September 18, 2006
A land of bigger is always better (?)
It’s great to know Bigger Isn’t Always Better is selling in Thailand (see August 22nd post). But I’m wondering whether it will be a big hit in Russia. A recent New York Times article called Russia a country where bigger is always better.
The article comments on President Vladimir Putin’s plans to create giant enterprises as a way to revive the country’s strategic industries. First step – next month’s rollout of the world’s largest aluminum company.
A few observers, however, are less sure about the logic of this strategy:
Market capitalization seems to be Russia’s new standard of comparison with the West, though, as I pointed out in Bigger Isn't Always Better, it can be a counterproductive goal.
When otherwise smart business people go after not-always-economic-goals, there’s often something psychological going on. The Times article may have nailed it:
Link
The article comments on President Vladimir Putin’s plans to create giant enterprises as a way to revive the country’s strategic industries. First step – next month’s rollout of the world’s largest aluminum company.
A few observers, however, are less sure about the logic of this strategy:
“Some Russians, recalling the Soviet boasts of having the biggest rockets, the biggest steel mills, the biggest ice-breakers, were cynical. ‘We had a joke in the 1980’s that our microchips were the biggest in the world,’ said Aleksei Venediktov, the editor in chief of Echo of Moscow Radio. ‘It’s that mentality of greatness, in the sense of size, even if it doesn’t make sense.’ “
Market capitalization seems to be Russia’s new standard of comparison with the West, though, as I pointed out in Bigger Isn't Always Better, it can be a counterproductive goal.
When otherwise smart business people go after not-always-economic-goals, there’s often something psychological going on. The Times article may have nailed it:
“The Kremlin is clearly hoping to sell the new gigantism not just as a business strategy, but as a balm for the wounded pride of Russians who endured the economic disasters of the 1990’s.”
“Mr. Venediktov of Echo of Moscow radio explained it this way: ‘We need to say we are the greatest somewhere, in something. Russia is suffering post-imperial syndrome, like England in the 40’s or France in the 50’s. But ah-hah! We are still the best someplace. We win more gold medals in gymnastics. And now in this: We passed America in aluminum.’ “
Link
