The New Russian Business Leaders - By Manfred F. R. Kets de Vries, Stanislav Shekshnia, Konstantin Korotov, and Elizabeth Florent-Treacy (original) (raw)
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To illustrate the transition that has occurred in Russia since 1992, the authors studied Russian business leadership and entrepreneurship in a range of situations, from the transformation of a Soviet-era biscuit factory, to high-tech start-ups modeled on Western business practices. This article describes organization and leadership practices in Russia, and focuses on an emerging leadership style the authors termed “global Russian.” The purpose of this research is both hindsight and foresight: by analyzing the rapid changes of the recent past, the authors seek to provide lessons on leadership that will be valuable for Russian business leaders and for those who seek to engage in working partnerships with them.
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Business and management in Russia have undergone substantial change during the past two decades as the country has transitioned from the centrally planned Soviet system to a more market-oriented economy. Russia has not been given as much attention as BRIC nations such as India and China in either academic research or the popular business press, despite its being a global energy giant and major natural resource player as well as a member of the G8 economic powers. We analyze research on Russian business and management published over the past two decades, draw implications for Russia's future in the global economic community, and offer directions for future research. Our basic conclusion is that Russian managers have relied excessively on informal institutions, including personal networks, to conduct business due to the void created by the weak legitimacy of the country's formal institutions. A major implication is that by continuing to rely on informal institutions in the context of a formal institutional void, Russia may well fall short of becoming a fully participating member of the global economic community, and may remain for some time as an unbalanced, corruption-ridden, natural resource-based economy.
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The transition to a market economy in Russia did not initially lead to significant changes in the social organisation of production, leading some to doubt that Russia was in transition to capitalism at all. Since the 1998 devaluation, Russian capitalist holding companies have invested in industrial enterprises. This article reviews the impact of such investment on the management structure of Russian companies on the basis of a series of intensive case studies. The case studies show a very consistent pattern of strictly centralised hierarchical management, which reproduces many features of the traditional Soviet system of administrative control, using financial rather than physical indicators, with production subordinate to projected sales, but very limited change in the traditional forms of personnel and production management. In conclusion, the question is raised whether this represents a distinctively Russian form of capitalism or is merely a transitional stage of capitalist development. Contrary to the expectations of the neo-liberal theorists of 'shock therapy', the collapse of the Soviet system did not lead to the rapid and spontaneous development of the institutions and practices typical of a capitalist market economy. This led some critics to doubt whether Russia was in transition to capitalism at all. Burawoy, (1996, 2001), for example, has characterised the development trajectory of the Russian economy as one of 'involution', akin to Weber's 'booty capitalism', in which profits are extracted by banks and trading monopolies while nothing is reinvested in production, which continues to be conducted in traditional Soviet ways. Q1 Ericson (2000) has even characterised the emerging system as 'industrial feudalism'. However, since the 1998 crisis there has been a marked penetration of capital into Russian industry, as an increasing number of industrial enterprises have been taken over by large Russian holding companies which purport to be the standard-bearers of capitalist management structures and practices in Russia. In this article I will look at the structures and practices that these holding companies put in place in their subsidiaries, but first I will outline a theoretical framework for the analysis, which is based on Marx's analysis of the development of capitalism in Europe.