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INDU1033: Managing Across Cultures Written Report U Veersma
Course School/Level Assessment Weight Submission Deadline
BU/PG 30.00% 06/12/2010
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Pathik Aka Jain Karunakar Gonu MD Faruq
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Managing across Cultures Group work
western Siberian companies. the future of Russian as the major player in the world market in next 30 years. Every news. natural gas. social and political problems. Langepasneftegaz. The prospects of Russia are very high.Written Report Tutor -Wim Vandekerckhove -6-12-2010 Due date Why Russia? Let me take pride in explaining why we have selected Russia as our home country and Iran as our host country. Lukoil and subsidiaries. and ended up with many economical. Urayneftegaz. the basis of the company is made on mergers. Why Lukoil? The company which is the best example of public as well as Private Corporation. London stock exchange (LSE) and NYSE. Russia is very interesting country with collapse of Soviet Union. the biggest and the across culture vehicle for expansion of its present and future lukoil. Keeping in mind. newspapers and bankers are seen taking of emerging markets BRICK countries.-INDU1033: Course Cultures Managing Across Coursework . the company is best to be considering for the group assignment because of its diverse corporate governance control by its financial strength both in international and domestic stock exchange like Russian. and other forms of natural resources. the largest multinational corporation and the fifth largest supplier of oil of the world. The company lukoil is the merger of three major state-run. and Kogalymneftegaz. as one of the largest emerging markets highly dependent on state energy market including oil. Managing across Cultures Group work Page 2 .
maintaining business stability and increasing the return on investment by the means of asset value appreciation and cash dividends are the objectives of the company. LUKOIL is one of the world's biggest vertically integrated companies. Both in Russia and International market.1 million tons of oil per year. the Company is the leader in its core business.000 people. Although its main resource is based in Western Siberia. The Company‟s global oil reserve is around 1%. Company overview For production of crude oil & gas. and their refining into petroleum products and petrochemicals. Iranian culture and language are historically rooted from Indian culture.9% of total Russian oil refining.Why Iran? The country which ruled by its strict rules and regulation by Islam. The country which has international pressure from USA regarding their internal and external affairs. The Russian energy sector is dominated by LUKOIL.6% of total Russian oil fabrication and 18. and marketing of these products are the major activities of the company. It is also found that the company is successfully running its business by employing more than 150. Production of oil & gas. its history has much more common with south Asian countries. The Company's products are marketed not only in Russia but also Eastern and Western Europe. Creating value. country whose 80% exports are oil and petroleum product. Millions of people in 30 countries of the world buy their products. A noteworthy oil refining facility is owned by the LUKOIL both in Russia and outside Russia. There company owns 4 refineries in Russia and the total capacity of LUKOIL facilities is 45. most of the exploration and production movement of the company is located in Russia. production of petroleum products and petrochemicals. The country which is geographically in Middle East/ Arab but. with 18. Managing across Cultures Group work Page 3 .
With the index and middle finger of the right hand resting on the thumb.Russian culture: The usual greeting is handshake while maintaining straight eye contact whilst giving the appropriate greeting for the time of day. leather or wool and men typically wear thick soled loafers. it is quite normal that single children lives with their parents and married children with spouse lives with one of the parents. For example. sneakers or sweatshirts. In general their uniforms are very formal and conservative.Subdued business suits with skirts that cover the knees are worn by women and business suits with highly polished shoe are worn by men. Attitudes to residential care: Managing across Cultures Group work Page 4 . Entering a room: It is well-mannered to release the door and let women or the guest to come into the room first and to remove their shoes upon entering a home. In Russia. The guests are often given a pair slippers (tapki) to help keep the place clean. Russians are mostly attached to their family members because it is usual for many Russians to live in small apartments in large blocks. Family structure: In general. a gesture linked to the Russian Orthodox religion is to cross themselves. Russian family life is „dependence‟. with 2-3 generations living together. blue jeans. Attire: There are some differences between man and women to choose colour such as women usually wear a dark coloured coat.
Residential care is seen by elderly Russian people as the last option and other in home support programs will be accessed to prolong independence for as long as possible. A key challenge is integration process is cultural differences both in terms of organizational culture and national culture. the culture can be viewed practically by observing the following three intertwined elements: . “Although M&A activity is predominantly driven by a rational-economic model. 75 percent of them cited “harmonising culture and communicating with employees” as the most important factors for successful post-merger integration (mmc. For example.Those factors that influence patterns of behaviours (Drivers) Managing across Cultures Group work Page 5 . lower quality of products. A merger can be made between two companies in order to obliterate competition in their market or to demolish competition in two different markets all together. cultural attitudes are likely to play a role in influencing selection decisions and management integration practices” (Curtwright and cooper. Mergers are known to be an aggressive stance to lessen competition. and less innovation. Mergers and Acquisitions: A merger is defined as the "union of two or more commercial interests or corporations. Some mergers create a scrupulous market. In the context of M&A. in a 2004 transatlantic study of executives involved in M&A deals.The business outcomes they produce (Outcomes) . It is equivalent to them to Leave home and move into any other communal arrangement.com). which in turn. cultural integrations should be considered as the heart of merger difficulties. To become successful in merger and acquisition. can lead to higher prices. reduced availability of goods or services.The individual and organisational behaviours themselves (Behaviours) . while others produce a single firm to increase prices. 1997).
the parties to the deal expect a diverse set of outcomes (such as greater revenue. is suffering with societal and economic mystifying. all phase of integration decisions are drivers of organisational behaviour. Iran the country with Extremist and confrontational policies with both inside and outside. In another way. Its state owned corporations and religious charity institutes manage over 80% of non-agricultural economy fails to create employment and the result creates approx one million unemployed Iranians. The year 2003 lukoil stepped in Iran with Anaran project.Norsk hydro block. that is most powerful over every business process. Iran Lukoil entry: The company lukoil was set of in year 1991 as mention above. The post-revolutionary regime has resulted in two social issues 1)the countries slow- Managing across Cultures Group work Page 6 . one important question is. Therefore. if different business results are required. However. cost savings or market share). then the behavioural patterns that make up the current culture must change. Form the year 1991 till date lukoil is the company that is an example of merger and acquisition growth. in the culture change management process.The behaviour patterns explain how the people of an organization are managed that means whether the management power is centralized or decentralised. including business design and work processes. Lukoil enjoys 25% exploration venture with Norway‟s. Majority of unemployed youth fall in to the category of Brain draining. Some level of behaviour change and therefore some change in behavioural drivers are required to achieve these new outcomes.What happens when a change event such as an acquisition. people practices. and the way the organisation is engaged. leadership and organisational design. joint venture or divestiture occurs? Almost by definition. Therefore. an organisation‟s culture can be seen as the aggregation of those individual behaviours that make up how work gets done. Country‟s cultural and resource history: PRESENT: Iran the country with over 60 million people.
the finding that Iran is cultural cluster of south Asian and not Arab/Middle. Where in high power index culture like Russia inequalities are seen in every decision as compare to Iran it is almost 40% less.moving economic performance cause results low standard of leaving. Indonesia. In Iran where there is low PDI scores compare to Russia the Russian have to take care of involving other team members in decision making process or them. (Outcomes of the study conducted by GLOBE). 2) Era of militant came up with Islamic attitudes resulted strict code of behaviour. The major problem with cultural understanding of Iranian is they are geographically Arab but managerial and leadership qualities of Iranian ended up like south Asian cluster similar as India.East. Managing across Cultures Group work Page 7 .com Power distance index: Russian is very well known for their obeying the rules and do what is expected.geert-hofstede. Source: www. Philippines and Malaysia.
it ultimately refers to man's search for Truth. History shows Russian as collectivist people example of USSR. Managing across Cultures Group work Page 8 .time horizon. It indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations.love performance. Where in Iran there can be sudden plan changes according to leaders and their leaders.Individualism Individualist side of both country is more or like totaly similar and have same collective society. Masculinity: With the help of globalization and close proximity with Europe Russian are changing there high masculinity and well-coming feminist to there culture but the prominent figure in hierarchical is always male. but from other research materials we can say that Iranian are a group of people . The Russian are likely to accept the surprise and work according to the situations where Iranian are not made to follow it as per their long history. In terms of future orientation behaviours there is no aspiration.in Russia and Iran they both value group and collectively working with each other. Women‟s are not allowed to share physical space with male in profession. The Russian are more lucrative from European and western culture and the are very well in planning and future goals. Under the present theocratic regime. Uncertainty Avoidance: It deals with a society's tolerance for uncertainty and ambiguity.orientated culture with short. Iranian women still have uphill struggle to reduce gender in equality. In Russian there is strict way of following the things and they have to obey the process and follows in high uncertainty avoidance group. Long-term: As per the graph there is no data available for long term orientation.
Russian are co-operative and they are motivated by more of collectivist.making hard working and earns their employees with broad participation. They follow respect and compliance their leader‟s vision. Employments options open up and social imbalance broadly. Most of the managers are very high risk They are eager to learn about every taker and lead by example. Loyalty part of the firm Loyalty is towards family and group. shifting to other countries. Managing across Cultures Group work Page 9 . a source of reform. Loyalty is towards family. Performance both group and individual management is increasingly common as achievement. employers mobility of employees to foreign firms and group. Iranian has long-term and stable relationship with the company Hiring Employees are often hired because they In iran there is differentiation of cast have family relations with in the with Persian and Islam drives the company company hires the person.The comparison between Russian and Iranian management characteristics Point difference Characteristics of manager Managers in both private and foreign Iranian managers do not expect an of Russia Iran Good firms are expected to be entrepreneurial.group orientation Iranian is motivated through group. Motivation Employees in Russia are generally Due to in. elaborate process of decision. due to the recent political population is are high.
employers use to pay less In Iran it‟s more of religious affairs in salary but offer more different benefits. and centralized and strongly hierarchical. and decision is made based on Islamic they are punished for mistakes. The most powerful Russian doesn‟t make mistakes. does what is said. Information sharing Russia sees information as the form of Iranian employees are expected to power and has informal network and maintain personal connections. Majority of firms in Russia is based on Iranian needs jobs safety as their main energy and offers free house. Managing across Cultures Group work Page 10 . Decision making Decision-making is extremely Iranian follows the leader blindly. harmonious relationships within the company. rules. Source Authority of In companies like where there is Management in Iranian companies are western corporate governance the more often authoritarian and autocratic. other basic. Respects to the supervisors are on higher nature. gas and benefits. both professional life and social life. general Russian are But in of flowers hierarchical. direction of flow of authority are both sides from lower to higher.Compensation In the past.
The managers should act according to the culture of the particular country where the company is trying to operate by adapting its culture. R. Managing mergers. Control mechanisms in cross border acquisitions: An international comparison.com 5. Managing across Cultures Group work Page 11 . (1994). The cultures may be individualistic or collectivistic. Calori. (1997).pdf 4. 127-138. (2003). 361–379. P.Conclusion: Managers who perform internationally should be aware that now two countries of different parts of the world have similar cultures. academy of managment excutive .-l.com/knowledgecenter/Mercer_impactCultureM&ATransactions. 15. Organisation Studies. Oxford: Butterworth Heinemann. 3. culture and leadership in iran. & Very. Excerpt: Managing Across Cultures 6. Coming to the case study of LUKOIL one of the world's biggest vertically integrated companies is to establish its operations in Iran. http://www. the managers should be able to plan the strategies according to the environments which favour the company existence. M. acquisitions and strategic alliances:interpreting people and cultures. j.. Cartwright. m. 2. C. The culture may differ by its political policies which may show effect on their operations. should operate keeping in mind about the culture and government policies of Iran References: 1. dastmachian. s.lukoil.. a.. 7. barsoux.mmc. (2003). managing across culture. L. www. Lubatkin. S. england: pearson education limited. & Cooper.
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