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. Last Updated: 07/27/2016

Siberian Institute Graduates Top Talent

IRKUTSK, Eastern Siberia -- One of the chief obstacles in reforming Soviet-era enterprises has been getting managers that are used to functioning according to old practices, such as ceaseless lobbying for state credits, to understand the sink-or-swim rules of a market economy.

One beacon in the ongoing process of exposing Russians to new ways of doing things can be found in a fairly unlikely place: amid the vast and isolated stretches of eastern Siberia.

Irkutsk's Baikal Institute of Business and International Management, which runs a business-school program jointly administered by Irkutsk State University and the University of Maryland, has been turning out graduates since 1996 who, in the words of institute director Vladimir Saunin, "are being sprinkled around the region in the hope of influencing companies from within."

A number of graduates have also gone on to work or study in graduate programs abroad or were snapped up by local offices of multinationals such as Procter & Gamble, which hired six of the institute's former students.

"The program gave me the foundations to work at Procter & Gamble," said institute graduate Zinaida Blinnokova, now Procter & Gamble regional manager for sales in northern Russia. "That included marketing, finance and management.

"It would have been difficult to work here without the business writing I learned at the institute alone," she added.

The inception of the institute, formerly known as the Siberian-American Department of Management, began before the fall of the Soviet Union. "It was evident that something in Russia was going to change, and we hoped it would be toward a market economy," Saunin said, sitting in a modernized wing of the "White House," a mansion built in 1804 for tsarist governors general of eastern Siberia, now the part of Irkusk State University housing the institute.

Saunin said Irkutsk State University, of which he is also vice rector, had planned to set up a program in Japan - where the University of Maryland has a department - after taking part in Tokyo meetings of the Association of Pacific Region Universities. "We looked for a partner abroad because we could find neither books, nor anyone with enough experience or adequate foreign-language skills here."

At the same time, the University of Maryland had been looking to begin a business-school program in the Soviet Union.

"It took one year to develop our ideology and programs and create a unique curriculum that would prepare Russians to work in Russia," Saunin said.

Although the ensuing program, launched in 1991, bestows students from the region with a degree from the University of Maryland in addition to one from Irkutsk State University, Saunin said the program is specifically tailored to address its students' needs as well as the peculiarities of working in Russia.

Applicants chiefly come from the Siberian regions of Irkustsk, Yakutsk, Buryatia and Krasnoyarsk.

The institute teaches from the same books used at the University of Maryland, but employs different testing schedules. Teachers also especially concentrate on marketing, accounting, management and international finance, subjects not previously taught - or taught badly - in Russia.

Another difference is that Russian students, who tend to be generally better prepared in mathematics than their U.S. counterparts, need less tutoring in the subject, Saunin said.

One of the management program's first tasks was getting students' language skills up to par so they would score well on TOEFL, an international standardized English language test. In their first two years, students learn from Russian teachers who stress teaching the language.

In their third year, students take classes taught by one of two U.S. professors from the University of Maryland at College Park who teach in Irkutsk on a one-year contract. The program also uses distance-learning techniques through which students get credit for following classes taught in Maryland.

Students earn their double diplomas at the end of their fourth year, but have the option of staying on one more year to learn from courses aimed at teaching ways to adapt what they have learned for use in Russia.

"The fact that our program is accredited at the University of Maryland is a great boon, but it also ties our hands," Saunin said, adding that the institute's Russian teachers have become no less able - and sometimes more so - than their American counterparts. "Everything is changing all the time, and our teachers have to know what's going on here and what's going to happen," Saunin said.

Although a number of graduates have left the region, most remain, fulfilling one of the institute's missions. Fifteen graduates work in the Irkutsk governor's office.

The program has been so successful that some initially did not believe the results.

Saunin happily recounted how the U.S. State Department and Western companies, fearing a conspiracy, sent worried representatives to Irkutsk at various times to find out exactly why the program's students and graduates uniformly fared well on different exams, including TOEFL.

Oksana Yaverbaum, commercial director of Irkutsk's Severnaya Korona mobile telecom provider, praised the school's graduates. "They're good for financial departments, and do good accounting work."

But while many applicants to the Baikal Institute may have the mettle to learn to work well, they do not always have the cash.

Tuition fees are $25,000 for five years, tiny compared to fast expanding U.S. tuitions, but a massive burden in a region in which the average monthly wage is 3,282 rubles ($115). While an emerging middle class in Siberia could begin to pay such fees by 1997, the country's August 1998 financial collapse wiped out most savings.

Students now find sponsors in the local administration, which funds a number of spots each year, and companies willing to pay for tuition in return for employment contracts.

At the same time, the institute's own financial situation remains precarious. "We haven't recovered from the crisis," Saunin said.

Starting a new one-week program for regional political and business leaders has helped the institute cope with the financial strain. The institute also has a program to teach the "engineering elite," Saunin said. "I feel like an ambulance doctor," he added. "People come to us who desperately need tolearn new ways of doing things. Most of the time, they should have come much earlier - before their companies went bankrupt."

But while the institute's programs have earned uniform praise, its graduates are still few - in 1999, there were 43 graduates from the four-year program and 35 graduates from the three-year program. And the problems they often face in their new jobs are endemic. "Local processes such as privatization are very slow," Saunin said.

Irina Shestakova, a member of the institute's first graduating class of 1996 and now a project director at Moscow's Ancor recruiting agency, said the program provided good background in Western practices, but added that using the knowledge in Russian companies will only be possible in 10 years.

"Unfortunately, the political and economic situation in Russia doesn't allow one to use the experience because Russian companies function according to different realities," she said.

To influence the activities of a company from within requires "enthusiasm and faith in one's knowledge and principles," she added. "On top of that, one also has to have opportunities - a high enough position to be able to influence decisions."

Anton Bogdanov, who graduated in 1999 and is now head of the marketing division at Irkutsk's Enerpred, which produces hydraulic equipment, echoed the same opinion. "The institute provided knowledge of useful international practices, but adaptation is needed because such business practices are frozen in Russia."

The Irkutsk administration paid for both Bogdanov's and Shestakova's tuitions.

Irkutsk Deputy Governor Alexander Sukhodolov agreed that changing mindsets in the region is a difficult process. "The old cadres blame everyone else for their problems," he said. "But once some companies functioning along market rules show growth, one can point to them and say, 'See, others can work in the same conditions, so why can't you?'"