American Enterprise in Foreign Markets: Studies of Singer and International Harvester in Imperial Russia

American Enterprise in Foreign Markets: Studies of Singer and International Harvester in Imperial Russia

American Enterprise in Foreign Markets: Studies of Singer and International Harvester in Imperial Russia

American Enterprise in Foreign Markets: Studies of Singer and International Harvester in Imperial Russia


In 1914 the two largest firms in Russia were subsidiaries of American companies. Remarkably, they were almost as large as their parent companies, striking testimony to the potential of the underdeveloped Russian market. Fred Carstensen provides detailed histories of the movement of International Harvester and Singer into this new, profitable, and somewhat forbidding territory.

Describing how both sales organizations evolved in Russia, Carstensen relates their development to overall company histories, worldwide growth, changing sales strategies and structures, recruitment and training of employees, and corporate leadership in America and abroad. He finds that both firms entered the Russian market because they needed new outlets to sustain high levels of production and sales. Although there are parallels in their experiences, Carstensen identifies how the responses of the two corporations differed, reflecting the varying strategies and perceptions of company management.

Together the case studies provide a test for many of the supposed qualities and patterns of Russian economic history. Contrary to accounts of the experiences of other companies, these firms found the Russian market remarkably rich, developing a level of sales that might have surpassed the American market if war had not erupted. In contrast to the standard view of foreign enterprise, neither company came to Russia because of government invitation or influence but rather because of the intrinsic attractiveness of the markets, and neither firm found the government bureaucracy graft-ridden or the customers dishonest.

Carstensen shows that International Harvester and Singer Sewing Machine clearly influenced Russia in a positive way. Both trained large numbers of Russians in modern industrial and marketing procedures and both provided an extraordinary volume of credit on comparatively easy terms to encourage purchase of their products. Indeed, the success of their approach suggests that Russian economic development may have been limited not by weak aggregate demand but by the relative absence of sources of credit.

Originally published in 1984.


The two largest commercial industrial enterprises in Imperial Russia on the eve of World War I were subsidiaries of American multinational corporations. Kompaniya Singer and International Harvester in Russia were notably successful businesses, each generating sales that made the Russian market for their respective products not only the largest of all foreign markets but nearly as large as the American. Each had also built in Russia a major factory, which provided part of the supply of its product marketed in Russia and dominated domestic Russian production in its sector. Both American parent firms had come to Russia autonomously in the 1860s and 1870s, searching for a new market for their product. Their Russian operations developed slowly at first because Russian demand was weak and more attractive potential markets existed in other countries. But from the mid-1890s Russia provided the principal growth in sales for each company. Detailed study of the origins and evolution of these American enterprises in Russia therefore provides an unusual opportunity to identify and assess the timing, motivation, and conduct of the growth and evolution of two of America's earliest multinational enterprises during their formative years.

Case histories offer more than a mere examination of organizational evolution and corporate life. The modern, thoroughly Western enterprises studied here operated within, reacted to, and interacted with the Russian legal, political, cultural, and economic environments. They also formed part of the great flood of foreign capital, entrepreneurs, and firms that swept into Russia in the two and a half decades before World War I. Their histories therefore illuminate aspects of Russian economic history, the role of foreign enterprise in Russian economic development in the late imperial period, and, more broadly, comparative economic growth.

Russia stood at the periphery of Europe and long remained largely unaffected by the waves of industrialization and economic modernization that swept the North Atlantic region from the middle of the eighteenth century. Even though Russia had been an important nation in European power relations since the early part of that century, by 1860 it remained a distinctly non-European polity and society in many ways. It had not shared in the trans-

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