In a short period of time, the privatization of Russian enterprises has been extensive. The process has been successful in meeting important political objectives to establish an irreversible base of individual share ownership through the rapid transfer of vast numbers of enterprises to the private sector. However, major questions remain with regard to the impact of privatization on efficiency and the successful transition to economically viable enterprises. This article investigates governance and managerial characteristics of 171 Russian buy-out firms both before and after the privatization program that occurred between 1992 and 1994. The program has resulted in significantly lower employment levels, increased training, little investment, but increased equity ownership. These changes may enable managers to effect some additional changes, but more recalcitrant organizations will have to await the development of more robust competition and improved systems of corporate governance.