confidential top secret. welcome À andidas.com danone culture research centre, london
TRANSCRIPT
Confidential
TOP SECRET
Welcome
À ANDiDAS.COM
Danone Culture Research Centre, London
http://www.andidas.com/
Economic Climate in Russia
À Communism, Plan Economy -> Perestroika
À Transition towards market economy (mixed economy)
À Instable Economy in 1990s:Á GNP reduction by 10% (1991)Á $115 billion debtÁ High crime ratesÁ Corruption
À Support from the international CommunityÁ Admission to the World Bank and IMF in 1992
À Foreign direct investment will be delayed until stability and security are established
Introduction – Analysis – Recommendations – Conclusion
http://www.andidas.com/
Situation at Bolshevik
À Despite uncertainty, Danone acquired of Russian Biscuit Manufacturer; Bolshevik, 1994
À 50% of all mergers fail, culture is often an issue
À Danone has only consulting status, but soon takes over management control
À Bolshevik has not been able to adapt to new marketÁ No knowledge of free market conceptsÁ Ineffective decision makingÁ Poor disciplineÁ Overstaffing
À French expatriates have not been able to make positive changes, lack of cooperation from Bolshevik staff
Introduction – Analysis – Recommendations – Conclusion
http://www.andidas.com/
Objectives i
À Give an understanding of Russian national & Bolshevik‘s organisational culture and traditional Russian leadership style.
À Identify changes needed to make Bolshevik compatible with a market economy and the Danone Group and caveats
À Outline the profile and leadership style most suitable to successfully implement these changes
Introduction – Analysis – Recommendations – Conclusion
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Objectives ii
Introduction – Analysis – Recommendations – Conclusion
Bolshevik Organisational
Culture
Russian National Culture
French/ Danone Culture
New leader
source: authors‘ own estimate
Performance enhancing Organisational Culture in the Russian Context
Outcome
Objectives
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Hofstede‘s Cultural Dimensions
À Power DistanceÁ The extent to which society accepts the fact that
power is distributed unequally (small/ large)
À Individualism – CollectivismÁ The degree to which people live in a loosely knit
social structure versus a tight social structure
À Masculinity – FemininityÁ The extent to which the dominant values in society
are masculine (materialistic) rather the feminine (caring, quality of life, people orientation)
À Uncertainty AvoidanceÁ The extent to which society feels threatened by
uncertainty (weak/ strong)
Introduction – Analysis – Recommendations – Conclusion
http://www.andidas.com/
Cross Cultural Analysis
Hofstede's Cultural Dimensions, France (1980) & Russia (1989)
6871
43
86
30
76
26 28
92
10
40
91
62
46
29
0
33
67
100
Power Distance Individualism -Collectivism
Masculinity -Femininity
UncertaintyAvoidance
Long-termOrientation
France (1980)
Russia (1989)
USA (1980)high
med.
low
Source: Hofstede, 1980 & 2001 and Bollinger, 1994
Introduction – Analysis – Recommendations – Conclusion
http://www.andidas.com/
Power Distance
À High
À Long history of monarchy
À Elitist behaviour
68
76
40
0
33
67
100
high
med.
low
Introduction – Analysis – Recommendations – Conclusion
Fra
nce
Rus
sia
US
A
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Individualism
À Russia: Collectivistic Society
À France: Individual Society
Introduction – Analysis – Recommendations – Conclusion
71
26
91
0
33
67
100
high
med.
low
http://www.andidas.com/
Masculinity
À Low
À “Women know how to do everything, men do the rest” (Russian Proverb)
À Materialism is not a top priority
Introduction – Analysis – Recommendations – Conclusion
43
28
62
0
33
67
100
high
med.
low
http://www.andidas.com/
Uncertainty Avoidance
À High
À History of centralized power
À Technocrats and bureaupathology
À Blat (“Eastern European Guanxi”)
À “Learned helplessness”
Introduction – Analysis – Recommendations – Conclusion
86
92
46
0
33
67
100
high
med.
low
http://www.andidas.com/
Long Term Orientation
À New dimension
À Short term orientation
À Living today, not caring about long term consequences
Introduction – Analysis – Recommendations – Conclusion
30
10
29
0
33
67
100
high
med.
low
http://www.andidas.com/
Summary of Russian Culture
À High power distance
À Collectivistic
À High Uncertainty avoidance
À Femininity
À Short term focusÁ Bear in mind when creating new strategy
À French culture relatively similar, should facilitate the “danonizing” process
À In the long run, cultures are expected to converge; globalisation
Introduction – Analysis – Recommendations – Conclusion
http://www.andidas.com/
Traditional Russian Leadership
À Authoritarian & paternalistic
À Reliance on belligerence and coercive power
À Paradox of dependence on, but dislike for strong leaders (Kets de Vries, 2000)
À Tightly hierarchical management structure, closely controlled flow of informationÁ Similar to France
À Micromanagement (Uncertainty Avoidance)
À New breed of managers expected to emerge
À Old managers less likely to adapt to change as well as younger managers
Introduction – Analysis – Recommendations – Conclusion
http://www.andidas.com/
Suggested Change
À Danone will be able to take managerial control soon
À Organisation & Cultural Change
À Recommendations to make Bolshevik compatible with Á A market economyÁ Danone‘s organisational culture
Introduction – Analysis – Recommendations – Conclusion
http://www.andidas.com/
Operations & Culture i
1.) Current management does not seem suitable (Shimanov)
2.) Integrate French expatriates
3.) “Theft upward reporting and fact-fudging were common at all levels...“ (Case, p. 4)
Immediate counter measures needed
Introduction – Analysis – Recommendations – Conclusion
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Operations & Culture ii
4.) Continued employment of middle management should be reviewed on a case to case basis
5.) Otherwise employ new younger mangers (ideally with western work experience),
Á Require lower payÁ Allows to compensate inexperience with in-house
training
6.) “Paying a monetary bonus only benefits a firm one time in increased motivation” (Fey et al,
1999, p.51)
Introduction – Analysis – Recommendations – Conclusion
http://www.andidas.com/
Operations & Culture iii
7.) Offer evening classes to the entire workforce to teach the working of a market economy
8.) Introduce group work
9.) Make layoffs as painless as possibleÁ Outsource
10.) Communication of Organisation Strategy and Rationale
Á Internal compass
Introduction – Analysis – Recommendations – Conclusion
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Operations & Culture iv
À Long term considerations:
Á Employee empowerment (negative decision lists)
Á Flatter hierarchy
Á Lateral communication
Á Computer technology
Á Western accounting standards
Á Benchmarking
Introduction – Analysis – Recommendations – Conclusion
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New Director Leadership style
À Leadership Models
À Model Methodology
Leadership styles effective in Russia:
Source: Fey et al, 2001
Introduction – Analysis – Recommendations – Conclusion
Task
Relations
Authoritarian Democratic
Statesman
ClergymanPolitician
Military Man
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Authoritarian vs. Authoritative
Russians must learn to distinguish between:
À Authoritarian (Status Quo)Á Autocratic, dictatorial, despotic, tyrannical,
oppressive, illiberalÁ Not compatible with Danone Core Values
À Authoritative (Target)Á Dependable, trustworthy, authentic, strictÁ Facilitate empowerment, involve workforce by
providing meaning, encourage people to “own”, foster openness & teamwork, exercise discipline and control by providing clear boundaries, give support, create a sense of security.
Á Compatible with Danone Core ValuesSource: Oxford Dictionary Thesaurus & Kets de Vries,
2000
Introduction – Analysis – Recommendations – Conclusion
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Leadership Strategy
À Transactional Leadership
À Transformational Leadership
Source: authors‘ own estimate
Introduction – Analysis – Recommendations – Conclusion
Shimanov New Director
Status Quo > Transformation >
Authoritarian Authoritativesoft "Military Man"
Statesman
Long Term Objective
after imple-mentation of Organisational Change
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Leader Profile
À “We don‘t understand what‘s going on at the Bolshevik. Maybe it‘s because of the interpreters but we don‘t understand what the people over there mean when they talk” (Danone Management)
À New Director ProfileÁ Transformational leaderÁ Bicultural & Bilingual manager („Expatriate -
Inpatriate“)Á Working experience in France (or Western
organisation) and RussiaÁ AuthoritativeÁ FlexibleÁ Build trustÁ Communicate
Introduction – Analysis – Recommendations – Conclusion
http://www.andidas.com/
Overcoming Resistance to Change
À Implement changes slowly, small steps or incremental, in accordance with workforce
À Clear communication and trust building (Education)
À Use local employees as “agents of change”
Introduction – Analysis – Recommendations – Conclusion
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Disclaimer
À Only secondary research possible
À “All models are wrong, but some are useful”
À Culture is not an exact science, it is not possible to extract the national/organisational component only
À Culture is constantly changing, every individual is different
À Leadership must be flexible
À Recommendations are suggestions/ guidelines, not definitive
À Other models are not mutually exclusive
Introduction – Analysis – Recommendations – Conclusion
http://www.andidas.com/
Conclusion
À A simple replication of Western management systems is not the answer
À Attempts must take Russian culture/values into account
À Slow, systematic implementation of all changes in accordance with the workforce
À Communication, trust, training, group work
À Change to Authoritative leadership
À Leadership must change with changes in culture
Introduction – Analysis – Recommendations – Conclusion
http://www.andidas.com/
References & Further Reading
À Fey, C. F., Nordahl, C., & Zätterström, H. 1999. "Organizational Culture in Russia: The Secret to Success". Business Horizons. vol. November-December. p. 47 - 55.
À Fey, C. F., Adaeva, M., & Vitkovskaia, A. 2001. "Developing a model of leadership styles: What works best in Russia?". International Business Review. vol. 10. p. 615 - 643.
À Kets de Vries, M. F. R. 2000. "A Journey in the "Wild East": Leadership Style and Organizational Practices in Russia". Organizational Dynamics. vol. 28. no. 4. p. 67 - 81.
À Camiah, N. & Hollinshead, G. 2003. "Assessing the potential for effective cross cultural working between "new" Russian managers and western expatriates". Journal of World Business. vol. 38. p.245 - 261.
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