The Cherkizovsky Group

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 Essay regarding The Cherkizovsky Group



The Cherkizovsky Group (A) (Abridged)

" Merely don't produce things, We die. I can create, ” declared Igor Babaev, owner of Russia's largest foodstuff processing venture. " Then when I die, I want to spoke of a well-functioning company. ” In January 1997, however , all that he had labored to create over the past six years was in peril. Following the demise of the Soviet Union 20 years ago, Babaev modified quickly to Russia's economic liberalization. He previously taken charge of a dilapidated Soviet production unit, the Cherkizovsky Beef Processing Flower located on the outskirts of Moscow, and through five and half numerous years of diligence and hard work experienced expanded this into the Cherkizovsky Agro-Industrial Group, a diversified food conglomerate with six, 000 staff. To help direct the welcoming company, Babaev had created a three-person management panel which, moreover to Babaev, included Musheg Mamikonyan, the president whose expertise since an industrial engineer was instrumental in reorganizing the production method, and Robert Harman, a new American expatriate who served as the financial overseer. In the summer of 1997, in the same way the managing team was trying to consolidate the company's functions into a workable structure, catastrophe struck. Accusations appeared inside the Russian media that Cherkizovsky, along with other Russian meat processors, was offering hot pups it had made out of tainted beef. Though blatantly false, the stories place the company for the defensive with Russia's finicky consumers. Simultaneously, hot dogs of strange origin commenced inundating the marketplace at prices far lower than Cherkizovsky's. Not Babaev nor any of his similarly influenced competitors recognized what to do. That they stood simply by watching since sales plummeted through the remaining year.

The Cherkizovsky Group

A local of the southern part of Russia which has a Ph. G. from Krasnodar Polytechnic Commence, the 47-year old Babaev had put in his complete career inside the Soviet various meats industry, where he was quickly perceived as a rising legend. He was named general director of one of the largest meat plants in the Soviet Union while in his late twenties, and later was put in demand of meats distribution pertaining to southern The ussr. For his innovative handling of the development process, he was appointed for the Soviet Academy of Sciences, a high academic honor.

________________________________________________________________________________________________________________ Professor Lynn Sharp Paine and Exploration Associate Harold F. Hogan, Jr. ready the original variation of this circumstance, " The Cherkizovsky Group (A), ” HBS Number 399-119. This version was prepared by Teacher Lynn Razor-sharp Paine and Research Affiliate Charles A. Nichols III. HBS instances are produced solely as the basis to get class discussion. Cases are not designed to serve as endorsements, sources of principal data, or perhaps illustrations of effective or perhaps ineffective managing. Copyright © 2005 Director and Geniuses of Harvard College. To order replications or request permission to reproduce components, call 1-800-545-7685, write Harvard Business Institution Publishing, Boston, MA 02163, or head to No part of this publication could possibly be reproduced, kept in a retrieval system, used in a schedule, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Organization School.


The Cherkizovsky Group (A) (Abridged)

Babaev's abilities were fully recognized in 1988 if he was designated chief engineer of the Cherkizovsky Meat Digesting Plant in Moscow. Obtaining any location in Moscow was considered a plum assignment throughout the Soviet time, for it provided proximity for the all-important preparing bureaus and Party regulators in control of the nation. Babaev started to be president with the plant in 1991, then led it through the privatization procedure in the recently capitalist The ussr. Despite his achievements, the gross squander and...