1 Mission Statement and Values “Service Station of Choice”. Environmentalism. Customer and employee satisfaction through TQM. Respect Human Rights and the Laws. –Equal employment. Respect for other cultures.

2 Objectives Shareholder value. Continuous training and development. Image creation  Growth in market share. Future expansion into new markets. –Managing political risks in going to Russia. Build long-term relationships both internally and externally.

3 Policies I Getting the Best person for the job! Consistency between individual and corporate goals. Decrease culture shock by using local experts and employees. Managing cultural differences in styles of Management, HRM, Marketing etc. Corporate wide Code of Ethics.

4 Policies II Empowerment and knowledge workers. Uniform, agreed corporate culture. Flexible organization with open, two-way communication. HRIS for controlling and decision making. Proactive change management.

5 Organizational Structure

6 Baltics and Russia Organization Use the services of the Finnish functional departments Have their own operational level Will have the same organizational structure as in Finland in the future

7 Management Team Members –CEO –Country Managers –Functional VP´s Tasks –Planning –Organizing –Leading –Controlling

8 Benefits of organizational structure Regional Management has direct access to functional experts Emphasis on teamwork –Management team –Regional managers Open vertical and horizontal communication Clearly divided duties

9 Personnel

10 Functional Departments Marketing VP, 5 Managers (FIN, EST, LAT, LIT, RUS) HR VP, 1 Manager +9 Assistants (3/market area) Finance/Accounting VP, 1+1 Manager, 4+4 Assistants Supply/Logistics VP, 1 Manager +9 Assistants (3/market area)

11 Regional Offices TitlePeople/region Administrative Assistant/ IT Specialist2 Public Relations Person1 Clerks2 Accountants2 Total7

12 Facilities TitlePeople/Facility Facility Manager1 Associate (Head Manager in Training) 1 Assistant Managers4 Assistants in Training (as needed) Total 5-6

13 CEO Duties and Specifications Implements and monitors the vision and strategy Plans and implements future expansion with BPAmoco Facilitates communications MBA Extensive managerial experience Strong goal commitment and leadership skills Cultural understanding for all three country areas

14 Country Managers Duties and Specifications Implements and controls business plans Surveillance of economical and political situations Master’s Degree Managerial work experience Knowledge of language and culture

15 Functional Managers Duties and Specifications MKT: product, place, price and promotion HR: all HRM functions F/A: financial control, investment planning S/L: network Master´s or Bachelor´s degree International work experience Leadership and team work skills Negotiation skills

16 Regional Manager Controls and maintains regional operating activities Coordinates regional budget Sets quality standards Ensures standards are met Sets policy for quality improvement goals

17 Regional Manager, Continued Functions as regional spokesperson Researches and chooses new franchisees, with country manager Maintains contacts with local government officials (Russia only) Directs local administrative staff Other duties as assigned

18 Regional Manager Requirements Masters Degree Past management experience Experienced in foreign trade Knowledge of regional business and culture Strong communication and interpersonal skills Ambitious and innovative Risk-management experience

19 Facility Manager Controls the everyday operations Implements the strategies Evaluates and initiates outsourcing needs Reports to Regional Manager Training Associate Facility Managers (Finland only) Other duties as assigned

20 Assistant Facility Manager On-site manager of facility Oversees quality of franchisees Oversees work of out-sourced labor Make daily facility reports to Head Facility Manager Other duties assigned by the Head Facility Manager

21 Facility Managers Requirements Bachelors or equivalent degree preferred Extremely effective inter-personal skills Knowledge of the industry Fluent in local language and business customs Ambitious and self-motivated Some previous service work experience preferred

22 Training Corporate culture customs and standards commitment to BP Amoco team spirit and internal communication Environment differences Cross cultural training Networking for job rotation Motivate for advancement Keep low cost level ! Orientation in Chicago pre-Finnish market entry Establish training center in Finland On-the-job training in Finland, Russia, and Baltic Cooperation with Consulting firms Continuos development Objectives Schedule

23 Training CEO, VP, HR

24 Training in Finland

25 Future Expansion Cooperation with training Consultants –Fintra, ELC Finland, Business Link Consulting Internship program with Universities Planned career progression

26 Recruitment of Management Finland Very good supply of young entry-level managers Smaller candidate pool for mid-level managers Russia and Baltics Ample supply of entry-level managers Sufficient supply of mid-level managers

27 Recruitment I CEO Country Managers Functional Managers -Internal - External - Headhunters - External/Internal - Advertising - Internet

28 Recruitment II Regional Managers Facility Managers - External - Internet, advertising - External - Public agencies - Internet, advertising

29 Selection Process

30 Employment Tests IQ-test Teamwork ability Job Qualification Maturity Attitude Toward Work

31 Interview Methods Panel –CEO, Country Managers, Functional Managers and Regional Managers Nondirective –CEO, Country Managers, Functional Managers, Regional and Facility Managers Situational/Behavioral Description –CEO, Country Managers, Functional Managers, Regional and Facility Managers, Associate/Assistant Facility Managers and Assistant Facility Managers In Training Structured Interview –Assistant Facility Managers In Training

32 Background Investigation References Previous employers Good citizen Psychological Test Motivation Commitment Leadership Communication Medical Test Physical examination No Drugs

33 Validity and Reliability Combination of different tools used in selection process More than one interviewer Amoco tests

34 Performance Appraisal in Finland Formal system still quite new in Finland –Traditionally has been informal: focus on weaknesses Start using MBO as a primary appraisal system –all employees involved –appraisals done semiannually –approaches to convince the Finns to accept a formal system development, not punishment benefits and compensations improve working conditions motivation from weaknesses to strengths confidentiality

35 Appraisal Chart

36 Cultural Modifications Appraising is a fairly unfamiliar concept Finns tend to be discrete Adaptation of the system to Russia and to the Baltics The firing process in Finland is long and difficult

37 Solution to Cultural Problems Training by the HR department To the whole organization To the raters To the interviewers

38 Compensation Policies Pay for performance Competitive base salaries Salary ranges for each management level Government legislation Factors affecting wage rates Indirect compensation

39 Salaries and Incentives Base Salary (US$)MeritBonuses Stock Indirect Annual options compensation CEO 130,000 Country Manager 90,000 Functional VPs 82,000 Regional Manager 55,000 Facility Manager 37,000 Salary Range +/- 25%

40 Pay-for-performance - incentives Merits Raise on base salary or lump sum Based on percentage guidelines Expectations in inflation and purchasing power Bonuses Pay for performance Goals set by superior in charge - MBO Percentage of sales Stock Options For CEO, Country and Functional Managers Set by Chicago HQ Evaluation based on appraisal (HQ)

41 Indirect Compensation Benefits Health care Career Development Training Flexible working hours Cellular phone Company car for top four level managers Expatriates to Russia and Baltic Basic health care for the family Child care and school placement 20% premium on top of base salary Housing arrangements