Mini Case 5.2: Building malls in Russia A Scandinavian retail company has adopted a diversification strategy: it invests in big malls in Russia. These malls usually consist of a furniture store, a huge supermarket, a do-it-yourself-store, an ice rink, a multiplex cinema and other smaller stores. Who are the main stakeholders of these international projects? It is the investor, namely the Scandinavian retailer. The investor also selects locations they consider

suitable for such a mall. The selected site is then developed by a Scandinavian- based company which takes care of the basic design. A project management

company based in Germany is responsible for the co-ordination of tasks between the different stakeholders, namely the investor, and the suppliers. It defines the interfaces between the different parties involved in the project. Another stakeholder is the Russian building authorities, especially the departments that approve the construction plans. The construction itself is carried out by a corporation based in Turkey and some local Russian companies. The investor has clarified in the contract with all suppliers that the project language needs to be English. When contacts between the different stakeholders were first established, it soon became obvious that there was a language barrier. The Russian authorities only spoke Russian. The Turkish construction company had staff who could speak Turkish and Russian. The project manager of the German project management company was fluent in German and Russian, with basic English only. The Scandinavian parties were all very fluent in English, but could not understand any Russian. In breach of the contract, English was not commonly spoken by all the stakeholders. Consequently, additional resources had to be factored into the overall calculation to plan for translators who could translate documents backwards and forwards, and could give help with interpreting at meetings.

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Another requirement of the contract was a bi-weekly meeting between the suppliers involved. As one of those projects was located in the middle of Siberia, this turned out to be a requirement which was hardly realizable. The Swedish and German teams would have needed to travel for two full days for meetings in the Siberian city. Therefore, a compromise with the investor was negotiated, agreeing on a monthly meeting in Moscow with photo documentation of the progress instead of an on-site meeting.

Question

Explain the cultural differences between the involved countries.