I thought you might be interested in seeing an advanced copy of a chapter on Russian multinationals written by two business school professors from the College of Business Administration at Northeastern University who are expert on Eastern European economics in general and Russia in particular. The proposed book title (scheduled to come out in late 2008) is Emerging Multinationals from Emerging Economies. Below is the introduction to the chapter entitled Russian Multinationals: Natural Resource Champions, written by Daniel J. McCarthy and Sheila M. Puffer. Profs. McCarthy’s and Puffer’s bios appear after the introduction, which is provided below. Please let me know if you’d be interested in seeing the entire chapter, or interviewing the professors on any of their ideas.
INTRODUCTION
Of the 63,000 multinational corporations in the world in 2006 (Lodge & Wilson, 2006), a relatively small, but increasingly visible number were from Russia. This was despite the country having ranked only 62nd out of 125 countries on the 2006-07 Global Competitiveness Index (World Economic Forum, 2006). Russia’s ranking fell from 53rd in 2005 due in large part to the increasingly pervasive role of the state in the economy. Still, the importance of these large multinationals is underscored by the fact that small and medium-sized enterprises in Russia accounted for only 12 percent of the country’s GDP in 2006 (Fallico, 2007). The future competitiveness of MNEs, however, will depend substantially on continued positive developments in the Russian economy in which they play so important a part. And it is clear that their competitiveness will also be determined in large part by the role the government plays in the economy.
The chapter begins with an overview of the Russian economy, including benefits as well as dangers like the Dutch disease, of its energy-driven character. The role and priorities of the Russian government in the economy are then discussed, including government ownership of key MNEs during the Putin administration. The next section traces the rise of Russian MNEs as well as the industries in which they operate. Corporate growth strategies for building international presence are the focus of the next section, which includes not only MNEs’ competitive strategies, but also how successful firms overcame late-entry challenges, the competitive advantages they possess, and obstacles to their development emanating from the national context in which they operate. This section is followed by one that discusses the sustainability of that presence. How the rise of these MNEs has changed global dynamics is the next topic addressed. The chapter concludes with implications for various parties of the entrance of Russian MNEs into the global economy.
IMPLICATIONS – The end of the chapter outlines implications of Russian multinationals’ global strategies on the following:
· Emerging Market Firms
· Western/Japanese MNEs
o Natural Resource-reliant MNEs
o Natural Resource-based MNEs
o Nonnatural Resource-based MNEs
· Russian Public Policy Makers
Daniel J. McCarthy, Alan S. McKim and Richard A. D'Amore Distinguished Professor of Global Management and Innovation, Entrepreneurship and Innovation Group. Professor McCarthy is cofounder and codirector of Northeastern’s highly ranked High-Technology MBA program. He has been a member of the editorial board of The Academy of Management Executive, and has more than 80 publications, including four editions of Business Policy and Strategy, as well as Business and Management in Russia, The Russian Capitalist Experiment, and the recently published Corporate Governance in Russia. Professor McCarthy is the lead director of Clean Harbors, Inc., and has consulted in the US and Europe for more than 40 companies. Early in his career, he was president and cofounder of Computer Environments Corporation and served as a director on its board, as well as the board of its sister company, Time Share Corporation, and other private company and nonprofit boards. Professor McCarthy holds AB and MBA degrees from Dartmouth College and a DBA from Harvard University. He is a Fellow at the Davis Center for Russian Studies at Harvard University. Professor McCarthy ranks as the #1 most published author (tied) in the Journal of World Business from 1993-2003, and has been identified as one of the top 5% of researchers in international business in a Michigan State University study of publications in the top international business journals from 1996-2005. He is also one of the top three scholars internationally in business and management in Russia and Central and Eastern Europe, based on a Journal of International Business Studies article analyzing publications in 13 leading journals from 1986-2003.
INTRODUCTION
Of the 63,000 multinational corporations in the world in 2006 (Lodge & Wilson, 2006), a relatively small, but increasingly visible number were from Russia. This was despite the country having ranked only 62nd out of 125 countries on the 2006-07 Global Competitiveness Index (World Economic Forum, 2006). Russia’s ranking fell from 53rd in 2005 due in large part to the increasingly pervasive role of the state in the economy. Still, the importance of these large multinationals is underscored by the fact that small and medium-sized enterprises in Russia accounted for only 12 percent of the country’s GDP in 2006 (Fallico, 2007). The future competitiveness of MNEs, however, will depend substantially on continued positive developments in the Russian economy in which they play so important a part. And it is clear that their competitiveness will also be determined in large part by the role the government plays in the economy.
The chapter begins with an overview of the Russian economy, including benefits as well as dangers like the Dutch disease, of its energy-driven character. The role and priorities of the Russian government in the economy are then discussed, including government ownership of key MNEs during the Putin administration. The next section traces the rise of Russian MNEs as well as the industries in which they operate. Corporate growth strategies for building international presence are the focus of the next section, which includes not only MNEs’ competitive strategies, but also how successful firms overcame late-entry challenges, the competitive advantages they possess, and obstacles to their development emanating from the national context in which they operate. This section is followed by one that discusses the sustainability of that presence. How the rise of these MNEs has changed global dynamics is the next topic addressed. The chapter concludes with implications for various parties of the entrance of Russian MNEs into the global economy.
IMPLICATIONS – The end of the chapter outlines implications of Russian multinationals’ global strategies on the following:
· Emerging Market Firms
· Western/Japanese MNEs
o Natural Resource-reliant MNEs
o Natural Resource-based MNEs
o Nonnatural Resource-based MNEs
· Russian Public Policy Makers
Daniel J. McCarthy, Alan S. McKim and Richard A. D'Amore Distinguished Professor of Global Management and Innovation, Entrepreneurship and Innovation Group. Professor McCarthy is cofounder and codirector of Northeastern’s highly ranked High-Technology MBA program. He has been a member of the editorial board of The Academy of Management Executive, and has more than 80 publications, including four editions of Business Policy and Strategy, as well as Business and Management in Russia, The Russian Capitalist Experiment, and the recently published Corporate Governance in Russia. Professor McCarthy is the lead director of Clean Harbors, Inc., and has consulted in the US and Europe for more than 40 companies. Early in his career, he was president and cofounder of Computer Environments Corporation and served as a director on its board, as well as the board of its sister company, Time Share Corporation, and other private company and nonprofit boards. Professor McCarthy holds AB and MBA degrees from Dartmouth College and a DBA from Harvard University. He is a Fellow at the Davis Center for Russian Studies at Harvard University. Professor McCarthy ranks as the #1 most published author (tied) in the Journal of World Business from 1993-2003, and has been identified as one of the top 5% of researchers in international business in a Michigan State University study of publications in the top international business journals from 1996-2005. He is also one of the top three scholars internationally in business and management in Russia and Central and Eastern Europe, based on a Journal of International Business Studies article analyzing publications in 13 leading journals from 1986-2003.
Sheila M. Puffer, Professor, International Business and Strategy Group. Professor Puffer is a fellow at the Davis Center for Russian Studies at Harvard University, and recently served as program director of the Gorbachev Foundation of North America. She has been recognized as the #1 scholar internationally in business and management in Russia, the former Soviet Union, and Eastern Europe according to a 2005 Journal of International Business Studies article analyzing publications in 13 leading academic journals from 1986-2003. Professor Puffer also ranks as the #1 most published author (tied) in the Journal of World Business from 1993-2003. She has been identified as one of the top 5% of researchers in international business in a Michigan State University study of publications in the top international business journals from 1996-2005. She was also ranked among the top 100 authors who published in Administrative Science Quarterly from 1981-2001. Professor Puffer has more than 125 publications, including over 50 refereed articles and 11 books including Behind the Factory Walls: Decision Making in Soviet and US Enterprises, The Russian Management Revolution, Managerial Insights From Literature, Management International, Business and Management in Russia, The Russian Capitalist Experiment, International Management: Insights From Fiction and Practice, and Corporate Governance in Russia. She served as the editor of The Academy of Management Executive as well as a member of the Academy’s Board of Governors from 1999-2002. She worked for six years as an administrator in the Government of Canada and has consulted for a number of private and nonprofit organizations. Professor Puffer earned a degree from the executive management program at the Plekhanov Institute of the National Economy in Moscow, and holds BA (Slavic Studies) and MBA degrees from the University of Ottawa, Canada, and a Ph.D. in business administration from the University of California, Berkeley.
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