This paper examines challenging processes of ownership transformation of Russian privatized enterprises. The major tendency is steady and continuous differentiation of the insider stock on that of managers and that of non-managerial employees.
Managers demonstrate controversial behavioral strategies.
The minor part of them utilizes control over enterprises for active market adaptation and restructuring, while the most of directors are much more devoted to intensive income and capital extraction for their own short-term benefits. Advantages and shortcomings of both strategies from macro- and microeconomic standpoints are revealed in the paper. In order to make the process of ownership concentration more consistent and irreversible, top managers create and strengthen in-enterprise managerial coalitions. The latter pave a path to changes in existing enterprise boundaries. Not only is the relatively modest financial potential an obstacle, but the strong unwillingness of enterprise managers to exchange control and ownership for monetary inflows, which in principle could be provided by interested outsiders, as well.