Entry mode decisions : The effects of corruption and weak law enforcement on foreign manufacturing SMEs in post-communist Russia

Abstract

Purpose

The purpose of this paper is to examine whether political elements affect entry mode decisions of foreign small- to medium-sized manufacturing enterprises (SMMEs) into post-communist Russia.

Design/methodology/approach

The paper employs a qualitative research technique. The data were collected using confidential, semi-structured face-to-face interviews.

Findings

Smaller manufacturers are more sensitive to the political environment. More specifically, during face-to-face interview, corruption and ineffective law enforcement were found to be the factors of significant concern to SMMEs in Russia.

Research limitations/implications

The research on sensitive topics has limitations largely due to possible political implications for firms operating in Russia.

Practical implications

This study on Russia is significant particularly for foreign small and medium enterprises, it will also raise concerns for firms entry modes into emerging markets of former USSR members.

Originality/value

The paper presents findings that are based on primary sources – interviews with foreign firms currently conducting business in Russia. The research findings will be a valuable source of information to contemporary firms conducting feasibility studies with a view to doing business in Russia. In addition, this study contributes to the limited body of research knowledge on the business environment in Russia and the emerging markets of former USSR members.

Citation

Kouznetsov, A., Dass, M. and Schmidt, P. (2014), "Entry mode decisions : The effects of corruption and weak law enforcement on foreign manufacturing SMEs in post-communist Russia", Baltic Journal of Management, Vol. 9 No. 3, pp. 277-293. https://doi.org/10.1108/BJM-06-2013-0104