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Posted on September 3rd, 2012, by

Rus Wane equipment is a Russian affiliate company of the multinational corporation, Wane Equipment, operating in Russia. In such a context, managerial skills of the company’s managers should meet the needs and traditions of employees working at the company, which are hired from the local specialists. Consequently, managers need to adapt their management style to specificities of the local culture that managers need to develop skills of adaptability to be able to develop a flexible management style. Furthermore, communication skills are also of the utmost importance. The existing tension between Russian and American managers proves the fact that the company suffers from communication gaps, which may be provoked by the difference of the management style of Russian and American managers, while well-developed communication skills could solve this problem. In addition, managers need to develop team works skills because they interact with each other and employees in order to improve the organizational performance and, thus, maximize the efficiency of the work of managers and employees. Finally, managers have to improve their organizational skills because, Rus Wane Equipment suffers from the inefficient financial management, while human resource management also turns out to be ineffective as managers, Lev and John, are unable to come to agreement on the candidature of the financial manager that means that they, as well as other managers, are likely to have different approaches to and vision of human resource management.

Cultural differences/sensitivity

The cultural differences is probably the major problem Rus Wane Equipment is facing because the company has started operations in Russia, which has a totally different culture and traditions compared to the USA or Western Europe. In this regard, it is worth mentioning the fact that Russian employees as well as managers are accustomed to rather authoritarian than democratic management style and strict organizational hierarchy. Such a management style, contradicts to the traditional orientation of western managers on democratic and liberal management style, with a high degree of autonomy of local managers and employees. In addition, corruption is another problem which is deep-rooted not only in Russian economy but also in Russian mentality and culture. In fact, corruption affects the organizational performance and management consistently because American and European managers are not accustomed to work in a highly corrupted environment, where bribery is a norm among the authorities and the company needs the support of the authorities to keep growing and developing in Russia. In such a context, the use of local managers can help bridge the cultural gap and solve problems related to this issue.

Joint venture

The creation of a joint venture was a plausible way of entering Russian market because it provided the company with the possibility to get a local partner, the company, NLZ, which was operating in Russian market for a long time and had an extensive experience of operations in Russia. On the other hand, Wane Equipment had advanced technologies and management methods and techniques which outpaced Russian ones consistently. For instance, the reliability of Rus Wane Equipment’s products was much better compared to those of local competitors. Hence, the creation of the joint venture facilitated the penetration of Russian market. On the other hand, the joint venture faced certain problems. For instance, Lev occupied the top position in both NZL and Rus Wane Equipment that was unacceptable to the latter because the organizational culture of Wane Equipment does not admit such behavior of its top executives. In addition, the company needed to develop the local production facilities and NZL proved to be useful in this regard. At the same time, the joint venture faced the problem of the employment of experienced and well-qualified managers who were acquainted with Russian culture and specificities of business in Russia, while Russian managers were often too young, for instance, Sasha Neresyan, who was only 30, to be accepted by their western colleagues.

Lack of training for expatriates

The lack of experience is a problem that is a direct effect of another problem the lack of training for expatriates. In fact, the efficient training of expatriates could facilitate the problem of closing the gap between western and Russian managers as well as employees. On the one hand, expatriates are acquainted with Russian culture and mentality. On the other hand, they can understand western culture and management style and adapt it to the Russian environment. In such a way, the training of expatriates could facilitate the integration of Russian culture into the organizational culture of Rus Wane Inc. However, the company definitely lacks such training.

Communication, low v. high context

The communication within Rus Wane Equipment is highly dependent on the cultural peculiarities of Russian managers and employees and western managers. In actuality, Russian employees and managers are accustomed to authoritarian management style, when the position of a top executive is not challenged by employees. In fact, Russian employees and managers are accustomed to administrative-commandment system, where the decision is taken by top executives and it descends down the organizational ladder to employees, who actually execute the decision. In such a situation, managers need to demonstrate their authority and leadership qualities to persuade employees in their ability to be true leaders of the organization. At the top level, communication should be focused on the development of positive interpersonal relations which should be rather friendly than professional solely. In fact, interpersonal relations are more important for Russian managers and employees than for western managers and, what is more, Russians need to have rather friendly than professional relations.

Russian hierarchical nature, high trust in friends/family

Russian managers and employees are very concerned with the organizational hierarchy, which is very important for them. Russians need a clear organizational hierarchy, where each professional takes his or her own position, which grants him/her or grants not, with the authority. In such a way, the higher position in the organizational hierarchy contributes to the authority of an individual and respect from the part of his or her subordinates. At the same time, interpersonal relations are of the utmost importance because Russians need to develop friendly relations and they view the organization as a kind of family, where each member performs his or her functions.

Power Distance

The power distance is very important for Rus Wane Equipment because Russian managers and employees get used to large distance between managers and employees. However, along with the changes in Russian society and culture and along with the introduction elements of western culture within Rus Wane Equipment, the power distance tends to decrease. However, it is still larger compared to western countries. Therefore, managers need to take into consideration the power distance in Russia.

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