Rus Wane Equipment

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Rus Wane Equipment

• Asli Kartal
• Bercin Mersin
• Chihlung Chen
• Esra Savas
• Gulbin Gezmis
• Navneeta Sengupta
• Senem Evrim Ozer

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Case Overview

• Wane Machines, Inc. (US Partner)
• Manufacture, Installation Maintenance of
  Large-scale Heating Cooling Equipment
• Customers
• Office Apartment Buildings
• Operates in 160 Countries
• In Addition to the U.S. and Canada

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Gulbin Gezmis
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Entering the USRR Market

• 1970-1980 Exported from Australia
• 85 of countrys people live in the apartment
  complexes
• President Gorbachevs Housing 2000 Project
• Demand 100,000
• Supply 60,000
• Low Quality of Production in the Market

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Gulbin Gezmis
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Formation of the Joint Venture

• NLZ in Moscow, St. Petersburg in Western Russia
• Negotiations started in1989 with NLZ company
• 57 belongs to Wane Machines, 43 to NLZ
• Joint venture elements
• Not to expect profit for 1st year
• Export Potential for Eastern Europe
• Hope of the Stability of the Soviet Ruble

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Gulbin Gezmis
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Construction of the Plant

• Started in 1990
• Completed in 1992
• Designed to produce Wane s European products
• June 1993
• Scheduled 5000 units of products for 1995
• September 1993
• Factory was entirely ready

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Gulbin Gezmis
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Major Issues in the Case

• Early Obstacles
• Decrease in Demand
• Difficulty in Securing Trustworthy Suppliers
• Changeable Legal Government Policy

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Gulbin Gezmis
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Staffing Key Managed Positions

• Rus Wane Equipment
• Assist Technology, Transfer Management Skills and
  Train Local Employee
• Deputy General
• Manufacturing
• Finance
• NLZ
• Sales Service
• Human Resource

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Gulbin Gezmis
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Rus Wane Equipments Org Chart
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Gulbin Gezmis
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Major Issues in the Case (Cont.)

• Tension in the Finance Department
• Jeffs Situation
• Dissatisfaction Among Financial Staff
• Miscommunication Problems Between Katya and Jeff

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Gulbin Gezmis
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Discord Over General Mgmt.

• The deputy general manager, John, was deeply
  concerned about problems but neither Lev, general
  manager, nor Ron, country manager, seemed to take
  the matters seriously!!!

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Bercin Mersin
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Hiring a HR Manager

• No HR Manager for 3 Years
• General manager, Lev, managed the position
• Lev hired people he favored
• His doctors son, his son, etc.
• John believed these hiring decisions were
  dangerous for companys success and reputation

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Bercin Mersin
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Recruitment Selection Policies

• Rus Wane Equipments hiring policies signed both
  by Wane Machines and NLZ.
• These policies has never been used by Rus Wane
  Equipment!!!

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Bercin Mersin
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Analysis Critiques

• Russia United States
• Society
• Business Culture
• Behavioral Characteristics

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Asli Kartal
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A Fragmented Society

• No Privacy in Russian Spirit of Collectivity
• Little Impact on Russian Society Individuals
• Distinct Self-sufficient Social Hierarchies
• Self-perpetuating Oligarchies
• Importance of Networking
• From Party to Enterprise
• Resistance to Change

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Asli Kartal
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Business Environment

• Reconstruction Since the Independence Day
• Announced in 1993
• Mafia
• Privatization
• Autocracy
• Centralized Decision Making
• Low Delegation

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Asli Kartal
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Absence of Formal Mechanisms

• Meetings in an Atmosphere of Discussion, Debate
  or Information Gathering vs Less Decision Making
  or Implementation Planning
• One-to-one or Informally
• No Equivalent of the Board Meeting, the
  Management Committee Meeting, the Staff Meeting
• A Small Group of Intimates or Confidents
• Undefined Roles Unstructured Operations
• Solid Personal Relationship Based on Loyalty
  Trust

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Asli Kartal
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Russian Business Culture

• Oral Communication
• Humor
• Understatement
• Listening
• No Distinction Between Home-life Business-life
• Time

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Asli Kartal
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Behavioral Characteristics

• Collectivism v.s Individualism
• Stereotyped to be Very Collectivist
• Indoctrination of Westernized behavior resulted
  in
• Higher individualism
• Low social responsibility
• Active networking for survival
• It is better to have 100 friends than 100
  Rubles
• Feel comfortable
• Like working in groups

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Esra Savas
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Behavioral Characteristics (Cont.)

• Power Distance
• Pre-Revolutionary
• Power was distributed unevenly
• Stalin Era
• Party Hierarchy
• Strong Respect for Authority
• Large on Power Distance
• Legacy of communism is an emphasis on equality

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Esra Savas
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Behavioral Characteristics (Cont.)

• Uncertainty Avoidance
• Fragmented and Uncertain Environment
• Stability and predictability is highly valued
• Welfare, job security and social benefits are
  important
• Desire to Avoid Uncertainty
• Russians are averse to risk

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Esra Savas
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Behavioral Characteristics (Cont.)

• Long-term Orientation
• Limited Future Orientation
• Government shuffling, changes in legislation and
  political instability
• Performance Evaluation
• In Soviet Era
• No rewards for achieving high results
• Now
• Everything is possible

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Esra Savas
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Behavioral Characteristics (Cont.)

• Human Orientation
• Absence of social norms and laws
• Unfairness and corruption in business
• Aggressiveness and hostile actions within the
  culture

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Esra Savas
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U.S. Background

• Located in North America
• Population 280,562,489
• July 2002 est.)
• Languages Spoken
• English,
• Spanish (spoken by a sizable minority)
• GDP- Purchasing Power Parity
• 10.082 trillion (2001 est.)
• Labor Force by Occupation

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Chihlung Chen
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Characteristics- American Culture

• Individualistic Self-reliant
• Friendly, Spontaneous, Informal
• Confident, Arrogant, Logical Direct
• Creative Innovative

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Chihlung Chen
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Characteristics- American Culture

• Great talkers and Debaters
• Firm Believers in the Written Word and
  Contractual Agreements
• Uncomfortable with Long Periods of Silence
• Passionate About Truth, Justice, and Equal
  Opportunity

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Chihlung Chen
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Americans Are Always

• Clear, Explicit Communication
• Personal Achievement Important
• Enjoy Debating and Stating a Specific Position
• Position in Society Determined by Ones Own
  Achievements
• Often Direct and to the Point

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Chihlung Chen
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Americans Are Always

• Logic Communication Skills are Important
• Separation Between Business Personal Lives
• Emphasis on the Individual
• Prefers to Have Things Spelled-out
• Values Written Contractual Agreements

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Chihlung Chen
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American Business Environment

• The Internal Factors
• Human Resource Management
• Size and Structure
• Ownership
• Sources of Finance
• Managerial Skills
• External Factors
• Economic
• Cultural Social
• Technological
• Legal

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Navneeta Sengupta
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External Business Environment
World
Region
Nation State
Local Community
Political
Organizations
Technological
Legal
Cultural Social
Economic
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Navneeta Sengupta
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American Business Behavior

• Individualism
• Small Power Distance
• Weak Uncertainty Avoidance
• Masculinity
• Universalism
• Specific Relationships
• Long-Term Oriented/Future Oriented

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Navneeta Sengupta
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Conclusion

• The Russian Business Challenge
• High Power Distance
• Individualism or Collectivism
• High Resistance to Change
• Communication Problems
• Jeff and Katya
• John and Lev

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Senem Evrim Ozer
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Conclusion

• Hiring Practices
• Sashas Neresyans Speedy Advance
• Levs son
• Western or Russian?
• Financial and Human Resources Practices

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Senem Evrim Ozer
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Class Discussion

• In how many countries does Rus Wane operate?
• From which country does Rus Wane start exporting
  its products to the USSR market?
• What was the social institution which allowed the
  mobility in old days in Russia?
• What is it now?

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Bercin Mersin
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Class Discussion (Cont.)

• Where are the two joint ventures located in
  Russia?
• When was Rus Wane entirely ready for its
  operations?
• What are two obstacles that Rus Wane faced?
• What do Russians prefer in order to avoid
  uncertainty?

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Bercin Mersin
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Class Discussion (Cont.)

• What is the reason for resistance to change?
• What is the dominating cultural role model for
  Russian leadership?
• What kind of communication type do Russians
  favor?
• What are the main concepts for Russian leaders in
  terms of uncertainty avoidance?

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Name Goes Here
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T H E E N D