Case Study -­‐ Premium Oil and Gas Global consultancy

Synopsis

Premium Oil and Gas (POG) is a multinational company; one of the world’s largest petroleum and gas groups. Operating in an international environment that counts 80 countries, POG faces great issues because of its new objectives to be a "truly great global company "and a "modern global learning organisation". Indeed at the moment 90% of POGs executives are HCNs. POG is now focusing on Azerbaijan market with huge opportunities, but with a high risk due mostly to its cultural difference with the Dutch one and for the importance of the Investments that weight for 10% of POG's total revenue per year. Being a global company for POG means moving from an ethnocentric to a geocentric approach. In Azerbaijan the reorganizational process has already manifested itself, for example by the choice of teaching English to HCNs; this represents a lingua franca (Vaara) for the Dutch company. However the need to embrace the rhetoric from Amsterdam and the reality in Azerbaijan raises many issues. Following Hofstede model we can better explore the culture dimensions that constitute a constraining factor for the change in the governance in Azerbaijan. Azerbaijan culture is high power distance as they are a status-­‐driven society; collectivist; and masculine, indeed admitting mistakes is way of losing face. An adaptation to local needs can demonstrate culture-­‐sensitivity, however this can strongly clash with POG's objectives. General managers in Azerbaijan will face the double-­‐bind dilemma (Halff, 2010) of managing the trade-­‐off between pursuing local diversity and corporate integration. POG is already providing a cultural training, through a "Communication and Team working" module, but the module itself presents HR issues: HCNs find some aspects alien, are afraid of westernization, don't accept to be taught by a woman; and moreover Azeri colleagues with several years' service deride them. Several cultural factors suggest a divergence in HRM policies, and seem to be incompatible with the objectives of building a visibly diverse top management team and adopting meritocratic processes at every level. On the other hand, for an organization that operates in the oil industry, highlighting convergence factors could lead to great advantages in terms of cost and consistency in policies. Furthermore, culture is a mind-­‐set difficult to change, but Azerbaijan is a transition economy that is experiencing an increasing influence from western countries, hence change is not unrealistic. Considering that POG wants to operate with a geocentric approach, we are no more supposed to talk about Dutch and Azerbaijani culture, but a