Fundamental principles of situational management
There is no one-size-fits-all approach to management. Different problem situations require different approaches to their resolution, and the results of the same management decisions may differ significantly from each other. There is more than one way to achieve a goal. Management is, first of all, the art of a manager to correctly assess a situation and choose the most effective management methods for it. Situational factors are considered in strategies, structures and processes, resulting in effective decision making.
The variety of different concepts of situational management should be considered not just as an overview, but as a structuring of some diversity, allowing us to identify the main core on which complementary provisions can be strung.
Situational theories, without denying the correctness of the concepts of previous schools and approaches and largely relying on their achievements, try to integrate various particular approaches to management. As a result of their development, it became possible to formulatesituational management concept , the main provisions of which are as follows.
1. There is no one-size-fits-all approach to management. Different problem situations require different approaches to their resolution.
2. Situational probabilistic factors are taken into account in strategies, structures and processes, thereby achieving effective decision making.
3. There is more than one way to achieve a goal.
4. The results of the same management decisions may differ significantly from each other.
5. Any management problem should be considered only in close connection with other problems.
6. Managers can adapt their organizations to the situation or change the situation as per the requirement of the organization.
7. Management is, first of all, the art of a manager to correctly determine and assess the situation and choose the most effective methods management that best suits the situation at hand.
Situational management theories provide guidance on howhow to manage in specific situations . In this case, the management process must consist of the following mandatory steps that must be carried out by the manager to achieve effective management in each specific situation:
The application of situational theories in management when developing and making decisions involvestaking into account limiting or constraining factors existing within the organization itself. Within these theories there arethree main types of restrictions :
The central point and object of situational management is the management situation. The word “situation” itself is often used in a wide variety of aspects and is sometimes inseparable from such concepts as state, event, process, position, etc. Many specialists in the field of management tend to view the situation as a set of circumstances, thereby approaching the position of the early works of D. Pospelov. For example, M. Meskon, M. Albert and F. Khedouri understand a situation as “a specific set of circumstances that have a significant impact on the work of an organization at a given moment.” This approach is highly controversial and controversial, but it identifies the main elements that can be used to determine the situation.
Later, D. Pospelov expands the concept of situation, adding information about connections between objects: “the current situation is the totality of all information about the structure of an object and its functioning at a given moment in time.” All information also implies cause-and-effect relationships, which can be expressed by many sequential events or processes. In this sense, the situation is fundamentally different from the state and event, which can correspond to only one moment in time. Some authors, trying to separate a situation from a state, consider it as a synonym for the word relationship.
Summarizing the above and taking into account the evolution of the development of situational management methodology, a management situation can be defined asa subjective assessment of the specific characteristics of the enterprise and the external environment (situational variables) and the connections between them that take place at the present time, but depend on past events and developing in time and space.
From the above definition it follows that correct definition management situation requires compliance with the followingfour necessary conditions :
1. The management situation must containa finite number of factors and describe their state and relationship.
2. The management situation should contain only those factors thatsignificantly affect the enterprise , since it is impossible to take into account the influence of absolutely all factors when making a decision.
3. The management situation should include only those factors that affect the organizationat this moment in time (not in the past or future).
4. When describing a management situation, it is necessary to take into accountthe causes and consequences of its occurrence.
The need to classify management situations is due to the fact thattheir recognition constitutes the first stage of the process of solving situational management problems . So far it has been developed a large number of classifications of management situations, differing in classification characteristics and depth of decomposition. As a basis for analyzing and resolving management situations, a model can be used that is based on taking into account a number of sources of management situations in the external and internal environment of the enterprise, considering their substantive characteristics and using several strategies for resolving situations.
The variety of classifications of management situations indicates that, depending on the goals of the situational analysis, they can be distinguishedvarious classification features . At the same time, the above list of possible classifications cannot be considered exhaustive, since each management problem necessitates the creation of an independent classification. Situational management is based on taking into account and analyzing many factors that in one way or another influence the organization. The complexity of its internal and, even more so, external environment requires management not only to know management theory, but also to best apply their own and past experience in practice. Therefore, in order to make the most effective decision in this particular situation and carry out changes in the organization in the best possible way, the manager must adhere to certain principles or rules, fundamental requirements for effective management, the most important of which are the following.
1. Principle of Leadership Competence . It is not enough to have only good theoretical training and possess information about the current state of the organization - you also need to have good managerial intuition and the ability to make non-standard and sometimes paradoxical decisions.
2. The principle of absence of precedents . No management situation, no matter how standard it may seem, can be absolutely similar to any situation that occurred in the past.
3. The principle of the relationship of situational variables . All factors of the situation form a single whole, a certain system, and therefore influence each other in one way or another.
4. The principle of dual influence of factors . Situational factors have different, sometimes even contradictory characteristics.
5. The principle of continuity of change . Changes in the organization and its external environment, one way or another, occur constantly.
6. The principle of irreversibility of change . Any change puts the organization at a new (higher or lower) stage of development.
7. Fast response principle . Constant changes in situational variables require the continuous development of management decisions aimed at adapting the organization to these changes.
8. The principle of having prerequisites for change . Along with constant monitoring of ongoing changes, it is necessary to continuously monitor the presence of prerequisites and conditions necessary to bring the organization’s parameters into line with the changed situation.
9. The principle of priority of the human factor . When making a decision, the manager must first of all take into account its impact on the workforce.
10. The principle of optimal balance between results and costs . The optimality criterion in this case is the organization’s closest approach to its goals.
11. Principle of a priori decision . A good leader must be able not only to correctly assess the situation and respond to its changes in a timely manner, but also to anticipate possible changes in this situation.
12. The principle of forming changes . The pinnacle of management art can be considered the adoption of decisions that not only allow the organization to adapt to changes in the situation, but also to adapt the changes themselves to the organization.
All principles of situational management are implemented in interaction. Their combination depends on the specific operating conditions of the organization, the state of the external and internal environment, the personal qualities of the leader and some other factors.
To implement these principles, certainmethods(toolkit) of situational management, that is, a set of techniques and methods of influencing the managed object to achieve the organization’s goals.
Most often in situational management, methods of system and situational analysis, factor and cross-factor analysis, genetic analysis, diagnostic method, expert analytical method, methods of analogies, morphological analysis and decomposition, methods of simulation modeling, game theory, etc. are used.
However, the greatest effect and quality of management are achieved when a system of methods is used in a complex, which allows you to see the control object from all sides and avoid miscalculations.
State regulation, to one degree or another, affects all participants in socio-economic processes who take part in the regulatory process, while at the same time being subjects of regulation. The main subject of regulation is the people, who elect their representatives to government bodies and thus indirectly participate in the regulation process. All participants in the regulatory process differ significantly from each other in terms of the degree of involvement in it or the form of participation. There are carriers, exponents and executors of economic interests. Bearers of economic interests are individuals and legal entities, groups of people who differ from each other by regional affiliation, type of activity, profession, income, property, etc. Associations and numerous unions can act as representatives of economic interests. Holders of economic interests can express their individual interests in the media, at rallies and demonstrations, and submit protests, demands and petitions to central and local authorities government controlled. In addition to official appeals, they sometimes lobby their interests in government bodies. The executors of economic interests are: the state represented by various government bodies, built on a hierarchical principle and representing three branches of government - legislative, executive and judicial; the country's central bank.
The state, as the largest entity, has a regulatory impact on the activities of other entities. Expressed economic interests, as they are received by government agencies, are not always fully or partially fulfilled. This is due to many circumstances: firstly, the expressed interests various media most often contradictory; secondly, they may contradict the goals economic policy a state that ensures economic balance, social stability, budget balance, etc.; thirdly, the state’s capabilities (including financial ones) have certain limits. The interaction of regulated subjects is also ensured through feedback. Feedbacks appear in various forms: carriers of economic interests can support the government or refuse support, issue warnings against it. Parliament can express no confidence in the government. The main line of feedback between the bearers and exponents of economic interests is trust or loss of trust, support by the bearers and exponents of economic interests for the economic policy pursued by the state. Object government regulation: may be the economy of the country as a whole or its individual regions, industries, spheres, enterprises. The objects of regulation are socio-economic phenomena, processes, and situations. Objects can differ significantly from each other in character and hierarchical level. This may be the structure of the water economy, the scale of social production, the rate of economic growth, employment, money circulation, prices, social security, the environment, etc. In the very general view The objects of state regulation are macro- and microeconomics.
Within the framework of macroeconomic processes, the objects of regulation can be: the economic cycle, sectoral, industrial and regional structures of the economy, conditions for capital accumulation, employment, money circulation, balance of payments, prices, R&D, competition conditions, social relations, personnel (training, retraining]), environment, foreign economic relations. In a market economy, the most important objects of regulation at the macro level are the closely interrelated aggregate demand, aggregate supply and aggregate production.
Microeconomics can be represented by individual economic agents: firms, households. A company as a legal entity is an economic organization. A household is an economic unit consisting of one or more units. It should be noted that it is the object that determines the content of regulation, its forms and methods. In the conditions of the Republic of Belarus during the transition period to the market, the most important objects of state regulation should be highlighted: qualitative transformation of the reproduction process; money turnover; conditions and sources of capital accumulation; structure National economy; structure of forms of ownership; processes of denationalization, demonopolization and privatization of state property; formation of a competitive environment; formation and development of the entrepreneurship system; development social sphere; mechanism of social protection of the population; labor Relations; environment; foreign economic relations.
Pure competition as such does not exist; it is more a theory than a practice. In reality, many markets operate in a structure in which there are quite a lot of sellers and an equally large number of buyers. Monopolistic competition is characterized by a smaller number of sellers, but there are enough of them to provide the required level of competition.
Market monopolization
Even if the products sold are similar in value, each seller gives his product special characteristics to make it different from others. This approach allows producers of a similar good to control the market value of their product. In this case, each firm acts as a small monopoly, although the power of the entrepreneur is very limited.
In such a market structure, product promotion through advertising is of no small importance. Let us give an example of pork ham, which in principle is a homogeneous product, but its different types can differ significantly from each other. The difference can be both physical (processing technology) and visual (the buyer's perception of the product). That is, if there are two types of ham on the market of approximately the same quality, but one of them is effectively advertised, then, most likely, buyers will prefer it, since they have the impression that this type is of higher quality. Consequently, the demand for a product increases as information about its merits reaches the buyer.
Imperfect market structure
Monopolistic competition and oligopoly are two intermediate models of market structure. In such market models, the market situation is controlled by two or more sellers. An oligopoly is a structure in which several competing firms operate. At the same time, oligopolists can produce both an absolutely identical standard product and a differentiated one, slightly different from the products of competitors. Monopolistic competition is a more accessible structure; it is extremely difficult to enter the oligopoly market industry, since information about it is practically inaccessible.
Main features of imperfect competition
Monopolistic competition also differs in that sellers do not take into account the reaction of competitors to their behavior. For example, if one of the companies reduces the cost of its products, then this allows it to expand the sales market and increase income at the expense of many other companies, which at the same time lose a little. For this reason, competitors do not need to change their pricing policies in response to changes in cost.
Difference between a monopolistic model and perfect competition
In a perfect market structure, the long-run price is equal to the average total cost of a standard firm. Monopolistic competition does not have this feature. This means that in the long term, a perfect model provides a larger volume of production and a more efficient use of resources. The advantages of monopolistic competition include the ability of the buyer to receive a wider selection of homogeneous goods in accordance with the tastes of different consumer groups.
Most of the world's population has problems with the cardiovascular system.
Moreover, an impressive number of them suffer from constant elevated blood pressure, which poses a serious danger to humans.
That is why those who are faced with blood pressure should know how to correctly measure blood pressure. Its level is determined using a special device called a tonometer.
But not everyone knows how to decipher the data obtained after determining blood pressure readings using this device. So what do the tonometer readings mean?
Circulatory system The human body is distinguished by a fairly branched and extensive network of arteries, veins and capillaries. But blood pressure, which can be upper and lower, is considered a kind of indicator that determines the pressure of passing blood on the internal surfaces of blood vessels.
Human circulatory system
It is quite clear that certain indicators in each artery will differ significantly from each other. Do not forget that the closer the artery is located to the heart, the correspondingly higher the pressure level will be. But in the case when the vessels are located on the periphery, the pressure level in them will be significantly lower.
We should not forget that during measurement with a tonometer, the so-called average pressure value in the entire body is determined, for which its numbers in the brachial artery are taken. This is because it is much more convenient to check the blood pressure level in the shoulder area than in any other place. In addition, the distance from the heart allows you to obtain the most reliable measurement indicators.
As a rule, the upper pressure shows the maximum pressure that exists in the arteries of the human body.
To be more precise, with each subsequent contraction of the heart muscle, at the moment of its beating, a portion of blood is released into the so-called vascular bed.
This indicator is also called.
The lower one, in turn, shows what the maximum pressure is in the arteries of the body when the heart relaxes. This indicator shows the level of pressure between heartbeats. It is also called .
You should find time and undergo a special examination for the emergence of various complications. High-quality and well-chosen therapy using certain medications will help normalize blood pressure levels in the shortest possible time.
But a severe form of the disease requires more thorough treatment. Often it ends in hospitalization of the patient. If you do not call an ambulance in time, then everything can end very badly. Typically, the patient may suffer a heart attack or stroke. In this case, the pressure level jumps to 181/110 mmHg. Art. and even a little higher.
Do not forget that not only an increase, but also a decrease in indicators is dangerous. Therefore, it is important to carefully monitor blood pressure readings.
What are the dangers of high and low blood pressure?
High blood pressure is more common in patients of all ages.
Moreover, it does not always carry danger, since athletes have it increased level helps to quickly cope with the load that is placed on the body during physical exercise.
If a person is in excellent health, then he has nothing to worry about. If the pressure does not return to normal after finishing classes in the gym, then this is already a cause for concern.
Typically, changes in tonometer readings occur if there are disturbances in the functioning of the nervous and endocrine systems. Permanent dysfunction of organs can contribute to this excretory system, regular use of certain medications, as well as the influence of unfavorable factors environment to your health.
Plays a significant role. Due to the large number of unpleasant consequences, it is advisable to protect yourself in every possible way from the manifestations of hypertension.
Low blood pressure is called hypotension. It is a rather dangerous condition that occurs in the presence of another illness.
In general, very low blood pressure is quite rare. Due to genetic characteristics, some people have a certain tendency to this condition of the body. At the same time, a person feels constant fatigue, drowsiness and weakness of the body.
It is important to note that when the pressure is below 91/62 mm Hg. Art. The blood supply to all tissues and organs is significantly disrupted, as a result of which they begin to experience difficulties in normal functionality.
This is due to a significant lack of oxygen. If certain measures are not taken in a timely manner, you may even fall into a coma.
In order not to bring the body to such mortal danger, you need to know how to decipher the tonometer readings.
Blood pressure and its indicators should be taken seriously even at eighteen years old.
This needs to be done in order to know how to bring it back to normal if it suddenly increases to a high level. We should not forget that physical activity will help avoid its increase. Taking a responsible attitude towards your own health will help you avoid problems in later life.
In some cases, high blood pressure is a symptom of other ailments, but often it appears “on its own.” Since hypertension is a dangerous disease that can lead to the development of heart attacks and strokes, it is necessary to take timely measures in the event of a sudden increase in levels.
Video on the topic
You can find out what blood pressure numbers mean in this video:
As you know, a person’s blood pressure readings can tell about the general condition of the body. You should always listen to its signals in order to maintain health and avoid the occurrence of various unpleasant diseases. If the pressure on the tonometer shows amazing numbers, then you need to quickly take some action.
For this purpose, there are certain drugs that can normalize its level. If medications do not help, then you need to immediately call an ambulance, since only qualified specialists can prevent a hypertensive crisis, the development of a heart attack and stroke. This applies not only to high blood pressure, but also to low blood pressure, which poses a similar health hazard.
It is no coincidence that corporate lawyers in the United States are often called shooters for hire.
E. Toffler. "Metamorphoses of Power"
Basic provisions of the Civil Code
From a legal perspective, the most important part of a company's relationship with other companies is the contractual relationship. Unlike many other types of legal work, the importance of work on contracts is recognized by most managers.
The agreement establishes the rules of relations between the company and its suppliers, consumers and partners. General provisions on contracts, the concept and terms of a contract, their conclusion, amendment and termination are provided for by the rules of the first part of the Civil Code Russian Federation(Civil Code of the Russian Federation).
In accordance with Chapter 9 of the Civil Code, a contract is a two- or multilateral transaction. Transaction - actions of citizens and legal entities aimed at establishing, changing or terminating civil rights and obligations. Let us recall several important provisions regarding contracts.
Important evaluative statement. Many practicing lawyers like to repeat: when two parties to a transaction do everything well, they do not need a contract. But when something wrong happens, the terms of the deal are violated, then a contract is necessary. This means that the contract must take into account everything related to adverse consequences and sanctions against the violator of the terms of the contract.
The second part of the Civil Code of the Russian Federation, from chapters 30 to 58, describes different kinds commercial relations, such as purchase and sale, rent, loan, contract, etc. An agreement concluded by Russian companies in each of the areas of economic relations regulated by the Civil Code must comply with the relevant chapter of the Civil Code. However, in accordance with Art. 421 of the Civil Code of the Russian Federation, “The parties may enter into an agreement either provided for or not provided for by law or other legal acts. The parties may enter into an agreement that contains elements of various agreements provided for by law or other legal acts (mixed agreement). In fact, the parties to an agreement can freely conclude any agreement between themselves if its subject matter or individual terms do not clearly contradict the provisions of Russian laws.
It is useful to know Article 157 of the Civil Code, which is called “Transactions made under conditions.” In accordance with this article, “1. A transaction is considered to be completed under a suspensive condition if the parties have made the emergence of rights and obligations dependent on a circumstance regarding which it is unknown whether it will occur or not.
2. A transaction is considered completed under a severable condition if the parties have made the termination of rights and obligations dependent on a circumstance regarding which it is unknown whether it will occur or not.
3. If the occurrence of a condition was prevented in bad faith by a party for whom the occurrence of the condition is unfavorable, then the condition is recognized as having occurred.
If the occurrence of a condition was facilitated in bad faith by a party to whom the occurrence of the condition is beneficial, then the condition is recognized as not having occurred.”
As we see, many problems associated with the execution of contracts can be solved through the use of suspensive and suspensive conditions.
A few words about concluding an agreement. An agreement is considered concluded if an agreement is reached between the parties in the required form on all essential terms of the agreement. The conditions regarding the subject of the contract are essential; conditions that are named in the law or other legal acts as essential or necessary for contracts of this type; as well as all those conditions regarding which, at the request of one of the parties, an agreement must be reached. Usually, the essential conditions are the subject of the transaction, its price and term, but this depends on the specific transaction. The agreement is concluded after the sending of an offer (offer to conclude an agreement) by one of the parties and its acceptance (acceptance of this offer) by the other party.
Finally, in most cases the contract should be simple and understandable. If a competent manager does not understand several terms of the contract, then the contract is poorly written.
Contractual relationship
Agreement as a document. Much attention is paid to the practical details of contractual legal work in the educational and practical manual “Legal Services for Business (Corporate Lawyer)” by K. K. Lebedev. The author separately examines the situation of writing contracts that are not at all provided for by laws and other legal acts (Article 421 of the Civil Code of the Russian Federation), that is, most likely, they have no analogues or prototypes. In such a case, he believes, the lawyer needs to “use a method of spatio-temporal imagination, which could be called the method of contractual modeling: he must imagine the entire “scenario”, i.e. how the relationship between the parties to the contract will develop, how the obligation arising from the contract will be fulfilled, what violations of the terms of the contract are potentially possible and what consequences may occur.”
If there are several interested parties in a transaction, Lebedev recommends drawing written diagrams of contractual relations. For large and complex transactions involving many companies, such as investments in construction, he recommends signing multilateral agreements with separate stages of the transaction.
One of the best methodological documents (and very laconic) dedicated to contractual work is the Instructive Letter of the Committee of the Russian Federation on Trade No. 1-1492/32-21 dated November 9, 1995. Its text, revised by the authors, is given in Appendix 1. This document examines in detail the general structure and main sections of the contract. We strongly encourage readers to read this document and use it as a teaching tool.
Despite all the elaboration of the topic of contractual work, a number of its aspects have not been sufficiently studied. From the point of view of organizing legal work, effective technology is needed to prepare high-quality contracts. It is from this angle that the authors will consider contractual work.
High-quality work on legal documents, including contracts, should begin with the preparation of a methodological standard that describes the requirements for this work. As a basis for preparing a qualitative regulation on the procedure for concluding contracts, the “Regulation on the procedure for concluding business contracts and organizing accounting and control over the fulfillment of contractual obligations” can be used, which is given in the book “Legal regulation of activities commercial organizations internal documents" by I. S. Shitkina2. This provision has the following structure:
- General provisions;
- Subjects of contractual legal work;
- Procedure, terms of conclusion and storage of contracts;
- Execution, amendment, termination of business contracts;
- Final provisions.
The role of lawyers in the process of preparing contracts is, of course, important. But it is often exaggerated. It comes to the point that contractual work is considered the competence of lawyers exclusively. But this is not so. Lawyers in the general flow of contracts are not the initiators of transactions, do not determine their economic content and most essential conditions and do not make a final decision on concluding the contract. Lawyers are more likely to be translators, rather than authors of contract texts.
An agreement within the framework of one transaction can be formulated in favor of both one party and the other party. Also, the agreement can be drawn up neutrally, taking into account the interests of both parties. The role of lawyers is to make the contract clear and specific and to protect the interests of their company by either agreeing on parity of rights and obligations, or establishing a system of rights and obligations under the contract in their favor. When preparing agreements within a company, a standard technical specification for writing an agreement will be very helpful, in which the initiator of the agreement must describe the essential conditions on the basis of which lawyers will prepare the text of the agreement. When working with contracts, the most important professional quality lawyers - the ability to formulate.
Working with contracts for a company is divided into 2 main types: working with your own contracts and working with other people’s contracts. Our own agreements require creative work, others require analysis and criticism.
It is impossible not to mention the situation with monopolists. Many large monopolists use standard contracts. Which are often printed in a typographical way. They cannot be changed; if you want to use the services, agree to such an agreement; such an agreement in accordance with the Civil Code of the Russian Federation is called an agreement of adhesion (Article 428).
N. Larina, in the article “How to avoid mistakes when drawing up a contract”, highlights the following aspects of working with contracts: “The art of drawing up a contract consists of the ability to formulate its articles in such a way that the drafter receives significant and at the same time advantages and abilities to the need to make a concession in one article, and in another - to reduce it to nothing, the ability to formulate the terms of the agreement in such a way that the partner is interested in its fulfillment.”
In the largest companies, the procedure for approving contracts becomes overly formalized, with large number approval authorities. Numerous stamps and a dozen visas for last page contracts the reader has probably encountered. But a large number of signatures does not guarantee the quality of contracts. Often, in joint work with contracts, each executor worries only about his narrow functional interests and does not pay attention to the whole picture. Precisely, representatives of the accounting department, lawyers, the interested department and an official who evaluates the interests of the entire company should participate in this coordination work.
Even the largest Russian companies are not spared from the December contract fever. The situation of an unexploited budget requires immediately signing an agreement and spending the planned money. At such moments, complex approval procedures are replaced by the simplest ones.
Currently, with established contractual relations with counterparties, the important risk of contracts for a company is not the failure of the counterparty to fulfill its obligations, but the prevention of tax claims. There are often situations when, despite all the approvals, contracts are not entirely successful from the point of view of the company’s tax interests. The following approach is correct: the subject of the agreement should be formulated only and exclusively in terms of Chapter 25 of the Tax Code (Articles 252-255).
Let us recall that in accordance with Article 252 of the Tax Code, the taxpayer reduces the income received by the amount of expenses incurred. Expenses are recognized as justified and documented expenses. Justified expenses mean economically justified expenses, the assessment of which is expressed in monetary form. Documented expenses mean expenses supported by documents drawn up in accordance with the legislation of the Russian Federation. Any expenses are recognized as expenses, provided that they are incurred to carry out activities aimed at generating income.
Consequently, Work and Services Acceptance Certificates must be formulated fully and in detail. Preliminary documents justifying costs must be prepared for contracts. These issues are presented in more detail in the “Practical Tax Encyclopedia”, vol. 5, Bryzgalina A.V., Bernika V.R., Golovkina A.N. For example, the authors recommend that when signing contracts for the repair of buildings, prepare defective statements as a description of the shortcomings , the elimination of which requires repair work.
Clients of contract work performed by a legal service should be made aware of certain basic terms that define the scope of work performed by contract review lawyers. In particular, from the point of view of the legal department, the difference in the external request is very significant: to agree on a contract or conduct a legal examination. The latter type of work, unlike the first, is more complex, lengthy and must be accompanied by the issuance of a detailed written report. Agreement is usually confirmed by affixing a visa.
Complex transactions require not only the participation of lawyers in working on individual and separate contracts, but also an understanding of the entire logic of the transaction, including the conclusion of a number of separate contracts.
Quite often, large companies in the relevant document on contractual work have a criterion for the need to include lawyers in contractual work. For example, lawyers do not check or approve contracts whose subject matter is valued at less than 10,000 rubles. This rule is applied based on the assumption that small, standard contracts should not be submitted to lawyers precisely because of the financial inefficiency of their work: the cost of lawyers’ work analyzing such contracts may be comparable to the financial effect of the document.
A fashionable technological tool for contractual work is the provision of a standard agreement on the main activities of the company. Most often, the provision consists of the text of the standard contract itself and instructions for it. Such documents are written by a group of multidisciplinary company specialists and are intended to describe in detail the standard agreement from the point of view of the company’s interests, to prepare a standard that is understandable to everyone and to provide for the possibility of modernizing the standard agreement by specialists from different areas and levels of management. This document provides that certain innovations can be made to the articles of the agreement without the approval of lawyers, financiers and managers, but more significant changes must be agreed upon.
Technologies for obtaining the initial sample. Modern reference legal systems, such as “Consultant” and “Garant”, contain a large number of draft (forms) contracts. In addition, on some Internet portals you can also find forms of carefully prepared contracts. Using forms in electronic form is much more convenient than finding them in numerous books on contract forms. However, such documents can be considered nothing more than semi-finished products, since they usually require significant revision. In addition, when using them, an important question arises - which side they protect to a greater extent: the contractor or the customer. Agreements are often written without maintaining an equal balance of interests of the parties, but with a preponderance in favor of one of the parties to the agreement. Usually it is always possible to distinguish between the stronger and the weaker parties to the contract.
Modern legal technologies consider a sample contract as the basis for constructing a final contract. It is advisable to further improve the agreement by adding standard blocks. Block preamble indicating the name of the company and the name of the director; block with company details; block of confidentiality conditions; block of conditions for exemption from liability (force majeure); a block of conditions on the procedure for resolving disputes (claim procedure, arbitration entry, agreement on contractual jurisdiction, conflict of law clauses); block of special conditions, etc. For most lawyers, such preparatory work on preparing semi-finished blocks of sections of contracts is not completed. In each company, it is advisable to bring it to the state of a library with several dozen current blocks, 3-4 blocks for each of the main sections of contracts often encountered in practice. Such a library, a kind of legal “Lego”, will be a good help in the work of the contract department of the legal department.
After the initial agreement is finalized in blocks, a period of final clarification of the wording of the agreement begins, taking into account the specifics of a particular transaction.
Let's consider the technical details of preparing contracts, since quite often lawyers stumble over problems of the form of contracts.
In large companies, the manager is physically unable to sign all the company’s contracts. In order for agreements to be signed by the relevant deputies within the framework of the division of powers general director and employees subordinate to them, they must have the right to issue powers of attorney themselves, and for this, such a right must be formally assigned to them in the Charter and in a special order for the company.
Modern financial companies sign hundreds of thousands of contracts a year, which does not allow the use of one seal, since its physical characteristics allow only a few tens of thousands of impressions to be made. Therefore, separate selling divisions of the company use stamps in their work to affix stamps on contracts and accompanying documents. This is in accordance with Russian corporate legislation (Article 2 of the Federal Law of February 8, 1998 N 14-FZ “On Limited Liability Companies”). The use of stamps requires an order from the company for the manufacture, storage and use of the stamp.
Resolution of the Federal Arbitration Court of the Moscow District dated March 20, 2003 N KG-A40/1381-03 determined that “The seal of a legal entity, according to general rule, is not a mandatory requisite of a contract concluded in simple written form.
According to paragraph 1 of Art. 160 of the Civil Code of the Russian Federation, by law, other legal acts and agreement of the parties may be established Additional requirements, which must comply with the form of the transaction (conducted on a certain form, sealed, etc.), and provide for the consequences of non-compliance with these requirements.”
Big contracts. Most contracts concluded by a large company are standard and are designed for a short period. However, sometimes companies enter into “big” contracts - important ones, for significant amounts and for long periods. Most often these are investment agreements, agreements related to real estate, joint ventures, and franchising. One of the authors of the book cannot forget the situation with his participation, when an international franchising agreement for a period of more than 15 years, with a volume of more than 100 pages, was concluded over 8 months, during its preparation 18 versions were made, the total cost of the services of external lawyers hired by a Russian company amounted to $350,000. At the end of the preparatory period, the head of the Russian company could only speak about this agreement in politically incorrect terms. But finally the agreement was concluded. Do you think this is the end of the legal problems? Of course not. After only 2 months, fulfilling the numerous conditions of this agreement (primarily approvals and reporting) became difficult, primarily because the terms of the agreement were not translated into specific instructions for company officials. The head of the company knew about the details of the contract, but the department heads did not. In addition, the text of the agreement was defined as strictly confidential - it was forbidden to give copies of the agreement to anyone for execution. However, a competent consultant will find the right solution even in a difficult situation. A detailed order was prepared for the company, which for a number of managers provided for specific responsibilities and specified deadlines for fulfilling the terms of the contract. The problem was solved.
Agreements between beneficiaries. Recently, it is in the sphere of large Russian businesses that so-called agreements between beneficiaries have become widespread. These agreements are usually concluded when working on new business projects between the main investor partners and fix their basic rights and obligations, including such specific ones as the use of personal connections and administrative capabilities. Corporate legislation has recently established the possibility of concluding such agreements, although literally such norms speak only of securing the rights of owners. Although rights without responsibilities in real world can rarely be realized. And the mechanism of such agreements appeared due to the fact that the usual charters of business companies in Russia did not provide for very important things for owners, such as a way to respond to urgent problems, assigning responsibilities to the owners and determining a formula for exiting the business. Nowadays, such agreements describe investment goals, investment volumes, distribution of areas of work between owners, control over the business, stages of development, overcoming conflicts between owners, and divorce procedures.
Such agreements are not written in one day and require special clarity, as they provide, among other things, for the possibility of partners leaving the business under certain conditions. Most often, they do not provide for the likelihood of consideration and protection of the parties to the agreement in a state court, although they are fully subject to consideration by a mediator under the condition of complete confidentiality.
Negotiating complex agreements is a lengthy process; such agreements are negotiated over several rounds of negotiations. In order for this significant investment of working time to produce a positive result, at each stage of negotiations it is necessary to record the agreements reached and the remaining disagreements. The most controversial positions should be discussed at the final meeting of company leaders.
In negotiations, it is important to adhere to the position of discussing the essential terms of the contract and not get stuck on trifles. However, novice lawyers often demonstrate their professionalism by the number of comments, including not particularly important ones.
Leading law firms offer a new service in the field of contract conclusion. They undertake the preparation and conclusion of partnership agreements when this work is ordered by two parties to the contract to one contractor. A partnership agreement is concluded if the financial and reputational risks of the parties largely coincide, that is, it is necessary to truly cooperate. This applies, first of all, to joint investments.
Work on such contracts as usual involves the participation of a minimum of two teams of lawyers, from both parties to the contract, and a maximum of four, taking into account additional external lawyers. During long negotiations, a lot of time is spent discussing minor details. This is interesting work for outside lawyers working on an hourly basis, but an inefficient and costly route for contracting parties. If this work, according to the technical specifications of the parties to the contract, is carried out by one team of lawyers, this will sharply reduce the monetary and time costs of each of the parties, and the time costs many times over. In addition, the parties to the contract will be largely freed from the nervousness of the negotiation process and will be able to jointly criticize certain shortcomings of one contractor.
Potential customers, having heard about such a service, usually express concerns about the neutrality of the contractor’s law firm, suggesting that the contractor may be inclined to better protect the interests of one of the parties. However, these fears are unfounded. Preparing an important agreement and agreeing on it with the parties is a long and complex process. And you can check the quality of such a contract for a very a short time. An hour of time is enough for a good lawyer to do this. Decent lawyers will never set themselves up like that.
One of the significant and subtle problems in the relationship between lawyers and company managers is the problem of monitoring the content of contracts at the stage of their preparation. This problem lies in the fact that lawyers are often accused by other company managers of unnecessary and economically unjustified rigidity in defending the company’s interests in contractual work. For managers, the troubles arising from this position of lawyers lie in 2 positions:
the signing of contracts itself is significantly delayed;
the counterparty to the transaction may refuse it if he considers that he is being offered too rigid a contract structure.
In such cases, the truth is often on the side of more experienced employees. For example, experienced sales management employees, exhausted by interactions with young lawyers, can rightly point out the following: you strictly structure the contract, and in such transactions, throughout the entire existence of the firm, we have never had problems with contractors. That is, such work on the agreement is meaningless.
But it happens on the contrary, novice sellers push an agreement through the counterparty’s editorial office, and experienced lawyers tell them: over the past year we have already had several conflicts with bad consequences for us due to several undeveloped wordings of agreements.
Lawyers further justify their approach as follows. Shareholders generally assume that lawyers are responsible for all contracts. One of the basic functions of lawyers is protecting assets, and working on contracts can save you from many troubles. Warm relations between a company and its counterparties can suddenly change, and this often happened during a crisis. Lawyers will deal with contractual claims and go to court.
The authors have found themselves in situations of similar claims many times. But one day this situation led to unexpected consequences. The criticism of managers was especially strong; it seemed that they were the ones who were right, while lawyers defended their professional position more out of habit. But when all the details were clarified, it turned out that 90% of the company's contracts were high-risk, with a constantly large number of legal conflicts every year. At the same time, the final structure of the transaction was drawn up by lawyers, and managers themselves usually did not read the entire contracts. But they sincerely believed that the lawyers were wrong...
What should you do in such situations? First. A tough position must be taken for important, complex and large contracts. For small standard contracts, rigidity is not needed. Second. The position of managers must be heard, and if they are sure (subject to their experience and adequacy) that rigidity in the contract is not needed, then it is not needed. In this case, the position of the lawyers should be documented in writing and stored for subsequent analysis, but not interfere with the conclusion of the contract. And the manager, accordingly, must be ready to take responsibility for accepting his proposal to soften the contractual terms.
A common problem in fulfilling obligations (contracts) is the difficulty of simultaneously achieving financial indicators, quality and deadlines. Typically, the executor of the contract does not fully meet at least one of the specified indicators.
Sometimes company managers and the lawyers advising them, having become accustomed to the specifics of their main contracts, cannot quickly switch to other contracts. We believe that it is necessary to know the general relationship between the complexity of contracts and the type of transaction: work contracts are usually more complex than purchase contracts, and service contracts are often more complex than works contracts. Services are more complex activities because their quality is more difficult to standardize and results are more difficult to verify.
In day-to-day work and routine contracts as part of their core business, corporate lawyers are generally highly qualified. Difficulties may arise when preparing or agreeing on non-standard contracts, in which it is important to highlight the essential conditions that affect the outcome of the transaction. When working on non-core documents, corporate lawyers must be aware of the inherent risks of such specialized contracts. For example, in construction contracts, the main problems are related to timing, quality of work and guarantees in case of delay in obligations. In addition, construction companies sometimes try to delegate to the customer specific work related to obtaining permits and approvals, setting the terms of the contract depending on the fulfillment of such conditions.
In insurance contracts, the insurer often tries to reduce the number of risks accepted for insurance (sometimes this leads to deleting very probable causes of damage from the list of insured risks). The insurer is trying to find reasons not to pay for actions provided for in the contract by the policyholder that were not performed in a timely manner or for documents specified in the contract that were not submitted. Large texts of agreements and rules are often published small print. And the most unpleasant thing for the client is included in the final paragraphs of the document, with the hope that his attention will decrease. In addition, when preparing insurance transactions, it is necessary to remember that the insurer-policyholder relationship is determined not only by the contract, but also by the insurance rules. In this case, the text of the agreement has higher force.
As previously emphasized, in complex transactions, a lawyer must know not only the formal aspects provided for by law for this type of agreement, but also the economic and technological features of these transactions. Only in this case, the solutions proposed by the lawyer will help establish the effective rights and obligations of the parties to the transaction.
Sometimes the flow of contracts in a company overwhelms lawyers. How to rank contracts, which of them are more important and are subject to first consideration? Can be used simple classification. Let us highlight the following criteria: transaction amount, size of potential problems, attention of senior management to this agreement. The minimum score for each criterion is 1, the maximum is 3 points. Any contract can be assessed on a scale from 3 to 9 points. 9-point contracts need to be done very urgently. 3-pointers can wait.
Typically, in large companies, new contracts are concluded at the end of the year. But sometimes all contracts need to be changed due to legislative innovations. Change it urgently, and big problem technical issues regarding the execution of contracts arise.
Thus, according to the Kommersant newspaper, by August 1, 2010, all food retailers had to rewrite contracts with suppliers in accordance with the adopted changes to the law “On Trade”. Now only remuneration for volume is allowed - no more than 10% of the cost of the delivered goods, and previously the contracts included all kinds of marketing, logistics and bonus payments, discounts for the first delivery, promotional discounts, etc. The author of the note is a procurement specialist at X5 Retail Group Kristina Busko, a former journalist, writes that this spring, when she was a special correspondent for Kommersant, she wrote about new law and considered it disingenuous that the networks complained that the period for redoing contracts was too short - only six months! Now working on the other side of the barricades - in the commercial department of X5 Retail Group, she can say: six months is not a long time at all
“In mid-July, at the daily morning “line-up” of the X5 procurement department, we were told that no more than half (!) of the contracts had been renegotiated, and we needed to “stress ourselves” by the end of the month. Previously, I would have thought that the delay was due to the invention of all sorts of cunning calculation schemes and the suppliers’ disagreement with them. But everything turned out to be simpler. There are no sophisticated schemes: in most of the new X5 contracts that I happened to hold in my hands, there is only one bonus for the retailer - allowed by law, in some agreements there is not even that, but all the bonuses that our networks received before are now taken into account in the purchase price. They just became lower and that's it. In reducing them, the chains even took into account the reduction of the deferment in payment for goods to the supplier (the law establishes payment terms of 10 calendar days for perishable goods, 30 days for products with a shelf life of 30 days, for the rest - up to 45 days), based on the calculation of the average market rate on bank loans for medium and small businesses. That is, if we assume that this rate is 15% per annum, and the supplier’s deferment has now been reduced from 30 to 14 days, then the counterparty will additionally reduce the price by approximately 0.7%. Now, nowhere in the contract will you find an explanation as to why the price has been reduced. It is simply reduced, and only the buyer and supplier know the reasons.
So what’s stopping us from meeting August 1st? I can tell you about myself: I cannot sign some contracts with suppliers even for several weeks. We send them the text of the agreed contract in a PDF file, locked for changes, so that they print it, sign it and send it to us by mail. But someone is trying to unlock the file and “imperceptibly” make their edits - this is easily detected in the lines that have been written, but time is wasted. The rest, as usual, send an incomplete package of documents, put it on the contract historical date, write corrections into the printed text with a pen and even cover up inconvenient points with “putty.” However, X5 management promised that it would temporarily reduce the level of requirements of the company’s lawyers and financiers for the execution of contracts. Otherwise, in the last month of summer, our shelves will remain half empty or we will have to break the law.”
Relations with foreign citizens.
Please read the following statement by the famous foreign politician mid-twentieth century: “The people of every country have the right and ought to be able, by constitutional action, by free unfalsified elections by secret ballot, to choose or change the character or form of government under which they live;<…>Freedom of speech and press must prevail;<…>the courts, independent of the executive and not subject to the influence of any party, must enforce laws which have received the approval of a large majority of the population, or have been sanctified by time or custom. These are fundamental freedom rights that every home should know.”
A beautiful phrase. Foreigners often believe this. We asked our Western colleagues, and they answered that they sincerely believe. And Russians treat such statements with skepticism. This phrase by W. Churchill is from the famous Fulton speech, which is considered to have started the Cold War.
Therefore, relations between Russian and foreign businesses are not always simple. We will give here an example from the relations between Moscow and Western European companies. They signed a fairly extensive partnership agreement. In the context of some liquidity difficulties in 2007, the Russian company briefly delayed the fulfillment of its financial obligations several times. At the same time, it was clear to both the Russian company and its foreign partner that these difficulties were temporary, the agreement itself was very important for the parties, and the relationship would continue. The foreign partner demanded from the Moscow company a large number of financial documents, including payment orders, etc. The Russians became wary and asked: why do you need all this? The answer was this: we will sue you; according to the contract, you owe us a fine for each delay. When the Russian side asked: what about our agreement, they received an answer - the agreement is in force, fines need to be paid, and after the fines you will perform your duties better. The Russian leader’s reaction was as follows: “….! Because of such little things they get fined, and after the fines they still want to cooperate!”
Relations with partners and competitors
For a large company, not only sales and purchasing are significant. The company’s relationships with other market entities - partners and competitors - are also important.
After the 1998 crisis, the Russian business community showed great interest in the creation of industry and professional associations. There are currently a large number of business associations operating in Russia: the system of chambers of commerce and industry, the Russian Union of Industrialists and Entrepreneurs, the Coordinating Council of Employers' Associations, OPORA, and a number of industry unions and associations. All these associations set the task further development legislation to establish effective rules for doing business. Typically, each such association has a legislative committee. The Resolution of the XIV Congress of the Russian Union of Industrialists and Entrepreneurs (Employers) states: “The Congress notes that the existing mechanisms for interaction between business and government in the preparation of bills and regulations of the executive branch do not always provide the opportunity for effective reflection in decisions government agencies entrepreneurship positions. The relatively low effectiveness of the dialogue is primarily due to the lack of consistency in the approaches of both sides.”
Let us remind you that individual offers to change industry legislation, in addition to the general modernization of business rules for industry companies, are not completely disinterested. For example, there were reports in the Russian press that the Association of Russian Banks (ARB) was promoting proposals to make it more difficult for clients to withdraw deposits on time.
Building effective partnerships requires accepting and following certain rules. L. Fedun, vice-president of NK LUKOIL, in his interview with Vedomosti describes the building of partnerships between large companies as follows:
“— Is the protection of the interests of each party somehow spelled out in the agreement between LUKOIL and ConocoPhillips?
- Yes, of course, but everything is standard there. Basically the topic comes down to three things. The first is the protection of their investments: we do not have the right to withdraw large assets from the company without the consent of the board of directors and the meeting of shareholders. The second part of the agreement concerns the management bodies of joint ventures: the mechanism of rotation of the general director, the distribution of all main positions in a 50 to 50 ratio. The third part regulates the management of shares. LUKOIL managers should not sell their shares anywhere so as not to lose control over the company. And ConocoPhillips shouldn't sell its shares either. Protection against hostile takeover is provided. In particular, ConocoPhillips should not acquire more than 20% of LUKOIL shares and does not have the right to consolidate with other shareholders in order to change the management system.”
At the same time, large companies within their market do not have partnership and friendly relations with all its participants. The statement about the fierce competition of large companies has long been a commonplace. Companies often enter into temporary alliances and groupings to achieve their goals.
For example, a few years ago, Norilsk Nickel had a chance to disrupt an unfavorable deal for it to combine the assets of South African Gold Fields (the fifth gold mining company in the world) and Canadian Iamgold. It was given by another company from South Africa - Harmony Gold, which announced plans to take over its competitor. Norilsk Nickel, which recently bought a 20% stake in Gold Fields, has already supported Harmony.
Protection against corporate blackmail and takeovers (GREENMAIL)
The largest Russian holdings quite often act as invaders of smaller companies of interest to them. Several years ago, the Russian media mentioned that the investment company Alfa-Eco had become a shareholder of SUN Interbrew, the second largest beer producer in Russia (its market share is 14.5%) and the largest in Ukraine (34% of the market). Alpha began a massive purchase of SUN Interbrew shares.
The parties' positions regarding the transaction differed significantly. The Chairman of the Board of Directors of SUN Interbrew wrote a short letter to Alfa Group notifying that the company did not want to develop a strategic partnership with Alfa.
In turn, Alfa-Eco President Alexander Savin confirmed to media representatives the fact of receiving a letter from the brewing company, but stated that Alfa-Eco does not intend to remain the holder of a small stake. The company is considering options to become an equal partner in management or to gain control of SUN Interbrew.
In March 2004, Norilsk Nickel acquired a 20% stake in South African Gold Fields for $1.16 billion and became its largest shareholder. But even a 20% stake in the capital did not give Norilsk Nickel the right to participate in the management of the South African company, and soon after the deal the companies began negotiations on how to get out of this situation. A source at Norilsk Nickel told Vedomosti that the company would like to merge its gold mining subsidiary Polyus with the foreign assets of Gold Fields.
However, Gold Fields preferred Canadian Iamgold to Norilsk Nickel: on December 7, 2004, Gold Fields shareholders had to approve the transfer of the company's assets outside South Africa to a joint venture with Iamgold, in which Gold Fields' share would be 70%.
Norilsk Nickel was unable to block this deal - a 25% stake was needed for this. However, the Russian company still has a chance to disrupt the unwanted deal.
It was donated by another South African company, Harmony Gold, which announced its intention to take over Gold Fields. As Harmony Marketing Director Ferdi Dippenaar explained to Vedomosti, his company wants to gain 100% control over Gold Fields. “The transaction amount will be approximately $8.1 billion. Harmony will offer Gold Fields shareholders its own newly issued shares at a ratio of 1.275 to 1,” he noted.
In October 2004, Harmony already announced an offer to buy out 34.9% of Gold Fields shares, and after the deal is approved by the Competition Commission, it will extend its offer to the remaining shares. Norilsk Nickel, of course, supported Harmony. “Having analyzed the deal between Gold Fields and Iamgold (...) and the proposal of the company Harmony, the management of Norilsk Nickel decided to vote (...) against the deal with Iamgold and in favor of the proposal of Harmony” - such a comment by the general director of Norilsk Nickel Mikhail Prokhorov was distributed by the company’s press service
In the spring of 2005, information appeared in the media that Gold Fields promised to allocate 2 seats on the board of directors to Norilsk Nickel representatives.
In his article “Analysis of the main motives for mergers and acquisitions,” S. V. Savchuk talks about a whole system of anti-takeover measures that managers use to resist unwanted transactions. Tables 2 and 3 present an attempt to summarize the most interesting of them and the most applicable in practice.
Table 2. Basic methods of protecting a company from a takeover before the public announcement of this transaction
| Type of protection | |
| Amendments to the corporation's charter (“anti-shark” amendments to the charter) | Rotation of the board of directors: the board is divided into several parts. Only one part of the council is elected each year. A larger number of votes is required to elect a particular director. Supermajority: approval of a merger transaction by a supermajority of shareholders. Instead of the usual majority, a higher share of the vote is required - at least 2/3, and usually 80%. Fair Price: Limits mergers to shareholders owning more than a certain percentage of shares outstanding unless a fair price (determined by a formula or appropriate valuation procedure) is paid. |
| Changing the place of registration of a corporation | Taking into account the difference in the legislation of individual regions, the place for registration is selected in which it is easier to carry out anti-takeover amendments to the charter and facilitate legal protection |
| Type of protection | Brief description of the type of protection |
| Pacman Defense | Counterattack against the invader's actions |
| Litigation | Legal proceedings are initiated against the invader for violating antitrust or securities laws. |
| Merger with the "white knight" | As a last-ditch attempt to protect yourself from a takeover, you can use the option of merging with a “friendly company”, which is usually called a “white knight” |
| "Green Armor" | Some companies make a buyback offer at a premium to a group of investors who are threatening to take them over, i.e. an offer for a company to buy back its shares at a price higher than the market price, and usually higher than the price the group paid for the shares |
The Russian practice of repelling takeovers often comes down to the urgent formation of a debt program. This is done in order to maximize the costs of the invaders, and if they fail to win, then force the invader to pay. So far the most in a simple way To legally fix a debt is to issue promissory notes.
Legal methods are also used to combat takeovers. Vedomosti described the following case: “Two years ago, one of the world’s largest producers of potash fertilizers, Uralkali, controlled by Dmitry Rybolovlev, was seriously thinking about reorganizing from an open joint stock company into a limited liability company to protect itself from corporate raiders. Today the company has gotten rid of the psychology of a “besieged fortress”: in order to compete for 1st place in the world, in the next 10 years, Uralkali is ready to invest $2.5 billion in modernization of production and infrastructure. And for this, the company needs to become more open to reputable Western investors, says Uralkali President Vladislav Baumgertner.”
Resistance to corporate invaders increases significantly when a business moves from the legal form of a joint stock company to a limited liability company and becomes very significant when assets are transferred to non-profit enterprises.
The most protected organizational and legal form from corporate takeovers for significant assets, in our opinion, will be a non-profit organization such as a non-profit partnership or foundation. Federal Law No. 7-FZ of January 12, 1996 “On Non-Profit Organizations” directly states that a foundation has the right to engage in entrepreneurial activities necessary to achieve the socially beneficial goals for which the foundation was created.
In addition, due to the very laconic regulatory description of non-profit organizations both in the Civil Code and in the text of the mentioned Federal Law, the charters of such non-profit organizations and the procedures for managing them may differ significantly from those characteristic of LLCs and OJSCs. For example, the authors had to deal with cases of non-profit partnerships, in the officially registered charter of which there was the following rule on management: the founders of a non-profit partnership (even after accepting a large number of new members) always have at least 76% of the votes at member meetings.
A foundation, as an organizational and legal form of a non-profit organization, is also used in legal schemes for the withdrawal of assets from problem companies. Due to the specific status of the foundation as a non-profit organization, the founders of the foundation do not have any rights to the property transferred to the foundation.
Large companies prefer to have specially prepared plans in case of major problems. An action plan to repel corporate takeover should be one of the first to be drawn up. In addition to the above procedures, Russian companies often use mechanisms to remove assets from the company and burden the company with large debts. Typically, the defending side resorts to making such relationships public, while the attacking side prefers to act without publicity. An important circumstance during a takeover is also the choice of the optimal moment to begin action: either at the moment of aggravation of other problems of the captured company, or at the time of the absence of the owner and key top managers.
Internet publications pay a lot of attention to Russian corporate wars; in addition, last years This topic is also developed in books.
A. Zemtsov, in the article “Help Yourself,” provides the following statistics on corporate conflicts in the Russian Federation: “Over the past month (from April 20 to May 20, 2005) six new public corporate conflicts were registered in Russia (only public conflicts in which the value of the enterprises involved exceeds $5 million and in which the right to operational management of the company/property complex is disputed). The total value of enterprises and/or property involved in the conflicts that began during this period exceeded $918 million. Mergers and Acquisitions magazine continues to monitor the development of the situation in a total of 44 public conflicts that have become known since July 2004 and which are still not completed. The total value of the assets involved is $2,605 million. Within a month, the end of one corporate conflict was publicly announced for a total amount approximately equal to (estimated) 5 million dollars.”
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Literature:
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- Shitkina I. S. Legal regulation of the activities of commercial organizations by internal documents. GARANT system, 2002
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- Savchuk S.V. Analysis of the main motives for mergers and acquisitions // Management in Russia and abroad. 2002. No. 5.
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- A. Zemtsov “Help yourself” Magazine “Mergers and Acquisitions” No. 28 June 2005