Internationalisation of Russian service companies

Abstract

In the research paper we did make attempt to answer several questions. What particular entry modes do better correspond to the specifics of Russian service companies while internationalizing? How entry mode correlates to the firm’s and country’s specific advantages/disadvantages? How similar / different internationalization methods for various companies within the same industry? For the purpose of research three service industries were chosen: Telecommunications, Banking industry and IT industry. From the analysis provided it is possible to see that internal conditions and approaches for internationalization are different between service industries, as well as it is different in terms of firm organizational structure. One of the advantages, or in some cases limitation, lies in governmental support of the company. When the role of the government is high, the company prefers acquisition with a majoritarian stake of shares in the company. That tendency is seen in telecom and banking industry, where the role of the state is high. The other situation is in less state-supported industry – IT, where companies’ most preferable entry mode is creating partnerships. CSA and FSA critically affects firms decision about its entry-mode. Country-Specific Advantage for Russian service companies, as it can be viewed from the conclusions, are working mainly in CIS countries. Russia, as an informal center of CIS is accepted and developed much better than its neighbors. So, the attitude to the Russian service is positive in CIS. In countries outside CIS, Russian service companies are affected by another business environment and attitude to their host country. Due to Country-Specific Disadvantages they are not able to develop their operations on the same scale as it is done in CIS. Firm-Specific advantages of described companies are better applied in CIS countries as well. Russian companies using its experience and reputation gained on home market together with ability to invest capital for development in foreign markets are able to earn its leadership in foreign markets. The difference of entry-modes within one industry is not common. There is a tendency of choosing the same entry mode for all companies, described. For telecom firms it is acquisitions, for banks – opening subsidiaries and for IT companies – creating partnerships.