Developing International Business Relationships in a Russian Context

Abstract

The collapse of the former Soviet Union has opened up a wealth of business opportunities for companies seeking new markets in the Russian Federation. Despite this, firms intending to do business in Russia have found themselves hampered by cultural differences in business practices and expectations. As Russia integrates into the global economy, understanding such practices and the managerial mindset of business people is crucial for managers who hope to navigate Russia's complex markets. This study draws on the trust literature and adopts quantitative tools to deconstruct the Russian 'Sviazi' system of social capital business networking. We develop a model isolating three dimensions of Sviazi: one an affective or emotional component; the second, a conative component; and the third, a cognitive component. The model provides a useful guide for helping foreign firms to succeed in Russia, while also serving as a basis for further research in the field.

Exporter-importer business relationships: Past empirical research and future directions

“…Network theory rests on the idea that the entire economy consists of interdependent coalitions of organizations that are specialized in certain tasks or skills and connected to each other through activity links, resource ties, and actor bonds (Achrol & Kotler, 1999;Håkansson & Snehota, 2006). Studies drawing on this theory mainly focused on the influence of business network connections on behavioral outcomes in E-I relationships (e.g., commitment, knowledge transfer) (Blankenburg- Holm & Eriksson, 2000;Nordman & Tolstoy, 2014), while some scholars also used this theory to explain the nature of specific network connections in China (guanxi) and in Russia (sviazi) (Berger, Herstein, Silbiger, & Barnes, 2017;Yen & Abosag, 2016). Other less frequent uses of this theory concerned the role of network influence on relationship formation (Ellis, 2000), as well as the link between focal relationship dimensions and management of their broader network (Lindstrand, Eriksson, & Sharma, 2009;Löfgren, 2014).…”

“…This was particularly true when studying relationships with Chinese business partners, where guanxi (i.e., personal connections of business relationships) is the dominant way of doing business (Barnes, Yen, & Zhou, 2011;Mavondo & Rodrigo, 2001;Ling-Yee & Ogunmokun, 2001;Yen, Barnes, & Wang, 2011). Another 5.1% of articles (especially those published recently) dealt with network ties, with the emphasis placed on: (a) the influence of network connections on establishing relationships (Ellis, 2000) and building trust and commitment (Blankenburg-Holm et al, 1996;Blankenburg-Holm & Eriksson, 2000;Havila, Johanson, & Thilenius, 2004); (b) factors driving the usage of customer networks (Lindstrand et al, 2009); and (c) developing measurement scales for network-associated variables (Berger et al, 2017). Another important issue, which, however, received attention only recently is the dark side of the E-I relationship, mainly focusing on the antecedents and outcomes of certain negative aspects of E-I relationships, including contract violation, infidelity, and betrayal (Griffith & Zhao, 2015;Leonidou, Aykol, Fotiadis, Christodoulides, & Zeriti, 2017).…”

“…Moreover, it would be useful to draw a distinction between behavioral constructs operating at the inter-organizational level (e.g., organizational trust), as opposed to those found at the inter-personal level (e.g., personal trust) and try to find possible links. Furthermore, it is important to take into consideration various cultural-specific constructs associated with the way business relationships are conducted in different parts of the world, such as 'guanxi' for Chinese (Yen et al 2011), 'sviazi' for Russians (Berger et al, 2017), and 'wasta' for Arabs (Berger, Silbiger, Herstein, & Barnes, 2015), and try to draw differences/similarities with Western relationships. Hofstede's (1991) dimensions (i.e., individualism/collectivism, masculinity/femininity, uncertainty avoidance, power distance, long-term orientation) which may explain variations in power dynamics, relational distance, and relationship formalization.…”

Doing favors in the Arab world

“…Ahlstrom & Bruton, 2006;Khakhar & Rammal, 2013). Some authors have reached similar conclusions, that social business networks and connections with government institutions permeate emerging economies more strongly than more developed economies, using reciprocity and even bribes to promote exchange (Puffer et al, 2013;Bu & Roy, 2015;Song, et al, 2014) view such networks in a more positive light Berger et al, 2017). We believe that informal social networks are in many cases culturally driven, and thus may be seen as a special form of collectivism or solidarity.…”

“…Sviazi is based more on economic reality than tradition and good social behavior, and basically is opportunistic in nature (Greene, 2017). Stemming from a culture in which masses of the population faced centuries of shortage and deprivation of the material necessities of life, in Soviet times Blat was a system of informal agreements, exchanges of services, connections, Party contacts, or black market deals to achieve results or get ahead (Hutchings and Michailova, 2006;Berger et al, 2017). In Soviet times the price of consumer goods was dictated by the state rather than set by the free market which resulted in a consumer goods deficit which in turn often led to corruption.…”