Can American Management Concepts Work in Russia - Case Study Example

ARE US’S MANAGEMENT CONCEPTS FEASIBLE IN RUSSIA? By Date In the wake of globalisation, it has become necessary for an organisation seeking to do business in a host country to have knowledge of local culture to triumph. It is a reality that organisations have to embrace in the internationalisation and globalisation endeavours. However much, there can be significant universality among the Western nations; other places in world such as Asian nations like Russia, there is a significant disconnect among models of management. Such situation makes intercultural prowess a crucial success factor for triumph of the world class corporations (Langford, 2011). For the case of US-based Corporation, in quest of setting business operations in Russia, the foremost assignment is to research and understand the Russians culture and its influence on business. Such research should be a comparative study, for it should include matching and mismatching contrast between the US and the Russian culture as an appropriate approach for identifying their similarities and differences. The similarities among cultures forms a cohesion that some of the American concepts of management can work in Russian setting (Grachev & Bobina, 2006). Conversely, a difference between the Russian and US cultures is an indication of inconsistency workability of US’s management concepts in Russian setting, and this necessitates critical comprehension and appreciation to avoid failure in the host country. If the cultures differ significantly, the relevant managerial concepts and organisational models are also probable of differing (Khikanova, Romanova, & Unpleby, 2004). Therefore, with substantial knowledge about Russian management mentality, it is possible to determine which of the US’s concepts management would excellently work in Russia. With the extensive research on the subject of culture influence on US businesses going, various researchers such Hofstede and Schein among others have deeply studied culture and suggested theoretical frameworks of reliance (Schein, 2006). With an imminent view of these two cultures and their influences on management, the researcher’s theoretical frameworks are best fronted to appraise whether the US management concepts would unswervingly work in Russia setting. The objective of this paper is to explore if US concepts are applicable in Russian context, and if they are, so how. The US –Russia Culture Perspective on Theoretical Frameworks With various study on the subject, Schein substantiates culture as the pattern of human action and the symbols that present implication of these actions. Culture manifestation is observable in terms of linguistics, customs, religion, culture of working with other perspectives. Schein further justifies that these patterns differ across boundaries and, as a result, brings diversity to the world. Consequently, the patterns and beliefs held by people in a particular region forms part of that region’s culture; hence it to some extent establishes how persons in that area behave (Schein, 2006). In a cross range of this definition, Geert Hofstede developed a six measuring models that have gained significant use to measure Culture. For instance in Alexander Naumov’s application of the measures, he defines the measures as one of the best means of to conclude how a cultural patterns can applied in solving problems, and how such behavioural patterns contrast to those of other countries. In line with Hofstede’s six measures and understanding of culture, Detelin Elenkov employs the measures in his study of which US model will work in Russian setting. Elenkov sustained that these measures are instrumental in gaining insight of the Russian culture and which of the American principles is likely to work in Russian setting. These measures include power distance, competition orientation, collectivism vs. individualism, uncertainty avoidance, political influence, and Dogmatism (Elenkov, 1998). The survey involved measuring 147 US managers and 178 Russian managers against the six measures above. Power Distance Dimension As with the power distance, Elenkov defines it as the extent or scope to which less influential members of a company accept and anticipate power to be disseminated unequally (Elenkov, 1998). In the case of a high power difference, the kind of leadership, that exists, is a centralised and tyrannical in nature. The author identified that Russia’s style of management as centralized at helm of autocratic leader and therefore power distance is high when compare to average in America. His study is coherent to Hofstedes conclusion of 90% power distance in pre perestroika era; however, a continual decline has been witnessed perhaps due to the upshot of decentralisation (Elenkov, 1998) Collectivism vs. Individualism Dimension In a study by Naomov, he describes collectivism as the culture where certain members of a group are cared for and protected as a reward for unconditional loyalty. It is a society where a group always gets priority before individuals (Langford, 2011). However, with individualism, each person takes care of themselves and those only related to them. Both Naomov and Elenkov established that Russian employees anticipate their employer to care and protect them as they could for their family (Elenkov, 1998). This is an indication that highly collectivism, unlike the US, that is characterized by high individualism. Competitive Orientation Dimension In reference to Hofstede’s cultural dimension of masculinity vs. femininity, Elenckov studied it in the survey and pointed the former as being highly competitive with latter being less aggressive and less competitive (Elenkov, 1998). It is from this study that he establishes Russians as characterized by pessimistic emotions of hopelessness and lacking of power of the state of their lives. In this regard, he notes such hopelessness as the reason for classification of the Russian culture as feminism-like and subsequently Russian managers as, low esteemed (Langford, 2011). Conversely to Russia, Americans are classified as average to highly masculine. Elenkov concluded that competitive US managerial style could be favourable for Russian’s transitional economy towards a liberated market structure (Eiteman, Stonehill & Moffett, 2001). Uncertainty avoidance As with avoidance of uncertainty, Elenkov defines it as a culture characterized by tolerance for uncertainty and vagueness (Langford, 2011). It is a measure for assessing a society’s level of comfort in unstructured settings. Various observers such as Bollinger have established that organizations in Russia seek a risk-free environment and avoid the risk. However, according to Hofstede, the US exhibits moderately to low level of uncertainty avoidance (Langford, 2011). Political influence and Dogmatism Political influence is described as the extent of acceptance in a culture to have informal arrangements, connections, and develop a relationship in carrying out business dealings. According to the findings from Elenkov’s survey, fresh entrepreneurs in Russia have inherited an altitude of using political influence as means of attaining their objectives (Langford, 2011). He also remarked that there is a significant level of political influence in Russia above the US level. Final measure is Dogmatism, which is described as the extent of inflexibility shown by individuals with new ideas. Highly dogmatized employees have a tendency to adhere stringently to corporation policy while are reluctant to novel ideas. A managerial study on attitude and behaviour suggested that Russian executives vested significant value on traditions, thus a reflection of high reverence for customary norms. However, as per David Ralston, US managers have a low to moderate degree of dogmatism (Elenkov, 1998). Implication of Elenkov’s Survey Results The above revelation by Elenkov’s survey of the US and Russian managers is fundamental to establishing the cross-cultural similarities and differences from the six cultural dimensions (Elenkov, 1998). The result revealed that Russian managers exhibit high power difference, political-influence orientation and uncertainty avoidance than the US-oriented managers who shows high dogmatism and individualism. However, from the studies by Elenkov, Hofstede,and Namrov, they equally established that both the US managers and Russian managers showed same competitive orientation. Elenkov supports this close link by quoting Sham, who identified Russian managers as being quick to distinguish economic fluctuations such as inflation, competition, and uncertainty (Elenkov, 1998). In response, they are correspondingly quick by initiating new structures, developing new competitive strategies, increasing incentives and sale strategies and seeking foreign partners (Robertson, Gilley & Street, 2003). In this regard, Russian concepts of management resemble the US’s concepts. However, for a US company trying out waters in Russia, Elenkov proposes that such firm must adapt its management styles to fit the local setting and to convey its managerial concepts successively (Elenkov, 1998). Therefore, to establish if the US’s administrative policies can work in Russia, the consideration is on the standard American notions. Most common ones engross Leadership style, motivation approaches, performance appraisal concepts, systems of strategic planning, and organizational configuration concepts (Elenkov, 1998). Leadership style concepts The definition of the role of leadership is described as visualising of the future, management and coordination of articulate mission for an organisation, supervision of the development and run of the firm’s products and services, and provision of motivational ambience for employees. Elenkov combined power distance and individualism scores for a country to determine various leadership styles. In this regard, the US’s concept of leadership that involves entails collaboration of ideas vertically through the chain of command contravenes Russian’s power distance domineering style (Langford, 2011; Elenkov, 1998). Consequently, using Raven’s social-power framework, the Russian leadership can be described as legitimate power (based on formal position in organisation), reward power (grant of recognition), expert power, referent power (due to liking) or coercive power. From this set of power reward, Russia’s immense power distance, political influence, and collectivism embraces Referent and legitimate power (Langfold, 2010; Elenkov, 1998). However, the US relies more on reward and expert power due to their minimal power difference and collectivism. Therefore, according to Elenkov, the workability of US’s concepts in Russia are dependent on the transfer of the Russian’s legitimate and referent powers to US’S reward and expert powers (Elenkov, 1998). Motivational Concepts Uncertainty avoidance and individualism are appropriate dimensions in appraising which American motivational approach can work in Russia. The high individualism indicated by US management implies calculative participation in organizations that lead to an expectancy motivation theory that uses projected result as the motivational driver (Langford, 2010). However, the Russian motivational characterized by immense uncertainty avoidance and low individualism focuses on team contribution and group benevolent. From his comparative study, Elenkov holds that US’s concepts of motivation can be successively implemented in Russian setting by workforce empowerment through human resource approaches such as training, recruitment, information, and group participation in problem solving endeavours (Elenkov, 1998). Performance Appraisal Concepts Using political influence and individualism as modalities, they can be used in establishing which of the US concepts of performance evaluation can work in Russia. Within these rationales, the American manager places more significance on employee performance perhaps due to the low political influence. Notably, due to the high degree of individualism, American concepts of management use direct employee response to improve on their performance. However, in a collectivist nation such as Russia, indirect response is frequently used for group evaluation and disciplines. Because of the high political influence, superiors are likely to deploy third party mediator to provide employees with feedback. Consequently, Promotions and demotions are also provided through outsourced agencies. In this regard, if American concepts of direct feedback are dispensed with Russian employees, they could destroy their self-esteem and wreck their loyalty to the firm (Grachev & Bobina, 2006). Strategic Planning Concepts As with strategic planning concepts, political-influence orientation and uncertainty avoidance dimensions can be deployed to determine which concepts can prevail in Russian setting. Strategic planning originally and primarily a U.S concept and part of strategic thinking strategy, and is a tool that is valuable and suitable for low political influence and uncertainty avoidance culture. Additionally, as held by Elenkov, the socio-economic environment in the U.S. is one characterised by competition, entrepreneurship, expansion, political stability and little government interference (Elenkov, 1998). However, in Russia due to its social-political and economic atmosphere, strategic planning concepts will have to be cautiously conceived and implemented. Therefore, the only way for strategic concepts to work in a Russian setting, is through techniques such as instant feedback and making decisions outside of prescribed strategic-planning. Organisational Configuration Concepts Outstandingly, competitive orientation and individualism dimensions are appropriate for appraising the two countries organisational configuration concepts. Elenkov held that US’s intra-organizational groups and teamwork can perfectly fit with Russian’s low individualism and moderately competitive orientation culture (Elenkov, 1998). Even so, Elenkov remarks that Russian employees are versed with team-building concepts that involve decision-making participation with even the lowest rank possible (Langford, 2011; Fey & Björkman, 2001). Therefore, for the triumph to prevail, it is necessary to invoke management’s invariable participation to satisfy the Russian’s high power distance. What can work in Russian setting? So far, it is evident that it could be difficult to apply the American management concepts directly in Russia to any significant degree. As established by Elenkov, Namrov and Hofstede, there is a complete detach between the two nations culturally, and only competition orientation seems to be little universal concept. However, a study by two other authors Daniel Denison and Carl Fey on about culture and its effectiveness in transitioning economy is critical for identifying what can work in Russia. They employed four models in the study: Involvement, adaptability, consistency and mission (Fey & Denison, 2003; Fey & Beamish, 2001). Primarily, they established that only adaptability and involvement models are the highest determinants of triumph in the Russian perspective. Consequently, the study showed that the US has greater potential in terms of mission model that is closely followed by involvement (Fey & Denison, 2003). From this study, they established mission as the foremost significant factor in the US perhaps due to relative economic stability, while whereas adaptability proved the most important factor in Russia owing to the transitional status of its economy. The authors found that mission and consistency were less valuable in a transitional financial system such as Russia than involvement and flexibility. However, there was concurrence of participation and adaptability in both countries meaning that the two concepts are applicable in Russian setting (Fey & Beamish, 2001). Conclusion Evidently from the study herein, any US-based corporation or any other Western-based company to be successful in Russia, its management ought to first endeavour to understand the Russian culture. Significantly, as discussed above, US concepts hardly correlate with Russian culture thus making their application inside Russia impossible. Using Hofstede’s six dimensions to measure the extent of influence on business by the Russian culture, Naumov’s found that Hofstede’s dimensions are reliable at appraising the culture extent in Russia. Among the six dimensions (power distance, competition orientation, collectivism vs. individualism, uncertainty avoidance, political influence, and Dogmatism), both Hofstede and Naumov found competitive orientation as the only dimension similar in both countries. Elsewhere, Detelin Elenkov also spent a great deal at appraising which of the US’s management concepts can work in a Russian setting. Using Hofstede’s dimensions, Elenkov invoked some comparatives such as leadership style, performance appraisal, motivational, and strategic planning concepts to establish which among them works in Russia. Similar to his counterparts, he also found competitive orientation dominating in both countries. However, Elenkov found that high power difference, collectivism and uncertainty avoidance dominated Russian managements whereas individualism and low power difference dominated American administrations. From such striking differences, Elenkov concluded that for the US concepts to work effectively in Russia, they must be edited or configured to fit the Russian culture. Finally, Daniel Denison and Carl Fey employed four models of adaptability, consistency, mission, and involvement to find which factors work in Russia. The found the mission as the foremost significant factor in the US whereas flexibility proved the most important factor in Russia owing to the transitional status of its economy. However, they found involvement and adaptability concurrence in both countries. Ultimately, the degree of workability of US concepts in Russia is minimal, and, therefore, as evidently provable from the study, most of the US concepts of management ought to be edited to work successfully in Russia. Bibliography Anbari, F. T., Khilkhanova, E. V., Romanova, M. V., & Umpleby, S. A., 2004. Cross-cultural differences and their implications for managing international projects. Journal of International Business and Economics, 2(1). Eiteman, D. K., Stonehill, A. I., & Moffett, M. H., 2001. Multinational business finance. Pearson Education India. Elenkov, D. S., 1998. Can American management concepts work in Russia? California Management Review, 40(4), 133-156. Fey, C. F., & Beamish, P. W., 2001. Organizational climate similarity and performance: International joint ventures in Russia. Organization studies, 22(5), 853-882. Fey, C. F., & Björkman, I., 2001. The effect of human resource management practices on MNC subsidiary performance in Russia. Journal of international business studies, 59-75. Fey, C. F., & Denison, D. R., 2003. Organizational culture and effectiveness: can American theory be applied in Russia?. Organization science, 14(6), 686-706. Grachev, M., & Bobina, M., 2006. Russian organizational leadership: Lessons from the GLOBE study. International Journal of leadership studies, 1(2), 67-79. Langford, E., 2011. US Multinationals Operating in Russia: Russian Employees in the American Business Model. Doctoral dissertation. University of North Carolina Wilmington. Robertson, C. J., Gilley, K. M., & Street, M. D., 2003. The relationship between ethics and firm practices in Russia and the United States. Journal of World Business, 38(4), 375-384. Schein, E. H., 2006. From brainwashing to organizational therapy: A conceptual and empirical journey in search of ‘systemic’health and a general model of change dynamics. A drama in five acts. Organization Studies, 27(2), 287-301. Read More