Sergey Filippov

Russian companies: the rise of new multinationals

Purpose – The focus of this paper is the emergence of Russias multinational companies. It aims to analyse their motives to internationalise as well as the approaches to internationalisation. While relevance of the theoretical perspectives is highlighted, the purpose of this paper is to contribute to the understanding of the present‐day phenomenon of emerging Russian multinationals.Design/methodology/approach – The paper relies on a qualitative approach for the analysis of the nature of Russian multinationals. The phenomenon of the emerging Russian multinationals is analysed through the prism and using insights from a number of subjects, namely transition studies, politics, innovation studies and international business studies.Findings – The paper traces the evolution of Russian companies; the idiosyncratic path of their formation serves as a background for understanding of their internationalisation strategies. A special attention is devoted to the R&D activities of Russian multinational companies, and a...

Innovation Processes in the Russian Manufacturing Subsidiaries of Multinational Corporations: An Integrated View from Case Studies

The extant literature acknowledges the role of overseas subsidiaries in the growth and development of multinational companies (MNCs). Such subsidiaries are viewed as critical players in the innovation process at MNCs. This topic remains largely under-researched in the Russian context. This study aims to fill this gap by examining the dynamics of the innovation process in Russian-based subsidiaries of global MNCs. We present qualitative findings that indicate Russian subsidiaries are not only recipients of knowledge and technology developed elsewhere in the MNCs but are active developers of innovative products and solutions.

Emerging Russian multinational companies: managerial and corporate challenges

In recent years, large Russian companies have shown an impressive performance in their expansion abroad. This internationalisation has attracted a great deal of interest from both scholars and practitioners. Advance of these companies into Western markets has become a contentious topic; quite often, it is due to the clashes between the distinctly Russian managerial style and the Western style of classic management. Yet, the interplay between the specificities of the Russian managerial style and the process of firm internationalisation remains an under-researched topic. The paper seeks to fill this gap and to examine management practices in Russian companies, with a specific emphasis on internationalisation. The study provides a detailed account of several elements of these practices, such as human resource management, knowledge management, corporate governance, corporate social responsibility. Furthermore, the paper formulates directions for further research.

Emerging Russian Multinationals: Innovation, Technology, and Internationalization

This article examines the role of technology and innovation, as ownership advantages, in the internationalization process of Russian companies. It focuses on three distinctive groups of firms—medium-technology manufacturing enterprises, software and IT companies, and state corporations. We identify different roles of innovation in internationalization of these companies and provide corresponding examples. First, medium-technology manufacturing enterprises tend to expand abroad led by a technology-seeking motive, seeking to boost their technological competence through foreign acquisitions. Second, companies in the emerging IT and software sectors internationalize driven by innovation and using their competitive advantage. This international expansion is often organic in terms of establishment of greenfield subsidiaries rather than acquisitions of foreign firms. Third, state corporations engage in international operations, too, and the role of innovation differs. This internationalization may be either technology-driven or technology-seeking. The article concludes with managerial recommendations and policy implications.

Competence building in foreign subsidiaries : The case of new EU member states

This article examines patterns of competence-building in foreign subsidiaries located in new member states of the European Union. Among the theoretical foundations of this paper are the concepts of dynamic capabilities and subsidiary-specific advantages. We consider subsidiary competences as a combination of distinctive competences built into particular business functions. Furthermore, we examine sources of competences, and complementarities between these sources. We use a proprietary database to examine the research topic and find distinctive uneven growth of functional competences over time, distinctive patterns of complementarities between different functional competences and specific patterns of access to sources of competence. Finally, we discuss managerial and policy implications.

Foreign Direct Investment in Times of Global Economic Crisis: Spotlight on New Europe

This paper examines the potential impact of the economic crisis, which started in 2008, on the dynamics global foreign direct investment, especially in the new member states of the European Union. The global economic crisis that hit the world in 2008 has forced scholars and policy makers alike to rethink their approaches to the global economy, in particular to financial markets (including stock exchanges and portfolio investment). It can be hypothesised that the crisis has been particularly devastating because it has resulted from the coincidence of three factors: a cyclical downturn in the world economy; a structural change that hit certain industries which used to be star performers in the global economy (especially the automotive industry); and the collapse of the previous model of the financial industry based on excesses. This paper asks how this crisis affects foreign direct investment flows, with special attention being paid to the question of which locations are set to lose the least and which ones are set to lose the most. In this respect, particular attention is paid to the activities of subsidiaries of multinational enterprises. These subsidiaries can follow different scenarios as a response to the global economic turmoil, including a reorganization of their production systems, and a reduction or closure of activities that are deemed to be less necessary for the continuation of activities. Finally, the paper examines the policy implications of the crisis. It challenges the view that rising economic nationalism (in the form of protecting one location against locations in other countries) would be the right answer to the problems created by corporate restructurings.

Chinese firms entering Europe: Internationalization through acquisitions and strategic alliances

Purpose – The purpose of this study is to examine specific use of strategic alliances and acquisitions for Chinese firms to catch‐up technologically and to enhance their internationalization competence.Design/methodology/approach – The paper offers a conceptual analysis of internationalization through either FDI or strategic alliances. This is a novel approach, as most of the extant literature tends to view internationalization solely through the prism of FDI. The empirical evidence presented in the paper is twofold. First, it analyses empirical data on strategic alliances and acquisitions retrieved from Thomson SDC database, a premium business directory. Second, it also approaches the topic qualitatively, by offering a case study of Chery Automobile Co. Ltd, a Chinese company that has relied heavily on strategic alliances in its internationalization strategy.Findings – First, the study finds statistical evidence of a rising trend of formation of outward strategic alliances by Chinese firms. Second, the a...

Innovation Processes in the Russian Manufacturing Subsidiaries of MNCs – An Integrated View from Case Studies

The extant literature acknowledges the role of overseas subsidiaries in the growth and development of multinational companies (MNCs). Such subsidiaries are viewed as critical players in the innovation process at MNCs. Although this topic has gained importance, it remains largely under-researched in the Russian context. This study aims to fill this gap by examining the dynamics of the innovation process in Russian-based subsidiaries of global MNCs. It seeks to explore and understand motivation and drivers of innovation, key participants, and impact and outcomes of innovation, with a specific reference to the peculiarities of the Russian institutional environment. We present qualitative findings from several case studies of Russian manufacturing subsidiaries of foreign MNCs, which indicate that Russian subsidiaries are not only recipients of knowledge and technology developed elsewhere in the MNCs, but are active developers of innovative products and solutions that are later applied in other units of the respective MNCsSubsidiaries of foreign multinational companies are essential part of the modern Russian economy. In many sectors, they enjoy dominant positions. Innovation is an important driver and determinant of this dominance. Yet, little research has been done on innovation strategies and innovation processes in foreign subsidiaries in Russia. The paper aims to fill this gap. On the basis of qualitative evidence, it explores the goals, patterns and challenges of innovation activities in Russian subsidiaries. Our findings suggest that that manufacturing subsidiaries have implemented numerous effective innovation routines that are an integral part of daily ‘routine’ management. This is driven by the two-faceted objective – to achieve global quality standards and low production costs.

New Europe's Promise for Life Sciences

The life sciences sector (and biotechnology in particular) has emerged as a prospective area, and attracted a lot of attention recently. Multinational companies in the life sciences seek to explore new markets, and, on the other side, governments strive to develop the life sciences sector perceiving it as a basis for long-term development. Whilst the R&D activities of global multinationals in life sciences still remain concentrated in the Triadic economies, these companies increasingly seek for new location to tap the knowledge. New EU member states emerge as such prospective locations. Notwithstanding the interest towards this sector, the body of literature on the development of life sciences in new EU member states, and particularly, the role of multinational companies, remains scant. In this explorative study we attempt to fill this gap and focus on the role of multinational companies in the Czech life sciences sector.

Cost Reduction as Major Driver in Traditional Technology Business: Will Outsourcing Relations Come to an End?

Traditional technologies can have an extended lifetime if companies use various cost-reducing strategies. One of these strategies employed in Western European countries in past decades has been low-cost outsourcing in Central and Eastern Europe, mainly derived from low wages. Specifically, the Czech Republic, Poland, and Hungary are prime destinations for low-cost outsourcing as well as foreign direct investment. However, there is a trend of increased wage levels in Central and Eastern European countries, urging the question of how long (time period) cost advantages can be gained there in the future. Accordingly, in a situation of diminishing cost advantages, the question can be posed to what extent traditional manufacturing will “return” to Western Europe if smart manufacturing methods are being used. This study adopts a scenario-analysis approach in which five scenarios are drawn, particularly focusing on labor cost development and the crucial cost advantage and other critical factors in outsourcing, such as the availability of low-skilled labor, productivity changes, and greening of manufacturing. In one scenario, “reshuffle,” cost reduction will be abandoned as the competitive strategy in favor of high product quality. Each scenario will be examined in terms of attractiveness for outsourcing and potential implications on decisions by companies for (continuing) outsourcing relationships with Central and Eastern Europe.