This article focuses on planning change in Russian companies with foreign participation. Based on extensive interviews with Russians
and Westerners in 5 companies, it identifies 4 major obstacles arising in that process: the variety of roles in the change process,
the need for developing common understandings, the manner in which vision is communicated in the organization, and the importance of
symbols and signals in the process of planning and carrying out organizational changes. This article addresses these themes from
both Russian and Western perspectives.

Executive Overview
When Westerners enter Russian companies, either by acquiring shares in existing ones or by making greenfield investments, they plan,
initiate, carry out, and manage ambitious and fundamental organizational changes. In the complex process of planning change, they
often face serious difficulties and experience clashes with the local managers and employees.
This article focuses on planning change in Russian companies with foreign participation. Based on extensive interviews with Russians
and Westerners in five companies, it identifies four major obstacles arising in that process: the variety of roles in the change
process, the need for developing common understandings, the manner in which vision is communicated in the organization, and the
importance of symbols and signals in the process of planning and carrying out organizational changes. The article addresses these
themes from both Russian and Western perspectives. It presents a number of practical lessons and guidelines for Western owners,
managers, and expatriates in Russian companies.
After the break-up of the Soviet Union and the collapse of communism in 1991, Russia began to open its economy and attract the
interest of foreign investors. As the country with the largest territory in the world, with a population of approximately 150
million, and a wealth of attractive natural resources, Russia offers enormous opportunities that might have a significant influence
on future international business. At the same time, however, with a weak legal system, an unpredictable economy, and short-lived
governments, Russia has the reputation as a country with paradoxical realities and shocking experiences, a country that is in a
systematic collapse and general chaos, and is one of the most difficult markets to enter.' In the words of Marshall Goldman, an
expert on the Russian economy, Russia is predictable in the sense that it will continue to be unpredictable. Others describe it as a
combination of contradictions and a unity of opposites.2 There is the need to know how these phenomena are reflected in Russian
management practice and what that would imply for Westerners3 engaged in Russian enterprises.
Significant contrasts between cultures do exist4 and do indeed make a difference, often substantial, in the way managers and workers
behave in organizations.5 The cultures of some countries, such as Russia, are especially difficult for Westerners to understand:
Westerners and Russians differ not merely in terms of national culture, but also in the economic, political, ideological, religious,
and social systems from which they come.
When a company establishes itself in a foreign country, the new organization will reflect certain features of both host and foreign
country elements.6 The interface between foreign and host country personnel, on the one hand, and between the foreign company and
the host country environment, on the other, are of critical importance for the organization exposed to a variety of intercultural
issues. Although the debate on whether Western management principles and practices are applicable in an alien environment is not
new,7 a substantial number of management models implicitly assume that Western management approaches and techniques can easily be
transferred across borders.
The findings in this article support the argument that managerial knowledge and practices are contextually embedded. They reflect
attitudes, values, and norms of the society where they have been developed, and might, therefore, be limited in their applicability
elsewhere. Even though Western managerial practices have proved to be superior in a number of countries with developed market
economies, they do not suggest the one best way for managing organizations-even less so in societies such as those in the former
Soviet Union.8 The uncritical application of Western management philosophies and practices in alternative cultural settings neglects
cultural diversity and ignores the potential for learning and development processes rooted in national, business, and management
cultures.9
This article looks predominantly at differences in perceptions, understandings, work patterns, and behaviors adopted by Russians and
Westerners in Russian-Western organizational settings. It emphasizes the contrasts, although certain similarities between these two
groups also exist. The intention is not merely to focus on obvious differences, but to discover underlying intents. Since Russia is
an extremely diverse country in terms of races, cultures, regions, religions, and languages, the conclusions drawn here are valid
mainly for the specific settings analyzed in the article. However, the findings and conclusions can be extrapolated to a larger
sample of organizations where Westerners and Russians work together.
From 1996 to 1999, I collected data from five Russian companies with Western participation. Written and video material about the
companies, observations, informal conversations, and interviews were among the instruments applied. I carried out 37 open-ended,
face-to-face interviews with organizational members, 24 of them with Russians and 13 with Westerners. Most of the respondents were
top and middle managers, since these constitute the most important and potentially most influential and powerful organizational
subpopulation in terms of planning and initiating change.10 The following section introduces the five companies by providing
contextual details relevant for understanding the process of planning change.
Five Russian Organizations
Established in the 1920s, Oilgas11 is a Russian project organization operating in the oil and gas industry. Following changes in
Russian legislation, it was transformed into a joint stock company in 1992. After 70 years of existence, the company's prospects
were rather negative. The problems on the Soviet market were grave and the year-long practice of delivering to nonpaying clients was
discouraging. The most probable outcome at that maturity stage of the life cycle would have been destruction,12 whereby the company
would go bankrupt, be taken over, or merge with another company. But in 1996, a large multinational enterprise with West European
origins acquired shares in Oilgas. The majority of Oilgas's shares belonged to the Russian state. The company employed 750 people
with an average age of 45. The average age at the management level was over 55, and 160 organizational members were pensioners-women
over 55 and men over 60. Six expatriates from various Western countries were assigned to key management positions in Oilgas. The CEO
was a Russian who occupied the position for the last 10 years. In 1996, only nine employees in Oilgas spoke English and only one of
the six Western expatriates spoke Russian. The long-term aim, as formulated by the Westerners in Oilgas, was to transform the
company into an engineering organization, able to deliver to Western clients.
Teleon is a five-year-old Russian company in the telecommunications sector. A minor part of its shares belonged to a Western company
with longterm activities in the Russian market and a major part to a Russian shareholder. Teleon employed 70 people with an average
age of 30. A Westerner was assigned to work in Teleon as a controller. He was present in the company full-time for the first three
years and half-time for the following year. By 2000, the Western presence in the everyday life of Teleon was almost nonexistent. The
CEO, who joined the company one year after it was established, was Russian, as was his management team. The managers in Teleon spoke
English.
Construct is the result of the takeover of part of a Russian factory in the construction industry by a large Western company.
Construct employed 560 people. A team of six Westerners occupied the key management positions-the CEO and the viceCEO posts and the
positions of production, financial, marketing, and personnel directors. One of the Westerners spoke Russian fluently and the others
were learning Russian. None of the Russians in Construct spoke English, except a few secretaries hired after the takeover.
Trans was established when a large Western company with international operations started its activities in Russia in 1992. Trans
operated in the transport industry and employed 25 people in two Russian cities. The largest office employed 16 people with an
average age of 26. The key management positions were occupied by four Westerners who did not speak Russian. All Russian employees
spoke English, as this was one of the selection criteria for their employment.
Equip was started in 1993 as a greenfield investment by an internationally operating Western company in the equipment industry.
Approximately 100 people were employed in Equips production unit and sales office. The CEO was a Westerner, as were the members of
the management team. Equip presented a mixed picture in terms of English language abilities-some spoke English and some did not. An
overview of the five companies and their key characteristics is presented in Table 1.
Two of the Russian companies, Oilgas and Construct, had been operating as state-owned organizations in the centrally planned
economy. They were stable, formalized, and bureaucratic. Their cultures were monolithic and dominated by the managers. Conformity
contributed to their repeating past experiences. Top-down management and one-man authority were combined with strong and lasting
relationships among organizational members. In 2000, these two companies were in the process of rebirth, and their struggle to
survive was aided by a strong injection of capital and know-how by the respective Western partners. Teleon, Trans, and Equip were
established after the collapse of the centrally planned economic system and, consequently, did not bear the burden of the socialist
past. However, many of the managers and employees working for these companies had been influenced by the experiences of a socialist
past, and some relied heavily on these experiences.
In the cases of Oilgas and Construct, the investors considered the rich experience of the respective Russian partner in the
particular industry, the partner's reputation and position in the Soviet market, and the importance of existing personal networks
and relationships. In the cases of Trans and Equip, the Western investors preferred that the Russian employees have no considerable
previous experience, were young, well-educated, and able to speak English. Teleon was formed at the outset of the business in which
the company operated. In this case, the Western investor relied mainly on the Western managers' personal contacts in Russia.
Critical Issues in Planning Change
Based on the data generated in these companies, Figure 1 proposes a model of planning change in Russian companies with Western
participation. The model identifies the major issues that appear to be most problematic in these Western-Russian organizational
settings.
The four issues illustrated in Figure 1 are not iterative stages in the change process. The emphasis on issues varies in different
cases and over time. Additionally, since change is complex, nonlinear and unfolding in nature, organizations move back and forth
between these issues, some of which are likely to occur simultaneously or stop and start again. Moreover, the processes of planning
change cannot be separated from those of implementation: the managers' task is also to ensure that the planned changes actually
occur.13
The following sections provide an analysis of the variety of roles in the organizational change process, examine difficulties in
developing common understandings, focus on key features related to crafting and communicating the vision of the organization, and
point out the relevance of symbols and signals sent and received. Examples let the reader hear some of the voices of Russians and
Westerners from the five companies. Each section concludes with action-oriented guidelines addressed mainly to Westerners.
Table 1
FIGURE 1
Identifying roles in the change process
Planned change is associated with transformational rather than incremental change. Whereas the former refers to major shifts in the
strategy of the organization, the latter refers to gradual change within the routines and paradigms of those in the organization.14
Planning and managing change is related to organizational politics and the various roles played by organizational members.15 The
following three subsections analyze the roles of Western expatriates, Russian managers, and Russian employees in the process of
planning change in the five companies.
Western expatriates: Change strategists
In each of the companies, the Western expatriates established strong coalitions among themselves soon after they were assigned to
work in Russia. They form a kind of clan culture,16 although lasting relationships among them were rare. The clan consisted of
enthusiasts united around the potential of an idea or vision, and respected diversity, complexity, and fluidity. The Western
expatriates identified the need for change, crafted the vision, defined the nature of the change, and decided on its feasibility.
They developed specific work plans, schedules, and budgets.
In Construct, Trans, and Equip, the top manager was a Westerner, as were the members of the top management team. In the case of
Oilgas, where the CEO was Russian, the change vision and strateg was developed by the Westerners working there. Teleon had a Russian
management team, but the main initiative and the key concepts in terms of further change and development were designed by the
foreign investor. When the Russian team in Teleon came up with more strategically oriented suggestions, these were discussed with
and approved by the Westerners in a dialogue with the Russian shareholder. The transformation activities in all five Russian
organizations were heavily financed by the Western partners.
One of the main obstacles to identifying roles in the change process was the way Western expatriates were perceived by Russian
employees and managers. Westerners were viewed as capital deliverers, consultants, or outsiders, even in the cases where the
companies were started by Westerners. This reinforced the us-vs-them attitude, made the communication links within the respective
organization fragile, jeopardized the integrity of joint actions, and left a significant imprint on future cooperation.
Another concern shared by the Western respondents was that, even if they took the opportunity to demonstrate and implement their
transformation vision at the organizational level, the company environment did not change, at least not with the same speed as the
organization's. Their frustration was caused by the discrepancy between their strong belief that the environment could be
transformed and the reality they encountered in Russia. According to the field data, Russians seemed to prefer adapting to the
environment instead of trying to transform it. Russians have been found to perceive their physical and social environment as having
a narrow zone of assured safety (where the environment is considered friendly and secure), a larger zone of uncertainty (containing
a mixture of good and danger), and a huge zone of danger (the part of the environment that primarily contains hazards).17 Both
Westerners and Russians in the companies seemed to have accepted the existence of the different realities, their organizations and
the outside environment, and to have learned their intricate rules.
A related problem was handling the organization-environment relationship. One of the change strategist's main tasks is to deal with
the environment. However, this is exactly what the Western expatriates found difficult in Russia: they defined the environment as
very different, alien, sometimes impossible, and absolutely unpredictable. They needed to have the insiders' view and knowledge of a
number of issues when dealing with other Russian organizations, authorities, or the public. At the same time, the Russian top
managers' perspective on developing the change vision and strategy was not as refined as that of the Westerners. Only one company in
the study, Teleon, successfully integrated the advantages of the locals and the foreigners.
Identifying key persons in the change process and clarifying the distribution of tasks and responsibilities are critical in the
process of planning change. At Oilgas, the Western expatriates applied an approach that functioned very well in the Russian context,
appointing a person from the expatriates' group as transformation director, although he and the Russians defined his functions and
responsibilities in completely different ways. The Russians claimed that they would know whom to blame if the transformation did not
work, which was in line with the centralization approach and the one-man authority style. In contrast, the transformation director
saw his own role and responsibility as an enthusiastic, positive thinker who dealt mainly with relationships and who, of course,
could not be solely responsible for Oilgas's transformation.
Since planning change is related to the issue of power and coalitions, a meaningful question would be: with whom should the Western
expatriates establish coalitions? In the cases where the CEO was a Russian, it was important to convince him to work for the change
initiated by the Western expatriates. Westerners in Oilgas adopted this approach from the very beginning, as did Westerners in
Construct before they took over part of the existing Russian factory. The Western controller in Teleon, however, who spoke Russian,
started at the bottom of the organization and made his way up to the CEO gradually: "The Russians prepared a nice office for me at
the end of the corridor, but I asked them to move me to one that had a much worse design but a more central location. This is how I
got to know the people quite well. Then gradually, I worked my way up to the management level. But before I reached the top people,
they were quite impressed by my relationship and contacts with the shop-floor employees."
Once the potential partners in the coalition have been identified, the question arises: how to establish the coalition? To assume
that the formal organizational chart reflects the real power distribution would be wrong. The problem for the Westerners in these
companies was that they were hardly involved in the informal life of the organization. Participating in company parties or other
social events would give the Westerners much more information about which individuals and groups set agendas at critical junctures
and really make the decisions; who among the Russians is more influential; who is more respected; who communicates with whom; who is
avoiding whom; what rumors are circulating. In terms of establishing coalitions, this would be highly relevant information, but
information difficult to obtain formally at the meeting table.
A number of authors highlight the importance of personal relationships and trust in the Russian context,18 and these issues often
cause another difficulty for Western expatriates, who typically do not interact with Russian managers in other Russian companies.
Westerners establish very good relationships among themselves within the companies as well as across them. They tend to share
problems and exchange experiences, however, only among themselves, not with Russians. Friendships between Westerners and Russians
would be of great benefit and value in the Russian organizational context.19 Although establishing intimate friendships is a long,
energy-consuming and difficult process, investing in friendships is worthwhile, especially since Russians regard friends20 as people
whom they can trust fully.
Russian managers: Change implementors in an ambiguous position
Russians and Westerners view change differently, as illustrated by the following comments:
I often say that each general director should be sent to the Canary Islands for three to four months and be left there without
connection to his company. If the company changes in a negative direction, the director must be fired. If the company develops
positively, he must also be fired. If everything goes on without any changes, he must receive a bonus, because this would mean that
he has established standards and procedures that work effectively.
They [Western expatriates] only talk about changes. How about not changing, and maintaining what we already have?
-Russian middle manager, Construct
There is so much that needs to be changed, actually everything-from the reconstruction of the building, introduction of new
qualifications and skills, to changing attitudes and values.
-Western expatriate, Construct
They also differ about their roles in the change process:
I do not like the Western-Russian separation, but it is there. It goes in various aspects. We work together in terms of space, but
that is it. We are very, very different. They [Westerners] have the power, because they have money. They invest in our company
according to contract and that is fine.
-Russian middle manager, Oilgas
My role as transformation director is internal. I am a change agent, but I am somehow treated as a consultant. My clients are people
from the organization, mainly from the top.
-Western expatriate, Oilgas
The Russian top and middle managers acted mainly as change implementors21 in the day-today change process. Since the Russian
managers were not actually involved in developing the change strategy, they were motivated to implement it either because they
believed in it or because they were told to. While both motivations were found in the studied companies, the data strongly suggest
that the main motivation for implementing change came from following orders.
In Oilgas and Construct, the Western management teams forced the Russian managers to change the roles in which they had been trapped
for years and which shaped their identities as managers. The Western managers demanded radical changes in their Russian colleagues'
leadership style and ways of communicating and motivating. The Russian employees, however, preferred that their managers preserve
the longterm alliances they had built with them in the socialist past.22 This created a great deal of ambiguity for Russian
managers-"should they serve the tsar or should they serve the people?"23 The older Russian managers and employees in Equip and
Teleon dealt with the same dilemma, incorporating experiences from previous work places into the organization. The mentality and
spirit of paternalism remained very strong. A CEO of a traditional Russian organization can still be compared with the largest
matrioshka doll who holds all the other managers and workers,24 and enjoys the support and trust of the workers on many different
occasions? As a result, Russian managers in companies with foreign participation are not completely sure of their roles, and how
they should meet the various expectations from their Western colleagues and superiors and their Russian colleagues and
subordinates.26
Moreover, the very idea of change is alien to many of the interviewed Russian managers. They explicitly claimed that the manager's
task is to establish procedures that ensure continuity. They defined the change projects initiated by the Westerners as "losing the
ground, because there are so many changes at the same time," or "not understandable, since the managers' task is to secure the
stability of the organization."
Russian employees: Forced to change but choosing to resist
The majority of Russian employees in the studied companies regarded openness as inappropriate behavior. Afraid of how their
superiors would understand and interpret what they said, they preferred to keep their opinions to themselves. Their initiative and
ambition had been denigrated for decades by a system that tolerated gray, drab, and conventional people, and excluded those oriented
towards personal achievement. Disobedient and independently thinking employees were regarded as conflict-prone, or as antisocial
personalities, and were often called "enemies of the people."27
Russian employees in the studied companies were not involved in planning change. They felt uncomfortable and claimed they were being
forced to change. If the Western expatriates had been removed from the management groups, it is likely that organizational change in
all five companies would have either stopped completely or slowed down considerably. The employees' participation in decision making
was relatively limited.28 Some of them agreed ostensibly with the change, but since they did not commit to it, they were only
passively in favor of it. Many employees were partly dissatisfied with the former management system; however, they did not consider
the new alternatives proposed by the Western investors to be much more promising. Therefore, it is difficult to draw a clear
distinction between passive resistance to change and passive support for change. Passive and covert resistance to change is the most
serious problem for Western expatriates to cope with: employees may agree to change, but their agreement is, in truth, rejection,
and they cannot be counted on.29
Actions for Westerners in developing roles in the change process
Create a coalition with the Russian top managers based on trust and oriented towards a longterm friendship.
Get actively involved in the social life of the company. Attend the parties organized by Russian colleagues. Establish good informal
relationships with people who may be strong supporters of the change activities, and do not form coalitions merely by following the
formal organizational chart.
Expand the circle of interactions beyond the relationships with other Western colleagues and establish contacts with Russian
managers in Russian companies without foreign participation. This will help gain a deeper understanding of the Russians' behavior in
a Westerner's own organization.
Remember that Russian managers are in a highly ambiguous situation. What a Westerner wants from them is often the opposite of what
their Russian subordinates expect them to do. Be sensitive to the fact that Russian managers greatly value stability and continuity.
Remember that Russian employees have been subject to ideological changes with no substantive basis in the past and tend to
extrapolate these experiences into the present. Therefore, be prepared for passive resistance to change from shop-floor employees.
Developing Common Understandings
The diversity of meanings generated by the same words is a highly significant issue in organizational life. People's understandings
are not uniform, and notions and terms are not used in a vacuum. They involve different associations in different cultural
environments. In that sense, notions themselves might be viewed as cultural artifacts and language as a means of communication in a
particular culture rather than a universal means of communication. Where different cultures interact, language is a guide for
classifying reality into perceptual units that make a difference for people in the culture.30 Russians and Westerners note major
differences in the meanings of a number of words and phrases. Significantly, many words in the Western management vocabulary, such
as planning, decision making, and teamwork, evoke different mental images. Terms like market, profit, and money often sound negative
in Russia, since they connote social injustice and chaos.31 The variety of meanings as such does not lead to a quandary: the problem
is the failure to clarify and agree on the meanings and the consequent failure to reach a common understanding. This causes a great
deal of uncertainty in interactions, often with a heavy impact on organizational life.
The following examples from the field are important in planning change. They focus particularly on how time, planning, and control
were interpreted by Russians and Westerners in the studied companies.
Understanding of time
The past is there and we cannot simply eliminate it, even though some try to do so. The past is a fact and we have to deal with it.
-Russian CEO, Oilgas
One should not forget that this company has been existing for years. It may be fine to change, and restructure, but we should look
back more often and remember how it was.
-Russian middle manager, Construct
In order to develop, one should look forward. We are oriented towards the future and this helps us survive.
-Western expatriate, Trans
Time is perceived differently by the Russians and Westerners who participated in the study. (See Table 2).
The Russian respondents frequently referred to their experiences and the traditional Russian way of handling situations. Whereas
efficiency, predictability, professionalism, and modernity are seen as key forces for rationality in the West,32 belief in fate and
destiny reflect an underlying faith in the Russian context. While a professionally oriented and modern Western society provides
little room for traditions and regards them as slowing down progress, Russians tend to value them very highly. They perceive the
future orientation and focus on action and achievement in the Western context as not very appropriate, and admire history and
traditions instead.
Understanding of planning
A plan is a plan. Once you get it, you have to execute it. This is very serious.
-Russian middle manager, Teleon
There is no discipline without an exactly defined plan. And if there is no discipline, there is no success.
-Russian middle manager, Equip
There are jumps back and forth. We continue diagnosing, since we find new surprises every day. The diagnosis phase is never ending.
We do not know how it is going to be-it might be worse, it might be better. We will not know until we go through it; everything else
is pure speculation.
-Western expatriate, Oilgas
Another concept that exemplifies the variety of meanings interpreted by Russians and Westerners is planning.33 (See Table 3.)
Westerners view the plan as a document that articulates alternative courses of action. For them, planning is a long-term activity of
continuous reassessment and readjustment. It is a management tool that they use actively in evaluating work progress and in
implementing a major new course of action. To formulate a plan means to commit initially to the goal. However, this is only a
starting point; continuously reformulating the plan is a significant part of their managerial job.
Soon after Westerners enter a Russian company and start working with Russian colleagues, they often realize that their perception of
planning is alien to the Russian understanding of setting and executing goals. Although Russia had a planned economy for more than
70 years and managers had been planning all the time, most are actually not interested in long-term planning and consider it
useless. They prefer small and sure steps: any sizable move might bring them into the dark area of the totally unknown.34 Russians
generally perceive short-term oriented plans as ultimate end-- tasks, the execution of which they associate with success. Oilgas
provides an extreme case in that sense. According to the Russian CEO, his perspective for thinking and acting was 24 hours, while
the plans of some Western expatriates in the same company were 10 years ahead. The Russian managers concentrated their thoughts and
actions on the survival of their companies and their own positions. Because of that perspective, as well as unpredictable changes in
the environment, they did not see much room for strategic thinking or long-term plans.
Russians are committed to the goal, expect more rigidity,35 and resist changing plans at a later time. Planning understood as an
ultimate value might be seen as a legacy of the socialist system, where a planned economy, on a societal level, reinforced the
execution of the plan by all means, including manipulations and massive collective overtime work. It might also take its roots
centuries back in history, in the times of the village communes. The members of the communes "openly and uninhibitedly exercised
their right to articulate their interests and opinions before decisions were made. However, once a decision had been reached, they
were obliged to abide by it."36 Two specific considerations were made at that point. First, the decision was taken by one single
person who did not necessarily respect the opinions and voices of the others. Second, even if new and unpredicted circumstances
appeared, the plan had to be executed and the decision had to be followed as formulated initially.
Table 2
Table 3
Understanding of control
When asked questions concerning feedback mechanisms in their organizations, many of the Russians asked if the author meant how
control was exercised in the company. When they elaborated, it was clear that they perceived control as a topdown and discrete
activity. The Russian notion assumes that top managers periodically check on the activities of employees at lower levels. The
underlying understanding is that formal reward and punishment systems are most effective in getting employees to perform their
tasks. This differs tremendously from the understanding of the Western respondents, who prefer the concept of feedback rather than
control. When speaking of control, Westerners mean a continuous activity intrinsic to the actions of all organizational members. To
them, control focuses on involvement, not on formalized bureaucracy. (See Table 4.)
The variety of meanings and understandings that single words can generate sometimes has serious and expensive consequences. In
Oilgas, for example, the Western expatriates and Russian managers had several discussions on how to organize the control activities
after a new information technology system was installed. Every time, both groups left the meeting room frustrated and confused. Each
group thought the other was "blocking us and our activities" and "not willing to cooperate." They never asked each other how the
other party understood the term "control." Instead, each assumed that the interpretations were identical; therefore, they discussed
only operational issues.
One of the ways to overcome this type of misunderstanding is to employ a cultural catalyst,37 who has a bicultural background and is
aware of different representations of the same phenomenon. Two of the companies, Construct and Oilgas, have applied this approach.
Construct hired a Westerner who had been living in Russia for 10 years, spoke the language fluently, and acted, in his words, as "a
bridge between the understandings of the Russians and the Westerners." One of the Western expatriates in Oilgas was born in Russia.
Although he left the country in his childhood, he was very helpful as a cultural catalyst during his assignment.
In a cross-cultural setting in which different languages are used, one encounters frequent reports of confusion and misunderstanding
unless two interpreters are used-one to translate, and the other to monitor and feed back the extent to which the intended meaning
has been conveyed. During the fieldwork, several misinterpretations occurred. In eight of the interviews with Russians at Construct,
the interviewing team of two researchers worked with the company's interpreter. Had the researchers not understood Russian, they
would not have been aware that on a number of occasions the interpreter completely modified the meaning of the questions or the
answers. It would not be surprising if such mistranslations also occurred in the everyday communication of the company.
Table 4
Actions for Westerners to develop common understandings
Assume as few things as possible. Listen carefully and ask clarifying questions. Before discussing how to do things, make sure that
you and your Russian counterparts are talking about the same things. Time, planning, and control are only a few examples of how
different people's understandings might be.
Do not ignore the importance of traditions, history, and past experiences. Russians value them highly.
When introducing strategic plans, formulate short-term tasks with achievable and observable results and assign Russians to work on
them.
Do not be afraid of applying formalized topdown control techniques. Russians respect them and, therefore, expect them.
Invest in a cultural catalyst who has a bicultural background and is aware of different representations of the same phenomenon. Or
hire an interpreter with these qualifications. This should be someone who does not merely translate words, but effectively conveys
the intended meanings.
Crafting and Communicating the Vision
What direction an organization should take, why it should do so, and how it can proceed are components of a vision. A vision is an
articulation of the possible and the desirable under given circumstances. It is the larger picture that needs to be kept in mind, in
order to avoid the preoccupation with daily operational activities at the cost of the overall organizational goals.38
In the five companies studied, the Western expatriates elaborated a vision, but in a number of cases communicated it poorly or not
at all. Consequently, employees neither understood nor shared. The Western expatriates in Oilgas, for instance, developed both an
overall and a detailed version of a transformation plan; however, only a few Russian managers in the company were told about its
content. Employees at the lower levels did not even know of its existence and were convinced that the Western managers did not have
a clear idea of what to do and where to lead them. The real power of a vision is unleashed only when most of those involved in an
enterprise or activity have a common understanding of its goals and direction. That shared sense of the desirable future can help
motivate and coordinate the kinds of actions that create transformation.39
Communicating the vision is especially important in Russia, since Russian employees are accustomed to a high level of certainty
about the direction of the organization, the concrete organizational goals, and the means of achieving them. Failing to clearly
transmit the vision creates a vacuum in terms of responsibility. Since managing is, in a very general sense, directing others' work,
vision must be communicated to those working at the lower levels where the everyday work is performed. Making the vision explicit
and ensuring its diffusion throughout the organization can provide a shield against anxiety in a period of change, can boost morale,
and sustain self-esteem.40
An important aspect of communicating the vision is the way it is verbalized. Using formulations that Russian employees associate
with those used in the centrally planned economy could have the opposite effect to that intended by Westerners. The following
extract from an interview with a Russian middle manager in Oilgas is indicative:
This happened shortly after our Western colleagues came here. They arranged a meeting in the big room where we used to have
communist party meetings and various celebrations. We all were there, 750 people. The first shock was when the Westerners announced
that they called this meeting because they wanted to give us the opportunity to ask questions, put forward concerns, in other words,
give us the stage to share with them whatever we thought was important. I found that completely meaningless and so did my
colleagues. How can you put hundreds of people together without a clear agenda? What are we discussing here? Give us the topic, then
we can maybe discuss.
After long minutes of complete silence, one of us, a 55-year-old woman, had a question about our Western colleagues' office hours.
She asked when their office hours would be, but they understood the question to be about their working hours. After the Westerners
understood that she was asking about the hours when employees are allowed to go to the managers' offices, one of them said: "Thank
you very much for this question. I am happy and proud to tell all of you that we will not have any office hours. All the time we
will be here only for you." All the time here only for you. This we have heard so many times before. Westerners use the same nice
words like our communist leaders did. What the Westerners said sounded very much like the socialist phrase "everything for the
person and his well-being."
Using expressions that can easily be associated with the communist past increases the risk that Russian employees will evaluate the
vision as just words, or just another change project like those that never worked in the past.
Actions for Westerners to communicate the vision
Tell employees about the vision. Communicate it explicitly and clearly. Russian employees sometimes have difficulties dealing with
ambiguity about the organization's direction and the main goals to be achieved.
Be aware that stability and certainty are highly valued by Russian managers and employees. When planning change, make sure that
Russian organizational members understand what will be maintained and reproduced.
Be very careful when phrasing ideas. Do not use words and sentences that can be easily associated with the communist period and that
may seem laden with meaningless ideology.
Providing Symbols and Signals
Much of organizational change is symbolic and based on signals. The need to understand the signals is crucial, since mundane tools
for creating and manipulating symbols over time can reshape beliefs and expectations.41 Symbols and signals are embedded in the
structure, relationships, and language of the everyday life of an organization. It is important that the verbal signals sent by
managers are consistent with their actions. This is even more important in cross-cultural settings, where people are more sensitive
and more careful in observing each other's behavior and interpreting signals.
Two stories from Oilgas illustrate the difficulties of interpreting symbols and signals. The source of inconsistency in the first
story is the Russian CEO and in the second the Western expatriates. Both cases had serious negative consequences for planning
change.
The Russian CEO's last-second block
After long negotiations with the Russian CEO, the Western expatriates in Oilgas reached agreement that the company needed to appoint
a young, welleducated and highly professional person to be responsible for introducing and managing the new information technology
system in the organization. They also agreed that this person would receive a salary corresponding to her or his qualifications and
not to age, and that the salary would be funded by the Western investor's budget. The recruitment and selection procedure turned out
to be very time-consuming. The Russian CEO took part and was continuously informed about progress.
After several weeks of announcements, meetings, and interviews a "brilliant" candidate was selected. A contract was prepared, but
before it was signed the Russian CEO, the Russian middle managers, and the Western expatriates met. The Russian CEO announced to
everybody: "After several months of procedures, we finally have selected a person who will be in charge of the IT department. He has
been studying at [ ...] and has [...] qualifications. He is 26 years old and will start by the beginning of next month with a salary
of [... ] rubles." The CEO knew perfectly well that his middle managers, who had been working in the company for decades, would
never accept and allow a situation where a newcomer, half their age, received a salary twice their own. Told informally by the
Russian CEO and middle managers that he would not get the job, the candidate phoned and informed the company that he would not be
taking the position.
The Russian CEO claimed throughout that he agreed with the terms suggested by the Western expatriates. He even participated actively
in the selection and appointment of the new candidate. However, this did not actually mean that he supported the decision. According
to the Western viceCEO and a number of middle Russian managers, mentioning the salary was a deliberate act that blocked the decision
and put an end to a timeconsuming and complicated process without achieving the result expected by the Westerners.
Westerners' actions contradict talk of teamwork
The Western expatriates in Oilgas simultaneously did two things that contradicted each other. Soon after they joined the company,
they started working hard on introducing the teamwork idea at the management level, conducting meetings and initiating discussions
devoted to the topic. They also offered psychological training in group work and team leadership for the whole management group
aimed at solving some of the problems between Russians and Westerners. At the same time, however, the Westerners redesigned and
ordered new furniture for their own offices, but not for the uncomfortable and poorly furnished offices of the Russian CEO and their
Russian colleagues.
Upgrading the furniture for the Russian managers would have been a very small investment in terms of money, but it would have gone a
long way in demonstrating that the Westerners meant what they said about being a team. The Russian respondents in the company
repeatedly cited this example of the discrepancy between Westerners' statements and actual behavior. The inconsistency between
claims and actions led to postponing or never reaching mutual trust, which is vitally important in planning and carrying out
organizational change. In Oilgas, both incidents led to deep frustration and tensions.
Another important and sensitive topic is the way in which rewards are handled in Russian companies with foreign participation, and
how the rewards relate to the notion of contributing equally and working as a team at the management level. There is often a huge
difference between the salaries of the Russian managers and their Western colleagues in companies where they work together.
Expatriates typically receive a base salary, benefits, allowances, and tax equalization. The immense differences in salaries is
often expected by Westerners, but is seriously demoralizing for Russian managers. This additionally complicates the relationship
between the two groups. When local employees begin to learn about the much higher benefits people working next to or sometimes under
them enjoy and compare them to their own compensation, they may feel underpaid, betrayed, or discriminated against. According to one
expert:
When local people do not see super performance by extremely well-paid expatriates (which often is the case due to various reasons),
they begin to question the relation between expatriates' costs and the value they add to the company, as well as the fairness of the
compensation system itself. So far this problem has not caused any major revolts on the Russian side, only silent disapproval, but
it could be a time-bomb.42
Actions for Westerners to provide symbols and signals
Be consistent in terms of statements and actual behavior. Their signals should clearly indicate that they mean what they say. During
transformational change, organizational members are extremely sensitive towards discrepancies between words and actions, and need as
much coherence as possible. The significance increases in a cross-cultural setting where the different parties are generally more
sensitive and more careful in observing each other's behavior.
Do not assume that Russian colleagues and subordinates will act according to what they say. If Western managers' actions contradict
their basic attitudes and understandings, the Russians will often find ways to surprise them.
Take up the salary issue. Present the picture honestly and explain that there are reasons why expatriates receive higher salaries
than the locals in the company. This helps to avoid rumors and establish a good basis for trust.
Toward Greater Cooperation
Organizational change is related to a variety of different needs-financial, psychological, and social. It evokes strong feelings
that are often deeply ambivalent: change is both needed and not needed, expected and unexpected, constructive and destructive.
Unless these meanings are taken into serious consideration, planning organizational change may bring about negative consequences.
No one seems to dispute the fact that differences in perceptions, values, attitudes, and relational systems make the application of
standard managerial systems and practices inappropriate. What is in dispute, however, is how and to what extent to localize
management approaches and techniques. Western investors and managers need to develop deeper insights and understandings of Russian
organizational and managerial assumptions, traditions, attitudes, and values if they are to do business with Russians successfully.
Neither side should subscribe to the other's way of doing things. Both parties must be willing to work at developing understandings
of each other's values and experiences, as well as organizational realities and processes. In doing so, they may develop an
appreciation of why the other party behaves in certain ways, which could lead to greater cooperation.
Acknowledgments
Part of the data used in this article are from the action-research project SODIAC (Sculpturing Organizational Dynamics in a Context)
at Copenhagen Business School, Denmark. The author gratefully acknowledges the participation of the case organizations and the
financial support of the funding companies and institutions.
Endnotes
1 Oleynik, I. 1999. Dealing with Russia: A winning strategy for the future. Journal of East-West Business, 4(4): 81-90; Coleman, L.
& Beaulieu, E. 1999. Marketing in Russia: A problem or opportunity? Journal of East-West Business, 4(4): 69-80; Driakhlov, N. 1996.
Tradition versus modernity. In C. Williams, V. Chuprov, & V. Staroverov, (Eds.), Russian society in transition: 75-83. Aldershot,
UX: Dartmouth.
2 Hingley, R. 1981. The Russian mind. New York: Charles Scribner.
3 The terms "Western" and "Westerners" were frequently used by the respondents in this study, Russians as well as foreign
expatriates. This ambiguous term has gained broad acceptance mainly in terms of dichotomies, such as West-East, Western
Europe-Eastern Europe, or Europe-America. Western culture includes many national cultures, national identities, and sociocultural
contexts, and reflects a wide variety of organizational practices and forms, management attitudes and behavior, leadership styles,
and human resource policies and practices.
4 Kelley, L., Whatley, A. & Worthley, R. 1987. Assessing the
effects of culture on managerial attitudes. Journal of International Business Studies, 18(2): 17-31; Griffeth, R., Hom, P., DeNisi,
A. & Kirchiner, W. 1980. Multivariate multinational comparison of managerial attitudes. Academy of Management Proceedings: 63-67.
5 Steers, R., Bischoff, S. & Higgins, L. 1992. Cross-cultural management research: The fish and the fisherman. Journal of Management
Inquiry, 1(4): 321-330; McDonald, G. & Pak, P. 1996. Ethical acculturation of expatriate managers in a cross cultural context. Cross
Cultural Management: An International Journal, 3(3): 9-30.
6 Buono, J. & Bowditch, A. 1989. The human side of mergers and acquisitions: Managing collisions between people and organizations.
San Francisco: Jossey-Bass; Kelley et al., op. cit.
7 Kanungo, R. & Jaeger, A. 1990. Introduction: The need for indigenous management in developing countries. In P. Kanungo & A.
Jaeger, (Eds.), Indigenous management in developing countries: 1-19. London: Routledge; Boyacigiller, N. & Adler, N. 1991. The
parochial dinosaur: Organizational science in a global context. Academy of Management Review, 16(2): 262-290.
8 Puffer, S. M., McCarthy, D. J. & Naumov, A. I. 2000. The Russian capitalist experiment: From state-owned organizations to
entrepreneurships. Cheltenham, U.K. and Northampton, MA: Edward Elgar.
9 Culture is defined in a number of ways (see Usinier, J.-C. 1998. International and cross-cultural management research. London:
Sage). Many difficulties exist in differentiating between cultural and national factors (see Kelley, L. & Worthley, R. 1981. The
role of culture in comparative management: A cross-cultural perspective. Academy of Management Journal, 16(1): 67-76) and between
cultural, national, and situational effects (see Bhagat, R. & McQuaid, S. 1982. Role of subjective culture in organizations: A
review and directions for further research. Journal of Applied Psychology, Monograph, 67, 5). The majority of studies implicitly
assume national boundaries as operational definitions of culturally distinctive units (see Adler, N. 1983. A typology of management
studies involving culture. Journal of International Business Studies, 14(2): 29-47). The present article adopts the view of culture
as a shared system of representations and meaning (see Geertz, C. 1983. Local knowledge. New York: Basic Books; Goodenough, W. 1971.
Culture, language and society. Reading, MA: Addison-Wesley) that is learned and used by people to interpret experience and to
generate social behavior (see Terpstra, V. & David, K. 1991. The cultural environment of international business, 3rd edition.
Cincinnati: South-Western Publishing Co.). This implies that culture is not necessarily associated with the whole of a particular
society (see Ronen, S. 1986. Comparative and multinational management. New York: John Wiley & Sons), but is related to certain sets
of activities and interactions within the boundaries of a specific group. When the article refers to cultural characteristics and
features it assumes that these constitute key determinants of managerial practices and effectiveness (see Neghandi, A. & Prasad, B.
1971. Comparative management. New York: Appleton-Century-Crofts). These characteristics are of a more fundamental, pervasive nature
in their capacity to induce valences for a broad variety of domains (see Wilpert, B. & Scharpf, S. 1990. Intercultural
management-Joint ventures in the People's Republic of China. International Journal of Psychology, 25: 643-656).
10 Of the interviews with the Western expatriates, eight were conducted in English and five predominantly in the language (other
than English) of the Western expatriate. The author conducted 15 of the interviews with the Russian respondents in Russian, one in
English, and eight using a translator. In order to study the obstacles in the communication when using translators in the companies'
everyday life, an interpreter was asked to
translate the questions and responses in five of the interviews in one of the studied organizations. In these cases, the interview
interpreter was an employee working as interpreter in the respective Russian company.
11 All company names in this article are disguised.
12 Schein, E. 1992. Organizational culture and leadership, 2nd edition. San Francisco: Jossey-Bass.
13 Senior, B. 1997. Organizational change. London: Pitman Publishing.
14 Johnson, G. & Scholes, K. 1999. Exploring corporate strategy, 5th edition. London: Prentice Hall.
15 Kanter, R., Stein, B. & Jick, T. 1992. The challenge of organizational change: How companies experience it and leaders guide it.
New York: The Free Press; Hardy, C. 1994. Managing strategic action, mobilizing change: Concepts, readings and cases. London: Sage;
Hardy, C. & Clegg, S. 1999. Some dare call it power. In S. Clegg & C. Hardy, (Eds.), Studying organization: Theory & method. London:
Sage: 368-387.
16 Ouchi, W. 1980. Markets, bureaucracies, and clans. Administrative Science Quarterly, 25: 129-141.
17 Mikheyev, D. 1987. The Soviet mentality. Political Psychology, 8(4): 491-523.
18 Dabars, Z. & Vokhmina, L. 1995. The Russian way. Lincolnwood, IL: Passport Books; Holden, N., Cooper, C. & Carr, J. 1998. Dealing
with the new Russia: Management cultures in collision. Chichester, UX: John Wiley & Sons; Kets de Vries, M. 1998. The anarchist
within: Clinical reflections on Russian character, leadership style, and organizational practices. Working paper 98/96,
Fontainebleau, France: INSEAD; Ledeneva, A. 1998. Russia's economy of favors: Blat, networking and informal exchange. Cambridge, UX:
Cambridge University Press.
19 Puffer, S. M. 1994. Understanding the bear: A portrait of Russian business leaders. The Academy of Management Executive, 8(1):
41-54; Smith, H. 1976. The Russians. New York: Times Books/Quadrangle.
20 The Russian language offers a number of different words for friend.
21 Kanter et al., op. cit.
22 Puffer, S. M. & McCarthy, D. J. 1995. Finding the common ground in Russian and American business ethics. California Management
Review, 37(2): 29-46; Richmond, Y. 1996. From nyet to da: Understanding the Russians. Yarmouth, ME: Intercultural Press.
23 A Russian proverb says: Who serves the tsar, cannot serve the people.
24 Vlachoutsicos, C. & Lawrence, P. 1990. What we don't know about Soviet management. Harvard Business Review, November-December:
50-63.
25 Puffer, S. M. 1993. A riddle wrapped in an enigma: Demystifying Russian managerial motivation. European Management Journal,
11(4): 473-480.
26 Ivancevich, J., DeFrank, R., & Gregory, P. 1992. The Soviet enterprise director: An important resource before and after the coup.
The Academy of Management Executive, 6(1): 42-55.
27 Michailova, S. 1998. Interface between Western and Russian management attitudes: Implications for organizational change. In Lang,
R., (Ed.), Fuhrungskrafte im osteuropaischen
TransformationsprozeB (Executives in the East European transformation process): 279-302. Munich: Hampp.
28 Wright, M., Hoskisson, R., Filatotchev, I., & Buck, T. 1998. Revitalizing privatized Russian enterprises. The Academy of
Management Executive, 12(2): 74-85.
29 Ward, M. 1995. 50 essential management techniques. Aldershot: Gower.
30 Whorf, B. 1956. Language, thought, and reality. New York: Wiley; Terpstra & David, op. cit.
31 Cattaneo, E. 1992. Managing joint-ventures in Russia: Can the problems be solved? Long Range Planning, 25(5): 68-72.
32 Adams, G. & Ingersol, V. 1990. Culture, technical rationality, and organizational culture. American Review of Public
Administration, 20(4): 285-302.
33 Michailova, S. & Anisimova, A. 1999. Russian voices from a Danish company. Business Strategy Review, 10(4): 65-78.
34 Mikheyev, op. cit., 521.
35 Lawrence, P. & Vlachoutsicos, C. 1990. Managerial patterns: Differences and commonalities. In P. Lawrence & C. Vlachoutsicos,
(Eds.), Behind the factory walls: Decision making in Soviet and U.S. enterprises: 271-286. Boston: Harvard Business School Press.
36 Vlachoutsicos, C. 1998. The dangers of ignoring Russian communitarism. Transition, October: 13-14.
37 Lee, M. 1995. Working with choice in Central Europe. Management Learning, 26(2): 215-230.
38 Legge, K. 1984. Evaluating planned organizational change. London: Academic Press.
39 Kotter, J. 1996. Leading change. Boston: Harvard Business School Press.
40 Carnall, C. 1995. Managing change in organizations. 2nd edition. London: Prentice Hall.
41 Peters, T. 1987. Symbols, patterns and settings: An optimistic case for getting things done. Organizational Dynamics, 7(2): 3-23.
42 Shekshnia, S. 1996. Managing people in Russia. In S. M. Puffer & Associates, (Eds.), Business and management in Russia: 239-257.
Cheltenham, U.K. and Brookfield, VT: Edward Elgar.
43 Mikheyev, op. cit., 514.
44 Kets de Vries, op. cit.
Snejina Michalova is an associate professor at Copenhagen Business School, Denmark. She has a master's degree from the University of
National and World Economy, Sofia, Bulgaria, and a Ph.D. from Copenhagen Business School. Recipient of the EFMD first prize in the
1997 European case writing competition, her research includes management in post-socialist organizations and change in Russian--
Western organizations. Contact: Michailova@cbs.dk.