In the early years of the new century, it wasn’t hard to see that Ivanovskaya Manufactura, the Russian wool processing plant, with over 3300 employees couldn’t keep doing business the old-fashioned twentieth cen- tury way. The newly appointed Vice Director for for- eign relations Maria Ivanova, having completed her MBA in the UK and now back in Russia to support her family business, fully realized that she had to rise to this challenge to justify her new position in the recently formed foreign relations department. Headquartered in Moscow, Ivanovskaya Manu- factura was the only wool processing company in central Russia, offering a wide range of wool fab- rics, and woollen blankets for the army and civil- ians, as well as producing screens and felts for paper machines to commercial customers of all sizes throughout the country. Over the years it had diversified into various types of activities by dividing the company into smaller business units until it consisted of more than 30 separate such units. ‘Like mother, like son’ each had its own hierarchy, char- acterized by strong top-down administration and the well-defined rules and procedures typical of the textile industry; virtually every employee possessed specialized knowledge about a narrowly defined market niche. After Maria’s presentation on the development of trends in management science and how the company should adapt its business practices, the upper-level management gave the matter considerable attention and concluded that Ivanovskaya Manufactura’s refined division of labour into technical specialisms needed to give way to a collaborative learning organization, one where employee empowerment and open information made it possible for anyone, from workers at the shop floor to the management in each business unit to be knowledgeable about a variety of products the other units were producing, and as a result to join forces on the R&D front. Since it was Maria’s idea, she was given responsibility to start implementing the learning organization environment. She wanted to introduce newsletters as vehicles of information sharing – an idea she had seen working well abroad. However, she was stuck, as she was obstructed at every step and could not print the necessary information as a newsletter, could not summarize the information on the website and if newsletters were sent via email then only the top management would have access to these and then only during working hours. It appeared that there was always a reason why things were not possible. Alexey Ivanov, the president of the company, clued her in. After weathering a turbulent period, one that had seen plenty of layoffs in the textile industry, many employees viewed the restructuring and new information-sharing methods as the first step in a process that would lead to redundancy let- ters landing on their desks. Some employees, in fact, saw their own highly specialized knowledge as a kind of job insurance policy. .

1. In the early years of the new century, it wasn’t hard to see that
Ivanovskaya Manufactura, the Russian wool processing plant,
with over 3300 employees couldn’t keep doing business the old-
fashioned twentieth cen- tury way. The newly appointed Vice
Director for for- eign relations Maria Ivanova, having
completed
her 
MBA in the UK and now back in Russia to support her family
business, fully realized that she had to rise to this challenge to
justify her new position in the recently formed foreign relations
department. Headquartered in Moscow, Ivanovskaya Manu-
factura was the only wool processing company in central
Russia, offering a wide range of wool fab- rics, and woollen
blankets for the army and civil- ians, as well as producing
screens and felts for paper machines to commercial customers
of all sizes throughout the country. Over the years it had
diversified into various types of activities by dividing the
company into smaller business units until it consisted of more
than 30 separate such units. ‘Like mother, like son’ each had its
own hierarchy, char- acterized by strong top-down
administration and the well-defined rules and procedures typical
of the textile industry; virtually every employee possessed
specialized knowledge about a narrowly defined market niche.
After Maria’s presentation on the development of trends in
management science and how the company should adapt its
business practices, the upper-level management gave the matter
considerable attention and concluded that Ivanovskaya
Manufactura’s refined division of labour into technical
specialisms needed to give way to a collaborative learning
organization, one where employee empowerment and open
information made it possible for anyone, from workers at the
shop floor to the management in each business unit to be
knowledgeable about a variety of products the other units were
producing, and as a result to join forces on the R&D front.
Since it was Maria’s idea, she was given responsibility to start

2. implementing the learning organization environment. She
wanted to introduce newsletters as vehicles of information
sharing – an idea she had seen working well abroad. However,
she was stuck, as she was obstructed at every step and could not
print the necessary information as a newsletter, could not
summarize the information on the website and if newsletters
were sent via email then only the top management would have
access to these and then only during working hours. It appeared
that there was always a reason why things were not possible.
Alexey Ivanov, the president of the company, clued her in.
After weathering a turbulent period, one that had seen plenty of
layoffs in the textile industry, many employees viewed the
restructuring and new information-sharing methods as the first
step in a process that would lead to redundancy let- ters landing
on their desks. Some employees, in fact, saw their own highly
specialized knowledge as a kind of job insurance policy. ‘They
know that if they don’t share their specialist information now,
they become a lot more important to the company.’ However,
Maria thought that it was not the workers that were not ready to
share their expertise and experience, it was also management
that did not want any ideas to be shared. She thought, ‘They
simply do not want to devolve the power to lower levels!’
Question: 1 What are some of the social, political and economic
forces that are influencing Ivanovskaya Manufactura’s decision
to move with the time and become a learning organization?
2. If you were a specialist at Ivanovskaya Manufactura, how and
why would you respond to the proposed changes? What steps
would you sug- gest Maria take to increase employee utilization
of the knowledge-sharing system in particular? How can she
encourage management and employees to share information?
3. What general obstacles would you foresee in a company such
as Ivanovskaya Manufactura try- ing to make the transition from
a hierarchical, or bureaucratic, to a learning organization? What
are some general measures managers can take to smooth the
way?