Production Association

(combine), a single, specialized production and economic complex that includes factories, plants, research institutes, and design and production organizations interrelated by production links and characterized by centralized auxiliary and service production. The production units in a production association are not legal entities and are not covered by the Statute on the Socialist State Production Enterprise.

The first production associations were firms (firmy) established in the USSR in the 1960’s. Most of the production associations were formed by placing small enterprises related by the production of essentially the same product under the leadership of a head enterprise.

In the context of the scientific and technological revolution and the increase in the volume of output, the concentration of diverse types of production at large enterprises was inadequate and was therefore replaced by the concentration of specialized production, which makes possible the extensive use of highly productive equipment, as well as increased economic efficiency in social production. Among the many production associations in the USSR is the Kama Truck Plant (KamAZ), the country’s largest complex for the production of trucks and engines, which is located in Naberezhnye Chelny and is made up of specialized industrial enterprises. Other production associations include the Likhachev Automotive Plant (ZIL), the Likhachev tractor and machine tool associations, the Luch footwear association in Minsk, and Ukrhozhgalantereia, a leather goods production association in Kiev.

Production associations operate on the basis of economic accountability and ensure the complete coverage of outlays for production, the maintenance of managerial personnel, and the receipt of a profit sufficient to make payments to the state budget, to pay interest on loans, to develop the production association, and to form various funds and reserves.

Because they possess economic and operational independence and command large resources, production associations provide favorable conditions for complete economic accountaility. A large production association offers considerable opportunities for the rational organization of production, supply, and marketing and for pursuing a uniform technological policy.

The production associations are important economic links in industry. Their organization rests on a combination of centralized leadership and economic independence and initiative. The production associations operate in conformity with the Statute on the Production Association (Combine), which was approved by a decree issued by the Council of Ministers of the USSR on Mar. 27, 1974. In addition, production associations sometimes have rights granted according to the established procedure by a ministry, department, or Union republic council of ministers. Production associations may be part of an all-Union or republic industrial association.

As a rule, a production association is administered by the managerial staff of the main enterprise and headed by a general director or director. A board of directors acts as an advisory body within the production association. The top executives of all production units and a representative of the appropriate trade union body are members of the board, the chairman of which is the general director (director) of the association.

In the foreign socialist countries, complexes similar to the Soviet production associations encompass entire sectors and sub-sectors. They are established on the basis of technological uniformity of production, unified supply of raw materials, or supply of raw materials, or logical sequence of the production process. The most widespread forms of production associations analogous to the Soviet type are combines in the German Democratic Republic and Poland, state economic organizations in Bulgaria, and concerns and combines in Czechoslovakia.