapter 3. Romanian industrialisation – legal framework, characteristics and social consequences 81 3.1. The Soviet Union and the Romanian economy 82 3.2. The Romanian command system 89 3.2.1. Preparations for the command economy 92 3.2.2. Extensive industrialisation 96 3.2.3. Labour and cadre policies 102 3.3. The workers' protests and strikes in communist Romania 120 3.4. Conclusions 124 Chapter 4. Methodology 129 4.1. An interpretive perspective over the communist enterprise 129 4.2. The research methods 131 4.2.1. The interview 132 4.2.2. Document analysis 132 4.3. Three enterprises: Unirea, FMR, and Carbochim 135 4.3.1. The monographs 137 4.3.2. The history of Unirea and FMR 137 4.4. The managers’ perspective 140 Chapter 5. Plan and enterprise in communist Romania 143 5.1. The Soviet industrial enterprise 143 5.1.1. Managerial practices in Soviet industry 145 5.1.2. The shortage syndrome 148 5.2. The Plan - from theory to Romanian practice 150 5.3. Results of the empirical study 156 5.3.1. Taut plan and shortage of resources from the beginning 156 4 5.3.2. Poor knowledge of planning methods and techniques 160 5.3.3. Salaries first 162 5.3.4. Permanent negotiations 168 5.3.5. Irrational investment plans with unlimited resources 171 5.3.6. Poor performances and quality – the case of exports 174 5.4. Conclusions – the vicious circle of the Romanian planned economy 176 5.4.1. Shortages from the beginning 177 5.4.2. Dysfunctionalities from the beginning 178 5.4.3. Permanent negotiation of the plan 180 5.4.4. Constant loss accumulation 181 5.4.5. Romanian enterprises in Berliner’s framework 184 Chapter 6 – The human side of the communist enterprise 186 6.1. Building a working class 187 6.2. Red versus … not-so-red in education 194 6.3. Hiring in the communist enterprise 198 6.4. Serviciul de cadre. Red versus expert - Romanian version 201 6.5. Serviciul Plan. The negotiation ritual 213 6.6. Conclusions 217 Chapter 7. Conclusions 221 7.1. Empirical findings 222 7.1.1. The formation and key features of Romanian industrial enterprises during the process of industrialisation under the communist regime 22 7.1.2. The continuous process of negotiation of the plan objectives between enterprises and central state structures 225 7.1.3. The human side of the Romanian communist enterprise 226 7.2. The potential of the interpretivist approach 228 7.3. Managers – the grave diggers of the Romanian planned economy? 229 7.4. Limitations and future research 232 5 References 233 Appendix 1. Archival documents 244 Appendix 2. Former employees of Unirea and FMR 247 Appendix 3. Other sources 248 Appendix 4. Sample of scanned documents 249 6 List of tables Table 1-1. GDP/capita (international dollars Geary-Khamis 1990) 19 Table 1-2. Hungary and Romania GDP evolution (in equivalent units) 26 Table 1-3. The evolution of GDP/capita in 8 communist countries between 1980 and 1989 27 Table 3-1. The use rate of industrial capacity between 1985 and 1989 100 Table 6-1. Unirea total number of employees from 1938 to 1990 191 Table 6-2. Number of hired persons in each year at Carbochim 192 7 List of figures Figure 2-1. Assumptions about the nature of social science 76 Figure 2-2. Four paradigms of social theory 76 Figure 5-1. The vicious circle of a planned economy 176 Figure 6-1. Evolution of Unirea’s number of employees 191 Figure 6-2. Changes in the number of hired persons in each year at Carbochim 192 Figure A-1. The document D1 249 Figure A-2. The document D18 250 Figure A-3. The document D27 251 Figure A-4. The document D32 252 Figure A-5. The document D33 253 8 Acknowledgement This thesis wouldn’t have been possible without the work, time, effort, and support of so many different people, a few of whom I would like to thank here. Firstly, I’d like to thank to Professors Terry Cox and Stephen White for supporting me with their exceptional erudition, knowledge, expertise, time, and meticulous reviews. Their careful and always constructive feed-back has been crucial. Many other academics have kindly helped me with comments, suggestions, and sometimes with much needed criticism. They are too many to mention them here. Additionally, all the interviewees, who allowed themselves to be questioned, deserve my gratitude. Even if not all of them are quoted in this dissertation, they all helped me to get a better understanding of the industrial activity on that period. I’d finally like to thank all of my close friends and family for providing the support during this difficult endeavour. I cannot express my gratitude enough to my parents, without whom I wouldn’t be here today. And to Dan and Tudor, my perpetual sources of inspiration. 9 Author’s declaration “I declare that, except where explicit reference is made to the contribution of others, that this dissertation is the result of my own work and has not been submitted for any other degree at the University of Glasgow or any other institution.” Printed Name: Voicu Ion SUCALĂ Signature: 10 Chapter 1. Introduction The research for this thesis examines the main organisational and social practices within the Romanian industrial enterprise in the period of communist rule. This includes the relation between the enterprises and the planning structures - mostly the industrial branch ministry, and aspects of personnel relations with the enterprise, on the processes of selection and promotion, and on the relations between these processes and the ruling Communist Party's strategies, directives and plans. The research makes use of documents identified in Romanian National Archives, in the company archives of three selected enterprises in Cluj, Unirea, Carbochim and FMR, and on interviews with former employees of these and other companies in the area.