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Gorbachev as a corporate reorganizer of USSR Inc. Glasnost and the CEO

The Gorbachev Strategy: Opening the Closed Society, by Thomas H. Naylor. Lexington, Mass.: Lexington Books. 255 pp. $19.95. COULD Lee Iacocca fix up the Soviet Union? Professor Naylor never asks such a jazzy question in this admiring look at the program of the man who wants to engineer a turnaround at USSR Inc. But the comparison to the most publicized corporate turnaround artist of our time is not as far-fetched as it might at first seem.

This is essentially a portrait of Mikhail Gorbachev, CEO. It analyzes much of what the dynamic Soviet leader has done in terms of a corporate executive officer's taking the helm of an ailing conglomerate:

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Firing deadwood, promising bonuses for successful subsidiaries, listening to worker complaints, planning to eliminate unprofitable divisions, enforcing labor discipline, decentralizing managerial authority, backing pragmatic economists, winning over intellectuals, eagerly introducing computer/-robotic automation, impatient with capital city bureaucrats, determined to reallocate resources and to invest heavily in retooling creaking plants.

Not all these steps echo folk-idol Iacocca. But a lot of them do.

So does Mr. Gorbachev's artful jawboning and public relations talent.

Naylor is right to say that, overall, Gorbachev is setting about the herculean task of changing something like an immense corporate culture. It seems to me, though, that he generally underestimates the degree to which the extreme complexity of that party/state/nomenklatura/multiethnic corporate culture makes Gorbachev's likelihood of success far less certain than the perestroika (restructuring) of even the largest Western corporation.

There is also a probability that his thesis underweights the cost of restive client states in Eastern Europe. And overweights the likely contribution of joint enterprises with Western firms and of future trade with the West.

Further - although he recognizes the skepticism of the average laborer who has seen repeated reform efforts come and go - he does not convincingly dispose of the question of worker support for radical reform. After all, the Gorbachev program holds out the threat that one may lose one's job or have rent, food, and transportation costs go up before improved wages, profits, and better consumer goods appear.

Naylor is a consultant on (and evangelist for) strategic management techniques. He is also what might be called a ``Soviet economy buff'' - a different breed from many of the ``Sovietologists'' who populate universities and foreign ministries in the West.

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His book shares many of the conclusions about the current stagnant state of the Soviet economy that mainstream Sovietologists hold. But his outlook is sharply different. At his most impatient, he states that Gorbachev's sincerity and determination as a radical reformer have ``eluded the White House, the Congress, and most Sovietologists,'' as well as the news media. As a result, he adds sarcastically, the United States ``is extremely well positioned to enter the foreign policy arena of the 1950s....''

Such irritability doesn't age well.

Naylor's argument - that ``Reagan has single-handedly made Gorbachev's task of injecting new vitality into the Soviet political and economic systems inordinately [emphasis added] easier...'' - is only less intemperate in degree than Mr. Reagan's foolish ``evil empire'' statement.

Despite such excess, there are useful aspects to this ``strategic management'' approach. One is the interactive way Naylor fits together 10 aspects of the Gorbachev strategy: economy, agriculture, technology, consumption, trade, democratization, foreign policy, third-world policy, arms control, and cultural changes.

Another is his attention to the central importance of trade with the West as a Gorbachev goal - a factor often underplayed.

What this book does, it seems to me, is examine all facets of the Soviet CEO's plan without fully subjecting them to the gritty test of reality in all its variables.

Earl Foell is the Monitor's editor in chief.

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