In large part, the modernization of Soviet industrial management has assumed such exceptionally complex forms since 1965 because the system is conceived to be politically integrated and ideologically defined by the institutions of central planning and public ownership of productive property. Structurally, Soviet industrial management is a constituent element in the larger, highly differentiated, Party–state organizational complex. The dominant influences on industrial management are political.

In the division of labor between the bureaucracies of the Communist Party and the Soviet state, the state assumes formal responsibility for the determination of operational goals, allocation of authority and resources, selection and deployment of personnel, and coordination and control of the processes of implementation. Penetrating, overlapping, and controlling the state bureaucracy is the apparat of the Communist Party. Fulltime Party officials routinely intervene in virtually every management function at every level of the hierarchy; the Party also has special responsibilities for mobilizing and integrating the system. As T. H. Rigby has suggested, “The Soviet Union may be termed a mono-organizational society, since nearly all activities are run by hierarchies of appointed officials under the direction of a single overall command.”

The organization of Soviet industrial management is intricate. Its formal structure has close affinities with its classic counterpart in the West. It is defined by a hierarchical and pyramidal structure, specialization of function, explicitly fixed jurisdictions and performance criteria, and trained personnel. Formal authority flows from a single, if collective, source.