Areas of Local Discretion in a Centrally-Planned State Enterprise

Using a framework constructed in a companion paper, we here model the internal system of resource allocation within a large state enterprise. Budgetary data are employed in order to uncover ways in which decisions relating to capital expenditure are dispersed through the organisation. Two parallel systems of budgetary decision-making are found to co-exist in this enterprise, and structural stabilities are identified in departments and budget centres.In discussing these findings we suggest that they are consistent with rational, optimum-seeking behaviour on the part of management.