Organisational Transformation in the Russian Oil Industry

Organisational Transformation in the Russian Oil Industry

New Horizons in International Business series

Sarah Dixon

Four longitudinal case studies of Russian oil companies are drawn upon to explain the process of organisational transformation. The book highlights how and why this process differs between companies within the same industry, explores the complexity of the change process and discusses the importance of the top management team. The links between organisational learning, dynamic capabilities and the implementation of change are analysed. An interesting insight into the constraints and enablers of organisational change is also provided. The framework developed from this study can be successfully applied to other organisations wishing to bring about organisational change.

Chapter 2: Transition Context

Sarah Dixon

Subjects: business and management, international business, strategic management

Extract

The external context is important for organisational processes (Johns, 2001; Meyer, 2007) and strategic management research and the resource-based view have been criticised for not sufficiently taking into account industry and environmental effects (Dess et al., 1990; Miller and Shamsie, 1996; Johns, 2001; Tsui, 2004). This chapter therefore describes the external (macro-environmental and industry) and internal (administrative and cultural heritage) context for the Russian oil companies. There are six sections which describe the general characteristics of the macro-environment in a transition economy; the stages of development in the macro-environment from 1990 to 2005; the key characteristics of the international oil industry; the key characteristics of the Russian oil industry; the administrative and cultural heritage of the Soviet planned economy; and a conclusion. Primary and secondary data are interwoven with the literature to provide a rich description, thus setting the scene for the subsequent analysis. MACRO-ENVIRONMENTAL CONTEXT OF TRANSITION ECONOMY Transition economies are faced with an unprecedented degree of change as they move from a centrally planned economy to market-based system. In the FSU and CEE, a major motivation for rapid liberalisation and privatisation was the political imperative to dismantle the socialist state as quickly and irreversibly as possible (Sachs, 1993; Brada, 1995; Hoffman, 2002). In these transition countries the main approach was ‘big bang’ or ‘shock therapy’, whereas China took the ‘gradualist’ approach (Peng, 2000). The shock therapy required to unleash market forces was manifested in price liberalisation and mass privatisation (Sachs, 1993). In the initial stages,...

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