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Article
Publication date: 6 June 2019

Daniel J. McCarthy, Sheila M. Puffer and Daniel M. Satinsky

The purpose of this paper is to examine the dramatically changed role of Russia in the global economy since the dissolution of the Soviet Union in 1991, as the Soviet…

Abstract

Purpose

The purpose of this paper is to examine the dramatically changed role of Russia in the global economy since the dissolution of the Soviet Union in 1991, as the Soviet institutions collapsed and were either reformed or replaced in a new Russian institutional landscape. The paper presents a fact-based and balanced view of Russia’s evolving role in the global economy, as distinguished from the sometimes one-sided view presented by some Western commentators. The authors establish that the two countervailing views are fundamentally based on different cultural perspectives about institutions, primarily the roles of business and government.

Design/methodology/approach

This paper is developed as a perspectives article drawing upon the decades of academic and business experience of all three authors with Russian business, management and the economy. The paper focuses on the structure of Russian institutional change and places it within the historical context of the challenges of various periods of time from the late 1980s to the present. The authors posit that cultural foundations complicate that institutional evolution.

Findings

Russia will remain a major player in world markets for energy, raw materials and armaments for the near future at least. Principal institutional questions facing Russia have to do with how to reduce the country’s overall dependence on raw material exports, with its vulnerability to world market fluctuations, and how to modernize Russian economic and political institutions. The degree of success in addressing these questions will depend largely upon the ability of the new and reformed economic institutions to show the flexibility to respond to changes in the global order, on whether political considerations will continue to supersede economic issues, and how markedly cultural traditions will continue to impede positive changes.

Research limitations/implications

The entire system of international trade is under question, disrupted by the growing nationalism that is threatening the globalization that became institutionalized over decades in the wake of the Second World War. Russia’s future role is partially dependent upon how new patterns of international trade develop in response to the current disruption of established trade regimes, and by how political conflicts are expressed economically. The authors observe that Russia’s historical and cultural traditions, especially acquiescence to a highly centralized government with a strong autocratic leader, limit the country’s options. The authors explore how Russia’s reactions to Western sanctions have led to a new strategic approach, moving away from full engagement in the global economy to selective economic, and sometimes political, alliances with primarily non-Western countries, most notably China. The authors contrast Russia’s situation with that of China, which has been able to make substantial economic progress while still embracing a strong, centralized political institutional structure.

Originality/value

Many Western analysts have viewed Russian institutional evolution very critically through the lens of Western politics and sanctions, while Russia has continued along its own path of economic and institutional development. Each view, the authors argue, is based upon differing cultural perspectives of the roles of business and government. As a result, a distinct difference exists between the Western and Russian perspectives on Russia’s role in the world. This paper presents both points of view and explores the future of Russia’s position in the world economy based upon its evolving strategy for national economic policy. The authors contrast the situations of Russia and China, highlighting how Western-centric cultural views have affected perceptions of each country, sometimes similarly and at times with decided differences.

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Article
Publication date: 30 July 2019

Ron Berger, Ram Herstein, Daniel McCarthy and Sheila Puffer

The purpose of this paper is to analyze the role of Wasta, a culturally based system of social networks of exchange among in-group members in the Arab world, as…

Abstract

Purpose

The purpose of this paper is to analyze the role of Wasta, a culturally based system of social networks of exchange among in-group members in the Arab world, as exemplified by three groups of Arabs in the Palestinian Authority, and then compares it to Guanxi (China), Sviazi (Russia) and JaanPechaan (India). The use of social networks is a common business model around the world to accomplish business objectives and is especially relied upon in emerging economies where formal institutions are weak. It is important to understand the commonalities and differences in the use of reciprocity in various cultural contexts in order to conduct business effectively. The aim of the paper is to illustrate the structure of Wasta and how it is perceived and constructed among three Arab social groups, and then compare and contrast it with social business models in three other high context cultures.

Design/methodology/approach

Qualitative approach based on interviews to better understand the relationships involved.

Findings

The findings provide the foundation for a number of critical insights for non-Arab managers seeking to do business in the Arab world. For international managers to conduct business successfully, it is essential to understand how Wasta works, and establish relationships with members of influential social networks by building trust over time such that they create Wasta for themselves and indirectly for their firms. Using Wasta in the Arab world, as noted above, is similar to doing business successfully in other emerging economies such as using Sviazi in Russia (McCarthy and Puffer, 2008; Berger et al., 2017), Guanxi in China (Yen et al., 2011) and Jaan–Pechaan in India (Bhattacharjee and Zhang, 2011). The authors feel more confident in stating this view after comparing Wasta with these other three concepts, and noting that all four are built upon the same fundamental constructs.

Research limitations/implications

The authors recognize that the study is limited in terms of the geographical sample since it does not include any non-Palestinians, although the managers the authors sampled came from various regions in the Palestinian authority. Additionally, Palestinian managers are highly educated and mobile, and can be found in many other Arab countries working in managerial positions (Zineldin, 2002), thus potentially broadening the generalizability of the findings. Nonetheless, the samples would be called ones of convenience rather than randomly drawn from the three groups, since the latter would be extremely difficult to execute not only in the Palestinian Authority but in most of the Arab world due to the culturally based reluctance to provide sensitive information to those outside one’s network. Despite the difficulties that might be involved in exploring such culturally sensitive issues as the authors did in this study, the benefits in knowledge gained can be of significant importance to the study of international business in emerging and transition economies.

Originality/value

Little research has focused on the use of Wasta in the Arab world, a gap which this paper addresses. The authors do so by analyzing the views of Wasta held by three important groups – leaders, business people and students. While each type of reciprocity has its own unique characteristics, the authors focus on three interrelated constructs that have been found to underlie the use of reciprocity in various cultures. In the Arab world, these are Hamola, which incorporates reciprocity; Somah, that incorporates trust; and Mojamala, which incorporates empathy through social business networks.

Details

International Journal of Emerging Markets, vol. 14 no. 5
Type: Research Article
ISSN: 1746-8809

Keywords

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Article
Publication date: 1 March 1997

Daniel J. McCarthy, Sheila M. Puffer and Alexander I. Naumov

This article describes the quality leadership style of a Russian woman entrepreneur who started a successful software operation under a licensing agreement with an…

Abstract

This article describes the quality leadership style of a Russian woman entrepreneur who started a successful software operation under a licensing agreement with an American company. A cornerstone of her business philosophy was that quality should be its hallmark Her style reflected many similarities with American entrepreneurship, while other features were unique to the Russian environment, and to herself. Much of her approach can be explained by her bicultural Russian and American background; her leadership style, values, and behavior exhibited a blend of both cultures. These characteristics are analyzed using an integrative framework that recognizes the importance of a quality orientation in all aspects of leadership. The analysis of Olga Kirova's leadership style also takes into account bicultural influences upon her values, ethics, and managerial behavior, and notes a number of similarities and differences from the more traditional Russian leadership style. Conclusions and recommendations are presented about the utility of the framework in a Russian setting, and its value in evaluating leadership styles of potential Russian business partners.

Details

The International Journal of Organizational Analysis, vol. 5 no. 3
Type: Research Article
ISSN: 1055-3185

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Article
Publication date: 1 May 1993

Sheila M. Puffer

Management education is a booming business in Russia these days,with more than 1,000 business schools and training centres having beenestablished in the past couple of…

Abstract

Management education is a booming business in Russia these days, with more than 1,000 business schools and training centres having been established in the past couple of years in Moscow alone. Focuses on the way management education is evolving in Russia. First presents an overview of the management education system that existed during the communist period as background. Follows with a discussion of how political, social and economic changes have influenced management education since 1988. Next presents the latest developments in management education. Topics include the types of business schools which have been created, as well as the characteristics of their faculty, programmes and curricula and teaching methodologies. Concludes with a discussion of the future of management education, and presents a pessimistic and an optimistic scenario of the potential impact of management education on the economy, politics and society in the new Russia.

Details

Journal of Management Development, vol. 12 no. 5
Type: Research Article
ISSN: 0262-1711

Keywords

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Book part
Publication date: 9 August 2016

Günter K. Stahl, Christof Miska, Sheila M. Puffer and Daniel J. McCarthy

Highly publicized scandals and increased stakeholder activism for sustainable development have resulted in calls for more responsible global leadership. At the same time…

Abstract

Highly publicized scandals and increased stakeholder activism for sustainable development have resulted in calls for more responsible global leadership. At the same time, emerging economies characterized by weak institutions, political instability, and a shaky rule of law have gained in importance for global business. Under the lens of responsible global leadership, we highlight the challenges that global leaders face in addressing the needs of diverse, cross-boundary stakeholders, with a particular focus on Western multinational enterprises (MNEs) doing business in emerging markets. We identify three prototypical approaches that MNEs and their leaders take in responding to calls for responsible global leadership, focusing on the tensions and possible trade-offs between globally integrated and locally adapted approaches. We discuss the implications in view of managerial decision making and behavior and offer recommendations for how organizations may promote responsible global leadership.

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Article
Publication date: 1 March 2013

Doren Chadee and Banjo Roxas

Following the demise of the Soviet Union in 1992, Russia undertook major institutional and market‐oriented reforms to enhance the competitive advantage of domestic…

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Abstract

Purpose

Following the demise of the Soviet Union in 1992, Russia undertook major institutional and market‐oriented reforms to enhance the competitive advantage of domestic enterprises. Although Russia has experienced rapid growth over the last two decades, the extent to which institutions in Russia impact on firm innovation and performance remains poorly understood due to a lack of research on the subject. This paper seeks to contribute to the literature on the competitiveness of Russian firms by focussing specifically on the extent to which the state of the regulatory quality, rule of law, and corruption affect the innovation capacity and performance of firms in Russia.

Design/methodology/approach

The study uses structural equation modelling and data from a large‐scale firm level survey (n=787) of firms in Russia undertaken by the World Bank in 2009. It investigates the direct and indirect perceptions of respondents of the effects the current institutional environment has on the innovation capacity and performance of their respective organisations.

Findings

The results show that regulatory quality, rule of law and corruption have strong direct and negative impacts on both the innovation capacity and performance of firms, and that innovation capacity strongly mediates the effects of institutions on firm performance. The results suggest that the current state of the regulatory quality, rule of law and corruption in Russia inhibit firm innovation and their resulting performance.

Research limitations/implications

The findings should be interpreted with caution to the extent that the study is limited to only three elements of the formal institutional environment and does not take into consideration the role of informal institutions. These two limitations present avenues for future research.

Originality/value

The study is one of the first to provide empirical evidence based on a large‐scale survey of the extent to which formal institutions inhibit innovation and firm performance in Russia, and provides valuable guidance to business policy‐makers in Russia on possible avenues for enhancing the overall competitiveness of Russian firms.

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: 1 March 2013

Daniel J. McCarthy, Sheila M. Puffer and Snejina Michailova

The purpose of this article is to analyze the initial public offerings (IPOs) of Russian companies in the context of the country's investment attractiveness and the…

Abstract

Purpose

The purpose of this article is to analyze the initial public offerings (IPOs) of Russian companies in the context of the country's investment attractiveness and the readiness of its companies to list on stock exchanges, domestically and/or internationally. The analysis takes a balanced approach. It recognizes the positive aspects from the development of Russia's stock markets and the launched and planned IPOs of Russian companies, but underscores reasons for caution in assessing this developing situation, emphasizing the need to maintain a critical perspective. The article is intended to help determine, in the sphere of IPOs at least, whether Russia is currently, or is on the road to becoming, as solid as a BRIC.

Design/methodology/approach

Drawing upon publicly available material from English‐ and Russian‐language sources, the authors discuss the development of the two Russian stock exchanges and analyze the progress that Russian companies have made in successfully completing IPOs on Russian and foreign stock exchanges. The paper also analyzes the barriers faced by Russian companies in launching IPOs and/or attracting investment, including global factors, country‐level conditions, and individual firm characteristics.

Findings

The results of the analysis indicate that the Russian stock exchanges have developed reasonably well over the two decades since perestroika. Correspondingly, a substantial number of Russian companies have mounted successful IPOs not only on the Russian stock exchanges but also on international exchanges, particularly the London Stock Exchange. Yet the number of successful IPOs relative to the number of planned IPOs has been much smaller than the global average. The latter finding is attributed to Russia's particular investment problems, which extend beyond global economic forces, specifically the country‐level and firm‐specific factors, both of which heighten the risk for investors.

Originality/value

The authors' review of the literature has uncovered no journal articles covering the circumstances surrounding the IPOs of Russian firms. Additionally, the available sources seldom provide a balanced view, much less a critical view of the IPO landscape in the context of Russia's overall circumstances, particularly risk. Thus, this article, with its critical but balanced perspective, allows for a relatively objective analysis for theorists as well as investors as they approach the topic of Russian company IPOs, domestically or internationally.

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: 1 January 1994

Women in Management Review Volume 8 No. 7 of this journal contains four articles of interest. In the first, entitled “Women Managers in the Former USSR: A Case of ”Too…

Abstract

Women in Management Review Volume 8 No. 7 of this journal contains four articles of interest. In the first, entitled “Women Managers in the Former USSR: A Case of ”Too Much Equality?“” Sheila M. Puffer discusses the conditions experienced by women in the former USSR who are aspiring to or are currently occupying managerial positions. Soviet women feel the pressure of two societal forces: they are expected to work as well as to be the primary person responsible for home and family. Many complain: “We have too much equality”. Previews the statistics on women in the labour force in the former USSR, and examines seven factors affecting Soviet women's access to managerial positions: (1) the perception of management as a masculine domain, (2) cultural constraints on women's roles, (3) women's roles in family life, (4) the stage of the country's economic development, (5) social policy, (6) access to higher education and (7) organisational context. Concludes with an assessment of the prospects for Soviet women in managerial positions.

Details

Equal Opportunities International, vol. 13 no. 1/2
Type: Research Article
ISSN: 0261-0159

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Article
Publication date: 1 March 2013

Snejina Michailova, Daniel J. McCarthy and Sheila M. Puffer

This introductory paper aims to outline the reasons for optimism as well as for skepticism in regard to Russia's position in the group of BRIC nations and in the global economy.

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1540

Abstract

Purpose

This introductory paper aims to outline the reasons for optimism as well as for skepticism in regard to Russia's position in the group of BRIC nations and in the global economy.

Design/methodology/approach

The paper presents a brief overview of developments in Russia. This discussion serves as a contextual introduction to this special issue by embracing some of the common themes elaborated in the other papers that are featured in the issue.

Findings

The paper takes a balanced perspective by discussing both positive and negative trends in Russia's development.

Originality/value

The paper sets the context in which the other papers that comprise this special issue can be situated.

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: 1 March 2013

Nigel Holden and Vlad Vaiman

The purpose of this paper is to supply insights into talent management (TM) in Russia in the light of Soviet experience and the contemporary officially sanctioned…

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2093

Abstract

Purpose

The purpose of this paper is to supply insights into talent management (TM) in Russia in the light of Soviet experience and the contemporary officially sanctioned business‐antagonistic political culture.

Design/methodology/approach

A diachronic approach, whereby a key dictum of Karl Marx which underlays Soviet thinking and methods is contextualized and applied to post‐communist Russia, and TM practice in Russian firms and foreign firms in Russia is contrasted.

Findings

A key finding is that there is seemingly greater value placed on Russian employees' talents by foreign companies. Six influential factors are identified which give Russian‐style TM a dysfunctional character: Russia's default position (i.e. instinctive gravitation to authoritarian rule), mistrust of institutions, entrenched “bossdom”, persistence of “Soviet mental software”, negative selection, and limited tradition of empowerment.

Research limitations/implications

The paper highlights needs for: comparative empirical studies, contrasting Russian firms' and foreign firms' understanding and application of TM; investigation into the relationship of Russian‐style TM and career progression in Russian companies; and studies into contrasting ways of transferring TM concepts and practices by Western firms.

Practical implications

Foreign firms must be prepared to engage with Russia's prevailing officially sanctioned business‐antagonistic, occasionally xenophobic political culture.

Originality/value

The paper demonstrates how engagement with contemporary Russia for management research purposes requires a deep appreciation of the Soviet period and the complexities of its legacy and judicious use of Russian‐language material adds credibility.

Details

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

Keywords

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