Russian Direct Investments in Poland

SUMMARY

The article describes the expansion of the Russian direct investments in Poland, especially in the oil sector, illustrated with an example of Lukoil. Apart from the capital transfer, the company contributed to long-term sustainable economic development by implementing environmentally friendly production technologies. However, corruption and political involvement related to the expansion of the Russian investments in the strategic assets had negative impact on the perception of Russian investments in Poland.     

Yukos' Stake in Slovak Transpetrol

SUMMARY

In 2002, Yukos was the ideal investor for Slovak Transpetrol, as Yukos was one of the Russia's largest oil producers, and hence had enough oil to fill Transpetrol's pipelines. Just as important, Yukos was the standard-bearer for Russia's more transparent, well-managed oil sector. Unlike some Russian energy companies, Yukos' conduct never raised suspicions that it was acting as an agent for the Russian State in its former empire. Nevertheless, the situation at the beginning of 2005 is different from 2002. Yukos' forthcoming bankruptcy negates all those advantages because of which Yukos was welcomed as the strategic investor and leaves the Slovak Government with a lot of additional problems. For any decision that the Slovak Government would like to undertake, the agreement of the Russian side is necessary. No swift resolution is likely. Important decisions about the future of the respective oil industry may be made in Moscow rather than in Bratislava.     

An Overview of Russia's Largest Corporations Abroad

SUMMARY

Russian outward foreign direct investments have grown rapidly during the past few years. The natural-resource based companies have been the main drivers of the international growth of the Russian economy. Whereas the leading companies in oil, gas, and metal industries already rank among the top global players, the manufacturing and telecommunication industries are increasingly catching up and seeking for growth outside the Russian borders. The current article seeks to provide an overview of the international activities of the leading Russian companies in several industrial sectors with additional policy conclusions regarding the internationalisation patterns of Russian enterprises.     

Hindering or enabling structural social capital to enhance buyer performance? The role of relational social capital at two levels in China

Purpose: In its cognitive, relational, and structural forms, social capital has been identi?ed as a powerful strategic tool. However, prior empirical studies focus only on the direct effect of various dimensions of social capital and address relational social capital at either a dyadic level or a network level. Drawing on the social capital theory and social network theory, this study fills the above-mentioned gaps by examining the role of structural and relational social capital on performance through exploring direct and interaction effects simultaneously and revealing the moderating effect of relational social capital at the dyadic and network levels (including business ties and political ties) simultaneously.

Methodology/Approach: Based on data for 393 distributors from China, a moderated regression analysis is used to test the hypotheses.

Findings: The empirical test generally supports the hypotheses and indicates that the value of structural social capital is conditional on both curvilinear and linear moderating effects of relational social capital: the moderating effects of business ties on the structural social capital–buyer performance relationship is inverted U-shaped, while the moderating effects of relational social capital at the dyadic level and political ties on the structural social capital–buyer performance relationship is positive.

Research Implications: This study incorporates all three dimensions of social capital, represents one of the first attempts to examine the interplay between structural and relational social capital in emerging economies, explores relational social capital at the dyadic and network levels simultaneously, and responses to the fact that buyer–supplier relationships (BSRs) are embedded within a larger context of social networks. By addressing these issues, this study sheds new light on the individual and joint impact of various dimensions of social capital and provides new evidence on both the positive and negative aspects of social capital in a single model.

Practical Implications: The results provide important implications for managers in addressing social capital in an emerging economy. In order to improve performance, managers should first encourage and foster frequent, diverse, scarce, and high-quality information exchange and interactions to accumulate structural social capital. Additionally, managers should not only emphasize relational social capital building and development in BSRs, but also pay attention to the cultivation of relational social capital among the business network. They should acknowledge the persistent positive effect of political ties and the potential negative effect of business ties.

Originality/Value/Contribution: First, few studies examine both the individual and synergetic effects of various dimensions of social capital in a single model or explicitly explore relational social capital in a dyadic relationship and deeply consider it at the network level in a single model. This study addresses these issues.     

A Survey of Capital Budgeting Techniques in the Public and Private Sectors of a Less Developed Country (LDC)

ABSTRACT

This study surveys the capital budgeting practice in private and commercially-oriented public sector enterprises in the Sudan, an African Less Developed Country (LDC). The study attempts to fill a gap in the existing literature by documenting the capital budgeting practice in an LDC where the economic environment is different than the developed and developing counterparts and where public sector still plays a major role in the economy.

The study found a sizable number of commercially-oriented public corporations that do not use capital budgeting techniques in their capital investment decisions while the majority of private sector companies use these methods. Among the corporations that use capital budgeting methods, both in the public and private sector, the payback method (PB) is the most widely used method, followed by the Internal Rate of Return (IRR) and Net Present Value (NPV) in the private sector and the public sector respectively.

The study also revealed additional factors such as cost, size, quality, experience and hard currency requirements that affect the capital budgeting process in both sectors. However, there are differences in the level of importance of these factors between the two sectors.     

Employee Turnover in International Brand Hotels in Russia: A Comparison of Nationals and Foreign Nationals

ABSTRACT

This empirical study tests the relations between employee turnover and the organizational dimensions of service climate, comparing nationals and foreign nationals in the international brand Russian hotel industry. This study extends the geographic scope of employee turnover to the undertested Russian context. Responses were analyzed using a partial least squares model. Results show that nationals’ and foreign nationals’ responses to model variables diverge. Job insecurity directly affects the turnover intentions of Russian nationals, while its effect for foreign nationals was indirect through organizational commitment and job satisfaction. Compounded indirect effects of turnover antecedents and service climate dimensions are also examined and discussed.     

Introduction

SUMMARY

Since the beginning of the transition from centrally planned to market economy, the FDI outflows of the Russian Federation have consistently exceeded the inflows. In the 1990s, most of the outflows were of an informal nature, and unregistered in the balance of payments, or misregistered under other items. Since 2003, their recording has improved. However, the question remains: how can a lower-middle income country become a net capital exporter? It is supposed to be the combined result of economic and political factors such as the economic and business environment, still deemed to be difficult. The fact that the ‘oligarchy’ created under the presidency of Boris Yeltsin (1991-1999) continues to control large parts of the privatized natural resources of the country also stimulated capital exporting behavior. With the political changes currently taking place, only a limited increase in the influence of the State is expected to happen. Moreover, the strategic interest of Russian firms to control their vertical value chains through outward FDI is expected to remain in the longer term.     

Value Co-Creation in ICT Services Company: A Case Study of a Cross-Border Acquisition

Abstract

Post-merger and acquisition (M&A) integration is especially important for the services industry, where value co-creation between actors plays a crucial role. This paper is a qualitative single case study of a multinational company (MNE) in information technology (ICT) industry, and the post-acquisition processes of its subsidiary in Russia. The main contribution of this article is the application of a value co-creation view, to the settings of the international business. We also identify the actors and their roles and activities in the value co-creation in the Russian context.     

Cultural Differences Between U.S. and Russian Students

Abstract

The study explores differences in U.S. and Russian national work-related values. Comparing the results obtained using Hofstede's 1994 instrument with earlier, but very limited U.S. and Russian studies, differences in value orientation of U.S. and Russian cultures were found. A comparative examination of value orientations of U.S. (n = 73) and Russian (n = 75) students found differences that may affect international alliances. Despite exposure of Russian students to Western values, their cultural values remained almost totally unchanged. The study upheld cultural divergence. Implications for practice and future research are offered.     

Russian Companies in Old EU Member States

SUMMARY

In Germany small businesses seem to dominate Russian investment activities in number. Larger, export-oriented Russian companies, mostly from the raw materials sector, use Germany as an entry to Europe-primarily to the old EU member statesutilizing its technological and intellectual infrastructure. However, the majority of investment activities are unspecific and insignificant. Driven by market seeking motives, the Russian companies have established primarily representative offices and marketing subsidiaries. The only remarkable exception is Gazprom, which is involved in more specific and significant investments in Germany.     

International Hotel Companies in Russia

Abstract

Existing studies addressing the modal choice in the global hotel industry have discussed to a limited extent the restrictions posed to the choice of entry mode by the local environment, mainly the host government. This paper describes entries of foreign hotels in a market, Russia, in which the local (city) government has an active role in the hotel industry. The study proposes that, in the Russian market, the foreign hoteliers have to take into account the interests of the local governments regardless of the operation mode. On the basis of secondary data collected mainly from industry reports and Russian newspapers, the strategic choices made by the foreign hotel companies can be divided into two categories. First, some hotel chains have brought their brands to the Russian market early, but have made strategic concessions in the mode of entry. Second, there are companies that have stuck to their general strategies and postponed entry to Russia until it could be done with the mode preferred by the company.     

Food Retailing and Supply Chain Linkages in the Russian Federation

Abstract

This paper focuses on the evolution of Russian food retailing and linkages between and among firms in the food supply chain. Intermediation theory is used to develop a conceptual framework. Intermediaries have played an important role throughout the Russian food supply chain fulfilling the function of matching sellers and buyers. Tighter vertical linkages between firms in the Russian food industry are becoming more prevalent, and the roles of intermediaries may be performed by agents acting on behalf of a vertically integrated principal. The food retailing sector in the Russian Federation is evolving to be a source of information from the consumer to upstream firms.     

Three Estonian Companies' Management of the Russian Boycott During the Summer of 2007

ABSTRACT

This article analyzes three Estonian companies' management of the Russian boycott during the summer of 2007. The explorative nature of the study made a case study methodology a suitable research approach. The respondents' statements about the boycott revealed a “business as usual” attitude. This attitude isaccounted for as a sign of preparation for crises that facilitated the respondent companies' management of the boycott. Also, the sanctions appeared to strengthen the relations between the respondent companies and their Russian partners. The boycott was, therefore, not perceived as a major threat to the respondent companies' businesses in Russia.     

Performance and Competitiveness of Latin American Cities: The Human Capital Case

Abstract

Besides the human capital, elements that make Latin American cities competitive include, for instance, their culture or financial maturity. However, the most important challenge for Latin American cities to succeed is how to manage all these variables. The purpose of this study is to identify the contribution of human capital and its relationships and impacts on the performance of Latin American cities. This quantitative, non-experimental, explanatory, correlational, and cross-sectional study observes factors that increase city competitiveness and develop their relationships. The study is based on the Economist Intelligence Unit database of 2012, in which 120 cities were evaluated, particularly contrasting Latin American cities with the top cities in the world and their characteristics. Urban competitiveness in Latin American cities can be predicted partially on the presence of Human Capital. In some instances, we found positive relationships between human capital and the characteristics considered in a city’s performance.     

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.     

To be Involved or Not to be Involved? HRM Competences for Internationalization Process in Russian Companies

Abstract

This paper aims to identify the list of human resource management (HRM) competencies that are crucial for a company during the internationalization process. We focus on the Russian context and investigate the level of human resource (HR) managers’ involvement in the implementation of firm’s internationalization strategy, HRM competencies that facilitate internationalization process of Russian companies, and HR manager’s proficiency level, suitable for these competencies. Based on interviews of 125 HR managers from 110 companies, the study proves that communication competence, HR acumen, and relationship management are the most essential competencies that HR managers should possess. This research demonstrates that, in the field of internationalization there is a shift from more universal models to context-related models in terms of competence importance.     

The Effect of Entering the WTO on the Oil Industry and the Economy of Taiwan

The crude oil price of the world increased two‐fold during 1999–2002. The price of domestic oil products for the same period increased with a smaller percentage, i.e., 27 per cent. This phenomenon could be attributed to Taiwan's oil market liberalisation after 2000 and its entering the WTO since November 2001. According to this study, the effect of entering the WTO itself suppressed the oil price from increase by 15.455 per cent in 2002. It also reduced the inflation rate by 0.74 per cent and increased the economic growth by 0.39 per cent. Nevertheless, entering the WTO also increases the competition in the oil industry, which is a big challenge to the domestic oil refinery sector and the state‐owned Chinese Petroleum Corporation in particular. The price decrease of oil products also increases the demand for oil products and exacerbated air pollution and CO₂ emissions. For minimising the negative impact of entering the WTO on the economy, the Taiwan government has devised a series of preparations in the last decade. Those preparations include a step‐by‐step market liberalisation plan, a strategy taken by the state‐owned CPC, a new taxation implementation and the legislative works such as the Petroleum Act. This experience might be worthwhile for the reference of other economies.     

Testing the Cross-National Applicability of U.S. and Russian Advertising Belief and Attitude Measures

Abstract

Examining the cross-national applicability of advertising measures is becoming increasingly important, especially in rapidly changing countries such as Russia. Therefore, our study's purpose is first to demonstrate recommended procedures for testing the cross-national equivalence of advertising belief and attitude measures. Then, we conduct an initial cross-national comparison of beliefs and attitudes toward advertising in general between student samples from both the U.S. (n=148) and from Russia (n=64). Results indicate that, while Russian respondents felt advertising is more essential, U.S. respondents felt advertising resulted in greater negative social effects. Also, U.S. respondents were more favorable toward the institution of advertising (its purpose and effects), with no differences for the instrument of advertising (its methods and practices). Russian respondents' attitudes toward advertising in general were more favorable than those of U.S. respondents.     

Remittances and FDI Effects on Economic Growth: A VECM and GIRFs for the Case of Albania

ABSTRACT

This paper analyzes the effects of remittances and foreign direct investments (FDI) on economic growth, gross fixed capital formation (GFCF), and inflation in Albania through a vector error correction model. The results show that remittances Granger-cause positively economic growth short- and long-run and negatively inflation, while no significant relationship has been established between remittances and GFCF. The findings support that remittances, apart from affecting economic growth, disinflate the Albanian economy. With respect to FDI, there are signs that inflation Granger-causes negatively FDI, while there appears to be no relationship between FDI, economic growth, and capital formation.     

Enterprise Restructuring and Turnaround Management in Russia

Summary

After the wave of privatization has swept Russia, the crucial stage of enterprise restructuring begins. According to various circulating estimates, about half of large enterprises need to be reorganized if they are to prosper in the new market economy of Russia. Some of other enterprises need to be closed immediately so that they cease to drag the Russian economy down by subtracting value from it. On the other hand, there is evidence of fraudulent bankruptcies orchestrated by Russia's powerful managers and designed to strip existing enterprises of valuable assets which are then transferred to private pockets illegally or semi-legally. The Russian Government is trying to cope with these challenges under very difficult conditions of inadequate human and financial resources, unclear market structures (e.g., financial-industrial groups), underdeveloped markets for assets, and social-political pressures to maintain status quo which is not sustainable in the longer term. Legislative and other actions need to be taken to adopt decentralized, imaginative solutions which can bring results under Russia's particular circumstances. No ready-made solutions exist but the Russian Government sees quite a lot of good analogies in the new German Lacnder. Other potential solutions, like debt-for-equity swaps, vulture funds, etc., stem from the Anglo-Saxon or American traditions. All these solutions should be considered carefully. Some of them should be used domestically; others should give Western capital opportunities to assist in the enterprise restructuring and other transition processes in Russia.