Despite the importance and necessity of rapid changes in the status of enterprises and their adaptation to a market environment, the very idea risks being discredited. A number of mechanisms have been proposed in Nizhni Novgorod oblast to alleviate the af ormentioned adverse consequences.

Firstly, a certain period of time should separate a large enterprise's joint stockholding from its final privatisation. Time is needed to find potential investors, accurately appraise the value of the enterprise, draw up plans for its reorganisation (divi sion into departments and production units), change the management system (switch from control over technical processes to control of finances and capital), and prepare a plan for staff cutbacks, alleviating as much as possible the consequences of mass r edundancies.

Secondly, the work collective and administration should be given sufficient time to choose the optimal method (from the three proposed scenarios) of privatization for their enterprise. A situation could (and is likely to) arise, where the work collective, acting in its own interests, wil have to forgo some of its shares in order to attract an investor, who wants to acquire a controlling block of shares (2/3 or 3/4 of the total), as an investment guarantee.

According to existing legislation, the vouchers are only valid until the end of 1993. Consequently, the enterprises have little more than a year left to consider their options. However, this timeframe could prove insufficient, especially for large enterpr ises, and it might therefore prove necessary to extend the voucher deadline. To prevent production management destabilization during the transition stage, it might prove worthwhile retain the existing administrative apparatus and give it new rights and obligations. In this case, the statuory capital of the new joint stock companie s s not distributed among the owners at the first stage. Instead, common (joint) statutory capital is created. At the second stage, the common (joint) statutory capital is distributed among the owners in accordance with the legislation on privatisation. Here we recommend that the property committee and fund -- if the work collective opts for one of the privatization scenarios without determining a potential investor -- not sell its package of shares in small lots (up to 5-10%) until the controlling block has been sold to the potential investor.

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