Managing Pibrex Russia Essay

Pibrex, a European leader in the employment and discipline of polymers, faces the loss of its three Russian subsidiaries. This threat stems from issues encountered after entering the region in 1992 and then being hit with the Russian financial crisis of August 1998. As result, a steering committee comprised of three senior managers from Pibrex Region Europe North (PREN) exercised many anti-crisis initiatives including assigning newly appointed financial controller Elena Michailova with the undertaking of auditing all three Pibrex Russian subsidiaries. Upon completion of Michailovas audit, she has discovered that it is the combination of remaining issues from the reduction period and the Russian financial crisis that threaten the existence of Pibrexs existence in Russia. The steering committees ultimate goal is to resolve these issues to ensure survival of the Russian subsidiaries and breaking financially even in the near future. IssuesShort term1. Lack of an integrated operating s ystem and task redundancy across departments2. Large differences in wages between managers, sales, marketing, and ware workers3. Very little communication between anxiety and subordinates4. Poor working conditionsLong term1. In the plant there is a inadequacy of revision and financial control2. Contention between staff and management3. Bad management and employee relations4. Outdated facilitiesAnalysisLet us use the fiver whys method of analysis to find the root cause1. Why is Pibrex in danger of losing its Russian subsidiaries? Pibrex is in danger of losing its Russian subsidiaries because of unsolved issues lingering after the reduction period and the Russian financial crisis.2. Why were these issues left unresolved?The issues were never resolved by previous management.3. Why were these issues never resolved by previous management? Managers were distant and many times unaware of issues within the organization. 4. Why were managers distant and unaware?There was a lack of comm unication and operational control for the management of Pibrex Russia. 5. Why was there was a lack of communication and operational control for the management of Pibrex Russia? Pibrex used a decentralise structure worldwide. This structure was complicated and Russians did not easily adapt to it. Pibrex Region Europe North had many other subsidiaries besides Russia therefore issues in the Russian subsidiaries were often over looked. This limited progress and denied proper management of Pibrex Russia. The root cause of Pibrex being in danger of losing is Russian subsidiaries is the use of a deconcentrate structure. Alternatives1. Go to a much more(prenominal) centralized structure that the Russians are more accustomed to2. Restructure management my replacing all managers3. PREN would focus more on the Russian subsidiaries4. Drop all Russian subsidiaries and disperse production duties among other subsidiaries in PREN Criteria1. Financial losses from the Russian subsidiaries must sto p2. centering should be more accessible and properly trained3. Communication between managers and subordinates is key4. Improve workforce morale5. Increase efficiencyDecisionPibrex involve Elena Michailova to take the job of financial and managing director of Pibrex KZ. I believe that her taking on both positions is the only scenario where Pibrex can keep the Russian subsidiaries and eventually grant them profit equal to(p) again. Michailova has seen the issues and identified them through her audit. There is no one else more qualified than her to take on these two positions. She also happens to be Russian a unlike her predecessor. This should help greatly in resolving the tense relationship with the workers and management. With her experience and a well thought out restructuring plan, I nourish the up most confidence that the Russiansubsidiaries can be saved. Programming the DecisionElena Michailova as the experience, all she needs is a solid restructuring plan. The short term i ssues should be addressed immediately. Finances will be tight at first so she might have to think outside of the box to be able resolve some of these issues. For instance, if the budget will not allow for a new integrated operating system she might have to find a better way of communication to cut down on task redundancy and revenue loss due to missed deliveries. Michailova will also have to decide if she can make the decentralized management work in Russia. If she can get the Russians to adapt to the concept it might be beneficial. Decentralized management makes access to excellent expertise but if the Russians cannot adapt then it might be more productive to have a more centralized stool of management for them. She will also have to deal with the financial crisis. This might mean more layoffs to cut costs. It will definitely mean making production more effective. The subsidiaries will not survive in this financial climate if it cannot find ways to save money and make a profit.