Walking the bear: "Danonizing" the Bolshevik Biscuit Factory

Résumé du document

It is largely claimed that a large part of mergers and acquisitions fails. The reasons for these failures are numerous, but one of the most important ones, is the difficulty to deal with different management and organizational cultures. It is explained in the case study about Danone, when it acquired Bolshevik, a Russian biscuit manufacturer in 1994, they were faced with these difficulties. Indeed, Bolshevik was deeply marked by the communist environment in which it was developed and had therefore an organizational culture considerably different from the Western Danone's one. So, throughout this essay, we will try to determine how the 'Danonizing' process of the Bolshevik biscuit factory occurred. In order to do that, it is relevant to start with a description of the two companies and the takeover process. Then, we will analyse the differences between the two firms, namely, by characterizing the Russian national culture and the Bolshevik organizational one. Finally, we will present in the perspectives part, the problems and strategic elements which Danone faced.

Extraits

[...] “After the takeover, it became clear that the structure of the old Soviet system of planned economy still influence the way in which Bolshevik operated.”[20]Indeed, Bolshevik didn't have a lot of consideration for promotion (awareness of the market and customers), technology (modernisation of product lines and high-quality products), evaluation of the relationship with the channel distribution as well as engagement of their employees. Bolshevik didn't take into account the different elements of marketing mix and consumer satisfaction because they considered their clients as their wholesalers. Furthermore, at the beginning, the French managers worked only as consultants. [...]

[...] Walking the bear: "Danonizing" the Bolshevik Biscuit Factory Table of contents 1. Introduction Description of the case Description of the two companies Danone Bolshevik Why and how Danone took over Bolshevik Analysis 5 Cultural differences between the two companies Russia's national culture Bolshevik's Organisational culture Perspectives 10 Problems / Strategic Elements to which Danone is faced Management Style Organisational changes Adaptation/Training of the employees to the new changes The name Conclusion Bibliography Introduction It is largely claimed that a large part of the mergers and acquisition fails. [...]

[...] Power Distance Index “extent to which the less powerful members of organizations and institutions accept and expect that power is distributed unequally.”[10] Russia: High France: High Russians tend to expect obedience towards superiors and clearly distinguish between those with status and power and those without it. Typically, power in Russian organizations rests in the hands of the Director. Individualism the one side versus its opposite, collectivism, that is the degree to which individuals are integrated into groups.”[11] Russia: Medium France: High For many years in Russia, it has been considered destructive in society, if a person was performing individually trying to achieve results better or different from the ones of the group. [...]

[...] F. R., Florent-Tracy, E., and Pavlovsky, P. (2000), “Walking the Bear; "Danonizing" the Bolshevik Biscuit Factory INSEAD, Fontainebleau, p.8 ibidem Elenkov, D. S "Can American Management Concepts Work in Russia?". California Management Review. vol no p - 156. Kets de Vries, M. F. R., Florent-Tracy, E., and Pavlovsky, P. (2000), “Walking the Bear; "Danonizing" the Bolshevik Biscuit Factory INSEAD, Fontainebleau, pp.7 Goleman D., (2000), “Leadership that gets results.”, Harvard Business Review, March-April, pp. [...]

[...] However, the company and the management were not prepared to this kind of issue. They were since about a century just a biscuits producer without any objectives in terms of sales. So, it was the right moment for Danone for this acquisition. The purpose of Danone behind this purchase was to develop products locally that are able to please to the Russian culture and market. The management of the French company was aware that it would take a certain time to modernize and to change the mentality of the people there. [...]