Responsible Entrepreneurship in Developing Countries: Understanding the Realities and Complexities

Developing countries have recently experienced a burgeoning of small-scale individual entrepreneurs (SIEs) – who range from petty traders to personal service workers like small street vendors, barbers and owners of small shops – as a result of market-based reforms, rapid urbanisation, unemployment, landlessness and poverty. While SIEs form a major part of the informal workforce in developing countries and contribute significantly to economic growth, their potential is being undermined when they engage in irresponsible and deceptive business practices such as overpricing, sale of underweight or substandard products, or attempts to hoard goods, to name a few. Despite the growing interest in corporate social responsibility (CSR) initiatives of small businesses in developing countries, the SIEs have received almost no attention. To address this void in the literature, we explore the reasons for the less than optimal level of social responsibility demonstrated by some SIEs in developing countries. We do so by drawing upon the existing literature to develop a comprehensive framework of social responsibility of SIEs highlighting their unique characteristics and the different contextual factors that they encounter in developing countries. Based on this framework, we then present a set of propositions specifying the influence of these contextual factors such as business environment, cultural traditions, socio-economic conditions, and both international and domestic pressures on the business practices of SIEs. The framework offers an explanation for the lack of responsible entrepreneurship of SIEs and has important implications for promoting sustainable business practices in developing countries where businesses are striving hard to survive and compete.     

Knowledge transfer between self-initiated expatriates and their organizations: Research propositions for managing SIEs

Knowledge management is increasingly recognized as a key aspect of international business and management. This paper offers research avenues for investigating knowledge transfer between self-initiated expatriates (SIEs) and their employer organizations. Building on the existing literature on expatriation and knowledge transfer, it offers a series of research propositions. It illustrates the knowledge transfer process in three phases: opportunity seeking, knowledge sharing, and knowledge application. We suggest that different characteristics of SIEs and their organizations can influence the knowledge transfer process. Furthermore, we advance that SIEs may be a source of sustained competitive advantage to their companies. Several implications for future empirical research are also discussed and the paper concludes with practical implications for SIE talent management.     

Person-environment fit and emotional control: Assigned expatriates vs. self-initiated expatriates

Studies exploring the difference of assigned expatriates (AEs) and self-initiated expatriates (SIEs) have recently started to emerge. However, so far few results have been connected to theory developed in this area. In the current study, we use responses from 324 business expatriates in China and take departure in the two elements of the person-environment fit theory, supplementary fit and complementary fit. We use the supplementary fit element of this theory to explain why emotional control (low dispositional anger and high self-control) increases performance and satisfaction in China. We rely on the complementary element of person-environment fit theory for understanding why this effect may vary between AEs and SIEs. Our argument is that as opposed to SIEs, AEs could add contact and knowledge from the parent company to the local organization thus complementing it. Our findings, with regard to supplementary fit, show that self-control has a positive association with both job performance and job satisfaction while trait anger has a negative effect on job satisfaction. In relation to complementary fit, also as expected, we found a buffering moderation effect of being AE, meaning that the negative effect of their trait anger on job satisfaction was diminished for this group.     

Ethical behavior perceptions in Russia: Do ethics-related programs and individual characteristics matter?

This paper aims to analyze how individual differences and ethics-related programs predict Russian business students and working adults' perception of personal business ethics. This research evaluates the business ethics perceptions based on surveys of 1,207 managers, employees, and business students in Russia. This study finds the significant correlations between individual differences (gender, age, education level, and management experience), ethics-related programs (business ethics courses taught in universities, ethics and diversity professional development training), and personal business ethics' perceptions of Russian business students and working adults. We also find that individual differences moderate the relationship between ethics-related programs and how the personal business ethics of Russian business students and working adults are perceived. These findings advance current literature by revealing that age moderates the relationship between ethics-related programs (formal ethic courses, ethics, and diversity trainings) and personal ethical behavior perceptions of working adults and business students in Russia. Our study found that gender had a significant positive moderating effect on relationship of organizational code of ethics, formal ethic courses, and diversity professional development with personal ethical behavior perceptions. The relation between personal ethical behavior perceptions and the presence of an organizational code of ethics was negative and marginally moderated by age and managerial experience. This study contributes to business ethics research by deepening the understanding of the impact of individual differences on the relationship between ethics-related programs and personal business ethics' perceptions.     

Entering and Participating in the Turbulent Russian Market

Abstract

This paper discusses how foreign firms enter and operate in a turbulent Russian market. Following the internationalisation process model, this paper is based on the assumption that current business activities are a driving force of internationalisation. Since planning in highly turbulent and uncertain markets is difficult, the IP model with its emphasis on gradual learning provides a good starting point. When foreign markets are assumed to be rather static, experiential knowledge can be easily utilised in subsequent actions. However, the Russian market is highly turbulent, which questions the value of experiential knowledge and seems to challenge the validity of the IP-model. In an attempt to address this problem, the paper suggests to deconstruct the concept of current business activities, so that it becomes more powerful in explaining the behaviour of firms in the markets characterised by high turbulence. Drawing on the Austrian Economics, this paper suggests that current business activities in a foreign market can conveniently be seen as consisting of two fundamental processes-search and discovery. The search process occurs when a firm already has knowledge about what it is looking for, but has to search for it. The discovery process initiates as searching for something known, but the turbulence turns it into a discovery of something else. Since the market conditions change rapidly and the knowledge is imperfectly distributed, discovery is an essential part of the firm's business activities in the Russian market. In the end, the paper discusses the implications of search and discovery processes for firms both entering and participating in the Russian market. Finally, it advances relationship as a mechanism to handle the market turbulence.     

Work‐related attitudes and job characteristics of expatriates in Saudi Arabia

This study investigates the influence of job satisfaction, job autonomy, job variety, task identity, feedback, and employee demographics on organizational commitment among self‐initiated expatriates (SIEs) in Saudi Arabia. An examination of a sample of 481 SIEs reveals that only job satisfaction and job variety are related to organizational commitment. The rest—job characteristics and demographics—are unrelated to organizational commitment. The findings and the anomalies of the findings are discussed. © 2001 John Wiley & Sons, Inc.     

The Ukraine/Russia conflict: Geopolitical and international business strategies

The Ukraine and Russian conflict is one of the most pressing current global business issues. It has become a political and social issue that is influencing business practices around the world. While the topic is popular in the mainstream business press, there has been relatively little academic work on the topic. To address this gap, this article discusses the impact of the conflict on international business in terms of the perception by society about Ukrainian or Russian business activities. This means highlighting how a conflict can involve direct military intervention but also social interaction. This article reveals that there are many effects on global business stemming from the Ukraine–Russian conflict many of which are currently known, but others will be known in the future. Managerial implications are stated in the article that highlights the cultural and social impact of the crisis as well as future research suggestions for international business researchers that stress the importance of the conflict.     

Business Ethics in Russia

Most of the features of modern Russian business are transient, determined by the transitional character of the Russian economy and drastic changes in the social structure, ideology, and consciousness of Russian society in general. There are three main normative experiences in the traditions of Russian business: a) the experience of pre-Revolutionary business, specifically developed and practiced by the merchants of the old-believers extraction; b) the experience of socialist economy, which was more or less oriented to the public good and presupposed selfless aspirations by the economic agents; c) the experience of legally and administratively constrained private business and illegal shadow business, which expected businessmen to be vigorous, industrious and enterprising. The process of privatization was developed under the aegis of state, specifically the state bureaucracy. The influence of changes in the social-economic system has been ambivalent for social morals. However, the reforms could stimulate their improvement. The recent development in the cultural environment of business testify to the emerging space of civilized business, which manifests that it is practically useful for businessmen to be ethical.     

The role of social networks and institutions in the internationalization of Russian entrepreneurial firms: Do they matter?

Drawing upon network theory and institutional theory, this paper examines the influence of networks on the internationalization of Russian entrepreneurial firms. Our case analysis suggests that within the context of the Russian environment, networks play a much less important role in the internationalization process than it is usually assumed in the literature. For the Russian entrepreneurial firms examined in our study, the most important factor in their internationalization was their engagement in honest business practices that established trust and commitment in their relationships with international business partners. This study underscores the importance of the institutional context of an entrepreneurial firm’s country.     

Joint Ventures in Russia: The View from the Russians

This article, detailing research on Russian joint ventures with foreign partners far to the south east of the capital, focuses on Russian business people who are not playing the GKO market or trying to stash money away in Swiss bank accounts. The findings of this research suggest that some Russians may be growing as disenchanted with the experience of doing business with foreigners as some foreigners have become at doing business with Russians.     

Joint Ventures in Russia

There is an extensive literature on the role of joint ventures in international business. Most of this has focused on the involvement of multinational enterprises (MNEs) in establishing joint ventures in developing countries. Recent political and economic reforms in Eastern Europe have focused attention on joint venture opportunities in ex-centrally planned economies, including opportunities for small and medium-sized enterprises. This paper examines the experiences of two small, family owned Scottish companies in establishing joint ventures in the largest of the East European countries, the Russian Federation. The cases highlight the important strategic and managerial issues involved in planning, negotiating and implementing joint ventures with Russian partners. Sensitivity to the business development needs of the host organization, the establishment of good personal relationships and flexibility are crucial to the joint venture process.     

Comparing Attitudes Toward Ethical Dilemmas in Small Business

Abstract

This paper presents a comparative analysis of attitudes between Russian and U.S. undergraduate students on ethical issues in managing Russian small firms engaged in business transactions with U.S. firms. Based on the real life situations, Russian and American respondents were asked to select decision alternatives dealing with ethical dilemmas. Significant differences were found between the two groups. Russians do not recognize significant differences between various alternatives, despite the disparity in the severity of these alternatives for resolving business problems. Russians, compared to Americans, tend to prefer more forceful decision alternatives resorting to business practices that would be considered unethical in the U.S. This is attributable to differences in the countries' history, political, legal, and cultural environment. The transitional nature of the Russian economy affects decision-making and business ethics.     

Russian Gas and Oil Giants Conquer Markets in the West

Abstract

Russian firms are not integrated to the global business world solely via investments from the West to the East but also through investments from Russia to other countries. This article proves that some significant Russian corporations have already taken root in Western economies, including the US market. The first wave of the Russian companies in the West increases the pressure to analyze them as potential partners or competitors. This article uses a REM model to describe the foreign operations of the two biggest Russian corporations, Gazprom and LUKoil. The fast-expanding activities of Russian firms abroad signify that a new era in international business has begun on the eve of this millennium.     

Russian Companies in the Forthcoming EU Member States

SUMMARY

If serious problems of business ethics plague and continue to plague the way business is conducted within Russia, the internationalization of Russian companies puts forward the problem of what business culture they bring along and what impact it may have on the recipient country. This article focuses on the case of Lukoil investments and operations in Bulgaria. It describes the main factors forming the contemporary Russian business culture and highlights the negative features that could be feared from the point of view of the country receiving Russian investments. Later the paper tries to analyze the operations of Lukoil in Bulgaria and investigate if there is reason to suspect a negative business culture spillover.     

The Role of Language in the Communication Process Between Business and Government: Evidence from Russian Firms

Abstract

The paper investigates how language facilitates communication process between government and business. We use Russian context to show barriers and challenges of using language in official communication between governmental authorities and Russian companies. In our work, we demonstrate how language may produce employee’s misunderstanding and discuss typical sources of ineffective usage of language. The results indicate that problematic issues of both linguistic and non-linguistic nature can lead to serious implications for successful communication between government and business in Russia. We found that documentations’ complexity, which is perceived as such due to a complicated subject area they belong to (legal, tax, etc.) and language insufficiency applied are most likely to raise multiple problems related to government’s communication with business.     

As Different as Chalk and Cheese? The Relationship Between Entrepreneurial Orientation and SMEs’ Growth: Evidence from Russia and Finland

The purpose of this study is to investigate the relationship between entrepreneurial orientation (EO) and firm growth and the moderating role of business environment for Russian and Finnish small- and medium-sized enterprises (SMEs). For hypothesis testing, structural equation modeling is applied to the data set of 104 Russian and 117 Finnish privately owned SMEs. Results show that while in the Finnish market context EO dimensions are directly associated with firm growth, in the emerging Russian market the relationship is moderated by the dynamic and hostile environment. The results also provide evidence of the nature of EO for SMEs operating in Russia.     

Enhancing knowledge sharing from self-initiated expatriates in Vietnam: the role of internal marketing and work-role adjustment in an emerging economy

This study is an empirical exploration of whether internal marketing activities can positively influence self-initiated expatriate’s (SIE’s) work-role adjustment and knowledge sharing. Leader–member exchange is considered in developing a moderated-mediation model. Using data collected from 140 SIEs in Vietnam, the findings support the mediation model and specifically indicate that internal marketing activities can increase the degree of work-role adjustment which, in turn, influences SIEs’ knowledge-sharing. However, moderated-mediation analyses fail to support the role played by leaders in the implication of internal marketing activities. This model is intended to present an agenda for future research. Some theoretical and practical implications are also discussed.     

Big business in the Russian empire: A European perspective

This paper presents an inventory of the largest private companies in the Russian Empire in 1914, and their comparison to the largest contemporary British, German, and French companies identified by Youssef Cassis as ‘big business’. It focusses on three questions. First, how big was big business in Russia from a European perspective? Second, how did the structure of big business in Russia compare to that of other large European economies? And finally, how did foreign entrepreneurship appear in Russian big business? Drawing on new empirical evidence, it contributes to the discussion on the ‘backward’ and ‘peripheral’ character of the Russian economy before the First World War.     

CSR-Based Political Legitimacy Strategy: Managing the State by Doing Good in China and Russia

The state is a key driver of corporate social responsibility across developed and developing countries. But the existing research provides comparatively little knowledge about: (1) how companies strategically manage the relationship with the state through corporate social responsibility (CSR); (2) how this strategy takes shape under the influence of political institutions. Understanding these questions captures a realistic picture of how a company applies CSR to interacting with the state, particularly in countries where the state relationship is critical to the business operation. This article draws on political legitimacy as a useful concept to directly address both strategic and politically embedded natures of CSR. This work extends the currently under-specified political implication of the strategic view of CSR and provides fresh insights to the political legitimacy research by specifying a typology of CSR-based legitimacy strategies and its contextual variation. China and Russia are the focal settings. A qualitative analysis of business?Cstate interaction cases is done using a database that contains the majority of CSR reports published in Chinese and Russian as the end of 2009. As a result, this paper identifies four qualitatively different types of CSR-based political legitimacy strategies and reveals how the adoption of these strategies differs across Chinese companies, Russian companies, and multinational corporations.     

Balancing State, Market and Social Justice: Russian Experiences and Lessons to Learn

This article deals with the relations in the triangle state–society–business in modern Russia. It is shown against Russian historical background, that the absolutist state in this country could never be identified with the society and these relations were shaped under its strong domination. The ethics of rule-following characteristic for market economy in general did not develop in Russia. The breakdown of communist Russia and market reforms proceeding since 1992 did not change this situation significantly. The period of political alliance between big business and government was followed by restoration of state dominance in somewhat modified forms. Both periods were characterized by corruption, which contrary to Putin’s slogans, increases in Russia. In the article I show the evolution of Putin administration’s policy which changed from emphasizing and improving legal institutions to selective use of legal norms depending on personal loyalty. Main forms of state exploitation of Russian business are described. The conclusion is that Russian experience of balancing state and market should be called negative.Dr. Vladimir Avtonomov is Professor and Dean of Economic Faculty at State University-Higher School of Economics in Moscow. He is also Head of Department in the Institute of World Economy and International Relations of Russian Academy of Sciences. Among his works are two books on model of man in economics, textbooks in history of economic thought and introductory economics for high-schools. He is a corresponding member of Russian Academy of Sciences and a member of Council of European Society for History of Economic Thought (ESHET).