Management in today’s Russia: now that’s a problem



Vladimir Fadeev Executive MBA International Management Candidate Geneva School of Economics and Management Université de Genève Genève, March 2016

Being an integral part of people’s organization relationship, management is key to the effective exercise of any company or business structure. Over the past two decades in Russia, attempts have been made to continuously improve the approach to problem solving both in public administration, and public management. Those actions initially were aimed at enhancing the performance of the economy, and its private sector. However, a national cultural impact to the decision making and problem solving approaches in Russia has slowed down the achievement of international management standards. To be able to identify a trend in the evaluation of the Russian Management, it is obviously necessary to consider the basic aspects of management from both the theoretical and practical points of view.
According to Peter F. Drucker (14.04.1909-11.11.2005), a well known writer, professor, and management consultant, “Management is no more a science than is medicine: Both are practices.” (Peter F. Drucker, The Frontiers of Management. 1985, p. 227).  At the same time, the practices in a modern economic life require us to reveal the scientific aspects of successful management, to increase the experts’ efficiency for such a socially important field of the whole economy as a business activity. Therefore, paraphrasing Peter Draker, it would be nearer the truth to say, the scientific content of management consists of a set of principles, methods and knowledge, which are aimed at the realization of successful business and social activity in a competitive world.
Success is a religion and a top criterion of the management quality. Skills which help to achieve success despite getting involved in the most confusing, unforeseen situations, give benefits of authority to a manager, both among subordinates, and heads or partners. Therefore, the primary goal of a manager is to maximize and maintain a successful, well-coordinated activity of the company or business they lead. Consequently, among many motivational factors that should not be ignored on the journey to success, success itself appears the major one, having an effect on career growth, and opening new horizons for business development and stockholders’ wealth.
It is known that the meaning of « management » has multiples definitions. There are also different interpretations between the concept of management and the manager’s work. On the one hand, this enables each of us to consider ourselves as a manager, as each of us has an ability to commit, to plan an activity that we have chosen, organized and controlled. On the other hand, the definition of management we used to have was about appropriate relations with some people having more of a formal authority over the others.  From this point of view management can be considered as an action, which is:

  • carried out by people playing appropriate roles in a definite structure;
  • aimed at achievement of business goals;
  • assumed by strong individual performance with the role optimization of each team member;
  • regulated by its own and/or common systems and procedures;
  • continuously revised in order to enhance existing structures, systems and procedures, to improve effectiveness, to map out and optimize roles, to increase the responsibility of the company.

Some American experts consider management both as a concrete function which is carried out by people, having a certain social status and power, and also as a scientific discipline and research area. «Management is problems. Management is tasks. Management is a discipline. But management is also people. Each achievement of management is an achievement of a manager. Every failure is a failure of a manager». (Peter F. Drucker, Management. Pan Books, 1979, p.14). At the same time, lots of other authors are not in favor of considering management as a separate subject. Here is the crucial question: is there a unique discipline covering the whole manager’s activities, or a concept of management that gets together a set of disciplines which any manager requires for his or her effectiveness and performance at work?
Looking at the definition of a “manager”, it appears to have no explicit meaning. Even in the present era it is sometimes difficult to find out, what and who a “manager” is: a specialist or just a job position? Most Russian companies use a free-name practice concerning managers. The main aim of it is to give a higher, prestigious status to employees. However, a negative disadvantage, a backside of this practice is an immeasurable amount of “managers”, who don’t really play any manager’s role. Furthermore, a lot of them do not even have sufficient enough skills and knowledge to fulfil this role.
There is no doubt that the role of management in today’s business is undisputed, distinguishing management science with its own principles, ideology, methods, philosophy and ways of learning from the other social sciences.
In modern Russia an unfavorable trend of assimilation can be easily identified: this concerns the two seemingly related concepts « management » and « administration ». One of the roots for such confusion comes from the translation from French to English of Henri Fayol’s work experience that he published in his book “Administration Industrielle et Générale”. The first English edition (1929) used the word-for-word translation, so that the key title « administration » did not change his primary meaning. However, the 1949 edition used the title word “management” instead of « administration ». Moreover, modern dictionaries tend to consider these two concepts as synonyms. Management is sometimes interpreted as « administration of business », along with administration being often considered as « public affairs management. » Obviously there might be a clear overlap between these two interpretations, thus many authors use it at their discretion. However, it appears that most of us still do feel a subtle difference between these two meanings, a difference which is not easy to identify.
Nowadays, the word « management » is mostly recognized as a general descriptive term. At the meantime, « administration » is often related to a particular function, inherent in systems and procedures initiated by the management. While “administration” appears as implementation of some form of rules or procedures, “management” assumes the action with a greater freedom. In a broader sense, “management” is mostly applicable to organizations in both private and public sector. Whereas “administration” is interpreted as a part of management process, associated with the development and implementation of systems and procedures to help with achievement of business targets.
Consequently, we could determine Management as a harmony of administration and political Will of a manager, which is aimed at the achievement of a company’s success.
Some of the top-managers say, manager is a person, who has a great amount of work and cannot do all of it themselves. That is why duties are delegated to other team members, making them responsible for results. Even Theodore Roosevelt said: “The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint to keep from meddling with them while they do it.”  Thus determining that manager is a role with its own frameworks where a certain amount of work should be intelligently split between people in order to achieve success. It may appear ambiguous, but this reminds us about the changeable nature of Management, as well as about individual authority of a manager. The nature of a manager’s authority is to utilize their abilities and skills to lead business successfully. Subordinates delegate to a manager the right to be supervised in exchange for the right to take part in the decision making process.
By and large, in terms of the scientific approach, management should be seen as a process that is common to all the other functions performed by the organization, where a very primary role of a manager is to assume the burden of responsibility of the company. In accordance with organizational targets, a management policy determines and provides concrete guidelines for the operation activity, which is formally aimed at survival, development, and profitability. What is essential is that the role of management is not confined to the blind implementation of such policies outlined by the board of directors. High professionalism, hands-on experience, knowledge of the organization and its environment, make a manager an absolutely necessary adviser for further improvement of a company’s mission, strategy, and organizational policies.
Figuring out the essence of organizational problems and policies seems a prerequisite for successful long-term management. Two questions then arise as to what actually the interpretation of success in Russia is, and how management as a process fits to a many-sided Russian environment?
As a result of a not fully eradicated command economy with a large share of black market, sophisticated corruption, bureaucracy and lack of transparency in business, management in Russia as a key to the effective exercise of any company is still in its infancy. Its role is underestimated, not only by a lot of owners, entrepreneurs and stakeholders, but furthermore, by the majority of the population. This is partially due to the insufficient development of competitive domestic production of consumer goods. Over the past years, the concentration of Russian management mainly in the commercial sector had severely influenced public opinion. In Russians’ mind businessmen and managers are only looking for a short-term lucre, without creating anything useful to society, without any social responsibility. Within this context, taking care of your own personal success becomes an obstacle, because a desire to cash in prevails over common sense. Against this background, successful management examples have been demonstrated by lots of foreign companies, doing business in the Russian market with already established strong management structures and corporate cultures.
A personal initiative, which for many decades was suppressed by the past mode of governance, should and will obviously become a main drive to Russian business development. Initiative is a fundamental and integral part of management, which definitely determines the way to success. The personal initiative which helps with development and evolution of common organizational results has to be encouraged. A common Russian expression « initiative is punishable » is still in use, but it will certainly disappear, as it creates passivity, leading to a lack of competitiveness of the company, and sometimes even to its collapse.
Management in today’s Russia could be described as a multi-polar, contradictory administration process under constant development, which has yet to win its place in the economic life of the country. The fate of the country and the well-being of Russian citizens depends on how quickly this happens.