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 5: TNK/TNK-BP Case Study

Sarah Dixon

Subjects: business and management, international business, strategic management


INTRODUCTION This case study traces the process of organisational transformation of TNK/TNK-BP. TNK1 was created from the privatisation of several oil enterprises in 1995. In 1998 the financial investors Alfa Group and Access/Renova (AAR) gained control of the company in an auction of its shares. Sidanco, later acquired by TNK, was created in the privatisation process in 1994. BP’s first involvement was a 10 per cent shareholding in Sidanco in 1997, subsequently increased to a 25 per cent shareholding plus one share in 2002 to give it blocking rights. The 50/50 JV TNK-BP was set up in February 2003 involving three companies: BP, TNK and Sidanco. The case study format follows that for Yukos. In each section the elements of the framework are applied firstly to TNK and then to TNK-BP. Sidanco, which had a chequered history under TNK with a partial BP shareholding, is included under the TNK-BP sections because of BP’s involvement in turning around the company in the later stages of their relationship. An overview of the organisational transformation process is provided in the time-ordered and conceptually ordered data displays in Tables 5.1 (TNK) and 5.2 (TNK-BP). Organisational transformation in TNK lagged that of Yukos, but the arrival of BP in 2003 speeded up the process. TNK was the last of the integrated oil majors to be privatised. It was an inauspicious amalgamation of assets that were left over in the privatisation process. This was the starting point for the case study: The bumpy birth of TNK...

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