Daniel J. McCarthy

Entrepreneurship in Russia and China: The Impact of Formal Institutional Voids

Transition economies are often characterized by underdeveloped formal institutions, often resulting in an unstable environment and creating a void usually filled by informal ones. Entrepreneurs in transition environments thus face more uncertainty and risk than those in more developed economies. This article examines the relationship of institutions and entrepreneurship in Russia and China in the context of institutional theory by analyzing private property as a formal institution, as well as trust and blat/guanxi as informal institutions. This article thus contributes to the literature on entrepreneurship and institutional theory by focusing on these topics in transition economies, and by emphasizing how their relationship differs from that in developed economies. We conclude that full convergence toward entrepreneurs‘ reliance on formal institutions may not readily occur in countries like Russia and China due to the embeddedness of informal institutions. Instead, such countries and their entrepreneurs may develop unique balances between informal and formal institutions that better fit their circumstances. Implications for the theory and practice of entrepreneurship in such environments are also offered.

Finding the Common Ground in Russian and American Business Ethics

Business ethics in Russia are changing as is the very nature of business itself. This article compares Russian and American conceptions of ethics in business using a framework of ethical and unethical practices in both countries. While Americans may consider some current Russian business practices to be questionable or even unethical, they may fail to appreciate that the reverse is true as well. The article also presents a series of recommendations for American managers doing business with Russians to assist them in interpreting their own, as well as Russian, business behavior in order to develop business practices that will be ethically acceptable to both.

A framework for leadership in a TQM context

Abstract Leadership theories and TQM have much in common, both having as primary objectives the enhanced performance of organizations and increased job satisfaction for employees. Despite these commonalities, leadership theory and TQM principles have not been effectively integrated. This article provides a framework for applying an expanded concept of leadership to organizations adopting TQM principles. Several well-known leadership theories have been adapted to take internal and external stakeholders of TQM organizations into account, and to broaden the concept of leadership to apply to all organizational members. The components of the TQM leadership model are defined and illustrated with examples from TQM organizations. Implications for leadership research and TQM practice conclude the article.

Corporate Governance in Russia

This article analyzes Russias emerging corporate governance system taking into account both foreign and domestic influences. It discusses influences on Russias corporate governance from other countries, particularly the US, Germany, and France. Aspects of Russian culture and traditions are then examined to see how they might influence the countrys evolving corporate governance system. Although Russia will continue to be influenced by international standards and systems of other countries, the article concludes that Russian corporate governance will evolve into its own unique model reflecting the countrys traditions, values, and culture. Implications for Western investors are discussed.

Russian managers' beliefs about work: Beyond the stereotypes

This study examines the beliefs about work of 292 Russian managers who were surveyed using Buchholzs (1977) 45-item instrument depicting six major belief clusters: humanistic belief system, organisational beliefs, work ethic, beliefs about worker participation in decisions, leisure ethic, and Marxistrelated beliefs. Although there were numerous similarities among responding groups, differences in some beliefs were found for managerial groups depending upon managerial level, age, and gender. Some of these findings go against stereotypes of the way Russian managers view their work. In addition, beliefs for two major managerial groups, Soviet-era executives and new entrepreneurial managers, are illustrated with profiles of two real-life managers. Interpretations and conclusions are offered for Western managers involved in selecting and motivating Russian managers and business partners, as well as for investors in Russian businesses.

Russia’s retreat to statization and the implications for business

Despite the many problems that emerged during Russias experiment with a market economy in the 1990s, Western firms are not likely to forego the lure that still exists in that market of 150 million people. Understanding the economic and political developments of that decade, and their effects upon business, can provide insights into the potential for business opportunities in the coming years. This article is based on a longitudinal field study of the political and economic environment for businesses in Russia, supplemented by statistical data and other information from published sources. We analyze the major economic and political developments during the 1990s and classify them in four stages --commercialization, privatization, nomenklatura, and statization. A scenario is then presented in which the statization stage, a period of increased state involvement in the economy, will likely continue in the next decade. An enlarged state role, however, is expected to coexist with a still evolving private sector. The article concludes with implications for Western firms doing business in Russias mixed economy.

Convergence in Entrepreneurial Leadership Style: Evidence from Russia

Entrepreneurial leadership is crucial for economic growth in all countries, yet little is known about the leadership style of entrepreneurs in transition economies such as the BRIC countries (Brazil, Russia, India, and China). There has been a need for research into cross-cultural similarities in entrepreneurial characteristics that would support an argument for convergence across cultures. This article investigates entrepreneurial leadership styles based on interviews with 130 exemplary Russian entrepreneurs over a recent five-year period. The results showed that a large majority of these entrepreneurs had adopted an open leadership style similar to U.S. entrepreneurs, adding support to a convergence theory of entrepreneurial leadership style.

“Diamonds and rust” on Russia's road to privatization: The profits and pitfalls for western managers

Abstract McCarthy and Puffer focus on large, state-owned Russian enterprises, and explore what changes have occurred in them during the recent privatization process. They compare the conditions facing Russian managers in these firms at the beginning of 1995 with the situations reported by managers of state-owned enterprises during the early stages of privatization in 1992. They make several recommendations to Western business managers to assist them in uncovering the potential “diamonds” among Russian enterprises, rather than wasting time fruitlessly scraping at the rust of others.

Russia: as solid as a BRIC?

Purpose – This introductory paper aims to outline the reasons for optimism as well as for skepticism in regard to Russias position in the group of BRIC nations and in the global economy.Design/methodology/approach – The paper presents a brief overview of developments in Russia. This discussion serves as a contextual introduction to this special issue by embracing some of the common themes elaborated in the other papers that are featured in the issue.Findings – The paper takes a balanced perspective by discussing both positive and negative trends in Russias development.Originality/value – The paper sets the context in which the other papers that comprise this special issue can be situated.

A Test of the Measurement Validity of the Resistance to Change Scale in Russia and Ukraine

The authors developed a Russian-language version of Oreg’s (2003) Resistance to Change (RTC) Scale, a multidimensional dispositional measure of an individual’s tendency to avoid or resist change, and tested its generalizability to the post-Soviet context with data from Russia and Ukraine. Confirmatory factor analysis results indicated a lack of configural consistency for the cognitive rigidity subscale, and post hoc examination suggested an unintended frame of reference for the cognitive rigidity items. The other three subdimensions of the scale—routine seeking, emotional reaction, and short-term thinking—were measurement-invariant in the two countries, providing a psychometrically acceptable measure of individual resistance to change. As a result, this respecification of the RTC Scale should be useful for much needed research devoted to individual resistors to change in the post-Soviet context, an effort essential for understanding obstacles to organizational change, and for generating prescriptive guidelines in a situation where most organizations are pressed by transition-induced need for systemic change and development.