GTI in Russia Case Solution

2. Problem Statement

The dynamics of the Russian market are entirely different the US one. The management of the company needs to develop a comprehensive strategy for the entry into this market. The strategy to enter Russia entails the development of a comprehensive human resource plan (Grachev, Smith and Bobina, 2003). The vice-president of GTI must develop the strategy for expatriate assignment, recruitment and compensation of the employees in the Russian office. Also, the management of the organizational culture and the training of the employees is a major challenge for the management of the company (Grachev, Smith and Bobina, 2003).

3. Key Lessons Derived by Granum

The Vice President of the company, Granum, has already carried out an analysis of information about the Russian market. The process of information collection took him four weeks. During these four weeks, Granum focused on the development of a human resource strategy for GTI’s operations in Russia (Grachev, Smith and Bobina, 2003). The starting point of the planning was the development of a human resource vision of the company. The objective for the creation of a human resource vision was to set a foundation on which the entire recruitment, compensation and organizational culture will be based. The legal infrastructure for the labor and the employees is well established. This implies that the organization will need to entire into legal contracts with the recruited employees (Grachev, Smith and Bobina, 2003).

The second most important finding of Granum’s investigation was the identification of the salary ranges. This information is the key to formulation of the organizational budgeting before initiating the operations. The maximum salary of a brand manager in a multination organization varied from 4,500 USD (for a brand manager) to 1,000 USD (for an office manager) (Grachev, Smith and Bobina, 2003).

4. Questions that still require Resolution

The case study narrates that Granum has collected a diverse set of information. However, GTI still need to resolve several unanswered questions. The company seeks to address several important aspect of setting up its operations in Russia.

The first issue that needs to be resolved is the cultural mismatch between Russian and US-based business. The organizational culture in Russia is based on collectivist values while the predominant values in the GTI’s existing culture are individualism. Thus, the management of the company will need to accommodate decision-making with a collectivism approach (McFarlin and Sweeney, 2011). This consideration will slow down the decision-making process; however, it will help to avoid conflicts between the regional operations and the headquarters. Also, Russian organizational culture ranks quite high in uncertainty avoidance. The managers in the country are unwilling to take risks. The American management will need to inculcate calculated risk-taking among the employees since the business is in the initial phase in the Russian market. Without taking risks, the business will not be able to capture a sizeable share of the market (McFarlin and Sweeney, 2011).

Another highly important problem that hasn’t been resolved is the lack of an adequate legal framework in Russia.