Insightegy Consultants

By knowing the specifics of the Russian corporate culture it is easier to make an acquisition of a local firm a rewarding effort for the Nordic investor.

Today's Russian corporate culture is driven by order and command embedded in a rigid hierarchical system. The legacy of Soviet history in particular remains quite strong and will continue to influence the business community in the short to medium term. In stark contrast, Nordic corporate culture is driven by ongoing dialogue between top management and its subordinates. This presents several immediate challenges to the Nordic investor seeking to integrate a recently acquired Russian business:

  1. Russians generally expect specific instructions and orders from the new owner; in one meeting between a Finnish client and the manager of its newly acquired Russian firm, a bemused Finnish CEO was asked to provide direct orders, "like in the army."

  2. Russian firms are highly bureaucratic organizations; unlike in Nordic culture, a verbal agreement will rarely if ever provide an adequate substitute for a signed document

  3. Russian companies have been slow to respond to foreign management in the past; a chain of command between the foreign HQ needs to be established as quickly as possible to minimize friction in the integration

  4. A Nordic investor must assign clear responsibilities and voice unambiguous expectations to the newly acquired Russian firm, thus avoiding time and financial losses being the result of constantly moving goalposts, changed agendas and unfulfilled tasks

  5. A buy-in from the Russian side must be sought by motivating the employees to adopt the ethos of the Nordic mother firm. This can be accomplished by showing a good example of teamwork (in the recently acquired company) which addresses the key stages of efficient work performance: priority setting, task planning, responsibility assigning, execution and progress tracking. Following that a "lessons learnt" session can be quite useful to hear feedbacks of the Russian side and make sure new work methods and new cultural facets have started finding their ways in the acquired organization.

This subject will be addressed in more detail at a workshop called How to Make PMI in Russia a Rewarding Effort.
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