How important is competition in the product market to the economic performance of the firm? How important is the corporate governance structure of the firm to its performance? How does external competition interact with corporate governance to influence firm performance? These questions are posed in a dramatic way in transition economies because product market competition and profit-seeking organizations with new ownership structures were both introduced within a short time period. This paper does not answer these questions. Its aim is to bring together the several often separate literatures that discuss the issues. In the first part, the competition-performance link in theory and empirical work is examined. In the second part, the ownership and governance structures in the firm and in particular, those that affect the key performance-related decision-making processes are investigated. In the third part, the sparse attention given in the literature to the possible interaction between external market pressures and corporate governance structures is considered. In each section, reference is made first to the theory and evidence from outside transition and second to transition-specific models and evidence.