TASKS:

Read the case: Building Malls in Russia (see below).

Analyze the case using the Cultural Gap Tool focussing on Planning and Organizing issues. Basedon the

information provided by the Gap Tool:

1. What is/are the problem (s)? (Max 50 words)

2. What is/are the cause(s)? (Max 100 words)

3. What should have been done to avoid the(se) problem(s) from occurring in the firstplace?

(Max 200 words)

Case Study: Building Malls in Russia

A Scandinavian retail company has adopted a diversification strategy: it proposes and develops large

scale shopping malls in overseas locations. These malls usually consist of afurniture store, a huge

supermarket, a do-it-yourself-store, an ice rink, a multiplex cinema and other smaller stores.

In the case of the Russian market, the retailer has successfully pitched its development andhas assisted

Russian investors select locations it considers suitable for such a mall. A project management company

based in Germany is responsible for the co-ordination of tasks among the various stakeholders. An

important stakeholder is the local municipal building authorities, in particular, the departments that

approve the construction plans. The construction itself is carried out by a contracted corporation based

in Turkey in partnership with local Russian companies.

The Scandinavian investor has clarified in the contract with all suppliers that the project language needs

to be English. When contacts between the different stakeholders were firstestablished, 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 fortranslators

who could translate documents backwards and forwards, and could give help with interpreting at

meetings.

Another requirement of the contract was a bi-weekly meeting between the suppliers involved. As one

of those projects was located in 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 compromisewith the investor was negotiated, agreeing on a monthly

meeting in Moscow with photo documentation of the progress instead of an on-site meeting.

(Source: Koster 2010)