Checking JSC «Severskiy Granitny Karier» — good and evil

Nowadays in the world of business tax authorities, as well as fire service and other state inspections, are becoming the unofficial and popular market regulator. In principle, this is a civilized and correct regulator. But somehow when businessmen or employees engaged in commercial sphere are asked about their experience of deal with state control organizations a wry smile plays at their faces! It is considered that checks by state authorities are usually sent by competitors, they are the consequence of raider claims or weaning enterprise. And an incredible amount of this practice prevents the formation of correct attitude to these useful control procedures.

Once again, the regional companies are becoming the object of serials state checks. Let’s examine their influence on business at the example of JSC «Severskiy Granitny Karier» — an enterprise that recently has faced numerous checks by almost every state control organization.

Modern history of JSC «SGK» is not very long. It began with the fact that the factory was transferred to the new owners. They are represented by the managing company, which started the internal audit of all main departments: financial, legal, partner, production. From the very business organization foundation, the managing company has reviewed all the core «SGK» documents. The analysis of contractual relations has passed with re-estimating of every contract which had been signed earlier according to the new policy of supply and marketing. For this purpose detailed plans for repairing and purchases of new manufacturing facilities were developed. Particular attention was paid to the pricing policy, to discount and wholesale offers elaborating. The system of salary payment was invented in accordance with the European principle: a) fixed salary is paid for conscientious performance of employees duty and their job skills, b) bonus part is paid according to the production results achievement which are defined as a plan data, c) personal bonus is paid as an award for personal efficiency of employees: careful attention to the technical tools, professional initiative, mentoring, professional development and the achievement of other development criteria. Naturally, the principle of salary compensation is the same for all the managers and employees, JSC «SGK», but each position has the key performance indicators (KPI). On the one hand, this balanced and almost an icon approach is very productive in Western Europe. On the other hand, the very transition of the company to a new system of working faces internal and external resistance.

During the work in the Soviet format, a lot of management decisions had been crystallized and shown to be effective - such as the creation of a HR reserve, competition between teams of workers for greatest result, mentoring, maintenance and development of social projects for SGK employees. But unfortunately the system had been ruined in the period of «perestroika» and first accumulation of capital in 90-s in Russia with the following economic devastation of the country when city-forming enterprises had become a target of the «Russian roulette» privatization. Without a host, conscientious, diligent, any business is in decline. But that's not just the owners themselves who are to blame in desperation. No person without feeling that his property or business is guaranteed by the state for long-term development will invest in it. As well as not a single employee without guarantees of salary payment (long-term) will fight for the result. «Severskiy Granitny Karier» wasn’t an exception. Owner’s confidence and employee’s confidence in the business must be unconditional and reciprocal. Will the SGK’s managing company convince its people that the company is to make a profit that would increase their wages? Will the SGK’s managing company believe that these employees are interested in working for the development? The process is complicated.

Nowadays a lot of people of the senior and middle-level management has been fired. This was provoked by identifying violations, theft, careless attitude. There were also cases of voluntary dismissal. The establishment of the European salary model scared people because in case of production pause workers could have received only a fixed part of the salary. Therefore, in practice when the production income was below the planned rates the managing company took a decision to accrue salaries above a fixed salary. But the personnel losses and rotation — is not always a sign of crisis. To lose those who are involved in the distribution of wage fund but does not take part in shaping it - strategically positive situation. Rotation on JSC «SGK» is impressive. Requirements to all the employees are very high, but also is the bonus reaching 200% from fixed salary. Could we assume that SGK’s managing company has found «the core stone» of management? Could the European practices be realized on the basis of Russian reality?

Time would show. But now, at a glance, it’s a striking fact that after the internal structure reform of the company, JSC «SGK» is undergoing a control authorities inspection period. Timeliness of such procedures shouldn’t be argued by us, but the fact that inspections are now «just in time» — at the moment of management «cleaning» and «repairing», is obvious. While enterprise management system does not work consistently, imperfections, we believe, are available. Vicious and threatening violations that could stop production were not revealed yet. JSC «SGK» fulfills its obligations in shipping, procurement and salaries. The loans are being paid. But what would go next? Of course, the press-service official version — «everything would go», but the market has a lot of mechanisms to remove the alien body. And implementing European standards make the company a real alien one.

Undoubtedly, the disadvantage to the JSC «SGK» is that the company is being under attention of control inspection without any «incubation» period of management stabilization. This case is a minus for «CFS» because it indicates a general background of competitors cautious (it’s not a secret that many checks are often provoked). And one couldn’t convert a public perception that your company is successfully being suspended by competitors to the real long-term contracts. Yet the business - it is a story about money and not about the public pities.

But there are advantages. While JSC «SGK» meets regulatory authorities openly and willingly, and the team does not demonstrate PR miracles, pointing to a formidable enemy — competitor — the all disasters origin — there is a policy of cooperation with state control organizations. If the «Seversky granite quarry» is being prepared for a major audit and restructure it’s really useful to enlist the official decision on each issue to clarify that need to be developed or remade. It’s a strange way, but very westernized, logical. Before further large-scale reorganization of production, during which the key parameters would change, it’s high time to determine «nedodel» and put all modernization points in budget.

May be due to the influx of foreign investment to the region with their methodology, business management style and different from Russia attitude to the timeliness and regulatory requirements, as well as on the authority audit, we would learn to see their role not as a weapon against business, but as a normal practice of social responsibility.

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