...making a $100 million investment in either Russia or Czech Republic the risk considerations have become critically important in choosing the best option. The risk considerations include evaluation of each nation’s political, economic and legal systems along with the cultural practices, education and skill levels and each countries stage of economic development. The political systems of a country shapes both the economic and legal systems (Hill, 45). These systems are interconnected and play a vital role in making a decision of which country to make an investment in. In evaluating the risks of making the investment in Russia, the most widely discussed risk that is found is the corruption in the country; this remains a major barrier success for businesses in the nation. There is a complex business environment in Russia along with known issues involving bribery. The corruption in the nation leads to a number of problems including non-transparent and inconsistent application of laws and regulations with the weak enforcement of laws and court decisions (Business Anti-Corruption Portal). This isn’t the only area where corruption is a problem in Russia, there is corruption in the area of licensing and permits with multiple inspections and red tape. Intentional and lengthy delays in the procedures for starting a business, getting required permits and licensing are additional risks along with the corruption. It does seem as though the worst corruption lies within the public procurement sector...
Words: 1312 - Pages: 6
...| Russia: PEST Analysis for Foreign Direct Investment | Principal of Finance | Russia: PEST Analysis for Foreign Direct Investment Overview Russia is a large country with a long history extending back to the 12th century AD when it first freed itself from Mongol domination (Russia). Russia’s most relevant historical past is its emergence from Communist rule and the breakup of the Soviet Union under Mikhail Gorbachev in 1991 due to his policies of glasnost and perestroika, or opening and restructuring. Since that period Russia has been defined by a kind of political turmoil that has seen every sort of leader from a, it is said, Vodka imbibing progressive in Boris Yeltsin to a former intelligence officer in the KGB with a black belt in Judo, in Vladimir Putin (Russia). While the political turmoil has unfolded publicly, the business and professional climate has deteriorated from the heady days of the Soviet breakup when foreign enterprises believed the region was ripe for investment and, to some degree, exploitation. The level of corruption has largely dissuaded the full development of foreign investment and is an international concern, not just local to Russia: “the prevalence of corruption and crime in business affairs has been generally recognized as a major cause of concern...”(Taylor, Kazakhov & Thompson par.1). Until Russia is able to solve this unregulated chaos, business in Russia will remain an exercise in risk rather than revenue. Political Many...
Words: 2627 - Pages: 11
...Walmart: Is it Right for Russia? Introduction Walmart is the largest retail in the world and employs over $2.1 million Associates. The company has been revered by some as the #1 retail service provider due to its ability to offer the lowest price to all customers. Walmart’s strategy, due to its large size and purchase power, is the strategy for commanding the low purchase price of merchandise from its suppliers. In turn, the company passes these savings to all customers as a discount retail chain; Save Money, Live Better and EDLP (Everyday Low Price). Walmart is in 57 countries under multiple banners, but is Walmart right for Russia and if so, is Russia right for Walmart? The Russian People The Russian population stands at a 143 million people across multiple districts and is projected to decrease to 140 million (1.6%) by the year end of 2015. The main point associated with the population decrease is that the death rate of the Russian Federation, which holds 85% of the total population, is increasing at a faster pace than the birth rate. There is a slight increase of people that are migrating to Russia, not enough to outweigh the significant population decreases. Poor health conditions due to alcohol consumption (Vodka) have reduced the male life expectancy is 60 years of age. This has caused there to be a starling 10,000 more deaths than births over the last decade. This is 15 years less than other industrialized nations. It has also been reported that the...
Words: 1603 - Pages: 7
...winter games and there is a lot of corruption. The Sochi Olympics is a gigantic construction site where 70,000 workers from every corner of the old Soviet Union dig, lift, pull and churn day and night. I would like to talk about few points about this article, my first point is location, second corruption, and lastly cost. Sochi Olympics was a bad choice of location, I agree with The Economist view, the International Olympic Committee should bring people to another safer place. According to The Economist Sochi an odd choice for the winter games. The place, for the Sochi Olympics game is close to the black sea this is an environment contaminated, this environment can sicken to the people. “Sochi is also worrying”, because to the north Caucasus, a predominantly Muslim part of Russia, had a civil conflict for two decades ago. Sochi is becoming the capital of the Caucasus, former Turkic poorest province, Olympics game should be removed to other place, north Caucasus does not include a nationwide security operation to protect the venue against attack, also the Sochi game need more security, to protect the life of people. The government should be security operation to protect to the place, also everybody who attend to Olympics Game. In addition, In Russia corruption indeed is not a side-effect, here The Economist is right it is a product almost as important as the sporting event itself. Corruption is the key threat to Russia, for this reason the Sochi Olympics...
Words: 648 - Pages: 3
...A comparative study of political, economic and social-cultures issues of the Russia and India Prepared for: Dr. Joe Zhou Peng Submitted: 11 May 2015 Prepared by: Zahara CitraArifin 006 Table of Contents INTRODUCTION 1 Task 1 1.1 Economy of Russia and India 2 Terrorist aspects of globalization 2 1.2 Political System of Russia and India 3 Discrimination against Woman 4 Corruption 4 1.3 Socio-Cultural of Russia and India 5 Hofstede’s Cultural Dimension of Russia and India 5 Written and Unwritten Laws 6 Task 2 2.1 Culture Shock 7 2.2 Cross Cultural Training ...
Words: 2545 - Pages: 11
...chosen market. Orica Mining Services (OMS) is the global market leader in the supply and servicing of commercial explosives and blasting systems to the mining, quarrying and infrastructure sectors. Commercial explosives, initiating systems and Blast-Based Services are its main offerings. The business is run globally with a presence in Australia, Asia, Europe, the former Soviet Union, Africa, the Middle East, North America and Latin America. Mining services contributed to 55% of the 2010 revenues. OMS business activities are guided by three pillars: Page 2 of 8 • Strategy - planning for business growth • Efficiency – productivity improvements and capital management • Culture – having common attitudes, behaviours and ethics. Orica in Russia Russia, the largest country in the world, has always been known for its vast abundance of natural resources including oil, natural gas, coal, timber and...
Words: 1803 - Pages: 8
...Lovisa Björcke 900313-‐0961 Cross-‐Cultural Management Summer Course Assignment 4: Case Study – IKEA: entering Russia Introduction This case study describes IKEA’s entrance on the Russian market and the many obstacles the company was faced with. As IKEA’s Russian country manager Lennart Dahlgren stated; everything that was not assumed to be a problem turned out to be a problem and everything that was assumed to be a problem was in fact not one. IKEA dealt with many problems relating to culture during the launch in Russia but dodged them all surprisingly well. I believe that the most important factor why IKEA could solve these problems was because of their smart way of adapting their concept to the Russian market and because of the company’s strong organizational culture. Below I will present the main problems I have identified and ...
Words: 1536 - Pages: 7
...through openings provided by the transition economy to become a setback to the Russian society and economy. Organized crime disables successful economic reform by influencing important issues such as competition, entrepreneurship, capital flight, the shadow economy, and violence. The major roots of organized crime in Russia go back to the middle of the twenty century. As early as the 1970’s, the Russian mafia had advanced to the status of primary protectors and beneficiaries in the robust Soviet shadow economy. By 1991, organized crime had expanded to form over 700 gangs in the Russian republic alone. This expansion was aided by Perestroika’s, a political movement within the Communist Party, opening up of market opportunities. In Leningrad, as much as ninety percent of the cooperatives produced by the liberal policies of Perestroika were deeply involved with organized crime. Specifically, two characteristics of the USSR were integral in the development of a powerful organized crime syndicate. These were an excessive bureaucratic power and the presence of illegal markets. This excessive bureaucratic power facilitated organized crime by providing a basis for corruption, bribery, shakedowns, and extortion. According to the...
Words: 1239 - Pages: 5
...Country Analysis: Russia MBA Fall 2015 International Management in Sport and Entertainment Table of Contents Country Analysis: Russia 1 Introduction 1 Economic Environment 1 Political and Legal Environment 2 Culture 2 Conclusion 6 Country Analysis: Russia Introduction Russia is the world’s largest nation, covering 6,5 million square miles, with a population of 143 million people recorded in 2014. Russia borders European and Asian countries as well as the Pacific and Arctic oceans. In order to make a decision, concerning the market expansion of an organization into Russia, the economic environment as well as the political and legal environment will be analyzed with a focus on the cultural aspects. Economic Environment Russia is one of the BRICS countries (Brazil, Russia, India, China and South Africa), which are projected to be the fastest growing emerging economies, with a combined GDP of $16 trillion. With a GDP of $2.6 trillion, Russia is a leading exporter of natural gas and oil and is the fifth largest economy in the world. Services are the largest sector of the economy and accounts for 58 percent of the GDP. The most important segments in services include wholesale and retail trade, repair of motor vehicles, motorcycles and personal and household goods. This represents 17 percent of total GDP; public administration, health and education (12 percent); real estate (9 percent) and transport storage and communications (7 percent). Industry contributes...
Words: 1926 - Pages: 8
...the economic theory, the change was for government to consider the ways to set economic purpose and use their strength to direct the economy to try achieving those objectives. The government also followed the trend of selling off business enterprises to private firms in the anticipation that competition and the profit motive will increase their success achieved in the performance. Lastly, it’s the globalization. The increased of international trade and investment have decreased the gap of cultures, technologies and economic decision making. As the globalization carried on, the economies had also become more very much alike. Body The intention of this essay is test the benefits and failures of Russia's transition. The change of Russia shifting from planned to market system has brought many benefits. The graph below shows that the Russia’s GDP has increased throughoutly since 2000. Source : www.tradingeconomics.com (world bank) On the other hand, the productivity was also increasing. It is also a major factor for economic growth. There were evidence to it since middle of 19th century. The economic growth was mushrooming in the 20th century. It was because of the substracted inputs of labor, energy, materials, and land of economic output, and also the broader markets for various outputs. (Dr. Jean-Paul Rodrigue, 1998) The graph below shows the level of productivity has increased. Source : www.tradingeconomics.com...
Words: 1387 - Pages: 6
...of how the society influences life-satisfaction Despite being separated by only one country Russia and Sweden have many differences. Russia is not only almost 40 times the size of Sweden and has a population 15 times larger but how the citizens in the respective countries perceive their society and life situation also differs. Nevertheless, several important similarities can be found too. By comparing three aspects of everyday-life — education, civic engagement and life-satisfaction — differences and similarities between Russia and Sweden will be explored. According to the Organization for Economic co-operation development (OECD), education aids an individual in many ways and is a key-factor to attain life-satisfaction. However, it will be demonstrated that living in a society where the government displays trustworthiness and encourages civic engagement might play a more important role when it comes to a person’s happiness and wellbeing. A high-quality education is beneficial for both the individual and the country (OECD). Educated people are more likely to have well-paid jobs which increase their chances to achieve a social network to rely on and to afford essentials which are important for one’s wellbeing (OECD). The economic development of a country depends on a well-educated population and, in turn, a prosperous society can offer more benefits to their citizens (OECD). Russia and Sweden have equal rates of high school graduates, as much as 91% of the people between 19...
Words: 1034 - Pages: 5
...developed nation like the US, as predicted by International Monetary Fund estimates. Corporate profits incline to grow faster when economic growth is higher. Likewise, US companies have done well in the last 12 months is because of their growth in non-US markets. Emerging markets also prove beneficial to investors as they create diversification as they act differently than developed markets. Emerging Markets Index of Morgan Stanley's consists of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey (Forbes). Russia is one of the booming emerging markets in the East. However, Russia is not always an investor favorite as it is a booming market in global oil and gas demand. Russia has tons of both. It is the world's prominent natural gas producer and exporter and has the 8th largest oil reserves in the world. Russia is considered as a bargain for equity, but that is mostly due to country risk. (Forbes) During the recession in 2008, world markets in developed countries crashed but the emerging markets saved the global economy, mainly Brazil, India and China. The global credit crisis was one of the longest, deepest, and most painful in history. Wall Street icons like Lehman Bros, toppled and required government bailouts. This shocked the global economy and resulted in deep economic recession and even a deeper crisis of confidence. The crisis revealed a new world order in...
Words: 2614 - Pages: 11
...protection of society, deterrent effect, economic injustice of life imprisonment, and act of humanism. However, a large number of countries in the world have refused this type of punishment, in particular, Algeria, Tajikistan, Sri Lanka, Laos, Russia and others. They cite the following reasons: possibility of a miscarriage of justice, absence of addressing the causes of crime, contradiction to the international law standards. In the modern globalized world the international community faced faces with the active development of global problems such as terrorism, drug trafficking, corruption, etc. These problems stimulate the constant debate about the necessity to toughen penalties for dangerous criminals, in particular, people discuss the need for of the death penalty in states, where the law does not provide it as capital punishment. The Russian Federation is one of these states. It is the largest country in the world, and many criminal elements from neighboring less prosperous countries penetrate on its territory, they commit serious crimes in Russia and its citizens also organize or take part in crimes, the most dangerous crimes concern the high level of corruption . In this regard, the discussion on the introduction of the death penalty in Russia is very important. In my opinion, the study of the national peculiarities of this question is very interesting, so let us consider this issue in detail. On the one...
Words: 1679 - Pages: 7
...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...
Words: 6551 - Pages: 27
...APPLICATION OF CAGE DISTANCE FRAMEWORK - AN ANALYSIS OF KENYA AND RUSSIA SUBMITTED BY: YULIA BEREZINA SUBMITTED TO PROF. DANIELE CERRATO MATHIAS KOSKE DAVIDE NICHETTI VANESSA ZERRATE 11TH FEB. 2015 1 Foreign investment can be particularly challenging. In order get it right, the use of tools and evaluations is critical. In this document, based on the CAGE framework, we analyze distances between Russia and Kenya, and assess how they impact business establishment and operations in the latter. One of the most important things to take into account is the culture. We noticed that the two countries have very distinct and diverse cultural dimensions. They do not have a common language i.e. Russia has Russian as it official language while Kenya has English and Swahili, or have any shared ethnicity despite Russia having 185 and Kenya 42 ethnic groups. Religious disparities are also evident in these two economies. The Russians are largely unbelievers with the Russian Orthodox being the dominant religion whereas Kenyans are largely Christians. Despite these differences, the Muslim population in both countries is significantly represented but their marginalization makes them insignificant on an investment front. Finally, the social norms and values in both countries are quite similar, with the similar concepts of family, societal upbringing and gender roles. When evaluating both countries at the administrative level we encounter that they do not share a...
Words: 1044 - Pages: 5
