Organisational Transformation in the Russian Oil Industry
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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.
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Chapter 6: Lukoil and Surgutneftegaz Case Studies

Sarah Dixon

Extract

6. Lukoil and Surgutneftegaz case studies INTRODUCTION Chapters 4 and 5 presented case studies of the organisational transformation of Yukos and TNK/TNK-BP (Western-style companies). This chapter presents contrasting case studies of Surgutneftegaz and Lukoil (Sovietstyle companies), which demonstrated little organisational transformation. Lukoil was the first vertically integrated oil company to be created after the collapse of the Soviet Union. It was set up in 1991 in accordance with a blueprint developed by the then First Deputy Minister of the USSR Oil Industry, Vagit Alekperov. Alekperov then became the Lukoil President. Lukoil did not take part in the ‘loans for shares’ deal. Alekperov and other members of the management team had significant shareholdings in the company. Surgutneftegaz was set up in 1992, but retained the General Director who had been in place since 1984, Vladimir Bogdanov. In the 1995 loans for shares deal the Surgutneftegaz pension fund acquired 40.16 per cent of Surgutneftegaz, making Surgutneftegaz management (Bogdanov) de facto sole owner of the company. TOP MANAGEMENT TEAM This section reviews the Lukoil and Surgutneftegaz TMTs, describing key personalities and the characteristics and management style of the teams. Alekperov, General Director of Lukoil, was an oilman, so was therefore very much an insider, having spent his whole career in the oil industry. Everyone acknowledges that Lukoil, as distinct from practically all other Russian firms, was created by production people who came from a good school in life. Mr Alekperov progressed from a rank-and-file driller to the First Deputy Minister of...

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