Introduction
As a developed country, Russia has many business opportunities due to availability of resources. This country has experienced a steadfast economic growth due to expansion of industries. The average growth rate of Russia GDP from the year 2001-2008 is 7.4%. During the economic recession of 2008, Russia was among the few countries whose economic growths were not greatly affect. The GDP of Russia during the 2008 economic recession stood at 6%. Russia has a challenging, unique, complex and dynamic business environment. Hence doing business in this country is not an easy task and requires entrepreneurs with determination and perseverance. On the other hand, the complex business environment is also advantageous to multinational corporate. Some multinational companies such as AvtoVAZ and Siemens Company have took advantage of the business environment, which has act as a barrier to other business organization, to reap high returns.
1. Stiff competition in the in market competition has also encouraged business organization to improve their performance. Business organizations have improved the quality and quantity of goods and services they produce and deliver to consumers respectively. AvtoVAZ is an example of local Russian company that has thrived in market competition despite multinational competition from other automobile corporate.
The full name of AvtoVAZ is Avtomobilniy VolzhskyAvtomobilny Zavod. This company was established in 1960 in partnership with FIAT. Despite the presence of a dynamic business environment in Russia AvtoVAZ has been able to thrive in the market competition thanks to good management and proper organization (Aervitz 2009, pg 65). Due to the presence of good managerial strategies AvtoVAZ has expanded dramatically and is currently the largest automotive corporate in Russia. It produces an average of one million vehicles annually (Myers, 2005, pg 45).
However the achievement of AvtoVAZ has not came on a silver platter; many stakeholders have played their role and perform their duties exemplarily to ensure the success of this company. The company is renowned for employing highly qualified managers who have good leadership and management capabilities. Over the years leaders of AvtoVAZ have been authoritative instead of been authoritarian.
Since Russia is a communist country, businesses corporate have been used to business leaders with enormous power. This form of leadership has act as an advantage to AvtoVAZ because it has enabled leaders to carry out their duties with little or no interference. This corporate has been deploying charismatic leaders with good education qualification and vast business experience (Markides 2002, pg 60). The presence of highly qualified and experienced business leaders has ensured a smooth management of AvtoVAZ. Proper organization at the work place has largely contributed towards the success of AvtoVAZ.
AvtoVAZ has a habit of hiring Russian bosses because the management of this corporate believes Russians are familiar with the business environment of their country; hence they are well placed to guide this organization into prosperity. This has acted as an advantage to this organization because its managers always posses enough knowledge on current market trends (Myers, 2005, pg 65). They are better placed to manage AvtoVAZ and succeed in the dynamic business environment unlike foreign managers.
Good business planning has also played an integral role towards the success of AvtoVAZ. Planning in business, acts as a road map that guides a business organization towards success. It guides a business organization into success because it enables a business organization to achieve its objective. While planning, AvtoVAZ considered the following factors; objective, vision, mission statement and goals. Fulfilling the above factors propelled AvtoVAZ towards success.
However before a business plan is fully implemented into this business organization there are various business traditions that are followed. The company first, gathers adequate information regarding the product or service it wants to produce, it then devises a strategy of fully implementing the action and it finally evaluates the performance of the plan.
This company has built a strong organization culture that consists of visible elements. The high performance and competitive advantage of AvtoVAZ is attributed to the strong organization culture. AvtoVAZ has adopted clear and sustainable organizational cultures that have enabled it to achieve various goals. The organization culture of AvtoVAZ has key elements that have propelled the organization into prosperity in the market competition. Those key elements that have attracted customers to AvtoVAZ Company are openness, initiative and trust. The management of this company has ensured the trust of employees is not halted.
The quality of goods and services produce by this company has been of high quality in the quest of ensuring customers are not disappointed. Producing inferior goods will halt the trust of customers hence the company has avoided doing such a mistake. This company has created new technology that has enabled it to produce high quality products. Technology is used to create new vehicle parts and spare parts that are of high quality and highly preferred by customers. Customers prefer new products because they want to possess the latest products in the market.
The company has maintained both internal and external openness. This has been enhanced by creation a good channel of communication by the firm. Therefore, employees and employers have been able to communicate with each other. Thus if there is any complain within the organization it can easily be sorted out. External openness has promoted a good relationship between the organization and its customers. The management of AvtoVAZ Company has provided customers with the platform of contributing to the growth of the company.
Empowerment of employees has motivated them to work extra hard and to provided high quality products. This company empowers employees by motivating those who performs exemplarily at the work place. There are two ways that have been adopted by AvtoVAZ to motivate employees. They are salary increment and promotion at the work place. Motivating employees has been an effective business strategy of increasing productivity of the company because it increases competition among employees (Schlesinger 2001, pg 86). Each and every employee works extra hard to be recognized by the management. In the process the company benefit because the level of production increase due to competition at the work place.
Good budgeting has enabled AvtoVAZ to thrive despite competition from other multinational corporate such as Toyota, BYD, Volkswagen and Isuzu. Budgeting is a good management strategy that has enabled AvtoVAZ to continue thriving in the market competition and has driven the company towards success. Each and every department is allocated a specific amount of capital that it should properly manage and utilize.
2. Siemens is a Russian company that has succeeded in the market competition despite economic, political, legal and social-cultural factors. Siemens is a multinational company that supplies oil and gas to consumers across the world and Russia mostly. The success of this company has not been easy; it has passed through a lot of challenges. With many downslides facing Russian investors such as corruption, lack of proper legal stability and IP protection, this company has still made enormous profit from the sale of oil and gas products.
Siemens Company has been able to deal with these economic, political, legal and social-cultural factors by forming a department that has adequate knowledge concerning the local legislation. The main task of this department is to handle any legal matter that affects the production of the company. On corruption matters Siemens Company have created a transparency committee that spearheads all the activities of this organization. The main objective of this committee is to ensure politics do not interfere with the activities of this organization. Therefore during time of employment, employees are employed based on their level of qualification and their previous work experience. There is no even a single individual who is employed due to political influence.
The company has dealt with office politics well to prevent them from derailing the growth and expansion of the company. Employees are train good business etiquette before they are employed. Therefore since all employees are equipped with business etiquettes it is very unlikely they will involve themselves in office politics. Hence Siemens Company has put in place control measures of office politics. On social factors that affected the production of Siemens Company, this company has eradicated the double ethical standard that affects many business organization in Russia.
Maintaining business ethics has enabled Siemens Company to attract many customers. This company often urges its employees to behavior well at the work place. In return, the company has received high business return since employees prefer business organizations with business ethics. This is because customers prefer genuine and trustworthy business organizations.
The good performance of this company has enabled it to get many contracts that have enabled it to thrive in the market competition despite the presence of economic, political, legal and social-cultural factors that affect business activities in Russia (Mulcaster 2009, pg 70). Every stakeholder of Siemens Company is expected to act ethically at the work place. This rule applies to all stakeholders in the organization regardless of their working position.
In conclusion, the study of these two business organizations indicates that business organization can thrive anywhere despite the challenges they face. With proper management a business organization can perform exemplarily in the market competition despite the presence of already successful business organizations in the market competition. Thus with determination of succeeding, there is no challenger that can stand on the way of a business organization that wants to thrive in the market competition.
References
S. L. Myers, (August 13, 2005), “Pervasive Corruption in Russia is ‘Just Called Business,’” New York Times, A3;
S. Puffer and D. McKarthy, (2005), “Finding the Common Ground in Russian and American Business Ethics,” California Management Review,
Aervitz, Irina (2009-04-08). "AvtoVAZ: a New Beginning or a Dead End?" Russia Profile Retrieved 2009-06-13
Mulcaster, W.R. (2009), "Three Strategic Frameworks," Business Strategy Series, Vol 10, No 1, pp 68 – 75
Schlesinger, L. and Heskett, J. (November–December 2001)"Customer Satisfaction is rooted in Employee Satisfaction," Harvard Business Review,
Markides, Constantinos (2002), “A dynamic view of strategy” Sloan Management Review, vol 40, spring, pp55–63.
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