Conditions in Russia and Their Effect . . . .

Kouznetsov and Jones

CONDITIONS IN RUSSIA AND THEIR EFFECTS ON ENTRY
MODE DECISIONS OF MULTINATIONAL
MANUFACTURING ENTERPRISES:
A QUALITATIVE STUDY IDENTIFYING ISSUES FOR
FURTHER RESEARCH IN THE AREA OF COUNTRY
CONDITIONS AND THEIR IMPACT ON ENTRY MODE
ALEX KOUZNETSOV, Melbourne Institute of Technology
ASHELEY JONES, Melbourne Institute of Technology
This study examines entry modes employed by foreign multinational manufacturing enterprises
(MMEs) when entering Russia. This exploratory study focuses on country-specific conditions associated with the chosen entry mode - an important component in the consideration of overall entry strategy. Information from field studies representing 18 manufacturers – 10 directly manufacturing in Russia and 8 selling their products in Russia via representative/sales offices – was obtained by means of personal interviews with senior management in Moscow and constituted the primary qualitative data. Research questions are posed for further examination of conditions in
Russia and the effects of such conditions on the entry mode decisions of MMEs. The study finds economic conditions to be the only important determinant of entry modes for large multinational manufacturing companies investing in Russia with other country factors playing no role in their choices. INTRODUCTION
With the expansion of global business activity, the ability to analyze the key characteristics of potential host countries becomes increasingly important. The key to successful international market entry is an understanding of differences in conditions that exist when comparing one market to another. While developed countries still remain the major destination for foreign direct investment (FDI), emerging economies have become increasingly important locations for MMEs’ production. Changes