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Article
Publication date: 15 February 2013

Päivi Karhunen and Riitta Kosonen

The purpose of this paper is to show how the institutional context in an emerging economy, Russia, moderates the “do or buy” decision of international firms operating in…

Abstract

Purpose

The purpose of this paper is to show how the institutional context in an emerging economy, Russia, moderates the “do or buy” decision of international firms operating in the country. This is examined through the influence of institutional voids on transaction costs and definition of core competencies.

Design/methodology/approach

The paper adopts a qualitative research approach, where the empirical data are based on interviews with executives of eight Finnish companies, which have invested in Russia's second largest city, St Petersburg.

Findings

The key findings include first, that the formal and informal constraints in the Russian business environment influence outsourcing decisions in terms of increased transaction costs, and in terms of resources needed to be competitive. Second, the authors show that, due to these constraints, a firm in Russia may need to insource functions that it would otherwise outsource as non‐core activities and invest in building of competencies specific to the Russian business environment.

Research limitations/implications

The limitation of the study is its focus on two countries. However, the analytical framework proposed for examining influence of institutions on outsourcing strategies is applicable to other country contexts.

Practical implications

This paper shows how the institutional constraints of the host country, reflecting in this case as underdeveloped market for business services and complex state regulation, can result in a significant need for adaptation of a foreign firm's business processes. This must be taken into account in business planning and allocation of resources to the Russian operations.

Originality/value

The paper provides researchers and practitioners with new information about a little‐studied topic by showing concrete ways of how institutions influence outsourcing strategies in Russia.

Details

Journal of Business & Industrial Marketing, vol. 28 no. 3
Type: Research Article
ISSN: 0885-8624

Keywords

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Article
Publication date: 1 July 2014

Päivi Karhunen, Riitta Kosonen and Svetlana Ledyaeva

– The purpose of this paper is to analyse the impact of institutional distance, extended to capture subnational institutional variation, on foreign entry mode choice.

Abstract

Purpose

The purpose of this paper is to analyse the impact of institutional distance, extended to capture subnational institutional variation, on foreign entry mode choice.

Design/methodology/approach

As an empirical study, it focuses on manufacturing firms established in Russia by foreign investors from developed countries. The dependent variables, the share of foreign ownership and the entry mode choice binary variable (equal to 1 for full foreign ownership and zero for a joint venture) were obtained from the registry of foreign-owned firms in Russia. The World Bank's regulatory quality (RQ) index on a national level and a respective indicator for the various Russian regions on a subnational level were utilised to measure institutions. Multilevel cross-classified analysis including foreign firms, the various Russian regions and characteristics of the foreign owners’ home countries was applied to for making empirical estimations.

Findings

The empirical results show, first, that the regionally adjusted institutional distance, i.e. the distance between the home country and the Russian region in question, when measured in terms of RQ, shifts the ownership structure towards shared ownership. However, nation-level institutional distance between the home country and Russia does not show any statistically significant relationship with the modal choice.

Originality/value

The results indicate that with the exception of industries of strategic importance to the state, the most important “rules of the game” for foreign entry strategies are provided not by the federal government but by the regional governors. The theoretical value of the paper lies in the extension of the institutional distance concept to the subnational level. At the same time, the paper identifies those institutional features that foreign entrants eyeing Russia need to take into account when selecting an entry mode and location within Russia.

Details

Baltic Journal of Management, vol. 9 no. 3
Type: Research Article
ISSN: 1746-5265

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Article
Publication date: 1 March 2013

Päivi Karhunen and Riitta Kosonen

This paper seeks to discover whether and how a subsidiary located in a high‐corruption host country can pursue its parent's corporate non‐corrupt strategy, rooted in a…

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Abstract

Purpose

This paper seeks to discover whether and how a subsidiary located in a high‐corruption host country can pursue its parent's corporate non‐corrupt strategy, rooted in a low‐corruption home country. Theoretically, it aims to apply the construct of institutional duality. It also aims to argue that the subsidiary's strategic response is contingent to the relative strength of two sets of institutional demands: the articulation of the multinational company's (MNC's) corporate policy towards corruption; and the direct influence of the host country corruption on the subsidiary's daily business.

Design/methodology/approach

A qualitative analysis of interviews with executives of 27 Finnish companies (15 large MNCs and 12 small to medium‐sized enterprises (SMEs)) with subsidiaries in Russia was conducted.

Findings

The subsidiary's strategic response to host country corruption is contingent to the firm size and the respective resources. Large MNCs can implement their non‐corrupt policy also in their Russian subsidiaries due to their financial and relational resources. SMEs, which lack such resources, need to adapt to the demands from the corrupt environment. This is usually done by “outsourcing” situations prone to corruption to a local intermediary.

Research limitations/implications

The empirical analysis is limited to one pair of countries (Russia and Finland) and selected locations in Russia (Moscow and St Petersburg).

Practical implications

The paper provides examples of business strategies that help to mitigate the negative consequences of host country corruption without giving up one's moral and ethical principles.

Originality/value

The paper enriches the literature on corruption in international business by identifying the firm size as a key determinant for strategic responses to host country corruption.

Details

Critical perspectives on international business, vol. 9 no. 1/2
Type: Research Article
ISSN: 1742-2043

Keywords

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Article
Publication date: 15 February 2013

Olga Tretyak

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299

Abstract

Details

Journal of Business & Industrial Marketing, vol. 28 no. 3
Type: Research Article
ISSN: 0885-8624

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Book part
Publication date: 10 November 2016

Pasi Koski

Compared with the history of many other countries, sport has had an exceptional role in the Finnish transformation from a young to a mature nation. Finland has a…

Abstract

Compared with the history of many other countries, sport has had an exceptional role in the Finnish transformation from a young to a mature nation. Finland has a relatively long tradition in the sociology of sport. The interest has been focused on a wide range of physical activities. At the same time, the parent discipline of sociology has been a “mother” science in the field; as such the more representative term in Finland for this area is the “social science of sport and physical activity.” Finnish sociology of sport is strongly concentrated in Jyväskylä and most of the scholars in the field have been educated at the University of Jyväskylä. Recently the research in the field has spread to other universities and new perspectives have enriched the research. The critical mass of Finnish sociology of sport is not very big. Approximately 400 students have graduated in the field during its history and approximately 60 have worked in the field as professional researchers. Most of the publications in the field are for a domestic audience. The group of internationally active scholars is relative small. The variety of research themes is nevertheless wide. However, interest has continued in a few of them, and has focused on several researchers. In this respect, the most central themes have included changes in sports culture, socialization into sport and physical activities, gender and physical activities, the social significance of sport and physical activity, and organized sport movements.

Details

Sociology of Sport: A Global Subdiscipline in Review
Type: Book
ISBN: 978-1-78635-050-3

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