Academic journal article European Research Studies

Corporate Culture as a Tool of Adaptation of TNC to the Russian Economic Conditions

Academic journal article European Research Studies

Corporate Culture as a Tool of Adaptation of TNC to the Russian Economic Conditions

Article excerpt

1. Introduction

The Chairman of the Russian Federation Government Dmitry Medvedev quite fully described the features of the modern stage of the Russian economic development: "Now for several years we have been living under increased turbulence manifested in all spheres of social and economic life - in t he dynamics of production and foreign trade, the welfare and employment level, in financial and foreign exchange markets. Modern economic and technological development in general is difficult to forecast, but in the period after 2008 a qualitatively different level of instability is observed, the possibility to predict even the near future is sharply reducing" (Medvedev, 2016; Hapsoro and Suryanto, 2017; Thalassinos et al., 2015; Giannarakis, 2016; Arslan-Ayaydin et al., 2014; Tupcu et al., 2015).

The main trend of the global development at the current stage is global process intensification. The driving force of this process is the spread of TNCs all over the world, which use the advantages of the global economy in the activity hoping for reduction of the production costs and sales market expansion due to penetration in the economies of different countries. According to UNCTAD transnational corporation is a joint-stock or private company comprising a parent enterprise and its affiliates. The TNCs mostly operate outside the country where it is registered, more often in several countries where it has a number of divisions, affiliates, enterprises (Podmolodina, 2012; Hadi et al., 2016; Giannakopoulou et al., 2016).

The world experience shows that the production trans-nationalization is important for the growing economies, because it attracts modern and advanced technologies and, knowledge; employees get acquainted with new labor organization methods. All these facts have positive impact on the national economy. Thus, international production provided by the TNC as well as their sales networks are the basis for the international economy and a conductor of global processes.

Transnational corporations do not only decide which goods and services to offer to the consumer, but how to organize business processes, what management tools to apply for successful activity in extremely uncertain business environment of the receiving countries as well. "TNCs turned into a main force of the market production and international labor division, into the dominating factor of the world economy and world economic relations" (Podmolidina, 2011; Shmaliy and Dushakova, 2017; Ivanova and Bikeeva, 2016; Savina, 2016).

However, despite growing power of TNC in the countries-recipients they face difficulties due to national economic peculiarities. As a rule these are protectionism measures used to protect national producers. Moreover, the consumers are loyal to their national traditions, rituals, habits and this fact directly influences upon consumer preferences formation in this or that country (Morkovina, 2016). Consequently, TNCs work under competition with national enterprises and other TNCs willing to operate in this market and expand their influence. In the last decade the Russian market has been attractive for the TNCs of different industries which are seeking for new markets to sell their products.

These are the national economy specifics and peculiarities of business environment, which in many cases determine the possibility for TNCs to operate and seek the set of tools, which in their turn promoting, on the one hand, corporation adaptation to the economy, on the other, the receiving party gains additional competitive advantages and learn modern management methods.

The said above proves the timeliness and topicality of the research aimed at developing an approach to select and design tools to adapt the transnational corporations activities to the Russian economy at the mutual beneficial basis. The rationale for selecting a set of tools for TNC adaptation, in our view, should include several stages. …

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