Waking the Bear (A): "Danonizing" the Bolshevik Biscuit Factory

Summary

Direct foreign investment in Russia was only 1% of GDP in 1999, and Russian industry was only half as productive in that year as in 1992. Not surprisingly, the prevailing opinion is that privatization has only aggravated Russia's economic problems, and that foreign firms should avoid investing in Russia for the time being. This case study argues that, on the contrary, Russian companies can be successfully integrated within a multinational organization. It shows that an Anglo-Saxon-style revolutionary change process is not always the best way to proceed in Eastern European organizations; that the commonly accepted goals of rapid change, employee empowerment and a flatter hierarchy are not necessarily appropriate in these organizations in the short-term, moreover that even the definitions of trust, strategy and leadership can differ according to cultural context. The challenge lies in understanding the complexities the lingering influence of the Soviet planned central economy - as well as the Russian culture and management systems.

Teaching objectives

Case A describes the process of transforming a Russian organization, still run as if it were part of the Soviet-era planned economy, to one with the leadership and mentality to operate as part of a global organization in an open market. Case A analyses these key themes:

Keywords
  • Russian leadership style
  • Russian culture
  • Acquisitions in Russia
  • Danone
  • Change management
  • Cross-cultural management
  • French leadership styles
  • French/ Russian corporate culture