Organizational and management system of Fabergé firm.

  Let's analyze the evolution of Fabergé firm organizational and management system.

The management structure of the enterprise was linear since foundation of Fabergé firm in 1842 and till the second half of 1880s. As far back as 1886, after 44 years of existence, the firm had more than two dozens of employees i.e. it was a relatively small organization in terms of staff number and it consisted of a workshop and a store.

Having linear system, a manager is fully responsible for his/her own work and for that of his/her firm. This virtually eliminates the probability for employees of being given contradictory instructions. Ideally, a manager must possess comprehensive knowledge and should control all types of work being done at an enterprise.

Operational issues dominate over strategic ones in such a structure because of their number and the need for urgent decision. Linear structure allows an enterprise to function well during solution of stable tasks, doing repetitive operations, but it is difficult to adapt to new tasks and objectives while using this structure.

Such a system was convenient to Gustav Fabergé, but it was not convenient to his successor who was not only a talented jeweler but also a talented entrepreneur who did not scare innovations both in creative and organizational activity of the firm.

It is with the leadership of Carl Fabergé the next step of the firm's organizational work is connected with (from the mid 80s of the XIX century) which may be called as a stage of functional management structure. This management structure is based on division of labor at the enterprise and in the management board. Every functional manager has all administrative rights on the matters within his/her competence. The links transferring binding decisions to downline links are created within certain functions. Such system allows managing production properly. However, there are some drawbacks here; the principle of stewardship unity is violated because of many enforceable orders coming from every functional leader in every workshop.

Franz Bierbaum characterizes this period in his notes as follows "Fabergé brothers who were knee-deep in work were not able to master the workshops and therefore they decided to establish autonomous workshops which owners were obligated to work only according to company's designs and layouts and solely for that company. So, Holstrem's and Tileman's jewelery workshops, Raymer's gold product workshop, Collin's, Perkhin's, Rappoport's silver workshop (my italics – V.S.), Vyakevy's silver workshop, Aarne's silver workshop and other workshops were founded. A certain type of product has been allocated to each of them, and journeymen specialized in a particular type of work in them. Products of these workshops have craftsman's hallmark and they also have the company's hallmark where the space allows".  [1]

The situation when a large company hired craftsmen to job was not invented by Fabergé. "Nichols and Plinke" company, "Ivan Ekimovich Morozov" Trading house, C. Bolin Court jeweler have worked in such a manner for many years. The craftsmen categorically undertook not to serve anyone, not to disclose technological secrets and design developments while working for this company and that was new in the activity of Fabergé.

This system allowed the company to increase the company's staff up to several hundreds of people. Such organizational system allowed the company to fulfill both mass nature products and unique, time-consuming stuff.

Note that matrix management structure elements were observed at Fabergé firm. The matrix structure is the result of the further development of production systems. This structure allows coordinating and aligning the activities of many services and departments, streamlining horizontal communications, reducing their length, minimizing the consequences of multilevel linear subordination, accelerating decision-making, acting to raising responsibility. It is characterized by creating special coordination units - program managers, receiving the right to work for all other functional managers – program participants. Ivan Antony was one of the leaders of the "Program of fulfillment of the Highest orders" at the firm. He served at the firm since 1898 and was responsible for coordination of fulfillment of the annual Imperial Easter eggs. The best artists of different specialties were used during manufacturing these products: stone work was fulfilled in Werfel's workshop, enamel work was fulfilled in Petrov's workshop, jewelry surprise was fulfilled in Holstrem's workshop, and mounting work was fulfilled in Perkhin's and Vigstrem's workshop. The cases were fulfilled in the best case workshops of Kyaki or Karl Iegis own workshop, gilding was fulfilled in the united gilding workshop, miniatures were created by Vasily Zuev, enamel miniatures were created by a group of artists, etc. Naturally, this process needed a strict organizational control. [2]

Note that this system has involved not only the permanent firm employees into the work on the project, but also allowed to invite specialists helping to implement a particular project. There were famous architects (Benois L.N.), sculptors (Ober A.L., Fredman-Klyuzel B.O.) and artists (Savitsky G.K.) among these experts.

The system also included the area of activity which we call marketing now. The company managers spent a lot of money for publication of catalogs, price lists, [3] participation in Russian exhibitions and international exhibitions, etc. The same system contributed to the production of a wide range of products.

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[1] History of Fabergé firm. According to the memoirs of Franz P. Birbaum, chief master of the company. / Authors-compilers Fabergé T.F., Skurlov V.V. SPb.: Russkie Samotsvety, 1993.P.6.

[2] Carl Fabergé could not physically keep all important orders under his control. Although he did it himself till 1893 (the year when Franz Birbaum joined the firm). Later he instructed "conducting" the most important orders to the most responsible persons of his administrative staff. Over the years, this staff has grown by his sons Carl-Eugene and Agaphon. Alexander, his third son, was sent to lead Moscow branch, and Nicholas, his youngest son, was sent to lead London branch.

[3] There is a reservation clause in the Moscow branch Price List of Fabergé firm in 1893: "Many of the best styles cannot be placed here because of fear of fake on the part of the rivals."  The same concern is present in the price list of 1899 (although it has been placed 408 stock items in it in comparison with 226 stock items in 1893, that "says" that the product range is constantly growing and it is necessary to demonstrate it for the purpose of quickest sale despite the plagiarism of ideas by competitors). After 1902, the company had ceased to produce price lists yet because of spread of style fake, the models were called so at that time. In the same period, the company reorganized the system of customer service having changed over to individual customer service by studio type.