This paper focuses on the managerial challenges involved in establishing subsidiaries in the Post- Soviet market. In these circumstances, the Western firms’ management meets the host country’s institutional structures. It is suggested that management transfers from the Western parent firm towards the local subsidiary take place across institutional boundaries. The analysis focuses on aspects creating, or reducing tensions in relations between local employees and the Western firm’s representatives. This paper explains why some local employees develop identities that facilitate management transfers, and why other employees develop conflict identities that inhibit management transfers.