Confidential
Welcome
Danone Culture Research Centre, London
À ANDiDAS.COM
Introduction – Analysis – Recommendations – Conclusion
Economic Climate in Russia
À Communism, Plan Economy -> Perestroika
À Transition towards market economy (mixed economy)
À Instable Economy in 1990s:
Á
Á
Á
Á
GNP reduction by 10% (1991)
$115 billion debt
High crime rates
Corruption
À Support from the international Community
Á Admission to the World Bank and IMF in 1992
À Foreign direct investment will be delayed until stability
and security are established
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Introduction – Analysis – Recommendations – Conclusion
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 market
Á
Á
Á
Á
No knowledge of free market concepts
Ineffective decision making
Poor discipline
Overstaffing
À French expatriates have not been able to make
positive changes, lack of cooperation from Bolshevik
staff
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Introduction – Analysis – Recommendations – Conclusion
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
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Introduction – Analysis – Recommendations – Conclusion
Objectives ii
Outcome
Performance enhancing
Organisational Culture
in the Russian Context
Russian
National
Culture
Bolshevik
Organisational
Culture
New leader
Objectives
French/
Danone
Culture
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source: authors‘ own estimate
Introduction – Analysis – Recommendations – Conclusion
Hofstede‘s Cultural Dimensions
À Power Distance
Á The extent to which society accepts the fact that power is
distributed unequally (small/ large)
À Individualism – Collectivism
Á The degree to which people live in a loosely knit social
structure versus a tight social structure
À Masculinity – Femininity
Á The extent to which the dominant values in society are
masculine (materialistic) rather the feminine (caring, quality
of life, people orientation)
À Uncertainty Avoidance
Á The extent to which society feels threatened by uncertainty
(weak/ strong)
http://www.andidas.com/
Introduction – Analysis – Recommendations – Conclusion
Cross Cultural Analysis
Hofstede's Cultural Dimensions, France (1980) & Russia (1989)
100
France (1980)
92
91
86
high
Russia (1989)
76
USA (1980)
71
68
62
67
med.
40
33
46
43
26
30
28
low
29
10
0
Power Distance
Individualism Collectivism
Masculinity Femininity
http://www.andidas.com/Source:
Uncertainty
Avoidance
Long-term
Orientation
Hofstede, 1980 & 2001 and Bollinger, 1994
Introduction – Analysis – Recommendations – Conclusion
Power Distance
100
À High
high
76
À Long history of monarchy
68
67
med.
À Elitist behaviour
40
USA
0
Russia
low
France
33
http://www.andidas.com/
Introduction – Analysis – Recommendations – Conclusion
Individualism
100
91
À Russia: Collectivistic Society
high
71
À France: Individual Society
67
med.
33
26
low
0
http://www.andidas.com/
Introduction – Analysis – Recommendations – Conclusion
Masculinity
100
À Low
high
67
62
À “Women know how to do everything,
men do the rest” (Russian Proverb)
med.
43
33
À Materialism is not a top priority
28
low
0
http://www.andidas.com/
Introduction – Analysis – Recommendations – Conclusion
Uncertainty Avoidance
100
92
À High
86
high
À History of centralized power
67
med.
33
46
À Technocrats and bureaupathology
À Blat (“Eastern European Guanxi”)
low
À “Learned helplessness”
0
http://www.andidas.com/
Introduction – Analysis – Recommendations – Conclusion
Long Term Orientation
100
À New dimension
high
À Short term orientation
67
med.
33
À Living today, not caring about long term
consequences
30
29
low
10
0
http://www.andidas.com/
Introduction – Analysis – Recommendations – Conclusion
Summary of Russian Culture
À High power distance
À Collectivistic
À High Uncertainty avoidance
À Femininity
À Short term focus
Á 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
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Introduction – Analysis – Recommendations – Conclusion
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 information
Á 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
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Introduction – Analysis – Recommendations – Conclusion
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 economy
Á Danone‘s organisational culture
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Introduction – Analysis – Recommendations – Conclusion
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
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Introduction – Analysis – Recommendations – Conclusion
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 pay
Á 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)
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Introduction – Analysis – Recommendations – Conclusion
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 possible
Á Outsource
10.)
Communication of Organisation Strategy and
Rationale
Á
Internal compass
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Introduction – Analysis – Recommendations – Conclusion
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
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Introduction – Analysis – Recommendations – Conclusion
New Director Leadership style
À Leadership Models
À Model Methodology
Leadership styles effective in Russia:
Military Man
Statesman
Task
Authoritarian
Democratic
Relations
Politician
Clergyman
http://www.andidas.com/
Source: Fey et al, 2001
Introduction – Analysis – Recommendations – Conclusion
Authoritarian vs. Authoritative
Russians must learn to distinguish between:
À Authoritarian (Status Quo)
Á Autocratic, dictatorial, despotic, tyrannical, oppressive,
illiberal
Á Not compatible with Danone Core Values
À Authoritative (Target)
Á Dependable, trustworthy, authentic, strict
Á 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 Values
http://www.andidas.com/
Source: Oxford
Dictionary Thesaurus & Kets de Vries, 2000
Introduction – Analysis – Recommendations – Conclusion
Leadership Strategy
À Transactional Leadership
À Transformational Leadership
Shimanov
Status Quo
Authoritarian
New Director
>
Transformation
Authoritative
soft "Military Man"
>
Long Term Objective
after implementation of
Organisational
Change
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Statesman
Source: authors‘ own estimate
Introduction – Analysis – Recommendations – Conclusion
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 Profile
Á Transformational leader
Á Bicultural & Bilingual manager („Expatriate - Inpatriate“)
Á Working experience in France (or Western
organisation) and Russia
Á Authoritative
Á Flexible
Á Build trust
Á Communicate
http://www.andidas.com/
Introduction – Analysis – Recommendations – Conclusion
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”
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Introduction – Analysis – Recommendations – Conclusion
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
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Introduction – Analysis – Recommendations – Conclusion
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
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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