Ste. Basil Hotel - Moscow: Struggling with Values in a Post-Communist State
This cases study examined the challenges of operating a business in a foreign country. The case study presents a specific business situation in Moscow, describes the prevailing conditions which needed to be addressed, relates the decisions that were made, and examines the consequences of failing to apply sound business and management principles. This case exemplifies many of the themes in international HR management including recruiting, onboarding, training and development, motivation and rewards/compensation, ethics, performance management, and cultural differences between the home country and host country.
In a foreign business environment there is always going to be pressure on a manager to conform to prevailing cultural values and attitudes, but businesses succeed or fail in accordance with their adherence to sound business and management principles, not their adherence to cultural expectations. However, in the Ste Basil case an understanding of the different cultures would have allowed Greg to better understand his employees and how they would respond to certain practices/programs. This being said many of the problems encountered could have been avoided or overcome if top priorities would have been established, such as making decisions based upon sound management principles, delegating authority to subordinate managers only if they have demonstrated competence and reliability, and ensuring that effective assistance could be obtained if corrupt business rivals seek to exploit their connections to undermine the business or infiltrate it with their own people.
According to Paula Caligiuri, David Lepak and Jaime Bonache in Managing the Global Workforce, there are "two factors to consider which will influence a firms organizational structure across it foreign subsidiaries. They are geographical dispersions and multiculturalism" (page 3). In the case of Ste Basil there was not a...
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