Background knowledge about Pibrex. Its short-term and long-term issues. Essay

BACKGROUND
Pibrex is a company based out of Gothenburg, Sweden. Pibrex began operations in the early 1900s and was one of the largest developers of petrochemicalbased polymers. Pibrex entered Russia once in 1910 and reentered again in 1992. Now in 1998 Pibrex is struggling with its three Russian subsidiaries after the Russian financial crisis as well as pervious issues after they initially entered Russia in 1992. Because of the issues that Pibrex was having a steering committee was formed out of three senior managers from Pibrex Region Europe North (PREN), which is the division in which Russia is located.
The steering committee gave a woman named Elena Michailova the job of auditing the three Russia subsidiaries. After Michailova completed her audit on the subsidiaries she found that leftover issues from the reduction period and the market crash of 1998 are affecting the Pibrexs three Russian subsidiaries. The goal of her audit is to fix the issues Pibrex faces and survive in the industry or at least break even financially.
ISSUES
Short term
1. Very poor working conditions, including not having adequate water supply.
2. Absence of an integrated operating system and task redundancy
3. Difference in wages between staff, management, sales/marketing, and production personnel.
4. Poor communication after the 1997 joint venture between Pibrex KZ and Pibrex Russia.
5. Difficult to get the attention of PREN
Long term
1. The plant is outdated and the management seems to not be concerned with the conditions of the plant.
2. The plant seems to have little order and lack in financial control
3. This creates animosity between the different departments.
4. This will only continue to separate the managers and employees
5. If they cannot get PRENs attention it makes it harder to get the help the Russian subsidiaries needed.
ANALYSIS
We can use the five whys method to analyze the root cause of the problem
1. Why is Pibrex going to lose its Russian subsidiaries?
Because of issues after the Russian financial crisis and reduction period of the company
2. Why were there issues after the crisis and reduction period?
Management did not resolve the issues
3. Why did the management not resolve the issues?
Because management did not always know of the problems.
4. Why did the management not know there were problems?
Because of the poor communications between management and workers
5. Why was the company lacking in communications?
Because the Russian workers did not adapt to the new decentralized system.
The root cause of Pibrexs problem is the decentralized system.
ALTERNATIVES
1. Switch to a centralized system
2. Let go of the Russian subsidiaries
3. Get PREN to help more at the subsidiaries
4. Hire new management
5.
CRITERIA
A. Management must be better trained and more active in visiting the plant
B. Must at least break even over the next year, so decrease losses
C. Help increase the morale of the employees
D. Better communication between the employees and the managers
E.