V. P. Baranovsky. Private Initiative in the Defense Sector of Russian Economy in the Early Twentieth Century

Abstract

Private business contributed significantly to the growth of the defense sector of the economy in the Russian Empire in the early twentieth century. This paper analyzes the evolution of the company of P. V. Baranovsky and its role as a corporation to promote military-industrial development of Russia. The company’s activity was accompanied by a very specific government model of financing defense industries in order to stimulate domestic manufacturing and lessen the country’s dependence on imported goods. The role played by the strategic leadership of the founder and director of the company Victor Petrovich Baranovsky is of particular interest. By exploring the case of Baranovsky company, this paper illuminates how equity military-industrial enterprises took shape through traditional Russian family business, Western corporate culture and investment. The article contains a number of new approaches to the explanation of the institutional and organizational aspects of the company. It shows the structure of ownership and control, orientation relationships among managers and shareholders, the process of development and implementation of strategic and operational plans. The analysis of Baranovsky`s part in the management of joint-stock companies shows scales of its business, degree of its business activity (complete or limited, including participation of the partners or occupied post), its integration in most dynamically developing structures of the Russian business, ability to work with large industrial and financial resources (first of all associated). Finally, the participation of Baranovsky in the activity of business group allows to reveal structural parameters of industrial business in the beginning of the 20 century which were the most important for defense sector of the Russian economy. The analysis also highlights the role of financial intermediaries (banks) in the investment support of business groups.