8 Insider Privatization and Careers A Study of a Russian Firm in Transition. Introduction How do firms adjust their personnel policies and internal structure to changes in their economic and institutional environment? | 8 ---------------------------------------- Insider Privatization and Careers A Study of a Russian Firm in Transition Guido Friebel and Elena Panova Introduction How do firms adjust their personnel policies and internal structure to changes in their economic and institutional environment Chandler 1977 has investigated how firms in the last century reacted to challenges posed by new technologies and by market demands by developing professional management the line staff and later the multidivisional organization. Doeringer and Piore 1971 have documented how and why firms created internal labor markets to protect their workers from market shocks and to provide them with incentives to invest in firm-specific human capital. Following Carter and Carter 1985 Lazear 1992 and Baker Gibbs and Holmstrom 1994 a literature has emerged that investigates the personnel files of single firms over a long period of time to learn more about their internal labor One main finding is that a firm s organizational structure and career paths remain remarkably stable even in turbulent times. Guido Friebel is a researcher at the Institute of Industrial Economics IDEI and a lecturer at EHESS the French School for Advanced Studies in Social Sciences both at the University of Toulouse and is affiliated with the Centre for Economic Policy Research CEPR . Elena Panova is an assistant professor of economics at the University of Quebec at Montreal. We would like to thank the editor Julia Lane and two referees. We are also grateful to Erik Berglof Anders Bjorklund Peter Gottschalk Joep Konings Margaret Meyer Marc-Andreas Muendler Asa Rosen Kathy Terrell and seminar participants at the CAFE conference in Nuremberg Boston College LICOS Leuven London Business School SITE Stockholm School of Economics SOFI Stockholm University University of Michigan and the University of Toulouse. We are grateful for the support of SITE. All errors are ours. 1. A non-exhaustive list includes Ariga Ohkusa and
