Managing Informal Business Practices in Russia: The Experience of Foreign Companies
Journal
Mir Rossii
ISSN
ISSN 1811-038X
ISSN-Digital
1811-0398
Type
journal article
Date Issued
2015-09-22
Author(s)
Abstract
This article discusses how foreign companies deal with informal practices while operating in Russia. Informal practices encompass all activities which take place outside of formal structures and/or complement them. Such activities constitute one of the main challenges for foreign companies doing business in the Russian environment. To demonstrate the phenomenon of informality from a foreign company's point of view, we conducted 42 in-depth interviews with German and Russian managers and CEOs. These interviews revealed the typical informal practices which occur in companies' internal affairs, in relations with external partners and suppliers, and in dealing with authorities. Through an analysis of real-life examples, we show not only what kinds of informal practices foreign companies might be faced with, but also what strategies they can use to manage this informality. We conclude that leadership by example, judicial independence, effective control, transparency, outsourcing, a strong corporate culture, and a leveraging of the cultural context are the main strategies for foreign enterprises to mitigate informality in the Russian business environment.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher place
Moskva
Volume
24
Number
4
Start page
149
End page
174
Pages
26
Subject(s)
Division(s)
Eprints ID
244069
File(s)![Thumbnail Image]()
Name
mr_15_4_7.pdf
Size
1.2 MB
Format
Adobe PDF
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