Opening ceremonies for new manufacturing plants are commonplace and yet, they are surprisingly under-documented. Although these ceremonies may, at first glance, appear to simply serve as celebrations to mark the successful completion of an industrial project, they are based on symbolic actions, and usually very well planned and executed. Consequently, their underlying meaning is more complex. A study of the opening ceremonies of 56 manufacturing facilities in Russia by foreign multinationals shows that opening ceremonies also serve to demonstrate mutual acceptance of the differing motives of both the foreign investors and the local authorities for building the plant. The analysis points to recommendations regarding the timing and design of the ceremonies, as well as participants’ behavior, that can ensure that such events contribute to the attainment of organizational goals.
This study analyses the development of Russian manufacturing subsidiaries of MNCs, by underlying the close relationship between local embeddedness and business excellence. We illustrate this relationship by the example of Knauf CIS, a subsidiary of international family-owned company Knauf. We find that the relationship between Knauf’s HQ and Knauf CIS does not hinder the subsidiary’s creativity, and innovativeness; subsidiary’s management processes successfully combine the HQ’s management standards and guidelines with specific managerial and innovation routines, that in a great part are reminiscent of the practices in the Soviet industry during the period of its rapid development (1955-1978).
Oriflame CIS, a regional subsidiary of a Swedish beauty and cosmetics company operating in the countries of the former Soviet Union, generated 43 percent of global sales and 62.2 percent of operating profits for the parent company in 2014—despite the fact that markets in Russia and Ukraine were stagnant or declining. Using an attractive remuneration scheme, Oriflame CIS was able to profit from its position as a latecomer to localized manufacturing by attracting managers with experience and skills gained from working with the manufacturing arms of other foreign multinationals in Russia. In addition, the firm was also able to enhance links with customers by localizing the process of designing the company’s product catalogs. In significantly expanding its mandate, Oriflame CIS was able to overcome the challenges arising from a volatile market, increase robustness, and remain profitable.
Strategic agility requires having a keen awareness of incipient trends, the ability to quickly make bold decisions, and knowing how to reconfigure business systems and redeploy resources. Strategic persistence is the ability to learn from an experiment, even if it takes a long time. Both are key features of HEM Ltd., a medium-size company based in Moscow that produces instruments, equipment, and materials used in medical laboratories. When HEM moved into the emerging ready-to-use biological culture market, these qualities enabled the firm to change its market focus, adjust its marketing mix, and develop innovative products through cooperative international alliances. Companies from developed countries looking for partners in emerging markets may want to consider organizations with these same characteristics.