ABSTRACT:*This paper examines the issues which may create pressures and incentives to introduce efficiency‐enhancing governance structures in enterprises which are privatized through voucher schemes in Russia. These pressures emphasize the need to view buy‐outs created on privatization as transitory organizational forms with a three‐stage process being suggested as the most feasible for developing governance mechanisms which produce efficiency gains, The paper uses illustrative case studies of the first major enterprises to experience post‐privatization ownership