CORPORATE GOVERNANCE OF PRIVATIZED ENTERPRISES IN TRANSITIONAL ECONOMIES - A THEORETICAL ATTEMPT

Privatized enterprises in transitional economies are not yet genuine private enterprises. From the analysis of corporate governance it appears that these corporations remain primarily under the control of insiders (employees and managers). It is then derived from the theory of property rights that new shareholders are not capable of supervising and disciplining insiders so that managers keep on exerting rights on assets. A look at the usual behaviour of insider coalitions within organizations convinces that they maximize the firm's growth and autonomy instead of profit and efficiency. The privatized enterprise is finally analyzed as being a specific << survival-oriented >> firm in the highly risky context of transition.