International Management in Action: The Political, legal and Technological Envir

Question

International Management in Action: The Political, legal and Technological Environment Business Report - Delaying Entry into Russia Market Doing business overseas cannot happen without learning about and trying to understand the customs, cultures, and work habits of people in other countries. Equally effective management styles must be developed. The example of Russia follows. Russia is moving from a central to a market economy, and management is changing along with that new direction. The United States and Russia interpret “partnerships” differently. Management in Russia is more authoritarian than that of the United States; the chain of command, responsibility, communication, and the decision-making process are all affected by this difference in management style. Looking back at history and incorporating the evolutionary knowledge can aid the understanding of emerging economies. Assignment Create a two-to-three page business report as you would submit to your CEO of why you feel a planned entry of the company "Happy Hamburger" into the Russian market should not be rushed. The executive team has decided to go full steam ahead, but you see pitfalls in hurrying this move. State your reasons, with facts to back them up. This means citing your sources. This U.S. - Russia Business Council website , may be of some help, but also use your text book. Your personal opinion does not count. Do not write as you speak, remember this is a report, designed to persuade the CEO to hold off. This is not a reflection paper or a letter. Discuss political, legal and technological aspects of market entry and consider the following in your response as well: Act of state doctrine, Doctrine of comity, Foreign Corrupt Practices Act (FCPA)

Explanation / Answer

Organisational structure of Russia is totally different than America as it causes high level of authoritarian abilities. As russia has been relatively tough place for business, new Market entrants usually face problems in Russian environment. Availability of a competitive market force and authoritarian managerial environment creates problems for newcomers to implement structure in Russia.

Some factors which are effective in Russian environment are as follows

Political factors

Russia is politically authoritative in terms of provision of the services. This authoritarian type of approach of politics makes it one of the hardest place to do the business. Many of the organisations face every discrimination against the local suppliers and producers. This type of approach limits overall options for international businesses to enter Russia and to obtain proper revenue from the same market. Political influence over the policy creation as well as Monopoly of big business houses in the Russian market is also dominant factor which reduces the availability of partnerships uSA and Russia.

Technological factors

Technology has always been leader in many of the advanced Technologies. As Asia has developed their own structure of operation for new technologies, dependency on other countries have drastically reduced. As the country is very well capable of generating their own technologically required equipments as well as implementation of strong idea of using self manufactured devices is also one of the most important approach that reduces the impact of the foreign marketer or foreign investors to get the system installed in the company from the local market. This process is backed by strong laws in Russia which helps it to maintain better quality of the operational business structure.

Legal factors

Russia has legal system that is oriented towards creating a Monopoly for few big Russian brands. And policies of trade are designed according to the requirement of the market for this specific brands, availability for international brands to grow in Russia is relatively Limited. Provision of the services is based on the qualification for benefiting the local brands rather than focusing international trade friendly policy russia has very strict rule against foreign corruption as it strongly implement foreign corrupt practices act in its structure. This type of cockroach helps Russia to maintain and build an environment which is secure for international businesses but due to the Monopoly of many bigger brands, reducing opportunities of business.

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