Essay by munaverUniversity, Master'sA-, March 2005

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MGMT 810

November 4, 2004


Cimentrics technology uses a geographically dispersed product development model. There are two software teams in two different cities of Russia, with a manager in Canada and central office in Boston.

Lee and his buddy started a company and tried working on projects in computer integrated manufacturing (the name Cimentrics comes from here), initially there was little marked for the products Cimentrics made but with some unexpected change in the marked Cimentrics products started to come in demand but the problem for Lee was in finding skilled labor at an affordable cost.

Initially Lee tried head hunters and personal relationships to get skilled labor but this did not turn out well, so he tried a second approach and that was to hire only the people he knew about. But this technique of hiring people left him in leaving out a wide pool of applicants.

With encouragement from his father Lee visited Russia to look for skilled labor, it took some time and effort but Lee finally found skilled programmers that suited his organization's requirements and at an affordable cost.

At this point Lee had the problem of establishing a company base in Russia; the problem was it was too hard to open an office in Russia: managing an office in a foreign country bureaucracies, exorbitant real estate prices, taxes and foreign currency issues and payoffs to organized crime were some of the major issues.

Lee decided a "stealth operation" this was the basis of his "Virtual Corporation". With little capital investment developers were hired as contractors responsible for paying their own taxes and providing their own place of work (most of them worked from their homes). One Cimentrics's principals will travel to Russia ever six months and distribute the...