Russia was in transition from a planned to a market economy. Pepsi had preceded Coke into the former Soviet Union and was optimistic that it could further increase its market presence. However, it required a Russian organization to implement its strategy. While Pepsi had previously run its Soviet operations from Vienna, they now needed to hire and develop Russian employees and managers. A 31 year-old human resources manager in Pepsi International, was tasked with building the Russian organization. Recently arrived in Moscow, he found an incomplete business infrastructure, language, cultural and ethical issues to contend with, fluid and uncertain regulations and few Russians with relevant business experience. His challenge was to hire a Sales manager and a Technical Engineering manager, as well as develop staffing compensation and training priorities for the new Pepsi Russian organization. The case is written to illustrate the localization challenges confronting a mid-level transition manager.
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